2ERP to E RPSandeep Desai

Abhishek Srivastava

A CASE STUDY APPROACH

ERP to E2RP

ERP to E2RPA Case Study Approach

SAndEEP dESAiExecutive Vice President (Information Technology)

AFCONS Infrastructure LimitedMumbai

AbhiShEk SRivAStAvATEChCANVASS

Mumbai

Delhi-1100922013

ERP to E2RP: A Case Study ApproachSandeep Desai and Abhishek Srivastava

© 2013 by PHI Learning Private Limited, Delhi. All rights reserved. No part of this book may be reproduced in any form, by mimeograph or any other means, without permission in writing from the publisher.

ISBN-978-81-203-4804-2

The export rights of this book are vested solely with the publisher.

Published by Asoke K. Ghosh, PHI Learning Private Limited, Rimjhim House, 111, Patparganj Industrial Estate, Delhi-110092 and Printed by Mudrak, 30-A, Patparganj, Delhi-110091.

ToMy uncle and one of my mentors

Shri Pandhari Hari Desai who led the successful path for me

–Sandeep Desai

ToMy parents and family

–Abhishek Srivastava

Preface xvAcknowledgements xvii

Part I ERP

1. Introducing ERP and E2RP 3–29 Learning Objectives 1 1.1 Enterprise, Resource and Planning 3 1.1.1 Enterprise 3 1.1.2 Resource 4 1.1.3 Planning 5 1.2 Business Problems 6 1.2.1 Workforce Management (WFM) 7 1.2.2 Customer Care 8 1.2.3 Manufacturing Cycle 9 1.2.4 IT System 10 1.3 ERP—A New Paradigm Shift 11 1.3.1 Definition 11 1.3.2 Evolution of Integrated Solution 11 1.4 ERP Drivers and Its Key Characteristics 21 1.4.1 Rich Functionality 22 1.4.2 Applied Technology 24 1.4.3 Rapid Implementation 25 1.5 ERP Products 25 Summary 27 Exercises 27 Case study 28

Contents

vii

viii Contents

2. Business Processes 30–69 Learning Objectives 30 2.1 Introduction—Industry Verticals and Business Processes 30 2.1.1 Industry Verticals 30 2.1.2 Business Process 32 2.2 Industry Verticals 37 2.2.1 Discrete Manufacturing 37 2.2.2 Process Manufacturing 37 2.2.3 BFSI 38 2.2.4 Infrastructure 38 2.2.5 Public Services 39 2.3 Core Processes 40 2.3.1 Automotive Industry 40 2.3.2 Construction Industry 52 Summary 66 Exercises 66 Case study 67

3. Supporting Process 70–97 Learning Objectives 70 3.1 Introduction 70 3.2 Finance, Accounting and Taxation 71 3.2.1 Functions 71 3.3 Human Resource (HR) 81 3.3.1 Functions 81 3.4 IT and Other Support Functions 91 3.4.1 IT Functions 91 3.4.2 Administrative Functions 92 Summary 92 Exercises 93 Case study 94

4. ERP: Functional and Technical Architecture 98–129 Learning Objectives 98 4.1 Introduction 98 4.2 Functional Architecture 99 4.2.1 Level–1 (Processes Related to Manufacturing) 99 4.2.2 Level–2 (Processes Related to Manufacturing) 108 4.2.3 Level–3 (Processes Related to Manufacturing) 114 4.2.4 Level–4 (Processes Related to Manufacturing) 118 4.2.5 Functional Modules (Manufacturing Operations) 119 4.2.6 Functional Modules (Construction Industry) 119 4.2.7 Functional Modules (Healthcare Industry) 121 4.3 Technical Architecture 122 4.3.1 Foundation 122 4.3.2 Two-tier Implementations 123

Contents ix

4.3.3 Three-tier Implementations 123 4.3.4 Integrated Yet Modular 124 4.3.5 Built on a Common Data Model 125 4.3.6 Based on the Web 125 4.3.7 WorkflowDriven 125 Summary 125 Exercises 126 Case study 126

5. ERP Implementation 130–175 Learning Objectives 130 5.1 Introduction 130 5.2 Phases of Implementation Life Cycle 131 5.3 ERP Project Launching 132 5.3.1 Business Problems: A Review Process 132 5.3.2 Objectives of ERP Implementation 133 5.3.3 Formal Announcement 134 5.4 Product Discovery 140 5.4.1 Selection of ERP Product 140 5.4.2 Selection of Implementation Partner 143 5.5 Implementation Strategy 144 5.5.1 Implementation Paths and Transition Phases 144 5.5.2 Implementation Steps 146 5.6 ERP: Implementation Methods 164 5.6.1 OracleUnifiedMethod (OUM) 164 5.6.2 SAP Implementation Methodology (ASAP) 165 Summary 167 Exercises 167 Case study 168

6. ERP Processes 176–213 Learning Objectives 176 6.1 Introduction 176 6.2 Procure to Pay (P2P) 177 6.2.1 Process Terminologies 177 6.2.2 Business Process Steps (Procure to Receive or P2R) 178 6.2.3 Processes Built in ERP Software 179 6.2.4 Business Process Steps (Receive to Pay or R2P) 186 6.3 Hire to Retire (H2R) 187 6.3.1 Recruitment 187 6.3.2 ERP Process 188 6.4 Tendering Processes in Construction Industry 191 6.4.1 Process Terminologies 192 6.4.2 Tendering Process 192

ERP to E2RP : A Case Study Approach

Publisher : PHI Learning ISBN : 9788120348042 Author : Sandeep DesaiAnd Abhishek Srivastava

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