Enterprise
Resource
Planning
What is ERP
ERP is a solution, which
facilitates company-wide integrated
information systems, covering all
functional areas
performs core Corporate activities and
increases customer service augmenting
Corporate Image
Integration is Key to ERP
ERP is a way to integrate the data and
processes of an organization into one
single system
ERP systems is the use of a unified
database to store data for the various
system modules.
The Current Scenario
Islands of Information
Difficult to get timely & accurate information
Heterogeneous Hardware & Software
platforms & practices
Poor connectivity between different
organizational locations
Sticking with obsolete technology
Resist to change
Lack of proven man-power to develop
integrated software
Information Islands
ERP Architecture
ERP Structure
Why ERP?
For Management – to know what is happening
in the company
One solution for better Management
For cycle time reduction
To achieve cost control & low working capital
To marry latest technologies
To satisfy the customers with high
expectations
Evolution of ERP
1960’s - Systems Just for Inventory Control
1970’s - MRP – Material Requirement Planning
(Inventory with material planning & procurement)
1980’s - MRP II – Manufacturing Resources Planning
(Extended MRP to shop floor & distribution Mgnt.)
Mid 1990’s - ERP – Enterprise Resource Planning
(Covering all the activities of an Enterprise)
2000 onwards – ERP II – Collaborative Commerce
(Extending ERP to external business entities)
ERP – Expectations
Integrating all the functions
Integrating the systems running in all the
locations
Transparency of information using a single
data source across the organization
Software must be responsive
○ Modular
○ Flexible
○ Easy to add functionalities
○ Provide growth path
ERP – 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 Readymade)
Going for Tailor-made ERP packages available in the market like
SAP, Oracle applications, Baan, PeopleSoft etc.
OPTION 3 – MAKE [using External resources]
Developing a custom-built ERP package, specific to the
requirements of the organization, with the help of a
software solution provider
ERP Product selection
Criteria
Goal:
. Functionality
To select the
Most Suitable Software 5 Strategic
Package Solution Requirement
Levels Technology
Vendor
Support
Costs
ERP System Cost Component
Software 30.2%
Consulting 24.1%
Hardware 17.8%
Implementation 13.5%
Team
Training 10.9%
Other 3.3%
Implementation
Phase(SDLC)
.
Commercial ERP Package
Implemented
SAP 25%
ORACLE 14.2%
BAAN 8.8%
J.D.Edwards 7.4%
People Soft 2.5%
Other Packages 27.3%
The Ideal ERP System
Manufacturing :Engineering, Management,
Quality Control, Cost Management,
Manufacturing Process, Manufacturing
Projects
Supply Chain Management :Inventory,
Order Entry, Purchasing, Supply Chain
Planning etc.
Financials :General Ledger, Cash
Management, Accounts Payable, Accounts
Receivable, Fixed Assets etc.
. Human Resources :Human Resources,
Payroll, Training, Time & Attendance,
Benefits etc.
Customer Relationship Management :
Sales and Marketing, Commissions,
Service, Customer Contact and Call
Center support etc.
ERP Vendors
SAP (SD,MM,HRM,FI/CO,CRM, SCM,PP,QM,WMS)
Infor Global Solution :
BAAN (manufacturing, financial, project estimating and
management )
Oracle : 89 % SMB Customer .
People soft (HRM,CRM,Manufacturing,Financial)
JD Edward(HRM)
Comparison :
SAP :
1)Only 66% SMB Customer Recommendation
2)Average Vendor Support 3.4 for SMB.
3)Deployment time 69% of the SAP were on time.
Oracle:
1)Only 89% SMB Customer Recommendation
2)Average Vendor Support 4.0 for SMB.
3)Deployment time 78% of the Oracle were on time.
ERP Selection
Check whether all function aspect of the
business are dully covered.
Check whether all the business function
and processes are fully integrated .
Check whether all latest IT trends are
covered.
ERP Markets
India
Malaysia
Singapore
South Korea
Australia
Europe
Japan
ERP Cost
Based on the ERP survey conducted by
Meta Group in 2002, the average cost of
ERP ownership was $15 millions
ranging from half millions to $300
millions. The average cost per user per
year could be as high as $20,000.
Advantages of ERP Systems
A totally integrated system
Only Customization Required
The ability to easily share data across
various departments in an organization
Improved efficiency and productivity levels
Better tracking and forecasting
Lower costs
Improved customer service
Disadvantages of ERP
Systems
Customization in many situations is
limited
The need to reengineer business
processes
ERP systems can be cost prohibitive to
install and run
Technical support can be shoddy
.
Thank You
