1. Enterprise Resource Planning
Need, Usage and Advantage

2. ERP – Enterprise Resource Planning
PLANNING the RESOURCES of an ENTERPRISE
ERP is a way to integrate the data and processes of an organization into one single system with modules that support core business areas such as manufacturing, distribution, financials and human resources.
ERP allows managers from most or all departments to look vertically and horizontally across the organization to see what they must see (information) to be productive in their managerial roles.
ERP captures data from historical activity and current operations . That data can be transformed into information that, along with external information, is useful in planning and controlling operations, and in developing business strategies.
ERP is evolving into a Multi-Module Application Software Package that automates inter-organizational business processes across the supply chain which involve business partners, suppliers, customers, and more.

3. BEFORE ERP
Problems:
Delays, Lost Orders, Keying into different computer systems invites errors

4. AFTER ERP

5. EVOLUTION OF ERP 1960s – Inventory Control
1970s – MRP (Material Requirement Planning).
This system helped in translating the master production schedule into requirements for individual units like sub assemblies, components and raw materials. MRP systems helped determine what to order, how much to order, when to order and when to schedule delivery.
1980s – MRPII (Manufacturing Resource Planning)
MRPII supported efforts to optimize the entire plant production system by supporting capacity planning, shop floor control, and distribution management activities. MRPII was further extended to support areas like Finance, Human Resources, Engineering, Project Management etc. As MRPII like systems were adopted by non manufacturing enterprises like banks and airlines to support cross-functional coordination and integration of business processes, the “M” no longer fit, thus the name ERP was coined.
1990s – ERP
Today, ERP is the foundation system for domestic and global business operations, supporting most or all functional areas in their daily operations. For some organizations, ERP is a source of competitive advantage.
21st century – ERPII
ERPII is the name some now use to describe ERP like systems that are evolving to support inter-organizational business processes across the supply chain.

6. Primary Business Need (s) Scope Enabling Technology MRP
The Evolution of ERP
System
Primary Business Need (s)
Scope
Enabling Technology
MRP
Efficiency
Inventory Management and Production planning and control.
Mainframe computers, batch processing, traditional file systems.
MRPII
Efficiency, Effectiveness and integration of manufacturing systems
Extending to the entire manufacturing firm (becoming cross functional).
Mainframes and Mini computers, real-time (time sharing) processing ,database management systems (relational)
ERP
Efficiency (primarily back office), Effectiveness and integration of all organizational systems.
Entire organization (increasingly cross functional), both manufacturing and non-manufacturing operations
Mainframes, Mini and micro Computers, Client server networks with distributed processing and distributed databases, Data warehousing, and mining, knowledge management.
ERPII
Efficiency, Effectiveness and integration within and among enterprises.
Entire organization extending to other organizations (cross functional and cross enterprise--partners, suppliers, customers, etc.)
Mainframes, Client Server systems, distributed computing, knowledge management, internet technology (includes intranets and extranets).
IRP
Enterprise Suite, or whatever label gains common acceptance
Efficiency, Effectiveness and Integration within and among all relevant constituents on a global scale.
Entire organization and its constituents (increasingly global) comprising supply chain from beginning to end as well as other industry and government constituents
Internet, Web Service Architecture, wireless networking, mobile wireless, knowledge management, grid computing, artificial intelligence.

7. ERP TODAY
Today’s focus seem more to be external as organizations look for ways to support and improve relationships and interactions with customers, suppliers, partners and other stakeholders.
The focus of ERP in increasingly on Front-Office Applications and inter-organizational business processes, thus making it visible to “OUTSIDERS”
The increasing importance of E-Commerce and Globalization of business makes support of inter-organizational processes more important.
ERP Vendors
SAP
PeopleSoft
Oracle
Microsoft Business Solutions
SSA Global
ERP vendor products reflect the evolving business needs of clients and the capabilities of IT, perhaps most notably internet related technologies.
ERP helps Organization to
improve competitiveness
increase profits
prosper in the global economy.

8. ERPII—The Future of ERP
ERPII is a business strategy and a set of collaborative operational and financial processes internally and beyond the enterprise
New multi-enterprise business models like Value Collaboration Networks, customer-centric networks that coordinate all players in the supply chain, are becoming popular as we enter the 21st century
These new business models reflect an increased business focus on external integration
There is movement away from Client-Server System to Internet Based Architecture

9. New Technologies in ERPII
E-Commerce (Electronic Commerce)
M-Commerce (Mobile & Wireless Technologies)
C-Commerce (Collaborative Commerce)
Middleware
Enterprise Portal Technologies
Web Services
RFID
Analytical Capabilities (Data Warehousing & Data Mining)
CRM, SCM, SRM
Knowledge Management
Business Intelligence

10. Difference Between ERP & ERPII
Six key differences between ERP and ERP II Systems
Keys
ERP
ERPII
Role
Traditional ERP was concerned with optimizing an enterprise, Internal optimization.
ERP II systems are about optimizing the supply chain through collaboration with trading partners.
Domain
ERP systems focused on manufacturing and distribution.
ERP II systems will cross all sectors and segments of business.
Function
As ERP systems cross sectors and segments, they will no longer be able to present all things to all people.
ERP II vendors to pick the industries in which they’re going to play, and focus on providing deep functionality for those users.
Process
In ERP systems, the processes were focused on the four walls of the enterprise.
ERP II systems will connect with trading partners, to take those processes beyond the boundaries of the enterprise.
Architecture
Old ERP systems were monolithic and closed.
ERP II systems will be Web-based, open to integrate and interoperate with other systems that allow users to choose just the functionality they need.
Data
Information in ERP systems is generated and consumed within the enterprise.
In an ERP II system, that same information will be available across the supply chain to authorized participants.

11. ERP Characteristics Real Time Integrated System Customizing
(Configuration)
Best Practice
Process Oriented
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12. ERP Characteristics (cont.)
Modular design comprising many distinct business modules such as financial, manufacturing, accounting, distribution, etc.
Use centralized common DBMS
Integrated modules provide seamless data flow among the modules, increasing operational transparency through standard interfaces
Generally complex systems involving high cost
Flexible and offer best business practices
Require time-consuming tailoring and configuration setups for integrating with the company’s business functions
Work in real time with online and batch processing capabilities
They are Internet-enabled
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13. Core ERP Modules Accounting management Financial management
Manufacturing management
Production management
Transportation management
Sales & distribution management
Human resources management
Supply chain management
Customer relationship management
E-Business
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14. Advantages & Disadvantages of ERP
Centralized database & common software infrastructure
Communicates with supply chain members
Helps reduce supply chain inventories. Supply chain visibility leads to reductions of the bullwhip effect (buildup of supply chain safety stock inventories)
Standardizes processes & eliminates redundant resources while increasing productivity
Tracks employees’ time & performance
Integrates financial, production, supply, & customer information.

15. ERP Advantages What benefits How Reliable information access
Common DBMS, consistent and accurate data, improved reports.
Avoid data and operations redundancy
Modules access same data from the central database, avoids multiple data input and update operations.
Delivery and cycle time
reduction
Minimizes retrieving and reporting delays.
Cost reduction
Time savings, improved control by enterprise-wide
analysis of organizational decisions
Easy adaptability
Changes in business processes easy to adapt and restructure.
Improved scalability
Structured and modular design with
Improved maintenance
Vendor-supported long-term contract as part of the system procurement
Global outreach
Extended modules such as CRM and SCM
E-Commerce, e-business
Internet commerce, collaborative culture 15

16. Advantages & Disadvantages of ERP- Cont.
Substantial capital investment is needed to implement the system. The average total cost of ERP ownership was $15 million.
Software is designed around a specific business model based on specific business processes. The adopting firm must change its business model & associated processes to fit the built-in business model designed into the ERP system.

17. ERP Disadvantages Disadvantages How to overcome Time-consuming
Minimize sensitive issues, internal politics and raise general consensus
Expensive
Cost may vary from thousands of dollars to millions.
Business process reengineering cost may be extremely high
Conformity of the modules
The architecture and components of the selected system should conform to the business processes, culture and strategic goals of the organization
Vendor dependence
Single vendor vs. multi-vendor consideration, options for “best of breeds,” long-term committed support.
Features and complexity
ERP system may have too many features and modules so the user needs to consider carefully and implement the needful only
Scalability and global outreach
Look for vendor investment in R&D, long-term commitment to product and services, consider Internet-enabled systems
Extended ERP Capability
Consider middle-ware and extended modules SCM. 17

18. ERP Vendors
There were five dominating ERP software suppliers: SAP, Oracle, PeopleSoft, Baan and J.D. Edwards.
They controlled more than 60% of the multi- billion dollar global market.
Each vendor had a specialty in one particular module area such as
Baan in manufacturing,
PeopleSoft in human resources management,
SAP in logistics, and
Oracle in financials
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19. CONCLUSION
Enterprise systems are evolving because organizations are changing.
To know what the future of ERP holds, one must look to the changing environment of business and changing business needs.
Systems will evolve to meet the business needs. Based on current trends, these will be increasingly inter-organizational and global.
Inter-organizational systems (ERPII) will pose challenges beyond the ones faced with ERP because of the need to integrate the diverse systems of different organizations.
Global supply chains mean inter-organizational systems that span different cultures and countries. That will bring even greater challenges due to cultural differences, legal issues, and more.