ERP BUSINESS

MODULES AND
RELATED
TECHNOLOGIES
• ERP packages contain many modules. The number and features
of the modules vary with the ERP package. Here we will see
some of the most common modules available in almost all
packages:
• Finance
• Manufacturing Production Planning
• Sales
• Distribution & other Services
• Plant Maintenance
• Quality Management
• Materials Management
• HR Management
• Marketing
Business Modules of an
ERP Package Business Environment

HR Production
Management Planning

Financial
Management ERP Plant
SYSTE Maintenance
M
Manufactur Sales &
ing Distribution

Quality Materials
Management Management
 1.Financial
Module
• This module deals with accounting aspects. All
accounting transactions are recorded.
• Accounting software needs to access information in each
area of our organization from R&D and market research
through manufacturing, distribution, and sales.
• The financial solution must provide the management with
information that can be used for strategic decisions, in
order to achieve competitive advantage.
• The finance module of most ERP systems will have the
following sub systems
A)Financial Accounting:
This module helps in maintaining
different ledgers, trial balances and is integrated with
accounts receivable and payables management.
This module automates financial
transactions and help speedy period end accounting
tasks and financial closing cycle. This module also
complies with different regulatory compliance
standards. This helps in managing following processes:
• General Ledger (GL): This records all business
transactions and is integrated with other operational areas of
a company as most of the business transactions in a company
can have accounting implications.
• Accounts Receivable (AR): This component of ERP
financial accounting module manages and records all
customer accounting data. From this component a lot of
useful reports on customer’s payment history can be
obtained like for which customers payment is due more than
30, 60 or 90 days.
• Accounts Payable (AP): This component of ERP Financial
accounting module manages and records all vendor
accounting data.
• Assets Accounting: This component maintains the accounts
of fixed assets according to company specific different
depreciation standards and accounting rules.
• Contract Accounting: This is a specialised type of
accounting requirement for managing contracts ie. managing
high-volume, recurring time or quantity-based billing.
• Legal Consolidation:These applications combine
heterogeneous general ledgers for the purposes of statutory
reporting and continued need for consolidation in light of the
wave of mergers and acquisitions. Hyperion is a market leader
in this application category. SAP’s Business Consolidation
Service (BCS) is getting momentum here while Oracle also
has their offering here.
• Financial module helps in creating different financial
statements as per company laws and country-specific
regulations.
B)Controlling:
Financial controls are the procedures, policies, and means by
which an organization monitors and controls the direction, allocation, and
usage of its financial resources. Financial controls are at the very core of
resource management and operational efficiency in any organization.
Overhead cost Controlling:
Overhead costs are fixed operating expenses that are not
linked to a productor a service. These are typically regularly occurring
expenses that the company needs to operate like internet costs, insurance,
rent, employee salaries, utilities, accounting fees, legal fees, office
supplies, etc.
Overhead Cost Controlling component enables to plan,
allocate, control, and monitor overhead costs. It is an important
preparation for a strong profitability analysis, as well as for a precise
product costing. By planning in the overhead area, we can specify
standards that enable to control costs and valuate internal activities.
Overhead Cost Controlling is divided into the following areas.
• Cost center accounting:
It analyses where overhead occurs within the organization. Costs
are assigned to the sub areas of the organization where they originated. By
creating and assigning cost elements to cost centers, you not only make
cost controlling possible, but also provide data for other application
components in Controlling, such as Cost Object Controlling.
• Overhead orders
Overhead Orders are internal orders used either to monitor
overhead costs for a limited period, or overhead incurred by executing a
job, or for the long-term monitoring of specific parts of the overhead.
Independently of the cost centre structure, internal orders collect the plan
and actual costs incurred, enabling you to control the costs continuously.
This system can monitor and automatically check budgets assigned to each
measure.
In comparison to overhead calculation, costs can be allocated more
effectively to their sources throughout the value chain when cost drivers
are used to allocate process quantities. Activity-Based Costing enables you
to calculate the costs of products more accurately in the overhead areas.
In comparison to overhead calculation, costs can be allocated
more effectively to their sources throughout the value chain
when cost drivers are used to allocate process quantities.
Activity-Based Costing enables you to calculate the costs of
products more accurately in the overhead areas.
• Activity-Based Costing
Activity-Based Costing provides a transaction-
based and cross-functional approach for activity output in
which several cost centers are involved. The emphasis is not
on cost optimization in individual departments, but the entire
organization.
The Activity-Based Costing module is a response
to the growing need for monitoring and controlling cross-
departmental business processes. In addition to functions and
products, seeing costs from a new perspective substantially
• The Product Cost Controlling Information System (CO-
PC-IS)
This provides an extensive range of reports for the
following areas:
• Product Cost Planning
• Cost Object Controlling with subcomponents:
• Product Cost by Period
• Product Cost by Order
• Product Cost by Sales Order
• Actual Costing/Material Ledger
You can use the Product Cost Controlling Information System
to evaluate the data generated in the respective components. It
provides reports for both standard and specialized analysis
• Profitability analysis
This enables you to analyse profit or contribution margins by
market segment or by strategic business unit (such as a sales organization
or business area). Your market segments can be classified according to
products, customers, orders, or any combination. Profitability analysis
provides sales, marketing, product management, and corporate planning
departments with information to support internal accounting and
decision-making.
• Two forms of profitability analysis are available:

• Margin analysis stores costs and revenues in accounts and uses cost
and revenue elements. This type of profitability analysis provides you
with a profitability report that is permanently reconciled with financial
accounting.

• Costing-based profitability analysis groups costs and revenues

according to value fields and costing-based valuation approaches, both
of which you can define yourself. It ensures access at all times to a
• Investment Management
This module within the ERP (Enterprise
Resource Planning) system helps to centralize and optimize
the management of capital investments and expenditures
within an organization. This solution facilitates the planning,
investment, and financing processes, ensuring efficient
resource utilization and alignment with strategic objectives.
• The inclusion of IM by consultants in an organization
helps in:
• The generation of long term project proposals (for
operations and investments alike).
• Reviewing, analysing and choosing from the generated
proposals.
• Implementing and monitoring the selected proposals.
 C) Treasury module
Treasury Management System (TMS) is a software
application that allows companies to process cash flow,
manage banking relationships and enhance the value of their
cash flow. A Treasury Management System can help
companies manage their assets, liabilities and bank accounts
through automation and integration with third-party
applications.
A TMS provides real-time visibility into cash
positions, enables better decision-making, and improves
overall operational efficiency. The system includes a range of
features and functionalities, including cash and liquidity
management, risk management, and payment processing.
• A treasury system usually includes different modules, each focusing on
an important aspect of your finances:

• Cash Management: A TM tracks incoming and outgoing payments,

including those made through ACH transfers. The system ensures that
funds are available when they’re needed by monitoring the company’s
accounts receivable and payable balances as well as its bank balances.
• Cash Forecasting: A TM helps identify trends so treasury can adjust
budgets accordingly in order to meet goals without encountering
unexpected costs along the way.
• Risk Management: A TM provides a comprehensive solution for
identifying, assessing, and managing financial risk, including
advanced analytics and reporting capabilities.
• Liquidity Management: A TM monitors cash flow on an ongoing
basis, allowing organizations to plan ahead for future expenses like
payroll or vendor payments in order to avoid overdrafts at the bank or
costly loan fees from third parties like credit card companies or payday
lenders.
D) Enterprise controlling :
Enterprise control is the ability to combine
control, intelligence and process management to enable
business optimization that is inclusive of business and
production operations. It combines the strength of both
business processes and production operations processes.
• Executive information system :
The executive information system provides
an overview of the critical information necessary to
manage the organisation. This component integrates
data from other ERP components, and non-ERP data
sources both inside and outside the enterprise.
• Business planning and budgeting:
• Business planning and budgeting supports the
management teams of business units and groups in the
calculation business targets, such as return on
investment.
• This module also supports central investment planning,
budget release and tracking. This module automatically
transfers data about investment requirements from
transaction applications, and provides extensive analysis
functions for budget monitoring.
2. Manufacturing (Production)
• Manufacturers are measured by their ability to react quickly to
sudden, often unpredictable change in customer demand for
their products and services.
• A good manufacturing system should provide for multi-mode
manufacturing application that encompasses full integration of
resource management.
• These manufacturing applications should allow an easier
exchange of information throughout the entire global
enterprise, or at a single site within a company.
• Regardless of how big or small an enterprise is these
applications should provide a wealth of feature/function, broad
scope of coverage, operational stability and a platform-
independent architecture. These capabilities empower an
enterprise to achieve productivity gains, adopt forward –
thinking technologies and implement process reengineering.
• Some of the major subsystems of the Manufacturing
module are:
• Material and Capacity Planning..
• Shop Floor Control..
• Quality Management..
• JIT/Repetitive Manufacturing..
• Cost Management..
• Engineering Data Management..
• Engineering Change Control..
• Configuration Management..
• Serialisation/Lot Control..
• Tooling
• Production Planning and Scheduling
• Production Planning and Scheduling is the process of determining what and when
needs to be produced. First, it creates a schedule for each product or group of
products. This schedule list includes things like when each item will be made, how
many units will be produced on each shift, and how many workers are needed on
each shift. The production schedule is then shared with other modules so that they
can plan their activities accordingly.
• Real-Time Inventory Valuation
• This function helps to track physical items throughout their lifecycle. Once an item
is produced, it can be followed using this function until it reaches its end-of-life
date or until it is sold to customers. This information is stored in ERP databases so
that companies can have real-time data regarding their inventory levels, material
requirements, and costs associated with producing goods or services.
• Facility planning
• Facility planning helps users to plan and organize their manufacturing processes so
that they can achieve their goals more efficiently. For example, they can use this
function to determine what equipment should be purchased in order to meet
customer demand or how many workers are needed at each stage of production. By
knowing these factors, companies will be able to allocate resources more
effectively and make sure that they always have enough resources available when
needed.
• Bill of materials processing
• The BOM is a list of the components and sub-assemblies that make up
a finished product. It is an essential component of the manufacturing
process because it allows you to track how many parts are needed to
build each finished product and whether those parts are available in
inventory. For example, if your company makes computer cases, you’ll
need to know how many steel sheets and plastic panels go into each
case so that you can purchase enough raw materials when required.
• Shop floor scheduling and control
• The Shop Floor Control function allows you to schedule the
manufacturing process by defining machines, batches, products, and
materials. You can specify how much time each machine will be busy
processing parts and when it can be interrupted by other jobs. This
function also allows you to set up different processing schedules for
various departments or workstations within a department. In addition,
you can also specify which steps need to be performed in a specific
order as well as define different sequence rules for each step.
• Work order processing
• Work order processing is the process of creating, modifying, approving,
releasing, and tracking work orders in manufacturing. Work orders are
produced from the Bill of Materials (BOMs) that define the products that
need to be manufactured. You can use this function to create new BOMs
from existing ones or vice versa, modify existing BOMs, change the
quantity on a BOM line item, approve or reject BOMs for production,
release all approved BOMs for production, or track the progress of each
individual component part as it moves through your factory’s operation
sequence.
• Routing management
• The routing management function of an ERP for manufacturing
industry allows users to set up schedules for every step in the production
process, including when materials are received and when they’re shipped
out. This helps ensure that production runs smoothly and efficiently,
without delays or other issues that could impact customer orders. In
addition, it defines processing times per work center type and determines
how much time is spent at each work center type for each product or
production order.
• Material requirements planning
• MRP is the process of planning, scheduling, and controlling the
production of goods. The primary purpose of MRP is to determine
what materials are required to manufacture a product, when they
will be needed and what resources are required to produce them.
The material requirements planning module is mainly used to plan
production by analyzing the demand for raw materials and finished
products. It helps a company to meet customer demand while
minimizing stock levels, inventory costs, and wastage of raw
materials and finished products.
• Quality Control Management
• Quality control management ensures that the products being
produced are up to the company’s standard. The main objective of
this function is to ensure that the products meet customer
requirements and maintain high-quality standards throughout the
supply chain process. The quality control management process
includes a number of steps, including inspection, sampling,
3. Human Resources Management
• Human resources management is an essential factor of any
successful business. HR managers must continually review
and optimise their business processes. The HR modules of
most ERP systems have a set of rich features, and will
integrate seamlessly with the other modules and are thus,
invaluable aids in improving productivity.
• In today’s organizations employees are viewed as human
resources that need to be carefully nurtured,
accommodated and developed. The various sub systems
under HR module are following.
• Personnel Management• (HR master data, Personnel
administration, Information systems, Recruitment, Travel
management, Benefits administration, Salary
administration)
• Organizational Management (Organizational structure,
Staffing schedules, Job descriptions, Planning scenarios,
Personnel cost planning)
• Payroll Accounting (Gross/net accounting, History
function, Dialog capability, Multi-currency capability,
International solutions)
• Time Management (Shift planning, Work schedules,
Time recording, Absence determination) Personnel
Development (Career and succession planning, Profile
comparisons, Qualifications assessments, Additional
training determination, Training and event
management)
• Personnel management includes numerous software
components, which allow us to deal with human
resources ,tasks more quickly, accurately, and efficiently.
• We can use these components not only as part of the
company-wide ERP solution, but also as stand-alone
systems.
• Personnel Administration Information is no longer
owned by specific departments, but is shared by
multiple entities across an organization. This eliminates
duplicate entries, reduces the chance for error and
improves data accuracy.
• The HR modules provide a global, fully integrated data
structure for the enterprise without compromising our
control over individual segments of the operations.
• Employee master data: most systems have the facility to
scan the original documents for optical storage. The HR IS
displays graphical information such as organization charts or
employees data
• Recruitment management for hiring right people with the
right skills. These requirements are fulfilled only through
effective automation of the entire recruitment process.
• Travel management to process the travel expenses, business
trip from start to finish. It provides with self explanatory
forms , statements, and an electronic approval process
• Benefits Administration provides capabilities and flexibility
to effectively manage benefits programs for diverse
employee populations. These systems can maintain an
unlimited number of benefit types and individual plans that
are offered to the employees
• Salary Administration module assists in the salary
review process also, by taking into account standard
salary changes within the company as well as individual
compensation exceptions
• Organizational management for accurate picture of
organization’s structure, no matter how fast it changes.
You can also create multiple simulations for your
organization as you explore your options for making
adjustments in personnel. Accurately forecasting
personnel costs provides your management team with a
more complete cost picture to assist them in making
informed decision
• Time Management: is a powerful tool to administer and
evaluate data related to the time that employees spend
working. It manages work schedules efficiently and
effectively
• Pay Roll Accounting The Payroll Accounting system can fulfill
the payroll requirements and provide us with the flexibility to
respond to our changing needs.
• Payroll Accounting should address payroll functions from a
global point of view. We should be able to centralize our
payroll processing, or decentralize the data based on country
or legal entities.
• Most Payroll Accounting systems give us the options and
capabilities to establish business rules without modifying the
existing payroll. Many systems have the features to remind
us when transactions are due for processing.
• When the process is completed, a built-in audit trail date
stamps the record for future reference. The system
automatically creates a history record for every payroll
transaction. With Payroll Accounting, we have the ability to
tailor the system to our organization's requirements.
• Shift planning
• Shift planning module helps us to plan our workforce
requirements quickly and accurately. We are able to arrange
a target plan that can be drafted for any given period.
• We can plan our shifts according to our requirements,
taking into consideration all criteria, including absences due
to leave or sickness and employee requests for time off.
• Shift planning keeps us informed at all times of any staff
excess or deficit; a convenient planning hoard is provided to
guide copying shifts and us when entering for any
designated period.
• Another advantage of Shift Planning is that it enables us to
temporarily assign an employee or employees to another
organizational unit where they are needed, allowing for a
temporary change of cost centre.
• Personnel development
• This function helps in selecting the best people and
enhancing careers more effectively. The system provides
advanced tools to automate the labour intensive
process of matching internal job requirements to
qualified candidates.
• We can profile predefined tasks and prerequisites of
each position in our organization. Additionally, we can
profile the qualifications of employees and external
candidates under consideration for each position.
• A comparison of qualifications and profiles assists us in
selecting individuals for further consideration in
effective personnel development planning ensures that
the goals of the organization and the goals of the
employee are in harmony.
• Training and Event Management Every successful organization
should plan the training and events faster than ever before.
• A good HR system will have features to assist us with planning,
managing and analyzing our scheduled seminars, training courses
and business events.
• Detailed information for each of the events is maintained to
facilitate production of event catalogue and schedules.
• There should be tools to maintain information on the internal or
external organizers of each event, as well as details such as
prerequisites, objectives, content, time schedule prices, capacity,
locations, attendee billing information, and budgets resources
such as instructors, rooms, equipment and course materials an
automatically suggested, saving us a great deal of data entry
time.
• On completion of a training course, appraisal forms can be
automatically issued. Appraisals can be carried out for instructors,
attendees, business events and training courses.
4. Plant Maintenance
• Plant maintenance supports various options for structuring
technical systems wit its object, type, and functional related
views, and enables flexible data navigation. Data concerning
the planning , processing and history of maintenance tasks is
documented in the system and compiles with business
verification requirements. It also forms basis for defining an
optimum maintenance strategy in the sense of “Total
Productive Maintenance”. The major sub system are following
• 1. Preventive maintenance control: provides planning,
scheduling, and control facilities and equipment.
Maintenance tasks can be tracked for each machine or piece
of equipment by two user defined modes, as well as calendar
day frequency. PM control enables organizations to lower
repair costs by avoiding down time, machine breakage and
process variability
• Equipment Tracking: this history includes acquisition and
disposition information and associations between
different pieces of equipment to pin point operational
dependencies
• Component Tracking: the component are typically sub
sets of larger equipment and deserve same amount of
cost controlling scrutiny. It enables equipment managers
to identify components with chronic repair problems.
Planning component replacements, rather than waiting
for component failures to occur reduces unscheduled
down time. It includes repair/ exchange history and
component service life
• Plant maintenance calibration tracking allows
organizations to leverage their investment in the plant
maintenance module by providing for tracking of
equipment calibration in support of ISO 9000requirements
• Plant maintenance warranty claims tracking
• Plant Maintenance Warranty Claims Tracking is an
administrative system designed to provide control of all
items covered by manufacturer and vendor warranties.
• It enables plant management to recover all of the
warranty, reimbursements to which they are entitled
but have not been able to recover in the past.
• Features include the ability to establish the type and
length of warranty, for example, elapsed day, months,
mileage stipulation, or operating units.
• A complete history is performed for each item covered
by the warranty, and complete information regarding
the warranty service provider is generated.
• The MM module optimizes all purchasing processes with workflow
driven processing functions, enables automated supplier
evaluation, lowers procurement and warehousing costs with
accurate inventory and warehouse management, and integrates
invoice verification. The sub modules are
• 1. Pre-purchasing activities: It supports the complete cycle of bid
invitation , award of contract and acceptance of the services.
Activities include maintaining a service master-database in which
the description of all services are to be procured can be stored. The
system also keeps a separate set of service specifications that an be
created for each concrete procurement project or proposed
procurement in the purchasing department. Set of service
specifications may include both items with services and items with
material. There are two ways of entering service specifications –
planned and unplanned
• 2. Purchasing: This module is fully integrated with other modules in
the system and supports all phases of MM. It works side by side
with cost accounting system, financial accounting, sales and
distribution
• Vendor evaluation: Information such as delivery dates,
prices and quantities can be taken from purchase order and
data from quality management such as result of incoming
inspections or quantity audits.
• Most of the vendor evaluation system offers a point based
evaluation system based on certain selection criteria. The
main criteria that are used are price, quality, delivery, service
and support, replacement of returns, lead time , and so on.
• Inventory Management: To manage stock on a quantity and
value basis and plan, enter, and check any goods movement
and carry on physical inventory. With every goods
movement , the following values are updated
• Stock value for inventory management
• Account assignment for cost accounting
• Corresponding GL accounts for financial accounting via
automatic account assignment
• Invoice Verification and material inspection: It provides link
between the materials management component and financial
accounting, controlling and asset accounting components.
6. Quality Management
• The ISO 9000 series and a host of other international
standards define the functions of quality management and
the elements of a quality management system. In the area of
production , quality assurance is no longer viewed in terms of
inspection and the elimination of defects alone. Instead , the
production process itself becomes focus of attention.
• The integration of quality management in the ERP systems
provide considerable advantages because only an integrated
system can support all of the elements of a quality
management system according to international standard. The
module supports fulfills functions like
• Quality planning includes management of basic data for
quality planning and inspection planning ,material
specifications, inspection planning.
• Quality inspection (checking) trigger inspections, inspection
processing with inspection plan selection and sample selection,
print shop papers for sampling, record results and defects,
make the usage decision, and trigger the follow up actions.
• Quality control manages dynamic sample determination on
the basis of the quality level history, application of statistical
process control techniques using quality control charts, quality
scores for the inspection lot, quality notifications for
processing internal or external problems and initiating
corrective actions to correct the problems, inspection lot
processing and problem processing, quality management
information system for inspections and inspection results and
quality notification.
• 7. Marketing
• The marketing module enables organizations to
maximize the efficiencies of marketing resources and
empowers marketers to acquire and develop long term
customer relationship. Marketers can analyze , plan,
execute and measure all marketing activities. The
marketing module supports critical marketing
processes like
• Marketing resource management to analyze, plan,
develop, implement and measure all marketing
activities to maximize the efficiencies of your available
resources and gain visibility and control into your
marketing processes.
• Segment and list management sub-system helps you in
managing enterprise customer and prospect data
without the need of IT support
• Campaign management is used to make the most dialog
marketing by marketing by implementing inbound and
outbound campaigns that are both multi channel and
multi-wave. You can develop and execute the best
marketing strategy, using constraint based optimization
techniques to determine the optimum marketing mix
• E-mail marketing, innovative thinking will uncover
dozens of areas where e mail marketing programs can
be used to drive revenues, improve customer
satisfaction and streamline internal processes.
• It enables to drive efficiency and gain true ROI on
campaigns, shorten campaign cycles, target right people
with the right message, swiftly build personalized and
content rich messages, without being web guru, obtain
immediately feedback, allowing to track campaign
activity as soon as the campaign is launched and track
customer behaviors such as when they opened the e
mail, how many times they viewed it ad whether they
logged in to the corresponding web site
• Trade Promotion management, to increase brand equity and
achieve sales objectives, to lower costs for managing promotion
processes and budgets. This sub system delivers powerful
connectivity. The application enables a closed loop process that
adds value to each of the five major steps in the trade
promotion process: headquarter planning, field accounts
planning, sell-in and negotiation ,retail execution, and
validation, and pre a
• Lead Management: enables you to align marketing and sales
organizations and extend lead management process to partner
organizations in order to increase conversion rates.
• Marketing analytics: to leverage a wide range of analytics, such
as customer values, churn scores and satisfaction scores , to
make profitable decisions. The application also helps to identify
business challenges and opportunities and predict customer
behavior , anticipate their needs, and create more
relevant ,targeted messages and post evaluation and analysis.
• Web-based Marketing Surveys: the survey sub-system
enables better communication between you and your
customers. To capture information on the opinions and
behavior of the people that matter to their business such
as employees, customers, business partners and suppliers.
• On line surveys – this sub system manages the entire
survey cycle from building individual survey questions , to
launching the survey either on a web site or via an e mail.
It also minimizes the time spent collating and tabulating
results into meaningful data
• Getting the right information at the right time- with on
line surveys the results are available as soon as the
respondents complete the survey. This allows to react to
mission critical responses decisively and immediately
• Multiple deployment options: the survey sub system
creates each survey a separate hyperlink that can be
placed on any web site to help drive traffic to the
survey. You can also upload contact lists and data bases
and send them a direct and unique link to the survey
and track their individual response details.. Furthermore
, via integration with e marketing you can actually place
the survey an e mail so that your respondent never even
has to leave his e mail application to answer your
question
• Instant results-Easy to understand reports are available
and all results data can be downloaded to excel for
further analysis if necessary
• Self Service Portal : The self service portal form helps to
meet the demands of today’s customer by allowing them
with access to information and answer s to their
questions at their convenience. The robust , integrated
application works with common internet browsers to give
enterprises in the small to mid market a global support
presence.
• The FAQ feature, an on-line store of answer to customer’s
most frequently asked questions, allow customers to help
themselves to information at any time of the day and
from any where in the world
8. Sales and Distribution Module
SD is a software module within the ERP system
that is designed to manage the sales and distribution
processes of an organization. SAP SD is one of the core
modules of the SAP ERP system and is used by companies
to manage their sales operations, including sales order
processing, pricing, shipping, billing, credit management
and after sales support.
A sales and distribution network of an organisation
comprises various parties, such as wholesalers, retailers,
distributors and commission agents. The sales and
distribution module of an ERP system streamlines the sales
and distribution activities of an organisation.
• The sales and distribution process involves the following steps:
• Pre-sales: Before any sales take place, there are certain activities
that must be carried out by an organisation to attract customers;
for example, arranging product demos to invite buying enquiries.
• Sales order processing: After a customer is satisfied by enquiring
about the product, he/she may place an order to buy that
product. Various mediums can be used by customers for placing
their orders. For example, customers nowadays feel comfortable
in buying products online as it saves time and efforts.
• Shipping: The next step in the sales and distribution process is to
make products available to customers by drafting delivery
schedules, transporting goods, tracking transit details, etc.
• Invoicing: This is the last step in the process of sales and
distribution. After a product is received by a customer, an invoice
is generated and handed over to the customer and the payment
is collected
 Sales

Order
Enquiry Quotation Contracts

Shipping

Delivery

Billing

Invoice

Materials Managemnt Financial Accounting

• Sub-Modules of Sales and Distribution Module
Sales is considered to be a comprehensive
function of an organisation as it comprises various activities
such as shipping, invoicing and order tracking. The sales and
distribution module of an ERP system allows organisations to
carry out such activities with the help of various sub-modules.

• Master Data Management

• Order Management
• Warehouse Management
• Shipping and Transportation
• Billing and Sales Support
• Foreign Trade
(Details in SD_Module.docx)
• LIMITATIONS OF THE ERP SYSTEM
• The ERP system has 3 significant limitations:
• 1.Managers cannot generate custom reports or queries
without the help from a programmer and this inhibits
them from obtaining information quickly, which is
essential for making a competitive advantage.
• 2.ERP systems provide current status only, such as open
orders. Managers often need to look past status to find
trends and patterns that aid better decision-making.
• 3.The data in the ERP application is not integrated with
other enterprise or division systems and does not
include external intelligence.
• There are many technologies that help to overcome
these limitations.
• These technologies when used in conjunction with the ERP
package, help in overcoming the limitations of a stand-alone
ERP system and thus help the employees to make better
decisions. Some of these technologies are:
• 1. BUSINESS PROCESS RE-ENGINEERING (BPR)
• 2. DATA WAREHOUSING & Data Marts
• 3. DATA MINING
• 4. ON-LINE ANALYTICAL PROCESSING (OLAP)
• 5. PRODUCT LIFE CYCLE MANAGEMENT (PLC)
• 6. SUPPLY CHAIN MANAGEMENT(SCM)
• 7. CUSTOMER RELATIONSHIP MANAGEMENT
• 8. GEOGRAPHICAL INFORMATION SYSTEMS
• 9. INTRANETS AND EXTRANETS
• 10. ELECTRONIC DATA INTERCHANGE (EDI)
• 11. ELECTRONIC FUNDS TRANSFER (EFT)
BUSINESS PROCESS RE-ENGINEERING (BPR)
• DEFINITION : Dr. Michael Hammer defines BPR as “the
fundamental rethinking and radical redesign of business
processes to achieve dramatic improvements in critical,
contemporary measures of performance such as cost,
quality, services and speed.”
• One of the main tools for making this change is the
Information Technology (IT).
• Any BPR effort that fails to understand the importance of
IT, and goes through the pre-BPR analysis and planning
phases without considering the various IT options
available, and the effort of the proposed IT solutions on the
employees and the organization is bound to crash during
take off.
BPR-the different phases
The tasks that experts agree upon to successfully perform
BPR, can be grouped in to seven steps, or phases. All
successful BPR projects begin with the most critical
requirement communication throughout the organization
• 1. Begin organizational change
• 2. Building the reengineering organization
• 3. Identifying BPR opportunities
• 4. Understanding the existing process
• 5. Reengineer the process
• 6. Blueprint the new business system
• 7. Perform the transformation
ADVANTAGES OF BPR
• 1. It helps in integrating the various business processes
of the organization.
• 2. With good ERP package, the organization will be able
to achieve dramatic improvements in areas such as cost,
quality, speed, etc.
• Hence, many BPR initiatives are used in ERP
implementation.
IMPORTANCE OF DATA WAREHOUSING
• The primary concept of the data warehousing is that the
data stored for the business analysis can be accessed
most effectively by separating it from the data in
operational systems.
• The most important reason for separating data for
business analysis, from the operational data, has always
been the potential performance degradation on the
operational system that can result from the analysis
processes.
• High performance and quick response time is almost
universally critical for operational system.
HOW DATA MINING WORKS
Data mining is all about organizing
and interpreting data
• You’ll see data points that may include:
• 1. What time they visited your site
• 2. What device they used to access your site
• 3. Which pages they visited
• 4. Which items they put into their shopping cart
• 5. Which items they purchased together
• 6. Whether they compared items
• 7. How often they come back to your site
• The amount of data accumulated each day by various
businesses, scientific and governmental organizations
around the world is daunting.
• Research organizations, academic institutions and
commercial organizations create and store huge amounts of
data each day.
• It becomes impossible for human analysts to cope with such
overwhelming amounts of data.
• Two other problems that surface when human analysts
process data are:
• i. The inadequacy of the human brain when searching for
complex multi-factorial dependencies in the data.
• ii. The lack of objectiveness in analyzing the data
 ADVANTAGES: Data Mining
• A human expert is always a hostage of the previous
experience of the investigating other system.
• Sometimes this helps, sometimes this hurts, but it is almost
impossible to get rid of this fact.
• While data mining does not eliminate human participation in
solving the task completely, it significantly simplifies the job
and allows an analyst, who is not a professional in statistics
and programming to manage the process of extracting
knowledge from data
 ON-LINE ANALYTICAL PROCESSING (OLAP)
• DEFINITION OLAP can be defined in five words – Fast Analysis of
Shared Multi-dimensional Information.
• Fast : means that the system is targeted to deliver most responses to
users within about 5 seconds, with the simplest analysis not taking
more than one second and very few taking more than 20 seconds.
• Analysis: means that the system can cope with any business logic and
statistical analysis that is relevant for the application and the user, and
keep it easy enough for the target user.
• Shared: means that the system implements all the security
requirements for confidentiality and if multiple write access is needed,
concurrent update locking at an appropriate level.
• Multi-dimensional: means that the system must provide a multi-
dimensional conceptual view of the data, including full support for
hierarchies and multiple hierarchies.
• Information: is refined data that is accurate, timely and relevant to the
user.
Importance
• OLAP technology is being used in an increasingly
wide range of applications.
• The most common are sales and marketing
analysis, financial reporting and consolidation
and budgeting and planning.
• OLAP is being used for applications such as
product profitability and pricing analysis; activity
based coating; manpower planning and quality
analysis or for that matter any management
system that requires a flexible, top down view of
an organization.
Benefits: GIS
• Telecom and network services
• Urban planning
• Environmental impact analysis
• Transportation planning
• Surveying
• Traffic density planning
• Regional planning
• Disaster and business community planning
 ANALYTICS

• The definition of the term analytic applications includes

business applications that analyse data for specific business
subjects (like supply chain, customer relationship
management, human resource, finance, etc.) that span
industries or that are specific to industries (like retail analytics,
oil and gas analytics, etc.).
BI Versus Analytics
• Business intelligence is sometimes called analytics though
there are distinctions between them. BI is a fullest of
technologies and programmes where as analytics comprise all
specialised programmings that analyse data about a particular
field, like marketing, sales, human resource, etc
• Presently, there are many analytics available in the
market such as CRM analytics, supply chain analytics,
sales analytics, customer analytics, product and service
analytics, finance analytics, etc.
• Analytics can be divided to two major categories such
as:
• Descriptive analytics that focuses on history (say,
historical customer patterns) and
• Prescriptive analytics that focuses on trends to predict
(say, customer’s future behavior).
• Different Analytics Segments
• Analytics can be divided into different segments as follows:
• Financial and Business Performance Management (BPM) Analytic
Applications
• These analytic applications are designed to measure and optimise
financial performance and/or establish and evaluate an enterprise
business strategy. These analytic applications are designed to
measure and optimise financial performance and/or establish and
evaluate an enterprise business strategy. The major categories are
as follows:
• Financial analytics: This category includes applications for financial
consolidation, budgeting and planning, activity-based costing, etc.
• Business Performance Management (BPM): This category
includes applications that evaluate and measure the success of an
enterprise business strategy. Examples include balanced scorecard
applications and BPM that spans multiple functions.
• Customer Relationship Management (CRM) Analytics
These analytic applications are designed to measure and
optimise customer relationships. CRM analytics can be either
industry specific (for verticals such as financial services,
telecommunications, retail, etc) or cross-industry CRM
analytics (like marketing or multi-channel CRM analytics).
• Operations and Production Analytic Applications
These analytic applications are designed to measure and
optimise the production and delivery of products and
services. There can be different categories of applications
under this as follows:
Financial services, Human resource management and
payroll,Materials management/logistics, Manufacturing,
Retail etc
 BUSINESS INTELLIGENCE

• Business intelligence tools mainly help in reporting as per the end

user requirement. OLAP, analytics, datamining, etc. described
earlier is a part of business intelligence suite. Beyond these BI
tools also provide following functionalities:
• Alerts: BI solutions can provide alerts capabilities, i.e. whenever
there is a difference between planned and actual performance
and the difference crosses beyond a limit, BI solutions can provide
automatic alerts. These alerts can spin off an automatic workflow.
• Scorecards: BI solutions can display metrics displayed in a
dashboard and align key performance indicators to a strategic
objective. Scorecard metrics are linked to related reports and
information in order to do further analysis.
• Dashboards: These BI dashboards indicate the state of the
performance metrics, compared with a goal or target value.
• Ad hoc query: This is known as self-service reporting, enables
users to ask their own questions of the data, without relying on
IT to create a report.
• Workflow: BI application can have strong workflow capability so
that reports and alerts can be triggered and sent to right user.
• Data delivery: BI tools can provide multi-channel delivery
capabilities, i.e. BI functionality be delivered embedded in
operational applications such as ERP or CRM or via mobile
devices, such as iPhone. It is important that the BI product to be
integrated with office products.
• Customisation of reports based on user profile: BI products can
customise reports, queries, or dashboards based on user profile.
• Predictive modelling and data mining using advanced
mathematical techniques.
• Visualisation: BI tools can provide strong data visualisation
capabilities, i.e. data analysis in the form of different charts
and interactive pictures.
• Slice and dice of data: As discussed earlier, BI tools have
multi-dimensional data analysis capabilities in the form of
drill down, drill across (slice and dice), ability to drill from
one dimension to another,etc.
• Leading Business Intelligence Vendors
• Business intelligence market has seen a lot of action in
recent times. Earlier, this market used to be dominated by
specialised nitch vendors like Brio, Business objects, etc
• Today this market is dominated by following vendors:
• Business Objects (taken over by SAP recently)
• Cognos (taken over by IBM recently)
• SAP (SAP Business Intelligence is SAP’s flagship product)
• Brio
• Oracle
• SAS Institute
• Hyperion
E-Commerce and
E-Business
Introduction
• E-Commerce can be broadly classified as the set of
business activities involving consumers, service
providers, manufacturers, and intermediaries who use
computer network such as the internet for conducting
their business transactions.
• Primary goal is to bring organizations closer to their
actual customers, thus providing the customers with
products and services much faster and at a lesser cost
than the traditional business models.
• Reduced product and service cost, improved customer
response, product and service quality and customer
satisfaction
The IT Revolution
• The revolutionary changes in IT, changes all aspects of people’s
life and lifestyle. Computers and communications are becoming
integral part of our lives.
• Inanimate objects like computers, changed our way of
communication. Automated guided vehicles, missiles can hit
target by comparing the landscape with their own map.
• This changes in the information technology made changes in
business and organisations. To survive , organizations have to
manage the technology or more appropriately manage with
technology.
• This made E-commerce an integral part of doing business in this
internet age.
Technological Advancements
• Increased computational power of the computers
• Increased network capacity
• Machines using massively parallel processors(MPPs)
• Computers will provide raw computational power necessary to
support new and powerful software applications
• Many of our business transactions are carried out without human
intervention.
• Today we conduct many of our educational endeavors and social
interactions without leaving our homes. This new manner of
carrying out commerce is called E-commerce.
E-Commerce Defined
• E-Commerce integrates communication, data management and
security services, to allow business applications within different
organizations to automatically interchange information.
• Communication services : Transfer the information from the
originator to the recipient.
• Data management services : Define the interchange format of the
information.
• Security services : Authenticates the source of information, integrity
of the information received, prevent disclosure of the information to
unauthorized users and verify that the intended recipient has
received the information.
• Webster’s dictionary defines ‘commerce’ as an interchange of goods
or commodities between different countries (foreign commerce) or
between different parts of the same country (domestic commerce).
E-Commerce Defined
• A typical commerce activity may include a purchase order and
invoice. It may require updating accounting and inventory
records, and it may require manipulating and modifying
administrative information.
• Information is also an integral part of electronic commerce, but
electronic and traditional commerce each deal with information
differently.
• E-commerce is commerce that is transacted using automated
processing procedures integrated with automated procedures for
the interchange of information.
Evolution Of E-commerce
• Although the term E-commerce has gained popularity only
recently, electronic commerce has been around in various
forms for over 30 years.
• Electronic data interchange (EDI) - latter half of the 1970s.
• credit cards, phone banking and automated teller
machines (ATM) in the 1980s.
• The exponential growth of Internet has changed
traditional E-commerce activities like EDI and EFT can now
be conducted with new participants on a global scale.
E-commerce Growth Factors
• Growth and commercialization of the Internet and the
popularity of the WWW.
• Advancements in the field of information technology.
• Confidence in consumer protection, privacy and
Internet security.
Consumer Protection, Privacy
and Internet Security
• Expanding the digital economy means assuring shoppers
that their communications are secure and their personal
data is protected.
• strengthening self-regulatory mechanisms and
formulating and enforcing Internet/cyber laws.
• modern encryption and security methods like Virtual
Private Networks (VPN), Secure Socket Layer (SSL),
Secure Electronic Transactions (SET), etc. have played a
major role in improving consumer confidence and
reducing fraud over the Internet.
Entry of Small and Medium-
Sized Business
• Anyone with a laptop and modem can open a storefront
and have access to a global marketplace.
• Some small businesses may face barriers to adopting E-
commerce, including a lack of knowledge about the
technology and its costs, insufficient information about
the benefits of E-commerce and potentially applicable
business models, a shortage of technically trained
employees, complex and user-discouraging E-commerce
implementations and the absence of unbiased, qualified
assistance.
E-commerce To E-business
• E-commerce has now became an integral part of
business
• Back in 1994 websites are used for commercial
advertising
• Now every organization uses website for their business.
E-Business
• E-Business is the convergence and fusion of business process,
enterprise applications, business infrastructure, technology,
information and organizational structure (people) necessary to create
a high-performance business.
• E-Business, in addition to encompassing E-commerce, includes both
front and back-office applications that form the engine for modern
business.
• It involves fundamental re Structuring and streamlining of the
business using technology.
• enterprise resource planning (ERP) systems, supply chain
management, customer relationship management (CRM), data
warehousing, data marts, data mining, on-line analytical processing
(ÖLAP), geographical information systems (GIS), etc.
Difference

• E-Commerce refers to the performing online commercial

activities, transactions over internet. It includes activities like
buying and selling product, making monetary transactions etc
over internet.
• Examples of E-Commerce are online retailers like amazon,
flipkart, Myntra, paytm mall, seller of digital goods like
ebooks, online service etc.
• Activities of E-Commerce are :
• Buying and selling product online
• Online ticketing
• Online Payment
• Paying different taxes
• Online accounting software
• Online customer support
• E-Business refers to performing all type of business activities
through internet. It includes activities like procurement of raw
materials/goods, customer education, supply activities buying
and selling product, making monetary transactions etc over
internet.Internet, intranet, extranet are used in e-business.
Websites, apps, ERP, CRM etc are required for e-business.
• Activities of E-Business are :
• Online store setup
• Customer education
• Buying and selling product
• Monetary business transaction
• Supply Chain Management
• E-mail marketing