CONTENTS Introduction on Enterprise Resource


Definition 1 Characteristics 1 Evolution of ERP 3


Typical Architectural Component 4 Why implement an ERP system? 5 How should we implement ERP system? 6 Importance of ERP 9 Disadvantages of ERP 9 ERP Expectations and Options 10 Building ERP solutions using internal and external Sources 11








ERP Product Selection Criteria 12


Beyond ERP 12 Conclusion 13


ERP (Enterprise Resource Planning)
ERP is a solution, which

Facilitates company-wide integrated information systems, covering all functional areas. Performs core corporate activities and increases customer service augmenting Corporate Image.

“A business strategy and set of industry-domain-specific applications that build customer and shareholder communities value network system by enabling and optimizing enterprise and inter-enterprise collaborative operational and financial processes”.

Historical system architectures
Historically, companies created “islands of automation”. A hodge-podge of various systems that operated or managed various divergent business processes.

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.

Key Characteristics of ERP
Integration Seamless integration of all the information flowing through a company – financial and accounting, human resource information, supply chain information, and customer information.
Contd. (1)

Packages Enterprise systems are not developed in-house • IS life cycle is different

Mapping organizational requirements to the processes and terminology employed by the vendor and

2. Making informed choices about the parameter setting.

Organizations that purchase enterprise systems enter into long-term relationships with vendors. Organizations no longer control their own destiny.

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 and managing different 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 organizations rebel against the inflexibility of these imposed business practices.

Contd. (2)

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. • • • Interfaces to legacy systems Third-party bolt-on applications Best of Breed Strategy

Evolution of ERP

1960’s - Systems Just for Inventory Control.

1970’s - MRP – Material Requirement Planning (Inventory with material planning & procurement). 1980’s - MRP II – Manufacturing Resources Planning (Extended MRP to shop floor & distribution Management.). Mid 1990’s - ERP – Enterprise Resource Planning (Covering all the activities of an Enterprise). 2000 onwards – ERP II – Collaborative Commerce (Extending ERP to external business entities).

Contd. (3)

Contd. (4)

Move from 2 tier two three tier architecture. Simplified Deployment Other advantages of this architecture become apparent when we look at application deployment. In client server environments, you would need to install the application on each desktop. If you add new users, you need to install the application. If you want to upgrade.... you need to install the application. If we’ve learned one thing from Y2K compliance, it’s that upgrading 100’s or 1000’s of desktops is a challenge best avoided. The true, three-tier architecture avoids this pitfall. By storing the application on the middle tier, the ICA requires you to upgrade only the servers. Clients upgrade themselves. As soon as the browser detects that a new application version exists, it’s downloaded automatically. Even some “web” tools use plug in that load windows components as opposed to IC architecture. These can be as difficult to uninstall as typical windows applications.

Why implement an ERP System?
• To support business goals – Integrated, on-line, secure, self-service processes for business – Eliminate costly mainframe/fragmented technologies

Contd. (5)

• Improved Integration of Systems and Processes • Lower Costs • Empower Employees • Enable Partners, Customers and Suppliers

How should we implement ERP Systems
It’s all really about control; it’s about aligning your people process and technology so that they master the raging waters of your high volume transactional system. The three stages has been explained below • 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.

Contd. (6)

– Project Structure – Should be aligned to processes

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. Here Phasing and Scoping is also important. 2. Design

Prepare various functional reports - specifies current scenario and wish list. Prepare Design document which specifies how the system is going to work. Prepare test scripts to be followed on system testing. Map out the interface paths to various modules.

• •

Challenge: INFORMATION SHARING - Availability of staff.

Contd. (7)

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.

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 RESISTANCE Understanding and acceptance data preparation.

5. Production
• • •

Official hand holding. Effectiveness assessment. Business and Technical Direction recommendations.


Technology is an enabler, not the driver (it is there to assist the organization to achieve business goals).

It is a means to an end, not the end.

Contd. (8)

Importance of ERP

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. For Management – to know what is happening in the company. One solution for better Management. For cycle time reduction. To achieve cost control & low working capital. To marry latest technologies. To shun the geographical gaps. To satisfy the customers with high expectations. To be Competitive & for survival.

• • • • • • •

Disadvantages of ERP

An island of Information that is it provides large information. Difficult to get timely & accurate information.

Heterogeneous Hardware & Software platforms & practices.

Cont d. (9)

Poor connectivity between different organizational locations. Sticking with obsolete technology. Resist changing. Lack of proven man-power to develop integrated software.

• • •

ERP – Expectations
  

Integrating all the functions. Integrating the systems running in all the locations. Transparency of information using a single data source across the organization.

 Software must be responsive • • • • Modular Flexible Easy to add functionalities Provide growth path

ERP – Options OPTION 1 – MAKE [Using Internal resources]

Developing a custom-built ERP package, specific to the requirements of the organization, with the help of the inhouse IT department.

Going for Tailor-made ERP packages available in the market like SAP, Oracle applications, Baan, PeopleSoft etc.
Contd. (10)

OPTION 3 – MAKE [using External resources]
Developing a custom-built ERP package, specific to the requirements of the organization, with the help of a software solution provider.

Building ERP solutions using Internal Sources
 

Lack of adequate & qualified manpower. Not driven with clear focus on expectations, time & cost. Poor software project management. Lack of seriousness with the Management & the IT Team. High employee turnover. Lot of schedule gaps during Project execution. Normally project life is more.

 

  

Frequent change in the scope with the approval of the Management.

Building ERP using External sources
 About this option  The Principle!  The Steps  Why?  Points of Concern
Contd. (11)

 Software Vendor selection

Critical Success factors

Preparation Phase

Framing ERP Implementation Strategies

 Formation of Apex & Steering committees  Functional & IT team formation  Training on ERP functions & features  Scope finalization
Contd. (12)

 GAP analysis

Action plan to resolve the gaps

• 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.
Contd. (13)

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