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ERP Enterprise Resource Planning

Aim: Write a report on a manufacturing firm who implemented ERP explaining its Pros and cons. Theory: Introduction: Enterprise resource planning (ERP) is business management software that allows an organization to use a system of integrated applications to manage the business. ERP software integrates all facets of an operation, including product planning, development, manufacturing processes, sales and marketing. It is a cross-functional enterprise system driven by an integrated suite of software modules that supports the basic internal business processes of a company. ERP gives a company an integrated real-time view of its core business processes such as production, order processing, and inventory management, tied together by ERP applications software and a common database maintained by a database management system. ERP systems track business resources (such as cash, raw materials, and production capacity) and the status of commitments made by the business (such as customer orders, purchase orders, and employee payroll), no matter which department (manufacturing, purchasing, sales, accounting, and so on) has entered the data into the system. ERP facilitates information flow between all business functions inside the organization, and manages connections to outside stakeholders. Enterprise system software is a multi-billion dollar industry that produces components that support a variety of business functions. Enterprise systems are complex software packages that offer the potential of integrating data and processes across functions in an enterprise. Although the initial ERP systems focused on large enterprises, there has been a shift towards smaller enterprises also using ERP systems.

Top ERP Packages:


Top 10 Mid-market Packages

SAP Business ByDesign Microsoft Dynamics AX Sage ERP 300 (formerly ACCPAC) Microsoft Dynamics NAV Epicor 9 (formerly Vantage) Microsoft Dynamics GP Macola ES (Exact Software)

ERP System Used In AMC Entertainment System

AMC Entertainment always gets the latest blockbuster movies onto its 5,128 movie screens in the United States and three other countries in time for each premiere. It wanted to be as effective in its distribution of corporate informationwhether that meant exchanging data between the theatres and corporate offices, or between AMC and its vendors. By deploying technologies including Microsoft BizTalk Server, AMC is achieving its goal. The company has reduced IT maintenance spending from 70 to 30 percent of the department budget, freeing staff and funds to meet strategic business needs more quickly and effectively. Situation On the 5,128 movie screens in the 361 theatres owned and operated by AMC Theatres, characters of different cultures, species, and even planets regularly learn to overcome their differences and live together in just under two hours and then repeat the performance several times a day without breaking into a sweat. For example, consider technology. We were running VAX/VMS and Alpha systems, various versions of the Windows Server operating system, and a mixture of UNIX-based and Linux-based back-end systems, recalls Derrick Leggett, Vice President, Enterprise Information Systems at AMC Theatres. We

were spending 70 percent of our IT budget to maintain this and wanted to shift funds to invest in real-time decision-making and profit-generating systems. If AMC could boost interoperability among these systemsgetting them to overcome their differences and communicate more effectively with each other it would go a long way toward helping the company to realize its goals. Solution AMC approached these issues in stages. First, it considered a project to improve interoperability and information sharing by installing Red Hat Linux on desktop computers, computer servers, and POS devices. However, the companys IT team was familiar with Microsoft technologies particularly those it already deployed for desktop computers, messaging systems, and directory services. Which set of technologies would better meet the companys needs? AMC worked with Microsoft Services consultants to create an enterprise data integration strategy and to design the architecture to implement it. At the center of that architecture is Microsoft BizTalk Server 2010, Microsoft integration and connectivity server software. BizTalk Server is designed for the internal and external connectivity needs of companies like AMC; the software includes more than 25 multiplatform adapters and a robust messaging infrastructure, a rules engine to handle automated information workflow, electronic data interchange (EDI) connectivity, and more. An offshore development team from Microsoft handled the development work for the initial BizTalk Server deployment (of BizTalk Server 2006 R2). Benefits AMC wanted to reduce costs and increase revenues by centralizing the flow of internal and external information through BizTalk Server. It succeeded. Spurs Projected $17 Million Annual Revenue Gain Saves $2.6 Million in Annual Expenditures Reduces Maintenance Spending from 70 to 30 Percent of IT Budget

Advantages of ERP (Enterprise Resource Planning) System: 1. Complete visibility into all the important processes across various departments of an organization (especially for senior management personnel). 2. Automatic and coherent work-flow from one department / function to another to ensure smooth transition/ completion of processes. 3. A unified and single reporting system to analyze the statistics/ numbers/ status etc in real-time, across all the functions / departments. 4. Since same software is used across all departments this can avoid individual departments having to buy and maintain their own software systems.

5. Certain ERP vendors can extend their ERP systems to provide Business Intelligence functionalities as well. 6. Advanced e-commerce integration is possible with ERP systems that can handle web-based order tracking/ processing. 7. There are various modules in an ERP system like Finance/ Accounts, Human Resource Management, Manufacturing, Marketing / Sales, Supply Chain / Warehouse Management, CRM, Project Management, etc. 8. Since ERP is a modular software system, its possible to implement either a few modules (or) many modules based on the requirements of an organization. If more modules implemented, the integration between various departments might be better. 9. Single Database is implemented on the back-end to store all the information required by the ERP system and that enables centralized storage / back-up of all enterprise data. 10. ERP systems are more secure as centralized security policies can be applied to them and all the transactions happening via the ERP systems can be tracked. 11. ERP systems provide visibility and hence enable better/ faster collaboration across all the departments. 12. It is possible to integrate other systems (like bar-code reader, for example) to the ERP system through an API (Application Programing Interface). Disadvantages of ERP (Enterprise Resource Planning) Systems: 1. The cost of ERP Software, planning, customization, configuration, testing, implementation, etc is too high. 2. ERP deployments take 1-3 years to get completed and fully functional. 3. Too little customization may not integrate the ERP system with the business process & too much customization may slow down the project and make it difficult to upgrade. 4. The cost savings/ payback may not be realized immediately after the ERP implementation & it is quite difficult to measure the same. 5. The participation of users is very important for successful implementation of ERP projects So, exhaustive user training and simple user interface might be critical. But ERP systems are generally difficult to use (and learn). 6. There maybe additional indirect costs like new IT infrastructure, upgrading the WAN links, etc. 7. Migration of existing data to the new ERP systems is always difficult to achieve as with integrating ERP systems with other stand alone software systems. 8. ERP implementations are difficult to achieve in decentralized organizations with disparate business processes and systems. Conclusion: Thus, ERP Systems make it easier to track the work-flow across various departments and reduce the operational costs involved in manually tracking, and perhaps duplicating data using individual & disparate systems.