Www.syspro.com Copyright © 2015 SYSPRO All rights reserved. Defining the Purpose of ERP Paulo de...
Transcript of Www.syspro.com Copyright © 2015 SYSPRO All rights reserved. Defining the Purpose of ERP Paulo de...
www.syspro.comCopyright © 2015 SYSPRO All rights reserved.
Defining the Purpose of ERP
Paulo de Matos
SYSPRO Business Development Executive
Why the need for ERP systems
Functional areas are interdependent
Each requires data from the othersEnterprise Resource Planning (ERP) programs: Core software used by companies to coordinate information in every area of business
Help manage company-wide business processes
Use common database & shared management reporting tools
Allows all functional areas to share a common, INTEGRATED database
Allows accurate, real-time information to be available
Modular
Primary Purpose of ERP
Money $$$ (Economic Theory)
Facilitation of trade (Exchange)
Store of Value (Wealth)
Measure or Index (Price, Worth)
“The delivery vehicle for a company to be able to
get its goods and services to market.”
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Benefits of ERP
Paulo de Matos
SYSPRO Business Development Executive
Benefits of ERP Systems
Elimination of redundant data and communications lagsData integration (data entered once into ONE database & then used throughout the organization)More efficient business processes that cost less than those in unintegrated systemsEasier global integration (integrates people & data while eliminating the need to update and repair many separate computer systems)
Allows management of operations, not just monitoring
Use of best (right) practice
Can reduce costs & improve operational efficiency
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Management Factors for ERP
Paulo de Matos
SYSPRO Business Development Executive
Management Factors for ERP…
Companies had unintegrated IS that supported only the activities of individual functional areas
Silos of information limits the exchange of information
Functional model led to top-heavy and overstaffed organizations incapable of reacting quickly to change
Companies shift focus from a functional focus to a business process focus
Development of a vision of integrated IS
Y2K issues
Compliance with the Sarbanes-Oxley Act of 2002
Requires internal controls on all information
Management Factors for ERP…
Figure 2-2 Information and material flows in a functional business model (Source: Monk and Wagner 2013)
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Top Management
Material & Product Flow
Management Factors for ERP
Figure 2-3 Information and material flows in a process business model (Source: Monk and Wagner 2013)
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Top Management
Finance & AccountingAccounts Payable
Accounts Receivable
Marketing & Sales
Procurement LogisticsManufacturing
Information Flow
SuppliesStorage & Shipping
Conversion
Material & Product Flow
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Technological Factors for ERP
Paulo de Matos
SYSPRO Business Development Executive
Technological Factors
Software enhancements (DBMS; EDI) support integration
Manufacturing software developed during the 1960s and 1970s
Evolved from simple inventory-tracking systems
To…
Material requirements planning (MRP) softwareA software based production planning & inventory control system used to manage manufacturing processes
MRPII (Manufacturing Resource Planning) systems
To…
ERP systems (1990 ->)
Materials planning
Order entry
Distribution
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The Evolution of ERP
Paulo de Matos
SYSPRO Business Development Executive
The Evolution of ERP…
ERPII2010
The Evolution of ERP
ERPII2010
"ERP II" was coined in 2000 in an article by Gartner Publications entitled ERP Is Dead – Long Live ERP II.
It describes web-based software that provides real-time access to ERP systems to employees and partners (such as suppliers and
customers). The ERP II role expands traditional ERP resource optimization and transaction processing.
ERP II leverages information in the resources under its management to help the enterprise collaborate with other
enterprises.
ERP II is more flexible than the first generation ERP. Rather than confine ERP system capabilities within the organization, it goes
beyond the corporate walls to interact with other systems.
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Business Processes, Functions & ERP
Paulo de Matos
SYSPRO Business Development Executive
Business Functions vs. Processes
Business functions: Activities specific to a functional area of operation
Business process: Collection of activities that takes one or more kinds of input and creates an output that is of value to a customer (internal or external). Looks at organization from customer’s perspective.
Integrated data leads to more efficient business processes
Integrated IS: Systems in which functional areas share data. Better integration leads to improvements in communication, workflow, and success of company
Functional Areas
Most companies have four primary functional areas of operation:
Marketing and Sales
Supply Chain Management (SCM)
Finance and Accounting
Human Resources (HR)
SCM consists of the procurement, manufacturing and logistics functions
Functional area of
Operation
Marketing & Sales
Supply Chain Management
(SCM)
Accounting & Finance
Human Resources
Business Functions
Marketing of a Product
Purchasing goods & raw materials
Financial accounting of payments from customers & to suppliers
Recruiting & hiring
Taking sales orders
Receiving good & raw materials
Cost allocation & control
Training
Customer support
Transportation & logistics
Planning & budgeting
Payroll
Customer relationship management
Scheduling production runs
Cash-flow management
Benefits
Sales forecasting
Manufacturing goods
Government compliance
Advertising Plant maintenance
Functional Areas of Operation
Figure 1-1 Examples of functional areas of operation(Source: Monk and Wagner, 2013)
Input Functional area responsible for
input
Process Output
Request to purchase computer
Marketing & Sales Sales order Order is generated
Financial help for purchase
Accounting & Finance
Arranging financing in-house
Customer finances through the computer company
Technical support Marketing & Sales 24-hour helpline available
Customer’s technical query is resolved
Fulfilment of order
Supply Chain Management (SCM)
Shipping & delivery
Customer receives computer
Business Processes
Figure 1-2 Sample business processes related to the sale of a PC (Source: Monk and Wagner, 2013)
Business Process Example
Figure 1-3 Example of a process view of business(Source: Monk and Wagner, 2013)
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Material Order Process
Customer Order Process
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Business Process Management or Modeling for ERP Selection,
Implementation and Maintenance
Paulo de Matos
SYSPRO Business Development Executive
Business Process Management (BPM) or Modeling
Role in Implementation
Role in ERP System Selection
On-going Role?
Further Uses – ISO, Standard Operating Procedures (SOP), On-boarding, Change Management
“Business Process Management or Modeling (SYSPRO Process
modeling – SPM) should be your go-to framework for ERP systems selection and implementation.”
Challenges in Implementations
Excessive customisation
Dilemma of internal integration
Poor understanding of business implications and requirements
Lack of change management
Poor data quality
Misalignment of IT with business
Hidden costs
Limited training
Lack of top management support
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