 Enterprise resource planning(ERP) is a

business management software that allows

an organization to use a system of
integrated applications to manage the
business.
 ERP systems are large computer systems
that integrate application programs in
accounting (i.e. account receivable),sales(i.e.
order booking), manufacture (i.e. product
shipping) and other functions in the firm.
 1960’s – systems just for inventory control
 1970’s – MRP – material requirement planning
(inventory with material planning and
procurement)
 1980’s – MRP 2 – manufacture resources
planning(extended MRP to shop floor and
distribution management.)
 MID 1990’s – ERP- enterprise resource
planning(covering all the activities of an
enterprise)
 Integrate financial information.
 Integrate customer order information.
 Standardize and speed up operations
processes.
 Reduce inventory.
 Standardize human resources information.
 Common definitions.
 Common database.
 Update one module, automatically update
others.
 FINANCE
 MATERIAL
 SALES
 MARKETING
 PERSONAL
 In this data is collected from various functional
departments and generate financial reports
ledger, trail balance, Balance sheets etc.
 HR module routinely maintain a complete
employee database including contact
information, salary details attendance,
promotions of all employees.
 Produce pay check reports
 Maintain personal record
 Training
 Time and attendance benefits.
 Purchasing module is tightly integrated with
the inventory control and production planning
module
 Inventory module facilities processes of
maintaining the appropriate level of stock in
the warehouse.
 Initiation-develop business case, project scope
and implementation strategy.
 Planning-establish implementation team,
determine goals and objectives, establish
metrics.
 Analysis and process design-analyze and
improve existing processes, map new processes
to be adopted by the system.
 Realization-install a base system,
customization, and test the system.
 Transition-replace the formal system with new
system, data conversion
 Operation-monitor and improve system
performance, provide continued training and
technical support.
 Availability of new web-based and wireless
ERP systems
 Adoption of easy-to-install ERP systems
 Linkage to other software system, e.g.
commerce, customer relationship management
system.
Internal benefits
 Integration of a single source of data

 Common data definition

 A real-time system

 Increased productivity

 Reduced operating costs

 Improved internal communication

 Foundation for future improvement.

External benefits:
 Improved customer service and order
fulfillment
 Improved communication with suppliers and
customers
 Enhanced competitive position

 Increased sales and profits

 High cost
 Forced change of processes
 Very complex software
 Lack of trained people
 Flexibility of software system upgrades
 Implementation timelines
 Education and training
 Implementation strategy and execution
 Resistance to change