3. An ERP Example: Before ERP
Customers
Customer
Demographic
Files
Sales Dept.
Vendor
Orders
Parts
Accounting
Accounting
Files
Purchasing
Purchasing
Files
Order is placed
with Vendor
Invoices
accounting
Inventory
Files
Warehouse
Checks for Parts
Calls back “Not in stock”
“We ordered the parts”
“We Need parts #XX”
“We ordered the parts”
Sends report
Sends report
Sends report
Ships parts
A K Roy
4. Problems with function based
application
Sharing of data between systems
Data duplication
Data inconsistency
Applications that don’t talk to one another
Limited or lack of integrated information
Isolated decisions lead to overall inefficiencies
Increased expenses
A K Roy
5. An ERP Example: After ERP
Database
Customers Sales Dept.
Purchasing
Warehouse
Accounting
Vendor
Inventory Data
If no parts,
order is placed
through DB
Orders
Parts
Order is submitted
to Purchasing.
Purchasing record
order in DB
Order is placed
with Vendor
And invoices accounting
Financial Data exchange;
Books invoice against PO
Books inventory
against PO
Ships parts
A K Roy
6. Solution to disparate
systems?
Integration
Consolidation
Right-sizing
Business Process Redesign
Enterprise wide system
A K Roy
8. ERP - Definition
ERP is a process of managing all resources and their
use in the entire enterprise in a coordinated manner
ERP is a set of integrated business applications, or
modules which carry out common business functions
such as general ledger, accounting, or order
management
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9. What is ERP?
The practice of consolidating an enterprise’s planning,
manufacturing, sales and marketing efforts into one
management system
Combines all databases across departments into a single
database that can be accessed by all employees
ERP automates the tasks involved in performing a business
process
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11. How Do ERP Systems
Work?
Managers and
Stakeholders
Central
Database
Reporting
Applications
Financial
Applications
Manufacturing
Applications
Inventory
And Supply
Applications
Human
Resource
Management
Applications
Service
Applications
Sales and
Delivery
Applications
Sales Force
And Customer
Service Reps
Customers Back-office
Administrators
And Workers
Suppliers
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12. What makes ERP different
Integrated modules
Common definitions
Common database
Update one module, automatically updates others
ERP systems reflect a specific way of doing business
Must look at your value chains, rather than
functions
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13. ERP Components
Finance: modules for
bookkeeping and making sure
the bills are paid on time.
Examples:
General ledger
Accounts receivable
Accounts payable
HR: software for handling
personnel-related tasks for
corporate managers and
individual employees.
Examples:
HR administration
Payroll
Self-service HR
Manufacturing &
Logistics: A group of
applications for planning
production, taking orders
and delivering products to
the customer. Examples:
Production planning
Materials management
Order entry and
processing
Warehouse management
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14. Benefits of ERP
Common set of data
Help in integrating applications for decision making
and planning
Allow departments to talk to each other
Easy to integrate by using processed built into ERP
software
A way to force BPR (reengineering)
A K Roy