23982521 ERP Implementation and E Business

7/29/2019 23982521 ERP Implementation and E Business

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ERP implementation and E-business


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ERP Implementation: Six Deadly Sins

Not understanding the true significance of what you have

taken on.

Not committing the right resources to the project.

Not managing the change effectively.

Not managing the benefits.

Not embracing integration.

Not planning for the end of the project before you start.


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Project Management Fundamentals

Co-ordination

Tasks

Equipment

Products

People

Time

Money

Balancing

Scope

Time

Cost

Quality

Needs vs..

Expectations Needs & Expectations

of stakeholders


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Step 1: Define the Scope of the Project

Step 2: Estimate Staffing to Lead the Project and Support Each Process Area

Step 3: Estimate Custom and Interface Development

Step 4: Assess Data Conversion Magnitude

Step 5: Estimate Project Duration

Step 6: Assess External Connectivity Requirements

Step 7: Estimate Supplemental Staffing

Step 8: Create a Time-Phased, Resource-Loaded Project Plan

Step 9: Estimate Resource Rates and Apply Them to the Plan

Step 10: Estimate Travel, Contingency and Final Project Costs

ERP Project Management10-Step Estimation Process


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Step 1: Define the Scope of the Project

Typical Macro-Processes Identified as Part of an ERPImplementation

Sample Process Decomposition

Step 2: Estimate Staffing to Lead the Project and Support Each

Process Area

Step 3: Estimate Custom and Interface Development

Custom Development

Interface Development

ERP PM10-Step Estimation Process (continued)


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Step 4: Assess Data Conversion Magnitude

Code Tables

Master Tables

Transaction Tables

Step 5: Estimate Project Duration

Project Planning and Preparation

Phase 1: Standard Solution Design

Phase 2: Standard Solution Development

Phase 3: Pilot Deployment

Phase 4: Rollout

Project Management



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Step 6: Assess External Connectivity Requirements

Step 7: Estimate Supplemental Staffing

Point Staffing for Custom Development

Point Staffing for Data Conversion

Point Staffing for End-User Training

Step 8: Create a Time-Phased, Resource-Loaded Project Plan

Step 9: Estimate Resource Rates and Apply Them to the PlanStep 10: Estimate Travel, Contingency and Final Project Costs



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Change Management: Of Vital Important


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2

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3

5

ERP enables better, faster decisions

by unleashing the power of the

integrated enterprise

6

9

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10

There are three distinct stages

in each wave after going live

Companies should anticipate atemporary dip in performance

after going live

ERP also yields significant returns

from unexpected benefits

ERP delivers significant tacticaland bottom-line strategic benefits

ERP provides a backbone to further

extend functionality through bolt-onsand other solutions

Issues and obstacles show

dramatic shifts in emphasis after

going live

An ERP implementation is at its core

a people project

There are twelve best practices for

accelerating, maximizing, and

sustaining the benefits of the ERP

journey

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ERP Success Factors: Top Ten Findings

Going live is not the end of

the ERP journey

Findings and Conclusions


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12 best practices for sustaining the benefits of ERP

Focus on Benefits

Alignment

Breadth of Change

Business Case

Post-Implementation Plan

Role Transition

Process Expertise

Extending Capabilities

Commonality

Using Capabilities

Benefits Ownership

Metrics

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Implementation: ERP The Next Wave

ERP 2: The e-business challenge

Information SharingERP focus is on internal information , e-

business provides ability to share info internally & externally Optimization FocusERP focus is across one value chain, e-

business focus is on multiple value chains

Internet SubstituteERP one in all in application opposed to

standalone apps linked on internet backbone

Technology ObstacleClosed client/server vs. open standards


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ERP Trends: Combined ERP & E-business Benefits

TANGIBLE BENEFITS INTANGIBLE BENEFITS

Increased revenue Improved customer and employee

satisfaction

Reduced costs, inventories, and

collection efforts

Frees employees to work on tasks

requiring human creativity and

judgment

Shorter cycle times Continuous operation

Capability to manufacture to actual

demand

Improved supplier relationships

Improved cash management


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E-business Models and Disintermediation

Pure e-business play?

The case of Amazon.com

Click-and-mortar

Hybrid of the pure e-business and the brick-and-mortar model

Dependence of e-business and physical facilities

Disintermediation

Manufacturers interact directly with consumers, bypassing intermediariessuch as wholesalers and retailers

Impact on a companys business processes

Warehouse must now manage a large number of low-volume orders Accounts receivable must now process a large number of invoices

and accommodate increased collection activity

Customer service may be inundated with calls

Customer returns must now be managed by manufacturer


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The E-business PlatformExtreme Demands

Operating demands place a strain on e-business platforms.

Fluctuating traffic.

Frequent system changes.

24 x 7 operation.

Flawless system stability. True 24 x 7 availability requires 99.999% reliability.

Scalable.

Dramatic spikes in site traffic.

Security.

Exposure of corporate resources on the Web.Robust Design.

Testing tools available.

Examples of AOL, E*Trade, Charles Schwab and eBay.


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ERP and E-business: Adaptive vs. Disruptive Technology

E-business is a revolution

Internet (4 years to reach 50 million users)

Television (13 years)

PC (16 years)

Radio (38 years)Adaptive technologies move earlier technologies forwardincrementally while Disruptive technologies change the way peoplelive or the way businesses operate.

ERP is adaptive while e-Business is disruptive.

Touch-tone telephone was adaptive while telephone itself wasdisruptive.

Electric train was adaptive while the train itself was disruptive.


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Life Cycle of Adaptive versus Disruptive Technologies

Impact

Time Disruptive technology

Adaptive technology

Critical Mass

(1)

Initial hype

(2)

Learning,

Experimenting,

investing

(3)

New wave of

Technology andequipment

(4)

Infrastructure consolidation

(5)

Critical mass

achieved.

Mass marketing


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ERP & E-business Recap

Structured approach to optimizing a companys internal value chain.

Organize, codify and standardize a companys business processes and data.Collate and transform transactional data into useful information for analysis.

Not intrinsically strategic; rather, it is an enabling technology.

Business process re-engineering or re-design (BPR) often accompanies ERPprojects to eliminate non-value-adding work, thus improving a companysfinancial performance through operational improvements.

ERP implementation requires employees to be willing to new technology, &also new ways of working.

This forces employees to upgrade their skill sets.

ERP implementation with BPR affects a companys organizational structure. Affects individual roles within the organization.

Staff reductions are often seen, or staff may be moved into other areas (inexpanding companies).

Change management is key to successful implementations.


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ERP & E-Business Re-cap (continued)

E-commerce

Leverage an Internet-based sales channel to enhance marketing and sell

products or services, or leverage the Internet to make purchasing more

efficient.

Ideally, with minimal disruption to organizational culture and business processes

e-storefront, e-catalog, e-billing, e-payment, e-procurement

Focuses on efficiency in selling, marketing and purchasing

E-business

Uses IT and open standards to connect suppliers and customers at all steps

along the value chain.

Requires trust among business partners, and agreement on standard ways ofworking.

Focuses on effectiveness through improved customer service, reduced costs

and streamlined business processes.

Many companies enter e-business by first engaging in e-commerce.


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Complementary Technologies of ERP and E-Business

ERP and Internet technologies are rapidly coming together.

Merger is still incomplete and its exact nature unclear

ERP is the internal technological hub of a single enterprise.

Web-based technology extends each enterprises organizational boundaries.

ERP is focused on internal process efficiency and effectiveness while E-

Business is focused on external, cross-enterprise process efficiency,operational effectiveness, and product promotion.

ERP technology supports current business strategy while E-business opens thedoor to new strategic opportunities.

E-business is best supported by a well-tuned ERP system.

What lies behind the web page is important.

ERP is necessary to fulfill the promises made on the Web page, that is, the promiseof e-business.

Enterprises need some sort of internal transaction engine to match the internalinformation flow with the actual flow of goods and/or services.

Key issue is to blend ERP and Web-based technology successfully and to pusheach to achieve its maximum benefit.


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ERP complements E-Business

ERP: The hub of a single enterprise

Integrates resource planning, supply-chain management, demand-chain management

and knowledge management.

Achieved through tightly integrated modules for Finance, Manufacturing, Logistics,

Human Resources, and Sales & Marketing.

E-Business: The ideal extension to internal processes

Enables improved customer focus (individualized service, low-cost products, short

cycle times, and accurate delivery dates) and customer relationship management

Enables interactive relationships with value-chain partners

ERP boosts E-Business potential Communication with partners in the supply chain and customers in the value chain is

not enough.

Collaboration and coordination are also important.

Processing logic is required in order to respond to information available across the

Internet.


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ERP / E-Business Matrix

Greenfield

Non-integrated

systems

Limited / Single-

Function ERP

Integrated Business-

Unit ERP

IntegratedEnterprise ERP

No

E-Business

CapabilitiesChannel

Enhancement

Value

Chain

IntegrationIndustry

Transformation Convergence


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ERP / E-Business Organizational Issues:

Domain & Level Matrix

Greenfield

Non-integrated

systems

Limited / Single-

Function ERP

Integrated Business-

Unit ERP

Integrated

Enterprise ERP

No

E-Business

Capabilities

Channel

Enhancement

Value

Chain

IntegrationIndustry

Partnership Convergence

1. Start-Up2. Enterprise Growth Limited

(High Risk = Opportunity)

4. High Cost Relative to Benefit

5. Optimize Business at Unit Level

6. Optimize across Enterprise

3. Customer Benefit Limited

(Reduced E-Options

and Flexibility)


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E-Business Examples

CHANNEL ENHANCEMENT

- Point solutions such as selling over the Web, providing customer self-service and conducting Web-

based indirect procurement. (e-commerce)

VALUE CHAIN INTEGRATION (e.g. Adaptec)

- Integrate customers and suppliers operations with their processes and systems (e-CRM and e-SCM).

INDUSTRY TRANSFORMATION (e.g. Solectron and Ingram Micro)

- Boundaries between companies and their partners become less pronounced as they link internal

systems through the Web, creating new markets, new opportunities, new customers and new products and

services. There is an intense relationship between the partners to create an environment for shared

business improvements, mutual benefits and joint rewards.. (Collaborative Advantage)

CONVERGENCE (e.g. Shell, Mobil, BP, GM and GE)

- Coming together of companies from different industries to provide goods and services to consumers.

This is not solely a function of e-business technologies: it is equally a function of industry deregulation,

globalization of business, evolving customer demand and new competitive tactics. However, it is helped

by decreasing costs and rapid adoption of technology. (Industry Convergence)


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Summary: ERP Vendor Responses to E-Business Challenges

Employees Customers Vendors

Focus Inside Company Out Outside Company In

Release Process Periodic, Complex

Upgrade

Continuous, Small

Changes

Method of Integrating

with Other Businesses

Through APIs or EDI Browser, Portals, IT

Business Processes Complex Simple

User Interface User Training

Required

Intuitive

Traditional ERP versus E-Business Applications

Dimensions ERP Apps E-Business Apps


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ERP Vendor Responses to E-Business Challenges (contd)

Extend ERP Functionality

SCM

CRM

APS BI

Internet-based Procurement

Build communities of users through portals and trading exchanges

Public versus private

Horizontal versus vertical Direct versus indirect materials


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ERP Vendor Responses to e-business challenges (contd)

Create new ERP delivery and pricing models

Traditional pricing includes initial license fee for a specified number of

employees, with annual maintenance fees

Introduction ofRole-based pricing (part of SAPs mySAP.com strategy in

which users access the system through role-specific Workplaces) Industry-specific, pre-configured solutions to offset high implementation costs

(e.g. SAPs Accelerated Applications and Oracles FastForward RPM)

Pre-configured, pre-installed and pre-integrated (e.g. partnership between

IBM and vendors like J D Edwards, MAPICS, QAD and SAP)

Traditional outsourcing (either through ERP vendors or their partners) Application service provision

Third-party service provider typically licenses the software from the ERP

vendor and resells the package to many buyers for fixed, per-month, per-

user fee. Users access the offsite system via Internet.

Internet-based delivery of basic ERP system (e.g. Biztone)

23982521 ERP Implementation and E Business

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