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ERP Implementation: Six Deadly Sins
Not understanding the true significance of what you have taken on. Not committing the right resources to the project. Not managing the change effectively. Not managing the benefits. Not embracing integration. Not planning for the end of the project before you start.
Project Management Fundamentals Co-ordination Tasks Equipment Products People Time Money Balancing Scope Time Cost Quality Needs vs. Expectations Needs & Expectations of stakeholders ..
Contingency and Final Project Costs .ERP Project Management – 10-Step Estimation Process Step 1: Define the Scope of the Project Step 2: Estimate Staffing to Lead the Project and Support Each Process Area Step 3: Estimate Custom and Interface Development Step 4: Assess Data Conversion Magnitude Step 5: Estimate Project Duration Step 6: Assess External Connectivity Requirements Step 7: Estimate Supplemental Staffing Step 8: Create a Time-Phased. Resource-Loaded Project Plan Step 9: Estimate Resource Rates and Apply Them to the Plan Step 10: Estimate Travel.
ERP PM – 10-Step Estimation Process (continued) Step 1: Define the Scope of the Project • Typical Macro-Processes Identified as Part of an ERP Implementation • Sample Process Decomposition Step 2: Estimate Staffing to Lead the Project and Support Each Process Area Step 3: Estimate Custom and Interface Development • Custom Development • Interface Development .
ERP PM – 10-Step Estimation Process (continued) Step 4: Assess Data Conversion Magnitude • Code Tables • Master Tables • Transaction Tables Step 5: Estimate Project Duration • Project Planning and Preparation • Phase 1: Standard Solution Design • Phase 2: Standard Solution Development • Phase 3: Pilot Deployment • Phase 4: Rollout • Project Management .
Contingency and Final Project Costs .ERP PM – 10-Step Estimation Process (continued) Step 6: Assess External Connectivity Requirements Step 7: Estimate Supplemental Staffing • Point Staffing for Custom Development • Point Staffing for Data Conversion • Point Staffing for End-User Training Step 8: Create a Time-Phased. Resource-Loaded Project Plan Step 9: Estimate Resource Rates and Apply Them to the Plan Step 10: Estimate Travel.
Change Management: Of Vital Important .
maximizing. faster decisions by unleashing the power of the integrated enterprise ERP provides a backbone to further extend functionality through bolt-ons and other solutions Issues and obstacles show dramatic shifts in emphasis after going live An ERP implementation is at its core a people project There are twelve best practices for accelerating.ERP Success Factors: Top Ten Findings Findings and Conclusions 6 1 Going live is not the end of the ERP journey 7 ERP enables better. and sustaining the benefits of the ERP journey 2 ERP delivers significant tactical and bottom-line strategic benefits 8 3 ERP also yields significant returns from unexpected benefits Companies should anticipate a temporary dip in performance after going live There are three distinct stages in each wave after going live 9 4 10 5 .
12 best practices for sustaining the benefits of ERP 1 Focus on Benefits 7 8 9 Process Expertise 2 3 4 5 6 Alignment Extending Capabilities Breadth of Change Commonality Business Case 10 11 12 Using Capabilities Post-Implementation Plan Benefits Ownership Role Transition Metrics .
open standards . ebusiness provides ability to share info internally & externally Optimization Focus – ERP focus is across one value chain.Implementation: ERP The Next Wave ERP 2: The e-business challenge Information Sharing – ERP focus is on internal information . ebusiness focus is on multiple value chains Internet Substitute – ERP “one in all in application” opposed to “standalone apps” linked on internet backbone Technology Obstacle – Closed client/server vs.
ERP Trends: Combined ERP & E-business Benefits TANGIBLE BENEFITS INTANGIBLE BENEFITS Increased revenue Reduced costs. inventories. and collection efforts Shorter cycle times Capability to manufacture to actual demand Improved cash management Improved customer and employee satisfaction Frees employees to work on tasks requiring human creativity and judgment Continuous operation Improved supplier relationships .
E-business Models and Disintermediation Pure e-business play? The case of Amazon.com Click-and-mortar Hybrid of the pure e-business and the brick-and-mortar model Dependence of e-business and physical facilities Disintermediation Manufacturers interact directly with consumers. bypassing intermediaries such as wholesalers and retailers Impact on a company’s business processes Warehouse must now manage a large number of low-volume orders Accounts receivable must now process a large number of invoices and accommodate increased collection activity Customer service may be inundated with calls Customer returns must now be managed by manufacturer .
Flawless system stability. 24 x 7 operation. Fluctuating traffic. E*Trade. Scalable. Robust Design.999% reliability. Dramatic spikes in site traffic. Frequent system changes. Security. Charles Schwab and eBay. True 24 x 7 availability requires 99. Testing tools available. . Exposure of corporate resources on the Web. Examples of AOL.The E-business Platform – Extreme Demands Operating demands place a strain on e-business platforms.
. Touch-tone telephone was adaptive while telephone itself was disruptive.ERP and E-business: Adaptive vs. ERP is adaptive while e-Business is disruptive. Electric train was adaptive while the train itself was disruptive. Disruptive Technology E-business is a revolution Internet (4 years to reach 50 million users) Television (13 years) PC (16 years) Radio (38 years) Adaptive technologies move earlier technologies forward incrementally while Disruptive technologies change the way people live or the way businesses operate.
investing (4) Infrastructure consolidation Impact (1) Initial hype Time Disruptive technology Adaptive technology . Mass marketing (3) New wave of Technology and equipment (2) Learning. Experimenting.Life Cycle of Adaptive versus Disruptive Technologies Critical Mass (5) Critical mass achieved.
ERP & E-business Recap Structured approach to optimizing a company’s internal value chain. This forces employees to upgrade their skill sets. Business process re-engineering or re-design (BPR) often accompanies ERP projects to eliminate non-value-adding work. Not intrinsically strategic. Organize. & also new ways of working. Staff reductions are often seen. Collate and transform transactional data into useful information for analysis. it is an enabling technology. thus improving a company’s financial performance through operational improvements. Affects individual roles within the organization. or staff may be moved into other areas (in expanding companies). . rather. ERP implementation with BPR affects a company’s organizational structure. codify and standardize a company’s business processes and data. Change management is key to successful implementations. ERP implementation requires employees to be willing to new technology.
e-catalog. Requires trust among business partners. or leverage the Internet to make purchasing more efficient. e-billing. . Ideally. with minimal disruption to organizational culture and business processes e-storefront. and agreement on standard ways of working.ERP & E-Business Re-cap (continued) E-commerce Leverage an Internet-based sales channel to enhance marketing and sell products or services. marketing and purchasing E-business Uses IT and open standards to connect suppliers and customers at all steps along the value chain. reduced costs and streamlined business processes. Many companies enter e-business by first engaging in e-commerce. e-procurement Focuses on efficiency in selling. Focuses on effectiveness through improved customer service. e-payment.
that is. ERP technology supports current business strategy while E-business opens the door to new strategic opportunities. ERP is necessary to fulfill the promises made on the Web page. ERP is focused on internal process efficiency and effectiveness while EBusiness is focused on external. operational effectiveness. . Enterprises need some sort of internal transaction engine to match the internal information flow with the actual flow of goods and/or services. and product promotion. the promise of e-business. cross-enterprise process efficiency. Merger is still incomplete and its exact nature unclear Web-based technology extends each enterprise’s organizational boundaries. Key issue is to blend ERP and Web-based technology successfully and to push each to achieve its maximum benefit.Complementary Technologies of ERP and E-Business ERP and Internet technologies are rapidly coming together. ERP is the internal technological hub of a single enterprise. What lies behind the web page is important. E-business is best supported by a well-tuned ERP system.
Human Resources. and accurate delivery dates) and customer relationship management Enables interactive relationships with value-chain partners E-Business: The ideal extension to internal processes ERP boosts E-Business potential Communication with partners in the supply chain and customers in the value chain is not enough. low-cost products. and Sales & Marketing. Logistics. demand-chain management and knowledge management. Achieved through tightly integrated modules for Finance. . Processing logic is required in order to respond to information available across the Internet. short cycle times. Enables improved customer focus (individualized service. Collaboration and coordination are also important. Manufacturing.ERP complements E-Business ERP: The hub of a single enterprise Integrates resource planning. supply-chain management.
ERP / E-Business Matrix No E-Business Capabilities Greenfield Non-integrated systems Limited / SingleFunction ERP Integrated BusinessUnit ERP Integrated Enterprise ERP Channel Enhancement Value Chain Integration Industry Transformation Convergence .
ERP / E-Business Organizational Issues: Domain & Level Matrix No E-Business Capabilities Channel Enhancement Value Chain Integration 2. Optimize Business at Unit Level 6. 3. Industry Partnership Convergence Greenfield Non-integrated systems Limited / SingleFunction ERP Integrated BusinessUnit ERP Integrated Enterprise ERP 1. Start-Up Enterprise Growth Limited (High Risk = Opportunity) 4. Customer Benefit Limited (Reduced E-Options and Flexibility) High Cost Relative to Benefit 5. Optimize across Enterprise .
GM and GE) . new customers and new products and services. There is an intense relationship between the partners to create an environment for shared business improvements. providing customer self-service and conducting Webbased indirect procurement. (e-commerce) VALUE CHAIN INTEGRATION (e.E-Business Examples CHANNEL ENHANCEMENT .Boundaries between companies and their partners become less pronounced as they link internal systems through the Web.g. Solectron and Ingram Micro) . Mobil.g.. globalization of business.Coming together of companies from different industries to provide goods and services to consumers. creating new markets. INDUSTRY TRANSFORMATION (e. it is helped by decreasing costs and rapid adoption of technology. Shell. Adaptec) . This is not solely a function of e-business technologies: it is equally a function of industry deregulation. (Collaborative Advantage) CONVERGENCE (e.g. However. (Industry Convergence) .Point solutions such as selling over the Web. evolving customer demand and new competitive tactics.Integrate customers’ and suppliers’ operations with their processes and systems (e-CRM and e-SCM). mutual benefits and joint rewards. BP. new opportunities.
Complex Upgrade Vendors Outside Company In Continuous. IT Simple Intuitive Traditional ERP versus E-Business Applications . Small Changes Method of Integrating with Other Businesses Business Processes User Interface Through APIs or EDI Complex User Training Required Browser.Summary: ERP Vendor Responses to E-Business Challenges Dimensions ERP Apps E-Business Apps Employees Focus Release Process Customers Inside Company Out Periodic. Portals.
ERP Vendor Responses to E-Business Challenges (cont’d) Extend ERP Functionality SCM CRM APS BI Internet-based Procurement Build communities of users through portals and trading exchanges Public versus private Horizontal versus vertical Direct versus indirect materials .
g. per-month.g. MAPICS. pre-installed and pre-integrated (e. peruser fee. Biztone) . partnership between IBM and vendors like J D Edwards. pre-configured solutions to offset high implementation costs (e.ERP Vendor Responses to e-business challenges (cont’d) Create new ERP delivery and pricing models Traditional pricing includes initial license fee for a specified number of employees. SAP’s Accelerated Applications and Oracle’s FastForward RPM) Pre-configured.com strategy in which users access the system through role-specific Workplaces) Industry-specific. Users access the offsite system via Internet. QAD and SAP) Traditional outsourcing (either through ERP vendors or their partners) Application service provision Third-party service provider typically licenses the software from the ERP vendor and resells the package to many buyers for fixed. Internet-based delivery of basic ERP system (e.g. with annual maintenance fees Introduction of Role-based pricing (part of SAP’s mySAP.
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