• What is an ERP System? • Why implement an ERP system? • How should ERP systems be implemented? • Conclusion
What is an ERP System – definition
ERP - Enterprise Resource Planning Definition “a business strategy and set of industry-domainindustry-domainspecific applications that build customer and shareholder sharehold er communities value network system by enabling and optimizing enterprise and inter-
enterprise collaborative operational and financial processes”(Source: Gartner’s Research Note SPA-12-0420)
ERP
Source: O’Brien, James. Introduction to Information Systems, 12e, 2005
Historical system architectures
Historically, companies created “islands of automation”. A hodge-podge of various systems that operated or managed various divergent business processes. Sometimes Sometimes these systems were integrated with each other and sometimes they weren’t. Sometimes they were loosely interfaced and sometimes they were more tightly interfaced.
What is an ERP – Key Characteristics Integration
seamless integration of all the information flowing through a company – financial and accounting, human resource information, supply chain information, and customer information.
What is an ERP – Key Characteristics Packages Enterprise systems are not developed in-house • IS life cycle is different 1. Mapping Mapping orga organisa nisation tional al re requi quiremen rements ts to the proc processe esses s an and d terminology employed by the vendor and 2. Making Making info informed rmed choi choices ces abo about ut the para paramete meterr se settin tting. g.
•
Organisations Organisatio ns relationships that purchasewith enterprise systems enter into long-term vendors. Organisations no longer control their own destiny.
What is an ERP – Key Characteristics Best Practices • ERP vendors talk to many different businesses within a given industry as well as academics to determine the best and most efficient way of accounting for various transactions transacti ons and managing different processes. processes . The result is claimed to be “industry best practices”. • The general consensus is that business process
change adds considerably to the expense and risk of an enterprise systems implementation. Some organisations organisatio ns rebel against the inflexibility of these imposed business practices.
What is an ERP – Key Characteristics Some Assembly Required
Only the software is integrated, not the computing platform on which it runs. Most companies have great difficulty integrating their enterprise software with a package of hardware, operating systems, database management systems software, and telecommunications suited to their specific needs.
What is an ERP – Key Characteristics Evolving
Enterprise Systems are changing rapidly • Architecturally: Mainframe, Mainframe, Client/Server, Client/Server, WebWebenabled, Object-oriented, Componentisation • Functiona Functionally: lly: front-office (i.e. sales management), supply chain (advanced planning and scheduling), data warehousing, specialised vertical industry solutions, etc.
To support business goals – Integrated, on-line, secure, self-service processes for business – Eliminate costly mainframe/fragmented technologies
•
Improved Integration of Systems and Processes
•
Lower Costs
•
Empower Employees
•
Enable Partners, Customers and Suppliers
How should we implement ERP systems
Obtain the right mix of people, processes and technology!!
How should we implement ERP Systems?
• People – Project Structure – Should be aligned to processes • Process – Implementation Process (outlined in detail) – Adapt your your processes to those those of the ERP. ERP. • Technology – Hardware – Software – Integrated Systems
Process 1. Definition and Analysis • Hold discussions with various functional personnel to establish the actual number of systems
operating at client site, what they are used for, why and how often • Produce the Project Scoping Document outlining current situation, proposed solution and budgeted time Challenge : REQUISITE EXPERTISE - No two
clients are the same
Process 2. Design • Prepare various functional reports - specifies s pecifies current scenario and wish list
• Prepare Design document the system is going to workwhich specifies how • Prepare test scripts to be followed on system testing • Map out the interface paths to various modules Challenge : INFORMATION SHARING -
Availability of staff staff
Process 3. Build • Configure system as per set up document specifications i.e. transfer conceptual model into
reality • Test system to verify accuracy (preliminary tests)
Challenge : TECHNICAL ENVIRONMENT System functionality
Process 4. Transition • Train users on their specific areas • Assist in test data compilation and system testing testing
by users • Finalise the Live system and captured opening balances Challenge : USER RESISTANCE Understanding and acceptance data preparation
Process 5. Production • Official hand holding • Effectiveness assessment
• Business and Technical Direction recommendations
Technology
• Technology is an enabler, not the driver (it is there to assist the organisation to achieve business goals) • It is a means to an end, not the end
Enterprise Resource Planning
Benefits of ERP • Quality and Efficiency • Decreased Costs • Decision Support • Enterprise Agility
Enterprise Resource Planning
Causes of ERP Failures • Underestimating the Complexity of Planning, Development, and Training Needed • Failure to Involve Affected Employees • Trying to do Too Much Too Fast • Over Reliance by Company on Claims of Software Companies
Conclusion
• ERP systems provide a mechanism for implementing systems where a high degree of integration between applications is required • The Business Case or Value Proposition for implementation must be outlined • To successfully implement a proper mix of people, processes and technology should be maintained
CRM: The Business Focus
Supports an Integrated and Collaborative Relationship Between a Business and it’s Customers Customer Life Cycle CRM Functional Solutions
Acquire
Enhance
Di Dire rect ct Mark Market etin ing g
Cros Crosss-se sell ll and and Up Up-s -sel elll
Sales Force Automation
R e t a in Pr Proa oact ctiv ive eS Ser ervi vic ce
Customer Support
The Internet CRM Integrated Solution
Shared Customer Data
Partner
Collaborative Service
Company
Customer
CRM: The Business Focus
CRM Uses ITEnterprise to CreateSystem a CrossFunctional Marketing and Customer Fulfillment Service and Fax
Sales •Cross-Sell •Up-Sell
e-Mail
Support
Prospect or Employee Telephone
Web
Retention and Loyalty Contact and Programs Account Management
CRM: The Business Focus
• Identify and Target the Best Customers Benefits and Challenges of CRM • Customization and Personalization of Products and Services • Track Customer Contacts
CRM Failures
• 50% of Applications Fail to Meet • Expectations 20% of the Time CRM Damaged Customer Relationships • Lack of Understanding and Preparation is Blamed
CRM: The Business Focus
Gevity HR and Monster.Com: Gevity HRin and Monster.Com: Failures CRM Implementation • Employees Undercut the System Believing Their Jobs Threatened by CRM On-Line Customer Problem Solutions. • Complex Installation Since it Touches So Many Legacy Systems • Failures Lead to Loss of Customer Goodwill and Business and Negatively Affects Employees Also
CRM: The Business Focus
Telstra Corporation: The Business Value of CRM • Provides Fixed, Wireless, and eCommerce Services to Customer Base in 19 Countries • Offers Voice, Data, Internet, Multimedia and Communications • Services Sought CRM Solution to Integrate More than 20 Core Legacy Databases Across the System •• Benefits ReducedQuickly TrainingFollowed Time
SCM: The Business Network SCM Software Helps Firms Reengineer and Integrate The Functional SCM Processes
Supply Chain Life Cycle SCM Functional Processes
Commit
Schedule
Make
Deliver
Strategic Sourcing Forecast and Demand Planning and Procurement Customer Order Fulfillment Service Distribution Network and Warehouse Operations Production Logistics
Transportation and Shipment Management
The Internet Shared Market Data
SCM Integrated Solution Supplier
Manufacturer
Collaborative Fulfillment Retailer
Customer
SCM: The Business Network Supply Chain Management : a top strategic objective for many firms • The Right Products • The Right Place • The Right Time • In the Proper Quantity • At an Acceptable Cost
SCM: The Business Network
Objectives of Supply Chain Management Business Value Goals Rapid Demand Fulfillment
Collaborative Supply Chain Planning and
Customer Value Goals Give customers what they want, when and how they want it, at the lowest cost
Execution Interenterprise Effective Responsiveness and Coordination of Distribution and Manufacturing and Channel Partnerships Accountability to Customers Business Process
SCM: The Business Network
Objective SCM Efficiently Managesofthis Process by: •• Forecasting Demand Controlling Inventory • Enhancing Business • Relationships Receiving Feedback and Status of Every Link of the Chain
SCM: The Business Network
Benefits and Challenges of SCM
• Lack of Proper Planning Knowledge, Tools, and Guidelines • Inaccurate Demand Forecasts • Lack of Adequate Collaboration • Software Itself Immature
Enterprise Application Integration EAI Software Connects Major e-Business Applications Like CRM and ERP
Front-Office CRM Applications Customer Service Field Service Product Configuration Sales Order Entry
Enterprise Application Integration EAI
Back-Office ERP Applications Distribution Manufacturing Scheduling Finance