Cours Erp v5
Cours Erp v5
– EFREI –
– ESTIA –
Guillaume Rivière
Last update: March 2018 1
Objectives of this course
• Learn what ERP software is
– Be aware of the major actors
– Be able to analyze and select ERP solutions
– Be able to speak with editors and consultants
– Be able to parameter ERP software
– Be able to develop modules for ERP software
2
Schedule
1. ERP: Introduction to basis principles (2h cours)
2. ERP: How to select software (2h cours)
3. OpenERP: Administration, Development (4h cours)
4. OpenERP: Installation and configuration (2h TP)
5. OpenERP: Follow a complete flow (4h TP)
6. OpenERP: Module programming + Webservice (10h TP)
Jour 1 Jour 2 Jour 3
Cours TP TP
ERP OpenERP OpenERP
Cours TP TP
OpenERP OpenERP OpenERP
Reminder
• System Analysis of Enterprises
Joël de Rosnay, Le macroscope,
Strategy Éditions du Seuil, 1975, 314 pages.
Prices policy
Constraints
Decision
Executive
System
Business intelligence
Environment Information Reporting
Information Environment
Transmit
Information
Transform into
global
information
System sophisticated
information
6
Reminder
• Are the following part of the information
systems?
– A list of supplier
– A file cabinet
• informatique = . . . . . . . . . . .
7
Summary of MIS chronology
1978 1989 1995
VisiCalc Excel
1979 1985 2000 2003 2005
9
The evolution of MIS
• Main factors of evolution
– Technologies for information systems
• Evolution of programming languages
• Evolution of network capacities, of web technologies
– The environment of enterprises
• Globalization of the market
– Internationalization: companies across several countries,
customers over the world
– Several currencies, laws
• Needs of the market change very rapidly
• Mergers and Acquisitions (M&A)
10
Building a MIS using IT
• Own software written by the enterprise
– Needs high-level and up-to-date internal skills
– External support/help is impossible
• No externalization
– Corrections must be done
by the enterprise
– Unfocusing from core business
– Low compatibility with partners,
customers, …
11
Building a MIS using IT
• Several EAS (Enterprise Application Software)
– Many EAS exist for each function of a company
– Some are known as best of their category
• Usually called « Best-of-breed » software
– Need to build bridges between programs
• Activate / Synchronize data
• Enterprise Application Integration (EAI)
EAI
12
Building a MIS using IT
• ERP software (Enterprise Resource Planning)
– An ERP is a central EAS aiming to covers (nearly)
all the functions of company
– Written by an editor outside of the enterprise
– Used by several companies
– Easy to find external skills
• Externalization
ERP
• IT consulting
• Focus on core business
13
The rise of ERP systems
• Started 25 years ago (early 1990’s)
• The rise happened with the necessary
evolution of MIS because of:
1. The year 2000 problem
• 1960’s: expensive memory and mass storage (1bit = $1)
• Year coded as 2 digits (programs, databases, programming
languages, windows 3.x file manager, etc.)
• Announced since early 1980’s
• Really taken into account between 1995 and 1998
• Next known "bug": January 19th, 2038 at 3:14:07 am
POSIX 32 bits systems using a signed integer (2106 if not signed)
14
The rise of ERP systems
2. The Euro changeover
• January 1st, 1999: introduction to world financial
markets as an accounting currency
• January 1st, 2002: Euro coins and banknotes entered
circulation
• Rather than starting corrections on existing
programs (more or less old)
– Migration of 60% of French large companies
• Other 40%: migration already done or correction of
existing programs
15
Mutation
• The management of information is changing
– Adaptation to the constant evolution of markets
– Mergers and Acquisitions (M&A)
– Collaborative software solutions
– Single currency in the European Union
– Enlargement of the European Union
– Growing global concurrency
• Call into question existing systems
– Abandon of « tailor-made » existing solutions
and adoption of « ready-to-install » ERP 16
Modern ERP software
17
3’ – Sage ERP Solutions – 2011
OUTLINE
1. What is ERP? Why ERP?
– Definition
– Characteristics
2. Conduct an ERP project
– Phases of the project
– Criteria for selection
– Steps of installation
3. Major actors of ERP market
– Proprietary and open source solutions
– IT consultants 18
Definition
• ERP is an EAS allowing to manage all the
processes of an enterprise, by the integration
of all the functions like:
20
Characteristics
• From a unique creator
• A modification on a module causes a direct
update on linked modules (1 DB, workflow engine)
• Ensure uniqueness of information (no redundancy)
• Easier detection and solving of potential
dysfunction (the origin of each information is easy to identify)
• Can be sufficient to fully cover all needs (of
MIS) of an enterprise, and the modular
architecture permits a progressive installation
21
according to the evolution of needs
Reminder?
Presentation tier
1960’s-70’s Client-Server model Logic tier
Data tier
1-tier architecture 2-tier architecture 1980’s
Centralized
n-tier architecture 2000’s
Thin clients
Rich/Thin clients 22
ERP infrastructure
• General setup
Human Customer
Network resources relationship Network
Central
component
Production Financials
Logistics
Stocks
Thin clients Rich clients
ERP server(s) Database
server(s)
23
Module-based architecture
• Each function of enterprises is implemented by
an independent module
– These modules share the same database
– Modules are compatible with others (verification not needed)
– Pluggable as
Retail
and
Customer Lego blocks
Help Desk
Commerce
Inventory Marketing and work
Production E-Commerce
together
Payables General
Receivables Ledger
Fixed Management
Asset Accounting
24
Modules
• Financial Accounting
– General Ledger, Fixed Asset, Payables, Receivables,
Cash Management, Financial Consolidation
• Management Accounting (Analytic)
– Budgeting, Costing, Cost Management, Activity
Based Costing
25
Modules
• Manufacturing
– Engineering, Bill of Materials, Work Orders,
Scheduling, Capacity, Workflow Management,
Quality Control, Manufacturing Process,
Manufacturing Projects, Manufacturing Flow,
Product Life Cycle Management, Product Data
Management
– Computerized maintenance management system
(CMMS)
26
Modules
• Material Requirement Planning
– MRP 1
– MRP 2
• Simulations
– It is possible to response to this order (supply chain,
workbenches, …)
– Should i prefer to answer to this order or to another order
27
Modules
• Supply Chain Management (Logistics)
– Supply Chain Planning, Supplier Scheduling, Order
to Cash, Purchasing, Inventory, Warehouse,
Product Configurator, Claim Processing
– Essential for Just-in-time (JIT) production strategy
28
Modules
• Customer Relationship Management
– Sales and Marketing
– Commissions
– Service
– Customer Contact
– Call Center Support
• CRM systems are not always considered part
of ERP systems but rather Business Support
System (BSS) systems
29
Modules
• Human Resources
– Recruiting, Training, Payroll, Benefits, 401K,
Diversity Management, Retirement, Separation
– Carriers, Skills, Vacations, Presence
• Project Management
– Project Planning, Resource Planning, Project
Costing, Work Break Down Structure, Billing, Time
and Expense, Performance Units, Activity
Management
30
Modules
• Data Services
– Various "self–service" interfaces for customers,
suppliers and/or employees
• Access Control
– Management of user privileges for various
processes
31
Domains / Sectors
• Certain ERP or module (or overlay) are
dedicated to particular domains of activity:
– Hospitals – Automobile
– Telephony – Electrical goods
– Cosmetics – Aeronautic
– Agribusiness – Construction
– Printers/Publishers – Banks
– Ready-to-wear – Insurances
– Hypermarket –…
distribution 32
Workflow engine
• Integrated workflow engine
– After an input / After an update
• Store information into database
– New information is spread in all the modules
needing it (synchronization)
• Automated (and customizable)
– Unnoticeable for end-users Workflow
engine
33
Workflow programing
• BPM modeling (Business Process Management)
– Flowchart diagrams
– BPMN (Business Process Model and Notation)
– XPDL (XML Process Definition Language)
– BPEL (Business Process Execution Language)
– WS-CDL (Web Services Choreography Description Language)
35
Strong points of ERP
• Main advantages
– A unified system allow to make working users of
different activities in a identical applicative
environment
• Coherent and homogenous data (single DB)
• Integrity and unity of information (no redundancy)
• Minimal costs
– No interface between modules, synchronized treatments,
corrections assumed by the editor
• Global training for end users (same logic and ergonomics)
• Costs and time of installation are known
– Often 3 to 36 months (but can also be 7 or 8 years!) 36
Weak points of ERP
• Main inconvenient
– High cost (heavy investment)
– Functionalities rarely covers all needs
• Extra developments are (always) required
– Functional coverage is larger than needed
– Requires deep knowledge of the enterprise processes
– Must sometimes adapt the processes to the ERP
– High dependency to the editor (source code, new versions)
– Heaviness and rigidity of the installation process
• Long or difficult appropriation by end users
37
Benefits for the organization?
• Multi-currencies/languages/legislations tool
• No divergent information between
departments, then some conflicts are avoided
• Better coordination among departments
• Better management of storage
• More reliable indicators and dashboards
• Putting all the enterprise in a single software
– Allow a global vision of the enterprise
– Helps having a more standard internal functioning38
Risks
• When the ERP stops working, the enterprise
stops too!
• When the DB fails, the ERP stops!
• If the DB breaks, all data of the enterprise can
disappear and be lost forever!
• Disaster Recovery Plan (DRP)
– Documented process and set of procedures
– Recover an IT infrastructure in case of a disaster
• NYC flooded by Hurricane Sandy in October 2012
• Physical duplication was not enough 39
Do i need ERP?
• This is a strategic choice
– Nowadays SME are also concerned
• Strategic analysis
– Environment / Enterprise
– Risks / Opportunities
– Strengths / Weaknesses
– Main objectives of the enterprise? Key processes?
– What level of modules? Sales/Finance/Logistics/B2B/B2C
• Not only reduce costs, but increase global
40
performance (quality, reduce times, decisions, reduce errors)
Back to reality
• ERP systems were designed in order to be a
single solution allowing to manage all the
functions of the enterprise: it is not the case!
• Limitations
– Not possible to parameter in order to fit the
process of the company
• Don’t tell the enterprise ERP knows better its business
• Adapt the enterprise to the ERP
– Function is not (yet) implemented
With local laws
– Function is not compatible With other software used
41
in the company
Communication with other EAS
• Plug an external software with ERP
– Thought CSV file or XML file
– Thought Database (triggers)
– Thought webservice (RPC/XML, SOA)
• Compatibility
– Office software suites (MS OFFICE, OPENOFFICE, LIBREOFFICE)
– Reporting tools (SUGARCRM, KETTLE, JASPERREPORT, REPORTLAB)
– Business intelligence tools (PENTAHO, SPAGOBI)
– Accounting EAS (CIEL, SAGE, CEGID QUADRA)
42
Other software for enterprises
• Groupware: software for collaborative work
– Shared e-mail boxes
– Shared calendars
– Shared contacts directories
– Electronic Document Management System (DMS)
– Examples:
• IBM LOTUS NOTES • ORACLE BEEHIVE
• MICROSOFT SHAREPOINT • O3SPACES
• HORDE PROJECT • Box.net
• Do not confuse all business software with ERP43
Your products in action with ERP
44
7’ – Jonac Systems Inc. – 2011
OUTLINE
1. What is ERP? Why ERP?
– Definition
– Characteristics
2. Conduct an ERP project
– Phases of the project
– Criteria for selection
– Steps of installation
3. Major actors of ERP market
– Proprietary and open source solutions
– IT consultants 45
Factors to Consider When Selecting an
ERP Platform
46
7’ – Sage ERP Solutions
ERP project
• ERP should not only be seen as a tool or
software
– For the enterprise, ERP is a real project
– New way of thinking MIS
– Need to know (to discover?) and write all
procedures
– Needs new collaborations between departments
– Should be conducted with end-users
• A failing ERP project can endanger the
enterprise 47
What criteria?
• Hundreds of solutions around the world
• How to select an ERP among others?
• Steps of installation?
• Preparation?
• Roadmap?
48
The market of ERP
• Can be divided in 3 categories
I. The more powerful and expensive systems
• Only few editors at this level
• Budget of at least $600,000
(but largely higher according to the number of modules and users)
II. Less powerful ERP but with really lower cost
• Medium-sized or subsidiary company of big enterprises
• Smaller business start using it to be better challengers
• Budget ranging from $100,000 to $600,000
III. Lot of small EAS (considered as complete ERP?)
• Budget ranging from $5,000 to $100,000 49
Functions and processes
of the enterprise covered by the ERP
by activity
Generalist ERP Production
less traditionnal modules Distribution
Project management Sales points
Verticalization
Human ressources Business to business
Maintenance Business to customer
traditionnal modules
by domain/sector
Accounting
Textile
Purchasing Agribusiness
Sales
Chemistry
Inventory
Hostels
Manufacturing
Banks
50
Features of each category
• ERP for large companies
– Modules around a central core
– Extended parameters for processes and workflow
– Fully configurable
• ERP for SME
– Several modules included in the common core
– Fixed processes and workflow
– Minimal accounting (simple purchasing and sales backlogs)
– Mono-lingual
– Supports only one DBMS and one OS 51
TCO
• Total Cost of Ownership
– For all phases of the ERP project
• Phase 1: Preliminary studies, detailed studies
• Phase 2: Developments, parameters
• Phase 3: Preparation and first tests
• Phase 4: Training end users
• Phase 5: Replacing the old system by the new one,
checking the new data stream is all right
• Phase 6: Maintenance, evolutions, new versions
– Estimate the number of days and persons
– What resources? (internal, external, hardware, infrastructures)52
ROI
• Return On Investment
– Can be very long
– Promises not always kept
• Competitive advantage
• Costs reduction
– But the real ROI of ERP is not always about money
• Better decisions and management
• Better visibility of the activities
• Clarification of procedures
• Productivity increased
53
Before and after ERP
• Lenôtre: first gourmet catering in France
• Created in 1957, 1400 employees
– Decrease 15% of the stocks in 3 years
• Optic 2000
• Created in 1969, 620 employees in 2011
– Immediate decrease of out-of-stock problems
– Higher rate of service for delivery
– Better quality control of bought products
Kenneth Laudon, Jane Laudon, Management des systèmes 54
d’information, Chapitre 11, Pearson Education Inc, (9e édition, 2006)
Before and after ERP
• RhodiaSilicones
– Before ERP, about 4 on 10 orders were not
delivered on the date asked by the customers. The
OTIF indicator (On-Time In-Full) went from 62% to
75%-80% at Saint-Fons factory
56
Before and after ERP
• Soitec: a French semiconductor manufacturer
• Created in 1992, 1275 employees in 2011
– Automatisation and integration of the information
flow reduce time for input and reduce input errors
and the time to correct input errors
– Accounting and sales administration: about 5% to
15% increase of productivity
– Logistics: about 10% to 20% increase of
productivity
– Under 1% of errors for packaging and labelling (it
was 6% before ERP) 57
Achat d’un système ERP
• Michel Beaudry, www.formateur.ca (2009)
– Dans cette capsule, Michel Beaudry nous explique
comment faire pour choisir le bon logiciel ERP ?
– Voici donc les cinq étapes de la méthodologie
mise au point par Michel Beaudry qui vous
aideront à faire le bon choix. La majorité des
entreprises qui ont appliqué cette technique
ont choisit le bon logiciel et l’implantation fût
un grand succès.
58
13’30 (« Canceller » = Annuler)
Achat d’un système ERP (1)
59
6’ - Michel Beaudry – Directeur de projets – 2009
Achat d’un système ERP (2)
60
7’30 - Michel Beaudry – Directeur de projets – 2009
Steps for phase 1
1. Create the vision of the enterprise
2. Establish the list of needed functionalities
3. Identify critic and standards functionalities
4. Make a list of potential ERP candidates
5. First selection process to retain 5 candidates
6. Write scope statements and send call for tender
7. Analyze responses
8. Select 3 final candidates
9. Demonstration by the 3 editors/vendors
of the solutions with data of the enterprise Final user
63
Proprietary or Open source
• Large company
– Proprietary ERP
• Small and Medium sized companies
– Proprietary ERP
– Open source ERP
– Specialized proprietary ERP (and low price)
• Other criteria that can be considered
– Rich client not available for GNU/Linux
workstations used in the small enterprise
65
Solidity of the editor
• Prices of proprietary ERP are sometimes quite
excessive
– But one could say that:
« at least, their editors are rich society and wont
become bankrupt overnight! »
73
Sage ERP x3 overview
74
3’ – Sage ERP Solutions
Proprietary ERP solutions
• Hundreds of solutions
• Main actors of the market:
1. SAP (1972)
2. ORACLE (v1 en 1978) 2005-2009
• E-BUSINESS SUITE
Autres SAP
• PEOPLESOFT + JD EDWARDS 30% 33%
• SIEBEL (CRM) Dynamics Oracle
3. SAGE ERP (1981) 14% 23%
4. MICROSOFT DYNAMICS
75
Major actors: SAP
• Identity
– System Analysis and Program Development
– Systems Applications and Products in Data
Processing
– German company
– Created in 1972 by 5 former IBM engineers
• Dietmar Hopp, Hans-Werner Hector, Hasso Plattner,
Klaus E. Tschira, and Claus Wellenreuther
76
History of SAP versions
DB DB
1973 R/1 1981 +30,000 +30,000
tables tables
1982 R/2 1991
1992 R/3 2001 mySAP.com
AllinOne, ByDesign
2002 ECC 2012
78
SAP
• Some figures
– 1972: 9 persons
• Revenue 300,000 EUR
– 1982: 250 customers in Germany
– 1988: first american office in Phyladelphia
– 1998: 20,000 installations of R/3
• 1.5 Million of employees use SAP daily
– 2000: 25,000 persons
• Revenue 6.3 Billion EUR
79
SAP
• Products
– SAP All-in-one
• For medium size companies
• From 20 to 60 client workstations
– SAP Business One
– SAP Business ByDesign
– SAP R/3
80
SAP R/3 modules
• SAP R/3
(1992-2001)
81
SAP programming language
• SAP ERP (ECC) 6.0 is written in C, C++, ABAP/4
• ABAP was created by SAP in 1983
– Advanced Business Application Programming
– Inspired by COBOL
– High-level programming language
– SQL integration
– Interpreted language
– ABAP/4 is object oriented
– Used in several EAS of SAP Business Suite
82
Oracle
• Oracle E-Business Suite
– Part of Oracle Applications
(non-database and non-middleware Oracle software)
83
Sage
• 1981
• Targets mid-sized enterprises (less than 500 employees)
• Several products
– Sage One, Sage 50, Sage 100, Sage 300, Sage 500
• Sage ERP X3 (formerly Adonix X3)
– Acquisition of the editor Adonix in 2005
– Product for SME-SMB of 500-2000 employees
84
Sage modules
• Sage ERP x3
85
Microsoft
• Microsoft Dynamics (Microsoft Business Solutions successor)
– MS Dynamics AX (formerly Axapta)
– MS Dynamics GP (formerly Great Plains Software)
– MS Dynamics NAV (formerly Navision)
– MS Dynamics SL (formerly Solomon IV)
– MS Dynamics CRM
– MS Retail Management System (formerly QuickSell)
86
GEAC
• 1971, Canada
• Generalist ERP (SmartStream, Expert, Millennium)
• Verticalization
– Libraries: Vubis, Advance, GeacPlus
– Hostels: Geac UX, Geac SCO, Geac /GH
– Restaurants: Geac CTC, Geac Remanco
– Purchase and costs: Geac CCS
– Golf clubs: Geac Pebble Beach
87
Other proprietary ERP editors
• Cegid (1983, Lyon)
• Baan (1978, Netherlands)
• Divalto (1982, Strasbourg)
• Silog (1984, Caen)
• Prism (1987, PrismERP in 2002)
• Lawson (1975, acquisionned by Intentia in 2006)
• SSA Global (1981, Chicago, USA)
88
Open Source ERP
• Around 30 ERP solutions
• Main ERP solutions
– OPENERP (2002, Python) www.openerp.com
– OPENBRAVO (2005, Java) openbravo.com
– ADEMPIERE (2006, Java) www.adempiere.com
– COMPIERE (1999, Java) www.compiere.com
2000 2008 2009
– ERP5 (2003, Python) www.erp5.org
2006
– NEOGIA (2004, Java) neogia.org
89
A list of open source ERP
– OpenTaps (Java) – Ezinux
– OFBiz (Java) – FreedomERP (Java)
– OpenBlueLab – OpenConcerto (Java)
– PlazmaERP (Java) – OpenSI (Java)
– JFire (Java) – SQL Ledger (Perl)
– JallInOne (Java) – Taïka PGI (created from
several open source EAS)
– OpenAguila (Java)
– Tryton (Python)
– Dolibarr (PHP)
– Vanilla Openbravo
– EBI Neutrino R1 (Java)
– Ekylibre (Ruby) 90
Differences among open source ERP
• Programming languages (Java, Python, PHP)
• Databases (Oracle, PostgreSQL, MySQL, Zope)
• Licenses (GPL, AGPL, Apache, …)
• Governance: Editor / Community
91
Open Source ERP
• Strong points
– Solidity of editors (communities)
– Designed and developed closely with the users
– Lesser time to put in place than proprietary ERP
– Very low failure rate (because very adaptable)
– Training is not designed and exclusively managed by
the editor (debateable way to do things)
• Weaknesses
– Proprietary competitors installed for decades
– Still relatively new (youth) 92
Changement de SI chez Yves Rocher
• Dans ce groupe SAP prenait déjà en charge :
– la comptabilité, la finance et la gestion de la chaîne
logistique
• Le nouveau DSI s'est vu attribuer la tâche
d'enrichir l'existant : il a consulté le marché
– Solutions existantes trop chères selon la société
– Choisit Compiere qui couvrait 75 % des besoins
• Avec seulement 20 % du budget initial investis sur les
développements et l'intégration, Yves Rocher est arrivé
au bout du projet sans pour autant remettre en cause
toutes les habitudes des utilisateurs 93
IT consulting enterprises
• French enterprises
– CAPGEMINI (1967, Grenoble)
• 120,000 employees in 2011
– UNILOG (1968, acquisitioned by Logica in 2005)
• 41,000 employees in 36 countries
• 9,200 in France
– ALTEN (1988, Paris)
• 16,000 employees in 14 countries in 2012
– SMILE (1991, Paris)
• 700 employees in 16 agencies around Europe
95
IT consulting enterprises
• Around the world
– IBM (1911)
– ACCENTURE (Arthur Andersen, 1913, 1989, 2002, USA, now Ireland)
• 257,000 employees in 120 countries (2012)
– LOGICA (1969)
• And many many many others
– Can be local ones (city, country)
– And other international ones
96
ERP et stratégie
• Débat MyDSI-TV, Accenture (8 janvier 2009)
– Pour débattre, autour de Luc Fayard, de
l’alignement stratégique du SI sur la trajectoire
de l’entreprise :
• Christian Lévi Directeur de la transformation financière EDF
• Jean-Marc Lagoutte DSI de Danone
• Philippe Nieuwbourg Directeur du musée de l’informatique
• Vincent Delaporte Responsable ligne de service SAP d’Accenture
101
25’ (BI = Business Intelligence)
ERP et stratégie
102
25’ – Débat MyDSI-TV – 8 janvier 2009
Schedule
1. ERP: Introduction to basis principles (2h cours)
2. ERP: How to select software (2h cours)
3. OpenERP: Administration, Development (3h cours)
4. OpenERP: Installation and configuration (5h TP)
5. OpenERP: Follow a complete flow (4h TP)
6. OpenERP: Module programming + Webservice (8h TP)
Jour 1 Jour 2 Jour 3
Cours TP TP
ERP OpenERP OpenERP
Cours
TP TP
OpenERP
OpenERP OpenERP
TP OpenERP