Presentation for MBA Students

By: Prof. Adesh Kr Srivastava

 An ERP system is an attempt to integrate all
functions across a company to a single
computer system that can serve all those
functions specific needs.
Integration is the key word for ERP
implementation.
 It may also integrate key customers and
suppliers as part of the enterprises operation.
It provides integrated database and custom-
designed report systems.
It adopts a set of best practices for carrying
out all business processes.
 Integrate financial information
Integrate customer order information
Standardize and speed up operations
processes
Reduce inventory
Standardize Human Resources information
 Internal Benefits
Integration of a single source of data
Common data definition
A real-time system
Increased productivity
Reduced operating costs
Improved internal communication
Foundation for future improvement
 External Benefits
Improved customer service and order
fulfillment
Improved communication with suppliers and
customers
Enhanced competitive position
Increased sales and profits
 Limitations of ERP technical capabilities
Inconsistency with existing business processes
Costs - implementation (hardware, software,
training, consulting) and maintenance
Impact on organizational structure (front office
vs. back office, product lines, etc.)
Changes in employee responsibilities
 Flexibility of software system upgrades
Implementation timelines
Availability of internal technical knowledge
and resources
Education and training
Implementation strategy and execution
Resistance to change
 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
 ERP is a process of managing all resources and
their use in the entire enterprise in a
coordinated manner

ERP is a cross functional enterprise systems

that serves as a framework to integrate and
automate many of the business processes that
must be accomplished within the
manufacturing, logistics, distribution,
accounting, finance and HR functions of a
business.
 Is management ready to undertake drastic
business process reengineering efforts to yield
dramatic outcomes?

Is management ready to make any changes in

the structure, operations, and cultural
environment to accommodate the options
configured in the ERP system?

Is the organization financially and

economically prepared to invest heavily in an
ERP implementation?
 People-related issues such as corporate
philosophy and leadership style can play an
important role in the ERP implementation
process.

Research has concluded that active top

management support and commitment are
essential to the success of any system
implementation.
 Employees can be quite wary of any kind of
change in the business processes, particularly
during periods of economic downturn.

Ill-trained employees who fight the changes in

the business process tend to be poor
performers.
 Depending on the size of the company and the
modules installed, the cost of implementation
can range from one million to five hundred
million dollars, and will take as long as two
years for a mid-size company and seven years
for a large, multinational corporation to
complete.
 First, managers must conduct a feasibility study
of the current situation to assess the
organizations needs by analyzing the
availability of hardware, software, databases,
and in-house computer expertise, and make the
decision to implement ERP where integration is
essential.