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ENTERPRISE

RESOURCE
PLANNING
ABSTRACT
Enterprise Resource Planning (ERP) systems have dominated the large-scale business
implementation landscape for over a decade. An ERP system supports most of the business system
that maintains in a single database the data needed for a variety of business functions such as
Manufacturing, Supply Chain Management, Financials, Projects, Human Resources and Customer
Relationship Management.

Prior to the concept of ERP systems, it was not unusual for each department within an organization
to have its own customized computer system. Typical difficulties involved integration of data from
potentially different computer manufacturers and systems. ERP software, among other things,
combined the data of formerly separate applications. This simplified keeping data in
synchronization across the enterprise, it simplified the computer infrastructure within a large
organization, and it standardized and reduced the number of software specialties required within
larger organizations.Because of their wide scope of application within a business, ERP software
systems are typically complex and usually impose significant changes on staff work practices.

Over the past decade, most large corporations have turned to enterprise resource planning (ERP)
solutions to enable a seamless flow of information and transactions across diverse business
functions, business units and geographic boundaries. Accenture believed a comprehensive ERP
solution would not only help address statutory compliance risks that vary by country, but also
facilitate the integration of new business areas and acquisitions by providing consistent processes
and tools across finance, human resources and sales. To achieve the full benefits of its ERP
solution, Accenture created a production support capability that could rapidly build employee
proficiency and drive collaboration across the diverse business functions that use the ERP solution.

HISTORICAL DEVELOPMENTS
In the ever growing business environment the following demands are placed on the industry :
 Aggressive Cost control initiatives
 Need to analyze costs / revenues on a product or customer basis
 Flexibility to respond to changing business requirements
 More informed management decision making
 Changes in ways of doing business
Difficulty in getting accurate data, timely information and improper interface of the complex
natured business functions have been identified as the hurdles in the growth of any business. Time
and again depending upon the velocity of the growing business needs, one or the other applications
and planning systems have been introduced into the business world for crossing these hurdles and
for achieving the required growth. They are:
 Management Information Systems (MIS)
 Integrated Information Systems (IIS)
 Executive Information Systems (EIS)
 Corporate Information Systems (CIS)
 Enterprise Wide Systems (EWS)
 Material Resource Planning (MRP)
 Manufacturing Resource Planning (MRP II)
 Money Resource Planning (MRP III)
The latest planning tool added to the above list is Enterprise Resource Planning. Enterprise
resource planning (ERP) is the planning of how business resources (materials, employees,
customers etc.) are acquired and moved from one state to another.

An ERP system supports most of the business system that maintains in a single database the data
needed for a variety of business functions such as Manufacturing, Supply Chain Management,
Financials, Projects, Human Resources and Customer Relationship Management.

An ERP system is based on a common database and a modular software design. The common
database can allow every department of a business to store and retrieve information in real-time.
The information should be reliable, accessible, and easily shared. The modular software design
should mean a business can select the modules they need, mix and match modules from different
vendors, and add new modules of their own to improve business performance.
Manufacturing management systems have evolved in stages over the past 30 years from a simple
means of calculating materials requirements to the automation of an entire enterprise. Around
1980, over-frequent changes in sales forecasts, entailing continual readjustments in production, as
well as inflexible fixed system parameters, led MRP (Material Requirement Planning) to evolve
into a new concept : Manufacturing Resource Planning (or MRP2) and finally the generic concept
Enterprise Resource Planning (ERP)

The initials ERP originated as an extension of MRP (material requirements planning, and then
manufacturing resource planning) and CIM (computer-integrated manufacturing) and was
introduced by research and analysis firm Gartner. ERP systems now attempt to cover all basic
functions of an enterprise, regardless of the organization's business or charter. Non-manufacturing
businesses, non-profit organizations and governments now all use ERP systems.

NEED FOR ERP IN ACCENTURE


Most organizations across the world have realized that in a rapidly changing environment, it is
impossible to create and maintain a custom designed software package which will cater to all their
requirements and also be completely up-to-date. Realizing the requirement of user organizations
some of the leading software companies have designed Enterprise Resource Planning software
which will offer an integrated software solution to all the functions of an organization.

Accenture's ongoing research into the characteristics of high-performance businesses reveals that
top companies regard IT as a source of both operational excellence and competitive advantage.
They look beyond using IT as a tool for controlling costs. Rather, they understand that IT is a
strategic asset that can drive productivity and generate bottom-line results. In this regard,
Accenture itself operates like a high-performance business.

To generate greater value from its own IT investments and help manage its explosive growth,
Accenture made the strategic decision to migrate to a single global instance of SAP and establish a
global production support model. By implementing a fully integrated ERP solution starting with
the finance function, followed by human resources and then sales, Accenture felt it could improve
productivity by focusing on end-to-end processes, across countries, throughout the enterprise. The
company also believed it could benefit from a single instance of integrated business data, which
would provide much greater visibility into the business and enable the earlier identification of
challenges and opportunities.
Finally, Accenture believed a comprehensive ERP solution would not only help address statutory
compliance risks that vary by country, but also facilitate the integration of new business areas and
acquisitions by providing consistent processes and tools across finance, human resources and sales.

To achieve these benefits, Accenture first needed to overcome a significant challenge. The
proposed program replaced the core finance, human resources and sales systems, taking away the
familiar applications and reporting tools that had been used to run Accenture's business for years.
At the same time, the program needed to create an environment that would enable internal
organizations to work together on a shared, fully integrated system. As quickly as possible,
Accenture had to get its people back to where they had been with their core proficiencies, but with
completely new tools and processes.

From the very beginning, Accenture knew that implementing a multifunction ERP system entailed
more than simply changing the company's technology platform. The company also needed to
introduce sweeping new user and application support processes and methodologies to help
employees master the solution quickly and to maintain the solution for long-term gain. For this
reason, Accenture set out to build a leading-edge production support environment.

FEATURES OF ERP
Some of the major features of ERP and what ERP can do for the business system are as below:
 ERP facilitates company-wide Integrated Information System covering all functional areas
like Manufacturing, Selling and distribution, Payables, Receivables, Inventory, Accounts, Human
resources, Purchases etc.,
 ERP performs core corporate activities and increases customer service and thereby
augmenting the Corporate Image.
 ERP bridges the information gap across the organization.
 ERP provides for complete integration of Systems not only across the departments in a
company but also across the companies under the same management.
 ERP is the only solution for better Project Management.
 ERP allows automatic introduction of latest technologies like Electronic Fund Transfer
(EFT), Electronic Data Interchange (EDI), Internet, Intranet, Video conferencing, E-Commerce
etc.
 ERP eliminates the most of the business problems like Material shortages, Productivity
enhancements, Customer service, Cash Management, Inventory problems, Quality problems,
Prompt delivery etc.,
 ERP not only addresses the current requirements of the company but also provides the
opportunity of continually improving and refining business processes.
 ERP provides business intelligence tools like Decision Support Systems (DSS), Executive
Information System (EIS), Reporting, Data Mining and Early Warning Systems (Robots) for
enabling people to make better decisions and thus improve their business processes

To achieve the full benefits of its ERP solution, Accenture created a production support capability
that could rapidly build employee proficiency and drive collaboration across the diverse business
functions that use the ERP solution. Resources from Accenture's Operations Support for the
Enterprise (OSE) partnership, in collaboration with Accenture's consultants and IT organization,
began by examining production support capabilities at a number of Accenture's corporate clients.
Based on this assessment, Accenture set out to rethink the entire concept-and effectiveness-of
production support. The result was a powerful new ERP production support paradigm steeped in
early planning and comprising three primary components.

The first component was a robust methodology. To ensure that production support structures
were in place when the new solutions went live, the team leveraged the Service Introduction
components of the Accenture Delivery Methods for SAP. The team tailored the tasks and
deliverables defined in the methodology (based on the unique requirements of each capability
being added to SAP) and incorporated them into the overall implementation plan for each new
capability. As a result, the first report to be designed coincided with the design of the first
component of the production support structure. In short, the team tailored and then leveraged a
repeatable production support enablement methodology that ensured that the procedures, tools and
people were ready to support users as soon as they logged onto the system for the first time.
The second component was strong governance. Because the single-instance ERP would manage
and integrate information related to finance, human resources and sales, the Accenture team
recognized that a sound governing body was needed to balance the three groups' requirements and
guide the right decisions for the business, even under challenging circumstances. According to
Todd Harding, Accenture's director of OSE, "Our expansive approach to governance is arguably
the most pivotal aspect of Accenture's production support capability." The governance structure
includes business leaders from Accenture's IT organization and its finance, human resources, sales,
business operations and geographic services departments. As Harding explains, "Today, the
governance structure serves as an essential integrator. It challenges each member and encourages
each support person to think beyond their departmental boundaries to understand the effects that
any proposed changes to the ERP might have on other processes." Rounding out the governance
model is a cross-operations team composed of IT and OSE resources, which work across three
support tiers to track service level agreements, measure production support effectiveness and
monitor benefits.

The final component was a comprehensive, scalable support structure. In planning the day-to-
day support capabilities, Accenture aimed to create as comprehensive a support structure as
possible. The goal was to establish a single group to control master data and user security access
and to deliver comprehensive procedural process and technical support via a single global network
and a common toolset.

To achieve this objective, a three-tiered support model was created in which both IT and business
representatives play crucial roles Tier 1 support is delivered by a network of actual end users who
are trained as Super/Lead Users to provide their peers authoritative answers about SAP-enabled
processes and by the global Help Desk organization, which provides answers to technical
questions day or night.

Within the Tier 2 support level, subject matter experts from Accenture's business teams (finance,
human resources, sales and OSE) are integrated as full-time participants in the support
organization. These resources work with the IT team to answer escalated queries from Tier 1,
maintain user security access and business data models, design and test fixes to the solution in
production, and identify, prioritize and design enhancements. These fixes and enhancements entail
not only updates to the system itself, but also to the process and procedures Accenture uses
internally to manage the business. Pivotal to the structure at this level is the central team that
governs and integrates the core master and reference data used by each of the business functions.
The Business Data Architecture team ensures that that common data definitions and synchronized
data values are used by each capability.

Tier 3 support is also provided through collaboration between the IT organization and business
teams. In addition to the developers and technologists that keep the infrastructure, solution and
network well tuned, Tier 3 support includes a robust change management team that keeps user
proficiency equally well tuned. Within the Tier 3 support level, OSE's Learning & Knowledge
Management team manages the SAP Business Procedures website, which lets end users help
themselves. Further, this group creates and updates job aids, conducts training and distributes
communications to users to ensure that they are kept current with issues and changes to the
solution.

Many companies take years to stabilize their ERP implementations. Accenture's early and ongoing
focus on production support—as well as its commitment to establishing robust governance
capabilities, methodologies and support structures—allowed the company to quickly generate
value quickly generate value from its solutions in the areas of finance and human resources while
also adding new capabilities. Within just 12 months after incorporating the human resources
functionality, Accenture's SAP production support capability was extended to include Sales-
Opportunity Management activities. "The need for process and data integration with Finance and
HR was the primary business driver behind the decision to move Accenture's sales systems to
SAP," explains Mark Hawn, managing director, sales effectiveness. As the third business
capability to be added to Accenture's ERP solution, we were able to capitalize on the production
support model already in place and immediately reap the benefits of integration that the model
enables."
HIGH PERFORMANCE DELIVERED
By tapping IT and business resources from across the organization, Accenture developed a
leading-edge production support capability that enabled the company to quickly maximize returns
on its ERP investment. Specifically, the production support model has:
• Reduced the post-implementation stabilization period, which translates into more rapid
benefits realization. Whereas it took four months to stabilize the initial SAP Finance
implementation, more recent releases have achieved stabilization in half the time or less. Created
operational efficiencies by reducing the slope of the learning curve for users and minimizing the
productivity dip that is typically experienced.
• Reduced internal costs by rationalizing the number of support teams, structures and tools,
and by leveraging common structures and toolsets across the functions using SAP. For example,
Accenture has added a number of new capabilities since the first SAP release for finance in 2004.
Consequently, the number of frequent users of the application has grown by 270 percent. Despite
this increase in complexity and number of users, the size of the production support teams has
grown by only 34 percent.
• Enabled the company to prioritize and deliver enhancements, which optimize benefits for
and across multiple functions. Each successive release since the initial SAP Finance
implementation has added 50 percent more batch processes. Despite this increase, the support
teams have reduced the quarterly close-to-report cycle by nearly 25 percent, from 30 days to 23
days.
• Established common, scalable support processes that facilitate the quick integration of
support for new capabilities, users and business acquisitions, and which provide a platform for off-
shoring and outsourcing opportunities. Currently, 60 percent of the support team resources are
located offshore. This marks an increase of 10 percent since the first SAP implementation.
Several important characteristics set the Accenture production support model apart and form a
solid platform for growth and high performance. "Production support has helped us integrate our
employee data and financial data in a powerful way and, in the process, eliminate many of the
legacy activities needed to reconcile data between human resources and finance," says Michael
Adamson, senior director-HR infrastructure. "But these advantages pale in comparison to the
benefit of having the integrated information necessary to make faster, better decisions and drive
high performance in our business operations."
The production support model also promotes standardization wherever possible, which improves
the company's business and risk management capabilities, while reducing costs. "We focus on
quality at the source, which allows improved visibility of key information across the enterprise,"
points out Grant Ireland, Accenture's assistant controller. "More accurate information enables us to
manage risks, and provide business support and analysis that helps grow the top and bottom line
faster."

Given the success of Accenture's production support model, the company plans to extend the
capability to additional applications, such as recruiting, forecasting, procurement and performance
management. In this way, the production support solution will be helping Accenture optimize even
more of its business capabilities and lay an even stronger foundation for long-term high
performance.

SIGNIFICANCE OF ERP IMPLEMENTATION


Companies have to clearly know what enterprise resource is planning before thinking of
implementing them. The catch word of ERP implementation is speed. The faster it is implemented
the quicker and better are the advantages and delivery in terms of results. This early process has
another hold. The returns are sought at a shorter period. This deviation from the conventional
practice has become the order of the day as far as many companies are concerned. Formerly
Business process reengineering played a vital role with respect to implementation. It is important
to know the components of Enterprise resource planning .Merely defining enterprise resource
planning will not help in this.

This naturally paved way to development of gaps between the actual results and the one derived
during the process of foreseeing. Tuning ERP as per the whims and fancies of the practices
followed in the company became a routine affair. This led to slogging and dragging beyond the
time limits permitted. It was monetarily pinching and played havoc in the customer's trust. It is
also necessary to understand that mere ERP planning does not guarantee the benefit of erp.It has to
be implemented as planned after understanding the components of enterprise resource planning.
In spite of having improved the implementation issues what remains static and unfettered is the
manner in which companies go ahead with ERP implementation. They do it for the heck of it and
without following systematic procedures. In fact they don't even check the desirability of going
into ERP. Some issues that an organization has to address after defining enterprise resource
planning are
 Popular information systems
 Likelihood of fluctuations in the choice of technology
 The ability of market players to stay in tune with it
 The ways and means to implement a business applications like ERP
 To benefit from the same so as to gain a competitive edge

If an organization is able to answer these questions without any ambiguity and substantiate the
results then it can be said that it has a path or up focus in taking ERP. The questions mentioned
above are crucial and will even decide the business model of the company. ERP implementation is
a vital in the whole process of ERP. They can take place only if one understands "What is
enterprise resource planning" and defining enterprise resource planning in their organization.
REFERENCES

• www.accenture.com
• www.zdnet.com
• www.dailymarkets.com
• en.wikipedia.org
• www.erpwire.com