ASSIGNMENT

ENTERPRISE RESOURCE PLANNING

Submitted by:
Afrah Abdul Azeez
3rd sem
1.DISCUSS ERP, MRP, MRP II AND CLOSED LOOP MRP?
ERP - An ERP system is an attempt to integrate all functions across a company to a single computer system
that can serve all those functions’ specific needs. ERP is the practice of consolidating an enterprise’s
planning, manufacturing, sales and marketing efforts into one management system. It combines all databases
across departments into a single database that can be accessed by all employees. ERP automates the tasks
involved in performing a business process. 3 Major Reasons for using ERP:
 To integrate financial data.
 To standardize manufacturing processes.
 To standardize HR information.
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 analyse 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.
MRP - Material Requirement Planning is a special technique to plan the requirements of materials for
production. For the manufacturing company to produce the end items to meet demands the availability of
sufficient production capacity must be coordinated with the availability of all raw materials and purchased
items from which, the end items are to be produced. In other words, there is a need to manage the
availability of dependent demand items from which the products are made. Dependent demand items are the
components, i.e., materials or purchased items, fabricated parts or sub-assemblies that make up the end
product.
One approach to manage the availability of dependent demand items is to keep a high stock of all the items
that might be needed to procured the end items and when the on-hand stock drops below a present re-order
level, the items are procured or bought as the case may be to replenish the stock to the maximum level.
However, this approach is costly due to the excessive inventory of components, fabricated parts and sub-
assemblies to ensure high service level. An alternative approach to manage these items is to plan for
procurement or manufacture of the specific components that will be required to produce the required
quantities of end products as per the production schedule indicated by the master production schedule
(MPS). The technique is known as Material Requirement Planning (MRP) technique.
MRP is a computer-based system in which the given MPS is exploded into the required amounts of raw
materials, parts and sub-assemblies needed to produce the end items in each time period (week or month) of
the planning horizon. The gross requirement of these materials is reduced to net requirements by taking into
account the materials that are in inventory or on order.
MRP II - Manufacturing resource planning (MRP II) is a comprehensive type of planning for
manufacturing companies. It is a sort of extension to the original material requirements planning (MRP)
concept. It emerged in the 1980s to help companies deal with dynamic processes. Both of these, MRP and
MRP II, are related to the enterprise resource planning (ERP) system, which is a top-level business
information system that helps companies to plan better and work more efficiently. Manufacturing resource
planning may include various software tools as well as support processes. It is an overarching concept for
business management. The tools may include master production schedules, advanced invoicing, production
resources, inventory tools and more. The support processes may include contract management, shop floor
data collection, sales analysis and more.
Through the use of diverse new technologies, companies can adjust how they work to improve productivity
and efficiency. Inventory control systems are a good example — by aggregating big data and analyzing
them for business intelligence, companies can reduce warehouse inventory levels, to save on maintenance
cost. This is just one way that MRP works for businesses; another way involves improving supply chains as
well as other parts of the production cycle.
CLOSED-LOOP MRP - Closed Loop Manufacturing Resource Planning (MRP) is a software system
companies use for production planning and inventory control. The system contains an information feedback
feature that enables plans to be continuously checked and adjusted. Closed Loop MRPs synchronize the
purchasing or materials procurement plans with the master production schedule. Inputs to the system include
a bio of materials, inventory status files and master production schedules. The system feeds back
information about completed manufacture and materials on hand into the MRP system, so that these
production plans can be adjusted according to capacity and other requirements. The system is called a closed
loop MRP because of its feedback feature, which is also referred to as "closing the loop.” Closed Loop
MRP’s benefits include reductions in inventory (and associated costs), rush orders, and lead-times, greater
responsiveness to customer demand, shorter delivery times and better capacity utilization.

2. EXPLAIN THE ADVANTAGES OF ERP?

 Reduction of lead time - The lead-time is the elapsed time between placing an order and receiving
it. It has a great role in purchasing and inventory control. The consequences of the non-availability of
an item that is required for production can result in a lot of problems such as missing the delivery
schedules, losing the customer to the competition
 Reduction of cycle time - Cycle time is the time between receipt of the order and delivery of the
product. Manufacturing spectrum can be viewed in terms of make-to-order where cycle time and cost
of production are high or make-to-stock. In both cases ERP systems can reduce the cycle time.
 Better customer satisfaction - Customer satisfaction means meeting or exceeding customers’
requirements for a product or service. Degree of satisfaction can be assessed using the following
measures :- Product or service has the features that are most important to the customer. Response to
the customers’ demands in timely manner.  Product or service is free of defects and perform as
expected.
 Reduction in quality cost - ERP systems play a significant role in reducing cost of quality by
ensuring that the company has an efficient and effective quality assurance and management systems.
 Improved supplier performance - The ERP systems contain features which support supplier
management and control processes that help organization in managing the supplier relations,
monitoring the vendor activities and managing the supplier quality
 Increased flexibility - Flexibility is a key issue in the formulation of strategic plans in companies.
Product flexibility is the ability of the operation to efficiently produce highly customized and unique
product. ERP Systems have the features that increase flexibility in both the organization as whole
and manufacturing operations.
 On time shipment - With ERP systems, businesses are not limited to a single manufacturing
method, such as ‘make-to-stock’ or ‘make-to-order’. Instead, many manufacturing and planning
methods, can be combined within the same operation, with unlimited flexibility to choose the best
method or combination of best methods for each product at each stage throughout its life cycle.
 Improved resource utilization - Manufacturers place increased emphasis upon planning and
controlling capacity. The creation of an accurate, achievable production schedule requires the
availability of both material and capacity. The capacity planning features of most ERP systems, offer
both rough-cut and detailed capacity planning. The system loaded each resource with production
requirements from Master Production Scheduling, Material Requirements Planning, and Detailed
Capacity Planning. The ERP systems also have simulation capabilities that help the capacity and
resource utilization scenarios and choose the best option.
 Improved information accuracy and decision making capability - In order to manage the
information, in order to deliver high quality information to the decision-makers at the right time, in
order to automate the process of data collection, collation and refinement, organizations have to
 make IT an ally, harness its full potential and use it in the best way. The major drawbacks of the
legacy systems was that it lacked an integrated approach.

3. WHAT ARE THE RISKS OF ERP IMPLEMENTATION?

ERP Implementation Risk:
1. Failure to Redesign Business Processes to Fit the Software:- There is strong desire to fit the new ERP
system to fit to current process. But this is hardly the case. In fact the right thing is to redesign your current
processes to fit to purchase ERP system. The reality is neither option is easy. It is very difficult in most
business to change old or existing processes and to customize the ERP system to fit to current processes is
costly and time-consuming venture. In my view this is biggest ERP implementation risk
2. Lack of Senior Management Support - Support of top management is crucial for accomplishing
projects objectives. It is easy for senior managers to become a sponsor but very difficult to let go the crucial
team member for pilot testing or super user training. The unfortunate fact is the people who need to be trained
as “Super Users”, are the same “key” people who run the business. The lack of senior people support to give
time away from the desk, as they are too afraid to miss sales, delivery to customer is one of the most common
ERP implementation risk.
3. Insufficient Training and Reskilling of End-Users - A number of firms learned that 
investment in
training and reskilling the employees were higher than expected. Most ERP implementation comes with
deadlines that need to met. As a result, there is hardly enough time to train most people and give them skills
they need to reach the satisfactory performance state.
4. Lack of Ability to Recruit and Retain Qualified Systems Developers - Many of the organizations
found it difficult to recruit and retain good ERP specialists because the market rates for these people are high.
The developers of biggest market share ERP vendors like SAP, Oracle, Microsoft Dynamics and Infor are in
high demand and moves from one consultancy project to another. So not finding a in-house ERP specialist
could be significant ERP implementation risk

4. DISCUSS THE TANGIBLE AND INTANGIBLE BENEFITS OF ERP SYSTEMS?

Tangible benefits are those measured in monetary terms and intangible benefits cannot be measured in
monetary terms but they do have a very significant business impact.
Tangible benefits:
 Improves the productivity of process and personnel
 Lowering the cost of products and services purchased
 Paper and postage cost reductions
 Inventory reduction
 Lead time reduction
 Reduced stock obsolescence
 Faster product / service look-up and ordering saving time and money
 Automated ordering and payment, lowering payment processing and paper costs
Intangible benefits:
 Increases organizational transparency and responsibility
 Accurate and faster access to data for timely decisions
 Can reach more vendors, producing more competitive bids ;
 Improved customer response
 Saves enormous time and effort in data entry ;
 More controls thereby lowering the risk of mis-utilization of resources
 Facilitates strategic planning
  Tangible benefits are those measured in monetary terms and intangible benefits cannot be measured
in monetary terms but they do have a very significant business impact.

5. WHAT ARE THE TECHNOLOGIES THAT ARE USED TO IMPROVE THE CAPABILITIES
OF ERP SYSTEMS?
Some of these technologies are:
1.BUSINESS PROCESS RE-ENGINEERING (BPR)
Dr. Michael Hammer defines BPR as “ the fundamental rethinking and radical redesign of business processes
to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality,
services and speed.” One of the main tools for making this change is the Information Technology (IT). Any
BPR effort that fails to understand the importance of IT, and goes through the pre-BPR analysis and planning
phases without considering the various IT options available, and the effort of the proposed IT solutions on the
employees and the organization is bound to crash during take off. It helps in integrating the various business
processes of the organization. With good ERP package, the organization will be able to achieve dramatic
improvements in areas such as cost, quality, speed, etc. Hence, many BPR initiatives are used in ERP
implementation.
2.MANAGEMENT INFORMATION SYSTEMS (MIS)
MIS is a computer – based system that optimizes the collection, collation, transfer and presentation of
information throughout an organization, through an integrated structure of databases and information flow.
The main characteristics of MIS are:
 MIS supports data processing functions of transaction handling and record keeping.
 MIS uses an integrated database and supports a variety of functional areas.
 MIS provides operational, tactical and strategic levels of organization with timely, structured
information.
 MIS is flexible and can adapt to the changing needs of the organization.
3.DECISION SUPPORT SYSTEMS (DSS)
Decision support systems are interactive information systems that rely on an integrated set of user-friendly
software and hardware tools, to produce and present information targeted to support management in the
decision making process. Managers spend a lot of time and effort in gathering and analyzing information
before making decisions. Decision support systems were created to assist managers in this task. A DSS can
help close this gap and allow managers to improve the quality of their decisions. To do this, the DSS hardware
and software employ the latest technological innovations, planning and forecasting models, 4th generation
languages and even artificial intelligence.
The main characteristics of a DSS are:
 A DSS is designed to address semi-structured and unstructured problems.
 The DSS mainly supports decision-making at the top management level.
 DSS is interactive, user-friendly and can be used by the decision maker with little or no assistance
from a computer professional.
 DSS makes general purpose models, simulation capabilities and other analytical tools available to the
decision maker.
4.EXECUTIVE INFORMATION SYSTEMS (EIS)
EIS is a decision support system especially made for senior level executives. Top level executives and decision
makers face many problems and pressures. They have to make the right decisions at the right time to take the
company forward. An EIS is concerned with how the decisions affect an entire organization. An EIS takes the
following into considerations:
 The overall vision and mission of the company and the company goals.
 Strategic planning and objectives.
  Organizational structure.
 Crisis management/ contingency planning.
 Strategic control and monitoring of overall operations.
Successful EIS are easy to use, flexible and customizable and use the latest technological innovations.
5.DATA WAREHOUSING
If operational data is kept in the database of the ERP system, it can create a lot of problems. As time passes,
the amount of data will increase and this will affect the performance of the ERP system. However once the
operational use of the data is over, it should be removed from the operational databases. The primary concept
of the data warehousing is that the data stored for the business analysis can be accessed most effectively by
separating it from the data in operational systems. The most important reason for separating data for business
analysis, from the operational data, has always been the potential performance degradation on the operational
system that can result from the analysis processes. High performance and quick response time is almost
universally critical for operational system.
6. DATA MINING
Data mining is the process of identifying valid, novel, potentially useful and ultimately comprehensible
information from databases that is used to make crucial business decisions. The main reason for needing
automated computer systems for intelligent data analysis is the enormous volume of existing and newly
appearing data that require processing. While data mining does not eliminate human participation in solving
the task completely, it significantly simplifies the job and allows an analyst, who is not a professional in
statistics and programming to manage the process of extracting knowledge from data.
7. ON-LINE ANALYTICAL PROCESSING (OLAP)
OLAP can be defined in five words – Fast Analysis of Shared Multi-dimensional Information.
Fast : means that the system is targeted to deliver most responses to users within about 5 seconds, with the
simplest analysis not taking more than one second and very few taking more than 20 seconds.
Analysis: means that the system can cope with any business logic and statistical analysis that is relevant for
the application and the user, and keep it easy enough for the target user.
Shared: means that the system implements all the security requirements for confidentiality and if multiple
write access is needed, concurrent update locking at an appropriate level.
Multi-dimensional: means that the system must provide a multi-dimensional conceptual view of the data,
including full support for hierarchies and multiple hierarchies.
Information: is refined data that is accurate, timely and relevant to the user.
8.SUPPLY CHAIN MANAGEMENT(SCM)
A supply chain is a network of facilities and distribution options that performs the function of procurement of
materials, transformation of these materials into intermediate and finished products and the distribution of
these finished products to the customers. Supply chains exist in both service and manufacturing organizations,
although the complexity of the chain may vary greatly from industry to industry and firm to firm. Traditionally,
marketing, distribution, planning, manufacturing and the purchasing organizations along the supply chain
operated independently. These organizations have their own objectives which are often conflicting. There is
a need for a mechanism through which these different functions can be integrated together. Supply chain
management is a strategy through which such integration can be achieved.

6. DISCUSS THE FUNCTIONAL MODULES OF ERP?

Different functional modules :
 Human Resource
 Inventory
 Sales & Marketing
 Purchase
 Finance & Accounting
  Customer Relationship Management(CRM)
 Engineering/ Production
 Supply Chain Management (SCM)

1. HUMAN RESOURCE MODULE(HR):

It helps for efficient management of human resources within the organisation. HR module helps to manage
employee information, track employee records like performance reviews, designations, job descriptions,
skill matrix, time & attendance tracking. Important sub module in HR module is Payroll System which helps
to manage salaries, payment repots etc. It can also includes Travel Expenses & Reimbursement tracking.
Employee Training tracking can also managed by ERP.
2. INVENTORY MODULE:
Inventory module can be used to track the stock of items. Items can be identified by unique serial numbers.
Using that unique numbers inventory system can keep track of item and trace its current location in
organization. Inventory module includes functionalities like inventory control, master units , stock
utilization reporting etc. There may be integration of inventory module with purchase module of ERP.
3. SALES MODULE :
Sales module implements functions of order placement, order scheduling, shipping and invoicing. It is
closely related to organisations’ ecommerce websites. CRM module can take help of Sales module for future
opportunity creation & lead generation.
4. PURCHASE MODULE:
Take care of process related to procurement of raw material and items. Purchase module consist of
functionalities like supplier listing, supplier & item linking, sending quotation request to vendors, receiving
& recording quotations, analysis of quotations, preparing purchase orders, tracking the purchase items,
preparing GRNs(Good Receipt Notes) various reports . Purchase module is integrated with Inventory
module & Engineering/production module for updating of stocks.
5. FINANCE & ACCOUNTING MODULE:
Inflow and outflow management. This module keeps track of all account related transactions like
expenditures, Balance sheet, account ledgers, budgeting, bank statements, payment receipts, tax
management etc. Financial reporting is easy task for this module of ERP. One click availability of financial
data.
6. CUSTOMER RELATIONSHIP MANAGEMENT (CRM) MODULE:
CRM department helps to boost the sales performance through better customer service & establishing the
healthy relationship with customers. All the stored details of customer is available in CRM module. CRM
module helps to manage & track detailed information of the customer like communication history ,calls,
meetings, details of purchases made by customer, contract duration etc. CRM module can be integrated with
Sales module to enhance sales opportunities.
7. ENGINEERING / PRODUCTION PLANNING MODULE:
Production module is great help for manufacturing industry for delivering product. This module consist of
functionalities like production planning, machine scheduling, raw material usage,(Bill of
material)preparation, track daily production progress production forecasting & actual production reporting.
8. SUPPLY CHAIN MANAGEMENT (SCM):
SCM module manages the flow of product items from manufacturer to consumer & consumer to
manufacturer. Common roles involved are manufacturer, Super Stockiest, Stockiest, distributors, retailers
etc. SCM involves demand & supply management , sales returns & replacing process, shipping &
transportation tracking etc.

7. WHAT IS BUSINESS PROCESS REENGINEERING (BPR)? EXPLAIN THE DIFFERENT

STEPS IN IMPLEMENTING THE BPR?
BPR can be defined as the radical redesign of the business process to achieve dramatic improvement in the
productivity and quality and to reduce costs. Business process re-engineering (BPR) is a business
management strategy, originally pioneered in the early 1990s, focusing on the analysis and design of
workflows and business processes within an organization. BPR aimed to help organizations fundamentally
rethink how they do their work in order to dramatically improve customer service, cut operational costs, and
become world-class competitors. Business process reengineering is also known as business process redesign,
business transformation, or business process change management.
Steps in implementing BPR are:
Project kick off - Project goal, project team and communication standards are agreed upon. A number of
workshops are held where project scope, sponsors commitment, project risk, milestones and deliverables are
discussed.
Process identification and data gathering: “As is” processes are assembled through flow charts. Current
practice of Interfacing with business partners is gathered. Bottlenecks, delays, complexity, internal blame
games, idle assets etc. are brought forward. Major and strategic business processes to be reengineered, are
identified. Stakeholders categorize the processes to be reengineered and agreed upon on the timeline of
implementation.
Process Reengineering: In this phase, actual reengineering begins. A number of brain storming sessions are
held with project team and other stakeholders, where current business processes are critically analyzed to
determine non value adding activities and identify excess control and check. Impact of new technologies on
process improvement is also evaluated. New process ideas with reduced check and control and enabling
technologies are envisaged.
Blueprint of new system: Blueprinting involves modeling workflow and information requirement, of new
business processes. New organization structures, human resource need, performance monitoring and
compensation, technological needs, are also outlined. Normally, a first cut redesign scheme is produced
which is modified after gathering actionable feedback from the stakeholders.
Transformation: The migration plan would include establishment of new organizational structure, detailed
training and reallocation of workforce, and cut off dates for implementation. Change management and
introduction of new technologies will form an important part and may need engagement of outside
consultants for this specific purpose. There should be provision on the plan to tweak the implemented
system so as to get maximum value out of it.

8. EXPLAIN PLANNING, EVALUATION AND SELECTION OF ERP SYSTEMS.

A successful ERP project requires selecting an ERP solution, implement the solution, manage changes and
examine the practicality of the system
Stage 1 - Plan Requirement - Business need is defined, along with areas in business that required technical
approach. Develop a specific business case with business value for a solution. Get familiar with the software
and hardware infrastructure presence for the solution seeking.
Stage 2 - Request for Proposals (RFP) - Shortlist interesting vendor based on the outcome of market survey
for products. Invite interesting vendors for interaction/demonstration of their products.
Stage 3 - Solution Evaluation - Identify and prioritise remaining gaps between software capabilities as
demonstrated and business requirements.If the gaps can be bridge consider reengineering of those affected
business processes affected and continue with the evaluation.
Stage 4 - Contract Negotiation - Negotiate with each vendor. Establish software, hardware and other
infrastructure agreement requirements, which include version, components, maintenance and support. Also
negotiate participation in user groups, license costs, maintenance fees and many others. Establish other legal
requirements.
Stage 5 - Selection and Agreement - Upon successful negotiation with the right vendor; Review all legal
terms on privacy protection, operation guidance and data manipulation etc. Approve agreements with the
selected vendors.

9. EXPLAIN ERP IMPLEMENTATION LIFE CYCLE.

Pre-Evaluation Screening - Pre-Evaluation Screening is the phase which starts when company decides to go
for a ERP System, the search for perfect solution starts. It is very time consuming process to select few where
all claims be the best, it is just superficial study of package. Not all packages are same each has its own
weakness and strength. While making the analysis it is good to investigate the origins of the different packages.
Some packages can be good in some areas while in other sectors they may not. Once few packages are screened
detailed evaluation process starts.
Package Evaluation - Package Evaluation process is one of the most imp phase of the ERP implementation
, because the package you select will decide failure or success of project. There is little room for error in this
as ERP packages are so expensive once purchased can not switch to another.{do it right the first time} While
making the analysis the imp point is nothing is perfect , imp here is whether it is a perfect fit or good fit. It is
impossible to get a system which will perform exactly asthe company does business but aim is to get least no
of differences. Few imp points to remember while evaluating software includes.
 Flexibility & Scalability.
 Complexity
 User Friendliness
 Technology
 Quick Implementation
 Amt of Customization Required
 Ability to support multi site planning & control.
 Local support infrastructure .
 Total cost i.e license, training, customization etc.
Project Planning Phase - This is the phase which plans that designs the implementation process. In this phase
details of how to go about implementation , schedules and deadlines etc are decided. Roles and responsibilities
are identified and assigned. This is phase which will decide when to begin, how to do it and when the project
is supposed to be completed and what to do in contingencies. Their is a committee for this and which is
suppose to meet periodically through out cycle to review process and chart future course of action .
Gap Analysis - Gap analysis is a phase in the ERP implementation, where the organization tries to find out
the gaps between the company’s existing business practices & those supported by the ERP package. This is
the process through which companies create a complete model of where they are now & where they want to
head in the future. The main objective is to design a model, which both anticipates & covers any function gap.
It has been estimated that even the best ERP package meets only 80% of the company’s functional gaps.
Re-engineering: - It is in this phase that the human factors are taken into account. Two different connotations
are : 1st one is the controversial, involving the use of ERP to aid in downsizing efforts. There have been
occasions where high level executives have invoked the reengineering slogan & purchased an ERP package
with the aim of reducing number of employees. While every implementation is going to involve some change
in job responsibilities, so it is the best to treat ERP as an investment as well as cost-cutting measure, rather
than a downsizing tool. ‘Downsizing’ is a business practice that may have its place, but it should not be cloaked
within the glossier slogan of ‘reengineering’.
The 2nd use of the word re-engineering in the ERP field refers to an ERP implementation model initially
designed & used. The BPR approach to an ERP implementation implies two separate, but closely linked
implementations involved on an ERP site i.e. a technical implementation & a business process
implementation. The BPR approach emphasis the human element of necessary changes within the
organization, which is generally more Time consuming & has received its share of criticism for creating
bloated budgets & extended projects. The ERP market shifts to a mid-market focus & as all implementation
are becoming more cost sensitive; the BPR approach has come under some real scrutiny.
Configuration / customization - This is the main functional area of the ERP implementation. Business
processes have to be understood & mapped in such a way that the arrived solution matches with the overall
goals of the company. A prototype- a simulation of the actual business processes of the company- will be used.
The prototype allows for thorough testing of the ‘to be’ model in a controlled environment. As the ERP
consultants configure & test the prototype they attempt to solve any logistical problems inherited in the BPR
before the actual go-live implementation. Configuring a company’s system reveals not only the strengths of a
company’s business process but also- & perhaps more importantly- its weakness. It is vital to the health of the
company & to the success of the ERP implementation that those configuring the system are able to explain
what won’t fit into the package & where the gaps in functionality occur.
Implementation team training - When the configuration is taking place the implementation team is being
trained not how to use the system, but how to implement it. This is the phase where the company trains its
employees to implement & later run the system. The ERP vendors & the hired consultants will leave after the
implementation is over. For the company to be self sufficient in running the ERP system, it should have a
good in-house team that can handle the various situations. Thus, it is very vital that the company recognizes
the importance of this phase & selects those employees who have the right attitude- people who are willing to
change, learn new things & are not afraid of technology- & good functional knowledge.
Testing: - This is the phase where you try to break the system. Here we reach a point where we are testing
real case scenarios. The system is configured & now we must come up with extreme case scenarios- system
overloads, multiple users logging on at the same time with the same query, users entering invalid data, hackers
trying to access restricted areas & so on. The test case must be designed specifically to find the weak links in
the system & these bugs should be fixed before going live.
Going live - On the technical side, the work is almost complete- data conversions is done, databases are up &
running, & on the functional side, the prototype is fully configured & tested & ready to go operational. The
system is officially proclaimed operational, even though the implementation team must have been testing it &
running successfully for some time. But once the system is ‘live’, the old system is removed & the new system
is used for doing business.
End user training: - The success or failure of an ERP system depends on how the actual users use the system.
The most successful implemented ERP packages fail due to lack of end user training. People are divided into
groups ERP system changes the job descriptions of the people, so it is important to identify the people who
are going to use the system. The current skills of the people are identified & they are divided into groups.
Every group is provided training on the new system. The training section gives the overall view of the system
& how the individual actions will be affecting the entire system. Every employee is also provided with the
training of the job profile which he is going to perform. The training section should address about the new
technologies & how people will be successful in making the change over. Atleast the end user training is
important because the success of an ERP system depends upon it & this phase is equally difficult.

10. DISCUSS ABOUT THE DIFFERENT PHASES OF ERP IMPLEMENTATION.

Pre-Evaluation Screening - Pre-Evaluation Screening is the phase which starts when company decides to go
for a ERP System, the search for perfect solution starts. It is very time consuming process to select few where
all claims be the best, it is just superficial study of package. Not all packages are same each has its own
weakness and strength. While making the analysis it is good to investigate the origins of the different packages.
Some packages can be good in some areas while in other sectors they may not. Once few packages are screened
detailed evaluation process starts.
Package Evaluation - Package Evaluation process is one of the most imp phase of the ERP implementation
, because the package you select will decide failure or success of project. There is little room for error in this
as ERP packages are so expensive once purchased can not switch to another.{do it right the first time} While
making the analysis the imp point is nothing is perfect , imp here is whether it is a perfect fit or good fit. It is
impossible to get a system which will perform exactly asthe company does business but aim is to get least no
of differences. Few imp points to remember while evaluating software includes.
 Flexibility & Scalability.
 Complexity
 User Friendliness
 Technology
 Quick Implementation
 Amt of Customization Required
 Ability to support multi site planning & control.
 Local support infrastructure .
 Total cost i.e license, training, customization etc.
Project Planning Phase - This is the phase which plans that designs the implementation process. In this phase
details of how to go about implementation , schedules and deadlines etc are decided. Roles and responsibilities
are identified and assigned. This is phase which will decide when to begin, how to do it and when the project
is supposed to be completed and what to do in contingencies. Their is a committee for this and which is
suppose to meet periodically through out cycle to review process and chart future course of action .
Gap Analysis - Gap analysis is a phase in the ERP implementation, where the organization tries to find out
the gaps between the company’s existing business practices & those supported by the ERP package. This is
the process through which companies create a complete model of where they are now & where they want to
head in the future. The main objective is to design a model, which both anticipates & covers any function gap.
It has been estimated that even the best ERP package meets only 80% of the company’s functional gaps.
Re-engineering: - It is in this phase that the human factors are taken into account. Two different connotations
are : 1st one is the controversial, involving the use of ERP to aid in downsizing efforts. There have been
occasions where high level executives have invoked the reengineering slogan & purchased an ERP package
with the aim of reducing number of employees. While every implementation is going to involve some change
in job responsibilities, so it is the best to treat ERP as an investment as well as cost-cutting measure, rather
than a downsizing tool. ‘Downsizing’ is a business practice that may have its place, but it should not be cloaked
within the glossier slogan of ‘reengineering’.
The 2nd use of the word re-engineering in the ERP field refers to an ERP implementation model initially
designed & used. The BPR approach to an ERP implementation implies two separate, but closely linked
implementations involved on an ERP site i.e. a technical implementation & a business process
implementation. The BPR approach emphasis the human element of necessary changes within the
organization, which is generally more Time consuming & has received its share of criticism for creating
bloated budgets & extended projects. The ERP market shifts to a mid-market focus & as all implementation
are becoming more cost sensitive; the BPR approach has come under some real scrutiny.
Configuration / customization - This is the main functional area of the ERP implementation. Business
processes have to be understood & mapped in such a way that the arrived solution matches with the overall
goals of the company. A prototype- a simulation of the actual business processes of the company- will be used.
The prototype allows for thorough testing of the ‘to be’ model in a controlled environment. As the ERP
consultants configure & test the prototype they attempt to solve any logistical problems inherited in the BPR
before the actual go-live implementation. Configuring a company’s system reveals not only the strengths of a
company’s business process but also- & perhaps more importantly- its weakness. It is vital to the health of the
company & to the success of the ERP implementation that those configuring the system are able to explain
what won’t fit into the package & where the gaps in functionality occur.
Implementation team training - When the configuration is taking place the implementation team is being
trained not how to use the system, but how to implement it. This is the phase where the company trains its
employees to implement & later run the system. The ERP vendors & the hired consultants will leave after the
implementation is over. For the company to be self sufficient in running the ERP system, it should have a
good in-house team that can handle the various situations. Thus, it is very vital that the company recognizes
the importance of this phase & selects those employees who have the right attitude- people who are willing to
change, learn new things & are not afraid of technology- & good functional knowledge.
Testing: - This is the phase where you try to break the system. Here we reach a point where we are testing
real case scenarios. The system is configured & now we must come up with extreme case scenarios- system
overloads, multiple users logging on at the same time with the same query, users entering invalid data, hackers
trying to access restricted areas & so on. The test case must be designed specifically to find the weak links in
the system & these bugs should be fixed before going live.
Going live - On the technical side, the work is almost complete- data conversions is done, databases are up &
running, & on the functional side, the prototype is fully configured & tested & ready to go operational. The
system is officially proclaimed operational, even though the implementation team must have been testing it &
running successfully for some time. But once the system is ‘live’, the old system is removed & the new system
is used for doing business.
End user training: - The success or failure of an ERP system depends on how the actual users use the system.
The most successful implemented ERP packages fail due to lack of end user training. People are divided into
groups ERP system changes the job descriptions of the people, so it is important to identify the people who
are going to use the system. The current skills of the people are identified & they are divided into groups.
Every group is provided training on the new system. The training section gives the overall view of the system
& how the individual actions will be affecting the entire system. Every employee is also provided with the
training of the job profile which he is going to perform. The training section should address about the new
technologies & how people will be successful in making the change over. Atleast the end user training is
important because the success of an ERP system depends upon it & this phase is equally difficult.

11. DISCUSS ERP TRANSITION STRATEGIES.

Big bang strategy – In this strategy organisation plan a grand ERP implementation for their companies. The
installation of ERP systems of all modules happens across the entire organisation at once. The big bang
approach promised to reduce the integration cost in the condition of thorough and careful execution. This
method dominated early ERP implementations and it partially contributed to the higher rate of failure in ERP
implementation. In big bang strategy the company moves from the existing or legacy system to the new ERP
system on a specific date. Success in using big bang strategy comes with carefull preparation and planning
prior to using big bang.
Phased implementation – The phased approach implements one functional module at a time, in sequential
order. The phased approach also known as modular, functional and sequential approach. This limits the scope
of implementation usually to one functional department. This approach suits the companies that do not share
many common processes across department or business units.
Parallel implementation – The parallel approach keeps both the legacy system and the new ERP system
active simultaneously for a length of time. An advantage to the parallel approach is that it has good recovery
options in case something goes wrong. The parallel approach provides an exact number comparison in real
world conditions. This consumes more resources than other techniques during the transitions.
Processed implementation – The process line strategy is following the mini big bang strategy and parallel
implementation. However, it breaks the implementation strategy to manage parallel product lines. This
approach is utilized by many small to mid-sized companies, which tends to have less complex internal business
processes. Upon the completion of the first process line, resource is then loaned to the more difficult and
challenging process line.
Hybrid strategy – This is a combination of phased, parallel, and processed transition strategy. At the
beginning of an ERP implementation it is predicted whether to implement hybrid or not. The complexity of
hybrid varies tremendously depending upon the situation. It can change as people learn more about the
software and project scope changes. Many implementations use hybrid strategy because they are flexible in
adapting to specific needs of the situation.

12. EXPLAIN THE SUCCESS AND FAILURE FACTORS OF ERP IMPLEMENTATION.

Key success factors are:
 Project Startup - Perform the due diligence of getting the project on the right track by preparing all
the necessary information and communicating it to the appropriate personnel.
 Management Commitment - An ERP implementation is going to impact how a company operates
by updating business processes and changing system transactions. IT should not be the only area
responsible for the project.
 Project Scope - Define your project scope from a position of knowledge, fully detailing what the
project is going to include.
 Project Team - The core project team should be composed of full-time personnel, including a project
manager and others representing the core areas of the business.

Failure factors are:

 ERP implementation is, at its core, a people project : The biggest challenge before and after
implementation is not the technology; the biggest issues are related to people. At every stage,
companies must work harder to manage change, secure buy-in, communicate with and educate their
employees. Top human resources issues are related to changing management, training and internal
staff adequacy.
 Employee Resistance : If the employees are not educated and informed about the benefits of the ERP
system and assured about the security of their jobs by the top management, they will start believing in
the rumors that float around and will either resist or sabotage the ERP implementation.
 Lack of top management commitment : The top management should pledge and demonstrate that
the ERP implementation has its full support. They should assure the employees about their jobs, clear
any doubts and explain why the ERP system is a necessity for the organization. The CEO or some
senior level manager should sponsor the ERP project in order to demonstrate the management
commitment.
 Inadequate training and education : All users of the ERP system should be trained properly in using
the system to its fullest. When the employees do not understand what the new system is and what it is
supposed to do and how to operate it, they will not use it or use it incorrectly. This can lead to failure
of the system. Train process owners (department managers) in how to use the system. Have them train
the users.
 Inadequate requirements definition : If the requirements of the new system or what is expected from
a new system are not adequately defined, then the implementation team will find it very difficult to
plan the project. Only if the requirements are specified correctly, the ERP package that is best suited
can be selected.

13. WRITE A NOTE ON CRM, SCM, OLAP, DSS, AND MIS.

CRM
Customer relationship management has to be focused on aligning the business processes with customer
strategies employed by the firm. Customer Relationship Management (CRM) can be very useful if it works.
It allows companies to gather customer data swiftly, identify the most valuable customers over time, and
increase customer loyalty by providing customized products and services. It also reduces the cost of serving
these customers and makes it easier to acquire similar customers. It is assumed that CRM has to be technology
intensive. Objectives of CRM can be fulfilled without installing a high-tech solution, if a company has highly
motivated employees who are aware of and sensitive to customer needs.

SCM
A supply chain is a network of facilities and distribution options that performs the function of procurement of
materials, transformation of these materials into intermediate and finished products and the distribution of
these finished products to the customers. Supply chains exist in both service and manufacturing organizations,
although the complexity of the chain may vary greatly from industry to industry and firm to firm. Traditionally,
marketing, distribution, planning, manufacturing and the purchasing organizations along the supply chain
operated independently. These organizations have their own objectives which are often conflicting. There is
a need for a mechanism through which these different functions can be integrated together. Supply chain
management is a strategy through which such integration can be achieved.

OLAP
OLAP can be defined in five words – Fast Analysis of Shared Multi-dimensional Information.
Fast : means that the system is targeted to deliver most responses to users within about 5 seconds, with the
simplest analysis not taking more than one second and very few taking more than 20 seconds.
Analysis: means that the system can cope with any business logic and statistical analysis that is relevant for
the application and the user, and keep it easy enough for the target user.
Shared: means that the system implements all the security requirements for confidentiality and if multiple
write access is needed, concurrent update locking at an appropriate level.
Multi-dimensional: means that the system must provide a multi-dimensional conceptual view of the data,
including full support for hierarchies and multiple hierarchies.
Information: is refined data that is accurate, timely and relevant to the user.

DSS
Decision support systems are interactive information systems that rely on an integrated set of user-friendly
software and hardware tools, to produce and present information targeted to support management in the
decision making process. Managers spend a lot of time and effort in gathering and analyzing information
before making decisions. Decision support systems were created to assist managers in this task. A DSS can
help close this gap and allow managers to improve the quality of their decisions. To do this, the DSS hardware
and software employ the latest technological innovations, planning and forecasting models, 4th generation
languages and even artificial intelligence.
MIS
MIS is a computer – based system that optimizes the collection, collation, transfer and presentation of
information throughout an organization, through an integrated structure of databases and information flow.
The main characteristics of MIS are:
 MIS supports data processing functions of transaction handling and record keeping.
 MIS uses an integrated database and supports a variety of functional areas.
 MIS provides operational, tactical and strategic levels of organization with timely, structured
information.
 MIS is flexible and can adapt to the changing needs of the organization.

14. GIVE A BRIEF NOTE ON MOBILE ERP AND CLOUD ERP SYSTEMS.
Mobile ERP
Mobility and real-time communication are two driving forces reigning the software space for a while. Mobility
is impacting the way businesses conduct their day-to-day operations. Companies are not hesitant in exploring
newer ways to leverage the technology of mobile tools as an extension of their ERP systems. In a mobile ERP
setup, users have the comfort of using their ERP system via mobile devices such as smartphones and tablets,
instead of a fixed computer location. Mobile ERPs enhance mobility within the framework of a company,
thereby increasing business productivity.
CLOUD ERP
Cloud-based computing (also called Software as a Service, or SaaS) allows users access to software
applications that run on shared computing resources (for example, processing power, memory, and disk
storage) via the Internet. These computing resources are maintained in remote data centers dedicated to hosting
various applications on multiple platforms. Cloud ERP is Software as a Service that allows users to access
Enterprise Resource Planning (ERP) software over the Internet. Cloud ERP generally has much lower upfront
costs, because computing resources are leased by the month rather than purchased outright and maintained on
premises. Cloud ERP also gives companies access to their business-critical applications at any time from any
location.