Enterprise Resource Planning

Enterprise Resource Planning

Yigit GUNAYDINIndustrial Engineering Department,

Dokuz Eylul University, Turkey

•Enterprise Resource Planning is a software solution integrating various functional spheres in an organization.

•ERP is the tool for an integrated information system to stay competitive and customer-oriented for all organizations.

The smart organizations today could anticipate and exceed customer expectations that are evaluated on the basis of quality, time, service, availability and efficiency. The one tool that innovative and progressive organizations have come to increasingly depend on in this endeavor is Enterprise Resource Planning (ERP) solutions.

OBJECTIVES OF ERP

•Provide support for all variations of best business practices

•Enable implementation of these practices with a view towards enhancing productivity

•Empower the customer to modify the implemented business processes to suit their needs

IMPLEMENTATION• ERP's scope usually implies significant changes

to staff work practices. Generally, three types of services are available as consulting, customization, and supporting

• Implementation time depends on;1. The size of the business2. The number of modules3. The extent of customization4. The scope of the changes to business

processes5. The willingness of the customer to take

ownership for the project

•The typical project consumes about 14 months and requires around 150 consultants.

•Implementing ERP software can overwhelm technicians who lack explicit experience with it.

•Consulting firms typically provide three areas of professional services:

1. Consulting2. Customization3. Support

ERP TECHNOLOGIES

•Information systems technologies have been evolved from mainframe-based computing through the client server era to the Internet era. These distinct phases are marked by parallel development in hardware technologies.

•The client server era began when computing power delivered at desktop machines increased manifold and matched mainframe computing power.

•The Internet era has brought in the ability to deliver information around the globe. This is made possible with advancements in communication infrastructure.

•ERP systems need to leverage these technologies to deliver complete, and adaptable business systems.

ADVANTAGES•No synchronizing changes between

multiple systems - consolidation of finance, marketing and sales, human resource, and manufacturing applications.

•Enables standard product naming/coding.•Provides comprehensive view of the

enterprise (no "islands of information"). Makes real–time information available to management anywhere, anytime to make proper decisions.

•Protects sensitive data by consolidating multiple security systems into a single structure.

•Decisions can be quicker and with fewer errors.

•Data is visible across the organization.

DISADVANTAGES•Customization is problematic.•Re-engineering of business processes to fit

the ERP system may damage competitiveness and/or divert focus from other critical activities.

•Can cost more than less integrated and/or less comprehensive solutions.

•High switching costs increase vendor negotiating power vis a vis support, maintenance and upgrade expenses.

•Overcoming resistance to sharing sensitive information between departments can be a diversion.

•Integration of truly independent businesses can creates unnecessary dependencies.

•Extensive training requirements take resources from daily operations.

•Post implementation depression.