ERP and Business Processes

Transcription

1 ERP and Business Processes

2 Presentation Overview About ERP Evolution of ERP Implementation Issues What is the State of the ERP Market? Case Study:An ERP success: NESTLE ERP and Business Process Modelling Business Process Restructuring ERP Systems: SAP How to customize ERP systems? Business Process Modeling Assignment: Timberjack Parts Case

3 About ERP Problem of information islands

4 About ERP A collection of software systems that help to manage business processes for an entire organization. Usually runs on DBMS.

5 About ERP Replaces Countless Departmental and Workgroup Information Systems

6 About ERP Integration of business functions into one seamless application

7 About ERP Implementation normally involves Business Process Reengineering (BPR). Cross-Functional Business Processes

8 Evolution of ERP 1960 s: Inventory Control Systems 1970 s: MRP: Material Requirement Planning 1980 s: MRPII: MRP & Distribution 1990 s: MRPII ERP with introduction of other business functions Extended ERP, ERP II

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10 Today: Interenterprise ERP, Web Enabled ERP Connecting ERP Externally

11 Implementation Issues ERP means: Single customer, product and supplier data Information captured only once Visibility through the business process Workflow management and eventtriggered processes Empowered users Informed management decisions Globalisation of the business Rapid change capability In short, Dr Jekyl

12 Implementation Issues Difficult to build: Require fundamental changes in the way the business operates Technology: Require complex pieces of software and large investments of time, money, and expertise Mr Hyde

13 Implementation Issues (Costs)

14 Implementation Issues 35% ERP projects are cancelled 55% overrun their budgets Less than 10% are on time and under budget Implementation averages Cost: 178% over budget Schedule: 230% longer Functionality: only 41% Mr Hyde

15 Implementation Issues.. So why do it? Some firms recognize benefit in $10 to $100 million + e.g. Competitive advantage in international supply chains Standardize and improve processes Improve level of systems integration replacement of outdated legacy systems Improve IT responsiveness and information quality Customer-driven

16 Implementation Issues.. So why do it? Year 2000 and the Euro Reporting requirements of Sarbanes-Oxley and International Accounting Standards Mergers and Acquisitions

17 What is the State of the ERP Market? Mature market in U.S. and parts of Europe - ERP Systems firmly entrenched in infrastructure Continued growth in implementations worldwide Implementing CRM, SCM ERP Applications Business Process Management (BPM)

18 What is the State of the ERP Market? Linking ERP s to Web Web Services, Web Services Integration SOA service oriented architecture Public Sector Growth laggards Midmarket growth Niche ERP packages

19 What is the State of the ERP Market? In 1999, the five biggest ERP vendors-- SAP, PeopleSoft, Oracle, Baan, and J.D. Edwards--accounted for 59% of the market. In 2009, the two biggest ERP vendors-- SAP, Oracle (which bought PeopleSoft and J.D. Edwards), accounted about 70% of the revenues.

20 ERP and Business Process Modelling Where does ERP fit in a business process class? It is arguably the most common cause of process redesign in business today. But the thinking is inverted. Instead of designing a process and building the support structure including IT you start with the software and modify your processes to fit. Or else?!

21 ERP and Business Process Modelling We have a component-based ERP (Enterprise Resource Planning) system that consists of independent modules can be customized to the organization s needs How can we investigate if this system can support our business? how it can make our business processes more efficient? which modules are needed? how the modules should be customized?

22 ERP and Business Process Modelling BPR - Steps Step 1 Step 2 Step 3 Understand Simplify/Improve Automate Understand the existing systems associated with all the functionalities Draft & frame the possibilities & ways to simplify, or improve, or eliminate the processes Implement with the help of ERP

23 ERP Systems: SAP SAP (Systems - Applications - Products): One of leading software vendors for ERP systems SAP R/3: Separate modules Each module contains a number of transactions (>5,000 all together) can be used independently of others must be configured (customized) can be supplemented with add-ons

24 ERP Systems: SAP mysap.com Solutions Cross-Industry Solutions mysap Workplace mysap CRM mysap SCM mysap Marketplace* mysap E-Procurement mysap BI mysap PLM mysap HR mysap Financials mysap Mobile Business Industry Solutions mysap Aerospace & Defense mysap Automotive mysap Banking mysap Chemicals mysap Consumer Products mysap Engineering & Construction mysap Financial Service Provider mysap Healthcare mysap High Tech mysap Higher Education & Research Infrastructure and Services mysap Technology mysap Services mysap Insurance mysap Media mysap Mill Products mysap Mining mysap Oil & Gas mysap Pharmaceuticals mysap Public Sector mysap Retail mysap Service Providers mysap Telecommunications mysap Utilities mysap Hosted Solutions *mysap Marketplace is delivered through MarketSet, a joint solution from SAPMarkets & Commerce One.

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27 How to customize ERP systems? ARIS = Architecture of Integrated Information Systems Toolset for modeling, analysis and optimization of business processes Specially tailored to the needs in SAP projects System described with respect to different views (organization, data, function) at different implementation levels (requirements definition, design specification, implementation description)

28 How to customize ERP systems? purchaser John Smith Organization View Establish ownership of data and responsibility for processes Analysis of resource usage and workflow (at different organizational levels) Model of organization structures (company, departments, etc.) Linked to processes and data structures

29 How to customize ERP systems? Purchase order processing Function View Shows the main business processes, but not the order of execution or who carries them out Shows the relationship between high-level tasks/application areas and individual low-level tasks Hierarchical model of functions (function tree) Function can be application area, high-level processes, tasks or individual process steps

30 How to customize ERP systems? Purchase order Data View Analysis of information needed to carry out tasks Specification of information generated in the system Non-hierarchical static model with entities (objects), relationships, and attributes May distinguish between data elements and information objects

31 How to customize ERP systems? Process View Combination of views Business model portraying the interconnections between functions, data, and organizational units The logical time sequence is involved

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33 Organizational element.... Carries out & Supports Carries out & Supp... Carries out & Supports Carries out & Supports Carries out & Supports Application system. Carries out & Supports Carries out & Supp... Carries out & Supports Carries out & Supports Carries out & Supports Stock On-hand (System) Pick Item Item is Physically On Hand Post Goods Issue Item Released GCSS-A Process Reservation Stock Not On-hand (System) Send IDoc (Refusal Notification) Item is Physically Not On Hand Send IDoc (Denial Notification) Print Physical Inventory Document Enter Count Results Post Inventory Differences Send IDoc (Inventory Results) Delete Reservation Customer Received Status PLM+ LMP New Source Resource from New Source Requirement Identified Create / Process Stock Transport Order i... Receive IDoc (Refusal/Deni al) Decide if Backorder or New Source Send IDoc (Status) Receive IDoc (Inventory Results) Adjust Inventory Balance Application Application system Application system. Application system. system.. Backorder Processing Process Backorder New Source Resource from New Source BSM Requirement Identified Create and Send MRO Process copied from LMP -> needs to be confirmed Receive Refusal/ Denia... Block Stock Decide if Backorder or New Source Send Status to Customer Receive Inventory Results Unblock Stock Adjust Inventory Balance Backorder Processing Process Backorder GFEBS Update General Ledger General Ledger Updated The Advantage?... From Architecture to Configuration to Execution Customer Business Process Carries out & Supports Customer Carries out & Supports Business Process supported by ERP components (and Carries others) out & Supports Carries out & Supports Carries out & Supports Carries out & Supports ERP Configuration Model Solution Manager GCSS-A PLM+ LMP Requirement Identified Create and Send MRO BSM Requirement Identified Create and Send MRO GFEBS Carries out & Supports Carries out & Supports Scenarios Processes Process Steps Receive MRO Valid On-hand Syste... Not valid On-hand Syste... Process copied from LMP -> needs to be confirmed Release Purchase Requisition Pick Item Send Refusal Notification Release Purchase Requisition Item is Physically On Hand Item is Physically Not On Hand Release Purchase Requisition Release Item Item Released Send Denial Notification Block Stock Receive Refusal/ Denia... Receive Refusal/ Denia... Release Purchase Requisition Exchange Infrastructure Initiate Inventory Block Stock Block Stock includes all reasons for physical inventory Post Inventory Results Decide if Backorder or New Source Decide if Backorder or New Source Unblock Stock Stock Unblocked Send Inventory Results Receive Status Backorder New Source Processing Resource Process from Backorder New Source Send Status to Customer Backorder New Source Processing Resource Process from Backorder New Source Send Status to Customer BPEL XI Execution Model Customer Received Status Receive Inventory Results Receive Inventory Results Unblock Stock Unblock Stock Adjust Inventory Balance Adjust Inventory Balance Update General Ledger General Ledger Updated Source: Peter Thiele, IDS Scheer 2006

34 Bridging Business and IT views of the same process!!!

35 How does the Integration Work??? Process Carries out Is i... Is a... Is c... Ha... Re... Business Architect users ARIS for SAP NetWeaver Architecture Corporate Process Portal Relationships Relationships Relationships Business Server Customer order must be created Create customer order Delivery must be created Create delivery Pick order must be created ARIS is the Enterprise Process Repository Sync. using Remote Function Call of SAP O/S: Windows / Unix D/B: Oracle / SQL / DB2 Sales team Order processing dep. SAP Solution Manager mysap Business Suite

36 Process View

37 Business Process Modeling Assignment: Timberjack Parts Case There is not one correct answer for this assignment. Everybody s diagram will have differences, but it should handle all the assumptions listed above and make use of the information available in Timberjack s ERP system. The only deliverable is a process diagram (Hand drawn is OK if it is neat). You are required to use information symbols and organization unit symbols. a teamwork, ~10 minutes