the erp application

8/2/2019 The Erp Application

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THE ERP APPLICATION

An integrated suite of business applications,

which..

Closely links, monitors, and controls primary enterpriseresources like manpower, machine, material, methods,market and money

Enables corporate houses to readily change theirprocesses to adapt to the ever changing business scenario

Provides expertise in industry specific business processes


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Why Clients would buy ERP?

Corporate Initiatives

Strategic initiatives

A requisite capability in a competitive global business

Operational initiative A foundation for performance and cost improvement

via integration

Organizational initiative

To initiate a major organizational change within thecompany

Technology IT is making the transition from a supporting operational entity to

becoming a strategic competitive tool.


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Information Fragmentation

Information is typically spread across numerouscomputer systems, each housed in individualbusiness unit, office, factory or region.

This results in redundant data, and there arises aneed for re-entering or re-formatting data.

Interoperability problems exist between individualsystems.


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Information Integration

At the core of an ERP software system, is a single

comprehensive database, which streamlines the flowof information throughout the business, therebyeliminating redundancy of data.

The database collects data from and feeds data into,modular applications that support virtually all of the

companys business activities.


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Central

database

Financial

Manufac-turing

Inventory

and Supply

Back-Office

Admin.

and

Workers

S

U

PP

L

I

E

R

S

Reporting

Managers

and

Stakeholders

Employees

Service

Sales &

Delivery

Sales Force&

Customer

Service

Represent-

atives

C

U

ST

O

M

E

R

S

Central

database

Human

Resource

Mgmt

AN ERP SYSTEM


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Characteristics of ERP

ERP (Enterprise Resource Planning) systemstypically include the following characteristics:

An integrated system that operates in real time (or next to realtime), without relying on periodic updates

A common database, which supports all applications.

A consistent look and feel throughout each module.

Installation of the system without elaborate application/dataintegration by the Information Technology (IT) department.


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ExampleA warehouse in Singapore enters a customer order

-- data automatically flows to other areas of the company.

-- it would flow to the financial and accounting people in NewYork.

-- accounts receivable automatically updated .

-- the order would also flow to the manufacturing operations inEurope instructing them to manufacture components.

-- inventory levels would automatically be reduced in thewarehouse and an order would be placed to replenish inventory

Characteristics of ERP(contd.)


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ADVANTAGES OF USING ANERP PACKAGE

-The fundamental advantage of ERP is that integrating

the myriad processes by which businesses operate

saves time and expense.

-Decisions can be made more quickly and with fewer

errors.

-Data becomes visible across the organization.


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ADVANTAGES OF USING AN ERPPACKAGE(contd.)

-Tasks that benefit from this integration include:

Sales forecasting, which allows inventory optimization

Chronological history of every transaction through relevant datacompilation in every area of operation.

Order tracking, from acceptance through fulfillment

Revenue tracking, from invoice through cash receipt

Matching purchase orders (what was ordered), inventory receipts(what arrived), and costing (what the vendor invoiced)


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ADVANTAGES OF USING AN ERPPACKAGE(contd.)

- ERP systems centralize business data, bringing the

following benefits:

They eliminate the need to synchronize changes between multiplesystemsconsolidation of finance, marketing and sales, human

resource, and manufacturing applications

They bring legitimacy and transparency in each bit of statistical data.

They enable standard product naming/coding.

They provide a comprehensive enterprise view (no "islands ofinformation"). They make realtime information available tomanagement anywhere, any time to make proper decisions.

They protect sensitive data by consolidating multiple security systems

into a single structure.


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PRODUCT FEATURES

HUMAN RESOURCE MANAGEMENT SYSTEM

-- Payroll, Benefits, Human Resources, Pension Administration,

Time & Labor

ACCOUNTING AND CONTROL

-- General Ledger, Payables, Receivables, Asset Management,

Projects, Budgets, Expenses, Cash Management

-- Treasury Management

-- Materials Management

-- Supply Chain Planning

-- Service Revenue Management

-- Procurement

-- Enterprise Performance Management

-- Project Management


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Results that can be expected fromERP culture

Reduced working capital requirements

Improved customer service

Improved direct labour productivity

Reduced purchase costs

Reduced obsolescence

Reduced overtime

Having the figures to make decisions

Having accountability throughout the organization

Improved quality of life


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LIMITATIONS OF ERP

The processes that are in practice in the organization need

to be modified to suit the ERP package.

The software may initially seem a little complicated, owingto the wide variety of functions it integrates

Software logic and company strategy needs to match.


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SUCCESS STORIES

Autodesk (computer aided design software maker)

Reduced delivery time from two weeks to lessthan 24 hours

Fujitsu Microelectronics

Reduced the cycle time for filling orders from 18

days to 1.5 days Time to close financial books from 8 to 4 days

the erp application

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