Session ERP

8/2/2019 Session ERP

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LEARNINGOBJECTIVES Appreciating the importance of a well

defined process for the purchase of ERPsystems

Analyzing the different steps involved in theselection of ERP vendors and ERP package

Identifying the steps involved in preparingRFP ( Request for proposal)

Understanding the process of vendoranalysis

Evaluating the pros and cons of systemacquisition alternatives


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INTRODUCTION

Once the decision or the case hasbeen made to go for ERP system,

the organization needs to purchasean ERP system and hence there isa requirement of selecting the

software vendor and the softwarepackage.


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mportance o en orSelectionThe selection of a vendor is a critical step,

because:

There are a large number of ERP products (ERPsystems) available in the market with differentfunctionalities and features.

To decide which product and from which company is

the most suitable may be a confusing situation forthe organization.

ERP systems, along with being the most complex, area heavy investment decision, and thus need carefulassessment of the various vendors and theirpackages so as to make the final decision about theERP package.


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Selection Process

Various steps involved inselecting a vendor and the ERPsoftware package are:

Identification of requirements

Preparation of database of ERPvendors ERP packages

Matching User requirements toERP product features

Request for bids/proposal

Vendor Analysis and Selection Negotiation and Contract

Agreement

Delivery and Implementation

Post Implementation Review


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Major ERP providingCompanies

SAP AG

Oracle Corporation

J.D. Edwards World SolutionCompany

Infor Global Solutions

SSA Global Technologies

Epicor

Microsoft


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Alternatives for ERPAcquisition

For the implementation of ERP

systems, besidespurchasing a readymade ERP system from a vendor,

organizations may have otheralternatives/options as well. Theseoptions include:

Building In-house ERP Software

Software as a Service (SaaS)


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Building an In-house ERPSoftware

Sometimes, an organization might haveunique business processes which providethem with a competitive advantage.

In that case, an organization would liketo develop ERP system in-house. In-house developmentapproach may alsosuit to small or medium organizations.

When the system is built in-house, the

developers of the system need to followthe SDLC approach and the developmentmodel as per the nature of the ERPproject.


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Software as a Service(SaaS)

An organization that offers the use ofsoftware through communication linesis called anApplication Service

Provider (ASP). The concept is called Software As A

Service (SaaS) or software bysubscription.

Manycompanies including IBM GlobalServices, US internetworking (USi),and Oracle Corporation offer suchservices.


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Software as a Service (SaaS)Contd...

In the SaaS approach, anASPdoesnot install any software on aclients computers; rather, the

application is installed at the ASPslocation, along with the databasesand other files that the application

processes for the client.


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An organization, which opts for thisalternative, gets the following benefits:

An organization is not required to commitlarge sums of money upfront.

The application is immediately available. There is no need to hire experts for installation

and maintenance. No need to acquire hardware for the

installation.

There is no need to learn how to maintain theapplication since it is the responsibility of theASP.

No storage hardware is required for theapplication and the associated data since thevendor uses its own hardware.


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However, SaaS has the following

risks as well:

There may be long transactionresponse time on the Internet.

There is a high security risk, as the

application is controlled by thevendor.


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Basic Concepts

Business process (What/why actions to produceoutputs from inputs)

Value added (Add value to organizational customersvia values added to products/services)

Business Process Reengineering (BPR) Fundamental changes to people and culture, organizational

structure, policies/procedures, and technology

Demand chain Pressures to produce products or provide services

Supply chain Flow of materials, information, and services from raw

material suppliers through factories & warehouses to the endcustomers (also includes organizations and processes thatcreate and delivery those products, information, and servicesto the end customers)


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Basic Concepts

Supply chain management Planning, organizing, coordinating all supply chain

activities to reduce uncertainty and risks andpositively affect inventory levels, cycle time,

business processes, and customer service Extended supply chain

Combination of the push of the supply chain andthe pull of the demand chain

Networked organization Linking functional components of the organization

via Intranets, Internet, LAN, and WAN


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What is a Business

Process? A collection of activities that take one ormore inputs and turn that into a productthat adds value to a customer


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arac er s cs oBusiness Process

Reengineering Several jobs are combined into one Employees are empowered to make

decisions

Steps in business process: natural order

Process may have multiple versions

Work is performed where it makes the

most sense


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Common Benefits of BPR

Enterprise integration Departments are consolidated

Several jobs are combined into one job

Worker empowerment There is both horizontal and vertical

reorganization

Handoffs are eliminated

There are fewer rules and less coordinationis required


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Common Benefits of BPR,Contd

Number of steps in a process arereduced

This is simplification

Inspections, checks and controls arereduced or eliminated

The steps are performed in a more

natural order


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When to Use BPR?

Failure rate as high as 75-85%

Improperly aligned BPR and IT

Expensive

Organizational resistance


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INTRODUCTION

BPR becomes a prerequisite for thesuccessful implementation of anERP system in an organization.

The stage of BPR is analogous tosystems analysis and design in a

typical system development lifecycle.


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What is Business ProcessReengineering?

Business process reengineeringrefers to a systematic methodology

to identify the best way of doingthe business; and to re-engineer orredesign the business processes so

as to get the maximum benefits.


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Business Process Reengineering(Contd..)

There may be the following reasonsfor conducting a BPR study in anorganization:

To implement the current purchased ERPsystem

To automate the existing manual processes

To improve the customer services To streamline the current business

processes to increase efficiency andreduce cost


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BPR Life Cycle

The BPR life cycle, which is also knownas a BPR process, consists of thefollowing steps:

Preparation and planning for undertaking BPR

Current or existing business processes of theorganization are understood

Business Process Mapping and Gap Analysis isdone

Business processes are redesigned so as tomatch the best practices

Redesigned processes are tested andevaluated for further improvements.


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BPR Life Cycle


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Preparation and Planning forBPR

In this phase, the goals and scopeof BPR is defined. The goals must

be measureable and simple tounderstand by an organization.


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Understanding of the CurrentBusiness Processes AS IS

In this phase the existing businessprocesses are understood.

This activity is considered as themost difficult and also the mosterror-prone activity because of the

communication gap between theuser and the technical people.


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Process Mapping and GapAnalysis

Process mapping refers to modelingthe business processes using somegraphical tools and techniques so as to

understand the business processes.

As the technical person may not bewell versed in business processes,

there may be certain gaps in theirunderstanding when these processesare described by the users.

rocess app ng an ap na ys s


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rocess app ng an ap na ys s(Contd...)

The process mapping is done by using varioustools and techniques like Data Flow Diagram

(DFD), Data Dictionary, Decision Tree,Decision Table, ER Diagram and objectoriented tools & techniques like rationalunified language and use cases.

DFD for Payroll

Processing


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Redesigning the Business ProcessesTO BE

This phase dismantles the existingprocesses and puts them back with

a new sense of purpose. Some ofthe processes are eliminated andsome may be grouped or combined

to get efficient and better results.


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Evaluation and ContinuousImprovement

After the business processes areredesigned, the new processes must betested for the validity and reliability of

the results.

Processes are evaluated on continuous

basis and improvements made as perthe changed requirements of anorganization.


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BPR Tools And Technologies

There are various approaches, which anorganization can use to re-engineer itsbusiness processes.

Broadly speaking, there are twocategories of tools and technologies usedin reengineering the business processesof an organization:

Technology enabled reengineering

Clean slate ( line up) reengineering


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Success and Failure Factors inImplementing BPR

Generally the following factors areconsidered critical success and failurefactors while implementing BPR:

Top management commitment

BPR planning

User participation

Collaborative environment

IT application

Training & education

Resistance to change


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Business Process MappingTools

Some of the BPR mapping toolsare given below:

Data Flow Diagram (DFD)

Data Dictionary

Structured English

Decision Trees Decision Tables

Session ERP

Documents

Transcript of Session ERP