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ERP
SIS
Lori Martel
Ramkin Shetty
Hahn Shin
Dinesh Sekar
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ERP
SIS
Table of Contents•Introduction
•Organizational & Technological Change•Business Engineering Vs. Business Process Re-engineering
•Definition & ERP’s role in the Supply Chain•Business Aspects
•ERP: Vendors, Comparison, Characteristics of ERP, Applications and Advantages•SAP R/3 •Constraints: Business &Technical
•Technical Aspects•Layer Architecture•Application Architecture•Customization
•Industry Example: Quantum•Look into the Future
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ERP
SIS
Introduction
Growing Competition
Decreasing Innovation Cycles
Market Globalizationneed
for flexible, integrated,and open software
Relationship Based Transactions
Different Manufacturing Environments
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ERP
SIS
Introduction
• Changes in Structure– Functional Vs. Process Based Structure
• Value Chain Thinking
Personnel ProductDevelopment
Marketing& Sales
Production
Order Processing
ProductDevelopment
Customer Service
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ERP
SIS
Introduction
• 70’s Standard Software, Mainframe Systems– Separate Applications for business functions
• 90’s Technological Trends– Client/Server Computing– Innovative process integrated business solutions– Open Systems– Increasing computing speed, GUI’s– Faster Data processing– Data Integration
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ERP
SIS
Introduction
BPR
BE
• Use of Prototyping/Modeling - Building Systems around Business
• Automating Business Processes through IT
•Use of Blueprinting - Designing & Integrating Business Processes
• IT used as a Strategic Tool
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ERP
SIS
- ERP is a software package integrating organizational business processes & data across the company
ERP
SIS
Definition
Modelingall the processes
Integratingall the
information
Strategic useof IT
Integrated views
Quality,Cost,
Delivery
Effective useof
resources
EIS
DSS
TPS
MIS OA
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ERP
SIS
ERP
ERP
ERP
Extended Supply Chain Management
Internal Supply Chain Management
CoordinatedManufacturing
PlantManagementMRP MRP
Role in Supply Chain
SupplyPlanning
Scheduling
DemandPlanning
Logistics
InternalSuppliers
InternalCustomers
ExternalSuppliers
ExternalCustomers
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ERP
SIS
Business Aspects
34%
13%9%7%5%
5%
5%5%
3%3%11%
SAP Computer AssoicatesSSA BaanJ.D. Edwards JBAOracle MarcamPeoplesoft QDAOthers
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ERP
SIS
Business Aspects
Func
tiona
lity
Technology
* Oracle
J.D. Edwards *
Low
Low
High
High
* R/3
* CA
ReinforceReview
RemainRebuild
* Baan
* Peoplesoft
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ERP
SIS
Characteristics
• NOT Multiple Packages Pieced together through Complex Interfaces
• Modeling Business Processes and Integrating through Software
Configuration - • 8,000 Tables set up by Programmers• Series of Switches• Requires Deep Understanding of Existing Business Processes
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ERP
SIS
Business Aspects
Aerospace & Defense Automotive
Chemicals Consumer Products Financial Services
Healthcare High-Tech & Electronics
Oil & Gas Pharmaceuticals
Retail Telecommunications
Utilities
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ERP
SIS
Business Aspects
• Largest vendor of standard business application• R/3: Real-Time Version 3.0• Client/Server enterprise application software• 6,000 companies, 50 countries• Companies in diverse businesses• 30 seats or installations with 3,000 end users• 800 predefined business processes
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ERP
SIS
Business Aspects
• Business Components
• Business Objects
• Business Information Warehouse
• Business Engineer
• Integration Technologies (ALE)
- Finance, HR, Logistics
- Customer, Invoice
- Aggregate Internal & External Data
- Customization Tool
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ERP
SIS
Business Aspects
Reference Model
• Data Model • Business Object Model • Organization Model • Process Model• Distribution Model
Event Driven Process Chain (EPC)
• Event• Function/Task• Organization• Communication
- Repository Holds the Reference Model, Industry Specific Models & Enterprise Models
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ERP
SIS
Business Aspects
• Fast• Flexibility
• Open• Industry Specific
• Expandable
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ERP
SIS
• Synchronous Transfer of Data• Encourages Multi-Disciplined Teamwork• Reduces Redundant Labor• Provides Standard Based Development Environment• Process Engineering Cost Benefits• Flattens Organizations to Increase Agility
•Allows Companies to Adapt to New Business Opportunities
Business Aspects
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ERP
SIS
Business Aspects
• Every $1 Spent in Software Licenses - $8 - $10 Spent on Consulting Support• Outside Consulting Fees can cost $1500/day• Requires Equipping employees with new skill sets• Hard to Keep Resources• Changing Business Processes to suit ERP/ can Effect the Organization’s Culture
• Very Expensive
• Can NOT Impose ERP Infrastructure on Company
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ERP
SIS
• Lack of Flexibility• Complexity & Rigidity• High Implementation Time• Difficult in Decentralized Environments• Difficult Interfaces• Steep Learning Curve
Business Aspects
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ERP
SIS
Technical Aspects Layer Architecture
- Issues: Scalability, Portability, Interoperability & openness, Customizability, GUI, etc.
Middleware
Middleware
Development workbenchApplications
Dictionary Programeditor
Interfacebuilder
Modelingtools
Repository
System software: GUI, DBMS, OS, N/W
ApplicationLayer
BasisLayer
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ERP
SIS
Technical AspectsApplication Architecture
- Issues: 1. Independent from all types of computers(UNIX, Window NT, AS/400, etc.), DBMS(Informix Online, Oracle 7, ADABAS, DB2, MS SQL Server 6.0, etc.), GUI flatform(OS/2 Presentation Mgr.., OSF/Motif, Macintosh, Windows, etc) 2. Independent from the country specific rules, languages, etc.
ISSD CO AM
MM
PP HRM PS
WFFI
QM PM DW
System model
Business model
Scope, Rules & Pattern
Business Kernel
Full Business
Specific Situation
DM
FM WFM
Repository
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ERP
SIS
Technical AspectsCustomization: Support of initial implementation projects, follow-up projects, and release-change projects
- Issues: Integrated customizing functions, quality assurance, etc.
Implementation environment
Procedure model
Reference model:FM, PM, DM, IFM, OM,Comm. Model, Distr. Model
Implementation guides Customized model
Documentation Release management
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ERP
SIS
Industry Examples
Objectives– Available-to-Promise (ATP), the real-time capability
to take an order, schedule it to be delivered anywhere in the world and confirm delivery instantly
– Ability to determine what was actually in inventory or in production and how much of it had been promised to other customers
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ERP
SIS
Industry Examples
Scope– Based on the full suite of Oracle Corp.'s manufacturing
and operations applications– 750 users in 25 locations worldwide– To adopt Big-bang approach
• One of the largest distributed business systems to go live worldwide at one time
– HP9000 hardware, HP UX operating system (10.1) and Oracle Release 10.4
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ERP
SIS
Industry Examples
Pre-Implementation Assessment– Legacy system-based MRP system in use
– Each division's business transactions in separate databases by business unit, and by function within a unit
– Databases couldn't share information
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ERP
SIS
Industry Examples
Project Planning & Control– Project team members pulled from regular jobs
& relocated to “Building 12”– “Building 12” essentially set up a scaled-down
business model of Quantum– Team members play-acted their real-life roles– Improved business processes and wrote
requirements for the new system
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ERP
SIS
Industry Examples
Implementation Process– Packaged available applications & selected Oracle
applications– Consultants from Price Waterhouse and Oracle,
installed the software & began pilot projects– Complexity and magnitude of the project
quadrupled (Digital Disk drive division acquisition)
– Conference room pilots tests
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ERP
SIS
Industry Examples
Human (HR) Side– Locally trained about 100 users from all over the
world and flew them into Milpitas to run a full-scale system simulation
– Sponsored massive user training - users had to pass a test before returning to their jobs
– Ran Internal PR campaign- Entailed group meetings, presentations,an intranet site and events emphasizing system's importance
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ERP
SIS
Industry Examples
Project Statistics– October 1992 - May 1996– 16 full time managers– 100 person multidisciplinary team– 1,632 meetings – 79 shouting matches
– 800GB of disk space – 18,064 miles of cable – 300,000 cups of coffee– 58,000 e-mails – 7,503 cases of beer – 1.62 million miles of air travel
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ERP
SIS
Future Aspects
• Supply Chain Management• Internet Enabled• Workflow Management• Resource Planning• Data Warehousing
• Targeting Small & Medium Enterprises• Addition of Simple GUI based development Tools• Strategic Alliances
- Andersen Consulting & SAP- IBM & J.D. Edwards- GE & Oracle
Business
Technology