Home Furnishings Ecommerce Platform Short Pitch 2024
ERP
1. MIS Presentation
On
PUTTING THE ENTERPRISE INTO THE ENTERPRISE SYSTEM
BY THOMAS H. DAVENPORT
Siddarthan Kameswaran,
SOM, Manipal
2. Contents
What is ERP?
ERP Scope
Costs of an ERP system
Advantages & Disadvantages
Anatomy of an enterprise system
Configuring an enterprise system
The Allure of Enterprise Systems
When System and Strategy Clash
The Impact on an Organization
Doing It Right at Elf Atochem
The Role of Management
Conclusion
3. ERP- Information System software
A suite of integrated applications that a company can use to
store and manage data from every stage of business,
including:
Manufacturing
Product planning, cost and development
Marketing and sales
Inventory management
Shipping and payment
E.g.- PeopleSoft from Oracle
SAP Business suite from SAP
4. ERP Scope
An enterprise system by its very nature imposes its own logic on a
company's strategy, organization and culture.
Financial management
Human Resource Management
Operations & Logistics
Sales and Marketing
6. Costs of an ERP system
Acquisition Price
Costs of customizing the system
Costs of installing the ERP system
Training
Transition to a new system can incur extra costs
Maintenance costs
7. Emerging Trends in ERP
CRM
Need based ERP purchases
Increasing focus on business intelligence ERP
Increased need for specialized ERP services
8.
Big companies acquiring smaller startups
Rising importance of ERP on Cloud
More focus on profit from ERP
Mobile ERP
Emergence of two-tiered ERP systems
10. ANATOMY OF AN ENTERPRISE SYSTEM
At the heart of an enterprise system is a central
database that draws data from and feeds data
into a series of applications supporting diverse
company functions.
Using a single database dramatically streamlines
the flow of information throughout a business.
11.
12. CONFIGURING AN
ENTERPRISE SYSTEM
Adjust the system using configuration tables to
achieve the best possible fit for the company
Two configuration mechanisms:
Modules
(Company Specific-functions grouped
together)
Configuration
tables (to tailor a particular aspect
of the system, e.g.: FIFO or LIFO)
Customization
vs Configuration
13. The Allure of Enterprise Systems
Every big company collects, generates, and
stores vast quantities of data.
The information is spread across dozens or even
hundreds of separate computer systems.
Maintaining many different computer systems
leads to enormous costs
If a company's systems are fragmented, its
business is fragmented.
14.
The ES system performs nearly every information
transaction resulting from the sale.
An ES streamlines a company's data flows and
provides management with direct access to a
wealth of real-time operating information.
These benefits have translated into dramatic
gains in productivity and speed.
Eg:
Autodesk-2 weeks to 24hrs,
IBM Systems Division,
Fujitsu
15. When System and
Strategy Clash
Companies would first decide how they wanted
to do business and then choose a software
package that would support their processes.
With enterprise systems however the sequence is
reversed.
The company may Integrate its data and improve
its processes only to lose its service edge and in
turn its customers.
STRATEGY
SYSTEM
16.
For companies that compete on cost rather than on
distinctive products or superior customer service, enterprise
systems raise different strategic issues.
A speedy implementation of an enterprise system may be a
wise business move, but a rash implementation is not.
Eg: Foxmeyer, compaq
17. The Impact on an Organization
Real-time access
Streamlines the management
Centralization of control
(or)
To break down hierarchical structures
18.
To achieve tight coordination throughout their businesses.
They can rapidly shift sourcing, manufacturing, and
distribution functions worldwide in response to changing
patterns of supply and demand.
This capability allows them to minimize excess manufacturing
capacity and reduce both component and finished-goods
inventory.
19.
Example
Owens Corning adopted an ES to replace 211 legacy
systems. For the company to grow internationally, its chief
executive, Glen Hiner, felt it was critical to coordinate
order-management, financial-reporting, and supply chain
processes across the world. Having implemented the
system and established a new global-procurement
organization, the company is now able to enter into larger,
more advantageous international contracts for supplies.
Finished-goods inventory can be tracked daily, both in
company warehouses and in the distribution channel, and
spare-parts inventory has been reduced by 50%. The
company saved $65 million by the end of 1998 as a result of
its adoption of these globally coordinated processes.
20.
For most companies, however, differences in regional
markets remain so profound that strict process uniformity
would be counterproductive
Rather than implementing a single, global ES, these
companies roll out different versions of the same system in
each regional unit, tailored to support local operating
practices.
This approach has been taken by a number of large
companies, including Hewlett-Packard, Monsanto, and
Nestlé.
21. Doing It Right at Elf Atochem
•
ADOPTED SAP’ S R/3
•
ESTABLISHED THE DESIGNATION “DEMAND
MANAGER”
•
MORE THAN 75 % IS UPDATED , 9 OF THE 10 BUSINESS
UNITS RUNNING NEW SYSTEMS
•
JUST ONE CALL , AGAINST GIANT 5 CALLS IN
PREVIOUS DAYS
22. The role of management
ES as a silver bullet
Involment of top management in deciding the
areas of ES implemantation
Importance of monitoring the development of ES
And maintain the system to run the process
smoothly
23. Advantages/Benefits
Information entered once into system
Allows customization
Provides functionality to interact with other modules
Eliminates disparate stand-alone systems
Provides integrated, enterprise-wide common tools, processes
and systems
Integrates and increases control of budgeting, planning and
financial management
Growth of an organization
Control over systems
24. Disadvantages
Implementation may require major changes in
the company and its processes.
Maintenance is costly and time consuming
Data errors are replicated through the system
25. Conclusions
ERP system may be expensive but it offers organizations cost
efficient system in the long run.
ERP software works by integrating all the different departments
in an organization into one computer system allowing for
efficient communication between these departments and
hence enhances productivity.
Organizations should take extra measures when it comes to
choosing the correct ERP systems.
A Cheapest one adds competitive advantage
