ERP in ATCOConcepts and Real Applications

By Ahmed Rami Elsherif21/05/2007

What Is ERP?• ERPS (Enterprise Resource Planning Systems) comprises of software packages that promises the seamless integration of all the information flowing through the organization - financial, accounting, human resources, purchasing, Sales, Inventory, Cost Controlling, Etc..

• ERP Systems provide information management and analysis to organizations.

• ERP Systems need of an integrated hardware infrastructure to deliver its full potential

• ERP Implementation project is a Business Project. IT is a supplier and facilitator for such a project.

ERP Characteristics• Integrated online/real time information throughout all the

functional areas of an organization.• Data standardization and accuracy across the enterprise.• Best-practices or optimized solutions are included in the

applications.• Creates efficiencies that organizations would not otherwise

have.• Delivers analysis and reporting capacity that can be used for

short and long-term planning and management.

ERP

Planning

Finance & Accounting

Expenses & Costs

Human Resources

Material Management

Fixed Assets

Special Solutions

Division 1

Division 2

Division N

An Integrated Model

Branch 1

Branch 2

Branch X

ERP

Division 1

Division 2

Division N

Standardized DataChart of Accounts

Cost & Profit Centers

Employees Master Data

Materials Master Data

Assets Master Data

Third Parties

Budget Items

Single Master Data Entry

through out the Organization.

Best-Practices e.g. Purchase Order Process

Purchase Petition

Approval PP

Offer Evaluation

Purchase Order

Approval PO

Reception of Goods

ERP

Material Management

Accounting & Finance

Budget

Purchasing Limit

Analysis and Reporting

Balance and Result Sheets

Divisions

Costume Presentation

Economical Indicators

Drill-Down Analysis

Graphical Presentations

Accounts payables and receivables

Sorting Criteria

Graphical Presentations

ERP Benefits

Tangibles:• Inventory Reduction (25 – 30 %).• Material Cost Reduction (5 %).• Labor Cost Reduction (10%).• Improved Customer Service & Sales (10 %).• Reduce AR & AP Delays (18 %).Intangibles:• Single Source, Online Data, Information & knowledge for the decision

making.• Control and Management over the enterprise processes.“Not everything that counts can be counted, and not everything that can

be counted counts.” Einstein

Where Does ATCO Stands?

• Partially Connected Network.• Diverse non-integrated number of Information System across

divisions and branches.• Un standardized master data in some cases.• Varied procedures and processes depending on available

systems and interconnectivity.• Redundant work by operational and administrative personnel.• Excel based estimation process and lack of integration

between Estimation, Planning and execution in the Construction division.

Network and system current situation.

ATCO-DammamHead office

East West Factory

CMD Warehouse

Other Branches

Other showrooms

Hardware

Accpac-Head office

ATCO Menu Head Office

Paradox-Warehouse &Showrooms

Gesco – Office 1

DacEasy – Jeddah & Riyadh

Software

Jubail Office

Riyadh Office

Jaddah Office

Actual Sales Process Flow

Sales Order

Financial Credit Control

Invoicing

Product/Service Delivery

Inventory ControlSales Person

Sales and Invoicing

Distribution and

Logistics

Elaborated twice:1. In branch2. In head office

Non Existent because is done post operation.

Elaborated twice:1. In branch2. In head office

Elaborated twice:1. In branch2. In head office

Redundant Time • 70 % of Accountant•50 % of Auxiliary Acc.

Construction Project Lifecycle

Planning

Execution

Estimation

Excel Based. Lacks controls and retro alimentation from executed data.

Done in Primavera but it lacks integration with Estimation and Execution

Done in Accpac and Atco menu. It suffers from the same problems we mention earlier.

Proposed Improvements

New:• IS/IT Organizational structure.• Infrastructure.• Optimizing the ERP systems by eliminating redundant work

and adding control elements.• Construction division automation, integration between

estimation, planning, and execution.• Intranet and Business Intelligence Portal.Under Implementation:• CRM or Sales tracking system.• Tracking system for E&W.• Sales & Distribution system.

Proposed Plan# Pri. Task Est. $$ Lead Time Prereq. Dependency

1 1 IT/IS Organizational Structure 15 Days 0

---Form a competency center in charge of internal software and information systems-------Organanizational chart-------Pay scale?

---Form steering committee made up from different business divisions-------Members nominated by divisions-------Regular meetings

2 1 Infrastructure 3 Months 1--Work with infrastructure and steering committee in prior zing

3 2 CRM or Sales Tracking System 2 Months 1--Implement

14 2 Tracking System for E&W 2 Months

--Implement

5 3 Sales & Distribution System for trading Divisions 3 Months 1--Implement

6 2 ERP evaluation & reimplementation 12-18 Months 0--First option initiate a conversation with Accpac people for possible upgrade 1-2 Months--Look at other products in the market--Make a decision on the way to go--Implement

7 2 Construction Division Integration 12-18 Months 0--Evaluate Estimation, Planning and Execution support software 1-2 Months--Possible Integrations with other softwares--Implement

8 2 Intranet and Business Intelligence portal 1-2 Months 0--Implement as a confidence building measurement

9 XX Others? New Business requirements?

ConclusionERP/IT plays a key role in providing businesses a competitive edge by managing, optimizing, and transparenting organizational activities like:

1. Financial.2. Administrative3. Accounts payable and receivable.4. Payroll.5. Material Management, etc..

Not only does it enhances accountability, responsibility and communication but also it is used as a reporting tool; what have we done? and did we gain or lose money?. Demo