Welcome to ERP-BPI course

Enterprise Resource Planning-

Business Process Integration

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 INTRODUCTION & EVOLUTION OF ERP

• What is ERP ??
• Why Enterprise Resource Planning?
• What is ERP from the Manager’s Perspective?
• Definition of ERP Systems
• Evolution of ERP Systems
• Concept of ERP Systems
• Advantages & Disadvantages of ERP Systems
• ERP Systems Architecture
• Modules of an ERP System

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 ERP – Meaning
• ERP stands for Enterprise Resource Planning.

• ERP is a process used by companies to manage and integrate the

important parts of their businesses which is to manage all the core
processes needed to run a company: finance, manufacturing, HR,
supply chain, services, procurement, and others.

• At its most basic level, ERP integrates these processes into a

single system.

• It facilitates company operations across every department and

helps to optimize handling business resources such as material,
human resource, machine and money.
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 What is an Enterprise or organization

• Exists either to serve some commercial purpose or

to achieve some social objective.

• Differs depending on the purpose or goal they are

trying to achieve, their ownership or management
structure, and the regulatory environment in which
they operate

(Source Magal, S. and Word, J., 2012. Integrated business processes with ERP systems. Hoboken, NJ: Wiley).
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 Resources ???
In the context of business and economics,
A resource is
– Any factor that’s necessary to accomplish a
goal or carry out an activity.
– Components that a business needs in order to
do business.
– Employees, working space, equipment, or
capital.

(Source : https://www.grantham.edu/blog/a-guide-to-
organizational-resources-and-how-to-manage-them)
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 Planning
• Planning is the process of thinking about and organizing the activities
required to achieve strategic objectives.
• Planning is the fundamental management function,
– involves determining in advance, what is to be done, when is it to be done, how it
is to be done and who is going to do it.
– An intellectual process which lays down an organization's objectives and
develops various courses of action, by which the organization can achieve those
objectives.
– It is a blue print to chalk out exactly, how to attain a specific goal.

( Source : https://businessjargons.com/planning.html,
https://courses.lumenlearning.com/)

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 What is a Business Process
• A business process, is a set of tasks or activities that
produce desired outcomes. Every process is triggered by
some event, such as receiving a customer order or
recognizing the need to increase inventory.

(Source Magal, S. and Word, J., 2012. Integrated business processes with ERP systems. Hoboken, NJ: Wiley).
 Key Business Processes

(Source Magal, S. and Word, J., 2012. Integrated business processes with ERP systems. Hoboken, NJ: Wiley).
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 An example
• Tofu has a small business and is well known in the city of Jaipur. He is
into business of local and traditional handcrafted products.
• He has a workshop where these products are made by hand by the
local artisans.
• He sells the products in a small shop located at Chandpole Bazaar in
Jaipur .
• His specialty products are as shown in the picture. He sells about
600 products( 100 each) every month on an average.

Can we identify the main business processes here??

Do we require planning ??
What resources are required??

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Business Growth – Dream of each
businessman
• Tofu opens 3 more outlets in Jaipur due to increase in customer
demand
• Tofu also opens outlets in Pune, Bangalore and Delhi .
• A new workshop in Delhi and Pune.
Demands and demands for products and so the
challenges
• Handling the business data…???
• Decision Making for business based on data
analysis
What to make ???
Where to make ???
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How much to make ???
 Changes in Tofu’s Business scenario
• One outlet to many outlets…
• One workshop to 3 workshops
• Business processes at multiple places
• Transactional data generated in each outlet and workshop
• Employees at multiple places
• Raw material procurement has incresead
• Inventory at many places
• Accounts to be maintained at many places

For decision Making Tofu needs consolidated and reliable

data from one source …. How??

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Decisions and Actions to be taken by Tofu to
be fulfill customer order…
• For a corporate event to be held at Pune, Acc Software
wants 2000 products from tofu.
– 1000 Pen stands
– 500 each tree wall décor and wood wooden
coaster set

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The Concept of ERP

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American Production and Inventory Control
Society (2001) has defined ERP systems as

“a method for the effective planning and

controlling of all the resources needed to take,
make, ship and account for customer orders in a
manufacturing, distribution or service company.”

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 Definition of ERP Systems

Enterprise resource planning systems or enterprise systems

are software systems for business management,
encompassing modules supporting functional areas such as
planning, manufacturing, sales, marketing, distribution,
accounting, financial, human resource management,
project management, inventory management, service and
maintenance, transportation and e-business.
The architecture of the software facilitates transparent
integration of modules, providing flow of information
between all functions within the enterprise in a
consistently visible manner.

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 Why do I need to know ERP, today- tomorrow
and always?
• Complex nature of today’s business environment
• Business process are complex and mapping the functional
processes has become vital
• Right information at the right time brings timely rewards
• Unprecedented growth of information & communication
technology.
• Improve competitiveness by cost reduction and better
logistics

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ERP Evolution

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 Evolution of ERP Systems
• The evolution of ERP systems closely followed the spectacular
developments in the field of computer hardware and software systems.
• During the 1960s most organizations designed, developed and
implemented centralized computing systems, mostly automating their
inventory control systems using inventory control packages (IC) such as
COBOL, ALGOL and FORTRAN.
• Material requirements planning (MRP) systems were developed in the
1970s which involved mainly planning the product or parts requirements
according to the master production schedule(MPS).
• Following this route new software systems called manufacturing resources
planning (MRP II) were introduced in the 1980s with an emphasis on
optimizing manufacturing processes by synchronizing the materials with
production requirements.
• MRP II included areas such as shop floor and distribution management,
project management, finance, human resource and engineering.

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 Evolution of ERP Systems, continued

• ERP systems first appeared in the late 1980s and the beginning of the
1990s with the power of enterprise-wide inter-functional coordination
and integration.
• Based on the technological foundations of MRP and MRP II, ERP
systems integrate business processes including manufacturing,
distribution, accounting, financial, human resource management,
project management, inventory management, service and maintenance,
and transportation, providing accessibility, visibility and consistency
across the enterprise.
• During the 1990s ERP vendors added more modules and functions as
“add-ons” to the core modules giving birth to the “extended ERPs like
APS, APO, CRM, SCM etc.”

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 Material Requirements planning
• Is a production planning and inventory control system
used to manage manufacturing processes. Most MRP
systems are software-based, while it is possible to
conduct MRP by hand as well.
• An MRP system is intended to simultaneously meet
three objectives:
• Ensure materials and products are available for
production and delivery to customers.
• Maintain the lowest possible level of inventory.
• Plan manufacturing activities, delivery schedules and
purchasing activities.

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 MRP
• MRP is a tool to deal with these problems.
It provides answers for several questions:
• What items are required?
• How many are required?
• When are they required?

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 MRP-I and MRP-II
• Prior to MRP and before computers dominated the industry,
reorder-point/reorder-quantity (ROP/ROQ) type methods
like EOQ had been used in manufacturing and inventory
management.
• In the 1960s, Joseph Orlicky studied the TOYOTA
Manufacturing Program and developed Material
Requirements Planning (MRP), and Oliver Wight and
George Plossl then developed MRP into manufacturing
resource planning (MRP II).[
• Joe Orlicky's MRP evolved into Oliver Wight's
manufacturing resource planning (MRP II) which brings
master scheduling, rough-cut capacity planning,
capacity requirements planning and other concepts
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Enterprise , Resources & Management

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 Characteristics of ERP
• Modular design comprising many distinct business modules such as
financial, manufacturing, accounting, distribution, etc.
• Use centralized common database management system (DBMS)
• The modules are integrated and provide seamless data flow among the
modules, increasing operational transparency through standard
interfaces
• They are generally complex systems involving high cost
• They are flexible and offer best business practices
• They require time-consuming tailoring and configuration setups for
integrating with the company’s business functions
• The modules work in real time with online and batch processing
• capabilities
• They are Internet-enabled (Web-enabled / Gui)

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Advantages of ERP

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Disadvantages of ERP

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 Architecture of ERP System
• The modules of an ERP system can either work as stand-alone units or
several modules can be combined together to form an integrated
system.
• The systems are usually designed to operate under several operating
platforms such as UNIX, MS Windows NT, Windows 2000, IBM AIX,
and HP-UX systems.
• Enterprise systems employ thin client/server (C/S) technology or
client/fat server (C/FS) architecture, creating a decentralized
computing environment.
• In a C/S system a number of client devices operated by end users such
as desktop PCs request services from application servers, which in
turn get the requested service-related information from the database
servers.
• The requests may be simple data files, data values, communication
services, transaction processing or master file updates.

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 Architecture of ERP System, continued
• The general practice is to have three-tier architecture
• In this three-tier system the user interface runs on the client.
• To run ERP systems relatively powerful PCs (clients) and
powerful servers are required where most of the hundreds of
thousands of operations are performed.
• The client/server system functions are performed following three
layers of logic:
• Presentation Layer: Graphical user interface (GUI) or browser for
data entry or accessing system functions
• Application Layer: Business rules, functions, logic, and programs
acting on data received/transferred from/to the database servers
• Database Layer: Management of the organization’s operational or
transactional data including metadata; mostly employs industry
standard RDBMS with structured query language (SQL) provisions

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Three-tier ERP Systems Architecture

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 Why ERP for Managers

Answer is :
"Simplifying Complex Processes” of the
business organisation

Sound too theoretical but true once

implemented successfully!!!!

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What are we Learning and why??
• ERP –BPI using SAP E-business Suite
• SAP UAP Alliance
• Certified Faculty
• SAP participation certificates to all who
complete the course
• SAP Next Gen -Certifications for students
in concessional fees
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Some enterprises
•Grocery Store
•D- Mart
•Patanjali Ayurveda
•Tata Motors
•Cadila Healthcare Limited.
•Amul
•HUL
•Infosys
•Ola Cabs
•Marriott International India Pvt Ltd.
•Mahindra Logistics Ltd.
•Housing Development Finance Corporation Ltd. ( HDFC)
•AXIS Bank ………

Identify 3 key Processes in the following enterprises

and Justify why you think they are significant 33
 Learning Summarizing through
videos…
• Let’s look at some useful videos to
understand and identify few processes from
each of the organizations.
• Identify 3 processes from each video
• Note down the challenges faced and what
solution did they implement..

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 Few quick Questions to Relook
• What is the difference between System and
Process
• How are they related…
• Each study group to give an example of a
system and the processes involved in it
from your domain…

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