What is ERP ?

Evolution Of ERP
Importance of ERP
Why implement ERP in business ?

Prepared By:
Praveen Venugopal
 (ERP) is a process by which a company
(often a manufacturer) manages and
integrates the important parts of its business.
An ERP management information system
integrates areas such as planning,
purchasing, inventory, sales, marketing,
finance, human resources, etc.
 Enterprise resource planning (ERP) is business
management software that allows an organization
to use a system of integrated applications to
manage the business.

 Being Specific ERP systems are large computer

systems that integrate application programs in
accounting (i.e., accounts receivable), sales (i.e.,
order booking), manufacturing (i.e., product
shipping) and the other functions in the firm.
This integration is accomplished through a
database shared by all the application programs.
 A typical ERP system will use multiple components
of computer hardware and software to achieve the
integration.
 A key ingredient of most ERP systems is the use of a
unified database to store data for various system
modules.
 Broken down into business processes
› HRM
› Distribution
› Financials
› Manufacturing
Enterprise resource
planning (ERP) is business
management software—usually a
suite of integrated applications—
that a company can use to store
and manage data from every
stage of business, including:

•Product planning, cost and

development
•Manufacturing
•Marketing and sales
•Inventory management
•Shipping and payment
 At its core, ERP helps employees do their jobs more
efficiently by breaking down barriers between business
units. More specifically, an ERP solution:
 Gives a global, real-time view of data that can enable
companies to address concerns proactively and drive
improvements

 Improves financial compliance with regulatory standards

and reduces risk

 Automates core business operations such as lead-to-

cash, order-to-fulfillment, and procure-to-pay processes
 Enhances customer service by providing one source for
billing and relationship tracking.
 Integrate financial information.
 Integrate customer order information.
 Standardize and speed up operations
processes.
 Reduce inventory.
 Standardize Human Resources information .
 Common definitions.
 Common database.
 Update one module, automatically updates
others.
1. Enhance productivity, flexibility and customer
responsiveness
By integrated core business processes together in
one single application, it helps company maximize
the efficiency of business process across the
entire organization. Plant manufacturing can
produces product faster. Increase on time
delivery, Increase productivity, Increase ability to
forecast demand to supplies, Increase order
capacity, and improve customer service
(Customer Relationship Management (CRM)).
2. Eliminate costs and inefficiencies

Using an ERP system to standardize business

processes can dramatically improve
company’s operation. ERP enable company to
manage relationship with vendor results in
lower cost for purchased items. Better resource
management results in more inventory turns
and decrease the level of inefficiencies.
3. Data consistency

Because an ERP system integrates all business

management functions, it decreases level of
inconsistency information from different
systems. Thus, by using ERP system,
managers can gather correct information and
make a right decision.
4. Extend your business using the Internet

By integrating all business functions together in

one system, it increases ability of a company to
use internet as part of the business strategy.
Web-enabled technology allows you to access
information, sell product, run business
processes, and communicate with customers
and partners at any time and from anywhere in
the world.
 High cost.
 Forced change of processes.
 Very complex software.
 Lack of trained people.
 Flexibility of software system upgrades.
 Implementation timelines.
 Availability of internal technical knowledge and
resources.
 Education and training.
 Implementation strategy and execution.
 Resistance to change.
 Pre evaluation
Screening

Evaluation Package

Project Planning

GAP analysis

Reengineering

Team training

Testing

Post implementation
 Pre-selection Process

Package Evaluation

Project Planning

Gap Analysis Reengineering Configuration

Implementation
Testing End- user Training
Team Training

Going Live

Post – implementation
Phase

ERP implementation Life Cycle

 Decision for perfect package

 Number of ERP vendors

 Screening eliminates the packages that are

not at all suitable for the company’s business
processes.

 Selection is done on best few package

available.
 Package is selected on the basis of different
parameter.

 Test and certify the package and also check the

coordination with different department

 Selected package will determine the success or

failure of the project.

 Package must be user friendly

 Regular up gradation should available.

 Cost
 Designs the implementation process.

 Resources are identified.

 Implementation team is selected and task

allocated.

 Special arrangement for contegencies

 Most crucial phase.

 Process through which company can

create a model of where they are standing
now and where they want to go.

 Model help the company to cover the

functional gap
 Implementation is going to involve a
significant change in number of
employees and their job responsibilities.

 Process become more automated and

efficient.
 Takes place along with the process of
implementation.

 Company trains its employees to

implement and later, run the system.

 Employee become self sufficient to

implement the software after the vendors
and consultant have left.
 This phase is performed to find the weak
link so that it can be rectified before its
implementation.
 Thework is complete, data conversion is
done, databases are up and running, the
configuration is complete & testing is
done.

 The system is officially proclaimed.

 Oncethe system is live the old system is

removed
 Theemployee who is going to use the
system are identified and trained.
 This is the maintenance phase.

 Employees who are trained enough to handle

problems those crops up time to time.

 The post implementation will need a different set

of roles and skills than those with less integrated
kind of systems.

 An organization can get the maximum value of

these inputs if it successfully adopts and
effectively uses the system.