Erp Review - Business Processes & Functions

**Introduction** **What is Erp?** - Enterprise Resource Planning (ERP) is the integrated management of main business processes, often in real-time often mediated by software and technology. This helps organizations automate and manage core business processes for optimal performances....

**Introduction** **What is Erp?** - Enterprise Resource Planning (ERP) is the integrated management of main business processes, often in real-time often mediated by software and technology. This helps organizations automate and manage core business processes for optimal performances. - ERP systems can be local-based or cloud-based. - ERP provides an integrated and continuously updated view of core business processes using common databases maintained by a databases management system. **History And Expansion of ERP** - Integration of Information systems started even before ERPs came into being. This form of integration had limited focus; nevertheless, using information systems for tracking and monitoring business processes were central to the existence in manufacturing organizations. - MRP or Material Requirement Planning was practiced in the 1960s and 1970s by many manufacturing organizations. **MRP-1 (Material Requirement Planning)** MRP-I was a software which automated production planning and inventory control so that all business related manufacturing was completed in a seamless manner. The objectives of this system were as follows: 1. Required Input materials are available for production. 2. Required products are made from input material and delivered to the customers. 3. Maintain an optional level of investors. 4. Schedule manufacturing activities to meet delivery schedules for the customer. 5. Schedule purchasing activities to meet manufacturing activities. **Scope Of MRP-1** Manufacturing Industries, in general, deal with invention management all the time. The day-to-day problems lie with customers and suppliers. Customers want the products to be available in a short time irrespective of the cycle time required for producing them. The organization also needs to control both quantity and quality of materials that they get from the suppliers; and these materials should be available at the lowest possible cost. MRP-I helps to solve problems like; - What items are required? - What is the quantity of each item? - What is the time frame for availability of these items? **Purpose of MRP-I** 1. Materials plan (raw material) 2. Production scheduling 3. Inventory management **Benefits of MRP-I** 1. Efficient Resources Utilization 2. Reduced inventory cost 3. Improved delivery performance 4. Enhanced Visibility **Problems with MRP-I** MRP-I was able to satisfy simple manufacturing business process. In Business processes, where brought-in items and sub assemblies were involved, the situation become complex. In these complex situations, a bill of material needs to be handled effectively to take care of details of required materials, details of components and sub-assemblies to make each product. MRP-I was not able to handle these complex situations effectively. Specific Problem of MRP-I 1. Data Accuracy and Integrity 2. Lead time Variability 3. Location limitations 4. Resistance to change 5. Capacity Constraints **MRP-II** MRP-II came as an improvement of MRP-I in the 1980s. This, as the name suggests, was an extension of MRP-I. Unlike MRP-I, this was not a software alone, but a combination of planning skills, data integrity skills and computing resources. Thus, it gave birth to the concept of managing different departments simultaneously by effectively using resources. **Expanded Scope** 1. Capacity Planning - machine, labors, other resources 2. MPS (master production schedule)- detailed plan. Answer the question, what, when and how many 3. Shop Floor Control- 4. Inventory Management- lead time and safety measures 5. Purchasing and supplier management- 6. Quality Control **Problems of MRP-II (1980s)** 1. Complex Implementation- resource intensive process 2. Cost- SMES 3. Maintenance and Updates- up to date 4. Limited Forecasting- both MRP I and II problem 5. Overemphasis on Automation **Reason why organization implement ERP system** 1. Integration of business process 2. Effiency and productivity 3. Compliance and reporting 4. Supply chain optimization 5. Data security 6. Global Operations **Group 1** **ERPM BUSINESS PROCESS AND FUNCTION** **Business function**- refers to the various activities performed by a company. These activities are divided into several functions or departments. In the most basic classification, they can be divided into core functions and support functions. **Core functions**- refer to income-generating activities, such as the production of final goods or services. These functions are usually the company's main activities. However, if the company considers other activities part of its core function, it may also include them. **Support functions**- refer to activities within the organization that facilitate core functions. They don't produce output to sell or generate revenue; rather, they provide support services to core functions. **Core business functions** The four main business functions of a well-functioning business are: - **Operations (Production):** This function is responsible for transforming raw materials and resources into tangible goods or delivering intangible services. - **Human Resources (HR):** HR acts as the strategic talent management. It focuses on attracting, recruiting, training, and developing a high-performing workforce equipped with the necessary skills and motivation to achieve company objectives. - **Marketing:** The marketing team is responsible for understanding customer needs and demands. They are tasked with promoting the company's offerings and generating sales through targeted strategies and effective communication. - **Finance and Accounting:** This function manages the organization's financial health. This involves strategic resource allocation, meticulous cash flow monitoring, and ensuring financial compliance with all applicable regulations. **Importance of business function** **Functional areas of Operation** - Functional areas are interdependent - Each requires data from the others - Better integration of functional areas leads to improvements in communication, workflow, and success of company - Information system (IS): Computers, people, procedures, and software that store, organize, and deliver information 1. **Marketing And Sales** -- - Marketing and sales have two key roles in your business: attracting more customers and developing the customers you already have. The ultimate goal of both is to bring in more revenue. - Sales refers to activities that lead to convincing a prospect to buy a product or a service from you. A sales rep usually communicates with prospects one-on-one over email, phone, or in person. - Marketing consists of strategies and processes that generate prospects for the sales team and customers for the business as a whole. Marketers help their business reach new people, turn them into high-quality leads and drive demand for products or services. They also communicate with customers to make them aware of the latest products and features, both to promote these updates and to act as guides. 2. **Supply Chain Management** -- - Supply chain management (SCM) is management of the flow of goods, data, and finances related to a product or service, from the procurement of raw materials to the delivery of the product at its final destination. 3. **Accounting and Finance** -- - Accounting and finance refer to the recording and analyzing of business activities. Understanding where your incoming and outcoming cashflow will help you make better decisions moving forward to avoid failure. 4. **Human Resources --** - Human resources (HR) is the division of a business responsible for finding, recruiting, screening, and training job applicants and administering employee benefit programs. The primary goal of HR is to support employee recruitment, retention, engagement, and overall productivity, which can vary between organizations and positions. **BUSINESS FUNCTIONS PER FUNCTIONAL AREA (COMPARE AND CONTRAST)** **Marketing** Business Functions: - **Market Research:** Gathering and analyzing data about consumer needs and market trends. - **Brand Management:** Creating and maintaining a strong brand identity. - **Advertising and Promotion:** Designing and executing campaigns to generate interest in products/services. - **Sales:** Direct interaction with customers to close deals. - **Customer Relationship Management (CRM):** Managing interactions with current and potential customers. Comparison: - Focuses on outward-facing activities to attract and retain customers. - High emphasis on creativity, customer insight, and communication skills. Contrast: - Unlike finance, marketing is less about numbers and more about qualitative insights. - Compared to operations, marketing deals more with perception and consumer behavior than with efficiency. **Operations** Business Functions: - **Production Management:** Overseeing the manufacturing of products or delivery of services. - **Supply Chain Management:** Managing the flow of goods, services, and information across the supply chain. - **Quality Control:** Ensuring that products/services meet certain standards of quality. - **Inventory Management:** Tracking and managing the levels of raw materials, work-in-progress, and finished goods. - **Process Improvement:** Identifying and implementing ways to enhance operational efficiency. Comparison: - Focuses on internal efficiency and effectiveness. - Strong emphasis on process, logistics, and continuous improvement. Contrast: - Unlike marketing, operations deal with internal processes and tangible products rather than customer perception. - Compared to HR, operations are less concerned with people management and more with material and process management. **Finance** Business Functions: - **Financial Planning and Analysis (FP&A):** Budgeting, forecasting, and analyzing financial performance. - **Accounting:** Recording, classifying, and summarizing financial transactions. - **Treasury Management:** Managing the organization's cash flow, investments, and capital structure. - **Risk Management:** Identifying and mitigating financial risks. - **Tax Management:** Ensuring compliance with tax laws and optimizing tax obligations. Comparison: - Focuses on managing the organization\'s financial resources. - High reliance on quantitative analysis, financial modeling, and compliance. Contrast: - Unlike marketing and HR, finance is more data-driven and focused on monetary value. - Compared to operations, finance is less about process efficiency and more about financial health and risk management. **Human Resources (HR)** Business Functions: - **Recruitment and Staffing:** Attracting, hiring, and onboarding new employees. - **Training and Development:** Providing education and growth opportunities for employees. - **Performance Management:** Monitoring and evaluating employee performance. - **Compensation and Benefits:** Managing employee pay, benefits, and rewards. - **Employee Relations:** Managing the relationship between the organization and its employees, including conflict resolution. Comparison: - Focuses on managing the organization\'s human capital. - Emphasizes people skills, organizational behavior, and legal compliance. Contrast: - Unlike operations and finance, HR is less focused on tangible products or financials and more on employee well-being and development. - Compared to marketing, HR is inward-focused, concentrating on the internal workforce rather than external customers. **Information Technology (IT)** Business Functions: - **Infrastructure Management:** Maintaining the hardware and software that supports the organization's operations. - **Cybersecurity:** Protecting the organization\'s digital assets from threats. - **Data Management:** Storing, managing, and securing the organization's data. - **Application Development:** Creating and maintaining software applications that support business processes. - **IT Support:** Providing technical support to employees and ensuring the smooth operation of IT systems. Comparison: - Focuses on supporting and enhancing the organization's technology capabilities. - High emphasis on technical skills, problem-solving, and innovation. Contrast: - Unlike HR, IT is more focused on systems and data than on people. - Compared to finance, IT is less about managing resources and more about enabling business processes through technology. **BUSINESS PROCESS** At its core, a business process is a repeatable collection of steps a company uses to accomplish a goal. Good processes are crucial to making progress toward your goals and improving your business's operations. It is a collection of activities that takes one or more inputs and creates an output that is of value to the customer. Input: Technical support by M/S Process: 24-hour help line available Output: Customer's technical query is resolved The purpose of a business process is to help your company reach a specific target. It view promotes efficiency and competitiveness. It require information sharing between functional areas. A good process meets three essential criteria: - **Repeatability:** All processes must be designed to be repeated. A process that you don't intend to repeat is an action plan instead of a true process. It's the difference between routine purchases and buying a new facility. - **Transparency:** Processes also need to be trackable, allowing you to monitor them for success. A good process has built-in data-tracking steps, allowing you to compare performance and efficacy over time. - **Agility:** Processes that are set in stone don't hold up in the real world. A process should be adaptable to multiple situations so small changes to the work environment don't cause delays. Furthermore, a good process should be easy to update in case of more significant or permanent adjustments. **Characteristics of Business Process** 1. **Structured Sequence-** Each step is dependent on the successful completion of the previous one. 2. **Objective-Driven-** it can be a short or long term goal that is initiated to be achieved 3. **Cross- Functional-** there is coordination between other department. 4. **Repetitve-** performed reqularly as part of a routine such as invoice processing, quality customer and customer support. 5. **Measurable-** each BP can be measured through KPIs. **THE IMPORTANCE OF BUSINESS PROCESSES** Business processes help keep your company on task, prevent errors, and increase the speed with which your staff can accomplish their work. Without defined processes, there's no way to guarantee that anyone does a task the same way twice. It facilitates communication between customers, suppliers and stakeholders. Improved business process boost productivity by eliminating redundancies and unnecessary tasks. **Four Types of Business Process** 1. **OPERATIONAL PROCESSES** Operational processes are the most fundamental parts of a business because they're directly responsible for creating and delivering products and services. - Product Development - The product development process involves creating and improving your offerings over time. This process looks different at every business, but the basic structure is the same: - A market opportunity is identified that the company can address. - The development team brainstorms solutions to the problem. - A few promising solutions are chosen for development. - The demos are tested to see how they work. - One version is chosen for release. - The released version's success is monitored. - This process repeats whenever the company wants to improve or update its current products or release something entirely new. - Manufacturing - Once your offerings have been developed, it's time to produce them. The manufacturing process is usually one of the most obvious and well-designed business processes. It typically involves steps such as: - Sourcing materials - Transporting materials to the manufacturing location - Following a predetermined order of steps to transform the materials into a product - Packing the product for delivery - Bringing the packed product to the pickup location - If you have any experience with Lean methodology (a management mentality focusing on low waste and high efficiency), you've seen how a specific focus on manufacturing processes can improve a company's operations. - Delivery - The delivery process may or may not be simple, depending on your business's structure. It may be nothing more than bringing products to an on-site showroom, or it may require navigating international shipping laws. This process will look different for product-based and service-based companies. - For instance, a product may be shipped to a wholesaler, to a retail store or directly to the consumer, and a service may be performed on your premises or at the customer's location. Developing a well-thought-out delivery process can reduce wasted time, money, and effort regardless of your specific business model. 2. **SALES PROCESSES** Businesses need to sell their products, or they won't succeed; the sales processes are the procedures businesses use to make sure they bring in revenue. - Sales - The sales process is the collection of steps a company takes to discover a lead and convert them into a loyal customer. The overall sales process includes several subprocesses, such as: - Lead generation - Lead qualification - Contacting leads - Negotiation - Closing the deal - Nurturing current customers - Each of these subprocesses should be structured to support your business model. Together, they help you build toward generating more sales overall. - Marketing - Marketing may be considered part of the lead generation sales subprocess, but it's significant enough to warrant its own department in many businesses. In the marketing business process, your goal is to build trust in your brand and brand loyalty. Marketing may also involve subprocesses focusing on different types of advertising, such as social media, search engines, and physical ads. - Customer Service - The customer service process is part of the nurturing sales subprocess. Providing your current customers with excellent service encourages them to buy from you again in the future. The customer service process may involve learning what problems customers often face, trying the most common solutions, developing new solutions for unusual situations, and following up to make sure everything works. 3. **SUPPORTING PROCESSES** Supporting processes include the business procedures and departments that are critical to the operation of a business but aren't directly connected to sales or product delivery. - Accounting - Managing your organization's current assets and debts is fundamental to remaining solvent. Furthermore, accounting is essential for maintaining compliance with the Internal Revenue Service and other government regulations. The accounting process looks similar for many businesses, requiring in-depth record keeping, careful monitoring of bank accounts, loans, debts and assets, and staying up to date on legal requirements. - Maintenance - Your maintenance and janitorial teams are critical to your business despite not directly contributing to sales. Instead, they perform essential upkeep that prevents future expenses. The vital tasks they perform keep your equipment and office from breaking down. Maintenance includes: - Routine cleaning for your office - Regular upkeep on manufacturing equipment 4. **MANAGEMENT PROCESSES** Management processes are the actions necessary to keep everything else running smoothly. - Management - There may be dozens of individual teams and departments in larger businesses. These teams can lose their connection with one another and the company's ultimate goals if they aren't being managed carefully. The management process is intended to keep larger groups of people on track. An example of the management process may involve: - Scheduling regular meetings with individual teams. - Scheduling regular meetings with department heads. - Monitoring results from different employees. - Assigning projects and work to appropriate teams. - Rewarding strong performers and working with weak employees to improve their results. - The specific order and frequency of these steps can vary depending on your company's management style. However, building a consistent management process helps your staff know what to expect and enables you to develop a coherent company culture. - Finance - The process of financing is different from that of accounting. Whereas accounting is responsible for tracking the assets and debts a company has, financing is the process of negotiating and managing additional funds and assets. The finance process involves applying for funding, negotiating terms and conditions, and following up with those terms to remain in good standing. This keeps the organization's finances in check and ensures every department has the funding necessary to do its work. - Onboarding - Onboarding new staff is essential if you want your employees to perform at their best from the start. The onboarding process includes steps such as: - Training employees on new technology. - Educating them on safety and security procedures. - Getting them onto your payroll and into other company systems. - Onboarding can be overlooked in smaller companies and departments, but it's critical for getting new staff integrated into your business. Building a better onboarding process saves time and money by reducing mistakes and keeping your entire team on the same page. Note: - Functional Area information systems should be integrated, so shared data are accurate and readily available. - ERP software provides this capability by using a single common database. Group 2 Overview of ERP **What is ERP?** - Enterprise resource planning (ERP) refers to a type of software that organizations use to manage day-to-day business activities such as accounting, procurement, project management, risk management and compliance, and supply chain operations. - Enterprise resource planning (ERP) systems refer to suites of application systems comprising multiple integrated software modules that help organizations to manage their resources. - ERP enables seamless integration of business processes and information sharing across departmental boundaries within a company, and even with its business partners. - ERP is the lifeblood of daily business operations for many companies. **Overview of ERP** The main purpose of ERP is to integrate and streamline various business functions and processes within an organization. It enables the efficient management of resources, such as finance, human resources, supply chain, and customer relationship, providing a centralized system for data storage, analysis, and decision-making. **BENEFITS OF ERP** - Higher productivity: Streamline and automate your core business processes to help everyone in your organization do more with fewer resources. - Deeper insights: Eliminate information silos, gain a single source of truth, and get fast answers to mission-critical business questions. - Accelerated reporting: Fast-track business and financial reporting and easily share results. Act on insights and improve performance in real time. - Lower risk: Maximize business visibility and control, ensure compliance with regulatory requirements, and predict and prevent risk. - Simpler IT: By using integrated ERP applications that share a database, you can simplify IT and give everyone an easier way to work. - Improved agility: With efficient operations and ready access to real-time data, you can quickly identify and react to new opportunities. **Types of ERP System: Tier I, II and III with examples** - **Tier I Enterprise Resource Planning Systems** - A Tier I ERP system is the technological pinnacle of ERP solutions. Typically used by the largest and most complex conglomerates, a tier I solution is aimed at organisations with at least 1000 employees and over half a billion dollars in revenue per annum. - A tier I ERP system would be customized for the organisation\'s precise needs and would cover everything from accounting to programme management. **Examples:** - Microsoft Dynamics - JD Edwards - Orion - Texada - SAP S/4HANA - Infor CloudSuite Industrial - Oracle ERP Cloud **Advantages** - Highly customisable and robust. It can be adjusted to fit your organisation\'s precise needs, reducing teething problems. - Is supported by millions of dollars\' worth of R&D, meaning you are using the latest technologies. **Disadvantages** - The most expensive form of ERP software, at minimum costs \$1,000,000 to implement. - Its implementation cycle is slow moving, and can expect anywhere upwards of a year for an implementation. - Tier one ERP has the highest risk of implementation failure because of its complexity and cost. Unlike other ERP solutions, all aspects of the ERP solution must be ready to go live. A step-by-step modular approach is infeasible. - **Tier II Enterprise Resource Planning Systems** - For many organizations, especially medium sized and rapidly growing businesses, tier 2 solutions are in the goldilocks zone. They offer some of the features of a tier 1 solution but at a lower price and are quite often premade software solutions, reducing the need for in house IT specialists. - Where Tier 2 ERP solutions are attractive is they are often modular, allowing for an organisation to start off with a more basic solution and to add additional capabilities as needed. You can expect an implementation to cost anywhere upward of \$10,000, depending on the functions needed within the ERP system, your organisation's size and its complexity. **Examples:** - Oracle NetSuite - SAP business - SAGE - Epicor ERP - Acumatica - Microsoft Dynamics 365 Finance and Operations **Advantages** - A full implementation, depending on organisation complexity, can take as little as two months. - As the software is often premade, it is a low-risk implementation. - Many tier 2 ERP solutions sit within the cloud, meaning IT support is managed by a third party. An organisation using a tier 2 solution wouldn't need dedicated IT professionals to manage it. - Tier 2 ERP software is quite often modular and easily configurable, making it suited for organisations which are rapidly growing or are expanding their capabilities. **Disadvantages** - Doesn't offer the customization a Tier 1 solution has. - For multinational manufacturing companies, a tier 2 system might be insufficient for the complexity of the organization. - In house accountants or finance teams are needed to fully harness the financial aspects of the system. - **Tier III Enterprise Resource Planning Systems** - Tier 3 ERP solutions are often the cheapest and easiest to implement ERP solutions. Quite often they are the simplest to run, meaning a qualified accountant or finance professional isn't needed so a junior bookkeeper or business owner could manage the entire system. - Tier 3 solutions can also be made for a niche market or subvertical, which can fit your operations nicely. They can cost anywhere upwards of a few hundred dollars, although specialised tier 3 solutions are considerably more. **Examples:** - QuickBooks - Aptean - Odoo **Advantages** - Fast implementation time. - Quite often the lowest cost ERP solution. - Doesn't require as much technical expertise as tier 1 or two. - As a tier 3 system is often quite narrow, the risk of implementation is low. - Could specifically cater for the challenges you face. **Disadvantages** - The functions of a targeted tier 3 system might fit a particular niche well, eg telecoms manufacturing, but often struggle outside of it. - Quite often, these tier 3 systems do not have the security systems of a tier 1 or 2 solution. - As Tier 3 solutions can be quite specialised, finding the right consultants to adapt a specific system can be difficult. - They can often struggle with scale. **What are ERP Modules?** - ERP system modules are a collection of groups of different features that are designed to help with the business administration process. - ERP system modules perform many functions that support various aspects of the company. It will automate tasks connected to business resources to save processing time and optimize business management. **The basic functions of each of the modules are as follows:** - **Sales and Distribution (SD) module** records sales orders and scheduled deliveries. Information about the customer (pricing, address and shipping instructions, billing details, and so on) is maintained and accessed from this module. - **Materials Management (MM) module** manages the acquisition of raw materials from suppliers (purchasing) and the subsequent handling of raw materials inventory, from storage to work-in-progress goods to shipping of finished goods to the customer. - **Production Planning (PP) module** maintains production information. Here production is planned and scheduled, and actual production activities are recorded. - **Quality Management (QM) module** plans and records quality control activities, such as product inspections and material certifications. - **Plant Maintenance (PM) module** manages maintenance resources and planning for preventive maintenance of plant machinery in order to minimize equipment breakdowns. - **Asset Management (AM) module** helps the company manage fixed-asset purchases (plant and machinery) and related depreciation. - **Human Resources (HR) module** facilitates employee recruiting, hiring, and training. This module also includes payroll and benefits. - **Project System (PS) module** facilitates the planning for and control over new research and development (R&D), construction, and marketing projects. - **Financial Accounting (FI) module** records transactions in the general ledger accounts. This module generates financial statements for external reporting purposes. - **Controlling (CO) module** serves internal management purposes, assigning manufacturing costs to products and to cost centers so the profitability of the company's activities can be analyzed. The CO module supports managerial decision making. - **Workflow (WF) module** is not a module that automates a specific business function. Rather, it is a set of tools that can be used to automate any of the activities in SAP ERP. It can perform task-flow analysis and prompt employees (by email) if they need to take action. The Workflow module works well for business processes that are not daily activities but that occur frequently enough to be worth the effort to implement theworkflow module---such as preparing customer invoices. **ERP System Modules** 1. **Finance and Accounting** - The finance and accounting module is the most important ERP module because it allows businesses to understand their current financial state and future outlook. Key features of this module include tracking accounts payable (AP) and accounts receivable (AR) and managing the general ledger. It also creates and stores crucial financial documents like balance sheets, payment receipts and tax statements. - The financial management module can automate tasks related to billing, vendor payments, cash management and account reconciliation, helping the accounting department close the books in a timely manner and comply with current revenue recognition standards. It also has the data that financial planning and analysis employees need to prepare key reports, including profit and loss (P&L) statements and board reports, and run scenario plans. 2. **Human Capital Management** - A human resource management (HRM) or human capital management (HCM) module usually encompasses all the features of a workforce management application and offers additional capabilities. HRM could be viewed as CRM for employees. This popular module has detailed records on all employees and stores documents like performance reviews, job descriptions and offer letters. It tracks not only hours worked but also paid time off (PTO)/sick days and benefits information. - Since the HRM module stores a vast amount of information on every employee across the organization, it eliminates a lot of duplicate or inaccurate data that many organizations store in various spreadsheets. 3. **Procurement** - The procurement module, also known as the purchasing module, helps an organization secure the materials or products it needs to manufacture and/or sell goods. Companies can keep a list of approved vendors in this module and tie those suppliers to certain items, helping with supplier relationship management. The module can automate requests for a quote, then track and analyze the quotes that come in. - Once a company accepts a quote, the procurement module helps the purchasing department prepare and send out purchase orders. It can then track that purchase order as the seller turns it into a sales order and ships the goods, automatically updating inventory levels once the order arrives. 4. **Manufacturing** - The manufacturing module is a key planning and execution component of ERP software. It helps companies simplify complex manufacturing processes and ensure production is in line with demand. This module typically includes functionality for material requirements planning (MRP), production scheduling, manufacturing execution, quality management, and more. 5. **Order Management** - An order management module tracks orders from receipt to delivery. This piece of the ERP feeds all orders to the warehouse, distribution center or retail store after customers place them and tracks their status as they're prepared, fulfilled and shipped to the customer. The order management module prevents orders from being lost and boosts on-time delivery rates to keep customers happy and cut unnecessary expenses for expedited shipping. - More advanced order management applications can help a company determine the most cost-effective option for fulfilling an order---a store vs. a warehouse vs. a third-party fulfillment partner, for example---based on available inventory and the buyer's location. 6. **Inventory Management** - It allows manufacturers to gain real-time inventory information and manage all aspects of the business on one platform. This includes finance, planning, logistics and operations. 7. **Warehouse Management** - It manages high-volume warehouse operations and guides employees throughout the operation from put away to picking, packing, and shipping. It is a crucial module for manufacturing organizations. 8. **Supply Chain Management** - It tracks every step in the supply chain process. It ensures the availability of the right inventory, in the right place, and at the right time. This module also manages man, materials and refunded products or replacement orders. 9. **Customer Relationship Management** - It helps manufacturers manage the customer lifecycle, from initial contact to sales, production and post-sale maintenance and support services. You can find information about customer and prospects their communication history, and purchase history. 10. **E-Commerce** - It integrated with ERP software provides a feature-rich Ecommerce platform for B2B and B2C manufacturers. It ensures a shared database of payment, order and inventory information. - It ensures automation, real-time information, data consistency, and eliminates data redundancy. It saves time and eliminates the possibility of manual data entry errors. **Choose the right ERP software for your Business.** - Choosing the right ERP software for your business is not a cakewalk. It needs a high degree of dedication, patience and perseverance to select one ERP system among the many solutions available. ERP software plays a vital role in overcoming business challenges, reducing waste, and ensuring operational efficiency. **Group 3** **ERP Cycle** - Understanding the lifecycle of an ERP system is crucial for businesses, as it encompasses more than just the implementation of technology. It is a journey that begins with the identification of business needs and extends through selection, implementation, integration, and maintenance, eventually leading to upgradation or replacement. - Each phase of this lifecycle carries its own set of challenges and opportunities, and the manner in which a business navigates these stages can significantly impact its overall efficiency, adaptability, and competitiveness. **ERP Project Stages** - Project Planning Stage - Business Needs: Identify the specific business needs that the ERP system will address. - Scope Definition: Define the scope of the ERP implementation, including the modules and processes to be covered. - To-Be Process Definition: Define the desired future state of business processes after ERP implementation. - As-Is Process Documentation: Document the current state of business processes. - Project Team Selection: Assemble a team with the necessary skills and experience to manage the ERP implementation. - Cost Estimation: Estimate the total cost of the ERP project, including software, hardware, implementation services, and training. At the outset, the customer decides to implement ERP so that specific business benefits can be obtained. These business benefits will freeze the scope of implementation. The scoping essentially implies that at this stage, the departments and functions that will be covered through ERP will be selected by the management. This selection is done based on the prioritization of the business processes which are deemed to be critical to business success. The process that needs to be followed to achieve the success is defined at this point of time; this new process is known as the 'to be' process. Simultaneously, all relevant work related to the documentation of the existing processes is carried out. This is known as 'as is' process. The difference between 'to be' and 'as is' processes is known as the 'GAP' and this gap helps to estimate the cost of the project. - **Project Execution Stage** - Requirement Elicitation: Gather detailed requirements from all stakeholders to ensure the ERP system meets their needs. - Requirement Validation: Validate the gathered requirements to ensure they are accurate, complete, and consistent. - Vendor Selection: Select the appropriate ERP vendor based on the requirements and budget. - ERP Solution Finalization: Finalize the ERP solution, including the modules, configuration, and customization. - Implementation Strategy: Develop a detailed implementation plan, including timelines, resources, and communication strategies. - Change Management Strategy: Plan for managing the change associated with the ERP implementation, including training, communication, and support. Once the estimation has been approved by the top management, requirement gathering and validation is done by vendors. The vendors, based on the 'to be' Process, interview and elicit requirements from the end users and subject matter experts. Based on these requirements, ERP solutions are finalized which will provide the required business benefits to the organization. A detailed technical planning is carried out which includes database migration, implementation roadmap and customization efforts. The customization is needed to align the chosen ERP solution to the 'to be' process. - **Go Live Stage** - End User Training: Train end users on how to use the new ERP system. - System Testing: Thoroughly test the ERP system to ensure it functions correctly and meets the requirements. - Data Migration: Migrate data from existing systems to the new ERP system. - Go Live: Launch the new ERP system and begin using it for day-to-day operations. To make the adoption of the new solution a smooth affair, training for end users is organized. Also, feedback from the end users are taken at this stage to further fine-tune the customized ERP solution. After the training sessions are completed, the end users are involved in testing the solution which helps to iron out any bugs, if detected, in the solution. Once all technical implementation has been done (including data migration), the project is declared as 'live' meaning the ERP has been implemented. **ERP Life Cycle** An ERP implementation life cycle is the time it takes to deploy ERP software within your company. The implementation life cycle includes multiple steps and processes, including discovery and planning, design, development, support, deployment and training. The implementation timeline can vary depending on the complexity of your business. But the lifecycle usually takes six to 12 months. These are the stages of ERP project goes through a cycle of life of the ERP implementation. It is important to complete these steps with attention to detail in order to run the ERP project successfully. After the application is done, maintenance is also important and the system must be regular updates to keep up with changes in technology. **ERP 8 Implementation Life Cycle** 1. **Selection of packages:** This is the first step of the life cycle where the perfect ERP package has to be selected in agreement that fits your business environment. In the selection process, ERP packages that are not suitable they are eliminated. The package has to be carefully selected and testified. The right choice will determine the success of the ERP implementation. A proper study and research should be done before the selection. 2. **Project Planning:** Proper planning of the implementation process of the project shall be made and designed. Resources should be allocated and the team members have to be selected. 3. **Analysis GAP:** GAP analysis is an important step in the life cycle of ERP implementation step. GAP analysis is performed to analyze the current situation of the organization and its future position as needed. 4. **Re-engineering:** Re-engineering is needed to make the implementation process involves many changes and alterations. The job responsibilities of employees and the number of employees can be altered as well. This step is done to make the business process more efficient. 5. **Training:** Training of employees starts with the implementation process in the life cycle of the ERP implementation. Employees of getting used to the new system in order to run the system smoothly later. Get the time at this stage to learn the software and its features and become self-sufficient in order to be able to operate later, when consultants and suppliers to end and go. 6. **Testing:** Testing is an important step and is carried out so that the errors can be found and resolved before the actual application process. 7. **Application:** This step is performed when data conversion is done and the work of the database is over. After setup and testing is completed, the actual implementation is done. Once the new system is implemented, the old system is removed. The end user is trained on how to use the new system. 8. **Maintenance:** Maintenance is carried out in the post-implementation life cycle of ERP implementation phase. The problems are identified and employees learn how to deal with it. Maintenance is also an important stage in the life cycle. **How ERP Improves Productivity** - Productivity in an organization can be improved through many factors, and different initiatives are carried out to improve the productivity level. - ERP improves the productivity in two ways: 1. by bringing in best practice to its modules thereby increasing efficiency of the existing processes 2. helping to retrieve information in a timely manner for effective decision making. **How ERP Improves Productivity using Automation** - **Streamlined Processes:** ERP improves the productivity by bringing in best practices to its modules, increasing the efficiency of existing processes. Automation helps to generate invoices, purchase orders, etc., automatically, saving time and allowing faster access to information for decision-making. This provides a competitive edge to organizations that automate their business processes. - **Real-Time Data Access:** Automation in ERP helps retrieve information in a timely manner for effective decision-making. This allows for faster access to information, making decisions at a quicker rate and providing opportunities to address changing market and environmental conditions. For example, online banking systems introduced by Dena Bank and ICICI Bank revolutionized retail banking through real-time access to financial information. - **Automated Tasks:** Automation in ERP enables tasks that were previously done manually to be generated automatically, saving time and increasing productivity. For instance, ordering products online from websites like Amazon.com and Dell.com eliminates the need to physically visit stores, showcasing the efficiency and convenience of automated processes. - **Improved Collaboration:** Automation through technology in ERP allows more people to access and share information, enabling better collaboration within organizations. By streamlining processes and providing real-time data access, automation facilitates improved collaboration among team members. For example, HLL (now ULL) used process automation to achieve a zero-stock production system, enhancing collaboration among different departments for efficient production. Note: SAP S/4 HANA - Coca Cola - Nike - Nestle - Procter and Gamble (P&G) - Adidas (apparel) Oracle ERP Cloud - Amazon - Starbucks