Enterprise Resource Planning

Introduction
Enterprise resource planning (ERP) is business process management software that allows an organization to
use a system of integrated applications to manage the business and automate many back office functions
related to technology, services and human resources. ERP software typically integrates all facets of an
operation — including product planning, development, manufacturing, sales and marketing — in a single
database, application and user interface. ERP software is considered to be a type of enterprise application,
that is software designed to be used by larger businesses and often requires dedicated teams to customize
and analyze the data and to handle upgrades and deployment. In contrast, Small business ERP applications
are lightweight business management software solutions, often customized for a specific business industry
or vertical.

Limitations of ERP System

The ERP system has three significant limitations
1. Mangers cannot generate custom reports or queries without the help from a programmer and this
inhibits them from obtaining information quickly, which is essential for making a competitive
advantage.
2. ERP system provides current status only, such as open orders. Managers often need to look past
status to find trends and patterns that aid better decision making
3. The data in ERP application is not integrated with other enterprise or division systems and does
not include external intelligence
There are many technologies that help to overcome these limitations. These technologies when used in
conjunction with ERP package, help in overcoming the limitations of a stand-alone ERP system and thus
help the employees to make better decisions.
Following are some of the ERP technologies
1. Business Process Re-engineering (BPR)

 Processes are generally identified in terms of beginning and end points, interfaces, and
organization units involved, particularly the customer unit. High Impact processes should
have process owners. Examples of processes include: developing a new product; ordering
goods from a supplier; creating a marketing plan; processing and paying an insurance claim;
etc.
 Business process reengineering (often referred to by the acronym BPR) is the main way in
which organizations become more efficient and modernize. Business process reengineering
transforms an organization in ways that directly affect performance . Business process
reengineering (BPR) is the analysis and redesign of workflow within and between
enterprises. BPR reached its heyday in the early 1990's when Michael Hammer and James
Champy published their best-selling book, "Reengineering the Corporation".
  The two cornerstones of any organization are the people and the processes. If individuals are
motivated and working hard, yet the business processes are cumbersome and non-essential
activities remain, organizational performance will be poor.
 Business Process Reengineering is the key to transforming how people work. What appear to
be minor changes in processes can have dramatic effects on cash flow, service delivery and
customer satisfaction. Even the act of documenting business processes alone will typically
improve organizational efficiency by 10%.

2. Online Analytical Processing (PLAP)

 OLAP (Online Analytical Processing) is the technology behind many Business Intelligence
(BI) applications. OLAP is a powerful technology for data discovery, including capabilities
for limitless report viewing, complex analytical calculations, and predictive “what if”
scenario (budget, forecast) planning.
 OLAP is an acronym for Online Analytical Processing. OLAP performs multidimensional
analysis of business data and provides the capability for complex calculations, trend analysis,
and sophisticated data modeling. It is the foundation for many kinds of business applications
for Business Performance Management, Planning, Budgeting, Forecasting, Financial
Reporting, Analysis, Simulation Models, Knowledge Discovery, and Data Warehouse
Reporting. OLAP enables end-users to perform ad hoc analysis of data in multiple
dimensions, thereby providing the insight and understanding they need for better decision
making.
 OLAP technology has been defined as the ability to achieve “fast access to shared
multidimensional information.” Given OLAP technology’s ability to create very fast
aggregations and calculations of underlying data sets, one can understand its usefulness in
helping business leaders make better, quicker “informed” decisions

3. Supply Chain Management (SCM)

 Supply chain management (SCM) is the broad range of activities required to plan, control and
execute a product's flow, from acquiring raw materials and production through distribution to
the final customer, in the most streamlined and cost-effective way possible.
 SCM encompasses the integrated planning and execution of processes required to optimize
the flow of materials, information and financial capital in the areas that broadly include
demand planning, sourcing, production, inventory management and storage, transportation --
or logistics -- and return for excess or defective products. Both business strategy and
specialized software are used in these endeavors to create a competitive advantage.
 Supply chain management is an expansive, complex undertaking that relies on each partner --
from suppliers to manufacturers and beyond -- to run well. Because of this, effective supply
 chain management also requires change management, collaboration and risk management to
create alignment and communication between all the entities.
 In addition, supply chain sustainability -- which covers environmental, social and legal
issues, in addition to sustainable procurement -- and the closely related concept of corporate
social responsibility -- which evaluates a company's effect on the environment and social
well-being -- are areas of major concern for today's companies.
 Supply chain management creates efficiencies, raises profits, lowers costs, boosts
collaboration and more. SCM enables companies to better manage demand, carry the right
amount of inventory, deal with disruptions, keep costs to a minimum and meet customer
demand in the most effective way possible. These SCM benefits are achieved through the
appropriate strategies and software to help manage the growing complexity of today's supply
chains
4. Management Information System (MIS)
 A computer based system that optimizes the collection, collation, transfer and presentation of
information throughout an organization, through an integrated structure of database and
information flow.
 A management information system (MIS) is a computerized database of financial information
organized and programmed in such a way that it produces regular reports on operations for
every level of management in a company
 MIS is flexible and can be adapted to the changing needs of the organization.
 MIS supports data processing functions of transaction handling and record keeping

5. Decision Support System (DSS)

 Decision support system (DSS) is a computer-based information system that supports
business or organizational decision-making activities.
 DSSs serve the management, operations, and planning levels of an organization (usually mid
and higher management) and help people make decisions about problems that may be rapidly
changing and not easily specified in advance.
 Unstructured and Semi-Structured decision problems.
 Decision support systems can be either fully computerized, human-powered or a combination
of both
 Decision Support System consists of four phases: Intelligence: Searching for conditions that
call for decision. Design: Developing and analyzing possible alternative actions of solution.
Choice: Selecting a course of action among those. Implementation: Adopting the selected
course of action in decision situation
6. Executive Support System
 An executive information system (EIS), also known as an executive support system (ESS), is
a type of management information system that facilitates and supports senior executive
information and decision-making needs.
 It provides easy access to internal and external information relevant to organizational goals.
 It is commonly considered a specialized form of decision support system (DSS).
 EIS emphasizes graphical displays and easy-to-use user interfaces.

7. Customer Relationship Management (CRM)

Customer relationship management (CRM) is an approach to managing a company's interaction with
current and future customers. It often involves using technology to organize, automate, and
synchronize sales, marketing, customer service, and technical support. Customer relationship
management (CRM) is the combination of practices, strategies and technologies that companies use
to manage and analyze customer interactions and data throughout the customer lifecycle, with the
goal of improving customer service relationships and assisting in customer retention and driving
sales growth. CRM systems compile customer data across different channels, or points of contact
between the customer and the company, which could include the company's website, telephone, live
chat, direct mail, marketing materials and social media. CRM systems can also give customer-facing
staff detailed information on customers' personal information, purchase history, buying preferences
and concerns
 Sales force automation, which implements sales promotion analysis, automates the tracking
of a client's account history for repeated sales or future sales, and coordinates sales,
marketing, call centers, and retail outlets.
 Data warehouse technology, used to aggregate transaction information, to merge the
information with CRM products, and to provide key performance indicators.
 Opportunity management which helps the company to manage unpredictable growth and
demand, and implement a good forecasting model to integrate sales history with sales.
 CRM Facilitates discovery of new customers Helps the sales team in closing deals faster.
Enhances effective cross and up selling of products. Simplifies the sales and marketing
processes. Enhances customer loyalty and Builds up on effective internal communication
 8. Data Warehouse
Data warehouse is a database which stores collection of past (historical) as well as present (current)
data. In an organization these data are useful for decision making process, comparison process &
forecasting. The Data warehouses have following characteristics:
 Reside on computers.

 Run on a database management system (DBMS) such as those from Oracle, Microsoft

Access, MySql, SQL Server etc.

 Retain data for long periods of time

 Consolidate data obtained from many sources

The main characteristics of data are as follows:

(i) Subject-oriented: The data inside the data warehouse should be related to a particular
subject. For example, Bank related Data warehouse contain data related to depositor,
borrower, account, loan etc, it cannot contain data related to Library.
(ii) Integrated: data inside the data warehouse should come from different sources called data
marts. Each of these sources has its own designer which creates its database file (collection
of data) in different format. Integration of all files in a Data warehouse require
transformation program which transforms many sources into one particular format so that
integration program integrate all same format files into one consistent database. Non-olatile:
Data inside the Data warehouse can be accessed but cannot be changed. Time variant: Data
is stored inside the Data warehouse in timely variant manner.
Types of Data Warehouses
Enterprise Warehouse: covers all areas of interest for an organization
Data Mart: covers a subset of corporate-wide data that is of interest for a specific user group (e.g.,
marketing).
Virtual Warehouse: offers a set of views constructed on demand on operational databases. Some of the
views could be materialized (pre-computed)

9. Data Mining

 Data Mining is a powerful & emerging new technology today with great potential to help
companies focus on the most important in their data warehouses. Data Mining is also known
as Knowledge Discovery in Databases. The basic goal of Data Mining is discovering hidden
value of the data warehouses.
 Data Mining can be defined as the non-trivial extraction of implicit, previously unknown, &
potentially useful information from data. It uses machine learning, statistical & visualization
techniques to discovery & present knowledge in forms which are easily comprehensible to
Humans.
 Modern Data Mining systems self-learn from the previous history of the investigated system,
formulating & testing hypothesis about the rules, which the system obeys. Data mining tools
 predict future trends & behaviors, allowing businesses to make proactive, knowledge-driven
decisions.
 Data mining tools can answer business questions that traditionally were too consuming to
resolve. They clean Databases for hidden patterns, finding predictive information that expert
may miss because it lies outside their expectations. Data mining techniques are the result of a
long process of research & product development.
 Data Minings evolution began when business data was first stored on computers, continued
with improvements in data access, & more recently, generated technologies that allow users
to navigate through their data in real time. The most commonly used techniques in Data
Mining are: - Ć Artificial neural networks Ć Decision trees and Generic Algorithms

10. Business Intelligence (BI)

 Since ERP systems were not originally designed to provide real-time reports to massive
users, the entire system could not facilitate the decision support function.. In order to justify
their return-on-investment (ROI), more and more organizations are turning to BI tools that
make data collected by ERP, customer relationship management (CRM), and other data-
intensive applications meaningful.
 Business Intelligence (BI) systems can pull the data in ERP systems and then perform various
analyses and deliver superior reporting, which help users make timely and accurate decisions.
More and more organizations extend their ERP systems beyond the level of back-office to
improve sales, customer satisfaction, and business decision-making.
 BI tools are capable of analyzing the long- and the short-term business scenarios using
existing data captured from the enterprise information systems. BI technology can be used for
any organization to structure the information in ERP systems and other data repositories such
as data warehouses and data marts for performing optimized and effective decision-making.
 The integration of the BI system and the ERP system contributes additional values to the
business community, for example providing meaningful Analysis and Optimizing the ERP
Investment