Enterprise Resource Planning
Enterprise Resource Planning
Enterprise Resource Planning
ERP ERP
Introduction Framework Applications
Outlines
Introduction
Definition & History
Core & Extended ERP Components
Operating Model
Vendors of the ERP System
ERP Challenges
ERP Framework
Conceptual Model
Critical Issues across the ERP Life Cycle
Analysis of Failure Attributes for an ERP System
Influence of ERP systems on business process agility
ERP Applications
Stages of ERP Implementation
Critical Implementation Concerns
Commercial ERP system
Success Stories
Menu
ERP integrates all departments and functions throughout an
organization into a single IT system (or integrated set of IT
systems) so that employees can make enterprise-wide
decisions by viewing enterprise-wide information on all
business operations
The International Journal of Management Science, (2003)
Program description
Objectives
Provide a better growth platform
Align and consolidate existing
process and IT Integrate the former processes and tools
into one system
Finance
Supply chain management Provide a basis for synergy savings
Services value chain
Customer interface
Program importance
Introduction
ERP systems handle the manufacturing, logistics,
distribution, inventory, shipping, invoicing, and
accounting for a company
Introduction
Material Manufacturing
Requirements Resource Planning ERP
Planning (MRP). (MRP II)
EAS ERP II
Introduction
Purchasing, Manufacturing, Distribution
Advanced Applications
Financials, Distribution
Accounting, HRM, PLC ….
Integration with SCM, CRM,..
ERP Components
Introduction
Journal of Enterprise Information Management, 2009
Introduction
The organization Before ERP
Introduction
The organization After ERP
Introduction
ERP Integration Data Flow
Introduction
ERP Process Flow Example:
ERP automates business processes such as order fulfillment—taking an
order from a customer, shipping the purchase, and then billing for it.
With an ERP system, when a customer service representative takes an
order from a customer, he has all the information necessary to complete
the order (the customer’s credit rating and order history, the company’s
inventory levels, and the delivery schedule).
Introduction
Introduction
Source: IDC, Worldwide ERP Applications 2006-2011
Introduction
Source: IDC, Worldwide ERP Applications Vendor Shares. 2011
Introduction
Source: IDC, Worldwide ERP Applications (per module) 2011
Introduction
Source: IDC, Worldwide ERP Applications (per region)
Introduction
Journal of Enterprise Information Management, 2009
Introduction
Many companies purchase modules from an ERP
vendor, an SCM vendor, and a CRM vendor and
must integrate the different modules together
Introduction
Journal of Enterprise Information Management, 2009
Introduction
Legacy
Data Warehouse Systems
ERP System
On-Line Analytical Processing Bolt-On Applications
(OLAP) (Industry Specific Functions)
Customers Suppliers
Core Functions [On-Line Transaction Processing (OLTP)]
Sales
Business Shop Floor
& Logistics
Planning Control
Distribution
Operational Database
Customers, Production,
Vendor, Inventory, etc.
ERP Framework
Pre implementation Project Business Final preparation
Realization & go live Support
Activities Preparation blueprinting
ERP Framework
Company Management Pre-Evaluation Screening ERP Vendors
Go ahead
Package Evaluation
Project Planning
Going Live
Scope ERP
During Implementation
Scope
ERP Framework
Unisource Worldwide, Inc., a $7 billion distributor of paper
products, wrote off $168 million in costs related to an abandoned
nationwide implementation of SAP software.
ERP Applications
Dell Computer Corp. has recently abandoned a much-publicized SAP
implementation following months of delay and cost overruns.
Dow Chemical, after spending half a billion dollars over seven years
of implementing SAP R/2, the mainframe version, now has decided
to start all over again on the new client/server version (R/3).
ERP Applications
The Earthgrains Co. implemented SAP R/3 and:
• Reports that its operating margins improved from 2.4 to 3.9
percent
• Pushed its on-time product delivery rate to 99 percent in
1997.
• The company also reports better management information
and happier customers.
ERP Applications
At Par Industries in Moline, IL, an ERP system allowed management to
base production on current customer orders rather than forecasts of
future orders.
• The delivery performance improved from 60 percent on time to
more than 95 percent.
• Lead times to customers reduced from six weeks to two weeks.
• Repair parts reduced from two weeks to two days
• work-in-process inventory dropped almost 60 percent.
• The life of a shop order dropped from weeks to mere hours.
ERP Applications
IBM Storage Systems division, after implementing an ERP system:
• Was able to re-price all of its products in five minutes compared
with five days prior to the implementation.
• It also reduced the time to ship a replacement part from 22 days
to three days.
• The time to perform a credit check from 20 minutes to three
seconds.
ERP Applications
The first tier players in the ERP market are SAP, Baan, Oracle,
and PeopleSoft, while the second tier players are vendors such
as J.D. Edwards, Lawson, and QAD.
ERP Applications
Mergers/Acquisitions => Standardization over the same
ERP solution.
ERP Applications
One important reason for its failure is related with the reluctance or
unwillingness of users to accept ERP system. Therefore, a good
understanding of users acceptance of ERP systems is essential to
user productivity.
Studies from Amaoko-Gyampah and Nah et al. found that users are
more concerned with whether the ERP system can help them
perform their daily job functions rather than with system
capabilities to integrate data.
ERP systems are designed to meet these characteristics by
embedding technological and functional competences that can only
be streamlined by firm’s user usage.
ERP Applications
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ERP Applications
The Approach –
This is the stage of making the design decisions. Especially in ERP
systems, companies have found that the organization has to adapt
to the packaged system rather than changing the software to
meet current company processes.
The Dive –
The point of implementation when the inevitable problems arise.
Technology problems, bad data, inadequate understandings; all
the typical occurrences but on a grander scale.
ERP Applications
Resurfacing –
Typically four to twelve months after implementation, new roles and
workflows have been learned and the organization has re-stabilized.
Swimming –
Finally some of the expected benefits are starting to occur. Systems are
continually improving as new capabilities are added and processes start
to optimize.
Jet-skiing –
Organizational boundaries have been changed, the organization has
developed agility and ability to rapidly change to a changing
environment, and management decision making processes have been
redefined. A business transformation has occurred.
ERP Applications
• Top Management • Implementation Costs
Commitment • ERP Vendors
• Reengineering • Selecting the Right
• Integration Employees
ERP Applications
• System Compatibility • Embedded Best Practices
• System Complexity • Online Training
• Transactional Efficiency • Employee Empowerment
ERP Applications
Questions? Comments?
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