8/3/2019 Enterprise Resource (Shambvi)
1/75
ENTERPRISE
RESOURCEPLANNING
8/3/2019 Enterprise Resource (Shambvi)
2/75
INTRODUCTIO
N
8/3/2019 Enterprise Resource (Shambvi)
3/75
ERP-Enterprise Resource
Planning
ERP is a process ofmanaging all resources andtheir use in the entire
enterprise in a coordinated
Erp Definition
8/3/2019 Enterprise Resource (Shambvi)
4/75
Erp system:definitionERP is a set of integrated
business applications, ormodules which carry outcommon business functionssuch as general ledger,accounting, or order
management
8/3/2019 Enterprise Resource (Shambvi)
5/75
What makes Erp
different Integrated modules. Commondefinitions.
Common database.
Update one module, automaticallyupdates others.
ERP systems reflect a specific way of
doing business. Must look at your value chains, rather
than functions.
8/3/2019 Enterprise Resource (Shambvi)
6/75
BENEFITS
Common set of data.
Help in integrating applications fordecision making and planning.
Allow departments to talk to eachother.
Easy to integrate by using processed
built into ERP software. A way to force BPR (reengineering).
Easy way to solve Y2K problem.
8/3/2019 Enterprise Resource (Shambvi)
7/75
EVOLUTION
http://whatiserp.net/erp-basic-knowledge/erp-system/8/3/2019 Enterprise Resource (Shambvi)
8/75
In 1990 Gartner Group first
employed the acronym ERP asan extension of materialrequirements planning (MRP),
later manufacturing resourceplanning and computer-
integrated manufacturing.Without supplanting these terms,ERP came to represent a larger
whole, reflecting the evolution of
8/3/2019 Enterprise Resource (Shambvi)
9/75
all ERP packages weredeveloped from a
manufacturing core. Vendorsvariously began with
accounting, maintenance andhuman resources. By themid1990s ERP systems
addressed all core functionsof an enterprise. Beyondcorporations, governments
and non rofit or anizations
8/3/2019 Enterprise Resource (Shambvi)
10/75
8/3/2019 Enterprise Resource (Shambvi)
11/75
Accounting Managementsolutions where gainingstrength. ERP, developed fromearlier MRPII systems, werealso integrated with financialapplications to provide acomplete solution to acompany for managing theirinventory, cash and people
8/3/2019 Enterprise Resource (Shambvi)
12/75
ERPImplementation
Fundamentals
8/3/2019 Enterprise Resource (Shambvi)
13/75
Agenda
What is an ERP System?
Why implement an ERP system?
How should ERP systems be
implemented?
Conclusion
Questions and Answers
8/3/2019 Enterprise Resource (Shambvi)
14/75
What is an ERP Systemdefinitions
Simplistic DefinitionERP - Enterprise Resource Planning
Detailed Definition
a business strategy and set of industry-domain-specific applications that buildcustomer and shareholder communitiesvalue network system by enabling and
optimising enterprise and inter-enterprise collaborative operational andfinancial processes
8/3/2019 Enterprise Resource (Shambvi)
15/75
Historical systemarchitectures
Historically, companies createdislands of automation. A hodge-podge of various systems thatoperated or managed variousdivergent business processes.Sometimes these systems wereintegrated with each other and
sometimes they werent. Sometimesthey were loosely interfaced andsometimes they were more tightly
interfaced.
8/3/2019 Enterprise Resource (Shambvi)
16/75
What is an ERP KeyCharacteristics
Integration
seamless integration of all the
information flowing through a companyfinancial and accounting, humanresource information, supply chaininformation, and customer information.
8/3/2019 Enterprise Resource (Shambvi)
17/75
PackagesEnterprise systems are not developed in-
house IS life cycle is different
1. Mapping organisational requirements to theprocesses and terminology employed by thevendor and
2. Making informed choices about theparameter setting.
Organisations that purchase enterprisesystems enter into long-term relationshipswith vendors. Organisations no longercontrol their own destiny.
What is an ERP Key
Characteristics
8/3/2019 Enterprise Resource (Shambvi)
18/75
Best Practices ERP vendors talk to many different
businesses within a given industry as wellas academics to determine the best and
most efficient way of accounting for varioustransactions and managing differentprocesses. The result is claimed to beindustry best practices.
The general consensus is that businessprocess change adds considerably to theexpense and risk of an enterprise systemsimplementation. Some organisations rebelagainst the inflexibility of these imposedbusiness practices.
What is an ERP KeyCharacteristics
8/3/2019 Enterprise Resource (Shambvi)
19/75
Some Assembly Required
Only the software is integrated, not thecomputing platform on which it runs. Most
companies have great difficulty integratingtheir enterprise software with a package ofhardware, operating systems, databasemanagement systems software, and
telecommunications suited to their specificneeds.
Interfaces to legacy systems
Third-party bolt-on applications
Best of Breed Strategy
What is an ERP KeyCharacteristics
8/3/2019 Enterprise Resource (Shambvi)
20/75
EvolvingEnterprise Systems are changing rapidly
Architecturally: Mainframe,
Client/Server, Web-enabled, Object-oriented, Componentisation
Functionally: front-office (i.e. salesmanagement), supply chain (advanced
planning and scheduling), datawarehousing, specialised verticalindustry solutions, etc.
What is an ERP KeyCharacteristics
8/3/2019 Enterprise Resource (Shambvi)
21/75
Some Assembly RequiredOnly the software is integrated, not thecomputing platform on which it runs. Mostcompanies have great difficulty integratingtheir enterprise software with a package ofhardware, operating systems, databasemanagement systems software, andtelecommunications suited to their specific
needs. Interfaces to legacy systems Third-party bolt-on applications Best of Breed Strategy
What is an ERP KeyCharacteristics
8/3/2019 Enterprise Resource (Shambvi)
22/75
Typical architecturalcomponents
E-business PlatformTech Stack
CRM
Foundation
WebInternet
MobileWireless
e-Mail Call CenterICM/Telephony
InteractionChannels
Common Data and Object Models, Security, Interfaces, Globalisation
E-
BusinessFoundatio
n
Marketing Sales eCommerceBusinessApplication
s
MarketingIntelligence
SalesIntelligence
CustomerIntelligence
Call CenterIntelligence
AnalyticalApplication
s
Interaction History Universal Work Q1-to-1 Fulfillment
Assignment Engine
EscalationsTCA
Installed Base
Tasks Notes
Resources
Calendar
Territories
OSS HR
8/3/2019 Enterprise Resource (Shambvi)
23/75
Tech Stack - InternetComputing Architecture
Database
XApplication
Application
Application
Application
Application
Application
Browser
Browser
Java
Application Server
ApplicationApplication
2 Tier
3 Tier
8/3/2019 Enterprise Resource (Shambvi)
24/75
Why implement an ERPSystem?
To support business goals Integrated, on-line, secure, self-service
processes for business
Eliminate costly mainframe/fragmentedtechnologies
Improved Integration of Systems andProcesses
Lower Costs Empower Employees
Enable Partners, Customers andSuppliers
Ho sho ld e implement
8/3/2019 Enterprise Resource (Shambvi)
25/75
How should we implementERP systems
Obtain the right mix of people,processes and technology!!
8/3/2019 Enterprise Resource (Shambvi)
26/75
How should we implement ERPSystems?
People Project Structure Should be aligned to processes
Process Implementation Process (outlined in
detail) Adapt your processes to those of the
ERP.
Technology Hardware Software Integrated Systems
8/3/2019 Enterprise Resource (Shambvi)
27/75
Process
1. Definition and Analysis Hold discussions with various
functional personnel to establish theactual number of systems operating at
client site, what they are used for, whyand how often
Produce the Project Scoping Documentoutlining current situation, proposed
solution and budgeted time
Challenge : REQUISITE EXPERTISE- No two clients are the same
8/3/2019 Enterprise Resource (Shambvi)
28/75
Process
2. Design Prepare various functional reports -
specifies current scenario and wish list Prepare Design document which
specifies how the system is going towork
Prepare test scripts to be followed onsystem testing
Map out the interface paths to various
modules
Challenge : INFORMATIONSHARING - Availability of staff
8/3/2019 Enterprise Resource (Shambvi)
29/75
Process
3. Build Configure system as per set up
document specifications i.e. transferconceptual model into reality
Test system to verify accuracy(preliminary tests)
Challenge : TECHNICALENVIRONMENT - System functionality
8/3/2019 Enterprise Resource (Shambvi)
30/75
Process
4. Transition Train users on their specific areas Assist in test data compilation and
system testing by users Finalise the Live system and
captured opening balances
Challenge : USER RESISTANCEUnderstanding and acceptancedata preparation
8/3/2019 Enterprise Resource (Shambvi)
31/75
8/3/2019 Enterprise Resource (Shambvi)
32/75
Technology
Technology is an enabler, not thedriver (it is there to assist theorganisation to achieve business
goals)
It is a means to an end, not the end
8/3/2019 Enterprise Resource (Shambvi)
33/75
Conclusion
ERP systems provide a mechanism forimplementing systems where a highdegree of integration between
applications is required The Business Case or Value
Proposition for implementation mustbe outlined
To successfully implement a propermix of people, processes andtechnology should be maintained
8/3/2019 Enterprise Resource (Shambvi)
34/75
METHODOLOGY
8/3/2019 Enterprise Resource (Shambvi)
35/75
8/3/2019 Enterprise Resource (Shambvi)
36/75
The ERP implementationmethodology includes extensiveservices from the vendor. It is
important for the companies toanalyze each ERPimplementation method, since therisk of failure in ERPimplementation is existent andcan be a highly expensive ordeal.
8/3/2019 Enterprise Resource (Shambvi)
37/75
Different approaches to ERPimplementation
The most potent one's is the so-called joint ventures withrespective companies of the same
industry. This method allows thecompany to begin ERPimplementation process on itsown or share all the responsibilitywith the partners.
8/3/2019 Enterprise Resource (Shambvi)
38/75
This implies that it
would be a sharedplatform where the
files are shared withthe joint venture
company, as they willbe a part of ERP
implementation
8/3/2019 Enterprise Resource (Shambvi)
39/75
ERP implementationis also accomplished
by basing all theimplementation on thepresent needs and
resources of thecompany. Thecompany can first gofor a total ERP systemand then have theERP implementation
8/3/2019 Enterprise Resource (Shambvi)
40/75
It is important to chooseappropriate software forgenerative ERP systemimplementation. The
company must be able toutilize the software to itsfull potential, to have a
successful ERP project.
SUCCESS
8/3/2019 Enterprise Resource (Shambvi)
41/75
SUCCESSFACTORS
7 K f ERP S
8/3/2019 Enterprise Resource (Shambvi)
42/75
7 Keys of ERP SuccessFactorsThe world of technology andbusiness consulting is tainted byhorror stories of ERP projectsgone wrong. Companies such as
Hershey's have had widelypublicized lawsuitsagainst ERP software vendorsbecause of their failedimplementations. In someextreme cases, these companiessue because they couldn't ship
product or their entire
8/3/2019 Enterprise Resource (Shambvi)
43/75
So how does one increase thelikelihood of ERP success and
ERP benefits realization? Many assumesuccess or failure is the fault of thesoftware you purchase, but in reality,95% of a project's success or failure is inthehands of the company implementing thesoftware, not the software vendor. Here
are seven ERP critical success factorsthat we have seen:
8/3/2019 Enterprise Resource (Shambvi)
44/75
1. Focus on business processesand requirements first: Too
often, companies get tied up inthe technical capabilities orplatforms that a particularsoftware supports None of thisreally matters. What reallymatters is how you want yourbusiness operations to run and
what your key businessrequirements are. Once you havethis defined, you can engage in a
more effective ERP software
8/3/2019 Enterprise Resource (Shambvi)
45/75
2.Focus on achieving a healthy ERPROI(Return on Investment): Thisrequires doing more than just developinga high-level business case to get
approval from upper management oryour board of directors. It also entailsestablishing key performance measures,
setting baselines and targets for thosemeasures, and tracking performanceafter go-live. This is the only way tomaximize the business benefits of ERP.
8/3/2019 Enterprise Resource (Shambvi)
46/75
3. Strong project management andresource commitment: At the endof the day, your company owns thesuccess or failure of a large ERPproject, so you should manage itaccordingly. This includes ensuringyou have a strong project manager
and your "A-players" from thebusiness to support and participatein the project.
8/3/2019 Enterprise Resource (Shambvi)
47/75
4. Commitment from company
executives: Any project withoutsupport from it's top-managementwill fail. Support from a CIO or IT
Director is fine, but it's not enough.No matter how well-run a project is,problems arise (such as conflicting
business needs), so the CEO andyour entire C-level staff needs to beon board to drive some of these.
8/3/2019 Enterprise Resource (Shambvi)
48/75
8/3/2019 Enterprise Resource (Shambvi)
49/75
8/3/2019 Enterprise Resource (Shambvi)
50/75
7. Make sure you understand why you'reimplementing ERP: This is arguably the
most important one. It's easy to see thatmany big companies are running SAP orOracle and maybe you should too, but it'sharder to consider that maybe you don't
need an ERP system at all. Perhapsprocess improvement, organizationalredesign, or targeted best-of-breedtechnology will meet your business
objectives at a lower cost. By clearlyunderstanding your business objectives andwhat you're trying toaccomplish with an ERP system, you will be
able to make a more a ro riate decision on
8/3/2019 Enterprise Resource (Shambvi)
51/75
By ensuring you have
these 7 keys of successfactors in place, it will be
much more likely tomaximize the benefits ofERP.
8/3/2019 Enterprise Resource (Shambvi)
52/75
WATS
pitfallsa factor causing trouble inachieving a positive result ortending to produce anegative result;
8/3/2019 Enterprise Resource (Shambvi)
53/75
Inadequate training
Success of any organization is dependent onvarious factors, like, skill and experience ofthe workforce, optimum utilization ofresources and proper planning. A propertraining in ERP is very important in order to
make the system work correctly. Manycompanies try to save money by notproviding enough expenses for ERP trainingof employees. This results in an inadequatecognizance of the particular ERP vendor
package being used. Improper training maylead to mishandling of the technology byemployees, which can result in the loss ofvaluable information.
8/3/2019 Enterprise Resource (Shambvi)
54/75
Expensive software ERP is a very expensive technology and the
installation itself can dig a deep hole in thecompany's pocket. Its purchase basicallydepends on the scope of implementation,complexity of the departments and ERP
vendors. Packaged ERP software may costaround a few million dollars. Besides ERPsoftware, new computer hardware updatednetwork equipment and security softwareare also required for the implementation ofERP systems. The costs of these hardwareand software depend on factors, like, thenumber of modules and the platforms used.
8/3/2019 Enterprise Resource (Shambvi)
55/75
Limited customization
The customization of an ERP setup is verylimited, as it may involve changing of theentire ERP software structure. The flexibilityof the setup is very much dependent on the
brand of software being used. Some brandsgive a provision of extended customizationand flexibility, which makes them moreconvenient to use, as compared to others.Often due to this the scope of implementation
of ERP becomes too difficult and rigid, whichhampers the specific work-flow of a business.
I t c cti it f
8/3/2019 Enterprise Resource (Shambvi)
56/75
Interconnectivity of
departments The interconnectivity of the various
departments within an organization isadvantageous as well asdisadvantageous. As we all know, achain is as strong as its weakest link.With the implementation of ERPpackage, an inefficiency in one
department may affect otherparticipants. If one of the departmentsbreaks down or becomes inefficient, itmay adversely affect the efficiency of
other departments.
8/3/2019 Enterprise Resource (Shambvi)
57/75
Very high implementation time
The time required for the implementationof a complete ERP system is very high.This installation and training time maydisturb the regular functioning of theorganization and may pose a huge riskof loss of a potential business in thatparticular period. The completeinstallation may take a year or more,depending on the number of modules
that have to be installed. This time isworth spending only if the whole newsetup gives significant profits in terms oftime and money.
8/3/2019 Enterprise Resource (Shambvi)
58/75
MANAGEMENT CONCERNS
Many managers understand
8/3/2019 Enterprise Resource (Shambvi)
59/75
Many managers understandthe risks involved with new
software & put all theirefforts into minimizing them.
Many problems with acompanys existing systemare more related toinaccurate data than to
faulty systems.
8/3/2019 Enterprise Resource (Shambvi)
60/75
Erp implementations are highlycomplex, time-consuming &
unpredictable in terms of cost.
There are manypeople,technological,business
process,implementation &operational issues that increase therisk of erp implementation.
People issues are the
8/3/2019 Enterprise Resource (Shambvi)
61/75
People issues are themost critical.
According to a studyconducted by Deloitte
consulting, peopleissues are the key allalong the way-before,
during & after the erpimplementation.
Managers need
8/3/2019 Enterprise Resource (Shambvi)
62/75
Managers needmore focus On the
decision-making &analysis features ofthe system.
Educate everyone
to understand whatis going to beachieved with the
Additional education
8/3/2019 Enterprise Resource (Shambvi)
63/75
Additional educationshould include total
quality management& changemanagement
strategies.The management &
employees should be
made aware of thebenefits so that thereare no over
expectations.
8/3/2019 Enterprise Resource (Shambvi)
64/75
8/3/2019 Enterprise Resource (Shambvi)
65/75
8/3/2019 Enterprise Resource (Shambvi)
66/75
8/3/2019 Enterprise Resource (Shambvi)
67/75
8/3/2019 Enterprise Resource (Shambvi)
68/75
8/3/2019 Enterprise Resource (Shambvi)
69/75
8/3/2019 Enterprise Resource (Shambvi)
70/75
8/3/2019 Enterprise Resource (Shambvi)
71/75
8/3/2019 Enterprise Resource (Shambvi)
72/75
8/3/2019 Enterprise Resource (Shambvi)
73/75
8/3/2019 Enterprise Resource (Shambvi)
74/75
8/3/2019 Enterprise Resource (Shambvi)
75/75
Top Related