Enterprise Resource

Planning
Session 2
Introduction
Contd...
Neetu Ganapathy SDM IMD September 2014

Today's Session
ERP System
Vendors
Benefits

Neetu Ganapathy SDM IMD September 2014

Business Needs and ERP

To stay ahead, companies need to
Shorten throughput times
Reduce stock to a minimum
Enlarge range of products and customise to
order
Improve product or service quality
Schedule flexibly & respond to new customer
needs

Neetu Ganapathy SDM IMD September 2014

Business Needs and ERP

To meet these challenges
Organisation boundaries getting diffused
More stakeholders joining in to form a
synergistic and harmonious business
ecosystem
Multilocation, multiplant

To meet the needs of such an organisation

Need to integrate the entire enterprise.
IT to the rescue
Neetu Ganapathy SDM IMD September 2014

ERP System
In the 90s, ERP a tightly integrated monolith
Entire package had to be bought even if you intended
to install only Finance module.
Large initial capital investment

Today, modular in nature

Modules for Finance, HR, Production etc.

Today, quite flexible financing and purchasing

options
Individual modules can be purchased and installed
without having to buy the entire package
An Enterprise can buy only what they need when they need it
Neetu Ganapathy SDM IMD September 2014

Functional Modules in ERP Systems

Main functional modules of an ERP system

Sales and Distribution

Materials Management
Production Planning and Control
Plant Maintenance
Human Resource
Financial Accounting
Quality Management
etc.

Neetu Ganapathy SDM IMD September 2014

SAP

Neetu Ganapathy SDM IMD September 2014

Neetu Ganapathy SDM IMD September 2014

Some Vendors
R/3, Business
One, Business by
Design

E-business suite

100
AX, NAV, GP, SL

ERP LN, ERP

Business
Neetu Ganapathy SDM IMD September 2014

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ERP Needs
Strong executive support to implement
Process approach rather than silos
Change in business procedures (BPR)
Change in organizational structure,
culture, strategy
Technology change

Neetu Ganapathy SDM IMD September 2014

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ERP can be compared to

Fly-by-wire operation of an aircraft
Manually piloted aircraft Vs. Airbus 340

ERP systems
Would relieve operating managers of routine
decisions.
Gives them time to think, plan and execute vital
long term decisions.
Leads to significant cost savings by
continuously monitoring organisation health.
Neetu Ganapathy SDM IMD September 2014

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If you Decide on an ERP

System
Can be
Made using Internal Resources
Need for a strong IT team

Made using External Resources

IBM, TCS, etc.

Bought off-the-shelf
COTS
Some Vendors: SAP, Oracle, MS, etc.

Rented
SaaS cloud computing, etc.

Neetu Ganapathy SDM IMD September 2014

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Implementation Approach
Implementation Approach
Single ERP Package
Single ERP package with other systems
Multiple ERP packages with other systems
Best of breed from several ERP packages
Totally in-house developed
In-house plus specialized packages
Neetu Ganapathy SDM IMD September 2014

ERP Expectations
Integrating all the functions
Integrating the systems running in all the locations
Transparency of information using a single
data source across the organization
Software must be responsive
Modular
Flexible
Easy to add functionalities
Provide growth path
Neetu Ganapathy SDM IMD September 2014

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What companies forget

That ERP is a generic representation of the way
a typical company does business.
Companies find that an important business
process is not supported by ERP.
Solution
Change the process to the one the s/w supports
Very difficult but ideal solution as ERP provides best
practices

Modify S/W to fit the current process, peoples roles

and responsibilities.
Slows down the implementation
Unless carefully attempted will cause ERP implementation
costs to spiral out of control.
Slight change ok. But complete change not recommended.
Neetu Ganapathy SDM IMD September 2014

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Potential Risks
Difficult to implement
Often easier to adapt business processes
to the software than vice versa
Inflexible
Overly hierarchical?

Neetu Ganapathy SDM IMD September 2014

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Mission

People

Process

Technology

Vision
Neetu Ganapathy SDM IMD September 2014

Strategy
20

ERP S/W is like cement

you can pour it to look like
anything you want, but once
it dries, youre stuck with it

Neetu Ganapathy SDM IMD September 2014

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