introduction to erp
DESCRIPTION
TRANSCRIPT
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Introduction to ERP
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History of organizational systems
• Calculation systems• Functional systems• Integrated systems
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Calculation systems
• 1950-80• Single purpose• Eliminate tedious human work• Examples: Payroll, General ledger,
Inventory• Technology used: Mainframes,
magnetic tapes, batch processing
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A System/370 Model 145 (1970’s)
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Hard drives
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A very nice-looking magtape-drive
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Magtapes
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Batch processing
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Printer 800 lines/minute with 48 character train, 136 columns with 6 or 8 lines per inch spacing
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Stack of Computer Printout Paper
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Functional systems
• 1975-20??• Use computers to improve operations• Applications: Human resources, order
entry, manufacturing resource planning
• Technologies: Mainframes, PC’s, LAN’s
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Minicomputer
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Functional systems
• Typically contained within a department
• Islands of automation• Applications independently
developed and deployed• Driving force: availability of mini-
computers
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Functional system applications
• Human resources System• Accounting and finance systems• Sales and marketing System• Operations management System• Manufacturing Systems
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Human Resources
• Recruiting• Compensation• Assessment• Development and Training• Planning
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Accounting and Finance
• General Ledger• Financial Reporting• Costing• Budgeting• Accounts Payable• Accounts receivables
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Sales and Marketing
• Lead tracking• Sales forecasting• Customer management
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Operations
• Order management• Inventory management• Customer service
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Manufacturing
• Inventory• Planning
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Types of Organizational information Systems
• Administrative systems• Scheduling / Transaction systems• Value oriented systems• Reporting and controlling systems• Analysis and information systems• Planning and decision support
systems(From Business Process Engineering by
A.W. Scheer)
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Problems with function based application
• Sharing of data between systems• Data duplication• Data inconsistency• Applications that don’t talk to one another• Limited or lack of integrated information• Isolated decisions lead to overall
inefficiencies• Increased expenses
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Solution to disparate systems?
• Integration• Consolidation• Right-sizing• Business Process Redesign• Enterprise wide system
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Integrated systems or
Enterprise Resource Planning System
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ERP - Definition
• ERP is a process of managing all resources and their use in the entire enterprise in a coordinated manner
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ERP 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 management
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What is ERP?
• Enterprise Resource Planning• Support business through optimizing,
maintaining, and tracking business functions
• Broken down into business processes– HRM– Distribution– Financials– Manufacturing
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What makes ERP different
• Integrated modules• Common definitions• Common database• Update one module, automatically
updates others• ERP systems reflect a specific way of
doing business• Must look at your value chains,
rather than functions
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Benefits of ERP
• Common set of data• Help in integrating applications for
decision making and planning• Allow departments to talk to each other• Easy to integrate by using processed
built into ERP software• A way to force BPR (reengineering)• Easy way to solve Y2K problem
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Vendors
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Difficulty in implementation
• Very difficult• Extremely costly and time intensive• Typical: over $10,000,000 and over a
year to implement• Company may implement only
certain modules of entire ERP system• You will need an outside consultant
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Common Pitfalls
• Do not adequately benchmark current state
• Did not plan for major transformation• Did not have executive sponsorship• Did not adequately map out goals
and objectives• Highly customized systems to look
like old MRP systems
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Survey of ERP implementations
Done by ittoolbox.com in 2004
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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 change
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How would you characterize your budget for new ERP implementations/new modules deployments for 2004
compared to your budget in 2003?
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Who is directly responsible for determining your ERP
implementations/new modules deployments?
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Who are the other key decision-makers/influencers in decisions to add
new ERP packages/new modules?
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Do you currently have an ERP package?
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If your answer is "Yes", which ERP package(s) do you currently use?
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Are you considering adding new modules to your existing ERP package?
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If your answer is "Yes", which modules are you planning to add?
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If you plan to deploy a new ERP package and/or add modules to your existing packages, when would this
implementation take place?
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Who do you partner with for new ERP implementations and additions of new
modules?
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What do you see as the main challenges to successful ERP implementations within your
organization?
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For more details…
• http://projectmanagement.ittoolbox.com/documents/research/