Management Information

Systems

Enterprise Resource Planning

Dr. Md. Rakibul Hoque

University of Dhaka
 Objectives

After completing this chapter, you will be able to

understand:
•Enterprise
•Business Process
•Business Functions
•Enterprise Resource Planning (ERP)
•Benefits of ERP
•Challenges of ERP
•ERP Career Path

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 Enterprise
• An enterprise is a company or business, often a
small one.
• Enterprise is the activity of managing companies
and businesses and starting new ones.
• An Enterprise is a group of people with a
common goal, which has certain resources at
its disposal to achieve that goal. The enterprise
acts as a single entity.

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 Business Scenario

It has many departments or business units

These departments or business units
continuously communicate and exchange data
with each other
The success of any organization lies in effective
communication, and data exchange, within
these departments, as well as associated third
party such as vendors, outsourcers, and
customers.
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Business Scenario

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 Business Functions
• Business function is an operation that is performed
routinely to carry out a part of the mission of an
organization.
• Activities specific to a functional area of operation
– Marketing and Sales
– Supply Chain Management
– Accounting and Finance
– Human Resources

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 Business Functions

Examples of functional areas of operation and their business functions

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 Business Process
• Businesses take inputs (resources) and transform
these inputs into goods and services for customers.
• Business Process is a collection of activities that takes
one or more inputs and transform them into outputs that
is of value to a customer.
• Managing inputs and business processes effectively
requires accurate and up-to-date information.
• Every process is triggered by some event, such as
receiving a customer order or recognizing the need to
increase inventory. The specific steps in the process are
completed in different functional areas.

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Business Process (Added Value)
The difference between the cost of purchasing raw
materials and the price the finished goods are sold for

Cost of Production process Value of output of

inputs/materials adds value finished goods,
includes the services,
and ‘extras’ added
during production
 Business Process
• BP are the way a company does things
– Process invoice, Service customers, Take orders….
• Performed in sequence of tasks or parallel activities
• By one or more individuals and/or computer applications
• Clear definition of roles, responsibilities, expected time frames
and objectives (Who, What, When, How, Why, Where)
• Takes one or more input and creates an output
• Has a value to an organization/customer.
• Connected to other processes
• Performance can be measured
• Modified, redesigned, improved
 Business Process Components

Every BP has well defined goals.

Every person performing a process should work towards a common goal.

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 Business Process Example

• Production or manufacturing process (make)

– manufacture to inventory
• Procurement or purchasing process (buy)
– procure to pay
• Fulfillment process (sell)
– order to cash

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 Business Process Example
• Make iPods (production)
– What parts are required to make an iPod
– How to assemble these parts
– Who performs these steps
• Buy parts (procurement)
– What are some steps in the buying process
– Who performs these steps
• Sell iPods (Fulfillment)
– What are some steps in the selling process
– Who performs these steps
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 Business Process Example
Procurement
•Create Master Production Schedule (MPS)
•Create Bill of Materials (BOM)
•Check material availability
•Create purchase requisition for materials not in stock
•Create Purchase Order (PO)
•Send PO to suppliers
•Receive and inspect materials from suppliers
•Update inventory database
•Receive and verify invoice from suppliers
•Send payment to suppliers

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 Exercise

The fulfillment process (Sell)

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The Fulfillment Process (Sell)

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Business Process

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 Business Process
• For example, when a retailer (customer) places an order
for bicycles, the manufacturer (seller) uses a specific
process to ensure that the correct products are shipped to
the customer in a timely manner and that payment for the
order is received. These process steps can include
validating the order, preparing the shipment, sending
the shipment, issuing an invoice, and recording the
receipt of payment. The sales department receives and
validates the customer order and passes it on to the
warehouse, which prepares and ships the order. The
accounting department handles the invoice and payment
steps.

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 Sample Business Processes
Related to the Sale of a Personal
Smartphone

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Recruiting Process – fill a vacancy

Exercise

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 Recruiting Process – fill a vacancy
•Identify a vacancy
•Develop description of the job profile
•Advertise ‐ soliciting of applications through advertisement, campus
career fairs, personal contacts etc.
•Scan resumes and applications
•Review applications
•Administer written test, oral test, personality test
•Select applicants based on qualification, experience,…
•Interview applicants (telephone/personal).
•Conduct background check, reference check, etc.
•Offer job
•Goal ‐ Hire a successful candidate

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Functional Business Model

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Business Process Model

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Business Process Model

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Integration of Business Functions
Information Systems-Then and Now

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Decentralized System Problems

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 Decentralized System Problems
• Numerous disparate information system generates
individually over time which are difficult to maintain
• Integrating the data is time and money consuming
• Inconsistencies and duplication of data
• Lack of timely information leads to customer
dissatisfaction , loss of revenue and reputation
• High Inventory, material, and human resource
cost.

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Centralized Systems

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 Centralized Systems

1) Data is maintained at a central location and is

shared with various Departments

2) Departments have access to information or data of

other Departments

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 Centralized Systems
• Key benefits of the centralized system are:
• It Eliminates the duplication, discontinuity and redundancy in data
• Provides information across departments in real time.
• Provides control over various business processes
• Increases productivity, better inventory management , promotes
quality , reduced material cost, effective human resources
management, reduced overheads boosts profits
• Better customer interaction and increased throughput. It also
improves customer service
• Hence, a centralized enterprise management system is required.

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 Enterprise Systems/ERP

• Single, integrated IS that uses a single database, help

various functional departments share information and
communicate with each other.
• Enterprise systems integrate business process in
manufacturing and production, finance and accounting,
sales and marketing, and human resources into a single
software systems
• Information entered in one process is immediately
available for other processes
• Enterprise systems provide a technology platform where
organization can integrate and coordinate their major
internal business process.
• Enterprise Resource Planning (ERP) systems is also
known as Enterprise Systems .
 Enterprise Systems/ERP

• Enterprise resource planning systems or enterprise systems are

software systems for business management, encompassing modules
supporting functional areas such as planning, manufacturing, sales,
marketing, distribution, accounting, financial, human resource
management, project management, inventory management, service
and maintenance, transportation and e-business.
• Enterprise resource planning (ERP) systems are the world’s largest
and most complex ES. ERP systems focus primarily on intra-
company processes— that is, the operations that are performed
within an organization—and they integrate functional and cross-
functional business processes. Typical ERP systems support
Operations (Production), Human Resources, Finance & Accounting,
Sales & Distribution, and Procurement.
 Enterprise Systems/ERP

An Enterprise is Resources
a group of Planning
people with a included are
common goal, money and is done to
which has all other ensure
certain things that that
resources at its are required nothing
disposal to goes
achieve that
to run the
goal. enterprise. wrong.
Traditional View of Systems
Enterprise Systems/ERP
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Business Process using Functional
Systems before ERP

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Business Process using ERP

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Legacy System to ERP System

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Legacy Systems Vs. ERP Systems

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Offices Before ERP
Offices After ERP
 Enterprise Systems/ERP

• Business value of enterprise systems

– Integrate Business Processes
– Gain strategic advantage
– Replace legacy systems (not able to support growth)
– Increase operational efficiency
– Standardize IT infrastructure & business processes
– Provide firm-wide information to support decision making
– Include analytical tools to evaluate overall organizational
performance
– Keep closer tabs on global operations
 Enterprise Systems/ERP

• Business value of enterprise systems

– Single data entry points leading to less errors & reconciliation
time
– Right Information at the Right Time
– Enable rapid responses to customer requests for information
or products
– Improve interaction & communication with employees and
partners
– Complete Inventory visibility and lowering of carrying cost
– Automated Product Costing & Financial system
– Right Information at the Right Time
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 Challenges of Enterprise
Systems/ERP
• Difficult to build: Require fundamental changes in the
way the business operates
• Technology: Require complex pieces of software and
large investments of time, money, and expertise
• Centralized organizational coordination and decision
making: Not the best way for the firms to operate
• Lack of business and technical knowledge
• Insufficient training of end-users.

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 Why ERP? Career Path –
You want to earn a master or doctorate degree?

http://scn.sap.com/thread/1479427
SAP ERP Event
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 Why ERP? Career Path –
You want to earn a master or
doctorate degree?

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 Why ERP? Career Path –
You want to earn a master or
doctorate degree?

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ERP Career Path
ERP Career Path
 ERP Career Path
Types of SAP consultants
•Developer consultant: This type of SAP consultant is responsible
for coding Java and ABAP programs.
•Business and sales consultant: Business/sales SAP consultants
focus on winning projects at the customer level.
•Functional consultant: This type of SAP consultant works closely
with developers to create custom code for ABAP programs,
customizing SAP to meet the client requirements.
•SAP basis consultant: An SAP basis consultant helps to install,
maintain and fine-tune databases and SAP servers. SAP basis
consultants may have other responsibilities as well depending on
the size of the project.
 ERP Career Path
How do I step my foot in the world of ERP?
If you work in a company that plans to implement ERP system, then
you should strive to be part of implementation team. You will gain
invaluable experience by going through all the five phases just
covered and learning what efforts and activities each phase entails.
Your biggest asset will be your in-depth and comprehensive
business process knowledge of your area of working.
If and when you come to know that a company plans to implement
ERP system soon, try to join that company and be a part of the
implementation team. You can improve your chances of being hired
in such a company if you get the necessary training and certification
to stand out from the crowd.
If you want to make a consulting career in ERP then try to find
opportunities available in several authorized consulting firms in
Bangladesh. Your chances of getting a break in consulting fields
improve if you acquire the necessary training and attain
certification from these consulting firms.
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 ERP Vendors in the Market
• There are mainly two options for companies to
acquire ERP System in the Market:

• Commercial Vendors

• Open Source Vendors

Commercial Vendors Vs. Open Source
Vendors
Commercial Vendors Open Source Vendors
License and implementation cost NO License Cost only support
is high. service charges

Lengthy process from RFP to Go Agile based Implementation

Not best fit for local industry Specifically designed for SMEs

No Customization Leading to use Easily and Rapidly customized

third party Solution
Development is Quick.
Development is complex
NO Migration Cost on new version
Migration to new version has a
different cost Free of Cost Flexibility & Module
addition.
Flexibility and Module addition
entail extra cost
Categorization of ERP Systems
Categorization of Some Renowned
ERP Systems
Worldwide ERP Software Market
share
The market is
still dominated
by SAP. SAP
have also
introduced their
own cloud-
based offerings.
Selected ERP Systems for Comparison
Oracle
Developed by US Giant
software company Oracle
SAP Inc. and is the second
Developed by German Giant
software company SAP AG and market share holder in ERP
is the leader in ERP Market. It has Market. It has been used
been used over 296,000 customers
in 190 countries and has the
over 350,000 customers in
solution for all business vertical. 145 countries.

Microsoft Dynamics IFS

Developed by US giant Developed by IFS AB a
software Company Swedish software
Microsoft Corporation company and has over
2,000 customers in 50
and is the third market
countries.
share holder in ERP
Market. It has over
220,000 ERP customers
in countries
 Modules
SAP solutions include a number of functional modules,
which support transactions to execute key business
processes, such as −
• Financial Accounting (FI)
• Controlling (CO)
• Sales and Distribution (SD)
• Production Planning (PP)
• Materials Management (MM)
• Quality Management (QM)
• Human Capital Management (HCM)

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Modules
 Modules
The Oracle EBS practice leverages and unifies core
EBS modules that consist of a collection of 
•Oracle HRMS.
•Oracle Payroll.
•Oracle CRM.
•Oracle Financials.
•Oracle Supply Chain Management.
•Oracle Order Management.
•Oracle Procurement.
•Oracle Project Portfolio Management.

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 Modules

Microsoft Dynamics solutions include a number of

functional modules.
• Sales.
• Customer Service.
• Field Service.
• Marketing.
• Human Resource
• Project Automation.
• Finance and Operations.
• Supply Chain Management.

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 Modules
IFS (Industrial and Financial Systems) include a number of
functional modules.
• Financials
• Human Resources
• Manufacturing Management
• Inventory Management
• Supply Chain
• Purchasing Management
• Quality Management
• Sales Management

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 Open Source ERP
• Odoo is an integrated suite of applications that includes modules for
project management, billing, accounting, inventory management,
manufacturing, and purchasing. Those modules can communicate
with each other to efficiently and seamlessly exchange information.
• ERPNext is one of those classic open source projects; in fact, it was
featured on opensource.com way back in 2014. It was designed to
scratch a particular itch, in this case replacing a creaky and expensive
proprietary ERP implementation. ERPNext was built for small and
midsized businesses. It includes modules for accounting, managing
inventory, sales, purchase, and project management. 
 Open Source ERP
• Dolibarr offers end-to-end management for small and midsize businesses
—from keeping track of invoices, contracts, inventory, orders, and
payments to managing documents and supporting electronic point-of-sale
system. It's all wrapped in a fairly clean interface.
• Tryton's based on a EPR system called TinyERP and has been around
since 2008. Over its lifetime, Tryton has grown both in popularity and
flexibility. Tryton is aimed at businesses of all sizes, and has a range of
modules. Those include accounting, sales, invoicing, project management,
shipping, analytics, and inventory management. The system is modular,
so you can install only the modules your business needs. While the
system is web based, there are desktop clients for Windows and MacOS.
 Open Source ERP
• Metasfresh is popular open source ERP software that keeps up
with its name of keeping its code “fresh”. It is an affordable ERP
solution for small and medium businesses to keep up with their
business needs. The system can easily be self-hosted by users. 
• ADempiere is a well-established open-source ERP system that is
aimed at small and medium businesses. ADempiere is an Italian
word that means “achieve” or “Satisfy”, clearly representing the
essence of the software to offer users multidimensional features
aimed to achieve greater efficiency and increased efficiency. The
system comes with complete integration with SCM, as well as,
CRM, making it easier for users to manage various business
functions including sales, purchase, accounting, and inventory
management.
 Cloud ERP
• Cloud ERP is an approach to enterprise resource
planning (ERP) that makes use of cloud computing
platforms and services to provide a business with more
flexible business process transformation.
• Unlike traditional ERP software, Cloud ERP relies on the
cloud rather than proprietary server infrastructure to help
companies share information across departments. Cloud
ERP software integrates some or all of the essential
functions to running a business, e.g. accounting, inventory
and order management, human resources, customer
relationship management (CRM), etc. - into one complete
system.

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 Cloud ERP

• Due to the coronavirus disease (COVID-19)

outbreak and consequent lockdowns imposed by
governments of several countries, there is a rise in
the adoption of remote working models and e-
commerce channels. This is driving the demand for
cloud-based ERP solutions to remotely manage
complex systems, increase security, meet
compliance standards and access data in real-
time.

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 ERP Market in Bangladesh
• In Bangladesh, some large organizations are using ERP, but
most of the organizations are still using manual processes
or some scattered applications (e.g. excel) to maintain their
transactions and business process. The situation is more
vulnerable in SME sector. They are not able to maintain an
ERP because of the high price and high maintenance cost.
• In addition with lengthy implementation, poor project
management, high expectation of users, lack of IT
knowledge, inaccurate system study, and scarcity of
expertise creates high complexity.

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 ERP Market in Bangladesh
• More than 150 companies have already implemented ERP
in Bangladesh. As the target is to help build a  Digital
Bangladesh, the number of ERP implemented-companies
are increasing at significant rate. Now most of the
companies choose ERP for business automation as its
benefit is significantly higher than cost of implementing it.
A short list of Bangladeshi companies with implementing
partners are Viyellatex, Meghna Group of Industries,
Coopers Pvt. Limited (PWC), LG Butterfly, Uttara Motors
Ltd, Bashundhara Group, Exzatech Solutions Bangladesh,
Berger Paints   and    Madina Group.

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 ERP Market in Bangladesh
• Jibika Plexus offers customized ERP features for all kinds of
firms in Bangladesh. It is a cloud-enabled software vendor that
offers payroll and HR systems based on customer requirements.
• XERP stands for eXtreme Enterprise Resource Planning. It is
chiefly designed to be cloud-native, but XERP can work with any
modern browser running on nearly any networked device.
• Zab ERP system integrates all the business management
functionality in one single interface. This local ERP solution is
highly useful for garments usage. Scannability, robustness,
flexibility makes this ERP solution the most desirable one for
ultimate business growth. 
 ERP Market in Bangladesh
• Like other business management software, Erp2all is also a
business management software popularly known as ERP
(Enterprise resource planning) software. The main reason of
selection of this name was lying in the purpose of this
software which was to bring down the cost to all SME's
affordability.
• Prism ERP: It’s core business modules & management of
administrative, managerial business propositions have made
them one of the best ERP software in Bangladesh.
PrismERP supports practically every category of the
company by its presets. There are almost 30 types of
companies that are already executed successfully.
 ERP Market in Bangladesh
• Desh ERP: The vendor is dominating ERP
Company in Bangladesh for providing accounting
and inventory management systems. It integrates
all core functionalities of businesses. The features
of Desh ERP are “user-friendly tools, accounting &
inventory tools, buying and selling tools,
manufacturing and payroll, automation phase by
phase, modular structure, well customization,
unlimited user licenses, financial tools, and ability
to access from anywhere.”

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Thank
You