[PPT]Enterprise Resource Planning ERP - Faculty of...
Transcript of [PPT]Enterprise Resource Planning ERP - Faculty of...
Instructor’s Profile
Name : Ameer Rizvi 1998-2001: Oracle Corp.
Presale, Business Consulting, Apps Trainer 2002-2003: Deloitte & Touché
ConsultingOracle Financials Training
2003-2005: Arthur ConsultingOracle Financials Consultant
2006-2009: IBAPermanent Faculty Member
Grading 1st & 2nd Term 30 Marks Final 30 Marks Term Report 30 Marks Class Attendance & Participation 10
Marks
Total 100 Marks
ERP Course Outline ERP Introduction (Lecture) Virtual Organization ( Group Exercise) Business Function Processes and Data Requirement (Lecture) ERP Selection Process ( Group Exercise + Lecture) ERP Major Vendors (Students Presentation) ERP Business Requirement ( Group Exercise + Lecture) ERP RFP Development ( Group Exercise +Lecture) Sales & Marketing SAP (Group Exercise + Lecture) Production & Supply Chain SAP ( Group Exercise +Lecture) Material Management SAP ( Group Exercise +Lecture) Financial SAP ( Group Exercise +Lecture) ERP & E- Commerce ( Group Exercise +Lecture) ERP Implementation Success & Failure ( Survey Presentation)
Definition of ERP
Business solution that addresses all the needs
of an enterprise with the process view of an
organization to meet the organizational goals
and integrate all the functions of the
Enterprise.
Business solution that addresses all the needs of an enterprise with the process view of an organization to meet the organizational goals and integrate all the functions of the Enterprise.
ERP software integrates all departments and functions onto a single system that can serve the needs of the entire company.
… complex mega packages (Gable et al., 1997) designed to support the key functional areas of an organization.
Definition of ERP
The American Production and Inventory Control Society (APICS) defines ERP as “an accounting oriented information system for identifying and planning the enterprise-wide resources needed to take, make, ship, and account for customer orders” (Watson & Schneider, 1999).
An ERP system can be thought of as a company-wide Information System that tightly integrates all aspects of a business. It promises one database, one application, and a unified interface across the entire enterprise Bingi et al., 1999 .
Definition of ERP
ERP links all areas of a company with external suppliers and customers into a tightly integrated system with shared data and visibility. ERP systems are designed to solve the problem of the fragmentation of information over many legacy systems in large business organizations (Chen, 2001, p. 374; Chen, 2001, p. 379)
Definition of ERP
Supply ChainManagement
Sales ForceAutomation
Internet Integration
Business Intelligent
CustomerRelationship ManagementKnowledge
Management
ElectronicCommerce
ERP IIERP
EnterpriseResourcePlanning
(+BPR, HR Logistics Service..)
MRP IIManufacturingResourcePlanning(+Cash flow)
MRPManufacturingResourcePlanning
(+Capacity)
mrpMaterial RequirementPlanning
Evolution of ERP
MRP: MaterialRequirement Planning
Payroll
GL: General Ledger
AP: Accounts Payable
AR: A/C Receivable
EDI-Electronic Data Interchange
Planning
Scheduling
Distribution
MRP :Ⅱ Mfg Requirement Planning
HR: Human Resource
FMIS:Financial Mgmt
Information Systems
E-Commerce
SFA: Sales ForceAutomation
CRM: Customer Relationship Mgmt
SCMSupply ChainManagement
ERPEnterprise ResourcePlanning
E-Business
ESCMExtended SCM
EERPExtended ERP
1970 1980 1990 2000*source: HP
Evolution of Business Systems
The Value Chain
Supportactivities
Primary activitiesInbound logistics Materials receiving, storing, and distribution to manufacturing premisesOperations Transforming inputs into finished products.Outbound logistics Storing and distributing productsMarketing and Sales Promotions and sales forceService Service to maintain or enhance product valueCorporate infrastructure Support of entire value chain, e.g. general management planning,
financing, accounting, legal services, government affairs, and QMHuman resources management Recruiting, hiring, training, and developmentTechnology Development Improving product and manufacturing processProcurement Purchasing input
Functions of ERP System Attempts to integrate all departments
and functions across a company onto a single computer system servicing all of the different departments’ needs
Allows the various departments to more
easily share information and communicate with each other.
Maintain Corporate wide Information
under one Unified software program ( Single Data Base)
ERP ComponentAn ERP System includes Business Processes that ERP software
supports, Users of ERP systems Hardware and Operating Systems that run
ERP applications ERP software,
Note: The failures in one or more of those four components could cause the failure of an ERP project. The failures of multi-million dollar ERP projects are reported once in a while even after 20 years of ERP implementation.
Integrated ERP Solution
Finance Projects
Supply ChainManagement
Manufacturing
FrontOffice
HumanResources
Applied Technology
Subsystems of ERP Store and purchase Raw Materials Payroll and HRD Production Planning and scheduling Financial Accounting Sales and dispatch Export process Marketing Customer Relationship Inter office communication Event Tracking Inter office data synchronization Engineering & Maintenance
Issues & Problems Availability of the Items cannot be checked
at the time of Accepting Sales order On-line Material Status is not available &
Shortages Poor Productivity Enhancements Poor Material Planning Poor Customer Service Poor Cash Management Mismanagement of Inventory Poor Quality Management
To Enhance Profitability
BY
Increase in Sales - Say 30%
And /OR
Reduce Procurement Cost - Say by 5-10 %
For Healthy Operations Integration of Systems across the
Functional Departments in a Company as well as across the Enterprise as a Whole.
Better Customer Service. Introduction of Latest Technologies as and
when they are ready for the Industry acceptance
Expertise database Avoids data redundancy
Competition in the Market. Manufacturing Challenges. Manufacturing Globally. Distribution network spread. New Product introduction. Lower manufacturing lead time. Focus on industry markets. Satisfying the needs of customers. Develop specific business methods and
processes. Integration with third party products.
Demands on the Industry Better products at lower costs Tough competition Need to analyze costs / revenues on a
product or customer basis Flexibility to respond to changing
business requirements More informed management decision
making
Authorization and Security User / Password level authentication User wise activity permission Tracking of changes made by users Facility of authorization/approval of
transaction Restriction in modifying the transaction
after approval is done
IT System Present Software does not meet
business needs Legacy systems difficult to maintain Obsolete hardware/software difficult to
maintain
Objectives of the ERP Systems
Facilitates Company-wide integrated Information Systems Covering all functional Areas.
Performs core corporate activities and increases customer service augmenting Corporate Image.
Organizes & optimizes the data input methodologies systematically.
To have a fully harmonised online system, which can integrate with Back Office
Objectives of the ERP Systems
To introduce proper systems and processes which will not be man dependent
To ensure full security by introducing adequate controls, checks and balances and also by maintaining audit Trails.
To minimize data redundancy by eliminating duplicate entries.
To enable the organizations to provide its customers a more value added service.
To create a flexible system so that future needs and changes in the business flow can be easily incorporated
Advantages of an ERP Package?
Highly Graphics based User Interface. Zero Down time/ planned down time. Readymade solutions for most of the
Problems. Integration of all functions ensured. Easy enterprise wide information sharing. Suppliers and Customers can be on-line
communication. Knowledge transfer between industries
guarantees innovation. Automatic adaptation to new technology.
Integrated Solution ONE DATABASE
MEANS: Less Management Less Complexity Less Integration Open Standards Customers,
Products,& Everything
Else!Service
Financials
HR
Procurement
Marketing
Sales
Supply Chain
OrderManagement
Savings
Today
Business Planning
Transaction Processing
and Reporting
}Measuring &Controlling Financial/
Accounting Risk
Tomorrow
Transaction Processing
and Reporting
Measuring andControlling Business Risk
Business Planning
20%
25%
55%
Strategic Solution
Generic Business Benefits of ERP
Improves access to accurate and timely information
Enhances workflow, increases efficiency, and reduces reliance on paper
Tightens controls and automates e-mail alerts
Provides user-friendly Web-based interfaces Streamlines processes and eases adoption
of best business practices Establishes a foundation for new systems
and integrates existing systems
Process Improvement Helps with order fulfillment process Integrates financial information (the truth of its
overall performance) Integrates customer order information (keeps
track of orders more easily) Standardizes and speeds up manufacturing
processes Reduces inventory (improves flow of supply
chain) Standardize Human Resource information
(employee benefits, hiring & firing, etc.)
Business Benefits
A Framework of Business Benefits Dimension Subdimension Explanation[1] Operational 1.1 Cost reduction
1.2 Cycle time reduction
1.3 Productivity improvement
1.4 Quality improvement
1.5 Customer services improvement
Because ERP systems automate business processes and enable process changes, one would expect ERP systems to offer all of these types of benefits.
Adapated from Shang and Seddon (2000)
A Framework of Business Benefits Dimension Subdimension Explanation[1] Operational 1.1 Cost reduction
1.2 Cycle time reduction
1.3 Productivity improvement
1.4 Quality improvement
1.5 Customer services improvement
Because ERP systems automate business processes and enable process changes, one would expect ERP systems to offer all of these types of benefits.
Adapated from Shang and Seddon (2000)
Business Benefits cont.
Business Benefits cont.[2] Managerial 2.1 Better resource
management
2.2 Improved decision making and planning
2.3 Performance improvement
With a centralized database and built in data analysis capabilities, it seems likely that ERP systems will provide informational benefits to management.
[3] Strategic 3.1 Support business growth3.2 Support business alliance3.3 Build business innovations3.4 Build cost leadership3.5 Generate product differentiation (including customization)3.6 Build external linkages (customers and suppliers)3.7 Worldwide expansion3.8 Enabling e-commerce
ERP systems, with their large-scale business involvement and internal and external integration capabilities, could assist in achieving these strategic benefits.
Business Benefits cont.
Business Benefits cont.[4] IT Infrastructure 4.1 Build business
flexibility for current and future changes4.2 IT cost reduction4.3 Increased IT infrastructure capability
ERP systems, with their integrated and standard application architecture, provide an infrastructure that could support this dimension.
Business Benefits cont.[5] Organizational 5.1 Support
organizational changes5.2 Facilitate business learning5.3 Empowerment5.4 Build common visions5.5 Change employee behavior5.6 Better employee morale and satisfaction
The integrated information processing capabilities of ERP systems could affect the establishment of organizational capabilities.
Traits of ERP System Some key traits in ERP solutions: ERP applications address a business process. ERP applications are modular. ERP applications are integrated. ERP applications include a company’s reach beyond its walls — to its suppliers, customers, and partners. The entire ERP suite will address all areas (or the great majority) of a company’s business functions.
Traits of ERP System Some key traits in ERP solutions: ERP applications address a business process. ERP applications are modular. ERP applications are integrated. ERP applications include a company’s reach beyond its walls — to its suppliers, customers, and partners. The entire ERP suite will address all areas (or the great majority) of a company’s business functions.
Process Driven Procure to Pay Cycle
Overview
ReceiveRequisition PO
Oracle Purchasing Oracle Payable
Supplier
Pay on Receipt
Traits of ERP System Some key traits in ERP solutions: ERP applications address a business process. ERP applications are modular. ERP applications are integrated.ERP applications include a company’s reach beyond its walls — to its suppliers, customers, and partners.The entire ERP suite will address all areas (or the great majority) of a company’s business functions.
Financials Application Suite
FinancialsCash
Management
AssetManagement
ExpenditureManagement
FinancialPlanning
Billing &Cash Collection
FinancialConsolidation
& Analysis
Financial Core Module General Ledger Purchasing Payables Receivable Cash Management Fixed Asset
Traits of ERP System Some key traits in ERP solutions: ERP applications address a business process. ERP applications are modular. ERP applications are integrated.ERP applications include a company’s reach beyond its walls — to its suppliers, customers, and partners.The entire ERP suite will address all areas (or the great majority) of a company’s business functions.
Oracle’s ERP Solution
ProjectsProject CostingProject BillingProject Time & ExpenseActivity Management GatewayProject ConnectProject Analysis Collection Pack
Supply Chain ManagementOrder Entry PurchasingProduct ConfiguratorSupplier SchedulingSupply Chain Planning InventoryWeb Suppliers
ManufacturingEngineeringBills of MaterialMaster Scheduling/MRPCapacityWork in ProcessQualityCost ManagementProcess ManufacturingProject ManufacturingFlow ManufacturingRHYTHM Factory PlanningRHYTHM Advanced Scheduling
FinanceGeneral LedgerFinancial AnalyzerCash ManagementPayablesReceivablesFixed AssetsWeb PurchasingWeb Expenses
Applied TechnologyBusiness Intelligence SystemApps Data WarehouseWorkflowAlertEDI Gateway
Human ResourcesHuman ResourcesPayrollTraining AdministrationTime ManagementAdvanced BenefitsWeb Human Resources
Front OfficeSales MarketingField Sales OnlineMobile Field SalesSales CompensationServiceMROContractsTelephony ManagerMiddlewareInternet Commerce ServerWeb Customers
FinanceProjects
Supply ChainManagement
Manufacturing
FrontOffice
HumanResources
Applied Technology
Strategic Enterprise ManagementActivity Based ManagementBalanced Scorecard
Traits of ERP System Some key traits in ERP solutions: ERP applications address a business process. ERP applications are modular. ERP applications are integrated.ERP applications include a company’s reach beyond its walls — to its suppliers, customers, and partners.The entire ERP suite will address all areas (or the great majority) of a company’s business functions.