Unit 1: Overview of Business Functions

An ERP software has over the years proved to be an extremely beneficial and effective tool when it comes
to handling different functions and departments within a manufacturing business. Majority of such businesses,
irrespective of their size, use an ERP system to manage their processes, streamline their operations, and enhance
their profitability. An ERP software gives them access to real-time accurate data, and helps them monitor the
effectiveness of employees working on the shop floor, so that they can make much-informed and timely decisions,
increase company output, and make the organization more efficient at the same time.
An ERP software also takes care of another vital area of any manufacturing business – supply-chain
management. It oversees and manages the flow of raw materials, the inventory in use, or the final product from the
point of origin to the point of consumption. A smooth supply chain is the lifeline of a manufacturing business, and
quite naturally, any hurdle in the supply chain can affect the business adversely.
For example - non-availability of raw materials, which either run out or are not replenished in a timely
manner, can hamper the production process. That‘s where material management, a subpart of the supply-chain,
gains significance.

Business function in an organization

Enterprise Resource Planning (ERP) is a business process management software.
This is used by an organization to manage the office and automate the business functions. These
system make the data easily accessible and more usable in terms or organization of files.
This allows accurate planning by the company and have result oriented approach.
The company can also schedule the daily activities with the help of ERP software solu tions. It also
helps in managing the finances well.
These software play a very crucial role in the development of a company.
ERP solutions also help in managing the records of the employees and allow the employer to plan
the growth accordingly.
This also allows the company to have fluent communication with the clients.
It is a very cost effective system and the benefits are always greater than investment. This helps in
long-term planning and management.
This eliminates the need of multiple management softwa re. It helps to integrate the interaction
between marketing, sales, quality control, product processes, supply lines, stocks, human resource
module, customer relationship management, information technology, and many other functions in
a single database.
It reduces the chances of typing errors and re-entry.
Enables the company to use a single software and maintain one database for the whole company.

Why is Important for Business?

ERP tools help in managing accounts, employee records and internal and extern al factor affecting
the company.
It reduces cost in the long term by increasing the productivity.
Reduces the time and effort of managing records as compared to the paper records.
The merger of financial and operational information allows the company to an alyse the business
needs and act in a more effective manner.
 By combining all the records in one whole, ERP makes the management of data easier and more
productive.
Apart from records, ERP also helps in the management of material and ensures that no materi al is
lost or stolen. It would also automate the process of buying and maintaining material after
analyzing the stock.
Helps the company to predict market trends and decide the course of action accordingly.
Allows the company to expand business using the internet.
We decide upon the scope of ERP and plan your software accordingly.
We have a team of highly experienced and trained professionals who work devotedly on your
project.
We offer cost effective solution with option of flexible payments.
Ensure 100% safety of your data with a no leak guarantee.
We synchronise your data into a whole to help with better management of all the sections.
We help you to expand your business through internet by proper management of the data.
Allow the IT sections of your company to focus on core business issues instead of bothering over
trivial data management.
We provide the latest software suiting your business needs.

Material management
For a manufacturing business to function smoothly, it requires an uninterrupted flow of materials, or the
physical items such as raw materials, components, parts, etc. required for producing goods. In today‘s business
scenario, where demand often exceeds supply, the significance of materials to efficient manufacturing operations
is increasing more than ever. Every business needs raw materials in abundance, and thus looks to purchase, and
store enough stocks of materials for immediate as well as long-term requirements.
Material management is thus an integral function of any manufacturing business. It can be defined as a set
of processes that include activities of acquiring various types of materials, controlling their storage, and managing
their flow and supply to different places in the right quantity at right place and time.

Why is it so important?
Manufacturing businesses face a lot of challenges pertaining to the effective management of materials. The biggest
of them all is the prospect of not being able to honor the agreement with the customer to supply the product at the
agreed time. A failure in doing so can have disastrous effects on the business, as the disgruntled client may switch
to a new supplier entirely or ask for heavy discounts in the future.
Another major concern is the wastage of money invested in excessive or unused material stock as well as
incurred on the warehouse rent for the same. These are nothing but dead funds, and can be recovered only when
the final product is being sold, something which is uncertain. The repercussions of such a situation can be felt
when there is a sudden demand/trend change, and stock no longer holds any value.
That‘s precisely why you need a material management system in place, which can help you with inventory
optimization & control, cost reduction, and even operations optimization.
The following are the activities that can be done with the help of ERP for Materials management.
1. Material Valuations: Material valuation helps in determining the price of a material which then needs to
be recorded in the general ledger account for financial accounting. This also helps in tracking and moving
materials.
2. Multi location Inventory: For manufacturing units which produce goods on a large scales, esp. for
consumer goods – often have more than one distribution units for making supply chain management
easier.
3. Bin Management: Bin management module that allows inventory to be received at the warehouse and
stored into preferred bins within the rack system of the warehouse for easy picking later during the order
fulfillment process. These inventory can be grouped, tagged and scanned into the system for future
reference. This is also helpful in retail specific companies who have to store other companies‘ inventory.
 They need to know on a real time basis if the particular brand is available or not so that they can refill it
before the stock runs out.
4. Lot and Serial Traceability: Lot and Serial Tracking is used to control and monitor from receipt to
shipment the allotment of lot or serial numbers for items part and finished goods. Once a part has been
tagged, the ERP System for materials management maintains all the record from the time it is received
from the vendor until it is shipped to the customer. All information about a specific lot / serial number can
be accessed instantly.
5. Product Life Cycle management: New products are the backbone of your company‘s growth and
profitability. But said that, the success of any product depends on the stage that it is in, in the PLC. A
proper analysis should be done to estimate which products have a scope of selling more, which products
are on the verge of being defunct, which products need to be revamped. The reason for doing so is to avoid
any unnecessary spilling of resources and focusing all resources where it is required.
6. Material Management (MRP): Materials Requirement planning empowers the company‘s logistical
processes. An ERP enables you coordinate warehousing measures with your delivery schedule and enable
your company to function efficiently with minimum inventory levels to raise work orders and purchase
orders.
7. Inventory Replenishment: Allows you to execute differentiated, highly automated inventory planning
integrated with the demand forecast. It also makes inventory replenishment more agile by providing a
multitude of planning strategies such as economic order quantity, service-level-driven safety stocks and
special models to handle slow-moving parts.
8. Scheduling and Resourcing: Enables you to plan your resources efficiently by streamlining all the work
order scheduling and activity planning. It provides a common way of planning preventive maintenance and
initiating corrective maintenance.

Scheduling
Production Scheduling is one of the key features of a manufacturing ERP system. Scheduling of materials and
resources is the heart of a discrete manufacturing business.
A business needs to know how much materials and total resources will be needed as input to finish a job
and how long it will take. Time needs to be figured both overall for the entire job and by resource, such as
individual machines.
All this is extremely complex and needs to be done by software. Ideally, that software should be a part of
your ERP system. Most ERP systems have manufacturing scheduling modules either built into the basic system or
available as an add-on module.
When choosing an ERP system for a manufacturing enterprise, it's important to make sure the scheduling
module has the functionality you need to support your production needs. Here are some of the features to look for.

Flexible Scheduling
The module needs to be able to schedule a production run both backwards and forwards. That is, it needs to define
the schedule both by defining a start time for the job and estimating the completion time and by setting a
completion time and estimating when you need to start. This is basic.
Finite Scheduling and Infinite Scheduling
A good scheduling module can handle both finite and infinite scheduling. Some resources, such as tools, are finite.
They can only be scheduled for so many hours in a production period. Other resources, such as people, are more
flexible. Though normally limited to a set number of hours per production period that can be expanded if needed.
For instance people normally work 40 hours a week, but that can be increased by scheduling overtime. A good
scheduling module knows the difference in these resources and can respond appropriately when constructing a
schedule.
Shop floor control
Shop Floor Control (SFC) is a software system of methods and tools that are used to track, schedule and
report on the progress of work in a manufacturing plant. Shop Floor Control systems generally evaluate the portion
of an order or operation that has been completed. That percentage of work in process is useful for resource
planning, inventory evaluations [1] and supervisor and operator productivity on a shop floor.

Data Reported On By Shop Floor Control and How It Is Used

Shop Floor Control systems typically evaluate materials status, machine usage, labor and other resources to report
on work in process [2]. They also enable the accurate management of activities, resources and work flows inside
the plant [3]. This type of data can be very useful to manufacturing owners and supervisors for improving overall
shop floor operations, particularly with an interactive, real-time Shop Floor Control system.
Data gathered and reported on by a Shop Floor Control system regarding labor, work progress and
production time can also increase worker productivity, reducing throughput and cycle times. In addition to
delivering worker productivity information to supervisors, real-time Shop Floor Control can be useful to the
operators themselves. Giving operators access to their own work process empowers them to set, meet and exceed
their targets and goals. With an incentive system in place, operators are further encouraged and motivated to meet
those targets and goals, thus improving performance and overall plant productivity.

How Shop Floor Control Reduces or Eliminates Risk in a Manufacturing Plant

Shop Floor Control systems can help identify risks and vulnerabilities in the shop floor environment, from
technology and machine issues to employee-related or labor concerns. With a real-time Shop Floor Control system
in place, manufacturing plant owners and supervisors are empowered to realize a proactive environment where
they are able to identify, adjust and resolve issues as they occur or even before they arise, as opposed to the run-of-
the-mill batch shop floor control systems that limit users with retroactive data and reporting.

Factory Conditions: Accountability and Responsibility with Shop Floor Control

In today‘s social climate, light has been shed on many regrettable factory conditions around the globe. Even
manufacturers who are diligent about going above and beyond all regulations and compliance are keenly aware of
the concerns. Shop Floor Control systems are uniquely able to help address these concerns within a plant, ensuring
that all social and labour compliance issues are met. Shop Floor Control is designed to monitor, track and report on
labour-related compliance, giving operators, supervisors and owners alike peace of mind.
Shop floor control is responsible for the detailed management of activities and the flow of materials inside
the plant, including employees, materials, machines, and production time. Shop floor control activity typically
begins after planning (e.g., with MRP, ERP); once planned, orders and purchase requisitions are created. Shop
floor control attends to the following functions (sequentially):
Planned orders
Conversion of planned orders to process/production
Production and process order scheduling
Capacity requirements planning
Material availability assessment
Release of production/process orders
Material withdrawals
Order confirmations
Goods receipt documentation
Order settlement

Best practices for shop floor control

Efficiently execute, prioritize, and release work orders to the shop floor with real-time status of
progress and completion.
Deliver accurate and up-to-date information on materials consumption and availability, which is
essential for reliable inventory planning and costing.
Effectively execute change management processes to ensure that the proper revision of products, bills
of materials, and processes are always in place for production.
 Automate shop floor equipment control and data collection to reduce human errors and increase
productivity.
Provide the correct manufacturing SOPs, technical drawings, and diagnostics to shop floor operators to
reinforce training and ensure proper processing.
Download setup programs directly to equipment based on product and process specifications.

Forecasting
The most common ERP forecast will use past data to develop trends which can be extended to the future. Any ERP
system is full of past data. Every transaction has been captured and these can be extracted and analyzed. So what
areas can this data be used to fuel ERP forecasting and improved efficiency?
1. Demand Forecasts
What orders can you expect over time periods? You can forecast by customers, products or geography.
Any of these can show seasonality. You should be looking at a sales pipeline from your CRM and predict which
quotes will convert to orders and when that might happen.
2. Financial Forecasts
You should try to predict revenue and costs through ERP forecasts. These become a budget. You can also
predict capital requirements in the future based on shop load from our ERP combined with future product
demands. Financial forecasts are also essential when working on long-term projects with customers. Costs will
change and your initial quote should take this into account.
3. Job Scheduling
Although not traditionally seen as an ERP forecast, job scheduling relies on analysis of previous job data
and a reaction to this analysis. You should know how long each operation will take based on engineering standards
or past history. Without ERP forecasting you cannot simply expect a production job to be at a work center at 10:14
PM and arrange for components to be on hand at exactly that moment.
4. Supply Forecasts
You should look at your supply chain and predict when materials will arrive. You already have a stated
lead time from your supplier. You have data on the elapsed time for delivery in the past. You could look at
shipping schedules, weather reports and union strikes within your ERP allowing you to predict when it these
materials will arrive.
5. External Forecast Integration
Not only do you have our own ERP data to analyze but you can add all kinds of external data looking for
correlations and a basis to possibly improve our forecasts. Governments all have a variety of indices they publish.
The Dow Jones has a long history and many forecasts of its future value. Scientists predict El Niño weather and
global warming. These and many other data sets can be integrated with your ERP forecasting.

Accounting and finance

Enterprise Resource Planning (ERP) software has become an inevitable part of modern businesses. It hosts a world
full of business functionalities that are designed to address inventory requirements, quality of finished products,
manage production functions and oversee crucial business processes.
The benefits of ERP systems are many but how does it benefit the accounting and financial management
department in an organization?
Let‘s have a quick glance at the benefits of ERP for accounting and financial management.
1. Integrate, and manage all your financial and accounting needs with ERP
The Finance and Accounting department in every business is indispensable. The way they work can be
unique and different, but the objective is almost the same in every case. Every financial manager aims at:
 improving the wealth, profit margin
minimizing expenses
promoting savings
ensuring safety on investments and optimum fund acquisition
increasing the value of the firm
There are multiple things to manage. From estimation of capital requirements to disposal of surplus to
management of cash and financial control, there are many activities to look after. ERP lets you unify the data and
bring it all together in one place.
An integrated ERP system improves cost accounting and allows managers to accurately define budget and allocate
costs (for raw material, labour, transportation, and other overhead costs).
Whether it is about making payments to vendors, paying wages to employees or financial forecasting, all
you need is an ERP system to manage it. Also, when you have a single business management system (i.e., an ERP
system) to look after multiple departments, you do not need to work in multiple systems. This indeed minimizes
the cost and time spent on many tools.
2. Manage billing, payment, and revenue on time with ERP
ERP acts as a financial management system to ensure customer payment schedules, revenue tracking and credit
management across the business. ERP systems integrate a CRM (Customer Relationship Management) system to
automate reminders and prevent customer complaints.
With increased tracking capabilities and easy to use automated payment systems, billing, payments and
revenue management becomes easy. It can help manage cost analysis, profit tracking, invoice
tracking, budgeting, investments and more.
3. Around the clock access to quality data and financial information
You get the data when you need it. When processes are well organized and resources are optimally used,
future business ventures are promoted and the bottom-line is enhanced. ERP software allows businesses to
maintain financial measures, through having in-depth information, whenever required.
Financial data is confidential and can‘t be disclosed openly. ERP gives you the opportunity of
safeguarding your information and co-author, edit and manage it as per the access you allow. Multiple reporting
options and modules eliminate the need for maintaining spreadsheets and paper files.
4. Integrated + automated data across the organization (flexibility of generating information and creating
reports)
Get real-time data synchronization, improved data quality and an updated view of the organization at the push of a
button with ERP.
Generating information, consolidating it and managing the company-wide business process becomes
hassle-free with an ERP system. Shared management tools and integrated financial management
modules track accounting data with international standards. This means that you can select a framework in
multiple languages, currencies, companies, and charts of accounts.
ERP systems let you gather financial data from different departments to generate reports such as general
ledger and other financial statements. Every piece of data is seamlessly integrated within the system and this is
what makes ERP an indispensable part of every modern business.
5. GAAP compliant ERP make business seamless
Generally, accounting software is often not GAAP compliant, whereas a full-fledged ERP solution
typically is. Adopted by the US Securities and Exchange Commission, GAAP is the accounting standard which
provides a standardized methodology for recording transactions and events.
An extensive ERP solution, which is driven by a powerful engine, encourages productive financial reporting that
goes well with multiple accounting standards, including GAAP.
Summary
Benefits of using an ERP system for accounting and financial management are empirical. A finance
manager can create an estimate regarding the capital requirements and manage the overall accounting activities of
the organization in a mindful way. Most business owners depend on accounting software, but they don‘t
understand that ERP systems are an all-in-one solution which encompass modules for every department including
finance, production, quality, sales, procurement and more. Also, manufacturing ERP systems make things easy
and ensure the utmost data security.

Human resource

Human Resources is another widely implemented ERP module. ERP HR module streamlines the management of
human resources and human capital.
The advanced HR module is integrated with knowledge management systems to optimally utilize the
expertise of all employees.
A knowledge management system is an information technology system. It stores and retrieves the
knowledge to improve understanding, collaboration, and process alignment. Knowledge management systems can
exist within organizations or teams. And they can also be used to center knowledge base for clients.

ERP HR modules refer to the systems and processes at the intersection between human resource management
(HRM) and information technology. The linkage of its financial and human resource modules through one
database is the most important distinction to the individually and proprietary developed predecessors. That makes
this software application both rigid and flexible.

Submodules of ERP HR module

1. Organizational Management: it helps with personnel planning and application development. It enables
analyzing the complete organizational structure. This allows planning and developing personnel summary.
2. E-Recruitment: submodule for hiring both internal employees and external candidates. That includes access
to talents regardless of geography.
3. Time Management: it enables functionality to record attendance and absence for employees. It also helps in
the evaluation of attendance, absences, overtime, bonus, wages.
4. Personal Administration: it manages many individual pieces of information. This information is stored,
updated and managed for each employee. To manage personnel data related to tasks you need it.
5. Payroll: it manages payroll of employees in an organization. Payroll can be integrated with other modules like
accounting and time management. It consists of payments for each employee and deductions made. In the
transactions of the payroll module, the user is allowed entering the daily attendance data of all the employees
of the company on the payroll. The user can mark the entire employee‘s data as present or absent. Also if the
operator of the company has done any overtime then the user of the software can enter the data relating to the
operators over time.
6. Reporting: it provides reports of individual employees and consolidated reports across departments,
demographics.
The HR management module is a component covering many other HR aspects from application to retirement.
that includes
Recording basic demographic and address data.
Selection, interviewing and complete the hiring process.
Training and development of employees.
Capabilities and skills management.
Compensation planning record.
Other related activities.

Productivity management
Modern ERP Solutions are highly customized, covers almost everything that you need to run your
organization whether it may be small enterprise or a full fledge multinational firm. It includes the system starting
from the employee‘s entry inside the gate to final product to customer for a product manufacturing company. All
facilities like customer complaints, accounting & finance, HR, sales & marketing, purchase, inventory, tax details
like excise, sales tax etc including export & VAT documentation will also be handled by the system. To maintain
all this it has high degree of security/access control. Ultimate result is that it helps in increasing productivity and
better profits.
ERP helps in reducing operational costs…
Once implemented across various departments of an organization, ERP software solution help in greatly
streamlining processes and reducing running costs related to the business. This major benefit is actually achieved
through a better co-ordination among the various departments of an organization. This improved co-ordination
actually helps in improving overall efficiencies of the business for which the ERP solution is being implemented.
Some of the key benefits of this system include lower operating costs, better inventory management & better
preparation for contingencies, reduced production costs and reduced marketing costs as well.
It helps in facilitating everyday Management…
The other key advantage of ERP implementation is the better Management of everyday schedules which is actually
achieved by better control of the participating processes working in an organization. ERP‘s major contribution
actually comes in the form of a better database support, which helps the organization‘s management in deciding
about the course of action in a timely and organized manner.
Helps the management in Strategic Planning…
Resource Planning is indeed the most fundamental step towards an organization‘s success in the business. And
ERP is just about this very crucial factor of a business activity. It also helps in putting the available resources to
their most optimum use, thus resulting in increased productivity of an organization. And a better planned system
always create better scope of refined strategic planning by the management, who can do so with the effective
support of ERP system‘s solutions already in place in an organization.
In today‘s dynamic business environment the key for success lies in customer satisfaction, through
understanding customer needs, and providing quality goods and services in the shortest time possible. Hence
making ERP a vital need of an organization which helps in improving its productivity and becoming globally
competitive.
Unit 2: Typical Business Processes

The below are the important Business processes occur in a typical manufacturing company.

Procurement process (buy)

Production process (make)
Fulfillment process (sell)
Financial Accounting process
Procurement business process includes all activities of buying the raw materials to make products. Procurement
can also include purchase of consumables, equipment and assets.

Production or making process includes all activities or events to produce products in an enterprise.

Selling or fulfillment process includes all activities of creating sales orders, sales invoices and delivering products
to customers.

Financial Accounting process includes all activities to manage accounts payable, accounts receivable, assets and
G/L accounts in an enterprise.

Core processes
ERP systems and other core business systems play an important role in supporting the operational and strategic
processes within organisations. An ERP project is a major undertaking for any organisation. There are many
factors to be considered prior to the selection of an ERP system. This includes the preparedness of the organisation
to adopt the ERP. The ERP system may need to integrate with other systems within the organisation. The
organisation‘s objectives and future plans must be considered to ensure that the ERP system can support these.
Hence prior investing in an ERP system or upgrade, organisations must define their ERP strategy. Failure to do
this can result in cost and time implications as well as missed opportunities.
Sysprove has helped a number of organisations in defining effective strategies to acquire ERP systems and
associated activities towards the successful implementation. Whether an organisation is planning to upgrade its
ERP system or implement an ERP for the first time, several strategic decisions must be made to ensure that the
ERP project is successful and delivers the envisaged outcomes.

Product control
Production planning and control (or PPC) is defined as a work process which seeks to allocate human resources,
raw materials, and equipment/machines in a way that optimizes efficiency. In layman‘s terms, PPC helps
manufacturers work smarter in allocating internal resources of people, materials, and machines in order to meet the
demands of customers.
With ever-shorter lead times and increasing price pressure, the challenges of make-to-order manufacturing and
complex variant management are loud and clear. To compete, mid-sized companies must optimize their production
processes. That's why ERP production planning and control (PPC) is at the heart of the abas ERP system for
modern production companies. It enables efficiency, coordination, and the leveraging of production-related data to
drive improvement.
Production under control
Since medium-sized suppliers are becoming increasingly involved in their customers' product development, the
subject of Product Lifecycle Management (PLM) is gaining importance. The development and production of
complex products at different sites with a large number of people involved requires significant coordination and
collaboration. A central database, as provided by abas ERP, ensures that your team has access to the
latest CAD data, drawings and specifications at all times. You can trace the version history seamlessly over many
years to check what was developed or changed and when. No confusion or redundancy of effort here.

Sales order processing

Order processing is the most important function in order management. As soon as the sales order is generated,
resource allocation begins to procure raw material from inventory stock. The order then reaches production stage
and well-guided through ERP solution till the end of assembly line.
A sales order is an official agreement between a business association and a sold-to party concerning the delivery of
products or provision of services. It includes defined costs, item amounts, and conveyance dates.
Every timely delivered sales order establishes you as a trustworthy name in the market. When the number of sales
orders starts soaring, it becomes challenging for traditional business applications to manage the load.
It is your basic responsibility towards customers to deliver orders on time. Apart from that, order delivery process
should be smooth making it an exciting experience for customers to deal with you.
An organized order management process is indicative of your operational efficiency, minimize inventory load and
saves both time and money. All this is possible to achieve with the implementation of ERP solution.

The role of ERP

A typical order begins through generation of purchase order of customer by sales team with data variables like
customer number, product number, order size, delivery dates etc.
This information is processed through ERP order management solution and order entry is created. With this
begins a chain of automated events to allow order process monitoring and control.
Every department in the organization is alerted about the order so that they can collectively work in real-time to
timely process the order.
Sales order processing
Order processing is the most important function in order management. As soon as the sales order is generated,
resource allocation begins to procure raw material from inventory stock.
The order then reaches production stage and well-guided through ERP solution till the end of assembly line.
The order consequently reaches packaging and shipping department. Here, it is processed for packing with
customer label and bar code on top of it.
Finally, when the sales order is ready for dispatch to customers, automated invoice is generated taking into
consideration freight charges and taxes.
Therefore, the whole process is automated because every department can track the order progress in real-time
and schedule their tasks accordingly.
In case there are multiple business units catering to a single order, a centralized order entry is created that can
be tracked by all business units. It liberates employees from burden of excessive communication resulting in
loss of time.
Furthermore, it prevents unwarranted confusion about the sales order. Besides your employees, the order
progress can be tracked by customers and vendors. ERP is also enabled to prioritize orders in line with
production assembly, delivery schedule and urgent orders.
Customer data processing
Customer specifications, needs and demands vary extensively. Customer variables may include address, terms
and conditions specific to customer, pricing, credit limit etc.
However, ERP software is fully capable to deal with these disparities. Every detail is accurately processed
during the sales order processing.
Data analytics
Order management system allows you to analyze and generate report to track efficiency of business in
processing orders. It enables you to identify flaws across the organization that resulted in sales order delay.
Such issues may be related to manpower efficiency, product packaging, flawed assembly line, order backlogs,
order returns etc. Hence, it enables you to suggest process improvements and remove glitches.
Manage your orders effectively with ERP
ERP system integrates your sales, finance, inventory and production department. It helps to maintain inventory
levels, manage sales returns, keeps a track of payment and delivery status.
Moreover, it helps to improve sales visibility and order processing efficiency.
Purchase
ERP Internals/Modules/Purchasing. A Purchase Order authorizes a supplier to ship products to or perform
services for the enterprise and invoice them for it. In some enterprises, the purchasing cycle starts with
a purchase requisition, which is a request to Purchasing to locate a supplier and issue a purchase order.

Enterprises purchase multiple types of materials from different vendors in varying quantities and require a multi-
featured ERP purchase module. The profit an enterprise earns can be optimized with a functional user friendly
ERP Purchase module.

ERP Purchase module streamlines the entire life cycle of the procurement and purchase process including purchase
of raw materials, awarding orders to suppliers, billing and supports continuous and integrated active processing of
purchase orders, the entry of goods receipts and invoice verification.
The purchase module provides an option to record all the details pertaining to a vendor and these details are the
master data for vendors who supply goods to the company. The purchase department is entrusted with the task of
purchasing materials required for manufacturing products in the enterprise.

The purchase department is also responsible for purchasing materials in the right quantities of the right quality at
the right time. The purchase module assists the department with the right information inputs to in this task.

As shown in the above picture, the Purchase module is integrated with the Material management and Financial
Accounting management module. This is because all purchase transactions have a financial implications and a
stock update. Developers of SCM module should understand the integration points between the three modules. An
example of this integration is that when a purchase invoice is raised, the vendor account which is an Accounts
Payable account is credited and purchase account is debited. The transaction table in the ERP database will reflect
the purchase invoice transaction entry and update of accounts is reflected in the accounts table.

If you are developing Purchase module, take care to record multiple items with multiple delivery dates.

The vendors are also referred to as suppliers and managing these suppliers is possible with this module and so this
module is also referred to as SCM module.

The main objective of this module is the enterprise should not order material in excess of requirement. Suppliers
and the company can work in a tandem using the SCM module. The suppliers can optimize their resources while
the company can optimize its resources while allowing the suppliers also to do the same.

A supply chain consists of the vendors who supply material to the seller. The seller may be a manufacturer or a
multi-product distributor or an e-commerce business.

Administrative process
The System Administration module controls data and tables that are used by more than one module. Typically,
this data tailors the ERP to a particular enterprise. System Administration sets up new companies as well as user
names, passwords and access to ERP data and functions.
Admin module helps to ERP administration for efficient management of human resources. Admin module helps to
manage employee information, track employee records like performance reviews, designations, job descriptions,
skill matrix, time & attendance tracking. One of the important sub module in Admin module is Payroll System
which helps to manage salaries, payment repots etc. It can also includes Travel Expenses & Reimbursement
tracking. Employee Training tracking can also managed by ERP.
 User Entry, Role Configuration
 Role wise, User wise access rights
 Deactivate users
 User login history
 Manage passwords
 Business status, Graphical analysis
 Email configuration
Human resource
ERP, or Enterprise Resource Planning, is a suite of integrated business software applications (often called
modules) that allow companies to track and manage data and even automate some business functions, including
Human Resources.
Human Resource modules in particular are used to track different people-related functions, such as planning,
payroll, administration, development, hiring, and more. Business services, like Standard Operating Procedures, job
postings, news, forums, tracking of work hours, and benefits, etc., can all be unified into one module, which makes
overall management and decision-making easier.
Benefits of using HR modules
Businesses that have integrated ERP and more specifically HR modules, have been able to benefit in a number of
ways. Here are 5:
1. Automated processes that free up management
A large function of HR, as with many other business processes, is data entry and reporting. If you are trying to
develop reports without an integrated ERP system, you probably need to pull data from numerous sources which
takes time. This is time that can probably be better spent on more relevant tasks.
An ERP module data, once set up, will be more accessible. This simultaneously makes it easier to enter and pull
data together into reports. And because large parts of daily tasks can be automated, you can ensure that what you
need to complete is actually achieved.
2. Enhanced sharing of information and collaboration
Because HR is a central function of any business, data related to HR needs to eventually be shared with other
teams or departments. Without ERP this likely means you will need to ask different people to share their data and
then compile it into a useable format.
With ERP for HR, data is stored in a central location, or brought together to a central location, which means that
data from different sources can be shared faster and easier. This also ensures that the right data is shared, thus
enhancing overall outcomes and making it simpler for other teams to work together.
3. Management gains a clearer picture of HR
It can be tough to gain a short-term picture of your employee resources, especially when it comes to identifying
potential resource shortfalls (e.g., double-booked holidays, employees who are constantly late, etc.) and where
improvements can be made. For example, in most modules you can track overtime hours of employees, and
receive alerts when overtime is past a certain threshold.
If you spot that one department is consistently banking extended overtime hours, you can move quickly to address
this.
4. Data is kept up-to-date
As we‘ve stated above, HR systems usually involve data from various locations. This means that there is always a
chance of duplicate or incorrect information. A healthcare ERP module can help ensure that the data is not only
correct, but also not duplicated, which can in turn speed up decision-making and enable better decisions to be
made.
5. Reduced licensing expenses
Without ERP, your HR team could need five or more systems in order to keep track of everything. Each of these
systems will need to be licensed, which can often be a serious investment on your behalf, not to mention the costs
of setting up and maintaining these systems.
Because HR ERP modules offer an integrated solution, you pay for one license to cover all of your needs. This
reduces overall expenses while also making it easier to budget and maintain.
Finance support processes

1. Profit Tracking
A primary function of ERP financial management modules is profit tracking. The profit tracker will help provide a
bird‘s-eye view of how the business is using its financial resources, and of its overall financial health. Tracking
your profits will show you where the majority of profits are coming from, while also determining the return on
investment for any buy.
The tracker uses the incurred costs and any receivables to calculate how much your organization is profiting from
your efforts. Some programs will forecast future profit based on historical expense and sales data.
On the other side of the coin, financial management software can also help companies track costs. This involves
evaluating individual cost centers, looking at procurement from the top or otherwise evaluating how the business is
spending money.
The desired result of these types of tools is to make changes that will increase profits for a business. Think of
financial management software as providing a road map for business leaders who understand the best moves in
their current business environments.
2. Ledger Management
Ledger management is another fundamental function of ERP financial systems. A general ledger provides a
thorough record of all financial transactions. It integrates with all of your other ERP modules, such as inventory
management or customer relationship management.
Entries are typically made directly into the general ledger (GL), but your system may allow you to make entries
anywhere within the application. Either way, you‘ll be able to view your entries in one central location. You can
keep track of a variety of things; for example, assets, liabilities, capital accounts, income and expenses.
Having all of your financial data in one place can make filing tax returns more manageable and help you stay on
top of spending. You can quickly identify any odd transactions or fraud, and some systems will automatically
notify you of these instances.
The GL provides excellent visibility in your financial department and shows you the bigger picture. It‘s the
starting point for creating financial statements that are integral to evaluating your financial health.
3. Accounts Payable
Accounts payable will manage all of the funds your company owes to your vendors and other creditors. An
accounts payable feature integrates your payable data with your purchasing system so you can take control of your
cash flows.
Automating accounts payable will save you money and time on labor hours as well as avoid human errors. AP
automation saves you $16 per invoice, or more, depending on the size of your company. The system will be able to
quickly process large amounts of invoices and other financial transactions between your company and vendors.
Some applications offer document capture, also known as imaging features, which will convert paper invoices into
electronic documents.
In short, an accounts payable system will let the user know how much they owe and when it‘s due, so you‘ll never
be late on a payment again. Sounds nice, right?
4. Accounts Receivable
Accounts receivable allows your business to manage all of the funds customers owe them. It will track customer
payments as well as manage invoices and cash.
Some systems offer a portal for your customers where they can make payments or access invoices. You can
automate tasks such as sending payment reminders or account statements and generating recurring invoices.
AR automation speeds up the collection process and will boost customer relationships because ease of payment
makes your organization more accessible. The ease of payment produces happy, returning customers.
5. Fixed Asset Management
This solution tracks and manages all of your company‘s tangible assets, such as manufacturing equipment,
computers, company cars and office space. It will take into account depreciation calculations, compliance
requirements and tax implications.
Asset management gives your organization better visibility in terms of utilization, costs and maintenance. For
example, keeping track of the depreciation of your assets can help you forecast expenditures and create budgets. If
you are aware that your equipment is aging and may need maintenance soon, you can plan accordingly for those
payments.
Tracking your assets will prevent you from paying taxes on items that you have eliminated or replaced, which is an
easy mistake to make while trying to maintain your own records. The tool will also pick up on opportunities for
sales tax savings — some jurisdictions give tax breaks, or exemptions, to specific industries.
6. Risk Management
A great deal of business is ultimately about risk, and business leaders want to know that their organization is
protected. Risk management tools can predict, analyze and manage crises.
These situations can range anywhere from financial issues to even natural disasters. Other potential calamities that
can be managed with risk management solutions could be related to security, legal liabilities, compliance or
reputational risks.
Compliance regulations can be challenging to keep track of because they are ever-changing. In a food and
beverage manufacturing setting, the risk management tool could notify you in the event of contamination or any
other issues in the process. From a financial point of view, it will be monitoring any money flowing in and out of
your business. Your risk management tool can ensure that you have enough cash reserves to cover accounts
payable if a customer misses a payment; this manages credit risk.
7. Reporting
Analytics provide real-time access to financial data, which is crucial for maintaining your finances. The visibility
helps you make data-driven predictions and decisions concerning your company‘s finances.
On a basic level, reporting and analytics will show you where revenue is being generated and where it‘s not being
generated. But the dashboard can do so much more, such as display your sales, expected sales, expenses and many
other financial components. Typically, the dashboard is customizable, so you can choose which categories you
would like to see. Data is shown in graph format which allows you to quickly understand the financial health of
your company at that exact moment.
8. Multi-Currency Management
If you have global clients, the ability to manage multiple currencies is critical. Multi-currency management
automates the process of both buying and selling in foreign currencies. Currency conversion capabilities allow you
to complete transactions in numerous different currencies.
9. Tax Management
Tax management solutions store system taxation settings and provide tax audit and tax reporting functions.
Taxation settings should be used across the system to provide a consistent collection of sales and VAT taxes.
Perhaps your tax management feature will complete the tedious task of determining sales tax jurisdictions of ship-
to addresses or use prebuilt tax intelligence to process sales transactions in compliance with proper regulations.
The capabilities of your tax management depend on which system you purchase, and the system you purchase will
depend on the needs of your company. Either way, employing tax management within your organization is a great
way to avoid spending time on mundane tasks.
Marketing

Sales and Marketing module provides functionalities which begin from contacting customers which are referred to
as pre sales activities, allows tracking of each customer orders right from placing an order to dispatch of material
for that particular order, raising sales invoices and receiving payments from customer. Below are the list of core
functionalities of ERP sales and Marketing module.

Sales order
Order scheduling
Shipping with delivery note
Tracking sales invoices
Sales returns
Additionally the following activities can be recorded with the ERP sales and marketing module.

Automating the sales force activities such as visits to customers and tracking their expenses.
Target setting for marketing personnel.
Business partners and franchises are common in today's businesses. Marketing personnel need to work
closely with business partners to promote their business. Recording of these activities.
Recording of payments received from customers after dispatches are made. An ERP sales and marketing
module allows marketing executives to contact customers and follow-up each and every sales invoice and
receive payments for invoices.
Track lost orders and identify the reasons for loosing those orders.
Allow the preparation of comprehensive reports of the sales and marketing activities of the company such
as track sales trends over different periods, drill down for the consolidated data and allow for sales
forecast.
Strategic planning
The strategy will be outlined in the following activities:
Define key stakeholders and participants in the selection process
Agree upon project timelines and key milestones
Define scope, including users, modules, locations, level of customization/centralization and potential
solution structure
Conduct kick-off meeting and project overview with key stakeholders and participants
Help establish initial communication planning to the user base to create initial awareness and project
support
Begin reviewing existing business and technical documentation of the organization‘s current environment
Establish an ERP project governance structure to guide the evaluation process, team, scope, and
deliverables
Establish initial Organizational Change Management planning
Establish a project management site for information sharing and project management
Executive Strategic Planning
Panorama will conduct a series of executive planning workshops. The focus of the workshops will be to define the
organization‘s strategic business direction and plans for execution.
The team will define the following during the workshops:
 Assess long-term strategic goals and objectives. (Includes a high level overview of where the organization
wants to go in the next several years).
Assess ideas and plans for execution that are required in the short and long term.
Pain points around the use of technology.
Education on software standardization pros and cons.
Education on industry standards around shared services and the options available.
Education of IT strategy pros and cons.
Outline desired future state business model to include process standardization and shared services.
Risk assessment and mitigation strategies.
Research and development problems in traditional functional view
 Business Integration and Improved Data Accuracy: ERP system is composed of various modules/
submodules where a module represents a particular business component. If data is entered in one module
such as receiving, it automatically updates other related modules such as accounts payable and inventory.
This updating occurs at real time i.e. at the time a transaction occurs. Since, data needs to be entered only
once at the origin of the transaction, the need for multiple entries of the same data is eliminated. Likelihood
of duplicate/ erroneous data is, therefore, minimized. The centralized structure of the database also enables
better administration and security provisions, which minimizes loss of sensitive data.
 Planning and MIS: The various decision support tools like planning engines and simulations functions,
form an integral part of an ERP system that helps in proper utilization of resources like materials, human
resources, and tools. Constrained based planning help in drawing appropriate production schedules,
thereby improving the operation of plant and equipment. As a part of MIS, an ERP system, contains many
inbuilt standard reports and also a report writer that produce ad hoc reports, as and when needed.
 Improved Efficiency and Productivity: In addition to provision of improved planning, ERP system
provides a tremendous boost to the efficiency of day to day and routine transactions such as order
fulfillment, on time shipment, vendor performance, quality management, invoice reconciliation, sales
realization, and cash management. Cycle time is reduced for sales to cash and procurement to pay
sequences.
 Establishment of Standardized Procedures: ERP system is based on processes of international best
practices, which are adopted by the organizations during implementation. Department silos are purged, and
maverick practices are done away with. Because of top-down view available to management, chances of
theft, fraud and obsolescence are minimized.
 Flexibility and technology: Due to the globalized environment, where production units, distribution
centers, and corporate offices reside in different countries, organizations need multi-currency, multi-
language and multi-accounting modes, in an integrated manner. These provisions are available in most of
the ERP systems, particularly in products offered by tier 1 and tier 2 vendors. ERP vendors are also quick
to adopt latest technologies, from mainframe to client server to the internet. Unlike a bespoke system,
Upgrading to latest technology for a running ERP system is uncomplicated, involving mostly adoption of
service packs and patches.
Need for integrated process view
ERP systems comprise multiple modules to create a smooth flow of information tailored to both department-level
and enterprise-level needs. These can be individually purchased or as part of tailored packages based on
organisational needs. Some of the functional ERP modules that can be integrated into one ERP system are:
Accounting and Financial Management
Human Resource & Payroll Management
Inventory Management
Customer Relationship Management (CRM)
Why use an integrated ERP solution?
These strategic tools reduce costs, optimise business processes, and promote healthier risk management. At the
very core of every ERP software is the aim to bring every aspect of your business together under one roof to
produce a well-oiled machine of a business.
For instance, a customer-specific ERP software or CRM will boost customer relations that converts to revenue for
the business. A CRM enables managers to take a detailed look at every customer relationship. They can organise
the client base as per their values — high and low, and target higher value customers with their marketing material
and sales efforts. Communications with clients then become informative, timely and efficient. Implementing CRM
also makes it easier to respond quickly when key clients have a complaint.
A company can even optimise their supply chain to eliminate waste with integrated warehouse management and
shop floor management where efficiency is improved through constant communication and revamping of systems
according to trends.
Where is ERP today?
The short answer to this question is – everywhere. ERP software now works in conjunction with a variety of
technology trends to encompass every single business need one might think of. The following new and continuing
computing trends have an impact on the growth of enterprise ERP software:
Mobile ERP
Executives and employees want real-time access to information. Consequently, businesses are embracing mobile
ERP apps to gain visibility into real-time reports and dashboards.
Cloud ERP
The cloud has advanced on all fronts of business as the advantages of the cloud such as, access to data in real-time,
scalability and expandable storage, has become apparent.
Social ERP
Social media has been abuzz with how important —or not — it is to add social media to ERP systems. Many have
been quick to seize the opportunity and connected social media to their ERP systems.
Two-tier ERP
An all-encompassing ERP system was the aim of every enterprise system. These were intended to take care of
every aspect of organisational systems. A change in strategy has brought about the two-tier system where one
covers corporate level functions and the other, subsidiary.
How will the business benefit from an integrated ERP system?
Originally, ERP systems were created with the purpose of seamlessly merging basic processes like planning,
manufacturing, and sales with each other within an enterprise. More recently ERP software encompass marketing,
inventory monitoring, order automation, customer service, finance, and human resources as well. As the span of
functions covered by an ERP solution has increased, it has also led to increased communication among correlated
departments. Every company is a synergistic entity and all the departments must collaborate amongst each other to
meet the needs of the entire company. An integrated ERP system enables you to do just that by providing role-
based access to information with linked ERP modules.
The advantages of an integrated ERP are numerous and it might be exactly what your business needs right now to
accelerate revenue growth. Increase communication among departments, improve workflow and help your
employees make informed decisions that are backed by reports with an integrated ERP system.
Information as a resource
ERP software is considered to be a type of enterprise application, that is software designed to be used by larger
businesses and often requires dedicated teams to customize and analyze the data and to handle upgrades and
deployment. In contrast, Small business ERP applications are lightweight business management software
solutions, often customized for a specific business industry or vertical.
Today most organizations implement ERP systems to replace legacy software or to incorporate ERP applications
because no system currently exists. In fact, a 2016 study by Panorama Consulting Solutions, LLC., indicates that
organizations implement ERP for the following reasons:
To replace out-of-date ERP software (49%)
To replace homegrown systems (16%)
To replace accounting software (15%)
To replace other non-ERP systems / had no system (20%)
ERP Software Modules Explained
ERP software typically consists of multiple enterprise software modules that are individually purchased, based on
what best meets the specific needs and technical capabilities of the organization. Each ERP module is focused on
one area of business processes, such as product development or marketing.
The Difference Between CRM and ERP
Some of the most common ERP modules include those for product planning, material purchasing, inventory
control, distribution, accounting, marketing, finance and HR. A business will typically use a combination of
different modules to manage back-office activities and tasks including the following:
Distribution process management
Supply chain management
Services knowledge base
Configure prices
Improve accuracy of financial data
Facilitate better project planning
Automate the employee life-cycle
Standardize critical business procedures
Reduce redundant tasks
Assess business needs
Accounting and financial applications
Lower purchasing costs
Manage human resources and payroll
As the ERP methodology has become more popular, software applications have emerged to help business
managers implement ERP in to other business activities and may incorporate modules for CRM and business
intelligence, presenting it as a single unified package.
The basic goal of using an enterprise resource planning system is to provide one central repository for all
information that is shared by all the various ERP facets to improve the flow of data across the organization.

Motivation for ERP

The goal of this research was to increase the knowledge base regarding Enterprise Resource Planning (ERP)
Software implementation, particularly in the public sector. To this end, factors regarding benefits sought through
ERP system implementation and critical factors surrounding successful ERP implementation were identified. In
addition, the perception of project team members‘ satisfaction with modules implemented and their concerns about
implementing ERP software were identified in this study. The results of this study provided recommendations for
public- and private-sector organizations in order to increase their opportunity for successful ERP system
implementation. The literature review and results of this study suggested that the benefits sought during ERP
system implementation were consistent among public- and private-sector organizations. Benefits such as increased
standardization, better reporting, and reduced operational costs were recognized as goals of ERP software
implementation. Factors that attributed to successful ERP system implementations were top management support,
and knowledgeable project managers and team members. The t-test analyses found differences among the two
groups, public and private sector organizations, regarding some benefits sought and the level of satisfaction with
some modules. The study included recommendations for organizations to fully research ERP functionality prior to
implementation, implement strong change management, use other means of measuring return on investment,
ensure employee buy-in and top management involvement, and avoid scope creep.
Unit 3; Evolution of Information System

EDP (Electronic Data Processing) System

Electronic Data Processing, also known as EDP, is a frequently used term for automatic information processing.
It uses the computers to manipulate, record, classification and to summarize data. If someone asks what is
electronic data processing, then EPD meaning can be described as the processing of data using electronic means
such as computers, calculators, servers and other similar electronic equipments. A computer is the best example of
an Electronic Data Processing machine. Electronic Data Processing is an accurate and rapid method.

Methods of Electronic Data Processing (EDP)

There are various methods of data processing but there are some very popular methods when it comes to
―electronic data processing‖. These methods are widely adopted in almost every industry. Depending on the nature
of requirement of data processing, some of the most popular methods of electronic data processing are explained
below:
Time-sharing
Real-time processing
Online processing
Multiprocessing
Multitasking
Interactive processing
Batch processing
Distributed processing

Time- Sharing: In this processing method, many nodes connected to a CPU accessed central computer. A multi-
user processing system controls the time allocation to each user. Each user can allocate the time slice in a sequence
of the Central Processing Unit. The user should complete the task during the assigned time slice. If the user cannot
finish the task, then the user can complete the task during another allocated time slice.

Real-Time Processing: Providing accurate and up-to-date information is the primary aim of real-time processing.
It is possible when the computer process the incoming data. It will give the immediate response what may happen.
It would affect the upcoming events. Making a reservation for train and airline seats are the best example for real-
time processing.
If the seats are reserved, then the reservation system updates the reservation file. The real-time processing
is almost an immediate process to get the output of the information. This method saves the maximum time for
getting output.

Online Processing: In this processing method, the data is processed instantly it is received. A communication link
helps to connect the computer to the data input unit directly. The data input may include a network terminal or
online input device. Online processing is mostly used for information research and recording.
Multiprocessing: Multiprocessing is processing of more than one task that uses the different processors at the
same time of the same computer. It is possible in network servers and mainframes. In this process, a computer may
consist of more than one independent CPU. This makes data processing much faster.
There is a possibility to made coordination in a multiprocessing system. In this process, the different
processors share the same memory. The processor gets the information from a different part of one program or
various programs.

Multitasking: It is an essential feature of data processing. Working with different processors at the same time is
called multitasking. In this process, the various tasks share the same processing resource. The operating systems in
the multitasking process are time-sharing systems.

Interactive Processing: This method includes three types of functions. The following are the types of function
 1. Peak detection
2. Integration
3. Quantitation
It is a simple way to work with the computer. This method of the process can compete for each other.

Batch Processing: Batch processing is a method of the process the organized data into divided groups. In this
method, the processing data can be divided as a group over a required time period. The batch processing method
allows the computer to perform different priorities for an interaction. This method is very unique and useful to
process.

Distributed Processing: This method is usually used for remote workstations, since the remote workstations are
connected to a big workstation. The customers get the better services from this process. In this process, the firms
can distribute the use of geographical computers. The best example for this distributed processing method is
ATMs. ATMs are connected to the banking system.

Elements of Electronic Data Processing

Hardware, Software, procedure, personnel is the basic elements of electronic data processing. In the hardware
section, scanners, barcode scanners, cash registers, personal computers, medical device, servers, video and audio
equipment are the elements of electronic data processing. In the software section, accounting software, data entry,
scheduling software, analytics, and software are the elements of Electronic Data Processing. In the procedure
section, sorting, analysis, reporting, conversion, data collection, aggregation be the elements of EDP.
In personnel, the programmer uses the electronic data processing to create the components and
spreadsheets. The data entry specialists use to scan the barcodes. The importance of data processing is now
understood by all the fields. Each industry now focuses on what works best for them and how to achieve greater
profits.
Stages of Electronic Data Processing
A collection is the first stage of Electronic Data Processing. It is a very crucial part. In an EDP system, this
process ensures that accurate data gathering. Census, sample survey, and administrative by-product are some types
of data collection. Preparation is the second stage of electronic data processing. Preparation is used to analyze the
data processing.
Input is the third stage in Electronic Data Processing. Data entry is done by the use of a scanner, keyboard,
and digitizer. The fourth stage is processing. It has various methods. The last stage is storage. Every computer has
the use to store the file.

Advantages of Electronic Data Processing

The system of electronic data processing is once created then the cost of the managing data will be reduced.
Documents can be protected as an extreme data sensitive. Because of the documents should be treated as a
primary asset. When all the information is collected by the papers are the challenging one.
The management of document is costly. So, electronic data processing reduces the cost of the paperwork.
The electronic data processing provides the documentation controls. With the help of electronic data
processing, you can easily automate the PDF publishing process.
In electronic data processing, there is a facility to search a document in the system. It will reduce the time
loss. The electronic data processing has the benefit to improve the internal and external collaboration. The
electronic data processing helps to improve the better submissions. The electronic data processing also fast
up the complete structure to make the generation of documents.
The famous software product such as Ms. Office is using the electronic data processing concept. The EDP
has the facility to reduce the duplication of effort and repeated entries. The EDP has the capability to make
the decisions. An electronic data processing has the ability to store the enormous amounts of data and this
data can then be further utilised for data presentation and analysis.
Disadvantages of Electronic Data Processing
When the computer hackers make the strike on the computer, then the processing of data will make the
insecurity. Then the data will be the loss. The fault in a equipment will harm all the equipment in the office.
The security of the computer would be the big problem. In a coding process, a computer not recognizes the
same individuals.
When a small number of digit codes are compared with a large number code then, it occupies the computer
storage less. The alphabetic codes can be descriptive.

Examples of EDP: It is used in a telecom company to format bills and to calculate the usage-based charges. In
schools, they use EDP to maintain student records. In supermarkets, used for recording whereas hospitals use it to
monitor the progress of patients.
Further, the Electronic Data Processing is used for hotel reservations. It can be used in learning
institutions. The EDP is also used in banks to monitor the transactions. In the departments such as police,
cybercrime, and chemical the electronic data processing is used to note the entries. It enables larger organizations
to collect the information and process the data. The electronic data processing can also be used as video and audio
equipment. It can be used as a barcode scanner.

MIS (Management Information Systems)

A management information system (MIS) is a computerized database of financial information organized
and programmed in such a way that it produces regular reports on operations for every level of management in a
company. It is usually also possible to obtain special reports from the system easily. The main purpose of the MIS
is to give managers feedback about their own performance; top management can monitor the company as a whole.
Information displayed by the MIS typically shows "actual" data over against "planned" results and results from a
year before; thus it measures progress against goals. The MIS receives data from company units and functions.
Some of the data are collected automatically from computer-linked check-out counters; others are keyed in at
periodic intervals. Routine reports are pre-programmed and run at intervals or on demand while others are obtained
using built-in query languages; display functions built into the system are used by managers to check on status at
desk-side computers connected to the MIS by networks. Many sophisticated systems also monitor and display the
performance of the company's stock.
Businesses use information systems at all levels of operation to collect, process, and store data.
Management aggregates and disseminates this data in the form of information needed to carry out the daily
operations of business. Everyone who works in business, from someone who pays the bills to the person who
makes employment decisions, uses information systems. A car dealership could use a computer database to keep
track of which products sell best. A retail store might use a computer-based information system to sell products
over the Internet. In fact, many (if not most) businesses concentrate on the alignment of MIS with business goals to
achieve competitive advantage over other businesses.
MIS professionals create information systems for data management (i.e., storing, searching, and analyzing
data). In addition, they manage various information systems to meet the needs of managers, staff and customers.
By working collaboratively with various members of their work group, as well as with their customers and clients,
MIS professionals are able to play a key role in areas such as information security, integration, and exchange. As
an MIS major, you will learn to design, implement, and use business information systems in innovative ways to
increase the effectiveness and efficiency of your company.

More Than Coding

A common misconception is that MIS only concerns coding (or writing computer code). While coding concepts
represent some of the fundamental principles of information systems development, implementation, and use, many
jobs in MIS do not utilize coding at all. A large portion of the MIS degree focuses on data analysis, teamwork,
leadership, project management, customer service, and underlying business theories. These aspects of the degree
are what set the MIS professional apart from a computer science specialist.
Do you enjoy working with people?
 Would you enjoy the chance to work on global problems with people from all over the world?
Do you enjoy analyzing and solving problems?
Do you want to create innovative, cutting-edge technology solutions?
Do you want to learn how to make businesses more efficient, effective and competitive?
Then you should consider as your major the field that is experiencing a critical shortage of professionally
trained individuals. A field where demand is skyrocketing with projected growth rates of 38 percent – the
fastest of any business discipline (U.S. Bureau of Labour Statistics).

EIS (Executive information system)

An Executive Information System can be defined as a specialized Decision Support System. This type of the
system generally includes the various hardware, software, data, procedures and the people. With the help of all
this, the top level executives get a great support in taking and performing the various types of the decisions. The
executive information system plays a very important role in obtaining the data from the different sources, then help
in the integration and the aggregation of this data. After performing these steps the resulting information is
displayed in such a pattern that is very easy to understand.
Executive information system is ‗a computer based system that serves the information that is needed by the
various top executives. It provides very rapid access to the timely information and also offers the direct access to
the different management reports.‘
Executive Information System is very user friendly in the nature. It is supported at a large extent by the graphics.
Executive support system can be defined as the comprehensive executive support system that goes beyond
the Executive Information System and also includes communications, office automation, analysis support etc.
According to Watson, Executive Information System / executive support system depends on some of the
factors that can be summarized as the follows
1. Internal factors
i. Need for the timely information.
ii. Need for the improved communications.
iii. Need for the access to the operational data.
iv. Need for the rapid status updates on the various business activities.
v. Need for the access to the corporate database.
vi. Need for very accurate information.
vii. Need for the ability to identify the various historical trends.
2. External Factors
i. Increasing and intensifying the global competition.
ii. Rapidly changing the business environment.
iii. Need to be more pro active.
iv. Need to access the external database.
v. Increasing the various government regulations.
Characteristics of the Executive support system/ Executive Information System

1. Informational characteristics
i. Flexibility and ease of use.
ii. Provides the timely information with the short response time and also with the quick retrieval.
iii. Produces the correct information.
iv. Produces the relevant information.
v. Produces the validated information.

2. User interface/orientation characteristics

i. Consists of the sophisticated self help.
ii. Contains the user friendly interfaces consisting of the graphic user.
iii. Can be used from many places.
iv. Offers secure reliable, confidential access along with the access procedure.
 v. Is very much customized.
vi. Suites the management style of the individual executives.

3. Managerial / executive characteristics

i. Supports the over all vision, mission and the strategy.
ii. Provides the support for the strategic management.
iii. Sometimes helps to deal with the situations that have a high degree of risk.
iv. Is linked to the value added business processes.
v. Supports the need/ access for/ to the external data/ databases.
vi. Is very much result oriented in the nature.

Executive Information System / Executive Support System Capabilities

1. Helps in accessing the aggregated or macro or global information.
2. Provides the user with an option to use the external data extensively.
3. Enables analysis of the address and the hoc queries.
4. Shows the trends, the ratios and the various deviations.
5. Helps in incorporating the graphic and the text in the same display, which helps to have a better view.
6. It helps in the assessment of the historical as also the latest data.
7. Problem indicators can be highlighted with the help of the Executive Information System / executive
support system.
8. Open ended problem explanation with the written interpretations can be done with the help of the
Executive Information System / executive support system.
9. Offers management by the exception reports.
10. Utilizes the hyper text and the hyper media.
11. Offers generalized computing.
12. Offers telecommunications capacity.

Executive Information System / Executive Support System benefits

1. Achievement of the various organizational objectives.
2. Facilitates access to the information by integrating many sources of the data.
3. Facilitates broad, aggregated perspective and the context.
4. Offers broad highly aggregated information.
5. User‘s productivity is also improved to a large extent.
6. Communication capability and the quality are increased.
7. Provides with the better strategic planning and the control.
8. Facilitates pro active rather than a reactive response.
9. Provides the competitive advantage.
10. Encourages the development of a more open and active information culture.
11. The cause of a particular problem can be founded.
Information needs of organization
Information processing beyond doubt is the dominant industry of the present century. Following factors states few
common factors that reflect on the needs and objectives of the information processing −
Increasing impact of information processing for organizational decision making.
Dependency of services sector including banking, financial organization, health care, entertainment,
tourism and travel, education and numerous others on information.
Changing employment scene world over, shifting base from manual agricultural to machine-based
manufacturing and other industry related jobs.
Information revolution and the overall development scenario.
Growth of IT industry and its strategic importance.
Strong growth of information services fuelled by increasing competition and reduced product life cycle.
Need for sustainable development and quality life.
Improvement in communication and transportation brought in by use of information processing.
Use of information processing in reduction of energy consumption, reduction in pollution and a better
ecological balance in future.
Use of information processing in land record managements, legal delivery system, educational institutions,
natural resource planning, customer relation management and so on.
In a nutshell −
Information is needed to survive in the modern competitive world.
Information is needed to create strong information systems and keep these systems up to date.
Implications of Information in Business
Information processing has transformed our society in numerous ways. From a business perspective, there has
been a huge shift towards increasingly automated business processes and communication. Access to information
and capability of information processing has helped in achieving greater efficiency in accounting and other
business processes.
A complete business information system, accomplishes the following functionalities −
Collection and storage of data.
Transform these data into business information useful for decision making.
Provide controls to safeguard data.
Automate and streamline reporting.
The following list summarizes the five main uses of information by businesses and other organizations −
Planning − At the planning stage, information is the most important ingredient in decision making.
Information at planning stage includes that of business resources, assets, liabilities, plants and
machineries, properties, suppliers, customers, competitors, market and market dynamics, fiscal policy
changes of the Government, emerging technologies, etc.
Recording − Business processing these days involves recording information about each transaction or
event. This information collected, stored and updated regularly at the operational level.
 Controlling − A business need to set up an information filter, so that only filtered data is presented to the
middle and top management. This ensures efficiency at the operational level and effectiveness at the
tactical and strategic level.
Measuring − A business measures its performance metrics by collecting and analyzing sales data, cost of
manufacturing, and profit earned.
Decision-making − MIS is primarily concerned with managerial decision-making, theory of
organizational behavior, and underlying human behavior in organizational context. Decision-making
information includes the socio-economic impact of competition, globalization, democratization, and the
effects of all these factors on an organizational structure.
In short, this multi-dimensional information evolves from the following logical foundations −
Operations research and management science
Theory of organizational behaviour
Computer science −
o Data and file structure
o Data theory design and implementation
o Computer networking
o Expert systems and artificial intelligence
Information theory
Following factors arising as an outcome of information processing help speed up of business events and achieves
greater efficiency −
Directly and immediate linkage to the system
Faster communication of an order
Electronic transfer of funds for faster payment
Electronically solicited pricing (helps in determining the best price)
MIS Need for Information Systems
Managers make decisions. Decision-making generally takes a four-fold path −
Understanding the need for decision or the opportunity,
Preparing alternative course of actions,
Evaluating all alternative course of actions,
Deciding the right path for implementation.

MIS is an information system that provides information in the form of standardized reports and displays for the
managers. MIS is a broad class of information systems designed to provide information needed for effective
decision making.
Data and information created from an accounting information system and the reports generated thereon are used
to provide accurate, timely and relevant information needed for effective decision making by managers.

Management information systems provide information to support management decision making, with the
following goals −
Pre-specified and pre-planned reporting to managers.
Interactive and ad-hoc support for decision making.
Critical information for top management.
MIS is of vital importance to any organization, because −
It emphasizes on the management decision making, not only processing of data generated by business
operations.
It emphasizes on the systems framework that should be used for organizing information systems
applications.

ERP as an integrator of information needs at various levels

An integrated ERP or Enterprise Resource Planning (ERP) system is a software utilised to optimise business
process management. Essentially, a system of interconnected business applications manages your enterprise and
automates many back-end business functions such as financial accounting, human resources, and more through
function-specific ERP modules. You do not have to waste time and resources on manual, repetitive tasks and can
shift your focus on improving your business.
What are the different ERP modules that are part of an integrated ERP system?
ERP systems comprise multiple modules to create a smooth flow of information tailored to both department-level
and enterprise-level needs. These can be individually purchased or as part of tailored packages based on
organisational needs. Some of the functional ERP modules that can be integrated into one ERP system are:
Accounting and Financial Management
Human Resource & Payroll Management
Inventory Management
Customer Relationship Management (CRM)

Why use an integrated ERP solution?

These strategic tools reduce costs, optimise business processes, and promote healthier risk management. At the
very core of every ERP software is the aim to bring every aspect of your business together under one roof to
produce a well-oiled machine of a business.
For instance, a customer-specific ERP software or CRM will boost customer relations, that converts to
revenue for the business. A CRM enables managers to take a detailed look at every customer relationship. They
can organise the client base as per their values — high and low, and target higher value customers with their
marketing material and sales efforts. Communications with clients then become informative, timely and efficient.
Implementing CRM also makes it easier to respond quickly when key clients have a complaint.
A company can even optimise their supply chain to eliminate waste with integrated warehouse
management and shop floor management where efficiency is improved through constant communication and
revamping of systems according to trends.

Where is ERP today?

The short answer to this question is – everywhere. ERP software now works in conjunction with a variety of
technology trends to encompass every single business need one might think of. The following new and continuing
computing trends have an impact on the growth of enterprise ERP software:
Mobile ERP - Executives and employees want real-time access to information. Consequently, businesses
are embracing mobile ERP apps to gain visibility into real-time reports and dashboards.
Cloud ERP - The cloud has advanced on all fronts of business as the advantages of the cloud such as,
access to data in real-time, scalability and expandable storage, has become apparent.
Social ERP - Social media has been abuzz with how important —or not — it is to add social media to ERP
systems. Many have been quick to seize the opportunity and connected social media to their ERP systems.
Two-tier ERP - An all-encompassing ERP system was the aim of every enterprise system. These were
intended to take care of every aspect of organisational systems. A change in strategy has brought about the
two-tier system where one covers corporate level functions and the other, subsidiary.
How will the business benefit from an integrated ERP system?
Originally, ERP systems were created with the purpose of seamlessly merging basic processes like planning,
manufacturing, and sales with each other within an enterprise. More recently ERP software encompass marketing,
inventory monitoring, order automation, customer service, finance, and human resources as well. As the span of
functions covered by an ERP solution has increased, it has also led to increased communication among correlated
departments. Every company is a synergistic entity and all the departments must collaborate amongst each other to
meet the needs of the entire company. An integrated ERP system enables you to do just that by providing role-
based access to information with linked ERP modules.
The advantages of an integrated ERP are numerous and it might be exactly what your business needs right
now to accelerate revenue growth. Increase communication among departments, improve workflow and help your
employees make informed decisions that are backed by reports with an integrated ERP system.

Decision making involved at the above level

Managers at all levels must make decisions on behalf of a company. The difference between decisions at various
levels lies in the scope of the choices made. Long-term decisions affecting the company as a whole belong to the
highest management levels, while decisions affecting day-to-day operations fall to bottom management. All
decisions relate directly or indirectly to broader management functions: planning, organizing, leading, staffing and
controlling. Different management levels spend more time on certain functions than on others.

Board or Owner Creates the Mission

All business and management activity follows from a company‘s mission – its reason for being in business. A
company‘s board or owners create the mission and write a mission statement for the internal and external
audiences. Success in accomplishing the mission could take many forms. The form chosen gives a company its
vision, an ideal the business seeks to actualize.
A caterer, for instance, might envision becoming the first choice for jet-set soirees. Besides defining a lofty
ambition and the existential question of mission, a company‘s board or owners also articulate a company‘s core
values, those standards the business will never compromise.

Upper Management Needs a Strategic Plan

Upper management must translate the vast scope of mission and vision into concrete achievements over time. In
other words, upper management needs a strategic plan. Decisions related to strategy involve company-wide
matters enacted over the long term. The goals are what the company hopes to accomplish at least a year – more
often five years – into the future.
Management then chooses a grand strategy, such as growth or diversification, to reach strategic goals. Of
all management levels, upper managers spend the most time making decisions involving plans. They also have
decision power over middle management.
Middle Management Accomplish Strategic Goals
Once upper management decides the overall direction of the company, it‘s up to middle management to
choose smaller tactical objectives that, put together, accomplish strategic goals. Middle managers create tactical
plans, which have more detail than strategic plans. The tactics often are geared toward some function or
department such as production, where a possible objective could involve some measurable efficiency or quality
improvement.
Middle management‘s choices and plans see fruition in a year or less. Managers in this tier oversee other
middle managers or operational managers.

First-Line or Operational Management

Also called first-line management, operational management is the level directly responsible for employees. By
choosing their own goals on a daily, weekly or monthly basis, first-line management accomplishes the objectives
of middle management. The scope of operational management covers departments, sections or teams.
Inventory, scheduling and budgeting are examples of plans and decisions that operational managers adopt.
Goals might include a certain number of sales for the day.
Unit-4 ERP models/functionality

ERP Functions
A solution adaptable to the needs of each company.
Quickly access information on any process, in an updated and real-time.
Automation reduces time and errors in all processes.
Protection of all data by centralizing its management and automated backups.
Standardization of work, so that all the members of the company work under the same support.
Typologies of ERP Modules and Features
A business management software is a computer program designed specially to solve and automate the needs of
companies, regardless of their economic sector. Among the different programs of this type, the ERP system is the
flagship product of this line of ICT tools. Since its launch, back in the 80s, numerous versions and specific tools
have been made to solve all types of business requirements. They exist from ERPs for the horticultural industry, as
for chemistry or tourism.
It is a business management program made up of interdependent units called modules. So far, taking into account
the impact that the ERP system has had during the last years, it is obvious. But, what types of modules exist in the
market? And what are the common characteristics of ERP business management software in all of its suppliers?
Types of existing modules in an ERP system
As mentioned previously, ERP business management software is made up of independent elements called
modules. Each of these is responsible for performing a specific.
Basic ERP Module:
They are all those modules that, at the moment in which a company is made with the services of the ERP business
management software, come standard. That is to say, they are the basic modules that every company must acquire
in a mandatory way so that the ERP system can undertake its most basic functionalities.
Optional ERP Module:
The other types of modules are more specific. These are functionalities that companies can add over the life of the
ERP program to complement features that, in their day, were not considered necessary but over time have become
essential.
Vertical ERP Module:
Finally, this typology of modules is characterized by being of the same type as the optional ones, but with a
difference: they are specialized modules in specific economic and industrial sectors. As, for example, of the
horticultural and tourism sector. The most important tool for hotels is the PMS and for the horticultural sector, the
horticultural ERP – specialized in cooperatives in this sector.
But beyond the typology of modules, which is common in all ERPs, there is another type of simultaneous
characteristics that occur in all the tools of the different business management software providers in the market.
Some of the most important are the client/server architecture, a large number of features, the degree of abstraction
of the tool, the adaptability to different needs and the modularity of the ERP system.
Therefore, it is important to be aware of the main characteristics that must be set to choose an ERP business
management software that meets our needs and requirements as a company.
 Sales order processing

Order processing is the most important function in order management. As soon as the sales order is generated,
resource allocation begins to procure raw material from inventory stock.
The order then reaches production stage and well-guided through ERP solution till the end of assembly line.
The order consequently reaches packaging and shipping department. Here, it is processed for packing with
customer label and bar code on top of it.
Finally, when the sales order is ready for dispatch to customers, automated invoice is generated taking into
consideration freight charges and taxes.
Therefore, the whole process is automated because every department can track the order progress in real-time
and schedule their tasks accordingly.
In case there are multiple business units catering to a single order, a centralized order entry is created that can
be tracked by all business units. It liberates employees from burden of excessive communication resulting in
loss of time.
Furthermore, it prevents unwarranted confusion about the sales order. Besides your employees, the order
progress can be tracked by customers and vendors. ERP is also enabled to prioritize orders in line with
production assembly, delivery schedule and urgent orders.
ERP system integrates your sales, finance, inventory and production department. It helps to maintain inventory
levels, manage sales returns, keeps a track of payment and delivery status.
Moreover, it helps to improve sales visibility and order processing efficiency.
MRP
Material requirements planning (MRP) is a computer-based inventory management system designed to assist
production managers in scheduling and placing orders for items of dependent demand. Dependent demand items
are components of finished goods—such as raw materials, component parts, and subassemblies—for which the
amount of inventory needed depends on the level of production of the final product. For example, in a plant that
manufactured bicycles, dependent demand inventory items might include aluminum, tires, seats, and bike chains.
The first MRP systems of inventory management evolved in the 1940s and 1950s. They used mainframe
computers to explode information from a bill of materials for a certain finished product into a production and
purchasing plan for components. Before long, MRP was expanded to include information feedback loops so that
production personnel could change and update the inputs into the system as needed. The next generation of MRP,
known as manufacturing resources planning or MRP II, also incorporated marketing, finance, accounting,
engineering, and human resources aspects into the planning process. A related concept that expands on MRP is
enterprise resources planning (ERP), which uses computer technology to link the various functional areas across
an entire business enterprise.
MRP works backward from a production plan for finished goods to develop requirements for components and raw
materials. MRP begins with a schedule for finished goods that is converted into a schedule of requirements for the
subassemblies, the component parts, and the raw materials needed to produce the final product within the
established schedule. MRP is designed to answer three questions: what is needed? how much is needed?
and when is it needed?"
MRP breaks down inventory requirements into planning periods so that production can be completed in a timely
manner while inventory levels—and related carrying costs—are kept to a minimum. Implemented and used
properly, it can help production managers plan for capacity needs and allocate production time. But MRP systems
can be time consuming and costly to implement, which may put them out of range for some small businesses. In
addition, the information that comes out of an MRP system is only as good as the information that goes into it.
Companies must maintain current and accurate bills of materials, part numbers, and inventory records if they are to
realize the potential benefits of MRP.
MRP INPUTS
The information input into MRP systems comes from three main sources: a bill of materials, a master schedule,
and an inventory records file. The bill of materials is a listing of all the raw materials, component parts,
subassemblies, and assemblies required to produce one unit of a specific finished product. Each different product
made by a given manufacturer will have its own separate bill of materials. The bill of materials is arranged in a
hierarchy, so that managers can see what materials are needed to complete each level of production. MRP uses the
bill of materials to determine the quantity of each component that is needed to produce a certain number of
finished products. From this quantity, the system subtracts the quantity of that item already in inventory to
determine order requirements.
The master schedule outlines the anticipated production activities of the plant. Developed using both internal
forecasts and external orders, it states the quantity of each product that will be manufactured and the time frame in
which they will be needed. The master schedule separates the planning horizon into time "buckets," which are
usually calendar weeks. The schedule must cover a time frame long enough to produce the final product. This total
production time is equal to the sum of the lead times of all the related fabrication and assembly operations. It is
important to note that master schedules are often generated according to demand and without regard to capacity.
An MRP system cannot tell in advance if a schedule is not feasible, so managers may have to run several
possibilities through the system before they find one that works.
The inventory records file provides an accounting of how much inventory is already on hand or on order, and thus
should be subtracted from the material requirements. The inventory records file is used to track information on the
status of each item by time period. This includes gross requirements, scheduled receipts, and the expected amount
on hand. It includes other details for each item as well, like the supplier, the lead-time, and the lot size.
MRP PROCESSING
Using information culled from the bill of materials, master schedule, and inventory records file, an MRP system
determines the net requirements for raw materials, component parts, and subassemblies for each period on the
planning horizon. MRP processing first determines gross material requirements, then subtracts out the inventory
on hand and adds back in the safety stock in order to compute the net requirements.
The main outputs from MRP include three primary reports and three secondary reports. The primary reports
consist of: planned order schedules, which outline the quantity and timing of future material orders; order releases,
which authorize orders to be made; and changes to planned orders, which might include cancellations or revisions
of the quantity or time frame. The secondary reports generated by MRP include: performance control reports,
which are used to track problems like missed delivery dates and stock outs in order to evaluate system
performance; planning reports, which can be used in forecasting future inventory requirements; and exception
reports, which call managers' attention to major problems like late orders or excessive scrap rates.
Although working backward from the production plan for a finished product to determine the requirements for
components may seem like a simple process, it can actually be extremely complicated, especially when some raw
materials or parts are used in a number of different products. Frequent changes in product design, order quantities,
or production schedule also complicate matters. The importance of computer power is evident when one considers
the number of materials schedules that must be tracked.
BENEFITS AND DRAWBACKS OF MRP
MRP systems offer a number of potential benefits to manufacturing firms. Some of the main benefits include
helping production managers to minimize inventory levels and the associated carrying costs, track material
requirements, determine the most economical lot sizes for orders, compute quantities needed as safety stock,
allocate production time among various products, and plan for future capacity needs. The information generated by
MRP systems is useful in other areas as well. There is a large range of people in a manufacturing company that
may find the use of information provided by an MRP system very helpful. Production planners are obvious users
of MRP, as are production managers, who must balance workloads across departments and make decisions about
scheduling work. Plant foremen, responsible for issuing work orders and maintaining production schedules, also
rely heavily on MRP output. Other users include customer service representatives, who need to be able to provide
projected delivery dates, purchasing managers, and inventory managers.
MRP systems also have several potential drawbacks. First, MRP relies upon accurate input information. If a small
business has not maintained good inventory records or has not updated its bills of materials with all relevant
changes, it may encounter serious problems with the outputs of its MRP system. The problems could range from
missing parts and excessive order quantities to schedule delays and missed delivery dates. At a minimum, an MRP
system must have an accurate master production schedule, good lead-time estimates, and current inventory records
in order to function effectively and produce useful information.
Another potential drawback associated with MRP is that the systems can be difficult, time consuming, and costly
to implement. Many businesses encounter resistance from employees when they try to implement MRP. For
example, employees who once got by with sloppy record keeping may resent the discipline MRP requires. Or
departments that became accustomed to hoarding parts in case of inventory shortages might find it difficult to trust
the system and let go of that habit.
The key to making MRP implementation work is to provide training and education for all affected employees. It is
important early on to identify the key personnel whose power base will be affected by a new MRP system. These
people must be among the first to be convinced of the merits of the new system so that they may buy into the plan.
Key personnel must be convinced that they personally will be better served by the new system than by any
alternate system. One way to improve employee acceptance of MRP systems is to adjust reward systems to reflect
production and inventory management goals.
MRP II
In the 1980s, MRP technology was expanded to create a new approach called manufacturing resources planning,
or MRP II. "The techniques developed in MRP to provide valid production schedules proved so successful that
organizations became aware that with valid schedules other resources could be better planned and controlled,"
Gordon Minty noted in his book Production Planning and Controlling. "The areas of marketing, finance, and
personnel were affected by the improvement in customer delivery commitments, cash flow projections, and
personnel management projections."
Minty went on to explain that MRP II "has not replaced MRP, nor is it an improved version of it. Rather, it
represents an effort to expand the scope of production resource planning and to involve other functional areas of
the firm in the planning process," such as marketing, finance, engineering, purchasing, and human resources. MRP
II differs from MRP in that all of these functional areas have input into the master production schedule. From that
point, MRP is used to generate material requirements and help production managers plan capacity. MRP II
systems often include simulation capabilities so managers can evaluate various options.
Scheduling
To achieve efficiency, planning and scheduling is required in every firm; this is especially important within the
manufacturing, distribution and e-commerce sectors. Scheduling and planning of manufacturing and procurement
is key to the success of your business. Whether that is through the use of a visual planning board or a lean manual
Kanban processes, WinMan offers a variety of solutions.
Production Scheduling is one of the key features of a manufacturing ERP system. Scheduling of materials and
resources is the heart of a discrete manufacturing business.

A business needs to know how much materials and total resources will be needed as input to finish a job and how
long it will take. Time needs to be figured both overall for the entire job and by resource, such as individual
machines.
All this is extremely complex and needs to be done by software. Ideally, that software should be a part of your
ERP system. Most ERP systems have manufacturing scheduling modules either built into the basic system or
available as an add-on module.
The module needs to be able to schedule a production run both backwards and forwards. That is, it needs to define
the schedule both by defining a start time for the job and estimating the completion time and by setting a
completion time and estimating when you need to start. This is basic.
Finite Scheduling and Infinite Scheduling
A good scheduling module can handle both finite and infinite scheduling. Some resources, such as tools, are finite.
They can only be scheduled for so many hours in a production period. Other resources, such as people, are more
flexible. Though normally limited to a set number of hours per production period that can be expanded if needed.
For instance people normally work 40 hours a week, but that can be increased by scheduling overtime. A good
scheduling module knows the difference in these resources and can respond appropriately when constructing a
schedule.
Forecasting
Sales forecasting is the prediction of the future sales of a particular product over a specific period of time based on
past performance of the product, inflation rates, unemployment, consumer spending patterns, market trends, and
interest rates.
In the preparation of a comprehensive marketing plan, sales forecasts help the marketer develop a marketing
budget, allocate marketing resources, and monitor the competition and the product environment.
Sales forecasting uses past sales figures to predict the short-term or long-term future performance to enable sound
financial planning.
For shops and stores, market research may yield the following indicators for deriving initial forecasts.

Importance of sales forecasting:

Sales forecasting is a crucial part of the financial planning of a business. It‘s a self-assessment tool that uses past
and current sales statistics to intelligently predict future performance.
With an accurate sales forecast in hand, you can plan for the future. If your sales forecast says that during
December you make 30 percent of your yearly sales, then you need to ramp up manufacturing in September to
prepare for the rush.
One simple sales forecast can inform every other aspect of your business
Maintenance
ERP maintenance presented a key definitions. First, we offered definitions for traditional business systems
maintenance. We defined maintenance of a traditional business system as consisting of (at
least) enhancement (changes to the functionality/requirements of the system) and correction (changes made to
correct errors in the system).
Then we offered comparable definitions for the ERP setting. We defined maintenance of an ERP system as
consisting of the following:
· Customization (changes made to ERP functionality via internal configuration switches)
· Extension: changes made via ERP system "exits" to...
o Custom-code "add-ons"
o Third-party vendor "bolt-ons"
o Legacy systems
· Modification (changes made to the code of the ERP itself--either by the user or the vendor)
The underlying concern here was that, with the large level of maintenance/enhancement needed by traditional
information systems, it might not be possible to perform comparable changes to an ERP. If that were the case,
the longevity of use of an ERP could be severely compromised.
We asked whether the respondents had made changes to their ERP's functionality since implementation
Everyone had done "customization" (using configuration switches); all but one had done "extensions" (half of
those had done "add-ons" and/or "bolt-ons" and/or linking to legacy code); a third of the total had used the
vendor-supplied language to build extensions. Two-thirds of the respondents had had modification performed
(changes to the ERP code itself), largely done by the users themselves or (to an extent half that for user
changes) by the vendor of the ERP. (Note: User package software modification is generally considered to be a
very bad practice.)
Distribution
ERP software represents a bold new vision for distribution and how distribution companies operate. If you look at
Manufacturing and Distribution business processes from a macro-level, they seem undeniably similar. The order to
cash process, identification of potential customers and management of the supply chain are very much alike.
However, when you start to peel back the layers, order quantity and order volume is where they differ. Small
manufacturers typically deal with small orders; small distributors deal with large orders and generally have a
greater volume of orders to manage.
Distributors place bulk orders with the manufacturer and then sell far smaller quantities to either retail stores or
end-user customers. Distributors handle the logistics and marketing requirements that manufacturers don‘t want to
 or aren‘t able to handle in house. Since the two verticals work in different areas of the supply chain, their
technology must conform to different needs.
Distribution ERP tools are typically built with (or combined with) business intelligence and Customer Relationship
Management (CRM) capabilities that provide valuable insight into customers‘ buying habits. Distributors
technically need more tools as they provide end-to-end solutions. Features such as fleet management, inventory
management, marketing and shipping are all necessary for a successful distributor to run their business, but are not
necessarily important to a manufacturer.
Why Do You Need It?
Regardless of size, an ERP system should provide functionality for all of your business processes by streamlining
them from one single database. But what happens if something goes wrong? Say, for a distribution company, if
your run out of stock, or one of your delivery trucks gets a flat tire, or you miss a delivery date? Having an ERP
system can alert you of any issues you may run into immediately, potentially saving you thousands of dollars.
From an economic standpoint, an ERP solution helps distributors keep track of pricing. Forecasting elasticity and
pricing demands is virtually impossible to do manually, so an ERP is critical to staying competitive in the
distribution market.
Benefits of distribution ERP
Eliminate Data Redundancy and Errors: Data repetition and errors are a common sight when you use
different software to deal with such data. With an ERP integrated to your distribution business, you can get rid
of such inefficiencies and manage your business better by having complete visibility of all your procedures and
operations.
Increased Revenue Growth: Since an ERP is integrated with your business, most of your sales and revenue
data are readily available and are updated in real-time. With this information, you can get a deep understanding
of business revenue. You will be in a better position to identify and manage cost variances. You will also be
able to allocate financial, human, and operational resources better. This will eventually lead to rewarding
outcomes such as an upward revenue growth, business expansions, better-paid employees, etc
Improved Inventory Management: An ERP system can save you precious time and money by eliminating
the daunting task of manually process inventory management. Automated inventory management capabilities
can improve your management processes by allowing end users to track and manage data across multiple
warehouses – giving you real-time visibility to current inventory in transit and costs.
Finance
All kinds of organizations small scale, large scale benefit from the implementation of ERP finance module. The
financial module is the core of many ERP software systems.
It gathers financial data from various functional departments and generates valuable financial reports. Reports such
as general ledger, trial balance, balance sheet, and quarterly financial statements.

This module of the ERP software will take care of all accounts related entries and their impact on the whole
system. How finance comes and how it is been utilized. The total flow of money (Cash/Bank) and total
expenditures will be reflected here.
As an aftereffect of this, the management will be able to take their important financial decision and Budgeting.
They can come to know about the company‘s financial position at any moment.
All sorts of important financial reports like,
1. Trial Balance
2. Trading A/c
3. Profit & Loss A/c
4. Balance Sheet
5. Debtor‘s Balance
6. Creditors Balance
7. Cash/Bank Fund position
General Ledger (G/L)
The General Ledger module is the foundation of your accounting system. It meets the current and future financial
management requirements of organizations of all types and sizes. It provides a robust feature set designed to
handle your most demanding budgeting and processing needs.
General Ledger integrates with all modules and is the key to maximizing the efficiency and accuracy of your
financial data.
G/L Security
The G/L Security module enables access control. Organizations can control which users can view or use certain
general ledger accounts. The above is based on segment validation in G/L Security settings.
G/L Consolidations
G/L Consolidations lets you transfer and merge the General Ledger account. It merges transaction information
between separate companies and branch office locations.
It is also designed to enable subsidiaries and holding companies to run without being on the same network or
accounting database.

The function of this module starts with account creation. External departments like marketing or purchase will
create some of those accounts. Apart from regular voucher entries, this module will help the authority as well as
other departments by providing financial figures.
Final accounts will be generated from this module. Documents like receivable and payable statements are
generated from this module.
This module bridges between sales & procurement processes. All figures will be protected under the password.
The only authorized person will be eligible to access information from this module.
Fund manipulation control
Funds manipulations concerns are an important factor and some times it is treated as blood for an organization. So
in this regard, sources of funds and application of funds are to be taken care of, by defining
Balance sheets
Schedules
General and Sub-Ledger
Party and customer masters.
Also the various input transaction such as,
Voucher Entry
Credit/Debit entry
Cash/Bank receipts
Cash/Bank Payment
Bank Reconciliation statements
Bill verification.
Then finally different types of financial reports, which can be of various types according to specified company
standard.
ERP finance module provides businesses the control and accountability of their finances.
Features of each of the models description of data flows across modules
Overview of the supporting databases
SAP Identity Management supports the following database systems:
 Oracle
IBM DB2
SAP Adaptive Server Enterprise (SAP ASE)
Oracle
The following versions of Oracle are supported:
Oracle version 11.2 (and higher)
Oracle version 12.1
Oracle version 12.2
Refer to the documentation for the database system for details about installation and also how to install and
configure a clustered database.
IBM DB2
The following versions of IBM DB2 are supported:
IBM DB2 10.1 (and higher) for Linux, UNIX and Microsoft Windows
IBM DB2 10.5 (and higher) for Linux, UNIX and Microsoft Windows
The installation is available from the SAP Software Download Center on the SAP Support Portal. In the SAP
Software Download Center, go to Databases Database and Database Patches and download installation and
support package files for SAP and third-party databases.
Technologies required for ERP
RP is an integrated system which incorporates an organization tasks in a uniform way. According to the report by
Statista more than 94% of the companies claim that their data security centers have improved using ERP
technologies.
The role of information technology in ERP is immense. In the article below we have thoroughly discussed the list
of ERP technologies that are used in the ERP development projects.
Below you will find the list of ERP technologies mentioned in this article:
Databases
PostgreSQL
MSSQL
Oracle SQL
Programming Technologies
.NET and ASP.NET
Java
Ruby
Python
PHP
Frontend Technologies
JavaScript
AngularJS
React
Vue.JS
SIMPLIFIED STRUCTURE OF ERP SYSTEMS
Before giving you an ERP technologies list, it is very important to understand the typical structure of ERP
systems. In a real life, enterprise resource planning solutions consist of dozens of connected application, databases,
modules, APIs etc. However, as any applications, they can be viewed as a structure built of the database, backend
or server part and the frontend or the user interface:
o Database – it is where the data about the assets (like the number of products in the warehouse etc) is stored.
o Backend – the engine that performs the operations in the system according to the users‘ request, for example,
make a request for the database to make a list of the products and goods on the particular warehouse and
render it to the user.
o Frontend – the graphical interface that allows the users to communicate with the backend and to form the
requests and then display the received information.
Those are the very simplified explanation of the ERP components from the software architecture perspective. In
this article, we will use them as the criteria for listing of the technologies in ERP systems to show their role and
exhibit their value for the business intelligence software as a whole.
TYPES OF ENTERPRISE RESOURCE PLANNING SOLUTIONS
Client/server or Desktop ERP
A client/server ERP technology works on a hub of computers which are networked locally or with the cloud
server. It enables database hosting in the central location and distribution of reporting services and user interface
into all other locations. Client/server ERP technologies help organizations to monitor and manage resources in real
time.
In desktop ERP frontend and backend run as an application launched on the user‘s machine. The data to the
desktop ERP is shared via the database located in the intranet (local server) or extranet (database is placed
somewhere in the cloud like the Azure). It allows for quick collaboration and easy access to the database even if
the team members are located in different countries.
Cloud/web-based ERP
In cloud/ web-based ERP the database and the backend are running in the cloud typically, a SaaS product. The
interface is rendered in the web browser. All you need to access it is a web browser on any device.
You can easily access applications including disk storage, memory and processing power which are hosted on the
server. The upfront cost of the web-based ERP technology is lower. Installation of software and hardware is not
required which is usually a long process, therefore the turnover of cloud-based ERP technology is quick.
Hybrid ERP
Hybrid ERP is the combination of the web-based ERPs and desktop based solution. There are two versions, the
one which can be launched as a desktop app and the other which you can access via a browser. They have a unified
database to share the same data regardless of how user access it whether via the browser or application. The
backend for the web app runs on the server and the backend for the desktop app runs on the users‘ machine. Both
that versions make the request for the database that is running in the cloud in the same manner irrespective of
whether an individual is using the browser or desktop application.
Organizations prefer Hybrid ERP over cloud and web ERP due to its rapid implementation, shorten maintenance
cycle and vendor independence. The downside of the hybrid ERP includes installation of the latest technological
infrastructure which usually needs a huge amount of investment. These solutions are neither as tested nor mature
compared to cloud-based ERP.

HOUSING OR HOSTING AND HARDWARE INFRASTRUCTURE

A strong foundation is essential for the durability of a system. Open technology in ERP consultants recommends
careful selection of technology. However, choosing the most recommended ERP hardware is what can make you
stand out. Performance is also totally dependent upon the hardware you choose. The long-run success of ERP
depends upon its infrastructure; therefore it is essential to properly examine all available options.
Today, cloud computing allows businesses and enterprises to host their system on the internet and make it
available for all employees wherever they are and whatever device they are using. Companies can use any from the
available list of ERP technologies. Organizations which are not willing to implement cloud computing can use a
hybrid approach which allows them to keep some functions of ERP in-house and host rest of the operations.
ERP managers need to consider a lot of essentials aspects when reviewing the infrastructure of the hardware.
Every time when there is new software introduced in the organization it reflects it is time to update the whole
platform. Implementation of the ERP requires thinking out of the box as everything is going to be operated through
a virtual server.
For both organizations big and small, cloud computing has gone from a bleeding edge technology to the most
liable and efficient technology. Cloud computing has allowed both small and large enterprises to save both money
and time. Now the information technology departments do not require keeping the in-house servers which are
usually expensive and hard to manage.
As companies both small and large are on a mission to downsize their IT operations, the popularity of cloud
computing is increasing among them.
 Choosing the best server for your business is a tricky as this is a matter of finance and this can cost huge money.
Also, choosing a bad and inefficient can be disastrous for your organization. In the section below we have
explained the pros and cons of In-House Server and Cloud Server.
In-House Server
o Pros
o It allows you to control your backup.
o No third party can access your company‘s critical as it is kept in-house.
o You can keep your operations running even without having an internet connection.
o Viable for both small and medium-sized organizations due to the cost-efficient nature.
o Cons
o It involves a huge installation cost for its infrastructure and hardware.
o It needs a highly expert team of IT gurus. It also occupies significant space in your office which you may
call the server room.
o Because of its in-house location, it is more susceptible to data loss.
o In case if any mishap happens, you cannot guarantee the recovery time.
Cloud Server
o Pros
o It is perfectly viable for companies which are small sized with a probability of outgrowing storage
capacity.
o You can always add solutions whichever you need. For example, you can always buy more storage.
o Cloud server provides you with better security.
o Backup your data is just a click away. You can easily do it with your smartphone, tablet or computer.
o You can backup your data within short intervals as short as 15 minutes; therefore there is less probability
of data loss particularly in critical situations.
o Cons
o Once data is lost, the recovery cost may outweigh the benefits you get.
o Due to the high cost involved and the limited storage available, every user can recover data to a certain
limit.
o In case of data loss, full data recovery can take time and is costly.
o Cloud is not always beneficial. If both of the parties loss internet connectivity simultaneously, you will
not be able to access your data at that specific time.
ERP TECHNOLOGIES
Database systems and DBMS
Developers have a significant list of the ERP-friendly database technologies at their disposal. A DBMS interacts
with the users and the database which is the significant part of the framework that holds data which is inquired by
the user. The most recommended DBMS is MSSQL. There are several reasons for choosing it, first, because of it‘s
open source nature. Secondly, it has the most authentic consistency. Another database which is super powerful is
PostgreSQL, which comes handy in troubleshooting with its powerful tools including server management studio
and server profiler.
PostgreSQL
PostgreSQL – arguably the most advanced open-source database technology which can be included in the ERP
technologies list. If the development team has decided to opt for the open-source technologies for the ERP project
then PostgreSQL is definitely the best choice because it shares the same philosophy as the rest of the ecosystem
and has an advanced connectivity that allows it to be easily integrated. In addition, PostgreSQL includes a
diversity of indexing techniques, full-text search, and Elastic search capabilities, which is very important for ERP
system users.
MSSQL
Microsoft‘s SQL is one of the popular ERP databases. Its primary function includes storing and retrieving data
whenever it is requested by the applications. MSSQL can assist you in optimizing the performance of a server thus
ensuring availability and restorability. Low cost of installation, enhanced performance, and better security features
make it developers‘ favorite choice.
Oracle SQL
The major goal of Oracle SQL is upgrading the data, saving it and retrieving it when needed with super intense
speed. One of the complex new ERP technologies this relational database boosts productivity. The self-governed
characteristics of SQL allow excluding system failures. Both relational cloud and non-relational database services
maintain Oracle SQL. The best thing about SQL is its automated backup allows easy accessibility of data and it‘s
elimination of manual tasks.
Backend Programming Technologies
When it comes to back-end programming languages there is no shortage of options, and there is a huge list of ERP
technologies. However, the ultimate decision depends upon what‘s your long run goal.
.NET
.NET, and ASP.NET. are the all-time favorites in the developers‘ ERP technologies list. Those frameworks
include less code and enhanced reuse of its codes, which consequently involves less time and cut short extra costs.
.NET allows easy integration of applications via the internet with partners. They include value chain management,
product applications, accounting management, and service applications. .NET is mostly applicable for web
services due to its ability to transmit and communicate information using standard internet protocols. It comes with
a rich set of tools for web and desktop development, such as WPF and Winforms for creating excellent interfaces
in a short period of time.
Java
Same as the .NET, Java can be used for the ERPs that are planned solely for the desktops or web or both at the
same time. The frontend for the desktop would be built on the SWING, for example. Things even better with the
web version connected to the same Java backend because there is a vast choice of the web development
frameworks that give consistent experience across different browsers and platforms.
Java is one of the best options available for the systems that require both cloud and desktop computing. Once you
use Java in your ERP, then you use the code for any of other business. It is easy to code and has excellent
networking abilities. The benefits include high UI for mobile and desktop experiences. Java ensures proper data
security; the users can download resources from any of the non-trusted websites without causing damage to the
data. It offers a variety of flexibility; therefore, it always comes handy. Java is an efficient, dynamic and neutral
architecturally.
Ruby
In our list of new ERP technologies, next comes Ruby. The two reasons that led to the choice of Ruby, first, it has
the ability to extend the modules and classes due to its self-hosting feature. Secondly, its quick database allows
makes it the best programming language for the CRM. Ruby is also a nice choice for the backend if you‘re
planning to make a web-based ERP without the desktop version and with the mobile apps. However, it is slightly
harder to maintain, because Ruby is supported only by the community and it is quite hard to find many Ruby
developers because there is lack of them on the job market and they are highly demanded.
Python
From the main architecture to its core scripting, ERP needs a simple language and it is one of the easy to use open
technology in ERP. The goal-oriented Python is easy to use and easy to read, thus programmers can easily
implement it. It offers sophisticated data and allows regular check-in. It also serves as an automatic garbage
collector. It is used to create byte-code for large-scale applications and allows high-end abstraction in the ERP
model.
PHP
Is also a programming language worth mentioning in terms of the ERP technologies, however from the slightly
different angle. Many of the enterprise applications have been written using PHP and it is still one of the most
commonly used languages for the content management systems. Being the first server-side technology has given
PHP a great start, but it was rather used because of the lack of good alternatives. .NET, Java, and Ruby beating
PHP in all comparisons. Thus, we don‘t recommend anybody to use PHP as a ground for the new application in
2018 and as a technology used in ERP in particular.
Frontend technologies for the ERP
For the last years, a plenty of frontend ERP technologies are available for creating the beautiful, fast and
responsive interfaces.
Available options may vary for both a desktop interface and web-based versions. Each one of them has their pros
and cons.
JavaScript
It is worth to start this list with JavaScript because, together with HTML5 and CSS, it is one of the pillars of
modern web applications and single page applications are standing on. In most cases, it is a great choice if you are
going to build a cloud-based ERP system that will be used by the staff via web browsers or mobile apps. To make
it even more accessible, it can be used with the Node.js as a server-side technology, to execute JavaScript code
outside the users‘ browser thus delegate the heavy-lifting to the cloud.
AngularJS
AngularJS is a great framework if you have the backend on the Java or C# to make a responsive web application
that would work across different browsers, devices etc. AngularJS can help programmers to boost the development
process. When a query is fed, the pre-information data is retrieved with ease. It also allows the formation of
dynamic applications, which means that you can always get things done according to your requirement.
React
React offers a great approach to the development of ERP due to its extensive capabilities. It is perfect for the
solution driven results of an organization. It is easy to use because once you develop codes for the websites you
can use them for the mobile app development as well, thus reducing the overall costs involved.
Vue.JS
This progressive framework is widely used for the developing user interface. It allows you to create powerful
single page applications that work exactly like their desktop versions. If you already have a project it is pretty
simple to add Vue.JS. The flexibility to write its code makes it a perfect choice of developers.

CONCLUSION
The diversity of the databases, languages and frameworks technologies in ERP gives a great flexibility. However,
it comes at a price, because it is quite hard to connect the dots and choose a right set of the development tools to
make the application click. There are several criteria that should be well defined before even starting the
consideration, such as platforms where the app will be used, number of users, a structure of the database,
scalability, security etc. The good news is that having the clearly defined requirements, each organization will be
able to solve this puzzle after a thoughtful research or with the help of consultants savvy in that area.