IT2041 - Enterprise Resource Planning Handle by B.Sathya

To know the importance of Enterprise Resource Planning. Objectives: Aim: To know the importance of Enterprise Resource Planning. Objectives: To know the basics of ERP To understand the key implementation issues of ERP To know the business modules of ERP To be aware of some popular products in the area of ERP To appreciate the current and future trends in ERP

What is ERP ? ERP stands for: Enterprise Resource Planning ERP system attempts to integrate all data and processes of an organization into a unified system , by use of multiple components of computer software and hardware. A method for the effective planning and controlling of ALL the sources needed to take, make, ship and account for customer orders in order to do the manufacturing, distribution or service in the company. A best feature of most ERP systems is the use of a unified database to store data for the various system modules.

SYLLABUS

UNIT 1 - ERP AND TECHNOLOGY Introduction Related Technologies Business Intelligence E-Commerce and E-Business Business Process Reengineering Data Warehousing Data Mining OLAP Product life Cycle management SCM CRM

UNIT II - ERP IMPLEMENTATION Implementation Challenges Strategies Life Cycle Pre-implementation Tasks Requirements Definition Methodologies Package selection Project Teams Process Definitions Vendors and Consultants Data Migration Project management Post Implementation Activities.

UNIT III -ERP IN ACTION & BUSINESS MODULES Operation and Maintenance Performance Maximizing the ERP System Business Modules Finance Manufacturing Human Resources Plant maintenance Materials Management Quality management Marketing Sales, Distribution and service.

UNIT IV - ERP MARKET Marketplace Dynamics SAP AG Oracle PeopleSoft JD Edwards QAD Inc SSA Global Lawson Software Epicor Intutive.

UNIT-5 -FUTURE TRENDS IN ERP Enterprise Application Integration ERP and E-Business ERP II Total quality management Future Directions Trends in ERP.

LECTURE TIMING UNIT 110 HOURS UNIT 29 HOURS UNIT 39 HOURS UNIT 49 HOURS UNIT 58 HOURS TOTAL=45 HOURS

UNIT I What is ERP? ERP is a solution, which facilitates company-wide integrated information systems, covering all functional areas ERP is a System for the Entire Company – A Global Tightly Integrated Closed-Loop System An enterprise is a group of people work together to achieve a common goal with the help of resources.

Benefits of the ERP systems Online Data Flow decreases the process time Fast & Online Confirmation Less Paperwork No need for folder storage Database Security Less Employee needed Easy Financial Management Better Inventory Management

ERP - Definition “Software solution that addresses the Enterprise needs, taking a process view of the overall organization to meet the goals, by tightly integrating all functions and under a common software platform”

Evolution of ERP 1960’s - Systems Just for Inventory Control 1970’s - MRP – Material Requirement Planning (Inventory with material planning & procurement) 1980’s - MRP II – Manufacturing Resources Planning (Extended MRP to shop floor & distribution Mgnt.) Mid 1990’s - ERP – Enterprise Resource Planning (Covering all the activities of an Enterprise) 2000 onwards – ERP II – Collaborative Commerce (Extending ERP to external business entities)

ERP – Expectations Integrating all the functions Integrating the systems running in all the locations Transparency of information using a single data source across the organization Software must be responsive Modular Flexible Easy to add functionalities Provide growth path

ERP Application Components vvvv

Functions Of Enterprise Engineering Design Sales Human resources Production Planning Inventory Enterprise Finance Controlling Maintenance Quality legal

Business Process . . A logical series of related transactions that converts inputs to outputs or results. a chain of logical connected, repetitive activities utilizes the enterprise’s resources refine an object (physical or mental) for a purpose of specific /measurable results/products internal or external customers

BPR - Steps Understand Simplify/Improve Automate Step 1 Step 2 Step 3 Understand the existing systems associated with all the functionalities Draft & frame the possibilities & ways to simplify or Improve or eliminate the processes Implement with the help of ERP

Data Warehousing Architectures Separates functions of the DW, eliminates resource constraints, can create data marts

Data Warehousing Architectures DSS engine runs on same platform as the DW, so more economical

Knowledge Discovery (KDD) Process Data mining—core of knowledge discovery process Pattern Evaluation Data Mining Task-relevant Data Selection Data Warehouse Data Cleaning Data Integration Databases

Different Phase of ERP implementation Life Cycle: UNIT II Different Phase of ERP implementation Life Cycle: Pre-Evaluation Screening Package Evaluation Project Planning Phase Gap Analysis Reengineering Configuration Implementation Team Training Testing End-User Training Going Live Post Implementation Phase

ERP implementation Lifecycle Company Management ERP Vendors Pre-Evaluation Screening Package Evaluation Project Planning Gap Analysis Reengineering Configuration Implementation Team Training Testing End-User Training Go ahead Going Live Post Implementation Phase ERP implementation Lifecycle

Vendors,Consultants & End user Vendors- They make ERP s/w Consultants –They who are responsible to implement the project End users -They are the people who use the ERP system once it has been developed

VENDORS MAKE ERP S/W TIME, EFFORT, MONEY FOR R & D OF ERP S/W FLEXIBLE, EASY TO USE & EFFICIENT

HE IS RESPONSIBLE FOR ADMINISTRATION OF THE PHASES CONSULTANTS WHO ARE RESPONSIBLE TO IMPLEMENT THE PROJECT CLEAR CUT IDEA TELLS THE CHANGE MUST BE MADE SO THAT WITH HIS DECISISON CHANGES ARE MADE HE IS RESPONSIBLE FOR ADMINISTRATION OF THE PHASES

Role of Sales Organisation UNIT III Role of Sales Organisation Once the sales plan has been formulated, the next logical step is to organise a sales force to achieve the organisational objectives. Major Qualified Sales Objectives Overall Objectives Break Up or Division 1. Total volume of products 1. Quarter, month and week 2. Total annual value of products 2. Product line and range 3. Total annual selling costs 3. Region and sales area 4. Total annual profit contribution 4. Type of customer Cont….

Components of Sales and Distribution ECC 6.0 January 2008 Components of Sales and Distribution Sales and Distribution (SD) Sales Support Credit Mgmt. Shipping Transport Billing Foreign Trade Information System Master Data Sales Support: Computer-Aided Selling The Sales Support component provides a wide range of functions for opportunity management. It helps your sales and marketing department to support your existing customers and, at the same time, to develop new business. Within the Sales Support environment, all sales personnel in the field and in the office can share valuable information about customers, sales prospects, competitors and their products, and contact people. Purpose The Sales Support component is:  Sales a tool for lead generation, lead qualification, and lead tracking a source of information for all areas of Sales and Distribution Customer inquiries and quotations Four groups of sales documents are differentiated: Sales allows you to execute different business transactions based on sales documents defined in the system. Complaints, such as free of charge deliveries, credit and debit memo requests and returns Outline agreements, such as contracts and scheduling agreements Sales orders Shipping Transportation Transportation is an essential element in the logistics chain. It affects both incoming and outgoing goods. Effective transportation planning and processing ensure that shipments are dispatched without delay and arrive on schedule. Transportation costs play an essential role in the calculation of the price of a product. It is important to keep these transportation costs to a minimum so that the price of a product remains competitive. Efficient transportation planning and processing helps to keep these costs down. Billing  Creation of: This component includes the following functions: Billing represents the final processing stage for a business transaction in Sales and Distribution. Information on billing is available at every stage of order processing and delivery processing. Pro forma invoices Issue credit and debit memos Invoices based on deliveries or services Cancel billing transactions Transfer billing data to Financial Accounting (FI) Issue rebates Comprehensive pricing functions Credit management Credit and Risk Management Outstanding or uncollectible receivables can spoil the success of the company greatly. Credit Management enables you to minimize the credit risk yourself by specifying a specific credit limit for your customers. Thus you can take the financial pulse of a customer or group of customers, identify early warning signs, and enhance your credit-related decision-making. This is particularly useful if your customers are in financially unstable industries or companies, or if you conduct business with countries that are politically unstable or that employ a restrictive exchange rate policy. Customer Service Processing  Service notifications Customer Service enables you to plan and manage a wide range of service scenarios. It includes functions for processing: Service contracts Service orders Warranties Service quotations Customer Service (CS) draws on functionality from different SAP application components, in particular Plant Maintenance (PM) and Sales and Distribution (SD). For example, CS involves the planning and processing of external services, such as contracts for the maintenance and repair of equipment that a customer has either bought or rented. Maintenance planning and servicing is managed in PM; in SD you can create and maintain the relevant service contracts. Contract-related charges that are incurred in PM are passed on in the form of requests for billing in SD Repair orders Sales Information Systems - Reports and Analyses   The SAP R/3 System offers you a wide range of information and analysis tools for sales and distribution. These provide you with a quick overview of your current business situation. You want to determine how many orders customer XY issued in the last quarter. To see this information, you can execute the report "List orders". This gives you a list of orders and also contains information on the items, order value etc. You can set the scope of this list yourself. Foreign Trade / Customs As markets become increasingly more global and business structures more complex, the need for accuracy in handling the foreign trade needs of a business is gaining rapidly in importance. SAP’s R/3 Foreign Trade / Customs application (FT) provides the tools you need to compete effectively in today’s fast-paced market. It is designed to help you meet the rapidly changing foreign trade requirements of your business. Manage import and export processes, integrating them efficiently into the supply chain SAP’s R/3 Foreign Trade application enables you to: Automatically identify licensing requirements for importing and exporting goods based on current regulations Provide an active interface for sending or retrieving data via internationally available EDI systems and other electronic media Determine which of your products qualify for preference handling Simplify reporting with automatic procedures for creating, printing and submitting declarations Update or change data in all relevant foreign trade documents at any time prior to the final goods issue. Even after you have posted the goods issue, you can still change data in the invoice. © SAP AG and The Rushmore Group, LLC 2008

Internal Sales Organization ECC 6.0 Internal Sales Organization January 2008 South India Sales North India Sales India Sales S000 Tamilnadu Sales Group Kerala UP MP Salesperson 1 4 3 6 5 8 7 2 The organization in Sales is represented by the elements sales office, sales group and salespersons © SAP AG and The Rushmore Group, LLC 2008

HUMAN RESOURCE MODULE Human resource management is an essential factor of any successful business. The various subsystems under HR module are: Personnel management: Organizational management: Payroll Accounting: Time management: Personnel development:

Major subsystem of the manufacturing module - Materials and capacity planning Shop floor control Quality management JIT/repetitive manufacturing Cost management Engineering change control Engineering data management Configuration management Tooling Serialization/lot control

PLANT MAINTAINENCE MODULE The Plant maintenance module includes an entire family of product covering all aspects of plant/ equipment maintenance and becomes, integral to the achievement of process improvement. The major subsystems of a maintenance module are : Preventive Maintenance Control. Equipment Tracking. Component Tracking. Plant Maintenance Calibration Tracking. Plant Maintenance Warranty Claims Tracking.

MATERIAL MANAGEMENT MODULE: The material management module optimizes all purchasing processes with workflow- driven processing functions, Enables automated supplier evaluation, lowers procurement and warehousing costs with accurate inventory and warehouse management and integrates invoice verification. The main module of material management are as follows: i. Pre- Purchasing Activity. ii. Purchasing. iii. Vendor Evaluation. iv. Inventory management. v. Invoice verification and material inspection.

QUALITY MANAGEMENT MODULE – FUNCTIONS: The quality management module fulfills the following functions: QUALITY PLANNING QUALITY INSPECTION QUALIT CONTROL

UNIT IV Some of the top-tier ERP vendors are SAP-AG, BAAN, PeopleSoft, Oracle Application and J.D.Edwards. ERP vendors - products. •SAPAG - SAP R/3 •Oracle Corporation - Oracle Applications •JD Edwards World solutions Co. – One world •People Soft Inc. – People soft •Baan Co. - Baan

SAP AG:COMPANY PROFILE SAP (System Applications & Products in data processing) . SAP is the world's leading provider of business software, SAP delivers products and services that help and accelerate business innovation for their customers. Today, more than 82,000 customers in more than 120 countries run SAP applications SAP defines business software which comprises enterprise resource planning and related applications such as SCM , CRM and SRM. SAP AG was founded in 1972 by five German engineers in Germany; and is one of the top most ERP vendors providing the client server business application solutions. The SAP group has offices in more than 50 countries worldwide & employs a workforce of over 19300. SAP’s ERP package comes in 2 versions i.e. (SAP R/2) & (SAP R/3).(R-Real)

BAAN :- Company profile Baan company was founded in Netherlands in 1978 by brothers Jan and Paul Baan.. The BAAN Company is the leading global provider of enterprise business software. The BAAN company products reduce complexity and cost, improve core business processes, are faster to implement and use, are more flexible in adapting to business changes.

BAAN ERP Modules: Manufacturing Module: Finance Module: Project Module: Distribution Module:

ORCALE CORPORATION:-Company profile Oracle Corporation was founded in the year 1977 and is the world’s largest s/w company and the leading supplier for enterprise information management. It provides databases and relational servers, application development, decision support tools and enterprise business applications.

MODULES OF ORCALE APPLICATIONS: Oracle application consists of 45 plus software modules which are divided into following categories Oracle Financials Oracle Human Resource Oracle Projects Oracle Manufacturing Oracle Supply Chain Oracle Front Office

PEOPLESOFT:- Company profile PeopleSoft Inc. was established in 1987 to provide innovative software solutions that meet the changing business demands of enterprises worldwide. It employs more than 7000 people worldwide.& the annual revenue for the year 1998 was $ 1.3 million. PeopleSoft develops markets and supports enterprise-wide software solutions to handle core business functions including human resources management, accounting and control, project management, treasury management, performance measurement and supply chain management.

The PeopleSoft’s business management solutions are in the areas given below: Human Resources Management Accounting and Control Treasury Management Performance Measurement Project Management Sales and Logistics Materials Management Supply Chain Planning Service Revenue Management Procurement

JD EDWARDS:COMPANY PROFILE: On March 17, 1977 J.D. Edwards was formed, by Jack Thompson, Dan Gregery & Ed-Mc Vaney. In early years J.D. Edwards was designed for small & medium sized computers. As the company began to out grow, its headquarter in Denver, opened branch offices in Dallas & Newport Beach, California, Houston, San Francisco & Bakenfield. And then internationally expanded its Europe headquarters in Brussels & Belgium. By the mid of 1980’s, J.D Edwards was being recognized as an Industry-leading supplier of application software Today J.D Edwards is a publicly traded company that has more than 4700 customers with sites in over 100 countries & more than 4200 employees.

QAD : -Company Profile It was found in 1979. QAD offers a variety of supply chain and enterprise resource planning s/w products to manufacturing industries. It optimizes the enterprise by increasing the speed of internet processes and synchronizing the business operations. It is available in 26 languages and supports multiple currencies. It has an easy-to-understand graphical interface.

SSA:-COMPANY PROFILE: System Software Associates, Inc. (SSA) was founded in 1981. It has branches in more than 91 countries & more than 2000 employees. SSA’s vision is to be the best global partner to the world’s industrial companies. The Mission statement has six key goals. They are: Best client satisfaction Single image worldwide Enterprise Solution Leadership Proven leading Technology Highly skilled & motivated professional Strong financial results

ERP – Options OPTION 1 – MAKE ERP package [Using Internal resources] UNIT V ERP – Options OPTION 1 – MAKE ERP package [Using Internal resources] OPTION 2 - BUY OPTION 3 – MAKE [using External resources]

Trends in ERP vvvv

Trends in ERP Flexible ERP: This makes the software easier to integrate with other application programs of business users, as well as making it easer to make minor modifications to suit a company’s business processes. Web-enabled ERP: These features make ERP system easier to use and connect to other internal application as well as to the systems of company’s business partners. Interenterprise ERP: This Internet connectivity has led to the development of interenterprise ERP systems that provide WEB-enabled links between key business systems (such as inventory and production) of a company and its customers, suppliers, distributors and others. vvvv

Trends in ERP E-business Suites: The major ERP software companies have developed modular, Web-enabled software suites that integrate ERP, customer relationship management, supply chain management, procurement, decision support, enterprise portals, and other business applications and functions. Example: Oracle’s e-business suite and Sap’s mySAP. vvvv

TEXT BOOK 1. Alexis Leon, “ERP Demystified”, Tata McGraw Hill, 2000 TEXT BOOK 1. Alexis Leon, “ERP Demystified”, Tata McGraw Hill, 2000. REFERENCES 1. Joseph A Brady, Ellen F Monk and Bret Wagner, “Concepts in Enterprise Resource Planning”, Thompson Course Technology, 2001. 2. Vinod Kumar Garg and Venkitakrishnan N K, “Enterprise Resource Planning Concepts and Practice”, Prentice Hall of India, 2003.

ASSIGNMENT TOPICS: Business Process Reengineering (BPR) ERP Implementation lifecycle Quality management Baan ERP and e - Commerce

SEMINAR TOPICS: Data warehousing and data mining SCM Contracts with vendors Project management and monitoring. Human resources Sales and distribution SAP AG Peoplesoft EIA ERP and internet

WEBSITES: http://www.slideshare.net/sonalichauhan/chapter-3-e-r-p-and-related-tech-alexis-leon www.scs.dauniv.ac.in http://notes.indiarhythm.com/erp.php http://siestyit.0fees.net/ERP%20MARKET.ppt http://www.scribd.com/doc/53617085/1d4dbe-Commerce-and-Erp http://www.google.co.in

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