E nterprise R esource P lanning Overview

1. Enterprise Resource PlanningOverview By CA. PankajDeshpande B.Com, FCA, D.I.S.A. (ICA)

2. Enterprise • Any business unit, • A group of people, • Using common resources • To achieve a common goal,

3. Resource

4. Planning • Acquire • Utilize • Dispose off

5. Enterprise Resource Planning • A common system used by all and used for all types of resource planning and utilization.

6. Business Units/Departments Finance / Accounts Human Resource Quality Control Material Management Sales & Distribution Production Logistics Production Planning

7. A small case study Finance H.R. Stores Out of Stock Raw Material Not in Stock Sales Dept. Shop Floor Production Planning Vendor

8. Success Factor • Proper Communication and exchange of data between business units.

9. Two Types of Systems • De-centralized • Centralized

10. De-centralized Systems • Data is maintained by each department separately. • Department does not have access to data of other department.

11. De-centralized system Problems Stores Out of Stock Sales Dept. Loss of Revenue, Loss of Reputation New Vendor

12. De-centralized system Problems Finance H.R. Stores Out of Stock Raw Material Information is stored separately by both departments Sales Dept. Production Floor Raw Material Not in Stock Production Planning Vendor

13. Major Problems • Increase in cost • Increase in delay • Increase in data • Increase in dis-satisfaction

14. Centralized System Finance H.R. Stores Central Database Shop Floor Sales Dept. Production Planning Vendor

15. Benefits ERP System

16. Business Functions • Planning • Materials Management • Production • Sales & Distribution • Finance & Accounting • Human Resource • Research & Development

17. Business Processes • Combination of activities that takes some input and generates an output. • Creates value for customer. • May spread across different functions.

18. Business Process Example

19. Integrated Information System • Sharing of common data.

20. Sharing of Data • Material requisition is sent by Production to Stores Department • Stores department sends the requirement to Purchase Department • Purchase Departments raises a purchase order on approved vendor. • Material is received by Stores Department • Invoice is sent to Accounts Department • Material is sent to Production Department • Payment is made to the vendor by Accounts Department.

21. Sharing of Data • Use of common master data. • E.g. Name of stock items, Name of vendors, etc. • Use of common transaction data. • E.g. Sales figures used by Accounts and Marketing Department shall be from same data.

22. Working of ERP Software

23. ERP & Related Technologies • Business Intelligence • Data Warehousing • Online Analytical Processing • Product Life Cycle Management • Supply Chain Management • Customer Relationship Management

24. Business Intelligence • Decision Making Tool • Includes Skills, Processes, Technologies, Applications, Practices, etc. • Facilitates quicker, better and correct decision making.

25. Management wants to • Identify and exploit areas of strength. • Address areas that are not performing well. • Identify areas of opportunity • Know consequences of decisions (What if) • Reward those who perform well • Educate those who do not perform well • Identify areas of business growth

26. Business Intelligence

27. Data Warehouse

28. Data Warehousing • A system of separating operational and non operational data.

29. Data Warehousing

30. Purpose • Operational Data – Recording of transactions • Non Operational Data – Viewing / Analysis

31. ETL

32. ETL

33. ETL Uses • Data Warehouse • Old Software to New Software • Mergers & acquisitions • Data from third parties

34. Meta Data • Definitions of data elements in the data warehouse/data sources • Transformation rules • Data about data • Used by the end user to find and understand data in data warehouse

35. Meta Data • Data – Books • Meta Data – Numbering system, Arranging System, Titling System

36. Advantages of Data Warehousing • Fast and smooth working with operational data by reducing the load. • Easy reporting and analysis of information. • Facilitate Decision Support System

37. Dis-advantages of Data Warehousing • Cost of maintenance • Latency as compared to operational data

38. Where it is useful ? • Credit Card Analysis • Insurance Fraud Analysis • Phone Call Record Analysis • Logistic Management

39. Data Mining

40. Data Mining • Extracting information from data and converting it into knowledge.

41. Data Mining Example • Mobile Call Rates Decision • Call Duration • Gender of caller • City of caller • Time of call • Age of caller

42. Online Analytical Processing • Approach to quickly answer multi-dimensional analytical queries. • Part of Business Intelligence

43. OLAP Example • What are the top five products sold from these three points to the customer between the age of 15 to 30 ?

44. Probable Problem • In case of web store, age is stored as date of birth. • In case of point of sales – age is stored as a range, i.e. between 15 to 30.

45. Popular OLAP Software • Oracle Express Server • Hyperion Solutions Essbase • Cognos • Business Objects • MicroStrategy

46. Product Life Cycle Management • Process of managing entire lifecycle of a product. • Integrates people, data, processes, business systems.

47. PLCM Phases • Phase 1 : Conceive – • Imagine, Specify, Plan, Innovate • Phase 2 : Design – • Describe, Define, Develop, Test, Analyze, Validate • Phase 3 : Realize – • Manufacture, Make, Build, Procure, Produce, Sell, Deliver • Phase 4 : Service – • Use, Operate, Maintain, Support, Sustain, Phase Out, Retire, Recycle, Dispose.

48. Supply Chain Management • Process of planning, implementing, controlling the operations of supply chain. • Includes movement and storage of raw materials, work in process inventory and finished goods from point of origin to point of consumption. • Integrates supply and demand management within and across companies.

49. Customer Relationship Management • It starts with Customer/Customers • Its about gaining and retaining customer.

50. Types of CRMs