2. Today We will be covering:
What is ERP.?
History/Evolution of ERP.
Module/components of ERP.
ERP Implementation and Selction.
Advantage & Disadvantages of
Some Success Stories.
Why ERP Fails?.
Future of ERP.
4. ERP : Definition
ERP is a set of integrated business
applications, or modules which carry out
common business functions such as general
ledger, accounting, or order management.
IT software that integrates business activities
across an enterprise
5. What is ERP?
ERP is short for enterprise resource
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.
Support business through optimizing,
maintaining, and tracking business functions.
From product planning, parts purchasing,
inventory control, and product distribution, to
6. Evolution /History of ERP
1960’s - Systems Just for Inventory Control
1970’s - MRP – Material Requirement
(Inventory with material planning &
MMAS-Material Management and Accounting
1980’s - MRP II – Manufacturing Resources
(Extended MRP to shop floor & distribution
Mid 1990’s - ERP – Enterprise Resource
(Covering all the activities of an Enterprise)
8. Components OF ERP!
Accounting and Finance
• This gathers and manage financial data and financial
processes from various functional departments and
generates valuable financial reports such as balance
sheet, general ledger; trial balance and quarterly
This component maintains a employee database containing
information about employees contact information, salarydetails,
attendance, performance evaluation and promotion details.
This component helps the management to make use of the
employees best talent.
9. Components OF ERP!
• This component provides the information needed
for the manufacturing process to take place.
• It contains number of manufacturing methods, so
that the organization can choose the best which
fits for them
• Bills of Material, Scheduling, Capacity, Workflow
Management, Quality Control, Cost Management,
Manufacturing Process, Manufacturing Projects,
10. Projects Management
• Project management is the discipline of planning, organizing,
motivating, and controlling resources to achieve specific
• Costing, Billing, Time and Expense, Activity Management
Customer Relationship Management
• Involves managing all aspects of a customer’s relationship
with an organization to increase customer loyalty and
retention and an organization’s profitability.
• Sales and Marketing, Commissions, Service,
Customer Contact and Call Center support.
Components OF ERP!
11. Components OF ERP!
Supply Chain Management
(SCM), sometimes referred
to as logistics, improves the
flow of materials through an
organization by managing
procurement, and fulfillment,
to maximize customer
satisfaction and profitability.
17. ERP – Implementation Options
OPTION 1 – MAKE [Using Internal resources]
Developing a custom-built ERP package, specific to the
requirements of the organization, with the help of the
in-house IT department
OPTION 2 - BUY
Going for Tailor-made ERP packages available in the market like
SAP, Oracle applications, Baan, PeopleSoft etc.
18. Major Things for ERP Implementation :
Flexibility of software system upgrades
Availability of internal technical
knowledge and resources
Education and training
Need an outside consultant
Implementation strategy and execution
19. ERP Selection
• Check whether all functional
aspects of your Business are
• Check whether all the business
functions and processes are
• Check whether all latest IT
trends are covered
• Check whether the vendor has
customizing & implementing
• Check the Service options
• Check your purse & calculate
ROI (Return On Investment)
20. Advantage of ERP
Improved customer service and order fulfillment
Improved communication with suppliers and
One common system - less duplication, more
Saves enormous time and effort in data entry.
Improved business performance.
21. Disadvantages of ERP
High Software cost
Forced change of processes.
Very complex software
Lack of trained people
22. Success Stories
Autodesk (computer aided design software
• Reduced delivery time from two weeks to less
than 24 hours
IBM Storage Systems Division
• Reduced time to re-price – 5 days to 5 minutes
• Time to ship a replacement part – 22 to 3 days
• Time to complete a credit check – 20 minutes to 3
23. Success Stories
• Reduced the cycle time for filling orders –
from 18 days to 1.5 days
• Time to close financial books – from 8 to 4
24. Systems can be very difficult to use.
Software logic and the company strategy
may not match!
Inadequate training to to end users.
Many companies cut costs by cutting
ERP systems can be very expensive to
Why ERP fails ?
25. ERP in Future !
Internet – continue to help organizations integrate
data and process across functional departments
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 key backbone application for companies in a fast
The risks in an ERP implementation are usually outweighed by
ERP is recommended in an organization not only because the
advantages outnumber the disadvantages but also by keeping
in mind the ways to overcome the disadvantages. An
organization has to correctly weigh the advantages and
disadvantages of ERP before going for them