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Enterprise Resource Planning

Discover the difference between CRM and ERP, where ERP serves as the back-end system integrating production planning, logistics, financials, and HR, enhancing efficiency and reducing costs. Explore the evolution of ERP from MRP to customer-focused integration and inter-enterprise applications.

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Enterprise Resource Planning

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  1. Enterprise Resource Planning Building the e-business Backbone:

  2. What is the difference between CRM and ERP? • CRM is the “front end” of a business, i.e., the part of the business that deals with customers and collecting revenue • ERP is the “back-end” of the business, the part of the business that deals with production and controlling costs

  3. What is ERP? Short for enterprise resource planning, a business management system that integrates all facets of the business, including production planning, integrated logistics, accounting and financials, human resources and sales distribution.

  4. Production Planning • Its purpose is to minimize production time and costs, efficiently organize the use of resources and maximize efficiency in the workplace.

  5. Logistics • Logistics is the management of the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers

  6. Accounting and Financials • The systematic recording, reporting, and analysis of financial transactions of a business. • Sample reports include: • Income statements • Profit and loss statements • Cash flow statements • Assets/liabilities

  7. Human Resources • The objective of human resources is to maximize the return on investment from the organization's human capital and minimize financial risk.

  8. Sales Distribution • Sales distribution is all about how we can get the finished product delivered on time to the customer.

  9. Evolution of ERP - MRP • Stage 1 – Manufacturing Integration (MRP) • 1970s to 1980s • MRP = Manufacturing Requirements Planning • These applications focused on organizing materials required for production • There was little or no integration with other systems

  10. Evolution of ERP –Enterprise Integration • Stage 2 – Enterprise Integration (ERP) • Replacing separate systems that use old technology with a single system • Gaining more access to back end data through integrated reporting • Managing production in a global environment

  11. Evolution of ERP – Customer Focus • Stage 3 - Customer Focused Integration • As customer service became more critical, businesses adapted their ERP applications to include front-office functions like sales and marketing

  12. Evolution of ERP – Inter-enterprise Applications • Stage 4 – Inter-enterprise Applications • Most organizations rely on other businesses to supply at least part of their raw materials • ERP applications that can span the supply chain will help reduce costs and improve customer service

  13. ERP Screen Example 1

  14. ERP Screen Example 2

  15. Journal Question • Choose an ERP function (Production Planning, HR, Logistics, Sales Distribution, Accounting) and discuss how this function is related to “front end” business applications. Provide examples.

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