Enterprise Resource Planning Notes SYBCA – HETA DESAI

Enterprise Resource Planning Enterprise Resource Planning (ERP) is a set of integrated programs that manages a Company’s Vital Business operations for an entire multisite, global organisation. At a core of a the ERP system there is database which is shared by all users by which all business function have access to current and consistent data for operational decision making and planning.

ERP Includes Mainly Following Modules Production and Supply chain Management Customer relationship Management Financial & Managerial Accounting

Advantages of ERP Improved access to data for operational decision making ERP operates via an integrated database using one set of data to support all business functions. The system can support decisions on optimal source of cost accounting.

Advantages Elimination of Costly & Inflexible Legacy systems Adopting ERP enables an organisation to eliminate dozens of other systems and replace them with a single integrated set of application for the entire enterprise

Advantages Improvement of work Process The implementation of ERP systems ensures good work processes based on best practice. for example managing customer payments, the ERP finance module can be configured to reflect most efficient practice of leading companies in industry.

Advantages Upgrade of technology infrastructure In ERP organisation can upgrade and simplify the information technology. When implementing ERP a company must determine which hardware, operating system,and database It want to use.

Disadvantages of ERP system

Disadvantages Expense and Time in implementation Getting full benefit of ERP takes time & Money. A large firm typically needs three to five years and spend tens of millions of dollars to implement a successful ERP system

Disadvantages Difficulty in implementing changes a company has to radically change how it operates to confirm the ERP work process. these changes can be so drastic to long time employees that they retire or quit rather than go through these changes & some time best practice are not appropriate for firms

Disadvantages Difficulty in integration with other systems Most companies have other systems that must have to be integrated with ERP system such as financial analysis programme ,e-commerce etc. Many company faces difficulties in making these other system operate with ERP system

Disadvantages Risk of implementation failure Implementing ERP is extremely challenging and requires tremendous amount of resources.ERP installations occasionally fails and problem with ERP implementation can require expensive solutions.

Product And Supply chain Management(SCM) ERP follows systematic Process for development a Production Plan that draws on the information available in ERP system datebase. The Process starts with Sales Forecasting to developed an estimate of future customer demand. The sales and operations plan takes demand and create inventory levels in to account & determine specific product item that needs to be produced

SCM (C) Demand Planning refines the production plan by determining the amount of weekly or daily production needs Detailed scheduling uses production plan defined by demand management process to determine detailed production schedule Material requirement planning determines the amonut of timing for pacing raw material order with supplier ERP do not directly interfere with production machines so some means must be provided to capture information about what was produced and these data passes to ERP acconting to keep counting of finished product inverntory

Customer relationship Management Customer Relationship management helps Company to manage all aspect of customer encounters including Marketing and advertising ,sales ,customer service after sales and programs to keep current & potential customer to increase customer retention and loyalty while optimizing the way product and services are being sold.

CRM(C) Business Implementing CRM systems benefits such as improved customer satisfaction, increased customer retentions, reduced operating costs and ability to meet customer demands.

Financial & Managerial accounting The general ledger is main accounting Module of Business. It is often divided in to different categories including assents ,liabilities ,expense etc. These categories in turn than are divided in to sub ledger to capture information such as cash, account payable ,receivable etc.