ERP. ISE413 Software Applications in Industry

Transcription

1 ERP ISE413 Software Applications in Industry

2 Introduction to ERP Upon completion of this lecture you will be able to : Describe the concept of ERP Define key terms as they relate to ERP Describe the basic ERP model

3 Introduction to ERP Identify the five different ERP maturity levels Understand the transition from MRP to ERP State the benefits of ERP State the pitfalls of ERP implementations.

4 What is ERP? A Software tool Manages business systems Supply chain, receiving, inventory, customer orders, production planning, shipping, accounting, HR Allows automation and integration of business processes

5 What is ERP? Enables data and information sharing Enterprise-wide system Introduces best practices

6 ERP Definition An information system that supports different activities for different departments, assisting executives with planning and running interdependent functions - Oz & Jones

7 ERP Definition A set of integrated programs capable of managing a company s vital business operations for an entire multi-site, global organization Stair, Reynolds and Chesney

8 One more.. A commercial software package that promotes seamless integration of all the information flowing through a company. (Dawson & Owens, 2008) 8

9 ENTERPRISE RESOURCE PLANNING (ERP) IS..

10 Enterprise Resource Planning Replace old, disparate information systems with enterprise applications Enterprise Resource Planning: Manages daily operations Complex Require special tailoring for specific organizations Relatively expensive

11 HISTORY

12 History of ERP 1960 s - Systems Just for Inventory Control 1970 s - MRP Material Requirement Planning (Inventory with material planning & procurement) 1980 s - MRP II Manufacturing Resources Planning (Extended MRP to shop floor & distribution Mgnt.)

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14 History of ERP Mid 1990 s - ERP Enterprise Resource Planning (Covering all the activities of an Enterprise) 2000 onwards ERP II Collaborative Commerce (Extending ERP to external business entities)

15 MODULES

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20 Top five ERP software vendors SAP Oracle Microsoft Dynamics SSA Sage

21 Revenues and shares Vendor Revenue (million $) Market Share(%) 1 SAP 2, Oracle 1, The Sage Group 1, Microsoft 1, SSA Global Tech

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33 Facts About ERP projects 65% of executives believed that ERP could be harmful to their organizations. (Muscatello & Chen, 2008) Robbins-Gioia, an Alexandria, Va.-based program management consulting firm, recently reported that : 51 percent of ERP projects are considered failures, a full 30 percent far exceed budget and miss their completion dates by a wide margin (Caruso, 2007) 33

34 Facts About ERP projects 25% of organizations adopting ERP systems faced significant resistance from staff and that 10% of the organizations also encountered resistance from managers (Muscatello & Chen, 2008)

35 Advantages of ERP systems Improved access to data for operational decision making Elimination of costly, inflexible legacy systems Improvement of work processes Upgrade of technology infrastructure

36 Disadvantages of ERP systems Expense and time in implementation Difficulty implementing change Difficulty integrating with other systems Risks in using one vendor Risk of implementation failure

37 ERP Systems Major investment Cost between $50,000 and $100,000,000+ Variety of business justifications Replace legacy systems Reduce cycle times Lower operating costs Enables better management decisions Real-time On-line

38 Conclusion ERP systems take a holistic view of an organisation by making the link between the different sub-systems Although an ERP system can be very beneficial to an organisation the implementation of ERP is not risk-free and needs careful managing

39 Conclusion The ERP system : is not a simple information system cannot automatically drive the strategic and tactical changes is a strategic and tactical revolution which requires a total commitment from all involved. 39

40 Summary ERP systems can improve the effectiveness of organizations through automation and integration of business processes ERP systems allow data and information sharing across the organization

41 Summary Departmental benefits include increased efficiency, faster design and production, and accuracy Implementing an ERP system helps the organization obtain and maintain a competitive advantage

42 ERP Options OPTION 1 MAKE (Using Internal resources) Developing a custom-built ERP package, specific to the requirements of the organization, with the help of the in-house IT department

43 ERP Options OPTION 2 - BUY Going for Tailor-made ERP packages available in the market like SAP, Oracle applications, Microsoft, Baan, PeopleSoft etc.

44 ERP Options OPTION 3 MAKE (using External resources) Developing a custom-built ERP package, specific to the requirements of the organization, with the help of a Software solution provider

45 END OF LECTURE 2