Erp - Enterprise Resource Planning

ENTERPRISE RESOURCE PLANNING (ERP) SUBMITTED BY Hitesh Aggarwal Nishant Mahajan Prathima.S.Vadana

What is ERP? • An ERP or Enterprise Resource Planning system integrates information and business processes to enable information entered once to be shared throughout the organization. • ERP had its origins in manufacturing and production planning. In the mid-90’s it was extended to other backoffice functions such as financial management and human resource management. • More recently these systems have addressed applications specific to higher education such as student systems and grants management.

Enterprise Resource Planning

Needs Assessment Phased Implementation

Software Selection

ERP Project Process Reengineering

Training Conference Room Pilot

Common examples include SAP, PeopleSoft, Banner and Oracle.

The Players • SAP R/3- still must maintain mainframe architecture of large R/2 user population. Strong finance and accounting. By far the largest vendor (approx. 30% market share). • Baan - known for manufacturing, distribution, process modeling modules - web and Internet. • PeopleSoft - known for human resource package. • Oracle- simplest product to install and support. Recently advertising flow manufacturing enhancement. • J.D. Edwards - SCM module (SCOREx) WSJ 11/17/98. • Manugistics - Distribution - truck loading and routing focus.

What are the Benefits of ERP? • Improve access to information • Improve workflow and efficiency • Improve controls and program alerts • Process reengineering – update old processes • Foundation for new processes, such as eprocurement, with significant ROI Enterprise Resource Planning

Buyer or Management Approval Cycle

Requisitioning Purchase Order User Product Selection

Supplier Fulfillment Route to Recipient

Ship Product Receiving Accounts Payable General Ledger Financial Reconciliation

P ot e nt ia l B e n ef it

We are here Efficiency, Effectiveness & Service Stage 3: Efficiency & Effectiven Stage 2:

Extend capabilitie s

Incremental Improveme Efficien nt cy “Get it Stage 1: working” ERP Go“Get it Live in”

LIFE CYCLE OF ERP

Efficiency, Effectiveness & Service Stage 4: Create New Capabilitie

“Get alignment”

“Change the game”

Time after Go-live

WORKFLOW AUTOMATION

1. Strategic& business planning-Materials •New product •Product •Bill of introduction pricing material s •Long range •Engineering forecasting & change capacity planning management

•Order management •Distribution management

2. Operational planning & execution-Materials •Routing

•Order •Supplier processi manageme ng nt •Inventory/Warehou •Forecastin se management g •Scheduling & •Distribution WIP management management

DATABASE CREATION 3. Strategic & business planningResources •Intelligent resource planning

Organizational Payroll/Employee Cost accounting Accounts receivable General ledger Job/Project management Fixed assets Accounts payable Budgeting Inventory Logistics/Distribution Materials

Data Model

•Human resource planning

•Quality management

IMAGING

EL E C T R O NI C D AT A IN T E

ELECTRONIC MAIL

•Facilities maintenance/ Planning & implementation

•Payroll •Costing & budgeting

•Recruitment •Job evaluation & performance appraisal •Quality control & planning

•Maintenance •Fixed engineering assets and manageme scheduling

•Resource MIS

MULTI-PLATFORMMULTI FACILITYMULTI-MODE MANUFACTURING MULTI-CURRENCYMULTI-LINGUAL

ERP Lifecycle • Planning – Most important part – Fit-gap – Functional and technical parties must be involved and work hand-in-hand

• Execution – KISS – Avoid customizations – Who makes decisions (Customize vs. BPR)?

• Post-Implementation – The system will NOT be 100% when you

Problem • The time and resources required to implement and maintain ERP systems far exceed original expectations • The purchase price for ERP software is the most visible expense, but implementation and maintenance contains many hidden costs • Organizations fail to recognize the true Total Cost of Ownership (TCO) of ERP systems and often make policy decisions early in the implementation plan that likely have long-term impacts on the TCO

Problem contd….. • Tend to make decisions with little solid information. This happens simply because we are running out of time! • Sometimes our decisions come back to haunt us in the long-term. • Have not fully extended the ERP capabilities let alone create new capabilities • The inability to move forward in the ERP lifecycle prevents realization of the full potential benefit of ERP (West and Daigle 2004). • Unable to get the decision makers to see the big picture

ERP Project Management • One of the most important decisions on an ERP is the selection of the project manager • The PM should be a professional manager with experience with project management, loyal to the university, with both functional and technical knowledge. • Use a standard methodology to provide guidance and structure to the project • In addition, to the project manager, there should be functional and technical managers. • Individual functional teams, such as grants management, should have a designated lead. • Use of committees and executive steering group

Track 6 – Enterprise Resource Planning

Key Functional Issues Needs analysis Process engineering Back-filling staffs Training Recruiting and retaining staff • Conference room pilot (CRP) • Reporting • • • • •

• Gaps analysis • Setting expectations • Obtaining user buy-in and acceptance • Validation of data and systems • Communications • Process documentation • Audit of data and system

Track 6 – Enterprise Resource Planning

Key Technical Issues • Sizing the system • Recruiting the talent • Holding the line on modifications • Conversion of data • Interfaces • Report development • Change management and problem tracking

• Desktop requirements • Network issues • Distributed versus centralized production • Help Desk and ongoing support • Planned upgrades and revisions • Production budgets

Track 6 – Enterprise Resource Planning

SAP AG’S R/3 • SAP AG, A German firm, is a world leader in ERP software. -Designed to operate in a threetier client/server configuration -Applications are fully integrated so that data are shared between all applications

R/3 System Functional Components Financial Accounting

Sales & Distribution

R/3 System Functional Components

Manufacturing & Logistics

Human Resources

The Promise of Integration - SAP R/3 View of Manufacturing Sales and Distribution

Sales Profit planning planning SOP Planned requirements Forecasts Customer order processing Shipping, billing, transport

Production Planning Demand

management Master planning Rough-cut capacity planning MRP/Planned orders Order - Creation - Release Confirmatio Shop floor control Capacity leveling

Project system

Materials Management Direct

requisition Purchasing Inventory management Goods receipt Material valuation Invoice verification Warehouse management

Quality Lot Management inspection Process

Preventive Maintenance

Planned repair

Reasons for Implementing SAP R/3 • Desire to standardize and improve processes • To improve the level of systems integration • To improve information quality

Summary ERP is a business wide common system. Can integrate all of our business units. Very expensive and time intensive. Proper implementation can help the business function better. • Poor implementation can hurt the business immensely. • Training • • • •

Thank you! Questions?