Introduction to ERP. Definition of ERP

Transcription

1 Introduction to ERP Definition of ERP 1.Software solution that addresses all the needs of an enterprise with the Process view of an organization to meet the organizational goals and integrate all the functions of the enterprise. 2.ERP is a cross functional enterprise system driven by an integrated suite of software modules that supports the basic internal business processes of a company What is an ERP? Facilitates Company-wide integrated Information Systems Covering all functional Areas. Performs core Corporate activities and increases customer service enhancing Corporate Image. Organizes & Optimizes the data input methodologies systematically. Evolution of Business Applications MIS Management Information Systems Decision Support No EIS Executive Information Systems Decision Support - Yes CIS Corporate Information systems Decision Support Yes Evolution of Planning Systems Materials Requirement Planning (MRP I) Manufacturing Resource Planning (MRP II) Evolution of ERP MIS EIS CIS + MRP I MRP II ERP Computer Based Accounting-ERP (CA Sri Lanka) Page 1

2 Inventory Management & Control-1960 s Inventory Management and control is the combination of information technology and business processes of maintaining the appropriate level of stock in a warehouse. The activities of inventory management include identifying inventory requirements, setting targets, providing replenishment techniques and options, monitoring item usages, reconciling the inventory balances, and reporting inventory status. Material Requirement Planning (MRP)-1970 s Materials Requirement Planning (MRP) utilizes software applications for scheduling production processes. MRP generates schedules for the operations and raw material purchases based on the production requirements of finished goods, the structure of the production system, the current inventories levels and the lot sizing procedure for each operation Manufacturing Requirements Planning (MRP II)-1980 s Manufacturing Requirements Planning or MRP utilizes software applications for coordinating manufacturing processes, from product planning, parts purchasing, inventory control to product distribution. Enterprise Resource Planning (ERP)-1990 s Enterprise Resource Planning or ERP uses multi-module application software for improving the performance of the internal business processes. ERP systems often integrates business activities across functional departments, from product planning, parts purchasing, inventory control, product distribution, fulfillment, to order tracking. ERP software systems may include application modules for supporting marketing, finance, accounting and human resources. Cost of ERP Computer Based Accounting-ERP (CA Sri Lanka) Page 2

3 Why ERP? Profitability Computer Based Accounting-ERP (CA Sri Lanka) Page 3

4 For Healthy Operations Integration of Systems across the Functional Departments in a Company as well as across the Enterprise as a whole. Computer Based Accounting-ERP (CA Sri Lanka) Page 4

5 Better Customer Service. Introduction of Latest Technologies as and when they are ready for the Industry acceptance. Expertise database. Avoids data redundancy. Competition in the Market Manufacturing Challenges. Manufacturing Globally. Distribution network spread. New Product Introduction. Lower manufacturing lead time. Focus on industry markets. Satisfying the needs of customers. Develop specific business methods and processes. Integration with third party products. Demands on the Industry Better products at lower costs. Strong competition. Need to analyze costs/ revenues on a product or customer basis Flexibility to respond to changing business requirements More informed management decision making. Current System Problems? Unable to get accurate, timely information Applications not complete for existing business practices Modifications are time consuming or not feasible. The ERP Market Sizing Total ERP market revenue grew to over $28B in 2006, driven by a combination of strong customer demand and leading vendors expanding their product portfollos through acquisition. Computer Based Accounting-ERP (CA Sri Lanka) Page 5

6 ERP Vendors ranked by license revenue Computer Based Accounting-ERP (CA Sri Lanka) Page 6

7 ERP Vendor license revenue share, 2006 ERP SYSTEM Typical ERP Modules Financial General ledger Accounts payable Accounts receivable Budgeting Multi-currency Computer Based Accounting-ERP (CA Sri Lanka) Page 7

8 Sales And Distribution Quotation and order processing CRM Multi-stores Credit management Mobile sales Purchasing Procurement management Inventory management Multi-ware house Manufacturing BOM and MRP planning Job manufacturing Project costing Advance manufacturing Retail Operation Point of sales Batch and serial no tracking Bar-coding HRM Time attendant Payroll HRM Other Modules Fixed assets Business Intelligence Service management Other industry related modules Broad Market Categorization for Business Software Small Market Computer Based Accounting-ERP (CA Sri Lanka) Page 8

9 SME Mid Market Enterprise Small Market Number of employees up to 20 Number of Users up to 5 Annual revenue up to 100 million SME Number of employees 20 to 100 Number of Users 5 to 40 Annual revenue up to 300 million Mid Market Number of employees 100 to 1000 Number of Users 40 to 250 Annual revenue up to 1000 million Enterprise Number of employees Number of Users 250+ Annual revenue 1000 million+ Head Office Germany Clear Leader among fortune 1000, Global 5000 and Enterprises Support for Different Verticals Around 45,000 Customers in 120 Countries SAP All in one, SAP Business One Computer Based Accounting-ERP (CA Sri Lanka) Page 9

10 Head Office USA Number two in ERP Market Around 37,000 Customers worldwide Oracle E-Business, Oracle PeopleSoft, Oracle JD Edwards Head Office UK Number three in ERP Market 5.7 Million Customers for its business software Sage ERP X3, Sage MAS 500, Sage Evolution Sage Accpac, Sage Line 500, Sage UBS Head Office USA Forth largest ERP Manufacture Vertical Oriented 70,000 Customers worldwide SyteLine, BAAN, MEPICS Head Office USA Among top 5 Computer Based Accounting-ERP (CA Sri Lanka) Page 10

11 Strong Manufacturing and Distribution capabilities Around 83,000 Customers ERP Products Dynamics, GP (Great Plane), NAV (Navision), AX (Axapta) SELECTING ERP SYSTEM FOR YOUR COMPANY How to Select an ERP System Chose an ERP selection project manager Assess business features & functions need Develop customized RFP for your organization Distribute your RFP to software vendors Rank vendor responses Plan vendor demos Schedule site visits Consider other factors ERP Vendor/ Product Selection Corporate vision of supplier Technology & system architecture Product functionally Product functionality Product cost Service & support Supplier background Computer Based Accounting-ERP (CA Sri Lanka) Page 11

12 Why ERP Implementations Fail Selecting of vendor & consulting company Lack of top management commitment Inadequate requirement definition Inadequate resources Resistance to change Poor project planning Inadequate training & education Unrealistic expectation of benefits an ROI Benefits of ERP Systems Improving integration, flexibility Fewer errors Improved speed and efficiency More complete access to information Lower total costs in the complete supply chain Reduce stock to a minimum Improve product quality Provide more reliable delivery dates and higher service to the customer Efficiently coordinate global demand, supply and production Computer Based Accounting-ERP (CA Sri Lanka) Page 12