ERP Final Evaluation

By,

Hari thirumal

Roll No. 16, PGPB’03

1. How different functions in an organization interact

• Marketing and Sales (M/S)

• Supply Chain Management (SCM)

• Accounting and Finance (A/F)

• Human Resources (HR)

There are majorly 4 functions in an organization :

They are always interdependent in each other.

Better integration of functional areas leads to improvements in communication, workflow, and success of company

How functional areas operate

Functional area of operation

Marketing & Sales Supply Chain Management

Accounting & Finance Human Resource

Business Functions

Marketing of a product Purchasing goods & raw materials

Financial accounting of payments from customers and to suppliers

Recruiting and Hiring

Taking Sales order Receiving goods and Raw materials

Cost allocation and control Training

Customer Support Transportation & Logistics

Planning and Budgeting Payroll

Customer RelationshipManagement

Scheduling production runs

Cash Flow management Benefits

Sales Forecasting Manufacturing goods Government Compliance

Advertising Plant Maintenance

How different functions are interdependent

• Data from Accounting and Finance used by Marketing and Sales and Supply Chain Management

Why interaction between functions important

• Request to Purchase (IN)

• Order Generated (OUT)

Marketing and Sales

• Financial Help for Purchase (IN)

• Customer finance to the product firm (OUT)

Accounting & Finance • Technical Support

(IN)

• Customer’s technical query is resolved (OUT)

Marketing and Sales

• Fulfilment of Order (IN)

• Customer receives product (OUT)

Supply Chain Management

• Small example of How an e-commerce portal works, When we place an order.

This is how functions of an organization interact to product best output for customer

satisfaction.

Functions & their interactions

FOR MARKETING & SALES SUPPLY CHAIN MANAGEMENT

Functions & their interactions

FOR ACCOUNTS & FINANCE FOR HUMAN RESOURCE

How ERP like SAP makes an impact

SAP makes Impacts on a Positive & Negative way.

SAP ERP manages many of the world’s largest companies, the company is also quick to remind that about 65% of SAP solutions

There are also many midmarket companies that use SAP ERP as their primary enterprise software solution. And as we all know, there is no one-size-fits-all ERP solution.

How it has impacted

Imp

act

Positive

Software Scope

Global Solution

Expandability

Mobility

Enterprise tools

Negative

Complex Pricing

Deployment Risk

Master data management

Recurring Upgrades

Lack of Innovation

How SAP makes an Positive Impact ?Software Scope

The application breadth of SAP ERP, and even wider scope when considered within the SAP Business Suite, provides a central and enterprise-wide system for the largest of companies while delivering some consistent benefits

Global Solution

SAP supports global functionality with 45 standard country versions and eight add-on country editions. The application is also scalable to support thousands of concurrent users across multiple locations.

Expandability

SAP business applications can be procured modularly for individual functions such as CRM or SCM, or customers can acquire the SAP Business Suite to integrate all or most of their business processes.

Mobility

The 2010 acquisition of Sybase reinvigorated SAP’s vision, technology and commitment to enterprise mobility Enterprise tool

Enterprise tools

Enterprise grade tools such as SAP PLM (Product Lifecycle Management, an information center for developers with document and code management and collaborative engineering) with supporting technologies such as NetWeaver empower IT shops with the needed tools to aid manageability of complex business systems.

Complex Pricing

SAP pricing is unnecessarily complex and lacks transparency which facilitates sales gamesmanship. Further, new SAP software maintenance models have been very controversial with the customer base

Deployment Risk

Continuing one of the prior points a step further, ERP buyers must recognize SAP ERP software is broad, deep and complex, thereby rendering the conditions for a perfect storm and a very challenging and costly deployment

Master Data Management

SAP’s Master Data Management (MDM) strategy still lacks clarity, and SAP customers are left to procure and implement up to three MDM tools to achieve their objectives, including SAP NetWeaver MDM (for mixed application environments)

Recurring Upgrades

TCO and budget considerations are the recurring nature of new version releases. As is typical of complex on premise ERP systems, new version releases are regarded as Fork Lift upgrades with deployment costs that often exceed the purchase price of the original ERP software.

Lack of Innovation

The company has launched other technology releases such as NetWeaver in 2003, but nothing that’s achieved a leadership position. Today when discussing innovation all conversations lead to HANA, which is an impressive technology

How SAP makes an Negative Impact ?

Preparation organization must take before ERP implementation

ERP implementation to go smoothly and provide value, it is critical that a company understand both its current processes and the desired state of the

processes after implementation.

• Project Preparation (15 to 20 days)

• Business Blueprint (25 to 40 days)

• Realization (55 to 80 days)

• Final Preparation (35 to 55 days)

• Go Live and Support (20 to 24 days)

The ERP implementation project is presented in an Implementation Roadmap, consisting of the following five phases:

The most successful implementation of is decided with how the first 4 phases are planned before implementing ERP

ERP Implementation

Implementation of ERP is very expensive and it ranges between 10 million to 500 Million, which includes the following cost:

• Software licensing fee

• Consulting fee

• Project Team Member Time

• Employee training

• Productivity Losses

A company must also manage the transfer of data from its old computer system to the new ERP system.

Managing master data such as materials data, customer data, vendor data, and so on, a company must also transfer transaction data, which includes sales orders and purchase orders, many of which are likely to be in various stages of processing—a challenging task.

4 Phases before ERP Implementation in an Organization

Project Preparation

• Organizing technical team

• Defining system landscape

Business Blueprint

• Documentation of business process

• Critical Process Mapping

• Technical team determines method of data transfer.

Realization

• Team works with consultants to configure ERP

• SAP software to match Business blueprint, Which has test system and Production System.

Final Preparation

• Testing the system throughput for critical business

• Setting up help desk

• Setting up operation of the production.

Reasons for ERP implementation failures

• You charge ahead, select a vendor, eschew due diligence, and fail to define clear business requirements and goals. Perhaps you even know you don’t understand your business processes as well

Setting unrealistic expectations at the

outset

• Put a separate team together to tackle just this one aspect of the install. You don’t need a bunch of fancy new tools to do this often its just a matter of collecting all the data and then going through it by hand. But, this is what ERP is all about so skipping or skimping on this critical step is a big mistake.

Failure to manage organizational

change

• The company is going in this new direction and using this new technology and If you want to get and stay on board, then this is how you can do it. If you are good leader, you are going to provide the steps along the path that will get them there: training, coaching or whatever it takes to get there. This is basic change management.”

Not involving key stakeholders

Reasons for ERP implementation failures

• If you can’t find someone to hire, make sure you engage a qualified third-party consultant — not the SI’s folks or the vendor’s folks — to act in their stead. After all, the truth of the matter is its in the best interest of the vendor and the SI for installs to go long since they will have people on the ground the entire time billing for their services.

Poor Project management

• Most ERP installs don’t fail outright but by degrees of unrealized business benefit. Huge failures like the ones outlined in the introduction are really the exception. Most failure are incremental and made up of small incidents that accumulate and amplify: Maybe you are using the wrong software and only figure this out post-implementation because of the rush to get the project going. Or maybe you didn’t fully realize how your business processes work or that all of that customization to get things to “look like they used to” caused too many cost overruns

Failure to manage business benefits

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