Enterprise Resource (Shambvi)

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    ENTERPRISE

    RESOURCEPLANNING

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    INTRODUCTIO

    N

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    ERP-Enterprise Resource

    Planning

    ERP is a process ofmanaging all resources andtheir use in the entire

    enterprise in a coordinated

    Erp Definition

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    Erp system:definitionERP is a set of integrated

    business applications, ormodules which carry outcommon business functionssuch as general ledger,accounting, or order

    management

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    What makes Erp

    different Integrated modules. Commondefinitions.

    Common database.

    Update one module, automaticallyupdates others.

    ERP systems reflect a specific way of

    doing business. Must look at your value chains, rather

    than functions.

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    BENEFITS

    Common set of data.

    Help in integrating applications fordecision making and planning.

    Allow departments to talk to eachother.

    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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    EVOLUTION

    http://whatiserp.net/erp-basic-knowledge/erp-system/
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    In 1990 Gartner Group first

    employed the acronym ERP asan extension of materialrequirements planning (MRP),

    later manufacturing resourceplanning and computer-

    integrated manufacturing.Without supplanting these terms,ERP came to represent a larger

    whole, reflecting the evolution of

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    all ERP packages weredeveloped from a

    manufacturing core. Vendorsvariously began with

    accounting, maintenance andhuman resources. By themid1990s ERP systems

    addressed all core functionsof an enterprise. Beyondcorporations, governments

    and non rofit or anizations

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    Accounting Managementsolutions where gainingstrength. ERP, developed fromearlier MRPII systems, werealso integrated with financialapplications to provide acomplete solution to acompany for managing theirinventory, cash and people

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    ERPImplementation

    Fundamentals

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    Agenda

    What is an ERP System?

    Why implement an ERP system?

    How should ERP systems be

    implemented?

    Conclusion

    Questions and Answers

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    What is an ERP Systemdefinitions

    Simplistic DefinitionERP - Enterprise Resource Planning

    Detailed Definition

    a business strategy and set of industry-domain-specific applications that buildcustomer and shareholder communitiesvalue network system by enabling and

    optimising enterprise and inter-enterprise collaborative operational andfinancial processes

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    Historical systemarchitectures

    Historically, companies createdislands of automation. A hodge-podge of various systems thatoperated or managed variousdivergent business processes.Sometimes these systems wereintegrated with each other and

    sometimes they werent. Sometimesthey were loosely interfaced andsometimes they were more tightly

    interfaced.

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    What is an ERP KeyCharacteristics

    Integration

    seamless integration of all the

    information flowing through a companyfinancial and accounting, humanresource information, supply chaininformation, and customer information.

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    PackagesEnterprise systems are not developed in-

    house IS life cycle is different

    1. Mapping organisational requirements to theprocesses and terminology employed by thevendor and

    2. Making informed choices about theparameter setting.

    Organisations that purchase enterprisesystems enter into long-term relationshipswith vendors. Organisations no longercontrol their own destiny.

    What is an ERP Key

    Characteristics

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    Best Practices ERP vendors talk to many different

    businesses within a given industry as wellas academics to determine the best and

    most efficient way of accounting for varioustransactions and managing differentprocesses. The result is claimed to beindustry best practices.

    The general consensus is that businessprocess change adds considerably to theexpense and risk of an enterprise systemsimplementation. Some organisations rebelagainst the inflexibility of these imposedbusiness practices.

    What is an ERP KeyCharacteristics

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    Some Assembly Required

    Only the software is integrated, not thecomputing platform on which it runs. Most

    companies have great difficulty integratingtheir enterprise software with a package ofhardware, operating systems, databasemanagement systems software, and

    telecommunications suited to their specificneeds.

    Interfaces to legacy systems

    Third-party bolt-on applications

    Best of Breed Strategy

    What is an ERP KeyCharacteristics

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    EvolvingEnterprise Systems are changing rapidly

    Architecturally: Mainframe,

    Client/Server, Web-enabled, Object-oriented, Componentisation

    Functionally: front-office (i.e. salesmanagement), supply chain (advanced

    planning and scheduling), datawarehousing, specialised verticalindustry solutions, etc.

    What is an ERP KeyCharacteristics

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    Some Assembly RequiredOnly the software is integrated, not thecomputing platform on which it runs. Mostcompanies have great difficulty integratingtheir enterprise software with a package ofhardware, operating systems, databasemanagement systems software, andtelecommunications suited to their specific

    needs. Interfaces to legacy systems Third-party bolt-on applications Best of Breed Strategy

    What is an ERP KeyCharacteristics

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    Typical architecturalcomponents

    E-business PlatformTech Stack

    CRM

    Foundation

    WebInternet

    MobileWireless

    e-Mail Call CenterICM/Telephony

    InteractionChannels

    Common Data and Object Models, Security, Interfaces, Globalisation

    E-

    BusinessFoundatio

    n

    Marketing Sales eCommerceBusinessApplication

    s

    MarketingIntelligence

    SalesIntelligence

    CustomerIntelligence

    Call CenterIntelligence

    AnalyticalApplication

    s

    Interaction History Universal Work Q1-to-1 Fulfillment

    Assignment Engine

    EscalationsTCA

    Installed Base

    Tasks Notes

    Resources

    Calendar

    Territories

    OSS HR

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    Tech Stack - InternetComputing Architecture

    Database

    XApplication

    Application

    Application

    Application

    Application

    Application

    Browser

    Browser

    Java

    Application Server

    ApplicationApplication

    2 Tier

    3 Tier

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    Why implement an ERPSystem?

    To support business goals Integrated, on-line, secure, self-service

    processes for business

    Eliminate costly mainframe/fragmentedtechnologies

    Improved Integration of Systems andProcesses

    Lower Costs Empower Employees

    Enable Partners, Customers andSuppliers

    Ho sho ld e implement

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    How should we implementERP systems

    Obtain the right mix of people,processes and technology!!

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    How should we implement ERPSystems?

    People Project Structure Should be aligned to processes

    Process Implementation Process (outlined in

    detail) Adapt your processes to those of the

    ERP.

    Technology Hardware Software Integrated Systems

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    Process

    1. Definition and Analysis Hold discussions with various

    functional personnel to establish theactual number of systems operating at

    client site, what they are used for, whyand how often

    Produce the Project Scoping Documentoutlining current situation, proposed

    solution and budgeted time

    Challenge : REQUISITE EXPERTISE- No two clients are the same

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    Process

    2. Design Prepare various functional reports -

    specifies current scenario and wish list Prepare Design document which

    specifies how the system is going towork

    Prepare test scripts to be followed onsystem testing

    Map out the interface paths to various

    modules

    Challenge : INFORMATIONSHARING - Availability of staff

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    Process

    3. Build Configure system as per set up

    document specifications i.e. transferconceptual model into reality

    Test system to verify accuracy(preliminary tests)

    Challenge : TECHNICALENVIRONMENT - System functionality

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    Process

    4. Transition Train users on their specific areas Assist in test data compilation and

    system testing by users Finalise the Live system and

    captured opening balances

    Challenge : USER RESISTANCEUnderstanding and acceptancedata preparation

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    Technology

    Technology is an enabler, not thedriver (it is there to assist theorganisation to achieve business

    goals)

    It is a means to an end, not the end

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    Conclusion

    ERP systems provide a mechanism forimplementing systems where a highdegree of integration between

    applications is required The Business Case or Value

    Proposition for implementation mustbe outlined

    To successfully implement a propermix of people, processes andtechnology should be maintained

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    METHODOLOGY

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    The ERP implementationmethodology includes extensiveservices from the vendor. It is

    important for the companies toanalyze each ERPimplementation method, since therisk of failure in ERPimplementation is existent andcan be a highly expensive ordeal.

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    Different approaches to ERPimplementation

    The most potent one's is the so-called joint ventures withrespective companies of the same

    industry. This method allows thecompany to begin ERPimplementation process on itsown or share all the responsibilitywith the partners.

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    This implies that it

    would be a sharedplatform where the

    files are shared withthe joint venture

    company, as they willbe a part of ERP

    implementation

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    ERP implementationis also accomplished

    by basing all theimplementation on thepresent needs and

    resources of thecompany. Thecompany can first gofor a total ERP systemand then have theERP implementation

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    It is important to chooseappropriate software forgenerative ERP systemimplementation. The

    company must be able toutilize the software to itsfull potential, to have a

    successful ERP project.

    SUCCESS

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    SUCCESSFACTORS

    7 K f ERP S

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    7 Keys of ERP SuccessFactorsThe world of technology andbusiness consulting is tainted byhorror stories of ERP projectsgone wrong. Companies such as

    Hershey's have had widelypublicized lawsuitsagainst ERP software vendorsbecause of their failedimplementations. In someextreme cases, these companiessue because they couldn't ship

    product or their entire

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    So how does one increase thelikelihood of ERP success and

    ERP benefits realization? Many assumesuccess or failure is the fault of thesoftware you purchase, but in reality,95% of a project's success or failure is inthehands of the company implementing thesoftware, not the software vendor. Here

    are seven ERP critical success factorsthat we have seen:

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    1. Focus on business processesand requirements first: Too

    often, companies get tied up inthe technical capabilities orplatforms that a particularsoftware supports None of thisreally matters. What reallymatters is how you want yourbusiness operations to run and

    what your key businessrequirements are. Once you havethis defined, you can engage in a

    more effective ERP software

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    2.Focus on achieving a healthy ERPROI(Return on Investment): Thisrequires doing more than just developinga high-level business case to get

    approval from upper management oryour board of directors. It also entailsestablishing key performance measures,

    setting baselines and targets for thosemeasures, and tracking performanceafter go-live. This is the only way tomaximize the business benefits of ERP.

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    3. Strong project management andresource commitment: At the endof the day, your company owns thesuccess or failure of a large ERPproject, so you should manage itaccordingly. This includes ensuringyou have a strong project manager

    and your "A-players" from thebusiness to support and participatein the project.

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    4. Commitment from company

    executives: Any project withoutsupport from it's top-managementwill fail. Support from a CIO or IT

    Director is fine, but it's not enough.No matter how well-run a project is,problems arise (such as conflicting

    business needs), so the CEO andyour entire C-level staff needs to beon board to drive some of these.

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    7. Make sure you understand why you'reimplementing ERP: This is arguably the

    most important one. It's easy to see thatmany big companies are running SAP orOracle and maybe you should too, but it'sharder to consider that maybe you don't

    need an ERP system at all. Perhapsprocess improvement, organizationalredesign, or targeted best-of-breedtechnology will meet your business

    objectives at a lower cost. By clearlyunderstanding your business objectives andwhat you're trying toaccomplish with an ERP system, you will be

    able to make a more a ro riate decision on

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    By ensuring you have

    these 7 keys of successfactors in place, it will be

    much more likely tomaximize the benefits ofERP.

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    WATS

    pitfallsa factor causing trouble inachieving a positive result ortending to produce anegative result;

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    Inadequate training

    Success of any organization is dependent onvarious factors, like, skill and experience ofthe workforce, optimum utilization ofresources and proper planning. A propertraining in ERP is very important in order to

    make the system work correctly. Manycompanies try to save money by notproviding enough expenses for ERP trainingof employees. This results in an inadequatecognizance of the particular ERP vendor

    package being used. Improper training maylead to mishandling of the technology byemployees, which can result in the loss ofvaluable information.

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    Expensive software ERP is a very expensive technology and the

    installation itself can dig a deep hole in thecompany's pocket. Its purchase basicallydepends on the scope of implementation,complexity of the departments and ERP

    vendors. Packaged ERP software may costaround a few million dollars. Besides ERPsoftware, new computer hardware updatednetwork equipment and security softwareare also required for the implementation ofERP systems. The costs of these hardwareand software depend on factors, like, thenumber of modules and the platforms used.

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    Limited customization

    The customization of an ERP setup is verylimited, as it may involve changing of theentire ERP software structure. The flexibilityof the setup is very much dependent on the

    brand of software being used. Some brandsgive a provision of extended customizationand flexibility, which makes them moreconvenient to use, as compared to others.Often due to this the scope of implementation

    of ERP becomes too difficult and rigid, whichhampers the specific work-flow of a business.

    I t c cti it f

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    Interconnectivity of

    departments The interconnectivity of the various

    departments within an organization isadvantageous as well asdisadvantageous. As we all know, achain is as strong as its weakest link.With the implementation of ERPpackage, an inefficiency in one

    department may affect otherparticipants. If one of the departmentsbreaks down or becomes inefficient, itmay adversely affect the efficiency of

    other departments.

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    Very high implementation time

    The time required for the implementationof a complete ERP system is very high.This installation and training time maydisturb the regular functioning of theorganization and may pose a huge riskof loss of a potential business in thatparticular period. The completeinstallation may take a year or more,depending on the number of modules

    that have to be installed. This time isworth spending only if the whole newsetup gives significant profits in terms oftime and money.

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    MANAGEMENT CONCERNS

    Many managers understand

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    Many managers understandthe risks involved with new

    software & put all theirefforts into minimizing them.

    Many problems with acompanys existing systemare more related toinaccurate data than to

    faulty systems.

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    Erp implementations are highlycomplex, time-consuming &

    unpredictable in terms of cost.

    There are manypeople,technological,business

    process,implementation &operational issues that increase therisk of erp implementation.

    People issues are the

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    People issues are themost critical.

    According to a studyconducted by Deloitte

    consulting, peopleissues are the key allalong the way-before,

    during & after the erpimplementation.

    Managers need

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    Managers needmore focus On the

    decision-making &analysis features ofthe system.

    Educate everyone

    to understand whatis going to beachieved with the

    Additional education

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    Additional educationshould include total

    quality management& changemanagement

    strategies.The management &

    employees should be

    made aware of thebenefits so that thereare no over

    expectations.

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