ERP is an integrated software solution that automates an organization’s administrative and core business processes and has decision support capabilities.
ERP Objective = Reduction of costs
- Integration typicaly means that each of the process modules shares a common user interface, common databases or data warehouse and information/entities across modules or geographic locations.
- Examples of ERP common process modules:
Purchasing, Materials Management, Plant Maintenance, Finance (General Ledger & Costs), ¦lt;br /> HR (Benefits, Time, Personnel and Payroll), Sales capture and logistics.
What covers ERP?
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A sales order is made and recorded (Sales)
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Parts are reserved or purchased and delivered (Purchasing and Supply)
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Labour is scheduled and charged (Human Resources)
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The cost of parts is taken from General Ledger inventory accounts, and the revenue is booked and billed when the order is completed (Finance)
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The required goods are manufactured and assembled (Production)
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The completed order is shipped to the costumer (Distribution)
What is the business case for ERP?
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Generally first tier, large organization… but latest developments are scalable to small enterprises.
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Return on investment of 20% or greater.
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Payback in less than 5 years.
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One ERP vendor has more than 9,000 customers… that’s a strong indicator of its popularity.
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Regulatory and reporting pressures may force firm to invest in a computerized enterprise resource management system like ERP.
Reference:
BayanTrade
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