ERP

Module I
BPR
 

Business Process Reengineering Cycle

Module II
General ERP Implementation Methodology
. Identification of the needs for implementing an ERP package.
a. Why should I implement an ERP package?
b. Will it significantly improve my profitability?
c. Will it lead to reduced delivery times for my products?
d. Will it enhance my customers’ satisfaction level in terms of cost, delivery
time, service and quality?
e. Will it help reduce the costs of my products?
f. Will it enable me to achieve the same business volume with reduced
manpower?
g. Will it enable me to re-engineer my business processes?
 The other factors that should be taken into consideration are:
i. Need for quick flow of information between business partners.
ii. Effective management information system for quick decision-making.
iii. Elimination of manual preparation of various statutory statements.
iv. Need for a high level of integration between the various business
functions.
. Evaluating the “As-Is” situation of your business. The various business
functions should be first enumerated. The process map should give you the
following details for any business process:
a. The total time the business process takes to complete.
b. The total number of decision points involved.
c. The number of departments/geographical locations that the business
process involves.
d. The flow of information.
e. The number of reporting points.
. Deciding upon the desired “Would-Be” situation of our business. In this
step, we decide on what we want our business processes to finally look like.
Here we use the techniques of benchmarking to ensure that the targets set
are comparable to the best in the industry. Benchmarking can be done on
various aspects of the business like cost, quality, lead time, service, etc.
. Re-engineering of the business processes to achieve desired results. This
step is also known as Business Process re-engineering.
. Evaluation of various ERP packages based on -
a. Global Presence
b. Local Presence 
c. Investment in R & D
d. Target Market  
e. Price 
f. Modularity 
g. Obsolescence 
h. Ease of Implementation 
i. Cost of Implementation 
j. Post-Implementation Support
. Finalizing of the ERP package. After a thorough evaluation of all the ERP
packages vis-à-vis the key factors of your business, the package best suited to
your business needs is selected. The process of finalizing can be simplified by
making a matrix of the key factors. You can then rate all the packages under
these heads.
. Installing requisite hardware and networks. In this step, one has to install the
hardware and networks required for the chosen ERP package. The installation
 of the hardware has to be well-planned because generally the hardware
arrives in time and lies idle due to the delays in implementation. Also, the
induction of the hardware should be in a phased manner to avoid blocking of
capital.
. Finalizing the implementation with consultant. The factors which go into the
selection of the consultant are -
a. Skill-set available with the consultant (application area)
b. Installation base of the consultant
c. Industry-specific experience (knowledge of the various industry-specific
business processes)
d. Finances involved in hiring the particular consultant.
. Implementation of ERP package. The broad steps involved in the
implementation of the ERP package are - 
a. Formation of Implementation Team
b. Preparation of Implementation Team
c. Mapping of business processes on to the package
d. Gap Analysis
e. Customization
f. Development of User-specific reports and transactions
g. Uploading of data from existing systems
h. Test runs
i. User Training
j. Parallel run
k. Concurrence from user on satisfactory working of the system
l. Migration to the new system
m. User Documentation
n. Post-Implementation support
o. System Monitoring and Fine Tuning

Implementation Team
Implementation Team consists of:
IT personnel 
Implementation consultants
Project Manager, Project Leaders and the Module Leaders 
Steering committee

Module III
ERP Selection
The first step in selecting an ERP system is generally to research vendor ERP
systems on the market and to identify a short list of vendors who will help to
shape business requirements. The following should be considered when
researching vendors and gathering information:
. Other businesses using the vendor
. The vendor's financial position
. The vendor's implementation philosophy and support issues
. The hardware and software infrastructure used to support the ERP
. The vendor's direction and currency of software
. The vendor's release and upgrade strategies
. The vendor's user-base involvement in defining future functional changes 
. The vendor's development and maintenance resources

Request For Proposal Approach

The Request-For-Proposals approach is an expensive and time-consuming
process for both the company and vendor(s), but it can yield significant software
savings when done right. In addition, one of the benefits of bidding is a more
detailed understanding of the ERP system functionality and a willingness of the
vendors to work with the company better to ensure a successful implementation.
The Request For Proposals (RFP), is sometimes called Request For Bids (RFB). 

The key elements of an RFP, from the perspective of an organization looking to

obtain new business system software should be three fold: 
. Provide an easy “apples to apples” comparison of potential suppliers 
. Ready access to key decision information.
. Eliminate any extra information which is not relevant to the decision process.

The five key elements in a quality RFP are: 

. Definition of why you are seeking new software (i.e., your buying criteria) 
. Description of your business, transaction volumes, user count, etc. 
. Clear definition of what information you are seeking from the suppliers 
. Quantitative (rather than qualitative)   evaluation criteria 
. Definition of how the process will work  moving forward and the time frames
involved.

Proof-of-Concept Approach
This is the fastest approach of all, it is done when the company has chosen which
package to implement, it just needs to confirm the selection before signing the
contract and start implementing it. There can be several reasons why an
organization has identified the preferred package.
Steps
. Define the critical requirements that are unique to your company and match
to the vendors on your short list. Please note: Critical requirements only. You
have to assume that all systems will have an "Aged Trial Balance". This list
should not be longer than two pages. Only continue to step 2 with those that
sufficiently match.
. Visit a company using the system, in a similar industry and size as your own.
You may not get all criteria matched, but ask. With these demands, it is more
difficult for the vendor to select who you visit.
. Till now we  should have a favourite system. If we are still not comfortable
enough to take the force, this final step eliminates any further risk. Ask this
vendor to bring in the trainer you will work with after the sale is complete, not
the professional presenter. Trainers have to live with their promises after the
sale, and will be quite forward about what the system can, or cannot do. 

Difficulties in selecting ERP Packages

. Cost
. User Interface
. Complexity
. Needs lot of BPR
. Approach of implementation 
. Implementation time
. Technology
. Helpful for each Management level
. Expected outcome meets expectations
. Security

EDI
Electronic Data Interchange (EDI) is a set of standards for structuring
information that is to be electronically exchanged between and within
businesses, organizations, government entities and other groups, without human
intervention. 
An inter-company, application-to-application communication of data in standard
format for business transactions.

Module IV
SAP
SAP, started in 1972 by five former IBM employees in Mannheim, Germany,
states that it is the world's largest inter-enterprise software company and the
world's fourth-largest independent software supplier, overall.  
The original name for SAP was German: Systeme, Anwendungen, Produkte,
German for "Systems, Applications and Products". The original SAP idea was to
provide customers with the ability to interact with a common corporate database
for a comprehensive range of applications.

Integrated SAP Model

SAP R/3 Architecture

SAP R/3 is one of the main product of SAP, where R stands for Real Time and the
number 3 relates to three tier application architecture (Data base, Application
Server and Client).
Most of the business in today’s world runs on SAP R/3 system. About 80% of the
companies implemented this software.

SAP R/3 Components

Internet communication Manager (ICM) - set up connection to internet.
Supports protocol HTTP, SMTP.
Dispatcher distributes the requests to the work processes. If all the processes
are occupied then the requests are stored in dispatcher queue.
 ABAP Work Process executes the ABAP code.
SAP gateway makes the RFC interface between SAP instances available.
Remote Function Call (RFC) is the standard SAP interface for communication
between SAP systems. RFC calls a function to be executed in a remote
system. 
Message server exchanges the messages and balances the load.

mySAP Business Suite

The mySAP Business Suite includes various business modules and numerous
sector and cross-sector solutions. A distributed system of this nature requires a
common infrastructure, which is provided by SAP NetWeaver and, in particular,
by the SAP Web Application Server (Web AS)—the successor to SAP Basis. This
type of system architecture is subdivided into three layers, which make up the
basic services of a business application system: the presentation layer, the
application layer, and the database layer. Each of these layers performs certain
functions and constitutes a part of the overall system landscape. 

PeopleSoft
Founded in 1987 by David Duffield and Ken Morris, PeopleSoft began with an
idea Duffield had about a "Client-Server" version of Integral Systems popular
mainframe HRMS package. 
PeopleSoft expanded its product range to include a Financials Module in 19923,
Distribution in 19945, and Manufacturing in 1996.
In 2003, PeopleSoft performed a friendly merger with smaller rival J.D.
Edwards.

Oracle moved to capitalize on the perceived strong brand loyalty within the JD
Edwards user community by rebranding former JD Edwards products. Thus
PeopleSoft EnterpriseOne became JD Edwards EnterpriseOne and PeopleSoft
World became JD Edwards World. Oracle Fusion has taken the best aspects of the
PeopleSoft, JD Edwards and Oracle Applications and merged them into a new
product suite. The PeopleSoft name and product line are now marketed by Oracle
under the new product Oracle Fusion.

Oracle
Oracle Corporation (NASDAQ: ORCL) specializes in developing and marketing
enterprise software products — particularly database management systems.
Through organic growth and a number of high-profile acquisitions, Oracle
enlarged its share of the software market. By 2007 Oracle ranked third on the list
of largest software companies in the world, after Microsoft and IBM.
Subsequently it became larger than IBM after its acquisition of Hyperion and
BEA. The corporation has arguably become best-known due to association with
its flagship Oracle database. The company also builds tools for database
development, middle-tier software, enterprise resource planning software (ERP),
customer relationship management software (CRM) and supply chain
management (SCM) software.

BAAN
Baan was a vendor of Enterprise Resource Planning (ERP) software that is now
owned by Infor Global Solutions. Baan or Baan ERP was also the name of the
ERP product created by this company. The Baan Corporation was created by Jan
Baan in 1978 in Barneveld, Netherlands, to provide financial and administrative
consulting services. 

Module V
Supply Chain Management
Definition
Supply chain management (SCM) is the management of a network of
interconnected businesses involved in the ultimate provision of product and
service packages required by end customers. It spans all movement and storage
of raw materials, work-in-process inventory, and finished goods from point-of-
origin to point-of-consumption (supply chain).

Key Drivers
Supply chain management must address the following problems:
Production
Location/Facilities
Inventory
Transportation
Information

Aims of Supply Chain Management

The ultimate aim of supply chain management is to satisfy the needs of the
end-consumers
The objective of every supply chain is to maximize the overall value generated
by an enterprise and it consists of all stages involved, directly or indirectly, in
fulfilling a customer request
The central aim of supply chain management, to have the right products in the
right quantities (at the right place) at the right moment at minimal cost, is
translated into the interrelated issues of customer satisfaction, inventory
management, and flexibility. 

SCOR Model
The Supply Chain Operation Reference (SCOR) model was developed by the
supply chain council with the assistance of 70 of the world’s leading
manufacturing companies. It has been described as the “most promising model
for supply chain strategic decision making.” The model integrates business
concepts of process re-engineering, benchmarking, and measurement into its
framework. This framework focuses on five areas of the supply chain: plan,
source, make, deliver, and return. These areas repeat again and again along the
supply chain. The supply chain council says this process spans from “the
supplier’s supplier to the customer’s customer.
Plan - Demand and supply planning and management are included in this first
step. Elements include balancing resources with requirements and
determining communication along the entire chain. The plan also includes
determining business rules to improve and measure supply chain efficiency.
These business rules span inventory, transportation, assets, and regulatory
compliance, among others. The plan also aligns the supply chain plan with the
financial plan of the company.
 Source - This step describes sourcing infrastructure and material acquisition.
It describes how to manage inventory, the supplier network, supplier
agreements, and supplier performance. It discusses how to handle supplier
payments and when to receive, verify, and transfer product.
Make - Manufacturing and production are the emphasis of this step. Is the
manufacturing process make-to-order, make-to-stock, or engineer-to-order?
The make step includes, production activities, packaging, staging product,
and releasing. It also includes managing the production network, equipment
and facilities, and transportation.
Deliver - Delivery includes order management, warehousing, and
transportation. It also includes receiving orders from customers and invoicing
them once product has been received. This step involves management of
finished inventories, assets, transportation, product life cycles, and importing
and exporting requirements.
Return - Companies must be prepared to handle the return of containers,
packaging, or defective product. The return involves the management of
business rules, return inventory, assets, transportation, and regulatory
requirements.

SCOR Structure
 

SCOR Model Structure

Steven’s Model of SCM

Graham C. Stevens, who was a senior managing consultant at Peat Marwick
McLintock, suggested a 4-stage supply chain integration model or framework as
below -  

Supply Chain Integration Model

Baseline: each department in the same company manages supply chain

issues separately. At this stage, "Functional Silo" is a major problem.
Functional Silo is the way each function works on their own objectives.
Functional Integration: each department in the same company works
together to reduce costs.
 Internal Supply Chain Integration: each department is now connected via the
same IT infrastructure to increase the efficiency. At this stage, "Corporate
Silo" is the major issue. Corporate Silo is the way each company works on
their own agenda.
External Supply Chain Integration: each company in the same supply chain
joins hands and work together to achieve the same goal to satisfy customer's
requirements.

 
 

Stevens integration model and the seamless supply chain 

Bullwhip Effect
The bullwhip effect can be explained as an occurrence detected by the supply
chain where orders sent to the manufacturer and supplier create larger variance
then the sales to the end customer.  These irregular orders in the lower part of the
supply chain develop to be more distinct higher up in the supply chain.  This
variance can interrupt the smoothness of the supply chain process as each link in
the supply chain will over or underestimate the product demand resulting in
exaggerated fluctuations.

Factors contributing to the Bullwhip Effect

There are many factors said to cause or contribute to the bullwhip effect in
supply chains; the following list names a few:
Disorganization - between each supply chain link; with ordering larger or
smaller amounts of a product than is needed due to an over or under reaction
to the supply chain beforehand.
Lack of communication - between each link in the supply chain makes it
difficult for processes to run smoothly.  Managers can perceive a product
demand quite differently within different links of the supply chain and
therefore order different quantities.
Free return policies - customers may intentionally overstate demands due to
shortages and then cancel when the supply becomes adequate again,  without
return forfeit retailers will continue to exaggerate their needs and cancel
orders; resulting in excess material.
Order batching - companies may not immediately place an order with their
supplier; often accumulating the demand first.  Companies may order weekly
or even monthly.  This creates variability in the demand as there may for
instance be a surge in demand at some stage followed by no demand after.
Price variations - special discounts and other cost changes can upset regular
buying patterns; buyers want to take advantage on discounts offered during a
short time period, this can cause uneven production and distorted demand
information.
Incorrect Demand information - relying on past demand information to
estimate current demand information of a product does not take into account
any fluctuations that may occur in demand over a period of time.
 

Bullwhip effect example

Benefits of SCM
Improved delivery performance—quicker customer response and fulfillment
rates
Greater productivity and lower costs
Reduced inventory throughout the chain 
Improved forecasting precision
Improved quality and products that are more technologically advanced 
Enhanced inter-operational communications and cooperation 
Shortened repair times and enhanced equipment readiness 
More reliable financial information. 
Fewer suppliers and shorter planning cycles 

ERP vs SCM
ERP and SCM today are commonly integrated in most companies. ERP focus
is on providing an integrated transaction processing that enhances
organizational performance by increasing information consistency and
transaction efficiency. SCM’s on the other hand, are aimed at providing a
 higher level of business planning and decision support functionality for
effective coordination and execution of inter-organizational business
processes.

Points ERP SCM

of
compar
ison
Yes, covers many more areas Relatively less
Comprehen than SCM 
sive
Complexity Highly complex Relatively less complex

Sourcing Relatively static Dynamic

Tables
Handling of In a ERP system, all the Simultaneous handling of the
constraints demand, capacity and material constraints
constraints are considered in
isolation of each other.
Relatively less dynamic as they Can perform simulations of
Functionali are mainly concerned with adjustments with regard to the
ty transaction processing and constraints dynamically in
have more number of jobs to real-time
do
Speed of Relatively slower Faster
processing
requests

Customer Relationship Management

A true CRM integrates corporate strategy, business methodology, and technology
to accomplish a myriad of goals for companies that want to operate in a
customer-driven environment. CRM provides support for the front-end customer
facing functionality (e.g., marketing, sales, and customer service), which are
usually not available in traditional ERP systems.

Evolution of CRM
 

Evolution of CRM

Types of CRM
Operational CRM - Provide front- and back-end support for sales and
marketing, administrative personnel, or customer-service processes.
Analytical CRM - Provide tools for collection and analysis of data gathered
during the operational process to help create a better relationship and
experience with clients or end-users.
Collaborative CRM - Deal with the interaction points between the
organization and the customer.

CRM Delivery Processes

Campaign Management 
to generate “leads” or potential clients for the organization.
Sales Management
to convert the lead generated by campaign management into a potential
customer.
Service Management
provide ongoing support for the client and to assist in the operation of the
product or service purchase.
Complaint Management
 to improve customer satisfaction by directly addressing the complaint of
the customer and supporting a continuous improvement process.

CRM Support Processes

Market Research
Focuses on systematic design, collection, analysis, and reporting of data,
and on findings relevant to specific sales activity in an organization.
Involves integration of external and internal data from a wide variety of
sources.
Loyalty Management
Provides the processes to optimize the duration and intensity of
relationships with customers.

CRM Analytical Processes

Lead Management
Focus is on organizing and prioritizing contacts with the prospective
customers.
Customer Profiling
Focus is to develop a marketing profile of every customer by observing his
or her buying patterns, demographics, buying and communication
preferences, and other information that allows categorization of the
customer.
Feedback Management
Consolidates, analyzes, and shares the customer information collected by
CRM delivery and support processes with the analysis process and vice
versa.

CRM Components
Market Research
The two key functionalities here are campaign management and market
analysis.
Campaign management provides support for preparing such things as
marketing budgets, ad placement, sales targeting, and response
management. 
Marketing analysis tools provide statistical and demographic analysis.
Sales Force Automation (SFA)
Provide basic functionality for sales personnel to automate sales lead
distribution and tracking etc.
Customer Service Support
 Typically includes help desk ticket management software, e-mail, and other
interaction tools connected to a fully integrated customer database, which
is connected to the SCM and ERP application.
Data Mining and Analytics
Data must be collected, sorted, organized, and analyzed for trends,
demographics, cross-selling opportunities, and identification of other sales
patterns.

CRM Vendors