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Overheard in a computer shop: Customer: "I'd like a mouse mat, please." Salesperson: "Certainly sir, we've got a large variety." Customer: "But will they be compatible with my computer?" Data Processing & Decision Network presents: Enterprise Resource Planning · Davidson, Paul, · Paterson, Jennifer · Dyrud, Brian, · Neal, Lindsay The ERP acronym is erroneous; resource and planning are not involved in ERP. Enterprise is the true ambition of ERP. How can ERP increase business performance? Improve the order fulfillment process Cross link business departments Why ERP? Companies can compete at the same level Increases customer and B2B relationship Benefits of ERP Systems Offers a single depot of information Real time Management capabilities So what can ERP do? Automate tasks Standardize company information ERP Solutions (a few front runners in the industry) Software provider for service industries Lawson and integration Manages critical information in the most cost effective way The vision of Oracle… Real Time Enterprise uses no intermediaries People Soft has implemented Pure Internet Architecture Helps businesses of all sizes SAP’s Business One Software uses current IT programs ERP Logistics ERP efforts usually run between one and three years. To do ERP right, the ways you do business will need to change and the ways people do their jobs will need to change too. This takes time and money. Five major reasons for ERP. Integrate financial information Integrate customer order information Standardize and speed up manufacturing processes Reduce inventory Standardize HR information Will ERP fit the way We do Business? The most common reason companies walk away from ERP projects is that they discover the software does not support one of their important business processes. change the business process to accommodate the software modify the software to fit the process What does ERP really cost? Meta Group recently did a study looking at the total cost of ownership (TCO) of ERP, including hardware, software, professional services and internal staff costs. The TCO numbers include getting the software installed and the two years afterward. Among the 63 companies surveyed—including small, medium and large companies in a range of industries—the average TCO was $15 million (the highest was $300 million and lowest was $400,000). When will I get payback from ERP —and how much will it be? A Meta Group study of 63 companies found that it took eight months after the new system was in (31 months total) to see any benefits. Median annual savings from the new ERP system were $1.6 million. What are the hidden costs of ERP? Training Integration and testing Customization Data conversion Data analysis What are the hidden costs of ERP? (Cont.) Consultants and infinitum Replacing your best and brightest Implementation teams can never stop Waiting for ROI Post-ERP depression Why do ERP projects fail so often? Disagreement among departments Resistance to change Inability to see the big picture This is where ERP projects break down How do companies organize their ERP projects? The Big Bang Franchising strategy Slam dunk How does ERP fit with e-commerce? E-commerce means IT departments need to build two new channels of access in to ERP systems. B2C B2B ERP success stories EarthGrains Indian Motorcycle Company A&P Office Depot EarthGrains (The Problem) $1.9 billion bakery products company. The division had no integration: order-to-cash picking delivery accounts receivable Management lacked detailed understanding of business operations EarthGrains (The Solution) Implemented SAP's R/3 in 1999 They were able to analyze customer profitability 180 low-margin retailers were unwilling to change their purchasing patterns, therefore, they were no longer serviced Eliminated the 20 percent of the product line, that was unprofitable In the first year, the division's earnings jumped by more than 70 percent Tips for Implementing ERP Define what it is you expect from ERP Assess risk Maintain control and outsource when possible Monitor outsourcer performance Make changes early concerning the control structure Tips for Implementing ERP, cont. Designate a manager Break it up Plan and implement quickly Ensure appropriate resources Install only what you need Monitor all systems Outsourcing Why should you outsource? Concentrate more on core competencies Increase in number and capabilities of external suppliers Keep up with the latest technology Money saving Avoiding Problems Install the right thing Take one step at a time Prioritize Test for problems before installation 1st Time Success ERP is not magic; it takes careful planning Technology can’t fix a flawed business strategy Define your business strategy Be flexible Designate a capable leader Challenges and Hard Lessons Learned Some companies have spent fortunes on an ERP software and implementation only to find that their business performance has not improved at all. Nestle Hershey Why do ERP projects fail so often? It’s the process!! Demo of Live ERP System Lawson Software MD Anderson Cancer Center Procurement Accounts Payable Inventory Control Asset Management ERP for Everyone ERP to the Rescue Your ERP Package Guide The Showstoppers Before you Buy “Gib’s law: “Computers are unreliable, but humans are even more unreliable” Any Questions?
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