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