Enterprise Resource Planning (ERP)
ERP Systems: Advantages
- Added visibility reduce supply chain inventories (raw materials, WIP, finished products) - Helps to standardise manufacturing processes - Measure performance and communicate via a standardised method
Tactical ERP Implementation Success Factors
- Balanced team - Project team - Communication plan - Project cost planning and management - IT infrastructure - Selection of ERP - Training and job re-design - Troubleshooting/ crises management - ERP consultant selection may be required?
Elements of ERP systems
- Collects data from many divisions of firm for use in nearly all of firm's internal business activities - Information entered in one process is immediately available for other processes - Resolves problem of fragmented data - Coordination of daily activities - Helps managers make decisions about daily operations and longer-term planning
Business Value of ERP
- Increase operational efficiency - Provide firm-wide information to support decision making - Enable rapid responses to customer requests for information or products - Include analytical tools to evaluation the overall organisational performance
Implementation Problems
- Lack of top management commitment - Lack of adequate resources - Lack of proper training - Lack of communication
ERP Systems: Disadvantages
- Substantial time and capital investment - Complexity - Firms adapt processes to meet ERP system
Strategic ERP implementation success factors
- Top management commitment and support - Visioning and planning - Project Champion - Implementation strategy and timeframe - Project management - Change management
Hidden Costs of ERP
- Training - Integration and testing - Data conversion - Data analysis - Consultants - Implementation teams can never stop
Types of ERP
1) Best of Breed 2) Single Integrator Solution
ERP Evolution
1960s - Inventory Control Packages 1970s - Materials Requirement Planning (MRP) 1980s - Manufacturing Resource Planning - engineering, finance, HR 1990s - Enterprise Resource Planning (ERP) - integrate business processes 2000s - Extended ERP and ERPs on cloud - e-business solutions such as CRM and SRM
Balanced Team (Tactical)
A balance of both business and IT skills
Change Management (Strategic)
Build user acceptance of the project and positive employee attitude. This could be done through education about the benefits and need for an ERP system
IT Infrastructure (Tactical)
IT readiness of the organisation. Infrastructure might need to be improved/ revamped
Project Cost Planning and Management (Tactical)
Necessary budget and what the implementation costs will be
Troubleshooting/ Crises Management
On-going requirement
Software Providers of ERP
Oracle Microsoft SAP
ERP Implementation: Single Integrator Solution
Pick all the desired applications from vendor
ERP Implementation: Best of Breed
Pick the best application for each individual function. However, software may not integrate well
Communication Plan (Tactical)
Planned communication among various functions and organisational levels. Open communication amongst the organisation, suppliers and customers
Selection of ERP (Tactical)
Selection of appropriate package
Project Team (Tactical)
Solid, core implementation team 'best and brightest individuals'
Top Management Commitment and Support (Strategic)
Strong and committed leadership
Enterprise Resource Planning (ERP)/ Enterprise Systems
Suite of integrated software modules and a common central database. ERP is a process by which a company manages and integrates the important parts of its business such as: planning, inventory, sales, marketing, finance and human resources
Project Management (Strategic)
The ongoing management of the implementation plan
Implementation strategy and timeframe (Strategic)
Time phased approach
Visioning and planning (Strategic)
Identifying clear goals and objectives and providing a clear link between business goals and systems strategy