e-Business Landscape

What is ERP?

Decisions to be Made Prior to Implementation

Major ones:• What software package(s)?• Which consulting company?• What hardware?• What approach?• Re-engineering before or during

the ERP project?

SAP Helped KKR Win Pepsi IPL 2014

How?

SAP Helped KKR Win Pepsi IPL 2014

• KKR team leveraged SAP HANA based platforms

• SAP Auction Analytics, SAP Game Analytics and SAP Lumira (a data visualization software) to evaluate players during auction

• Predictive analytics capability of SAP HANA helped find similar players to provide alternatives during auction

• Derive post-game analytics following each of the team’s games.

Three Key Properties of ERP Systems

• Multi-functional in scope– HR, mfg, financials, …

• Integrated in nature– Data updates across system

• Modular in structure– Add functionality over time

The Architecture of HR module

People MaintenancePeople Intake People Outgo

Recruitment& Selection

PersonnelAdministration

Time & LabourAnd Knowledge

Management

Training &Development

PensionAdministration

Compensation& Benefits

Administration

Payrollinterface

PerformanceEvaluation Outplacement

Labour Relations

Expense &Travel Admin.

OrganisationalManagement

Health &Safety

ReportsEmployeeSelf-ServiceData Entry Telephone Enquiries

Evolution of ERP

Adoption Status of ERP in India

Small

(<50 employees)

Medium

(50-499 employees)

Large

(>500 employees)

No. organizations who are aware of ERP across top 8 cities of India

45029 16572 4063

Implemented 0.9% 6.5% 35.6%

Planning/ Evaluation 2.7% 4.7% 33.5%

Not considering seriously 81.5% 75.9% 28.8%

Refused to answer 14.7% 13.0% 2.1%

* Source: IDC(India)

ERP Vendors

• SAP– the market leader

• Oracle – Number two, bought Peoplesoft and Peoplesoft bought J.D. Edwards in June 2003

• Baan – Smaller, European player

• Microsoft’s Navision

• ERP’s contribution to business vision and strategy

• Impact of ERP on the decision making process

• Competitors’ adoption of ERP

• Impact of ERP on cooperative business networks

• Impact of the decision to implement or not an ERP system on the competitive position and market share

• Estimation of the total cost of ERP ownership and impact on organizations’ resources

Evaluation of ERP Systems: Strategic Factors

Evaluation of ERP Systems: Operational Factors

• Impact of ERP on:– transactions’ costs

– time to complete transactions

– degree of business process integration

– intra- and inter-organizational information sharing

– reporting

– customer satisfaction

• Difficult to answer - size of investment can vary substantially depending on:

– scope of project

– technology involved

– level of internal resources (staff!) available

– level of “reuse” of existing equipment

– outsourcing.

Cost of ERP

Cost of ERP

ERP Software Costs

Infrastructure Costs

Implementation Cost

Training Costs

Integration And Testing Costs

Data Conversion CostsData Analysis CostsConsultants CostPost ERP Depression

Decisions to be Made Prior to Implementation

Major ones:• What software package(s)?• Which consulting company?• What hardware?• What approach?• Re-engineering before or during

the ERP project?

What Software Package?

• Important decision criteria:– package functionality meets needs of

company?

– ample base installed?

– quality of documentation?

– cost of software acceptable?

– local support provided by vendor?

– quality of customization tools?

– reputation/size of vendor?

ERP-How to implement?

Organizations employ information systems in three different ways:

1. Custom-built Systems2. Off-the-shelf Systems3. Hybrid Systems

ERP systems be employed as either custom-built or off-the-shelf or hybrid system. Since development is too costly and technology demanding, ERP systems generally appear as off-the-shelf packages

Single Vendor vs. Best of Breed

or

Decisions to be Made Prior to Implementation

Major ones:• What software package(s)?• Which consulting company?• What hardware?• What approach?• Re-engineering before or during

the ERP project?

Which Consulting Company?

• Product knowledge/potential to add value: Do consultants understand the particular product to be implemented?

• Do they understand the way we do business?

• Implementation/industry experience: Have they worked on similar projects?

• Methodology: – Does the consulting firm have a sound methodology?

– Are the consultants trained in the methodology?

ERP Service Providers

Europe North America

Decisions … What Hardware?

• What kind of equipment is needed? – Server/s, fiber optics communication infrastructure,

satellite communication, desktops, etc.

– Scalability? Customer support? Costs?– Compatibility with software?

• When is it needed?– From the start (minimum: for training, simulation

and testing)

Decisions … What Approach?

• Big Bang = implementing all modules at the same time, one cutover date for the entire new system.– very risky– cheaper (in total - if everything goes well)– faster

Decisions … What Approach?

• Phased approach = implement modules in different phases.– more expensive (development of temporary

interfaces)– takes longer (danger of losing speed)

• Series of “Small Bangs” = implement subgroups of modules in parallel. Best of both worlds?

Roles to Play by the Parties Involved!

• Vendor: delivery of software, initial training for key users, project support, quality control, conduct modifications.

• Consultants: bring/transfer know-how about package (beyond vendor training), development of detailed work-plans, optimize fit between processes and software, analysis of customization issues.

• Company: learn/assimilate information about software (independence!), make people sufficiently available (reallocation of responsibilities), keep up motivation (monitoring progress), responsibility for conversion (data extraction, interfaces) programs.

How to Succeed in Implementation

• Position project as business, not an IT, initiative.

• Put the company’s best people on the project! Have a strong project leader (VP).

• Build a strong cross-disciplinary team at project start-up and foster them through project completion

• Continued commitment of senior management.

• Get all affected parties to “buy in”.

• Communication

• Deal with organizational resistance quickly

• Make decisions and manage change effectively

The Future of ERP

• ERP’s are getting easier: – to use– to implement– to adapt to individual user needs.

• ERP’s are moving away from being a product towards being a service– SAAS