Bit Final Report

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September 10, 2011 [ERP IN DELL]

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A REPORT

ON

ERP IN DELL

Submitted to:

Dr. V.M. Mathur

Professor, Fore School Of Management.

Submitted By: Arjun Chikkara(201023)

Arushi Agarwal(201025)

Astha jain(201027)

Gautam Goel(201041)

Gulshan gupta(201042)

Kapil Goyal(201057)


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Acknowledgement

We are indebted to Dr. V.M. Mathur , my project guidewho has provided her

invaluable help in reviewing the project at various stages and providing her

constructive comments regularly.

Also we would like to thank all the people , who in some way or the other,

contributed towards and provided the moral and motivational support to

complete this project on time.

Thank you


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Table of Contents

CHAPTER 1Introduction...4

What is ERP?........................................................................................4-5Characteristics of ERP..5-6

How is it Implemented?.......................................................................6-9Benefits that come with ERP Implementation.9-10How can ERP Improve Company performance.10

Objectives..10CHAPTER 2

Dells Background11-16Dells Business Model...17

Direct Sales............17Direct Customer Relationship17-18Customer Segmentation for Sales and Service..18-19Build-to-order production..19-20

Dells IT Architecture20-21Dells IT Organization...21-22Methodology...23

CHAPTER 3Analysis of ERP in DELL .24

Enterprise Architecture issues24ERP introduction: SAP R/324-26

SAP Implementation Methodologies and Strategies ..27-35Implementation Methodology35-39i2 Technology Introduction39-49

Case Findings..50CHAPTER 4Conclusion and recommendations..51

Conclusions.51Recommendations51-52

REFERENCES..53


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CHAPTER 1

INTRODUCTION

WHAT IS ERP?

ERP (Enterprise Resource Planning) is principally an integration of business management practices

and modern technology. ERP integrates internal and external management information across an

entire organization, embracing finance/accounting, manufacturing, sales and service, customer

relationship management, etc. ERP systems automate this activity with an

integrated software application. Its purpose is to facilitate the flow of information between all

business functions inside the boundaries of the organization and manage the connections to outside

stakeholders. ERP systems can run on a variety ofhardware and networkconfigurations, typically

employing a database as a repository for information.

Integration is Key to ERP Systems

Integration is an exceptionally significant ingredient to ERP systems. The integration between

business processes helps develop communication and information distribution, leading to remarkable

increase in productivity, speed, and performance.

An ERP systems key objective is to integrate information and processes from all functional divisions

of an organization and merge it for effortless access and structured work flow. The integration is

typically accomplished by constructing a single database repository that communicates with multiple

software applications, providing different divisions of an organization with various business statistics

and information.

Although the perfect configuration would be a single ERP system for an entire organization, many

larger organizations usually deploy a single functional system and slowly interface it with other

functional divisions. This type of deployment can really be time consuming and expensive.
http://www.tech-faq.com/enterprise-resource-planning.htmlhttp://www.tech-faq.com/enterprise-resource-planning.htmlhttp://www.tech-faq.com/enterprise-resource-planning.htmlhttp://en.wikipedia.org/wiki/Management_informationhttp://en.wikipedia.org/wiki/Financehttp://en.wikipedia.org/wiki/Accountinghttp://en.wikipedia.org/wiki/Manufacturinghttp://en.wikipedia.org/wiki/Customer_relationship_managementhttp://en.wikipedia.org/wiki/Customer_relationship_managementhttp://en.wikipedia.org/wiki/Softwarehttp://en.wikipedia.org/wiki/Hardwarehttp://en.wikipedia.org/wiki/Computer_networkhttp://en.wikipedia.org/wiki/Databasehttp://en.wikipedia.org/wiki/Databasehttp://en.wikipedia.org/wiki/Computer_networkhttp://en.wikipedia.org/wiki/Hardwarehttp://en.wikipedia.org/wiki/Softwarehttp://en.wikipedia.org/wiki/Customer_relationship_managementhttp://en.wikipedia.org/wiki/Customer_relationship_managementhttp://en.wikipedia.org/wiki/Manufacturinghttp://en.wikipedia.org/wiki/Accountinghttp://en.wikipedia.org/wiki/Financehttp://en.wikipedia.org/wiki/Management_informationhttp://www.tech-faq.com/enterprise-resource-planning.html


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CHARACTERISTICS OF ERP SYSTEMS

When most people refer to the core ERP applications or modules, they mean the back-office

capabilities to manage human resources, accounting and finance, manufacturing, and project-

management functions. However, major ERP suites from Oracle, PeopleSoft, and SAP now provide

much moreincluding modules for sales force automation, business intelligence, customer

relationship management, and supply chain management.

ERP systems typically include the following characteristics:

An integrated system that operates in real time (or next to real time), without relying on periodicupdates. A common database, which supports all applications.

A consistent look and feel throughout each module. Installation of the system without elaborate application/data integration by the Information

Technology (IT) department.

Functions:

Finance/Accounting General ledger, payables, cash management, fixedassets, receivables, budgeting, consolidation

Human resources - payroll, training, benefits, 401K, recruiting, diversity management

Manufacturing - Engineering, bill of materials, work orders, scheduling, capacity, workflowmanagement, quality control, cost management, manufacturing process, manufacturingprojects, manufacturing flow, activity based costing, product lifecycle management
http://en.wikipedia.org/wiki/Financehttp://en.wikipedia.org/wiki/Accountinghttp://en.wikipedia.org/wiki/General_ledgerhttp://en.wikipedia.org/wiki/Accounts_payablehttp://en.wikipedia.org/wiki/Cash_managementhttp://en.wikipedia.org/wiki/Fixed_assetshttp://en.wikipedia.org/wiki/Fixed_assetshttp://en.wikipedia.org/wiki/Accounts_receivablehttp://en.wikipedia.org/wiki/Budgetinghttp://en.wikipedia.org/wiki/Consolidationhttp://en.wikipedia.org/wiki/Human_resourceshttp://en.wikipedia.org/wiki/Payrollhttp://en.wikipedia.org/wiki/Traininghttp://en.wikipedia.org/wiki/Employee_benefithttp://en.wikipedia.org/wiki/401Khttp://en.wikipedia.org/wiki/Recruitinghttp://en.wikipedia.org/wiki/Diversity_managementhttp://en.wikipedia.org/wiki/Manufacturinghttp://en.wikipedia.org/wiki/Engineeringhttp://en.wikipedia.org/wiki/Bill_of_materialshttp://en.wikipedia.org/wiki/Workflow_managementhttp://en.wikipedia.org/wiki/Workflow_managementhttp://en.wikipedia.org/wiki/Quality_controlhttp://en.wikipedia.org/wiki/Activity_based_costinghttp://en.wikipedia.org/wiki/Product_lifecycle_managementhttp://en.wikipedia.org/wiki/Product_lifecycle_managementhttp://en.wikipedia.org/wiki/Activity_based_costinghttp://en.wikipedia.org/wiki/Quality_controlhttp://en.wikipedia.org/wiki/Workflow_managementhttp://en.wikipedia.org/wiki/Workflow_managementhttp://en.wikipedia.org/wiki/Bill_of_materialshttp://en.wikipedia.org/wiki/Engineeringhttp://en.wikipedia.org/wiki/Manufacturinghttp://en.wikipedia.org/wiki/Diversity_managementhttp://en.wikipedia.org/wiki/Recruitinghttp://en.wikipedia.org/wiki/401Khttp://en.wikipedia.org/wiki/Employee_benefithttp://en.wikipedia.org/wiki/Traininghttp://en.wikipedia.org/wiki/Payrollhttp://en.wikipedia.org/wiki/Human_resourceshttp://en.wikipedia.org/wiki/Consolidationhttp://en.wikipedia.org/wiki/Budgetinghttp://en.wikipedia.org/wiki/Accounts_receivablehttp://en.wikipedia.org/wiki/Fixed_assetshttp://en.wikipedia.org/wiki/Fixed_assetshttp://en.wikipedia.org/wiki/Cash_managementhttp://en.wikipedia.org/wiki/Accounts_payablehttp://en.wikipedia.org/wiki/General_ledgerhttp://en.wikipedia.org/wiki/Accountinghttp://en.wikipedia.org/wiki/Finance


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Supply chain management - Order to cash, inventory, order entry, purchasing,productconfiguration, supply chain planning, supplier scheduling, inspection of goods, claim

processing, commissions

Project management - Costing, billing, time and expense, performance units, activitymanagement

Customer relationship management - Sales and marketing, commissions, service, customercontact, call center support

Data services - Various "selfservice" interfaces for customers, suppliers and/or employees Access control - Management of user privileges for various processes

HOW IS IT IMPLEMENTED?

ERP's scope usually implies significant changes to staff work processes and practices. Generally,

three types of services are available to help implement such changesconsulting, customization, and

support. Implementation time depends on business size, number of modules, customization, the scope

of process changes, and the readiness of the customer to take ownership for the project. Modular ERP

systems can be implemented in stages. The typical project for a large enterprise consumes about 14

months and requires around 150 consultants. Small projects can require months; multinational and

other large implementations can take years. Customization can substantially increase implementation

times.

Process preparation

Implementing ERP typically requires changing existing business processes. Poor understanding of

needed process changes prior to starting implementation is a main reason for project failure. It is

therefore crucial that organizations thoroughly analyze business processes before implementation.

This analysis can identify opportunities for process modernization. It also enables an assessment of

the alignment of current processes with those provided by the ERP system.

Configuration

Configuring an ERP system is largely a matter of balancing the way the customer wants the system to

work with the way it was designed to work. ERP systems typically build many changeable parametersthat modify system operation. For example, an organization can select the type of inventory
http://en.wikipedia.org/wiki/Supply_chain_managementhttp://en.wikipedia.org/wiki/Order_to_cashhttp://en.wikipedia.org/wiki/Inventoryhttp://en.wikipedia.org/wiki/Purchasinghttp://en.wikipedia.org/wiki/Product_configuratorhttp://en.wikipedia.org/wiki/Product_configuratorhttp://en.wikipedia.org/wiki/Product_configuratorhttp://en.wikipedia.org/wiki/Product_configuratorhttp://en.wikipedia.org/wiki/Project_managementhttp://en.wikipedia.org/wiki/Billinghttp://en.wikipedia.org/wiki/Customer_relationship_managementhttp://en.wikipedia.org/wiki/Call_centerhttp://en.wikipedia.org/wiki/Access_controlhttp://en.wikipedia.org/wiki/Access_controlhttp://en.wikipedia.org/wiki/Call_centerhttp://en.wikipedia.org/wiki/Customer_relationship_managementhttp://en.wikipedia.org/wiki/Billinghttp://en.wikipedia.org/wiki/Project_managementhttp://en.wikipedia.org/wiki/Product_configuratorhttp://en.wikipedia.org/wiki/Product_configuratorhttp://en.wikipedia.org/wiki/Purchasinghttp://en.wikipedia.org/wiki/Inventoryhttp://en.wikipedia.org/wiki/Order_to_cashhttp://en.wikipedia.org/wiki/Supply_chain_management


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accountingFIFO or LIFOto employ, whether to recognize revenue by geographical unit, product

line, or distribution channel and whether to pay for shipping costs when a customer returns a

purchase.

Customization

ERP systems are theoretically based on industry best practices and are intended to be deployed "as is".

ERP vendors do offer customers configuration options that allow organizations to incorporate their

own business rules but there are often functionality gaps remaining even after the configuration is

complete. ERP customers have several options to reconcile functionality gaps, each with their own

pros/cons. Technical solutions include rewriting part of the delivered functionality, writing a

homegrown bolt-on/add-on module within the ERP system, or interfacing to an external system. All

three of these options are varying degrees of system customization, with the first being the most

invasive and costly to maintain. Alternatively, there are non-technical options such as changing

business practices and/or organizational policies to better match the delivered ERP functionality.
http://en.wikipedia.org/wiki/FIFO_and_LIFO_accountinghttp://en.wikipedia.org/wiki/FIFO_and_LIFO_accounting


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Extensions

ERP systems can be extended with thirdparty software. ERP vendors typically provide access to data

and functionality through published interfaces. Extensions offer features such as:


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archiving, reporting and republishing; capturing transactional data, e.g. using scanners, tills or RFID Access to specialized data/capabilities, such as syndicated marketing data and associated trend

analytics.

Data migration

Data migration is the process of moving/copying and restructuring data from an existing system to the

ERP system. Migration is critical to implementation success and requires significant planning.

Unfortunately, since migration is one of the final activities before the production phase, it often

receives insufficient attention. The following steps can structure migration planning:

Identify the data to be migrated Determine migration timing Generate the data templates Freeze the toolset Decide on migration-related setups Define data archiving policies and procedures.

BENEFITS THAT COME WITH ERP IMPLEMENTATION

The fundamental advantage of ERP is that integrating the myriad processes by which businesses

operate saves time and expense. Decisions can be made more quickly and with fewer errors. Data

becomes visible across the organization. Tasks that benefit from this integration include:

Sales forecasting, which allows inventory optimization Order tracking, from acceptance through fulfillment Revenue tracking, from invoice through cash receipt Matching purchase orders (what was ordered), inventory receipts (what arrived),

and costing (what the vendor invoiced)

ERP systems centralize business data, bringing the following benefits:

They eliminate the need to synchronize changes between multiple systemsconsolidation offinance, marketing and sales, human resource, and manufacturing applications

They enable standard product naming/coding. They provide a comprehensive enterprise view (no "islands of information"). They make real

time information available to management anywhere, any time to make proper decisions.
http://en.wikipedia.org/wiki/Scannerhttp://en.wikipedia.org/wiki/RFIDhttp://en.wikipedia.org/w/index.php?title=Data_archiving&action=edit&redlink=1http://en.wikipedia.org/wiki/Invoicehttp://en.wikipedia.org/wiki/Purchase_orderhttp://en.wikipedia.org/wiki/Costhttp://en.wikipedia.org/wiki/Product_naming_conventionhttp://en.wikipedia.org/wiki/Product_naming_conventionhttp://en.wikipedia.org/wiki/Costhttp://en.wikipedia.org/wiki/Purchase_orderhttp://en.wikipedia.org/wiki/Invoicehttp://en.wikipedia.org/w/index.php?title=Data_archiving&action=edit&redlink=1http://en.wikipedia.org/wiki/RFIDhttp://en.wikipedia.org/wiki/Scanner


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They protect sensitive data by consolidating multiple security systems into a single structure.

HOW CAN ERP IMPROVE A COMPANYS BUSINESS PERFORMANCE?

ERPs best hope for demonstrating value is as a sort of battering ram for improving the way your

company takes a customer order and processes it into an invoice and revenueotherwise known as

the order fulfillment process. That is why ERP is often referred to as back-office software. It doesnt

handle the up-front selling process (although most ERP vendors have developed CRM software or

acquired pure-play CRM providers that can do this); rather, ERP takes a customer order and provides

a software road map for automating the different steps along the path to fulfilling it. When a customer

service representative enters a customer order into an ERP system, he has all the information

necessary to complete the order (the customers credit rating and order history from the finance

module, the companys inventory levels from the warehouse module and the shipping docks trucking

schedule from the logistics module, for example).

People in these different departments all see the same information and can update it. When one

department finishes with the order it is automatically routed via the ERP system to the next

department. To find out where the order is at any point, you need only log in to the ERP system and

track it down. With luck, the order process moves like a bolt of lightning through the organization,

and customers get their orders faster and with fewer errors than before. ERP can apply that same

magic to the other major business processes, such as employee benefits or financial reporting.

OBJECTIVE

To make an integrated analysis of the implementation of ERP (Enterprise Resource Planning) in Dell

and draw conclusions.


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CHAPTE 2

DELL BACKGROUND

Dell was founded by Michael Dell, who started selling personal computers out of his dorm room as a

freshman at the University of Texas in Austin. Dell bought parts wholesale, assembled them into

clones of IBM computers, and sold them by mail order to customers who did not want to pay the

higher prices charged by computer stores. The scheme was an instant success. He was soon grossing

$80,000 a month, and in 1984 he dropped out of school, incorporating his business as Dell Computer

Corporation (though it would initially do business as PC's Limited).

At the time, the PC industry was dominated by such large firms as IBM, while smaller, lesser known

mail-order firms sold IBM clones at a steep discount. Dell used low-cost direct marketing to undersell

the better known computers being sold through such high-overhead dealer networks. Dell placed adsin computer magazines, gearing his merchandise to buyers who were sophisticated enough to

recognize high-quality merchandise at low prices. Customers placed orders to Dell by dialing a toll-

free number. As a result of these methods, Dell's computers became the top brand name in the direct-

mail market.

Dell achieved sales of $6 million its first full year in business, approaching $40 million the next year.

Dell hired former investment banker E. Lee Walker as president in 1986 to help deal with his firm's

explosive growth. By 1987 Dell held a dominant position in the mail-order market, but it was clear

that the firm had to move beyond mail order if it was to continue growing. To accomplish this goalthe firm needed a larger professional management staff, and Dell hired a group of marketing

executives from Tandy Corporation, another maker of low-cost PCs. The group built a sales force able

to market to large corporations and put together a network of value-added resellers, who assembled

packages of computer components to sell in specialized markets.

The Tandy team soon helped raise gross margins to 31 percent, up from 23 percent a year earlier.

Rather than merely undercutting the prices of competitors, they set prices in relation to the firm's

costs. The new marketing department soon ran into trouble with Michael Dell, however. Battles

erupted over advertising budgets and the number of salespeople required for corporations and

resellers. While Dell believed that the new team did not understand direct selling and was trying to

create a traditional marketing department with an overly large sales force, the Tandy group alleged

that Dell lacked the patience to wait for the sales force to pay off. By early 1988, most of the Tandy

group had resigned or been forced out.

Regardless, the firm continued growing rapidly, opening a London office that sold $4 million worth of

computers during one month in 1988. Dell also formed a Canadian subsidiary. Early in 1988 the firm

formed various divisions to raise its profile among corporate, government, and educational buyers.


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With reported sales of $159 million in 1987, the firm went public in June 1988, selling 3.5 million

shares at $8.50 a share.

Increased Competition in the Late 1980s

The firm faced several challenges, however. Announcing their own clone of IBM's new PS/2

computer system well before it was actually ready, Dell later had trouble reproducing important

aspects of the PS/2's architecture, and the computers were delayed significantly, embarrassing the

young company. Furthermore, Dell faced competition from several Japanese manufacturers, which

were offering IBM clones at low prices. Further, having had trouble meeting demand, Dell used

money raised from its stock offering to expand capacity and warehouse space, leaving the company

with little cash. When it overestimated demand during the fourth quarter of 1988, the firm suddenly

had no cash and warehouses full of unsold computers.

Dell responded to the increasing competition by increasing the level of technical sophistication in its

computers. Half of its 1988 sales came from PCs using the Intel Corporation's 80386 microprocessor,

the most powerful PC chip at the time, and the company began producing file servers using the

sophisticated Unix operating system. Dell also hired computer scientist Glenn Henry away from IBM

to work on product development. Scrapping the company's first attempts at cloning IBM's PS/2,

Henry initiated new plans for producing clones. Henry built Dell's research and development staff

from almost nothing to 150 engineers, who began working on ways to combine the function of several

chips onto one chip. When Intel released its 486 microprocessor, Dell began speeding to market the

computers that could use it. Another of Henry's goals was high-quality graphics, which required better

monitors and special circuit boards. By mid-1989 Dell had finished initial attempts at graphics

hardware, giving it inroads into the higher end of the PC market.

Despite these advances, Dell still had a research and development budget of $7 million, compared

with the hundreds of millions spent by such larger competitors as IBM. Dell's share of the PC market

was only 1.8 percent, but it was still growing rapidly. U.S. sales for 1989 reached $257.8 million,

while sales in Britain increased to $40 million and a branch in Western Germany realized the break-

even point.Dell considered itself as much a marketing company as a hardware company, and its sales staff played

an important role in its successes. Dell's sales personnel trained for six weeks or more before taking

their seats at the phonebanks, and, along with their managers, they held weekly meetings to discuss

customer complaints and possible solutions. In addition to fielding questions and taking orders, sales

staff were trained to promote products. They helped buyers customize orders, selling them more

memory or built-in modems. Orders were then sent to Dell's nearby factory where they were filled

within five days. The telemarketing system also allowed Dell to compile information on its customers,

helping the firm spot opportunities and mistakes far more quickly than most other PC companies.


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In 1990 Dell set up subsidiaries in Italy and France as well as a manufacturing center in Limerick,

Ireland, to serve customers in Europe, the Middle East, and Africa. It also began selling some

computers through large computer stores, whose high-volume, low-margin strategy complemented

Dell's established operations. The firm was making important corporate inroads as well, developing

client/server computing systems with Andersen Consulting, for example, and introducing powerful

servers using the Unix operating system. As a result, 40 percent of Dell's $546 million in 1990 sales

came from the corporate world, up from 15 percent in 1987. Dell became the sixth largest PC maker

in the United States--up from number 22 in 1989--and retained a staff of 2,100. Furthermore, the

company's emphasis on customer satisfaction paid off, as it was rated number one in J.D. Powers

Associates' first survey of PC customer satisfaction.

That year, however, Dell purchased too many memory chips and was forced to abandon a project to

start a line of workstations. As a result, 1990 profits fell 65 percent to $5 million, despite the doubling

of the firm's sales.

Price Wars in the Early 1990s

Also during this time, the traditional PC market channels were in flux. With a recession dampening

sales, PC makers engaged in a furious price war that resulted in slumping profits nearly across the

board. Compaq, IBM, and Apple all had profit declines or were forced to lay off employees.

Furthermore, Compaq filed a lawsuit against Dell, which it eventually won, claiming that Dell's

advertising made defamatory statements against Compaq. Nevertheless, the economic recession

actually benefited Dell. While customers had less money, they still needed PCs, and they purchased

Dell's inexpensive but technologically innovative IBM clones in record numbers. Consequently,

annual sales shot up toward $1 billion.

In the early 1990s, notebook-sized computers were the fastest growing segment of the PC market, and

Dell devoted resources to producing its first notebook model, which it released in 1991. The following

year it introduced a full-color notebook model and also marketed PCs using Intel's fast 486 microchip.

As the PC wars continued, Compaq, which had been a higher priced manufacturer stressing its quality

engineering, repositioned itself to take on Dell, releasing a low-end PC priced at just $899 andimproving its customer services. The new competition affected Dell's margins, forcing it to cut its

computer prices by up to $1,400 to keep its market share. Dell could afford such steep price cuts

because its operating costs were only 18 percent of revenues, compared with Compaq's 36 percent.

The competition also forced Dell away from its attempts to stress its engineering. Dell executives

began speaking of computers as consumer products similar to appliances, downplaying the

importance of technology. Reflecting this increased stress on marketing, Dell began selling a

catalogue of computer peripherals and software made by other companies; it soon expanded into fax

machines and compact discs. Dell's database, containing information on the buying habits of more

than 750,000 of its customers, was instrumental in this effort.


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Toward the end of 1992 Dell's product line experienced technological difficulties, particularly in the

notebook market. In 1993 quality problems forced the firm to cancel a series of notebook computers

before they were even introduced, causing a $20 million charge against earnings. The firm was

projected to hold a 3.5 percent share of the PC market in 1993, but Digital Equipment Corporation,

whose focus was minicomputers, nevertheless topped Dell as the biggest computer mail-order

company. To fight back against Compaq's inexpensive PC line, Dell introduced its Dimensions by

Dell line of low-cost PCs. Sales for the year reached $2 billion, and Dell made a second, $148 million

stock offering.

During the early 1990s Dell also attempted a foray into retail marketing, the most popular venue with

individual consumers. In 1990 Dell placed its products in Soft Warehouse Superstores (later renamed

CompUSA) and in 1991 they moved into Staples, a discount office supply chain. Dell agreed to allow

the stores to sell the products at mail-order prices, a policy that soon caused Dell a lot of grief. The

value of existing computers on store shelves plummeted whenever Dell offered a new computer

through its direct sales, and Dell had to compensate retailers for that loss. With its direct sales

channel, Dell had never had inventories of old computers that it could not sell, because each of those

computers was made specifically to fill a consumer's order. Dell abandoned the retail market late in

1993.

With price wars continuing, Dell cut prices again in early 1993 and extended the period of its

warranty. Increased competition and technical errors had hurt Dell, however, and despite growing

sales, the firm announced a quarterly loss in excess of $75 million in 1993, its first loss ever. Dell

attributed many of the problems to internal difficulties caused by its incredible growth. It responded

by writing down PCs based on aging technology and restructuring its notebook division and European

operations.

Like most of its competitors, Dell was hurt by an industrywide consolidation taking place in the early

1990s. The consolidation also offered opportunity, however, as Dell fought to win market share from

companies going out of business. Dell moved aggressively into markets outside of the United States,

including Latin America, where Xerox began to sell Dell computers in 1992. By 1993, 36 percent of

Dell's sales were abroad. That year, Dell entered the Asia-Pacific region by establishing subsidiariesin Australia and Japan.

Late 1990s Expansion

After a loss of $36 million in 1994, Dell rebounded spectacularly, reporting profits of $149 million in

1995. That year, the company introduced Pentium-based notebook computers and a popular dual-

processor PC. The company grew by almost 50 percent that year and the next, raising its market share

to approximately 4 percent and entering the company into the ranks of the top-five computer sellers in

the world.


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Expansion continued on many fronts in 1996. Dell introduced a line of network servers and was soon

the fastest-growing company in that sector. The company also opened a manufacturing facility in

Penang, Malaysia. The most important development that year, however, was Dell's expansion into

selling directly to consumers over the Internet. Within three years, Dell was selling $30 million a day

over the Internet, which would come to account for 40 percent of the company's overall revenue. Dell

achieved enviable efficiencies using the Internet to coordinate the orders of consumers with its own

orders of parts from suppliers. The company's web site also provided technical support and allowed

consumers to track their orders from manufacturing through delivery.

Dell continued its exponential growth in 1997 and 1998, reaching profits of $944 million in 1998. The

company introduced new products and services, including a line of workstations, a leasing program

for individual consumers, and a line of storage products under the PowerVault brand. Dell also

expanded its manufacturing facilities in the United States and in Europe. In 1998 it established a

production and customer centre in Xiamen, China, raising the number of its overseas plants to three.

By the time Dell sold its ten millionth computer in 1997, it was a close fourth behind IBM, Hewlett-

Packard, and Compaq in the computer industry. By mid-1998, it had captured 9 percent of the market

and the number two spot.

Following on the success of its direct sales over the Internet, Dell opened an online superstore of

computer-related products in 1999. Gigabuys.com offered low-priced computer hardware, software,

and peripherals from various companies in the industry, although Dell continued to sell its own

products at www.dell.com. The company also expanded its Internet offerings in 1999 with Dellnet, an

Internet access service for Dell customers. Two more manufacturing facilities were added to the firm's

global production network that year, located in Nashville, Tennessee; and Eldorado do Sul, Brazil.

For the fiscal year ending in January 2000, Dell reported net income of $1.86 billion on total revenues

of $25.26 billion.

Early 2000s: Surviving Global PC Downturn, Diversifying

When the global PC industry fell into its worst slump ever during 2000, Dell responded by initiating a

price war to which its rivals were slow to respond, providing Dell with a chance to further increase itsmarket share. As a result, by 2001 Dell managed to gain for the first time the top spot globally in PC

sales, with a 13 percent worldwide share. The downturn also triggered the creation of a more

formidable competitor in the form of Hewlett-Packard, which acquired Compaq during this period.

Dell also responded to the PC slump by aggressively pushing into the market for Internet servers, a

more profitable sector than that of PCs. It launched another price war on the low end of the server

market, which cut into its margins somewhat but enabled it to gain share. Dell targeted other higher-

margin sectors as well. It continued its push into the storage market in late 2001 by entering into an

alliance with EMC Corporation to develop a new line of data-storage systems, and it entered the

market for low-end networking gear used by small businesses, launching its PowerConnect line of


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network switches in 2001. Finally, Dell stayed solidly in the black--while its rivals were losing

money--via a major cost-cutting program. The company made the first significant layoffs in its

history, slashing 5,700 jobs from the payroll during 2001 and taking nearly $600 million in charges

relating to restructuring actions. The charges reduced profits, but Dell still managed to record net

income of $1.78 billion on revenues of $31.17 billion for 2002.

Although Michael Dell remained firmly in charge of the company he had founded as chairman and

CEO, Kevin B. Rollins was increasingly taking over the day-to-day operations at Dell Computer and

had been instrumental in the maneuvers that had enabled the company to gain ground on its rivals

during the industry slump. Rollins had consulted for Dell while employed with the consulting firm

Bain & Company, before joining Dell in 1996 as a senior vice-president. He was named vice-

chairman in 1997 and then became president and chief operating officer in 2001. Rollins's assumption

of the operating reins enabled Michael Dell to concentrate more on long-range, strategic planning.

Continuing to seek new avenues for growth--as it aimed to double revenues to $60 billion by fiscal

2007--Dell Computer diversified further. During 2002 the company entered the handheld computer

market by launching its Axim line of personal digital assistants (PDAs). Early in 2003 it debuted its

own line of printers aimed at both businesses and consumers. Later that year Dell gained a toehold in

the cutthroat consumer electronics industry by introducing LCD flat-panel televisions, digital music

players, and an online music service. With businesses keeping a tight rein on their PC spending, Dell

in 2002 attempted to gain further sales from consumers by setting up kiosks at shopping malls where

customers could see and try out Dell computers, printers, and other products before placing their

orders online or by phone. Early in 2003, in a trial run, the company set up its first Dell store-within-

a-store inside of a Sears, Roebuck & Company outlet.

The corporation's widening interests took a quite concrete form in mid-2003 through the shortening of

the firm's name to simply Dell Inc. Dell's diversification, coupled with large increases in shipments of

high-profit-margin products such as servers, notebook computers, and storage equipment, propelled

the company to new heights in 2004. Net income surged 25 percent that year, hitting $2.65 billion,

while revenues jumped 17 percent, to $41.44 billion. Soon after these stellar results were released,

Michael Dell, the person with the longest-running tenure as CEO of a major U.S. computer company,announced that he would relinquish his CEO title to Rollins in July 2004 but would remain actively

involved in the company as chairman. With a smooth transition in leadership expected, it appeared

likely that Dell would maintain its leadership position in computer systems and also continue to

pursue its growth ambitions in the wider computer industry and into the realm of consumer

electronics.


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Dells Business Model

Dells direct distribution channel

Other than its unsuccessful venture into the retail channel, Dell has stayed faithful to its original

business model, which combines direct sales and build-to-order production. This business model is

simple in concept, but is quite complex in execution. While other PC makers rely on resellers,

retailers, and other agents to carry much of the burden of marketing and sales, Dell has to reach out to

customers largely through its own efforts. And while other PC makers can run high-volume assembly

lines to achieve economies of scale, Dell must fill each order to meet customer specifications, a

process that puts heavy demands on shop floor employees, suppliers, logistical systems, and

information systems. It has taken Dell 15 years to achieve its present skill in making the direct model

work, a point

driven home by Michael Dell himself and by the difficulties other firms have had in trying to imitate

parts of the model. A closer look at the direct sales and build-to-order processes helps illustrate howDell makes them work individually and in concert with each other.

Direct Sales

The direct sales approach is built on two key elements: direct customer relationships, and products

and services targeted at distinct customer segments. Direct sales means that Dell must reach out to

potential customers, either through its own sales force or through advertising and other marketing

efforts. Dell does sell through resellers and integrators

in some cases, especially outside the United States, but for the most part it does not use the services of

the channel, nor does it support the profit margins of the channel.

Direct Customer Relationships

Dells use of the direct approach reportedly provides it with nearly a 6% cost advantage compared to

indirect sellers (Kirkpatrick, 1997). It also provides Dell with detailed knowledge about its

customers.4 Vendors that sell through resellers and retailers often dont know who their final

customers are, so they must rely on secondary market research to identify their own customer base.

The direct approach also allows Dell to identify customer trends early so it can respond with the


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desired products before its competitors can.5 The direct approach allows Dell to build a relationship,

which makes it quick and easy for customers to do business with Dell. IT staff at Boeing report that

Dell has adapted its IT systems, user interfaces, and procurement processes to Boeings, making it

easy for Boeing employees to buy Dell computers because they can use a familiar process. Dell uses

EDI for processing orders directly into its order management system because Boeing is required to

operate

that way (rather than using the Internet) as a federal government/ Department of Defense contractor,

and because Boeing staff are familiar with EDI. Dell also has incorporated

its product information into Boeings in-house procurement catalog, again adjusting to Boeings way

of doing business. As a result, Dell is able to capture new and replacement PC business because it is

easy to do business with Dell, and contracting with another vendor would involve switching costs.

The drawback of direct sales is that Dell lacks the extensive

reach of the channel, which has thousands of large and small firms providing sales, marketing,

service, and support to customers of all sizes in all markets. To overcome this problem, Dell has

segmented the market by size and focused much of its own marketing efforts on large customers who

could be reached directly by Dells sales force. Only after establishing a strong brand name with

larger customers and developing the online infrastructure to reach new customers at a low marginal

cost has Dell seriously targeted the widely diffused small business and consumer markets. Dell also

sells to resellers and integrators in some cases and works with distributors to offer non-Dell products

such as software and peripherals. For example, Dell is reported to be the second largest reseller of

Hewlett-Packard printers (Schick, 1999). This flexibility helps Dell expand its marketing reach while

maintaining its direct sales strategy for the bulk of its business.

Customer Segmentation for Sales and Service

Dell segments its customers into Relationship, Transaction, and Public/International customers.6

Dells segmentation of customers helps it respond to changes in demand

among different customers, to develop new customer segments, and to grow the most pro. table

segments. Relationship customers are Fortune 1000 companies that purchase at least $1 millionannually. They currently number about 50 companies, including Boeing, Exxon,

Ford, Goldman Sachs, MCI, Microsoft, Mobil, Oracle, Procter &Gamble, Sears, Shell Oil, Toyota,

and Wal-Mart. Relationship customers accounted for 70% of Dells sales in 1997, up from 59% in

1992, reflecting Dells emphasis on growing its business with large pro. table clients . Dell

concentrates its resources on these customers, offering highly customized services to gain and keep

their business. Relationship customers are serviced by field-based

sales representatives in customer sites, and an equal number of telephone service representatives is

dedicated to these accounts. Each sales representative is dedicated to


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a single customer (or a region in some instances), and is responsible for understanding its IT

environment and service needs.

By selling directly, incorporating the right technology as it becomes available, and timing the

changeover well, Dell can take advantage of higher profit margins on new technology while also

taking advantage of falling prices on components.

Build-to-Order Production

Dells production system applies principles of lean manufacturing and just -in-time production, which

were first employed by Japanese manufacturers such as Toyota and have been applied extensively in

the U.S. PC industry. These principles aim to minimize parts inventories by requiring suppliers to

restock parts only as they are needed, and often

to maintain ownership of parts until they are used. In effect, the PC company is pushing the upstream

inventory problem onto the suppliers, a practice that is viable at least for larger vendors who have the

clout to make such demands (Kraemer & Dedrick, 1998). Dells build-to-order strategy goes even

farther than lean production, however, in order to achieve mass customization of products. Build-to-

order requires Dell and its suppliers to have available specific components as they are needed to fill an

incoming order. For instance, while Compaq or IBM might order hard drives in batches of different

models for different production runs, Dell must have on hand enough of each drive model to quickly

fill orders

of varying and unpredictable sizes. This requires very close coordination between Dells sales and

manufacturing arms and between Dell and its suppliers. It achieves this by refining its business

processes, developing close relationships with a limited number of suppliers, and using IT to facilitate

communication within and outside the company.

Dell has continually worked to improve the speed and flexibility of its production system. The build-

to-order production system is the focal point of Dells business operations, the common contact point

for sales, procurement, logistics, manufacturing, and delivery. The process is illustrated by what

happens when customers place an order via the Internet. They are aided by configuration managementsoftware that enables them to choose from a menu of hardware and software options. The configuror

ensures the items chosen are compatible with the rest of the system and prices the system, permitting

the customer to iterate through various choices. They also can call Customer Service, which can link

directly into Dells inventory to determine whether the required components are available.

To sum up, using direct sales eliminates inventory in the channel, provides Dell with information on

and access to the final customer, and allows Dell to offer other services to

the customer. Using build-to-order allows Dell to offer the latest technologies, which carry a higher

margin; allows it to customize its products to user specifications; and mea ns that Dell doesnt lay out


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cash for parts until it receives payment for the PC. Together, direct sales and build-to-order help

create a strong relationship between Dell and its customers, as both require direct interaction and

allow Dell to gather information on its customers needs.

Dells IT Architecture

According to Gregoire, G-2 is a blueprint for how to architect systems, execute development, and

implement rollout that delivers on the failed promises of client-server computing, that is, low cost to

build and manage and easy to use. Gregoire says that in an environment of 60% annual growth in

transactions processed, one cannot afford IT projects that take 2 years to implement. The G-2

architecture was designed to be flexible, meaning that changes could be made iteratively, without

having to shut down whole systems or retrain workers. The G-2 architecture is layered, with a Web

browser user interface sitting on top of an applications layer, a message broker, and a database (Figure

3). The key to this structure is the message broker layer, which is based on an IBM MQ series

application integration system. It serves as an information bus, linking all applications and databases

to each other, so they dont all

have to talk to each other separately. It also allows new data engines or applications to be added to the

system without having to make changes throughout the system. For instance,

a new database on customers (e.g., how much they have spent on various products in the past) can be

added at the data engine level and be linked via the message broker to Dells customer service

representatives order management system. This information can bemade available as an extra button

on theWeb browser interface without needing to change the users applications orretrain the users.

FIG. 3. Dells G-2 architecture.


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The G-2 architecture enables the company to run best-of-breed applications rather than only a

single enterprise system. It also makes it possible to run Dell on Dell, using the products that Dell

and its strategic partners sell: Dell servers, desktops, and laptops; Windows NT and the Explorer Web

interface; and Oracle databases. The G-2 architecture has extended the life of Dells legacy

applications, such as the DOMSandDell Product services (DPS), which are written for Tandem

hardware, even as other applications

are shifted to Windows NT servers, because the message broker layer allows these different systems

to talk to each other. Also, migration from legacy applications to NT-based applications can be done

incrementally, migrating individual functions over to new applications one at a time, rather than

having to rewrite entire applications or move entire databases all at once. Such flexibility enables

Dell to expand the capabilities of its information systems to meet the demands of rapid growth

without major disruption

to the businesss functioning. Creating and maintaining all of the linkages and interfaces required for

this flexibility is reported to be complex and costly, and problems sometimes result, but Dells IT

people seem to have made application integration work to serve the companys needs.

Dells IT Organization

Like the company as a whole, the IT is decentralized. Gregoires management philosophy is that allIT is local. He argues that when companies have highly centralized IT departments, there are

hundreds of other invisible IT departments scattered around the company, doing whatever they want

with no coordination among them. He prefers to keep IT decentralized, and follows the 100-person

rule, which states that whenever an IT department gets larger

than 100 people, it is time to break it up. Such a structure is decentralized, yet is easier to coordinate

than hundreds of invisible units. Still, Dells IT people admit that while their decentralized matrix

structure is good for supporting growth and innovation, it can be hard to maintain control. There are

clearly trade-offs, and Dell has decided that in such a fast-changing business, it is worth sacrificing

some control in return for greater flexibility.

The resulting complexity of Dells IT organization is illustrated by the Dell Americas IT structure in

Figure 4. Dells IT subunits are organized in a matrix structure, cutting across business functions and

markets, sitting on top of an integrated systems services layer and a functionally oriented applications

layer. The few functions are product design, manufacturing, sales, service, and corporate systems,

while the three business markets are relationship (large customers), transaction (consumers and small

businesses)


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FIG. 4. Matrix structure of Dell Americas IT organization.

and international/public (non-U.S. markets; government, education, small- and medium-sized

enterprise (SME)). Each of the three markets represents a subdivision of the Americas region, and

each must be supported by applications in some or all of the five functional areas.

The IT System Services functions are those that support the whole business, such as network services,

the help desk, database administration, and the data center. The actual interactions within the matrix

structure are less neat than the figure suggests. For instance, the DOMS application supports both

customer services and sales, while sales commissions applications must be linked to finance and

human resources. However, with Dells G-2 architecture, it is possible to link applications and data to

the necessary functions via the message broker layer. IT is highly integrated within Dells regional

operations, and less so across regions. Still there is a great deal of data sharing across regions to

support corporate functions and to share useful information throughout the organization. Regional IT

executives answer primarily to the regional business manager, who makes budget decisions

and choices about what types of applications to develop or adopt. However, CIO Jerry Gregoire

maintains the authority to enforce architectural standards across the company

and to ensure that long-term infrastructure projects are carried out. The company must decide to what

extent it wants to standardize applications across the company versus letting

regions make their own choices as to what systems best suit their needs. So far, there are no hard

rules, but in general, flexibility and decentralization are given priority over standardization. For

instance, the DOMS, developed in the United States, is used in the United Kingdom but not in France

or Germany, and a manufacturing system that was developed in Europe is used in Asia but not in the

Americas.


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METHODOLOGY

Enterprise Resource Planning (ERP) System implementation is both anart and science that consists of planning, implementation, and ongoingmaintenance. This methodology is designed to automate the drudgery

of implementation and provide organized approaches to problem solvingby listing, diagramming, and documenting all steps. Structuredmethodologies help to standardize and systemize ERP implementationand maintenance by approaching them as an engineering disciplinerather than as whims of individual software developers. It is essentialto understand structured methodologies in the implementation of ERPsystems.The basic steps of structured methodologies are:

Project Definition and Requirement Analysis. Defining the termsof reference, determining user needs and system constraints,generating a functional specification and a logical model forthe best solutions.

External Design. Detailing the design for a selected solution,including diagrams relating all programs, subroutines, anddata flow.

Internal Design. Building, testing, installing, and tuningsoftware.

Pre-implementation. Evaluation and acceptance

Implementation. Implementing systems. Post-implementation. Evaluation of controls and debugging.


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CHAPTER 3

ANALYSIS OF ERP IN DELL :

Issuess corping in organisation :

Enterprise Architecture Issues

Supply Chain Management: The purchase and number of transactions that Dell took in required a properlyconfigured and concise business process.

In-sourcing: To meet the demand of the market some parts of the process required the services of othercompanies that can be in partner with Dell.

Quality Assurance: The computer industry is a very dynamic one, which makes quality products stand outwhen faced with technology-oriented consumers.

Business Automation: As Dell advanced into online markets, its sales staff feared from losing their jobs infavour of automated sales transactions.

Dynamic Industry: The technology industry requires closely monitoring consumers' trend to maintain alow gap between the point of demand and the point of supply.

To remove theses issues Dell decided to use ERP and first purchased the SAP software in

1994 to run its manufacturing operations. Over the next two years, the computer maker tried

to implement the software across its multiple operations, but pulled back at the end of 1996.

In the late 90sDell Computer Corporation used first Escalle and Cotteleers model ofsingle

vendor, andbegan implementing SAP R/3 to run its manufacturing operations. However after

implementing the HR modules, they stopped. Also, the process took a very long time, and as

the company strategy changed from a global business strategy to more regionally segmented

strategy. SAP was not able to adapt to Dells needs, and two years later, the company decided

to abandon the SAP solution.

ERP introduction: SAP R/3

Towards the end of the 80's, client-server architecture became popular and SAP responded with the

release of SAP R/3 (in 1992). This turned out to be another success for SAP, especially in the North

American region into which SAP had expanded in 1988.

The growth of SAP R/3 in North America has been nothing short of stunning. Within a 5 year period,

the North American market went from virtually zero to 44% of total SAP worldwide sales. SAP

America alone employs more than 3,000 people and has added the names of many of the Fortune 500


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to its customer list (8 of the top 10 semiconductor companies, 7 of the top 10 pharmaceutical

companies etc). SAP today is available in 46 country-specific versions, incorporating 28 languages.

These solutions are tailored to meet the specific requirements of 23 different industry categories, from

aerospace and defense to utilities, giving SAP a competitive advantage that no other company can

match.

SAP R/3 is delivered to a customer with selected standard processes turned on, and many other

optional processes and features turned off. At the heart of SAP R/3 are about 10,000 tables which

control the way the processes are executed. Configuration is the process of adjusting the settings of

these tables to get SAP to run the way you want it to. Functionality included ranges from financial

accounting (e.g. general ledger, accounts receivable, accounts payable etc) and controlling (e.g. cost

centers, profitability analysis etc) to sales and distribution, production planning and manufacturing,

procurement and inventory management, and human resources.

SAP R/3 Functional Modules

SAP R/3 Master Data


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BUSINESS PROCESS REENGINEERING

SAP Implementation Methodologies and Strategies

Project management seeks to reach a previously defined result within the context of a given

schedule, specific costs, and in the required quality. Within this definition, SAP Project

Management provides an implementation methodology that adapts SAP functionality into the

organization and its businesses. Various implementation methodologies and models have been

developed over the years by SAP, the Big 4 and other SAP business partners, customers and

consultants. Many projects take an existing methodology one step further and adopt it to their

organization, introduce improvements and new tools to make the implementation task more

efficient. The benefit of using a methodology is the risk reduction that comes from using a

proven approach. Another benefit is the creation of a common framework for all teams to

work with. This includes standard terms and the coordination of time lines.

It also provides a rough guide as the overall work effort that will be needed. This breakdown

of tasks is very important for a smooth implementation. Most methodologies includes


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templates that show examples of normal project deliverables., which provide project teams

with guidance for their detailed work.

Finally a methodology contains the collective wisdom of those who produced it, and may even

contain this wisdom in the form if helpful tips.

According to [Norris, 1998] the top 10 risks to an SAP R/3 project are:

1. Inadequate sponsorship

2. Poor/slow decision making

3. Poor/no scope definition

4. Inadequate attention to change management

5. Lack of cooperation between business areas/departments

6. Poor use of consultants

7. Inappropriate resources

8. Unrealistic expectations

9. Inadequate knowledge transfer to your people

10. Poor project management

There are certain important things to remember when using a methodology.

1. A methodology is a generic approach. It will not prescriptively solve all of a companysproblems because, while it is generally true, it is never specifically accurate. Each

company has some unique aspects, and every R/3 implementation will be affected by the

particulars of the organization.

2. Because every organization is different in both its makeup and its reasons forimplementing R/3, a methodology cannot be relied on to such a degree that flexibility is

lost.

3. On the other hand, a methodology will not describe every necessary task; on the otherhand following every detail of the methodology may result in unnecessary work.

In short a methodology must be put into context of the business and its needs. It should beused with an understanding of the needs by adopting those aspects that support the goals and


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by discarding those that do not.

Similarities in All R/3 Methodologies

All methodologies for implementing SAP software have a few common elements. First and

most important, they are all structured. They consist of phases, which are broken down into

tasks, further broken down into activities and finally into work steps. Almost all

methodologies have four phases that

can generally be thought of as follows, although with different names:

1- Initiate: This phase includes planning and costing the effort, determining the internal staff

and outside help necessary, defining the scope of the implementation, and doing the initial

business case justification for the undertaking.

2- Think: This is the phase in which the current or as-is state of both systems and

processes is analyzed and what is wanted from the to-be state determined.

3- Work: In this phase, the R/3 program is actually configured to the specifics of a

companys business, then tested and deployed.

4- Watch: The watch phase entails measuring the results achieved against the expectations,

and supporting , maintaining, and upgrading the system as necessary.

Another important aspect of an SAP implementation is the implementation strategy the

business decides to pursue. A strategy defining the functional scope and regional coverage of

the implementation is chosen by analyzing the cost, resource requirements, risks and expected

returns of the implementation. At a high level, we can define three implementation strategies:

Step-by-step functional implementation, Big Bang, and site rollout. Each one has its pros and

cons, and selecting a strategy requires an in depth analysis of the above mentioned criteria.

The strategy should also define the business approach and

preference for technical development, i.e. adding customized code to core SAP, in form of

user exits, custom transactions, and modifications. The quite opposite implementation

strategy of using SAP as delivered is often referred to as Vanilla SAP. This is a big

challenge for the business to adapt the processes to the software, but results generally in


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minimum cost and risk for the implementation, and minimum maintenance after go-live.

Let us compare the three major implementation strategies, by its advantages and

disadvantages.

Step-by-step implementation

A step-by-step implementation is characterized by the implementation of the software in small

steps, and generally concentrates on the implementation of a few related modules at one time.

Before adopting this approach, an overall concept must be established for all relevant business

processes in order to avoid conflicts and constraints in subsequent implementations. For

example, due to the complexity of its financial legacy system over several regions, a company

might choose to implement certain logistics modules first (e.g. Materials Management, Sales

and Distribution, Logistics Execution) and build interfaces between R/3 and the legacy

systems.

Advantages

The complexity for coordinating, controlling, and organizing the project and resources is

reduced

A minimal amount of human resource is required for the project team and user community

The quality of the projects improves because the project members increase their knowledge

and skills

A team of internal consultants can be established over time, reducing the cost of the project

There is a smoother changeover throughout the company: people have time to adapt to

changes

Costs are spread over a longer period of time

Modest organizational changes can be considered during the implementation

Disadvantages

There is a longer project throughput time Interfaces must be developed to maintain existing systems I Integration advantages of the project can only be used step by step


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Customizing may not be optimally set because integrating components have not yetbeen implemented

Return on investment is generally delayed

Big Bang implementation

A big bang deployment of R/3 replaces all or most critical existing systems in a single

operation with the new software. Fastest by definition, the big bang had emerged as the most

cost-effective and also the riskiest solution. A majority of the SAP community would vote

against simultaneous launch of all R/3 modules in conjunction with a new IT infrastructure.

This approach is preferred by companies with a straightforward organizational structure or

with too many systems to replace where the cost of developing interfaces would be too high.

Advantages

Few or even no interfaces between legacy systems and the new application are needed

because all modules go live at the same time

There is a short throughput time

The project members motivation is high

It is highly efficient, because redundant customizing is avoided

There is optimal integration of all components under consideration of the integrated

business processes

Disadvantages

The implementation is complex due to the increased need for coordination and integration

It is resource intensive over a short period of time

All employees are subject to higher stress levels at the same time

A high degree of consulting support is required

Organizational changes must be limited in order to overcome resistance to change among

employees .


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Roll-out

Roll-out refers to region or business specific extensions of an implementation after a model is

created at one site or business unit, which is then used to implement to the other sites or

business units. For example, a company operating in USA and Europe might choose to create

a model for most of its functionality in USA and with a subsequent phase implement the tested

approach in Europe. Similarly, a company operating multiple business units might choose to

start the implementation with the one of the business units and leverage its experience. The

roll-out approach can be combined with the other implementation strategies above limiting or

enlarging its functional scope.

Advantages

There is valuable experience gained by project members

Expertise is available for a fast implementation

Costs are kept low because only limited resources are needed

Standard business processes can be achieved by using a model implementation and

leveraging the same design .

Disadvantages

Customization must also consider company standards for subsequentimplementations

Site-specific requirements can be overlooked

After the failure of the sap implementation by dell, it used the best-of-breed approach

and deployed the Glovia G2 for manufacturing tasks such as inventory control, warehouse

management, and materials management. Supply-chain vendor i2 Technologies Inc. was

chosen last year to manage the flow of raw materials throughout the company; Oracle was

selected for order management.

Now let us see each component in details:-


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Glovia G2:

Proven Manufacturing Solution

Extended ERP Glovia Solutions With Glovia, one can improve its operations no matter if

your business spans the world or only a few time zones. Deployed strategically, its solution

scales to meet the enterprise-wide needs of global corporations. Deployed tactically, Glovia

becomes a cost-effective platform for managing divisions or individual factories.

Because glovias clients often have customers, suppliers, and operations around the world, it

supports multiple languages, multiple currencies and complex business structures.

It is a proven, comprehensive, integrated, and flexible solution that world class manufacturers

use to manage their operationsfrom product design, sales and procurement, to production,

order management and post-sale service.

Essential Glovia business benefits include:

1. Enterprise-Wide Visibility

It provides you with true supply chain transparency as it eliminates information silos,

integrates systems and business processes, and links you to your customers and suppliers.

2. Unmatched Flexibility

Glovia supports your business, no matter what your industry or manufacturing mode, without

forcing you to change your business processesGlovia is an investment in your future.

3. Real-time Responsiveness

Glovia slashes order-to-fulfillment cycle times and helps you get the right product to the

customer at the right time, place and price.

4. Improved Efficiency

Glovia helps you reduce costs as it effectively eliminates excess inventories, boosts

productivity and manages resources.

Extending BoundariesExtended ERP for Modern Manufacturers

Glovia is the next-generation of enterprise solutions: Extended ERP. Extended ERP addresses

the pressing business issues that manufacturers face today such as the coordination of global

supply chains, management of complex product lifecycles, and growth of profitable service

offerings.


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Glovia provides manufacturers with advanced capabilities to manage and improve their entire

business from product design, procurement, planning and manufacturing to sales,

fulfillment, installation and support.

It streamlines operations within the four walls and beyond, integrates disparate internal

systems, eliminates functional silos, and brings you closer to your customers and suppliers.

The advantages are enormous.

For example, one can respond quickly and accurately to customer demands, compress cycle

times and information flow throughout the supply chain, transform the business into a lean

organization, and allow demand to trigger production and procurement.

Naturally, all of these benefits eliminate costs while they improve standing with customers

and against competition.

Glovias extended ERP suite includes more than 70 seamlessly integrated modules that allow

you to run and refine your key business processes.

Extended Demand: Manufacturing Management

Comprehensive Solutions for Materials Management and Production Planning

Glovia Manufacturing Management business benefits include:

Increased visibility and operational control Reduced finished goods and work-in-progress inventories Increased resource utilization and lowered manufacturing costs Reduced production bottlenecks and idle equipment Improved on-time delivery performance

One thing is for sure: You need strength and flexibility.

Glovia Manufacturing Management gives the control you need over all aspects of production

planning and materials management so you can focus each day on increasing profits.

Its flexible solution supports the entire spectrum of manufacturing styles-from High Volume

to Engineer-to-Order-and coordinates orders, equipment, facilities, inventory, and work-in-

progress to minimize costs and maximize on-time delivery. The solution includes powerful

shop floor functionality to track and manage each step of the manufacturing process.


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Glovia Manufacturing Management translates the supply chain plan into an achievable

production plan that balances the needs of sales, manufacturing, finance, and your customers.

Glovia Manufacturing also includes both finite and infinite capacity planning capabilities that

help you develop realistic schedules.

Our manufacturing heritage provides us with true insights into your needs. Glovia

Manufacturing Management helps one succeed by providing more visibility, flexibility, and

control to make you highly responsive, integrated, and lean.You can deploy our solution

strategically to manage a stand-alone company, an entire global business, or tactically to run

a division or factory.

Our customers often have customers, suppliers and operations that span the globe. Glovia

supports multiple languages, currencies and complex business structures, so you can manage

your enterprise around the clock, and around the worldwith a single, integrated solution.

Implementation Methodology

Simplified Implementation with Maximized ROI

Glovia has built a tremendous track record, over the last 30 years, of very successful

implementations. These implementations have always followed a guiding principle to provide

immediate value to the customer while also ensuring that we achieve the highest level of

expectations.

Examples of these metrics are:

Meeting go-live objectiveson time and on budget Deliver solution fit to customer requirements Manage scope of the overall project, both macro and detail level Minimizing risk Delivering best-in-class business consultation Delivering industry leading process improvements Limit customization and attempt best use of package implementation Effectively empower the customer user community


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All of these attributes lead to a major business benefit to our customers: the transfer of

ownership of both the glovia G2 system and the new and improved processes to our

customer's employees. Our objective is to provide a successful implementation however

measured.

The Glovia ERP system architecture is designed for scalability, easy implementation and

rapid deployment. Our site-by-site implementation allows a gradual evolution of information

systems without requiring complete systems replacement, minimizing business disruption and

controlling implementation costs.

We offer proven conversion procedures for a variety of legacy MRP, MRPII, & ERP

systems, including MAN-MAN Classic, Mapics, and BPCS, among others.

The basis of Glovia's implementation services to is built on a combination approach: a very

strong 11-step implementation methodology coupled with utilization of customer resource

and subject matter expertise.

The benefits of the Glovia implementation methodology are:

Secures management involvement, governance and oversight

Controls project costs and schedules Provides a high degree of project visibility and documentation Provides a system and business process architecture and platform that will support future

improvement initiatives

Limits risk

Implementation Phases for the implementation of core glovia G2

Phase 1: Implementation Planning and Organization

Establish Customer/Glovia project management process and team Collate all background information and documentation Confirm the business objectives for the project Develop macro and micro plan for implementing glovia G2 Develop plan for supporting technology infrastructure and deployment Provide first level education to user and technical team members Confirm Customer Business Unit representatives participation and involvement


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Confirm Glovia Professional Services staffing and plansPhase 2: Hardware and Technology Infrastructure

Acquire necessary hardware & network required Test and QA user response time and network loading Establish support modelPhase 3:glovia G2 Solution Definition to Requirements

Project team attends glovia G2 education and training sessions Team members practice with glovia G2 and develop internal customer knowledge and

skills

Team designs, develops and refines new business processes where required Customization requirements are identified for development Decisions and conversion definitions for data mapping are provided Business flows and desktop procedures prepared, validated and documented for use in

later project phases

Expose solution to the extended user community

Phase 4: Data Migration

Map legacy system(s) data to glovia G2 data schema Use the glovia G2 application EIF module and application adaptors to load programs or

prepare custom programs

Prepare one-time programs to extract and format legacy data for the glovia G2 loadprograms

Prepare one time data load and field initialization programs, including all requiredparameters

Identify old, inaccurate, obsolete legacy data to be improved or eliminated beforeconversion

Assign teams to cleanse dataPhase 5: Customization & Interfaces

Customization requirements: special forms, custom reports, interfaces and customizationare developed


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Provide technical programming skills to tailor the glovia G2 application software to meetunique customer requirements

Design and write specifications for customizations Make changes to programs following customer change control procedures Execute unit tests and QA scripts and correct as necessary Provide on going support during conference room pilot and integration test phasesPhase 6: Conference Room Pilot

Test, demonstrate and validate the glovia G2 solution Test; verify all setups, data migrations, processes and customizations Prove the glovia G2 solution meets the business requirements Resolve all issues, make necessary corrections before continuing Repeat the conference room pilot, if warranted, to prove the changes and the total

solution

Final Customer Executive decision for go-live phasesPhase 7: Integration Test

Conduct an integration test as a "dress rehearsal" for go-live Validate all solution deliverables Assure all elements required to execute the conversion and loads system are in place and

available

Select and train an extended user team to conduct the final testing Validate that glovia G2 fits the business requirements and can be used to run the business Make any required last minute, minor changes Confirm the go-live datePhase 8: Readiness Activity

Project team and the business prepare for the go-live Final conversion and startup schedules are refined Changes in user procedures and documents for training are completed Deliver training to the extended user community Dates and schedule for cutover and implementation are communicated throughout the

organization

Phase 9: Conversion and Cut-Over

A production environment for new system is initialized


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All data is converted and loaded into glovia G2 The team executes the detail conversion schedule with all validation steps to assure

complete and correct data is loaded

Customer does final month-end close on legacy system Final infrastructure changes are made Legacy system(s) is restricted to inquiry onlyPhase 10: Go-Live Support

When conversion is complete the new system is ready for production use User, IT and Glovia support teams provides round-the-clock on-site support for the new

system

Any issues are logged and resolved as reported For the first weeks, the user, IT and Glovia team support the startup Help desk receives calls, resolves as many as they can; remainder is given to project team

members to resolve on a priority basis

Support continues through the next 'x' months end close cycles-where 'x' is to be mutuallyagreed

Phase 11: Post-Implementation Audit

Evaluate the progress and effectiveness of the glovia G2 solution Review the operational effectiveness of the system as implemented Identify problems, performance or process issues Identify what is working well Review opportunities to further improve effectiveness with the users Eliminate short-term problems and obstacles Present a plan of longer term corrective actions and improvementsif required

i2 Technology Introduction :

i2 provides best-of-breed supply chain management tools, as well as business-to-business

(B2B) and collaborative commerce solutions, based on technologies and standards such as

Extensible Markup Language (XML), Common Object Request Broker Architecture

(CORBA ), and JavaTM . These solutions run on industry-leading application servers to

provide scalability, reliability, and value to i2

users.1


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i2 offers a suite of solutions available on Windows NT to help customers make better

decisions in every phase of business, including:

Direct and indirect procurement Dynamic sourcing Intelligent product allocation Collaborative demand planning and forecasting Inventory visibility and management Supply planning and optimization Intelligent order promising and real-time order status Collaborative logistics planning Collaborative product life cycle management (PLM)

TradeMatrix solutions and e-marketplaces

Companies can focus on improving any part of the value chain-no matter how far a company

has progressed in implementing an e-business strategy (see Figure 1 ). i2 TradeMatrixTM

builds and supports digital marketplaces with services, content, and technology to optimize

core business processes, connecting companies to their partners, customers, designers,

content sources, and the entire i2 TradeMatrix community.

Figure 1. i2 TradeMatrix solutions

Supplier Relationship Management


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Many i2 customers begin by deploying the TradeMatrix Supplier Relationship Management

(SRM) suite, focusing on reducing design, sourcing, and procurement time and costs

(see Figure 2 ). The benefits of TradeMatrix SRM include:

Figure 2. SRM: design, sourcing, and procurement

Reduced product development costs Reduced time to volume Reduced materials costs Reduced inventory costs Increased assurance of supply

Supply Chain Management

The i2 Supply Chain Management (SCM) planning and execution solutions maximize supply

chain velocity by optimizing demand, supply, fulfillment, and service processes. The benefits

of i2 SCM solutions include:

The i2 Supply Chain Management (SCM) planning and execution solutions maximize supply

chain velocity by optimising demand, supply, fulfillment, and service processes. The benefits

of i2 SCM solutions include:

Improved customer satisfaction and loyalty Differentiated response to customers Increased throughput and better product mix Fewer stock shortages Reduced inventory and obsolescence


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Reduced warehousing, transportation, and returns costs

Customer Relationship Management

The i2 Customer Relationship Management (CRM) solution provides planning and execution

processes to optimize each phase of the customer life cycle. This includes marketing, sales,

fulfillment, and service management processes that ensure customer satisfaction. The benefits

of the TradeMatrix CRM solution include:

Customer Relationship Management

The i2 Customer Relationship Management (CRM) solution provides planning and execution

processes to optimise each phase of the customer life cycle. This includes marketing, sales,

fulfillment, and service management processes that ensure customer satisfaction. The benefits

of the TradeMatrix CRM solution include:

Consistent and personalized interactions with customers Intelligent selling Improved service costs and execution

Content

Significant resources, technology, and expertise are required to collect and manage content

data from thousands of suppliers on tens of millions of products, spanning electronics,

equipment, suppliers, and maintenance, repair, and operations (MRO). The TradeMatrix

Content solution covers three areas: software, custom catalogs, and reference databases (with

over 50 million parts in dozens of industries). The benefits of TradeMatrix Content include:

Reduced purcha

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