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ENTERPRISE RESOURCE PLANNING ERP S. AMEER HASAN RIZVI.

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Presentation on theme: "ENTERPRISE RESOURCE PLANNING ERP S. AMEER HASAN RIZVI."— Presentation transcript:

1 ENTERPRISE RESOURCE PLANNING ERP S. AMEER HASAN RIZVI

2 Instructors Profile Name : Ameer Rizvi : Oracle Corp. Presale, Business Consulting, Apps Trainer : Deloitte & Touché Consulting Oracle Financials Training : Arthur Consulting Oracle Financials Consultant : IBA Permanent Faculty Member

3 Why Study ERP ?

4 Expectations from the Course?

5 Class Rules ?

6 Grading 1 st & 2 nd Term 30 Marks Final 30 Marks Term Report30 Marks Class Attendance & Participation 10 Marks Total 100 Marks

7 ERP Course Outline ERP Introduction (Lecture) Virtual Organization ( Group Exercise) Business Function Processes and Data Requirement (Lecture) ERP Selection Process ( Group Exercise + Lecture) ERP Major Vendors (Students Presentation) ERP Business Requirement ( Group Exercise + Lecture) ERP RFP Development ( Group Exercise +Lecture) Sales & Marketing SAP (Group Exercise + Lecture) Production & Supply Chain SAP ( Group Exercise +Lecture) Material Management SAP ( Group Exercise +Lecture) Financial SAP ( Group Exercise +Lecture) ERP & E- Commerce ( Group Exercise +Lecture) ERP Implementation Success & Failure ( Survey Presentation)

8 ERP General Concepts

9 Definition of ERP Business solution that addresses all the needs of an enterprise with the process view of an organization to meet the organizational goals and integrate all the functions of the Enterprise.

10 Business solution that addresses all the needs of an enterprise with the process view of an organization to meet the organizational goals and integrate all the functions of the Enterprise. ERP software integrates all departments and functions onto a single system that can serve the needs of the entire company. … complex mega packages (Gable et al., 1997) designed to support the key functional areas of an organization. Definition of ERP

11 The American Production and Inventory Control Society (APICS) defines ERP as an accounting oriented information system for identifying and planning the enterprise-wide resources needed to take, make, ship, and account for customer orders (Watson & Schneider, 1999). An ERP system can be thought of as a company-wide Information System that tightly integrates all aspects of a business. It promises one database, one application, and a unified interface across the entire enterprise Bingi et al., Definition of ERP

12 ERP links all areas of a company with external suppliers and customers into a tightly integrated system with shared data and visibility. ERP systems are designed to solve the problem of the fragmentation of information over many legacy systems in large business organizations (Chen, 2001, p. 374; Chen, 2001, p. 379) Definition of ERP

13 History of ERP

14 Supply Chain Management Sales Force Automation Internet Integration Business Intelligent Customer Relationship Management Knowledge Management Electronic Commerce ERP II ERP Enterprise Resource Planning (+BPR HR Logistics Service..) MRP II Manufacturing Resource Planning (+Cash flow) MRP Manufacturing Resource Planning (+Capacity) mrp Material Requirement Planning Evolution of ERP

15 MRP: Material Requirement Planning MRP: Material Requirement Planning Payroll GL: General Ledger AP: Accounts Payable AR: A/C Receivable EDI-Electronic Data Interchange EDI-Electronic Data Interchange Planning Scheduling Distribution MRP :Mfg Requirement Planning MRP :Mfg Requirement Planning HR: Human Resource FMIS: Financial Mgmt Information Systems FMIS: Financial Mgmt Information Systems E-Commerce SFA: Sales Force Automation SFA: Sales Force Automation CRM: Customer Relationship Mgmt CRM: Customer Relationship Mgmt SCM Supply Chain Management SCM Supply Chain Management ERP Enterprise Resource Planning ERP Enterprise Resource Planning E-Business ESCM Extended SCM EERP Extended ERP *source: HP Evolution of Business Systems

16 The Value Chain Support activities Primary activities Inbound logisticsMaterials receiving, storing, and distribution to manufacturing premises Operations Transforming inputs into finished products. Outbound logisticsStoring and distributing products Marketing and SalesPromotions and sales force ServiceService to maintain or enhance product value Corporate infrastructureSupport of entire value chain, e.g. general management planning, financing, accounting, legal services, government affairs, and QM Human resources managementRecruiting, hiring, training, and development Technology DevelopmentImproving product and manufacturing process ProcurementPurchasing input

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18 Functions of ERP System Attempts to integrate all departments and functions across a company onto a single computer system servicing all of the different departments needs Allows the various departments to more easily share information and communicate with each other. Maintain Corporate wide Information under one Unified software program ( Single Data Base)

19 ERP Component An ERP System includes Business Processes that ERP software supports, Users of ERP systems Hardware and Operating Systems that run ERP applications ERP software, Note: The failures in one or more of those four components could cause the failure of an ERP project. The failures of multi-million dollar ERP projects are reported once in a while even after 20 years of ERP implementation.

20 Integrated ERP Solution Finance Projects Supply Chain Management Manufacturing Front Office Human Resources Applied Technology

21 Subsystems of ERP Store and purchase Raw Materials Payroll and HRD Production Planning and scheduling Financial Accounting Sales and dispatch Export process Marketing Customer Relationship Inter office communication Event Tracking Inter office data synchronization Engineering & Maintenance

22 Why ERP?

23 Issues & Problems Availability of the Items cannot be checked at the time of Accepting Sales order On-line Material Status is not available & Shortages Poor Productivity Enhancements Poor Material Planning Poor Customer Service Poor Cash Management Mismanagement of Inventory Poor Quality Management

24 To Enhance Profitability BY Increase in Sales - Say 30% And /OR Reduce Procurement Cost - Say by 5-10 %

25 For Healthy Operations Integration of Systems across the Functional Departments in a Company as well as across the Enterprise as a Whole. Better Customer Service. Introduction of Latest Technologies as and when they are ready for the Industry acceptance Expertise database Avoids data redundancy

26 Competition in the Market. Manufacturing Challenges. Manufacturing Globally. Distribution network spread. New Product introduction. Lower manufacturing lead time. Focus on industry markets. Satisfying the needs of customers. Develop specific business methods and processes. Integration with third party products.

27 Demands on the Industry Better products at lower costs Tough competition Need to analyze costs / revenues on a product or customer basis Flexibility to respond to changing business requirements More informed management decision making

28 Authorization and Security User / Password level authentication User wise activity permission Tracking of changes made by users Facility of authorization/approval of transaction Restriction in modifying the transaction after approval is done

29 IT System Present Software does not meet business needs Legacy systems difficult to maintain Obsolete hardware/software difficult to maintain

30 Objectives of the ERP Systems Facilitates Company-wide integrated Information Systems Covering all functional Areas. Performs core corporate activities and increases customer service augmenting Corporate Image. Organizes & optimizes the data input methodologies systematically. To have a fully harmonised online system, which can integrate with Back Office

31 Objectives of the ERP Systems To introduce proper systems and processes which will not be man dependent To ensure full security by introducing adequate controls, checks and balances and also by maintaining audit Trails. To minimize data redundancy by eliminating duplicate entries. To enable the organizations to provide its customers a more value added service. To create a flexible system so that future needs and changes in the business flow can be easily incorporated

32 Advantages of an ERP Package? Highly Graphics based User Interface. Zero Down time/ planned down time. Readymade solutions for most of the Problems. Integration of all functions ensured. Easy enterprise wide information sharing. Suppliers and Customers can be on-line communication. Knowledge transfer between industries guarantees innovation. Automatic adaptation to new technology.

33 Integrated Solution ONE DATABASE MEANS: Less Management Less Complexity Less Integration Open Standards Customers,Products, & Everything Else! Service Financials HR Procurement Marketing Sales Supply Chain Order Management

34 Savings Savings Today Business Planning Transaction Processing and Reporting } Measuring & Controlling Financial/ Accounting Risk Tomorrow Transaction Processing and Reporting Measuring and Controlling Business Risk Business Planning 20% 25% 55% Strategic Solution

35 Generic Business Benefits of ERP Improves access to accurate and timely information Enhances workflow, increases efficiency, and reduces reliance on paper Tightens controls and automates alerts Provides user-friendly Web-based interfaces Streamlines processes and eases adoption of best business practices Establishes a foundation for new systems and integrates existing systems

36 Process Improvement Helps with order fulfillment process Integrates financial information (the truth of its overall performance) Integrates customer order information (keeps track of orders more easily) Standardizes and speeds up manufacturing processes Reduces inventory (improves flow of supply chain) Standardize Human Resource information (employee benefits, hiring & firing, etc.)

37 Some documented Benefits of ERP

38 Myth and Reality of ERP Benefit Realization

39 Business Benefits A Framework of Business Benefits DimensionSubdimensionExplanation [1] Operational1.1 Cost reduction 1.2 Cycle time reduction 1.3 Productivity improvement 1.4 Quality improvement 1.5 Customer services improvement Because ERP systems automate business processes and enable process changes, one would expect ERP systems to offer all of these types of benefits. Adapated from Shang and Seddon (2000)

40 A Framework of Business Benefits DimensionSubdimensionExplanation [1] Operational1.1 Cost reduction 1.2 Cycle time reduction 1.3 Productivity improvement 1.4 Quality improvement 1.5 Customer services improvement Because ERP systems automate business processes and enable process changes, one would expect ERP systems to offer all of these types of benefits. Adapated from Shang and Seddon (2000) Business Benefits cont.

41 [2] Managerial2.1 Better resource management 2.2 Improved decision making and planning 2.3 Performance improvement With a centralized database and built in data analysis capabilities, it seems likely that ERP systems will provide informational benefits to management.

42 [3] Strategic3.1 Support business growth 3.2 Support business alliance 3.3 Build business innovations 3.4 Build cost leadership 3.5 Generate product differentiation (including customization) 3.6 Build external linkages (customers and suppliers) 3.7 Worldwide expansion 3.8 Enabling e-commerce ERP systems, with their large-scale business involvement and internal and external integration capabilities, could assist in achieving these strategic benefits. Business Benefits cont.

43 [4] IT Infrastructure4.1 Build business flexibility for current and future changes 4.2 IT cost reduction 4.3 Increased IT infrastructure capability ERP systems, with their integrated and standard application architecture, provide an infrastructure that could support this dimension.

44 Business Benefits cont. [5] Organizational5.1 Support organizational changes 5.2 Facilitate business learning 5.3 Empowerment 5.4 Build common visions 5.5 Change employee behavior 5.6 Better employee morale and satisfaction The integrated information processing capabilities of ERP systems could affect the establishment of organizational capabilities.

45 Traits of ERP System Some key traits in ERP solutions: ERP applications address a business process. ERP applications are modular. ERP applications are integrated. ERP applications include a companys reach beyond its walls to its suppliers, customers, and partners. The entire ERP suite will address all areas (or the great majority) of a companys business functions.

46 Traits of ERP System Some key traits in ERP solutions: ERP applications address a business process. ERP applications are modular. ERP applications are integrated. ERP applications include a companys reach beyond its walls to its suppliers, customers, and partners. The entire ERP suite will address all areas (or the great majority) of a companys business functions.

47 Process Driven Procure to Pay Cycle Overview Receive RequisitionPO Oracle PurchasingOracle Payable Supplier Pay on Receipt

48 Traits of ERP System Some key traits in ERP solutions: ERP applications address a business process. ERP applications are modular. ERP applications are integrated. ERP applications include a companys reach beyond its walls to its suppliers, customers, and partners. The entire ERP suite will address all areas (or the great majority) of a companys business functions.

49 Financials Application Suite Financials Cash Management Asset Management Expenditure Management Financial Planning Billing & Cash Collection Financial Consolidation & Analysis Financial Core Module General Ledger Purchasing Payables Receivable Cash Management Fixed Asset

50 Traits of ERP System Some key traits in ERP solutions: ERP applications address a business process. ERP applications are modular. ERP applications are integrated. ERP applications include a companys reach beyond its walls to its suppliers, customers, and partners. The entire ERP suite will address all areas (or the great majority) of a companys business functions.

51 Oracles ERP Solution Projects Project Costing Project Billing Project Time & Expense Activity Management Gateway Project Connect Project Analysis Collection Pack Supply Chain Management Order Entry Purchasing Product ConfiguratorSupplier Scheduling Supply Chain Planning Inventory Web Suppliers Manufacturing Engineering Bills of Material Master Scheduling/MRP Capacity Work in Process Quality Cost Management Process Manufacturing Project Manufacturing Flow Manufacturing RHYTHM Factory Planning RHYTHM Advanced Scheduling Finance General Ledger Financial Analyzer Cash Management Payables Receivables Fixed Assets Web Purchasing Web Expenses Applied Technology Business Intelligence System Apps Data Warehouse Workflow Alert EDI Gateway Human Resources Payroll Training Administration Time Management Advanced Benefits Web Human Resources Front Office Sales Marketing Field Sales Online Mobile Field Sales Sales Compensation Service MRO Contracts Telephony Manager Middleware Internet Commerce Server Web Customers Finance Projects Supply Chain Management Manufacturing Front Office Human Resources Applied Technology Strategic Enterprise Management Activity Based Management Balanced Scorecard

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54 Traits of ERP System Some key traits in ERP solutions: ERP applications address a business process. ERP applications are modular. ERP applications are integrated. ERP applications include a companys reach beyond its walls to its suppliers, customers, and partners. The entire ERP suite will address all areas (or the great majority) of a companys business functions.

55 ERP System Supplier, Customers, Employees Web Interface


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