企业资源管理ERP课件

EnterpriseResourcePlanning-ERPKevinCowellNatthawutLertpitayakunIsabelleMerthaXiaoguangYou1EnterpriseResourcePlanning-WhatisERP?Thepracticeofconsolidatinganenterprise’splanning,manufacturing,salesandmarketingeffortsintoonemanagementsystem.1

Combinesalldatabasesacrossdepartmentsintoasingledatabasethatcanbeaccessedbyallemployees.2ERPautomatesthetasksinvolvedinperformingabusinessprocess.12WhatisERP?ThepracticeofcoEvolutionofERP3EvolutionofERP3EmployeesManagersandStakeholdersHowDoERPSystemsWork?CentralDatabaseReportingApplicationsHumanResourceManagementApplicationsFinancialApplicationsManufacturingApplicationsInventoryAndSupplyApplicationsHumanResourceManagementApplicationsServiceApplicationsSalesandDeliveryApplicationsSalesForceAndCustomerServiceRepsCustomersBack-officeAdministratorsAndWorkersSuppliersSource:Davenport,Thomas,“PuttingtheEnterpriseintotheEnterpriseSystem”,HarvardBusinessReview,July-Aug.1998.4ManagersandHowDoERPSystemsERPComponentsFinance:modulesforbookeepingandmakingsurethebillsarepaidontime.Examples:GeneralledgerAccountsreceivableAccountspayableHR:softwareforhandlingpersonnel-relatedtasksforcorporatemanagersandindividualemployees.Examples:HRadministrationPayrollSelf-serviceHRManufacturingandLogistics:Agroupofapplicationsforplanningproduction,takingordersanddeliveringproductstothecustomer.Examples:ProductionplanningMaterialsmanagementOrderentryandprocessingWarehousemanagement5ERPComponentsFinance:modulesAnERPExample:BeforeERPCustomersCustomerDemographicFilesSalesDept.VendorOrdersPartsAccountingAccountingFilesPurchasingPurchasingFilesOrderisplacedwithVendorInvoicesaccountingInventoryFilesWarehouseChecksforPartsCallsback“Notinstock”“Weorderedtheparts”“WeNeedparts#XX”“Weorderedtheparts”SendsreportSendsreportSendsreportShipsparts6AnERPExample:BeforeERPCustAnERPExample:AfterERPDatabaseCustomersSalesDept.PurchasingWarehouseAccountingVendorInventoryDataIfnoparts,orderisplacedthroughDBOrdersPartsOrderissubmittedtoPurchasing.PurchasingrecordorderinDBOrderisplacedwithVendorAndinvoicesaccountingFinancialDataexchange;BooksinvoiceagainstPOBooksinventoryagainstPOShipsparts7AnERPExample:AfterERPDatabWhoarethemainERPvendors?BaanJDEdwardsOraclePeopleSoftSAP8WhoarethemainERPvendors?BERPVendorsandIndustriesTheyServe9ERPVendorsandIndustriesTheRevenueandProfitsofMajorERPVendors10RevenueandProfitsofMajorERevenueandProfitsofMajorERPVendors11RevenueandProfitsofMajorEERPMarketSource:AMRResearch,2001.12ERPMarketSource:AMRResearchERPInvestmentsSource:

AMRResearchSurveyof686companieswithannualrevenuesrangingfrom<$50Mto>$1B,October2001.Roughly65%ofcompaniessurveyedalreadyhaveERPinplace.Ofthose,manyarestillactivelyspendingtoupgradeexistingsystemsandtotakeadvantageofnewweb-orientedfeatures.13ERPInvestmentsSource:RoughlyERPInvestmentsn=666n=232Source:AMRResearchSurveyof686companieswithannualrevenuesrangingfrom<$50Mto>$1B,October200114ERPInvestmentsn=666n=232SourcWhyERP?3MajorReasons:Tointegratefinancialdata.Tostandardizemanufacturingprocesses.TostandardizeHRinformation.15WhyERP?3MajorReasons:15ERPProjectandTimeRealtransformationalERPeffortswillusuallyrunbetween1to3years,onaverage.Shortimplementations(3to6months):smallcompanies,implementationlimitedtoasmallareaofthecompany,orthecompanyonlyusedthefinancialpiecesoftheERPsystem.TheimportantthingisnottofocusonhowlongitwilltakebuttounderstandwhyyouneedERPandhowyouwilluseittoimproveyourbusiness.16ERPProjectandTimeRealtransTotalCostofOwnershipofERPTotalcostofownership(TCO)

isamodeldevelopedbyGartnerGrouptoanalyzethedirectandindirectcostsofowningandusinghardwareandsoftware.TCOessentiallyhelpsacompanydeterminewhetheritwinsorlosesfromspecifictechnologyimplementations.

Metagroupstudyamong63companiessurveyedshowedthat:theaverageTCOwas$15million(thehighestwas$300millionandlowestwas$400k),theaverageTCOperuserwas$53,320.17TotalCostofOwnershipofERPTotalCostofOwnershipofERPItalsofoundthat:ittook8monthsafterthesystemwasintoseeanybenefits,butthatthemedianannualsavingsfromthesystemwas$1.6millionperyear.18TotalCostofOwnershipofERPHiddenCostsofERPTrainingIntegrationandtestingDataconversionDataanalysisConsultantsReplacingbestandbrighteststaffafterimplementationImplementationteamscanneverstopWaitingforROIPost-ERPdepression19HiddenCostsofERPTraining19BenefitsofERPSystemsImprovingintegration,flexibility

Fewererrors

Improvedspeedandefficiency

MorecompleteaccesstoinformationLowertotalcostsinthecompletesupplychainShortenthroughputtimesSustainedinvolvementandcommitmentofthetopmanagement20BenefitsofERPSystemsImproviBenefitsofERPSystems(cont’d)ReducestocktoaminimumEnlargeproductassortmentImproveproductqualityProvidemorereliabledeliverydatesandhigherservicetothecustomerEfficientlycoordinateglobaldemand,supplyandproduction21BenefitsofERPSystems(cont’RiskswithERPImplementationExpensive(cancosts100thousandstomillionsofdollars)

Time-consuming(cantakemonthstoyears)

Greatriskfortheorganization

TransferofKnowledgeAcceptancewiththecompany22RiskswithERPImplementationECaseStudyNestléUSA23CaseStudyNestléUSA23NestléBackgroundFoundin1866,Switzerland.World'slargestfoodcompany,#50inFortunemagazine’s Globe500NestléUSAwasincorporatedin1990;HomeOfficeinGlendale,CA.33manufacturingfacilities,6distributioncentersand17salesofficesaroundthecountry,17,300employeesnationwide.$11.1billioninSales(2001)“…America'smostadmiredFoodCompanyforthefourthconsecutiveyear”-FortuneMagazine,February200124NestléBackgroundFoundin1866Milkproducts,dieteticfoods,infantfoods,chocolateandconfections,refrigeratedandfrozenitems,icecream,andpetfoods Nestlé'sproductsandbrands

25Milkproducts,dieteticfoods,CompetitiveMarket USAFoodMarketin200126CompetitiveMarket USAFoodOrganizationalChart

JoeWellerChairman&CEOJeriDunnCIOOtherBoardmembersTomJamesDir.ofProcesschangeJoseIglesiasDir.ofISDickRamageVPofsupplychain

BenWorthen,“Nestlé'sERPOdyssey”,May15,2002IssueofCIOMagazine27OrganizationalChartJoeWelleBusinessChallengesAfterthebrandswereunifiedandreorganizedinto NestleUSA in1991,.Divisionsstillhadgeographicallydispersed.Forexample,NestleUSA’sbrandswerepaying29differentpricesforvanilla-tothesamevendor.¹Ninedifferentgeneralledgersand28pointsofcustomersentry.Yearsofautonomousoperationprovidedanalmost“insurmountablehurdle”.“…Nestlewastheworld’sNO.1foodandbeveragecompany–butoneoftheleastefficient”²28BusinessChallengesAftertheb

ProjectScope–“BEST”FiveSAPModules–purchasing,financials, salesanddistribution,accountspayableandaccountsreceivableandManugistics’supplychainmoduleFromOctober1997to1stQuarterof2000.$210millionbudget50topbusinessexecutivesand10seniorITprofessionalsSource:Worthen,Ben,“Nestlé'sERPOdyssey”,May15,2002IssueofCIOMagazine.29 ProjectScope–“BEST”FiveSA

ProjectObjectives-

“OneNestle,underSAP”Transformingtheseparatebrandsinto onehighlyintegratedcompany.Internalalignedandunited,establishingacommonbusinessprocessarchitectureStandardizingmasterdataSource:Worthen,Ben,“Nestlé'sERPOdyssey”,May15,2002IssueofCIOMagazine.30 ProjectObjectives-

“OneNes

ProcessofSAPImplementation

Thenewbusinessprocessconfused mostofemployees,thenresistancegrewintorebellionin2000.ReconstructedinJune2000andcompletedin2001.Source:Worthen,Ben,“Nestlé'sERPOdyssey”,May15,2002IssueofCIOMagazine.31

ProcessofSAPImpConclusionofNestléCaseChangesandsuccessCommondatabaseandbusinessprocessesleadto moretrustworthydemandforecast.Acomprehensiveaccountplanningtool.Nestlecannowforecastdowntotheredistributioncenterlevel.Nestlehasimprovedforecastaccuracyby2%Higherfactoriesutilizationfewerfactories=biggainsinfactoriesUtilizationReduceinventorylevel32ConclusionofNestléCaseChanConclusionofNestléCase586371Saved$$$-WithERPinpractice,$371millionhasbeensaveduntil2001.33ConclusionofNestléCase58637ConclusionofNestléCaseLessonslearnedbyNestléDon’tstartaprojectwithadeadlineinmind.Updateyourbudgetprojectionatregularintervals.ERPisn’tonlyaboutthesoftware.

“Nomajorsoftwareimplementationisreallyaboutthesoftware.”FormerNestléCIOJeriDunnsays,“Youarechallengingtheirprinciples,theirbeliefsandthewayhavedonethingsformanymanyyears”

Keepthecommunicationlinesopen.Remembertheintegrationpoints.Source:Worthen,Ben,“Nestlé'sERPOdyssey”,May15,2002IssueofCIOMagazine.34ConclusionofNestléCaseLessoNestléintheFutureTheGlobalBusinessExcellenceProgram SupportedbySAP,contractedinJune2000andbyIBMinJuly2002.Tobecompletedbytheendof2005TosavecostaroundCHF3billion,withbenefitsrealizedfrom2003.35NestléintheFutureTheGlobalCaseStudy36CaseStudy36WhatisAgilentTechnologies?AgilentTechnologiesistheworld'sleadingdesigner,developer,andmanufacturerofelectronicandopticaltest,measurementandmonitoringsystems.SeparatedfromHewlettPackardandbecameapubliccompanyin1999WorldHQinPaloAlto,CASource:,viewed,viewedNovember3,2002.37WhatisAgilentTechnologies?AAroundtheWorldAgilenthasfacilitiesinmorethan40countriesanddevelopsproductsatmanufacturingsitesintheU.S.,China,Germany,Japan,Malaysia,Singapore,AustraliaandtheU.K.Approximately37,000employeesthroughouttheworld38AroundtheWorldAgilenthasfaProductsandServicesAgilentoperatesinthreebusinessgroups:TestandMeasurementTestinstrumentsandsystems,automatedtestequipment.SemiconductorProductsSemiconductorsolutionsforwiredandwirelesscommunications,informationprocessing.ChemicalAnalysis

Lifesciencesandanalyticalinstrumentsystems.39ProductsandServicesAgilentoAgilentrevenuefor2001TestandMeasurement:$5.4billionSemiconductorProducts:$1.9billionChemicalAnalysis:$1.1billionTotalrevenue:$8.4billionSource:

,viewedNovember3,2002.40Agilentrevenuefor2001TestaAgilent’sCustomersServedcustomersinmorethan120countriesaroundtheworld1ElectroniccomponentmanufacturersPharmaceuticalcompaniesChemicalcompaniesCommunicationcompanies241Agilent’sCustomersServedc4242ProjectScopeOracle’sliE-BusinessSuitesoftwareStartedSeptember2000till2004Budgetroughly100OracleconsultantstoinstalltheprogramSource:Songini,MarcL.,“ERPeffortsinksAgilentrevenue”Computerworld,Framingham,August26,2002.43ProjectScopeOracle’sliE-BusERPProjectObjective“OneIT”organizationSupplychaincapability;forexample,-Suppliers-CustomersMigrating2,200legacyapplicationsthatitinheritedfromHPtoOracleSource:Gaither,Chris,“WatchingOracleForSignsOfStrength”BostonGlobe,Boston,Mass.,September16,2002.44ERPProjectObjective“OneIT”OneITProject(Before)ITspendwas8-10%ofsales80%forbusinessoperations20%maint.&upgradinglegacysystemsFurtherautonomyovertheITportfoliowouldhaveledto50%costincrease45OneITProject(Before)ITspenOneITProjectMartyChuck,CIO,developedaVisionforOneITorganizationinAugust2000Movedmorethan2,500ITprofessionalsinthedifferentsite,regionalanddivisionalITorganizations46OneITProjectMartyChuck,CIOOneITProjectObjectiveToconsolidatealargenumberofindependentoperatinggroupsintoasingleworldwideITfunctionToshareinformationquicklyandefficientlyTodrivetheoperationalcostsdownbymorethan20%TocombineallITbudgets47OneITProjectObjectiveToconChangesinSupplyChainProcess:SupplierMigratingfromallexistingERPsystemstoasingleOracle-basedinfrastructuresystemTheuseofbarcodeformaterialsreceivedfromsuppliersTheuseofEvaluatedReceiptSettlement(ERS)48ChangesinSupplyChainProcesTheprocessofmigratingERP

systemstoOracle49TheprocessofmigratingERP

sEvaluatedReceiptSettlement(ERS)AnautomatedinvoiceandpaymentsystemHowdoesERSwork?50EvaluatedReceiptSettlement(ChangesinSupplyChainProcess:CustomersReal-timeinformationaboutinventoryandorderstatusEasiertounderstandinvoicingandpricingImprovedvisibilityonproductdeliveryleadtime51ChangesinSupplyChainProcesTroubleswithProjectEverestBecauseoftheconsolidationofits2,200softwaresystemstounder20,confusionmeantlostorderandrevenue.An$88millionreductioninthird-quarterordersOfthat,$38millionwaslostand$50millionwillbepulledthroughthefourthquarter.$105millioninlostrevenueand$70millioninoperatingprofitSource:Shah,JenniferB.,“Agilent’sERPRolloutExpensiveGlitches”EBN;Manhasset,August26,2002.52TroubleswithProjectEverestBTroubleswithProjectEverestCFOAdrianDillonsaidtheproblemwastwofold:Softwarebug“Aswebegantohitsortofa50percentrampofnormalcapacity,webegantogetconflictsinprioritiesofsystemsinstructions.Whenwehadthoseconflictsthatinevitablyshutthesystemdown.”53TroubleswithProjectEverestCTroubleswithProjectEverestMistakesconvertingbacklog.

“Theotherproblemwehadwasconvertingbacklogfromlegacytonewsystems,especiallyforourhighlyconfiguredproductsinourtestandmeasurementoperation.”Extra$35milliontocovercostsofERPandCRMrollout.54TroubleswithProjectEverestMLessonsLearnedbyAgilentERPimplementationsarealotmorethansoftwarepackages.People,processes,policiesandcultureareallfactorsthatshouldbetakenintoconsiderationwhenimplementingamajorenterprisesystem.ERPdisastersareoftencausedbyausercompanyitself.Source:Songini,MarcL.,“ERPeffortsinksAgilentrevenue”Computerworld,Framingham,August26,2002.55LessonsLearnedbyAgilentERPLessonsLearnedbyAgilentStudyERPwellbeforeimplementation

“Thedisruptionsaftergoingliveweremoreextensivethanweexpected”–CEONedBarnholtSource:Songini,MarcL.,“ERPeffortsinksAgilentrevenue”Computerworld,Framingham,August26,2002.56LessonsLearnedbyAgilentStudBestPracticesandwhatERPholdsfortheFuture57BestPracticesandwhatERPhoERPImplementationBiggestITprojectthatmostcompanieseverhandle,Changestheentirecompany,andHasrepercussionsinalldepartmentsanddivisionsoftheorganization.Itisessentialthatallthekeyplayersunderstandthescopeoftheproject.ThisisanIT-RelatedProject.58ERPImplementationBiggestITpBestPracticesofERPImplementationABusinessStrategyalignedwithBusinessProcessesTop-DownProjectSupportandcommitmentChangeManagementExtensiveEducationandTrainingDataCleanupandDataIntegrityImplementationisviewedasanongoingprocess59BestPracticesofERPImplemenBestPracticesofERPImplementationABusinessStrategyalignedwithBusinessProcessesBusinessstrategythatwillgiveyouacompetitiveadvantageAnalyzeandmapyourcurrentbusinessprocessesDevelopyourobjectivesEvaluateyourbusinessstrategyandERPplanbeforeyoucommittosoftwareacquisitionandinstallation.60BestPracticesofERPImplemenBestPracticesofERPImplementationTop-DownProjectSupportandcommitmentCEO1supportimplementationcostschampiontheproject,anddemandfullintegrationandcooperation.Mostknowledgeableandvaluablestaff261BestPracticesofERPImplemenBestPracticesofERPImplementationChangeManagementChangesinbusinessprocedures,responsibilities,

workload.1

Asaresult,ERPimplementationsaretimesofhighstress,longhours,anduncertainty.1Mid-levelmanagersmust2

facilitatecontinualfeedbackfromemployees,providehonestanswerstotheirquestions,andhelpresolvetheirproblems.Sources:

1.Yakovlev,I.V.,“AnERPImplementationandBusinessProcessReengineeringataSmallUniversity”,EducauseQuarterly,Number2,2002;2.Umble,M.Michael,“AvoidingERPImplementationFailure”,IndustrialManagement,Jan/Feb2002.62BestPracticesofERPImplemenBestPracticesofERPImplementationExtensiveEducationandTrainingGeneraleducationabouttheERPsystemforeveryone.Massiveamountofenduserstrainingbeforeandduringimplementation.Follow-uptrainingaftertheimplementation.10to15%oftotalERPimplementationbudgetfortrainingwillgiveanorganizationan80%chanceofasuccessfulimplementation.Source:Umble,M.Michael,“AvoidingERPImplementationFailure”,IndustrialManagement,Jan/Feb2002.

63BestPracticesofERPImplemenBestPracticesofERPImplementationDataCleanupandDataIntegrityClean-updatabeforecut-over.1“Nearenoughisnolongergoodenough.”2Tocommandtrust,thedatainthesystemmustbesufficientlyavailableandaccurate.3Eliminatetheoldsystems,includingallinformalsystems.364BestPracticesofERPImplemenBestPracticesofERPImplementationImplementationisviewedasanongoingprocessOngoingneedfortrainingandsoftwaresupportafterimplementation.Ongoingneedtokeepincontactwithallsystemusersandmonitortheuseofthenewsystem.Ongoingprocessoflearningandadaptationthatcontinuallyevolvesovertime.Source:Umble,M.Michael,“AvoidingERPImplementationFailure”,IndustrialManagement,Jan/Feb2002.65BestPracticesofERPImplemenERPImplementationPhases4MajorPhases:Concept/initiationDevelopmentImplementationCloseout/OperationandmaintenanceSource:“ERPImplementationandProjectManagement,ProductionandInventoryManagementJournal,Alexandria,ThirdQuarter2001,FCWestonJr.66ERPImplementationPhases4MajConclusionThebenefitsofaproperlyselectedandimplementedERPsystemcanbesignificant.Anaverage,25to30%reductiononinventorycosts;25%reductiononrawmaterialcosts.Lead-timeforcustomers,productiontime,andproductioncostscanbereduced.BUTcostofimplementingcanbequitehighandrisksaregreat.67ConclusionThebenefitsofaprTheFutureofERP

68TheFutureofERP68ERPIIIntegratesthefrontandbackofficetoenablean“informationvisibility”strategythatpushestherightinformationtotherightpeopleattherighttimethroughtherightcommunicationschannels.Acompetitivestrategythatintegratesacentralized,coreERPsystemwithhighlyspecializedsolutions.In2001,$4billion(or20%)ofthe$20billionoftotalvendorrevenuewasspentonextensionstotheERPsystem.In2006,AMRpredictsthispercentagewillincreaseto50%.

69ERPIIIntegratesthefrontandERPIIArchitecture70ERPIIArchitecture70ERPII:ARevolutionaryChange71ERPII:ARevolutionaryChangeERPII:ARevolutionaryChangeTechnologyTechnologygoalsalignedwithinternal

businessprocessesandthoseofdiversepartners,

customers,suppliers,anddistributors.BusinessProcessImplementationcannotbemadewithoutachangeofbusinessprocesses.PeopleERPIIimplementationsuccessdependsonthebusinesscommunity’sculturalacceptanceofthesystem.72ERPII:ARevolutionaryChangeConclusionToachievecompetitiveadvantageintheglobaleconomy,organizationsareextendingtheirERPsystembeyondthefirm.Futuregrowthoftheindustryliesinaddingextensions.Integration,scalabilityandflexibilityissues.73ConclusionToachievecompetiti

End74End74EnterpriseResourcePlanning-ERPKevinCowellNatthawutLertpitayakunIsabelleMerthaXiaoguangYou75EnterpriseResourcePlanning-WhatisERP?Thepracticeofconsolidatinganenterprise’splanning,manufacturing,salesandmarketingeffortsintoonemanagementsystem.1

Combinesalldatabasesacrossdepartmentsintoasingledatabasethatcanbeaccessedbyallemployees.2ERPautomatesthetasksinvolvedinperformingabusinessprocess.176WhatisERP?ThepracticeofcoEvolutionofERP77EvolutionofERP3EmployeesManagersandStakeholdersHowDoERPSystemsWork?CentralDatabaseReportingApplicationsHumanResourceManagementApplicationsFinancialApplicationsManufacturingApplicationsInventoryAndSupplyApplicationsHumanResourceManagementApplicationsServiceApplicationsSalesandDeliveryApplicationsSalesForceAndCustomerServiceRepsCustomersBack-officeAdministratorsAndWorkersSuppliersSource:Davenport,Thomas,“PuttingtheEnterpriseintotheEnterpriseSystem”,HarvardBusinessReview,July-Aug.1998.78ManagersandHowDoERPSystemsERPComponentsFinance:modulesforbookeepingandmakingsurethebillsarepaidontime.Examples:GeneralledgerAccountsreceivableAccountspayableHR:softwareforhandlingpersonnel-relatedtasksforcorporatemanagersandindividualemployees.Examples:HRadministrationPayrollSelf-serviceHRManufacturingandLogistics:Agroupofapplicationsforplanningproduction,takingordersanddeliveringproductstothecustomer.Examples:ProductionplanningMaterialsmanagementOrderentryandprocessingWarehousemanagement79ERPComponentsFinance:modulesAnERPExample:BeforeERPCustomersCustomerDemographicFilesSalesDept.VendorOrdersPartsAccountingAccountingFilesPurchasingPurchasingFilesOrderisplacedwithVendorInvoicesaccountingInventoryFilesWarehouseChecksforPartsCallsback“Notinstock”“Weorderedtheparts”“WeNeedparts#XX”“Weorderedtheparts”SendsreportSendsreportSendsreportShipsparts80AnERPExample:BeforeERPCustAnERPExample:AfterERPDatabaseCustomersSalesDept.PurchasingWarehouseAccountingVendorInventoryDataIfnoparts,orderisplacedthroughDBOrdersPartsOrderissubmittedtoPurchasing.PurchasingrecordorderinDBOrderisplacedwithVendorAndinvoicesaccountingFinancialDataexchange;BooksinvoiceagainstPOBooksinventoryagainstPOShipsparts81AnERPExample:AfterERPDatabWhoarethemainERPvendors?BaanJDEdwardsOraclePeopleSoftSAP82WhoarethemainERPvendors?BERPVendorsandIndustriesTheyServe83ERPVendorsandIndustriesTheRevenueandProfitsofMajorERPVendors84RevenueandProfitsofMajorERevenueandProfitsofMajorERPVendors85RevenueandProfitsofMajorEERPMarketSource:AMRResearch,2001.86ERPMarketSource:AMRResearchERPInvestmentsSource:

AMRResearchSurveyof686companieswithannualrevenuesrangingfrom<$50Mto>$1B,October2001.Roughly65%ofcompaniessurveyedalreadyhaveERPinplace.Ofthose,manyarestillactivelyspendingtoupgradeexistingsystemsandtotakeadvantageofnewweb-orientedfeatures.87ERPInvestmentsSource:RoughlyERPInvestmentsn=666n=232Source:AMRResearchSurveyof686companieswithannualrevenuesrangingfrom<$50Mto>$1B,October200188ERPInvestmentsn=666n=232SourcWhyERP?3MajorReasons:Tointegratefinancialdata.Tostandardizemanufacturingprocesses.TostandardizeHRinformation.89WhyERP?3MajorReasons:15ERPProjectandTimeRealtransformationalERPeffortswillusuallyrunbetween1to3years,onaverage.Shortimplementations(3to6months):smallcompanies,implementationlimitedtoasmallareaofthecompany,orthecompanyonlyusedthefinancialpiecesoftheERPsystem.TheimportantthingisnottofocusonhowlongitwilltakebuttounderstandwhyyouneedERPandhowyouwilluseittoimproveyourbusiness.90ERPProjectandTimeRealtransTotalCostofOwnershipofERPTotalcostofownership(TCO)

isamodeldevelopedbyGartnerGrouptoanalyzethedirectandindirectcostsofowningandusinghardwareandsoftware.TCOessentiallyhelpsacompanydeterminewhetheritwinsorlosesfromspecifictechnologyimplementations.

Metagroupstudyamong63companiessurveyedshowedthat:theaverageTCOwas$15million(thehighestwas$300millionandlowestwas$400k),theaverageTCOperuserwas$53,320.91TotalCostofOwnershipofERPTotalCostofOwnershipofERPItalsofoundthat:ittook8monthsafterthesystemwasintoseeanybenefits,butthatthemedianannualsavingsfromthesystemwas$1.6millionperyear.92TotalCostofOwnershipofERPHiddenCostsofERPTrainingIntegrationandtestingDataconversionDataanalysisConsultantsReplacingbestandbrighteststaffafterimplementationImplementationteamscanneverstopWaitingforROIPost-ERPdepression93HiddenCostsofERPTraining19BenefitsofERPSystemsImprovingintegration,flexibility

Fewererrors

Improvedspeedandefficiency

MorecompleteaccesstoinformationLowertotalcostsinthecompletesupplychainShortenthroughputtimesSustainedinvolvementandcommitmentofthetopmanagement94BenefitsofERPSystemsImproviBenefitsofERPSystems(cont’d)ReducestocktoaminimumEnlargeproductassortmentImproveproductqualityProvidemorereliabledeliverydatesandhigherservicetothecustomerEfficientlycoordinateglobaldemand,supplyandproduction95BenefitsofERPSystems(cont’RiskswithERPImplementationExpensive(cancosts100thousandstomillionsofdollars)

Time-consuming(cantakemonthstoyears)

Greatriskfortheorganization

TransferofKnowledgeAcceptancewiththecompany96RiskswithERPImplementationECaseStudyNestléUSA97CaseStudyNestléUSA23NestléBackgroundFoundin1866,Switzerland.World'slargestfoodcompany,#50inFortunemagazine’s Globe500NestléUSAwasincorporatedin1990;HomeOfficeinGlendale,CA.33manufacturingfacilities,6distributioncentersand17salesofficesaroundthecountry,17,300employeesnationwide.$11.1billioninSales(2001)“…America'smostadmiredFoodCompanyforthefourthconsecutiveyear”-FortuneMagazine,February200198NestléBackgroundFoundin1866Mil