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McGraw-Hill/Irwin

Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

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ERP is a cross-functional enterprise backbone that integrates and automates processes within
Manufacturing Logistics Distribution Accounting Finance Human resources

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marketing. accounting. inventory management. sales. ` An ERP system is utilized for standardizing process and storing information as well as recalling that data when it is required in real time environment. ` Implements a common enterprise-wide database as well as a range of application modules to support everyday business activity.` ERP integrates management information by managing the flow of data across an entire organization. distribution. project management. Exp: finance. manufacturing. planning. . human resource and so forth.

supplier. and customer information flows 8-4 .` Enterprise resource planning is a crossfunctional enterprise system An integrated suite of software modules Supports basic internal business processes Facilitates business.

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inventory control software were designed. MRP II involved area.1960s. inventory control was the focus of manufacturing systems. an extension of MRP with stress on manufacturing process optimization by synchronizing production requirements with material delivery. distribution management. 1980s Evolution of Manufacturing Resource Planning (MRP II). like finance. shop floor. 1970s MRR or Material Requirements Planning systems were created during 1970s and primarily involved planning product or parts requirements based on BoM or Bills of Materials and MPS of Master Production Schedules. modified and applied in order to automate inventory control based on conventional inventory principles. Therefore. project management and human resource. .

.` ` ` ` ` Inefficiencies of business process. Business process automation Eenhanced operational efficiencies and Easier accessibility of information To deal with complex and interrelated business troubles.

and also acquiring multi-currency. ` . reduced data duplication and also better forecasting features. multi-geography support) ` Replacing or upgrading the existing ERP system that is out of date Enhanced information accessibility. (may be raised in complexity due to acquisitions in the recent past or current significant organic growth. multi-office. ` Managing and streamlining the large-scale of company·s operational processes.` Achieving company·s financial goals from productivity gains as well as efficiency resulting from business process automation.

suite You can implement only few modules as they required or the entire ERP system suite. Modules vs. (alone or in conjunction with other modules) Mix and match modules: Lots of ERP system modules and functionalities are contained in different ERP packages. cross-industry and extended ERP system modules.No exact fit: No ERP package provides features that can precisely fulfill all requirements. . Small level of customization and configuration of the ERP & the business process are needed in ERP implementation. ERP modules are often broadly classified into 3 categories: sector-specific.

have started getting traction). . particularly pertaining to HCM and CRM. add-on features.Add-on features / functionalities drive ERP: Because of the commoditization of core ERP features (for instance financial accounting). (Open source ERP systems have yet to really carve out a place on the market while SaaS ERP systems. applications of industry-specific and improvements are be more important and are the actual drivers of the ERP market. Options to On-Premise: The traditional on-premise ERP implementation has been joined by open source ERP and also on-demand / SaaS ERP as feasible ERP alternatives.

Subscription-based pricing is typically used for on-demand ERP systems where service fees are paid on a periodic or monthly basis. location-based. A variety of options available in this model consist of user-based (concurrent user and named user) pricing. Realignment of business process in any company is determined by factors.Pricing models The most common pricing model is Licensed-based pricing whereas software expenses paid in advance. package-based pricing. and these normally take time for being effective. . ROI: ROI is recognized from process enhancements and not only from ERP software. like the process complexity. number of stakeholder involved and the proposed change user acceptance.

ERP Configuration: ERP system usually needs to be configured to make it perform the way you would like to the extent the system allows. hard to maintain. To modify or customize the source code or creating software to fulfill its requirements. . since it could potentially cause the system being complex. complicated to integrate with different system and also nonviable for support of ERP vendor. Modifications or customization must always be the last effort.

Implementation: Inadequate implementation. Comprehensive implementation along with good support of post implementation obviously can make ERP software an excellent fit. data migration / conversion costs. high and recurring cost of training. . Big unforeseen modification cost. flawed data migration or conversion and insufficient support of post implementation can cause even feature-rich software perform poorly. other small unpredicted cost components which can get out of hand as well as can take customers by surprise. key ERP team members replacement cost and maintaining parallel systems cost. Cost components: Along with fees for standard license and implementation services.

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` ERP Business Benefits Quality and efficiency Decreased costs Decision support Enterprise agility ` ERP Costs Risks and costs are considerable Hardware and software are a small part of total costs Failure can cripple or kill a business 8-16 .

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development. training ` Failure to involve affected employees in planning and development ` ` ` ` Trying to do too much too fast Insufficient training Insufficient data conversion and testing Over-reliance on ERP vendor or consultants 8-18 .` Under-estimating the complexity of planning.

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middle market and enterprise. Oracle 25% and Microsoft Dynamic 15%. SAP and Oracle are top ERP vendors for enterprise market while Microsoft is for small and medium business. aerospace and defense. transportation and so on. computer/electronic. such as agriculture. SAP. May be in the future people will establish short-list Top ERP vendor according to industry type. SAP market share is 31%.` ERP consultants segment Top ERP into small business. ` ` ` ` . Oracle and Microsoft are the most top ERP vendor based on their market share. automotive. Each market has its own top ERP vendor. For instance.

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The family of Microsoft ERP products are as follow : ` Microsoft Dynamics AX (Axapta) ` Microsoft Dynamics GP (Great Plains) ` Microsoft Dynamics NAV (Navision) ` Microsoft Dynamics SL (Solomon) .000 ERP customers. Microsoft has more than 83. Small Business Microsoft Dynamics is considered as top ERP for SMB (small medium business) because the features are ideally suited to the requirements of small and medium organizations.1.

manufacturing. distribution and non profit.2. manufacturing solutions supply . Infor has several different ERP software systems and particularly strong distribution. It offers solid ERP functionality together with a number of impressive Industry solutions for Professional Services Automation (PSA). and complex chain manufacturing. pharma. lean manufacturing.000 customers in more than 150 countries.000 customers and 3rd largest ERP manufacturer. hospitality management. behind only Oracle and SAP. process management (SCM). ` Infor Infor has more than 70.Middle ` Market Epicor Epicor has 20.

Enterprise ERP Leader Obviously SAP and Oracle are the most top ERP in this segment.000 SMB companies.3. Today SAP has released ERP solution for small and midsize business (SMB): SAP Business One and they claim that they have helped more than 75. They are #1 and #2 ERP market share leader. .