Business Process Engineering

Enterprise Resource Planning

ERP
✔ Enterprise Resource Planning, or ERP, is a software system that integrates and streamlines core business
processes, enabling efficient management and real-time data access for informed decision-making.
✔ Enterprise resource planning software, also known as ERP systems, has become necessary for businesses of
all sizes and structures, as they help organizations manage activities such as:
✔ Accounting

✔ Procurement

✔ Project management

✔ Risk management

✔ Supply chain operations

✔ These modules function using a central database, allowing access to real-time data, and giving visibility into
business performance across these departments while minimizing data duplication. A complete ERP system
will help companies budget, plan, and report on financial results.

✔ When selecting an ERP solution, it is important to consider specific needs, industry requirements, scalability,
and cost-effectiveness to ensure the system meets goals and objectives.
ERP
ERP
The Evolution of ERP Systems
✔ The term “ERP” can be traced back to earlier manufacturing resource planning (MRP) and MRP II systems.
✔ ERP systems were initially designed to automate back-end operations without customer or public interaction.
✔ It primarily focused on managing internal operations rather than customer needs.
✔ From the 1990s to the early twenty-first century, the adoption of ERP systems experienced rapid growth, as
more organizations began to implement these systems to streamline their operations and gain a competitive
edge.
✔ Early ERP systems were primarily focused on managing inventory, production, and accounting processes.
✔ Businesses became more complex and global, integrating other functions such as supply chain management,
customer relationship management, and human resources management directed to the development of
more comprehensive ERP solutions.
✔ Today, ERP systems have become integral to modern business management, enabling organizations to access
real-time data, optimize processes. I
✔ Introduction of cloud-based ERP solutions, businesses can now benefit from increased scalability, flexibility,
and lower upfront costs.
The Evolution of ERP Systems
The difference between MRP and ERP
✔ MRP I stands for material requirements planning, while MRP II stands for manufacturing resource planning.
✔ MRP is about taking inputs (material cost, material availability, expected demand, forecasted demand,

staffing ability, machinery capacity) all in order to make sure you have the right amount of
materials/labor/machinery on hand at any given time to satisfy the market or your company production
goals.
Key Differences between ERP and MRP:
✔ Scope: MRP is limited to materials, manufacturing, and production planning, while ERP covers all aspects of a

business, including materials, finance, HR, and more.

✔ Functionality: MRP focuses on material planning and inventory control, whereas ERP offers a broader range

of functionalities, including financial management, HR, CRM, and supply chain management.
✔ Integration: MRP systems may be standalone or integrated with other systems, while ERP provides

comprehensive integration across all business functions.

✔ MRP is a specialized system primarily used for materials and production planning, while ERP is an all-

encompassing solution that integrates and manages various business functions, making it suitable for
organizations that require a more holistic approach to resource planning and management.
The Evolution of ERP Systems
✔ The future of ERP is set to be shaped by emerging technologies such as:
✔ Artificial intelligence: It can enhance ERP systems by providing advanced analytics, forecasting,

automation and optimization.

✔ Blockchain: ERP systems integrated with blockchain enable real-time visibility into transactions and data

across the business processes. This transparency reduces disputes, enhances accountability, and bring up
trust among stakeholders. It prevents unauthorized access and changes to data, reducing the risk of
fraudulent transactions.
✔ The Internet of Things: Integrating ERP with the Internet of Things (IoT) can be highly beneficial – for

both back-office as well as customer-facing processes. It allows for data sharing in real-time from all kinds
of external machines and devices back into the internal ERP systems. Organizations no longer need to
struggle to connect their internal business applications and processes to external data. Data collection
from these IoT devices happens in real-time and is highly accurate, increasing the chances of gaining
actionable insights.

✔ As these technologies continue to evolve and mature, they will further enhance the capabilities of ERP
systems, helping businesses become even more agile, efficient, and responsive to changing market
conditions.
Key Components of an ERP System
How do ERP systems work?
✔ An ERP system – also called an ERP suite – is made up of integrated modules or business applications that talk
to each other and share common a database.
✔ Each ERP module typically focuses on one business area, but they work together using the same data to meet
the company’s needs. Finance, accounting, human resources, sales, procurement, logistics, and supply chain
are popular starting points.
✔ ERP systems also support industry-specific requirements, either as part of the system’s core functionality or
through application extensions that seamlessly integrate with the suite.
✔ ERP software can be bought using a cloud subscription model (software-as-a-service) or a licensing model
Types of ERP deployment
How do ERP systems work?
✔ Cloud ERP is hosted in the cloud and delivered over the Internet as a service that you subscribe to. The
software provider generally takes care of regular maintenance, updates, and security on your behalf. Today,
cloud ERP is the most popular deployment method for many reasons – including lower upfront costs, greater
scalability and agility, easier integration, and much more.

✔ On-Premise ERP is the traditional model for deploying software where you control everything. The ERP
software is typically installed in your data center at the locations of your choice. The installation and
maintenance of the hardware and software is your staff’s responsibility. Many companies are modernizing
and upgrading their on-premise ERP systems to cloud deployments. This requires careful planning of your ERP
upgrade as well as a thoughtful process of evaluating ERP software and deployment options.

✔ Hybrid ERP: For companies that want a mixture of both to meet their business requirements, there is the
hybrid cloud ERP model. This is where some of your ERP applications and data will be in the cloud and some
on premise. Sometimes this is referred to as two-tier ERP.
Implementation of ERP
Thank You