TERM PAPER

ON

SUBMITTED TO- SUBMITTED BY-

MS.NEHA TIKOO PRIYANKA SHARDA

ROLL NO-B28
 10903380

ACKNOWLEDGEMENT

Making this term paper was a fantastic journey. Let me

begin my acknowledgement by thanking my teacher Ms.
NEHA TIKOO for providing suggestions on how to proceed
with the term paper and clearing the doubts whenever
they accumulated in my mind. She has been a guideline
throughout the process. I am extremely thankful to her as
she has been a source of inspiration for me.
I am equally thankful to my friends who have been very
helping and supportive throughout the process. I also take
this opportunity to thank my roommate who is very co-
operative and also helped me to complete this term paper.
At last big thank you to LOVELY PROFESSIONAL
UNIVERSITY for making me a small part of it. I was blessed
as after coming here only I was able to understand the
main aim of my life. I am highly obliged to be a part of
India’s largest university.

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INDEX
1. ABSTRACT – pg no. 4
2. INTRODUCTION – pg no. 5-7
3. ORIGIN OF THE TERM – pg no. 8
4. REVIEW OF LITERATURE – pg no. 9
5. THE IDEAL ERP SYSTEM – pg no. 10- 12
6. ADVANTAGES – pg no. 12
7. DISADVANTAGES – pg no 13
8. ERP IMPLEMENTATION – pg no. 14
9. LATEST TRENDS IN ERP – pg no. 15-17
10. LEADING ERP GIANTS- pg no. 18-19
11. ERP’S SCOPE IN INDIA – pg no. 20-22
12. CONCLUSION- pg no. 23
13. REFERENCES – pg no. 24

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ABSTRACT

ERP, which is an abbreviation for Enterprise Resource Planning, is principally an

integration of business management practices and modern technology. Information
Technology (IT) integrates with the core business processes of a corporate house to
streamline and accomplish specific business objectives. Consequently, ERP is an
amalgamation of three most important components; Business Management Practices,
Information Technology and Specific Business Objectives. The term ERP originally
referred to the way a large organization planned to use its organizational wide
resources. Formerly, ERP systems were used in larger and more industrial types of
companies. However, the use of ERP has changed radically over a period of few
years. Today the term can be applied to any type of company, operating in any kind of
field and of any magnitude. The key objective of an ERP system is to integrate
information and processes from all functional divisions of an organization and merge
it for effortless access and structured workflow. The integration is typically
accomplished by constructing a single database repository that communicates with
multiple software applications providing different divisions of an organization with
various business statistics and information. Organizations generally use ERP vendors
or consulting companies to implement their customized ERP system.

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INTRODUCTION

According to Webopedia, Enterprise Resource Planning or ERP is a business

management system that incorporates into a cohesive whole all the components of the
business endeavor such as planning, manufacturing, sales, and marketing. This
business management system helps business managers in such stages as inventory,
order, audit, billing, customer service, finance, and human resources. In other words,
ERP is an information system that covers the entire enterprise and is designed to
coordinate, relay, and complete the business processes of the business enterprise.

Most of these business solutions come in the form of computer program software that
has a common database and modular design. The ERP system is maintained in a

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single database which is ideally integrated and interactive for purposes of data input,
storage, processing, consulting, referencing, and retrieval. The information should be
authentic, verifiable, and accessible. A third-party consulting company is usually
hired to implement the ERP system for the company. This consulting company
provides professional services in business solutions consulting, customization of the
modular software, and support services.

Data transfer and data exchange are what happen in ERP systems. The ERP systems
thrive well if data migration is successful. Good data transfer and exchange strategies
spell the success of the ERP implementation. These strategies include identifying the
data to be migrated, determining the timing of data migration, and deciding on data
archiving,

Enterprise resource planning (ERP) is an integrated computer-based system used to

manage internal and external resources including tangible assets, financial resources,
materials, and human resources. It is a software architecture whose purpose is to
facilitate the flow of information between all business functions inside the boundaries
of the organization and manage the connections to outside stakeholders. Built on a
centralized database and normally utilizing a common computing platform, ERP
systems consolidate all business operations into a uniform and enterprise wide system
environment.

An ERP system can either reside on a centralized server or be distributed across

modular hardware and software units that provide "services" and communicate on a
local area network. The distributed design allows a business to assemble modules
from different vendors without the need for the placement of multiple copies of
complex, expensive computer systems in areas which will not use their full capacity[2]

In simpler words, an ERP is a massive software architecture that supports the

streaming and distribution of geographically scattered enterprise wide information
across all the functional units of a business house. It provides the business
management executives with a comprehensive overview of the complete business
execution which in turn influences their decisions in a productive way.

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At the core of ERP is a well managed centralized data repository which acquires
information from and supply information into the fragmented applications operating
on a universal computing platform.

Information in large business organizations is accumulated on various servers across

many functional units and sometimes separated by geographical boundaries. Such
information islands can possibly service individual organizational units but fail to
enhance enterprise wide performance, speed and competence.

The term ERP originally referred to the way a large organization planned to use its
organizational wide resources. Formerly, ERP systems were used in larger and more
industrial types of companies. However, the use of ERP has changed radically over a
period of few years. Today the term can be applied to any type of company, operating
in any kind of field and of any magnitude.

Today's ERP software architecture can possibly envelop a broad range of enterprise
wide functions and integrate them into a single unified database repository. For
instance, functions such as Human Resources, Supply Chain Management, Customer
Relationship Management, Finance, Manufacturing Warehouse Management and
Logistics were all previously stand alone software applications, generally housed with
their own applications, database and network, but today, they can all work under a
single umbrella - the ERP architecture.

In order for a software system to be considered ERP, it must provide a business with
wide collection of functionalities supported by features like flexibility, modularity &
openness, widespread, finest business processes and global focus.

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Origin of the term

The initials ERP was first employed by research and analysis firm Gartner Group in
1990 as an extension of MRP (Material Requirements Planning; later manufacturing
resource planning) and CIM (Computer Integrated Manufacturing), and while not
supplanting these terms, it has come to represent a larger whole. It came into use as
makers of MRP software started to develop software applications beyond the
manufacturing arena. ERP systems now attempt to cover all core functions of an
enterprise, regardless of the organization's business or charter. These systems can now
be found in non-manufacturing businesses, non-profit organizations and governments.

To be considered an ERP system, a software package should have the following traits:
It should be integrated and operate in real-time with no periodic batch updates. All
applications should access one database to prevent redundant data and multiple data
definitions. All modules should have the same look and feel. Users should be able to
access any information in the system without needed integration work on the part of
the IS departments.

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REVIEW OF LITERATURE
ERP systems have become vital strategic tools in today’s competitive business
environment. The research study presents a review of recent research work in ERP
systems. It attempts to identify the main benefits of ERP systems, the drawbacks and
the critical success factors for implementation discussed in the relevant literature. The
findings revealed that despite some organizations have faced challenges undertaking
ERP implementations, many others have enjoyed the benefits that the systems have
brought to the organizations. ERP system facilitates the smooth flow of common
functional information and practices across the entire organization. In addition, it
improves the performance of the supply chain and reduces the cycle times. However,
without top management support, having appropriate business plan and vision, re-
engineering business process, effective project management, user involvement and
education and training, organizations can not embrace the full benefits of such
complex system and the risk of failure might be at high level.

Today's century is the era of a speeding of information we need is like the Enterprise
Resource Integration System (Corporate Resource Integration System, CRIS) an
effective tool for tackling key problems, CRIS can be integrated functional levels of
the elements, resulting in cross-functional information flow. In the modern business
environment, the Indian, Between enterprises is becoming increasingly fierce
competitive environment, in order to be able to quickly respond to customer needs,
and can be compared with the other competitors have a competitive advantage,
allowing companies are increasingly dependent on information technology; also to
competitors in a market in order to survive, and due to stress Intense competitive
conditions and therefore would like to help in the information technology of the
following can be integrated within the enterprise information and Limited resources in
order to achieve a competitive advantage and thus to achieve business goals,
enterprise resource planning (Enterprise Resource Planning, ERP) system, which
came into being. Because ERP is based on industry best-practice benchmark for the
Indian Business Process designed a set of computer software packages, can be
integrated throughout the enterprise arising from the information, so that Business
operations and circulation of information through timely operations, providing an

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authorized user as a decision-making. ERP system all current CRIS system integration
is the centre of the mainstream products, which is the ERP era is all about.

The Ideal ERP System or Commercial Applications

An ERP system would qualify as the best model for enterprise wide solution
architecture, if it chains all the below organizational processes together with a central
database repository and a fused computing platform.

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Manufacturing
Engineering, resource & capacity planning, material planning, workflow
management, shop floor management, quality control, bills of material, manufacturing
process, etc.

Financials
Accounts payable, accounts receivable, fixed assets, general ledger, cash
management, and billing (contract/service)

Human Resource
Recruitment, benefits, compensations, training, payroll, time and attendance, labour
rules, people management

Supply Chain Management

Inventory management, supply chain planning, supplier scheduling, claim processing,
sales order administration, procurement planning, transportation and distribution

Projects
Costing, billing, activity management, time and expense

Customer Relationship Management

Sales and marketing, service, commissions, customer contact and after sales support

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Data Warehouse
Generally, this is an information storehouse that can be accessed by organizations,
customers, suppliers and employees for their learning and orientation.

Advantages of ERP Systems

There are many advantages of implementing an EPR system. A few of them are listed
below:

• A perfectly integrated system chaining all the functional areas together

• The capability to streamline different organizational processes and workflows
• The ability to effortlessly communicate information across various
departments
• Improved efficiency, performance and productivity levels
• Enhanced tracking and forecasting
• Improved customer service and satisfaction

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Disadvantages of ERP Systems

While advantages usually outweigh disadvantages for most organizations

implementing an ERP system, here are some of the most common obstacles
experienced:

• The scope of customization is limited in several circumstances

• The present business processes have to be rethought to make them
synchronize with the ERP
• ERP systems can be extremely expensive to implement
• There could be lack of continuous technical support
• ERP systems may be too rigid for specific organizations that are either new or
want to move in a new direction in the near future

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ERP IMPLEMENTATION

ERP implementation is a very important task for every company. First every company
study on weather their company implement an enterprise system. How to link
enterprise systems to strategy and organization. Every company must know what the
ERP implementation life cycle is. There are many implementation methodologies.
There are many hidden costs in implementation. Very good organizing required for
the implementation. There is very important role of vendors, consultants and user role
in the ERP implementation. There must be very good project management and
monitoring system for the implementation otherwise there will be many issues come
in the time of implementation. Most organizations create implementation project
offices and appoint project managers with the assumption that the project will end and
life will go back to normal. It will not. What the organizations need is not a project
office, but a new organizational structure that" reflects the ongoing need for ERP
related activity. 'Sponsorship' is one example of the need. Many companies appoint
senior one solution is to create a hybrid role that oversees change in processes,
systems and information. There are not many of these around, but they are not
unprecedented. Another solution is that CIOs can oversee long term ERP change, but
the problem here is that the CIO should be ready to take on responsibilities that are far
behind his normal technology related issues.

Of course, there are other organizational implications of these systems. A substantial

support capability will have to be created; injecting more people into the existing
EDP/IS/IT departments can do this. More important, the long-term use of ERP could
change the broader organization in terms of its structure and function. For example,
the employees who are involved in the business of recording, analyzing and
producing reports may no longer be needed, or the number of managers needed can
go down after the ERP implementation, or the organization can become flatter. The
organizational restructuring at that level is any way the responsibility of the top
management and not that of the ERP chief.

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LATEST TRENDS IN ERP

ERP calls for constant modifications and up gradations. ERP developers

are facing tremendous pressure both from vendors and companies. In this
context it becomes important to analyze the ERP's trends and modalities.

Some of the relevant issues are as follows:

Need based applications

Organizations had to implement ERP through outt their systems
irrespective of the fact whether they help in all the functions or in one
particular function. This was proving to be a big hurdle to the firms. In
addition this remained as the main disadvantage or setback of ERP. They
had to purchase the whole applications even if it meant that most of them
would be idle except for the core function.

The latest ERP software programs have overcome this menace. They
offer need based applications. The firms need not be worried even if these
Software Programs were not available. They were given the liberty to
purchase and install Software Programs pertaining to that particular
function. This advantage has helped to increase the scope of ERP not
only among large firms but also small and medium business as well.

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Expenditures
ERP was a very costly affair. Thanks to the intrusion of internet and open
source applications. This has helped S.M.E.'S to enter the market of
prospective buyers. This has not only widened the horizon of S.M.E.'s but
also increased the usage among large firms.

These large firms were not able to invest huge money in spite of adequate
funds. Now that the spending on ERP gets reduced there are no
hesitations to show the green signal for fear of heavy monetary outlay. It
is encouraging to notice the improving IT ERP trends.

Reduction in implementation time

ERP was discouraged by companies because they took such a long time
to get installed and set the whole process into action. Since this resource
was spent excessively there were chances for reduction in potential
business and losing man-hours.

The current day ERP applications are less complex to install and train.
This has reduced the amount of time spent on ERP. Companies are
thereby assured of spending lesser time for ERP.

Open Source, Web enabled and wireless technologies

These are three important elements that have rejuvenated the functioning
of ERP. Open Source ERP has done away with the hassles of paying
license fees not only during installation but also whenever a modification
is made. The company is relieved from depending even for mince
matters.

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Web enabled ERP helps in making the enterprise operations go online.
Any stakeholder or third party can access the required information very
easily and that too by sitting anywhere in the world. This proves to be of
great help especially during emergencies when the details are to be
sourced with immediate effect.

Wireless ERP has helped organizations to make use of the

communication channels effectively and efficiently. It has made it
possible for many elements to operate in ERP which were otherwise not
possible. Wireless ERP is nothing but sharing enterprise information
through devices like internet and other devices making it possible for
outsiders to access the same.

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Leading ERP giants

This is a niche market where only the best gets to thrive. Needless to mention the
money involved and other factors ensure a tug of war between the players.

Some of the leading ERP giants are as follows:

Microsoft
This software major holds a promising segment in the Small and medium enterprises
market. They have been constantly upgrading the versions and are expert in
manufacturing the products from the vendor's point of view (who knows all the
practical difficulties of the stakeholders). They have been taking a very liberal stand
when it comes to the market and competitors so as to be more compatible to the users.
More innovations will take the company to great heights in the market around the
globe. The biggest advantage of this software is that many companies will prefer them
for one reason that they can be easily run in Microsoft application and platforms.

Oracle
They have been in the limelight ever since they have purchased People soft ERP
software. Another encouraging fact for them is the mass campaign carried by UNDP
(United Nations Development Program) to create an awareness of their products.
They have also satisfies the customers (of both people soft and oracle) by offering
many competitive features.

SAP ERP
A specialized ERP product meant to solve technical and managerial issues SAP ERP
continues to be the choice of many companies around the world. It helps companies to
redefine their business operations. Some of the features and advantages of this
software program are at par with industry standards though some others require to be

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improved in order to make it compatible to the end user.

People soft ERP

People soft ERP software program helps the companies to streamline their H.R.
functions in an easy and effective manner. This software continues to be the
undisputed leader in the market when it comes to H.R. operations anywhere in the
globe. Oracles recent takeover of People soft has only been a boon to its customers
who are now fable to access the eservices of Oracle also as a result of this merger.

UPS ERP
This ERP software has an important feature. They can work in combination with other
applications like S.A. P. oracle .This will enable them to get the best features from
each software and put them in use as may be demanded. This has also hogged the
limelight due to this advantage.

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ERP's Scope, penetration future opportunities and
challenges in India

India is a well known player in the ERP market. India occupies a promising position
in the whole of IT market .The governments, educational institutions and companies
are constantly working towards promoting and expanding the IT market. In this
context ERP holds lot of promises both in terms of supply and demand. There are
some issues to worry about and some others which deserve appreciation.

Some of the issues concerning ERP in Indian Market are as follows:

How did ERP penetrate on a vast scale in India?

The Y2K problem and other diminishing opportunities of IT professionals were seen
as a big challenge to the IT market. This was not only the case in India but else
elsewhere in the globe. This proved to be a biggest challenge to the nation who were
banking (and are still) on IT skills for development aspects (individual, economical
and overall). The slump of the IT sector would add drudgery and smash the hopes of
so many individuals and companies.

This problem in itself helped to get another important solution. Firstly this paved way
for more prospects in ERP market. The demand and supply gradually transformed
from general to enterprise resource market. Once this got stabilized there was no
looking back. It was well evident that ERP market could boom and give the necessary
impetus to stakeholders. However this did not mean that mediocre could survive in
the market. There was demand only for top notch services and professionals. This
naturally led to improvement in the quality of services offered. Such an improvement
increased the competition among various players. The end user was getting assured
that he would be receiving the best services for the money invested. Case ERP in
India got more and more competitive. The ERP implementation in India demanded
more than the custom ERP India module.

ERP software programs were initially used only for back office functions. They were

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not given the due importance and treated just like another supporting function.
Reasons like lack of awareness formed one part while other reasons were costs and
technical difficulties. As explained earlier the gradual demand for ERP increased with
a slump in the software market. Since this led companies to go in for ERP they
automatically started to learn more about it either by force or felt need as they were
left with no alternative. This indirectly created the awareness among companies. They
learned more on ERP and realized its diverse applications. Finally they resorted to use
ERP for the whole of the company and stopped the idea of restricting it to mere back
office functions.

Pressures mount on the industry

The industry is facing two major challenges when it comes to dealing with ERP in the
current context:

Sudden change
Firstly they are bound to increase the scope of ERP in enterprise operations. As
discussed earlier ERP was initially restricted to back office functions and later spread
its wings to all the operations in the enterprise. This naturally meant that the ERP
manufacturers and vendors had to increase the functionalities and scope of the
application. There are practical difficulties when it comes to this issue. The ERP
experts will definitely be able to restructure the ERP systems with the help of
resources and expertise available with them. However doing it all on sudden is a
difficult task. They must have been working with different requirements till then.
Compelling them to suddenly change will land things in a mess because there will be
lot of confusions for the vendors, manufacturers and end-users. The unrealistic
deadlines and time pressures further add agony to this menace.

Technical factors
Secondly ERP in the nation calls for a restructuring in the technical aspects. This is
definitely appreciable. The fate of the businesses that have already implemented and
deployed ERP remains a big question mark. No doubt change is inevitable and an
element for growth. However it would be next only to impossible to change even
before the current change has stabilized in the market. This is advantageous for the
companies that go for ERP at the first instance .But when it comes to companies that

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already run successful ERP systems they have to stick on to the technical changes or
ship out from the market. They can decide to stick on to change but it will cost them
heavily. They can work on to find some replacement technology rather than going for
an all round change. The effectiveness of the replacement is an important issue.

Finance
This is another important determinant of ERP market in India. Some bigger
companies still hesitate to invest in ERP due to the exorbitant costs. It is indeed
encouraging to find that a vast majority of them have realized its benefits and have
determined to go for it. However some of them are keeping quiet due to the risks
involved besides the unforeseen expenses and losses.

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CONCLUSION –

ERP trends reflect positive signals for the ERP vendors and companies availing their
service. It is important to remember the fact that both the vendor and the company
will be able to make use of any advantage (including the modern facilities) only
through proper coordination, teamwork and nurturing a cordial atmosphere. Mere IT
ERP trends will not help in this aspect. ERP is an industry that always shows bright
prospects. There needs to be no apprehension regarding outsourcing or other
technological advancements. Whatsoever be the case ERP will flourish and penetrate
one segment after the other. They are undoubtedly a complex process and handling
them requires meticulous care and professionalism. ERP product and ERP software
will be demanded for ever. The ERP market in India is definitely promising. However
India has got a long way to go when it comes to Improving ERP in terms of
technology, scope and applicability in terms of opportunities and venues, penetration
in terms of sectors like education, employment and the state run offices. To adapt to
today’s challenging and competitive business environment, organizations are
implementing ERP systems to achieve a capability to plan and integrate enterprise-wide
resources in order to shorten lead times, and to be more responsive to customer demands.

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REFERENCES –

• Murray, M., & Coffin, G. (2001). ‘A case study analysis of factors for success in ERP
system implementations’. Proceedings of the Seventh Americas Conference on
Information Systems, Boston, 1012–1018.

• Al-Mashari M, Ghani S,W Al-Rashid W. 2006. ‘A study of the Critical Success

Factors of ERP implementation in developing countries’. Internet and Enterprise
Management, 4(1): 68-95.

• http://en.wikipedia.org/wiki/Enterprise_resource_planning

http://www.topbits.com/erp.html

http://www.matthewlefevre.com/wiki/article.php/Companies_that_use_SAP_
ERP_Software

http://www.webopedia.com/TERM/E/erp.html
https://www.serviza.com/bizbook/SoftwareIsFree_html_m3b669ed0.png

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