An Integrated Solution for ENTERPRISE RESOURCE PLANNING An Integrated Solution for "Business Management" Presentation by; Mr. Abhijeet Shetty Ms. Ragini Mohite Mr. Aashay Khawte Mr. Sagar Shirwaikar Mr. Vinayak Dhumatkar Date: 05TH AUGUST 2009

ICAI - GMCS (LLIM - Jul/Aug 09) Contents Introduction to ERP Business Process Re-engineering (BPR) ERP Implementation Vendors of ERP Business Modules in ERP ERP & Role of Chartered Accountants Conclusion 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ICAI - GMCS (LLIM - Jul/Aug 09) Introduction To ERP 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

Why ERP ? To Survive ,Thrive And Beat The Competition Manage future Manage Information Automation of the process of Data Collection Information Technology (ERP Solution) 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ICAI - GMCS (LLIM - Jul/Aug 09) History Of ERP ERP (Enterprise Resource Planning) is the evolution of Manufacturing Requirements Planning (MRP) II. From business perspective, ERP has expanded from coordination of manufacturing processes to the integration of enterprise-wide backend processes. From technological aspect, ERP has evolved from legacy implementation to more flexible tiered client-server architecture. 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ICAI - GMCS (LLIM - Jul/Aug 09) Timeline System Description 1960s Inventory Management & Control It includes identifying inventory requirements, setting targets, providing replenishment techniques and options, monitoring item usages, reconciling the inventory balances, and reporting inventory status. 1970s Material Requirement Planning (MRP) MRP utilizes software applications for scheduling production processes. MRP generates schedules for the operations and raw material purchases. 1980s Manufacturing Requirements Planning (MRP II) Manufacturing Requirements Planning or MRP utilizes software applications for coordinating manufacturing processes, from product planning, parts purchasing, inventory control to product distribution. 1990s Enterprise Resource Planning (ERP) ERP was introduced by Research & Analysis by Gartner in 1990. ERP systems integrate 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. 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ICAI - GMCS (LLIM - Jul/Aug 09) What is ERP ? ENTERPRISE: An enterprise is a group of people with a common goal, which has certain resources at its disposal to achieve that goal. RESOURCE: Resources included are money, man-power, materials, and all other things that are required to run the enterprise. PLANNING: Planning is done to ensure that nothing goes wrong. Planning is putting necessary functions in place and more importantly, putting them together. ERP covers the techniques and concepts employed for the integrated management of business as a whole, from the viewpoint of the effective use of management resources, to improve the efficiency of an enterprise. 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ICAI - GMCS (LLIM - Jul/Aug 09) Features of ERP Integrates Business Operations. Library of Business Process. Real Time updating of transactions. Multi-Tasking & Multi-Currency Features. Easy Web Enablement Features. Supports - Alert facilities, data warehouse & OLAP. Integration of Workflow Management. 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

Industry wise Uses of ERP….. Manufacturing Software Insurance Healthcare Hospitality 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ICAI - GMCS (LLIM - Jul/Aug 09) ERP: Advantages Reduction of lead-time. Reduction in cycle time. Better customer satisfaction. Improved supplier performance. Increased flexibility. Reduction in quality costs. Improved resource utility. Improved information accuracy and decision-making capability. 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ICAI - GMCS (LLIM - Jul/Aug 09) ERP: Disadvantages Lack of clarity of expectations from ERP. Unreasonable scope & Inadequate Resources. Choice of wrong ERP product – not all products are suitable for all industries. Not choosing the right people for implementation. Lack of participation of end-users. Lack of proper communication within the organization. 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ICAI - GMCS (LLIM - Jul/Aug 09) Business Process Re-engineering 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ICAI - GMCS (LLIM - Jul/Aug 09) Introduction to BPR Business process reengineering (BPR) is, in computer science and management, an approach aiming at improvements by means of elevating efficiency and effectiveness of the business process that exist within and across organizations. The key to BPR is for organizations to look at their business processes from a "clean slate" perspective and determine how they can best construct these processes to improve how they conduct business. 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ICAI - GMCS (LLIM - Jul/Aug 09) Definitions of BPR Thomas H. Davenport (1993) "encompasses the envisioning of new work strategies, the actual process design activity, and the implementation of the change in all its complex technological, human, and organizational dimensions." Hammer and Champy (1993) "... the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance, such as cost, quality, service, and speed." 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ICAI - GMCS (LLIM - Jul/Aug 09) Benefits of BPR Business process is streamlined Business process is optimized and more efficient Strict controls can be enforced and monitored. Best practices can be adhered to. Time and cost saving as a result of eliminated redundant tasks. 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ICAI - GMCS (LLIM - Jul/Aug 09) Principles of BPR Focus on the Right Processes Voice of the Customer Managing Change Active Participation Targets and Performance Measure Integration Flexibility Project Management 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

“The onus of the successful implementation lies with the Organization” Conclusion of BPR “The onus of the successful implementation lies with the Organization” To be successful, business process reengineering projects need to be top down, taking in the complete organization, and the full end to end processes. It needs to be supported by tools that make processes easy to track and analyze. 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ICAI - GMCS (LLIM - Jul/Aug 09) ERP Implementation 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ERP Implementation And Methodology ERP implementation is a special event Consultants and Users Should Work Together Improve The Flow of Information Customization 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

Steps in ERP Implementation Identifying the needs for implementing an ERP package Evaluating the ‘As is’ situation of the business Deciding the ‘would be’ situation of the business Reengineering the business process to achieve the desired results in the existing processes Evaluating the various available ERP packages Finalizing the most suitable ERP packages Installing the required hardware & networks for selected ERP Finalizing the implementation consultants who will assist in implementation Implementing the ERP packages 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ICAI - GMCS (LLIM - Jul/Aug 09) Vendors of ERP Packages 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ICAI - GMCS (LLIM - Jul/Aug 09) Vendors of ERP Package Oracle corporation Oracle is one of the top players in the ERP market Oracle Manufacturing Applications offers internet enabled, network centric computing As a one stop shop, it offers the database, tools, implementation, applications and UNIX operating systems running on a wide choice of hardware SAP AG SAP is the world's second largest business software company. SAP focuses on six industry sectors: process industries, discrete industries, consumer industries, service industries, financial services, and public services SAP matches business processes to modules. 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09) 22

Vendors of ERP Package (Contd.) Baan It addresses manufacturers from largest global players to smallest ERP user. It offers tools for Business Process Analysis It uses 4GL language SSA BPCS was developed by System Software Associates (SSA) It is used in manufacturing companies It offers functionality of Process and Kanban Manufacturing 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09) 23

Vendors of ERP Package (Contd.) Sage Group plc It is engaged in the development, distribution and support of business Management software Accpac is a vendor of accounting, Customer relationship management and business management software It has two main product lines Sage Accpac ERP Sage Pro ERP 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09) 24

ICAI - GMCS (LLIM - Jul/Aug 09) Modules of ERP 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09) 25

Major Modules in ERP Packages Finance Module HR Module Manufacturing Module Material Management (MM) Module Sales & Distribution Module SALES & DISTRIBUTION MANAGEMENT LOGISTICS & CUSTOMER SERVICE MANAGEMENT 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09) 26

ICAI - GMCS (LLIM - Jul/Aug 09) Finance Module Finance functionality for organizations whose business is spread over the world. Company wide control & Integration of Financial Information. Sub Systems are : Financial Accounting Treasury Control Enterprise Management 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09) 27

ICAI - GMCS (LLIM - Jul/Aug 09) Human Resource Module HR is an essential factor of any successful business. This Module offer company wide solutions for HR departments and make it possible for authorized users of the other departments to access specific employee data. Personnel Administration Employee Master Data Recruitment Management Open Positions Selection & Hiring Travel Management Personnel cost planning 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09) 28

ICAI - GMCS (LLIM - Jul/Aug 09) Manufacturing Module Components of Manufacturing Module : Material & Capacity Planning Quality Management Cost Management Shop Floor Control 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09) 29

Material Management Module It supports all phases of Material - Management, planning, control, purchasing, receiving, inventory management & bill payment. Its sub-modules are : Pre Purchasing Activities Purchasing Vendor Evaluation Inventory Management Invoice Verification 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09) 30

Sales & Distribution Module Offers access to real-time, online information from sales to billing. Sub-systems in this modules are – Masters Data Management Order Management Warehouse Management Dispatch Invoicing Pricing Sales Support Transportation 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09) 31

Role of Chartered Accountants ERP & Role of Chartered Accountants 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

Role of Chartered Accountants in ERP How does ERP matter Chartered Accountants? Rapidly changing & challenging business world and automation of processes ERP helps the organization to realize its vision and objectives in an optimized way. Role as consultants, auditors, advisors or managers in controlling, managing and supporting the business. 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

Major Challenges in ERP Audits Complexity of ERP Manpower Inadequate Attention towards security of Systems 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ICAI - GMCS (LLIM - Jul/Aug 09) Conclusion “A Chartered Accountant without the knowledge of ERP may feel as if he is a fish out of the bowl” 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ICAI - GMCS (LLIM - Jul/Aug 09) Bibliography www.erpwire.com www.en.wikipedia.org www.icai.org www.teamtechnology.co.uk ICAI – Reference Books & Study Material. 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ICAI - GMCS (LLIM - Jul/Aug 09) Thank You 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)

ICAI - GMCS (LLIM - Jul/Aug 09) Please feel free To ask Questions 5 August 2009 ICAI - GMCS (LLIM - Jul/Aug 09)