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  • FROM THIS SINGLE SYSTEM – <br /> Managers need information to manage their resources <br /> Customers – need information such as Invoices <br /> Suppliers – need information such as PO’s & Payments <br /> Shareholders – want information to help guide strategy <br /> SAP IS EQUIPPED TO HANDLE THIS LEVEL OF COMPLEXITY – INTEGRATION IS A KEY STRENGTH OF SAP <br />
  • KSF <br /> Strategy <br /> Capabilities <br />

Why er ps maybe magic dust Why er ps maybe magic dust Presentation Transcript

  • Why an ERP could be the magic dust organisations need to succeed. Naeem Arif 26th February 2009 Arif Intelligence Ltd
  • Agenda • • • • • Why Implement an ERP When to Implement an ERP How to Implement an ERP Other sources of CA Associated Issues and Risks, including the aspect of Change Management
  • Agenda • • • • • Why Implement an ERP When to Implement an ERP How to Implement an ERP Other sources of CA Associated Issues and Risks, including the aspect of Change Management
  • What is an ERP • ERP = Enterprise Resource Planning (Gartner 1990) • A system for the entire organisation • Move from the best of breed to a single software, sharing a common database and common design • Covering more than 1 business function, including; – – – – – – Financials Human Resources Manufacturing Supply Chain Warehouse Managements Customer Relationship Management
  • Before ERP • Departments build and support their own “best of breed” systems. • Work on the different databases • Various views of the truth, different tools for planning and management of the organisation • Multiple support contracts, reliance of interfaces and luck
  • After ERP • • • • Departments work on the same database Single View of the truth Single view of customer Reduced support costs, less Interfaces
  • Benefits & Purpose of an ERP • • • • • • • Improve efficiencies Knowledge is Power Single version of the truth Supports the business process Reduce time delays in processing information Hold large volumes of data to support decision making Provides an integrated solution to an organisations “computer system” needs.
  • What Is Integration? • Integration is the seamless interaction of technology, processes, and thinking – Process integration • Business process alignment – Technical integration • Interfaces, third-party products • Avoid bad/non-integrated solutions – Process breakdown – Passing of bad information within your system landscape
  • A good ERP satisfies a number of people Shareholders Suppliers MY ORGANIZATION People Process & Technology Managers Customers
  • Examples of ERP Software • • • • • • JD Edwards Enterprise One & JD Edwards World from Oracle Microsoft Dynamics GP (formerly Great Plains) from Microsoft Paradigm from Consona Corporation PeopleSoft from Oracle SAGE ERP X3 from The Sage Group SAP R/3 from SAP
  • Agenda • • • • • Why Implement an ERP When to Implement an ERP How to Implement an ERP Other sources of CA Associated Issues and Risks, including the aspect of Change Management
  • Where do Projects come from? • Formal strategy to gain the tools • System replacement • Emergent projects just happen Deliberate strategy Intended strategy Realised strategy Unrealised strategy Emergent strategy (Mintzberg & Waters, 1985)
  • Definitions of strategy “…the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for those goals.” (Chandler, 1962)
  • Management of Technology … Why are you here? • Technology Management has been described as the “key to success for companies anywhere in the world in the coming years” (Morita, 1987, p246) • “Failure to exploit technological innovation leads to a loss of competitiveness which in turn has an impact on general economic development” (Durham, 1986)
  • TM and the organisation • TM is concerned with systems that transform inputs into outputs • A Tech system includes software, people, processes etc • TM systems can be categorised in terms of input, output, transformation, administrative, control • aim of TM is make use of Tech to obtain CA • TM needs to be aligned to the near and far environments
  • So ERP can provide a Control Mechanism
  • The ERP can do only do so much …. Source of Competitive Advantage Competitive Scope Narrow target Broad target Lower cost  Cost leadership Cost focus Differentiation Broad differentiation Differentiation focus (Porter, 1985)
  • Resources and capabilities Resources comprise the tangible and intangible assets of the firm. Capabilities are the processes through which resources are combined and co-ordinated.
  • Linking resources and capabilities Industry key success factors Competitive advantage Strategy Organisational capabilities Resources Tangible - Financial - Physical Intangible - Technology - Reputation - Culture Human - Skills/know-how - Capacity for communication and collaboration - Motivation Resources & Capabilities (Grant, 2002)
  • Key Success Factor for your ERP Prerequisites for success How does the firm survive competition? What do customers want? Analysis of competition: •What drives competition? •What are the main dimensions of competition? •How intense is competition? •How can we obtain a superior competitive position? Analysis of demand: • Who are our customers? • What do they want? Key success factors (Grant, 2005)
  • Agenda • • • • • Why Implement an ERP When to Implement an ERP How to Implement an ERP Other sources of CA Associated Issues and Risks, including the aspect of Change Management
  • How to Implement • Numerous ERP implementation strategies • Built on the basic principles of – – – – – Design Build Test Go-live Support (what happens after we go live?) • Prince2, PMBOK, GDPM • SAP has its own version
  • Project Managers Body of Knowledge (PMBOK) Plan Do Check Act Shewart-Deming 1. 2. 3. 4. 5. Initiating process group – start of the project phase Planning process group – planning objectives Executing process group - delivery Monitoring and Controlling process group – management team Closing process group – PMI
  • Characteristics of Projects (1) Temporary (2) Unique (different from a Steady State) (3) Progressive elaboration, which is the evolution of the original scope, process, requirements etc. This is different to scope creep, this is more to do with process and methodology.
  • Project Characteristics • • • • • • Participant mix (internal, external, mixed) Degree of standardisation Project visibility Business need Size & complexity Industry (Gardiner)
  • Symptoms of Poor Project Mgt • Project staff not seeing how their project fits in within the ‘bigger picture’ • Project staff being ambivalent about their projects • Decision-making processes being unclear or slow • Senior management unsupportive when problems with project occur • Staff equipped with inappropriate skills being recruited into projects • Working on projects and programmes being seen as a poor career path (Williams and Parr, 2004)
  • Benefits Management • Identify expected benefits that will be delivered by a programme • Establish a benefits management structure defining processes, relationships, communications, roles and responsibilities • Develop models to structure the programme benefits, including immediate and final outcomes • Asses how the benefits are interrelated • Develop a realisation plan • Define accountability (Williams and Parr)
  • Agenda • • • • • Why Implement an ERP When to Implement an ERP How to Implement an ERP Other sources of CA Associated Issues and Risks, including the aspect of Change Management
  • BPR • • • • Business Process Re-Engineering Reviewing and re-creating the business process Driven by issues or need to become more efficient Process driven or System driven? • Business Transformation is Process Driven • Technology projects are System Driven • BPR doesn’t need a system project
  • Sharpbenders Companies achieving a sharp and sustained improvement in performance by means of: • • • • • • Major changes in management Stronger financial controls New product-market focus Improved marketing Significant reductions in production costs Improved quality and service (Grinyer, Mayes and McKiernan, 1988)
  • Agenda • • • • • Why Implement an ERP When to Implement an ERP How to Implement an ERP Other sources of CA Associated Issues and Risks, including the aspect of Change Management
  • Project Failures • Beware of “ambitions for a better society” – people want what they want. • New technology produces new trajectories and new horizons – but people still want to be in control (e.g. pilots still want to control the plane, even thought the information is there). • New technology may replace old, but not always for the good? Sometimes old needs to sit with new (e.g. Paperless office not possible, but we have certainly reduced the need for paper records). • New technologies may have other side effects – e.g. online shopping (change of employment profile, delivery van still needed to deliver your products) • You can’t replace everything – e.g. people may still want to go into town and have a wonder around the shops • Sometimes the innovation does not meet all that was specified at the outset – you maybe let down by it. Geels and Smit (2000)
  • Why manage Change • Implementing a change to a system or a process requires a review of associated Change • Its basic common sense, if you changing the colour of the curtains – check with your wife first • User Acceptance • Reduce delays to getting the benefit • Use the system for what was designed
  • Knowledge Acquisition • Experience Accumulation – e.g. learning by doing lots of something • Knowledge Articulation – after the project, running a review of the project, appraisal etc. • Knowledge Codification – project experience in converted in documentation/procedures etc. (Prencipe & Tell)
  • Agenda • • • • • Why Implement an ERP When to Implement an ERP How to Implement an ERP Other sources of CA Associated Issues and Risks, including the aspect of Change Management
  • Why an ERP could be the magic dust organisations need to succeed. Naeem Arif 26th February 2009 Arif Intelligence Ltd