what organ is at ions should know about erp systems

8/3/2019 What Organ is at Ions Should Know About ERP Systems

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What Organisations Should Know About

ERP System

Presented By

Ritesh Shah

Sumit NarayanManmohan Panigrahi

Mitesh Vartak

Jyotiprakash Dash


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Introduction

Potential operational improvements required to become

globally competitive.

Inventory reduction to a minimum.

Reduction of total costs of products and/or services.

Provision of more reliable delivery dates.

Making of assortment of production.

Providing higher service levels to customer.

Solution Enterprise Resource Planning (ERP)

A tightly integrated solution to an organizations information

system needs.


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ERP

A strategic tool to obtain competitive edge by Integrating all business processes

Optimizing use of available resource

Keeping up with technical changes

Ensuring timely responses

Reasons for ERP introductions (Research by Chen in 2001) The use of multiple points of input with duplicated effort in the existing

system

The inability of the existing system to support organisational needs

The requirements of extensive resource for maintenance and support

The need of enterprise to reengineer their business process The growth of enterprise and subsequent incompatibility of several

information systems.

The inability of employees to respond easily to questions or information

requested by key customers or suppliers


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Evolution of ERP

MRP

MRP II

ERP

1960s

1980s

1990s

Prod req. in mfg environment

Mainly inventory control

Extension of MRP to shop floors and

distribution mgmt used by mfg.

Next generation of MRP II with other application areas

(Operation, Marketing, Finance and HR) used by Org.

Running on client server architecture


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ERP Implementation Success

Depends upon

How quickly the benefits can be reaped from it.

Rapid implementation that lead to shorter ROI period.

ERP implementation success refer to the degree of deviation from the project goal

in terms of expected cost, time, system performance and benefits. ERP system is configured and running and the whole project is more or less on

time and within budget.

Success if it achieves the level of ROL in the project approval phase.

How functions are divided and integrated in to the base system.

Support from top management.

Support from operation groups and business units.

Training and deputation of manpower from the associated departments.


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ERP Modules

Depends on Organization

Typically it has following modules

Accounting HR

Manufacturing and logistic

Sales

Controlling

Distribution

Material Management and Quality Management


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HR Module


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Finance Module


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Sales and Marketing


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Manufacturing Activities


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Integrated Information System


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ERP Implementation Stages

Implementation is complex process and

involve high cost, time and resources

Most Preferred model Langenwalter and

Davenports Model (2000)

Stages ofImplementation:

Stage 1:

Feasibility Study

Stage 2: Plan for

the system

Stage 3:

Selection of theappropriate ERP

Stage 4: Pre-

Implementation

Stage 5:

Implementation

Stage 6: Post

Implementation


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ERP Implementation Success.

Keys for successful implementation

Commitment from top management

Form a task force with personnel from all functional areas

Tie between functional areas and business functions

Assessment of hardware requirements Step by step introduction rather than all at once.

Early planning on training and support.

Streamline decision making

To determine success of ERP Implementation

Configured and running

Whole project is on time

Whole project is within budget


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ERP in developed Countries

Includes

North America(USA & Canada)

Europe(UK, Germany, France)

Japan

North America(USA & Canada) Represent 66% of ERP market.

Due to

Excellent IT infrastructure.

Strong economic and governmental IT policy.

High IT maturity.

Favorable computer culture.

Qualified personal to adopt advanced technologies.


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ERP in developed Countries.

Europe(UK, Germany, France)

Represent 22% of ERP market.

Due To

Strong economy and solid industrial and manufacturing base.

Information infrastructure is well established and qualified personnel available.

Highly customised application used.

13% use one functional area while 70% use several functional area.

Japan

Not widespread.

Due To

Regional environment and organisational culture.

Economy is highly dependent on neighboring countries.

Multiple language barriers.


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ERP in developing Countries

Includes

India

China

Brazil

South Asian countries contribute about 9% towards total ERP market while LatinAmerica contributes about 3%.

India

Largest developing country base in terms of software exports.

ERP offered by small localised players.

Largest developing country base in terms of implementing ERP systems. Lack of interest due to high implementation costs.

Lack of computer culture.

Common belief that ERP systems are only for larger companies because of high

cost od acquisition, implementation and maintenance.


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ERP in developing Countries.

China

Majority of enterprise in the country is small and medium in size.

High cost of ERP system is the problem.

Technical complexity is the biggest problem.

Language barrier, shortage of qualified staff. Lack of training, lack of incentives to state owned enterprises.

Different corporate cultures compared to the west..

Brazil

Main scope is in the telecomm sector.

Small companies has started implementing ERP.

Telecomm infrastructure is developing at a very faster rate.

High cost of ERP system is the problem.


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Conclusion

Strong need of a centralised system to be globally competitive.

Need for integration of information across various functional areas.

Major players are SAP, Oracle, Peoplesoft, Baan, J D Edwards.

SAP accounts for roughly 33 % of total market and serves more than 12000

customers.

Rest all accounts for almost 36 % of the total market.

Important factors to be considered for ERP implementation

Top management support.

Integrating existing legacy system and other application with the ERP system for

providing a common interface.

ERP system are complex and implementing is time consuming and expensive.

Better understanding is required to avoid failure.


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Takeaways

ERP is a business solution and not an IT project.

Degree of uncertainty is substantially high and extra care needs to be taken.

ERP has a greater impact on the organization than the traditional systems.

Intangible benefits are difficult to put in money terms.

Definitely emotional element is involved in ERP implementation because of drasticorganisational changes are involved.

On a long term basis it increases the productivity of the organization.


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Thank You

what organ is at ions should know about erp systems

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