ENTERPRISE RESOURCE PLANNING

LESSON 1 Industry Specific Modules

 Education – enrollment, grading
What is ERP?
systems, scheduling
Systems Applications and Products in  Retail – POS, inventory tracking,
Data Processing- software that integrates loyalty/reward system
key business processes like finance,  Construction – cost estimation,
manufacturing, and supply chain resource allocation, project scheduling
management. and management
 Healthcare/Hospitals – patient record,
Oracle- software system that includes all billing, compliance management
the tools and processes required to run a
successful company. Integration & Analytics
Microsoft- integrates and automates core  Business Intelligence – dashboard,
business processes, improving efficiency data analytics, reporting
and decision-making.  Cloud and Mobile Access - remote
access, use of mobile devices
International Business Machine- business  Al & Automation - Predictive analytics,
management software system designed to automated workflows, robotic process
manage and streamline an organization's automation (rpa)
business functions, processes and
workflows. Compliance and Security
FUNCTIONS:  Audit Trails
 Data Security – safeguarding digital
1) To integrate common process for single information
system for data to be collected easily.  Regulatory Compliance – RA 10173,
tax regulations
2) To improve efficiency, productivity, and
decision making. Benefits of Implementing ERP
-easy data extraction and information
SCOPE generation
-efficient operation and productive
I. Core Business Processes employees
 Finance & Accounting- GL, A/P, A/R, -accurate inputs, provides summary,
Budgeting, financial reporting graphs, visualization
 Human Resource Management- -cost savings, resource optimization
payroll, recruitment, performance -easier transaction enhances customer
training and development service
 Supply Chain Management- -standardized business process
procurement, logistics, inventory, -better compliance and security
warehouse management -scalability and flexibility
 Manufacturing and Production-
planning, scheduling, orders, control CHALLENGES IN IMPLEMENTING ERP
 Sales and Customer Relationship  Data Security & Compliance Risks
Management-marketing, o data in one place - both good
automation, customer data, order
and bad.
processing
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o Good- easy access; availability. o In order to maintain efficiency,
o Bad- cybercriminals have focus continuous monitoring is
on it. required.
o Data are sensitive → target of o Organization may struggle with
cyber threats maintenance, upgrades and
 High Cost system enhancements.
o High investment;
o cost of implementation, ERP IMPLEMENTATION STAGES
training, and maintenance; 1. Discovery and Planning
o adding modules may increase o A cross-functional project
cost team gathers input about
 Customization & Integration Issues different business groups'
o Choice of modules; requirements and the issues
o Not all ERP fits on all business that the ERP system needs to
processes; solve
o customization required; 2. Design
o integrating with third party o Analyze existing workflows,
applications may be complex how you'll customize the
 Data Migration Issues software and how to migrate
o Time to migrate data; paper- data to the new system.
based or digital → a challenge; 3. Development
o data inconsistencies, duplication o Configure the software to
& missing information may business requirements
create operational disruptions performance, prepare
 Time consuming deployment training materials and
o Deployment is complex; documentation, and begin to
o integration is complex; import data
o It may take months or even 4. Testing
o Progressively test the
years
 Resistance functions of the system and
o Employees & even management fine-tune development to
address any problems that
resist to change, due to
emerge.
unfamiliarity and fear of being
5. Deployment
replaced;
o After completing
o Lack of change management →
configuration, data migration
low adoption rates
and testing, go live
 Vendor Dependence Issues
6. Support
o Users may be dependent on ERP
o The project team ensures
vendor - updates;
that users have the support
o troubleshooting & maintenance
they need, and continues to
o Poor vendor support can slow
upgrade the system and fix
issue resolution
problems as needed.
 Post implementation concerns

Planning the ERP Implementation

 ENTERPRISE RESOURCE PLANNING
I) Define objectives Marketing & Sales
a) SMART (Specific, Measurable,  finding out the needs and wants of
Attainable, Relevant, Time-bound) potential customers and promoting
b) Based on present situation the company’s products or services.
II) Select the right ERP system  Advertising
III) Build an Implementation Team o What to advertise, how and
IV) Implement the ERP when?
a) Requirement analysis & system  Market research
design o What products or services will be
→ data migration & system configuration successful? Customers’ needs &
→ testing & user training wants
→ use & continuous upgrade  Promotion
o Which form of promotion will be
LESSON 2 developed, which is best suited?
Business Function and Processes  Selling products
o How much price be given? How
Business Function vs. Business Process sales will be increased?
Business Function
 Activities specific to a functional area Marketing & Sales
of operation  Conducts market research
o Taking sales orders ○  Develops advertising and
Advertising promotional strategies
o Recording transactions in the  Engages in sales and customer
ledge relationship management
Business Processes  produces customer demand and
 Collection of activities that takes one brand awareness
or more input and creates an output
that is of value to customer Marketing & Sales
o Sales order process  Needs market insight and
engagement
o Advertising process
 Customer research and data
Functional and Business Processes
analytics
 Are important to understanding ERP
 Effective branding and advertising
 To understand ERP, you must
strategies
understand
 Digital and traditional marketing
o How a business work
channels
o Functional areas of operations
 Customer relationship management
o Business processes
Human Resources
Four Functional Areas of Operations in
 manages the people who work for
Business
the organization
1. Marketing and Sales
 Recruitment and selection
2. Supply Chain Management
o Who’s the best people in the
3. Accounting and Finance
company?
4. Human Resources
 Staff training
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o What training to give in order  Control of quality
for employees to provide o What quality methods to ensure
quality service? a product or service is of an
 Industrial relations acceptable standard?
o How’s the work condition?
What about employee Operations
contracts? Are there issues and  Ensures efficient production
grievances? processes
 Health and safety  Manages supply chains and logistics
o Does the company look after  Focuses on quality control and
health and safety legislations? productivity
 Produces goods and services
Human Resources Operations
 Recruits and trains employees  Needs resources and efficiency
 Develops workplace policies and  Raw materials and supplies
benefits  Skilled workforce
 Maintains employee engagement  Efficient processes and technology
and company culture  Strong supply chain and logistics
 Produces a skilled and motivated
workforce Accounting & Finance
 responsible for managing the money
Human Resources coming into and going out of the
 Needs talent and culture business.
management  Raising finance
 Effective hiring and retention o Is there enough money to pay
strategies bills? Where to get or raise
 Training and development programs extra money?
 Competitive compensation and  Preparing budgets
benefits o How much money is expected
 Employee engagement and legal to come in and out of the
compliance business?
 Preparing final account
Operations o What does the final account
 responsible for making the product says about profit and loss?
or providing the service. What is the business worth?
 ensure products or services is of
quality to satisfy the customer. Accounting & Finance
 Production of goods or services  Manages budgets, investments, and
o How to manage stock? What expenditures
production method and  Ensures profitability and liquidity
distribution is best?  Handles financial reporting and
 Buying raw materials compliance
o Who is the best supplier that  Produces financial stability &
provide the most cost effective resource management
but high-quality materials?
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Accounting & Finance involved, particularly the customer
 Needs funding and financial control unit.
 Capital for investments and  High Impact processes should have
operations process owners.
 Accurate financial reporting and  BPR
forecasting o main way in which organizations
 Cost control and budgeting systems become more efficient and
 Risk management and regulatory modernize.
compliance o transforms an organization in
Core Business Functions working together ways that directly affect
 It must work together performance
o To achieve its main objectives o analysis and redesign of workflow
and its purpose within and between enterprises.
 relies on the others to enable them
to complete their specific functional Why reengineer business processes?
activities. Michael Hammer and James Champy
 Example:  promoted the idea that sometimes
o HR - Hiring people to work in radical redesign and reorganization
marketing. of an enterprise (wiping the slate
o MKT - do market research to clean) was necessary to lower costs
find out needs and wants and increase quality of service and
o OPs - carry out results of market that information technology was the
research; prepare products & key enabler for that radical change.
services  felt that the design of workflow in
o FIN - set budget for MKT to do most large corporations was based
research. Allocate budget for on assumptions about technology,
payment of HR. people, and organizational goals that
were no longer valid.
Business Processes
Routines – precise rules, procedures and 7 principles of reengineering to
practices that have been developed, in streamline the work process
order to produce goods and services 1. Organize around outcomes, not
Business processes are collections of tasks.
routines 2. Identify all the processes in an
 Are SOPs organization and prioritize them in
 A business firm is a collection of order of redesign urgency.
business processes 3. Integrate information processing
work into the real work that
IS should be aligned to the business produces the information.
processes of the firm 4. Treat geographically dispersed
resources as though they were
Business Process Reengineering (BPR) centralized.
 Processes are generally identified in 5. Identify all the processes in an
terms of beginning and end points, organization and prioritize them in
interfaces, and organization units order of redesign urgency.
 ENTERPRISE RESOURCE PLANNING
6. Put the decision point where the  Collaboration and communication
work is performed, and build control can be stronger and better
into the process.
7. Capture information once and at the
source. LESSON 3
Result: achieve significant levels of TYPES OF ERP SYSTEM
improvement in quality, time
management, and cost. Onsite ERP
 may also include using
Integrated Information System contractually hosted servers that
 An IS where transaction processing, aren’t onsite (According to
management information and BigCommerce)
decision support is integrated into  licensed, customized, upgraded,
one system. backed up for data recovery, and
 unified system that combines maintained by the company’s IT
different business processes, data, staff onsite on its owned servers
and technology into a single platform and computer equipment.
to improve efficiency,  Purchase software licenses and
communication, and decision- installing the ERP system directly
making within an organization. onto a company's own servers.
 EIS is becoming popular on most big
business organizations. PROS:
 Must be adapted and can be 1. don’t need to pay a continuing monthly
expanded [scalability & flexibility] or annual subscription fee The total costs
 Business functions share common may be lower over a long-term time
database, reducing duplication and horizon. its system needs.
inconsistencies [centralized data 2. business can develop many
management] customizations to the software to fit its
 Information flows seamlessly across needs better.
different departments; enabling 3. company information and data remain
faster and more accurate decision- on-site (except for secured off-site backup
making. [Real-Time Data Sharing] media).
 Reduces manual data entry, 4. company isn’t dependent upon the
streamlines workflows, and software vendor for its system needs.
enhances productivity. [Automation 5. Internet outages won’t affect the ability
& Efficiency] to use an on-premises computer-based
system
What makes IIS significant?
 Data accuracy and consistency is CONS:
better 1. requires a larger initial investment in
 Decision making can be enhanced software and computer equipment and
 Save costs can be achieved later equipment replacement.
 Efficiency and productivity is 2. Costs of hiring and retaining a qualified
improved and trained IT staff and possibly computer
 Competitive advantage and consultants as needed to solve computer
adaptability to business growth
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software problems, including bugs, CONS:
rebuilds, and security issues.  the company may pay more for a
3. User company bears the risk of software cloud ERP system over a long-time
obsolescence. horizon
4. Cybersecurity risks increase if the  Less customization may be possible
software isn’t timely upgraded on each than for on-premise ERP systems
computer  Bugs in the ERP software system and
5. Data backups performed in-house may additional desired features may
contain corrupted files, adding business require time for software vendors to
risk. develop or fix
6. It may require working in the office or
through a slower remote connection. Hybrid ERP System
 uses a hybrid approach that combines
Cloud ERP System the use of on-premise infrastructure
 Internet-based (and any connected EDGE devices for
 available from anywhere with an IoT) with cloud systems.
Internet connection at any time.  Cloud systems include private and
 hosted on remote servers and public clouds for services, storage,
accessed through the internet. data access, and other applications
 Also referred to as SaaS (software-as-
a-service) based on its ongoing billing PROS:
model.  Uses different types of ERP systems,
 Why choose this? infrastructure, and public cloud
o modern and web-based services to fit current business needs
o accessible from anywhere at any  Allows upgrade a legacy system by
time, including your mobile device. adding more modern technology, big
data warehousing and analytics, and
PROS: cloud software
 Small ongoing investment to use the  Will not need to add company-owned
software servers and network computer
 Ability to choose a SaaS billing plan equipment for more functionality
o fits business needs in terms of  When on-premise is included in the
software features and pricing hybrid, the company has more control
 Avoidance on costs of servers and over its ERP system features,
large IT staff expansion, customization, and data.
 Available anytime, anywhere, from
any Internet-connected device CONS:
 Upgrades are pushed out  retains the legacy system in the mix
automatically by the software vendor  Less flexibility to change the entire
to all users at the same time, reducing system than solely cloud-based
cybersecurity risk from vulnerabilities software customers
 Software vendor offers training,  require IT involvement to ensure
knowledge base, and customer adequate data security between the
support integrated systems and to build coded
connections
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OTHER TYPES OF ERP
 Open-Source ERP
o provides users with access to the
source code.
o company can customize, modify, or
redistribute the ERP to better meet
the company's needs.
o Implementing and maintaining
open-source ERP systems may
require more technical expertise
and resources compared to
commercial ERP solutions.
 Industry-Specific ERP
o tailored to meet the unique needs
and requirements of particular
industries.
o include industry-specific modules,
functionalities, and best practices
to address the complexities of the
industry.
o For example, consider a
manufacturing firm that is heavily
reliant on inventory, supply chain
management, and distribution of
goods. That type of ERP will be
vastly different than a client-based
ERP such as a financial institution's
ERP.
 Small Business ERP
o designed specifically for the needs
of small and medium-sized
businesses (SMBs).
o offer balance between being
slightly niche while offering
essential functionalities at a more
affordable price point.
o Because they are less robust, small
business ERP solutions are often
easier to implement and require
less customization compared to
enterprise-level ERP systems