WHAT IS ERP?
ERP, Enterprise Resource Planning, is a way to material, manufacturing process, workflow
integrate the data and processes of an management, etc.
organization into one single system. Usually ERP Financials: Accounts payable, accounts
systems will have many components. To achieve 60 receivable, fixed assets, general ledger and
5 integration, most ERP systems use a unified cash management, etc.
database to store data for various functions found Human Resources: Benefits, training, payroll,
throughout the organization. time and attendance, etc
Supply Chain Management: Inventory, supply
The term ERP originally referred to how a large
65 chain planning, supplier scheduling, claim
organization planned to use organizational wide
processing, order entry, purchasing, etc.
10 resources. In the past, ERP systems were used in
Projects: Costing, billing, activity management,
larger more industrial types of companies.
time and expense, etc.
However, the use of ERP has changed and is
Customer Relationship Management: sales and
extremely comprehensive, today the term can
70 marketing, service, commissions, customer
refer to any type of company, no matter what
contact, calls center support, etc.
15 industry it falls in. In fact, ERP systems are used
Data Warehouse: Usually this is a module that
in almost any organization – large or small.
can be accessed by an organizations
In order for a software system to be considered customers, suppliers and employees.
ERP, it must provide an organization with
75 ERP Improves Productivity
functionality for two or more systems. While
Before ERP systems, each department would
20 some ERP packages exist that only cover two
most likely have had their own computer system,
functions for an organization (QuickBooks:
data and database. Unfortunately, many of these
Payroll & Accounting), most ERP systems cover
systems would not be able to communicate with
80 one another but need cross computer system
Today's ERP systems can cover a wide range of communication to store or rewrite data. For
25 functions and integrate them into one unified instance, the financials of a company were on a
database. For instance, functions such as Human separate computer system than the HR system,
Resources, Supply Chain Management, Customer making it more intensive and complicated to
Relations Management, Financials, 85 process certain pay.
Manufacturing functions and Warehouse
Once an ERP system is in place, usually all
30 Management functions were all once stand alone
aspects of an organization work in harmony
software applications, usually housed with their
instead of every single system needing to be made
own database and network. Today, they can all fit
compatible with the other. For large companies,
under one umbrella – the ERP system.
90 increased productivity, less software are a result.
Integration is Key to ERP
Implementation of an ERP System
35 Integration is an extremely important part to ERP.
Implementing an ERP system is not an easy task
ERP's main goal is to integrate data and processes
to achieve, in fact it takes lots of planning,
from all areas and unify thesse for easy access
consulting and in most cases 3 months to
and work flow. ERPs usually do this by creating
95 1 year +. ERP systems are extraordinarily wide in
one single database that employs multiple
scope and for many larger organizations can be
40 software modules providing different areas of an
extremely complex. Implementing an ERP system
organization with various business functions.
will ultimately require significant changes in staff
Although the ideal configuration would be one and work practices. While it may seem reasonable
ERP system for an entire organization, many 100 for an in house IT staff to head the project, it is
larger organizations usually create an ERP system widely advised that ERP consultants be used, due
45 and then build upon the system and external to the fact that consultants are usually more cost
interface for other stand alone systems which effective and are specifically trained in
might be more powerful and perform better in implementing these types of systems.
fulfilling an organization’s needs. Usually this
105 One of the most important traits that an
type of configuration can be time consuming and
organization should have when implementing an
50 does require lots of labor.
ERP system is ownership of the project. Because
The Ideal ERP System so many changes take place and the broad effect
An ideal ERP system is when a single database is on almost every individual in the organization, it
utilized and contains all data for various software 110 is important to make sure that everyone is on
modules. These software modules can include: board and will help make the project and using
55 Manufacturing: Some of the functions include the new ERP system a success.
engineering, capacity, quality control, bills of
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WHAT IS ERP?
Usually organizations use ERP vendors or QUESTIONS TO ANSWER IN CLASS:
consulting companies to implement their
170 1) Can ERP be used at your school, why?
115 customized ERP system. There are three types of
professional services that are provided when 2) How would ERP use affect the students,
implementing an ERP system, they are secretaries etc.?
Consulting, Customization and Support.
3) Would ERP help in your field, why?
Consulting Services - usually responsible for the
4) Why are mid-sized companies important for
120 initial stages of ERP implementation, they help an
organization go live with their new system, with
product training, workflow, improve ERP's use in 5) Does it make sense to implement ERP in an
the specific organization, etc. economic downturn, why?
Customization Services - work by extending the 6) Write three questions of your own for
125 use of the new ERP system or changing its use by others to answer in class:
creating customized interfaces and/or underlying
180 A. ________________________________
application code. While ERP systems are made
for many core routines, there are still some needs
that need to be built or customized.
130 Support Services - include both support and
maintenance of ERP systems. For instance,
trouble shooting and assistance with ERP issues. ________________________________
Advantages of ERP Systems 185
There are many advantages of implementing an
135 EPR system; here are a few of them: B. ________________________________
A totally integrated system
The ability to streamline different processes
and workflows ________________________________
The ability to easily share data across various
140 departments in an organization
Improved efficiency and productivity levels 190 ________________________________
Better tracking and forecasting
Improved customer service C. ________________________________
145 Disadvantages of ERP Systems
While advantages usually outweigh disadvantages ________________________________
for most organizations implementing an ERP
system, here are some of the most common 195
obstacles experienced: ________________________________
150 Usually many obstacles can be prevented if
adequate investment is made and adequate
training is involved, however, success does
depend on skills and the experience of the
workforce to quickly adapt to the new 7) List words you didn’t know and their
155 system. 200 meaning:
Customization in many situations is limited
The need to reengineer business processes A. ___________________ ____________
ERP systems can be cost prohibitive to install
and run ________________________________
160 Technical support can be shoddy
ERP's may be too rigid for specific 205
organizations that are either new or want to ________________________________
move in a new direction in the near future.
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WHAT IS ERP?
10) Write two (2) more Multiple Choice
statements based on the article:
B. ___________________ ____________
A disadvantage of ERP is:
________________________________ A. support services.
215 255 B. supply chain management.
________________________________ C. rigidity.
D. all of the above.
8) List phrases where you don’t know the ________________________________
220 meaning although you know the words:
265 A. ___________________
9) Write two (2) more True / False
statements based on the article:
235 T / F You need ERP for CRM, HR etc.
280 D. ___________________
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