introduction to erp. history of organizational systems calculation systems functional systems...
TRANSCRIPT
Calculation systems
• 1950-80• Single purpose• Eliminate tedious human work• Examples: Payroll, General ledger,
Inventory• Technology used: Mainframes,
magnetic tapes, batch processing
Functional systems
• 1975-20??• Use computers to improve operations• Applications: Human resources, order
entry, manufacturing resource planning
• Technologies: Mainframes, PC’s, LAN’s
Functional systems
• Typically contained within a department
• Islands of automation• Applications independently
developed and deployed• Driving force: availability of mini-
computers
Functional system applications
• Human resources System• Accounting and finance systems• Sales and marketing System• Operations management System• Manufacturing Systems
Accounting and Finance
• General Ledger• Financial Reporting• Costing• Budgeting• Accounts Payable• Accounts receivables
Types of Organizational information Systems
• Administrative systems• Scheduling / Transaction systems• Value oriented systems• Reporting and controlling systems• Analysis and information systems• Planning and decision support
systems(From Business Process Engineering by
A.W. Scheer)
Problems with function based application
• Sharing of data between systems• Data duplication• Data inconsistency• Applications that don’t talk to one another• Limited or lack of integrated information• Isolated decisions lead to overall
inefficiencies• Increased expenses
Solution to disparate systems?
• Integration• Consolidation• Right-sizing• Business Process Redesign• Enterprise wide system
ERP - Definition
• ERP is a process of managing all resources and their use in the entire enterprise in a coordinated manner
ERP system: Definition
• ERP is a set of integrated business applications, or modules which carry out common business functions such as general ledger, accounting, or order management
What is ERP?
• Enterprise Resource Planning• Support business through optimizing,
maintaining, and tracking business functions
• Broken down into business processes– HRM– Distribution– Financials– Manufacturing
What makes ERP different
• Integrated modules• Common definitions• Common database• Update one module, automatically
updates others• ERP systems reflect a specific way of
doing business• Must look at your value chains,
rather than functions
Benefits of ERP
• Common set of data• Help in integrating applications for
decision making and planning• Allow departments to talk to each other• Easy to integrate by using processed
built into ERP software• A way to force BPR (reengineering)• Easy way to solve Y2K problem
Vendors
Difficulty in implementation
• Very difficult• Extremely costly and time intensive• Typical: over $10,000,000 and over a
year to implement• Company may implement only
certain modules of entire ERP system• You will need an outside consultant
Common Pitfalls
• Do not adequately benchmark current state
• Did not plan for major transformation• Did not have executive sponsorship• Did not adequately map out goals
and objectives• Highly customized systems to look
like old MRP systems
Overview
• 375 IT and business professionals • 52% anticipate budget increases for new
ERP implementations/new modules • SAP and PeopleSoft/J.D. Edwards were
cited as the most popular ERP packages • 46% indicated that the main challenge to
successful ERP implementations was inadequate definition of requirements and resistance to change
How would you characterize your budget for new ERP implementations/new modules deployments for 2004
compared to your budget in 2003?
If you plan to deploy a new ERP package and/or add modules to your existing packages, when would this
implementation take place?