ERP Presentation

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Objective Introduction to ERP Brief History & Evolution ERP Modules PROS & CONS ERP Implementation Process Implementation Experience at PFL

ERP Presentation

An overview of ERP & its Components, discuss its merits demerits and implementation experience

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Enterprise Resource Planning (ERP) ERP)

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.

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What Is ERP?
Software designed for organizing and managing business processes Modules share information across all business functions Sharing sales data with the supply chain to help with global replenishment Fully Integrated modules using common database

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Finance and accounting

Investment, cost, asset, capital, and debt management Budgets, profitability analysis, and performance

Sales and marketing

Handles pricing, availability, order management, shipments, & billing

Production and materials management

Process planning, product costing, MRP, allocates resources, schedules, POs, & inventory

Human resources
Workforce planning, payroll, benefits, & org chart

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First generation ERP

Managed all routine internal business activities From order entry to after-sales customer service Lacked supply chain support modules (added in second generation)

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Second Generation ERP

Late 1990s software integrated supply chains Systems focused on decision-making Application Service Providers set-up and run systems for others

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Many companies with ERP use e-commerce E-commerce needs to interface with ERP Cybex International is a good example:
Needed to integrate B2C and B2B transactions Cybex installed a Peoplesoft, Inc. ERP Reduced suppliers from 1000 to 550, paperwork by 2/3 Reduced customer order-to-ship time from 4 to 2 weeks

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ERP presents a systematic view of the business functions from a single information and IT architecture Increases organizational information flow Increases ability to incorporate better management control, speedier decision making, and cost reductions Allows replacement of disparate systems e.g. Exxon Mobile used ERP to replace 300 different systems A study of ERP implementations reports that benefits typically start 8 months post implementation with annual savings of $1.6 million

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Major suppliers are SAP AG, PeopleSoft, Oracle Costs for larger ERP systems range from hundreds of thousands to several million dollars. Outside consultants are usually involved in selection, configuration, and implementation.

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Consultant costs can run up to 3 times the cost of the system itself Added costs also include additional people, new computer hardware, and the cost to develop a new, integrated database Successful implementation requires leadership and top management commitment

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An ERP system has a service-oriented architecture with modular hardware and software units or "services" that communicate on a local area network. The modular design allows a business to add or reconfigure modules (perhaps from different vendors) while preserving data integrity in one shared database that may be centralized or distributed

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Ideally, ERP delivers a single database that contains all data for different software modules

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ERP AN OVERVIEW
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SAP Microsoft Dynamics Oracle Financials E-Business Suite PeopleSoft Enterprise

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Introduced by Gartner (R & D firm) in 1990 Extension of MRP (material requirements planning; Later called manufacturing resource planning) and CIM (Computer Integrated Manufacturing). ERP systems cover all core functions of an enterprise, regardless of the organization's business or charter.

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At least Two systems should be combined to be called an ERP

Example: A software package that provides both payroll and accounting functions could technically be considered an ERP software package

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Product lifecycle management Supply chain management Purchasing Warehouse Management (Inventory) Customer Relationship Management (CRM) Sales / Order Processing, Online Sales Financials, Human Resources, and Decision Support System.

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Manufacturing Logistics Distribution Inventory Shipping Invoicing Accounting Marketing, delivery, billing, production, quality management and human resource management.

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In the absence of an ERP system, a large manufacturer may find itself with many software applications that cannot communicate or interface effectively with one another.

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ERP systems connects the necessary software in order for accurate forecasting. This allows to maintain efficient levels of:
Inventory & Human Resources Accounts Management Information Systems Customer care / Relations Resulting in MORE PROFITS

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ERP Covering all Aspects

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Integration among different functional areas to ensure proper communication, productivity and efficiency Order tracking, from acceptance through fulfilment The revenue cycle, from invoice through cash receipt

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Managing inter-dependencies of complex processes bill of materials Tracking the three-way match between purchase orders (what was ordered), inventory receipts (what arrived), and costing (what the vendor invoiced

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ERP centralize the data in one place: Eliminates problem of synchronizing Top-down view of the enterprise (no "islands of information"), real time information availability Reduces the risk of loss of sensitive data by consolidating multiple permissions and security models.

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Investment in Continuous Training of personnel Use of data / system by untrained personnel Re-engineering of business processes

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ERP (An Expensive System) Too rigid and too difficult to adapt to the specific workflow Integrated links need high accuracy in other applications Once established, High switching cost

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Management Commitment Appointment /Selection of Consultant Dedicated Team Formation System Selection (HW / SW) Implementer Selection Training / Gap Analysis Scope

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Data preparation Business Process Re-Engineering Training of Key Users Preparation of Test Server Production server GO LIVE

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Integration of following Business processes

Accounts & Finance Sales and Distribution Purchasing Inventory HR & payroll Production Planning Asset Management Business Intelligence

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Post Implementation Support Training of all users Data Reconciliation Discontinuation of Old system

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