Enterprise Systems: Enterprise Resource Planning attempts to integrate all departments and functions of a company into a single computer system serving all the needs of the enterprise

What exactly is ERP? Enterprise resource planning (ERP) is an industry term for the broad set of activities supported by multi-module application software. This software can help a manufacturer or other business manage the important parts of its business, including planning products, purchasing parts, maintaining inventories, interacting with suppliers, providing customer service and tracking orders. ERP can also include application modules for the finance and human resources aspects of a business.

ERP attempts to build a single software program serving the needs of staff from finance to human resources right through to the warehouse. Each of those departments would typically have had its own computer system, each previously optimised for the particular department. ERP combines them into a single, integrated piece of software, running from a single, usually relational, database so that the various departments can more easily share information and communicate with each other. Can be implemented a module at a time What does ERP Involve?

Example : Order Entry As a paper order travels from in-basket to in- basket there is plenty of scope for errors and delays and the true status of the order is unknown. e.g. finance department can’t see whether the item has been shipped. Improved order entry ->immediate access to: – inventory –product data – customer credit history –prior order information. This raises productivity and increases customer satisfaction.

Why do companies adopt ERP software? Good for improving the order fulfilment process (back office software) Has nowadays also got Sales Force Automation & CRM modules to manage the selling process (front office software). Companies may undertake ERP to better understand overall performance, to standardise manufacturing processes or to standardise HR information. ERP forces discipline and organisation round business processes making the alignment of IT and business goals more likely.

Example Customer service representative enters a customer order and has all the information necessary to complete the order (the customer's credit rating and order history from the finance module, the company's inventory levels from the warehouse module and the shipping dock's trucking schedule from the logistics module, for example). People in different departments all see the same information and can update it. When one department finishes with the order it is automatically routed via the ERP system to the next department. To find out where the order is, log in to the ERP system and track it down.

With luck, the order process moves like a bolt of lightning through the organization, and customers get their orders faster and with fewer errors than before. ERP can apply that same magic to the other major business processes, such as employee benefits or financial reporting.

Problems with ERP The original process was simple. With ERP, employees roles change e.g. Customer service representatives have access to customer credit ratings from finance and stock levels from the warehouse so now must decide whether the order should go ahead or not. People in the warehouse who used to keep inventory in their heads or on scraps of paper now need to put that information online. If they don't, customer service reps will see low inventory levels on their screens and tell customers that their requested item is not in stock.

ERP systems have been designed according to particular business models and usually don’t exactly match the model of the firm who is adopting them. This means either: (i)The software must be customised for the company and every time it is upgraded must be re-adapted. This can lead to a lot of expense and time wasted. (ii)The companies work practices must be adapted to the software. Existing work practices /procedures can already work well and changing them may cause problems.

This means ….. The deployment of an ERP system can involve considerable business process analysis, employee retraining and new work procedures. ERP is very expensive and many systems have failed.

Why bother then? - five major reasons Integrate financial information—ERP creates a single version of the truth because everyone is using the same system. Integrate customer order information- companies can keep track of orders more easily, and coordinate manufacturing, inventory and shipping among many different locations at the same time. Standardize and speed up manufacturing processes Reduce inventory Standardize HR information—unified, simple method for tracking employees' time and communicating with them about benefits and services.

Key questions to ask Will ERP fit the ways I do business? Can the company afford it? A few oversights in the budgeting and planning stage can send ERP costs spiralling out of control faster than oversights in planning almost any other information system undertaking. e.g. consulting, process rework, integration testing, teaching users their new job processes, failure to consider data warehouse integration requirements, cost of extra software to duplicate the old report formats.

What are the hidden costs of ERP? 1.Training 2.Integration and testing 3.Customization 4.Data conversion 5.Data analysis 6.Consultants ad infinitum 7.Replacing your best and brightest 8.Implementation teams can never stop 9.Waiting for ROI 10.Post-ERP depression

Use of ERP in Supply Chain Management and decision support Data generated by ERP systems can be used within decision-oriented systems and supply chain management software to help improve the efficiency of the supply chain. Many ERP vendors add decision support, business intelligence, and CRM functionality to their systems. Internet-based supply chain integration meant that one organisation's ERP suite could communicate electronically with the corresponding systems of suppliers, distributors and other business partners.

Web Browser Interfaces allow employees to access an ERP system using a client other than the native ERP software. They make things easier to learn. provided the mechanism for universal employee self-service across enterprise systems such as time or expenses reporting. allow access by non-employees to selected information within an ERP system.e.g. customers could check the status of a pending order or verify that a payment had been credited to their accounts.

E-business web servers that implement electronic storefronts can provide tight linkages between the website's catalogue, order-entry system, customer database and other elements and the corresponding ERP suite functionality.