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CHPT 2 and 3 ERP 2016 PDF
CHPT 2 and 3 ERP 2016 PDF
Introduction to
Enterprise
Systems for
Management
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Learning Objectives
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Figure 1-1 Management Pyramid with Information
Requirements
Small amounts of
information: highly
qualified
3 management levels:
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Enterprise Resource Planning (ERP) Systems
WHAT IS ERP?
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ERPs Role in Logical Integration
ERP Systems:
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Figure 1-2 Integrated Systems - ERP
ERP
integrate departments and functions into a single infrastructure
replace an assortment of systems from an Organization
integrates information from different sources and makes it available in real-time.
?
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Evolution of ERP
Timeline System
1960s Inventory Management & Control
1970s Materials Requirements Planning (MRP)
1980s Manufacturing Requirements Planning (MRP-II)
1990s Enterprise Resource Planning
2000s Extended ERP (xERP) or ERP-II
A legacy system:
- old method, technology, computer system,
- old application program
- it often implies that the system is out of date or in need of replacement.
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Business Processes and ERP
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ERP goal -> serve the Org by converting data into useful info
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Figure 1-3 ERP key Components:
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ERP Architecture
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System Benefits of an ERP System
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Business Benefits of an ERP System
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ERP Implementation (ERP Life Cycle)
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ERP Implementation
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ERP Implementation strategies
Big Bang
Just as the name implies, a big bang ERP implementation
happens in a single, major event.
All modules are installed across the entire organization all at
once, more or less.
Of course the changeover from the legacy system doesnt
happen without proper planning.
There are many pre-implementation activities that need to be
carried out prior to the big bang.
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Big Bang
After the planning activities have been successfully executed, the
old system will be turned off, and the new system will be launched.
At this point there is no turning back. However, there should be fall-
back scenarios prepared just in case the initial changeover is a
failure.
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Big Bang
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Phased Rollout
An organization moves off the legacy system and onto the new ERP
system in a series of predetermined steps. This can be achieved in several
different ways.
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Phased Rollout
1. Phased rollout by module - This is the most common phased rollout strategy. ERP
modules are implemented one at a time. Typically you begin with core business
functions those necessary for daily operations then add in more modules and
functionality with each phase.
2. Phased rollout by business unit - Under this approach implementation is carried out
in one or more business units or departments at a time. Some organizations may put
together an implementation project team that travels between each department during
implementation phases. As the team gains more experience with each
implementation, subsequent phases become more efficient.
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Phased Rollout
Just like big bang, a phased rollout strategy has advantages and
disadvantages. This table includes several common viewpoints:
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Parallel Adoption
The third generic though less talked about ERP implementation
plan is the parallel adoption approach. This has also been referred
to as parallel conversion, parallel running, or parallel cutover.
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Parallel Adoption
Parallel adoption can be considered the middle road between big
bang and phased adoption. For example, the pace of the
changeover is slower than big bang, but faster than phased
adoption. Similarly, user adaptation is easier than big bang, but
more difficult than phased adoption.
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Pro
Least risky
Users learn the new system while working on the old
Slower pace than the big bang but faster than a
phased roll-out
Con
Most expensive
Employees have to enter data in both systems- this
can be inefficient and breed data-entry problems
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http://blog.softwareadvice.com/articles/manufacturing/erp-implementation-
strategies-1031101/
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Software and Vendor Selection
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Vendor Evaluation - costs
IT infrastructure requirements.
Future goals and plans for the short and long term.
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Cost of ERP - What does ERP really cost?
The total cost of ERP ownership includes the costs of packaged software, hardware, professional services (for ongoing
maintenance, upgrades and optimization) and internal costs. Based on the ERP survey conducted by Meta Group in 2002, the
average cost of ERP ownership was $15 millions ranging from half millions to $300 millions. The average cost per user per year
could be as high as $20,000.
Costs of Software
The cost of packaged ERP software depends on the scope of implementation (the # of ERP modules and the number of end users),
complexity of software and ERP vendors. ERP software that involves the integration with external business entities generally costs
more. ERP vendors offer discount for organizations who invest in a suite of ERP software systems. Mid-sized organizations typically
commit a few million dollars to packaged ERP software.
Costs of Hardware
Implementation of ERP systems routinely requires purchase of new computer hardware, systems software, network equipment and
security software. The costs of hardware varies in a wide range dependent on the scope of implementation and platforms. The
hardware typically costs about half million dollars for mid-sized organizations that implements ERP systems.
Integration ERP systems won't demonstrate its full potentials unless they are properly integrated with other enterprise software
application:
the integration of various functional ERP modules,
the integration of ERP with other e-business software applications, and
the integration of ERP with legacy systems.
Data Conversion The cost of data conversion depends on the format and the media that store the historical data. Data conversion
from legacy systems to RDBMS is a time-consuming process. Data conversion may lead to further data gathering to fill the missing
links in data requirements.
Testing ERP systems are thoroughly tested before they go into production. ERP testing includes unit testing, component testing,
regression testing, performance testing and user acceptance testing.
Training Workflow and UI design in ERP software are more complex than average business software. ERP training is expensive
because workers almost invariably have to learn a new set of processes of doing their daily tasks besides learning how to use the
ERP software. To reduce the cost of ERP training and to ease the transitions from old processes to new, organizations often seek
the help from training companies which are specialized in coaching workers46 on using ERP software from particular vendors.
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Ways to Developing ERP System
Method Advantages Disadvantages
Application service Least risk, least cost, fastest, At the mercy of the provider,
provider least subject to vendor change no control, and subject to
50 price increases
Project Management
For an ERP system to be implemented successfully,
project management must provide:
strong leadership,
a clear and understood implementation plan, and
close monitoring of the budget.
Consultants
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ERP Market Tiers
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ERP Vendors
SAP
SAP is the recognized global leader among ERP vendors
with over 12 million users. Its solutions are for all types of
industries and for every major market. www.sap.com
Oracle/Peoplesoft
As the second largest ERP vendor, Oracle provides
solutions divided by industry category and promises long-
term support for customers of PeopleSoft- (acquired in
2004). www.oracle.com
Infor
The worlds third largest provider of enterprise software. It
delivers integrated enterprise solutions in supply chain,
customer relationship and suppliers management.
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Lawson
Industry-tailored software solutions that include
enterprise performance management, distribution,
financials, human resources, procurement, and retail
operations. www.Lawson.com
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ERP Vendors (Contd)
SSA Global
Acquired Baan in 2004.They claim to offer solutions that
accomplish specific goals in shorter time frames and are
more efficient with time.
Epicor
This company provides enterprise software solutions for
midmarket companies around the world. Claims to have
solutions to a variety of needs, whether a customer is
looking for a complete end-to-end enterprise software
solution or a specific application.
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Software Extensions and Trends
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Summary
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Summary (Contd)
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Summary (Contd)
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The most powerful database systems running todays enterprise businesses around the world:
Oracle Oracle Enterprise Server, designed for grid computing, is the best RDBMS, running on
multiple platforms, with the latest version 11G.
DB2 DB2 is the database management system that delivers a flexible and cost-effective database
platform to build robust on demand business applications. The DB2 Universal Database (UDB)
Enterprise Server Edition 7 (ESE) is one of the best RDBMS.
SQL Server Microsoft SQL Server is a comprehensive database software platform providing
enterprise-class data management and integrated business intelligence (BI) tools.
Sybase Sybase Adaptive Server Enterprise (ASE) is a high-performance, mission-critical database
management system that gives customers an operational advantage by lowering costs and risks.
Teradata Teradata Database, currently on Version 2 Release 6.0, is the most powerful Very Large
Database (VLDB) system. Many largge scale data warehousing and business intelligence systems
are powered by Teradata.
ADABAS Adabas made by Software AG, once was the most powerful mainframe database, now
runs in multiple platforms, and provides superior reliability and performance.
MySQL A open source database, mySQL is the most popular database for web-based business
applications, and is moving to enterprise level.
FileMaker FileMaker Pro 8.5 is the #1-selling easy-to-use database software for Windows and Mac
OS. FileMaker Server 8 maximizes performance of shared databases while increasing security.
Access -Microsoft Access is the most used desktop database applicaiton in Windows.
Informix -Informix, now under IBM, once was the most promised object-oriented database.
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