• “A process or approach which attempts to consolidate all of a company's departments and functions into a single computer system that services each department's specific needs.”

A Brief History of E.R.P.

During the 1960’s, Inventory Control was the main focus.

ERP term first employed by research firm Gartner Group (1990) asextension of MRP

ERP= MRP II + Other Functions

In the 1980's the concept of MRP-II evolved.

ERP systems had a boost in sales in the ‘90s due to the Y2K problem

ERP II-next generation ERP systems

Users Site manager CEOProduction Manager

Other Users

SystemsInventory

ManagementSales Purchase HRMSFinance

Site

Production

Secretary’s New printer

application

Transfer to

Accounting Office

Example: Before ERP Systems

Ideal Solution

Users Site manager CEOProduction Manager

Other Users

Systems

Site

Manufacturing ERP

1. Purchase order form for a new printer

2. Head of Department Confirmation- Faculty Head

3. Purchase order document sent to E.M.U. Account Office

4. Account Office Secretary sents the purchase order to the Responsibles

5. Purchase order- Responsible personal Confirmation

6. Purchasing department- Manager Confirmation

7. Transfer to Finance Department Secretary for processing

8. Finance Department Responsible’s Confirmation

9. Transfer to Secretary Office

10. Secretary- Confirmation

11. Confirmation Transfer, to Purchase Department Secretary

12. Purchase Responsible personal commends with Purchase:

SAP SYSTEM ONLINE

HEAD OF DEPARTMENT

REQUEST OF NEW

HP PRINTERCONFIRMATION

SAP SYSTEM ONLINE

PURCHASE

RESPONSIBLE

FINANCIAL

ACCOUNTING

SAP SYSTEM ONLINE

PURCHASEING MANAGERCONFIRMATION

SECRETARY

SAP SYSTEM ONLINE

FINANCE DEPARTMENTCONFIRMATION

SAP SYSTEM ONLINE

RECTORS OFFICECONFIRMATION

SAP SYSTEM ONLINE

PURCHASE DEPARTMENT

PURCHASE

OF NEW

HP PRINTER

Inventory Reduction

Improved Cash Management

Increased Revenue and Profits

Reduced Transportation and Logistics Costs

Reduced Information Technology (IT) Costs

• Integrate Financial Information

• Integrate customer order information

• Standardize and speed up manufacturing processes

• Reduce inventory

• Standardize HR information

• Financial Management

• Inventory Management

• Purchasing

• Sales Management

• Production Planning

• Advanced Visual Planning

• Manufacturing Management

General

- Centralized data

- Streamline business process

- Reduce risk across enterprise

- Improve Productivity

Management

- Achieve growth objectives

- Meet revenue & profit targets

- Increase market share

- Responsiveness to change

Finance

- Manage cash flow

- Gain financials insight

- Improve data integrity

- Manage assets

Sales

- Meet sales goal

- Reduce sales cost

- Better sales forecast

- Meet customer demands

Supply Chain

- Simplify supply chain process

- Streamline & control inventory

- Improve responsiveness

- Better partner collaboration

Production

- Better product quality

- Deliver products within budget & time

- Manage demand pro actively

- Manage planning

IT

- User friendliness

- Scalability

- Dynamic reporting tool

- Easy maintenance

• Customer Relationship Management• Manages the enterprise's relationship with its customers

• Human Resource Management• Streamlines the management of human resources and human capitals.

• Finance and management• Gather financial data from various functional departments

• Supply chain management• Includes the controlling the direction of resource movement

• Sales• Implements functions of order placement, scheduling etc

• Marketing• ERP marketing module supports lead generation, mailing• Campaign and more.

1. Focus on business processes and requirements first

2. Take measures to achieve a healthy ERP ROI

3. Strong project management and resource commitment is key

4. Commitment from organization executives

5. Take time to plan up front

6. Ensure adequate training and change management

7. Make sure to understand why you are implementing ERP

8. Focus on data migration early in the process

9. Chart the course

10. Patience – The key to success

SALES & DISTRIBUTION

• Sales Register• Customer Invoice Register• Customer Outstanding Register• Pending Sales Order List• Daily Dispatch Program• Sales Day Book

INVENTORY

• Stock Ledger• Stock Movement Analysis• Inventory Issues List• Material Indent List

PURCHASE

• Purchase Order List• Material Receipt Note List• Pending Purchases• Purchase Day Book

FIXED ASSETS MANAGEMENT

• Asset Group• Asset Location• Opening Balance Voucher• Capital Budget• Asset Transfer• Depreciation• Generate Asset• Process Depreciation• Asset Revaluation• Asset Disposal• Capitalization Voucher

PRODUCTION

• Consumption of Raw Materials Report• Daily Production Report• Performance Report• Production Summary

HRMS

• Pay Sheet• Pay Slip Report• Salary Statement• Tax Reports• Attendance Check List• Leave Balance List Report

© 2013 Knowledge Matrix Inc.

ERP Challenges

• Calculating Return on Investment (ROI)

• Obtaining Support from Major Executives and Third Parties

• Major Business Process Reengineering (BPR)

• ERP Is Cost Prohibitive

• Scope Creep

• Difficulty of Training End Users

• Training

• Integration and testing

• Customization

• Data conversion

•SAP and Oracle are the top two ERP vendors

•SAP rank highest by capturing 32%-39% of the market

SAP; 15,6

Peoplesoft;

4,9

Oracle ; 4,8

Baan; 3

CA; 3

JDE; 2,2

SSA; 2,1

GEAC; 2

IBM; 1,8

JBA; 1,7

Others ; 59

Software Market Share

SAP 15.6

Peoplesoft 4.9

Oracle 4.8

Baan 3.0

CA 3.0

JDE 2.2

SSA 2.1

GEAC 2.0

IBM 1.8

JBA 1.7

Others 59.0

• Reduce cost and maximize profits

• Better decision taking capability

• Streamline and accelerate processes to improve efficiency and

productivity

• Standardize business processes

• Provide visibility to business processes across functions and

departments

• Optimize the use of current capacity

• Link global operations to improve interoperability and collaboration

• Online Data Flow decreases the process time

• Fast & Online Confirmation

• Less Paperwork

• No need for folder storage

• Database Security

• Less Employee needed

• Easy Financial Management

• Better Inventory Management

• ERP delivers a single database that contains all data for the software modules across an entire company. People in different departments all see the same information and can update it.

• Computer security is included within an ERP system to protect against both outsider and insider crime

• ERP systems tie together varied processes using data from across the company. For instance, a typical ERP system manages functions and activities as different as the bills of materials, order entry, purchasing, accounts payable, human resources, and inventory control, to name just a few of the modules.

• ERP software combined the data of formerly separate applications. This made the worry of keeping information in synchronization across multiple systems disappear. It standardized and reduced the number of software specialties previously required.

• ERP systems allow companies to replace multiple complex computer applications with a single integrated system.

• ERP systems replace two or more independent applications and eliminate the need for external interfaces previously required between systems and provide additional benefits that range from standardization and lower maintenance to make reporting capabilities easier.

• There are several disadvantages to enterprise resource planning:

• Cost • Implementing ERP is very expensive, price can range from

$30,000 - $500,000, depending on the size of the company.• ERP vendors can charge a license renewal fee annually which can

also be costly for any business.• Consultants may need to be used for installation or to maintain

the ERP.• Employees may need to be trained in ERP so they can fully utilize

the system. Training times takes away from work time and can also cost additional funds.

Disadvantages

• Expertise• Success of ERP depends on the skill level and experience of the

company’s work force.

• Enterprises view cutting training funds as a way to cut costs.

• Smaller companies may even need to under fund training this means their ERP system is often operated by personnel with inadequate education in ERP and the ERP vendor package being used.

• Proper training of the workforce is dependent to success with ERP.

• New employees must be trained before they can properly start working because of the ERP system

• Change

• Employees may be needed to change the way they work to become more efficient. They may feel resistant to change which can be a negative.

• Bugs!