Erp System Implication

Topics: Enterprise resource planning, Manufacturing resource planning, Supply chain management Pages: 7 (1968 words) Published: November 26, 2011
Analyzing Enterprise Resource Planning system implementation success factors in the Engineering-Procurement Construction & Commissioning Industry Introduction
Back Ground
Enterprise Systems (ES), also called Enterprise Resource Planning (ERP) systems, are among the most important business information technologies to emerge in the last decade. While no two industries Enterprise Systems are the same, the basic concept of Enterprise Systems is focused mainly on standardization, synchronization and improved efficiency. ERP is basically the successor to material resource planning (MRP) and integrated accounting systems such as payroll, general ledger, and billing. The benefits of Enterprise Systems are very significant: coordinating processes and information, reducing carrying costs, decreasing cycle time and improving responsiveness to customer needs [ (Davenport, 2000) ]. MRP is limited to controlling the flow of components and materials, and does not lend itself to more complete production control and coordination. The next generation of manufacturing software, known as MRP II, was developed to address this shortcoming and to further integrate business activities into a common framework. MRP II divides the production control problem into a hierarchy based on time scale and product aggregation. It coordinates the manufacturing process, allowing a variety of tasks such as capacity planning, demand management, production scheduling and distribution to be linked together. [ (Mendelson, 2000) ] Conventionally, the EPC firms have been faced with the predicament of handling the mega projects. The issue always is to keep these multimillion dollar projects on schedule, under budget, and safe with the quality specified by the end user. Although the EPC firms are one of the leading contributors to the development of region, yet it faces the challenges of most highly fragmented, inefficient, and geographically dispersed industries in the world. In recent times the emergence of ERP Software has helped such firms to overcome the issues. EPC Companies in the present world are expanding day by day, moving across the globe to open new avenues of business and expand. These companies also seek diversification in their business and continuously changing and adopting technology to keep pace and maintain their competitive advantage in their prior and newly adopted business sectors. Managing these huge companies need special support of Information Technology to keep a track of activities and handle them accordingly. Companies like BHP Billiton, Nestle etc. have implemented ERP systems around the globe wherever they operate. In our part of the world i.e. Pakistan companies such as Packages, FFC, Raftan Maize and Descon etc. have all implemented ERP systems to handle their business in a more efficient manner with their growth locally and globally. ERP is a software architecture that facilitates the flow of information among the different functions within an enterprise. Similarly, ERP facilitates information sharing across organizational units and geographical locations. It enables decision-makers to have an enterprise-wide view of the information they need in a timely, reliable and consistent fashion. ERP provides the backbone for an enterprise-wide information system. At the core of this enterprise software is a central database which draws data from and feeds data into modular applications that operate on a common computing platform, thus standardizing business processes and data definitions into a unified environment. With an ERP system, data needs to be entered only once. The system provides consistency and visibility-or- transparency across the entire enterprise. A primary benefit of ERP is easier access to reliable, integrated information. A related benefit is the elimination of redundant data and the rationalization of processes, which result in substantial cost savings. [ (Mendelson, 2000) ]. Problem Statement

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