Introduction to ERP

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An Introduction to ERP

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Introduction to ERP

  1. 1. INTRODUCTION TOENTERPRISEWIDE RESOURCE PLANNINGFebruary 10, 2013 Tata Consultancy Services 1 Calcutta
  2. 2. The 3-C Crisis Customer Competition ChangeFebruary 10, 2013 Tata Consultancy Services 2 Calcutta
  3. 3. Evolution of Business system Dynamic Models Functional View ERP MRPII MRP Value Chain View Inventory control 1970 1980 1990 2000 1960February 10, 2013 Tata Consultancy Services 3 Calcutta
  4. 4. What is ERP? A way of doing Business - With more clear and accurate information available at right time - Without constraints of distance and time - With optimal resourcesFebruary 10, 2013 Tata Consultancy Services 4 Calcutta
  5. 5. Defining ERP... An Accounting oriented Information System for identifying and planning the enterprise wide resources to take make ship account for customer orders.February 10, 2013 Tata Consultancy Services 5 Calcutta
  6. 6. Why ERP? -- the objective Better visibility and tracking of operations Lower costs across the value chain Reduction of lead-times Better Planning Low inventory Expand and improve product/service offerings to achieve customer satisfactionFebruary 10, 2013 Tata Consultancy Services 6 Calcutta
  7. 7. Why ERP ? Dynamic marketplace New markets across the globe Increased competition Higher customer expectations Manage business across geographically dispersed market locationsFebruary 10, 2013 Tata Consultancy Services 7 Calcutta
  8. 8. What is an ERP package ? Major business processes combined into a single & integrated software solution Accounts Finance Inbound Outbound Logistics Production Logistics Infrastructure & Human ResourcesFebruary 10, 2013 Tata Consultancy Services 8 Calcutta
  9. 9. Forecast Master Order Scheduling Entry SOP RCCP MRP BOM Shop Floor Inventory AR CRPHRD FA Purchase Cash Mt PA GL AP ReportingFebruary 10, 2013 Tata Consultancy Services 9 Calcutta
  10. 10. Attributes of a true ERP package Flexibility Intercompany Comprehensive Planning provision Open & Modular Adaptable to new technologies Integrated New millenium Low implementation compliant life-cycleFebruary 10, 2013 Tata Consultancy Services 10 Calcutta
  11. 11. Phases in implementation Analysis of client’s business requirements Demonstration/evaluation of different packages Conference room pilot Gap Analysis Customization development Identification of interfaces Implementation on the pilot site Go liveFebruary 10, 2013 Tata Consultancy Services 11 Calcutta
  12. 12. Other Side One Third of ERP projects failed, globally Companies Like HLL and Reliance have stumbled once before coming through successfully Some corporate still struggling to complete the implementationFebruary 10, 2013 Tata Consultancy Services 12 Calcutta
  13. 13. Areas of concern…. BPR changes should be well thought of Improper setting of business parameters Resistance to change from employees Loss of patience in implementation phase Improper phasing of module implementationFebruary 10, 2013 Tata Consultancy Services 13 Calcutta
  14. 14. Stumbling Blocks in implementation Lack of top management involvement Lack of preparation Improper package selection Inappropriate use of the ERP package Too high Expectations Too much Customisation Cost & Schedule Overrun Scale of OperationFebruary 10, 2013 Tata Consultancy Services 14 Calcutta
  15. 15. Conclusion... An ERP is much more than an application that supports a few essential enterprise functions like finance, payroll, inventory etc. It is an application that promises to induce a certain way of life within the organization where it gets implemented, irrespective of LOB & sizeFebruary 10, 2013 Tata Consultancy Services 15 Calcutta
  16. 16. Attributes of the ERP package A total solution towards a definite vision A powerful business tool to manage the business processes efficiently. Renders tangible and intangible benefits. Package features known before handFebruary 10, 2013 Tata Consultancy Services 16 Calcutta
  17. 17. Attributes of ERP The implementation life cycle less. Adaptable to business changes and needs Upgradable with the Latest Technology Supports EDI/ECFebruary 10, 2013 Tata Consultancy Services 17 Calcutta
  18. 18. Legacy system Plant/site specific Not process oriented Functionally based Ineffective support of EC/EDI Proprietary mainframe and minicomputer architecture Supplier hardware and software dependentFebruary 10, 2013 Tata Consultancy Services 18 Calcutta
  19. 19. Legacy system Lacking in Basic IT Strategy, Vision Lengthy, complex, costly development, implementation and re- engineering process - Difficult to document - Old technology - Home Grown Limited flexibility and adaptability to changes in business environmentsFebruary 10, 2013 Tata Consultancy Services 19 Calcutta
  20. 20. Legacy SystemFeatures of Legacy system Multiple systems and sources of information for same functions and data Limited - Data availability/accessibility - Data continuity - Data timelinessFebruary 10, 2013 Tata Consultancy Services 20 Calcutta
  21. 21. Present Scenario 150 Indian Companies including Reliance, Telco, HLL, UTI, L&T, M&M and Blue Star, Kirloskar, spent over 130 crores on software to put their organisation through ERP World Over 20,000 companies spent $13 billionFebruary 10, 2013 Tata Consultancy Services 21 Calcutta
  22. 22. Major Enterprise SolutionsCom pany Applicat ion Applicat ion sit esSAP AG SAP R3 Over 15000 sit esGerm any Rs. 2.5 lak hs per licenceOracle Or acle Applicat ions Over 3000sit esSof t w are SC 10.7I ndia Lt dBaan BaaN lV Upt o 4800 sit esI nf oSyst emI ndia Pvt Lt d February 10, 2013 Tata Consultancy Services 22 Calcutta
  23. 23. Major Enterprise Solutions Com pany Applicat ions Sit e Ram co syst em s Ram co Marshal 46 Sit es QAD I nc MFG/ PRO 3250 sit es JD Edw ards USA ONEWORLD 4300 sit es People Sof t People sof t 6 1300 sit es Mast ek Lt d MAMI S 31 Sit esFebruary 10, 2013 Tata Consultancy Services 23 Calcutta
  24. 24. ERP Software market in India 400 400 350 300 240 250 200 136.6 Rs in Crore 150 100 50 0 1997- 1998- 1999- 98 99 2000February 10, 2013 Tata Consultancy Services 24 Calcutta
  25. 25. Who are using ERP ! BaaN Oracle SAP QAD Ram coDiscr eet e 14 7 18 6 6Mf gAut om ot ive 4 1 4 2 1Mf gProcess Mfg 2 1 4 2 4Services 3 6 4 2February 10, 2013 Tata Consultancy Services 25 Calcutta
  26. 26. ERP EXPERIENCESCadbury Schweppes Plc Decided to implement ERP in 1994 SAP R3 was Selected Policy decision to re-engineer the process than to customise the packageFebruary 10, 2013 Tata Consultancy Services 26 Calcutta
  27. 27. ERP Experiences ... By 1997 Cadbury India had different way of workingCoco Sourcing Head Office 26 Depots point- Kerala Mumbai 6 Factories February 10, 2013 Tata Consultancy Services 27 Calcutta
  28. 28. ERP Experiences Pre ERP Process at Cadburys Calcutta Request Head Office Telephone Fax Pi c nic ch o co la tePicnic chocolate shortage Depots February 10, 2013 Tata Consultancy Services 28 Calcutta
  29. 29. ERP ExperiencesPost ERP Process at Cadbury Request ERP on-line, Calcutta Calcutta Pic nic Ch Request oc ola t ePicnic Chocolate Nearest Demand DepotFebruary 10, 2013 Tata Consultancy Services 29 Calcutta
  30. 30. ERP ExperienceTangible Benefit to Cadbury The Turnover has doubled since ERP was implemented but manpower has not been addedFebruary 10, 2013 Tata Consultancy Services 30 Calcutta
  31. 31. ERP Experiences Novartis India has Lowered its inventories by 30-35% HLL - 240 locations , 120 depots ,40 factories, and 13 branches are under ERP and the Benefits realised : -Depot Replenishment cycle of two weeks is cut by half a week -64 new products added last yearFebruary 10, 2013 Tata Consultancy Services 31 Calcutta
  32. 32. Who Wins ? Return on Investment 25-30 % / year Corporate and Customer Implementation and consultancy service provider 2500 crores by 2000 AD400 crores ERP Software Vendorsby 2000 AD February 10, 2013 Tata Consultancy Services 32 Calcutta
  33. 33. Questions Normally askedWhat would be the implementation time ? The size of oraganisation and the Preparation time affect the implementation time.Typically it takes18 months just to implement the software andmake the system liveFebruary 10, 2013 Tata Consultancy Services 33 Calcutta
  34. 34. Can one ERP package handle all the Functionality efficiently ? Each package is strong in one feature andsuited for certain business needs Can more than one ERP package used together?February 10, 2013 Tata Consultancy Services 34 Calcutta
  35. 35. Questions Normally askedWhat is the cost involved ? Can ERP system work with other systems.? How to handle customised portions during upgradation?February 10, 2013 Tata Consultancy Services 35 Calcutta

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