Chapter: 1 Enterprise-An Overview

1. Chapter: 1 Enterprise-An Overview

2. Que:- What is an Enterprise? • Ans:-Defination:-An enterprise is group of people with a common goal which has certain resources at its disposal(control) to achive this goal. People The Enterprise The Enterprise The Enterprise The Enterprise Resources (People, money, energy, material, space, time) Goal & Objective • The Enterprise

3. The enterprise act as single entity. • This view (single entity) is different from traditional approach.

4. Traditional Approach:- • The organization is divided in different units based on the functions they perform. • Different units like • Manufacturing and production department • Production planning department • Purchasing department • Sales& distribution department • Finance department • R&D department • This departments are compartmentalized and have their own goal & objectives

5. These departments function in isolation and have their own system of data collection & analysis. • (Problem):- So the information that is created or generated by various departments are available to only top management and not to the other departments. • Figure:- Production Planning Finance Marketing R & D Production Sales & Distribution Org. where there is no little communication between departments

6. So results, • Instead of taking org. towards the common goal the various depts. end up pulling it in different direction. • Because of only one department does not know what the other does. • So departmental objective can be conflict. • (Solution) In enterprise way , • the entire organization is considered as system and all depts.. are sub-system. • Information about all the aspects of the organization is stored centrally and is available to all depts..

7. Production & Planning Finance Marketing • Figure:- Central database R & D Production Sales & Distribution

8. Through transparency and information , departments will no longer be working in isolation. • Each sub system knows what other are doing, why doing, & what should be done for common goal. • ERP system helps to make easier by, • Integrating the information system • Enabling smooth & seamless flow of information across departmental barrier • Automating business process & function.

9. Business function:- • Organization that make products to sell have following functions: • Marketing & sales • Production & material managements • Accounting & finance • Human resources etc…………. • Each function area comprises a variety of business function and business activities. • (Problem) Earlier business system , • What happened in one functional area is not closely related to what happened in others. • So one area’s information system has no impact on other areas.

10. Business process:- • (solution) Recently organization has started term business process. • Definition:- A business process is a collection of activities that takes one or more kinds of input and created an output. • Used :- BP helps to manager to look their organization from a customer’s perspectives.

11. Difference between Business function & Business process:- • BP cuts across more then one BF to get the task done. • Example, There car was damaged during delivery so • BF: - to accept the damage items. • BP: - to repair or replace car. • For the company to provide satisfaction, it must sure that its functional area of operation is integrated. • Sharing data effectively and efficiency between and within functional area leads more efficient BP. • Information system can be designed so that accurate and timely data are shared between functional area. • These system are called integrated(combine in to whole) informationsystem.

12. Integrated Management Information:- • An information system is an open, purposive system that produces information using the ‘input-process-output’ cycle. • The minimal information system consists of three elements-people, procedures and data. • People follow procedures to manipulate data to produce information. • Today information system is an organized combination of people, hardware, software, communication, network and data resources that collects, collate (assemble), transforms, and disseminates in organization. • Management information system also called information reporting systems.

13. (Problem) These information system is that they operate at departmental level and they give only information that has been pre-defined. • Each department have their own database and information, so these system produce various reports of varying detail that was specified when the system were built. • This method of information of gathering , has major disadvantages. • The people in one department does not know the information of other department.

14. This system give only the information that they are designed to produce at the time they were built. • So if manager want some information, its not in the reports, So these system are not helpful to them. • So these integrated approach is required.(Lack,need,require). • There are three fundamental characteristics of informations are accuracy, relevancy and timeliness.

15. Business Modeling:- • Its first activity in any ERP project. • Definition:- A business model is representation of the business as • one large system, • Showing the inter connections and • Interdependencies of • Various sub-system and business processes. • A business model consisting of the business process, based on the organization’s goal, objectives and strategic plans. • Based on the business model, the ERP system is developed with the aim of providing the required information and necessary assistance to the various individuals to perform their business process more effectively and more efficiently.

16. In business modeling ,we model the business as an integrated system making the processes managing its facilities and materials. • Information is very important resources and is very critical in managing all the other resources. • A business model is a representation of the • actual business • what the various business functions of organization are • How they are related • What their interdependencies are and so on….. • A business model is usually represented in the graphical form using flowcharts and flow diagrams. • From this model data model of the system is created.

17. Integrated data model:- • Most critical steps in ERP is creation of an integrated data model. • All the employees from different departments get access to the data-integrated data. • Company uses the integrated data for its analysis and decision-making. • The information integrated and the process or procedure automation. • The data model should reflect the entire org. and should successfully depict (showing) and integrated the data structures of the entire organization

18. Chapter – 2 Introduction to ERP

19. Introduction:- • ERP is an abbreviation for Enterprise Resource Planning • It is the techniques and concepts for integrated management resources to improve the efficiency of enterprise management. • ERP concepts are supported by ERP packages which are integrated (covering all the business functions). • ERP packages were targeted at the manufacturing industry.

20. It consisted mainly of function for generally planning and managing the core business such as • Sales management • Production management • Accounting and financial management etc. • But in recent years, many industries adopt this expansion of implementation on global level.

21. ERP software is designed to model and automate many of the basic processes of a company from finance to shop floor • With a goal of integrating information • Eliminating complexity • (Advantage) ERP software is a mirror image of the major business processes of org. Such as customer fulfillment and manufacturing. • (dis advantage)ERP system is worse because • The old code at the least was written specifically for the company and task. • ERP system produce the dramatic (impressive) improvements and • It is capable only when used to connect part of an organization and integrate its various processes seamlessly (effortlessly).

22. Que:-Discuss the common myths about ERP and find the solution? • Ans:- • There are most common myths about ERP. • ERP means more work and Procedures • ERP will make many employees redundant and jobless • ERP is the sole (single) responsibility of the management • ERP is just for manager/Decision-makers • ERP is just for manufacturing Organizations • ERP is just for the ERP implementation team • ERP slow down the organization • ERP is just to impress the customers • ERP package will take care of everything • One ERP package suit everybody • ERP is very expensive • Organizations can succeed without ERP

23. ERP means more work and Procedures;- • Problem:- • Properly implementing and managing an ERP is not an easy task. • Many employees think that ERP will add more work, makes the work more difficult and force unnecessary procedures. • Transformation from the old system to the ERP system is a difficult process. • Solution:- • Management and implementation team do their job properly, ensuring that the employees are told what to expect and given proper training, then transitions can be smooth. • Once employees get used to the new system, they will understand the potential benefits and effort saved through the automation of task and job.

24. ERP will make many employees redundant and jobless;- • Problem:- • ERP system is that its implementation will make many jobs redundant because of the automation. • So it is possible that many employees will lose their jobs. • Solution:- • ERP system create the new job opportunities and the very same people whose job were automated could be used to fill the new job position s after giving them proper training. • So we can say that ERP is a people system made possible by computer software and hardware.

25. ERP is the sole responsibility of the management;- • Problem:- • Making an ERP system work is the responsibility of all the employees, departments and every person. • Then company management is not responsible for the day-to-day operation of the ERP system • Their main job is to create an organizational environment in which ERP can thrive (increase). • They should also involve in the development of ERP policies, usage guidelines, and allocation of budget, package selection and appointment of component professionals to implement and manage the ERP system. . • Solution:- • When the ERP team has the full backing and support of the management, they will be able to implement the system smoothly. • The management should monitor the implementation periodically. • It is the employees-the day-to-day users of system- who will decide the fate of the ERP system.

26. ERP is just for the manager /decision makers- • Problem:- • The managers and decision makers are the major users of the ERP system. • They are the people who benefit the most from a properly implemented ERP system. • They will have the information they need. • Solution:- • The quality of decision and speed improved as the ERP system provide high quality ,timely and relevant information. • Every employee in the organization benefits from the ERP system. • Best use of the information processing power of an ERP system the user should be trained on how to make the best use of the various features available.

27. ERP is just for Manufacturing Organizations:- • Problem:- ERP was historically developed from the methods of material requirement planning (MRP) and manufacturing resource planning (MRP II). • In the manufacturing Industry, MRP became the fundamental concept of production and at this stage BOM which is the purchase order management that utilizes parts list management and parts development. • This incorporated (integrated) financial accounting, HR management functions; distribution management function came to cover all areas of enterprise and came to be called ERP. • Solution:- • The concept of enterprise-wide planning of resources is not limited to any particular segment of industry.

28. ERP is just for the ERP implementation Team:- • Problem:- • The ERP implementation team usually consists of outside consultants, vendor representatives and select group of employees. • Once the implementation and user training is over, the consultants and vendor representative will leave. • Solution:- • It is the responsibility of each and every employee of the company to use the ERP system properly and to make the best use the new features and facilities.

29. ERP slows down the organization:- • Problem:- • Before the advent (start) and popularity of ERP tools, most business tasks were performed manually. • This was time consuming process. • Often a lot of effort was duplicated. • Solution:- • The ERP systems automated the information flow across departments thereby (in this manner) eliminating duplication of efforts and faster and accurate results. • Today ERP system never functions in isolation. • It is completely and seamlessly integrated with the supply chain tools and techniques and also improve the response time of org.. • ERP makes the organizations efficient and never slows it down.

30. ERP is just to impress customers:- • Problem and solution:- • It is true a properly implemented ERP system can help in serving the customers better as it helps the organizations to react faster, response better and deliver high quality products and services at astonishing (amazing) speeds. • This improved efficiency and quality will go a long way in improving customer goodwill (kindness) and customer relations. • So with an ERP system you get more satisfied customers but, that is only one of the advantages of an ERP system.

31. ERP package will take care of everything:- • Problem:- • ERP is not a silver bullet or cure-all (solutions-all). • If employees are not interested in using the ERP system or not using it improperly, if managers are not making use of the decision making capabilities of system or if the system in not maintained properly , then the ERP will not deliver it promises.. • Solution:- • ERP tool automate most business functions and processes thus lives of users a lot easier. • While the ERP tools make the jobs easier, there is no substitute(alternate) for human intelligence and decision making.

32. One ERP package will suit everybody:- • Problem:- • There are hundreds of ERP tools available which differ in features, capabilities, size, functionality, price technical support, customizability, scalability etc. • One tool will be suitable for all organizations are wrong. • Selecting and purchasing an ERP tool without analyzing whether it is suited for the org. will have disastrous (unsuccessful) consequences (cost). • Solution:- • For an ERP implementation to be successful, the tool that is implemented should be compatible (well-suited) with organizational culture, practices and procedures. • So when purchasing an ERP package proper attention should be given to the selection of a tool that is best suited for the organization.

33. ERP is very expensive:- • Problem:- • ERP packages come in all shapes and sizes. • The sophisticated (difficult) and high-end ERP tools are very expensive. • Thus implementing and managing an ERP system is an expensive affair (business). • . • Solution:- • An efficient ERP system will increase the productivity of human resources, shorten development and change cycles, streamline the production process, reduce errors by automating the monotonous (dull) and repetitive task, enable the better management of projects by providing quality information, improve customer satisfaction by resolving problems quickly. • When the benefits of the ERP system are considered, it becomes evident (clear) that the money spent on ERP is well spent and the ERP system will pay for itself.

34. Organizations can succeed without ERP:- • Problem:- • Before the advent of ERP, organizations were run manually. • If an org. is very small in size, caters (provide) to a niche (role) market and has very limited scope, then it can succeed without ERP. • If proper control mechanisms and procedures are not in place, so operations can get out of control and products and org. can fail. • Solution:- • Org. become large and the products are becoming more and more complex in size, sophistication and technologies used. • This is the era of multi-site, distributed production, where different groups suited in different parts of the world develop the components of a system.