Introduction to ERP
History of organizational systems
Calculation systemsFunctional systemsIntegrated systemsCalculation systems
1950-80Single purposeEliminate tedious human workExamples: Payroll, General ledger, InventoryTechnology used: Mainframes, magnetic tapes, batch processingA System/370 Model 145 (1970s)
removable-disk hard drives
Hard drives
A very nice-looking magtape-drive
Magtapes
Batch processing
Printer
800 lines/minute with 48 character train, 136 columns with 6 or 8 lines per inch spacing
Stack of Computer Printout Paper
Functional systems
1975-20??Use computers to improve operationsApplications: Human resources, order entry, manufacturing resource planningTechnologies: Mainframes, PCs, LANsMinicomputer
Functional systems
Typically contained within a departmentIslands of automationApplications independently developed and deployedDriving force: availability of mini-computersFunctional system applications
Human resources SystemAccounting and finance systemsSales and marketing SystemOperations management SystemManufacturing SystemsHuman Resources
RecruitingCompensationAssessmentDevelopment and TrainingPlanningAccounting and Finance
General LedgerFinancial ReportingCostingBudgetingAccounts PayableAccounts receivablesSales and Marketing
Lead trackingSales forecastingCustomer managementOperations
Order managementInventory managementCustomer serviceManufacturing
InventoryPlanningTypes of Organizational information Systems
Administrative systemsScheduling / Transaction systemsValue oriented systemsReporting and controlling systemsAnalysis and information systemsPlanning and decision support systems(From Business Process Engineering by A.W. Scheer)
Problems with function based application
Sharing of data between systemsData duplicationData inconsistencyApplications that dont talk to one anotherLimited or lack of integrated informationIsolated decisions lead to overall inefficienciesIncreased expensesSolution to disparate systems?
IntegrationConsolidationRight-sizingBusiness Process RedesignEnterprise wide systemIntegrated systems
or
Enterprise Resource Planning System
ERP - Definition
ERP is a process of managing all resources and their use in the entire enterprise in a coordinated mannerERP system: Definition
ERP is a set of integrated business applications, or modules which carry out common business functions such as general ledger, accounting, or order managementWhat is ERP?
Enterprise Resource PlanningSupport business through optimizing, maintaining, and tracking business functionsBroken down into business processesHRMDistributionFinancialsManufacturingWhat makes ERP different
Integrated modulesCommon definitionsCommon databaseUpdate one module, automatically updates othersERP systems reflect a specific way of doing businessMust look at your value chains, rather than functionsBenefits of ERP
Common set of dataHelp in integrating applications for decision making and planningAllow departments to talk to each otherEasy to integrate by using processed built into ERP softwareA way to force BPR (reengineering)Easy way to solve Y2K problemVendors
Difficulty in implementation
Very difficultExtremely costly and time intensiveTypical: over $10,000,000 and over a year to implementCompany may implement only certain modules of entire ERP systemYou will need an outside consultantCommon Pitfalls
Do not adequately benchmark current stateDid not plan for major transformationDid not have executive sponsorshipDid not adequately map out goals and objectivesHighly customized systems to look like old MRP systemsSurvey of ERP implementations
Done by ittoolbox.com in 2004
Overview
375 IT and business professionals 52% anticipate budget increases for new ERP implementations/new modules SAP and PeopleSoft/J.D. Edwards were cited as the most popular ERP packages 46% indicated that the main challenge to successful ERP implementations was inadequate definition of requirements and resistance to changeHow would you characterize your budget for new ERP implementations/new modules deployments for 2004 compared to your budget in 2003?
Who is directly responsible for determining your ERP implementations/new modules deployments?
Who are the other key decision-makers/influencers in decisions to add new ERP packages/new modules?
Do you currently have an ERP package?
If your answer is "Yes", which ERP package(s) do you currently use?
Are you considering adding new modules to your existing ERP package?
If your answer is "Yes", which modules are you planning to add?
If you plan to deploy a new ERP package and/or add modules to your existing packages, when would this implementation take place?
Who do you partner with for new ERP implementations and additions of new modules?
What do you see as the main challenges to successful ERP implementations within your organization?
For more details
http://projectmanagement.ittoolbox.com/documents/research/