ERP Implementation Fundamentals

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ERP Implementation Fundamentals

 

Agenda

• 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.

 

Typical architectural components Interaction Channels

Web Internet

Mobile Wireless

e-Mail

Call Center  Telephony

Analytical Application s

Marketing Intelligence

Sales Intelligence

Customer  Intelligence

Call Center  Intelligence

Business Application s

Marketing

CRM Foundation E-Business Foundation

Stack

Installed Base Tasks

Sales

eCommerce

Resources Notes

DSS

Territories Calendar 

HR

Assignment Engine 1-to-1 Fulfillment

  Common Data and Object Models, Security, Interfaces, Globalisation

E-business Platform

       

 

Internet Computing Architecture

Application

2 Tier 

Application

Application Application

Application

X

3 Tier  Database Application Application Browser Java Browser

Application Server

 

Why implement an ERP System?



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

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