3. What is an ERP System?
Why implement an ERP system?
How should ERP systems be
implemented?
Conclusion
Questions and Answers
4. Simplistic Definition
ERP - Enterprise Resource Planning
Detailed Definition
“a business strategy and set of industry-domain-
specific applications that build customer and
shareholder communities value network system
by enabling and optimizing enterprise and inter-
enterprise collaborative operational and
financial processes”(Source: Gartner’s Research Note SPA-12-0420)
5. Historically, companies created “islands of
automation”. A hodge-podge of various
systems that operated or managed various
divergent business processes. Sometimes
these systems were integrated with each
other and sometimes they weren’t.
Sometimes they were loosely interfaced
and sometimes they were more tightly
interfaced.
6. Integration
seamless integration of all the information
flowing through a company – financial and
accounting, human resource information,
supply chain information, and customer
information.
7. Packages
Enterprise systems are not developed in-house
IS life cycle is different
1. Mapping organizational requirements to the processes
and terminology employed by the vendor and
2. Making informed choices about the parameter setting.
Organizations that purchase enterprise systems
enter into long-term relationships with vendors.
Organizations no longer control their own destiny.
8. Best Practices
ERP vendors talk to many different businesses
within a given industry as well as academics to
determine the best and most efficient way of
accounting for various transactions and managing
different processes. The result is claimed to be
“industry best practices”.
The general consensus is that business process
change adds considerably to the expense and risk
of an enterprise systems implementation. Some
organisations rebel against the inflexibility of these
imposed business practices.
9. Some Assembly Required
Only the software is integrated, not the
computing platform on which it runs. Most
companies have great difficulty integrating their
enterprise software with a package of hardware,
operating systems, database management
systems software, and telecommunications suited
to their specific needs.
Interfaces to legacy systems
Third-party bolt-on applications
10. Evolving
Enterprise Systems are changing rapidly
Architecturally: Mainframe,Client/Server,
Web-enabled,Object-oriented,
Componentization
Functionally: front-office (i.e. sales
management), supply chain (advanced
planning and scheduling), data
warehousing, specialized vertical industry
solutions, etc.
12. To support business goals
Integrated, on-line, secure, self-service processes for
business
Eliminate costly mainframe/fragmented technologies
Improved Integration of Systems and Processes
Lower Costs
Empower Employees
Enable Partners, Customers and Suppliers
13. Obtain the right mix of people, processes
and technology!!
14. People
Project Structure
Should be aligned to processes
Process
Implementation Process (outlined in detail)
Adapt your processes to those of the ERP.
Technology
Hardware
Software
Integrated Systems
15. 1. Definition and Analysis
Hold discussions with various functional
personnel to establish the actual number
of systems operating at client site, what
they are used for, why and how often
Produce the Project Scoping Document
outlining current situation, proposed
solution and budgeted time
Challenge : REQUISITE EXPERTISE - No
two clients are the same
16. . Design
Prepare various functional reports - specifies
current scenario and wish list
Prepare Design document which specifies
how the system is going to work
Prepare test scripts to be followed on system
testing
Map out the interface paths to various
modules
Challenge : INFORMATION SHARING -
Availability of staff
17. 3. Build
Configure system as per set up document
specifications i.e. transfer conceptual
model into reality
Test system to verify accuracy (preliminary
tests)
Challenge : TECHNICAL ENVIRONMENT
- System functionality
18. 4.Transition
Train users on their specific areas
Assist in test data compilation and system
testing by users
Finalise the Live system and captured
opening balances
Challenge : USER RESISTANCE
Understanding and acceptance
data preparation
19. 5. Production
Official hand holding
Effectiveness assessment
Business andTechnical Direction
recommendations
20. Technology is an enabler, not the driver (it is
there to assist the organization to achieve
business goals)
It is a means to an end, not the end
21. • CRM systems focus specifically on
The organization before ERP ( systems)
Isolated Information: their own systems
Update issues Redundant
Inaccurate and different
Different in the different databases
Can’t access information maintained by another department
Can’t of the entire organization
22. ERP – integrates
(or integrated set of IT systems) so that employees can make
enterprise wide decisions by viewing enterprise wide
information on all business operations (enterprise wide
information)
Keyword in
ERP is
“enterprise”
ERP systems focus
on
all processes,
departments and
operations for the
entire enterprise
24. ERP systems
and correlates the data generating an enterprise
wide view that is consistent and real-time.
involved in sourcing, producing and delivering a
company’s product
Complete
Real time
Consistent
25. Three core components focus on
(accounting/finance, production/materials management and HR)
Extended components typically focus on
and require interactions with customers, suppliers and business partners
Typically
Internet
enabled.
Make sure that
you know what
each component
typically handles.
Skipped details
slides follow
26. Accounting and finance component – manages
accounting data and financial processes within
the enterprise with functions such as general
ledger, accounts payable, accounts receivable,
budgeting, and asset management
Human resource component – tracks employee
information including payroll, benefits,
compensation, performance assessment, and
assumes compliance with the legal requirements
of multiple jurisdictions and tax authorities
27. Production and
materials management
component – handles the
various aspects of
production planning and
execution such as
demand forecasting,
production scheduling,
job cost accounting, and
quality control
28. Extended ERP components include:
Business intelligence
▪ Tools to help analyze your business information and better
understand it so that you can better understand the business.
Customer relationship management
Supply chain management
E-business
▪ E-logistics – manages the transportation and storage of
goods
▪ E-procurement – the business-to-business (B2B) purchase
and sale of supplies and services over the Internet
29. At the heart of all ERP systems
when a user enters or updates information
30.
31. 1. Having integrated systems helps that many businesses had
previously started to use (also didn’t have to fix those old legacy
systems)
2. Integrate financial information and customer order information
3. Everyone working with the same information and removes
misinformation
4. Standardize and speed up manufacturing processes, as well as
reduce inventory
5. ERP addresses the
6. One of the greatest benefits of an ERP system is
Provides organizations with information that was previously
difficult (if not impossible) to obtain, allowing the organization to
perform more efficiently and effectively.
32. • Costly in terms of One vendor risks: too costly to Company essentially
held hostage.
Employees
Difficult to
34. ERP systems provide a mechanism for
implementing systems where a high degree
of integration between applications is
required
The Business Case or Value Proposition for
implementation must be outlined
To successfully implement a proper mix of
people, processes and technology should be
maintained
Conclusion
Hinweis der Redaktion
In most organizations, information has traditionally been isolated within specific departments, whether on an individual database, in a file cabinet, or on an employee’s PC. When reviewing this diagram demonstrate to the students how each department has its own database separate from all other organizational departmentsAsk your student what types of problems could occur if all departments maintain their own database and systems?Update issuesRedundancyInaccurate information across databasesDifferent formats of information in the different databasesInability to access other department information and not being provided with a 360 degree view of the organizationDifferent customer information in different databasesCustomer contact from multiple departments with different messages
An ERP system provides a method for effective planning and controlling of all the resources required to take, make, ship, and account for customer orders in a manufacturing, distribution, or service organization. What happens when sales and marketing departments are working from two different sets of customer information and product information?Would the marketing campaigns be accurate?Would sales be able to deliver the products it sells to its customers?Enterprise resource planning systems provide organizations with consistency.The key word in enterprise resource planning is enterprise.SCM systems focus specifically on suppliersCRM systems focus specifically on customersERP systems focus on everything, all processes, departments, and operations for an enterprise ERP systems encompass everything, including SCM and CRM.ERP enables employees across the organization to share information across a single, centralized database. With extended portal capabilities, an organization can also involve its suppliers and customers to participate in the workflow process, allowing ERP to penetrate the entire value chain, and help the organization achieve greater operational efficiencyOne database that supports the entire organization could eliminate many of the issues mentioned on the previous slideHowever, there are also issues could be caused by having one database that supports the entire organization?Not as flexible and far more difficult to changeMight not meet all department needs as well as an individual specific systemMultiple access levels increases security issuesEthical dilemmas from accessing different department information – such as payroll
When displaying the sales database example and the accounting database be sure to point out the differences in the dataCorrelating and making sense of these two similar, but different, spreadsheets, is going to be challenging.How can you understand customers when one spreadsheet has customer name and one has customer ID?How can you understand sales reps when one spreadsheet has sales rep names and one spreadsheet has sales rep ID?Date format is different – will this cause problems?One quantity is in units and one quantity has decimal points – what problems will this cause?Unit price and unit cost is rounded to dollars in one spreadsheet and contains cents in another – what problems will this cause?
The true benefit of an ERP system is its ability take the many different forms of data from across the different organizational systems and correlate, aggregate, and provide an enterprise wide view of organizational information.The two previous spreadsheets display examples of differences in data that can be fixed by using an ERP system.Without understanding how all of the different divisions, products, departments, etc. are operating you cannot run the business
SAP: market leader: #1Oracle: #2 in market share. Has grown, in part, through acquisition 2005: Oracle acquired PeopleSoft 2003: PeopleSoft acquired JD EdwardsOracle has enhanced their ERP product by acquiring the product’s of other companies and then integrating their products with the Oracle product. 2008: Oracle acquired BEA Systems 2007: Oracle acquired Hyperion Solutions 2005: Oracle acquired Siebel SystemsIn June 2003, Baan was sold to SSA Global Technologies. In May 2006, SSA was acquired by Infor Global Solutions of Atlanta, which was a major ERP consolidator in the market.In 2002, Microsoft acquired Great Plains Dynamics. Its products has gone under the name of Microsoft Business Solutions Great Plains Dynamics, as well asMicrosoft Dynamics
