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Quality in Technology Selection(ERP Focus – Corporate Perspective)

How Can Technology Serve Organizations

Nebal Abdulrazzak AnaimTechnological Solutions Consultant

& Business AnalystWork: [email protected]

Personal: [email protected]

+966-505610651

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Information Fun Facts: Meaning of 'Google‘:

The name 'Google' is a play on the word 'googol,' coined by MiltonSirotta, nephew of American mathematician Edward Kasner. A'googol' refers to the number represented by a 1 followed by100 zeros...

Google's use of the term reflects our mission to organize theworld's immense (seemingly infinite) amount of information andmake it universally accessible and useful.

2001: 2 Billion Webpages2007: 8 Billion Webpages

The Machine is Us/ing Us (on-line video):http://www.youtube.com/watch?v=NLlGopyXT_g

Thus, IT, Information Technology, refers to the technologyinvolving the development, maintenance, and use of computersystems, software, and networks for the processing anddistribution of data

www.merriam-webster.com/dictionary

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Audience ھ

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ی هللا ی

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ی

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ی :ی

ھ •

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Whatever your specialization is

Audience:

Decision-Makers who intend to select suitable application systems or have problems with existing systems:

• Management & Re-engineering Consultants

• Members of the Boards of Directors (& VPs)

• General Managers & their replacements

• Departmental Directors

• Section Heads/Supervisors

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Abstract Introduction:

Executive Managers of organizations fromdifferent industries and sectors always strive to findsolutions to improve the way their organizations are run.

There will come a time when they realize that technologyhas effective & efficient solutions to assist them in

achieving their corporate objectives. Enterprise ResourcesPlanning Systems, abbreviated as ERP (MRPII), representcomputer softwaretechnologies that link all departments inoneautomatedsystem(someof themweb-based).

Around61% of ERP implementation projects fail accordingto international & local statistics derived from studiesconducted by consulting firms & solution providers.

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Agenda:

What's an ERP System (A Business Solution or an IT System or both)?

Benefits of ERP Systems including samples of business functions.Examples of ERP Systems and which organizations use them.

The right process for ERP selection.

The importance of team effort, goal-setting, planning and step-by-stepexecution

Success factors and how to apply them.Failure factors and how to avoid them.

ERP Software Licensing & Pricing Schemes

Out of all ERP Modules why's the HRM software unique in the Gulf Region?

Examples of HRM Systems & their integration to ERP Systems

ERP & Business Intelligence (BI) Systems

In addition to other related topics

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(SCM)

SupplyChain

Management

Manufacturing/

Production

Foundation

Financial AccountingManagement Distribution

Service /Maintenance

Dept.

(HRM)Human

ResourcesManagement

ProjectManagement

(PM)

(CRM)

Customer

Relationship

Management

BI: Analytics &

Reporting

Sample of Enterprise Resources Planning (ERP) Modules

Different Management Programs& computerized Business Applications

that are linked

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Previously: Paperwork + Different Programs (If any)

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Avoid Common Mistakes

Avoid getting a computer programmer /software developer to create an accountingsoftware, warehouse management software,personnel & payroll, etc……How can atechnical person understand such criticalbusiness functions???

Avoid getting a different stand-alone program

for each department… How can theorganization run as one entity???

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Planning the Resources of your Enterprise

ClientsClients

ی ی Human ResourcesHuman Resources //

ی ی Finance/AccountingFinance/Accounting

//ی ی Sales/ShowroomsSales/Showrooms

ی ی Warehouses & DistributionWarehouses & Distribution

ی یManufacturing/ProductionManufacturing/Production

ی ی ی ی

StatisticalStatisticalReportingReporting

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Web-based, Multi-Company, branch, currency, etc.

Enterprise Resources Planning System

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An ERPis one

Multi-software Systemthat

connects / links / integrates

all Departments

Therefore,

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Facts

ی 61.25% .of ERP Implementation Projects Fail %61.25ی

ی 50% ی ...ی

50% of ERP software projects are terminatedsomewhere along the implementation process.

ی 75% ی )ی (ھی ی (ھ )ی ی ( )ی ھ

75% are rated poor by the users (Of those thatare implemented and reached the operational phase).

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Why?

The reason for these disappointing numbers istoo often based on ی

a lack of knowledge

Experience

Or

ی ی ی ERP system selection methodology

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Cost justificationis the first hurdle that a business system implementation projectmust clear:

Costs – Capital expenditures, on-time project expenses, andongoing support activities include:

• Application software and hardware• Modification of applications software, which potentiallyincreases the risk and length of the project

• Software and hardware maintenance;• Communications equipment and installation;

• Education and training• Conversion of initial operating expenses• Consultant and temporary staff expenses, until the new

operating environment settles down.

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Best J ustifications Match Technology Project Goals To Org’s Business Objectives

Some of the major elements of a justification model:

• Benefits 1) day-to-day savings that eventually aid the bottomline

2) increased working capital (cash availability)

• Revenue and Profits

• Inventory Management – Inventory is the repository of many of thecompany’s past mistakes

• Purchasing control - Fewer shortages improve manufacturingperformance.

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Human Factor

• Users are unprepared for the size of the task;• System information flow is not defined;• No support from upper management;• System users are not committed to the implementation;• Initial pains of implementation create resistance;• Operational ignorance is unchecked;• There is a lack of system data integrity;• A feeling of apathy and dis-interest spreads.

To lessen the chance of failure, you must ensure thateveryone involved recognizes that change is needed andact as willing participants in moving to the new world

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Benefits of an ERP

• Visibility on all operations and future path

• Much easier, faster & cost-efficient to introduce a newproduct(e.g. if U R a manufacturer)

• Identifying faults and planning improvements: What if you need to know the life cycle of a product?

• Better & faster Inventory Management

• Process Improvement based on historical methods

• Real-Time operations using networking technologiesfor multi-access

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Paperless Work Environment

ی ھ ی ERP systems Program & Automate Work functions

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Benefits of an ERP

• E.g.: System recognized by U.S. Congress forsubstantially improving defense readiness and

saving multiple hundreds of millions of dollars.• costs are reduced resulting in increased profits

• the organization is under control (e.g. fraud halt)

• trained staff efforts become more effective andefficient.

• More to come >>>

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Multi-Access * Central Storage

App lic ation

Servers

Web/Edge

Servers

Dumb

Terminals

Host

Systems

Host

Databases

Clients

Servers

Browsers

Internet

PDA

Distributed

Databases

PDA

ی Central Server In your HQ

e-Commerceی

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Imbedded Sub-modules (in some ERP Sys)

Document Management System (DMS)Content Management System (CMS)Business Intelligence (BI) Systems:

• Business Performance Management (BPM)

• Balanced Scorecards (BSC)• Key Performance Drivers (KPDs)• Key Performance Indicators (KPIs)• Budgeting

• Forecasting• Ad-hoc queries• OLAP – OLTP• Data Warehouse• Etc.

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Work Flow (Organized, Superior Productivity, etc.)

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Secure Authorizations & Audit Trail

The audit trail feature available in some systemstracks who (user name) did what, when, what’s

the old and new data

Digital

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Dashboard: Budgets, Available Resources, etc.

Analytics & Reporting

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Available for any Industry

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Examples of Local ERP Applications &

Individual Computerized Business Programs• AccuSoft• Alameen used by Almazalat• Alpha used by Rio Contracting• Asas• EMIS used by Annahdah Medical Co.

• GintSolutions.com used by Mubarak Alqithmi, Fast, etc.• IFS used by Halawani Brothers• Info used by Sawary• MFG Pro• Morooj used by Okaz• Osus• Rida used by Labbaik• SMAAC used by ARTECH - Gulf Arabia for Contracting• Soft Waves (Profit Waves) used by Batool Publishers• Venus, Data Ocean used by Heritage Carpets, Seraj J eddah Tiles, Some hospitals• Etc.

Listing sample customers doesn’t imply the success or failure of their implementations

List ing ERP names doesn’t imply they’re good. Not li sting an ERP doesn’t imply i t’s bad

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Examples of Int’l ERP Systems• ABAS ERP used by Copatra Graphics

• Epicor iScala ERP used Abuljadayel & J eddah Cables• Focus ERP used by Aloula RE & SNASCO• www.Infor.comSSA ERP (Formerly BaaN) used by

Nesma & Partners Contracting (Formerly Nesma-Alfadl)

• Microsoft ERP Systems:www.dynamics.com(future: Project Green) :

o Axapta ERP used by Alessa Group & Mattex

o Great Planes ERP used by Baghlaf & Albaiko Navision ERP used by IKEA & Sleep Higho Solomon ERP used by SPIMACO ی



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Examples• www.oracle.com Oracle Apps used by Emmar,

Attiah Steel, Rusd Group, Fine, Alkhorayef o PeopleSoftERP used by Alajou Group

o J D Edwards ERP used by BEMCO & APSCO

• Orion ERP used by ALFOZAN & AIC Steel• www.Sage.com used by WATANIA Group,

• www.Sap.com used by IDB, ARAMCO, SABIC,Alfaisaliah, Maghrabi Opticals, Banawi, SV

• Visualacc.com



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What’s the question?

Which ERP is the best?

X

Which ERP is the most suitable of our

organization?

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ERP Selection Steps

A) The Business Management Drivers answeringwhy you are considering investing in such a technology.

B) (Management Role & Commitment) The corporate and departmental objectives, Vision & Missionstatement(s) so that all parties involved are going in the same direction working to achieve thesame results with the consulting firm, ERP implementation partner, solution provider, system

integrator etc.

C) (Role of Departmental Managers) Organizational processes, policies and procedures (e.g. in HRM:What’s the Recruitment process, Training Process, Workflow, Career Path Plan, Time &Attendance, etc.) whichshould leadto the objectives above.

D) Operational transactions forming each process, i.e. a set of functionalities translating to systemfeatures that make up your organizational needs analysis; i.e. a further detailed RFP (Request

for Proposal) listing your requirements and expectations from the system. (e.g. inventorymanagement or tracking material in production process, there may be many systems thatperform each detailed function, but there may only be one or two that perform it the way neededfor your business. These functions should be described by a detailed information flow.

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ERP Selection Steps• Consultants must be scheduled in advance to visit any company looking for

an ERP.• Studying the requirements and analyzing all departmental needs and

expectations from the ERP takes months and must be budgeted for andplanned properly.

• Consultants will write a REQUEST FOR PROPOSAL (RFP) documenting allrequirements collected from all departments during their study.

• The RFP should be given to different ERP vendors so that they prepare

suitable demonstrations to present the modules you require specifically andgive an idea about other functionalities available in the ERP but not listed inthe RFP that may benefit your org.

• After the demo, proposals are requested for the required modules and sub-modules (including costs for the application licenses, implementation,training, any required customizations if needed)

• When a suitable, bestERP fit is selected plan with the solution provider &pay for a proof of concept (POC) exercise (workshop).

• When the POC step succeeds, an implementation methodology is setincluding the time period (in man-days) needed to fully implement eachmodule and integrate all modules in the ERP

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Avoid Common MistakesDon’t Work Hard, Work Smart

Technology, just like HR,

is an investment not an expense.

Choose the most suitable single point of contactDifferent Technology Sources Can be cost-effective vs putting alleggs in one basket

Be cautious of sales talks,

involve implementers especially when editing contracts

Establish Long-Term bonds with solution providers & mutual respect(e.g. Don’t waste their efforts & be gentle with promises)

Check references & site visits to ERP users

Guard Professionalism & Business Ethics

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Avoid Common MistakesPlan for the data entry (e.g. Parallel Run, HR Training –

Data Migration – Data Corruption, Date Changes, etc.)

Ensure ERP User-friendliness

Use standard ERP functionalities developed

based on Best Int’l Business Practice & avoidcustomizations as much as possible, i.e. beready to enhance some organizational policies

& procedures to follow the ERP way Just because it’s a technology, don’t throughthe responsibility on the CIO, IT Manager.

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Avoid Common MistakesDon’t think that you can save time, effort or moneyby skipping any step. Going through each stepprofessionally prepares your company for thechangeWhen you face a problem with the technology or theimplementation co. or any party:

* Identify it & find its causes to be avoided

escalate to the director or the mother co. don’t stick to

the local partner or decide to change the system. (Notethat some Int’l ERP organizations have one exclusive partner and others have multiple)

If you strategically decide to change the ERP (e.g. you

found a much more suitable ERP after research), don’t scrap thesystem, change it ownership.

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Avoid Common MistakesAutomating operations using an ERP system isa strategic decision and you need to managethe “change” against routine

Caution: Database Access Authorizations

Org policy: no data edition at the database levelUnderstand org sizes targeted by ERPproviders (Small, Medium, Enterprise Levels)

and be clear about your future projectionsConsider Vertical Solutions, specific to yourindustry

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Avoid Common MistakesDon’t generalize. Every organization is unique to a

certain extentDon’t go for an ERP just for Prestige(e.g. users will think it’s an expensive spreadsheet)

Decide on the operational language vs ERP

language in advanceRight-Left Programming example when typing checks from the ERP:

” “:ھ ” “:ی Arabic Proverb: “Ask a patient and don’t ask a doctor”

ی Ensure a team-decision

not a One-Man show(begin-end)

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www.TechnologyEvaluation.com

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Licensingی

ی ی

)ی &ی ( + (

ی/

ی: /)ی 100025000:(ی

ی

Choice of ERP Modules

Application Value + Services(Implementation & training)

Sister Companies (If Group)

& on how many servers?

Concurrent User Licenses

HRMS: Total #of EmployeeRecords (e.g. batch of 1000 for $25000)

Annual maintenance contract

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Human Resources Management Systems(H.R.M.S.)

OR

Human Resources Information Systems

(H.R.I.S.)

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SupplyChain

ManagementManufacturingFoundation

FinancialManagement Distribution

Service /Maintenance

Dept.Human

ResourceManagement

ProjectManagement

CRM

Analytics &Reporting

Enterprise Resources Planning Modules

HRHR FocusFocusی ی

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Why replace the HR Module of Tier 1 ERPs

GULF-REGION REQUIREMENTS:

HR is country-Specific.

We are complementing the Human Resources Management Module /System integrated with any ERP (or accounting software) to satisfyall requirements such as:

• Right-Left Alignment• Hijri Calendar Support• All regulations (e.g. Saudi, UAE, Kuwait) programmed including

forms (e.g. G.O.S.I. ی ی )• Multi-language (including full Arabization)• HR Dev Fund ی ی

• Passport Office• Etc.

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Examples of HRM SystemsAlso Technological Business Solutions

There are many HRM systems in the market internationally and locally:• Appian HRMS used by Bugshan-Bridgestone• www.ATKtech.com/atk_HRMS.htm• BSHsoft.com• Civil Soft used by SIC-Banaja & Ben Laden Construction Group• www.Executrack.com/en/solutions.html• www.GulfHr.com• HITS (www.alnafitha.com) used by Basamh Group• Mena HRMS• Oasis HRMS (www.saudico.com.sa)• PeopleGlobe (www.PerformICT.com) used by Arabian Cement & Qatar MA

• www.QCS-sa.com/hrm-management.htm used by Bakheet• Qusaibi HR used by Altamimi Group• ZFP (Acrebia) HRMS (www.ZFPit.com) used by Almtbouli Group• and others



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Example of an Org.

The HR Dept. is a function in the org. but it’s the all-encompassing

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Why Focus on HR applicationsAccording to Gartner .com:• To “enhance human resource efficiency and improve employee

resourcefulness.”

• Return on Investment (ROI): make their processes more efficient andtheir people more effective.

• “A prime candidate for process improvements — and a "sure shot" for

good payback — are the processes associated with human capitalmanagement(HCM).”

• “Visionaries in this market will look not only at improving administrativeefficiency, but also at developing, enhancing and managing humancapital.”

• Example: “ E-Recruitment. One HR process primed for improvement isnew-employee recruitment. Enterprises are looking for vendors that canhelp them attract candidates, screen resumes, and manage interviewsand hiring.”

(Publication Date: 10 J anuary 2003/ID Number: LE-19-1149)

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e-Payroll e-Recruitment

Manpower Planning &Org. Mgmt

Time & At tendance

BranchesHR Distribution

Appraisals &Evaluations / e-

assessments

Training

ManagementHR

Self-Service

Succession

Planning

HRMS Sub-Modules

e-HRM

Personnel

Admin

HRMS Offer Recruitment to Retirement e-services

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e.g. Time & Attendance - Timesheets

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Paperless, unwired, networkedEnterprise

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Conclusion: ERP Selection Process

• Goal-setting & Planning• Knowledge, Experience & Methodology• Understanding Different Types of Software & avoiding

Failure• Roles & Responsibilities

• Investment – Cost J ustification• Specifications and RFP• ERP Software Demonstrations & Comparisons• ERP Software Suppliers Ranking & Selection• "Concentrate on making things right the first time, rather than

finding faults afterwards." Right the First Time movie. In today’s competitive business world of globalization, you

need not to go with the follow but faster, especially if youwant to be a leader in your industry.

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Safe Senders ListIn your e-mail configuration put:

• [email protected]



as safe senders so that e-mails go to your inboxnot spam/junk

If what I presented is beneficial it’s by God’s assistance.

If anything is wrong I’ll always be learning unti l death.

Contributions & corrections are welcome.

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50

How Can Technology Serve

OrganizationsFocus: Enterprise Resources Planning Systems

Business & Managerial Perspectives

Thank you

Questions

Nebal Abdulrazzak AnaimBusiness-Information Technology Consultant

Work: [email protected]: [email protected]

+966-505610651

neb alan aim 150708

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