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E-BUSINESS PRESENTATION

The document provides an overview of Enterprise Resource Planning Systems (ERPS), defining them as integrated software solutions that manage and optimize business functions across an organization. It discusses the evolution of ERP from Material Resource Planning systems, highlights key components such as Human Resources and Customer Relationship Management, and outlines the benefits and concerns associated with ERP implementation. Recommendations for organizations considering ERP include having a clear vision, assessing costs and risks, and seeking partners with industry expertise.
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0% found this document useful (0 votes)
12 views

E-BUSINESS PRESENTATION

The document provides an overview of Enterprise Resource Planning Systems (ERPS), defining them as integrated software solutions that manage and optimize business functions across an organization. It discusses the evolution of ERP from Material Resource Planning systems, highlights key components such as Human Resources and Customer Relationship Management, and outlines the benefits and concerns associated with ERP implementation. Recommendations for organizations considering ERP include having a clear vision, assessing costs and risks, and seeking partners with industry expertise.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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MUNHUMUTAPA SCHOOL OF COMMERCE

DEPARTMENT OF STRATEGIC MANAGEMENT


AGNES P MUZEMBE M231394
MUDZIVO TARIRAI M081190

MASTER IN STRATEGIC MAMAGEMENT

LEVEL 1.1
GROUP PRESENTATION
STRATEGIC INFORMATION MANAGEMENT AND E BUSINESS(MSM611)
LECTURER: DR ZIMUTO
ENTERPRISE RESOURSE PLANNING SYSTEMS

Definition

Enterprise Resource Planning System is a business management system that


comprises integrated sets of comprehensive software, which can be used, when
successfully implemented, to manage and integrate all the business functions within
an organisation. This set usually include a set of mature business applications and
tools for financial accounting, sales and distribution, materials management, human
resource, production planning and computer integrated manufacturing, supply chain,
and customer information. (Boykin, 2001, Chen 2001)

Mallach (2020) defines Enterprise Resource Planning System (ERPS) as information


systems that tie parts of an organisation together through a shared database with its
modules replacing functional information systems.
ERPS is a type of software system that helps organisations automate and manage
core business processes for optimal performances.

Functional information systems are defined as information systems that support


one organisational function independently of others. (Mallach 2020)

EVOLUTION OF ERP
ERP Systems evolved out of Material Resource Planning (MRP) and Manufacturing
Resource Planning 11(MRP11)
MRP systems addressed the single task of materials requirements planning and the
MRP11 extended the scope to the entire manufacturing function. The manufacturing
industry traditionally had a better climate to use computers.
ERP history started with material requirements planning (MRP) systems in the
1960s, when J.I. Case, a manufacturer of tractor and construction machinery,
worked with IBM to develop what is believed to be the first MRP system.

While they were expensive to create, required a team of experts to maintain and took
up a lot of space, early MRP systems enabled businesses to track inventory and
production. That helped manufacturers manage raw materials procurement and
delivery of product to the factory so they could better plan production runs.

History of ERP in manufacturing: The ‘80s marked a milestone in the history


of ERP systems when the first manufacturing resource planning (MRP II) systems
appeared. These more sophisticated solutions supported manufacturing processes
beyond inventory and raw materials procurement. MRP II systems allowed the
various departments involved in manufacturing to coordinate, and they had more
advanced production scheduling capabilities.

By 1990, research firm Gartner coined the term “enterprise resource planning.”
The new name recognized that many businesses—not just manufacturing—were
now using this technology to increase the efficiency of their entire operations.

This is when ERP systems took on their current identity: a unified database for
information from across the company. ERP systems brought in other business
functions, like accounting, sales, engineering, and human resources (HR), to serve
as a single source of accurate data for all employees.

Diagrammatic presentation of the evolution of ERP adapted from


Mallach(2020)

(Page 199)
COMPONENTS OF ENTERPRISE RESOURCE PLANNING

Human Resources - An HR component automates payments, including tax and


benefits deductions. With an integrated timekeeping feature, even payments to your
hourly workers can be automated, so you don’t need to manually input their
timesheets.

Customer Relationship Management - A customer relationship


management (CRM) ERP component allows you to keep track of all your customers
and lead data within your ERP solution. The insights you can gain from a CRM help
optimize your marketing and sales efforts. One of the main uses of CRM is tracking
the buyer histories of your customers. You can also use CRM to track the
conversation history.

Business intelligence - The BI component of ERP software collects and analyses


data, providing actionable insights related to your business processes.

Supply Chain Management - The supply chain management (SCM) component of


an ERP system is one of the most crucial for this reason. You need the best SCM
features to be able to optimize your supply chain, and that starts by collecting real-
time data.

Inventory Management System - An inventory management component is one of


the most collaborative ERP components. Inventory management works in tandem
with the SCM component, but also dips its toes in other processes, such as sales
and warehousing. This main purpose of these components is to manage order
fulfilment and stocking a warehouse.

Financial Management - This component stores and analyses all your financial
data, including accounts payable, accounts receivable, costs, budgets, and
forecasts. It helps reveal insights into your spending, so you can discover profit
trends and times of unusually high spending. Then you can put that data to good use
by changing whatever processes are causing lower profits or high spend, so you can
maximize your profits while reducing costs.
The diagram below shows how different components of the ERMS connect within an
organisation through a web of functions. Mallach (2020) page 198

Delta Beverages and Afdis distilleries both have shifted to use the SAP for
automation of their functions. This has improved the efficiency of their functions in
areas like HR. Accounting, Inventory Management and Customer relations
Management.
BENEFITS OF ERP

▪ Elimination of manual information transfer from one department to the other.


▪ The central database provides a complete picture of all aspects of the
business.
▪ Management has visibility into the overall operation, not just each piece
individually.
▪ Better data and cloud security (dedicated security servers).
▪ Sharing one database elimination of inconsistent views of the same data by
different departments through sharing of the database.
▪ Best practices reflected in built-in processes tend to be better than home-
grown processes.
▪ Better reporting tools with real time information.
▪ Having all data in one place can facilitate compliance with regulatory
authorities such as Zimra.
▪ Inventory costs can be reduced with better forecasting.
▪ Eliminating duplicate data entry can save time and thus improve customer
satisfaction.

CONCERNS WITH ERP


ERP is not a magic bullet. Getting its benefits is not always easy. ERP concerns
include:

▪ ERP software and hardware can be expensive.


▪ Customizing an ERP package is complex. It may require new skills that will
not be cheap. It may take months or years. It might not be successful, but
without it, the ERP system may be unusable.
▪ Once customization is complete, implementation is also time-consuming and
expensive.
▪ The business processes in an ERP package, though excellent overall, may
not suit a specific organization. It may not be practical to customize the
package to be suitable, perhaps because an existing business process
depends on information that isn’t in the ERP database.
▪ Using a package’s processes, even after customizing, may mean changing
how people work. Changes can be upsetting, and sometimes require union
contract renegotiation.
▪ Running ERP software may require expensive hardware & software
upgrades.
▪ MIS staff, after being trained on an ERP system at their employer’s expense,
may use this knowledge to get higher-paying jobs elsewhere or demand
exorbitant raises to stay.

Despite these concerns, most large organizations, and an increasing number of


smaller ones find ERP worthwhile. Once a company has moved to ERP, it is
unlikely to go back—or to want to.
RECOMMENDATIONS

From the presentation above we recommend organisations to embrace ERPS for the
enhancement of their business processes. This has proved effective as
organisations like Delta, Afdis have embraced the use of SAP system in their
business processes.
However, before implementing ERPS, an organisation should have a clear vision of
what it needs to achieve and establish precise requirements, which are aligned with
its business goals. It is crucial to assess what you want to accomplish and how each
business process can be improved.
Further considerations should be made such as the cost of the system, the risks,
backup services, size of the organization, functional fit for your organisation etc.
Looking for a partner that has deep industry expertise, understands your business
processes inside and out, and has a track record of process expertise would
enhance the chances of coming up with a system that is efficient.

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