BIS Ch. 6 - Supporting Processes with ERP Systems
Legacy Information Systems
Previously invested IT Single focus Slow and nonextensible Nonintegratable High cost to maintain
Integrated Business Solution Vendors
SAP SAP Business Suite, SAP All-in-One, SAP Business ByDesign, SAP Business One Oracle Applications Oracle, JD Edwards, PeopleSoft, Siebel, Retek Microsoft Business Solutions Dynamics: Great Plains, Navision, Axapta, Soloman The Sage Group Sage Software - Accpac ERP, PeachTree SSA Global Technologies BAAN
What are the hidden costs of ERP?
Training Integration and testing Customization Data conversion Data analysis Consultants forever Replacing your best and brightest Implementation teams can never stop Waiting for ROI Post-ERP depression
Check other Questions
Why do ERP projects fail so often? How important have ERP systems become? How does ERP fit with e-commerce? ... We will discuss all of these questions as part of SAP
EAI {Enterprise Application Integration} does the following:
* Connects information silos via a new layer of software that connects information systems together. * Enables existing applications to communicate and share data * Provides integrated data * Leverages existing systems, leaving departmental information systems as is, but providing an integration layer over the top * Enables a gradual move to E.R.P * Not nearly as disruptive as converting to E.R.P, can be less expensive, and provides many benefits of E.R.P
What makes SAP different from other E.R.P systems?
* Founded in 1972, based in Germany * SAP-America formed in 1998 to engage in US government work * 3rd largest software vendor worldwide * World's Largest Business Software Company *Over 55,000 employees in more then 75 countries * 183,000+ customers in more then 130 countries * 200,000+ installations * 2,500+ Business Partners * Within the US SAP is used in over 22 different industries * Over 80% of Fortune 500 companies use
SAP Portfolio Strength
* World-wide usage * Designed to satisfy the information needs for all business sizes (small local to large all international) * Multi-lingual * Multi-currency * Multi-balance (parallel G/L Accounting) * Designed to satisfy the information needs for all industries, e.g. * Automotive * Banking * Retail * Public Sector * Higher Education and Research etc.
E.R.P Costs (From SAP)
*Fortune 500 companies spend $100 million or more * Hardware 20-25% * Software 20-25% * Human ware 50-60% * Training, consulting, and implementation
Enterprise Application Integration
Connects the plans, methods, and tools aimed at integrating separate enterprise systems (EAI)
What types of organizations use E.R.P?
ERP by Industry Major: Large manufacturers Supply chain: Distributors, mining Service, Healthcare, Retail ... Example: NBA-Business Analytics ERP by Organizational Size Initially large manufacturing In time, smaller organizations International ERP Coordinate the operations in global scale
See Kodiak > Handouts > ERP Definition and Solutions
How long will an ERP project take? According to vendors: 3 to 6 months average implementation time 6 months is considered a short implementation with limited capabilities for a small company An expensive functional capability (using ERP in only accounting means pricy accounting system) ERP is going to change your business and it is not easy to do it very fast. 1 to 3 years on average It is significantly shorter in on-demand or software-as-aservice (SaaS) solutions
JIT
Just in time, purchase products as needed for production and immediate consumption by customer without storing and recording inventory
What makes SAP different from other ERP systems? 2
S-A-P is an abbreviation for "Systems, Applications, Products" * {English: "Systems, Applications, and Products in Data Processing"} * The Company's main product is SAP R/3 {E/3 is their ERP module} * Database has over 25,000 tables * Need to answer over 8,000 configuration decisions * Industry-specific platforms : a suit tailored and pre-configured for a specific industry such as retail, healthcare, and manufacturing
What are the elements of an ERP system?
Six components of an ERP 1 ERP Software 2 ERP Hardware 3 ERP Databases 4 Procedures 5 People 6 Inherent Business Processes
What are the benefits of an E.R.P system? Example measures of the benefits of E.R.P
The primary purpose of an E.R.P system is integration: an E.R.P systems allows the "Left-hand" of the organization to know what the right hand is doing.
What are the challenges of implementing an E.R.P system?
Very challenging initiatives *Kmart and Hershey's lost over $100 million in implementations * Check 10 Famous E.R.P Disasters, Dust-ups and Disappointments * http://www.cio.com/article/486284/10_Famous_ERP_Disasters_Dustups_and_Disappointments * Implementation decisions * People issues / Organization culture * Change in the processes, workflow, roles and responsibilities * Employee resistance for change * Manager's resistance for change in their roles * Management's lack of understanding/experience/leadership to push for change in ERP implementation * Failing to specify objectives and measures of processes and their relationships to ERP
What does ERP really cost?
What does ERP really cost?
ERP (Enterprise Resource Planning)
a suite of software, * a database * procedures * and a set of processes for supporting business operations with a single, consistent, information system. * Key term in ERP is INTEGRATION! * Integrate processes of different functions (departments) * Integrate information systems of different functions * Integrate data of different functions * Second key term in ERP is STANDARDIZATION!
E.R.P system
consolidates data about customers, products, people, equipment, machinery, facilities, production schedules, vendors, and finances in a single database. By consolidating the data in one place, the data are always up-to-date and available in real time to be used by any process in the organization.
Enterprise Resource Planning
integrates all departments and functions throughout an organization into a single IT system (or integrated set of IT systems) so that employees can make enterprise-wide decisions by viewing enterprise-wide information on all business operations.
What problem does an EAP system solve?
tackles the silo problem by providing layers of software that connect information systems together.
