Managing Enterprise Resource Planning (ERP)
- Enabled Change for Future Perspective


By

Ms.V.M. Anitha Rajathi
B.E, MBA, (Ph.D)
Asst. Professor and Research Scholar
Department of Management Studies
Anna University of Technology
Trichirapalli-620024

Mr. M. Kathiravan
MBA, PGDIB, PGDERP, (Ph.D)
Lecturer and Research Scholar
Department of Management Studies
M.I.E.T Engineering College
Gundur, Trichirapalli-620007

Mr. S. Dani Jacob Prakash
II Year Student
Department of Management Studies
M.I.E.T Engineering College
Gundur, Trichirapalli-620007
 


ABSTRACT

The Enterprise Resource Planning (ERP) based information system is increasingly becoming a necessary infrastructure to run any business enterprise, small or big, manufacturing or service. ERP is an integrated packaged software solution covering business and functions of diverse industries need. Once configured it allows information to enter at a single point in the process, and also updates a single, shared data base for all functions that directly or indirectly depend on this information.

ERP system promises benefits that range from increased efficiency to transformation of quality, productivity and profitability.  However, its implementation poses some unexpected organizational challenges and changes that can be structural as well as cultural in nature.  ERP not only helps to establish world class best business practices and bring transparency in the organization, but demands for empowerment and flexibility in decision-making process too. These papers discuss the recent advancements in enterprise systems and more over provide the key for the success for the Indian business globally.

Key words: ERP, Integration, Business process Re-engineering

INTRODUCTION

Enterprise Resource Planning is defined as an integrated suit of application software modules, providing operational, managerial and strategic information for an enterprise, in order to productivity, quality and competitiveness.  ERP enables an enterprise to balance its resources such as manpower, materials, money, methods and marketing to stay competitiveness. An ERP solution includes functions all the functions like human resources, corporate finance, production planning and control, materials management, plant maintenance, services management, sales and distribution. It is a business tool rather than a system tool as it establishes business process engineering as well as re-engineering and can bring radical changes in an organization. In this highly new inevitable competitive environment, government and business associations have realized one thing at the right time that they cannot survive without ERP globally.

ERP ENABLED BUSINESS TRANSFORMATION

Business enterprises in India are in the process of a major transformation due to the globalization and the deregulation of Indian economy, coupled with fundamental changes in business models due to the emergence of   information technology based business practices.   Most of these enterprises in developing countries, such as India, are in the process of implementing enterprise resource planning systems in alignment with organizational transformation and process of re-engineering initiatives.  The most promising argument is that, to thrive in the e-commerce world companies need to transform their internal business processes with the deployment of ERP systems.  Hence, ERP is considered to be the backbone of e-business. 

ENTERPRISE POTENTIALS OF ERP

ERP happens to be the first large-scale corporate IT application which is being adopted by large number of firms forcing them to change their business processes, structures and even business strategies.  Following ERP potentials can be exploited by a firm while adopting ERP systems into practice:

o Enterprise Integration
o Business Process Re-engineering
o Standardizing systems and procedures across the enterprise
o Transparency
o Business networking
o Best global management practices
o Global information systems infrastructure

ERP IMPROVES COMPANY'S BUSINESS PERFORMANCE

ERP automates the tasks involved in performing a business process such as order fulfillment, which involves taking an order from a customer, shipping it and billing for it.  With ERP, when a customer service representative takes an order from a customer, he or she has all the information necessary to complete the order.  Everyone else in the company sees the same computer screen and has access to the single database that holds the customer's new order.  When one department finishes with the order, it is automatically routed via the ERP system to the next department.  To find out where the order is at any point, one need only log into the ERP system and track it down.  The order process moves like a bolt of lightening through the organization, and customers get their orders faster and with fewer errors than before.  ERP can apply that same magic to the other major business processes, such as employee benefits or financial reporting.

We can summarize the entire gamut of ERP activities as follows:

o ERP facilitates a company-wide integrated Information Systems covering functional areas such as manufacturing, sales and distribution, accounts, payables, receivables, inventory, human resources, etc.

o ERP integrates and automates most business processes and shares information enterprise-side in real-time, thereby improving customer service and the corporate image.

o ERP provides complete integration of the system not only across departments but also across companies under the same management.

o ERP bridges information gaps across a company and focuses on key issues such as productivity enhancement, customer service, cash management, inventory, quality control, prompt delivery, etc.

o ERP is the solution for better project management.

o ERP provides business intelligence tools like decision support systems, executive information system, reporting, data-mining, early-warning systems, enabling people to make better decisions and improve business processes.

o ERP not only addresses the current requirements of the company but also provides an opportunity for improvement and refinement in the business processes on a continuous basis.

ERP MARKET HAS GROWN AND WILL CONTINUE TO GROW IN FUTURE.

ERP had its genesis in manufacturing; users form a range of other industry sectors are taking advantage of ERP benefits, resulting in an expected compounded annual growth rate of 4.8% over the next five years. 

Historically and traditionally, ERP was exclusive to manufacturing, going back to its roots in MRP (Manufacturing Resource Planning).  For the past decade, major portions of ERP solutions, most notably financials and human resources and more recently, supply chain management applications, have found their way into sectors like government, banking/finance, health, retail, distribution and education/administration under the ERP umbrella.  These sectors are becoming increasingly more acceptable to seeking relief from ERP solutions and in countries like India and China, ERP is now being sold into the real estate and construction markets.  While consolidation continues in this segment, the market continues to grow in spite of itself.  As many industry leaders attempt to encroach on SAP's dominant market share through aggressive acquisition strategies, they face challenges of the post-acquisition phase such as defining a forward strategy for integrating various products and the installed base.

There has always been a need for integrated solutions, especially when talking about an integrated enterprise from the plant floor up to the executive offices.  Integration has been difficult, but Service-oriented Architecture (SOA) provides value to the enterprise by freeing key pieces of business functionally from individual systems and making them available for integration with other applications.  Most ERP vendors are incorporating the other enterprise applications-Customer Relationship Management (CRM), Enterprise Asset Management (EAM), Product Lifecycle Management (PLM),

Supply Chain Management (SCM), and Supplier Relationship Management (SRM) and offering them under the ERP umbrella.

Most ERP vendors are adding more and more products aimed at improving the supply chain and these improvements are fuelling the growth of the ERP market.  Another factor that is improving this growth is the expansion of the market.  Now ERP packages that suit the needs of organizations of all sizes are available.  These factors will sustain the growth of the ERP market in the coming years.

ERP CONNECTING WITH BEST PEOPLE AND TALENT IN HUMAN RESOURCES 

SAP ERP Human Capital Management (SAP ERP HCM) is a comprehensive, integrated human resources management solution that delivers unmatched global capability. SAP ERP HCM gives organizations in all industries worldwide the tools needed to manage their most important asset: people. The solution helps executives, human resources (HR) professionals, and line-of-business leaders to forecast, plan, and hire the best talent, as well as cultivate the skills of and train their workforce and increases efficiency and supports compliance with changing global and local regulations.

CONCLUSION

ERP trends reflect positive signals for the ERP vendors and companies availing their service. It is important to remember the fact that both the vendor and the company will be able to make use of any advantage (including the modern facilities) only through proper coordination, teamwork and nurturing a cordial atmosphere. The optimal planning and design of the IT infrastructure is one of the keys to the successful implementation of the ERP system without bottlenecks and to cater to this, an Organisation-wide Integrated Information System is required to be envisioned, planned and developed in the form of a detailed IT Infrastructure strategy.  Careful planning and realistic estimates are key constituents of the success of ERP systems.  ERP act as a solution to run the business globally and profitably.

References:

o Enterprise Resource Planning-Concepts and Practice, 2nd edition, Vinod Kumar Garg and N.K. Venkitakrishnan, Prentice Hall of India Private Limited, New Delhi

o Enterprise Resource Planning, 1st edition,   Mary Sumner, Pearson Education

o Enterprise Resource Planning, Ashim Raj Singla

o Text Book of Enterprise Resource Planning, 1st edition, Mahadeo Jaiswal, Macmillan India Press, Chennai
 


Ms.V.M. Anitha Rajathi
B.E, MBA, (Ph.D)
Asst. Professor and Research Scholar
Department of Management Studies
Anna University of Technology
Trichirapalli-620024

Mr. M. Kathiravan
MBA, PGDIB, PGDERP, (Ph.D)
Lecturer and Research Scholar
Department of Management Studies
M.I.E.T Engineering College
Gundur, Trichirapalli-620007

Mr. S. Dani Jacob Prakash
II Year Student
Department of Management Studies
M.I.E.T Engineering College
Gundur, Trichirapalli-620007
 

Source: E-mail November 5, 2011

          

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