What is ERP?

ERP is the abbreviation of English Enterprise Resource Planning, which means enterprise resource planning. It is actually a software system, whose function is to systematize, optimize and integrate the operation processes of various functional departments in the internal value-added chain of enterprises, so as to organically combine the operation of the whole enterprise, fully realize the coordination and cooperation among departments and reduce friction. Through the overall planning and scheduling of all resources of the enterprise, the optimal combination and distribution of resources are realized. When integrating the operation of various departments of an enterprise, ERP must design the business philosophy, thinking, development strategy and realization means of the enterprise into the system, and realize it through the implementation of ERP system.

ERP is not a myth. Many enterprise executives believe that many management problems of enterprises will be solved as long as ERP is used. Unfortunately, it would be disappointing to regard ERP as a panacea. In fact, ERP, as a system software, is not a strategy in itself, but a tool to realize the strategy. Its function is only to organize, code and standardize the business processes and data of an enterprise, so as to make them information supporting the company's business. ERP takes a long time and costs a lot. Enterprises must be fully prepared in terms of capital, cognition, information and psychology before they can be launched. Otherwise, the results will not only fail to bring the expected benefits to enterprises, but sometimes seriously affect the normal operation of enterprises and bring economic losses to enterprises. Whether ERP can bring success depends on organization and implementation.

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ERP is not the best, only the most suitable.

When choosing an ERP system, corporate executives usually ask "which one is the best?" In fact, ERP system is not the best, only the most suitable. Every ERP system, regardless of its enterprise scale, is designed and developed based on a management concept. Generally speaking, if the management concept of ERP system is similar to that of enterprises, the implementation will be more successful, and vice versa. When the management ideas of enterprise and system are inconsistent, there are two choices: to modify the system to meet the requirements of the enterprise system, or to reform the enterprise system to meet the requirements of the system. When making a choice between the two, we should analyze the benefits and costs, compare their benefits, the cost of renovation and modification, and the negative impact it will bring. Many business owners think that systematic management thought is the summary of many excellent business management thoughts, so enterprises should rely on systematic management thought as much as possible. In fact, the management idea of an enterprise is usually run-in for a long time in a specific business environment, and the existence and profit of the enterprise prove its existence value. Furthermore, any subsystem plays a balancing role in a large system. Once the subsystem changes, its large system will be out of balance.

The implementation of ERP should not only choose the most suitable system, but also choose the most suitable system integration company. As an ERP implementation consultant, the system integration company should not only understand and master the ERP system and its development tools, but also deeply understand the existing environment, business philosophy and culture of the enterprise and make a correct judgment on the choice of the enterprise and system. It is more important to choose a system integration company that agrees with corporate culture and management ideas, so that the management ideas of enterprises will not be easily ignored.

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ERP is not a product, but a process.

The implementation of ERP is a process, a very painful process. If the implementation of ERP is regarded as a system installation, then it is certainly difficult for enterprises to cope with the impact that the implementation of ERP will bring to enterprises. Generally speaking, the implementation of ERP takes 2 to 3 years to see results. It not only involves the enterprise's investment in the system, but also requires all employees to make great adjustments in their duties and work habits, which is the redistribution of rights, responsibilities and benefits of the enterprise. Therefore, enterprises must be fully prepared to implement ERP in financial resources, manpower, energy and psychology.

As a process, the importance of ERP implementation sequence is often ignored. Many enterprises implement ERP in the order of hardware and network, ERP software and training. This sequence leads to a large investment in ERP in the early stage, and the implementation brings great psychological pressure. Because the software implementation cycle is very long, by the time the software is completed, the hardware value has been greatly depreciated, resulting in unnecessary waste. In addition, the demand for hardware is not clear before the software is determined, which often leads to excessive purchase and unnecessary waste of hardware. The correct order should be training first, then software, and finally hardware.

Training can be divided into cognitive training and operational training in content. Awareness training is mainly to make relevant employees, especially middle managers, understand ERP, identify with ERP, actively cooperate with the implementation of ERP, and make psychological preparations for the possible impact of ERP implementation. Operation training is to make relevant employees master the operation of the system skillfully.

Software implementation should be divided into three stages: familiarity, simplification and automation. Familiarity means that the implementation unit must fully understand the existing business processes and their guiding ideology; Simplification is to decompose the business process of an enterprise into subsystems that are easy to understand and control; Automation is to realize computerized control of all systems.

Implement a successful ERP project

Why is the failure rate of ERP implementation so high? Some scholars believe that the organizational structure of enterprises is unreasonable; Other technical experts believe that the decision-makers of enterprises can't make up their minds to make necessary adjustments to the enterprise's system and system. Both of these views have their reasons, but two more important points are: enterprises have no clear strategic positioning before implementing ERP; The implementation scheme of ERP system has the inherent characteristics of self-amplification. Solving these two points well is the basic guarantee for the successful implementation of ERP system.

First of all, a clear strategic positioning determines the goal to be achieved by ERP system and the system requirements for achieving this goal. ERP system integrates key data such as planning, purchasing, forecasting and finance that run through regions, products, branches and functional departments. The system can accurately reflect the above aspects in detail and effectively control them. However, whether it is detailed or not, the degree of control reflects the characteristics and culture of the enterprise in a sense, and the more detailed the better. But the way to deal with the details can be described as a hundred schools of thought contend, each with its own reasons. If the enterprise does not have a very clear strategic positioning, it is difficult for a huge system like ERP to achieve overall unity.

Secondly, it is human nature to pursue perfection. However, when implementing ERP, enterprises must stick to the budget and implementation plan, and don't be moved by the perfection of some details, and don't constantly change, otherwise the ERP system program will swell up, the implementation cycle will be delayed indefinitely, and the cost will increase indefinitely. When formulating the implementation plan, we should listen to opinions widely and think carefully. Once the implementation plan is determined, it must be strictly implemented. Frequent revision of the implementation plan is the biggest reason for the failure of ERP implementation.

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A concept developed by Gartner Group describes the next generation manufacturing business system and manufacturing resource planning (MRP II) software. It will include a client/service architecture, using a graphical user interface, and through the use of open systems. In addition to the existing standard functions, it also includes other functions, such as quality, process operation management and adjustment report. In particular, the basic technology adopted by ERP will make users independent in both software and hardware, making it easier to upgrade. The key of ERP is that all users can tailor their own applications, so it is naturally easy to use.

Gartner Group proposed that the functional standards of ERP should include four aspects:

1. Integrated functions beyond MRP scope

Including quality management; Laboratory management; Process operation management; Formula management; Product data management; Maintenance management; Control reporting and warehouse management.

2. Support mixed manufacturing environment

Including a manufacturing environment capable of supporting discreteness and process; The ability to combine business processes with international applications according to an object-oriented business model.

3. Support dynamic monitoring capability and improve business performance.

Including the adoption of control and engineering methods throughout the enterprise; Analog function; Decision support and graphic ability for production and analysis.

4. Support an open client/server computing environment.

Comprise a client/server architecture; Graphical user interface (GUI); Computer aided design engineering (CASE), object-oriented technology; Query relational database with SQL; Internal integration of engineering systems, business systems, data acquisition and external integration (EDI).

ERP is beyond MRP II. ERP is essentially based on MRP II, but it has surpassed the traditional MRP II in function and technology. This is a customer-driven, time-based enterprise resource planning for the whole supply chain management.

First, the management concept of ERP system

The core management idea of ERP is to realize the effective management of the whole supply chain, which is mainly reflected in the following three aspects:

1, which embodies the idea of managing the whole supply chain resources.

In the era of knowledge economy, it is impossible to effectively participate in market competition only by relying on the resources of its own enterprises. All parties involved in the operation process, such as suppliers, manufacturers, distribution networks and customers, must be brought into a close supply chain, so as to effectively arrange production and supply and marketing activities of enterprises, meet the needs of enterprises to use all market resources of the whole society to carry out production and operation quickly and efficiently, and further improve efficiency and gain market competitive advantages. In other words, modern enterprise competition is not the competition between individual enterprises, but the competition between one enterprise supply chain and another. ERP system realizes the management of the whole enterprise supply chain and meets the needs of market competition in the era of knowledge economy.

2. Reflect the ideas of lean production, synchronous engineering and agile manufacturing.

ERP system supports the management of mixed production mode, and its management ideas are manifested in two aspects: one is the idea of "lean production", which is the business strategy system put forward by MIT. That is, when an enterprise organizes production by mass production, it brings customers, sales agents, suppliers and cooperative units into the production system. The relationship between enterprises and sales agents, customers and suppliers is no longer a simple business relationship, but a cooperative partnership with * * * interests. This kind of partnership constitutes the supply chain of enterprises, which is the core idea of lean production. The second is the idea of "agile manufacturing". When the market changes and enterprises meet specific market and product requirements, the basic partners of enterprises may not be able to meet the requirements of new product development and production. At this time, the enterprise will organize a short-term or one-off supply chain composed of specific suppliers and sales channels to form a "virtual factory", regard suppliers and cooperative units as components of the enterprise, and adopt "synchronous engineering" to organize production, so as to bring new products to the market in the shortest time and keep products at all times.

3. Reflect the idea of planning in advance and controlling in the process.

The planning system in ERP system mainly includes master production plan, material demand plan, capacity plan, purchase plan, sales execution plan, profit plan, financial budget and human resource plan, and these planning functions and value control functions have been completely integrated into the whole supply chain system.

On the other hand, the ERP system defines the accounting subjects and accounting methods related to the transaction, so as to automatically generate accounting entries when the transaction occurs, and ensure the synchronous record and data consistency of capital flow and logistics. Therefore, according to the present situation of financial funds, we can trace the ins and outs of funds, further trace related business activities, change the situation that funds information lags behind material information, and facilitate the control and real-time decision-making in the process.

In addition, the functions of planning, transaction processing, control and decision-making are all realized in the business process of the whole supply chain. It is required to give full play to everyone's work potential and sense of responsibility in the business process of each process, and emphasize the spirit of cooperation between processes, so as to give full play to everyone's subjective initiative and potential in an organic organization. Realize the transformation of enterprise management from "towering" organizational structure to "flat" organizational structure, and improve the response speed of enterprises to dynamic changes in the market.

In a word, with the rapid development and application of IT technology, ERP system can transform many advanced management ideas into practical computer software systems.

Second, the relationship between the application of ERP and enterprises

ERP is an advanced and effective management concept and method, which borrows a new management mode to transform the old management mode of the original enterprise. In the practical popularization and application of ERP software, its application depth and breadth are not in place, and the effect of most enterprises is not significant, which has not aroused the shock of enterprise decision makers and people's extensive concern.

1. Implementing ERP is an all-round change in enterprise management.

Enterprise leaders should be educated first, followed by the implementers and executors of modern management theory, standardize enterprise management and its related links, make it become the conscious action of leaders, management and employees, and make modern management consciousness take root in enterprises and become a part of enterprise culture. It seems that there is no room for negotiation for foreign enterprises to implement ERP, and they are fully accepted and self-conscious. In fact, it is a matter of course to run a business, but we still have to wait for our concept to be upgraded and updated. Sometimes we have to avoid sharp edges, accommodate stale ideas and shirk each other. If we do not resolutely bid farewell to these bad habits, this all-round change will be repeated or even aborted.

2. The enterprise management team should master the knowledge of * * *.

Look inward, practice internal strength and do the basic work of management. No matter how good the application software and software suppliers can provide, they can only rely on their own efforts. The implementation of ERP is called "first-hand project", which shows the special role of enterprise decision makers in the implementation of ERP. ERP is a management system that affects the overall situation. Without the participation and authorization of the top leaders, it is difficult to mobilize the overall situation.

3.ERP investment is a systematic project.

Compared with the input and output of other fixed assets equipment, the input and output of ERP are not so intuitive, simple and clear, and it is impossible for the input to be rewarded immediately and see benefits. The input of ERP is a systematic project, and it is impossible to get immediate results. Mainly to carry out management ideas, which is a red line in enterprise management. It works for a long time, creates benefits, and needs to seek benefits from management in the process of deepening.

In addition, the implementation of ERP should be tailored to local conditions and vary from enterprise to enterprise. First of all, we should set up corresponding systems according to the specific needs of enterprises, instead of installing minicomputers or WindowsNT in general regardless of the size of enterprises. This long-term operation will do great harm to enterprises. Secondly, this kind of investment is not once and for all. With the rapid development of technology and the deepening of work, enterprises will feel the shortage of resources more and more. Therefore, there should be corresponding investment every year to ensure the healthy operation of the system.

4.4 implementation. ERP needs compound talents.

They should know both computer technology and management. At present, the cultivation of compound talents in colleges and universities is far from meeting the needs of enterprises. The cultivation of compound talents needs a process and a certain time, but enterprise leaders often regard these talents as general managers, not as hard-won wealth of enterprises. They are an important team. This is related to long-term neglect of management. The position of these compound talents in enterprises is far inferior to that of market developers and product developers, but they play an "auxiliary" role, not the object of policy inclination. This factor is an important reason for brain drain. In addition, when enterprises engage in ERP, these compound talents play a leading role. Once management enters the routine, they seem to become redundant, which has become an inevitable law. In the talent market, compound talents are the most active, and those entrepreneurs with vision will make great efforts to tap talents, which is not conducive to the stability of the executive team.

In a word, qualified enterprises should seize the opportunity to implement ERP management system, not just engage in pure theoretical research, re-study and long-term investigation. First sort out the basic data of internal management, choose or develop ERP software suitable for your own enterprise, and then go when the conditions are ripe.

Third, the risk of ERP and its prevention

No matter how superior the conditions of enterprises are and how well prepared they are, the risks of implementation still exist. In the implementation cycle of ERP system, various influencing factors may change at any time. How to effectively manage and control risks is one of the important links to ensure the success of ERP system implementation.

Risk of ERP project

Usually, when considering the factors of failure, people usually focus on the analysis of many factors in the implementation process, and often ignore the potential risks of ERP system before and after the project starts. For ERP projects, risks exist in the whole process of the project, including project planning, project preparation, implementation process and system operation. To sum up, the risks of ERP projects mainly include the following aspects:

1. Lack of planning or unreasonable planning;

2. Inadequate project preparation, manifested in the wrong choice of hardware and ERP software;

3. The implementation process is not strictly controlled, and the stage results are not up to standard;

4. The design process lacks effective control links;

5. Failure to evaluate the implementation effect or unreasonable evaluation;

6. The system security design is not perfect, and there is a hidden danger that the system is illegally invaded;

7. Inappropriate or incomplete disaster prevention measures can easily lead to system collapse.

1. Strategic plan

Does the enterprise have a five-year IT system plan? With the informationization of society, IT system is not only a tool for enterprises, but also a technical means. As an important part of IT system, ERP serves the long-term planning of enterprises and is the means and guarantee of long-term planning. The goal of ERP originates from IT system planning, which is the basic standard to evaluate the success or failure of ERP system. The implementation scope and content of ERP system should be determined according to IT system planning.

2. Project preparation

The determination of hardware and network scheme, the selection of ERP system and the evaluation of consulting partners are the three main tasks at this stage, and they are also the three major elements of ERP system implementation. Hardware and network schemes directly affect the performance, reliability and stability of the system. The function of ERP system determines the satisfaction degree of enterprise demand; The working ability and experience of consulting partners determine the quality and effect of the implementation process.

3. Project implementation control

In the implementation of ERP system, project management technology is usually used to control and manage the implementation process. Effective implementation control is manifested in scientific implementation plan, clear stage results and strict results audit. Moreover, effective control is also manifested in active coordination and unobstructed information transmission channels. Organizations implementing ERP include: steering committee, project manager, external consultant, IT department, implementation team of functional departments and end users of functional departments. The coordination and communication between departments determine the quality and efficiency of the implementation process. At present, this kind of risk is particularly obvious and serious in the absence of suitable project managers in enterprises.

4. Business process control

Business process reengineering is completed in the design stage of project implementation. The control and supervision links in the process ensure that all businesses are under effective control after ERP is officially put into operation, so as to avoid human losses of enterprises. When designing the control link, we should give consideration to both control and efficiency. Too many control links and redundant business processes will inevitably reduce work efficiency. The lack of control links will lead to the risk of business out of control.

5. Project implementation effect

Although project evaluation is the last link in the process of ERP implementation. But this does not mean that project evaluation is unimportant. On the contrary, the result of project evaluation is a direct reflection of the effect of ERP implementation. Correctly evaluating the implementation results is inseparable from clear implementation objectives, objective evaluation criteria and scientific evaluation methods. At present, there is a widespread problem of neglecting project evaluation. Ignoring the project evaluation will bring the hidden danger that the implementation team does not care about the implementation results. This is the great risk of ERP project.

6. System security management

System security includes: operating system authorization, network equipment permission, application system function permission, data access permission, virus prevention, illegal intrusion supervision, data change tracking, data security backup and archiving, computer room security management regulations, system administrator supervision and so on. At present, few people in enterprises are proficient in computer technology, and few computers are networked. Therefore, in the implementation of ERP system, there is a widespread phenomenon of not paying attention to system security. For example, users do not pay attention to password confidentiality, and super users authorize multiple people. The direct consequence of the lack of safety awareness is that there are loopholes and defects in the safety design of the system. In recent years, newspapers have constantly disclosed the news that the computer system of banks or enterprises has been illegally invaded, which has sounded the alarm for enterprises.

7. Accident or disaster

Irresistible natural disasters such as floods, fires and earthquakes will bring devastating blows to ERP systems. After the ERP system is officially launched by enterprises, this kind of destruction will directly cause the interruption of business transactions and bring immeasurable losses to enterprises. Preventive strategies and countermeasures are the best way to reduce this risk. Such as establishing a remote backup and recovery mechanism; Steps and measures to resume manual business processing when the computer system can't work normally.

Fourthly, the sign of successful ERP application.

In principle, the success of ERP application can be measured from the following aspects:

1. System operation integration:

This is the most basic performance of ERP application success in technical solutions. ERP system is a software system for integrated management of enterprise logistics, capital flow and information flow, and its core management idea is to realize the management of "supply chain". The application of software will span many departments and even many enterprises. To achieve the expected application goal, the most basic requirement is that the system can run, realize integrated application, and establish a perfect data system and information sharing mechanism for enterprise decision-making.

Generally speaking, if ERP system is only used in the financial department, it can only standardize financial management and improve the management of accounts receivable and funds; Only in the sales department can it strengthen and improve marketing management; Only used in the inventory management department, it can only help to master inventory information; Only in the production department, it can only assist in making production plans and material demand plans. Only when integration works can we achieve:

Reduce inventory, improve capital utilization rate and control business risks;

Control the production cost of products and shorten the production cycle;

Improve product quality and qualified rate;

Reduce financial bad debts, bad debts, etc.

Whether these goals can really be achieved depends on the implementation effect of business process reengineering.

2. Rationalization of business processes:

This is the embodiment of the successful application of ERP in improving management efficiency. The premise of successful ERP application is that enterprises implement business process reengineering. Therefore, the success of ERP application means that the business processes of enterprises tend to be rationalized, and the following ultimate goals of ERP application have been achieved:

The competitiveness of enterprises has been greatly improved;

The response speed of enterprises to the market has been greatly accelerated;

Customer satisfaction has been significantly improved.

3. Dynamic performance monitoring:

The application of ERP will provide rich management information for enterprises. How to make good use of this information and really play a role in the process of enterprise management and decision-making is another sign to measure the success of ERP application. After the ERP system is fully put into practical operation, enterprises should design a report system according to management needs to dynamically monitor the changes of management performance, so as to timely feedback and correct the problems existing in management. This work is generally designed by enterprises after implementing ERP system. If the enterprise does not use the information resources provided by ERP system to establish its own performance monitoring system, it means that the application of ERP system is not completely successful.

4. Continuous management improvement:

With the application of ERP system and the rationalization of business processes, the management level of enterprises will be significantly improved. In order to measure the improvement of enterprise management level, we can comprehensively evaluate the enterprise management level according to the enterprise management evaluation index system provided by management consulting companies. The evaluation process is not an end in itself, but the real purpose is to establish a mechanism for enterprises to constantly evaluate themselves and improve their management. This is also a sign that the successful application of ERP is often ignored by people.