Enterprise Resource Planning Lori Martel Ramkin Shetty Hahn Shin Dinesh Sekar
Table of Contents <ul><li>Introduction </li></ul><ul><ul><li>Organizational & Technological Change </li></ul></ul><ul><ul>...
Introduction Organizational Change Growing Competition Decreasing Innovation Cycles Market Globalization need  for flexibl...
Introduction <ul><li>Changes in Structure </li></ul><ul><ul><li>Functional Vs. Process Based Structure </li></ul></ul><ul>...
Introduction <ul><li>70’s Standard Software, Mainframe Systems </li></ul><ul><ul><li>Separate Applications for business fu...
Introduction Business Re-engineering (BPR)  Vs. Business Engineering (BE) BPR BE <ul><li>Use of Prototyping/Modeling  </li...
-  ERP is a software package integrating organizational    business processes & data across the company   ERP SIS Definiti...
ERP ERP ERP Extended Supply Chain Management Internal Supply Chain Management Coordinated Manufacturing Plant Management M...
Business Aspects Market Share of ERP Vendors
Business Aspects Comparison of  ERP Products Functionality Technology *  Oracle J.D. Edwards  * Low Low High High *  R/3 *...
Characteristics <ul><li>NOT  Multiple Packages Pieced together </li></ul><ul><li>through Complex Interfaces   </li></ul><u...
Business Aspects ERP in Industry Aerospace & Defense  Automotive  Chemicals  Consumer  Products  Financial Services  Healt...
Business Aspects <ul><li>Largest vendor of standard business application </li></ul><ul><li>R/3: Real-Time Version 3.0 </li...
Business Aspects SAP R/3 Business Framework <ul><li>Business Components </li></ul><ul><li>Business Objects </li></ul><ul><...
Business Aspects SAP Business Blueprint Reference   Model   <ul><li>Data Model  </li></ul><ul><li>Business Object Model  <...
Business Aspects <ul><li>Fast </li></ul><ul><li>Flexibility </li></ul><ul><li>Open </li></ul><ul><li>Industry Specific </l...
<ul><li>Synchronous Transfer of Data </li></ul><ul><li>Encourages Multi-Disciplined Teamwork </li></ul><ul><li>Reduces Red...
Business Disadvantages Business Aspects <ul><li>Every $1 Spent in Software Licenses -  </li></ul><ul><li>$8 - $10 Spent on...
<ul><li>Lack of Flexibility </li></ul><ul><li>Complexity & Rigidity </li></ul><ul><li>High Implementation Time </li></ul><...
Technical  Aspects Layer Architecture -  Issues:  Scalability, Portability, Interoperability & openness,    Customizabilit...
Technical  Aspects Application   Architecture -  Issues:   1.   Independent from all types of computers(UNIX, Window NT,  ...
Technical  Aspects Customization:   Support of initial implementation projects, follow-up projects, and release-change pro...
Industry Examples <ul><li>Objectives </li></ul><ul><ul><li>Available-to-Promise (ATP), the real-time capability to take an...
Industry Examples <ul><li>Scope </li></ul><ul><ul><li>Based on the full suite of Oracle Corp.'s manufacturing and operatio...
Industry Examples <ul><li>Pre-Implementation Assessment </li></ul><ul><ul><li>Legacy system-based MRP system in use </li><...
Industry Examples <ul><li>Project Planning & Control </li></ul><ul><ul><li>Project team members pulled from regular jobs &...
Industry Examples <ul><li>Implementation Process </li></ul><ul><ul><li>Packaged available applications & selected Oracle a...
Industry Examples <ul><li>Human (HR) Side </li></ul><ul><ul><li>Locally trained about 100 users from all over the world an...
Industry Examples <ul><li>Project Statistics </li></ul><ul><ul><li>October 1992 - May 1996 </li></ul></ul><ul><ul><li>16 f...
Future Aspects <ul><li>Supply Chain Management </li></ul><ul><li>Internet Enabled </li></ul><ul><li>Workflow Management </...
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  1. 1. Enterprise Resource Planning Lori Martel Ramkin Shetty Hahn Shin Dinesh Sekar
  2. 2. Table of Contents <ul><li>Introduction </li></ul><ul><ul><li>Organizational & Technological Change </li></ul></ul><ul><ul><li>Business Engineering Vs. Business Process Re-engineering </li></ul></ul><ul><li>Definition & ERP’s role in the Supply Chain </li></ul><ul><li>Business Aspects </li></ul><ul><ul><li>ERP: Vendors, Comparison, Characteristics of ERP, </li></ul></ul><ul><ul><li>Applications and Advantages </li></ul></ul><ul><ul><li>SAP R/3 </li></ul></ul><ul><ul><li>Constraints: Business &Technical </li></ul></ul><ul><li>Technical Aspects </li></ul><ul><ul><li>Layer Architecture </li></ul></ul><ul><ul><li>Application Architecture </li></ul></ul><ul><ul><li>Customization </li></ul></ul><ul><li>Industry Example: Quantum </li></ul><ul><li>Look into the Future </li></ul>
  3. 3. Introduction Organizational Change Growing Competition Decreasing Innovation Cycles Market Globalization need for flexible, integrated, and open software Relationship Based Transactions Different Manufacturing Environments
  4. 4. Introduction <ul><li>Changes in Structure </li></ul><ul><ul><li>Functional Vs. Process Based Structure </li></ul></ul><ul><li>Value Chain Thinking </li></ul>Organizational Change Personnel Product Development Marketing & Sales Production Order Processing Product Development Customer Service
  5. 5. Introduction <ul><li>70’s Standard Software, Mainframe Systems </li></ul><ul><ul><li>Separate Applications for business functions </li></ul></ul><ul><li>90’s Technological Trends </li></ul><ul><ul><li>Client/Server Computing </li></ul></ul><ul><ul><li>Innovative process integrated business solutions </li></ul></ul><ul><ul><li>Open Systems </li></ul></ul><ul><ul><li>Increasing computing speed, GUI’s </li></ul></ul><ul><ul><li>Faster Data processing </li></ul></ul><ul><ul><li>Data Integration </li></ul></ul>Technological Change
  6. 6. Introduction Business Re-engineering (BPR) Vs. Business Engineering (BE) BPR BE <ul><li>Use of Prototyping/Modeling </li></ul><ul><ul><li>- Building Systems around Business </li></ul></ul><ul><li>Automating Business Processes through IT </li></ul><ul><li>Use of Blueprinting </li></ul><ul><ul><li>- Designing & Integrating Business Processes </li></ul></ul><ul><li>IT used as a Strategic Tool </li></ul>
  7. 7. - ERP is a software package integrating organizational business processes & data across the company ERP SIS Definition Modeling all the processes Integrating all the information Strategic use of IT Integrated views Quality, Cost, Delivery Effective use of resources EIS DSS TPS MIS OA BPR BE
  8. 8. ERP ERP ERP Extended Supply Chain Management Internal Supply Chain Management Coordinated Manufacturing Plant Management MRP MRP Role in Supply Chain Supply Planning Scheduling Demand Planning Logistics Internal Suppliers Internal Customers External Suppliers External Customers
  9. 9. Business Aspects Market Share of ERP Vendors
  10. 10. Business Aspects Comparison of ERP Products Functionality Technology * Oracle J.D. Edwards * Low Low High High * R/3 * CA Reinforce Review Remain Rebuild * Baan * Peoplesoft
  11. 11. Characteristics <ul><li>NOT Multiple Packages Pieced together </li></ul><ul><li>through Complex Interfaces </li></ul><ul><li>Modeling Business Processes and </li></ul><ul><li>Integrating through Software </li></ul><ul><li>Configuration - </li></ul><ul><ul><li>8,000 Tables set up by Programmers </li></ul></ul><ul><ul><li>Series of Switches </li></ul></ul><ul><ul><li>Requires Deep Understanding of </li></ul></ul><ul><ul><li>Existing Business Processes </li></ul></ul>
  12. 12. Business Aspects ERP in Industry Aerospace & Defense Automotive Chemicals Consumer Products Financial Services Healthcare High-Tech & Electronics Oil & Gas Pharmaceuticals Retail Telecommunications Utilities
  13. 13. Business Aspects <ul><li>Largest vendor of standard business application </li></ul><ul><li>R/3: Real-Time Version 3.0 </li></ul><ul><li>Client/Server enterprise application software </li></ul><ul><li>6,000 companies, 50 countries </li></ul><ul><li>Companies in diverse businesses </li></ul><ul><li>30 seats or installations with 3,000 end users </li></ul><ul><li>800 predefined business processes </li></ul>SAP - The Leader
  14. 14. Business Aspects SAP R/3 Business Framework <ul><li>Business Components </li></ul><ul><li>Business Objects </li></ul><ul><li>Business Information </li></ul><ul><li>Warehouse </li></ul><ul><li>Business Engineer </li></ul><ul><li>Integration Technologies (ALE) </li></ul>- Finance, HR, Logistics - Customer, Invoice - Aggregate Internal & External Data - Customization Tool
  15. 15. Business Aspects SAP Business Blueprint Reference Model <ul><li>Data Model </li></ul><ul><li>Business Object Model </li></ul><ul><li>Organization Model </li></ul><ul><li>Process Model </li></ul><ul><li>Distribution Model </li></ul>Event Driven Process Chain (EPC) <ul><li>Event </li></ul><ul><li>Function/Task </li></ul><ul><li>Organization </li></ul><ul><li>Communication </li></ul>- Repository Holds the Reference Model, Industry Specific Models & Enterprise Models
  16. 16. Business Aspects <ul><li>Fast </li></ul><ul><li>Flexibility </li></ul><ul><li>Open </li></ul><ul><li>Industry Specific </li></ul><ul><li>Expandable </li></ul>Advantages of Component Based SAP R/3 Product
  17. 17. <ul><li>Synchronous Transfer of Data </li></ul><ul><li>Encourages Multi-Disciplined Teamwork </li></ul><ul><li>Reduces Redundant Labor </li></ul><ul><li>Provides Standard Based Development Environment </li></ul><ul><li>Process Engineering Cost Benefits </li></ul><ul><li>Flattens Organizations to Increase Agility </li></ul><ul><li>Allows Companies to Adapt </li></ul><ul><li>to New Business Opportunities </li></ul>Business Aspects Advantages of ERP
  18. 18. Business Disadvantages Business Aspects <ul><li>Every $1 Spent in Software Licenses - </li></ul><ul><li>$8 - $10 Spent on Consulting Support </li></ul><ul><li>Outside Consulting Fees can cost $1500/day </li></ul><ul><li>Requires Equipping employees with new skill sets </li></ul><ul><li>Hard to Keep Resources </li></ul><ul><li>Changing Business Processes to suit ERP/ can </li></ul><ul><li>Effect the Organization’s Culture </li></ul><ul><li>Very Expensive </li></ul><ul><li>Can NOT Impose ERP Infrastructure on Company </li></ul>
  19. 19. <ul><li>Lack of Flexibility </li></ul><ul><li>Complexity & Rigidity </li></ul><ul><li>High Implementation Time </li></ul><ul><li>Difficult in Decentralized Environments </li></ul><ul><li>Difficult Interfaces </li></ul><ul><li>Steep Learning Curve </li></ul>Business Aspects Technical Disadvantages
  20. 20. Technical Aspects Layer Architecture - Issues: Scalability, Portability, Interoperability & openness, Customizability, GUI, etc. Middleware Middleware Development workbench Applications System software: GUI, DBMS, OS, N/W Application Layer Basis Layer Dictionary Program editor Interface builder Modeling tools Repository
  21. 21. Technical Aspects Application Architecture - Issues: 1. Independent from all types of computers(UNIX, Window NT, AS/400, etc.), DBMS(Informix Online, Oracle 7, ADABAS, DB2, MS SQL Server 6.0, etc.), GUI flatform(OS/2 Presentation Mgr.., OSF/Motif, Macintosh, Windows, etc) 2. Independent from the country specific rules, languages, etc. IS SD CO AM MM PP HRM PS WF FI QM PM DW System model Business model Scope, Rules & Pattern Business Kernel Full Business Specific Situation DM FM WFM Repository
  22. 22. Technical Aspects Customization: Support of initial implementation projects, follow-up projects, and release-change projects - Issues: Integrated customizing functions, quality assurance, etc. Implementation environment Procedure model Reference model : FM, PM, DM, IFM, OM, Comm. Model, Distr. Model Implementation guides Customized model Documentation Release management
  23. 23. Industry Examples <ul><li>Objectives </li></ul><ul><ul><li>Available-to-Promise (ATP), the real-time capability to take an order, schedule it to be delivered anywhere in the world and confirm delivery instantly </li></ul></ul><ul><ul><li>Ability to determine what was actually in inventory or in production and how much of it had been promised to other customers </li></ul></ul>
  24. 24. Industry Examples <ul><li>Scope </li></ul><ul><ul><li>Based on the full suite of Oracle Corp.'s manufacturing and operations applications </li></ul></ul><ul><ul><li>750 users in 25 locations worldwide </li></ul></ul><ul><ul><li>To adopt Big-bang approach </li></ul></ul><ul><ul><ul><li>One of the largest distributed business systems to go live worldwide at one time </li></ul></ul></ul><ul><ul><li>HP9000 hardware, HP UX operating system (10.1) and Oracle Release 10.4 </li></ul></ul>
  25. 25. Industry Examples <ul><li>Pre-Implementation Assessment </li></ul><ul><ul><li>Legacy system-based MRP system in use </li></ul></ul><ul><ul><li>Each division's business transactions in separate databases by business unit, and by function within a unit </li></ul></ul><ul><ul><li>Databases couldn't share information </li></ul></ul>
  26. 26. Industry Examples <ul><li>Project Planning & Control </li></ul><ul><ul><li>Project team members pulled from regular jobs & relocated to “Building 12” </li></ul></ul><ul><ul><li>“ Building 12” essentially set up a scaled-down business model of Quantum </li></ul></ul><ul><ul><li>Team members play-acted their real-life roles </li></ul></ul><ul><ul><li>Improved business processes and wrote requirements for the new system </li></ul></ul>
  27. 27. Industry Examples <ul><li>Implementation Process </li></ul><ul><ul><li>Packaged available applications & selected Oracle applications </li></ul></ul><ul><ul><li>Consultants from Price Waterhouse and Oracle, installed the software & began pilot projects </li></ul></ul><ul><ul><li>Complexity and magnitude of the project quadrupled (Digital Disk drive division acquisition) </li></ul></ul><ul><ul><li>Conference room pilots tests </li></ul></ul>
  28. 28. Industry Examples <ul><li>Human (HR) Side </li></ul><ul><ul><li>Locally trained about 100 users from all over the world and flew them into Milpitas to run a full-scale system simulation </li></ul></ul><ul><ul><li>Sponsored massive user training - users had to pass a test before returning to their jobs </li></ul></ul><ul><ul><li>Ran Internal PR campaign- Entailed group meetings, presentations,an intranet site and events emphasizing system's importance </li></ul></ul>
  29. 29. Industry Examples <ul><li>Project Statistics </li></ul><ul><ul><li>October 1992 - May 1996 </li></ul></ul><ul><ul><li>16 full time managers </li></ul></ul><ul><ul><li>100 person </li></ul></ul><ul><ul><li>multidisciplinary team </li></ul></ul><ul><ul><li>1,632 meetings </li></ul></ul><ul><ul><li>79 shouting matches </li></ul></ul><ul><ul><li>800GB of disk space </li></ul></ul><ul><ul><li>18,064 miles of cable </li></ul></ul><ul><ul><li>300,000 cups of coffee </li></ul></ul><ul><ul><li>58,000 e-mails </li></ul></ul><ul><ul><li>7,503 cases of beer </li></ul></ul><ul><ul><li>1.62 million miles </li></ul></ul><ul><ul><li>of air travel </li></ul></ul>
  30. 30. Future Aspects <ul><li>Supply Chain Management </li></ul><ul><li>Internet Enabled </li></ul><ul><li>Workflow Management </li></ul><ul><li>Resource Planning </li></ul><ul><li>Data Warehousing </li></ul><ul><li>Targeting Small & Medium Enterprises </li></ul><ul><li>Addition of Simple GUI based </li></ul><ul><li>development Tools </li></ul><ul><li>Strategic Alliances </li></ul><ul><ul><li>- Andersen Consulting & SAP </li></ul></ul><ul><ul><li>- IBM & J.D. Edwards </li></ul></ul><ul><ul><li>- GE & Oracle </li></ul></ul>Business Technology A Look to the Future

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