This document provides an introduction to business process reengineering (BPR) and enterprise resource planning (ERP). It defines BPR as fundamentally rethinking and redesigning business processes to achieve dramatic improvements in areas like cost, quality and speed. The objectives of BPR include reducing costs and time, improving customer service and reinventing business rules. ERP software aims to integrate all departments and functions across a company onto a single system. It discusses the benefits of ERP including lower costs and better data access, as well as challenges such as high implementation costs and potential inflexibility.

1. INTRODUCTION TO BPR & ERP

2. What is BPR
 The fundamental rethinking and radically redesign of business
processes to achieve dramatic improvement in critical,
contemporary measures of performance such as cost, quality,
service and speed.
 The implementation of deliberate and fundamental change in
business processes to achieve breakthrough improvements in
performance.
 Enabled by IT
 Also known as Reengineering or Process Innovation is offered
as an enabler of organizational transformation.

3. BPR Objectives:
 To dramatically reduce cost
 Reduce time
 To dramatically improve customer services or to improve
employee quality of life
 To reinvent the basic rules of the business e.g.
 the airline industry
 Customer satisfaction
 Organizational learning

4. BPR
 Change:
 To transform an organization, a deep change must occur in
the key behavior levels of the organization:
 jobs, skills, structure, shared values, measurement systems
and information technology.
 Role of IT
 BPR is commonly facilitated by IT e.g.
 Organizational efficiency
 Effectiveness
 Transformation

5. BPR
 Transformation
 Applications in the transformation category change the basic ways
that people and departments work and may even change the very
nature of the business enterprise itself.
 A major change in the organization, including structure, culture, and
compensation schemes
 Efficiency
 Applications in the efficiency category allow users to work faster and
often at measurable lower cost
 Mere automation of manual tasks, resulting in efficiency gains
 Effectiveness
 Applications in the effectiveness category allow users to work better
and often to produce higher quality work.
 Requires changes not only in technology, but in skills, job roles,
and work flow (deeper).

6. Process
 A process is set of logically related tasks performed to
achieve a defined business outcome
 A collection of activities that, taken together, create value
for customer e.g. new product for customer. This tasks are
inter-related tasks

7. How can Companies Identify
their Business Processes.
 Manufacturing: As the procurement-to-shipment process
 Product development as the concept-to-prototype process
 Sales as the prospect-to-order process
 Order fulfillment as the the order-to-payment process
 Service as the inquiry-to-resolution process

8. Identify the need - consultant
 Simple Rules
 Start with a clean sheet of paper.
 With my current experience what can I do today
 If I were to re-create this company today, given what
I know and current technology, what would it look
like.
 How will I be focusing, organizing and managing the
company?

9. Simple Rules - Consultant
 Listen to customer
 Enhance those things that bring value to the customer or
eliminate those that don’t
 Be ambitious, focus your commitment to radical change on
the process

10. What is an enterprise
 An enterprise is a
group of people with
a common goal,
which has certain
resources at its
disposal to achieve
this goal.
(ERP – Alexis Leon)

11. What is ERP
 “Enterprise resource planning software, or ERP,
doesn't live up to its acronym. Forget about
planning—it doesn't do that—and forget about
resource, a throwaway term. But remember the
enterprise part. This is ERP's true ambition. It
attempts to integrate all departments and
functions across a company onto a single
computer system…”
From the Darwin “Executive Guide” reading

12. Basic Idea
Unification of all key operational systems
Integration is
 „
Geographic (multiple sites in USA, Europe & Asia
for many large firms)
Functional, with modules for
 „
Logistics
 „
Financial
 „
Human Resources
 „
And more specialized areas, such as real estate

13. Problems:
Delays, lost orders, keying into different computer systems invites
errors

15. Major Suppliers
 „
SAP
 „
Oracle
 „ Edwards
J.D
 „
PeopleSoft
 „
Siebel Systems

16. Advantages
 „
Lower cost
 „
Data entered only once, used by all processes
and departments
 „
Better customer service
 „
Current data accessible to all participants
E.g. customer service rep can see stock levels
in other divisions, progress on order, etc.
 „
Allows management of processes across
organizational boundaries

17. Issues
 Project cost is 2 to 10 times software price
 High profile implementation failures
 Inflexibility
 Can’t find better ways to do things
 Loss of supports for distinctive culture
 Inherent complexity of global project
 Training costs for users easy to underestimate.

18. Issues
 Integration
 When doesn’t work well in one area
 Problems in integrating into other systems
 Dependence
 How to deal with things it won’t support?
 Upgrade
 Like all software, frequent new releases can cause
major disruption

19. Latest Trends
 Increased Modularization of suites
 Shift to web based front ends
 Broadening to focus corporate portals,
external links.

20. ERP History
 MRP
 Began its life in 1970
 MRP asks the following
 What products are we going to make
 What are the materials needed to make these products
 What are the materials that are presently available in stock
 What are the items that are need to be purchased

21.  Closed Loop MRP
 Planning of sales and Production levels
 Development of production schedules
 Forecasting sales planning
 Capacity planning and order processing
 MRP II
 Sales and Operational Planning
 Financial interface and simulation capabilities
(Decision Making)

22. ERP Myths
 MYTH: “Our project is not progressing as
planned because it lacks management
commitment”
 FACT: Progress is often not achieved because of
management burn-out. People involved can be
disillusioned by promises made and expectations
that were built-up by overzealous vendor reps,
consultants who collect exorbitant fees as the
project lingers and IT personnel who were
looking for big budgets and the opportunity to
rub shoulders with the “big boys.”

23.  MYTH: “Our system went live in just a few
months”
 FACT: It is more likely that the financial part
of the ERP went live in a few months rather
than the whole system. Corporate financials
are fairly straight forward to implement

24.  MYTH: “Once we finished getting our ERP system
up and running, our expenses went down
drastically.”
 FACT: Outside consulting fees may have been
reduced and the initial costs for setting up the
system are paid off, but companies often fail to take
ongoing internal implementation investment into
consideration. In the words of one CIO, “we planned
for $600,000 and a 6 months project; we reached
both and then stopped counting.” An ERP
implementation extends over long periods of time,
and any worth its salt will take years, not months

25.  MYTH: “Consultants are professionals who
can guide the selection process and manage
the project while maintaining an objective
stance.”
 FACT: Its all

26.  Myth: You Must Use Only the Latest ERP
Technology
 Fact: Although the latest ERP integration
technologies offer many advantages to small
business owners, they have their own share
of problems. The biggest problem is the
integration of new technology to the old. In
some systems, you will find that retaining
older applications may be more useful than
overhauling it completely

27.  Myth: Installing ERP System Means That You
Can Keep Fewer IT Staff
 Fact: The ERP system is not meant to replace
your IT staff, it is there to help them with dayto-day problems related to maintenance and
troubleshooting.

28. ERP and Related Technologies
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BPR
Dataware Housing
Data Mining
OLAP
Product Life Cycle Management
Supply Chain Management
CRM
GIS
Intranets and Extranes

29. Dataware Housing
 Data warehouse is a repository of an
organization's electronically stored data.
Data warehouses are designed to facilitate
reporting and analysis.

30. Data Mining
 Data mining is the process of extracting
hidden patterns from data. As more data are
gathered, with the amount of data doubling
every three years, data mining is becoming
an increasingly important tool to transform
this data into information

31. OLAP
 is an approach to quickly answer multi-
dimensional analytical queries
 OLAP is part of the broader category of
business intelligence, which also
encompasses relational reporting and data
mining

32. Product Life Cycle Mgmt
 The product life cycle goes through many phases,
involves many professional disciplines, and requires
many skills, tools and processes.
 Product life cycle (PLC) has to do with the life of a
product in the market with respect to
business/commercial costs and sales measures;
 whereas product lifecycle management (PLM) has
more to do with managing descriptions and
properties of a product through its development and
useful life, mainly from a business/engineering point
of view. To say that a product has a life cycle is to
assert four things: 1) that products have a limited life

33. Supply Chain Management
 Supply Chain Management spans all
movement and storage of raw materials,
work-in-process inventory, and finished
goods from point-of-origin to point-ofconsumption (supply chain).

34. GIS
 A geographic information system (GIS)
captures, stores, analyzes, manages, and
presents data that refers to or is linked to
location.
 In the strictest sense, the term describes any
information system that integrates, stores,
edits, analyzes, shares, and displays
geographic information

35. CRM
 Customer relationship management (CRM)
consists of the processes a company uses to
track and organize its contacts with its
current and prospective customers.

36. Security and ERP
 Data Security:
 Computer owners and administrator use a variety
of security techniques like low-tech locks to
hightech software scrambling
 Passwords, use of firewalls, encryption of audits,
creating backups, etc
 Physical Security:
 Physical protection could be of human access to
buildings and information stored in critical rooms,
in much the same way a bank are secured.

37. Crime and Security
 A Dismissed employeee
 Employee with over all access
 Unauthorised access by a criminial(hacking)
 Virus
 Worms, trojans etc.

38. ERP Modules
 Technical Modules
 Basis ( SAP Administration)
 ABAP ( SAP Coding)
 Functional Modules
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Finance Module
Manufacturing Modules
HR Module
Materials Management
Production Planning
Plant Maintenance
Quality Management Module
Purchasing module
Marketing Module
Sales and Distribution module

39. Finance Module
 Gather Financial Data from different
departments
 Generates valuable financial reports such
balance sheet, general ledger, trail balance,
and quarterly financial statements.

40.  Sub-Systems
 Financial Management ( general ledger, accounts
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receivable/payable, special ledger, fixed asset accounting,
Legal consolidation)
Investment Management ( Investment
Planning/budgeting/controlling, depreciation
forecast/forecast.
Controlling( Overhead cost controlling, activity based
costing, product cost accounting, profit ability analysis)
Treasury ( Cash management, treasury management)
Enterprise controlling ( business planning and budgeting)

41. Manufacturing Module
 It Provides the information base upon which the
entire operation should be run.
 It contains the necessary business rules to
manage the entire supply chain process.
 Sub-Systems
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Material and capacity Planning
Shop floor control
Quality management
JIT/Repetetive management
Engineering data management
Engineering change control
Configuration management

42. HR Module
 Streamlines the management of human
resources and human capitals.
 Maintain complete employee database
 Sub-systems
 Personnel Management
 Organizational Management
 Payroll accounting
 Time management
 Personnel development

43. Materials Management
 Maintains the appropriate level of stock in a
ware house.
 Activities
 Identifying inventory requirement
 Monitoring item usages
 Reporting inventory status
 Integrating inventory control to sales , purchase
and finance modules and generate executive level
reports.

44. Production planning Module
 Optimizes the utilization of
 manufacturing capacity,
 parts,
 components material resourcing using historical
production data and sales forecasting.

45. Plant maintenance module
 Provides technical and business reports and
various presentation options
 Eg: organization unit, location, execution period
for the tasks.
 This info helps to reduce the duration and costs of
plant down times
 Subsystems
 Preventive maintenance control
 Equipment tracking
 Component tracking etc.

46. Quality Management Module
 Supports different quality management
Modules
 Quality Planning
 Quality Inspection
 Quality Control

47. Purchasing Module
 Streamlines the procurement of required raw
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materials.
Automates the processes of identifying
potential suppliers
Negotiating price
Awarding the purchase orders to the supplier
Billing process.

48. Marketing module
 Maximize the efficiencies of marketing resources
 Empowers marketers to acquire and develop
long term customer relation ship.
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Marketing resource management
Segment management
Campaign management
Email marketing
Trade promotion management
Lead management
Marketing analytics
Web based marketing surveys

49. Sales and Distribution
 Implements functions of
 Order placement
 Order scheduling
 Shipping and invoicing
 Closely integrate with the ecommerce
websites

50.  Sales related business transaction
 Sales queries such as inquiries and quotations
 Sales orders
 Outline agreements ( Contracts and scheduling
aggmnts)
 Delivery/shipment
 Invoicing/billing
 After sales support

51.  Basic Functions
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Inquiry handling
Quotation preparation and processing
Contract and contact management
Monitoring the sales transactions
Checking the availability
Transferring requirements to material planning
Scheduling the delivery
Calculating prices/taxes
Checking credit limits
invoicing/billing
Printing/edocuments

52. Phases of ERP Implementation
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Pre – Evaluation screening
Package evaluation
Project Planning Phase
GAP Analysis
Re-engineering
Customization
Implementation team training
Going Live
End user training
Post-implementation

53. Transition strategies
 Big bang strategy
 Phased
 Parallel
 Process line
 Hybrid

54. Big Bang Strategy
 Installation of all modules will happen at once
 Promised to reduce the implementation cost
 Higher failure rate
 Not many organizations dare to attempt
anymore
 Requires careful preparation and sound
planning

55.  Advantages
 Overall cost of implementation is less ( No
interface app)
 Eliminates all the sequencing and decision making
of implementing one module at a time
 Well designed for rapid implementations
 Avoid complex integration issues

56.  Disadvantages
 Amount and cost of planning and preparation is high
 Bottlenecks are high ( Lack of funds and resources etc)
 Recovery process is very difficult if something goes
wrong
 Consequences of failed implementations are huge may
lead to shut down of business itself

57. Variants in big bang
 Mini big bang
 Takes single big bang approach and break into
multiple sections ( based on few modules)
 Mega big bang
 With multiple sites, all going live at a time
 Do or die situation
 Multi mega big bang
 Multiple big bangs for multiple geographical locations
 For large companies which are located in different
geographical locations

58. Phased implementation
 Implements one module at a time
 Limits scope for one functional department
at a time
 Suits to companies that do not share many
common processes across departments and
units
 Integration will be done later part
 Reduces the risk of implementation,
customization and operation of system

59.  Advantages
 Allows to implement module at time
 Risk of implementation failure is less
 Total number of resources required is less at a
time
 Scheduling of people is convenient

60.  Disadvantages
 Large number of resources required , because of
conversion and interface problems.
 Overall and cost of implementation is high
 High turn over rate because of the length of
duration.

61. Parallel Implementation
 Keeps both the legacy system and new
system simultaneously active for some time
 Have good recovery options in case
something goes wrong
 Gives good psychological cushion as both the
systems running parallel

62.  Advantages
 Ideally suited for mission critical situations that cannot
survive major malfunctions
 Advantageous for the business environments which
require utmost stability like finance, pharma,
insurance etc
 Disadvantages
 But requires more resources
 Confusion may erupt when people don’t interact with
the both the systems
 Not suitable for which the legacy system has an
expiration date ( y2k issue)

63. Process Line Transition Strategy
 Conceptually similar to mini big bang
 But breaks implementation strategy to
manage parallel business flows and product
lines
 Mainly utilized by small and mid sized
companies which have less critical processes
 The smaller process lines, which pose less risk
and have a higher probability of success,
usually go first. Increasing its overall
probability of success.

64. Hybrid Transition strategy
 Combination of process line, phasing and
parallel implementation.
 Tend to evolve into the needed configuration
as ERP team members learn and analyze
information.
 Small single site ERP implementations tend
to have a simple hybrid strategies
 Flexible in adapting to the specific needs of
the situation.

65. Choosing a strategy
 Technical resource availability
 Number of users
 Consultant availability
 Structure of erp team
 Deadlines
 Reliability
 Hardware resources

66. ERP Implementation Process
 Before you leap consider
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How do we want to run our business?
What problems need to be resolved?
Do we know and understand our priorities?
Have we defined an action plan for pre-implemntation
activities
What tasks will be accomplished and by what dates?
What are the missing links in our software of choice?
What are real costs, benefits, and timetable
Do you have an executive level ERP champion that provides
link to top management
Who will implement ERP and make it work?

67. Pre-implementation planning session
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Assembling the participants – stakeholders
Need analysis review
Project vision and mission statements creation
Determination of organization structure
Determination of modules to be implemented
Creating the core team
Establishing the training needs
Establishing the data conversion strategy
Establishing interface
Determining work estimates
Cost of consultants
Calculation of implementation time
Identifying constraints
Establishing policies and guidelines

68. Implementation Methodologies
 Adoption decision
 Acquisition
 Implementation
 Use and maintenance
 Evolution
 Retirement

69. Organization of the project team
 CEO
 Steering committee
 Project Manager
 Project team
 Consultants
 Vendors

70. Implementation strategy
 Speed or urgency of implementation
 Availability of people for carrying out the
implementation tasks
 Availability of time for training all users
 Cost
 Confidence in the new system
 Disruption to operations
 Total timescale

71. ERP implementation plan

72. Risk Assessment

73. Budget

74. Cost
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Hardware
Operating system
Database license fee
Core software license fee
Additional module license fee
Additional seat license fee
Third party software license fee
Integration of third party software
Software customization
Project Management

75. Cost
 Consultancy
 Training
 Living and travel expenses
 Software maintenance or warranty renewal
 upgrades

76. Performance measurement
 Performance Related Measures
 Costs, time and benefits, deliverables
 Objectives vs actual
 Asses the variation
 Learn
 Apply in further phases

77. Problem Resolution
 Issues which are raised and which will require
resolution
 Agreed procedure to resolve issues and their
resolution
 Keep the track of problems
 Close the issues which are resolved.

78. System Issues
 How does the system perform when the erp app is
under heavy use?
 How quickly will space be consumed when the system
is live
 What is the backup procedure
 Can production server be maintained?
 What happens when two persons try retrieve the same
data
 Does the system locked, if so, how it can be unlocked
 Do the locations of pcs and printers required to be
changed

79.  How secure the system
 How will be the user access be selectively
restricted
 How are passwords managed
 Automated logout facility
 Disaster recovery procedure

80. Implementation methodologies by
vendors and consulting firms
 Methodology is a road map to
implementation
 Diff vendors have diff methods
 Mainly used for marketing purposes
 Now methods used in implementation based
on their experience.

81. Hidden Costs
 Eights areas most likely result in budget
overruns
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Training
Customization
Integration and testing
Data conversion
Data analysis
Consultants
Employee turnover
Continuing maintenance

82. Training and education
 Define Learning Objectives
 Determine Content
 Plan
 Deliver
 Asses Learner
 Review effectiveness of the training program

83. Data migration
 Translating data from one format to another
 Good data migration solution
 Reduce risk
 Low operational expenses
 Improve data quality