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Enterprise Resource Planning

Enterprise Resource Planning (ERP) systems integrate core business processes across an organization's departments into a unified software system. As companies grew, managing operations became too complex for individual departments, leading to departmentalization and isolated data systems. ERP addresses this by linking all areas of a company into a single, integrated system with shared data visibility. ERP software automates most organizational functions like finance, HR, and operations to allow improved information sharing and communication between departments toward common goals. Current ERP systems increasingly offer additional capabilities like business intelligence, supply chain management, and customer relationship management.

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89 views25 pages

Enterprise Resource Planning

Enterprise Resource Planning (ERP) systems integrate core business processes across an organization's departments into a unified software system. As companies grew, managing operations became too complex for individual departments, leading to departmentalization and isolated data systems. ERP addresses this by linking all areas of a company into a single, integrated system with shared data visibility. ERP software automates most organizational functions like finance, HR, and operations to allow improved information sharing and communication between departments toward common goals. Current ERP systems increasingly offer additional capabilities like business intelligence, supply chain management, and customer relationship management.

Uploaded by

Faisal Sana
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Enterprise Resource Planning

History (Industrial Revolution)


• In beginning, a single person was managing all
the operational and the related functions.

• Decisions were made keeping in mind the


overall company objectives and available
resources.
History (Industrial Revolution)
• Slowly the market demand and manufacturing
scales of companies grow, and managing the
entire operations become impossible for a
single person.
• So, more people were brought in and the
different business functions were given to
different individuals.
History (Department)
• In the large organization, each senior person
was provided with next level people to assist
him or her and the various departments
evolved.
• As the department concept became popular, it
was designated to be specific to a function.
History (Department)
• For example the Account Department was
made responsible for all the financial
transaction.

• Whereas the Purchase Department was made


responsible for procurement of goods and
services only.
History (Department)
• In the process of this evolution, departments
became large, specialized, and functionally
watertight.
• Each department has its own set of
procedures. These departments function in
isolation and have their own systems of data
collection and analysis.
• Employees, at most levels within department
would just collect and pass on the information
upwards.
• Thus, the information was shared between
departments only at the top level.
The result is that instead of taking the
organization towards the common goal, the
various departments end up pulling it in
different direction. This is because one
department does not know what the other
does.
ERP

General Concepts
E : Enterprise
R : Resource
P : Planning
Enterprise
• An enterprise is a group of people with a
common goal, which has certain resources at
its disposal to achieve this goal.
Enterprise
In enterprise way the entire organization is
considered a system and all departments are
its sub system, each sub system knows what
others are doing , why they are doing and
what should be done to move the company
towards common goal.
Definition of ERP
• Business solution that addresses all the needs
of an enterprise with the process view of an
organization to meet the organizational goals
and integrate all the functions of the
Enterprise.
• ERP software integrates all departments and
functions onto a single system that can serve
the needs of the entire company.
Definition of ERP
• The American Production and Inventory
Control Society (APICS) defines ERP as “an
accounting oriented information system for
identifying and planning the enterprise-
wide resources needed to take, make, ship,
and account for customer orders” (Watson &
Schneider, 1999).
Definition of ERP
• An ERP system can be thought of as a
company-wide Information System that tightly
integrates all aspects of a business. It
promises one database, one application, and a
unified interface across the entire enterprise
Bingi et al., 1999 .
Definition of ERP
• ERP links all areas of a company with external
suppliers and customers into a tightly integrated
system with shared data and visibility. ERP
systems are designed to solve the problem of
the fragmentation of information over many
legacy systems in large business organizations
(Chen, 2001, p. 374; Chen, 2001, p. 379)
Evolution of Business Systems
Evolution of Business Systems
EDI-Electronic
EDI-Electronic E-Commerce
E-Commerce
Data
Data Interchange
Interchange
SFA:
SFA: Sales
Sales Force
Force E-Business
Automation
Automation
CRM:
CRM: Customer
Customer
Relationship
Relationship Mgmt
Mgmt
Planning
Planning SCM
SCM ESCM
Scheduling
Scheduling Supply
Supply Chain
Chain Extended SCM
Management
Management
Distribution
Distribution
MRP:
MRP: Material
Material MRPⅡ:Mfg
MRPⅡ:Mfg
Requirement
Requirement Planning
Planning Requirement
Requirement Planning
Planning
Payroll HR: ERP
ERP EERP
Payroll HR: Human
Human Resource
Resource
Enterprise
Enterprise Extended ERP
GL:
GL: General
General Ledger
Ledger Resource
Resource
FMIS:
FMIS: Planning
Planning
AP:
AP:Accounts
Accounts Payable
Payable Financial
Financial Mgmt
Mgmt
Information
Information Systems
Systems
AR:
AR:A/C
A/C Receivable
Receivable
1970 1980 1990 2000
*source: HP
Current Scenario of ERP
• ERP integrates the information system of an organization
and automates most of the functions. The activities
supported by ERP system include all core functions of an
organization, including financial management, human
resource management, and operations.

• Allows the various departments to more easily share


information and communicate with each other.
 
• Maintain Corporate wide Information under one Unified
software program ( Single Data Base)
Current Scenario of ERP

Increasingly, ERP vendors are offering “bolt-on” products,


such as business Intelligence (BI), Product Life Cycle
Management (PLM), Advance Planning and Scheduling
(APS),Customer Relationship Management, Supply Chain
Management etc
ERP Component
An ERP System includes
• Business Processes that ERP software supports
• Users of ERP systems
• Hardware and Operating Systems that run ERP
applications
• ERP software

Note: The failures in one or more of those four


components could cause the failure of an ERP
project.

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