ENTERPRISE RESOURCE PLANNING

SESSION: 2024-2025
DEPARTMENT OF
COMMERCE

SUBMITTED TO- Dr. Mohammad Shahid

SUBMITTED BY-
Ambreen Shavez (23CMMCA125)
Asna Parveen (23CMMCA
 Table of Content

 Introduction To ERP
 Structure Of ERP System
 Components Of ERP System
 Benefits Of ERP System
 Applications Of ERP System
 Examples Of ERP System
 Challenges Of ERP System
 Conclusion

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ERP: ENTERPRISE RESOURCE
PLANNING SYSTEM

Introduction
Enterprise resource planning (ERP) is a platform companies use to manage and
integrate the essential parts of their businesses. Many ERP software applications
are critical to companies because they help them implement resource planning
by integrating all the processes needed to run their companies with a single
system.

An ERP software system can also integrate planning, purchasing inventory, sales,
marketing, finance, human resources, and more. Enterprise resource planning
systems are complete, integrated platforms, either on-premises or in the cloud,
managing all aspects of a production-based or distribution business.

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Furthermore, ERP systems support all aspects of financial management, human
resources, supply chain management, and manufacturing with your core
accounting function. ERP systems will also provide transparency into your
complete business process by tracking all aspects of production, logistics, and
financials. These integrated systems act as a business's central hub for end-to-
end workflow and data, allowing a variety of departments to access.

ERP Systems and software support multiple functions across the enterprise, mid-
sized, or small businesses, including customizations for your industry.

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What is an ERP System?
Individual ERP applications can offer software as a service (SaaS), while a
complete suite of ERP applications forms an ERP system that can be used to
effectively communicate and bring together a variety of business processes. ERP
systems enable a flow of data between individual applications, typically through
common databases either on-site/on-premise or in the cloud. ERP is frequently
referred to as the system of record for an organization, ensuring all data is
centralized, contributing to a single source of truth across the business.

ERPs connect every aspect of an enterprise. An ERP software system allows for
better performance and project management that helps plan, budget, predict
and accurately report on an organization’s financial health and processes. ERP
systems have become essential for businesses small, medium, and large across
many industries.

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How Does an ERP System Work?
The main purpose of an ERP system is to increase organizational efficiency of an
organization by managing and improving how company resources are utilized.
Improving and/or reducing the number of resources necessary without sacrificing
quality and performance are keys to effectively improving business growth and

profitability.

ERP systems typically cover all aspects of business operations and commonly
provide:

 An integrated system

 Common database

 Real-time operation

 Support for all applications/components

 Common user interface across application/components

 On-premise, cloud hosted, or SaaS deployment

ERP software has the ability to collect and compare metrics across departments
and provide a number of different reports based on roles or specific user
preferences. The data collected makes finding and reporting on data faster and
gives a complete view of business performance with complete insights on how
resources are being spent.

ERP synchronizes reporting and automation by reducing the need to maintain

separate databases and spreadsheets that would have to be manually merged to
generate reports. This combined data collection and reporting offers valuable
insight, such as where to cut costs and streamline processes, providing the
information to make real-time business decisions.

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 Components Of ERP
An Enterprise is a group of people which has certain resources as its control to
achieve its goal. It acts as a single entity. This single entity is different from
traditional approach. It is an integrated software that integrates many small
modules to become a big organization. These small modules are said to be the
components of ERP. It has the ability to manage many fields like finances,
manufacturing , customers, projects and many more. With ERP systems , we can
adapt to changes leading to an improved and efficient working of organizations.

Five Main Components of the ERP system are as follows :

1. Finance :

It keeps a track on all your financial data including Accounts receivable, Accounts
payable, General ledger, costs, budgets and forecasts. It helps to keep a record
of cash flow, lower costs, increase profits and make sure that all the bills are paid
on time. The growing complexity of the business makes important the need to
have a single system to manage all of the financial transactions and accounting
for multiple business units or product lines.

2. Human Resources (HR) :

It is a software handling all personal-related tasks for managers and employees.

Employees play a very important role in any organization, without them business

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would not exist. This component is responsible for automated payments to
employees, payment of taxes, generating performance reports, attendance
tracking, promotions, deciding working hours and holiday hours of the staff.

3. Manufacturing and logistics :

It as a group of applicants for planning, production, taking orders and delivering

the products to the customers. It provides you a view of the demanded and
achieved levels which is very important to check whether you are achieving your
targets or not. It provides all the stock summary and production plans beneficial
for the business. It includes Production planning , order entry and processing also
the warehouse management.

4. Supply Chain Management (SCM) :

A supply chain management is a network of facilities that perform the

procurement of the materials and transformation of these materials into
intermediate and finalized products and distribution of these products to the
customers. Planning, Manufacturing, Marketing, Distribution and the purchasing
organizations through a supply chain operate independently. These organizations
have their own goals and objectives.

5. Customer Relationship Management (CRM) :

This component interacts with the customers using data analysis to study large
amount of information. They target the audience and observe what is beneficial
for them. The component gathers customer data from multiple channels. Hence,

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CRM stores detailed information on overall purchase history, personal info, and
even purchasing behavior patterns. The benefit it gains is by keeping a track on
the customer’s buyer history and suggesting additional purchases.

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What Industries Can Benefit From ERP?
ERP software can be used in any industry to help a business become more
efficient. It provides an effective communication tool that can manage
information between internal and external departments, assist with daily
activities to manage projects, track adherence to guidelines, and handle day-to-
day intricacies that come with running a business.

Because the roots of enterprise planning software are closely associated with
manufacturing, there are robust manufacturing ERP solutions that cater to a
variety of specific industries. ERP software systems are very diverse and are key
parts of many industries, including but not limited to:

 Manufacturing

 Industrial Machinery and Components

 Construction and Home Improvement

 Electronics and Technology

 Automotive

 Aerospace and Defence

 Healthcare, Pharmaceutical and Life Sciences

 Agribusiness, Farming and Agriculture

 Food and Beverage

 Healthcare and Hospitality

 Clothing, Consumer Goods and Retail

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 What are ERP Modules?
Over time, ERP systems have grown to include support for other applications and
“ERP modules" that support day-to-day business functions. In many ERP systems,
these common functional areas are grouped into ERP modules, including but not
limited to:

 Financial Accounting
 Management Accounting
 Human Resources
 Manufacturing
 Order Processing
 Supply Chain Management
 Project Management
 Customer Relationship Management (CRM)
 Data Services
 Inventory Management
 Warehouse Management

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 Applications Of ERP System In
Businesses

Enterprise Resource Planning (ERP) systems are powerful tools used by

businesses to integrate and manage core processes across various departments.

Here's how ERP systems are applied in businesses:

● Centralized Data Management:

ERP systems centralize data from different departments like finance, human
resources, sales, supply chain, and manufacturing into a single database. This
ensures that all business units operate with the same data, reducing errors and
data redundancy.

● Streamlining Operations:

By automating and integrating processes, ERP systems streamline business

operations. This leads to more efficient workflows, reduced manual intervention,
and quicker decision-making processes.

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 ● Improved Reporting and Planning:

ERP systems provide real-time data and advanced analytics capabilities, enabling
businesses to generate detailed reports and forecasts. This helps in strategic
planning, budgeting, and performance analysis.

● Enhanced Collaboration:

With centralized data, different departments can easily collaborate. For instance,
sales and inventory management can work closely to ensure that stock levels
are aligned with demand forecasts.

● Regulatory Compliance:

ERP systems often include modules that help businesses stay compliant with
industry regulations and standards. This is crucial for industries like finance and
healthcare, where regulatory compliance is a key concern.

● Cost Efficiency:

By integrating multiple business processes into a single system, ERP systems

reduce the need for multiple software solutions, which can lead to significant
cost savings in the long run.

● Security and Data Integrity:

ERP systems offer robust security features, ensuring that sensitive business data
is protected against unauthorized access. They also provide audit trails, which
are important for tracking changes and ensuring data integrity.

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 Challenges In Implementing ERP
Systems
As businesses grow and evolve, they often need to upgrade their enterprise
resource planning (ERP) systems to keep up with their changing needs. However,
ERP implementations can be complex, time-consuming, and costly, and many
businesses have encountered significant problems during the process. In this
article, we will explore some of the common challenges that arise during ERP
implementations and offer some tips for overcoming them.

1. Lack of alignment between business processes and ERP

software

One of the most common challenges in ERP implementations is the misalignment

between business processes and the ERP software. ERP software is often
designed to be flexible and adaptable to a wide range of business processes, but
it may not meet all of the unique requirements of a particular business. To
address this issue, it's important to thoroughly assess your business processes
and requirements before selecting an ERP system, and to work closely with the
vendor to customize the software to meet your specific needs.

2. Poor project management and governance

ERP implementations can be complex and involve many stakeholders across the
organization, making effective project management and governance critical to
success. Without clear project plans, timelines, and communication channels, the
implementation process can quickly become disorganized and chaotic, leading to
delays, cost overruns, and other issues. To avoid these problems, it's essential to
establish a strong project management framework, assign clear roles and
responsibilities, and maintain open lines of communication throughout the
process.

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3. Data migration and integration issues

Data migration and integration are often major challenges in ERP

implementations, particularly when transitioning from legacy systems to new
ERP software. Data may be incomplete, inconsistent, or located in multiple
systems, making it difficult to extract and transfer into the new system. To
mitigate these issues, it's important to establish a clear data migration plan,
conduct thorough data cleansing and testing, and ensure that all relevant data is
mapped and integrated correctly.

4. Lack of user adoption and training

Even the most advanced ERP systems will not deliver value if users do not
understand how to use them effectively. Training and user adoption are critical
to ensuring that the new system is embraced by employees across the
organization. To address this issue, it's important to provide comprehensive
training to all users, develop user-friendly interfaces and workflows, and
establish a robust change management program to support the transition to the
new system.

In conclusion, ERP implementations can be challenging, but with careful planning,

effective project management, and a commitment to user adoption and training,
businesses can successfully implement new ERP systems that meet their
evolving needs. By addressing these common challenges head-on, businesses
can ensure that their ERP implementations deliver value and help them achieve
their strategic goals.

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 What Is ERP Implementation?
The process of transitioning to a new ERP system varies by project and requires
planning and strategizing to best fit the needs of your company. Choosing the
right ERP implementation strategy is key to finding success with your new
system. Implementation is an important part of any ERP project. The time and
financial investment involved depends on several factors, including deployment
model, system complexity, implementation strategy, company sizes and the
resources dedicated to the project. Done poorly, an implementation project can
eat up valuable resources. Done well, an ERP integration can set your company
up for an exciting new level of success. Learn more about the steps of a
successful ERP implementation below.

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 Examples Of Enterprise Resource
Planning

● FULTON & ROARK

Fulton & Roark, a boutique men’s grooming company specializing in high-quality

personal care products, utilizes ERP systems to manage its operations efficiently.
Here’s a detailed look at how Fulton & Roark implements ERP solutions:

Fulton & Roark’s ERP Implementation

1. Overview:

Fulton & Roark uses ERP systems to streamline its business processes, from
inventory management to order fulfillment. This integration helps them manage
their growing operations more effectively and deliver high-quality products to
their customers.

2. Purpose and Benefits:

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 - Streamlined Operations: The ERP system centralizes various business
functions, reducing manual processes and minimizing errors. This helps Fulton &
Roark manage their production, inventory, and sales operations more efficiently.

- Improved Inventory Management: The ERP system provides real-time visibility

into inventory levels, helping the company maintain optimal stock levels, reduce
excess inventory, and avoid stockouts.

- Enhanced Order Processing: By integrating order management with inventory

and financial systems, Fulton & Roark can process orders faster and more
accurately, improving customer satisfaction and operational efficiency.

3. Applications in Fulton & Roark’s Operations:

- Manufacturing and Production: The ERP system helps manage production

schedules, track raw materials, and oversee the manufacturing process. This
ensures that products are made to the highest quality standards and meet
customer demand.

- Inventory Management: The system provides tools for tracking inventory

levels, managing reorders, and optimizing warehouse operations. This helps
prevent overstocking and understocking issues.

- Sales and Distribution: The ERP solution integrates with sales channels,
including online platforms and retail partners, to manage orders and shipments.
It helps track sales performance and analyze customer data to drive marketing
and sales strategies.

- Financial Management: The ERP system handles financial operations such as

accounting, budgeting, and financial reporting. It ensures accurate financial data
and helps with compliance and financial planning.

4. Integration with Other Systems:

- E-Commerce Integration: Fulton & Roark’s ERP system is integrated with their
e-commerce platform, ensuring seamless order processing and inventory
updates across online sales channels.

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 - Customer Relationship Management (CRM): Integration with CRM systems
helps manage customer interactions, track sales leads, and personalize
marketing efforts.

5. Customization and Adaptability:

- Tailored Solutions: The ERP system is customized to meet the specific needs
of Fulton & Roark’s business, allowing them to adapt the system to their unique
processes and requirements.

- Scalability: As Fulton & Roark grows, the ERP system can scale to
accommodate increased production volumes, expanded inventory, and additional
sales channels.

6. Implementation and Impact:

- Efficiency Gains: The ERP system has improved operational efficiency by

automating key processes, reducing manual data entry, and providing real-time
insights into business performance.

- Enhanced Customer Experience: Faster order processing and better inventory

management have led to improved customer satisfaction and loyalty.

- Data-Driven Decisions: The ERP system’s analytics and reporting capabilities

provide valuable insights that help Fulton & Roark make informed business
decisions and refine their strategies.

By leveraging an ERP system, Fulton & Roark effectively manages their

operations, supports their growth, and enhances their ability to deliver high-
quality grooming products to their customers. The ERP solution plays a crucial
role in integrating and optimizing their business processes, contributing to their
overall success.

 MICROSOFT

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Microsoft's implementation of ERP systems is a key example of how large
corporations use these solutions to streamline and manage their complex
operations. Here's a detailed look at how Microsoft uses ERP systems:

Microsoft Dynamics 365

1. Overview:

Microsoft Dynamics 365 is an integrated suite of ERP and Customer

Relationship Management (CRM) applications. It combines several functionalities
into a unified platform, including finance, supply chain management, sales,
customer service, and project management.

2. Purpose and Benefits:

- Unified Platform: Dynamics 365 offers a comprehensive solution that

integrates various business functions into a single platform, reducing the need
for disparate systems and manual data handling.

- Data-Driven Insights: With built-in analytics and artificial intelligence (AI),

Dynamics 365 provides actionable insights that help Microsoft make informed
decisions and optimize operations.

- Scalability: The system is scalable, allowing Microsoft to adapt and expand its
ERP capabilities as its business grows and evolves.

3. Applications in Microsoft's Operations:

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 - Finance and Operations: Dynamics 365 helps manage Microsoft's financial
operations, including accounting, financial reporting, and compliance. It
streamlines processes and ensures accurate financial data.

- Supply Chain Management: The system enhances Microsoft’s supply chain

efficiency by providing real-time visibility into inventory levels, supplier
performance, and logistics.

- Sales and Customer Service: Dynamics 365 integrates with Microsoft's sales
and customer service functions, improving customer relationship management
and sales performance tracking.

- Project Management: The platform supports project planning, execution, and

monitoring, helping Microsoft manage its various projects effectively.

4. Integration with Other Microsoft Products:

- Microsoft Office: Dynamics 365 integrates seamlessly with Microsoft Office

applications like Excel and Outlook, allowing for smooth data exchange and
improved productivity.

- Azure Cloud: The system leverages Microsoft Azure for cloud-based

operations, offering scalability, security, and flexibility.

5. Customization and Adaptability:

- Custom Solutions: Microsoft can customize Dynamics 365 to meet specific

business needs and industry requirements, ensuring that the ERP system aligns
with its operational goals.

- Continuous Improvement: Microsoft continuously updates and enhances

Dynamics 365, incorporating new features and technologies to keep pace with
changing business demands and technological advancements.

By leveraging Dynamics 365, Microsoft not only manages its own complex
operations efficiently but also showcases the capabilities of its ERP solution to its
customers. This integration helps the company maintain a competitive edge,
optimize processes, and deliver better outcomes across its various business
units.

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  SAP

SAP, a global leader in ERP software, utilizes its own ERP systems to manage its
extensive operations effectively. Here’s a detailed look at how SAP leverages its
ERP solutions:

SAP ERP Systems

1. Overview:

SAP offers a range of ERP solutions, including SAP S/4HANA, which is its next-
generation ERP suite designed for real-time data processing and advanced
analytics. SAP S/4HANA integrates various business functions into a single
platform.

2. Purpose and Benefits:

- Real-Time Data Processing: SAP S/4HANA is built on an in-memory database,

enabling real-time data processing and analytics. This allows SAP to make quick
decisions and respond to business changes dynamically.

- Unified Business Processes: The system integrates core business functions

such as finance, supply chain management, manufacturing, and human
resources into a unified platform, ensuring seamless data flow and process
efficiency.

- Scalability and Flexibility: SAP’s ERP solutions are scalable and adaptable,
supporting SAP's global operations and the diverse needs of its business units.

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3. Applications in SAP’s Operations:

- Finance Management: SAP uses its ERP systems for financial management,
including accounting, financial planning, and analysis. It ensures accurate
financial reporting and compliance across its global operations.

- Supply Chain Management: The ERP system helps manage SAP’s supply
chain, providing visibility into inventory levels, supplier performance, and
logistics. This integration helps optimize supply chain operations and reduce
costs.

- Human Resources: SAP leverages its ERP solutions to manage human

resources functions, including talent management, employee development, and
payroll processing.

- Project Management: SAP’s ERP solutions support project management by

providing tools for planning, executing, and monitoring projects. This helps
manage resources, track progress, and ensure project success.

4. Integration with Other SAP Products:

- SAP Business Technology Platform (BTP): SAP integrates its ERP solutions with
BTP, enabling advanced analytics, artificial intelligence, and machine learning
capabilities.

- SAP Analytics Cloud: This tool is used for data visualization and business
intelligence, offering insights that help drive strategic decisions.

- SAP SuccessFactors: For human capital management, SAP integrates its ERP
with SuccessFactors, providing a comprehensive HR management solution.

5. Customization and Innovation:

- Tailored Solutions: SAP customizes its ERP solutions to meet the specific
needs of different industries and business processes. This customization ensures
that the ERP system aligns with SAP’s operational requirements.

- Continuous Innovation: SAP invests heavily in research and development to

continuously enhance its ERP solutions. This includes integrating new
technologies and features to stay ahead in the market.

6. Implementation and Benefits:

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 - Global Integration: SAP’s ERP systems help manage its global operations by
integrating various regional and functional units into a cohesive system,
improving overall efficiency and coordination.

- Operational Efficiency: By using its ERP solutions, SAP streamlines its internal
processes, reduces operational costs, and enhances productivity.

By leveraging its own ERP systems, SAP not only manages its extensive
operations efficiently but also demonstrates the capabilities of its ERP solutions
to its customers. This use case serves as a powerful testament to the
effectiveness of SAP’s software in handling complex, global business operations.

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 CONCLUSION
ERP systems offer significant benefits by streamlining business processes,
improving data accuracy, and enhancing decision-making capabilities.
However, their implementation comes with challenges, including high
costs, complexity, and potential resistance systems offer significant benefits by
streamlining business processes, improving data accuracy, and
enhancing decision-making capabilities. However, their implementation comes
with challenges, including high costs, complexity, and potential resistance to
change. Organizations considering an ERP system must
weigh these factors carefully, ensuring they have the necessary resources,
expertise, and commitment to successfully deploy and maintain the
system. When implemented effectively, an ERP system can be a powerful tool
for achieving operational excellence and maintaining a competitive edge in the
marketplace.
ERP implementations can be challenging, but with careful planning,
effective project management, and a commitment to user adoption and training,
businesses can successfully implement new ERP systems that
meet their evolving needs. By addressing these common challenges head- on,
businesses can ensure that their ERP implementations deliver value
and help them achieve their strategic goals.

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