Enterprise Systems (ITC-321)

Lecture 01
Ms. Sarah Farrukh
Course Evaluation
Component Weightage Count

Quiz 10% 4

Assignment + Case Study based 20% 2+1

Finals 50% -
Course Learning Outcomes
 Demonstrate an understanding of enterprise systems.
 Elaborate the scope of common enterprise system modules such as SCM,
CRM, HRM in local and global contexts.
 Implement a strategy for selected business process(es) in enterprise systems.
 Analyze the challenges associated with the implementation of enterprise
systems.
Course Policy
 Homeworks(Assignments)
 Late homework will not be accepted at any cost,
 Students found in copying assignments will receive negative marks and
face possible disciplinary actions.
 Attendance
 Students are expected to attend all classes with min 75% attendance
Textbooks
 Modern ERP :select, Implement And Use Today’s Advanced Business
Systems 3rd Edition, 2015
 Reference Books:
 Select , Implement and Use Todays’s Advanced Business Systems
2nd Edition.
 Enterprise Resource Planning by Rajesh Ray, Tata McGraw Hill
 Design of Industrial Information Systems by Thomas O. Boucher, Ali
Yalcin, Elsevier AP Printer, 2006 6. Enterprise Application Integration
by David S. Linthicum, Addison Wesley Information Technology
Series, 2000
“ERP” (Enterprise Resource Planning)
 Enterprise: is any organization having set of common goals
 Resource: Resources of an enterprise; for example human resource, capacity
(plants, warehouse and machines, etc), inventory (finished goods, raw materials
etc.)
 Planning: for effective utilization of resources; like demand planning, financial
planning & budgeting, quality planning, new product planning etc.
 ERP is an integrated information system built on a centralized database and
having a common computing platform that helps in effective usage of
enterprise’s resources and facilitates the flow of information between all
business functions of the enterprise (and with external stakeholders)
Need for an ERP
 Organizations are traditionally structured around departments For example
purchase, sale, production, procurement, quality
 Problems arises when all have specific objective which are not aligned to each
other which leads to have an enterprise view (i.e. larger view).
 ERP needs arises
 To move from function to process : New approach of viewing organizational work
through processes rather than individual functions has improved organization
efficiency.
Need for ERP
 To move from Information Silos to Integrated Information System: Before the ERP
era, every department used to have their own system which leads challenges for
 Duplication of data: Different organization departments necessitates entering the same
data several times in different systems.
 Integration Issues: These are isolated and does not interact with each other

 Relevant information not updated: If systems are not integrated, then at any point of
time, the data most of the departments are seeing in the system are not the most
recent one.
 To move from Departmental Database to Companywide Integrated Database: ERP
is about integrated information system that needs an integrated database
 No data duplication: same data is not entered twice.

 Data standardization: only one way of creating data for example: vendor will have same
fields
 Data Tracking: captures whole life cycle of data.
Organization need for ERP
Need for ERP
Advantages of ERP Systems
 Data Integration:
 Data is captured once and shared across the enterprise, reducing the risk of
inaccuracies and redundancies in data and eliminating time wasted in checking,
correcting rechecking, and reconciling data.
 Data integration gives stakeholders the ability to gain better visibility into business
operations.
 The enterprise has a single version of “the truth,” and all users benefit because they
share access to and responsibility for information that is current, complete, and
accurate.
 Real-time access to information
 Once data is entered, it is readily available online and in real time to all users in all
departments (who have the authority to view or edit the data).
 Interdepartmental communication improves.
 “Joined up,” process-centered company and ultimately improving productivity,
insight, and optimized business processes.
Advantages of ERP Systems
 Process Standardization
 Share a common process and data model covering broad and deep operational end-
to-end processes
 Unified User Interface
 ERP vendor’s modules look and act the same.
 Single interface and consistent navigation simplifies user experience.
 Financial Gain
 Reduced operational costs and increased revenue. For example, lower inventory
costs, production costs, or purchasing costs. Improve revenues generating
processes, including time to market, marketing and sales, and customer service
 Single interface and consistent navigation simplifies user experience.
Advantages of ERP Systems
 Provides Better Flexibility
 Flexible than traditional home grown applications.
 Several scenarios can be configured in ERP based on the way configuration is done.
 Can be configured according to the new business need.
 Provides better customer Satisfaction
 Can offer capabilities like online order status tracking, customized pricing, better
field service leading better customer satisfaction Example : CRM
 Helps in Better Planning, Analysis and Decision Making
 Create lots of operational data everyday, which can be taken up for analysis and
better decision making For example how the sales trend is, how the new product is
performing, what about the latest promotion campaign, etc
Advantages of ERP Systems
 Facilitates Business Process Reengineering (BPR)
 BPR principles helps in better TO BE process design and ERP makes it possible to run
this TO BE design
 Automates All Transaction-oriented Processes and Makes it More
Efficient
 ERP makes these processes faster and error free.
 ERP has capability to automate all regular transaction processes like accounting,
payroll, inventory management, creation of purchase and sales order, invoicing etc.
 Industry best practices
 A best practice is a business process that is generally recognized as more effective
and/or efficient than others in a particular industry.
 By choosing an ERP package, organization adopts the vendor’s perspective on best
practices and relying on the system to help them implement and follow these
practices effectively.
ERP Challenges
 Scope, Scope, Scope:
 New requirements/change requests keep on coming even after business blueprint signs
off.
 Support required from top management to project in scope.
 Large budget and Long timeline:
 Usually only ERP software license cost, hardware cost and consulting charges is
considered. Cost of training, ongoing maintenance, cost of replacing people are missed
out.
 ERP project depending on size can run between 6 and 24 months and there are global
ERP implementation and rollout projects.
 Organization needs to manage their operations for such a long time without few of its key
people as they would become full time ERP project team members
 Difficult to keep enthusiasm alive among team members for such a long time
ERP Challenges
 Business process redesign
 Process should be redesigned in a way that selected ERP package can support to
reduce over all risk
 Unrealistic expectation and infeasible deadlines
 ERP is expected to solve every problem which makes project scoping difficult.
Expectations should be realistic and achievable.
 There are too many things to be achieved in small period of time which can lead to
give non-feasible timeline
 ERP system need to interface with several other systems
 Timeline depends on complexity of interfaces and technical feasibility of
integrations.
ERP Challenges
 Challenges for ongoing Support and Maintenance
 Having right people to do the support job:
 In most cases, best people want to get into new implementations and do not
want to continue in a support role.
 Current trend is to outsource their ERP maintenance job to specialized IT
organizations even if in some cases it is costlier.
 Managing multiple vendors
 There are separate vendor for the ERP support, hardware support, networking
support etc. Issues are often to and from between vendors.
ERP Challenges
 Managing transition from implementation team to support team:
 Support team should have required knowledge transfer, document handover and
transition of open issues from the implementation team.
 Challenges of realizing benefits:
 Organizations find it difficult to measure such benefits on a quantitative scale due to
lack of data, no defined responsibility and no defined KPI to measure process
improvement.
 Completing an ERP project in 12 to 24 months is one big challenge, but getting real
benefits out of it in the next three to five years
 Managing Change:
 Managing change effectively decides the success and failure of an ERP project

 Objective is to take out fear from the employees and making them more
comfortable via training, communication, etc
ERP Challenges
 Managing large project team:
 Coordinating multiple teams, addressing interpersonal issues, and keeping
everyone aligned with the project's objectives can be challenging and complex.
 ERP projects often involve managing large, diverse teams spread across various
countries, languages, and time zones
 Large global projects can have multiple vendors with different roles, such as
onsite vendors for business blueprinting, offshore vendors for system
programming, and other vendors for training material.
 Managing employee retention and relocation:
 ERP projects often require relocating a large core team from their current
locations to a new project office, creating logistical challenges.
 At the end of the project, relocating the team back and finding new roles for
them within the organization can be difficult, as their newly acquired skills make
them attractive for industry
ERP Challenges
 Managing regular upgrades
 ERP vendors frequently come up with new upgrades. Upgraded version comes up
with new features, these new functionalities may not be required by the
organization all the time.
 Many companies do just a technical upgrade to ensure that their version is
supported and no functional upgrade.
 Each upgrade is a separate project that costs financial and other organizational
resources, so many companies do just a technical upgrade to ensure that their
version is supported and no functional upgrade.
 Challenges of Managing People
 Challenges of ensuring support from top management throughout the project:
 Top management support is essential throughout the project life cycle especially at
critical times For example UAT, GO-LIVE
History of ERP Application
 Material Requirement Planning (MRP)
 MRP was a magic solution for 60s and 70s which provided a scientific basis for
production and material planning
 Manufacturing Resource Planning (MRP II)
 MRP II extends beyond manufacturing and production and includes processes from
business planning, sales planning, forecasting, demand management etc.
 Enterprise Resource Planning (ERP)
 ERPs started offering functionalities in the areas of warehouse management, plant
maintenance, quality management, service management, human resource.
 ERP applications also have capabilities of collaboration and integration with other
advanced e-Business applications like CRM, SRM, PLM, etc.
History of ERP Application
ERP Market
 ERP vendors can be organized in tiers/grouping based on certain characteristics.
 Tier 1 vendors
 Sell ERP solutions to large, multinational corporations with more than 1,000 employees
and revenues greater than $1 billion (collectively known as the enterprise space)
 Vast capabilities, which include being able to handle the operations of a conglomerate
with multiple global subsidiaries.
 Tier 2 vendors
 Sell ERP solutions that are designed for mid-market companies, which usually range in size
from $50 million up to $1 billion in annual revenues and have between 250 and 1,000
employees.
 Often, they focuses on fewer industries, whereas a Tier 1 vendor covers many verticals
markets
ERP Market
 Tier 3 vendors
 Sell products that are designed for smaller companies that range in annual revenues from
$10 million to $50 million and have fewer than 250 employees
 Their products have limited breadth, they offer depth in a particular industry.
Sample ERP Vendors
Characteristics of ERP Vendor Tiers
Thank You