Enterprise Resource Planning

(ERP) Applications
Enterprise Application
Development

Enterprise Resource Planning Applications

What is an ERP?
Enterprise Resource Planning (ERP) is a company-wide
computer software system used to manage and
coordinate all the resources, information, and functions of
a business from shared data stores.
ERP attempts to integrate all departments and functions
across a company onto a single computer system that
can serve all those different departments particular
needs.
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Enterprise Resource Planning Applications

What is an ERP?...
Automates the tasks involved in performing a
business process
If installed correctly, it can have tremendous payback

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Enterprise Resource Planning Applications

Business Overview

COMMERCIAL
TECHNICAL
(Manufacturing)

FINANCE
(Accounts)

(Purchasing,
Storing and

Departments

Distribution)
Production Financial
Quality

Accounting

Assurance Cost
Maintenance

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Accounting

Purchasing
Warehousing
Distribution

Company ABC

HUMAN

SALES

RESOURCES

&

(Personnel)

MARKETING

Personnel
Recruitment
Personnel
Training

Marketing
Sales

Enterprise Resource Planning Applications

Organization
Accounts

Sales & Marketing

Financial Controller

Financial
Accounting

Financial Accountant

Cost Accountant

Cost Accounting

Marketing Manager

Marketing
Dept

Sales Manager

Sales Dept

Human Resource
Personnel Manager

Supplier

Commercial
Development

Purchasing
Purchasing
Dept

Commercial
Manager
Planner

Logistics

Plant Manager

QA Manager

Production Manager

QA Dept.

Production Dept.

Buyer
Plant Engineer

Stores &
warehousing
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Technical

Distribution
Supervisor

Maintenance Dept.

Enterprise Resource Planning Applications

Example of a Business Process

Supply Chain and Manufacturing
Customer
Sales &
Marketing
Department

Inventory
(Stores)

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Supplier
Purchasing
Department

Manufacturing

Business Process (Detailed)

Enterprise Resource Planning Applications

Direct Delivery

Customer
Customer
Order

Receipt

Delivery

Customer
Order
Reservation

Supplier

Picking

Purchase Requisition
Receipt
(Components)
Receipt
Purchase
Requisition

Purchase
Order

Purchasing
Purchase
Requisition
(Components)

Receipt (Finish Goods)

Inventory

Manufacturing
Requisition

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Material Issue

Enterprise Resource Planning Applications

Example: Order fulfillment

Before ERP

Problems:
Delays,
lost orders, keying into different computer systems invites errors
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Enterprise Resource Planning Applications

Example: Order fulfillment...

With ERP

Front Office Functions

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Back Office Functions

Enterprise Resource Planning Applications

ERP Evaluation
1960-70s MRP (Material Resource Planning)
Inventory and process time reduction with new
production planning systems
1980s MRP II
Greater reductions due to the integration with
accounting and human resources system
1990s ERP
Focused on clients. Real time transactions.
Asset management
2000s ERP Extended or ERP II
Focused on clients, optimizing the whole
business network; including supplier and clients
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Enterprise Resource Planning Applications

ERP Evaluation...
Integrate systems that covers the firms entire value
chain
Industry

oriented (specialized)
Transition from an internal view of the firm to business
network vision within the industry

Electronic commerce
Developing

web interfaces for the internet and intranet

Supporting complete commercial transactions

Applications with an object-oriented structure

Transition

from an highly integrated structure to

modules with higher complementarily
Plug and play facilities Component based.
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Enterprise Resource Planning Applications

ERP Evaluation...

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Source: Gartner group, 2001

Enterprise Resource Planning Applications

Advantages of ERP
A Totally integrated system
The ability to streamline different processes and workflows
The ability to easily share data across various departments
in an organization
Improved efficiency and productivity levels
Better tracking and forecasting
Lower costs
Improved customer service

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Enterprise Resource Planning Applications

Disadvantages of ERP
Customization in many situations is limited
The need to re-engineer business processes
ERP systems can be cost prohibitive to install and run
Training
Integration
Data

Analysis and Conversion

Technical support can be sloppy

Security Issues
ERP's may be too rigid for specific organizations that are
either new or want to move in a new direction in the near
future.
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Enterprise Resource Planning Applications

ERP Building Blocks

Financials
Accounts

payable, accounts receivable, fixed assets,

general ledger and cash management, etc.

Manufacturing
Engineering,

capacity, workflow management, quality

control, bills of material, manufacturing process,
material planning etc.

Supply Chain Management

Inventory,

supply chain planning, supplier scheduling,

claim processing, order entry, purchasing, etc.

Human Resources
Benefits,
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training, payroll, time and attendance, etc

Enterprise Resource Planning Applications

ERP Building Blocks...

Projects
Costing,

billing, activity management, time and

expense, etc.

Customer Relationship Management

sales

and marketing, service, commissions, customer

contact, calls center support, etc.

Data Warehouse
Usually

this is a module that can be accessed by an

organizations customers, suppliers and employees.

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Enterprise Resource Planning Applications

Industry Focus
Traditional (Manufacturing)
Automotive
Chemical
Pharmaceutical
Consumer
Oil

and Gas

Aerospace

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Goods
& Defense

Enterprise Resource Planning Applications

Industry Focus...
New Additions
Banking

and Insurance

Healthcare
Public

Administration

Education
Retail
Utilities
Telecommunication

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Enterprise Resource Planning Applications

New Developments In ERP

Availability of web-based and wireless ERP systems
Adoption of easy-to-install ERP systems
Linkage to other software systems,

e.g., supply chain management system, e-commerce,

customer relationship management system

Enterprise Resource Planning Applications

ERP Software Market Share

http://www.forbes.com/sites/louiscolumbus/2013/05/12/2013-erp-market-share-update-sap-solidifies-market-leadership/
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Enterprise Resource Planning Applications

Gartner Magic Quadrant for ERP

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Enterprise Resource Planning Applications

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