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Enterprise
Resource
Planning
Presentation - Path
ERP – General Concepts

ERP based applications - Options

Building ERP solutions using Internal Sources

Adapting Tailor-made ERP Solutions

Developing ERP applications using External Sources
Enterprise Resource Planning

ERP – General Concepts

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What is ERP?
The Current Scenario
Why ERP?
Definition
Evolution
Expectations
BPR & ERP
BPR – The Steps
Enterprise Resource Planning

What is ERP?
 Facilitates Organization-wide integrated
information systems, covering all
functional areas
 Performs core Corporate activities and
increases customer service augmenting
Corporate Image
Enterprise Resource Planning

The Current Scenario
 Islands of Information
 Difficult to get timely & accurate information
 Heterogeneous Hardware & Software
platforms & practices
 Poor connectivity between different
organizational locations
 Sticking with obsolete technology
 Resist to change
 Lack of proven man-power to develop
integrated software
Islands of Information
Enterprise Resource Planning

Why ERP?
 For Management – to know what is happening
in the company
 One solution for better Management
 For cycle time reduction
 To achieve cost control & low working capital
 To marry latest technologies
 To shun the geographical gaps
 To satisfy the customers with high expectations
 To be Competitive & for survival
Enterprise Resource Planning

ERP - Definition
“Software solution that addresses the
Enterprise needs, taking a process view of
the overall organization to meet the goals,
by tightly integrating all functions and
under a common software platform”
Enterprise Resource Planning

Evolution of ERP
 1960’s - Systems Just for Inventory Control
 1970’s - MRP – Material Requirement Planning
(Inventory with material planning & procurement)
 1980’s - MRP II – Manufacturing Resources Planning
(Extended MRP to shop floor & distribution Mgnt.)
 Mid 1990’s - ERP – Enterprise Resource Planning
(Covering all the activities of an Enterprise)
 2000 onwards – ERP II – Collaborative Commerce
(Extending ERP to external business entities)
Enterprise Resource Planning

ERP – Expectations
 Integrating all the functions
 Integrating the systems running in all the locations
 Transparency of information using a single
data source across the organization
 Software must be responsive
Modular
Flexible
Easy to add functionalities
Provide growth path
Business Process Re-engineering

BPR & ERP
 Just automating the existing business practices
will not help ERP to achieve the anticipated results.
 Business Process Re-engineering [BPR] brings out the
deficiencies of the existing setup
 BPR and ERP will give way to implement new
systems and the long pending improvements in the
existing systems
 BPR may be time consuming but the scope can be
restricted & controlled by the Management
Business Process Re-engineering

BPR - Steps
Step 1

Step 2

Step 3

Understand

Simplify/Improve Automate

Understand the
existing
systems
associated with
all the
functionalities

Draft & frame the
Implement
possibilities & ways with the help
to simplify or
of ERP
Improve or eliminate
the processes
Enterprise Resource Planning

ERP – Options
OPTION 1 – MAKE [Using Internal resources]
Developing a custom-built ERP package, specific to the
requirements of the organization, with the help of the
in-house IT department
OPTION 2 - BUY
Going for Tailor-made ERP packages available in the market like
SAP, Oracle applications, Baan, PeopleSoft etc.
3 – MAKE [using External resources]
Developing a custom-built ERP package, specific to the
requirements of the organization, with the help of a
software solution provider
Building ERP solutions
using
Internal Sources
ERP –Using Internal
resources
 Lack of adequate & qualified manpower
 Not driven with clear focus on expectations,
time & cost
 Poor software project management
 Lack of seriousness with the Management &
the IT Team
 High employee turnover
 Lot of schedule gaps during Project execution
 Normally project life is more
 Frequent change in the scope with the approval
of the Management
Tailor-made
ERP
Solutions
Tailor-made ERP solutions

Tailor-made solutions

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About this option
Execution Phases
ERP product selection phase
Product selection - Parameters
Preparation Phase
ERP product acceptance - Options
Gap Analysis
Production Phase
Implementation Phase
Post-Implementation Phase
Pitfalls & Points of Concern
Critical Success factors
Tailor-made ERP solutions

About
 Generalized off the shelf application s/w packages
 Modules based on rich functionalities for all business
functions
 User tested with lot of installations
 No lead time requirement for software development
 Tuned for more users/networks with adequate & inbuilt security
 Parameterized for flexibility
 Can sit on latest hardware & software platforms
 Upgradation of functionalities with version control
Tailor-made ERP solutions

Execution phases
 ERP product selection
 Preparations
 Production
 Implementation
 Post-Implementation
Tailor-made ERP solutions

ERP Product selection
Phase


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



ERP Team formation for selection
Appointment of Consultants [if needed]
Scoping study
Product selection
Implementation partners selection
Hardware/Communication cost estimation
Tailor-made ERP solutions

Product Selection Parameters

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



Reputation of the ERP product
No of installations in the geographical vicinity
% of the overall functional availability
Customization possibilities
After sales support
Your investment plan & budget
Implementation partner’s track record
ERP Product
selection Criteria
Goal:
To select the
Most Suitable Software
Package Solution

Functionality

5 Strategic
Requirement
Levels

Technology

Vendor

Support

Costs
Tailor-made ERP solutions

Preparation Phase

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



Framing ERP Implementation Strategies
Formation of Apex & Steering committees
Functional & IT team formation
Training on ERP functions & features
Scope finalization
GAP analysis
Action plan to resolve the gaps
Tailor-made ERP solutions

ERP product
acceptance – options
1. Adapting directly, all the functions available in
the ERP Product [Applicable for startup companies]
2. Change the way the firm does the business to fit
the product [Compromising]
3. Customize the ERP product to suit the business
Processes. [Customization]
Tailor-made ERP solutions

GAP Analysis
This is the process to identity the gaps by mapping
the expectations of the company with the
capabilities of the ERP product
Results of Gap Analysis







Directly Supported
Workaround suggested
Extension required
Change in business process – suggested
Not full supported
Manual – not under the scope of ERP
Tailor-made ERP solutions

Production Phase
 Installing the software & hardware
 Tuning the software to meet the
customization needs
 Master & Control data arrival as per
the Product data structures
 Location & people specific roles & rights
allocation for module access & security
Tailor-made ERP solutions

Implementation Phase
 Conference Room Pilot [Parallel run]
 Resolving the Parallel run issues
 Training the end users
 Live run
Tailor-made ERP solutions

Post-Implementation
 Regular monitoring
 Tuning [hardware/software] for patching
the performance issues
 Maintenance
Building ERP using Ext.
Sources








About this option
The Principle!
The Steps
Why?
Points of Concern
Software Vendor selection
Critical Success factors
Custom-Built ERP solutions

About
Here the whole package is designed & built
 By keeping a specific enterprise & its business
practices in mind
 By incorporating the improvements/additions
with due integration
 Without compromising or changing the current way
of doing the business and providing flexibility to
accommodate your business fluctuations
Custom-Built ERP solutions

The Principle!
The best as seen elsewhere, need not be the
the best for you.
What is your best is what
can be successfully implemented
Custom-Built ERP solutions

The Steps





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

Software vendor selection
Detailed study by the vendor
Scope & platform finalization
Freezing the commercials
Development
Hardware addition/upgradation
Old master/transaction data migration
Parallel run with Integration & connectivity check
Implementation
Maintenance
Custom-Built ERP solutions

Why?
 Very economical while comparing the cost of
implementing tailor-made ERP solutions
 Less prone for hidden-cost hits
 The company can opt for its choice of Hardware,
Software & communication platforms based on the skill
availability
 The company and the software vendor have the direct
relationship during the project execution. The proximity
would be high & convenient.
 IT department has good control over the Project
 What is required only would be considered under the
scope – No redundancy
Why? - Cont.
 The requisite flavor of E-Biz & work-flow components
can be embraced towards value edition
 The existing practices & applications can be tuned and
linked with the proposed package
 Maintenance & improvements are easy & less costlier.
Even IT team can maintain the setup after getting the
source code
Points of Concern
 Software development vendor selection
 Requirement/scope finalization [high chances of
retaining the islands as it is]
 Less chances of Value addition
 Not time tested
 Chances of Prolonged project duration
Software Vendor
Selection
The following traits should be considered while selecting
the software vendor for building the ERP application
 Technical expertise
 Domain knowledge
 Adequate manpower
 Project management skills
 Long existence in the field
 Extra skills [e-biz & workflow]
Custom-Built ERP solutions

The Critical Success
Factors
 Clear Vision & support of the Management
 Capabilities of the software development vendor
 Scope & Expectations finalization towards
meeting the ERP concepts
 Strict implementation schedules & periodical
monitoring
 The involvement of the IT & functional teams

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Streamline operations with an ERP presentation

  • 2. Presentation - Path ERP – General Concepts  ERP based applications - Options  Building ERP solutions using Internal Sources  Adapting Tailor-made ERP Solutions  Developing ERP applications using External Sources
  • 3. Enterprise Resource Planning ERP – General Concepts         What is ERP? The Current Scenario Why ERP? Definition Evolution Expectations BPR & ERP BPR – The Steps
  • 4. Enterprise Resource Planning What is ERP?  Facilitates Organization-wide integrated information systems, covering all functional areas  Performs core Corporate activities and increases customer service augmenting Corporate Image
  • 5. Enterprise Resource Planning The Current Scenario  Islands of Information  Difficult to get timely & accurate information  Heterogeneous Hardware & Software platforms & practices  Poor connectivity between different organizational locations  Sticking with obsolete technology  Resist to change  Lack of proven man-power to develop integrated software
  • 7. Enterprise Resource Planning Why ERP?  For Management – to know what is happening in the company  One solution for better Management  For cycle time reduction  To achieve cost control & low working capital  To marry latest technologies  To shun the geographical gaps  To satisfy the customers with high expectations  To be Competitive & for survival
  • 8. Enterprise Resource Planning ERP - Definition “Software solution that addresses the Enterprise needs, taking a process view of the overall organization to meet the goals, by tightly integrating all functions and under a common software platform”
  • 9. Enterprise Resource Planning Evolution of ERP  1960’s - Systems Just for Inventory Control  1970’s - MRP – Material Requirement Planning (Inventory with material planning & procurement)  1980’s - MRP II – Manufacturing Resources Planning (Extended MRP to shop floor & distribution Mgnt.)  Mid 1990’s - ERP – Enterprise Resource Planning (Covering all the activities of an Enterprise)  2000 onwards – ERP II – Collaborative Commerce (Extending ERP to external business entities)
  • 10. Enterprise Resource Planning ERP – Expectations  Integrating all the functions  Integrating the systems running in all the locations  Transparency of information using a single data source across the organization  Software must be responsive Modular Flexible Easy to add functionalities Provide growth path
  • 11. Business Process Re-engineering BPR & ERP  Just automating the existing business practices will not help ERP to achieve the anticipated results.  Business Process Re-engineering [BPR] brings out the deficiencies of the existing setup  BPR and ERP will give way to implement new systems and the long pending improvements in the existing systems  BPR may be time consuming but the scope can be restricted & controlled by the Management
  • 12. Business Process Re-engineering BPR - Steps Step 1 Step 2 Step 3 Understand Simplify/Improve Automate Understand the existing systems associated with all the functionalities Draft & frame the Implement possibilities & ways with the help to simplify or of ERP Improve or eliminate the processes
  • 13. Enterprise Resource Planning ERP – Options OPTION 1 – MAKE [Using Internal resources] Developing a custom-built ERP package, specific to the requirements of the organization, with the help of the in-house IT department OPTION 2 - BUY Going for Tailor-made ERP packages available in the market like SAP, Oracle applications, Baan, PeopleSoft etc. 3 – MAKE [using External resources] Developing a custom-built ERP package, specific to the requirements of the organization, with the help of a software solution provider
  • 15. ERP –Using Internal resources  Lack of adequate & qualified manpower  Not driven with clear focus on expectations, time & cost  Poor software project management  Lack of seriousness with the Management & the IT Team  High employee turnover  Lot of schedule gaps during Project execution  Normally project life is more  Frequent change in the scope with the approval of the Management
  • 17. Tailor-made ERP solutions Tailor-made solutions             About this option Execution Phases ERP product selection phase Product selection - Parameters Preparation Phase ERP product acceptance - Options Gap Analysis Production Phase Implementation Phase Post-Implementation Phase Pitfalls & Points of Concern Critical Success factors
  • 18. Tailor-made ERP solutions About  Generalized off the shelf application s/w packages  Modules based on rich functionalities for all business functions  User tested with lot of installations  No lead time requirement for software development  Tuned for more users/networks with adequate & inbuilt security  Parameterized for flexibility  Can sit on latest hardware & software platforms  Upgradation of functionalities with version control
  • 19. Tailor-made ERP solutions Execution phases  ERP product selection  Preparations  Production  Implementation  Post-Implementation
  • 20. Tailor-made ERP solutions ERP Product selection Phase       ERP Team formation for selection Appointment of Consultants [if needed] Scoping study Product selection Implementation partners selection Hardware/Communication cost estimation
  • 21. Tailor-made ERP solutions Product Selection Parameters        Reputation of the ERP product No of installations in the geographical vicinity % of the overall functional availability Customization possibilities After sales support Your investment plan & budget Implementation partner’s track record
  • 22. ERP Product selection Criteria Goal: To select the Most Suitable Software Package Solution Functionality 5 Strategic Requirement Levels Technology Vendor Support Costs
  • 23. Tailor-made ERP solutions Preparation Phase        Framing ERP Implementation Strategies Formation of Apex & Steering committees Functional & IT team formation Training on ERP functions & features Scope finalization GAP analysis Action plan to resolve the gaps
  • 24. Tailor-made ERP solutions ERP product acceptance – options 1. Adapting directly, all the functions available in the ERP Product [Applicable for startup companies] 2. Change the way the firm does the business to fit the product [Compromising] 3. Customize the ERP product to suit the business Processes. [Customization]
  • 25. Tailor-made ERP solutions GAP Analysis This is the process to identity the gaps by mapping the expectations of the company with the capabilities of the ERP product Results of Gap Analysis       Directly Supported Workaround suggested Extension required Change in business process – suggested Not full supported Manual – not under the scope of ERP
  • 26. Tailor-made ERP solutions Production Phase  Installing the software & hardware  Tuning the software to meet the customization needs  Master & Control data arrival as per the Product data structures  Location & people specific roles & rights allocation for module access & security
  • 27. Tailor-made ERP solutions Implementation Phase  Conference Room Pilot [Parallel run]  Resolving the Parallel run issues  Training the end users  Live run
  • 28. Tailor-made ERP solutions Post-Implementation  Regular monitoring  Tuning [hardware/software] for patching the performance issues  Maintenance
  • 29. Building ERP using Ext. Sources        About this option The Principle! The Steps Why? Points of Concern Software Vendor selection Critical Success factors
  • 30. Custom-Built ERP solutions About Here the whole package is designed & built  By keeping a specific enterprise & its business practices in mind  By incorporating the improvements/additions with due integration  Without compromising or changing the current way of doing the business and providing flexibility to accommodate your business fluctuations
  • 31. Custom-Built ERP solutions The Principle! The best as seen elsewhere, need not be the the best for you. What is your best is what can be successfully implemented
  • 32. Custom-Built ERP solutions The Steps           Software vendor selection Detailed study by the vendor Scope & platform finalization Freezing the commercials Development Hardware addition/upgradation Old master/transaction data migration Parallel run with Integration & connectivity check Implementation Maintenance
  • 33. Custom-Built ERP solutions Why?  Very economical while comparing the cost of implementing tailor-made ERP solutions  Less prone for hidden-cost hits  The company can opt for its choice of Hardware, Software & communication platforms based on the skill availability  The company and the software vendor have the direct relationship during the project execution. The proximity would be high & convenient.  IT department has good control over the Project  What is required only would be considered under the scope – No redundancy
  • 34. Why? - Cont.  The requisite flavor of E-Biz & work-flow components can be embraced towards value edition  The existing practices & applications can be tuned and linked with the proposed package  Maintenance & improvements are easy & less costlier. Even IT team can maintain the setup after getting the source code
  • 35. Points of Concern  Software development vendor selection  Requirement/scope finalization [high chances of retaining the islands as it is]  Less chances of Value addition  Not time tested  Chances of Prolonged project duration
  • 36. Software Vendor Selection The following traits should be considered while selecting the software vendor for building the ERP application  Technical expertise  Domain knowledge  Adequate manpower  Project management skills  Long existence in the field  Extra skills [e-biz & workflow]
  • 37. Custom-Built ERP solutions The Critical Success Factors  Clear Vision & support of the Management  Capabilities of the software development vendor  Scope & Expectations finalization towards meeting the ERP concepts  Strict implementation schedules & periodical monitoring  The involvement of the IT & functional teams