Introduction to ERP (Implementation Life Cycle)
Download as PPTX, PDF0 likes257 views
This document provides an introduction to Enterprise Resource Planning (ERP) systems. It outlines learning outcomes for the course, ground rules, contact information, assessment criteria, and an assignment. It then discusses what ERP is, the business processes it supports, typical modules, advantages and disadvantages, implementation issues, evolution of ERP, the ERP market and vendors. In particular, it describes ERP as an integrated suite of applications that supports business operations across an enterprise through a single database. It aims to integrate and standardize business processes and data.
Introduction to ERP (Implementation Life Cycle)
- 1. Year 03 – Semester 02 - 2016 Lecture 01 IM304 Enterprise Resource Planning Introduction to ERP
- 2. 2 Ground Rules • No food or drinks in the classroom. • Mute all cell phones during the class session. • No mini-conferences during the class session. • Sending short bills(Chits) are not encouraged. • Class attendance is compulsory. • Attendance and active participation are required for the tutorial classes. • Be punctual (perform exactly at the time appointed). ERP - Lecture 01 FIRST THINGS FIRST
- 3. 3 Contact Person • Module Leader (Contact hours will be announced in class): – Ms. Chathurangika Kahandawaarachchi – Lecturer – Department of Information Systems Engineering – Faculty of Computing – [email protected] • Tutorial Assistance: – Ms. Upani Padmila ([email protected] ) ERP - Lecture 01
- 4. 4 Learning Outcomes Learning Outcome Description LO1 Describe concept of ERP and have an understanding of how ERP systems work. LO2 Evaluate the risk and benefit of ERP systems. LO3 Appreciate and get directly involved in the implementation process of ERP systems. LO4 Understand the critical success factors of ERP implementation and be able to assist in effective ERP implementation. LO5 Understand ERP marketplace & marketplace dynamics and recognize the present and future trends in ERP. ERP - Lecture 01
- 5. 5 Lectures & Tutorials • Course Duration – 14 weeks • Lectures – Presentations, Case studies, Discussions • Tutorials – 1 × 1 hour tutorial per week – Answers will be discussed ONLY during the Tutorial class ERP - Lecture 01
- 6. 6 Assessment Criteria ERP - Lecture 01 Assessment components Contribution to the final grade Learning outcomes covered Continuous assessments •Mid-term Examination (Individual) 20% LO1-LO3 •Assignment (Group) 20% LO1-LO5 Final Examinations •Final Examination (individual) 60% LO1-LO5 Total 100%
- 7. 7 Assignment The objective: To understand the business operations of an ERP vendor in Sri Lanka. The aim: Gain exposure in business operations of an ERP vendor • Get into groups of 4 members (Do not exceed the number) • Choose an organization (vendor) who is implementing ERP solutions for Sri Lankan Clients – Discuss the areas covered in the assignment document in detail. – Date of handing over : During the 2nd Lecture – Date of submission : During the 7th Lecture (Report + Presentation) • Please adhere to the deadlines and use this opportunity to enhance your knowledge on ERP implementations ERP - Lecture 01
- 8. 8 Courseweb • All course related materials are published on Courseweb http://courseweb.sliit.lk • Contains everything about the course: syllabus, announcement, assignments, lecture notes, etc. • Check the course web regularly. ERP - Lecture 01
- 9. ERP SYSTEMS ERP - Lecture 01
- 10. 10 Learning Outcomes LO1: Describe concept of ERP and have an understanding of how ERP systems work. ERP - Lecture 01
- 11. 11 ERP Background • Introduction of PC led to narrowly focused information systems • Duplicate data across the enterprise not shared between departments • Mid – late 1990’s many large companies implemented Enterprise Resource Planning (ERP) which would integrate the data across the enterprise and replace outdated systems (legacy systems). ERP - Lecture 01
- 12. 12 What is ERP? • An ERP system is an integrated suite of information technology applications that support the operations of an enterprise from a process perspective. – Cross-Functional – serves many functions – Process-Centered – organized around processes • Built upon relational database systems – There is one data store, one source of the truth • Sold in modules – Don’t need to purchase/implement all modules – More modules implemented leads to more integration and ROI • Can cost millions of dollars and take years to implement (for larger companies – less for smaller – cloud makes faster) ERP - Lecture 01
- 13. 13 ERP-Supported Business Processes ERP - Lecture 01
- 14. 14 Typical Modules in an ERP System Operations (Core) · Engineering · Bills of Material · Scheduling · Capacity · Process Manu. · Quality Control · Cost Management · Discrete Manu. · Shop Floor Mgmt. · Inventory · Order Entry · Purchasing · Product Configuration · Supply Chain Planning · Supplier Scheduling · Quality Control · Demand Management · Sourcing Financials (Core) · General Ledger · Cash Management · Accounts Payable · Accounts Receivable · Fixed Assets · Controlling Projects · Project Costing · Project Billing · Time and Expense · Activity Management · Resource Availability · Project Contracts Human Resources (Core) · Human Resources · Payroll · Training · Time & Attendance · Benefits · Recruiting Customer Relationship Management · Sales and Marketing · Commissions · Service · Customer Contact · Call Center Support · Analytics Plus: Various Self-Service Interfaces for Customers, Suppliers, and Employees ERP - Lecture 01
- 15. 15 Who Uses/Needs to know about ERP? • End User – Purchasing – Manufacturing – Sales – Accounting/Finance – Human Resources – etc • Internal/external auditor – Verify that the ERP system is secure and maintains privacy over individuals. Also has proper segregation of duties (SoD). • Consultant – Assist in implementation and or maintenance of ERP systems • Developers – Customize the system ERP - Lecture 01
- 16. 16 ERP Value – Integration • The value of ERP is the opportunity to integrate an entire organization by having a single point of entry and sharing of data across the enterprise. • ERP becomes the authoritative data source: a recognized or official data production source with a designated mission statement to publish reliable and accurate data for subsequent use by users. • Creates less need to reconcile data and rekey which causes inefficiencies and delays • Inefficient business processes that were disjointed become much more efficient. ERP - Lecture 01
- 17. 17 Before and After ERP •Legacy systems (islands of automation) may be connected with enterprise application integration (EAI) - the process of linking such applications within a single organization together in order to simplify and automate business processes to the greatest extent possible, while at the same time avoiding having to make sweeping changes to the existing applications or data structures. Not as optimal as having an integrated system, common database, and common technical infrastructure. ERP - Lecture 01
- 18. 18 ERP Diffuses Best Practices • ERP systems are based on best practices • For instance, SAP has thousands of best practices embedded in their applications. – This means that any firm that installs has access to a wide range of best practices. • Further, business practices are being added all of the time. As new best practices are found and embedded in particular applications, they can become available for inclusion in new versions of software. • As a result, there is a cycle of finding best practices, building them into the software and diffusing them out to new users. – Vertical solutions – industry specific version of software ERP - Lecture 01
- 19. 19 ERP Facilitated Adoption of Client Server Computing • In the early 1990’s ,client server computing became available and offered many advantages over existing mainframe solutions. • Client/server describes the relationship between two computer programs in which one program, the client, makes a service request from another program, the server, which fulfills the request. • ERP became one of the dominant, initial corporate applications of client server computing. ERP - Lecture 01
- 20. 20 Technical ERP System Benefits • Integrated processes and information systems • More effective and efficient business processes • Enables organizational standardization • Eliminates information asymmetries • Provides on-line and real-time information • Facilitates intra- and inter-organization communication and collaboration • Can reduce complexity of application and technology portfolios ERP - Lecture 01
- 21. 21 ERP System Benefits • Integrate financials • Have one view of the customer • Standardize manufacturing processes • Reduce inventory/better visibility into inventory • Standardize information such as HR and Customer data there are others……depends on company ERP - Lecture 01
- 22. 22 ERP System Disadvantages • Standardized way of conducting business can be a disadvantage too because levels the playing field somewhat between companies • Lack of employee/user acceptance • Complex solution • Maintenance of hardware and software • Costly and time consuming implementations ERP - Lecture 01
- 23. 23 Implementation Issues • Employee resistance – They develop “work arounds” – Sabotage implementation process – Caused by lack of training (“how”) or understanding of organization’s motivation for adoption (“why”) – Need Change Management to lower resistance • Technical Issues – Complex system to implement – configuration issues and possible customization issues – Sometimes need expensive external consultants to assist implementation ERP - Lecture 01
- 24. 24 ERP Evolution • Roots are in Manufacturing Requirements Planning (MRP) & Manufacturing Resource Planning (MRP II) – Addressed needs of just the manufacturing environment – ERP manages resources for entire enterprise • With Y2K looming, companies began implemented new state of the art systems (ERP) that ran on client server technology • Now many companies outsource called Software as a Service (SaaS) – Multi-tenancy – serve many clients from a single instance via the Internet • Open Source ERP systems are evolving – where’s the help desk though!? ERP - Lecture 01
- 25. 25 ERP Market • Billion dollar industry and growing – 10% growth rate through 2012 • Growth drivers – Globalization – Centralization – Competition – Best practices etc Source: AMR researchERP - Lecture 01
- 26. 26 ERP Tiers • Tier 1 Vendor – “Enterprise Space” - multi-site, multi-national corporations, government entities with 1000 or more employees – #1 SAP • Stands for Systems, Applications and Products in Data processing • Formed by 5 former IBM engineers in 1972 in Walldorf Germany • SAP AG, SAG UK, SAP North America etc • Nearly 200,000 customers, over 50,000 employees • Service over 20 different industries – #2 Oracle • More than 380,000 customers—including 100 of the Fortune 100—and with deployments across a wide variety of industries in more than 145 countries around the globe, • In 2003 acquired PeopleSoft, Hyperion and Siebel ERP - Lecture 01
- 27. 27 ERP Tiers • Tier 2 Vendors – Market towards medium sized companies, few sites, 100-999 employees – Largest of all ERP tiers in number of potential customers – Tier 1 vendors moving into this area and below by reducing prices and simplifying product – Some vendors – QAD and SSA • Tier 3 Vendors – Market towards small, single site, family run corporations, sales under $40 million and less than 100 employees – Vendors – Microsoft Dynamics GP, NetSuite, Made-2-Manage, SAP Business by Design, SAP Business All in One • Tier 4 Vendors – Market towards small companies that can manage with basic accounting software – Vendors – Peachtree, Accpac, Quickbooks, SAP Business One, SAP Business by Design ERP - Lecture 01
- 28. 28 An Enterprise System - Reality In reality, an ERP implementation is usually just one part of a more complex environment, including bolt-ons, legacy applications retained, possible data warehouse(s), enterprise application integration (EAI) solutions and connections to external business partners. ERP - Lecture 01
- 29. 29 In Summary • What is an Enterprise? • Business Processes Vs Business Functions • Role of Enterprise in ERP implementation • History of ERP • Advantages of ERP • Why ERP? ERP - Lecture 01
- 30. 30 Learning Outcomes LO1: Describe concept of ERP and have an understanding of how ERP systems work. ERP - Lecture 01
- 31. 31 End of Lecture One ERP - Lecture 01