Module 1: Introduction

I. Description
This module shall help students to define Enterprise Resource Planning and
management and understand its importance, benefits and disadvantages. It will also
show the ERP’s structure and evolution
II. Objectives
✓ Understand ERP and its components.
✓ Identify ERP’s importance, disadvantages, and benefits.
✓ Understand ERP’s structure and evolution.
III. Duration
Start: Week 2
End: Week 3
IV. Learning Contents
A. What is ERP?
- ERP is an application that automates business processes and provides insights and
internal controls, drawing on a central database that collects inputs from departments
including accounting, manufacturing, supply chain management, sales, marketing and
human resources (HR). One major feature is detailed analytics and reporting on each
department.

- ERP is critical business software that collects information from various departments in a
common database, enabling leaders to monitor the pulse of a company using a single
vision of reality.

- ERP can generate major time and financial savings by providing organization-wide
visibility that spotlights inefficient manual processes and reveals opportunities for
growth.

- There are several deployment models for ERP software, including on-premises, cloud
and hybrid. While cloud ERP has become extremely popular in recent years, the best
approach for any given company depends on its needs.

B. Importance of ERP
- ERP systems have become table stakes for businesses looking to use resources wisely.
They can help leaders reallocate human and financial capital or build more efficient core
business processes that save money without sacrificing on quality or performance.
- An ERP is also an asset when it comes to planning and coordination. Employees can see
current available inventory and customer orders in detail, then compare supplier
purchase orders and forecasted future demand. If necessary, they can make

PrE8: Enterprise Resource Planning and Management

Prof. Julius Estes Paris Guevarra Manabat, RCrim.
 adjustments to head off problems. ERP software improves communication and
collaboration as well because workers can check on the status of other departments to
guide their own decisions.
- As a comprehensive source of data, an ERP system also provides a host of reports and
analytics that can be difference-makers for the business. Turning a vast trove of
information into charts and graphs that clearly illustrate trends and help model possible
results is an ERP capability executives find invaluable.
C. Benefits of ERP
- Cost savings. Perhaps the biggest value proposition of ERP systems is they can save your
organization money in a number of ways. By automating many simple, repetitive tasks,
you minimize errors and the need to add employees at the same rate as business
growth. Cross-company visibility makes it easier to spot inefficiencies that drive up costs
and leads to better deployment of all resources, from labor to inventory to equipment.
And with cloud ERP, companies may quickly see incremental value from the software,
over and above what they’re spending.

- Workflow visibility. With all workflows and information in one place, employees with
access to the system can see the status of projects and the performance of different
business functions relevant to their jobs. This visibility may be particularly valuable to
managers and leaders, and it’s far faster and easier than searching for the right
documents and constantly asking colleagues for updates.

- Reporting/analytics. Data is useful only if companies can analyze and understand it, and
an ERP helps with that. Leading solutions have impressive reporting and analytics tools
that allow users to not only track key performance indicator but display any metrics or
comparisons they can dream up. Since an ERP is all-encompassing, it can help a business
understand how a change or problem with a process in one department affects the rest
of the company.

- Business insights/intelligence. Because ERPs can access real-time data from across the
company, these systems can uncover impactful trends and provide extensive business
insights. This leads to better decision-making by organizational leaders who now have
easy access to all relevant data.

- Regulatory compliance & data security. Financial reporting standards and

governmental and industry-specific data security regulations change frequently, and an
ERP can help your company stay safe and compliant. An ERP provides an audit trail by

PrE8: Enterprise Resource Planning and Management

Prof. Julius Estes Paris Guevarra Manabat, RCrim.
 tracking the lifecycle of each transaction, including adherence to required approval
workflows. Businesses may also reduce the chance of errors and related compliance
snafus with automation. ERP software provides financial reports that comply with
standards and regulations, and SaaS applications are well-equipped to help companies
with PCI-DSS compliance.

- Risk management. ERP technology reduces risk in a few ways. Granular access control
and defined approval workflows can strengthen financial controls and reduce fraud.
Additionally, more-accurate data heads off mistakes that could lead to lost sales or
fines. And finally, the ability to see the status of the entire operation enables employees
to quickly handle risks posed by business disruptions.

- Data security. ERP providers understand that your system houses critical, sensitive data
and take necessary steps to ensure it is secure. This diligence is more important than
ever as the volume and scale of cyberattacks increase. Vendor-managed cloud ERP
software, in particular, uses cutting-edge security protocols to ensure your company
doesn’t fall victim to a damaging attack.

- Collaboration. Employees are most effective when they work together. ERP solutions
make it easy to share information — like purchase orders, contracts and customer-
support records — among teams. It knocks down walls between departments by giving
employees appropriate access to real-time data on related business functions.

- Scalability. The right ERP system will be scalable and flexible enough to meet your
company’s needs today and for the foreseeable future. Cloud systems in particular
adapt to minor and major operational changes even as the amount of data the
organization captures and demand for access increase.

- Flexibility. While ERP software helps businesses follow best practices, it also offers the
flexibility to support unique processes and objectives. The system gives administrators
the ability to build out company-specific workflows and create automatic reports
important to different departments and executives. An ERP enhances your
organization’s innovation and creativity.

- Customization. While most companies find that modern ERPs support their businesses
“out of the box,” some firms need to add to the extensive built-in functionality. If you
have a lot of specialized processes, look for an extensible system that allows your
integrator or IT staff to write code that adds needed features, or that can integrate with

PrE8: Enterprise Resource Planning and Management

Prof. Julius Estes Paris Guevarra Manabat, RCrim.
 homegrown or legacy solutions. However, before going the custom route, take a close
look at your processes — the prebuilt functionality and configurations modern ERP
solutions support are based on best practices gathered from thousands of companies.
Aim to minimize customizations.

- Customer & partner management. An ERP can strengthen a company’s partner and
customer relationships. It can provide insights on suppliers, shipping carriers and service
providers, with the cloud enabling even better, more convenient information exchange.
When it comes to customers, the solution can track survey responses, support tickets,
returns and more so the organization can keep its finger on the pulse of customer
satisfaction.

D. Disadvantages of ERP

- System cost. Because they were expensive to purchase, implement and maintain, early
ERP systems were accessible only to large companies. However, that hasn’t been the
case for two-plus decades. While ERPs still require a time and financial investment, the
technology has become much more affordable thanks to both SaaS systems that charge
a recurring fee and more solutions designed for small and midsize businesses entering
the market. Organizations can use tools to calculate estimated savings after one and
three years, for instance, to find out when returns will surpass costs.

- Need for training. Like any new tech, ERP has a learning curve. Anyone who will use the
software — that is, ideally, most or all of your employees — requires some level of
training. Although there may be resistance at first, that should fade away as people
realize how much the technology will help them. Newer systems that receive frequent
updates are more intuitive and user-friendly, reducing training requirements and
increasing adoption.

- Data conversion costs. When moving to a new ERP, you may need to convert some data
into a format that’s compatible with the new platform. This can lead to unexpected
costs and delays, so review your databases, and work with your IT team or an
integration partner to identify potential data compatibility issues early on. Then, you
can factor conversion efforts into the ERP implementation plan.

- Complexity. An ERP system is loaded with features, and that can be daunting to your
workforce. But the software available today is far easier to use than legacy systems
because vendors have focused on improving the user experience. Additionally,

PrE8: Enterprise Resource Planning and Management

Prof. Julius Estes Paris Guevarra Manabat, RCrim.
 employees need access to only the modules and dashboards required for their jobs,
which can make it more approachable. Thorough training should temper concerns about
complexity.

- Maintenance. In the past, maintenance was a large expense that deterred lower-
revenue businesses from adopting ERP. Not only did a company need an IT staff to
handle patches, security and required system upgrades, it often had to pay the vendor
or a third-party service provider for its expertise. This is less of a concern with a SaaS
system because the provider takes care of all maintenance and regularly moves all
customers to the latest version — and it’s all built into the subscription price.
Companies concerned about maintenance should thoroughly vet a potential supplier to
ensure it offers a true vendor-managed SaaS system.

- Doesn’t solve process and policy issues. If you have error-prone or inefficient
processes, an ERP won’t necessarily fix them, even though it may increase accuracy.
It can, however, uncover problems in your operations and help you brainstorm better
ways to do business. The same goes for policies that hold the organization back — it’s
up to you to adjust those and then configure the system to support better ways of doing
business.

PrE8: Enterprise Resource Planning and Management

Prof. Julius Estes Paris Guevarra Manabat, RCrim.
 E. ERP Modules

- Finance. A finance module, the foundation of just about every ERP system, manages the
general ledger and all financial data. It tracks every transaction, including accounts
payable (AP) and accounts receivable (AR), and handles reconciliations and financial
reporting.
- Procurement. The procurement module manages purchasing, whether raw materials or
finished goods. It can automate requests for quotes and purchase orders and, when
linked to demand planning, minimize overbuying and underbuying.
- Manufacturing. Manufacturing can be complicated, and this module helps companies
coordinate all the steps that go into making products. The module can ensure
production is in line with demand and monitor the number of in-progress and finished
items.

PrE8: Enterprise Resource Planning and Management

Prof. Julius Estes Paris Guevarra Manabat, RCrim.
 - Inventory management. An inventory management module shows current inventory
levels down to the SKU level and updates those numbers in real time. It also measures
key inventory-related metrics. Any products-based company needs this module to
optimize stock on-hand based on current and forecasted demand.
- Order management. This application monitors and prioritizes customer orders from all
channels as they come in and tracks their progress through delivery. An order
management module can speed fulfillment and delivery times and improve the
customer experience.
- Warehouse management. A warehouse management module directs warehouse
activities like receiving, picking, packing and shipping. It can generate time and cost
savings in the warehouse by identifying more efficient ways to execute these tasks.
- Customer relationship management (CRM). CRM is a popular module for businesses in
a wide range of industries. It tracks all communications with clients, assists with lead
management and can enhance customer service and boost sales.
- Professional services automation (PSA). Services businesses often utilize a professional
services automation (PSA) module to plan and track projects, including the time and
resources spent on them. It can simplify client billing and encourage collaboration
among staff members working on a project.
- Workforce management (WFM). A workforce management (WFM) module keeps track
of attendance and hours worked, and some can also manage payroll. This tool can
record absenteeism and productivity by department, team and individual employee.
- Human resources management (HRM). A human resources management (HRM) or
human capital management (HCM) module is similar to a workforce management
module. It keeps employee records with detailed information, like available PTO and
performance reviews, and can tease out workforce trends in various departments or
demographics.
- Ecommerce. An ecommerce module allows retailers and brands to manage the back-
and front-ends of their online stores. They can change the site look and feel and add and
update product pages with this application.
- Marketing automation. This module manages marketing efforts across all digital
channels — email, web, social — and enables organizations to optimize and personalize
their messaging. A marketing automation tool can boost leads, sales and customer
loyalty.

Reference:

✓ McCue, I. 2022. What Is ERP (Enterprise Resource Planning)?. Oracle Netsuite.

PrE8: Enterprise Resource Planning and Management
Prof. Julius Estes Paris Guevarra Manabat, RCrim.