TOPIC:

ERP MODULES: TYPES FEATURES &

FUNCTIONS
PREPARED BY:

Abdul Basit

Ahsan Ali

Muhammad Hassan

Afaq Ali
 OUTLINE
 ERP Definition  Causes of ERP Failures

 Centralized & Decentralized Systems  Best Practices of ERP Implementation

 ERP Components  Main ERP Vendors

 ERP Evolution

 Costs of ERP

 ERP Project & Time

 Hidden Costs of ERP

 Benefits of ERP Systems

 ERP Implementation

 Risks with ERP Implementation

 ERP

Definition:

ENTERPRISE RESOURCE PLANNING (ERP):

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 ERP?

 The practice of consolidating an enterprise’s planning, manufacturing, sales and marketing

efforts into one management system.

 Combines all cross databases apartments into a single database that can be accessed by all
employees.

 ERP automates the tasks involved in performing a business process

 ERP Example

Order parts

Check for parts

Call back “not in stock”
Ship parts.

We ordered parts
Sales dept.
Sends report Demographic Files
Sh
ip
pa
rt
s.

Ship parts.
Vendor
Accounting dept.
Warehouse

“we ordered parts”

Accounting
Inventory Files
Files

“we need parts”

Place order
 Centralized System

 Data is maintained at a central location and is shared with various Departments.

 Departments have access information/ data of the other Departments/ BU

Benefits of Centralized System

 Eliminates the duplication, discontinuity and redundancy in data.

 Provides information across departments in real time. Provides
control over various business processes.
 Increase Productivity, better inventory management, promotes
quality, reduced material cost, boosts profits.
 Better Customers interaction, increased throughout, improves
customer services
 Decentralized System

  An Interconnected information system where no single entity is the sole authority.

 In the context of computing and information technology, decentralized systems usually

take the form of networked computers.

 The success of any organization lie’s in effective communication and data exchange
within the Departments/ BU as well as associated third party such as Vendors,
Outsourcers and Customers
 Problems with Decentralized System

 Numerous disparate information system are developed individually over the time.
 Integrating the data becomes time and money consuming.
 Inconsistences and duplication of data.
 High inventory, material and human resource cost
ERP Application Components
Financial Management
 At the core of ERP are the financial modules including general ledger, accounts
 receivable, accounts payable, billing and fixed asset management.
 If your organization is considering the move to an ERP system to support expansion
into global markets, make sure that multiple currencies and languages are
supported, as well as regulatory compliance in the U.S. and in foreign countries.

 Other functionality in the financial management modules will include budgets, cash-
flow,
 expense and tax reporting.
 The evaluation team should focus on areas that are most important to support the
strategic plans for your organization.
 Business Intelligence

 Business Intelligence (BI) has become a standard component of most ERP packages.

 In general, BI tools allow users to share and analyze the data collected across the
enterprise and centralized in the ERP database. BI can come in the form of
dashboards, automated reporting and analysis tools used to monitor the
organizational business performance.

 BI supports informed decision making by everyone, from executives to line

managers and accountants.
 Supply Chain Management

 Supply Chain Management (SCM), sometimes referred to as logistics, improves the flow
of materials through an organization by managing planning, scheduling, procurement,
and fulfillment, to maximize customer satisfaction and profitability.

 Sub modules in SCM often include production scheduling, demand management,

distribution management, inventory management, warehouse management, procurement
and order management..
 Human Resource Management

 Human resource management ERP modules should enhance the employee experience –
from initial recruitment to time tracking.

 Â Sub modules can include payroll, performance management, time tracking, benefits,
compensation and workforce planning. Self-service tools that allow managers and
employees to enter time and attendance, choose benefits and manage PTO are
available in many ERP solutions.
 Manufacturing Operations

 Manufacturing modules make manufacturing operations more efficient through product

configuration, job costing and bill of materials management.

 ERP manufacturing modules often include Capacity Requirements Planning, Materials

Requirements Planning, forecasting, Master Production Scheduling, work-order
management and shop- floor control

Integration
 Key to the value of an ERP package is the integration between modules, so that all of
the core business functions are connected. Information should flow across the
organization so that BI reports on organization-wide results.
Customer Relationship Management (CRM)

 Helps bring together data that better enables salespeople and marketing planners alike
to better address customer needs, preferences and buying patterns.

 A CRM component allows you to do this by keeping track of all of your customer and
sales data within your ERP solution.

 The insights you can gain from a CRM component helps optimize your marketing and
sales efforts.

 It should also better manage invoicing activities, provide relevant and real-time
information for the best prepared proposals and monitor the overall status of contracts
to help you gain a better understanding and be kept informed at all times.
ERP Evolution
 EPR Evolution
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.

 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.
COSTS OF ERP
 ERP Project & Time

 Real transformational ERP efforts will usually run between 1 to 3

years

 On average. Short implementations (3 to 6 months)

 Small companies, implementation limited to a small area of the
company, or the company only used the financial pieces of the ERP
system.
 The important thing is not to focus on how long it will take but to
understand why you need ERP and how you will use it to improve
your business.
 Hidden Costs of ERP

 Training
 Integration and Testing
 Data conversion
 Data analysis
 Consultants
 Replacing best and
brightest staff after
Implementation
 Post-ERP depression
 Benefits of ERP

 Improving  Reduce stock to a

integration minimum
 Flexibility
 Enlarge product
 Fewer errors
assortment
 Improved speed and
Improve product
efficiency
quality
 More complete access
to information  Provide more reliable delivery dates and
higher service to the customer
 Efficiently coordinate global demand,
 Lower total costs in the
supply and production
complete supply chain
Shorten throughput times
 Sustained involvement and
commitment of the top
management
 Benefits of ERP

 Biggest IT project that most

companies ever handle.

 Changes the entire company, and Has

repercussions in all departments and
divisions of the organization.
 It is essential that all the key players
understand the scope of the project.
 This is an IT-Related Project.
 ERP Implementation

4 Major
Phases:

 Concept/Initiation

 Development

 Implementation

 Closeout/Operation and maintenance

RISKS WITH ERP IMPLEMENTATION

 Expensive (can costs 100 thousands to millions

of dollars)
 Time-consuming (can take months to years)
 Great risk for the organization

 Transfer of Knowledge
 Acceptance with the company
 CAUSES OF ERP FAILURES

 Business mangers and IT professionals

underestimate the complexity of the
planning, development, and training needed

 Failure to involve affected employees in the

planning and development phases

 Trying to do too much too fast in the

conversion process

 Failure to do enough data conversion and

testing
 Best Practices of ERP Implementation
 Change Management

 Extensive Education and Training

 Data Clean up and Data Integrity

 Implementation is viewed as an ongoing process

 Change
Management
 Changes in business
procedures, responsibilities ,
work load.
 ERP implementations are times
of high stress, long hours, and
uncertainty.
 Mid-level managers must
facilitate continual feedback
from employees provide honest
answers to their questions, and
help resolve their problems.
 Best Practices of ERP Implementation

 Extensive Education and Training  Clean-up data before cut-over.

General education about the ERP system
 “Near enough is no longer good
for everyone. enough.”
 Massive amount of end users training  To command trust, the data in the
before and during implementation.
system must be sufficiently
available and accurate.
 Follow-up training after the
implementation.  Eliminate the old systems, including all
 10 to 15% of total ERP implementation informal systems.3
budget for training will give an
organization an 80% chance of a
successful implementation.

 Data Clean up and Data

Integrity
Best Practices of ERP Implementation

 Implementation is viewed as an
ongoing process
 Ongoing need for training and
software support after
implementation.
 Ongoing need to keep in contact with
all system users and monitor the use
of the new system.
 Process of learning and
adaptation that continually
evolves over time.
 CONCLUSION

 The benefits of a properly selected and

implemented ERP system can be
significant.

 An average, 25 to 30% reduction on

inventory costs; 25% reduction on raw
material costs.

 Lead-time for customers, production

time, and production costs can be
reduced.

 BUT cost of implementing can be quite

high and risks are great.
Main ERP vendors
THANK YOU