INTRODUCTION TO ENTERPRISE

SYSTEMS FOR MANAGEMENT

Learning Objectives:
• Understand the information systems evolution and
its historical role in organizations leading to
systems integration and eventually ERP.
• Learn about ERP systems and their evolution,
components, and architecture.
• Understand the benefits and drawbacks of
implementing ERP systems and how they can help
an organization improve its efficiency and worker
productivity.
Learning Objectives:
• Have an overview of the implementation process.
• Understand the role of staff, vendors, consultants,
and the organization in making the ERP
implementation process successful.
• Comprehend the ethical, global and security
challenges while implementing an ERP system as
well as get an overview of ERP vendors and
industry trends.
Enterprise Systems in Organizations
Enterprise Systems in Organizations
• Enterprise systems, therefore, are a
crucial component of any successful
organization today.
• They are an integral part of the
organization and provide computer
automation support of most business
functions such as accounting, finance,
marketing, customer service, human
resource management, operations, and
more.
Information Silos and Systems Integration

• Information Silos – is an information

management system that is unable to
freely communicate with other
information management systems.

• System Integration - is the process of

integrating all the physical and virtual
components of an organization’s system.
Information Silos and Systems Integration
• As organizations become larger and more
complex, they tend to break functions into
smaller units by assigning a group of staff
to specialize in these activities.
• The role of information systems has been
and always will be one of supporting
business activities and enhancing the
workers, efficiency.
• As business changes and expands, systems
need to change to keep pace.
Information Silos and Systems Integration
• In today’s globally competitive
environment, an organization will find it
very difficult to operate and survive with
silo information systems.
• Integrated information systems are
needed today to focus on customers, to
process efficiency, and to help build teams
that bring employees together that cross
functional areas.
Enterprise Resource Planning Systems

• What is an ERP?
ERP systems are the specific kind of
enterprise systems to integrate data across
and be comprehensive in supporting all the
major functions of the organizations.
Enterprise Resource Planning Systems
Enterprise Resource Planning Systems

• ERP system’s goal is to make information

flow be both dynamic and immediate,
therefore increasing the usefulness and
value of the information.
• An ERP systems acts as a central repository
eliminating data redundancy and adding
flexibility.
Enterprise Resource Planning Systems

• Another goal of ERP system is to integrate

departments and functions across an
organization onto a single infrastructure
that serves the needs of each department.
Enterprise Resource Planning Systems

• In summary, ERP systems are the

mission-critical information systems in
today’s business organization.
• They replace an assortment of systems
that typically existed in those
organizations.
Enterprise Resource Planning Systems

• They solve the critical problem of

integrating information from various
sources inside and outside the
organizations environment and make it
available, in real time, to all employees and
partners of the organization.
Evolution of ERP
Evolution of ERP
 Business Process and ERP

• A crucial role of ERP in business, beside

integration of functional applications and
organization information, is to better position
the organization to change its business
processes.
• Business Process – is a series of tasks or
activities grouped to achieve a business
function or goal.
Business Process and ERP

• The ERP software has hundreds of business

processes built into the logic of the system.
• An organization has two choices when
implementing ERP: change business
processes to match the software’s
functionality or modify the ERP software.
Business Process and ERP

• It is therefore possible for organizations to

maximize their benefits by taking
advantage of their best practices.
• In reality, there are other negative
consequences for an organization when
modifying the ERP system to match existing
process.
 Business Process and ERP

• On the other hand, if the organization decides to

implement the ERP system “as-is”, disruptions will
occur with the functioning of the organization.
• Thus, management must pay very close attention to
the organizational consequences of modifying or
not modifying the ERP software to match their
organizations’ business process.
 Business Process and ERP

• On the other hand, if the organization decides to

implement the ERP system “as-is”, disruptions will
occur with the functioning of the organization.
• Thus, management must pay very close attention to
the organizational consequences of modifying or
not modifying the ERP software to match their
organizations’ business process.
ERP System Components
ERP System Components

• An ERP system depends on hardware,

software, information, process and people to
perform the input, process, and output phases
of a system.
• The basic goal of ERP is to serve the
organization by converting data into useful
information for all the organizational
stakeholders.
ERP System Components

• The implementation team must carefully

evaluate each component in relation to the
others while developing an implementation
plan.
• Failures are often caused by a lack of
attention to the business processes and
people components.
ERP System Components
• The layered approach
provides the ability to
change layers without
significantly affecting
the other layers.
• This can help
organizations lower
the long-term
maintenance of the
ERP application.
Benefits and Limitations of ERP
Systems benefits and limitations:
• Integration of data and applications across functional areas
of the organization
• Maintenance and support of the system improves as the IT
staff is centralized and is trained to support the needs of
users across the organization
• Consistency of the user interface across various applications
means less employee training, better productivity, and
cross-functional job movements.
• Security of data and applications is enhanced due to better
controls and centralization of hardware, software, and
network facilities.
Benefits and Limitations of ERP
Systems benefits and limitations:
• Complexity of installing, configuring, and maintaining
the system increases, thereby requiring specialized IT
staff, hardware, network, and software resources.
• Consolidation of IT hardware, software, and people
resources can be cumbersome and difficult to attain.
• Data conversion and transformation
• Can produce resistance and reduce productivity over a
period of time
Benefits and Limitations of ERP
Business benefits and limitations:
• Increasing agility of the organization
• Sharing of information across the functional
departments
• Linking and exchanging information in real
time
Benefits and Limitations of ERP
Business benefits and limitations:
• Quality of customer service is better and
quicker
• Efficiency of business processes are enhanced
• Retraining of all employees with the new
system can be costly and time consuming
Benefits and Limitations of ERP
Business benefits and limitations:
• Change of business roles and department
boundaries
• Reduction in cycle time in supply chain from
procurement of raw materials to production,
distribution, warehousing and collection
ERP Implementation Process
• Express – Implementation is functional out-of-the-box, the customer is a
single entity without complex processes and no add-on solutions are
required.

• Standard – Implementation is for Single or Multiple entities that require

minimal customizations and add-on solutions, and are single currency and
language.

• Advanced – Implementation is for Single or Multiple entities with various

locations, multiple currencies, and languages. Their business processes and
integrations range from moderate to complex.
6 Steps of ERP Implementation
Vendors
“Vendors are the people who has developed ERP
package”
• Invested huge amount of time and efforts in
research and development to create packaged
solution.
• ERP package grew out of experience or opportunities
of group of people working for company in
particular segment.
• Vendors have to constantly upgrade their product
Role of Vendors
 Vendor should supply product and its documentation
as soon as company has signed contract.
 Later company can organized training and testing for
implementation team
 Responsible for fixing anyproblem.
 Constantly interact with implementation team
Role of Vendors
Vendors training provides to keyusers:
• How package works, what are the major components,
how data and information flows across system, what
should be configured, what are the limitation,
strength and weakness.
• Objective on how the software works not how to
implementthesoftware
 Software has to becustomized.
 It is job of the vendors to customize software according
to the company needs.
 Company should get guarantee after customization
that software should fulfil all the requirements to
achieve goal from vendor
Consultants
 Deals with implementation and with various problem
arises during implementation.
 Experts in management, administration
 Have many years of implementationexperience
 They are very expensive
 Research various product in depth ,develop in-depth
understanding all the weakness nstrength
Role of Consultants
 Consultant should guarantee that software success of
software and must show desire results that satisfies the
need of company.
 Administer all thephase in details
 Schedule all the thing intime.
 They have to allocate right people
 For better implementation and better business
practice they should be impartial while questing.
 Responsible for analyzing and addressingcustomizing
issue.
 Must know the difference between “Must have" and
"nice to have" items.
 Decide level of customization
 Must use diplomaticskills.
 Provide drawback and advantage of all the area
 Maintain documentation
 Will leave once project isfinished
 Must leave knowledge and train people.
User
 These are the people who will use the ERP
system
 Use function that are being automated.
 Employee fear.
 Afraid of training.
 Job profile willchange
 Old job is gone but new job comes in
User Resistance
 Fear of being redundant
 Fear of failure
 Fear of the future
Dealing with User Resistance
 Training and education
 Creating ERP champions
 Pilot projects
 Involve employees in theprocess
 Addressing issues related to ERP implementation
Contract Negotiation with Vendors
• One of the key components of our ERP software
selection methodology is contract negotiation
with ERP vendors.
• Focuses on ERP consulting and extensive
knowledge of the ERP software industry.
• Enables consultants to provide clients with
a negotiation experience that delivers
desired results, quantifiable benefits and a
very strong return on investment on our
consulting fees
Key Elements
• Ensure not getting Over-Licensed on the software.
One big potential area of savings is making sure one
is not getting over-licensed, whether it be in terms
of unnecessary modules, too many users or other
instances of “shelfware” that turn out to be the
equivalent of throwing away money.
• Consider the Total Cost of Ownershipof
ERP Software.
 Negotiate a Long-Term License Deal. Rather than
focusing solely on the immediate purchase, it is more
important to view the acquisition of ERP software as a
long-term deal.
Implications for Management
• ERP systems implementation is a complex
organizational activity.
• ERP systems implementation requires strong project
management oversight.
• ERP systems provide improved and added
functionality for an organization.
• ERP systems are set to proliferate globally.