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Demand for industri
• Aggressive cost control initiatives
• Need to analyse cost/ revenue on a product or
customer basis
• Flexibility to respond the changing business
• More informed management decision making
• Changes in ways of doing business

Accounting and Human Resources. money and machine. Production. Finance.ERP • fully integrated business management system covering functional areas of an enterprise like Logistics. It organizes and integrates operation processes and information flows to make optimum use of resources such as men. . material.

• “Integration” is the key word for ERP implementation.What is ERP? • An ERP system is an attempt to integrate all functions across a company to a single computer system that can serve all those functions’ specific needs. .

• It adopts a set of “best practices” for carrying out all business processes. What is ERP? • It may also integrate key customers and suppliers as part of the enterprise’s operation. • It provides integrated database and custom- designed report systems. .

Evolution of ERP .

How ERP work? Managers and Stakeholders Financial Reporting Applications Human Sales and Resource Applications Delivery Management Applications Applications Sales Force Central ManufacturingBack-office Customers And Customer Database Service Reps Applications Administrators Suppliers And Workers Service Human Applications Resource Inventory Management And Supply Applications Applications Employees .

8 An ERP Example: Before ERP Orders Parts Sends report Customer Demographic Sales Dept. Files Customers Checks for Parts Calls back “Not in stock” Accounting “We ordered the parts” Files Accounting Sends report Invoices Sends report accounting Ships parts Vendor Warehouse Order is placed “We Need parts #XX” with Vendor Inventory Purchasing Files Files “We ordered the parts” Purchasing .

through DB Accounting Financial Data exchange. Database Purchasing record Books inventory order in DB against PO Order is placed with Vendor Warehouse Vendor Purchasing Ships parts And invoices accounting . Books invoice against PO Order is submitted to Purchasing. 9 An ERP Example: After ERP Orders Parts Inventory Data If no parts. order is placed Customers Sales Dept.

distribution. finance and sales . where once desparate system ruled manufacturing. ERP promises • One database • One application • One user interface for entire enterprise.

ERP characteristics • Flexibility • Modular and open • Comprehensive • Beyond the company • Best business practice .

Major Reasons for Adopting ERP • Integrate financial information • Integrate customer order information • Standardize and speed up operations processes • Reduce inventory • Standardize Human Resources information .

Potential Benefits of ERP • Internal Benefits ▫ Integration of a single source of data ▫ Common data definition ▫ A real-time system ▫ Increased productivity ▫ Reduced operating costs ▫ Improved internal communication ▫ Foundation for future improvement .

Potential Benefits of ERP • External Benefits ▫ Improved customer service and order fulfillment ▫ Improved communication with suppliers and customers ▫ Enhanced competitive position ▫ Increased sales and profits .

ERP Implementation Approaches • The big bang – install a single ERP system across the entire organization • Franchising – Independent ERP systems are installed in different units linked by common processes..g. e. • Slam dunk – install one or several ERP modules for phased implementation of key business processes. . bookkeeping.

Major Phases of ERP Implementation (Kent Sandoe. map new processes to be adopted by the system . and implementation strategy • Planning – establish implementation team. establish metrics • Analysis and process design – analyze and improve existing processes. determine goals and objectives. project scope. Enterprise Integration) • Initiation – develop business case.

Enterprise Integration) • Realization – install a base system. and test the system • Transition – replace the formal system with the new system. data conversion • Operation – monitor and improve system performance. customization. provide continued training and technical support . Major Phases of ERP Implementation (Kent Sandoe.

etc. back office. consulting) and maintenance • Impact on organizational structure (front office vs.Major Challenges to ERP Implementation • Limitations of ERP technical capabilities • Inconsistency with existing business processes • Costs . product lines. software. training.implementation (hardware.) • Changes in employee responsibilities .

Major Challenges to ERP Implementation • Flexibility of software system upgrades • Implementation timelines • Availability of internal technical knowledge and resources • Education and training • Implementation strategy and execution • Resistance to change .

4 15.8 21.7 .5 1.6 Lawson 1.5 JD Edwards 3.4 42.6 SAP 13. APICS. Benefits.4 16.4 11. October 1999.6 0.9 52.7 0.6 From: “ Implementation Study Reveals Costs.8 26.META Group Survey System Medium Average Smallest Largest Baan 16.2 SSA 1.9 4.1 13.8 308.8 PeopleSoft 7. p.9 5.” The Performance Advantage.7 29.4 Oracle 5.2 0.Total Cost of ERP Ownership (in millions of $) .1 0.3 58.7 7.2 1.6 0.

• A number of companies surveyed had a negative net present value. non-quantifiable benefits. Benefits of ERP Implementation (META Group Survey) • Benefits are mostly in terms of cost containment rather than revenue increase. • 53 companies (out of 63) reported annual savings of over $5 millions with the median annual saving of $1. . • The study found that much of the ERP value is in indirect. Nine companies account for 73.6 million.4% of the reported savings.

• The executive leaders are active and visible in their support. . • The resources are available to conduct the project completely. • The user group is trained to use the software before it is implemented.ERP Implementation .Key Enablers (APQC Best-Practice Report) • The organization is prepared for the change. • A good packaged system is used and not customized. • The initiative is seen as a business imperative by the organization.

▫ They tightly control implementation processes ▫ They appropriately use consultants throughout the implementation process ▫ They manage turnover of key implementation employees ▫ They have basic business reasons for implementation ▫ They align implementation with organizational strategies . ERP Implementation Practices (APQC Best-Practice Report) • Project Management ▫ Organizations link implementation teams to both the technical (IS) and functional departments.

. ▫ Resistance from the work force (including management) is the most significant obstacle. ▫ The executive sponsor is the change agent. ERP Implementation Practices (APQC Best-Practice Report) • Change Management ▫ Redesigned jobs call for higher levels of skills and accountability ▫ Change management is viewed as more than just increased training and communication ▫ Enterprise-wide systems drive redesigned changes.

▫ Organizations implement ERP packages on time and within budget ▫ Organizations centralize support groups within their IT departments . ERP Implementation Practices (APQC Best-Practice Report) • Technology Excellence ▫ Organizations rely heavily on the ERP package as the majority of their application configuration.

g.. supply chain management system.New Developments In ERP • Availability of web-based and wireless ERP systems • Adoption of easy-to-install ERP systems • Linkage to other software systems. e. customer relationship management system . e-commerce.

• Ketua kelas : Youngky . Y • No Hp : 085732420565 • Email : youngkyyusuf@gmail.