ERP Introduction by keralaguest


									ERP Introduction
The term Enterprise Resource Planning (ERP) is most commonly referenced in the
context of commercially available software systems. ERP systems provide an integrated
suite of information technology applications that support the operations of an enterprise
and are not, as the acronym ERP implies, limited to planning functions. The activities
supported by ERP systems include all core functions of an enterprise, including financial
management, human resources management, and operations. Increasingly, ERP vendors
are offering “bolt-on” products that provide specialized functionality to augment the core,
such as Advanced Planning and Scheduling (APS), and Customer Relationship
Management (CRM).

Although the term ERP generally refers to a software system, it also encompasses the
business processes that drive system requirements and capabilities. ERP systems support
and enable the transformation of enterprises through the deployment of best practices and
integrated business processes. Transformation of business processes can be achieved
using a Continuous Business Process Improvement (CBPI) approach. CBPI refers to both
incremental and larger, more radical process changes. Transformation through the use of
CBPI frequently leverages the implementation of an ERP solution as a key enabler. In
CBPI, business processes, work flows, information, organizational design and position
descriptions are changed.

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ERP Background
The ERP model took years to emerge and is still evolving today. The concept began in
the 1960’s with MRP, or Material Requirements Planning systems, that assisted
manufacturing companies in planning and scheduling. The first actual ERP system was
created in 1972, in Mannheim Germany, by five former IBM employees who founded the
company SAP to produce and market standard software for integrated business solutions.
In the early 1980’s, MRP evolved into Manufacturing Resource Planning, or MRP II,
introducing the concept of integrating financials with the manufacturing work-in-process.
These early MRP and ERP systems were mainframe based.

In the latter 1980’s, the second phase of ERP development occurred when organizations
increased the integration of their business and focused more attention on quality
measures. In the 1990's, with the Year 2000 computer problem looming and the advent of
client/server platforms, businesses decided there were benefits to integrating all the core
systems across their internal enterprise.

ERPs soon became known as Commercial Off-The-Shelf (COTS) solutions that
specialized in business processes, functions, and industries. This integration focus
resulted in a dramatic increase in the widespread use of ERPs. Today, in the world of the
Internet and e-commerce, ERP vendors are moving toward integrating businesses with
other businesses by building an organization that connects your supplier’s supplier to
your customer’s customer.

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ERP Purpose
The main value ERP systems provide is the opportunity to integrate an entire
organization. End to end business processes that were traditionally disjointed, now share
information through a common database. The information flow is much more efficient in
that there are clear lines of business processes across the enterprise. For example, in a
horizontally integrated ERP system, a purchasing department would process a purchase
order in a central database with a common General Ledger (GL). Both Accounts Payable
and Receiving have access to the same GL so the data would be immediately available to
them. There is no time lag, re-entry of information, or dependency on paper documents.
By having a single point of entry the risk of inaccuracy in the end-to-end transaction is
reduced, resulting in fewer reconciliation points. Additionally, the ERP systems of today
provide utilities for vertical integration with suppliers and distributors. When properly
implemented as part of a comprehensive transformation effort, ERP solutions can yield
the following results:

      Integrated processes and information systems
      Consolidation and/or elimination of current systems
      Reduced complexity of application and technology portfolios
      Reduced reliance on programmers to make software changes
      Authoritative data source
      Reduced data redundancy and duplicative data entry
      More effective and efficient business processes

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Figure 1: Before & After ERP
Figure 1 illustrates the concept of consolidating applications and interfaces through the
use of an ERP solution. This represents an “ideal” situation, which is rarely the
implementation reality, but nonetheless a goal.

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ERP in DoD
During the 1990s, the majority of Fortune 500 companies completed ERP
implementations and have been refining and upgrading these systems as part of
continuous improvement efforts ever since. By contrast, the Federal Government, and in
particular the Department of Defense (DoD) have just begun implementing ERP
solutions over the last three to five years. Since these implementations take years to
complete, there are few Government implementations to be benchmarked. Additionally,
due to the size, complexity and organizational composition of the DoD, many ERP
solutions are being deployed in stove piped rather than enterprise implementations. For
example, the Army Logistics community has several SAP implementations ongoing,
while the Navy and Air Force have their own Logistics ERP programs. Another example
is the Human Resources community, where enterprise ERP implementations are either
completed or underway, but civilian and military personnel are tracked in two different
ERPs. The implication is that ERP systems are being implemented in DoD as a point
solution rather than an enterprise solution. Although it is a step in the right direction in
terms of consolidation, the current situation does not represent the ideal state of an
integrated enterprise.

The Transformation Framework in Draft DA Pamphlet 5-XX provides an overarching
five-phase approach to transformation. Within these five phases, initiatives to move the
Army from its current state to its target state are identified and carried out. These
initiatives will include, among others, CBPI and ERP programs. A carefully orchestrated
portfolio of programs will maximize the effectiveness and efficiency of the institutional
Army and move toward the ultimate goal of a campaign quality Army with joint and
expeditionary capabilities.

ERP Data Sheets

       Manufacturing: The Manufacturing module defines the production
       process, calculates and tracks product and job cost, and records all of the
       activities necessary to manufacture products. Stages of manufacturing are
       consolidated into a process specification. Actual cost rollups within the
       process specification are compared to standard job cost for each lot or
       batch produced. All manufacturing-related activities are tracked and
       charged to a job, thereby determining actual job cost and variances.
       General Ledger journal entries are automatically created for all
       transactions, and lot trace information is recorded from the manufacturing
       Sales Order Management: Sales Order Management includes functions
       for Order Entry, Shipping, Invoicing, Credit Memos, and Sales Analysis.
       To support these functions, creation and maintenance of the Customer
       Master, along with Price and Discount functions are also included.
       Included with Order Entry and Shipping are on-line Credit Checking and
       Inventory Availability, including ‘Available to Promise’ and Reservations.
       Purchasing: The Purchasing module handles Purchase Requisitions,
       Purchase Orders, Receiving, and Vouchering of Invoices for raw
       materials, MRP purchases, Maintenance, and other MRO and one-time
       purchases. It can support the purchasing requirements of both multi-site,
       multi-national corporations and single-site domestic operations in either a
       centralized or decentralized mode.
       Financials: Financials is the central source of financial information that
       leverages data from across your enterprise and helps manage your critical
       financial processes – from planning through decision-making. It provides
       the flexibility and functionality to manage even large, complex, or multi-
       national enterprises in dynamic business environments.
       General Ledger: General Ledger provides a central, integrated data
       repository for all financial and statistical transactions, with flexible
       configuration and feature-rich functionality to plan, manage, and analyze
       your organization’s financial performance and operating results.
       Accounts Payable: The Accounts Payable module delivers
       comprehensive functionality for supplier maintenance, online inquiry, and
       cash management capabilities, handling multi-currency invoices and
       payments to enable you to conduct your business anywhere in the world.
       Accounts Receivable: The Accounts Receivable module delivers
       comprehensive functionality to streamline routine tasks such as billing,
       credit management, payment application, and tax calculation – reducing
costs and enabling your finance professionals to concentrate on analyzing
credit risk and customer performance.
Fixed Assets: Ross ERP enables you to efficiently track and maintain
detailed administrative data about your organization’s assets, from
acquisition to disposal. It allows you to distribute depreciation and
expense information to the General Ledger on a monthly basis.
Maintenance Management: Ross ERP enables you to maintain the
current and historical data you need to control and effectively manage
maintenance; ensure consistently high levels of equipment reliability,
regulatory compliance, and cost containment; and extend the life of
significant capital assets.
Security, eSignatures, and Audit Trails: Ross Enterprise Security
Manager provides advanced, role-based security administration
capabilities. Roles are created and users are assigned to one or many
roles. In order to use any of the transactions within the software, the user
must pass through a number of layers of security.
Technology and Deployment: Beyond business issues, systems
become obsolete due to the disconnect between the software vendor and
the technology platforms they run on. Ross Enterprise mitigates these
risks by ‘future-proofing’ your investment. Our software has one common
software code base for the business logic and provides the middleware to
port to all common platforms to ensure evolution without obsolescence.

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