What Organ is at Ions Should Know About ERP Systems
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Transcript of What Organ is at Ions Should Know About ERP Systems
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What Organisations Should Know About
ERP System
Presented By
Ritesh Shah
Sumit NarayanManmohan Panigrahi
Mitesh Vartak
Jyotiprakash Dash
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Introduction
Potential operational improvements required to become
globally competitive.
Inventory reduction to a minimum.
Reduction of total costs of products and/or services.
Provision of more reliable delivery dates.
Making of assortment of production.
Providing higher service levels to customer.
Solution Enterprise Resource Planning (ERP)
A tightly integrated solution to an organizations information
system needs.
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ERP
A strategic tool to obtain competitive edge by Integrating all business processes
Optimizing use of available resource
Keeping up with technical changes
Ensuring timely responses
Reasons for ERP introductions (Research by Chen in 2001) The use of multiple points of input with duplicated effort in the existing
system
The inability of the existing system to support organisational needs
The requirements of extensive resource for maintenance and support
The need of enterprise to reengineer their business process The growth of enterprise and subsequent incompatibility of several
information systems.
The inability of employees to respond easily to questions or information
requested by key customers or suppliers
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Evolution of ERP
MRP
MRP II
ERP
1960s
1980s
1990s
Prod req. in mfg environment
Mainly inventory control
Extension of MRP to shop floors and
distribution mgmt used by mfg.
Next generation of MRP II with other application areas
(Operation, Marketing, Finance and HR) used by Org.
Running on client server architecture
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ERP Implementation Success
Depends upon
How quickly the benefits can be reaped from it.
Rapid implementation that lead to shorter ROI period.
ERP implementation success refer to the degree of deviation from the project goal
in terms of expected cost, time, system performance and benefits. ERP system is configured and running and the whole project is more or less on
time and within budget.
Success if it achieves the level of ROL in the project approval phase.
How functions are divided and integrated in to the base system.
Support from top management.
Support from operation groups and business units.
Training and deputation of manpower from the associated departments.
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ERP Modules
Depends on Organization
Typically it has following modules
Accounting HR
Manufacturing and logistic
Sales
Controlling
Distribution
Material Management and Quality Management
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HR Module
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Finance Module
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Sales and Marketing
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Manufacturing Activities
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Integrated Information System
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ERP Implementation Stages
Implementation is complex process and
involve high cost, time and resources
Most Preferred model Langenwalter and
Davenports Model (2000)
Stages ofImplementation:
Stage 1:
Feasibility Study
Stage 2: Plan for
the system
Stage 3:
Selection of theappropriate ERP
Stage 4: Pre-
Implementation
Stage 5:
Implementation
Stage 6: Post
Implementation
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ERP Implementation Success.
Keys for successful implementation
Commitment from top management
Form a task force with personnel from all functional areas
Tie between functional areas and business functions
Assessment of hardware requirements Step by step introduction rather than all at once.
Early planning on training and support.
Streamline decision making
To determine success of ERP Implementation
Configured and running
Whole project is on time
Whole project is within budget
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ERP in developed Countries
Includes
North America(USA & Canada)
Europe(UK, Germany, France)
Japan
North America(USA & Canada) Represent 66% of ERP market.
Due to
Excellent IT infrastructure.
Strong economic and governmental IT policy.
High IT maturity.
Favorable computer culture.
Qualified personal to adopt advanced technologies.
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ERP in developed Countries.
Europe(UK, Germany, France)
Represent 22% of ERP market.
Due To
Strong economy and solid industrial and manufacturing base.
Information infrastructure is well established and qualified personnel available.
Highly customised application used.
13% use one functional area while 70% use several functional area.
Japan
Not widespread.
Due To
Regional environment and organisational culture.
Economy is highly dependent on neighboring countries.
Multiple language barriers.
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ERP in developing Countries
Includes
India
China
Brazil
South Asian countries contribute about 9% towards total ERP market while LatinAmerica contributes about 3%.
India
Largest developing country base in terms of software exports.
ERP offered by small localised players.
Largest developing country base in terms of implementing ERP systems. Lack of interest due to high implementation costs.
Lack of computer culture.
Common belief that ERP systems are only for larger companies because of high
cost od acquisition, implementation and maintenance.
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ERP in developing Countries.
China
Majority of enterprise in the country is small and medium in size.
High cost of ERP system is the problem.
Technical complexity is the biggest problem.
Language barrier, shortage of qualified staff. Lack of training, lack of incentives to state owned enterprises.
Different corporate cultures compared to the west..
Brazil
Main scope is in the telecomm sector.
Small companies has started implementing ERP.
Telecomm infrastructure is developing at a very faster rate.
High cost of ERP system is the problem.
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Conclusion
Strong need of a centralised system to be globally competitive.
Need for integration of information across various functional areas.
Major players are SAP, Oracle, Peoplesoft, Baan, J D Edwards.
SAP accounts for roughly 33 % of total market and serves more than 12000
customers.
Rest all accounts for almost 36 % of the total market.
Important factors to be considered for ERP implementation
Top management support.
Integrating existing legacy system and other application with the ERP system for
providing a common interface.
ERP system are complex and implementing is time consuming and expensive.
Better understanding is required to avoid failure.
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Takeaways
ERP is a business solution and not an IT project.
Degree of uncertainty is substantially high and extra care needs to be taken.
ERP has a greater impact on the organization than the traditional systems.
Intangible benefits are difficult to put in money terms.
Definitely emotional element is involved in ERP implementation because of drasticorganisational changes are involved.
On a long term basis it increases the productivity of the organization.
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Thank You