Achieving Operational Excellence:

ERP, SCM, CRM

Md. Rakibul Hoque

University of Dhaka
 Learning Objective

• Evaluate how enterprise systems help businesses achieve

operational excellence.
• Describe how supply chain management systems
coordinate planning, production, and logistics with
suppliers.
• Explain how customers relationship management systems
help firms achieve customer intimacy.
• Identify the challenges posed by enterprise applications.
• Describe how enterprise applications are used in platforms
for new cross-functional services.
Decentralized System
Problems
 Decentralized System
Problems
 Numerous disparate information system generates
individually over time which are difficult to maintain
 Integrating the data is time and money consuming

 Inconsistencies and duplication of data

 Lack of timely information leads to customer

dissatisfaction , loss of revenue and reputation
 High Inventory, material, and human resource cost.
Centralized Systems
 Centralized Systems

1) Data is maintained at a central location

and is shared with various Departments

2) Departments have access to information

or data of other Departments
 Centralized Systems
 Key benefits of the centralized system are:
 It eliminates the duplication, discontinuity and redundancy in data
 Provides information across departments in real time.
 Provides control over various business processes
 Increases productivity, better inventory management, promotes
quality , reduced material cost, effective human resources
management, reduced overheads boosts profits
 Better customer interaction and increased throughput. It also
improves customer service
 Hence, a centralized enterprise management system is required.
 Enterprise Systems/ERP
 Enterprise Systems is also known as enterprise
resource planning (ERP) systems
 Enterprise systems provide a technology platform where
organization can integrate and coordinate their major
internal business process.
 Enterprise systems integrate business process in
manufacturing and production, finance and accounting,
sales and marketing, and human resources into a single
software systems
 Information entered in one process is immediately available
for other processes
 Enterprise Systems/ERP

 Enterprise resource planning systems or

enterprise systems are software systems
for business management, encompassing
modules supporting functional areas such
as planning, manufacturing, sales,
marketing, distribution, accounting,
financial, human resource management,
project management, inventory
management, service and maintenance,
transportation and e-business.
 Enterprise Systems/ERP

 Enterprise systems
 Collects data from different firm functions and
stores data in single central data repository
 Information entered in one process is immediately
available for other processes
 Resolves problem of fragmented data
 Enable:
 Coordination of daily activities
 Efficient response to customer orders (production,
inventory)
 Help managers make decisions about daily
operations and longer-term planning
How Enterprise Systems Work
OFFICES BEFORE ERP
Offices After ERP
 Enterprise Systems

 Business value of enterprise systems

 Increase operational efficiency
 Provide firm-wide information to support
decision making
 Enable rapid responses to customer requests for
information or products
 Include analytical tools to evaluate overall
organizational performance
 Challenges of Enterprise
Systems
• Highly expensive to purchase and implement enterprise
applications – total cost may be 4 to 5 times the price of
software
• Requires fundamental changes
• Technology changes
• Business processes changes
• Organizational changes
• Incurs switching costs, dependence on software vendors
• Requires data standardization, management, cleansing
Categorization of ERP Systems
Categorization of Some Renowned
ERP Systems
Worldwide ERP Software Market
share - Gartner
The market is
still dominated
by SAP, which
covered 36% of
the entire
industry. SAP
have also
introduced their
own cloud-
based offerings.
Selected ERP Systems for Comparison
SAP
Developed by German Giant
software company SAP
AG and is the leader in
ERP Market. It has been
used over 296,000
customers in 190 countries
and has the solution for all
business vertical.
Microsoft Dynamics
Developed by US giant
software Company
Microsoft Corporation and
is the third market share
holder in ERP Market. It has
over 220,000 ERP
customers in countries
Oracle
Developed by US Giant
software company Oracle
Inc. and is the second
market share holder in ERP
Market. It has been used
over 350,000 customers in
145 countries.
IFS
Developed by IFS AB a
Swedish software
company and has over
2,000 customers in 50
countries.
 ERP Market
 One of the fastest growing markets in software industry
 Previously ERP software was mainly used by larger
companies and enterprises. The use of ERP on a
smaller scale has now created a higher demand for
business management software that will contribute
significantly to this market growth over the next three
to four years.
 The market for enterprise resource planning (ERP) is
predicted to be worth more than $41.69 billion by
2020, according to a new report.
22
23
 ERP Market
In Bangladesh, some large organizations are using ERP, but most
of the organizations are still using manual processes or some
scattered applications (e.g. excel) to maintain their transactions and
business process. The situation is more vulnerable in SME sector.
They are not able to maintain an ERP because of the high price
and high maintenance cost.
In addition with lengthy implementation, poor project management,
high expectation of users, lack of IT knowledge, inaccurate system
study, and scarcity of expertise creates high complexity.
 ERP Market
 Manufacturing sectors including RMG, textile,
pharmaceuticals and other consumer goods industries
have created sustainable demand for IT solutions like
ERP, HR information system, production and financial
management solution. On the other hand, service
industries like telecom (second highest after financial
sector within service sector), retail & wholesale, healthcare
(hospitals, diagnostic centers etc.), education (University,
schools and colleges), publishing/media and real state
have created sizable market space for IT solution
companies.
 ERP Market
 More than 50 companies have already implemented SAP
in Bangladesh. As the target is to help build a  Digital
Bangladesh, the number of SAP implemented-companies
are increasing at significant rate. Now most of the
companies choose SAP for business automation as its
benefit is significantly higher than cost of implementing it.
A short list of Bangladeshi companies with implementing
partners are Viyellatex, Meghna Group of Industries,
Coopers Pvt. Limited (PWC), LG Butterfly, Uttara Motors
Ltd, Bashundhara Group, Exzatech Solutions Bangladesh,
Berger Paints   and    Madina Group.
ERP Career Path
ERP Career Path
ERP Career Path
 ERP Career Path

How do I step my foot in the world of SAP ERP?

If you work in a company that plans to implement SAP ERP system, then you
should strive to be part of implementation team. You will gain invaluable
experience by going through all the five phases just covered and learning what
efforts and activities each phase entails. Your biggest asset will be your in-depth
and comprehensive business process knowledge of your area of working.
If and when you come to know that a company plans to implement SAP ERP
system soon, try to join that company and be a part of the implementation
team. You can improve your chances of being hired in such a company if you get
the necessary training and certification to stand out from the crowd.
If you want to make a consulting career in SAP ERP then try to find opportunities
available in several authorized consulting firms in Bangladesh. Your chances of
getting a break in consulting fields improve if you acquire the necessary training
and attain certification from these consulting firms.
 1
Phase 1
Project
Implementation 2 Preparation
Phase 2
Roadmap Business
3 Blueprint
Phase 3
Realization
4
Phase 4
Final Preparation
5 Phase 5
Go Live & Support
 Goal settings
Define the project goals and objectives

Implementation strategy
1.Clarify the scope of implementation
2.Establish the project organization and relevant committees
and assign resources

Implementation Sequence
Define sequence of the project has to be executed

Team
Core Team+ Project Team + Consultant Team

Sign off
At the end of phase every above step will be
documented and will sign off with client
Also, To refine the original project goals and
objectives and revise the overall project
schedule in this phase.

The purpose of this phase is to achieve a

common understanding of how the company
intends to run SAP to support their business.

The result is the Business blueprint, a detailed

documentation of the results gathered during
requirements workshops
 Scope Document
This Document will consists of questionnaire of entre
Business process

AS IS
1.Understanding the Business process from Core Team
2.Based on the Input AS IS document has to be created
according to module wise

TO BE
1.In this process you will map the Business Process in
SAP based on ASIS
2. Module wise TOBE document has to be created

GAP Analysis
1.The GAP b/w AS IS process and TO BE process is
called GAP analysis i.e. The input or business process
which can’t be mapped in standard SAP will be analyzed
here
2. GAP documents has to be created

Sign Off
Each process above has to be taken sign off from client
35
The purpose of this phase is to implement all
the business process requirements based on
the Business Blueprint.

In this phase also we have create

documentation for the configuration
implemented & it has to be taken sign off from
client.
Sl.
Process Description
No

1. Unit testing Testing with each module

Integrate testing of module i.e., combine

Integration
2. testing of all the modules which is
testing
implemented
End users of each module will be provided
User training by corresponding module consultant.
3. training and End user training document and user manual
testing has to be prepared . This document has to be
taken sign off from the client.

Before Go live phase there will cut-over

period for business process is carried .
Cut over During cut over period the master data and
4.
strategy transaction data from legacy system will be
migrated to SAP system . There are various
tools for this purpose LSMW, SCAT, BDC
 The Supply Chain

Network of organizations and processes for:

 Procuring materials

 Transforming materials into products

 Distributing the products

Upstream supply chain

Downstream supply chain
Internal supply chain
 Supply chain

• Supply chain is a network of organizations and

processes for:
 Procuring materials
 Transforming materials into products
 Distributing the products
• Upstream supply chain:
• Firm’s suppliers, suppliers’ suppliers, processes for
managing relationships with them
• Downstream supply chain:
• Organizations and processes responsible for
delivering products to customers
Nike’s Supply Chain
 Supply Chain Management Systems

 Supply chain management

 Inefficiencies cut into a company’s operating costs
 Can waste up to 25 percent of operating expenses
 Just-in-time strategy:
 Components arrive as they are needed
 Finished goods shipped after leaving assembly line
 Safety stock: Buffer for lack of flexibility in supply chain
 Bullwhip effect
 Information about product demand gets distorted as it
passes from one entity to next across supply chain
 The Bullwhip Effect

Inaccurate information can

cause minor fluctuations in
demand for a product to be
amplified as one moves
further back in the supply
chain. Minor fluctuations in
retail sales for a product can
create excess inventory for
distributors, manufacturers,
and suppliers.
 Supply chain management
systems
 Supply chain management is the close linkage and
coordination of activities involved in buying, making and
moving a product.
 Supply chain management (SCM) is the management of the
flow of goods and services. It includes the movement and
storage of raw materials, work-in-process inventory, and
finished goods from point of origin to point of consumption.
Interconnected or interlinked networks, channels and node
businesses are involved in the provision of products and
services required by end customers in a supply chain.
 Supply Chain Management
Software

Supply chain planning systems

 Model existing supply chain

 Enable demand planning

 Optimize sourcing, manufacturing plans

 Establish inventory levels

 Identify transportation modes

Supply chain execution systems

 Manage flow of products through distribution

centers and warehouses

 Supply Chain Management Systems

 Global supply chain issues

 Greater geographical distances
 Greater time differences
 Participants from different countries
 Different performance standards
 Different legal requirements
 Internet helps manage global complexities
 Warehouse management
 Transportation management
 Logistics
 Outsourcing
 Demand-driven supply
chains

• Demand-driven supply chains

• Push-based model (build-to-stock)
• Earlier S C M systems
• Schedules based on best guesses of demand
• Pull-based model (demand-driven)
• Web-based
• Customer orders trigger events in supply chain
 Internet enables move from sequential supply chains to
concurrent supply chains
 Complex networks of suppliers can adjust immediately
Push- Versus Pull-Based
Supply Chain Models
 The Emerging Internet-Driven Supply Chain

The emerging Internet-driven supply chain operates

like a digital logistics nervous system. It provides
multidirectional communication among firms,
networks of firms, and e-marketplaces so that entire
networks of supply chain partners can immediately
adjust inventories, orders, and capacities.
 Supply Chain Management Systems

 Business value of SCM systems

 Match supply to demand; reduce inventory levels
 Improve delivery service
 Speed product time to market
 Use assets more effectively
 Reduced supply chain costs lead to increased
profitability
 Total supply chain costs can be 75 percent of operating
budget
 Increase sales
 Customer Relationship Management Systems

 Customer relationship management (CRM)

 Knowing the customer
 In large businesses, too many customers and too many ways
customers interact with firm
 CRM systems:
 Capture and integrate customer data from all over the
organization
 Consolidate and analyze customer data
 Distribute customer information to various systems and
customer touch points across enterprise
 Provide single enterprise view of customers
 Customer Relationship Management (CRM)

CRM systems examine

customers from a
multifaceted perspective.
These systems use a set of
integrated applications to
address all aspects of the
customer relationship,
including customer service,
sales, and marketing.
 Customer Relationship Management Systems

 CRM software
 Packages range from niche tools to large-scale
enterprise applications.
 More comprehensive have modules for:
 Partner relationship management (PRM)
 Integrating lead generation, pricing, promotions, order
configurations, and availability
 Tools to assess partners’ performances
 Employee relationship management (ERM)
 Setting objectives, employee performance management,
performance-based compensation, employee training
 Customer Relationship Management Systems

 CRM software (cont.)

 CRM packages typically include tools for:
 Sales force automation (SFA)
 Sales prospect and contact information, sales quote
generation capabilities
 Customer service
 Assigning and managing customer service requests, Web-
based self-service capabilities
 Marketing
 Capturing prospect and customer data, scheduling and
tracking direct-marketing mailings or e-mail, cross-selling
 How CRM Systems Support Marketing

Customer relationship
management software
provides a single point for
users to manage and
evaluate marketing
campaigns across multiple
channels, including e-mail,
direct mail, telephone, the
Web, and wireless
messages.
C R M Software Capabilities
 Customer Loyalty Management
Process Map

This process map shows how a best practice for promoting customer loyalty through customer
service would be modeled by customer relationship management software. The CRM software helps
firms identify high-value customers for preferential treatment.
 Operational and
Analytical C R M
 Operational C R M
 Customer-facing applications
 Sales force automation call center and customer

service support
 Marketing automation

 Analytical C R M
 Based on data warehouses populated by operational

C R M systems and customer touch points

 Analyzes customer data (O L A P, data mining, etc.)

 Customer lifetime value (C L T V)

Analytical CRM Data Warehouse

Analytical CRM uses a

customer data warehouse and
tools to analyze customer data
collected from the firm's
customer touch points and
from other sources.
 Customer Relationship Management Systems

 Business value of CRM systems

 Increased customer satisfaction
 Reduced direct-marketing costs
 More effective marketing
 Lower costs for customer acquisition/retention
 Increased sales revenue
 Churn rate:
 Number of customers who stop using or purchasing
products or services from a company
 Indicator of growth or decline of firm’s customer base
 Enterprise Application
Challenges

Expensive to purchase and implement enterprise

applications
 Multi-million dollar projects in 2018

 Long development times

Technology changes
Business process changes
Organizational learning, changes
Switching costs, dependence on software vendors
Data standardization, management, cleansing
 Next-Generation Enterprise Applications

 Next-generation enterprise applications

 Enterprise solutions/suites:
 Make applications more flexible, Web-enabled,
integrated with other systems
 SOA (Service oriented architecture) standards
 Open-source applications
 On-demand solutions
 Cloud-based versions
 Functionality for mobile platform
 Next-Generation Enterprise Applications

 Next-generation enterprise applications (cont.)

 Social CRM
 Incorporating social networking technologies
 Company social networks
 Monitor social media activity; social media analytics
 Manage social and Web-based campaigns
 Business intelligence
 Inclusion of BI with enterprise applications
 Flexible reporting, ad hoc analysis, “what-if” scenarios,
digital dashboards, data visualization
Enterprise Application
Architecture
Thank
You