ERP solutions are designed to integrate multiple facets of a company’s business through the interchange of information from various business process areas and related databases. These solutions enable companies to retrieve and disseminate mission-critical data throughout the organization, providing managers with real-time operating information.
ERP technology foundation
ERP does not come without a price. That price includes, in most cases, an extensive IT (information technology) infrastructure. Of course the selection of an ERP software package and the number and availability of resources, will ultimately determine how long and how much it will cost to implement.
The six core business processes in ERP
There are six key business processes: quote to cash; procure to pay; plan to perform; manufacturing operations; product life cycle; and financial management. The sequence that is described assumes that there is an ongoing business and the organization is most effective when planning is done in a closed loop process that maximizes the organization’s strategic and tactical objectives.
Quote to cash: includes the steps required to participate in the marketplace. These steps include the following: . begin with the identification of qualified customers with needs; . apply company’s products to address the needs; and . conclude with customer payment for these goods and services.
Procure to Pay: includes functions associated with procurement of, and payment for, all materials required by the Order Fulfillment process.
Plan to Perform: includes the planning processes associated with demand prediction and associated resource requirements (facilities, personnel, and raw materials). Financial support includes activities required to do the following in all countries where the company has a presence: . supply management with financial status and performance data; and . meet statutory and regulatory requirement of various governments and investors.
Manufacturing operations begins with the receipt of customer orders and ends with the products packaged for delivery to the customer. There are three major manufacturing processes to accommodate production of different classes of products: discrete, lot-based, and flow.
Product life cycle includes management from conception to obsolescence, including product revisions and upgrades. The primary repository is called the product data management system it is the beginning and end of the data needed for the supply chain.
Financial management includes all regulatory reporting. Sub-processes include: accounts receivable; accounts payable; general ledger; and fixed assets. Also activities related to tax reporting, shareholder relations, intellectual property and Standard compliance reporting are located in this process flow.
ERP is the culmination of 40 years of improving systems to plan, procure, and produce products more effectively. Because ERP systems are so comprehensive, suggested business processes are pre-defined. These processes can be adapted to most business environments using process mapping. The As-Is processes are how the business is currently being run. The “To-Be” Processes are how the business would run under ideal conditions.
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