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ERP

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  • The E-Business material shall at all times remain the property of E-Business Strategies, Inc. No license under any trade secrets, copyrights, or other rights is granted by this Agreement or any disclosure of Confidential Information hereunder. Any such permitted copies will be considered Confidential Information. Confidential Information of E-Business Strategies, Inc. may not be copied or reproduced by the Recipient without E-Business Strategies, Inc. prior written consent.
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    • 1. Business Process Unit V Chapter - 8 G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 2. ERP: The Technological Backbone of E-Business <ul><li>ERP integrated app suite </li></ul><ul><ul><li>Framework to automate back-office functions: Financial, Manufacturing and Distribution, HR, Administrative </li></ul></ul><ul><ul><li>Unites major business processes within single family of modules: production, order processing, inventory mgmt and warehousing, A/P and A/R, general ledger, and payroll </li></ul></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 3. ERP: The Technological Backbone of E-Business <ul><li>ERP is the technological backbone of e-business </li></ul><ul><ul><li>Enterprise-wide transaction framework with links into </li></ul></ul><ul><ul><ul><li>sales order processing; </li></ul></ul></ul><ul><ul><ul><li>inventory mgmt and control; </li></ul></ul></ul><ul><ul><ul><li>production and distribution planning; </li></ul></ul></ul><ul><ul><ul><li>finance </li></ul></ul></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 4. Who Really Uses ERP Suites? <ul><li>Large corporations that want to gain control over disparate groups of core business apps </li></ul><ul><ul><li>3Com, Chevron Products Company, GM </li></ul></ul><ul><li>3 primary categories of ERP implementations </li></ul><ul><ul><li>Single to few products in single industry: eToys </li></ul></ul><ul><ul><li>Single SBU firms, selling only few products in a single industry: Delta Airlines, Dell, Microsoft, Nike </li></ul></ul><ul><ul><li>Large corporate conglomerates or multiple-SBU firms, selling many products in multiple industries: GE, IBM, Colgate-Palmolive, and Nabisco </li></ul></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 5. The Basics of ERP <ul><li>These apps are themselves built from smaller s/w modules that perform specific business processes within a given functional area </li></ul>Integrated Logistics Accounting &amp; Financials Human Resources Sales Distributions (Order only) Production Planning Customer/ Employee Enterprise Architecture G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 6. Evolution of ERP Manufacturing Integration (MRP) Enterprise Integration (ERP) Customer-Centric Integration (CRP) Interenterprise Integration (XRP) Wave 1 Wave 2 Wave 3 Wave 4 G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 7. Evolution of ERP <ul><li>1960s </li></ul><ul><li>Automation of all aspects of production master scheduling </li></ul><ul><li>Showed technology could link disconnected business functions </li></ul>Manufacturing Integration (MRP) Enterprise Integration (ERP) Customer-Centric Integration (CRP) Interenterprise Integration (XRP) Wave 1 Wave 2 Wave 3 Wave 4 G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 8. Evolution of ERP Manufacturing Integration (MRP) Enterprise Integration (ERP) Customer-Centric Integration (CRP) Interenterprise Integration (XRP) Wave 1 Wave 2 Wave 3 Wave 4 <ul><li>Began in 1980s as MRP II as execs sought for similar benefits as MRP by integrating other functions </li></ul><ul><li>Business drivers of ERP: replacing legacy systems, greater control, globalization, regulatory change, integration of decisions across enterprise </li></ul><ul><li>Y2K preparation in 1999 a significant factor </li></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 9. Evolution of ERP Manufacturing Integration (MRP) Enterprise Integration (ERP) Customer-Centric Integration (CRP) Interenterprise Integration (XRP) Wave 1 Wave 2 Wave 3 Wave 4 <ul><li>ERP evolving into CRP to integrate “brick” with “click” </li></ul><ul><li>Using middleware has drawbacks </li></ul><ul><li>Traditional ERP build for make-to-stock business models; but this is no longer the case; customer value, effectiveness, enhanced service delivery key today </li></ul><ul><li>Continuous planning vs. long planning cycle of ERP </li></ul><ul><li>Ericsson </li></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 10. Evolution of ERP Manufacturing Integration (MRP) Enterprise Integration (ERP) Customer-Centric Integration (CRP) Interenterprise Integration (XRP) Wave 1 Wave 2 Wave 3 Wave 4 <ul><li>A company’s partners benefit from the same seamless integration as the company itself </li></ul><ul><li>Extends beyond four walls of the enterprise to customer, suppliers and trading partners </li></ul><ul><li>B2B marketplaces </li></ul><ul><li>ERP does not support continuous-planning requirements of SCP </li></ul><ul><li>Collaborate or perish </li></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 11. Benefits of ERP <ul><li>Critical business need: Enterprise-wide shared services </li></ul><ul><ul><li>Replace old, autonomous departmental, or divisional services with single, streamlined, corporate-level process </li></ul></ul><ul><li>Shared-services standardize the processes for routine, non-core functions for all business units to use </li></ul><ul><ul><li>Accounting </li></ul></ul><ul><li>With processes defined, an ERP-based IT infrastructure can be established to manage them efficiently </li></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 12. ERP Decision = Enterprise Architecture Planning <ul><li>Management must resolve enterprise architecture issues before selecting an ERP suite of products </li></ul><ul><ul><li>“ What kind of company do we want to be?” </li></ul></ul><ul><ul><li>Not, “What are each application’s features?” </li></ul></ul><ul><li>Inability to find the right fit between ERP apps and their business causing corporate frustration </li></ul><ul><ul><li>FoxMeyer </li></ul></ul><ul><li>Problem not with ERP concept but in management’s demands for quick fixes and rapid cures to underlying structural problems </li></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 13. ERP Decision = Enterprise Architecture Planning <ul><li>Selecting and installing a new ERP solution one of the most important and most expensive endeavors </li></ul><ul><ul><li>Also most likely to go wrong </li></ul></ul><ul><ul><li>Lack of alignment between ERP, business processes and e-commerce objectives can derail best of firms </li></ul></ul><ul><ul><li>Managers must understand core functionality, not abdicate responsibility to IT dept </li></ul></ul><ul><li>Successful organizational change is gradual </li></ul><ul><ul><li>Enterprise apps require moving decades of corporate knowledge and information to a new technology platform </li></ul></ul><ul><ul><li>Technology is not the only challenge in managing transformation </li></ul></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 14. ERP Decision = Enterprise Architecture Planning <ul><li>Cannot lose sight of customers </li></ul><ul><ul><li>“ Is this something our customers will recognize as valuable?” </li></ul></ul><ul><ul><li>“ Will it shorten order-to-delivery cycle?” </li></ul></ul><ul><ul><li>“ Will this improve our product and performance?” </li></ul></ul><ul><li>ERP impacts not just s/w </li></ul><ul><ul><li>Corporate culture, business processes, staff, and day-to-day procedures are all affected </li></ul></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 15. ERP Decision = Enterprise Architecture Planning <ul><li>Executive mgmt must understand technical basis for business change and e-commerce functionality, besides ROI of new technology </li></ul><ul><ul><li>“ What business are we in?” </li></ul></ul><ul><ul><li>“ What are the key issues facing us today?” </li></ul></ul><ul><ul><li>“ What issues will be important tomorrow?” </li></ul></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 16. ERP Decision: Build Vs Buy Vs Rent <ul><li>Custom design app that meets specific requirements of an organization has several drawbacks </li></ul><ul><ul><li>Highly complex </li></ul></ul><ul><ul><li>Lengthy design, development and implementation efforts </li></ul></ul><ul><ul><li>Limited flexibility to support diverse and changing operations or to respond effectively to evolving business demands and technologies </li></ul></ul><ul><li>COTS apps address limitations of custom built apps </li></ul><ul><ul><li>Provide broad functionality, better integration with existing legacy systems, greater flexibility to change and upgrade, and a lower TCO </li></ul></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 17. ERP Decision: Build Vs Buy Vs Rent <ul><li>Downside of COTS apps </li></ul><ul><ul><li>Reengineer estbd. business practices </li></ul></ul><ul><ul><li>Customize apps </li></ul></ul><ul><ul><li>Hire consultants to make s/w work </li></ul></ul><ul><ul><li>No competitive edge </li></ul></ul><ul><li>Mgmt must view COTS apps within the context of overall business strategy </li></ul><ul><ul><li>“ What business processes bring us our identity and our competitive advantage?” </li></ul></ul><ul><ul><li>“ How can we ensure that we enhance these with COTS solution?” </li></ul></ul><ul><ul><li>“ How can we support our ecommerce initiatives with COTS?” </li></ul></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 18. Capabilities of COTS ERP Solutions <ul><li>Consolidation of back office </li></ul><ul><li>Creation of single back office that supports multiple distribution channels </li></ul><ul><li>Facilitation of changes in business practices </li></ul><ul><li>Facilitation of changes in technology </li></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 19. Microsoft <ul><li>Spent 10 months and $25 million installing SAP R/3 to replace a tangle of 33 financial-tracking systems in 26 subsidiaries </li></ul><ul><li>$18 million annual savings </li></ul><ul><li>Growth rate was straining company’s systems </li></ul><ul><ul><li>50 subsidiaries worldwide; continues to grow every day </li></ul></ul><ul><ul><li>More than 30 systems implemented in a piecemeal fashion over time supported financial, operations and HR groups alone </li></ul></ul><ul><ul><li>Batch processes to move information between systems </li></ul></ul><ul><ul><ul><li>Run time grew to more than 12 hours </li></ul></ul></ul><ul><ul><ul><li>90% of the more than 20,000 batch robs that ran each month retrieved and processes same information </li></ul></ul></ul><ul><li>Mgmt realized it needed a global and integrated solution to support its core business </li></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 20. ERP Implementation: Catching the Bull by the Horns <ul><li>Installation of ERP packages unique </li></ul><ul><ul><li>Each ERP app suite has own architecture, customization features, installation procedures, and level of complexity </li></ul></ul><ul><li>Implementation strategies for SAP </li></ul><ul><ul><li>Step-by-step </li></ul></ul><ul><ul><ul><li>One module at a time </li></ul></ul></ul><ul><ul><li>Big bang </li></ul></ul><ul><ul><ul><li>Replacing all old systems at once </li></ul></ul></ul><ul><ul><li>Modified big bang </li></ul></ul><ul><ul><ul><li>Various modules at once, but pilot first </li></ul></ul></ul><ul><ul><ul><li>Very common </li></ul></ul></ul><ul><li>Even if implementation strategy is right, setting up the solution not easy </li></ul><ul><ul><li>Brother Industries </li></ul></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 21. ERP Implementation Phases <ul><li>1.Project Preparation Phase </li></ul><ul><li>2. BluePrint Phase </li></ul><ul><li>3. Pilot Phase </li></ul><ul><li>4. Final Phase </li></ul><ul><li>5. Assessment Phase </li></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 22. <ul><li>Project preparation Phase </li></ul><ul><li>Project is organized </li></ul><ul><li>Estimation of project resources, costs and duration of each activity are made </li></ul><ul><li>BluePrint Phase </li></ul><ul><li>The consultants document the requirements of the enterprise and its business process design </li></ul><ul><li>Pilot Phase </li></ul><ul><li>The s/w is configured to match the structure of the company with the desired process. </li></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 23. <ul><li>Final Phase </li></ul><ul><li>All the work is consolidated. Covers the final system test, user training, and final migration of the data to the new system. </li></ul><ul><li>Finally, the user acceptance tests are run. </li></ul><ul><li>Assessment Phase </li></ul><ul><li>Reviews the system by </li></ul><ul><li>- checking the business processes and </li></ul><ul><li>the technical architecture </li></ul><ul><li>- checking with the end-users </li></ul><ul><li>measured to determine the ROI. </li></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 24. Roadmap to Rapid Implementation: Accelerated ERP Approach <ul><li>Today’s intense competitive pressures require fast response </li></ul><ul><ul><li>ERP app suites can’t keep up </li></ul></ul><ul><li>But successful companies understand business processes, simplify them, and then introduce automation </li></ul><ul><ul><li>Automating complex or non-value-adding processes will not increase productivity or provide measurable improvements in performance </li></ul></ul><ul><ul><li>Automation without simplification immortalizes ineffective processes </li></ul></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 25. Roadmap to New Leadership Skills <ul><li>Effective coordination mgmt encompasses a combination of four capabilities </li></ul><ul><ul><li>Strategic thinking </li></ul></ul><ul><ul><ul><li>How well does your ERP selection, implementation, and evolution strategy align with your business strategy? </li></ul></ul></ul><ul><ul><li>Process reengineering </li></ul></ul><ul><ul><li>Managing implementation complexity </li></ul></ul><ul><ul><li>Transition management </li></ul></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 26. New Generation ERP Architecture <ul><li>Elements required to achieve flexibility </li></ul><ul><ul><li>Components ,not modules </li></ul></ul><ul><ul><li>Incremental migration rather than massive reengineering </li></ul></ul><ul><ul><li>Dynamic rather than static configuration of ERP systems </li></ul></ul><ul><ul><li>Management of multiple strategic sourcing and partnership relationships. </li></ul></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India
    • 27. ERP Toolkits <ul><li>Categories of ERP Toolkits </li></ul><ul><li>Service-management tools –monitor the apps such as service reporting, availability and performance management. </li></ul><ul><li>Use-management tools – manage functions such as event monitoring, job scheduling, output, backup and recovery and user access. </li></ul><ul><li>System administration tools - manage network and systems such as inventory and asset management, s/w configuration, change management and s/w distribution. </li></ul>G Roy Antony Arnold Lecturer Panimalar Engineering College Chennai, Tamilnadu, India

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