ERP systems

Agenda
What is an ERP System?
Why implement an ERP system?
Key characteristics of ERP system?
Architecture of ERP system?
How should ERP systems be implemented?
What results can be expected from ERP
systems?
Hidden cost and Risks associated with ERP
systems?
History and evolution of ERPs?
Components of ERPs?
 What is an ERP System
definitions
Simplistic Definition
ERP - Enterprise Resource Planning

Detailed Definition

“a business strategy and set of industry-

domain-specific applications that build
customer and shareholder communities value
network system by enabling and optimizing
enterprise and inter enterprise collaborative
operational and financial processes”(Source: Gartner’s
Research Note SPA-12-0420)
Enterprise Resource Planning
... synchronization of Company functions...

Purchase

Manufacturing Finance

Sales

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Historical system
architectures
Historically, companies created “islands of


automation”. A hodge-podge of various

systems that operated or managed various
divergent business processes. Sometimes
these systems were integrated with each
other and sometimes they weren’t.
Sometimes they were loosely interfaced and
sometimes they were more tightly interfaced.
What is an ERP – Key
Characteristics
Integration
seamless integration of all the information

flowing through a company – financial and

accounting, human resource information, supply
chain information, and customer information.
 What is an ERP – Key
Characteristics
Packages
Enterprise systems are not developed in-house

IS life cycle is different

1.Mapping organizational requirements to the
System processes
2.Making informed choices about the parameter
setting of system functionality.
Organizations that purchase enterprise systems
enter into long-term relationships with
vendors. Organizations no longer control
their own destiny.
What is an ERP – Key Characteristics
Best Practices


ERP vendors talk to many different businesses

within a given industry as well as academicsto
determine the best and most efficient way of
accounting for various transactions and
managing different processes. The result is
claimed to be “industry best practices”.
The general consensus is that business process
change adds considerably to the expense and
risk of an enterprise systems implementation.
Some organizations rebel against the
inflexibility of these imposed business practice
changes by ERPs.
 What is an ERP – Key
Characteristics
Some Assembly Required
Only the software is integrated, not the computing

platform on which it runs. Most companies have

great difficulty integrating their enterprise
software with a package of hardware, operating
systems, database management systems
software, and telecommunications suited to their
specific needs.


Interfaces to legacy systems

Third-party bolt-on applications
What is an ERP – Key
Characteristics
Evolving
Enterprise Systems are changing rapidly

Architecturally: Mainframe, Client/Server,

Web-enabled, Object-oriented,
Componentization
Functionally: front-office (i.e. sales
management), supply chain (advanced
planning and scheduling), data
warehousing, specialized vertical industry
solutions, etc.
Typical architectural components
Interacti Web Mobile Call
on e - Mail Center
Internet Wireless Telephony
Channels
Call
Analytica Marketing Sales Customer
l Center
Intellige Intelligen Intelligen
Applicati Intelligen
ons nce ce ce ce

Business
Marketin Sales eCommerc OSS HR
Applicati g e
ons

Installed Resources Territories Assignment

Base Engine
CRM 1 - to - 1
Foundatio Tasks Notes Calendar Fulfillment
E -n Interaction
Escalations
Business History
Foundati Common Data and Object Models , Security ,
on Interfaces , Globalization
Tech
Stack E - business Platform
ERPs
 Te ch S ta ck - In te rn e t C o m p u tin g
A rch ite ctu re
Application
2 Tier
Application

Application
Application

Application
X
3 Tier

Database

Application
Application
Browser
Java
Application Server
Browser
Why implement an ERP
System?
To support business goals
Integrated, on-line, secure, self-
service processes for business
Eliminate costly
mainframe/fragmented
technologies
Improved Integration of Systems and
Processes
Lower Costs
Empower Employees
Enable Partners, Customers and Suppliers
How should we implement ERP
systems

Obtain the right mix of people, processes



and technology!!
How should we implement ERP
Systems?
People
According to Project Structure
(hierarchies)
Should be aligned to processes
Process
Adapt your processes to those of the
ERP.
Technology
Hardware
Software
Integrated Systems
How ERP becomes part of your
system
 Process
1. Definition and Analysis


Hold discussions with various functional

personnel to establish the actual number of
systems operating at client site, what they
are used for, why and how often
Produce the Project Scoping Document
outlining current situation, proposed
solution and budgeted time


 Challenge : REQUISITE EXPERTISE - No

two clients are the same
Process
2. Design


Prepare various functional reports - specifies

current scenario and wish list
Prepare Design document which specifies
how the system is going to work
Prepare test scripts to be followed on system
testing
Map out the interface paths to various
modules
Simulations, mokeups, prototype


 Challenge : INFORMATION SHARING -

Availability of staff

Process
3. Build


Configure system as per set up document

specifications i.e. transfer conceptual
model into reality
Test system to verify accuracy (preliminary
tests)


 Challenge : TECHNICAL
ENVIRONMENT - System functionality
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
Beta testing


 Challenge : USER RESISTANCE

Understanding and acceptance
 data preparation
Process
5. Production


Effectiveness assessment
Business and Technical Direction
recommendations
Technology
Technology is an enabler, not the driver (it is
there to assist the organization to achieve
business goals)
It is a means to an end, not the end

 W h a t re su lts ca n b e e xp e cte d fro m
a n “ E R P cu ltu re ” ?
§Reduced working capital requirements
§Improved customer service
§Improved direct labor productivity
§Reduced purchase costs
§Reduced overtime
§Having the figures to make decisions
§Having accountability throughout the organization ERP
§Improved quality of life

23
 SAP AG – At a Glance
§Founded in Germany in 1972

§Market Leader in Industrial Enterprise Application (IEA)

§About 56% market share in the ERP market

§Worldwide presence in over 50 countries

§18,000+ employees
§Trained consultants doubled since 1996 (40,000)

§About 20,000 companies in 120 countries

§Around 64,500 installations of SAP

§Strength lies in its high degree of integration, mainly for large, global corporate
enterprises
§Significant presence in Global Fortune 500 companies
–

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 SAP R/1 , R/2
§The R/1 system
§Developed for ICI Chemical
§Released 1972
§Focused on Sales & Distribution and Materials Management
§Discontinued after release of R/2

§The R/2 system

§Reorganized as leading mainframe software for large
multinational corporations
§4,300 copies worldwide in 1993
§Mainframe-based to replace user legacy software;
co-existence and migration strategy underway for R/2 and
R/3

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SAP R/3 : 3 Tier Architecture
The Presentation Layer
Those SAP R/3 software components that
specialize in interacting with end-users
form the Presentation Layer.

The Application Layer

Those SAP R/3 software components that
specialize in processing business
applications form the Application Layer.

The Database Layer

Those SAP R/3 software components that

specialize in the management , storage and
retrieval of data form the Database Layer

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SAP R/3 : 3 Tier Architecture

Presentation Layer Application Layer Database Layer

components components components

reside in: reside in: reside in:

Presentation servers: Application servers: Database servers:

Systems capable of Specialized systems Specialized systems
providing a graphical multiple CPUs and with fast and large
interface. vast amounts of RAM. hard drives.

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SAP R/3 : 3 Tier Architecture
Presentation Layer components are installed across many PCs

The Application Layer

components are installed
across one or more high-
end servers.

The Database Layer

components are installed on
high-end database server.

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 Organizational Structure in SAP R/3
Production Planning Financial Accounting

Compa
Plant ny
Code

Controlling Human Resources

Client
Client
Controll Person
ing nel
Area Area

Sales and Distribution Materials Management

Purchasi
Sales ng
Area Organizat
ion

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BAAN ERP MODULE

THINK BUILD OPERATE

CONSULTING CUSTOMIZATION SUPPORT

•Roll-out support
•ERP Assessment and •Requirement Study •Enhancements to
Health-check •Design & Development Customizations
•Product Selection •Integration •Product support
•System Performance •Integrate Legacy systems •System Administration
Tuning to OA
•System/Application
•Upgrade Assessment •Develop Custom APIs •Tuning and patching

IMPLEMENTATION UPGRADE SPECIAL OFFERINGS

•Business process study •Upgrade and up-to-date

•Maintenance upgrade •Center of Excellence
•Business process Mapping •Rollout Assessment
•Gap Analysis •Functional and
•Configuration Regression
•Go-Live Support Testing
 Implemented Modules Of Baan ERP
CRM HRMS PROJECTS
• •
• •Daily business intelligence for projects
•Marketing •Billing
•Core-HR
•Sales •Collaboration
•Payroll
•Services •Contracts
•Self-Service
•Partner •Costing
•Advanced Benefits
Relationship Management •Portfolio Analysis
•HR Intelligence
•Analytics •Time and Labor
•Project Resource Management

FINANCIALS
MANUFACTURING SCM

•General ledger
•Inventory •Procurement
•Assets
•Bill of materials •Manufacturing
•Cash management
•Work in progress •Order management
•Payables / receivables
•Engineering •Product lifecycle management
•Financial analyzer
•Mrp •Supply Chain Execution & Planning
•Enterprise planning &
•Cost •Logistics
budgeting
A WATERFALL & ITERATIVE APPROACH OF JD EDWARDS
PEOPLESOFT ERP ARCHITECTURE
Conclusion
ERP systems provide a mechanism for
implementing systems where a high degree
of integration between applications is
required
The Business Case or Value Proposition for
implementation must be outlined
To successfully implemen,t a proper mix of
people, processes and technology should be
maintained
THANK YOU………!!!!

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MORE YOU ASK , MORE YOU LEARN….!!!

Something to think
about…
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Respect for ourselves guides our morals;
respect for others guides our manners