Managers and stakeholders

Reporting applications Customers Sales + delivery appl. Central database Service applications

Financial applications

Manufacturing applications

ERP
Enterprise Resource Planning

HR management applications Employees

Inventory + supply appl.

Presented at May, 21st by Mmtaz Copur Andreas Reichert

for ITTM-class SS 2004

Agenda

What is ERP? Why ERP? ERP-architecture ERP-content ERP-suppliers Introducing ERP

What is ERP?

ERP(Enterprise Resource Planning Systems) comprises of a commercial software package that promises the seamless integration of all the information flowing through the company - financial, accounting, human resources, supply chain and customer information.

T.J. Davenport Harvard Business Review July-Aug., 1998

Why ERP?
In 1970s extensive computing was introduced in firms to control and monitor operations and financials Financial and accounting systems typically introduced first Additional needs created additional solutions Problem: Added modules used inconsistent processes, conflicting assumptions and redundant data

Why ERP?
More problems:
Year 2000 Mergers & Acquisitions Customer orientation Cost control

ERP-architecture

Managers and stakeholders

Reporting applications Customers Sales + delivery appl. Central database Service applications

Financial applications

Manufacturing applications

HR management applications Employees

Inventory + supply appl.

Source: Thomas H. Davenport. Putting the Enterprise into the Enterprise System, Harvard Business Review, July, August 1998, p.124.

ERP-architecture
Central database ist developed relational
Relates information regarding operational entities

2 ways of handling data:

Proprietary: access to data just through ERP Open database architecture: access to data through different applications

ERP-content

ERP-content
8 major data files concerning logistic operations:
Customer file Product file Supplier file Order file Bill-of-Materials file Purchase order file Inventory file History file

ERP-content
Customer file
Information describing the firms customers Helpful when multiple devisions of the firm serve the same customer

Product file
Information describing products and services offered Maintenance is increasingly challenging due to shorter life cycles and more frequent price changes

ERP-content
Supplier file
Lists firms suppliers for material and services

Order file
All open orders that are in some stage of processing or fulfillment by the firm Must accept orders from multiple sources, e.g. EDI, Internet, and internal order entry

ERP-content
Bill-of-Materials file
Describes how raw materials are combined for finished products

Purchase order file

Roughly comparable to order file except that it contains records of purchase orders that have been placed on suppliers Purchase order may be for raw material to support product or for MRO supplies necessary to support operations

ERP-content
Inventory file
Records physical inventory or quantity of product that is available

History file
Documents firms oder and purchase history to facilitate management reporting, budget and decision analyses

ERP-content
Managers and stakeholders

Reporting applications Customers Sales + delivery appl. Central database Service applications

Financial applications

Manufacturing applications

HR management applications Employees

Inventory + supply appl.

3 modules support the supply chain activity Includes raw materials aquisition, production and customer order fulfillment Modules incorporate the transactions and processes that initiate the entire range of supply chain activities

ERP-suppliers
5 companies cover 50% of total ERP-market revenue:
SAP Oracle Peoplesoft SAGE Microsoft Business Solutions Others 25.1 % 7.0 % 6,5 % 5,4 % 4,9 % 51,1 %

New license software revenue: 5$ billion (2002)

Source: Gartner Dataquest (June 2003) http://www.directionsmag.com/press.releases/index.php?duty=Show&id=7319

ERP-suppliers
Several points to analyze before the decission for one supplier:
Are all functional aspects of the company covered? Are all business functions and processes integrated? Are all latest IT-trends covered? Does the supplier have customizing and implementing capabilities? Do I have enough reserves, when will be the ROI?

Introducing ERP
Ensure the management is behind you Ensure enough financial funds Identify core project team, project manager, analysts and specialists for all functional areas Evaluate and select ERP package Evaluate implementation partner Make an implementation plan Present plan to management and employees

Introducing ERP
Define requirements
Check whether you have desired hardware Analyze existing processes Fine tune processes to be in line with those of ERP defined Prototype and present Refine prototype and freeze specifications

Introducing ERP
Topics involved:
Project planning Business and operational analysis Business requirements mapping to software Module configuration System modification and interfaces Data conversion Custom documentation End user training Acceptance testing implementation Post implementation support

Introducing ERP
Implementation schedule
Phase 1. Detailled discussions 2. Design & customization Tasks Deliverables

Project initialization Project organization Evaluation of processes, chart requirements Work teams Map organization Map business processes Define functions and processes Build ERP system modifications Organization structure Design specification Process flow diagramms Function model Systems modification

Introducing ERP
Implementation schedule
Phase Tasks Deliverables Testing environment report Customization test report Implementation report Reconciliation report Conversion plan execution

3. ImplemenCreate go live-plan & tation / Prepare documentation to go live Integrate applications Test ERP customization Train users 4. Production / go live Run trial production Maintain systems

Thank you for your attention. Questions?