ENTERPRISE RESOURCE PLANNING AND MANAGEMENT (1).pdf

ENTERPRISE RESOURCE PLANNING AND MANAGEMENT (1).pdf

1. ENTERPRISE RESOURCE
PLANNING AND
MANAGEMENT

2. ENTERPRISE SYSTEMS FOR MANAGEMENT

3. INFORMATION SYSTEMS IN ORGANIZATIONS
Information Systems are a critical component of a successful organization
today.
Information Systems provide high level of computer automation to support
business functions such as:
Accounting
Finance
Marketing
Customer Service
Human Resource Management
Operations

4. INFORMATION SYSTEMS IN ORGANIZATIONS
Information Systems play a major role in primary and secondary activities of an
organizations value chain.
Information systems include hardware, software, data processes and people.
Information Technology includes only the hardware and software components.
The role of an information systems is to process data into information using
information technology, business processes, and people resources.

5. WHAT IS AN ENTERPRISE?
An enterprise is simply another name for a business
Enterprise means organizing, starting and operating a business.
Someone who shows enterprise is an "entrepreneur"
It is an independent and organizationally separate business entity with the legal
rights.

6. Fundamental Criteria Inspire Entrepreneurs to
start business
A new idea or product that should be of interest to potential buyers;
A popular problem that worries many people;
The company has the opportunity to fill a gap in the market with its offer
The product can be offered below the market price, which creates competition.

7. TYPES OF ENTERPRISE
Sole Proprietorship
is an unincorporated company that is owned by one individual only
it also offers the least amount of financial and legal protection for the owner.
sole proprietorships do not create a separate legal identity for the business.

8. TYPES OF ENTERPRISE
Partnership
a partnership is a business owned by two or more people, known as partners.
Owners in partnerships are responsible for the liabilities of the firm.
There are different types of partnerships: general partnerships, limited
partnerships, and limited liability partnerships.

9. TYPES OF ENTERPRISE
Limited Liability Company (LLC)
are one of the most flexible types of businesses. LLCs combine aspects of both
partnerships and corporations.
LLCs benefit from limited liability status.
the company exists as its own legal entity. This protects the owners of the LLCs
from being personally liable for the operations and debts of the business.

10. TYPES OF ENTERPRISE
Corporation
are a separate legal entity created by shareholders.
Incorporating a business protects owners from being personally liable for the
company’s debts or legal disputes.
In sole proprietorships and partnerships, if one of the owners passes away or
declares bankruptcy, the company is dissolved. Corporations exist as a legally
separate entity.
There are three main types of corporations: C Corporation, S Corporation and
Non-Profit Corporation.

11. ENTERPRISE SYSTEM IN ORGANIZATIONS
Business organizations have become more complex due to increased layer of
management hierarchy and increased level of coordination across departments.
Each department has different information needs.
No single information system can support all the business needs of an
organization.
Management is generally categorized into three levels- Strategic, Middle, and
Operational
Each management level has different information requirements.

12. FIGURE 1 MANAGEMENT PYRAMID WITH INFORMATION REQUIREMENTS

13. INFORMATION SILOS AND SYSTEMS INTEGRATION
Over time, Information Systems create a hodgepodge of independent non-
itegrated systems ultimately creating bottlenecks and interfering with
productivity.
Organizations need to be agile and flexible and will require their information
systems to have integrated data, applications, and resources from across the
organization.
To compete effectively, organizations have to be customer focused.
This requires cross-functional integration among the accounting, marketing
and other departments of the organizations.

14. CURRENT SCENARIO
Island of Information
Difficult to get timely and accurate information
Heterogeneous Hardware and Software platform and practices
Poor connectivity between different organizational locations
Sticking with obsolete technology
Resist to Change
Lack of proven man-power to develop integrated software

15. FIGURE 2 INTEGRATED SYSTEMS - ERP

16. INTEGRATED DATA MODEL
The heart of any ERP exercise is to create an integrated model.
The ERP application must be capable to provide true integration capability over
the entire enterprise system to provide data for employees, suppliers and
customers.
General accounting to provide for multiple ledgers/sub-ledgers on a division
basis. Online management summaries and consolidation eliminate extensive
paperwork handling
Ability to drill down through successive levels of data provided
ERP and execution model and its flexible sets of integrated applications will
keep the operations flowing efficiently
ERP should be looked upon as the acquisition of an asset and not as an
expenditure

17. ENTERPRISE RESOURCE PLANNING (ERP) SYSTEMS

18. WHAT IS AN ERP SYSTEM?
Enterprise Resource Planning Systems are the first generation of enterprise
systems meant to integrate data and support all the major functions of
organizations.
ERP systems integrate various functional aspects of the organization as well as
system within the organization of its partners and suppliers.
The goal of an ERP system is to make the information flow dynamic and
immediate, therefore, increasing its usefulness and value.

19. WHAT IS AN ERP SYSTEM? (Cont’d)
ERP systems replace an assortment of systems that typically existed in
organizations.
ERP solves critical problem of integrating information from different sources and
makes it available in real-time.
Another goal of ERP is to integrate departments and functions across an
organization into single infrastructure sharing a common database and serving
the needs of each department

20. BUSINESS PROCESS and ERP

21. BUSINESS PROCESS and ERP
Business Process - is a series of tasks or activities grouped to achieve a
business function or goal
An organization has two choices when implementing ERP: change business
processes to match the software’s functionality or modify the ERP software.
A crucial role of ERP in business, beside integration of functional applications
and organization information, is to better position the organization to change its
business processes.

22. BUSINESS PROCESS and ERP
Vendors assert that they have embedded the “best practices or leading
practices” of a business process in their software.
It is therefore possible for organizations to maximize their benefits by taking
advantage of these best practices. This occurs only when organizations do not
make major modifications to their ERP software during implementation.

23. BUSINESS PROCESS and ERP
Vanilla Implementation - an organization decides to implement the ERP system
“as-is”
A good understanding of ERP technology and its implementation process can
significantly improve efficiency and effectiveness of the organization’s business
processes.

24. ERP SYSTEM COMPONENTS

25. Hardware Servers and peripherals
Software Process
Operating Systems and
Database
Information
Organizational data from
Internal and External
Sources
Process
Business Processes,
Procedures, and Policies
People End User and IT Staff
An ERP system consist of:
FIGURE 3 ERP SYSTEM COMPONENTS

26. .The layered approach also provides
the ability to change layers without
significantly affecting the other
layers.
This can help organizations lower the
longterm maintenance of the ERP
application because changes in one
layer do not necessarily require
changes in other layers.
FIGURE 3 ERP COMPONENTS INTEGRATION

27. ERP ARCHITECTURE

28. ERP ARCHITECTURE
The architecture of an ERP system influences the cost, maintenance, and the
user of the system.
The ERP architecture helps the implementation team build the ERP system for
the organization.
If purchased, ERP architecture is often driven by the vendor (Package-Driven
Architecture)
There are two types of architectures:
Logical focuses on the supporting needs of the end users.
Physical focuses on the efficiency of the system.

29. FIGURE 5 EXAMPLE OF ARCHITECTURE OF ERP AT LARGE UNIVERSITY

30. FIGURE 6 LOGICAL ARCHITECTURE OF AN ERP SYSTEM

31. FIGURE 6 TIERED ARCHITECTURE EXAMPLE OF ERP SYSTEM

32. ERP EVALUATION
is a systematic process that helps businesses identify the
most suitable ERP system for their specific business needs.
The evaluation process takes several factors into account,
including features and functionality, budget, technology and
compatibility, and vendor support.

33. ERP SYSTEM EVALUATION
To compare ERP products and software vendors effectively,
businesses should begin by identifying the issues they’re
trying to solve
What Issues You’re Trying to Solve
What Modules You Need
What Questions to Ask ERP Vendors

34. WHAT ISSUES YOU’RE TRYING TO SOLVE?
The evaluation process begins with identifying the issues your
business is trying to solve. Connect with as many people in
your organization as possible, from senior management to line
employees and staff.

35. WHAT MODULES YOU NEED
ERP systems typically offer a range of modules, including
finance, sales, inventory management, warehouse and
logistics management, human resources and customer
relationship management (CRM)
Any other options will depend on the company’s processes
and requirements.

37. WHAT QUESTIONS TO ASK ERP VENDORS?
How does your ERP system address my specific business
challenges?
What modules and features are included in your solution?
Can modules be added as needed over time?
How does your pricing structure work? Is there a subscription or
one-time fee? Is each user charged individually?
What is an estimated total cost of ownership? Does pricing include
updates, maintenance and security?
What kind of support and training do you provide during
implementation and beyond?
Does the ERP system integrate with other business software and
systems?

38. ERP BUDGET
an important factor in the evaluation process: It determines not only
how much your business can afford, but whether you’ll be able to justify
the cost of the system
Here’s one formula to calculate ROI:
ROI = [(Total value of investment – TCO) / TCO] x 100
The higher the resulting figure, the higher the ROI.

39. BENEFITS OF ERP
Enhanced Business Reporting
Better reporting tools with real-time information
A single source of truth – one integrated database for all business
processes
Better customer service
Better access to customer information
Faster response times
Improved on-time delivery
Improved order accuracy

40. BENEFITS OF ERP
Improved Inventory Costs
Only carry as much inventory as needed that can avoid these
common issues
Too much inventory, and higher overhead costs
Too little inventory, and longer customer fulfillment times
Boosted Cash Flow
Better invoicing and better collections tools to bring cash in faster

41. BENEFITS OF ERP
Cost Savings
Improved inventory planning
Better Procurement Management
Better Customer Service
Improved Vendor Relationship Management
Better Data & Cloud Security
Dedicated security resources
Avoid installing malicious software
Data distributed across multiple servers

42. BENEFITS OF ERP
Business Process Improvements
Automate manual or routine tasks
Implement smarter workflows
Gain efficiency