03.

Basic ERP Concepts

Enterprise Resource Planning (Second Edition) By Alexis Leon (2008)

Introduction
ERP is a set of tools and processes that integrates departments and functions across a company into one computer system. ERP runs off a single database, enabling various departments to share information and communicate with each other. ERP is an enterprise reengineering solution that uses new business computing paradigms to integrate IT processes across a company's division and departments. ERP offers a means of effectively increasing and managing the re uired resources. !or each resources ERP can identify what is re uired, when it is needed and how much is needed, thus ma"ing the operation of the organi#ation efficient and effective.

Enterprise Resource Planning (Second Edition). Copyrig t 2008! Alexis Leon. All rig ts reser"ed.

Customizing ERP Packages to Suit the Companys Business

In many cases ERP pac"ages have to be customi#ed to fit the way in which the company does business. This will slow down the pro$ect, introduce dangerous bugs into the system and ma"e upgrading the software to the ERP vendor's ne%t release very difficult. In some other cases, the organi#ation&s business process have to changed, if they are inefficient. This will mean ma"ing changes in long'established ways of doing business and redefine the roles and responsibilities. This if not done properly, can create employee resistance.
Enterprise Resource Planning (Second Edition). Copyrig t 2008! Alexis Leon. All rig ts reser"ed.

Importance of ERP Systems

ERP is most important to companies because of their improvement in the way the company takes a customer order and processes it into an invoice and revenue (order fulfillment process). ERP systems makes the business process automated and more streamlined and makes the organization more agile and competitive so that it can respond to the changing customer needs and competition uickly and efficiently. Some of the characteristics of ERP systems are: !. "t affects almost all organizations #. "t forces the competition to change their business strategies and processes $. "t influences business partners to become more competitive and agile %. "t improves the profits of the organizations engaged in implementation consultancy &. "t helps the business process reengineering process '. "t enforces best practice business processes in organizations (. "t fully utilizes the true potential of client/server computing and other latest technologies ). "t changes the information systems function and job profiles of IT professionals *. "t changes the nature of jobs in all functional business areas of the organization !+. "t is very expensive and its implementation is very costly and ris y !!. "ts implementation is a long and complex project !#. "t re uires the cooperation of all in the organization for succeed

Enterprise Resource Planning (Second Edition). Copyrig t 2008! Alexis Leon. All rig ts reser"ed.

ERP and a!ue Creation

ERP facilitates value creation by changing the basic nature of organizations in a number of different ways, !. "t integrates the organizations- activities #. "t eliminates !ata re!un!ancy $. "t provides accurate. timely. relevant and up"to"!ate information to the decision makers %. "t provides on"line an! real"time information &. "t enables better and faster !ecision"ma ing '. "t forces the use of best practices (. "t enables organizational stan!ar!ization ). "t eliminates information asymmetries *. "t allows simultaneous access to the same !ata for planning an! control !+. "t facilitates intra"organization communication !!. "t enables inter"organization collaboration !#. "t enables the organization to be more agile and competitive

Enterprise Resource Planning (Second Edition). Copyrig t 2008! Alexis Leon. All rig ts reser"ed.