ERP Preparedness


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The presentation is targeted for those companies looking for ERP as future opportunity to cut costs.

The presentation educates companies on various aspects on ERP Implementations and how to successfully do it.

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ERP Preparedness

  1. 1. ERP solution -Sawan Ruparel Tuesday, June 9, 2009
  2. 2. Why all the fuss about ERP ? <ul><li>Market statistics </li></ul><ul><li>US ERP sales grew from under $1 billion in 1993 to $12 billion in 2006 (Dataquest). </li></ul><ul><li>In 2006 US companies spent $95 billion on ERP systems integration. </li></ul><ul><li>Industry analysts expect an average rate growth of 37% per year for the next 5 years. </li></ul>
  3. 3. Why all the fuss about ERP ? <ul><li>If systems integration costs stay constant firms will be spending $752 billion by 2010. </li></ul><ul><li>Firms also spend about 15-20% annually to keep ERP systems up to date. </li></ul>
  4. 4. Phases of ERP Implementation <ul><li>The Chartering Phase </li></ul><ul><ul><li>Build a business case for ERP, Select a software package, Identify a project manager, Approve a budget and schedule. </li></ul></ul><ul><li>The Project Phase </li></ul><ul><ul><li>Software configuration, system integration, testing, data conversion, training, and rollout. </li></ul></ul><ul><li>The Shakedown Phase </li></ul><ul><ul><li>Bug fixing and rework, system performance tuning, retraining, staffing up to handle temporary inefficiencies. This is the phase in which the errors of prior phases are felt. New errors can arise in this phase also. </li></ul></ul><ul><li>The Onward and Upward Phase </li></ul><ul><ul><li>Continuous business improvement, additional user skill building, post implementation benefit assessment. Most of these activities are not performed. </li></ul></ul>
  5. 5. Phases of ERP Implementation <ul><li>There are several possible outcomes for each phase of the implementation. </li></ul><ul><li>Unresolved problems from one phase are inherited by the next phase. </li></ul><ul><li>Just like the SDLC, the longer problems go undetected and unresolved, the more expensive it is to fix them. </li></ul>
  6. 6. ERP Failure <ul><li>35% are Cancelled </li></ul><ul><li>55% overrun their budgets </li></ul><ul><li>Less than 10% are on time and under budget. </li></ul>Source : Virginia Commonwealth University
  7. 7. ERP Implementation Averages <ul><li>Cost: 178% over budget </li></ul><ul><li>Schedule: 230% longer </li></ul><ul><li>Functionality: –59% </li></ul><ul><ul><li>or: the system will only perform 41% of the functions it was intended to perform. </li></ul></ul>Virginia Commonwealth University
  8. 8. Why Implementations Fail <ul><li>People Don’t want the systems to succeed </li></ul><ul><li>People are comfortable and don’t see the need for the new system. </li></ul><ul><li>People have unrealistic expectations of the new system. </li></ul><ul><li>People don’t understand the basic concepts of the system. </li></ul><ul><li>The basic data is inaccurate. </li></ul><ul><li>The system has technical difficulties. </li></ul>
  9. 9. Steps in Implementation <ul><li>Cost analysis </li></ul><ul><li>Blueprinting of Business Processes </li></ul><ul><li>Staff Training </li></ul><ul><li>Integration </li></ul><ul><li>Data Conversion </li></ul><ul><li>Going live with ERP </li></ul>
  10. 10. 3 Steps to Integration: <ul><li>Implement entire business at once. </li></ul><ul><li>Implement one business unit at a time and make sure its right. </li></ul><ul><li>Implement one business unit until its right and then implement the rest all at once. </li></ul>
  11. 11. ERP & Raytheon Aircraft <ul><li>$5.5 million went into training employees. </li></ul><ul><li>5,000 employees trained for 20 hours/week months before the go-live date. </li></ul><ul><li>150 go-live managers worked full-time on ERP before go live date. </li></ul>
  12. 12. Summary <ul><li>ERP is a business wide common system. </li></ul><ul><li>Can integrate all of our business units. </li></ul><ul><li>Inexpensive compared to value it provides </li></ul><ul><li>Proper implementation can help the business function better. </li></ul><ul><li>Poor implementation can hurt the business immensely. </li></ul><ul><li>Training </li></ul>
  13. 13. THANKS