ERP
ENTERPRISE
RESOURCE
PLANNING
By İlhan SAĞER 2010503055
INDUSTRIAL ENGINEERING DEPARTMENT OF DOKUZ EYLUL UNIVERSITY
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WHAT IS AN ERP SYSTEM – DEFINITIONS
Simplistic Definition
ERP - Enterprise Resource Planning
Detailed Definition
“a business strategy and set of industry-domainspecific applications that build customer and
shareholder communities value network system
by enabling and optimising enterprise and interenterprise collaborative operational and
financial processes”(Source: Gartner’s Research Note SPA-12-0420)
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ERP – ENTERPRISE RESOURCE PLANNING
PLANNING the RESOURCES of an ENTERPRISE

ERP is a way to integrate the data and processes of an organization into one
single system with modules that support core business areas such as
manufacturing, distribution, financials and human resources.

ERP allows managers from most or all departments to look vertically and
horizontally across the organization to see what they must see (information) to
be productive in their managerial roles.

ERP captures data from historical activity and current operations . That data
can be transformed into information that, along with external information, is
useful in planning and controlling operations, and in developing business
strategies.

ERP is evolving into a Multi-Module Application Software Package that
automates inter-organizational business processes across the supply chain
which involve business partners, suppliers, customers, and more.
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BEFORE ERP
Problems:
Delays, Lost Orders, Keying into different computer systems invite errors
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Finance & Accounting
Information Flow
Logistics
Information Flow
Manufacturing
Information Flow
Sales
Information Flow
Marketing
Information Flow
ERP STRUCTURE
Top Management
Material & Product Flow
Figure 2-2 Information and material flows in a functional business model
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AFTER ERP
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EVOLUTION OF ERP
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1960s – Inventory Control
1970s – MRP (Material Requirement Planning).
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1980s – MRPII (Manufacturing Resource Planning)

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MRPII supported efforts to optimize the entire plant production system by
supporting capacity planning, shop floor control, and distribution management
activities. MRPII was further extended to support areas like Finance, Human
Resources, Engineering, Project Management etc. As MRPII like systems were
adopted by non manufacturing enterprises like banks and airlines to support crossfunctional coordination and integration of business processes, the “M” no longer fit,
thus the name ERP was coined.
1990s – ERP

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This system helped in translating the master production schedule into requirements
for individual units like sub assemblies, components and raw materials. MRP
systems helped determine what to order, how much to order, when to order and
when to schedule delivery.
Today, ERP is the foundation system for domestic and global business operations,
supporting most or all functional areas in their daily operations. For some
organizations, ERP is a source of competitive advantage.
21st century – ERPII

–.
ERPII is the name some now use to describe ERP like systems that are evolving to
support inter-organizational business processes across the supply chain.
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The Evolution of ERP
System
Primary Business Need (s)
Scope
Enabling Technology
MRP
Efficiency
Inventory Management and
Production planning and
control.
Mainframe computers, batch
processing, traditional file
systems.
MRPII
Efficiency, Effectiveness and
integration of manufacturing
systems
Extending to the entire
manufacturing firm
(becoming cross
functional).
Mainframes and Mini computers,
real-time (time sharing)
processing ,database management
systems (relational)
Entire organization
(increasingly cross
functional), both
manufacturing and nonmanufacturing operations
Mainframes, Mini and micro
Computers, Client server
networks with distributed
processing and distributed
databases, Data warehousing, and
mining, knowledge management.
ERP
Efficiency (primarily back
office), Effectiveness and
integration of all organizational
systems.
ERPII
Efficiency, Effectiveness and
integration within and among
enterprises.
Entire organization
extending to other
organizations (cross
functional and cross
enterprise--partners,
suppliers, customers, etc.)
Mainframes, Client Server
systems, distributed computing,
knowledge management, internet
technology (includes intranets
and extranets).
IRP
Efficiency, Effectiveness and
Integration within and among all
relevant constituents on a global
scale.
Entire organization and its
constituents (increasingly
global) comprising supply
chain from beginning to
end as well as other
industry and government
constituents
Internet, Web Service
Architecture, wireless
networking, mobile wireless,
knowledge management, grid
computing, artificial intelligence.
Enterprise Suite,
or whatever label
gains common
acceptance
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WHY IMPLEMENT AN ERP SYSTEM?

To support business goals

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Integrated, on-line, secure, self-service
processes for business
Eliminate costly mainframe/fragmented
technologies
Improved Integration of Systems and
Processes
Lower Costs
Empower Employees
Enable Partners, Customers and Suppliers
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HOW SHOULD WE IMPLEMENT ERP SYSTEMS
Obtain the right mix of people,
processes and technology!!
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TYPICAL ERP COMPONENTS
Interaction
Channels
Web
Internet
Mobile
Wireless
e-Mail
Call Center
ICM/Telephony
Analytical
Applications
Marketing
Intelligence
Sales
Intelligence
Customer
Intelligence
Call Center
Intelligence
Business
Applications
Marketing
CRM
Foundation
E-Business
Foundation
Tech Stack
Sales
eCommerce
OSS
HR
Installed Base
Resources
Territories
Assignment Engine
Tasks
Notes
Calendar
1-to-1 Fulfillment
TCA
Escalations
Interaction History
Universal Work Q
Common Data and Object Models, Security, Interfaces, Globalisation
E-business Platform
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ERP TODAY

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Today’s focus seem more to be external as organizations look for ways to
support and improve relationships and interactions with customers, suppliers,
partners and other stakeholders.
The focus of ERP in increasingly on Front-Office Applications and interorganizational business processes, thus making it visible to “OUTSIDERS”
The increasing importance of E-Commerce and Globalization of business
makes support of inter-organizational processes more important.
ERP Vendors

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SAP
PeopleSoft
Oracle
Microsoft Business Solutions
SSA Global
ERP vendor products reflect the evolving business needs of clients and the
capabilities of IT, perhaps most notably internet related technologies.
ERP helps Organization to



improve competitiveness
increase profits
prosper in the global economy.
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AN ERP SOFTWARE : SAP

SAP’s founders had to develop their first software
package at night on their first customer’s computer


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The first software package was referred to by various
names, including R, RF and R/1
Between 1978 and 1982, SAP developed a more
integrated software package, called R/2


Computers were not commonly available in 1972
R/2 was still a mainframe computer package
By 1988, SAP had developed R/2 into an international
software program and had sold 1,000 systems
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ERP VENDORS

Consolidation is currently taking place in the ERP
software business
PeopleSoft purchased ERP vendor J.D. Edwards in
2003
 Oracle, after a long battle, acquired PeopleSoft in 2005
 SAP and Oracle are now the two largest ERP vendors
 Microsoft is challenging SAP and Oracle to sell ERP
systems to small- and medium-sized businesses

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ERPII—THE FUTURE OF ERP

ERPII is a business strategy and a set of collaborative operational and
financial processes internally and beyond the enterprise

New multi-enterprise business models like Value Collaboration Networks,
customer-centric networks that coordinate all players in the supply chain,
are becoming popular as we enter the 21st century

These new business models reflect an increased business focus on external
integration

There is movement away from Client-Server System to Internet Based
Architecture
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NEW TECHNOLOGIES IN ERPII

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E-Commerce (Electronic Commerce)
M-Commerce (Mobile & Wireless Technologies)
C-Commerce (Collaborative Commerce)
Middleware
Enterprise Portal Technologies
Web Services
RFID
Analytical Capabilities (Data Warehousing & Data Mining)
CRM, SCM, SRM
Knowledge Management
Business Intelligence
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DIFFERENCE BETWEEN ERP & ERPII
Six key differences between ERP and ERP II Systems
Keys
ERP
ERPII
Role
Traditional ERP was concerned with
optimizing an enterprise, Internal
optimization.
ERP II systems are about optimizing the
supply chain through collaboration with
trading partners.
Domain
ERP systems focused on manufacturing
and distribution.
ERP II systems will cross all sectors and
segments of business.
As ERP systems cross sectors and
segments, they will no longer be able to
present all things to all people.
ERP II vendors to pick the industries in
which they’re going to play, and focus on
providing deep functionality for those users.
In ERP systems, the processes were
focused on the four walls of the
enterprise.
ERP II systems will connect with trading
partners, to take those processes beyond
the boundaries of the enterprise.
Old ERP systems were monolithic and
closed.
ERP II systems will be Web-based, open to
integrate and interoperate with other
systems that allow users to choose just the
functionality they need.
Information in ERP systems is
generated and consumed within the
enterprise.
In an ERP II system, that same information
will be available across the supply chain to
authorized participants.
Function
Process
Architecture
Data
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RETURNS FROM THE ERP INVESTMENT

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ERP eliminates redundant effort and duplicated data,
resulting in reduced personnel needs
ERP systems can help produce goods and services more
quickly, resulting in increased sales volume
An ERP system may be required to compete with competitors
who have effectively implemented ERP systems
ERP systems can reduce frustration resulting from the
inability to get accurate and timely data
More accurate and timely data can improve external
customer relations
The payoff from ERP systems can occur over many years,
when other factors may also affect the company, making the
return hard to calculate
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CONCLUSION
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Enterprise systems are evolving because organizations are
changing.
To know what the future of ERP holds, one must look to the
changing environment of business and changing business
needs.
Systems will evolve to meet the business needs. Based on
current trends, these will be increasingly inter-organizational
and global.
Inter-organizational systems (ERPII) will pose challenges
beyond the ones faced with ERP because of the need to
integrate the diverse systems of different organizations.
Global supply chains mean inter-organizational systems that
span different cultures and countries. That will bring even
greater challenges due to cultural differences, legal issues, and
more.
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CONCLUSION ( CONT.)



ERP systems provide a mechanism for implementing
systems where a high degree of integration between
applications is required
The Business Case or Value Proposition for
implementation must be outlined
To successfully implement a proper mix of people,
processes and technology should be maintained
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THANKS FOR YOUR ATTENTION!!!
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