Enterprise Resource Planning

A Management Approach

IMED
Pune
 Points to Ponder

Introduction to concept

What will ERP fix in the business?

What does ERP really cost?
When will I get payback from ERP—and how much will it be?
What are the hidden costs of ERP?
Why do ERP projects fail so often?
Will service-oriented architecture (SOA) replace ERP?
Can I use ERP to manage a network of foreign suppliers?

IMED,
Pune
 Getting started

A Profit making entity is called as an Enterprise

Enterprise Resource Planning

IMED,
Pune
 Resources

Man Power Material

Machines Methods

Money Measures

IMED,
Pune
 ERP Defined
Enterprise Resource Planning (ERP) systems
attempt to integrate several data sources and
processes of an organization into a unified system.
A typical ERP system will use multiple
components of computer software and hardware
to achieve the integration. A key ingredient of
most ERP systems is the use of a unified database
to store data for the various system modules.

IMED,
Pune
 ERP Functionality
Finance Human Resources e-Business
-General Ledger
-HR/Benefits -eProcurement
-Accounts Receivable
Administration - Employee Self Service
-Accounts Payable
-Payroll - e-Recruiting/e-Hiring
-Procurement
-Self-service HR - e-Filing
-Fixed Assets
- Citizen Access
-Treasury Mgmt
- Web-enabled transactions
-Cost Control
- e-Commerce
-Grant Management

Transaction Engine
Core software that manages
transaction flow among
applications and handles tasks
like security and data integrity

Customer Relationship Mgt

Data Analysis
Supply Chain Mgmt
Decision support software that lets -Consistent user experience
senior executives and other users - Personalization of services
Planning, scheduling and fulfillment - Realtime access- enterprise
analyze transaction data to track
applications that address all info
business performance
procurement requirements across
the enterprise
IMED,
Pune
 Critical Success Factor
 Leadership commitment

 Communication

 Full-time staff

 Professional project management

 Phased implementation approach

 Scope management

 Business transformation and change management

 Job-specific end-user training

 Focused issue resolution

IMED,  Post implementation support
Pune
 ERP Implementation Benefits
 Streamlines or eliminates inefficient manual processes

 Eliminates unrelated stand-alone systems

 Provides integrated, enterprise-wide common tools, processes

and systems

 Establishes a backbone structure that can be leveraged to handle

all operational processes

 Integrates and increases control of budgeting, planning and

financial management processes

IMED,
Pune
 ERP Implementation Benefits (Continued)
 Provides enterprise-wide reporting and decision support

 Presents opportunity for re-engineering with industry best

practices and templates

 Presents opportunity to lever vendors’ future investment in

enhanced functionality

IMED,
Pune
 Limitations and Pitfalls to ERP
 Success depends on the skill and experience of the work
force, including education in how to make the system work
correctly.

 Personnel turnover; companies can employ new managers

lacking education in the company's ERP system, proposing
changes in business practices that are out of synchronization
with the best utilization of the company's selected ERP.

 ERP systems can be very expensive to install.

 ERP vendors can charge sums of money for annual license

renewal that is unrelated to the size of the company using the
ERP or its profitability.
IMED,
Pune
 Limitations and Pitfalls to ERP (Contd.)
 Technical support personnel often give replies to callers that
        
        
        

are inappropriate for the caller's corporate structure. ERPs are

        
        
        
        

often seen as too rigid, and difficult to adapt to the specific

        
        
        
        

workflow and business process of some companies - this is

        
        
        

cited as one of the main causes of their failure.

        
        
        
 

 Systems can be difficult to use.

 The system can suffer from the "weakest link" problem - an

inefficiency in one department or at one of the partners may
affect other participants.

 Many of the integrated links need high accuracy in other

applications to work effectively.
IMED,
Pune
 Limitations and Pitfalls to ERP (Contd.)

 Once a system is established, switching costs are very high.

 The blurring of company boundaries can cause problems in

accountability, lines of responsibility, and employee morale.

 Resistance in sharing sensitive internal information between

departments can reduce the effectiveness of the software.

 There are frequent compatibility problems with the various

legacy systems of the partners.

 The system may be over-engineered relative to the actual

IMED, needs of the customer.
Pune
 Points to Ponder

Introduction to concept

What will ERP fix in the business?

What does ERP really cost?
When will I get payback from ERP—and how much will it be?
What are the hidden costs of ERP?
Why do ERP projects fail so often?
Will service-oriented architecture (SOA) replace ERP?
Can I use ERP to manage a network of foreign suppliers?

IMED,
Pune
 Reasons to undertake ERP Project

 Integrate Financial Information

 Integrate Customer Order Information

 Standardize and speed up manufacturing process

 Reduced Inventory

 Standardized Human Resource Information

IMED,
Pune
 Points to Ponder

Introduction to concept

What will ERP fix in the business?

Will ERP fit the ways I do business?
When will I get payback from ERP—and how much will it be?
What are the hidden costs of ERP?
Why do ERP projects fail so often?
Will service-oriented architecture (SOA) replace ERP?
Can I use ERP to manage a network of foreign suppliers?

IMED,
Pune
 Synchronize Business processes with ERP

 Before the implementation begins, it’s critical for the

companies to figure out if their way of doing business will fit
in standard ERP Package.

 Many times companies find that one or two of its processes

do not fit in standard ERP.

 In such case either company needs to change the business

process to fit in the ERP software or modify the software to
fit the processes.

 Both the changes have their difficulties.

IMED,
Pune
 Points to Ponder

Introduction to concept

What will ERP fix in the business?

Will ERP fit the ways I do business?
When will I get payback from ERP?
What are the hidden costs of ERP?
Why do ERP projects fail so often?
Will service-oriented architecture (SOA) replace ERP?
Can I use ERP to manage a network of foreign suppliers?

IMED,
Pune
 Cost Benefit Ratio for ERP

 Objective of ERP is to optimize the way things are done

internally not externally.

 To accommodate any change its takes time in any system

because there is always resistance to change.

 It may take few months to few years to realize the benefits

of new system, which depends on managements ability to
make it’s employees adopt the system adapt or adapt to
the system.

 ERP is more a cost of doing business to make the

company operate more efficiently than something that
IMED,
Pune offers dramatic payback.
 Points to Ponder

Introduction to concept

What will ERP fix in the business?

Will ERP fit the ways I do business?
When will I get payback from ERP?
What are the hidden costs of ERP?
Why do ERP projects fail so often?
Will service-oriented architecture (SOA) replace ERP?
Can I use ERP to manage a network of foreign suppliers?

IMED,
Pune
 Hidden Costs of ERP

 Training

 Integration and Testing

 Customization and data conversion.

 Data Analysis

 Implementation can never stop

 Waiting for ROI

 Post ERP Depression

IMED,
Pune
 Points to Ponder

Introduction to concept

What will ERP fix in the business?

Will ERP fit the ways I do business?
When will I get payback from ERP?
What are the hidden costs of ERP?
Why do ERP projects fail so often?
Will service-oriented architecture (SOA) replace ERP?
Can I use ERP to manage a network of foreign suppliers?

IMED,
Pune
 Reasons for failure of ERP

 Resistance to change from Employees.

 Customization

 A failure in the software can bring a company to a halt.

 Hidden costs of implementation

 Poor expectation management

 Poor staffing

IMED,
Pune
 Points to Ponder

Introduction to concept

What will ERP fix in the business?

Will ERP fit the ways I do business?
When will I get payback from ERP?
What are the hidden costs of ERP?
Why do ERP projects fail so often?
Can I use ERP to manage a network of foreign suppliers?
List of ERP Vendors

IMED,
Pune
 List of ERP Vendors

 SAP
 Oracle Applications
 Microsoft Dynamics
 The Sage Group
 SSA Global Technologies
 Lawson Software
 Industrial and Financial Systems
 Extract software
 QAD
 Epicor

IMED,
Pune
 ERP Softwares
 Lawson Financials
 Macola ERP from Extract Software
 MFG/PRO from QAD
 Microsoft Dynamics from Microsoft
 NetERP from Netsuite Inc.
 Oracle E Business Suite
 PeopleSoft from Oracle Corporation
 PROMIS MES from Books Automation
 SAGE MAS 500
 SAP R/3 from SAP

IMED,
Pune
 Thank You

And Have a Nice Day

IMED,
Pune