Cost Estimate and Accounting in ERP
February 12, 2025
ERP systems are complex, time consuming and expensive. Instances of failure of ERP projects abound including some high ticket failures such as Hershey, (largest chocolate maker of USA), where a SAP implementation was abandoned after three years. There are various “Dos” and “Dont’s” effecting success or failures of an ERP implementation. Some of critical success […]
Service Planning – Attending of unscheduled maintenance tasks arising out of breakdown and faults both for internal and external customer is an important service activity of any organization. However, bulk of service activities arise out of planned service activities. For internal customers, this may be routine maintenance of plant and equipments, arising out of preventive […]
Introduction Plant and machinery in the initial days always perform to their fullest capacity but as time goes with regular wear and tear, this becomes increasingly difficult. If proper and regular maintenance is undertaken than production capacity can be maintained at a more or less same level. Maintenance also requires replacement decisions. Replacement is a […]
Machine learning seems like an “IT” buzzword. It seems to be the sort of thing that would make a difference to high tech companies and not businesses that we interact with every day. However, that is not the case. Machine learning is expected to have a significant impact on all sectors and finance is not […]
Demand Planning: The objective of this function is to create a demand plan, based on historical sales data. The demand plan resulting from this function is the starting point for Supply Planning. The demand plan contains forecasted demand for an item, using standard forecasting methods. If the past data is inappropriate or insufficient, the forecast […]
Enterprise Resource Planning (ERP) and Business Process Re-engineering (BPR) evolved almost at the same time i.e. 1st half of 1990. Both relates to radical redesign of an organization at a relatively short period. Both are having the primary intend to optimize workflow and improve productivity. But, the chicken and egg question remained, whether an organization reengineer business process before implementing ERP or directly implement ERP and reengineer by adopting standard business process, included in the ERP package.
BPR means not only change but radical change within a short period. This change is achieved by complete revamp of organizational structure, business process workflow, job description, performance measurement and adoption of information technology. Some of Basic characteristics of BPR are:
A successful BPR implementation brings significant improvement to productivity, customer service and bottom-line. There are pain and difficulties during implementation and instances where BPR efforts did not achieve desired result. Notwithstanding, the risk is worth taking. Otherwise, there will be grater risk of being overtaken by competitors who develop and progress rapidly through BPR.
BPR or ERP: For successful of BPR implementation, Information Technology plays the role of a key enabler. Therefore, a question is raised whether it is logical to directly implement ERP and re-engineer business processes by adopting world class practices, contained in ERP packages. This approach would avoid embarking on BPR which is expensive, time consuming and often risky. Also reengineered process arising out of BPR exercise may not be best of class. On the other hand, there is a grave risk in this approach if a proper ERP package is not chosen. Process orientation and ownership will be lacking from employees which may lead to major implementation difficulties.
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