THE ERP APPLICATION

An integrated suite of business applications, which..

Closely

links, monitors, and controls primary enterprise resources like manpower, machine, material, methods, market and money Enables corporate houses to readily change their processes to adapt to the ever changing business scenario Provides expertise in industry specific business processes

Why Clients would buy ERP?

Corporate Initiatives
Strategic initiatives
A requisite capability in a competitive global business

Operational initiative
A foundation for performance and cost improvement via integration

Organizational initiative
To initiate a major organizational change within the company

Technology
IT is making the transition from a supporting operational entity to becoming a strategic competitive tool.

Information Fragmentation
Information is typically spread across numerous computer systems, each housed in individual business unit, office, factory or region. This results in redundant data, and there arises a need for re-entering or re-formatting data.
Interoperability problems exist between individual systems.

Information Integration
At the core of an ERP software system, is a single comprehensive database, which streamlines the flow of information throughout the business, thereby eliminating redundancy of data.

The database collects data from and feeds data into, modular applications that support virtually all of the

companys business activities.

AN ERP SYSTEM
Sales & Delivery

Managers and Stakeholders

Reporting

C U S T O M E R S

Financial

Sales Force & Customer Service Representatives

Central Central database database

Service Human Resource Mgmt

Manufac -turing

Inventory and Supply

BackOffice Admin. and Workers

S U P P L I E R S

Employees

Characteristics of ERP
ERP (Enterprise Resource Planning) systems typically include the following characteristics:
An integrated system that operates in real time (or next to real time), without relying on periodic updates A common database, which supports all applications. A consistent look and feel throughout each module. Installation of the system without elaborate application/data integration by the Information Technology (IT) department.

Characteristics of ERP(contd.)
Example
A warehouse in Singapore enters a customer order

-- data automatically flows to other areas of the company.

-- it would flow to the financial and accounting people in New York.

-- accounts receivable automatically updated .
-- the order would also flow to the manufacturing operations in Europe instructing them to manufacture components. -- inventory levels would automatically be reduced in the warehouse and an order would be placed to replenish inventory

ADVANTAGES OF USING AN ERP PACKAGE

-The fundamental advantage of ERP is that integrating the myriad processes by which businesses operate saves time and expense. -Decisions can be made more quickly and with fewer errors. -Data becomes visible across the organization.

ADVANTAGES OF USING AN ERP PACKAGE(contd.)

-Tasks

that benefit from this integration include:

Sales forecasting, which allows inventory optimization Chronological history of every transaction through relevant data compilation in every area of operation. Order tracking, from acceptance through fulfillment Revenue tracking, from invoice through cash receipt

Matching purchase orders (what was ordered), inventory receipts (what arrived), and costing (what the vendor invoiced)

ADVANTAGES OF USING AN ERP PACKAGE(contd.)

-

ERP systems centralize business data, bringing the following benefits:

They eliminate the need to synchronize changes between multiple systemsconsolidation of finance, marketing and sales, human resource, and manufacturing applications They bring legitimacy and transparency in each bit of statistical data. They enable standard product naming/coding.

They provide a comprehensive enterprise view (no "islands of information"). They make realtime information available to management anywhere, any time to make proper decisions.
They protect sensitive data by consolidating multiple security systems into a single structure.

PRODUCT FEATURES

HUMAN RESOURCE MANAGEMENT SYSTEM -- Payroll, Benefits, Human Resources, Pension Administration, Time & Labor ACCOUNTING AND CONTROL -- General Ledger, Payables, Receivables, Asset Management, Projects, Budgets, Expenses, Cash Management -- Treasury Management -- Materials Management -- Supply Chain Planning -- Service Revenue Management -- Procurement -- Enterprise Performance Management -- Project Management

Results that can be expected from ERP culture

Reduced working capital requirements Improved customer service Improved direct labour productivity Reduced purchase costs

Reduced obsolescence
Reduced overtime Having the figures to make decisions Having accountability throughout the organization Improved quality of life

LIMITATIONS OF ERP
The processes that are in practice in the organization need to be modified to suit the ERP package. The software may initially seem a little complicated, owing to the wide variety of functions it integrates Software logic and company strategy needs to match.

SUCCESS STORIES
Autodesk (computer aided design software maker) Reduced delivery time from two weeks to less than 24 hours

Fujitsu Microelectronics Reduced the cycle time for filling orders from 18 days to 1.5 days Time to close financial books from 8 to 4 days