-SAP lab demonstrated creating and changing some customer and order information. It showed me that the integrated system is complex, and hence, may turnout to be problematic/hard to use. Training is very important for all levels of users.
-Harley Davidson case was about ERP vendor choice and regarding process. We as well inducted such an hypothetical benefit/cost analysis for the last 3 providers in the class. At last we chose upon 5 decision criteria but the process revealed to be difficult if it was implemented in full scale in a more realistic and comprehensive way. Harley Davidson chose provider2 (ref: supplement of the case) at last but the project was stated to be a failure.
-Last discussion was about the future of ERP sector especially in Turkey. Very low implementation rates (despite the need) among SMEs imply growth potential for this industry.
-Feedbacks.
The course was very instructive for me, thanks to all who were involved.
Sunday, June 29, 2008
Saturday, June 28, 2008
Day4 Lessons Learned
Day 4 was the conclusion of what we had learned from this course. It began with lab session and trying to make the business process flow on the SAP was interesting and difficult. We created customer, material and made a sales order, etc. I understood that without proper training, using an ERP system that much big is very difficult and cumbersome.
I understood that why this implementation process takes this much money. Understanding business, understanding ERP solution, training users, forcing users to use properly is very difficult and needs time and money.
In the second part of the day4 we tried to make a solution for Harley Davidson case. This part was interesting that even if everything is OK defining the selection criteria and talking on the concepts/coverage/meaning of a criterion is very difficult and needs proper training and same language for the implementation team. In addtion to this, finding the cost of the parameters is another difficult point about the selection, since every one realize different about cost. Some people think license fees, setup costs as cost, some of them consultancy cost, etc.
Nevertheless, it was a good course for me although I think that I know many things about SAP. Articles, cases and trying to solve the problems in the class as a team was a good experience that forces to think.
Thank you.
I understood that why this implementation process takes this much money. Understanding business, understanding ERP solution, training users, forcing users to use properly is very difficult and needs time and money.
In the second part of the day4 we tried to make a solution for Harley Davidson case. This part was interesting that even if everything is OK defining the selection criteria and talking on the concepts/coverage/meaning of a criterion is very difficult and needs proper training and same language for the implementation team. In addtion to this, finding the cost of the parameters is another difficult point about the selection, since every one realize different about cost. Some people think license fees, setup costs as cost, some of them consultancy cost, etc.
Nevertheless, it was a good course for me although I think that I know many things about SAP. Articles, cases and trying to solve the problems in the class as a team was a good experience that forces to think.
Thank you.
Wednesday, June 25, 2008
Lessons Learned - Day 4 - Emre AKIN
- The lab session was a real example of how ERP implementation can go chaotic process. Since SAP software was developed to handle every detail of business processes, thus each module has quite detailed structure. It requires a fair amount of training to utilize ERP effectively.
- ERP solution selection for a company necessitates preparation of a selection model which takes companies existing business practices, future expectancies in terms of business process and benefits of each ERP solution.
- Any transaction in a module of the ERP systems effects at least several other modules. Thus customization of the ERP system to a company requires very experience employees to get involved.
- ERP solution selection for a company necessitates preparation of a selection model which takes companies existing business practices, future expectancies in terms of business process and benefits of each ERP solution.
- Any transaction in a module of the ERP systems effects at least several other modules. Thus customization of the ERP system to a company requires very experience employees to get involved.
Lessons Learned - Day 3 - Emre AKIN
IS solutions for a company
1) Keep Legacy
2) Best of Breed
a. (+) Company retains bargaining power
b. (-) Customer Support may be difficult
c. (+/-) Cost may be higher or lower
3) ERP
4) In House developed solutions
Decision Cycle for an ERP Implementation
0) Workshop on possible solutions
1) Current State Analysis
2) Evaluate possible future states you can reach with ERP systems
3) Determine Future State
4) Choose system and solution provider
Organization Change management is a hard stuff indeed
Refresher courses for the newcomers into the company
The way you define what kind of access to each person is given is determined by roles, like roles of sales people, pm people etc… Include people’s managers in this process. Since it is not a perfect process, new security request may come, and you may give extra access to users…
Organization Change Management
Training
Communication
Security Access
Super Users – idea is to distribute support within system rather than having a single source. They constitute about 10% of the users.
Business Process and Procedures
1) Keep Legacy
2) Best of Breed
a. (+) Company retains bargaining power
b. (-) Customer Support may be difficult
c. (+/-) Cost may be higher or lower
3) ERP
4) In House developed solutions
Decision Cycle for an ERP Implementation
0) Workshop on possible solutions
1) Current State Analysis
2) Evaluate possible future states you can reach with ERP systems
3) Determine Future State
4) Choose system and solution provider
Organization Change management is a hard stuff indeed
Refresher courses for the newcomers into the company
The way you define what kind of access to each person is given is determined by roles, like roles of sales people, pm people etc… Include people’s managers in this process. Since it is not a perfect process, new security request may come, and you may give extra access to users…
Organization Change Management
Training
Communication
Security Access
Super Users – idea is to distribute support within system rather than having a single source. They constitute about 10% of the users.
Business Process and Procedures
Day 4 Lab
Different parts of the SAP client:
Client
Training client
Testing client
Production Client
Company Code
Independent accounting units have different codes
Sales organization
different sales terms
distribution channels
direct/wholesale/mail order
sales division
subdivision of a distribution channel
plant
physical locations have different numbers
facility/warehouse/distribution vehicle
storage location
shipping point
Master & Transaction Data
Master data is relatively fixed
Customer master
Material master
General Ledger
Pricing
Transaction data is unique to a particular transaction
Customer Master
Contains all the customer related data necessary to processing orders, deliveries, invoices
sold to party
ship to party
bill to party
payer
Material Master
Contains all data required to define and manage a specific item or material
Integrates data from: Inventory Manufacturing etc.
General Ledger
All data required for financial statements
Pricing
Highly customizable. Is carried out automatically
Flow of Sales documents
Sales Order
material quantity time etc
Standard functions
check availability
price
check credit limit
reduces credit & inventory
forecast cash
schedules delivery
make material requirements plan (MRP)
Delivery note pick/pack/post goods issue
Client
Training client
Testing client
Production Client
Company Code
Independent accounting units have different codes
Sales organization
different sales terms
distribution channels
direct/wholesale/mail order
sales division
subdivision of a distribution channel
plant
physical locations have different numbers
facility/warehouse/distribution vehicle
storage location
shipping point
Master & Transaction Data
Master data is relatively fixed
Customer master
Material master
General Ledger
Pricing
Transaction data is unique to a particular transaction
Customer Master
Contains all the customer related data necessary to processing orders, deliveries, invoices
sold to party
ship to party
bill to party
payer
Material Master
Contains all data required to define and manage a specific item or material
Integrates data from: Inventory Manufacturing etc.
General Ledger
All data required for financial statements
Pricing
Highly customizable. Is carried out automatically
Flow of Sales documents
Sales Order
material quantity time etc
Standard functions
check availability
price
check credit limit
reduces credit & inventory
forecast cash
schedules delivery
make material requirements plan (MRP)
Delivery note pick/pack/post goods issue
Tuesday, June 24, 2008
Day 3 Articles (Serkan Kocak)
Configuring an ERP System: Introducing Best Practices or Hampering Flexibility?
The photographic supplies distribution company is trying to install J.D. Edwards ERP system.
- The core team composed of 8 members and its first duty was to analyze business, specifying all business requirements and research an appropriate ERP package/provider
- It is hard to customize existing system and also existing system was no longer supported those are some of the reasons of changing system.
- In order to keep the task manageable, the team worked one module at a time (to have successive starts before the previous modules went live).
- First three modules took 14 months and six months for 4th one Order Management.
- Because of the complex workflow in ordering and also fair degree of flexibility of JD Edwards, it is hard to implement order module.
- Tom thoughts that if just a conceptual model is needed for pricing than accounting people can do pricing no need for marketing but then he also states the importance of marketing to decide prices.
- Pricing matrix taken out from the meeting with marketing but it is not agreed that JDE is good enough to use it in a no disciplined and no controlled area.
**************************************************************************************
A Framework for Evaluating ERP Implementation Choices
- By appropriately modifying both the ERP system and business process can be result as good implementation of the system. Sometimes software some times process needed to be changed
- Successful ERP implementation requires fit between ERP system and business process.
- Adaptation of the organization to the ERP system is also very important to have a successful implementation. Associated organizational changes should be done because ERP systems change the ways of doing jobs.
When the system is customized to fit the process = Technical Customization
Technical Customization
- Module Selection: Companies choose modules to be used, provider adapts modules to the system
- Table Configuration: according to organizational needs the chosen table types adapted to the system
- Code Modification: In order to satisfy required functionalities the source code of ERO system is changed
Module to Code; risk, and cost increase, it is not guarantied that there would be improvements.
Process Customization
- No Change
- Incremental Change : improvements only in tasks and resources
- Radical Change: fundamental rethinking and resign of some parts of business process.
ERP Customization Choices
- No Customization
- Process Adaptation
- Process Conversion
- Fit System to Process
- Mutual Adaptation
- Fit Process to System
- System Conversion
- System Conversion and Process Adaptation
- System and Process Reengineering
o Table II Customization Choices (pg 326)
Technical Change Capability
- Overall ability to customize ERP
- Understanding of default ERP system
- Ability to develop and modify large-scale software in a networked database environment
- Organizations ability to manage large scale systems development projects
o Tech. Chan. Cap. Consists of scope and depth of its ability to understand ERP
Process Change Capability
- Ability to customize business process
- Ability to design new or changed business process
- Organizations must be capable of large scale business process changes
Overall Capability
- Combination of technical change capabilities and process change capabilities, so that the total of capabilities that are explained up to now.
The photographic supplies distribution company is trying to install J.D. Edwards ERP system.
- The core team composed of 8 members and its first duty was to analyze business, specifying all business requirements and research an appropriate ERP package/provider
- It is hard to customize existing system and also existing system was no longer supported those are some of the reasons of changing system.
- In order to keep the task manageable, the team worked one module at a time (to have successive starts before the previous modules went live).
- First three modules took 14 months and six months for 4th one Order Management.
- Because of the complex workflow in ordering and also fair degree of flexibility of JD Edwards, it is hard to implement order module.
- Tom thoughts that if just a conceptual model is needed for pricing than accounting people can do pricing no need for marketing but then he also states the importance of marketing to decide prices.
- Pricing matrix taken out from the meeting with marketing but it is not agreed that JDE is good enough to use it in a no disciplined and no controlled area.
**************************************************************************************
A Framework for Evaluating ERP Implementation Choices
- By appropriately modifying both the ERP system and business process can be result as good implementation of the system. Sometimes software some times process needed to be changed
- Successful ERP implementation requires fit between ERP system and business process.
- Adaptation of the organization to the ERP system is also very important to have a successful implementation. Associated organizational changes should be done because ERP systems change the ways of doing jobs.
When the system is customized to fit the process = Technical Customization
Technical Customization
- Module Selection: Companies choose modules to be used, provider adapts modules to the system
- Table Configuration: according to organizational needs the chosen table types adapted to the system
- Code Modification: In order to satisfy required functionalities the source code of ERO system is changed
Module to Code; risk, and cost increase, it is not guarantied that there would be improvements.
Process Customization
- No Change
- Incremental Change : improvements only in tasks and resources
- Radical Change: fundamental rethinking and resign of some parts of business process.
ERP Customization Choices
- No Customization
- Process Adaptation
- Process Conversion
- Fit System to Process
- Mutual Adaptation
- Fit Process to System
- System Conversion
- System Conversion and Process Adaptation
- System and Process Reengineering
o Table II Customization Choices (pg 326)
Technical Change Capability
- Overall ability to customize ERP
- Understanding of default ERP system
- Ability to develop and modify large-scale software in a networked database environment
- Organizations ability to manage large scale systems development projects
o Tech. Chan. Cap. Consists of scope and depth of its ability to understand ERP
Process Change Capability
- Ability to customize business process
- Ability to design new or changed business process
- Organizations must be capable of large scale business process changes
Overall Capability
- Combination of technical change capabilities and process change capabilities, so that the total of capabilities that are explained up to now.
Day 3 Learnings (Serkan Kocak)
Instead of ERP
1- Keep Legacy & Improve
2- Best of Bread
a. Different Applications
3- ERP
4- In house development
There are two main states:
1- Current State
2- Future State
In-between these states there are options and ERP provider selection should be done there.
That means after choosing ERP the next stage is choosing providers.
How?
- Providers come and do their presentations
- Analyses of competitor’s ERP providers
- every type of questions should be asked to the providers
Best of Bread as an alternative solution to ERP has some disadvantages:
May have cost disadvantage, needs different types of consultants, may have upgrade problems
Before implementation companies should complete their homework. Homework is to analyze their system enough to have right choices.
Some of the salesmen do not like ERP applications because they think that their know how; the information about customers are their most important properties. However, when all of the information of customers collected by an ERP system firms can fire a salesman without thinking any loss of customer information, which is very useful for firms. Also taking commissions makes salesman do not want to share their information.
Organization Change Management OCM
An ERP system change the way of doing jobs so this change should be managed as wall as ERP implementation process. The culture of the firm is very important; it can be very easy to change the organization in some companies where it had caused someone to be fired.
Welch Allyn, which is a family business, is a good example for us to see how OCM is done.
There are 2300 employees where 600 are trained and they had implemented SAP at 2004. They are using HR, SD/CS, MM/PP, FI/CO, PLM, and BW Modules.
The organization change management is divided into 5 parts.
Training: Core team training
Management Seminar
End User training
Training needs analysis (how many people to train)
Develop course content
Deliver training courses
After training-practice before go live. (Examinations to see users are ready or not)
Communication: ERP cause fair and insecurity in between company so that before the implementation process starts and also during the implementation the employees should be informed. First to get buy in for all levels in organization.
Security/Role Development: There is a common data base and it is used by everyone so that some limitation should be given to the user. To do that the roles of each employee should be defined and relevant access should be given.
Super User Development: They are chosen to ask some questions about new system because they are given a response to help employees in their department. They are chosen because they are better than others in terms of new system. And they are given more training then others. It is not a easy job; they need to search a lot to answer questions.
Business Process Procedures: The documentation process of business should be managed; document specification.
All of these parts should be managed very well to have an efficient organizational change.
1- Keep Legacy & Improve
2- Best of Bread
a. Different Applications
3- ERP
4- In house development
There are two main states:
1- Current State
2- Future State
In-between these states there are options and ERP provider selection should be done there.
That means after choosing ERP the next stage is choosing providers.
How?
- Providers come and do their presentations
- Analyses of competitor’s ERP providers
- every type of questions should be asked to the providers
Best of Bread as an alternative solution to ERP has some disadvantages:
May have cost disadvantage, needs different types of consultants, may have upgrade problems
Before implementation companies should complete their homework. Homework is to analyze their system enough to have right choices.
Some of the salesmen do not like ERP applications because they think that their know how; the information about customers are their most important properties. However, when all of the information of customers collected by an ERP system firms can fire a salesman without thinking any loss of customer information, which is very useful for firms. Also taking commissions makes salesman do not want to share their information.
Organization Change Management OCM
An ERP system change the way of doing jobs so this change should be managed as wall as ERP implementation process. The culture of the firm is very important; it can be very easy to change the organization in some companies where it had caused someone to be fired.
Welch Allyn, which is a family business, is a good example for us to see how OCM is done.
There are 2300 employees where 600 are trained and they had implemented SAP at 2004. They are using HR, SD/CS, MM/PP, FI/CO, PLM, and BW Modules.
The organization change management is divided into 5 parts.
Training: Core team training
Management Seminar
End User training
Training needs analysis (how many people to train)
Develop course content
Deliver training courses
After training-practice before go live. (Examinations to see users are ready or not)
Communication: ERP cause fair and insecurity in between company so that before the implementation process starts and also during the implementation the employees should be informed. First to get buy in for all levels in organization.
Security/Role Development: There is a common data base and it is used by everyone so that some limitation should be given to the user. To do that the roles of each employee should be defined and relevant access should be given.
Super User Development: They are chosen to ask some questions about new system because they are given a response to help employees in their department. They are chosen because they are better than others in terms of new system. And they are given more training then others. It is not a easy job; they need to search a lot to answer questions.
Business Process Procedures: The documentation process of business should be managed; document specification.
All of these parts should be managed very well to have an efficient organizational change.
Day 3 Articles
Introducing Best Practices or Hampering Flexibility
- The company sells 1000 different raw items and they are repackaged into over 12000 different end products each they 300 to 500 orders are shipped in the same day.
- The company’s pricing strategy is different. They apply different discount strategies for different users. They had an 10 year old ERP system that is highly customized and that system could not meet their requirements.
- They were implementing one module at a time and there was problem in Order management. While implementing order management they expect that ERP system will calculate the prices automatically for different customers.
- When billing their customers, the firm did not use objective approach. In the article it can be seen that there is no organizational standards applied, and they want to implement ERP to that company. In order to implement ERP into pricing module there should be some standards. If there is no control, no discipline, and no organizational standard it would not be beneficial to implement ERP.
A Framework for Evaluating ERP Implementation Choices
ERP sector is one of the fastest growing sectors. While implementing ERP, companies fail most of the time. Reasons of failure is spending more money then the company can afford, being incompatible with strategic partners, conflicting with its management partners, style and structure.
Any successful ERP implementation requires a fit between ERP system and organizational processes.
Customization in ERP Implementation:
a) Technical Customization
1. Module Selection: Companies use the modules using the default configuration set by ERP vendors.
2. Table Configuration:
3. Code Modification: Source code of the ERP is changed for organizational needs.
b) Process Customization
Fit can be achieved by changing the process. Process customization is the degree which business process is changed to fit the system.
It has 3 categories: No change, incremental change, radical change.
c) ERP Customization Choices
Mutual adaptation, process adaptation, System conversion, process adaptation
Capability Requirements for ERP Customization
a) Technical Change Capability
Technical change capability is an organization’s ability to customize ERP systems. Companies can develop and modify large-scale software in a networked database environment. Other thing is an organization’s ability to manage large-scale systems development projects.
b) Process Change Capability
Organization’s overall ability to customize business processes.
- The company sells 1000 different raw items and they are repackaged into over 12000 different end products each they 300 to 500 orders are shipped in the same day.
- The company’s pricing strategy is different. They apply different discount strategies for different users. They had an 10 year old ERP system that is highly customized and that system could not meet their requirements.
- They were implementing one module at a time and there was problem in Order management. While implementing order management they expect that ERP system will calculate the prices automatically for different customers.
- When billing their customers, the firm did not use objective approach. In the article it can be seen that there is no organizational standards applied, and they want to implement ERP to that company. In order to implement ERP into pricing module there should be some standards. If there is no control, no discipline, and no organizational standard it would not be beneficial to implement ERP.
A Framework for Evaluating ERP Implementation Choices
ERP sector is one of the fastest growing sectors. While implementing ERP, companies fail most of the time. Reasons of failure is spending more money then the company can afford, being incompatible with strategic partners, conflicting with its management partners, style and structure.
Any successful ERP implementation requires a fit between ERP system and organizational processes.
Customization in ERP Implementation:
a) Technical Customization
1. Module Selection: Companies use the modules using the default configuration set by ERP vendors.
2. Table Configuration:
3. Code Modification: Source code of the ERP is changed for organizational needs.
b) Process Customization
Fit can be achieved by changing the process. Process customization is the degree which business process is changed to fit the system.
It has 3 categories: No change, incremental change, radical change.
c) ERP Customization Choices
Mutual adaptation, process adaptation, System conversion, process adaptation
Capability Requirements for ERP Customization
a) Technical Change Capability
Technical change capability is an organization’s ability to customize ERP systems. Companies can develop and modify large-scale software in a networked database environment. Other thing is an organization’s ability to manage large-scale systems development projects.
b) Process Change Capability
Organization’s overall ability to customize business processes.
Day 3 Learnings
In order to implement ERP solution we should first do SWOT analysis. SWOT analysis before implementation of ERP should be made and SWOT analysis simulating after ERP implementation should be made.
There are system solutions
1) Keeping Legacy Systems
No change in the existing systems.
2) Best of Breed Systems
Writing different applications and trying to integrate them
3) ERP
4) In-House Development
In pre- ERP process company should create questions.
You should negotiate with different ERP vendors and invite salespeople to come to your company and make presentations. Usually implementation people do not come to companies in that process
Waiting documentation from companies makes consultant to understand if the companies do their homework or not. In this process consultants try to figure out the potential problems of companies.
After that process, company should select the provider.
Organizational Change Management
It is perceived as soft stuff; however it is usually a hard stuff. Using right people for that process is important. Key issue in that process is communication within the company.
There are five parts of Organizational Change Management. These are:
Training
Training has several elements:
Core team training
Management Seminars
End user training.
Communication
Elements of the communication plan is
What is the content/ message
Who is the audience?
How do we tell them?
What is frequency?
Who will deliver?
Security and Role Development
Giving permissions to people to view appropriate data or doing things.
Super User Development
Helpful person who has computer skills is called super user. Literally, it is 10% of the end users. They are educated to tell other users how to use the system.
Business Process Procedures
A document to define steps how each transaction is used within ERP system in your company.
It is strategy and tactics to capture, document and control business process procedures.
Why this procedure is hard stuff?
Because changing individual behaviors and changing company is first perceived as soft stuff.
There are system solutions
1) Keeping Legacy Systems
No change in the existing systems.
2) Best of Breed Systems
Writing different applications and trying to integrate them
3) ERP
4) In-House Development
In pre- ERP process company should create questions.
You should negotiate with different ERP vendors and invite salespeople to come to your company and make presentations. Usually implementation people do not come to companies in that process
Waiting documentation from companies makes consultant to understand if the companies do their homework or not. In this process consultants try to figure out the potential problems of companies.
After that process, company should select the provider.
Organizational Change Management
It is perceived as soft stuff; however it is usually a hard stuff. Using right people for that process is important. Key issue in that process is communication within the company.
There are five parts of Organizational Change Management. These are:
Training
Training has several elements:
Core team training
Management Seminars
End user training.
Communication
Elements of the communication plan is
What is the content/ message
Who is the audience?
How do we tell them?
What is frequency?
Who will deliver?
Security and Role Development
Giving permissions to people to view appropriate data or doing things.
Super User Development
Helpful person who has computer skills is called super user. Literally, it is 10% of the end users. They are educated to tell other users how to use the system.
Business Process Procedures
A document to define steps how each transaction is used within ERP system in your company.
It is strategy and tactics to capture, document and control business process procedures.
Why this procedure is hard stuff?
Because changing individual behaviors and changing company is first perceived as soft stuff.
Day 3 Articles by Tolga YILDIRIM
A Framework for Evaluating ERP Implementation Choices & Configuring an ERP System: Introduction Best Practices or Hampering Flexibility?
An important argument topic regarding ERP systems is the issue of the alignment between an organization’s business processes and the ERP system. The ERP solutions, in general, come with ‘best practices’ and many times, an organization simply adapts its processes to the ERP system. Sometimes, however, some portions of the ERP system are customized to use the unique business processes of the organization. The question, then, is how to find an appropriate match between customizing the ERP system and changing the business processes in the organization. The fit between business processes and ERP systems and among business processes is believed to be critical to the success of ERP implementation.
In order to ensure the fit between business processes and the ERP system, an organization can either play with its processes, or with the system, or with both. We can call customization on the ERP system as technical customization, where we call customization of business processes as process customization.
There are three possible technical customization options, which are module customization, table customization and code customization. Code customization is the most technical and detailed customization among them. Similarly, there are three possible process customization options, which are no change, incremental change and radical change. An organization should first analyze its technical change and process change capabilities in order to choose an appropriate combination of customization options. An organization with high technical capabilities can go for even code customization, where one with low technical capabilities should definitely not.
It is highly difficult to implement in environments where there is resistance to change. It takes a lot of effort to establish a fit between business processes and the ERP system, if the business processes are unique, as in Photographic Supplies Distribution Company. Different parties’ differing and conflicting interests and awareness levels on specific problems incur problems that are hard to be addressed.
An important argument topic regarding ERP systems is the issue of the alignment between an organization’s business processes and the ERP system. The ERP solutions, in general, come with ‘best practices’ and many times, an organization simply adapts its processes to the ERP system. Sometimes, however, some portions of the ERP system are customized to use the unique business processes of the organization. The question, then, is how to find an appropriate match between customizing the ERP system and changing the business processes in the organization. The fit between business processes and ERP systems and among business processes is believed to be critical to the success of ERP implementation.
In order to ensure the fit between business processes and the ERP system, an organization can either play with its processes, or with the system, or with both. We can call customization on the ERP system as technical customization, where we call customization of business processes as process customization.
There are three possible technical customization options, which are module customization, table customization and code customization. Code customization is the most technical and detailed customization among them. Similarly, there are three possible process customization options, which are no change, incremental change and radical change. An organization should first analyze its technical change and process change capabilities in order to choose an appropriate combination of customization options. An organization with high technical capabilities can go for even code customization, where one with low technical capabilities should definitely not.
It is highly difficult to implement in environments where there is resistance to change. It takes a lot of effort to establish a fit between business processes and the ERP system, if the business processes are unique, as in Photographic Supplies Distribution Company. Different parties’ differing and conflicting interests and awareness levels on specific problems incur problems that are hard to be addressed.
Day 3 Articles - OnurOzensoy
A Framework for Evaluating ERP Implementation Choices
-Although ERP systems usage are growing rapidly, for individual companies it is challenge to implement those systems. Most common failure reasons are exceeded budget, incompatibility between the company and the vendor/its software from cultural perspective, too comprehensive organizational change and necessity to improve and upgrade ERP and its infrastructure.
-Unlike traditional software, which is fitted upon any process, ERPs are more likely to urge the organization to change its processes in accordance.
-The crucial part is to determine a system customization vs. business adaptation /re-engineering point to decrease costs, time, applicability etc.
-ERP system "best practices", which are processes dictated by he software upon business processes, are not universal but country, culture, company specific. They are readily tailored for industry, though.
-Misfits between ERP capabilities, embedded "best practices" and company processes can be classified in three categories: data, process, output.
-Technical customization vs. process customization
-Technical customization may involve module selection. Since ERPs are modular softwares a specific company may select which modules to implement. This is, however, is not effective in fitting the system on business since it just provides a minimum number of alterations.
-It may involve table configuration. Without coding and leading to cease of vendor support, a company may determine what variables are for what and modify tables and hence table-driven ERP.
-Another option is code customization. This is done by changing the source code of software. The way a system communicates with others changes or a functionality may be augmented.
-Business process is a logical path that is performed to achieve a desired output by using company resources. These processes may also be customized to fit to ERP "best practices".
-If the process customization involves changes in tasks and/or resources, it is classified as "no change" and Little effort is necessary.
-In incremental change, relationships between tasks and/or between tasks and resources change but performance indicators or logic behind the process remain unchanged. TQM applications are examples.
-Radical changes, on the other hand, involve changes in the performance measures and/or logic.
-Capability to change processes is process change capability.
-First process change capability is about understanding current business processes and environments. Second is about designing and implementing new processes. Third is about managing and coordinating large-scale process changes.
-To find a optimum point in ERP implementation, the paper prepares a 3x3 ERP Customization matrix which combines process and software customizations.
-Technical Change capability is an organizations ability to modify the software.
-The first capability is about understanding the software and recognizing built-in options and modules. The second capability is about modifying an integrated large-scale software. The third capability is about the ability to manage large-scale software modification/development projects. i.e. matching and allocation necessary resources efficiently
-This combination of change choices and capabilities result in ERP Customer Evaluation Framework, which consists of another similar 3x3 matrix. This time indicating necessary human and IT(tangible and intangible) resources.
-The paper provides a case study which is an example of controversy to "conventional wisdom". Conventional wisdom states that firms should convert or re-engineer their processes to fit ERP best practices.
-Understanding ERP implementation as a series of projects.
Configuring an ERP System: Introducing Best Practices or Hampering Flexibility?
-Implementing ERP in non-systematic environment is very difficult. ERP implementation , ordering module in particular, will cut the flexibility and since flexibility in pricing is a strategic competency of PSDC, it should have been considered at the first place.
-In PSDC there was considerable resistance to change in sales department. It makes implementation even more difficult. We also see that key people from departments should be involved in the process to increase communication and define processes better.
-PSDC war team configured tables thoroughly to introduce some discount options that were normally not available but the process was difficult and it still did not satisfy sales people. But it showed that implementations can be a means of revising departmental strategies, procedures etc.
-Although ERP systems usage are growing rapidly, for individual companies it is challenge to implement those systems. Most common failure reasons are exceeded budget, incompatibility between the company and the vendor/its software from cultural perspective, too comprehensive organizational change and necessity to improve and upgrade ERP and its infrastructure.
-Unlike traditional software, which is fitted upon any process, ERPs are more likely to urge the organization to change its processes in accordance.
-The crucial part is to determine a system customization vs. business adaptation /re-engineering point to decrease costs, time, applicability etc.
-ERP system "best practices", which are processes dictated by he software upon business processes, are not universal but country, culture, company specific. They are readily tailored for industry, though.
-Misfits between ERP capabilities, embedded "best practices" and company processes can be classified in three categories: data, process, output.
-Technical customization vs. process customization
-Technical customization may involve module selection. Since ERPs are modular softwares a specific company may select which modules to implement. This is, however, is not effective in fitting the system on business since it just provides a minimum number of alterations.
-It may involve table configuration. Without coding and leading to cease of vendor support, a company may determine what variables are for what and modify tables and hence table-driven ERP.
-Another option is code customization. This is done by changing the source code of software. The way a system communicates with others changes or a functionality may be augmented.
-Business process is a logical path that is performed to achieve a desired output by using company resources. These processes may also be customized to fit to ERP "best practices".
-If the process customization involves changes in tasks and/or resources, it is classified as "no change" and Little effort is necessary.
-In incremental change, relationships between tasks and/or between tasks and resources change but performance indicators or logic behind the process remain unchanged. TQM applications are examples.
-Radical changes, on the other hand, involve changes in the performance measures and/or logic.
-Capability to change processes is process change capability.
-First process change capability is about understanding current business processes and environments. Second is about designing and implementing new processes. Third is about managing and coordinating large-scale process changes.
-To find a optimum point in ERP implementation, the paper prepares a 3x3 ERP Customization matrix which combines process and software customizations.
-Technical Change capability is an organizations ability to modify the software.
-The first capability is about understanding the software and recognizing built-in options and modules. The second capability is about modifying an integrated large-scale software. The third capability is about the ability to manage large-scale software modification/development projects. i.e. matching and allocation necessary resources efficiently
-This combination of change choices and capabilities result in ERP Customer Evaluation Framework, which consists of another similar 3x3 matrix. This time indicating necessary human and IT(tangible and intangible) resources.
-The paper provides a case study which is an example of controversy to "conventional wisdom". Conventional wisdom states that firms should convert or re-engineer their processes to fit ERP best practices.
-Understanding ERP implementation as a series of projects.
Configuring an ERP System: Introducing Best Practices or Hampering Flexibility?
-Implementing ERP in non-systematic environment is very difficult. ERP implementation , ordering module in particular, will cut the flexibility and since flexibility in pricing is a strategic competency of PSDC, it should have been considered at the first place.
-In PSDC there was considerable resistance to change in sales department. It makes implementation even more difficult. We also see that key people from departments should be involved in the process to increase communication and define processes better.
-PSDC war team configured tables thoroughly to introduce some discount options that were normally not available but the process was difficult and it still did not satisfy sales people. But it showed that implementations can be a means of revising departmental strategies, procedures etc.
Lessons learned by 23rd of June
There are alternatives for ERP software
- Keep Legacy system, and improve it
- Best of Breed Applications, and try to connect them.
- Use ERP
- In House development. Deal with your own problems
When implementing there are 5 steps
- You must check your options, do workshops
- Prepare today’s SWOT
- Prepare future’s SWOT
- Learn about the systems
- Select Your Provider
Organizational Change Management
- It is Who, Why, How, Where, When of your implementation plan
- Sample Case Welch Allyn
- 17 Consultants from capgemini
- 23 Project members
- Peoplestuff: training, communications, security,authorization, super user authorization, business process procedures. These all change behaviours. Of people
- Peoplestuff is therefore hard stuff.
Core team training is called Training period, you teach your members.
Where in management seminars you give your message t your superior executives, share your vision.
End user training grants the ability to your employees who will face the software on a daily basis.
What must be done is to practice the software before it goes live. Support people with the help of super users, who will act as local leaders and knowledge centers.
Keep in mind that people will have to do the loads of work when they will be back from training, so give them room but remind them practice makes it perfect.
Day3 - Article Key Points by Basak Tektemur
A Framework for Evaluating ERP Implementation Choices by Wenhong Luo and Diane M. Strong
It is important to define a connection between ERP system and organization’s business processes for an organization. There must be a good supportive system for the ERP implementation decision-making process and this paper provides a framework for a relevant support system including customization choices and the capabilities required to accomplish these choices. ERP systems are packaged software solutions rather than customized systems with built-in assumptions and some best practices. However, mostly these assumptions and practices do not match with the company and therefore, appropriate customization up to some level is required and crucial. There are various customization possibilities in order to achieve a successful ERP implementation and various capabilities required for technical ERP customization options and process change capabilities needed for process customization.
Technical Customization:
Module selection
Table configuration
Code modification
Process Customization:
No change
Incremental change
Radical Change
ERP Customization Choices:
No Customization
Process Adaptation
Process Conversion
Fit System to Process
Mutual Adaptation
Fit Process to System
System Conversion
System Conversion and Process Adaptation
System and Process Reengineering
Technical Change Capability:
Understanding of default ERP system processes, configurations and built-in options
Ability to develop and modify large-scale software
Ability to manage large-scale systems development projects
Process Change Capability:
Ability to understand company’s own existing business processes and their business environment
Ability to design new or changed business processes
Ability to manage and coordinate large-scale business process changes
Overall Capability in implementing and customizing ERP systems:
Novice Organization => Low technical change capability, low process change capability
Technician Organization => High technical change capability, low process change capability
Organizer type of organization => Low technical change capability, high process change capability
Expert Organization => Low technical change capability, high process change capability
Configuring an ERP System: Introducing Best Practices or Hampering Flexibility? by Olga Volkoff
The case is an example of an ERP implementation which is similar with Welch Allyn’s ERP implementation project that we cover in day3. Therefore many issues are similar such as the project team, who are involved in team. The team of 8 worked on implementing the order management and set up a pricing module. In the end, Tom Brown, Director of Finance and Accounting, made the best point: it is not easy, if not impossible, to make work a system like JDE in an organizational environment where there is no control, no discipline, no desire for change or resistance to change. Here, it is possible to refer lecture learning where we discussed a lot about communication and importance of communication before, during and after ERP implementation in order to release stress and anxiety, and break the resistance against ERP systems.
It is important to define a connection between ERP system and organization’s business processes for an organization. There must be a good supportive system for the ERP implementation decision-making process and this paper provides a framework for a relevant support system including customization choices and the capabilities required to accomplish these choices. ERP systems are packaged software solutions rather than customized systems with built-in assumptions and some best practices. However, mostly these assumptions and practices do not match with the company and therefore, appropriate customization up to some level is required and crucial. There are various customization possibilities in order to achieve a successful ERP implementation and various capabilities required for technical ERP customization options and process change capabilities needed for process customization.
Technical Customization:
Module selection
Table configuration
Code modification
Process Customization:
No change
Incremental change
Radical Change
ERP Customization Choices:
No Customization
Process Adaptation
Process Conversion
Fit System to Process
Mutual Adaptation
Fit Process to System
System Conversion
System Conversion and Process Adaptation
System and Process Reengineering
Technical Change Capability:
Understanding of default ERP system processes, configurations and built-in options
Ability to develop and modify large-scale software
Ability to manage large-scale systems development projects
Process Change Capability:
Ability to understand company’s own existing business processes and their business environment
Ability to design new or changed business processes
Ability to manage and coordinate large-scale business process changes
Overall Capability in implementing and customizing ERP systems:
Novice Organization => Low technical change capability, low process change capability
Technician Organization => High technical change capability, low process change capability
Organizer type of organization => Low technical change capability, high process change capability
Expert Organization => Low technical change capability, high process change capability
Configuring an ERP System: Introducing Best Practices or Hampering Flexibility? by Olga Volkoff
The case is an example of an ERP implementation which is similar with Welch Allyn’s ERP implementation project that we cover in day3. Therefore many issues are similar such as the project team, who are involved in team. The team of 8 worked on implementing the order management and set up a pricing module. In the end, Tom Brown, Director of Finance and Accounting, made the best point: it is not easy, if not impossible, to make work a system like JDE in an organizational environment where there is no control, no discipline, no desire for change or resistance to change. Here, it is possible to refer lecture learning where we discussed a lot about communication and importance of communication before, during and after ERP implementation in order to release stress and anxiety, and break the resistance against ERP systems.
Day 3 Articles
A Framework for Evaluating ERP Implementation Choices
- The paper proposes the balance of degree of customization for ERP software and processes
- A successful ERP implementation requires fit between software and business processes
- ERP systems are packaged, which indicates they target the market, not individual companies. So, the work with assumptions of their clients. These create
- Differences between ERP capabilities and Company requirements are company-industry-country specific, and can be categorized as in 3 groups, data, output and process.
- ERP projects are more riskier than IT projects because they are Company wise
- Module Selection, table configuration and code modification are the 3 steps of ERP customization.
- Design, implementation, stabilization, continuous improvement, and transformation are 5 steps that companies experience with ERP.
- Primary reason to customize ERP implementation is to fit processes that are supported with ERP to ERP system. Technical customization deals with that.
- Fit can be achieved by changing processes other than the system. Process customization deals with that
- Modules, tables and codes may have different degree of customization, ERP customization choices depends on the degree of fit between ERP system and the company’s requirements.
- When the degree of change and the capabilities of the companies to handle that change are low, project team’s development level must be high.
- The research helps companies understand the customization decisions given the company’s capabilities.
Configuring an ERP System: Introducing Best Practices or Hampering Flexibility
- Large number of orders, quick response is needed, too many employees are included.
- Implementation team is experts in their departments, external consulting is acquired but not in terms of customization
- Team is handling 1 department out of 6 at one time.
- Order management is complex because of difference of products and customers.
- Order management module was too complex to handle with only customizing the ERP software
- So the team decided to find a way between reengineer their customer dealings (business processes) and the software together.
Day 3 Lesson Learned
There are three approach to automate business processes:
- Keep legacy:
- Best of breed solutions
- ERP
- In house development
What should be the time for doing a Gap Analysis? First we should make a SWOT analysis for the current situation without defining a specific solution. After that should make gap analysis for different solutions.
There is an order to make an implementation:
- Workshop to learn different solutions
- Curent State SWOT
- Requirement Anlaysis SWOT
- Options (ERP solutions)
- Sales guys comes and make presentations
- Internet search
- Other companies that implemented
- Ask creative questions
- Is there any enough consultants
- Is there any other fee
- Does it do this...
- Do I need to make customization
- It may be cheaper or expensive than a single solution
- Finding consultants that knows the two sides of the integration points is difficult
- Upgrades of one of them may require upgrade of the integration implementations.
We can understand that if the company did its homework or not, when we look at the documentation that defines the business processes.
Implementing a system is not important if it is not used properly. In a CRM solution implementation, sales people do not want to enter their sales data to the system.
- Sales people do not want to share
- Sales people use personal relations
- Entering sales data to the system is not easy, since it is not a formatted data.
-Why is OCM first perceived as the “Soft Stuff” and why does it always finish as the “Hard Stuff”
Coomunication and getting commitment is important
“OCM”
because changing individual behaviours and changing company culture is first perceived as soft
This is a software project we can deal with human problems.
Welch allyn Company overview, diagnostic and medical devices, patient monitoring sytems,
Implemented nearly all SAP modules
There are 5 different initiatives of OCM:Training, Business Process Procedures,
Super user development, Communications, Security rules
-values,beahviours, beliefs and norms
-behaviours of employees
-company or department leadership sets the overall tone
----
Training has several elements
--Core team training, to understand the capabilities of the syste
--management seminar
--End user training
--Training needs analysis(ho many people do we have, how many will take this course...)
--Develop course contents(
Deliver training courses(make exams, give certificates)
-After training practice before go live
elements of Communication plan:What is happening with the project giving information to stakeholder
--what is content
--who is the audience
--who will deliver
--caos, insecurity, anxiety, fear
Security/Role Development
-You cannot give permission to see/change everything
-How can you define the roles
Sales&Marketing Mfg
1)Sales 1)Production
--transactions
--talk key managers
-- do they need other modules 2)Forecasting
2)Cust. Service Rep.
3)Repair
Super user development
develop super user organiztion, look for people who are natural leaders or change agents- target 10% of users
Organize Super User workshops – seek their help to improve SAP.
super userlara bonus verenler var. Boyle birsey verilemiyorsa yemektir falan ayarlanabilir.
Business Process Procedures
-Strategy and tactics to capture document and control business procedures
-What docs to control&store, where and how to control &store
Lessons Learned v3.0 by Tolga YILDIRIM
Organizations that are in search of effectively managing their information in order to have better decision-making capabilities have several options for an enterprise wide information system. The first option, obviously, is implementing an ERP solution to solve the information needs. An ERP solution should be considered as a digital nervous system that enables the organization to act as effectively and efficiently as if it were a single body. Information needs, business processes should be analyzed by a core team in the organization to implement an ERP solution which will enhance the capabilities of the organization.
However, implementing an ERP system is not the only option. The second option is the ‘best-of-breed’ solution. For example, an organization may choose to implement the best SCM (Supply Chain Management) from one solution provider, the best HR application from another solution provider and a CRM from another one. Then, the organization tries to tie these different applications so that information integrity is maintained. This approach incurs several concerns, beside advantages. By installing the best applications for different functions, an organization gets the best possible individual solutions and capabilities. However, the amount of time and effort, in addition to cost, needed to ensure the integrity of information is tremendous. The organization has to deal with the complex tasks of handling upgrades and monitoring any integrity problems, thereby employing increased number of technical staff.
Another option available is in-house development. Depending on the complexity of business processes and information needs of an organization, the success rate of in-house development approach diminishes. ERP solution providers, or solution providers in general, have the expertise and know-how in solving information needs successfully. Implementing an ERP system is a serious job, and requires professionalism, expertise and know-how. In addition, the organization needs to employ a huge number of technical staff.
Organizational Change Management is the most important aspect of an ERP implementation. The organization may implement the most appropriate ERP solution, yet information needs may not be met. An ERP system changes the way people do their jobs. Therefore, the human factor comes into play significantly. Resistance to change occurs if the organization does not manage the change process. The soft stuff in fact, is really the hard stuff. Organizational Change Management can be summarized as a series of initiatives to prepare the organization and the individuals. Five steps can be categorized as training, security/role development, super user development, communications, and business process procedures.
However, implementing an ERP system is not the only option. The second option is the ‘best-of-breed’ solution. For example, an organization may choose to implement the best SCM (Supply Chain Management) from one solution provider, the best HR application from another solution provider and a CRM from another one. Then, the organization tries to tie these different applications so that information integrity is maintained. This approach incurs several concerns, beside advantages. By installing the best applications for different functions, an organization gets the best possible individual solutions and capabilities. However, the amount of time and effort, in addition to cost, needed to ensure the integrity of information is tremendous. The organization has to deal with the complex tasks of handling upgrades and monitoring any integrity problems, thereby employing increased number of technical staff.
Another option available is in-house development. Depending on the complexity of business processes and information needs of an organization, the success rate of in-house development approach diminishes. ERP solution providers, or solution providers in general, have the expertise and know-how in solving information needs successfully. Implementing an ERP system is a serious job, and requires professionalism, expertise and know-how. In addition, the organization needs to employ a huge number of technical staff.
Organizational Change Management is the most important aspect of an ERP implementation. The organization may implement the most appropriate ERP solution, yet information needs may not be met. An ERP system changes the way people do their jobs. Therefore, the human factor comes into play significantly. Resistance to change occurs if the organization does not manage the change process. The soft stuff in fact, is really the hard stuff. Organizational Change Management can be summarized as a series of initiatives to prepare the organization and the individuals. Five steps can be categorized as training, security/role development, super user development, communications, and business process procedures.
Day3 - Lessons Learned by Basak Tektemur
System solutions options:
1) keep legacy system and just improve the quality
2) best of breed and connect them if you can (it can be part of ERP or not)
3) ERP
4) In-house development
You can do SWOT analysis and define your current situation then you can estimate future state and do SWOT for this estimation you can see the GAP and you can talk about the options that may help us to close the gap in between. Rather than focusing on ERP like doing SWOT pre-ERP and post-ERP, doing just SWOT is better because only since then you can think about options and choose or have the chance to choose among the option.
When you decide ERP is best and you decide to implement ERP you select the provider.
To do that you look at the options and you look at your requirements. You can look at companies like yourself to decide which provider is best for you, you can talk about the systems with people who come to your firm to present their solutions (these are salespeople of vendor).
But salespeople are not implementation people; it is not a good idea to trust them and their knowledge only.
If you are using an ERP system with modules coming from different providers but there will be some problems such as integration problems, upgrading problems, also you need to improve higher in-house abilities since your people must know about more than one system. Also cost is an issue, but it is difficult to say it will be cheaper or more expensive. An advantage may be you may obtain best solutions for each application.
If there is no documentation about business processes there is the probability that the firm did not do their homework and did not define their business processes and define their needs. Then it is extra job for consultant firm to define these things and then build a system accordingly.
There are three reasons for failure in persuade salespeople to enter their sales experience:
* Time consuming
* Do not want to share their valuable info
* The need for evaluation
Learning points
According to the general tendency the hard part is the implementation part, many companies do not think about the organizational change management- it is not a easy process as the companies usually think.
It is important and necessary to learn what can go wrong.
People’s jobs change, there is a gap you should close, and communication is a key concept in change management.
OCM is a series of initiatives to prepare your organization
Welch Allyn – family business that sells diagnostic medical instruments, they have patient monitoring systems
They have 2300 employees world-wide
The company was growing organically and also by mergers and acquisitions but their old IT system was not supporting this growth.
They wanted to implement all the system once at a time.
23 full time project members from Welch Allyn and there are 17 system integrators. The medical industry was highly regulated by food and drug ad. There was six team leads.
Technical issues: blueprinting, configuring, client strategy, transports, testing, code changes
OCM – five initiatives
Training
Business process procedures
Security and role development
Super user development
Communications
Culture eats strategy for breakfast everyday… => values, behaviors, beliefs and norms that permeate the group
Expressed through the words and behaviors of each employee
Company or department leadership sets the overall tone
Often influenced by the customers you serve
Most often revealed in the way companies approach and solve their problems
Entrepreneurial vs. bureaucratic
Team focused vs. independent initiatives
Risk taking vs. conservative
Aggressive vs. not
Loyalty vs. what have you done here lately
View points go hand in hand with culture, people may react to ERP training according to the culture in the company.
Ex: viewpoint => I’ve learned other systems before, I’ll figure this out
Culture => Management under-estimates complexity before Go Live – “ready-fire-aim”
Once we decide to implement ERP system
* We send the functional team to training in order to make them learn the needed functions. (on-site and off-site training)
* Management seminars are important and thereby managers ,CEOs and other executives can decide their roles and can be more supportive
* End user training- is like an implementation project it is like an HR project
o Training needs analysis
§ Survey end users; ask them questions
§ What do they know and what do they need to know?
§ What are the ways they learn best determine courses, cost estimates
o Develop course contents
§ Time schedule
§ The content
§ Course material who will do this
§ How will this be accomplished
§ Resources, funding, review tests and etc.
o Deliver training courses (to end users)
§ Identify and train instructors
§ Locate training rooms
§ Set schedule, manage invitations and attendance processes
o After training – practice before go live
§ Adhoc organized practice sessions, prepare for proficiency tests
§ Administer tests, score them, offer retest opportunities, and postpone security access as required.
Element of Communication plan
What is the content/message?
Who is the audience?
How do we tell them?
What is frequency?
Who will deliver?
Where will it come from?
When are delivery dates?
You use communication first to explain the change process in order to erase the anxiety, chaos and fear. You also keep people at speed what is going on at that specific time of the project.
The impact of SAP must be emphasized in order to show in-house people the importance of the project.
Lunch and Learn sessions are very helpful as a communication channel since there are business people involved in the project with IT people and their attendance to the regular meetings during the process is very important.
Day 3 Key Points of the Articles
A Framework for Evaluating ERP Implementation Choices
ERP is a packaged software and is developed for a market not an individual customer, there is a time to market pressure on the developers ad usually the developers are not related to the customers.
Therefore the fit of an ERP system to an organization is difficult.
Traditional software is tailor made and developers are involved first hand.
Best practices are hardly universal, culture and country specific applications are present
Larger, global, more complex, associated with higher risk.. ERP is regarded as a standard
Adaptation involves customization, positive correlation between initial fit and implementation success. Different types of customization are;
Technical customization
Module selection
Table configuration
Code modification
Table configuration is difficult since there are many tables, and relations and they should be understood very well and also it is time consuming however if the system is tailored this way full vendor support and ease of future upgrades remain.
Code customization has greatest flexibility, highest risk highest cost; incompatibility with higher versions.
The decision on which customization to choose depends on the capabilities both of the software and the company.
Technical change capabilities
1) understanding of ERP systems
2) ability to make desired system changes
3) ability to develop system management projects
Process change capabilities
1) understand business processes
2) ability to design and change business processes
3) ability to manage large scale change projects
Configuring an ERP System: Introducing Best Practices or Hampering Flexibility?
When configuring a system people knowing the business processes must be involved. Also in order to be able to benefit form an ERP system and avoid resistance key people from departments who will be using ERP after going live should be convinced and participate in the process.
ERP is a packaged software and is developed for a market not an individual customer, there is a time to market pressure on the developers ad usually the developers are not related to the customers.
Therefore the fit of an ERP system to an organization is difficult.
Traditional software is tailor made and developers are involved first hand.
Best practices are hardly universal, culture and country specific applications are present
Larger, global, more complex, associated with higher risk.. ERP is regarded as a standard
Adaptation involves customization, positive correlation between initial fit and implementation success. Different types of customization are;
Technical customization
Module selection
Table configuration
Code modification
Table configuration is difficult since there are many tables, and relations and they should be understood very well and also it is time consuming however if the system is tailored this way full vendor support and ease of future upgrades remain.
Code customization has greatest flexibility, highest risk highest cost; incompatibility with higher versions.
The decision on which customization to choose depends on the capabilities both of the software and the company.
Technical change capabilities
1) understanding of ERP systems
2) ability to make desired system changes
3) ability to develop system management projects
Process change capabilities
1) understand business processes
2) ability to design and change business processes
3) ability to manage large scale change projects
Configuring an ERP System: Introducing Best Practices or Hampering Flexibility?
When configuring a system people knowing the business processes must be involved. Also in order to be able to benefit form an ERP system and avoid resistance key people from departments who will be using ERP after going live should be convinced and participate in the process.
Day3 Learnings
After the review of the previous class
- Development opportunities for a company:
- Keep legacy & improve whtever needs improvement
- Best of breed solutions (for SCM, CRM , etc.)
- ERP
- In-house development
- In best of breed solutions, you don't lose bargaining power wrt software vendors. Probably, you can achieve better performance for each function as you are able to use more specialized products for these functions. However, you should possibly deal with lots of upgrades for each different functional software you have.
- Organization Cahnge Management : "The Soft Stuff is The Hard Stuff'"
Overview of SAP project:
- Company goal is to increase sales revenue with new product development.
- IT platforms would not suppot growth.
- Project lasts two years with 40 people ( 23 from Welch Allyn, 17 from Capgemini)
- Vice president of the company is the champion of the project.
- Technical stuff includes blueprinting, configuring, testing, code changes and so on.
- People stuff includes training, communication, security authorization, business process procedures.
- 5 main initiatives for OCM are training, business process procedures, super user development, security and communication. All these 5 initiatives are interrelated with one of another initiatives.
- In the last two hours, we have chance to experience a real SAP system in the labratory. System seems to be a little complicated due to involving so many functionalities and surely, using the system efficiently necessitates so much practice.
Day 3 Articles
A framework for Evaluating ERP implementation:
- ERP systems are packaged softwares, a little bit customization required for both erp system and business processes.
- There are process and technical customization options and also technical and process change capabilities.
- ERP software is developed for all market, not for an individual company. ERP implementation requires data entry and integration
- ERP best practices are generic solutions and are not universal.
- ERP implementations are company wide and generally contains all company business processes.
- ERP system customizations are module selection, table configuration, code modification, another defines this by bolt-ons, screen masks, extended reporting, workflow programming, user exits, ERP programming, interface development, package code modification.
- ERP implementations goes into 5 stages, design, implementation, stabilization, continous improvement, transformation.
- module selection
- table configuration
- code modofocations-- which is great flexibility bu backward compatibility injures.
- no change
- incremental-- relationships among tasks are customized
- radical change
- comprehensive understanding of ERP vendor reasons underlying
- developing an enterprise software or networked database software
- managing a large scale software project
- wide rang of understanding business processes and the evaluation of the process
- creative thinking for redesigning business processes
- need for large scale organizational change management
- Framework let a company resides in appropriate cell and thus figures out effort needed
- A variety of modules implemented using customization options mentioned in the article.
- Case is about implementing order management module while other modules are already implemented.
- they formed a war team that is appropriate for such project
- the existing software would be changed without any business reengineering.
- They thought they had enough expertise to implement ERP by themselves.
- In JD Edwards order processing tables are totally different identified.
- Grouping orders, customers is needed to manage discoutns or incentives.
- But marketing people have totally different and not organized procedures.
- Software system needed to make standardize pricing strategy of marketing.
Day 3 Lessons Learned
Elevation speech
Key performance indicator
short, brief
SWOT analysis
Before and future analysis and compare them,
ERP implementation alternatives
In house developed solutions
Best of breed Find best for each kinf of system and combine them if possible
Keep legacy system
Current State --------------------? Fıtıre State
Options
Figure out each of alternatives options. Then after choosing right solution then select the provider,
How do we select the provider,
-we can go and visit them
- we can have some presentations from different vendors, benefits and options can be explained by them
-That gives a basic overview of what a system will look like.
- ask a lot of questions or visit other companies who has an experience from that company,
SAP has user groups that can be questioned about other companies’ experiences.
Best of breed implementation
Advantage? you have bargaining power, functionality advantage
Disadvantage? upgrade difficulties, integration, different kinds of experience, cost disadvantages, integration point support can be difficult
How an ERP consultant can understand a company did not do his homework,
--lack of documentation
--must know business processes
--if they do not do that consultant must work extra hours to extract business processes
ERP system comes with its own practices somehow customizable,
-- first company must pass through the ERP systems’ best practices to get a taste of the system.
-- the way the erp system goes for the companies’ business processes.
We talked about physical infrastructure of an ERP system. Servers such as web, gateway, database, sybel.
We talked about Sybel software clients.
What would be reasons a salespeople would not use an ERP system
--Salespeople would not want to share their experience
--Salespeople use personel relations
--Depending on sales differnt things can be thought,so it is not easy to computerize the data
--It is not easy for a salespeople to enter data into a computer.
Organization Change Management
1- Organizational change management looks like soft but it is really the hard stuff.
2- The goal is to learn what can go wrong
3- Organizational cahnage is to change the functions of the organizational units.
4- The key part of change management is communication, to take commitments.
5- İs there a dedicated team for organizational chane.
We talked about WelchAllyn.
6- We talked about general structure of SAP implementation on WelchAllyn
7- There were differnt consultants , and everytime a different person came to team meetings. This was very disrupting.
8- There were to kinds of challange, technical stuff and people stuff
9- Five dimesnsions
a. Training
b. Role development
c. Super user developments
d. Communications
e. Business processes
10- Culture eats strategy for breakfast every day.
11- People do not want to learn purposes, just the stuff they will use
12- They think thet do not need any practice
13- Some other wants to learn the purposes.
14- Core team is trained to understand core functions, and they will be used to train other people at the company.
15- Training is a huge HR project in itself that goes with the big project hand in hand.
16- There is a huge process in documentation.
17- Arranging rooms, schedule, manage invitations is not easy.
18- After training practice sessions are arranged.
19- Tests, scoring...
20- Training is just training, real life situations are harder to manage.
After training, communication comes into picture
21- İnternal project level communication involves project team people communication
22- End user needs communication handling
23- İn order to take support from different departments, we need to communicate.
24- To prevent fear, insecurtiy, some type of chaos, we use communication, no need to be afraid, this gonna make good use, better process, we will have trainin sessions.
Securtiy/ Role Development
25- New responsibilities after SAP
26- New jobs evolve
27- New SAP transactions to do their jobs
28- When we think about authentication, we talk with roles.
29- We develop roles and security acess codes, than assign these to people
30- But there would be changes, when the system goes to live.
31- Super users and/or power users must be identified and trained.
32- 10% of end users, must be natural leaders
33- As super users leran over time, there will be fewer calls to HelpDesk
34- It is hard to prospect super user issues for the typical first weeks.
BUSİNESS PROCESS PROCEDURES
35- Strategy and tactics to capture, document and control business process procedures
36- What docs to control and store, where and how to control ans store
37- Web sites for easy access, to SAP On line Help.
38- BPP – Business Process Procedure – a document to define steps – how each transaction is used within SAP system as configures in your company.
39- These documentation is a concurrent process to implementation.
Key performance indicator
short, brief
SWOT analysis
Before and future analysis and compare them,
ERP implementation alternatives
In house developed solutions
Best of breed Find best for each kinf of system and combine them if possible
Keep legacy system
Current State --------------------? Fıtıre State
Options
Figure out each of alternatives options. Then after choosing right solution then select the provider,
How do we select the provider,
-we can go and visit them
- we can have some presentations from different vendors, benefits and options can be explained by them
-That gives a basic overview of what a system will look like.
- ask a lot of questions or visit other companies who has an experience from that company,
SAP has user groups that can be questioned about other companies’ experiences.
Best of breed implementation
Advantage? you have bargaining power, functionality advantage
Disadvantage? upgrade difficulties, integration, different kinds of experience, cost disadvantages, integration point support can be difficult
How an ERP consultant can understand a company did not do his homework,
--lack of documentation
--must know business processes
--if they do not do that consultant must work extra hours to extract business processes
ERP system comes with its own practices somehow customizable,
-- first company must pass through the ERP systems’ best practices to get a taste of the system.
-- the way the erp system goes for the companies’ business processes.
We talked about physical infrastructure of an ERP system. Servers such as web, gateway, database, sybel.
We talked about Sybel software clients.
What would be reasons a salespeople would not use an ERP system
--Salespeople would not want to share their experience
--Salespeople use personel relations
--Depending on sales differnt things can be thought,so it is not easy to computerize the data
--It is not easy for a salespeople to enter data into a computer.
Organization Change Management
1- Organizational change management looks like soft but it is really the hard stuff.
2- The goal is to learn what can go wrong
3- Organizational cahnage is to change the functions of the organizational units.
4- The key part of change management is communication, to take commitments.
5- İs there a dedicated team for organizational chane.
We talked about WelchAllyn.
6- We talked about general structure of SAP implementation on WelchAllyn
7- There were differnt consultants , and everytime a different person came to team meetings. This was very disrupting.
8- There were to kinds of challange, technical stuff and people stuff
9- Five dimesnsions
a. Training
b. Role development
c. Super user developments
d. Communications
e. Business processes
10- Culture eats strategy for breakfast every day.
11- People do not want to learn purposes, just the stuff they will use
12- They think thet do not need any practice
13- Some other wants to learn the purposes.
14- Core team is trained to understand core functions, and they will be used to train other people at the company.
15- Training is a huge HR project in itself that goes with the big project hand in hand.
16- There is a huge process in documentation.
17- Arranging rooms, schedule, manage invitations is not easy.
18- After training practice sessions are arranged.
19- Tests, scoring...
20- Training is just training, real life situations are harder to manage.
After training, communication comes into picture
21- İnternal project level communication involves project team people communication
22- End user needs communication handling
23- İn order to take support from different departments, we need to communicate.
24- To prevent fear, insecurtiy, some type of chaos, we use communication, no need to be afraid, this gonna make good use, better process, we will have trainin sessions.
Securtiy/ Role Development
25- New responsibilities after SAP
26- New jobs evolve
27- New SAP transactions to do their jobs
28- When we think about authentication, we talk with roles.
29- We develop roles and security acess codes, than assign these to people
30- But there would be changes, when the system goes to live.
31- Super users and/or power users must be identified and trained.
32- 10% of end users, must be natural leaders
33- As super users leran over time, there will be fewer calls to HelpDesk
34- It is hard to prospect super user issues for the typical first weeks.
BUSİNESS PROCESS PROCEDURES
35- Strategy and tactics to capture, document and control business process procedures
36- What docs to control and store, where and how to control ans store
37- Web sites for easy access, to SAP On line Help.
38- BPP – Business Process Procedure – a document to define steps – how each transaction is used within SAP system as configures in your company.
39- These documentation is a concurrent process to implementation.
Day 3 Learnings - OnurOzensoy
For implementing a business information system solution, we should first consider two states via SWOT analysis of business currently and an estimated/desired SWOT state. Either analyzing each solution separately to see if one fits or devising a workshop to determine which provides best benefits/cost ratio, help us to see what is the ideal tool to reach "future desired state".
Strategic alternatives are; keeping legacy systems with no change, employing "best of breed" solutions packages which are not thoroughly integrated, employing an ERP or utilize in house development team to devise an ERP or non-integrated solutions package. Among these ERP implementation has the difficulties of requirement of change in the organization and an extensive process to adopt ERP. Best of breed solutions, on the other hand, will require many consultants, a larger group of admins and maintaining personnel, potentially higher costs and more comprehensive work to upgrade the system whereas it does not offer integration between functional groups. It is important to note that a best of breed application may be implemented to a compatible ERP system, if it is more desirable to do so.
In the vendor selection process, a core team will assess the potential vendors. This, of course, requires an awareness of vendors and their products at the first place.
Typically, a firm will learn about opportunities via vendor presentations, mouth-to-mouth or attending seminars. Sales people are to be communicated carefully though since they probably are not familiar with implementation and compatibility issues. Another key issue is to map your business processes before starting the implementation as consultants for implementation will need them and success will mostly depend on "doing your homework"
We talked about difficulties in making sales people adopt CRM and some other cons of it.
Organizational Change Management
This is perceived as a last and easy step; "soft stuff". But typically it will turn out to be the "hard stuff" as people will realize that changing other people is the most difficult part. Since most employees will be afraid of losing their job or doing something that they are not used to do, there will be friction in the organization. This is not a solely technical issue and it is about culture. Using right people for it is important.
We analyzed OCM process in Welch Allyn which is an Syracuse medical company dealing with medical diagnosis devices. There are five parts of OCM.
-Training: It involves core team training, which is about presenting the system with its capabilities and opportunities, goes on with management seminars and end-user traning to support adoption and ease of usage. Practice course must be the main element with theory.
Attendance and attention to courses should be followed via surveys or simply taking attendance.
-Communication: It should involve bottom-up and top-bottom parts. Communication must be devised so that fears will be overcome and adoption of program will be successful.
Of course, communications should be designed on a audience basis.
-Security/Role Development: It involves grouping different tasks and transactions and giving authority to appropriate person to view appropriate data. There will be many requests to examine other transactions than previously planned ones but as long as job did not change, it should be rejected.
-Super User Development: Super user is a computer literate, helpful person who is responsible for communicating the system to people and for helping fellow employees to use the interface. The person does these along with his/her regular tasks. This is an important part to over come friction in the organization via communication. Super users should be trained further, though.
- Business Process Procedures: It is mapping business processes of the company (workflows) so as getting ready them before training. Also, pre-ERP business processes and post-ERP processes should be mapped along with implementation.
Strategic alternatives are; keeping legacy systems with no change, employing "best of breed" solutions packages which are not thoroughly integrated, employing an ERP or utilize in house development team to devise an ERP or non-integrated solutions package. Among these ERP implementation has the difficulties of requirement of change in the organization and an extensive process to adopt ERP. Best of breed solutions, on the other hand, will require many consultants, a larger group of admins and maintaining personnel, potentially higher costs and more comprehensive work to upgrade the system whereas it does not offer integration between functional groups. It is important to note that a best of breed application may be implemented to a compatible ERP system, if it is more desirable to do so.
In the vendor selection process, a core team will assess the potential vendors. This, of course, requires an awareness of vendors and their products at the first place.
Typically, a firm will learn about opportunities via vendor presentations, mouth-to-mouth or attending seminars. Sales people are to be communicated carefully though since they probably are not familiar with implementation and compatibility issues. Another key issue is to map your business processes before starting the implementation as consultants for implementation will need them and success will mostly depend on "doing your homework"
We talked about difficulties in making sales people adopt CRM and some other cons of it.
Organizational Change Management
This is perceived as a last and easy step; "soft stuff". But typically it will turn out to be the "hard stuff" as people will realize that changing other people is the most difficult part. Since most employees will be afraid of losing their job or doing something that they are not used to do, there will be friction in the organization. This is not a solely technical issue and it is about culture. Using right people for it is important.
We analyzed OCM process in Welch Allyn which is an Syracuse medical company dealing with medical diagnosis devices. There are five parts of OCM.
-Training: It involves core team training, which is about presenting the system with its capabilities and opportunities, goes on with management seminars and end-user traning to support adoption and ease of usage. Practice course must be the main element with theory.
Attendance and attention to courses should be followed via surveys or simply taking attendance.
-Communication: It should involve bottom-up and top-bottom parts. Communication must be devised so that fears will be overcome and adoption of program will be successful.
Of course, communications should be designed on a audience basis.
-Security/Role Development: It involves grouping different tasks and transactions and giving authority to appropriate person to view appropriate data. There will be many requests to examine other transactions than previously planned ones but as long as job did not change, it should be rejected.
-Super User Development: Super user is a computer literate, helpful person who is responsible for communicating the system to people and for helping fellow employees to use the interface. The person does these along with his/her regular tasks. This is an important part to over come friction in the organization via communication. Super users should be trained further, though.
- Business Process Procedures: It is mapping business processes of the company (workflows) so as getting ready them before training. Also, pre-ERP business processes and post-ERP processes should be mapped along with implementation.
Day 3 - Lesson learned - Seçil Akdemir
There are 3 types of Opportunities:
In-house developed systems
Best of breed approach – taking the best systems from different vendors
ERP system
Keep legacy system and improve whatever needs improvement
1st stage: Current SWOT analysis
2nd stage: Future SWOT analysis
3rd stage: Options in order to reach future desired and estimated state
4th stage: Choose the provider and the system
These vendors come to the potential companies and talk about their systems.
Companies should ask lots of questions in order to understand the exact benefits of the vendor system since there could be extra costs or different needs in order to use that feature.
Sales people do the presentations most of the time, implementers are different people. So, sales people do not care much.
Best of breed: bargaining power is the main advantage; hopefully you take the best products of each vendor so you can achieve a better system at the end.
But you have to manage the upgrades of different companies. You always have to manage the integration points.
Cost disadvantage since you need different consultants for each product.
If there is no clear documentation of business processes, then it means they do not know the business processes in detail.
When you buy an ERP system, it comes with some business processes in mind. So consultants have generally in depth knowledge in terms of generic business processes.
Sales people generally do not want to use information systems:
Since they are paid in terms of their sales amount so they do not want to share the information with others within the company
In most of the companies, they do not have good evaluation systems so they are not interested in seeing the reports of sales people
Moreover, sales people are only interested in sales and if reporting is not a part of the evaluation process they would not report.
Organizational Change Management Presentation
In many ERP projects, most of the companies did not consider the organization change part of this project.
Communicating expectations is a key part of OCM.
OCM is a series of initiatives to prepare your company to the change.
Commitment of the employees is also important for OCM.
Technical stuff vs. people stuff
People stuff is training, communications, security authorization, super user organization, business process procedures. These are all initiatives that involve changing people behavior.
Technical stuff is blueprinting, configuring and etc.
Which one is harder to change?
Company culture really matters in strategic changes and decisions. Culture includes values the company holds, behaviors, leadership, and customers.
Culture and the view points really affect the success of the project.
Training has several elements:
Core team training is important so they will be involved more and understand the features of the system
Management seminar – ensure management understands what is going on
End user training:
Training needs analysis
Develop course contents
Deliver training courses
After training – practice before go live
Getting employees to see SAP as an organization and business process change
When training is approached as a software project, participants focus on “how to perform their own transactions”
1st part of the OCM is the training and the 2nd part is the communication.
Communication
It is important in order to take support and commitment of every department and user.
Security / Role Development
At the beginning defining the end users access needs could be a difficult task.
Super User Development
Use these people to increase the communication within the organization. Also, we can use these users for training purposes. Super users could be used to elevate problems. To distribute support within the organization is the main idea.
You want people who know about the process.
You select the key users – good workers. They need to be helpful. You need to ensure that super users know where to get help.
Super user workshops can be useful in terms of improving the ERP system.
Super user trainings can be organized so they will transfer their knowledge to the regular users.
Business Process Procedures
BPP is a document to define steps – how each transaction is used within SAP system as configured in your company.
OCM initiatives are inter-related – support and enhance each other.
OCM is hard stuff because you are talking about changing people.
Do plan the OCM and have a significant budget. At least 10% of implementation cost should be put apart for this purpose.
In-house developed systems
Best of breed approach – taking the best systems from different vendors
ERP system
Keep legacy system and improve whatever needs improvement
1st stage: Current SWOT analysis
2nd stage: Future SWOT analysis
3rd stage: Options in order to reach future desired and estimated state
4th stage: Choose the provider and the system
These vendors come to the potential companies and talk about their systems.
Companies should ask lots of questions in order to understand the exact benefits of the vendor system since there could be extra costs or different needs in order to use that feature.
Sales people do the presentations most of the time, implementers are different people. So, sales people do not care much.
Best of breed: bargaining power is the main advantage; hopefully you take the best products of each vendor so you can achieve a better system at the end.
But you have to manage the upgrades of different companies. You always have to manage the integration points.
Cost disadvantage since you need different consultants for each product.
If there is no clear documentation of business processes, then it means they do not know the business processes in detail.
When you buy an ERP system, it comes with some business processes in mind. So consultants have generally in depth knowledge in terms of generic business processes.
Sales people generally do not want to use information systems:
Since they are paid in terms of their sales amount so they do not want to share the information with others within the company
In most of the companies, they do not have good evaluation systems so they are not interested in seeing the reports of sales people
Moreover, sales people are only interested in sales and if reporting is not a part of the evaluation process they would not report.
Organizational Change Management Presentation
In many ERP projects, most of the companies did not consider the organization change part of this project.
Communicating expectations is a key part of OCM.
OCM is a series of initiatives to prepare your company to the change.
Commitment of the employees is also important for OCM.
Technical stuff vs. people stuff
People stuff is training, communications, security authorization, super user organization, business process procedures. These are all initiatives that involve changing people behavior.
Technical stuff is blueprinting, configuring and etc.
Which one is harder to change?
Company culture really matters in strategic changes and decisions. Culture includes values the company holds, behaviors, leadership, and customers.
Culture and the view points really affect the success of the project.
Training has several elements:
Core team training is important so they will be involved more and understand the features of the system
Management seminar – ensure management understands what is going on
End user training:
Training needs analysis
Develop course contents
Deliver training courses
After training – practice before go live
Getting employees to see SAP as an organization and business process change
When training is approached as a software project, participants focus on “how to perform their own transactions”
1st part of the OCM is the training and the 2nd part is the communication.
Communication
It is important in order to take support and commitment of every department and user.
Security / Role Development
At the beginning defining the end users access needs could be a difficult task.
Super User Development
Use these people to increase the communication within the organization. Also, we can use these users for training purposes. Super users could be used to elevate problems. To distribute support within the organization is the main idea.
You want people who know about the process.
You select the key users – good workers. They need to be helpful. You need to ensure that super users know where to get help.
Super user workshops can be useful in terms of improving the ERP system.
Super user trainings can be organized so they will transfer their knowledge to the regular users.
Business Process Procedures
BPP is a document to define steps – how each transaction is used within SAP system as configured in your company.
OCM initiatives are inter-related – support and enhance each other.
OCM is hard stuff because you are talking about changing people.
Do plan the OCM and have a significant budget. At least 10% of implementation cost should be put apart for this purpose.
Day 3 Article Learnings - Can Altay
* We always say that ERP is only a tool and it does not necessarily improve your business, but it may require for companies to change or reengineer their business processes before implementing it. However, if there is lack of control, problems will definitely arise.
* We need to find a match between the ERP and system processes through customizing both the system and the organization.
* Technical customization: Changing the system à this includes module selection, table configuration and code modification. As you move towards code modification, the cost increases.
* Process customization: Changes in tasks and resources, incremental changes in relationships, rethinking and radical redesign. As you make more radical changes, customization increases.
* Determine where your business fits within these customization options and make your decision accordingly (matrix, 3 levels on process change capability, 3 levels on technical change capability-Tables II,III and IV in Luo and Strong).
* Volkoff article talks about the difficulties in implementing different pricing strategies to the ERP system and hence the difficulties faced by the firm in billing its customers. However, it also mentions a culture that has no discipline, no control and no desire to change at all. With these in mind, they would like to implement ERP and find solutions for the pricing module. In my opinion, it is a mistake to implement ERP in such an organizational culture.
* We need to find a match between the ERP and system processes through customizing both the system and the organization.
* Technical customization: Changing the system à this includes module selection, table configuration and code modification. As you move towards code modification, the cost increases.
* Process customization: Changes in tasks and resources, incremental changes in relationships, rethinking and radical redesign. As you make more radical changes, customization increases.
* Determine where your business fits within these customization options and make your decision accordingly (matrix, 3 levels on process change capability, 3 levels on technical change capability-Tables II,III and IV in Luo and Strong).
* Volkoff article talks about the difficulties in implementing different pricing strategies to the ERP system and hence the difficulties faced by the firm in billing its customers. However, it also mentions a culture that has no discipline, no control and no desire to change at all. With these in mind, they would like to implement ERP and find solutions for the pricing module. In my opinion, it is a mistake to implement ERP in such an organizational culture.
Day 3 Learnings - Can Altay
I will try to keep it as concise as possible.
* We have learned about the SAP software in general, which was a different experience. I experienced that the SAP is pretty complicated and difficult to use for first timers. No wonder people have high resistance against using it! However, it would be nice to simulate a business flow using different modules, so that we could see how convenient SAP makes people do business.
* Sales people think ERP is a waste of time and do not want to use it.
* OCM: Organizational Change Management. Communication is essential. Changing organizations and people seem easy, but actually people can be very resistant against change. The first-hand example is me, who was resistant to use the SAP during the lab session, when I experienced how difficult it is to use it. That is why OCM exists and companies depend highly on it.
* We learned about Super Users. I remember that from every department a super user is picked and those people form the core team for the ERP system. They wear different t-shirts and hats to distinguish themselves in a funny way within the organization.
* Business Processes and Procedures: Deciding on which documents to control and store, where and how to control and store these documents.
* We have learned about the SAP software in general, which was a different experience. I experienced that the SAP is pretty complicated and difficult to use for first timers. No wonder people have high resistance against using it! However, it would be nice to simulate a business flow using different modules, so that we could see how convenient SAP makes people do business.
* Sales people think ERP is a waste of time and do not want to use it.
* OCM: Organizational Change Management. Communication is essential. Changing organizations and people seem easy, but actually people can be very resistant against change. The first-hand example is me, who was resistant to use the SAP during the lab session, when I experienced how difficult it is to use it. That is why OCM exists and companies depend highly on it.
* We learned about Super Users. I remember that from every department a super user is picked and those people form the core team for the ERP system. They wear different t-shirts and hats to distinguish themselves in a funny way within the organization.
* Business Processes and Procedures: Deciding on which documents to control and store, where and how to control and store these documents.
Day 3 - Articles key points - Seçil Akdemir
Configuring on ERP System: Introducing Best Practices or Hampering Flexibility
The key personnel from the key departments related to the ERP module should be placed in the ERP implementation project team in order to assess the suitability of the ERP system to the process.
Employees, departments and end users of ERP systems should be convinced related to the benefits of ERP implementation before the implementation starts.
ERP projects could be beneficial in terms o f assessing and determining the main business strategy of the related departments since before the implementation every department should analyze and re-examine their processes in detail in order to match the process and the system.
Highly customization of ERP systems could be risky in terms of obtaining future help and upgrades. Moreover, excessive customization could be very costly for the company.
Systems used for core activities of the firms should be examined in more detail before the implementation since they are the strategic ones.
In order to integrate the activities, business process rules must be carefully specified and data must be defined in ways that make sense for different department users.
Key department should certainly be involved in order to sustain the future health of the ERP system because if they were not involved then, they would not know the essentials of the system. Therefore, they will create new stuff that does not fit with the system.
To conclude, implementing an ERP system in an environment with no control, no discipline and no desire to change would not work.
A Framework for Evaluating ERP Implementation Choices
The most important issue in ERP implementation is catching the match between the ERP system and the business processes of the firm.
In order to match these two things, companies should assess their technical and process change capabilities and the overall capabilities.
Traditionally, systems were developed and designed in order to fit with the current business processes of the firms but now many experts suggest that it is less costly and easier to change the business processes for the ERP systems.
ERP implementation is a very challenging task since it results in large-scale organizational changes.
Every ERP system has a generic best practice in mind but as discussed in the paper these best practices are not universal and there exist some cultural differences between companies.
The key personnel from the key departments related to the ERP module should be placed in the ERP implementation project team in order to assess the suitability of the ERP system to the process.
Employees, departments and end users of ERP systems should be convinced related to the benefits of ERP implementation before the implementation starts.
ERP projects could be beneficial in terms o f assessing and determining the main business strategy of the related departments since before the implementation every department should analyze and re-examine their processes in detail in order to match the process and the system.
Highly customization of ERP systems could be risky in terms of obtaining future help and upgrades. Moreover, excessive customization could be very costly for the company.
Systems used for core activities of the firms should be examined in more detail before the implementation since they are the strategic ones.
In order to integrate the activities, business process rules must be carefully specified and data must be defined in ways that make sense for different department users.
Key department should certainly be involved in order to sustain the future health of the ERP system because if they were not involved then, they would not know the essentials of the system. Therefore, they will create new stuff that does not fit with the system.
To conclude, implementing an ERP system in an environment with no control, no discipline and no desire to change would not work.
A Framework for Evaluating ERP Implementation Choices
The most important issue in ERP implementation is catching the match between the ERP system and the business processes of the firm.
In order to match these two things, companies should assess their technical and process change capabilities and the overall capabilities.
Traditionally, systems were developed and designed in order to fit with the current business processes of the firms but now many experts suggest that it is less costly and easier to change the business processes for the ERP systems.
ERP implementation is a very challenging task since it results in large-scale organizational changes.
Every ERP system has a generic best practice in mind but as discussed in the paper these best practices are not universal and there exist some cultural differences between companies.
Day 2 Learnings
After the review of the previous class
- Siebel is CRM software product of Oracle.
- With CRM software, customer data such as transaction frequency and habits is stored in a database.
- Using this data and after analysis with relevant tools, sales and profitability figures can be increased substantially.
- There were too many details about the infrastructure of Siebel which were not so relevant to the course material, in my opinion.
- ERP is just a tool, so it does not guarantee to make good results. Therefore, companies should carefully decide on whether they need ERP or not as it is an expensive software!
- A company can need an ERP system for:
- Data integrity and data sharing
- Efficiency
- Accurate Accounting
- High control level
- Before the decision to implement an ERP system, two main analysis should be conducted: SWOT analysis and GAP analysis.
- Internal (strensths and weaknesses) and external (opportunities and threats) analysis are both of the interest of SWOT analysis.
- We should conduct SWOT analysis both for current position of the company and for the position after a possible implementation of ERP system. By this way, we will be able to see the benefits and additional capabilities related to implementation of ERP system.
- In the GAP analysis, the company determines where it want to be and currently where it is now. Then, the company decide on the proper strategy or steps to reduce this gap between current and desired states.
- Elevator speech is a speech by which someone try to transfer its ideas to probably his executive in just a few seconds or very short time. As it goes on only within a very short time, it is informal and it does not include details of the idea.
day 3 readings by ahmet k
ERP is a tool, however, business may need to change in order to implement it.
Problems may arise in environments where there is no control.
Also, there should be a need for change for a successful implementation
---
match erp system & business pocesses
change system: technical customization
change busines: process customization
technical customization:
module selection, table configuration, and code modification
as you move right, cost increases
process customization:
changes in tasks & resources, incremental changes in relationships, fundamental rethinking and radical redisgn of elements
as you move right, customization increases
make matrix of these 6 items 3x3 and determine where a business fits
technical change capability:
overall ability to customize ERP systems; 3 levels
-understanding of default ERP system processes, configurations, and built-in options
-develop and modify large-scale software in a networked database environment
-organization’s ability to manage large-scale systems development projects
process change capability:
overall ability to customize business processes; 3 levels
-understand their existing business processes and their business environment
-design new or changed business processes, as well as implement these designs
-managing and coordinating large-scale business process changes
make a matrix 3x3 and see what an organization can do
no worries, training & hiring consultants help to improve these capabilities
do the feasibility using the 2 matrices and decide what to do
Problems may arise in environments where there is no control.
Also, there should be a need for change for a successful implementation
---
match erp system & business pocesses
change system: technical customization
change busines: process customization
technical customization:
module selection, table configuration, and code modification
as you move right, cost increases
process customization:
changes in tasks & resources, incremental changes in relationships, fundamental rethinking and radical redisgn of elements
as you move right, customization increases
make matrix of these 6 items 3x3 and determine where a business fits
technical change capability:
overall ability to customize ERP systems; 3 levels
-understanding of default ERP system processes, configurations, and built-in options
-develop and modify large-scale software in a networked database environment
-organization’s ability to manage large-scale systems development projects
process change capability:
overall ability to customize business processes; 3 levels
-understand their existing business processes and their business environment
-design new or changed business processes, as well as implement these designs
-managing and coordinating large-scale business process changes
make a matrix 3x3 and see what an organization can do
no worries, training & hiring consultants help to improve these capabilities
do the feasibility using the 2 matrices and decide what to do
Key Points of Day 3 Articles
Configuring an ERP System: Introducing Best Practices of Hampering Flexibility?
Similar to the lessons learned from the class discussions and other articles, implementation of ERP will not help unless you have a certain strategy with well-defined business processes, plans, and discipline. In this case, benefiting from each flexibility capability of the system makes things more complex and does not lead to anywhere. Rather, flexibility capabilities of the systems should be utilized in line with the organization’s business units’ strategies, plans, and rules.
Also, having employees in each business unit ready for implementation by believing that there is need for it is crucial in the success of the implementation project. In this case, design and implementation of the order management module became too difficult since marketing people – the key personnel knowing the flow well – were not enthusiastic and motivated for implementation. They did not believe in the benefits of ERP to their business and therefore were not helpful to the project team.
We have discussed the importance of having people knowing the flows well in the implementation project teams. It has been pointed out that from each key business unit related with each module to be implemented, people who know the work flows, processes, and the general practices well should be involved. This issue’s importance is also seen in this PSDC case. Order management is well known by marketing and sales people since they do the daily practices, but for reasons I have mentioned above, they do not get involved in the implementation preparation work. Rather, a manager in finance gets responsibility for this. However, the work gets stuck after a point since nobody in the team really knows the marketing-ordering-pricing procedures. So, it is understood that for every implementation case, people form the related departments should be involved.
A Framework for Evaluating ERP Implementation Choices:
Different from our class discussions, in describing ERP, the risks involved with its implementation, its benefits and the reasons for failure; the article points out that there is a gap between the producers of the system and the implementers. Sales staff of the ERP vendor and third party consultants physically contact with the organization (the implementer) rather than the system writers.
As another issue, it is pointed out that ERP is a package solution and it is designed for serving as many customers as it is possible. So, it is not a tool that is designed for individual organizations; rather, it is an industry best-practice application. Also, the article points out some researchers thinking that the systems are actually not universal indeed.
Customization:
The success of the implementation relies upon the fit between business processes and ERP systems. There is a positive correlation between the success and the fit. Accomplishing this fit is the main goal of customization.
Customization is defined in two parts: technical customization (adapting the system to the current business processes) & process customization (vice versa).
Technical Customization: There are three types: (1) module selection, (2) table configuration, and (3) code modification. Module selection consists of the least level of customization; there is no altering of the system but it is usually not sufficient for the needs of the organizations. Table configuration contains risk and necessitates a well understanding of the configurable options within the system. Code customization is the extreme of customization where the codes are re-written for some processes. While it provides the greatest flexibility to the organizations, it involves the highest risk among the technical customization options.
Process Customization: The categories are: (1) no change, (2) incremental change, and (3) radical change. If the company does not prefer to change the relationships among tasks and configurations of resources, then it goes with the no-change option. If improvements are decided to be made between the relationships among tasks and configurations of resources, it is the incremental change category. Or, the company may go with an extreme change of its processes; radical change. (Table 2 in the article).
For customization, it is clear that organizations must have some capabilities. These are classified under two headings in the article: Technical change capability & Process change capability; each related with technical customization and process customization, respectively.
Technical Change Capability: It is the overall capability for technical customization of the ERP systems. It includes understanding ERP configurations, options, the ability to develop large-scale software in every aspect, and the ability to manage this system with enough resources.
Process Change Capability: The capability to customize the organization’s business processes consists of having a ‘change’ capability on the enterprise scale with a design capability and creative thinking. As in the technical change capability case, it also necessitates managerial abilities for organizational change and project management.
Table 3 summarizes well that how the overall capability for customization is evaluated by the article.
These capabilities are not static; they can be improved in time by learning from experiences.
The Public University (PU) case shows that different levels of customizations according to the related capabilities of the organization may be applied for each module of the system. There is not only one way to customize general for the whole modules of the ERP system to be implemented since ERP implementation is actually not a single individual project. Rather, it is a portfolio of projects.
In conclusion, before implementation, the organizations should: (1) identify the fit between its own business processes and the selected ERP system, and (2) evaluate its own ability to manage these changes.
Similar to the lessons learned from the class discussions and other articles, implementation of ERP will not help unless you have a certain strategy with well-defined business processes, plans, and discipline. In this case, benefiting from each flexibility capability of the system makes things more complex and does not lead to anywhere. Rather, flexibility capabilities of the systems should be utilized in line with the organization’s business units’ strategies, plans, and rules.
Also, having employees in each business unit ready for implementation by believing that there is need for it is crucial in the success of the implementation project. In this case, design and implementation of the order management module became too difficult since marketing people – the key personnel knowing the flow well – were not enthusiastic and motivated for implementation. They did not believe in the benefits of ERP to their business and therefore were not helpful to the project team.
We have discussed the importance of having people knowing the flows well in the implementation project teams. It has been pointed out that from each key business unit related with each module to be implemented, people who know the work flows, processes, and the general practices well should be involved. This issue’s importance is also seen in this PSDC case. Order management is well known by marketing and sales people since they do the daily practices, but for reasons I have mentioned above, they do not get involved in the implementation preparation work. Rather, a manager in finance gets responsibility for this. However, the work gets stuck after a point since nobody in the team really knows the marketing-ordering-pricing procedures. So, it is understood that for every implementation case, people form the related departments should be involved.
A Framework for Evaluating ERP Implementation Choices:
Different from our class discussions, in describing ERP, the risks involved with its implementation, its benefits and the reasons for failure; the article points out that there is a gap between the producers of the system and the implementers. Sales staff of the ERP vendor and third party consultants physically contact with the organization (the implementer) rather than the system writers.
As another issue, it is pointed out that ERP is a package solution and it is designed for serving as many customers as it is possible. So, it is not a tool that is designed for individual organizations; rather, it is an industry best-practice application. Also, the article points out some researchers thinking that the systems are actually not universal indeed.
Customization:
The success of the implementation relies upon the fit between business processes and ERP systems. There is a positive correlation between the success and the fit. Accomplishing this fit is the main goal of customization.
Customization is defined in two parts: technical customization (adapting the system to the current business processes) & process customization (vice versa).
Technical Customization: There are three types: (1) module selection, (2) table configuration, and (3) code modification. Module selection consists of the least level of customization; there is no altering of the system but it is usually not sufficient for the needs of the organizations. Table configuration contains risk and necessitates a well understanding of the configurable options within the system. Code customization is the extreme of customization where the codes are re-written for some processes. While it provides the greatest flexibility to the organizations, it involves the highest risk among the technical customization options.
Process Customization: The categories are: (1) no change, (2) incremental change, and (3) radical change. If the company does not prefer to change the relationships among tasks and configurations of resources, then it goes with the no-change option. If improvements are decided to be made between the relationships among tasks and configurations of resources, it is the incremental change category. Or, the company may go with an extreme change of its processes; radical change. (Table 2 in the article).
For customization, it is clear that organizations must have some capabilities. These are classified under two headings in the article: Technical change capability & Process change capability; each related with technical customization and process customization, respectively.
Technical Change Capability: It is the overall capability for technical customization of the ERP systems. It includes understanding ERP configurations, options, the ability to develop large-scale software in every aspect, and the ability to manage this system with enough resources.
Process Change Capability: The capability to customize the organization’s business processes consists of having a ‘change’ capability on the enterprise scale with a design capability and creative thinking. As in the technical change capability case, it also necessitates managerial abilities for organizational change and project management.
Table 3 summarizes well that how the overall capability for customization is evaluated by the article.
These capabilities are not static; they can be improved in time by learning from experiences.
The Public University (PU) case shows that different levels of customizations according to the related capabilities of the organization may be applied for each module of the system. There is not only one way to customize general for the whole modules of the ERP system to be implemented since ERP implementation is actually not a single individual project. Rather, it is a portfolio of projects.
In conclusion, before implementation, the organizations should: (1) identify the fit between its own business processes and the selected ERP system, and (2) evaluate its own ability to manage these changes.
Lessons Learned Posting (June 23, 2008)
We have completed our discussion about strategy and potential analyses about strategy: The organization should first make a SWOT analysis for its current state and for a future state that is planned. In order to be able to make these analyses successfully, workshops may be arranged before these SWOTs. Then, considering both of the analyses for current and future states, options for ERP (keep legacy – best-of-breed – ERP – in-house development) should be evaluated by asking the question: “Will it help us to reach the future state?” and the provider can be chosen at last.
We have also discussed when choosing the provider, how can a firm get to know the provider firm. We have talked about the presentations, seminars, meetings, etc. by giving the SAP Users Group.
It was also noted in the discussions that, there is the risk of losing your bargaining power as an organization once you signed the contract with the provider – especially, with a major provider in the sector. This again brings us to the discussion that being a small customer of a major provider may include high risks associated. In order not to lose the power within the relationship, the company may choose to work with a small vendor, but as we discussed in the first two days, this has its own disadvantages too.
We have discussed about the “homework” of the organizations before the implementation. This includes to analyze your business processes well by making workshops and to ensure the knowledge exchange with the consultants during the implementation. If the organization has not done its homework, the consultants should be making them to do that.
Organization Change Management (OCM)
· It is clear that organizations go into a radical change when ERP implementation decision has been made. The change should be managed as well as the implementation project itself. The change should be treated as an individual project and be managed accordingly. There should be a dedicated team / leader to the change management.
· We have discussed the Welch Allyn case that OCM has been applied very successfully; but it was clear that managing it (with the trainings organized, the communication capabilities involved, business processes analyzed & documented) isn’t actually as simple as it seems.
· In the Welch Allyn case, OCM was implemented in five parts: (1) Training, (2) Communication, (3) Security/Role Development, (4) Super User Development, and (5) Business Process Procedures (BPPs).
· In analyzing the change, the culture of the organization should be emphasized. It may prevent the implementation of the strategy as it is. This may be seen in all of the five parts of OCM. When trying to manage the change, strategy may cause things to change from planned: “Culture eats strategy for breakfast everyday”.
· Training: Training is so important that, it should be treated and managed as an individual project itself. There are several stages of training: core-team training, management training, and end-user training. Culture, as mentioned before, plays a significant role in the success of training programs. Training and getting efficient results from it is indeed difficult since the employees would be reluctant for training due to their busy jobs and workloads. Also, the training materials and the design of the classes/class hours, the shifts should all be organized well and according to people’s programs. Training materials should include thing for practice as well as the theory of the system.
· Communication: It is needed very importantly in order to gain the commitment of everyone within the organization. Having a communications plan is a must; it states the communication channels defined for each group of audiences within the company and the schedules. Communication channels differ according to the audience and the specific goals of the communication with that audience group. In the Welch Allyn case, the success of the communications plan was not tested, but, in the class, we have discussed that it can be tested through different measures.
· Security/Role Development: This includes identifying the accesses of every employee to the system and it comes with defining the roles of everyone within the system. In order to define the roles, the transactions should be grouped and analyzed by looking at each individual and their participation of each flow. Then, we may decide about their roles and the relevant accesses to be given to them. Accesses may differ as monitoring access, modifying access, deleting access, etc. Each line manager should be included in this process since they are knowledgeable about the processes. Also, there needs to be a process to change or modify the accesses after they have been assigned to everyone – there should at least someone assigned for this because needs for modification will definitely occur after implementation as people start to practice their everyday-jobs with the system.
· Super User Development: It is the key component for communication. Super user means a person responsible for leading the implementation and helping to the people to start to use the software in their everyday practices; on a departmental basis. Approximately 10% of end-users should be chosen as super users to help others. This also reduces the otherwise significant workload on the helpdesk. Super users may be selected among best knowledgeable people; but not always, since they may not be enthusiastic; the motivation of the employee to become a super-user is in most of the cases more important. There should also be some super-user workshops and trainings and some benefits (like bonuses or additional fringe benefits) may be given to the super-users in order to motivate them and to make their job more appealing.
· Business Process Procedures: They are the documents specifying business processes; that are, specifying how each transaction is used within SAP system as configured in the company. This is about documentation management; documenting the workflows/business processes.
· The meaning of the workflow is similar with that of the business process.
· Preparing the business processes should be a concurrent process with implementation. The goal is to get them ready for training purposes and Go Live use; the output of BPP is an input for training.
· Plan for OCM should have a separate budget; at least 10% of the implementation budget.
· Identifying key people is crucial in OCM.
· The main failure would be to consider OCM as solely a technical project.
We have also discussed when choosing the provider, how can a firm get to know the provider firm. We have talked about the presentations, seminars, meetings, etc. by giving the SAP Users Group.
It was also noted in the discussions that, there is the risk of losing your bargaining power as an organization once you signed the contract with the provider – especially, with a major provider in the sector. This again brings us to the discussion that being a small customer of a major provider may include high risks associated. In order not to lose the power within the relationship, the company may choose to work with a small vendor, but as we discussed in the first two days, this has its own disadvantages too.
We have discussed about the “homework” of the organizations before the implementation. This includes to analyze your business processes well by making workshops and to ensure the knowledge exchange with the consultants during the implementation. If the organization has not done its homework, the consultants should be making them to do that.
Organization Change Management (OCM)
· It is clear that organizations go into a radical change when ERP implementation decision has been made. The change should be managed as well as the implementation project itself. The change should be treated as an individual project and be managed accordingly. There should be a dedicated team / leader to the change management.
· We have discussed the Welch Allyn case that OCM has been applied very successfully; but it was clear that managing it (with the trainings organized, the communication capabilities involved, business processes analyzed & documented) isn’t actually as simple as it seems.
· In the Welch Allyn case, OCM was implemented in five parts: (1) Training, (2) Communication, (3) Security/Role Development, (4) Super User Development, and (5) Business Process Procedures (BPPs).
· In analyzing the change, the culture of the organization should be emphasized. It may prevent the implementation of the strategy as it is. This may be seen in all of the five parts of OCM. When trying to manage the change, strategy may cause things to change from planned: “Culture eats strategy for breakfast everyday”.
· Training: Training is so important that, it should be treated and managed as an individual project itself. There are several stages of training: core-team training, management training, and end-user training. Culture, as mentioned before, plays a significant role in the success of training programs. Training and getting efficient results from it is indeed difficult since the employees would be reluctant for training due to their busy jobs and workloads. Also, the training materials and the design of the classes/class hours, the shifts should all be organized well and according to people’s programs. Training materials should include thing for practice as well as the theory of the system.
· Communication: It is needed very importantly in order to gain the commitment of everyone within the organization. Having a communications plan is a must; it states the communication channels defined for each group of audiences within the company and the schedules. Communication channels differ according to the audience and the specific goals of the communication with that audience group. In the Welch Allyn case, the success of the communications plan was not tested, but, in the class, we have discussed that it can be tested through different measures.
· Security/Role Development: This includes identifying the accesses of every employee to the system and it comes with defining the roles of everyone within the system. In order to define the roles, the transactions should be grouped and analyzed by looking at each individual and their participation of each flow. Then, we may decide about their roles and the relevant accesses to be given to them. Accesses may differ as monitoring access, modifying access, deleting access, etc. Each line manager should be included in this process since they are knowledgeable about the processes. Also, there needs to be a process to change or modify the accesses after they have been assigned to everyone – there should at least someone assigned for this because needs for modification will definitely occur after implementation as people start to practice their everyday-jobs with the system.
· Super User Development: It is the key component for communication. Super user means a person responsible for leading the implementation and helping to the people to start to use the software in their everyday practices; on a departmental basis. Approximately 10% of end-users should be chosen as super users to help others. This also reduces the otherwise significant workload on the helpdesk. Super users may be selected among best knowledgeable people; but not always, since they may not be enthusiastic; the motivation of the employee to become a super-user is in most of the cases more important. There should also be some super-user workshops and trainings and some benefits (like bonuses or additional fringe benefits) may be given to the super-users in order to motivate them and to make their job more appealing.
· Business Process Procedures: They are the documents specifying business processes; that are, specifying how each transaction is used within SAP system as configured in the company. This is about documentation management; documenting the workflows/business processes.
· The meaning of the workflow is similar with that of the business process.
· Preparing the business processes should be a concurrent process with implementation. The goal is to get them ready for training purposes and Go Live use; the output of BPP is an input for training.
· Plan for OCM should have a separate budget; at least 10% of the implementation budget.
· Identifying key people is crucial in OCM.
· The main failure would be to consider OCM as solely a technical project.
Lessons Learned Day 3
What can we do instead of implementing an ERP system.
- Best of breed (best solutions/modules from different providers and their comination)
- Customized development (in-house development)
- Keep going and improve whatever needs to be improved
- Convert everything to MS Excel
yERP so what?
The first task is to select the provider; for this you,
Research
Invite/presentations, let vendors talk
Look at what others do
You should not rely on the presentations; ask a lot of questions about features etc; price and licenses..
Extras, costs, man hours should be asked for.
There are SAP groups where you can learn about what I should ask my vendor
You should keep in mind that vendors are not implementing
Best of breed solutions have certain disadvantages as;
Difficulty in managing upgrades
Integration problems
Different systems, different admin skills (coding language or what)
Cost disadvantage? Different types of consultancy costs will incur
Best of breed, is it the best in terms of functionality? Some people claim this however this might not be the case.
To be successful in the implementation prior to the ERP your homework is to analyze your processes. As a consultant in order to find out if they did their homework look if they ask questions, if they say yes to everything, if they don’t know why they implement ERP, if they don’t have documentation of business processes. If they don’t have it you should have them go through this. Workshops can be conducted for this.
ERP comes with certain flexibility, and when consultants come there is some exchange of knowledge/information.
For the selection process it seems infeasible to check whatever is possible with that solution. Vendor presentations, and talking to people who use ERP is what you can do.
After selection go through courses/trainings to see how it goes with your functions.
Sales people keep track of information about their customers.
They don’t want to share information because you work on commissions, they build personal relationships which makes them powerful, salespeople don’t take this process as a part of their job it just looks like time consuming task with no benefits to them.
There needs to be a mechanism for evaluation and make people write down the information.
Organization Change Management
OCM is regarded as soft stuff but turns to be hard, since appropriate resources are usually not allocated.
OCM initiative can improve company’s success levels.
What is OCM?
Serious set of actions
People’s job changes
Communication is a key point
Ask questions, why are you here, what’s your involvement, do you have a dedicated team
In the example given the company was growing and the IT was not supportive enough.
A single global system was to be implemented.
The project was led by the VP as Champion.
Technical stuff
People stuff
OCM
Training
Security and role development
Business process procedure
Communications
Super user development
- Culture eats strategy for breakfast every day
Culture should allow (make room for) change (entrepreneurial vs. bureaucratic, risk taking conservative, trust vs. fear, etc.)
Underestimation of the complexity leads to unsuccessful projects.
There is not so much time, they have work plus training and on the top practice is required
Learn as less as possible, just what you need.
Just tell me the answer
Question the purpose
- Training starts with the core team training. (information exchange, understand the capabilities)
- Management seminar
- End user training (training needs, contents, delivery, after training-practice) exams, qualifiers before giving access.
Refresher courses are necessary for newcomers.
Courses are though, you have to prepare courses, write down material, come up with exercises and the set up must be done.
Set-up classes.
Who will train? Do you have your own key people managers that can contribute to the training, who could deliver the training?
An outsider specialist does not know your company, and your processes, they need to be backed up about the process.
Hire documentation specialists
Arrange training and manage back up for your functions.
Sending invites, make sure people come to class.
1 administrator and one database for the training
COMMUNICATIONS
Is all communication the same?
We need to communicate with end users, other plants, organizations.
Main goal is the consensus; avoid fear anxiety, insecurity among employees.
In a communications plan: stakeholder and audience, channel, objectives, frequency, communicator, date and time should be included.
Team lunch, impact project management team meeting, impact newsletter, weekly sire leader, cost of meetings
Branding, banners, boards
How to measure effectiveness is difficult.
Do people show up?
Polls? Might be ways of measurement
No time, there is real work to do is the people’s attitude.
SECURITY
Role development and security
You look at what people do at a company, define transactions and group them. These groups are your roles.
Then you look at the individuals and assign roles to them.
There are also view roles only.
When you go live you need to modify access, and change security roles.
Roles are built from scratch there might be templates
SUPER USERS
Super users are knowledgeable, you go to them when you have questions, they help elevate problems, 10% about all users. They also need help and learn throughout time.. they learn with the helpdesk, helpdesks know about all transactions.
When you go live there should be a certain level of understanding.
You select super users there are more than one, and they are chosen on departmental basis.
Super user location and function matrix.
Super user workshops and trainings separately, so they can help others.
BUSINESS PROCESS PROCEDURES
Documentation creation and management.
Not the same as configuration management.
If you do after implementation you won’t be able to use it for training.
The goal is to get them ready concurrently.
Difference from business blue print? Transactional, blue print is a managerial tool. You don’t use blue prints for documentation, blue print is mapping your procedures.
Security will determine training courses
BPP output is training document input.
Super users are key communication, key feedback on security
KEY learning points
Changing people!
Do plan!
Plan budget and resources! At least 10% for OCM
People initiatives
You need to focus on people even though this is a software project
- Best of breed (best solutions/modules from different providers and their comination)
- Customized development (in-house development)
- Keep going and improve whatever needs to be improved
- Convert everything to MS Excel
yERP so what?
The first task is to select the provider; for this you,
Research
Invite/presentations, let vendors talk
Look at what others do
You should not rely on the presentations; ask a lot of questions about features etc; price and licenses..
Extras, costs, man hours should be asked for.
There are SAP groups where you can learn about what I should ask my vendor
You should keep in mind that vendors are not implementing
Best of breed solutions have certain disadvantages as;
Difficulty in managing upgrades
Integration problems
Different systems, different admin skills (coding language or what)
Cost disadvantage? Different types of consultancy costs will incur
Best of breed, is it the best in terms of functionality? Some people claim this however this might not be the case.
To be successful in the implementation prior to the ERP your homework is to analyze your processes. As a consultant in order to find out if they did their homework look if they ask questions, if they say yes to everything, if they don’t know why they implement ERP, if they don’t have documentation of business processes. If they don’t have it you should have them go through this. Workshops can be conducted for this.
ERP comes with certain flexibility, and when consultants come there is some exchange of knowledge/information.
For the selection process it seems infeasible to check whatever is possible with that solution. Vendor presentations, and talking to people who use ERP is what you can do.
After selection go through courses/trainings to see how it goes with your functions.
Sales people keep track of information about their customers.
They don’t want to share information because you work on commissions, they build personal relationships which makes them powerful, salespeople don’t take this process as a part of their job it just looks like time consuming task with no benefits to them.
There needs to be a mechanism for evaluation and make people write down the information.
Organization Change Management
OCM is regarded as soft stuff but turns to be hard, since appropriate resources are usually not allocated.
OCM initiative can improve company’s success levels.
What is OCM?
Serious set of actions
People’s job changes
Communication is a key point
Ask questions, why are you here, what’s your involvement, do you have a dedicated team
In the example given the company was growing and the IT was not supportive enough.
A single global system was to be implemented.
The project was led by the VP as Champion.
Technical stuff
People stuff
OCM
Training
Security and role development
Business process procedure
Communications
Super user development
- Culture eats strategy for breakfast every day
Culture should allow (make room for) change (entrepreneurial vs. bureaucratic, risk taking conservative, trust vs. fear, etc.)
Underestimation of the complexity leads to unsuccessful projects.
There is not so much time, they have work plus training and on the top practice is required
Learn as less as possible, just what you need.
Just tell me the answer
Question the purpose
- Training starts with the core team training. (information exchange, understand the capabilities)
- Management seminar
- End user training (training needs, contents, delivery, after training-practice) exams, qualifiers before giving access.
Refresher courses are necessary for newcomers.
Courses are though, you have to prepare courses, write down material, come up with exercises and the set up must be done.
Set-up classes.
Who will train? Do you have your own key people managers that can contribute to the training, who could deliver the training?
An outsider specialist does not know your company, and your processes, they need to be backed up about the process.
Hire documentation specialists
Arrange training and manage back up for your functions.
Sending invites, make sure people come to class.
1 administrator and one database for the training
COMMUNICATIONS
Is all communication the same?
We need to communicate with end users, other plants, organizations.
Main goal is the consensus; avoid fear anxiety, insecurity among employees.
In a communications plan: stakeholder and audience, channel, objectives, frequency, communicator, date and time should be included.
Team lunch, impact project management team meeting, impact newsletter, weekly sire leader, cost of meetings
Branding, banners, boards
How to measure effectiveness is difficult.
Do people show up?
Polls? Might be ways of measurement
No time, there is real work to do is the people’s attitude.
SECURITY
Role development and security
You look at what people do at a company, define transactions and group them. These groups are your roles.
Then you look at the individuals and assign roles to them.
There are also view roles only.
When you go live you need to modify access, and change security roles.
Roles are built from scratch there might be templates
SUPER USERS
Super users are knowledgeable, you go to them when you have questions, they help elevate problems, 10% about all users. They also need help and learn throughout time.. they learn with the helpdesk, helpdesks know about all transactions.
When you go live there should be a certain level of understanding.
You select super users there are more than one, and they are chosen on departmental basis.
Super user location and function matrix.
Super user workshops and trainings separately, so they can help others.
BUSINESS PROCESS PROCEDURES
Documentation creation and management.
Not the same as configuration management.
If you do after implementation you won’t be able to use it for training.
The goal is to get them ready concurrently.
Difference from business blue print? Transactional, blue print is a managerial tool. You don’t use blue prints for documentation, blue print is mapping your procedures.
Security will determine training courses
BPP output is training document input.
Super users are key communication, key feedback on security
KEY learning points
Changing people!
Do plan!
Plan budget and resources! At least 10% for OCM
People initiatives
You need to focus on people even though this is a software project
Monday, June 23, 2008
day 3 learnings by ahmet k
Alternatives if there is need for change:
-Keep Legacy & improve
-ERP
-Best of Breed Apps
-In house Development
A good homework for the company: Analyze the business & form a core team
Sales People: don't want to lose time with things other then sales, unless its in their benefits in terms of remuneration. They don't want to share their secrets, nor customers.
OCM
---------------
Organizational Change Management
Communication is key!
A series of steps to prepare organization for changes
-Training
-Security/Role Development
-Super User Development
-Business Process Procedures
-Communications
Culture:
entrepreneur vs bureaucratic
team vs independant
risk vs conservative
structure vs variable
plan x3 vs ready, fire, aim (!!)
trust vs fear
Training:
Core team training
Management Seminar
End user training
Communications:
get support of workers
inform them!
-channels: team lunch & learns, newsletter, meetings, e-mails
Security/Role Development:
start with key managers!
then, bottom-up, what kind of special roles needed in addition to the ones specified generally
determine what each employee can & can't do!
Super User Development:
idea is to distribute support in community
Business Processes & Procedures:
what docs to control & store, where & how to control & store
Document business processes procedures!
BPP-a document to define steps, how each transaction is used within SAP system as configured in your company. get them ready & use in trainings.
Changing organization & people seems easy, but it is not. Thats why OCM exists!
-Keep Legacy & improve
-ERP
-Best of Breed Apps
-In house Development
A good homework for the company: Analyze the business & form a core team
Sales People: don't want to lose time with things other then sales, unless its in their benefits in terms of remuneration. They don't want to share their secrets, nor customers.
OCM
---------------
Organizational Change Management
Communication is key!
A series of steps to prepare organization for changes
-Training
-Security/Role Development
-Super User Development
-Business Process Procedures
-Communications
Culture:
entrepreneur vs bureaucratic
team vs independant
risk vs conservative
structure vs variable
plan x3 vs ready, fire, aim (!!)
trust vs fear
Training:
Core team training
Management Seminar
End user training
Communications:
get support of workers
inform them!
-channels: team lunch & learns, newsletter, meetings, e-mails
Security/Role Development:
start with key managers!
then, bottom-up, what kind of special roles needed in addition to the ones specified generally
determine what each employee can & can't do!
Super User Development:
idea is to distribute support in community
Business Processes & Procedures:
what docs to control & store, where & how to control & store
Document business processes procedures!
BPP-a document to define steps, how each transaction is used within SAP system as configured in your company. get them ready & use in trainings.
Changing organization & people seems easy, but it is not. Thats why OCM exists!
Learning Post (June 18,2008)
Review:
There is no certain fact that one kind of ERP vendor (whether a major firm, a small vendor, or open source) is superior to others. We should evaluate all pros and cons of each type of vendor and make a decision among them considering our company’s specific conditions and needs.
We should ensure that some knowledge is left in-house during the implementation. There would be always someone in the organization that became a star during this process by gaining expertise about ERP by utilizing from the consultants. In that case, the management should focus on the ways to keep these personnel in-house by giving them additional benefits. As an example, we have discussed the packaging woman in a factory that became the star of SAP implementation.
Oracle Siebel CRM:
The film about MyProjectHelp.com (Siebel CRM) has showed us that Customer Relationship Management (CRM) can be also made more efficient through ERP systems. Siebel is a system designed for CRM by Oracle. Implementing this system is actually about the needs of the company; systems can be designed according to the needs of the company related with its CRM strategy.
Building the ERP Business Case:
Why should a company choose to implement ERP? The main reasons we have discussed were to have more control, to share information, for process innovation & automation, accounting & reporting purposes, data integrity, effective communication of data & processes. Also when ERP is implemented, fewer people would be maintaining the same functions and time/human capital savings are also important.
The most important point in the decision of the implementation of ERP is that it does not make you competitive if it is not implemented well – that is, according to the nature of the business and to the needs of the organization. So, only way to justify the implementation of ERP should be strategic reasons more than reasons such as cost-cutting purposes.
Why should a company not choose to implement ERP? After the strategic decisions (evaluation of how ERP can make easier to accomplish the strategic objectives), the main considerations would be cost and time in giving this decision. The organization may not have enough staff and/or money for ERP. In addition, the readiness of the administration and the organization in general is crucial because as we have discussed, implementation of ERP would not be smooth certainly. So, you need to ensure that the organization is ready for change. Otherwise, the transformation can result in failure or and event it does not, resistance to use the new system would cause huge problems and inefficiencies.
While implementing ERP, some systems become more efficient while others may become inefficient due to some inflexibility in the system. This is similar to the situation of the Ohio plant in the “Why ERP?” book. The important thing is that when we sum up these efficiencies and inefficiencies, the dominant one should be the efficiencies increased by the implementation.
The decision of the implementation of ERP should be given in line with the strategic objectives and/or roadmap of the company. ERP is just a tool rather than a strategy; so it should be implemented only if it would help the firm to accomplish its strategic goals. Some strategic analyses should be made before giving the implementation decision. Among these analyses, we have discussed SWOT Analyses and GAP Analyses.
In GAP Analysis, the company identifies where it aims to be and compares it with its current situation, then defines a roadmap. This also includes enterprise architecture. For instance, the current situation can be defined as enterprise architecture 1 (EA1) and it is compared with the planned/desired future situation EA2 by a GAP analysis.
Executives should identify the following points during giving the implementation decision: improvement opportunities, benefits, benefit categories, the implementation plan, and the metrics. These analyses should be combined with an overall matrix in order to have a look at the bigger picture.
We should keep in mind the business objectives, critical success factors, key performance indicators, and the benefits of each of the areas.
There is no certain fact that one kind of ERP vendor (whether a major firm, a small vendor, or open source) is superior to others. We should evaluate all pros and cons of each type of vendor and make a decision among them considering our company’s specific conditions and needs.
We should ensure that some knowledge is left in-house during the implementation. There would be always someone in the organization that became a star during this process by gaining expertise about ERP by utilizing from the consultants. In that case, the management should focus on the ways to keep these personnel in-house by giving them additional benefits. As an example, we have discussed the packaging woman in a factory that became the star of SAP implementation.
Oracle Siebel CRM:
The film about MyProjectHelp.com (Siebel CRM) has showed us that Customer Relationship Management (CRM) can be also made more efficient through ERP systems. Siebel is a system designed for CRM by Oracle. Implementing this system is actually about the needs of the company; systems can be designed according to the needs of the company related with its CRM strategy.
Building the ERP Business Case:
Why should a company choose to implement ERP? The main reasons we have discussed were to have more control, to share information, for process innovation & automation, accounting & reporting purposes, data integrity, effective communication of data & processes. Also when ERP is implemented, fewer people would be maintaining the same functions and time/human capital savings are also important.
The most important point in the decision of the implementation of ERP is that it does not make you competitive if it is not implemented well – that is, according to the nature of the business and to the needs of the organization. So, only way to justify the implementation of ERP should be strategic reasons more than reasons such as cost-cutting purposes.
Why should a company not choose to implement ERP? After the strategic decisions (evaluation of how ERP can make easier to accomplish the strategic objectives), the main considerations would be cost and time in giving this decision. The organization may not have enough staff and/or money for ERP. In addition, the readiness of the administration and the organization in general is crucial because as we have discussed, implementation of ERP would not be smooth certainly. So, you need to ensure that the organization is ready for change. Otherwise, the transformation can result in failure or and event it does not, resistance to use the new system would cause huge problems and inefficiencies.
While implementing ERP, some systems become more efficient while others may become inefficient due to some inflexibility in the system. This is similar to the situation of the Ohio plant in the “Why ERP?” book. The important thing is that when we sum up these efficiencies and inefficiencies, the dominant one should be the efficiencies increased by the implementation.
The decision of the implementation of ERP should be given in line with the strategic objectives and/or roadmap of the company. ERP is just a tool rather than a strategy; so it should be implemented only if it would help the firm to accomplish its strategic goals. Some strategic analyses should be made before giving the implementation decision. Among these analyses, we have discussed SWOT Analyses and GAP Analyses.
In GAP Analysis, the company identifies where it aims to be and compares it with its current situation, then defines a roadmap. This also includes enterprise architecture. For instance, the current situation can be defined as enterprise architecture 1 (EA1) and it is compared with the planned/desired future situation EA2 by a GAP analysis.
Executives should identify the following points during giving the implementation decision: improvement opportunities, benefits, benefit categories, the implementation plan, and the metrics. These analyses should be combined with an overall matrix in order to have a look at the bigger picture.
We should keep in mind the business objectives, critical success factors, key performance indicators, and the benefits of each of the areas.
Day 3 Learnings
Summary:
Elevator speech,
used to convey an idea using implications on key performance indicators.
SWOT Analysis,
needs to be done prior to ERP implementation decision.
GAP Analysis
Options:
1- Keep legacy and improve it: some companies who implement erp return to legacy
2- Best of breed: has advantages of customization and quality but creates more overhead due to numerous upgrades. Also the programming language for each program is different, meaning highly skilled personnel may be needed for customization.
Best of breed may be different programs used together or applied on existing ERP systems with addons.
3- ERP
Consultant should check for documentation of business processes. If the company did not do its homework they will not have the required documentation. The consultant must address this problem before starting implementation. Exchange of information between consultant and company will show how the implementation will be undertaken. Learn how the ERP system works for your function(if you're a function manager).
4- Custom/In-house development
Considering the tool before SWOT & GAP analysis would create bias in analysis. You should first make the analysis then pick an option, or make the analysis for each system and pick the one that best fits.
Workshop-Current State-Future State-Options-System Provider selection(company representatives may come for sale, you can attend seminars, you can ask other companies who implemented these systems [ask questions!])
i.e. SAP users group
the sales people for the system are not usually implementation people, therefore not a very good source.
Siebel CRM - review
Sales software:
advantages: keeps record of customer information, and updates.
disadvantages: the salespeople like personal relationships and selling. They might not want to share the info or not have the time to record the data.
OCM: Organizational Change Management
Looks like the soft stuff but really is the hard stuff. People think implementation is the real thing, but OCM is more important.
OCM prepares the management team and employees for the change to be brought about by ERP.
WelchAllyn - Family Medical Business - f.1915
implemented SAP in 2004 in 2 plants.
Company goal: grow organicly and through acquisitions.
Old infrastructure cannot manage the change.
-6 team leaders (management team)
-23 full time project members
-system integrators - capgemini - 17 full time consultants
-2 years program with 40 people in a room.
The changes that pose a challenge:
technical stuff:
people stuff:
5 initiatives of OCM:
Elevator speech,
used to convey an idea using implications on key performance indicators.
SWOT Analysis,
needs to be done prior to ERP implementation decision.
GAP Analysis
Options:
1- Keep legacy and improve it: some companies who implement erp return to legacy
2- Best of breed: has advantages of customization and quality but creates more overhead due to numerous upgrades. Also the programming language for each program is different, meaning highly skilled personnel may be needed for customization.
Best of breed may be different programs used together or applied on existing ERP systems with addons.
3- ERP
Consultant should check for documentation of business processes. If the company did not do its homework they will not have the required documentation. The consultant must address this problem before starting implementation. Exchange of information between consultant and company will show how the implementation will be undertaken. Learn how the ERP system works for your function(if you're a function manager).
4- Custom/In-house development
Considering the tool before SWOT & GAP analysis would create bias in analysis. You should first make the analysis then pick an option, or make the analysis for each system and pick the one that best fits.
Workshop-Current State-Future State-Options-System Provider selection(company representatives may come for sale, you can attend seminars, you can ask other companies who implemented these systems [ask questions!])
i.e. SAP users group
the sales people for the system are not usually implementation people, therefore not a very good source.
Siebel CRM - review
Sales software:
advantages: keeps record of customer information, and updates.
disadvantages: the salespeople like personal relationships and selling. They might not want to share the info or not have the time to record the data.
OCM: Organizational Change Management
Looks like the soft stuff but really is the hard stuff. People think implementation is the real thing, but OCM is more important.
OCM prepares the management team and employees for the change to be brought about by ERP.
WelchAllyn - Family Medical Business - f.1915
implemented SAP in 2004 in 2 plants.
Company goal: grow organicly and through acquisitions.
Old infrastructure cannot manage the change.
-6 team leaders (management team)
-23 full time project members
-system integrators - capgemini - 17 full time consultants
-2 years program with 40 people in a room.
The changes that pose a challenge:
technical stuff:
people stuff:
5 initiatives of OCM:
- training:
core team training(onsite and offsite), management seminar, end user training (training needs analysis, develop course contents, deliver training courses, practice before go live, refresher courses for newcomers) - communications:
Communication plan: Content, audience, method of expression, frequency, who will deliver, origin, time.
Evaluations, motivation.
Fishbone analysis: Potential failure areas / impact / likelihood / solution - security role development
Groups of users in each functional area: new responsibilities after SAP? New jobs evolve? New SAP transactions to do the job?
Groups: Sales & Marketing (Sales, customer service, repair), Manufacturing (Production, forecasting)
Assess group functions and potential functions and give roles in bundle of transactions accordingly. There also are readonly roles. tedious procedure top-down then bottom-up.
Once gone live, roles will be adjusted. - super user organization
Develop the SUO: Determine objectives, identify criteria, identify 10% of end users as candidates, select and train super users, help desk, communications.
are people who know the processes and should be very helpful people. - business processes & procedures [BPP]
strategy & tactics to capture, document and control business process & procedures
what, where & how to control & store documents
website for easy access to SAP online help
actions can be recorded with screenshots to create tutorials for different transactions
Security will define roles... different courses for each role.
What is the company culture?
values, beliefs etc.
expressed in employee behavior
management sets tone
influenced by customers
usually revealed in problem solving
examples:
entrepreneurial vs bureucratic
team focus vs independent
risk taking vs risk averse
trust vs fear
Any questions?
Day 2 Learnings
CRM (Customer Relationship Management) is a cross-functional process that connects companies to the customers on the basis. They can be supported by the information technology systems. Its aim is to provide the direct access to the customer for responding its needs.
ERP systems have brought many benefits to the business environment. However it requires a very accurate and large scaled data input to provide the benefits. Although these conditions are satisfied, an ERP system still can fail, because there is another predecessor of the ERP. This predecessor is making an accurate analysis that will provide important vision about the susceptibility of our processes to ERP. These analyses are as follows:
SWOT analysis: The name SWOT abbreviates the Strengths, Weaknesses, Opportunities and Threats terms at once. As it is understood from the meanings of the terms, it involves the specified factors that will affect the future of the project or business.
GAP analysis: Likewise its name, it is a measurement tool to predict the gap between your capability and your target.
Elevator speech: The declaration that is directly focused on the main arguments. It reflects an overview about the subject.
Day 2 Articles
The ERP Purchase Decision: Influential Business and IT Factors
The objective of performing the research was to determine a set of business and IT factors that influence the purchase of ERP systems.
In the research a literature review on the potential ERP package capabilities was completed.
Five major vendors of the ERP (SAP, Oracle, PeopleSoft, Baan, J.D. Edwards) have occurred since 1997. SAP holds the largest market share.
Vendors are developing faster implementation methodologies and specific industry solutions to provide easier and less costly service for mid- and small-sized firms which will provide larger market spectrum.
In early 1990s, the ability to better meet various competitive goals, the desire to reengineer business processes, and access to integrated data were three influencing business capabilities of the ERP purchases. In these years, many businesses started BPR initiatives to achieve the results that will support their current system is inadequate in performing their BPR efforts.
Currently the experiences have shown that the business should be matched to the software rather than matching the software to the business. Therefore, implementing an ERP simultaneously results into reengineering business processes and replacing legacy systems.
In the second half of the 1990s, replacing the aging mainframe systems with modern enterprise-wide client-server architectures, replacement of legacy systems that no longer meet the firm’s needs, reducing the information systems costs by buying rather than building software were the three influencing IT capabilities for the ERP purchases.
And also between 1996 and 1999 avoiding year 2000 problems by adopting an ERP seemed reasonable for some companies. And at the same time they could improve their information systems capabilities.
As a conclusion, the results from the factor analyses are as; the four business factors are, data integration, new ways of doing business, global capabilities, flexibility/agility; and the four IT factors are IT purchasing, IT cost reduction, IT expertise, and IT architecture. And the Y2K problems affected the purchases before 2000.
Efe Bio
Hi! I am still an undergraduate in Industrial Engineering in
During my academic lifetime, I have completed two different internships at Tepe Betopan and Philips-Turk T.A.S. In this period, I have experienced production planning, product design and sales & export environment. During my internship in Philips-Turk T.A.S I performed madly efforts to experience S.A.P modules; unfortunately they never let me to do it. Anyway, this year I have been involved in a design and implementation of a MRP system for the boeing 737-800 aircrafts repair and maintanence parts Project with my five collegues from university. And, as i have learned from the Project and from the I.E courses, i have recognized the importance of the ERP systems and my intention to work on it.
My career goal is, to achieve a statue of systems and processes analyst as an Industrial Engineer that is capable of analyzing, interpreting and performing further researches, improvements and innovations for systems and processes.
The MBA675 ERP Systems: Strategy and Practice course will help me in learning the general knowledge and experiences of the ERP systems from the Business Administrator`s point of view. The benefits of this course will be crucial for me, in terms of gaining the necessary knowhow about the ERP systems, as a systems and processes engineer candidate.
The interesting thing about me is; i am stil an undergraduate waiting to be graduated at end of 2007-2008 summer semester, alhough i take this course by obligation, i am glad to have the chance to benefit from it to achieve my career goals. However, i have regretfully got used to be a late reacting person (in terms of accomplishing the given tasks on time) within slowly processing undergraduate environment compared to MBA. I hope i will beat this threat in this course.
Sunday, June 22, 2008
"Why ERP" Learnings (Can Kızılay)
The main character is Billy, a manufacturing manager at a furniture production plant in North Carolina. He faced the ERP implementation. Other main characters are Proffesor who provides advice, and Ruth, who owns the local cafe.
This is a book on ERP. These systems are large computer systems that integrate application programs in accounting, sales manufacturing and others. This integration is accomplished with a database shared by all the application programs. ERP systems integrate production, accounting, billing, and other tasks, usually separate, applications together. When a customer service representative takes a sales order it is entered in the common database and in the other applications where it is needed, for example, in the manufacturing backlog, the credit system and the shipping schedule. ERP systems real-time, meaning that the data is avaliable on time. Further, many of these systems are global. Since they can be deployed at aywhere around the world, they can work in different languages and currencies.
ERP has massive management and implementation issues associated with the systems. There are obviously deficiencies involved. Billy learns about ERP systems like SAP R/3 and installing them. Billy’s boss, Mr. McDougle, who owns the company, has an opportunity to expand the business by buying his brother’s furniture manufacturing plant in Ohio. The plant in Ohio is already using SAP R/3 and Mr. McDougle wants to get some efficiency by running the same software at both plants.
Billy goes to an SAP training seminar, he attends the seminar to learn more about the system and to determine whether it is appropriate for his company. He is shown the SAP R/3 software, some of the functionality like reservation or financial terms such as accounts payable terms, how the hardware is configured and a technique to help with the implementation. The program is also adaptable to ongoing changes. He learns that it is a massive process that requires a major business process analysis before the implementation. ERP increases the data integrity a lot but also, it requres a real time data input that my change the business. There are a lot of codes and logic implementations to run the ERP. A knowledge of programming is not sufficient also, management knowledge related to the company is key issues for success of an ERP system.
There is also a system called ASAP namely the Accelerated SAP which is a version that is start up customizable version of SAP and more implementable for smaller companies.
ERP reduces double effort, conflicting datas related to same subject, datas are real time accessible, data loss is minimized.
Billy has to imlement SAP installation in use at the Ohio plant. He travels to Ohio and learns about how that plant works and compares it. What is obvious is that SAP is crucial for Ohio plant since they have massive production with little variability. (less customized products) The vendors use the same system which increases integrity from vendors through customers. But this is not the case in North Carolina they have really have less production capability when compared. And, they customized products which an ERP system can not handle it easily. So, the ERP system in Ohio is not directly implementable to the North Carolina Plant. At least this issue needs detailed business process analysing with the help of consultants. Only a computer guy is not sufficient. So, he ends up with all kinds of questions about transferring the software from the Ohio plant to the North Carolina plant. In the end, Billy presents his boss with his recommendations that only the accounting module is implementable at least firstly and develops some guidelines. But the boss did not listen to him and the implementation turns to be a real failure. Such as they have lost the orders, they had to increase inventory, the efficiency drop.
Day 2 Learnings (Can Kızılay)
The CRM namely the Customer Relationship Managment is a process, a set of information technologies, that focuses on customers so that firms have a knowledge of their needs, wants, and buying patterns. In this way, CRM helps companies understand, as well as anticipate, the needs of current and potential customers.
Main providers of CRM are Oracle, SAP, Peoplesoft. The Siebel CRM belongs to Oracle. The Siebel has many advantages against its competitors, which can be stated as,
1) Highest market share
2) Easy to implement
3) High number of integration points
4) User friendly
5) Easy to configure
6) Easy administration and maintenance
Industry specific solutions help the CRM applications more customised. There are some industry specific solutions of Siebel CRM, which are,
1) Consumer Goods
2) Finance
3) Pharma
4) Energy
5) Media
6) Clinic
Siebel CRM has some applications like,
1) Employee application
a)Call center
b)Sales
c)Field Service
2) Partner Application
a)Partner Portal
b)Partner Manager
3) Customer Application
a)Advisor
b)Orders
c)Prices
d)Service
e)Sales
Siebel CRM has also 5 different Client configuration,
1) Web Client
2) Handheld Client
3) Wireless Web Client
4) Mobile Web Client
5) Dedicated Web Client
The physical architecture of Siebel CRM consists of,
1)Enterprise Server
a)Gateway Server
b)Siebel Server(s)
2)Web Server
3)Siebel File System
4)Database Server
Why should a company not implement an ERP system? The main reasons are initial costs, the costs don’t justify the benefits, organization readiness, not enough staff for this time consuming operation, belief of no need for growth, knowledge and capability are not accessible.
ERP systems change the way people do business, since it requires so much input data from the business. The costs of running ERP systems on a company makes it feasible for big companies. Also, the analyses whether or not a ERP system is needed is crucial to increase the possibility of success. The main failure is because of mostly the succesfull analysis is not implemented. The Potential Analysis are,
1) SWOT Analysis
As mjority of the M BA students know, SWOT stands for the Strengths, Weaknesses, Opportunities and Threats of a company. The Strengths, Weaknesses terms are internal part of analysis and, Opportunities, Threats are external part of analysis.
2) GAP Analysis
It is a measure that states difference between where you want to be and your capabilities. It analysis whether you are able to implement.
3) Elevator Speech
The main things that should be addressed are the product service solution, problem it addresses, what does it do, how it works and benefits.
Executives identify mainly, improvement opportunities, benefits, implementation plan and metrics
Day 1 Learnings (Can Kızılay)
ERP know as Enterprise Resource Planning is an IT implementation that connects the business units. It is an Information Technology term referring to a hardware or software system that serves all departments within an enterprise.
Mostly ERPs are multilungual systems that can serve global enterprises where the users in different countries, these systems can also integrate the tax issues and currency rates related to different countries.
The ERP is mostly generated from the term MRP but it can serve much more than MRP which is related with production department. It has financial, human resources, marketing, customer relationship management and many more aspects.
All ERP implementations are not successfull in fact the success ratio is around 60%
There are mainly four types of ERP systems.
1) Major ones
You have to pay license fees and most probably some consultinf fees for implementations related to this type, you should also have the appropriate infrastructure. These vendors are Oracle, SAP, People soft, etc. Major players have higher support, more professional(less failures) but more costly.
2)Minor ones
As well as the major ones you have to pay licencing, consulting fees and for infrastructure. These are smaller vendors that are newer to business. These are cheaper, mostly specialized but less support
3) Open-source ones
These are license free ones where you can easily access the code and customize according to your needs, you may have no consultancy or available if you only pay for it. You still need some infrastructure.
4) On-demand systems
These systems have the advantege which you don’t have massive infrastructure needed for implementation since all the application runs online.
Data warehouse is the common term for all ERP systems, where all the data is stored and accessed from datawarehouse. Datamining is the consept where you access to data warehouse collect the related data that you need for your application or forecast calculations.
Why ERP? - Summary
Billy is a manager at a furniture company. His friend, a professor at the local college, is studying ERP systems. They drink coffee together at the Cafe, and talk.
Billy was on vacation for two weeks and when he came back almost everything was going at its normal pace. His company is a very informal one where interdepartmental procedures are a joke. Communication between departments is done by paperwork and is so slow that by the time paperwork is processed for a job at one department, the job at the next department may already be finished.
He found out in a few days that their company is going to acquire a facility in Ohio which is implementing SAP. The chairman wants the two facilities to be integrated and asks him to find out about SAP and report on whether they should use it or not.
At first, when Billy asks Prof about it, it appears SAP is just the right answer for their problems, - the silver bullet. But as he learns more about the requirements of the system, his opinion shifts. He attends a seminar on SAP following Prof's advice and his manager's orders.
The food at the seminar is good. We get these kinds of irrelevant details all through the book since it is written in novel format; I skipped most of them.
One nice thing about the novel format was to see different perspectives on the rather academic information given at times. For example Billy talks in his head during the seminar questioning the information given.
a key point at the seminar that came up quite many times: "[In order to benefit from SAP R/3] you would have to make sure that the management roles were appropriately defined, the performance measures were correct, and the incentives were right."
A common information system prevents redundant paperwork, and provides better communication. SAP R/3 is comprehensive. It has many options and many programs in it. User-friendly interface enables anyone in the firm to use the clients.
SAP uses AND, OR, XOR logical commands, Function, Event, Process Path variables for all programs. Simple and logical.
Programs explained: Scheduler,
SAP requires discipline!
ASAP: Accelerated SAP installation system.
has 5 phases: Project Preparation, Business Blueprint, Realization, Final Preparation, Go Live & Support. 6 month or 9 month programs for installation are available.
ASAP is to be further customized according to needs after Go Live phase.
Customer Order Demo: Shows the flow of events and entries made in the system. The data given to the system ends up finally in the financial statements.
MRP example:
1- requirements planning is made with the forecasts using historical data. Various forecast methods are available.
2- master scheduling is made according to the forecast and can be customized for variations. Safety stock, or inventory pile up may be arranged using the system.
3- Manufacturing plan is made using the items that influence profitability.
Many types of reports and tables can be produced using the system.
... to be edited
Billy was on vacation for two weeks and when he came back almost everything was going at its normal pace. His company is a very informal one where interdepartmental procedures are a joke. Communication between departments is done by paperwork and is so slow that by the time paperwork is processed for a job at one department, the job at the next department may already be finished.
He found out in a few days that their company is going to acquire a facility in Ohio which is implementing SAP. The chairman wants the two facilities to be integrated and asks him to find out about SAP and report on whether they should use it or not.
At first, when Billy asks Prof about it, it appears SAP is just the right answer for their problems, - the silver bullet. But as he learns more about the requirements of the system, his opinion shifts. He attends a seminar on SAP following Prof's advice and his manager's orders.
The food at the seminar is good. We get these kinds of irrelevant details all through the book since it is written in novel format; I skipped most of them.
One nice thing about the novel format was to see different perspectives on the rather academic information given at times. For example Billy talks in his head during the seminar questioning the information given.
a key point at the seminar that came up quite many times: "[In order to benefit from SAP R/3] you would have to make sure that the management roles were appropriately defined, the performance measures were correct, and the incentives were right."
A common information system prevents redundant paperwork, and provides better communication. SAP R/3 is comprehensive. It has many options and many programs in it. User-friendly interface enables anyone in the firm to use the clients.
SAP uses AND, OR, XOR logical commands, Function, Event, Process Path variables for all programs. Simple and logical.
Programs explained: Scheduler,
SAP requires discipline!
ASAP: Accelerated SAP installation system.
has 5 phases: Project Preparation, Business Blueprint, Realization, Final Preparation, Go Live & Support. 6 month or 9 month programs for installation are available.
ASAP is to be further customized according to needs after Go Live phase.
Customer Order Demo: Shows the flow of events and entries made in the system. The data given to the system ends up finally in the financial statements.
MRP example:
1- requirements planning is made with the forecasts using historical data. Various forecast methods are available.
2- master scheduling is made according to the forecast and can be customized for variations. Safety stock, or inventory pile up may be arranged using the system.
3- Manufacturing plan is made using the items that influence profitability.
Many types of reports and tables can be produced using the system.
... to be edited
"Why ERP" learnings - OnurOzensoy
Billy, who is working as a production manager for a North Carolinan up scale furniture company, is assigned to work on ERP systems, particularly SAP R\3. This assignment includes enrolling to a SAP implementation course and assessing the necessity and feasibility of installing such a system as the boss is planning to takeover family business up north. Billy shares ideas with a professor from local college, ve olaylar gelişir...
-There are typically many different tracking systems for the same good among different departments. (i.e. functional departments) This means several inputs for the same good which is vulnerable to late if human error. These departments, such as sales, production, marketing etc. are likely to have separate forecasts for the same periods. This lack of consistency among organization.
-ERP is a system that integrates data among all departments. It can be visualized as business processes such as ordering, preparation of bill of materials crossing different "supposedly" parallel functions such as HR, Production, Sales etc. But this will involve re-engineering of business processes as well as jobs of different people at different functional departments.
-As it is a useful management tool, it is not a silver bullet solution to a firm's efficiency problems. In this sense it is also not a competitive advantage itself, but rather becoming more of an operational necessity that is acquired to gain competitive parity.
-ERP saves time and introduces some extent of efficiency to the organization by integration process since there is now a single designation for a single good, a single forecast for a particular period of time etc. In addition to inter departmental integration and coordination, it may provide better coordination among geographically separate plants and quarters, making way to efficient global operations as well. SAP is especially well known for its global references and leader position in global applications.
-All of pros of ERP implementation is prone to skepticism. As some companies do not need integration between separate plants and/or are in need of constant customization (i.e. flexibility) it may not be feasible to install an ERP system. Similarly most of the companies need serious amount of training before-after implementation as well as involvement of key people in business processes. They should adopt the system and be willing to use it instead of being afraid of it.
-Configuration process involves scaling the software to suit the scale of the company, i.e. number of clients. It, as well, involves customization of software to adapt to different industries and also different target segments in the value map as illustrated in the Ohio vs. North Carolina plants. In the former, finished goods are produced quickly in the fashion of a manufacturing plant whereas latter involves hand made production processes, determination of each particular production cost to assess profitability and in-production tracking.
-Even if we assume successful configuration and scaling, business processes must be revised as well as informal relations between departments. For example, the decision to use what kind of a forecast will not be given by the software itself. It typically involves a committee to devise a brand new forecast tool. So ERP does not solve interdepartmental problems itself but implementation may serve as a platform to revise relations and business processes.
-However, designers embed "best practice" business processes into the software that dictates the organization to adopt this best way, eventually increasing efficiency. But, these should be not only industry specific but also company specific so during configuration one should avoid short cuts and also not depend on superiority of dictated processes for particular situation. Everything should be analyzed by a person within the business who knows the process, industry and company well.
-Rather than emphasizing on time, it would be beneficial for prosperous ERP user companies to assess business processes and revise them through time and involvement. This is not a fast process, unfortunately it is impossible to do actuarial calculation with time.
-Other than multi plant operations and coordination a firm may want to implement ERP because of e-commerce compatibility. For example prevention of sale of same good on internet and on showroom. In all cases assessment of needs, careful inspection of organization, business processes and availability of successful legacy systems are crucial for the success of implementation. This seems to be most valid reason to implement ERP.
-During the assessment and usage of ERP it is important to keep in mind that inputs are given to the integrated database. So if you throw garbage in it, organization will try to process garbage. Special care must be given to pre-implementation legacy inputs which may not be accurate.
-Even with the best information these systems are unable to do any analysis. So at the end of the day, what makes a firm look forward is human capital. However these systems are more likely to be the basis for future business intelligence analysis software. Also it may be seen that as ERPs become more common, standards about the software and implementation will be introduced like accounting standards.
-Accelerated SAP is a roadmap for implementation of SAP. It involves Project Preparation, Business Blueprint, Realization, Final Preparation and Go Live&Support. So it involves a lot of preparation but paces the speed up, decreases costs completing typically in 6-9 months. However this is exclusively for smaller firms that will not re-engineer their processes. For a guaranteed success, on the other hand, configuration should be detailed. Other than smaller companies change costs are also smaller for highly centralized low flexibility companies as well as not thoroughly established, new firms.
-It is important to give room for flexibility both for empowerment of employees and continuity of operations in smaller companies.
Miscellaneous Learning
-SAP stands for Systems, Applications, Processes. It is a real time updating integration program. (R of R3 stands for real-time, although they are no more named as Rx but as mySAP)
-SAP R3 supports different languages and currencies as well as taxation legislations.
-SAP R3 is a client/server application, it does not use mainframes.
-Numerous companies may run under same client code.
-SAP utilized a 3 tier architecture. A presentation layer connects to user via an interface, GUI-graphical user interface; the second one is application layer which involves business specific logic forming the program; a third layer is database layer which stores all information on the system.
-There are typically many different tracking systems for the same good among different departments. (i.e. functional departments) This means several inputs for the same good which is vulnerable to late if human error. These departments, such as sales, production, marketing etc. are likely to have separate forecasts for the same periods. This lack of consistency among organization.
-ERP is a system that integrates data among all departments. It can be visualized as business processes such as ordering, preparation of bill of materials crossing different "supposedly" parallel functions such as HR, Production, Sales etc. But this will involve re-engineering of business processes as well as jobs of different people at different functional departments.
-As it is a useful management tool, it is not a silver bullet solution to a firm's efficiency problems. In this sense it is also not a competitive advantage itself, but rather becoming more of an operational necessity that is acquired to gain competitive parity.
-ERP saves time and introduces some extent of efficiency to the organization by integration process since there is now a single designation for a single good, a single forecast for a particular period of time etc. In addition to inter departmental integration and coordination, it may provide better coordination among geographically separate plants and quarters, making way to efficient global operations as well. SAP is especially well known for its global references and leader position in global applications.
-All of pros of ERP implementation is prone to skepticism. As some companies do not need integration between separate plants and/or are in need of constant customization (i.e. flexibility) it may not be feasible to install an ERP system. Similarly most of the companies need serious amount of training before-after implementation as well as involvement of key people in business processes. They should adopt the system and be willing to use it instead of being afraid of it.
-Configuration process involves scaling the software to suit the scale of the company, i.e. number of clients. It, as well, involves customization of software to adapt to different industries and also different target segments in the value map as illustrated in the Ohio vs. North Carolina plants. In the former, finished goods are produced quickly in the fashion of a manufacturing plant whereas latter involves hand made production processes, determination of each particular production cost to assess profitability and in-production tracking.
-Even if we assume successful configuration and scaling, business processes must be revised as well as informal relations between departments. For example, the decision to use what kind of a forecast will not be given by the software itself. It typically involves a committee to devise a brand new forecast tool. So ERP does not solve interdepartmental problems itself but implementation may serve as a platform to revise relations and business processes.
-However, designers embed "best practice" business processes into the software that dictates the organization to adopt this best way, eventually increasing efficiency. But, these should be not only industry specific but also company specific so during configuration one should avoid short cuts and also not depend on superiority of dictated processes for particular situation. Everything should be analyzed by a person within the business who knows the process, industry and company well.
-Rather than emphasizing on time, it would be beneficial for prosperous ERP user companies to assess business processes and revise them through time and involvement. This is not a fast process, unfortunately it is impossible to do actuarial calculation with time.
-Other than multi plant operations and coordination a firm may want to implement ERP because of e-commerce compatibility. For example prevention of sale of same good on internet and on showroom. In all cases assessment of needs, careful inspection of organization, business processes and availability of successful legacy systems are crucial for the success of implementation. This seems to be most valid reason to implement ERP.
-During the assessment and usage of ERP it is important to keep in mind that inputs are given to the integrated database. So if you throw garbage in it, organization will try to process garbage. Special care must be given to pre-implementation legacy inputs which may not be accurate.
-Even with the best information these systems are unable to do any analysis. So at the end of the day, what makes a firm look forward is human capital. However these systems are more likely to be the basis for future business intelligence analysis software. Also it may be seen that as ERPs become more common, standards about the software and implementation will be introduced like accounting standards.
-Accelerated SAP is a roadmap for implementation of SAP. It involves Project Preparation, Business Blueprint, Realization, Final Preparation and Go Live&Support. So it involves a lot of preparation but paces the speed up, decreases costs completing typically in 6-9 months. However this is exclusively for smaller firms that will not re-engineer their processes. For a guaranteed success, on the other hand, configuration should be detailed. Other than smaller companies change costs are also smaller for highly centralized low flexibility companies as well as not thoroughly established, new firms.
-It is important to give room for flexibility both for empowerment of employees and continuity of operations in smaller companies.
Miscellaneous Learning
-SAP stands for Systems, Applications, Processes. It is a real time updating integration program. (R of R3 stands for real-time, although they are no more named as Rx but as mySAP)
-SAP R3 supports different languages and currencies as well as taxation legislations.
-SAP R3 is a client/server application, it does not use mainframes.
-Numerous companies may run under same client code.
-SAP utilized a 3 tier architecture. A presentation layer connects to user via an interface, GUI-graphical user interface; the second one is application layer which involves business specific logic forming the program; a third layer is database layer which stores all information on the system.
Lessons Learned - Wed1
An ERP system simply is a giant computer program that integrates multiple traditional programs before used by many companies. It is sold as a bundled program system by various companies such as Oracle, PeopleSoft, Baan, J.D. Edwards, and SAP. There also are open source versions of the program.
The type of ERP system defines unique attributes to the program. For example when an SAP P/3 can require many management decisions be taken prior to implementation and require further customization of the system according to the company structure, an in-house programming team may be able to write a more easy-to-implement version of ERP for certain companies. Besides, customizations on these programs may have to be remade when a software upgrade is to be made, as the upgrade will erase or disregard the customizations made before.
Open source systems are easier to understand and customize, but the costs of acquiring a programming team for their implementation may go beyond expectations. Open source systems may not be the highest quality either. Noone is earning money off them after all.
Since ERP systems are giant programs, they require the installation of a considerably large hardware system. In addition to the computers in offices and at facilities, a number of servers are needed. The example given by Mr.Kumar for Siebel was as follows:
Web server --- Enterprise server --- Database server --- File system server
Where the enterprise server is actually a gateway server that allocates data flow to and from a number of Siebel servers that do the processing.
A query is made from the Siebel client, which goes to the webserver, and then to the enterprise server. Data is collected from the database server and the employee files are collected from the file server. Then they are processed by the siebel servers according to the incoming flow of information.
Siebel has various clients such as the webclient (internet explorer!:)), handheld client, mobile webclient, etc. In short, Siebel simply made a client version for each type of hardware (PDA, laptop, PC) for users, and one mobile and one fixed client for programmers.
Building the ERP case
The advantage of using ERP is basically integration between traditionally disparate departments of an enterprise. Such integration reduces paperwork and simplifies procedures for management, in return resulting in better management of and communication within an enterprise.
The risks are mainly lack of know-how or scale to implement an ERP system. It is a costly system, and if not implemented correctly: garbage in, garbage out. Besides SMEs may not have the scale to benefit from many functions of an ERP, and therefore the benefits may be less than costs.
Elevator Speech
Short speech you make to introduce a concept to someone, usually the manager/CEO. It is intended to convey the whole idea in a few seconds/minute. Advantage: informal speech, nothing written, face-to-face. Disadvantage: short, lack of detail. Making good elevator speeches is important in business! You may not ever get the chance of talking to the CEO or having an appointment with the CEO. Once you see him/her you have to take your chance and use time wisely.
...to be edited.
The type of ERP system defines unique attributes to the program. For example when an SAP P/3 can require many management decisions be taken prior to implementation and require further customization of the system according to the company structure, an in-house programming team may be able to write a more easy-to-implement version of ERP for certain companies. Besides, customizations on these programs may have to be remade when a software upgrade is to be made, as the upgrade will erase or disregard the customizations made before.
Open source systems are easier to understand and customize, but the costs of acquiring a programming team for their implementation may go beyond expectations. Open source systems may not be the highest quality either. Noone is earning money off them after all.
Since ERP systems are giant programs, they require the installation of a considerably large hardware system. In addition to the computers in offices and at facilities, a number of servers are needed. The example given by Mr.Kumar for Siebel was as follows:
Web server --- Enterprise server --- Database server --- File system server
Where the enterprise server is actually a gateway server that allocates data flow to and from a number of Siebel servers that do the processing.
A query is made from the Siebel client, which goes to the webserver, and then to the enterprise server. Data is collected from the database server and the employee files are collected from the file server. Then they are processed by the siebel servers according to the incoming flow of information.
Siebel has various clients such as the webclient (internet explorer!:)), handheld client, mobile webclient, etc. In short, Siebel simply made a client version for each type of hardware (PDA, laptop, PC) for users, and one mobile and one fixed client for programmers.
Building the ERP case
The advantage of using ERP is basically integration between traditionally disparate departments of an enterprise. Such integration reduces paperwork and simplifies procedures for management, in return resulting in better management of and communication within an enterprise.
The risks are mainly lack of know-how or scale to implement an ERP system. It is a costly system, and if not implemented correctly: garbage in, garbage out. Besides SMEs may not have the scale to benefit from many functions of an ERP, and therefore the benefits may be less than costs.
Elevator Speech
Short speech you make to introduce a concept to someone, usually the manager/CEO. It is intended to convey the whole idea in a few seconds/minute. Advantage: informal speech, nothing written, face-to-face. Disadvantage: short, lack of detail. Making good elevator speeches is important in business! You may not ever get the chance of talking to the CEO or having an appointment with the CEO. Once you see him/her you have to take your chance and use time wisely.
...to be edited.
Book Summary (Serkan Kocak)
Why ERP?
Summary
As it can be understood from the name book is about ERP systems but it is about just these systems work, although there is that. The management and implementation of a system with its advantages and disadvantages are stated. However, one of the main points that are highlighted is the importance of decision to implement an ERP or not.
Billy who is a plant manager of furniture plant, who is aware of every process, is charged with a duty of deciding to implement an ERP system or not. Billy’s boss thought to buy his brother’s factory which seems to be similar but a different kind of furniture plant. Although targeted market and process of other plant is different, their ERP system is suggested for Billy’s plant. And also the likelihood of buying the other plant forces them to have a common system to control both plants. Therefore Billy forced to search ERP systems their benefits and drawbacks, implementation and management of these systems.
A professor is helping Billy about ERP and also Billy went to seminars to learn more about ERPs. Billy learned lots of things about ERP systems.
He had learned the usage areas of ERP systems (accounting, sales, finance…), the importance of an ERP system to manage multi-plant companies, differences and similarities between MRP and ERP systems. Billy saw lots of usage areas of ERP systems with their good results. Beside these the most important thing that he learned during this process is to decide to implement an ERP system or not.
Before implementing an ERP system the business characteristics should be analyzed in detail in order to find the best fitted ERP or to decide not to implement. And the usage of ERP system by a competitor or by a brother company can not be a reason to decide to have ERP. And lots of analyses such as SWOT, cost, feasibility, GAP… should be done just before decision.
As a result, Billy who is smart enough to understand their plant is not ready to such a system refused to have ERP. And he resigned from the company and become an ERP consultant because his boss did not listened to him and decided to implement ERP. He is not succeeding with his ERP system but Billy becomes an experienced consultant who knows ERP can be a best solution if it fits to company.
Summary
As it can be understood from the name book is about ERP systems but it is about just these systems work, although there is that. The management and implementation of a system with its advantages and disadvantages are stated. However, one of the main points that are highlighted is the importance of decision to implement an ERP or not.
Billy who is a plant manager of furniture plant, who is aware of every process, is charged with a duty of deciding to implement an ERP system or not. Billy’s boss thought to buy his brother’s factory which seems to be similar but a different kind of furniture plant. Although targeted market and process of other plant is different, their ERP system is suggested for Billy’s plant. And also the likelihood of buying the other plant forces them to have a common system to control both plants. Therefore Billy forced to search ERP systems their benefits and drawbacks, implementation and management of these systems.
A professor is helping Billy about ERP and also Billy went to seminars to learn more about ERPs. Billy learned lots of things about ERP systems.
He had learned the usage areas of ERP systems (accounting, sales, finance…), the importance of an ERP system to manage multi-plant companies, differences and similarities between MRP and ERP systems. Billy saw lots of usage areas of ERP systems with their good results. Beside these the most important thing that he learned during this process is to decide to implement an ERP system or not.
Before implementing an ERP system the business characteristics should be analyzed in detail in order to find the best fitted ERP or to decide not to implement. And the usage of ERP system by a competitor or by a brother company can not be a reason to decide to have ERP. And lots of analyses such as SWOT, cost, feasibility, GAP… should be done just before decision.
As a result, Billy who is smart enough to understand their plant is not ready to such a system refused to have ERP. And he resigned from the company and become an ERP consultant because his boss did not listened to him and decided to implement ERP. He is not succeeding with his ERP system but Billy becomes an experienced consultant who knows ERP can be a best solution if it fits to company.
Day 2 Articles (Serkan Kocak)
1- ERP Software
Enterprise Resource Planning (ERP) systems are formed to integrate information from several sources (departments) into a unified system. And the software of ERP allows collection and consolidation of this information across the enterprise.
An application of ERP; to eliminate paper based information system, to have efficient vendor relations, is given as an example to application areas. Tracking transactions brought very important advantage to the firm “consistency” by the implementation of ERP.
However, there are also some drawbacks; legacy paper based systems to single enterprise level program will take long time, duplication of data, not having management functions in storing data (to define the meaning of data stored).
The cost of the system can not be predicted because it depends on how many people will use it and how big is the company.
And the future step is to have a more intelligent program which has more managerial analysis inside.
2- Decision Making in the Evaluation, Selection and Implementation of ERP Systems
ERP projects can be thought as one of the most important projects which’s success or failure has a great impact on organization. So that evaluation, selection and implementation are very important for these project which’s methodologies are discussed in this paper.
After having some information (advantages) about ERP systems paper continues with the decision making models:
1) The Classical Model: to maximize goal achievements best alternative should be chosen
2) The Administrative Model: the ones who meet minimum requirements can be chosen
3) The incremental Model: the small incremental changes by making successive limited comparisons done
4) The Adaptive Model: mix of administrative and incremental model to find best
5) The Irrational Model: Decisions are not done according to a problem; decisions are product of organizational events.
6) The political Model: the decision making when the organizational goals become politics.
3- The ERP Purchase Decision: Influential Business and IT Factors
In this paper authors focuses on the influences of set of businesses and IT factors that are associated with the purchase of ERP systems.
After having brief information about ERP, the importance of business characteristics and ERP Package Capabilities is searched in literature. It is claimed that the ability to better meet various competitive goals, desire to reengineer business processes, and access to integrated data, are the three business capabilities that affects ERP purchases. And also IT capabilities such as: replacing with aging main frame systems with more modern, and reduction of information flow costs, and lastly Y2K kind of special problem solutions, are shown as IT factors that affect purchase.
4- Assessing the ERP Software
Larson Company, which are using an ERP system, wants to get something integrated to manage their supply chain totally in one system. Larson realized that SAP, Oracle and PeopleSoft are the major players in this market, which are ranked highest degrees in supply chain management modules. And also the other players of supply chain management market are analyzed. The existence of third-party software providers are mentioned and their expanding, partnering with specific ERP vendors are highlighted. At the end the weakness of ERP as not meeting the needs or inefficient functionality is stated.
Enterprise Resource Planning (ERP) systems are formed to integrate information from several sources (departments) into a unified system. And the software of ERP allows collection and consolidation of this information across the enterprise.
An application of ERP; to eliminate paper based information system, to have efficient vendor relations, is given as an example to application areas. Tracking transactions brought very important advantage to the firm “consistency” by the implementation of ERP.
However, there are also some drawbacks; legacy paper based systems to single enterprise level program will take long time, duplication of data, not having management functions in storing data (to define the meaning of data stored).
The cost of the system can not be predicted because it depends on how many people will use it and how big is the company.
And the future step is to have a more intelligent program which has more managerial analysis inside.
2- Decision Making in the Evaluation, Selection and Implementation of ERP Systems
ERP projects can be thought as one of the most important projects which’s success or failure has a great impact on organization. So that evaluation, selection and implementation are very important for these project which’s methodologies are discussed in this paper.
After having some information (advantages) about ERP systems paper continues with the decision making models:
1) The Classical Model: to maximize goal achievements best alternative should be chosen
2) The Administrative Model: the ones who meet minimum requirements can be chosen
3) The incremental Model: the small incremental changes by making successive limited comparisons done
4) The Adaptive Model: mix of administrative and incremental model to find best
5) The Irrational Model: Decisions are not done according to a problem; decisions are product of organizational events.
6) The political Model: the decision making when the organizational goals become politics.
3- The ERP Purchase Decision: Influential Business and IT Factors
In this paper authors focuses on the influences of set of businesses and IT factors that are associated with the purchase of ERP systems.
After having brief information about ERP, the importance of business characteristics and ERP Package Capabilities is searched in literature. It is claimed that the ability to better meet various competitive goals, desire to reengineer business processes, and access to integrated data, are the three business capabilities that affects ERP purchases. And also IT capabilities such as: replacing with aging main frame systems with more modern, and reduction of information flow costs, and lastly Y2K kind of special problem solutions, are shown as IT factors that affect purchase.
4- Assessing the ERP Software
Larson Company, which are using an ERP system, wants to get something integrated to manage their supply chain totally in one system. Larson realized that SAP, Oracle and PeopleSoft are the major players in this market, which are ranked highest degrees in supply chain management modules. And also the other players of supply chain management market are analyzed. The existence of third-party software providers are mentioned and their expanding, partnering with specific ERP vendors are highlighted. At the end the weakness of ERP as not meeting the needs or inefficient functionality is stated.
Day 2 Learnings (Serkan Kocak)
At the having the review section of first lecture, we have watched the video, which is about CRM.
From the video:
One of the opportunities of CRM: Experienced professionals helping entry level professionals.
CRM is a company-wide business strategy designed to reduce costs and increase profitability by solidifying customer loyalty
CRM is a growing market, which is $6 billion now expected to be $18 billion in 2010.
The major players in the market are: Oracle, SAP, and PeopleSoft…
Some type of businesses that Siebel creates CRM applications; Pharma, Media, Finance, Energy, Clinic…
Siebel Industry Applications
Employee Application: Siebel Call Center, Marketing, Sales, Field Service
Partner Application: Siebel Partner Portal, Partner Manager
Customer Application: Siebel Adviser, Configuration, Rider, Price, e Service, e Sales.
Mobile Solutions
Siebel Remote, Wireless
Siebel Physical Architecture works as follows;
Signal comes from web server and Gateway Server distributes it one of the Siebel Servers (to one that is less busy). Then that Siebel Server takes relevant information from the data base in order to run the process, and the configurations are stored at Siebel file System to be used during process.
**********************
Building ERP Business Case
Initial Needs are as follows
· More control
· Share info
· Accounting purposes
· Process innovation + Automation
· Data integrity
· Competiveness
Why Should a Company not implement ERP?
· Costs
· Organization readiness
· Time Consumers
· No need for growth
· Knowledge or capability not accessible
Potential Analysis (in order to decide to implement ERP or not)
· SWOT analysis
· Gap Analysis (where you are – what is your target in terms of IT)
· Elevator Speech (to tell what is needed or relevant in two minutes time to find a job).
o What is the product service solution?
o Problem it addresses
o What does it do?
Enterprise Architecture
It is the frame work that enables us to understand current situation.
Executives Identify Top Items
· Improvement opportunities (providers)
· Benefits (triggers)
· Benefit Category
· Implementation plan
· Metrics
From the video:
One of the opportunities of CRM: Experienced professionals helping entry level professionals.
CRM is a company-wide business strategy designed to reduce costs and increase profitability by solidifying customer loyalty
CRM is a growing market, which is $6 billion now expected to be $18 billion in 2010.
The major players in the market are: Oracle, SAP, and PeopleSoft…
Some type of businesses that Siebel creates CRM applications; Pharma, Media, Finance, Energy, Clinic…
Siebel Industry Applications
Employee Application: Siebel Call Center, Marketing, Sales, Field Service
Partner Application: Siebel Partner Portal, Partner Manager
Customer Application: Siebel Adviser, Configuration, Rider, Price, e Service, e Sales.
Mobile Solutions
Siebel Remote, Wireless
Siebel Physical Architecture works as follows;
Signal comes from web server and Gateway Server distributes it one of the Siebel Servers (to one that is less busy). Then that Siebel Server takes relevant information from the data base in order to run the process, and the configurations are stored at Siebel file System to be used during process.
**********************
Building ERP Business Case
Initial Needs are as follows
· More control
· Share info
· Accounting purposes
· Process innovation + Automation
· Data integrity
· Competiveness
Why Should a Company not implement ERP?
· Costs
· Organization readiness
· Time Consumers
· No need for growth
· Knowledge or capability not accessible
Potential Analysis (in order to decide to implement ERP or not)
· SWOT analysis
· Gap Analysis (where you are – what is your target in terms of IT)
· Elevator Speech (to tell what is needed or relevant in two minutes time to find a job).
o What is the product service solution?
o Problem it addresses
o What does it do?
Enterprise Architecture
It is the frame work that enables us to understand current situation.
Executives Identify Top Items
· Improvement opportunities (providers)
· Benefits (triggers)
· Benefit Category
· Implementation plan
· Metrics
Day 2 Articles
Assessing ERP Software
· ERP vendors’ biggest advantage against companies specialized in supply chain planning is the integration they provide with all business units.
· However, as the need for supply chain management software becomes more complex or industry specific, ERP vendors are less likely to be chosen by the customers.
· The lower managerial level we go, the more people votes for point solutions instead of large ERP systems. Executives are interested in ERP solutions as these systems make it easy to analysis cross departmental processes such as sales-purchases-profits and on the contrary, especially operations managers are demanding more functionality and therefore choose supply chain planning vendors.
· To be competitive in some specialized functionalities such as CRM, SCM, etc., ERP vendors increase their functional module numbers day by day and even specialized in some narrow segments of these functions.
· By the integration they provide within business units, ERP systems increase the visibility across operations.
· Small ERP vendors are taking the advantage of having products for niche markets and high customization. They offer more and more specialized functions and modules.
· In some areas such as returns or reverse logistics, ERP system is insufficient.
· Although their biggest advantage is integration within business units, still there is road to go for ERP vendors about integration. Moreover, ERP software usually necessitates additional software for full integration such as a data mart.
· ERP vendors’ biggest advantage against companies specialized in supply chain planning is the integration they provide with all business units.
· However, as the need for supply chain management software becomes more complex or industry specific, ERP vendors are less likely to be chosen by the customers.
· The lower managerial level we go, the more people votes for point solutions instead of large ERP systems. Executives are interested in ERP solutions as these systems make it easy to analysis cross departmental processes such as sales-purchases-profits and on the contrary, especially operations managers are demanding more functionality and therefore choose supply chain planning vendors.
· To be competitive in some specialized functionalities such as CRM, SCM, etc., ERP vendors increase their functional module numbers day by day and even specialized in some narrow segments of these functions.
· By the integration they provide within business units, ERP systems increase the visibility across operations.
· Small ERP vendors are taking the advantage of having products for niche markets and high customization. They offer more and more specialized functions and modules.
· In some areas such as returns or reverse logistics, ERP system is insufficient.
· Although their biggest advantage is integration within business units, still there is road to go for ERP vendors about integration. Moreover, ERP software usually necessitates additional software for full integration such as a data mart.
ERP Software
· ERP software provides collection of information from each business unit.
· All data is stored in a single database and by this way this data can easily be used for record keeping and reporting purposes.
· Data is collected from different functions and this data integration makes it easy to tie multi-departmental applications. E.g.: Purchase decisions- Budget Constraints
· Integrated data is stored in a single database and it is easy to analysis relevant data for more efficient operations.
· Implementation of ERP system takes long time.
· Duplication of data is a problem that will continue if exists before ERP implementation.
· ERP is only a tool, it does not conduct analysis. Therefore, important thing is to be able to analysis this data in a right way and to make this data relevant to our operations.
· Customization of ERP system is the main reason for budget and time problems. As there is very little modification to ERP system, Winnipeg succeeds in fitting in with planned budget and time constraints.
· To improve operations, ERP constitutes the basic of the enterprise. Business intelligence software is the next step for further improvements.
· ERP software provides collection of information from each business unit.
· All data is stored in a single database and by this way this data can easily be used for record keeping and reporting purposes.
· Data is collected from different functions and this data integration makes it easy to tie multi-departmental applications. E.g.: Purchase decisions- Budget Constraints
· Integrated data is stored in a single database and it is easy to analysis relevant data for more efficient operations.
· Implementation of ERP system takes long time.
· Duplication of data is a problem that will continue if exists before ERP implementation.
· ERP is only a tool, it does not conduct analysis. Therefore, important thing is to be able to analysis this data in a right way and to make this data relevant to our operations.
· Customization of ERP system is the main reason for budget and time problems. As there is very little modification to ERP system, Winnipeg succeeds in fitting in with planned budget and time constraints.
· To improve operations, ERP constitutes the basic of the enterprise. Business intelligence software is the next step for further improvements.
Decision Making in the Evaluation, Selection and Implementation of ERP Systems
· ERP is application software that integrates information across the entire organization.
· The origins of ERP is the MRP systems (MRP1- Material Requirement Planning and MRP2-Manufacturing Resource Planning). Availability of other functionalities such as supply chain management (SCM), customer relationship management (CRM) and others are increasing day by day.
· Business strategy, business processes and different stakeholders are all involved in the decision process of the ERP project.
· There are six decision making models for ERP projects and they are explained briefly in Table 1 of the article.
1. The classical model
2. The administrative model
3. The incremental model
4. The adaptive model
5. The irrational model
6. The political model
HSP organization case demonstrates us a typical ERP decision process. A selection committee which is headed by an external consultant is formed. The committee members are unit managers of some basic operations. Selection committee makes the first round elimination with the briefings and reports demonstrated by the consultant about ERP systems, its capabilities, cost analysis and so on. For the evaluation of remaining alternatives, selection committee is expanded so that from all departments, a representative participation is provided for the committee. By this way, all business processes throughout the organization can be understood properly by the committee. Moreover, demonstrations of the vendors about the case studies of each function of the software can be evaluated by the committee member from the related department. At the final decision between two alternatives, all the committee members have similar power in voting. The six main decision making models listed above are mapped to the different phases of this ERP project decision. We can conclude that decisions during ERP project are structured or semi-structured, objectives for the project are well-defined and effective in decision making process, personal and group politics influence decision making process a lot.
· ERP is application software that integrates information across the entire organization.
· The origins of ERP is the MRP systems (MRP1- Material Requirement Planning and MRP2-Manufacturing Resource Planning). Availability of other functionalities such as supply chain management (SCM), customer relationship management (CRM) and others are increasing day by day.
· Business strategy, business processes and different stakeholders are all involved in the decision process of the ERP project.
· There are six decision making models for ERP projects and they are explained briefly in Table 1 of the article.
1. The classical model
2. The administrative model
3. The incremental model
4. The adaptive model
5. The irrational model
6. The political model
HSP organization case demonstrates us a typical ERP decision process. A selection committee which is headed by an external consultant is formed. The committee members are unit managers of some basic operations. Selection committee makes the first round elimination with the briefings and reports demonstrated by the consultant about ERP systems, its capabilities, cost analysis and so on. For the evaluation of remaining alternatives, selection committee is expanded so that from all departments, a representative participation is provided for the committee. By this way, all business processes throughout the organization can be understood properly by the committee. Moreover, demonstrations of the vendors about the case studies of each function of the software can be evaluated by the committee member from the related department. At the final decision between two alternatives, all the committee members have similar power in voting. The six main decision making models listed above are mapped to the different phases of this ERP project decision. We can conclude that decisions during ERP project are structured or semi-structured, objectives for the project are well-defined and effective in decision making process, personal and group politics influence decision making process a lot.
The ERP Purchase Decision: Influential Business and IT Factors
· Two type of ERP purchases are described by Porter Millar : Support ERP Purchases which involve human resources and/or financial/accounting modules and Value Chain ERP Purchases which involve materials management, production and operations and may include purchase of one or more support modules.
· Companies have both business and technical reasons for ERP purchase decision.
· There are three business capabilities that influence ERP purchase decision: the ability to better meet various competitive goals, the desire to reengineer business processes, and access to integrated data.
· There are three IT capabilities that influence ERP purchase decision: the desire to replace aging mainframe systems with more modern, enterprise-wide client-server architectures, replacement of legacy systems that no longer meet the firm’s needs, and the desire to reduce information systems costs by buying rather than building software.
· Y2K problem was one of the most powerful reasons that influence the ERP purchase decisions in 1990s. By ERP implementation, along with improving their information systems capabilities, companies can also get rid of Y2K problem as ERP systems use four digit notation for year data.
· Two type of ERP purchases are described by Porter Millar : Support ERP Purchases which involve human resources and/or financial/accounting modules and Value Chain ERP Purchases which involve materials management, production and operations and may include purchase of one or more support modules.
· Companies have both business and technical reasons for ERP purchase decision.
· There are three business capabilities that influence ERP purchase decision: the ability to better meet various competitive goals, the desire to reengineer business processes, and access to integrated data.
· There are three IT capabilities that influence ERP purchase decision: the desire to replace aging mainframe systems with more modern, enterprise-wide client-server architectures, replacement of legacy systems that no longer meet the firm’s needs, and the desire to reduce information systems costs by buying rather than building software.
· Y2K problem was one of the most powerful reasons that influence the ERP purchase decisions in 1990s. By ERP implementation, along with improving their information systems capabilities, companies can also get rid of Y2K problem as ERP systems use four digit notation for year data.
Day2 Articles
Decision Making in the Evaluation, Selection and Implementation of ERP Systems
-Brief History on evolution of ERP from MRP
- Business Strategy, Business Processes, Different stakeholders are dominant
- ERP is not only a IT upgrade
- Decision making models are used now primarily to evaluate an ERP project to be applied.
- HSP case was investigated, in team selection, project implementation.
What You Need to Know about ERP software
- Brief information
- Drawbacks are mostly highly time taking conversion of legacy paper based systems
- Vendors are listed as oracle, peoplesoft, SAP
- Cost is hard to lower, mostly dependant on the size of the company
- With the help of the
Assessing the ERP Software
- Integration is important
- Sap is known for Compatibility
- Oracle is known for Supply Chain
- Peoplesoft is human resources applications
- There are still room for third party applications regarding business processes
- Companies may choose to integrate different addons to ease their operations such as schedule programs for production.
The ERP Purchase Decision
- Purchase decision depends on ERP characteristic and multipal organizational characteristics
- Second half of the 90’s have 3 criteria of IT for purchase decisions: reduce Information system costs, replace old systems, requirements not met
- Study is conducted as below:
- 35 ERP package capabilities are defined
- Competitive Goals
- Business Processes
- Architecture
- Legacy Systems (including Y2K)
- Buy vs. build
- Data Access
Lessons Learned By 18.06.2008
- A revised discussion of past days topics
- CRM (Customer Relationship Management) Video by Siebel
- CRM Reduces Costs and increases profitability by solidifying customer royalty
- Siebel belongs to Oracle
- Siebel offers different sized applications, industry specific applications, employee, partner and customer applications and mobile solutions
- Needs for ERP were discussed some outcomes: you need more control, share of information, accounting easiness, one sustem is easier to manage, process innovation/automation, data integrity, same function is labored by lower number of people/efficiency
- Analyisis For ERP implementation was another topic, SWOT, GAP, Elevator Speech was introduced
Why ERP?
Billy was working at a Furniture company. After he did vacation he started to work again and the announcer said something about providing solutions for small and medium size businesses in partnership with SAP.
In order to implement ERP company hired many consultants but they want to be a part of the ERP implementation process.
There is a professor Kellsdorf and she claims that ERP can not manage the whole
company.
There was a use of MRP system in the company. MRP system has some bugs.
Problem of that software was company cannot see the forecasts and company cannot see the situation of deliveries. It creates some problems.
Part of the problem was deliveries. From MRP software delivery situation cannot be seen properly. At that time it was seen that no problem was actually happened but in
MRP there seemed to be a problem.
CEO of the company wanted to implement an ERP program so he wanted to form an implementation team.
To be a part of implementation process Billy gone to educate himself to SAP seminars.
Billy took advice from professor and the professor told him that ERPs are implemented in order to increases integration.
There should be so much management work done before implementing ERP on a company.
That furniture company wanted to use the best practice approach that means seeing other companies as an example then implementing ERP according to their outcomes.
In the management process before ERP implementation Billy understood that some jobs may change after ERP implementation.
There was some tests done at the implementation process such as financial implementations and it seemed that converting different currencies to their own currency seemed a good issue.
There was a problem that while the company was using MRP, they wrote small applications. However, these applications may not work cooperatively with implementation of SAP. Thus, company may lose data.
The company showed Billy that Ohio as an example of successful SAP implementation and for the reasons such as Ohio factory was working as a mass production factory and Billy’s factory work as a niche factory, Billy refused to implement SAP in his plant.
Billy also saw that in the plan of implementing SAP in the factory, the time needed to train the staff was too low and he refused the implementation of SAP.
After the factory wanted to implement SAP, Billy resigned from the company and changed his job he started to work as a consultant.
Like 70% of the ERP implementations, implementation of ERP failed. Because best practice approach did not work in the factory like in Ohio. Problem was the factory was a niche factory and Ohio was a mass production company.
In order to implement ERP company hired many consultants but they want to be a part of the ERP implementation process.
There is a professor Kellsdorf and she claims that ERP can not manage the whole
company.
There was a use of MRP system in the company. MRP system has some bugs.
Problem of that software was company cannot see the forecasts and company cannot see the situation of deliveries. It creates some problems.
Part of the problem was deliveries. From MRP software delivery situation cannot be seen properly. At that time it was seen that no problem was actually happened but in
MRP there seemed to be a problem.
CEO of the company wanted to implement an ERP program so he wanted to form an implementation team.
To be a part of implementation process Billy gone to educate himself to SAP seminars.
Billy took advice from professor and the professor told him that ERPs are implemented in order to increases integration.
There should be so much management work done before implementing ERP on a company.
That furniture company wanted to use the best practice approach that means seeing other companies as an example then implementing ERP according to their outcomes.
In the management process before ERP implementation Billy understood that some jobs may change after ERP implementation.
There was some tests done at the implementation process such as financial implementations and it seemed that converting different currencies to their own currency seemed a good issue.
There was a problem that while the company was using MRP, they wrote small applications. However, these applications may not work cooperatively with implementation of SAP. Thus, company may lose data.
The company showed Billy that Ohio as an example of successful SAP implementation and for the reasons such as Ohio factory was working as a mass production factory and Billy’s factory work as a niche factory, Billy refused to implement SAP in his plant.
Billy also saw that in the plan of implementing SAP in the factory, the time needed to train the staff was too low and he refused the implementation of SAP.
After the factory wanted to implement SAP, Billy resigned from the company and changed his job he started to work as a consultant.
Like 70% of the ERP implementations, implementation of ERP failed. Because best practice approach did not work in the factory like in Ohio. Problem was the factory was a niche factory and Ohio was a mass production company.
Day 2 articles by Tolga YILDIRIM
Assessing ERP Software
Corporate decision-makers put great emphasis on integration of IT systems. The shift of demand from supply-chain management solutions to ERP solutions is a clear example of this fact. ERP vendors have improved their solutions and added new capabilities such as better supply chain management features. Decision makers in companies have favored integrated ERP solutions with supply chain management capabilities over pure SCM solutions.
ERP Purchase Decision: Influential Business and IT Factors
There are business, as well as technical reasons for implementing a specific ERP solution. The ability to better meet various competitive goals, the desire to reengineer business processes and access to integrated data are the business capabilities affecting decision process. In addition, the desire to replace mainframe systems, replace systems that do not meet needs anymore, and reduce IT costs by purchasing, rather than in-house development.
Decision Making in the Evaluation, Selection and Implementation of ERP Systems
Decisions during different phases of ERP implementation are not purely financial. There are six models of decision-making in implementation lifecycle, which are
The classical model
The administrative model
The incremental model
The adaptive model
The irrational model
The political model
Buyers’ insider ERP Software
ERP allows the collection and consolidation of information across the enterprise. It acts as a transactional system for capturing business information. The data conversion at the very beginning of the ERP implementation is a necessary and takes long time. In addition, the article emphasizes on the customization issue. Off-the-shelf products which are not customized can decrease the time needed to implement and are more agile for upgrades. However, since these are not customized, such solutions are too generic to solve the information problems of an organization in general.
Why ERP? A Primer on SAP Implementation
First of all, this book is a poor imitation of the classic ‘The Goal’.
The book summarizes some of the aspects of SAP applications, in addition to factors that affect decision-making in ERP implementations.
There are factors other than rational factors, in an ERP implementation. The success and failure of ERP projects depend on these factors. The key point of the book is that it lays out the fact that companies should thoroughly investigate their processes and their needs and try to match these with specific ERP solutions.
Many companies, unfortunately, choose a specific ERP solution just because others have implemented it. A company should not bet its operational effectiveness on its competitors’ choices. Each ERP implementation should be taken into hand separately and individually.
In the decision-making process, there are different roles. An important role revealed in the book is the information gatekeeper. Information gatekeeper is the person who has a perceived ‘expertise’ related to the decision. In this case, the key information gatekeeper is the so called ‘computer guy’. The computer guy has taken role in implementation of ERP system of the sister company. He was perceived to be the ‘expert’ and his words have influenced the way decision-makers act. Companies should understand the information gatekeepers can lead to wrong decisions, despite their perceived ‘expertise’. In addition, the second learning revealed by the information gatekeeper role, is the fact that an ERP system is a business project, rather than a traditional IT project.
In ERP implementations, the issues of people, organization, functions and business objectives that need to be addressed before the ERP system can be used. With Accelerated SAP methodology, the aim is to accelerate the implementation phase while evaluating the business processes, objectives and activities. This methodology strongly raises the chance of success in the implementation, especially for small and medium size businesses that do not completely reengineer their processes.
Corporate decision-makers put great emphasis on integration of IT systems. The shift of demand from supply-chain management solutions to ERP solutions is a clear example of this fact. ERP vendors have improved their solutions and added new capabilities such as better supply chain management features. Decision makers in companies have favored integrated ERP solutions with supply chain management capabilities over pure SCM solutions.
ERP Purchase Decision: Influential Business and IT Factors
There are business, as well as technical reasons for implementing a specific ERP solution. The ability to better meet various competitive goals, the desire to reengineer business processes and access to integrated data are the business capabilities affecting decision process. In addition, the desire to replace mainframe systems, replace systems that do not meet needs anymore, and reduce IT costs by purchasing, rather than in-house development.
Decision Making in the Evaluation, Selection and Implementation of ERP Systems
Decisions during different phases of ERP implementation are not purely financial. There are six models of decision-making in implementation lifecycle, which are
The classical model
The administrative model
The incremental model
The adaptive model
The irrational model
The political model
Buyers’ insider ERP Software
ERP allows the collection and consolidation of information across the enterprise. It acts as a transactional system for capturing business information. The data conversion at the very beginning of the ERP implementation is a necessary and takes long time. In addition, the article emphasizes on the customization issue. Off-the-shelf products which are not customized can decrease the time needed to implement and are more agile for upgrades. However, since these are not customized, such solutions are too generic to solve the information problems of an organization in general.
Why ERP? A Primer on SAP Implementation
First of all, this book is a poor imitation of the classic ‘The Goal’.
The book summarizes some of the aspects of SAP applications, in addition to factors that affect decision-making in ERP implementations.
There are factors other than rational factors, in an ERP implementation. The success and failure of ERP projects depend on these factors. The key point of the book is that it lays out the fact that companies should thoroughly investigate their processes and their needs and try to match these with specific ERP solutions.
Many companies, unfortunately, choose a specific ERP solution just because others have implemented it. A company should not bet its operational effectiveness on its competitors’ choices. Each ERP implementation should be taken into hand separately and individually.
In the decision-making process, there are different roles. An important role revealed in the book is the information gatekeeper. Information gatekeeper is the person who has a perceived ‘expertise’ related to the decision. In this case, the key information gatekeeper is the so called ‘computer guy’. The computer guy has taken role in implementation of ERP system of the sister company. He was perceived to be the ‘expert’ and his words have influenced the way decision-makers act. Companies should understand the information gatekeepers can lead to wrong decisions, despite their perceived ‘expertise’. In addition, the second learning revealed by the information gatekeeper role, is the fact that an ERP system is a business project, rather than a traditional IT project.
In ERP implementations, the issues of people, organization, functions and business objectives that need to be addressed before the ERP system can be used. With Accelerated SAP methodology, the aim is to accelerate the implementation phase while evaluating the business processes, objectives and activities. This methodology strongly raises the chance of success in the implementation, especially for small and medium size businesses that do not completely reengineer their processes.
Day2 - Article Key Points by Basak Tektemur
Buyers' Inside ERP Software by Marlene Orton
ERP => Enterprise resource planning software allows the collection and consolidation of information across the “enterprise”, allows for tracking and running of basic reporting.
Capturing business information
All data from various sources; such as HR, finance, marketing department, is collected at a central location.
Giving reports
Drawbacks:
* It may take time to convert all legacy-paper based data and legacy computer systems into a single program.
* Duplication of data is a common problem.
* An ERP program is not analysis or management software, it is just a tool.
Vendor: Oracle, PeopleSoft, SAP
Cost:
Cost depends on size of the organization, its database and number of users; implementation costs such as consultancy and building infrastructure; and customization.
Decision Making in the Evaluation, Selection and Implementation of ERP Systems by Maha Shakir
The evaluation, selection and implementation (ESI) of ERP system involve multiple decisions which can be categorized in 6 models.
ERP implementation costs exceed $100000 but decision is not just financial.
ERPs are application software that integrate information across the entire organization as we mentioned several times. Systems remove the inconsistencies and help to have consolidated reports.
Decision Making Models:
The classical model: best alternative to maximize goal achievements
The administrative model: alternatives that meet minimum standards
The incremental model: incremental changes by making successive limited comparisons starting from the present situation with no set of clear objectives
The adaptive model: mix of administrative and incremental model
The irrational model: decisions are product of organizational events
The political model: policies replace organizational goals
Classical model is based on the economic theory and is difficult to implement since it is difficult to evaluate all possible alternatives. The administrative model is more practical and depends on the principle to find the alternative that meets the minimum standards. Incremental model is used for complex and uncertain problems. The adaptive model is mix of administrative and incremental model where objectives are defined in advance but decisions are made incrementally. The irrational model is used where the uncertainty levels are high. The political model depends on personal objectives rather than organizational ones.
Initiation => The political modelRequirement Analyses (RA)/ definition of KBP => The adaptive modelRA/ inviting vendors to bid => The political modelRA/ vendor shortlisting => The administrative and political modelDesign & implementation => The adaptive modelPost implementation => The administrative and political model
The ERP Purchase Decision: Influential Business and IT Factors by Carol V. Brown, Iris Vessey, Anne Powell
IS professionals started to implement large-scale, cross-functionally integrated, packaged systems known as ERP rather than specific solutions for a single enterprise.
Support ERP purchases => involve HR and/or finance/accounting modules, alone.
Value-chain ERP purchases => involve materials management, production and operations, and/or sales modules, but may also include purchase of one or more support ERP purchases.
Three business capabilities that influence ERP purchases => the ability to better meet various goals, the desire to reengineer business processes, and access to integrated data.
Three IT capabilities that influence ERP purchases => the desire to replace aging mainframe systems with more modern, enterprise-wide client-server architectures, replacement of legacy systems that no longer meet the firm’s needs, and desire to reduce information systems costs by buying rather than building software.
As a result, the authors identified four business factors: data integration, new ways of doing business, global capabilities, and flexibility/aging; and four IT factors: IT purchasing, IT cost reduction, IT expertise, IT architecture as decision inputs.
Assessing ERP Software by Brian Albright
The ERP vendors such as SAP, Oracle and PeopleSoft developed and improved supply chain management modules that became better than services of companies that are specialized in supply chain management, warehouse management and so on. And therefore they have higher market share and better functionality.
Enterprise software vendors offer a greater degree of integration with back-office applications.
ERP systems provide solutions for more complex and industry-specific problems. However they fail to integrate the back-office applications with supply chain management applications which is a big problem for the customers.
In mid-market with lower IT budgets small vendors have the advantage of serving to a niche by specialization in that industry or vertical industries and ability to integrate their supply chain offerings.
ERP systems lack the ability to handle returns or reverse logistics. Also, there are still integration problems even within an ERP suite which is supposed to be complete as we defined in class. However, ERP vendor are good at identifying their gaps and problems and most of them have partners to help them to complete implementations. For customers, it is unavoidable to work with a third-party if their ERP vendor cannot meet the requirements of your complex functions and do not have a partner to solve this problem.
ERP => Enterprise resource planning software allows the collection and consolidation of information across the “enterprise”, allows for tracking and running of basic reporting.
Capturing business information
All data from various sources; such as HR, finance, marketing department, is collected at a central location.
Giving reports
Drawbacks:
* It may take time to convert all legacy-paper based data and legacy computer systems into a single program.
* Duplication of data is a common problem.
* An ERP program is not analysis or management software, it is just a tool.
Vendor: Oracle, PeopleSoft, SAP
Cost:
Cost depends on size of the organization, its database and number of users; implementation costs such as consultancy and building infrastructure; and customization.
Decision Making in the Evaluation, Selection and Implementation of ERP Systems by Maha Shakir
The evaluation, selection and implementation (ESI) of ERP system involve multiple decisions which can be categorized in 6 models.
ERP implementation costs exceed $100000 but decision is not just financial.
ERPs are application software that integrate information across the entire organization as we mentioned several times. Systems remove the inconsistencies and help to have consolidated reports.
Decision Making Models:
The classical model: best alternative to maximize goal achievements
The administrative model: alternatives that meet minimum standards
The incremental model: incremental changes by making successive limited comparisons starting from the present situation with no set of clear objectives
The adaptive model: mix of administrative and incremental model
The irrational model: decisions are product of organizational events
The political model: policies replace organizational goals
Classical model is based on the economic theory and is difficult to implement since it is difficult to evaluate all possible alternatives. The administrative model is more practical and depends on the principle to find the alternative that meets the minimum standards. Incremental model is used for complex and uncertain problems. The adaptive model is mix of administrative and incremental model where objectives are defined in advance but decisions are made incrementally. The irrational model is used where the uncertainty levels are high. The political model depends on personal objectives rather than organizational ones.
Initiation => The political modelRequirement Analyses (RA)/ definition of KBP => The adaptive modelRA/ inviting vendors to bid => The political modelRA/ vendor shortlisting => The administrative and political modelDesign & implementation => The adaptive modelPost implementation => The administrative and political model
The ERP Purchase Decision: Influential Business and IT Factors by Carol V. Brown, Iris Vessey, Anne Powell
IS professionals started to implement large-scale, cross-functionally integrated, packaged systems known as ERP rather than specific solutions for a single enterprise.
Support ERP purchases => involve HR and/or finance/accounting modules, alone.
Value-chain ERP purchases => involve materials management, production and operations, and/or sales modules, but may also include purchase of one or more support ERP purchases.
Three business capabilities that influence ERP purchases => the ability to better meet various goals, the desire to reengineer business processes, and access to integrated data.
Three IT capabilities that influence ERP purchases => the desire to replace aging mainframe systems with more modern, enterprise-wide client-server architectures, replacement of legacy systems that no longer meet the firm’s needs, and desire to reduce information systems costs by buying rather than building software.
As a result, the authors identified four business factors: data integration, new ways of doing business, global capabilities, and flexibility/aging; and four IT factors: IT purchasing, IT cost reduction, IT expertise, IT architecture as decision inputs.
Assessing ERP Software by Brian Albright
The ERP vendors such as SAP, Oracle and PeopleSoft developed and improved supply chain management modules that became better than services of companies that are specialized in supply chain management, warehouse management and so on. And therefore they have higher market share and better functionality.
Enterprise software vendors offer a greater degree of integration with back-office applications.
ERP systems provide solutions for more complex and industry-specific problems. However they fail to integrate the back-office applications with supply chain management applications which is a big problem for the customers.
In mid-market with lower IT budgets small vendors have the advantage of serving to a niche by specialization in that industry or vertical industries and ability to integrate their supply chain offerings.
ERP systems lack the ability to handle returns or reverse logistics. Also, there are still integration problems even within an ERP suite which is supposed to be complete as we defined in class. However, ERP vendor are good at identifying their gaps and problems and most of them have partners to help them to complete implementations. For customers, it is unavoidable to work with a third-party if their ERP vendor cannot meet the requirements of your complex functions and do not have a partner to solve this problem.
Day2 - Lessons Learned by Basak Tektemur
ERP II connects suppliers and customers to the system; it allows you to integrate with them too.
Major players provide cheaper alternatives like ASAP. There may be a single module that can be implemented which costs less. ASAP costs less during implementation, it is also claimed that ASAP does not require that much consultancy. It is basically faster implementation.
SAP uses solution manager approach, for the initial installation, and it helps up to some level.
There is SAP configuration module and it works.
If you definitely want to work with a small vendor and you are not sure if they will be around for a long time it will be a good idea to develop some in-house capabilities or even attract people from the provider.
CRM is abbreviation for customer relationship management
CRM Opportunities:
MyprojectHelp.com
Experienced professionals helping entry level professionals
They are offering new way of educating people
From the speech of Mr. Kumar:
A company-wide business strategy designed to reduce costs and increase profitability by solidifying customer loyalty
Improve customer relations
There are mid market CRM and on-demand CRM
The competitors of Siebel: Oracle, SAP, Peoplesoft
Why Siebel CRM?
Highest market share and easy to implement
More number of integration points
Catchy GUI and very user friendly
Very easy to configure, code and deploy
Easy administration and maintenance
Siebel applications:
Siebel CRM enterprise
CRM professional edition
CRM on-demand
Siebel industry implications:
Consumer goods
Finance
Phama
Energy
Media
Clinic
Employee Application:
Call center
Marketing
Sales
Field service
Partner application:
Partner portal
Partner manager
Customer application:
Advisor
Configurator
Orders
Pricer
eService
eSales
Mobile solutions:
Remote
Wireless
*Mobile solutions are very useful since they can handle information better.
Companies can use their Siebel partners in order to interpret about customer behavior
Siebel Clients:
5 types
Web-client => internet explorer, u purchase the application
Handheld client => like blackberry and so on
Wireless web client => mostly used one
Mobile web client => software developers uses this one, install to the laptops
Dedicated web client
Siebel physical architecture
There is a Gateway server, which is bought by the enterprise, where all the requests are collected, also there are Siebel servers (number depends on the needs of the enterprise) that are helping GS and these two types compose the enterprise server. Also there is database server which is a separate one. The Siebel servers in CRM system benefit from the enterprise database server like the modules of ERP. There is also Siebel file system which usually contains configuration files, it eases the maintenance since you do not need to install configuration files to all other servers. All these are connected by a web server. All the orders from customers come from web and reach to the gateway server, GS sends the job to appropriate servers and they are processed in the Siebel server or servers.
Siebel application:
Siebel versions/releases
Siebel client demo
There is a possibility to use free trial versions for Siebel applications and learn about the program before buying it can be downloaded from Oracle’s site.
There are forecasts, tariffs, and other similar things in the sales module.
Siebel tool:
It is a step based configuration tool
Objects explorer
Drag&Drop facilities or Wizards
Tool Layer: GUI LAYER => Object layer => Data Layer
**********************************************************************************
ERP systems alone cannot increase company’s competitiveness.
If you can solve your problems with simpler applications use them because ERP systems are very expensive.
If you believe that ERP will allow you lower costs in the future use it, but it is good to keep in mind that maintaining ERP will be expensive.
Why does the company feel the need for an integrated system?
More control, share information, accounting purposes, process innovation and automation, data integrity, fewer people to maintain the same function => efficiency increases, one system-easy to maintain and competitiveness.
Why not?
* Costs
* The costs don’t justify the benefits
* Organization readiness
* Time consuming-not enough staff-not enough money
* No need for growth
* No accessible knowledge and capability
When you implement ERP, some processes become more efficient but some others get worse; because system brings some requirements. Therefore, it is important to have flexibility at least up to some levels.
Potential Analyses:
Before implementing ERP systems it is good to make some analyses such as:
SWOT Analysis
GAP Analysis: you determine where you are now first and then you decide where you want to be in certain time period. And then you look at the gap in between.
Enterprise architecture
Elevator Speech: a short but impressive speech to introduce yourself or your company
Executives-Identify top -3 items:
* Improvement opportunities (provides)
* Benefits (triggers)
* Benefit Category (achieved)
* Implementation Plan (measured)
* Metrics
Then you need to link these to strategic objectives. Companies must have key performance indicators that must be relevant with their businesses.
Major players provide cheaper alternatives like ASAP. There may be a single module that can be implemented which costs less. ASAP costs less during implementation, it is also claimed that ASAP does not require that much consultancy. It is basically faster implementation.
SAP uses solution manager approach, for the initial installation, and it helps up to some level.
There is SAP configuration module and it works.
If you definitely want to work with a small vendor and you are not sure if they will be around for a long time it will be a good idea to develop some in-house capabilities or even attract people from the provider.
CRM is abbreviation for customer relationship management
CRM Opportunities:
MyprojectHelp.com
Experienced professionals helping entry level professionals
They are offering new way of educating people
From the speech of Mr. Kumar:
A company-wide business strategy designed to reduce costs and increase profitability by solidifying customer loyalty
Improve customer relations
There are mid market CRM and on-demand CRM
The competitors of Siebel: Oracle, SAP, Peoplesoft
Why Siebel CRM?
Highest market share and easy to implement
More number of integration points
Catchy GUI and very user friendly
Very easy to configure, code and deploy
Easy administration and maintenance
Siebel applications:
Siebel CRM enterprise
CRM professional edition
CRM on-demand
Siebel industry implications:
Consumer goods
Finance
Phama
Energy
Media
Clinic
Employee Application:
Call center
Marketing
Sales
Field service
Partner application:
Partner portal
Partner manager
Customer application:
Advisor
Configurator
Orders
Pricer
eService
eSales
Mobile solutions:
Remote
Wireless
*Mobile solutions are very useful since they can handle information better.
Companies can use their Siebel partners in order to interpret about customer behavior
Siebel Clients:
5 types
Web-client => internet explorer, u purchase the application
Handheld client => like blackberry and so on
Wireless web client => mostly used one
Mobile web client => software developers uses this one, install to the laptops
Dedicated web client
Siebel physical architecture
There is a Gateway server, which is bought by the enterprise, where all the requests are collected, also there are Siebel servers (number depends on the needs of the enterprise) that are helping GS and these two types compose the enterprise server. Also there is database server which is a separate one. The Siebel servers in CRM system benefit from the enterprise database server like the modules of ERP. There is also Siebel file system which usually contains configuration files, it eases the maintenance since you do not need to install configuration files to all other servers. All these are connected by a web server. All the orders from customers come from web and reach to the gateway server, GS sends the job to appropriate servers and they are processed in the Siebel server or servers.
Siebel application:
Siebel versions/releases
Siebel client demo
There is a possibility to use free trial versions for Siebel applications and learn about the program before buying it can be downloaded from Oracle’s site.
There are forecasts, tariffs, and other similar things in the sales module.
Siebel tool:
It is a step based configuration tool
Objects explorer
Drag&Drop facilities or Wizards
Tool Layer: GUI LAYER => Object layer => Data Layer
**********************************************************************************
ERP systems alone cannot increase company’s competitiveness.
If you can solve your problems with simpler applications use them because ERP systems are very expensive.
If you believe that ERP will allow you lower costs in the future use it, but it is good to keep in mind that maintaining ERP will be expensive.
Why does the company feel the need for an integrated system?
More control, share information, accounting purposes, process innovation and automation, data integrity, fewer people to maintain the same function => efficiency increases, one system-easy to maintain and competitiveness.
Why not?
* Costs
* The costs don’t justify the benefits
* Organization readiness
* Time consuming-not enough staff-not enough money
* No need for growth
* No accessible knowledge and capability
When you implement ERP, some processes become more efficient but some others get worse; because system brings some requirements. Therefore, it is important to have flexibility at least up to some levels.
Potential Analyses:
Before implementing ERP systems it is good to make some analyses such as:
SWOT Analysis
GAP Analysis: you determine where you are now first and then you decide where you want to be in certain time period. And then you look at the gap in between.
Enterprise architecture
Elevator Speech: a short but impressive speech to introduce yourself or your company
Executives-Identify top -3 items:
* Improvement opportunities (provides)
* Benefits (triggers)
* Benefit Category (achieved)
* Implementation Plan (measured)
* Metrics
Then you need to link these to strategic objectives. Companies must have key performance indicators that must be relevant with their businesses.
Day 2 Learnings
We learned what CRM means.
CRM:
Customer Relationship Managementthat focuses on creating two-way exchanges with customers so that firms have an intimate knowledge of their needs, wants, and buying patterns. In this way CRM helps the companies to understand, anticipate and estimate the needs of their customers.
CRM market is a market that is now worth $6 Billion, and the market will grow to $18 Billion in 2010.
There are two kinds of CRM Mid market CRM and on demand CRM.
Siebel application focused on consumer goods, and they have
CRM enterprise
CRM professional edition
CRM on Demand softwares.
There are 5 types of Siebel Clients:
Web Client
Wireless Web Client
Handheld Client
Mobile Web Client
Dedicated Web Client
We did ERP business building case
Initial Needs are:
More Control
Share info
Accounting purposes
Process Innovation + Automation
Data Integrity
Fewer people to maintain the same function
Efficiency
And
We learned why should a company not implement an ERP system?
If the costs of the ERP system is too high and profits that is earned with ERP software then purchasing ERP is not preferable.
Other factors are
Organization readiness
The costs don’t justify the benefits
Organisation readiness
Time consuming– not enough staff
OK – no need for growth
Knowledge or capability not accessible
Some analysis should be made, potential analysis are,
SWOT analysis
GAP Analysis
Gap analysis is a business resource assessment tool enabling a company to compare its actual performance with its potential performance.
Elevator Speech
What is the product/service/solution?
Problem it addresses
What does it do?
How does it work and it benefits
Executives identify top 3 items
Improvement Opportunities: Integration between engineering and design systems.
Benefits (Triggers): Improved time to market reduces the development cost and reduces engineering changes
Benefit Category
Implementation Plan
Metrics
CRM:
Customer Relationship Managementthat focuses on creating two-way exchanges with customers so that firms have an intimate knowledge of their needs, wants, and buying patterns. In this way CRM helps the companies to understand, anticipate and estimate the needs of their customers.
CRM market is a market that is now worth $6 Billion, and the market will grow to $18 Billion in 2010.
There are two kinds of CRM Mid market CRM and on demand CRM.
Siebel application focused on consumer goods, and they have
CRM enterprise
CRM professional edition
CRM on Demand softwares.
There are 5 types of Siebel Clients:
Web Client
Wireless Web Client
Handheld Client
Mobile Web Client
Dedicated Web Client
We did ERP business building case
Initial Needs are:
More Control
Share info
Accounting purposes
Process Innovation + Automation
Data Integrity
Fewer people to maintain the same function
Efficiency
And
We learned why should a company not implement an ERP system?
If the costs of the ERP system is too high and profits that is earned with ERP software then purchasing ERP is not preferable.
Other factors are
Organization readiness
The costs don’t justify the benefits
Organisation readiness
Time consuming– not enough staff
OK – no need for growth
Knowledge or capability not accessible
Some analysis should be made, potential analysis are,
SWOT analysis
GAP Analysis
Gap analysis is a business resource assessment tool enabling a company to compare its actual performance with its potential performance.
Elevator Speech
What is the product/service/solution?
Problem it addresses
What does it do?
How does it work and it benefits
Executives identify top 3 items
Improvement Opportunities: Integration between engineering and design systems.
Benefits (Triggers): Improved time to market reduces the development cost and reduces engineering changes
Benefit Category
Implementation Plan
Metrics
Day 2 Key Points of the Articles
After all the in class discussions and reading the book the article readings were more a summary and review of what we have covered so far. There were not many key new learning for me in these readings. However below I sum up the main points discussed in the articles under the titles of each.
1) Decision Making in the Evaluation, Selection and Implementation of ERP Systems
The article explains different methodologies that can be used to evaluate select and implement ERP Systems. An example is given and the approaches applied are discussed.
As discussed in the class the implementation of an ERP system has a major benefit of removing inconsistencies in a company and achieves consolidation of all the data however this process is costly and might take from 6 months to 2 years. Another point that is mentioned is that the reason for implementation is not always financial but may be strategic or political.
The evolution of ERP is briefly mentioned, that it started with manufacturing based MRP systems and grew throughout the organizational units, now evolving to include CRM and SCM. The still growing market is promising.
The six different models in decision making discussed in the article are;
1) The classical model; the best alternative is chosen which maximizes goal achievement. This approach requires and extensive research and evaluation of all the possible alternatives.
2) The administrative model; the selection process is done among alternatives that meet the requirements.
3) The incremental model; the objectives are clear and the small incremental changes with limited comparison is made.
4) The adaptive model; incremental decision making for existing policy.
5) The irrational model; the decision is not due to a problem; the solution is found and applied when a problem occurs.
6) The political model; organizational goals are replaced by politics
There is not just one single model applied in the decision making process as seen in the example given while at some stages a political model might be observed in other stages administrative, incremental models might be used.
2) ERP Software
ERP is a transactional system that collects and consolidates information throughout an organization. In the article an example is given and with this example costs, benefits, etc of an ERP system are evaluated.
The example of the City of Winnipeg who installed an ERP system is given. Their main goal was to eliminate paperwork, to be able to track transactions, and to be able to put pressure on vendors knowing how good a customer they are to them.
However besides these benefits there were still drawbacks; legacy paper work had to be done in parallel to store some data and therefore there was still duplication in information, which is very likely to occur in an institution that requires paper based information storage.
Also there was a lot of information stored but the software does not really analyze it.
The price is difficult to predict and is dependent on the number of users.
To be on time and on budget one should be very careful and success is usually achieved if a company has lower customization.
The next step in enterprise wide software is predicted to be as business intelligence software which will provide management analysis.
3) Assessing ERP Software
Larson Manufacturing was using an ERP program which could not keep up with the company’s growth. They wanted to integrate the supply chain actions and found out that there are different ERP packages to manage supply chain execution/planning. PeopleSoft Enterprise is one of them. There are major players in terms of market share and functionality that are SAP, Oracle and PeopleSoft.
In the article mainly the providers are described.
People usually are aware of their needs but they want best breed solutions however they don’t ensure a good supply chain management. The ERP vendors who lack in discrete functions have a broad vision to make up for that shortcoming.
As a final point it is said that the ERP software is regarded as a seamless integration but there is a misperception.
4) The ERP Purchase Decision: Influential Business and IT Factors
This article does not provide much information different from what we have discussed in class and learned so far from the other articles.
Briefly the article mentions purchase reasons of ERP software are; to be competitive, reengineer business processes, and access integrated data. Then it continues with the capabilities of ERP, what it can do for a company.
A survey was done on the ERP capabilities affecting purchase decisions however the results which would have been interesting are not presented in the article.
1) Decision Making in the Evaluation, Selection and Implementation of ERP Systems
The article explains different methodologies that can be used to evaluate select and implement ERP Systems. An example is given and the approaches applied are discussed.
As discussed in the class the implementation of an ERP system has a major benefit of removing inconsistencies in a company and achieves consolidation of all the data however this process is costly and might take from 6 months to 2 years. Another point that is mentioned is that the reason for implementation is not always financial but may be strategic or political.
The evolution of ERP is briefly mentioned, that it started with manufacturing based MRP systems and grew throughout the organizational units, now evolving to include CRM and SCM. The still growing market is promising.
The six different models in decision making discussed in the article are;
1) The classical model; the best alternative is chosen which maximizes goal achievement. This approach requires and extensive research and evaluation of all the possible alternatives.
2) The administrative model; the selection process is done among alternatives that meet the requirements.
3) The incremental model; the objectives are clear and the small incremental changes with limited comparison is made.
4) The adaptive model; incremental decision making for existing policy.
5) The irrational model; the decision is not due to a problem; the solution is found and applied when a problem occurs.
6) The political model; organizational goals are replaced by politics
There is not just one single model applied in the decision making process as seen in the example given while at some stages a political model might be observed in other stages administrative, incremental models might be used.
2) ERP Software
ERP is a transactional system that collects and consolidates information throughout an organization. In the article an example is given and with this example costs, benefits, etc of an ERP system are evaluated.
The example of the City of Winnipeg who installed an ERP system is given. Their main goal was to eliminate paperwork, to be able to track transactions, and to be able to put pressure on vendors knowing how good a customer they are to them.
However besides these benefits there were still drawbacks; legacy paper work had to be done in parallel to store some data and therefore there was still duplication in information, which is very likely to occur in an institution that requires paper based information storage.
Also there was a lot of information stored but the software does not really analyze it.
The price is difficult to predict and is dependent on the number of users.
To be on time and on budget one should be very careful and success is usually achieved if a company has lower customization.
The next step in enterprise wide software is predicted to be as business intelligence software which will provide management analysis.
3) Assessing ERP Software
Larson Manufacturing was using an ERP program which could not keep up with the company’s growth. They wanted to integrate the supply chain actions and found out that there are different ERP packages to manage supply chain execution/planning. PeopleSoft Enterprise is one of them. There are major players in terms of market share and functionality that are SAP, Oracle and PeopleSoft.
In the article mainly the providers are described.
People usually are aware of their needs but they want best breed solutions however they don’t ensure a good supply chain management. The ERP vendors who lack in discrete functions have a broad vision to make up for that shortcoming.
As a final point it is said that the ERP software is regarded as a seamless integration but there is a misperception.
4) The ERP Purchase Decision: Influential Business and IT Factors
This article does not provide much information different from what we have discussed in class and learned so far from the other articles.
Briefly the article mentions purchase reasons of ERP software are; to be competitive, reengineer business processes, and access integrated data. Then it continues with the capabilities of ERP, what it can do for a company.
A survey was done on the ERP capabilities affecting purchase decisions however the results which would have been interesting are not presented in the article.
Why ERP? Key points
The book was written similar to "The Goal". There is a guy responsible from solving a problem and there is a professor who helps with asking questions and there are other plants and similar environment.
In this book, the guy, Billy, is responsible from an furniture plant. The Boss says that they will buy another plant and he wants and ERP integration between to plants in order to manage easily.
Billy goes to seminars about SAP and talks with professor and talks with the managers in the other plant and makes a conclusion. During these events there are some key points about implementing an ERP.
In this book, the guy, Billy, is responsible from an furniture plant. The Boss says that they will buy another plant and he wants and ERP integration between to plants in order to manage easily.
Billy goes to seminars about SAP and talks with professor and talks with the managers in the other plant and makes a conclusion. During these events there are some key points about implementing an ERP.
- ERP system is not a silver bullet that solves all the problems. It is only a tool to solve specific problems.
- Implementing an ERP does not bring competitiveness if your processes are not competitive.
- ERP is the integrated solution of MRP with accounting, sales and other departmens/systems.
- There are many ERP solutions, especially for sector specific.
- SAP has a R/3 system which includes many generic modules with "best practice"s.
- With an ERP system system, information sharing and entering the data once is maximized.This reduces the in accurate sales, demand and other forecasts. At least one forecast for all departments.
- Working on the same sector does not show that business have same operations cycles.
- ERP systems are not flexible for flexible/project based tailoring systems. Generally if there are many repeating tasks than ERP systems, makes the life easier.
- For mass production or just in time production with very little changing components, ERP systems increases the supply chain, manufacturing and sales cycle with integrated solutions to other systems. So the total output of the company increases because of automation.
- If you want to implement an ERP system, a team should be setup with personnel who has enough information about what it is done in the company.
- There are many consultant that wants to help to find a proper way.
- There is a fast implementation solution for SAP, called ASAP. It is a methodology that puts a roadmap. There are many configuration parameters for SAP and this methodology asks questions to define these parameters.
- Before implementing an ERP systems, problems with the processes, organization and other aspects should be solved as operations point of view, since managers solve the problems not the programs.
- If in the manual process, people do not obey the rules, implementing an ERP system does not solve the problem if those people do not enter proper data to the system.
- Before implementing a system the effected users should be defined and the final picture about these guys should be clarified in order to minimize the resistance of people to the change.
- During the implementation, generally technology guys make under estimation about the problems. This should be considered carefully buy the managers.
- Training is another most important part of the implementation. If people do not know how to use the software they make wrong things and trying to recover them might be frightening.
- Taking consultancy speeds the implementation. Although it is expensive, going to a wrong way might be more expensive.
- With the pressure of time and top management some wrong decisions can be given to save the day. But these bring more problems, may be the failure.
- After the implementation, new firms should stay in business, so the competitiveness should not be killed by changing the competitive processes in the company, just to automate.
- Best suitable ERP solution to the current processes/workflow should be chosen to implement, else it will be cumbersome.
Day 3 Articles
Articles:
A Framework for evaluating ERP Implementation choices:
This paper is about how to find a way to match the ERP system and the organization's business process by appropriately customizing the ERP system or the business process. Reasons for failures are interesting:
Key decision in the early stages is whether to accept the assumptions about business processes built into the system. Software development life cycle methodology is a little bit different in ERP projects, since analysis and design phases should be merged in ERP implementations.
There are two types of customization: Technical and process. Technical one is making modifications one the ERP system. Moving from module customization to code customization increases the risk and cost but it may or may not increase the benefits that much.
Moreover, technical change capability and process change capability should be considered to define the customization's scope whether it is a technical modification or not.
A Framework for evaluating ERP Implementation choices:
This paper is about how to find a way to match the ERP system and the organization's business process by appropriately customizing the ERP system or the business process. Reasons for failures are interesting:
- spending more money on ERP than the company can afford
- being incompatible with strategic partners
- conflicting with management style and structure
- being overwhelmed by the required organizational changes to fit the system
- dealing with ever changing ERP technology and its infrastructure
Key decision in the early stages is whether to accept the assumptions about business processes built into the system. Software development life cycle methodology is a little bit different in ERP projects, since analysis and design phases should be merged in ERP implementations.
There are two types of customization: Technical and process. Technical one is making modifications one the ERP system. Moving from module customization to code customization increases the risk and cost but it may or may not increase the benefits that much.
Moreover, technical change capability and process change capability should be considered to define the customization's scope whether it is a technical modification or not.
Day 2 Learnings- OnurOzensoy
After a review of Day 1, we elaborated on Customer Relations Management-CRM modules/solutions
CRM is a company wide application that manages relations with customers i order to increase loyalty and decrease costs regarding to this function. An important implication here is that CRM is especially important to keep profitable current customers, which make most of the contribution to the company. There are three mainstream types of CRM applications; Enterprise, Mid-market and On-Demand.
Although we had some communication problems with our friend Kumar, we tried to follow a presentation of market share leader Oracle CRM software. Siebel is the CRM application of Oracle, which is among a few vendors of CRM like PeopleSoft (currently under Oracle), Salesforce.com etc.
Siebel has CRM Enterprise, Professional and On-Demand editions. There are many industries that may use specific applications of Siebel, which include consumer goods, hospitality, finance, energy and many others. There are five types of clients that can utilize Siebel, Web client, Handheld client, mobile client, wireless client and dedicated web client.
During the implementation decision of an ERP system, firms should consider and compare a pre-ERP SWOT analysis to a post-implementation estimated SWOT analysis. A GAP analysis to determine the differences and the time and resources needed, is also necessary. Three obvious benefits of implementation are to be presented to executives. An elevator speech which is a short, informative talk about the benefits and/or necessity will also come in handy. Identifying benefits, benefit category, improvement opportunities and implementation plan is crucial in the decision and preparation of an ERP cost vs. benefit analysis along with key performance indicators, business objectives, projected sales etc.
Not all companies are capable of implementing an ERP. It is not just costly but also requires accurate and proper data input and willingness to use the system. Assessing these organizational readiness aspects is also very essential.
CRM is a company wide application that manages relations with customers i order to increase loyalty and decrease costs regarding to this function. An important implication here is that CRM is especially important to keep profitable current customers, which make most of the contribution to the company. There are three mainstream types of CRM applications; Enterprise, Mid-market and On-Demand.
Although we had some communication problems with our friend Kumar, we tried to follow a presentation of market share leader Oracle CRM software. Siebel is the CRM application of Oracle, which is among a few vendors of CRM like PeopleSoft (currently under Oracle), Salesforce.com etc.
Siebel has CRM Enterprise, Professional and On-Demand editions. There are many industries that may use specific applications of Siebel, which include consumer goods, hospitality, finance, energy and many others. There are five types of clients that can utilize Siebel, Web client, Handheld client, mobile client, wireless client and dedicated web client.
During the implementation decision of an ERP system, firms should consider and compare a pre-ERP SWOT analysis to a post-implementation estimated SWOT analysis. A GAP analysis to determine the differences and the time and resources needed, is also necessary. Three obvious benefits of implementation are to be presented to executives. An elevator speech which is a short, informative talk about the benefits and/or necessity will also come in handy. Identifying benefits, benefit category, improvement opportunities and implementation plan is crucial in the decision and preparation of an ERP cost vs. benefit analysis along with key performance indicators, business objectives, projected sales etc.
Not all companies are capable of implementing an ERP. It is not just costly but also requires accurate and proper data input and willingness to use the system. Assessing these organizational readiness aspects is also very essential.
Day 2 Articles
ERP Software:
Enterprise resource planning allows the collection and consolidation of information across the enterprise. This application allows for tracking and basic reporting
All input from different departments, collected at a central location.
By installing ERP to their companies, companies can compare the financial data and track the purchases under way.
In the case it can be seen that by installing ERP software, they added a kind of advantage which they can consistently buy things.
There are some drawbacks of ERP such as it takes long time to convert the data used before ERP into single enterprise-level program.
Duplication of data is another problem.
The ERP Purchase Decision: Influential Business and IT Factors
In that paper the main goal is to identify set of businesses and IT factors that are associated with the purchase of ERP systems.
While taking ERP Purchase decision there are four business factors, data integration, new ways of doing business, global capabilities, flexibility/agility and there are four IT factors such as IT purchasing, IT cost reduction, IT expertise and IT architecture is identified.
IS professionals are frequently involved in the implementation of large scale integrated, cross functional systems which is named ERP. 13% of mid-sized European companies buy ERP for one specific area, 70% of companies buy ERP for more than three functional areas.
Operational changes with third-party consulting costs ranges from 2 times to 10 times the purchase price of the ERP software.
There are three business capabilities that influence the ERP purchases: The ability to better meet various competitive goals, the desire to reengineer business purchases, and access to integrated data.
Before 1990s another benefit of the ERP systems was avoiding year 2000 problems.
Assessing the ERP Software
Most companies have an idea of implementing their preferences before the selection process begins.
While the supply chain management market has shrunk with the economic downturn, ERP vendors’ share of the market increases.
ERP vendors give importance on developing their modules.
Execution side of supply chain management grew 4% while planning segment decreased by 10%.
Third party software vendors would specialize in vertical industries, targeting mid-market customers.
There are some weak points of ERP softwares such as they can not handle returns or reverse logistics very well.
Decision Making in the Evaluation, Selection and Implementation of ERP Systems
Decision making selection and implementation of ERP systems involve making multiple decisions during the ERP project lifecycle.
ERP projects are strategic projects for the whole benefit of the organization.
ERP systems are expensive projects that exceed $100,000 and takes time to implement 6 months to 2 years.
ERPs are implemented in order to support supply chain management, customer relationship management, professional service automation and other areas.
There are 6 decision making models for implementation of ERP projects,
The Classical Model: Based on econ theory
The Administrative Model: Looks at alternatives that meet min. standards
The Incremental Model: Decision makers make small changes by making successive limited comparisons.
The Adaptive Model: Mix of administrative and incremental models
The Irrational Model: Decisions are a product of organizational events
The Political Model: The model is one in which politics replace organizational goals
Enterprise resource planning allows the collection and consolidation of information across the enterprise. This application allows for tracking and basic reporting
All input from different departments, collected at a central location.
By installing ERP to their companies, companies can compare the financial data and track the purchases under way.
In the case it can be seen that by installing ERP software, they added a kind of advantage which they can consistently buy things.
There are some drawbacks of ERP such as it takes long time to convert the data used before ERP into single enterprise-level program.
Duplication of data is another problem.
The ERP Purchase Decision: Influential Business and IT Factors
In that paper the main goal is to identify set of businesses and IT factors that are associated with the purchase of ERP systems.
While taking ERP Purchase decision there are four business factors, data integration, new ways of doing business, global capabilities, flexibility/agility and there are four IT factors such as IT purchasing, IT cost reduction, IT expertise and IT architecture is identified.
IS professionals are frequently involved in the implementation of large scale integrated, cross functional systems which is named ERP. 13% of mid-sized European companies buy ERP for one specific area, 70% of companies buy ERP for more than three functional areas.
Operational changes with third-party consulting costs ranges from 2 times to 10 times the purchase price of the ERP software.
There are three business capabilities that influence the ERP purchases: The ability to better meet various competitive goals, the desire to reengineer business purchases, and access to integrated data.
Before 1990s another benefit of the ERP systems was avoiding year 2000 problems.
Assessing the ERP Software
Most companies have an idea of implementing their preferences before the selection process begins.
While the supply chain management market has shrunk with the economic downturn, ERP vendors’ share of the market increases.
ERP vendors give importance on developing their modules.
Execution side of supply chain management grew 4% while planning segment decreased by 10%.
Third party software vendors would specialize in vertical industries, targeting mid-market customers.
There are some weak points of ERP softwares such as they can not handle returns or reverse logistics very well.
Decision Making in the Evaluation, Selection and Implementation of ERP Systems
Decision making selection and implementation of ERP systems involve making multiple decisions during the ERP project lifecycle.
ERP projects are strategic projects for the whole benefit of the organization.
ERP systems are expensive projects that exceed $100,000 and takes time to implement 6 months to 2 years.
ERPs are implemented in order to support supply chain management, customer relationship management, professional service automation and other areas.
There are 6 decision making models for implementation of ERP projects,
The Classical Model: Based on econ theory
The Administrative Model: Looks at alternatives that meet min. standards
The Incremental Model: Decision makers make small changes by making successive limited comparisons.
The Adaptive Model: Mix of administrative and incremental models
The Irrational Model: Decisions are a product of organizational events
The Political Model: The model is one in which politics replace organizational goals
Lessons Learned - Day 2 - Emre AKIN
- There can be several reasons for a company to implement ERP systems. They can be implemented only for a few functions like accounting and purchasing, or if the company may wish to exercise more control over her operations and thus increase efficiency.
- However ERP systems are not always advised to all companies. If the costs of implementation of an ERP system outweigh the benefits, no need to apply for it. Or implementing an ERP system without training employees appropriately would cause more chaos in the company. Furthermore if a company is not intending to grow, there may be again no need for an ERP implementation.
- Implementation of an ERP system is like implementing a strategic management. The company should first make a SWOT analysis and identify the level it aims to reach. Then according to the Gap Analysis, respective model of the ERP system should be defined.
- Furthermore it is crucial to identify a group of metrics that will be tracked during the implementation plan. The critical point is to match these metrics with the strategic targets of the company.
- However ERP systems are not always advised to all companies. If the costs of implementation of an ERP system outweigh the benefits, no need to apply for it. Or implementing an ERP system without training employees appropriately would cause more chaos in the company. Furthermore if a company is not intending to grow, there may be again no need for an ERP implementation.
- Implementation of an ERP system is like implementing a strategic management. The company should first make a SWOT analysis and identify the level it aims to reach. Then according to the Gap Analysis, respective model of the ERP system should be defined.
- Furthermore it is crucial to identify a group of metrics that will be tracked during the implementation plan. The critical point is to match these metrics with the strategic targets of the company.
Highlight of the Book "Why ERP?" - Emre AKIN
What I have learned from the book "Why ERP?" is as below.
- ERP can be seen both as a silver bullet solution and as a horror story. It all depends on how companies realize ERP implementation programs.
- No software can manage the company; it is the people who run the company indeed.
- MRP systems can handle necessary production processes and can be tailored to customize different processes. However successes of these customizations are mainly depends on the experience of the workforce and managers.
- Once ERP systems are implemented, they project significant benefits including better clerical efficiency, some reductions in overhead costs, and much better information running the business.
- ERP systems are simply integrated information systems, like talking of accounting system to sales system, which talks to production systems…
- It’s even possible to integrate your customers and suppliers within an ERP system.
- ERP is based on using a common information/databease. There is one inventory for an item like one value for monthly sales, a single production schedule, and only one accounts receivable amount.
- The information in the ERP systems is updated as changes occur and the new status is available for everybody to use to manage their part of business.
- Before implementing an ERP system, the management problems need to clarified and the relationship between functions should be clearly defined. ERP software is not able make such managerial decisions.
- Since ERP system is based on an integrated approach, it leads great complexity. This requires a second set of decisions to be made before ERP implementation and it is about the information flow between functions of the company.
- ERP software houses have a view of the enterprise that may not match that of some of their customers. It may be too restrictive for managers to apply these formality required by ERP systems.
- Entering data into ERP systems, especially at the initial transition phase requires extensive formal procedures.
- There is a great deal of management work needed before ERP implementation, which can not be delegated to someone who does not know the plant intimately.
- There are several reasons who companies implement ERP systems:
--- Legacy systems of the company may not be totally integrated. ERP may serve to sweep out these legacy systems and integrate various functions of the business of force a badly needed organizational change.
--- If the company has several plants and facilities around the country or the world, ERP may provide an effective tool for better communication and integration between them.
--- If the company needs to change to be positioned to exploit future communication and computing technology for E-business and other applications.
- ERP/SAP systems can be applied by companies from a variety of sectors, as can be understood from the diversity of the SAP seminar group.
- SAP stands for Systems, Applications and Products in Data Processing.
- R3 is an SAP product that integrates the information throughout an organization, providing the benefits of single data entry, immediate access, and common data.
- R3 is a multi-lingual software package and understands different currencies.
- R3 has chosen names for functions like sales, product development/marketing, human resources etc… However if a company has other names for these functions, R3 can accommodate these differences.
- The basic idea behind ERP is that if information is completely common, and the processes are completely integrated then organizational integration is possible. Moreover duplication of information is eliminated, saving time and improving the efficiency of operations.
- Integration of the organization requires changing the way people handle their businesses most of the time.
- R3 goes beyond material, labor, and production centered manufacturing systems to integrate all functions of the business, from hiring, training, and firing decisions to running the sales campaign to tracking the portfolio of assets owned by the company.
- R3 can support the operation of multiple international sites, global sourcing of parts, global distribution and provide appropriate performance metrics for operations around the world.
- R3 can be implemented to both multi-plant enterprises and single shops. R3 systems should be scaled according to need, which is called configuration.
- R3 allows companies to create their own menus and submenus.
- R3 designers have incorporated contemporary business practices in the R3 software. SAP calls these processes as best practices.
- Every one of the hundreds of processes supported by the R3 system is documented.
- One of the significant benefits of ERP systems is that everyone who needs to know of a change that could affect them is immediately notified.
- Having just one entry point for data that is distributed is a very big advantage in terms of minimizing the chances of error.
- Accelerated SAP (ASAP) is a guide for companies to get involved with R3 implementation. This program is mainly for smaller companies or for the ones that do not want to reengineer their processes completely.
- ASAP defines a sequence of activities called Roadmap in five major phases; namely Project Preparation, Business Blueprint, Realization, Final Preparation, and Go Live and Support.
- R3 programs are general so they apply to all kinds of organizations. That means they are developed around generic processes that must be performed in any business.
- Even after configuring the R3 system, it may still be needed to change some people’s job to fit the new processes.
- R3 is designed so that multiple clients can be run within a single system, if each division has their own version of R3. Each division in this case is a client and independent.
- R3 is a collection of individual computer programs.
- Integration of sales system to R3 makes it possible to receive orders via fax, EDI, internet.
- R3 system can also handle vendor contracts that include various quantity discounts, special scheduling agreements, and special quotas such as minimum order quantities.
- It is possible to automatically generate an electronic mail message to inform the person that ordered the goods that they have been received.
- Information obtained from R3 can also be quickly exported to Microsoft Excel spreadsheet for more specialized analysis.
- R3 organizes accounting information around external and internal users.
- External users require published information in conformance with legal requirements such as audit/annual reports.
- Internal users could be at any level in the company and require information on internal operations.
- Custom reports can be created and all data can be exported to Microsoft Excel sheets for custom analysis.
- R3 has materials requirements planning. The first step is determination of requirements. The second step is called master scheduling and is the process of determining how to meet this demand. The actual master schedule is a manufacturing plan reflecting how demand will be met. MRP program calculates detailed schedules for all supporting assemblies, subassemblies, and component parts.
- Execution of the MRP program also involves capturing details for tracking progress and cost accounting. An extensive reporting system regarding MRP activities is also provided by R3.
- Scalability refers to the ability to match the processing requirements to the needs of the organization over time.
- To make scalability possible, the computers are organized into three distinct tiers. At the heart of the system is the data base computer called server. The database server is a special computer designed to be very reliable. These database servers can be purchased from many vendors and there few suppliers of database programs that can work with R3.
- The next tier is the application layer. These are the computers that run R3 software.
- The last tier is the presentation layer. This consist of computers that users are actually using.
- The terms three tier client-server system is used to describe this approach to hardware support for the system. The application servers also send commands to the database servers to retrieve and store all the data used by the system.
- Knowledgeable people working in the implementation project in order to configure the system appropriately.
- Since each server will be running multiple programs, the system administrator needs to assign programs to the available computers and to set priorities for running these programs. This allocation of resources and setting priorities is often referred as tuning of the system.
- Oracle supplies both database software and ERP application software. The common database is still important aspect of their approach but their software is much more open to customization. Than means that R3 could use Oracle as the database for their system.
- If customers and suppliers are utilizing a special kind of ERP systems like SAP, the company should also utilize the same system to maximize the data communication between systems.
- Employees should be well communicated about ERP systems. Otherwise it is not surprising have bad attitudes toward ERP implementation. Their main concern is to be replaced by computers or at best have to learn whole new jobs.
- ERP systems don’t provide competitive advantages but may be generic operational effectiveness.
- ERP can be seen both as a silver bullet solution and as a horror story. It all depends on how companies realize ERP implementation programs.
- No software can manage the company; it is the people who run the company indeed.
- MRP systems can handle necessary production processes and can be tailored to customize different processes. However successes of these customizations are mainly depends on the experience of the workforce and managers.
- Once ERP systems are implemented, they project significant benefits including better clerical efficiency, some reductions in overhead costs, and much better information running the business.
- ERP systems are simply integrated information systems, like talking of accounting system to sales system, which talks to production systems…
- It’s even possible to integrate your customers and suppliers within an ERP system.
- ERP is based on using a common information/databease. There is one inventory for an item like one value for monthly sales, a single production schedule, and only one accounts receivable amount.
- The information in the ERP systems is updated as changes occur and the new status is available for everybody to use to manage their part of business.
- Before implementing an ERP system, the management problems need to clarified and the relationship between functions should be clearly defined. ERP software is not able make such managerial decisions.
- Since ERP system is based on an integrated approach, it leads great complexity. This requires a second set of decisions to be made before ERP implementation and it is about the information flow between functions of the company.
- ERP software houses have a view of the enterprise that may not match that of some of their customers. It may be too restrictive for managers to apply these formality required by ERP systems.
- Entering data into ERP systems, especially at the initial transition phase requires extensive formal procedures.
- There is a great deal of management work needed before ERP implementation, which can not be delegated to someone who does not know the plant intimately.
- There are several reasons who companies implement ERP systems:
--- Legacy systems of the company may not be totally integrated. ERP may serve to sweep out these legacy systems and integrate various functions of the business of force a badly needed organizational change.
--- If the company has several plants and facilities around the country or the world, ERP may provide an effective tool for better communication and integration between them.
--- If the company needs to change to be positioned to exploit future communication and computing technology for E-business and other applications.
- ERP/SAP systems can be applied by companies from a variety of sectors, as can be understood from the diversity of the SAP seminar group.
- SAP stands for Systems, Applications and Products in Data Processing.
- R3 is an SAP product that integrates the information throughout an organization, providing the benefits of single data entry, immediate access, and common data.
- R3 is a multi-lingual software package and understands different currencies.
- R3 has chosen names for functions like sales, product development/marketing, human resources etc… However if a company has other names for these functions, R3 can accommodate these differences.
- The basic idea behind ERP is that if information is completely common, and the processes are completely integrated then organizational integration is possible. Moreover duplication of information is eliminated, saving time and improving the efficiency of operations.
- Integration of the organization requires changing the way people handle their businesses most of the time.
- R3 goes beyond material, labor, and production centered manufacturing systems to integrate all functions of the business, from hiring, training, and firing decisions to running the sales campaign to tracking the portfolio of assets owned by the company.
- R3 can support the operation of multiple international sites, global sourcing of parts, global distribution and provide appropriate performance metrics for operations around the world.
- R3 can be implemented to both multi-plant enterprises and single shops. R3 systems should be scaled according to need, which is called configuration.
- R3 allows companies to create their own menus and submenus.
- R3 designers have incorporated contemporary business practices in the R3 software. SAP calls these processes as best practices.
- Every one of the hundreds of processes supported by the R3 system is documented.
- One of the significant benefits of ERP systems is that everyone who needs to know of a change that could affect them is immediately notified.
- Having just one entry point for data that is distributed is a very big advantage in terms of minimizing the chances of error.
- Accelerated SAP (ASAP) is a guide for companies to get involved with R3 implementation. This program is mainly for smaller companies or for the ones that do not want to reengineer their processes completely.
- ASAP defines a sequence of activities called Roadmap in five major phases; namely Project Preparation, Business Blueprint, Realization, Final Preparation, and Go Live and Support.
- R3 programs are general so they apply to all kinds of organizations. That means they are developed around generic processes that must be performed in any business.
- Even after configuring the R3 system, it may still be needed to change some people’s job to fit the new processes.
- R3 is designed so that multiple clients can be run within a single system, if each division has their own version of R3. Each division in this case is a client and independent.
- R3 is a collection of individual computer programs.
- Integration of sales system to R3 makes it possible to receive orders via fax, EDI, internet.
- R3 system can also handle vendor contracts that include various quantity discounts, special scheduling agreements, and special quotas such as minimum order quantities.
- It is possible to automatically generate an electronic mail message to inform the person that ordered the goods that they have been received.
- Information obtained from R3 can also be quickly exported to Microsoft Excel spreadsheet for more specialized analysis.
- R3 organizes accounting information around external and internal users.
- External users require published information in conformance with legal requirements such as audit/annual reports.
- Internal users could be at any level in the company and require information on internal operations.
- Custom reports can be created and all data can be exported to Microsoft Excel sheets for custom analysis.
- R3 has materials requirements planning. The first step is determination of requirements. The second step is called master scheduling and is the process of determining how to meet this demand. The actual master schedule is a manufacturing plan reflecting how demand will be met. MRP program calculates detailed schedules for all supporting assemblies, subassemblies, and component parts.
- Execution of the MRP program also involves capturing details for tracking progress and cost accounting. An extensive reporting system regarding MRP activities is also provided by R3.
- Scalability refers to the ability to match the processing requirements to the needs of the organization over time.
- To make scalability possible, the computers are organized into three distinct tiers. At the heart of the system is the data base computer called server. The database server is a special computer designed to be very reliable. These database servers can be purchased from many vendors and there few suppliers of database programs that can work with R3.
- The next tier is the application layer. These are the computers that run R3 software.
- The last tier is the presentation layer. This consist of computers that users are actually using.
- The terms three tier client-server system is used to describe this approach to hardware support for the system. The application servers also send commands to the database servers to retrieve and store all the data used by the system.
- Knowledgeable people working in the implementation project in order to configure the system appropriately.
- Since each server will be running multiple programs, the system administrator needs to assign programs to the available computers and to set priorities for running these programs. This allocation of resources and setting priorities is often referred as tuning of the system.
- Oracle supplies both database software and ERP application software. The common database is still important aspect of their approach but their software is much more open to customization. Than means that R3 could use Oracle as the database for their system.
- If customers and suppliers are utilizing a special kind of ERP systems like SAP, the company should also utilize the same system to maximize the data communication between systems.
- Employees should be well communicated about ERP systems. Otherwise it is not surprising have bad attitudes toward ERP implementation. Their main concern is to be replaced by computers or at best have to learn whole new jobs.
- ERP systems don’t provide competitive advantages but may be generic operational effectiveness.
Day 2 Article Learnings - Can Altay
* The ERP Purchase Decision: Influential Business and IT Factors
* ERP packages are analyzed in terms of their business capabilities and their IT capabilities. Their Business capabilities are:
- They can meet various competitive goals in a better way
- They can give user access to the integrated data
- They can provide the desire to rethink and reengineer the business processes
Their IT capabilities are:
- They can provide the desire to replace aging systems that do not meet the needs of the firm with more modern and broad architectures that match corporate requirements
- Getting rid of having to build software for the company and possibly reduce information system cost
* Assessing ERP Software: ERP software sales caused sharp decrease in the market share of supply chain planning software vendors.
* Netweaver: Enables integration and coordination of SAP and non-SAP applications.
* ERP vendors have formed partnerships in order to provide integration services to customers.
*Buyer’s inside ERP software: The City of Winnipeg example
- Legacy system integration is actually much harder !
- ERP systems can also have duplicated data
- Implementation cost varies depending on size of the company and number of users
- Implementation can take up to more than 2 years
* Implement ERP package as it comes out of the package.
* Decision Making in the Evaluation, Selection and Implementation of ERP Systems
Six models for decision making for the ERP system:
1) Classical: This model seeks to find a best alternative to maximize the achievements. Is not a feasible model, because it requires that all alternatives should be implemented before making a decision, which makes no sense
2) Administrative: This model seeks for alternatives that meet the minimal number of requirements of the company.
3) Incremental: No clear objectives, minor changes.
4) Adaptive: I did not clearly understand what this model mentions.
5) Irrational: Decisions are a product of organizational events.
6) Political: Politics more important than organizational goals.
* The article states that different models can be applicable in different parts of the decision process.
- Initiation: Political model
- Requirements analysis: Adaptive model
- Inviting vendors: Political model
- Vendor short-listing: Administrative and political models
- Implementation: Adaptive model
- After implementation: Administrative model
* Article mentions about several research findings, including:
- Politics inside the company (in terms of personal and group) influence decision-making very dramatically.
- Only a very small number of the alternatives are evaluated, which may be unhealthy for the corporation. - ERP cannot handle reverse logistics well.
* ERP packages are analyzed in terms of their business capabilities and their IT capabilities. Their Business capabilities are:
- They can meet various competitive goals in a better way
- They can give user access to the integrated data
- They can provide the desire to rethink and reengineer the business processes
Their IT capabilities are:
- They can provide the desire to replace aging systems that do not meet the needs of the firm with more modern and broad architectures that match corporate requirements
- Getting rid of having to build software for the company and possibly reduce information system cost
* Assessing ERP Software: ERP software sales caused sharp decrease in the market share of supply chain planning software vendors.
* Netweaver: Enables integration and coordination of SAP and non-SAP applications.
* ERP vendors have formed partnerships in order to provide integration services to customers.
*Buyer’s inside ERP software: The City of Winnipeg example
- Legacy system integration is actually much harder !
- ERP systems can also have duplicated data
- Implementation cost varies depending on size of the company and number of users
- Implementation can take up to more than 2 years
* Implement ERP package as it comes out of the package.
* Decision Making in the Evaluation, Selection and Implementation of ERP Systems
Six models for decision making for the ERP system:
1) Classical: This model seeks to find a best alternative to maximize the achievements. Is not a feasible model, because it requires that all alternatives should be implemented before making a decision, which makes no sense
2) Administrative: This model seeks for alternatives that meet the minimal number of requirements of the company.
3) Incremental: No clear objectives, minor changes.
4) Adaptive: I did not clearly understand what this model mentions.
5) Irrational: Decisions are a product of organizational events.
6) Political: Politics more important than organizational goals.
* The article states that different models can be applicable in different parts of the decision process.
- Initiation: Political model
- Requirements analysis: Adaptive model
- Inviting vendors: Political model
- Vendor short-listing: Administrative and political models
- Implementation: Adaptive model
- After implementation: Administrative model
* Article mentions about several research findings, including:
- Politics inside the company (in terms of personal and group) influence decision-making very dramatically.
- Only a very small number of the alternatives are evaluated, which may be unhealthy for the corporation. - ERP cannot handle reverse logistics well.
Lessons Learned v2.0 by Tolga YILDIRIM
Peter Drucker has influenced the way business people perceive what business is and the way they act and operate, by stating that the fundamental aim of a business is to create and keep profitable customers. His statement has shifted the focus from Fordism to customer-centric approaches. Today, business schools all around the world are embedding the importance of understanding customer needs, into their curriculums and companies, at least some of them, are trying hard to identify their customers and their needs, and make superior value propositions that the customers cannot refuse. CRM, which stands for Customer Relationship Management, is an invaluable element of this business endeavor.
Via utilizing CRM tools, companies seek to learn more about their customers’ needs and behaviors in order to develop stronger relationships with their customers. They can provide services and products that are exactly what customers want, offer better customer service and increase loyalty among customers. A good CRM application helps companies in two ways; first one is related to analyzing patterns, the second one is related to one-to-one relations.
Let us start with the first broad benefit. Pareto’s original 80/20 rule states that 80% of a nation’s wealth is enjoyed by the 20% of the society; where the remaining 20% of the wealth is enjoyed by 80% of the society. Pareto’s 80/20 rule can be applied to businesses, also. Most of the profits of businesses come from a couple of specific customer profiles. In order to align with Drucker’s ‘creating and keeping profitable customers’ idea, companies should seek to understand their customers, their behaviors and analyze patterns to increase the number of profitable customers they have. Good CRM implementations enable companies to do that.
Second broad benefit is dramatic effectiveness in one-to-one relationships with customers. Sales force gets the ability to close deals faster, and the ability to offer the best value proposition to a customer. Customer service increases and the individual customer feels he/she gets the treatment he/she deserves. Increased effectiveness in one-to-one relationships with customers directly raises loyalty, thereby helps companies keep profitable customers, and make each customer more profitable!
Siebel is the world-wide leader in CRM applications. Oracle has acquired Siebel, as well as Peoplesoft and JD Edwards. Siebel has specialized its CRM offerings into different industries, such as consumer goods, pharmaceuticals, financial services, in order to increase the effectiveness of its products. It has three different applications, which are Siebel CRM Enterprise, Siebel CRM Professional Edition and Siebel CRM OnDemand. It is highly remarkable that Siebel has added an on-demand solution to its portfolio as a traditional CRM software solution provider. It has five types of customers, which are, Siebel Web Client, Handheld client, Wireless web client, Mobile web client and Siebel Dedicated client.
During the analysis for ERP procurement, companies should perform SWOT analysis to understand the current, as well as potential future internal and external environment in addition to GAP analysis. During the decision making process, we should keep in mind the business objectives, critical success factors, key performance indicators and benefits.
Via utilizing CRM tools, companies seek to learn more about their customers’ needs and behaviors in order to develop stronger relationships with their customers. They can provide services and products that are exactly what customers want, offer better customer service and increase loyalty among customers. A good CRM application helps companies in two ways; first one is related to analyzing patterns, the second one is related to one-to-one relations.
Let us start with the first broad benefit. Pareto’s original 80/20 rule states that 80% of a nation’s wealth is enjoyed by the 20% of the society; where the remaining 20% of the wealth is enjoyed by 80% of the society. Pareto’s 80/20 rule can be applied to businesses, also. Most of the profits of businesses come from a couple of specific customer profiles. In order to align with Drucker’s ‘creating and keeping profitable customers’ idea, companies should seek to understand their customers, their behaviors and analyze patterns to increase the number of profitable customers they have. Good CRM implementations enable companies to do that.
Second broad benefit is dramatic effectiveness in one-to-one relationships with customers. Sales force gets the ability to close deals faster, and the ability to offer the best value proposition to a customer. Customer service increases and the individual customer feels he/she gets the treatment he/she deserves. Increased effectiveness in one-to-one relationships with customers directly raises loyalty, thereby helps companies keep profitable customers, and make each customer more profitable!
Siebel is the world-wide leader in CRM applications. Oracle has acquired Siebel, as well as Peoplesoft and JD Edwards. Siebel has specialized its CRM offerings into different industries, such as consumer goods, pharmaceuticals, financial services, in order to increase the effectiveness of its products. It has three different applications, which are Siebel CRM Enterprise, Siebel CRM Professional Edition and Siebel CRM OnDemand. It is highly remarkable that Siebel has added an on-demand solution to its portfolio as a traditional CRM software solution provider. It has five types of customers, which are, Siebel Web Client, Handheld client, Wireless web client, Mobile web client and Siebel Dedicated client.
During the analysis for ERP procurement, companies should perform SWOT analysis to understand the current, as well as potential future internal and external environment in addition to GAP analysis. During the decision making process, we should keep in mind the business objectives, critical success factors, key performance indicators and benefits.
Day 2 - Article key points - Seçil Akdemir
Assessing ERP Software
Supply chain planning vendors lost a lot of market share both due to the decrease in the market size with the economic downturn and the increase in ERP software share in the market.
For instance, SAP had given high importance on developing and improving the supply chain modules developed for different industries.
The most important development in SAP is the NetWeaver which is an integration platform that enables the integration and coordination of both SAP and non-SAP applications.
Most of the ERP vendors have still have weaknesses in some types of applications or integration and in order to deal with this problem they have established partnerships with other companies that provide these services to the customers.
ERP Software
ERP is a kind of software which enables the integration and collection of data within the enterprise in a single database.
Since ERP systems are very complex, they have some shortcomings. One of the most important drawbacks is that when a company decides on passing to ERP, all of the duplicated and misaligned data will also go with it. Moreover, ERP systems do not provide analysis on data by itself, so the main thing is to be able to use that organized and single data in management analysis efficiently. The most critical point is also the difficulty in converting the legacy paper-based system into a single program.
ERP implementation cost depends on the size of the organization, the number of users and its database. An implementation trick if possible could be going generic and using the out of box version because when the vendors come with an upgrade, it is very easy to upgrade. However, in case of customization firms should spend time in checking the suitability with their system.
ERP Purchase Decision: Influential Business and IT Factors
· Four business factors that are influential in deciding on ERP purchase are data integration, new ways of doing business, global capabilities and flexibility.
· Four IT factors on deciding ERP purchase are IT purchasing, IT cost reduction, IT expertise and IT architecture.
· IS professionals are now more reluctant to develop and maintain customized frameworks for single entities. So, they have started to implement ERP systems which are more large-scale, cross-functionally integrated, packaged systems.
· ERP implementation and consultancy costs are very expensive so vendors have some solutions to make their products easier and less costly for mid and small sized firms.
· Current view is matching the business with the software rather than vise versa so ERP will enable to reengineer the business processes. Moreover, ERP systems have best practices in mind which will be beneficial for designing business processes. In addition to these features, ERP businesses supply one single enterprise data for the enterprise since it uses a single database for all of the data.
Decision Making in the Evaluation, Selection and Implementation of ERP Systems
ERP implementation projects are strategic ones so the result of the strategy is very important for the company. The main reason is that ERP projects are very expensive and time consuming and they may lead to changes in the efficiency of the business processes.
They are expensive but the decisions on these projects are not purely financial because it affects the way the business done.
The market for ERP business is growing very rapidly and one of the triggers is the growing electronic commerce business.
There are 6 different types of decision making models which are classical, administrative, incremental, adoptive, irrational and political models. In classical model, decision markers are seeking for the best alternative that is achievable. Administrative model is looking for the alternatives that meet minimum standards. Incremental model is used for complex and uncertain problems. For irrational model, decisions are a product of organizational events. In the case of political model, politics are more important than the organizational goals.
Day 2 - Lesson Learned - Seçil Akdemir
In order to mitigate going concern risk of small ERP vendors, firms can make long term contracts with expert people from the vendor. Another method could be developing an in-house expert.
ERP system do not solve single data problems by themselves, you still need communication between departments in order to benefit from this feature of ERP systems.
CRM is a company wide business strategy which is developed to increase profitability with increased consumer loyalty while decreasing costs.
There are 3 types of CRM companies which are Enterprise CRM, Mid Market CRM and On Demand CRM and major players in CRM business are Oracle, SAP, Peoplesoft and Salesforce.Com.
Siebel is the CRM application of Oracle Company and it is the only enterprise CRM in the market. It has certain advantages over others so it has the highest market share. Siebel is said to be easy to implement, administrate and maintain and user friendly.
Siebel also have different applications which are CRM Enterprise, CRM Professional Edition and CRM On Demand. Siebel has also different industry specific applications for consumer goods, finance, energy, media, clinic and etc.
Siebel also have different employee, partner, customer and mobile application types.
There are 5 types of Siebel Clients which can be listed as Siebel Web Client, Siebel Handheld Client, Siebel Wireless Web Client, Siebel Mobile Web Client, and Siebel Dedicated Web Client.
There could be lots of different reasons for a company in order to decide on implementing ERP and the most important one is the increasing automation and control over firm and data integrity. Moreover, ERP system could be useful in terms of increasing efficiency, sharing information among departments and competitiveness. Another important purpose is generally the accounting needs of the company. With the help of ERP systems, accounting systems will become more integrated to other operations therefore, number of errors in the system will probably decrease.
However, on the other hand ERP systems are very expensive systems so firms should do cost vs. benefit analysis in detail before deciding on implementation. Companies should also consider their know-how, availability of their staff and time besides money. In case of some traditional companies, organization readiness could also create a problem for the implementation because if people resist on using the system the huge investment could mean nothing than a cost. Moreover, in some business processes ERP systems could affect the efficiency negatively because ERP systems demand so much information.
Therefore, as mentioned above before deciding on ERP implementation, companies should do detailed analysis such as SWOT analysis and GAP analysis. They have to think about the need for such a system for their long term organizational goals. So, firms should always begin with their business objectives to the analysis.
SWOT analysis is a brief presentation of a company’s internal strengths, weaknesses and external opportunities and threats. This analysis will certainly be useful in order to observe the current situation of a company.
In the case of GAP analysis, we begin with the current situation and then analyzed the future desired situation. After that we will decide on what we have to do in order to reach our target position.
Elevator speech is like an executive summary which will shortly and briefly present the improvement opportunities with the benefits. After that it should also mention the implementation plan and certainly the metrics such as KPIs.
ERP system do not solve single data problems by themselves, you still need communication between departments in order to benefit from this feature of ERP systems.
CRM is a company wide business strategy which is developed to increase profitability with increased consumer loyalty while decreasing costs.
There are 3 types of CRM companies which are Enterprise CRM, Mid Market CRM and On Demand CRM and major players in CRM business are Oracle, SAP, Peoplesoft and Salesforce.Com.
Siebel is the CRM application of Oracle Company and it is the only enterprise CRM in the market. It has certain advantages over others so it has the highest market share. Siebel is said to be easy to implement, administrate and maintain and user friendly.
Siebel also have different applications which are CRM Enterprise, CRM Professional Edition and CRM On Demand. Siebel has also different industry specific applications for consumer goods, finance, energy, media, clinic and etc.
Siebel also have different employee, partner, customer and mobile application types.
There are 5 types of Siebel Clients which can be listed as Siebel Web Client, Siebel Handheld Client, Siebel Wireless Web Client, Siebel Mobile Web Client, and Siebel Dedicated Web Client.
There could be lots of different reasons for a company in order to decide on implementing ERP and the most important one is the increasing automation and control over firm and data integrity. Moreover, ERP system could be useful in terms of increasing efficiency, sharing information among departments and competitiveness. Another important purpose is generally the accounting needs of the company. With the help of ERP systems, accounting systems will become more integrated to other operations therefore, number of errors in the system will probably decrease.
However, on the other hand ERP systems are very expensive systems so firms should do cost vs. benefit analysis in detail before deciding on implementation. Companies should also consider their know-how, availability of their staff and time besides money. In case of some traditional companies, organization readiness could also create a problem for the implementation because if people resist on using the system the huge investment could mean nothing than a cost. Moreover, in some business processes ERP systems could affect the efficiency negatively because ERP systems demand so much information.
Therefore, as mentioned above before deciding on ERP implementation, companies should do detailed analysis such as SWOT analysis and GAP analysis. They have to think about the need for such a system for their long term organizational goals. So, firms should always begin with their business objectives to the analysis.
SWOT analysis is a brief presentation of a company’s internal strengths, weaknesses and external opportunities and threats. This analysis will certainly be useful in order to observe the current situation of a company.
In the case of GAP analysis, we begin with the current situation and then analyzed the future desired situation. After that we will decide on what we have to do in order to reach our target position.
Elevator speech is like an executive summary which will shortly and briefly present the improvement opportunities with the benefits. After that it should also mention the implementation plan and certainly the metrics such as KPIs.
Murat Bio
Hi, I am Murat Kirazlı. I have graduated from Middle East Technical University in 2006. During my undergraduate education I had two summer internships at Erdemir and Siemens. These internships in such big companies made me understand how processes are going on in big companies. After my graduation, I have started Bilkent MBA program from which I will probably graduate on 1 July. Along with my MBA program, I have founded two companies about manufacturing, designing and sales of lighting equipments with my partners (one of whom is Can Kızılay from our class). Due to the economic trend (especially increase in steel prices), we sold our shares in March 2008. When I finish my MBA proram (I hope in two weeks time!), I will start at an international consulting company in Strategy&Operations Division. My first project will be about energy market and regulations of the public authority. The company also recruits ERP consultants and gives consultany services for ERP applications. I think to have passable knowledge of ERP applications will be very beneficial for me as I will probably face with an ERP project in my near-future career.
Day 2 Elevator Speech
Day2 can be examined in three different topics.
First one, is the general overview of the day 1 that we talked about the small &major players, open source and on demand solutions.
Second one is another important issue CRM in ERP solutions. We have watched and webinar about the Siebel's CRM solution. Webinar was interesting since it talked about many aspects/features about the CRM solution from the importance and functionality of a CRM solution to the architectural approach of Siebel Enterprise CRM. May be because of the sound system in the class we could not understand all the talks and it became boring for the social sciences backgrounded people. In the webinar, Oracle, SAP, salesforce.com, clarify was given as the enterprise CRM solutions. Since it was about Siebel's solution, it says that Siebel's CRM is better since it has the highest market share, more integration points, easy to configure and code, easy administration and only enterprise solution in the market(?). Siebel has specialized business solutions for goods, pharma, media, etc and other supportive modules such as call center, marketing, sales, partner portal, orders, pricer, etc.
Third one is the most important part of the day, which is titled Building the ERP Business Case. First we should understand the initial need for an ERP system. More cotrol over processes, sharing info between departments and companies, easy accounting, process innovation and automation, data integrity between many systems, fewer people to maintain the same function and efficiency are some of the benefits ERP systems bring with them. If we need one or more of them implementing an ERP system should be considered. On the other hand, if the cost of implementation does not justify the benefits, if we do not enough staff to implement it, etc trying to implement a system might be harmful. In order to find the decision we should make some analysis. These are SWOT Analysis, GAP Analysis. And we should write a elevator speech. I had not heard this terminology before. It is something like, you are on the elevator with the decision maker and you have 45 seconds to say the problem, and the roadmap to solve the problem to convince him/her. During these analysis and speech, we should touch the implementation opportunities, benefits, implementation plan and metrics to understand if we are successful or not. While doing all these things we should link them to our strategic objectives, keeping in mind critical success factors, key performance indicators, benefits for each of the areas.
In the last our, we began to prepare a power point presentation for a company that we can apply the topics, we have learned today.
First one, is the general overview of the day 1 that we talked about the small &major players, open source and on demand solutions.
Second one is another important issue CRM in ERP solutions. We have watched and webinar about the Siebel's CRM solution. Webinar was interesting since it talked about many aspects/features about the CRM solution from the importance and functionality of a CRM solution to the architectural approach of Siebel Enterprise CRM. May be because of the sound system in the class we could not understand all the talks and it became boring for the social sciences backgrounded people. In the webinar, Oracle, SAP, salesforce.com, clarify was given as the enterprise CRM solutions. Since it was about Siebel's solution, it says that Siebel's CRM is better since it has the highest market share, more integration points, easy to configure and code, easy administration and only enterprise solution in the market(?). Siebel has specialized business solutions for goods, pharma, media, etc and other supportive modules such as call center, marketing, sales, partner portal, orders, pricer, etc.
Third one is the most important part of the day, which is titled Building the ERP Business Case. First we should understand the initial need for an ERP system. More cotrol over processes, sharing info between departments and companies, easy accounting, process innovation and automation, data integrity between many systems, fewer people to maintain the same function and efficiency are some of the benefits ERP systems bring with them. If we need one or more of them implementing an ERP system should be considered. On the other hand, if the cost of implementation does not justify the benefits, if we do not enough staff to implement it, etc trying to implement a system might be harmful. In order to find the decision we should make some analysis. These are SWOT Analysis, GAP Analysis. And we should write a elevator speech. I had not heard this terminology before. It is something like, you are on the elevator with the decision maker and you have 45 seconds to say the problem, and the roadmap to solve the problem to convince him/her. During these analysis and speech, we should touch the implementation opportunities, benefits, implementation plan and metrics to understand if we are successful or not. While doing all these things we should link them to our strategic objectives, keeping in mind critical success factors, key performance indicators, benefits for each of the areas.
In the last our, we began to prepare a power point presentation for a company that we can apply the topics, we have learned today.
Saturday, June 21, 2008
Onur's Bio
Selam,
I am a management undergrad at Bilkent University. I will graduate (hopefully:)) this September.
I see education as a two direction thing, opposed to the common notion that knowledge flows from teacher to student. I evaluate my teacher, and work only hard enough that I will get the grade I gave my teacher ^^. There's a note for Mrs. Eseryel! To be honest, I am not the type of guy who will work hard to get that 4.0 CGPA.
Returning to the bio,
I originally come from a very small town in Aydın, Turkey. All my life I moved from city to city, around the world. There really is not anywhere I would call home but earth itself. Hey that sounds tacky:)
I have always been very involved with all sorts of art, and plan a career in some field of it. Maybe music, maybe painting, maybe cinema. For now I work on all of them.
I chose to study management because my father wanted so. I have not the least interest in this field, yet people say I am talented at sales.
I worked overseas (in African countries) for a while as "market developer" for Turkish and European firms, mainly in construction industry. It is a new type of job that is only emerging. You can get commissions from all over the supply chain and make more money than anyone involved in it. But takes a lot of effort. Anyone up to it should not miss the opportunity. It is not for me though.. :)
I started playing this game called Travian two years ago. I liked it. Now I am working as a volunteer for the game. If you have accounts on any Turkish server, let me know!!:)
I am a management undergrad at Bilkent University. I will graduate (hopefully:)) this September.
I see education as a two direction thing, opposed to the common notion that knowledge flows from teacher to student. I evaluate my teacher, and work only hard enough that I will get the grade I gave my teacher ^^. There's a note for Mrs. Eseryel! To be honest, I am not the type of guy who will work hard to get that 4.0 CGPA.
Returning to the bio,
I originally come from a very small town in Aydın, Turkey. All my life I moved from city to city, around the world. There really is not anywhere I would call home but earth itself. Hey that sounds tacky:)
I have always been very involved with all sorts of art, and plan a career in some field of it. Maybe music, maybe painting, maybe cinema. For now I work on all of them.
I chose to study management because my father wanted so. I have not the least interest in this field, yet people say I am talented at sales.
I worked overseas (in African countries) for a while as "market developer" for Turkish and European firms, mainly in construction industry. It is a new type of job that is only emerging. You can get commissions from all over the supply chain and make more money than anyone involved in it. But takes a lot of effort. Anyone up to it should not miss the opportunity. It is not for me though.. :)
I started playing this game called Travian two years ago. I liked it. Now I am working as a volunteer for the game. If you have accounts on any Turkish server, let me know!!:)
day 2 learnings by ahmet k
Siebel - Owned by Oracle
CRM - Strategy designed to reduce costs & increase profitability by solidifying customer loyalty!
$18 billion market
Enterprice CRM leads
Many competitors: SAP, Salesforce, Oracle
Industry Apps
Employee Apps Customer Apps
PArtnerships Mobile Solns
Siebel Mobile: Java!
Web Client: Internet Explorer
Handhold Client: used to connect to database
Wireless Web Client: for small apps
Mobile Web Client: Laptop
Dedicated Web Client: reaches database
Web Server-----Gateway Server------Siebel Server------DatabaseServer & Siebel File System
Strategic Reason for Siebel: When Merging, ERP makes it easy to merge processes
No need for ERP usually when:
Costs of ERP are high and NPV can be negative, watch out!
No need for growth
Potential Analysis:
-------------------
SWOT (internal vs external factors)
GAP (difference between capabilities & targets)
Elevator Speech (the speech you give to a top guy/lady you catch in elevator to impress him/her) answers:
-whats the product/service/soln
-problem it addresses
-what does it do
-how does it work & it benefits
identify:
-improvement opportunities
-benefits
-benefit category
-implementation plan
link to:
% sales generated
bus. objectives
critical success factors
key perf. indicators
benefits for each area
CRM - Strategy designed to reduce costs & increase profitability by solidifying customer loyalty!
$18 billion market
Enterprice CRM leads
Many competitors: SAP, Salesforce, Oracle
Industry Apps
Employee Apps Customer Apps
PArtnerships Mobile Solns
Siebel Mobile: Java!
Web Client: Internet Explorer
Handhold Client: used to connect to database
Wireless Web Client: for small apps
Mobile Web Client: Laptop
Dedicated Web Client: reaches database
Web Server-----Gateway Server------Siebel Server------DatabaseServer & Siebel File System
Strategic Reason for Siebel: When Merging, ERP makes it easy to merge processes
No need for ERP usually when:
Costs of ERP are high and NPV can be negative, watch out!
No need for growth
Potential Analysis:
-------------------
SWOT (internal vs external factors)
GAP (difference between capabilities & targets)
Elevator Speech (the speech you give to a top guy/lady you catch in elevator to impress him/her) answers:
-whats the product/service/soln
-problem it addresses
-what does it do
-how does it work & it benefits
identify:
-improvement opportunities
-benefits
-benefit category
-implementation plan
link to:
% sales generated
bus. objectives
critical success factors
key perf. indicators
benefits for each area
day 2 readings by ahmet k
-Business Capabilities of ERP Packages:
ability to better meet various competitive goals,
desire to reengineer business processes,
and access to integrated data.
-IT Capabilities of ERP Packages:
desire to replace aging mainframe systems with more modern, enterprise-wide client-server architectures,
replacement of legacy systems that no longer meet the firm’s needs,
desire to reduce information systems costs by buying rather than building software
Decision Making Models:
-Classical; seek a best alternative to maximize achievements
-Administrative; look for alternatives that meet minimum standards
-Incremental; small incremental changes, successive limited comparisons with no set of clear objectives
-Adaptive; Administrative + Adaptive (mix of two)
-Irrational; Decision doesn't begin with a problem & end with solution, they are products of organizational events (!!??)
-Political; politics replace organizational goals, very common
Research findings:
-decisions during the lifecycle of the ERP project are structured or semistructured
-a small number of alternatives are evaluated
-objectives for ERP projects are well defined and they guide the decision-making process
-personal and group politics influence decision-making.
an ERP Weaknes: doesn't handle returns or reverse logistics well.
--
The book is a story about ERP implementation decision. The ownew of a business decides to buy his brother's business and wants to learn about the SAP system they use in the other business.
He puts a skeptical worker into charge and tells him to learn about ERP systems. The guy, spending considerable time on the topic, concludes that the system in the other business can't be implemented-at least easily to the current business because there were big differences in flexibilities of business and makes his recommendation accordingly. However, the owner was persuaded to implement the system in the other business by the IT manager of the other business. They massed up, and now our guy is in charge to clean it!
key learning: analyze well, speak to people; Talk, Communicate, discuss!
ability to better meet various competitive goals,
desire to reengineer business processes,
and access to integrated data.
-IT Capabilities of ERP Packages:
desire to replace aging mainframe systems with more modern, enterprise-wide client-server architectures,
replacement of legacy systems that no longer meet the firm’s needs,
desire to reduce information systems costs by buying rather than building software
Decision Making Models:
-Classical; seek a best alternative to maximize achievements
-Administrative; look for alternatives that meet minimum standards
-Incremental; small incremental changes, successive limited comparisons with no set of clear objectives
-Adaptive; Administrative + Adaptive (mix of two)
-Irrational; Decision doesn't begin with a problem & end with solution, they are products of organizational events (!!??)
-Political; politics replace organizational goals, very common
Research findings:
-decisions during the lifecycle of the ERP project are structured or semistructured
-a small number of alternatives are evaluated
-objectives for ERP projects are well defined and they guide the decision-making process
-personal and group politics influence decision-making.
an ERP Weaknes: doesn't handle returns or reverse logistics well.
--
The book is a story about ERP implementation decision. The ownew of a business decides to buy his brother's business and wants to learn about the SAP system they use in the other business.
He puts a skeptical worker into charge and tells him to learn about ERP systems. The guy, spending considerable time on the topic, concludes that the system in the other business can't be implemented-at least easily to the current business because there were big differences in flexibilities of business and makes his recommendation accordingly. However, the owner was persuaded to implement the system in the other business by the IT manager of the other business. They massed up, and now our guy is in charge to clean it!
key learning: analyze well, speak to people; Talk, Communicate, discuss!
Day 2 Learnings - Can Altay
* ERP II allows you to integrate with your customers and suppliers.
* Although we say that major players are expensive, they offer cheaper alternatives such as ASAP, which offers a lower implementation cost solution to the company.
* It would be nice to gather some know-how for the ERP and how it works, as the consultants will probably not be hanging around for so long and the vendor may not provide enough assistance after implementation.
* We watched a video, but the guy’s English was poor and the stuff he talked about did not grab my attention at all. There was too much technical detail that I think is irrelevant for the course.
* ERP systems do not necessarily give you a competitive advantage. After all, they are expensive. You should look at your needs and the budget on hand, before deciding to implement an ERP system. There may always be better alternatives.
* Companies want integrated systems, because of:
* More control
* Share information
* Accounting purposes
* Data integrity
* Companies do not want integrated systems, because of:
* High Cost/benefit ratio
* Lack of time
* No need for growth
* No accessible knowledge and capability
* ERP systems do not necessarily bring you efficiency, it may make some processes efficient and some others inefficient.
Potential Analyses:
-SWOT
- GAP
Elevator Speech: Trying to impress a manager in two minutes by choosing the most effective words. I think that this was the most interesting term that I have heard for long.
Keep in mind:
* Business objectives
* Success factors
* Performance indicators
I am looking forward to the lab experience on Monday.
Best
Can Altay
* Although we say that major players are expensive, they offer cheaper alternatives such as ASAP, which offers a lower implementation cost solution to the company.
* It would be nice to gather some know-how for the ERP and how it works, as the consultants will probably not be hanging around for so long and the vendor may not provide enough assistance after implementation.
* We watched a video, but the guy’s English was poor and the stuff he talked about did not grab my attention at all. There was too much technical detail that I think is irrelevant for the course.
* ERP systems do not necessarily give you a competitive advantage. After all, they are expensive. You should look at your needs and the budget on hand, before deciding to implement an ERP system. There may always be better alternatives.
* Companies want integrated systems, because of:
* More control
* Share information
* Accounting purposes
* Data integrity
* Companies do not want integrated systems, because of:
* High Cost/benefit ratio
* Lack of time
* No need for growth
* No accessible knowledge and capability
* ERP systems do not necessarily bring you efficiency, it may make some processes efficient and some others inefficient.
Potential Analyses:
-SWOT
- GAP
Elevator Speech: Trying to impress a manager in two minutes by choosing the most effective words. I think that this was the most interesting term that I have heard for long.
Keep in mind:
* Business objectives
* Success factors
* Performance indicators
I am looking forward to the lab experience on Monday.
Best
Can Altay
Day 2 Articles
Assessing ERP Software
Generally companies seeks complete integrated ERP packages. This papers has some focus on Supply Chain Management and identifies some key issues such as lack of looking as a whole process to supply chain. another problem is when the sector is specialized some ERP vendors has shortages. That is supply chain contributors has already enterprise IT solutions, and these must be integrated with ERP solutions. The article mentions about SAP NetWeaver solution. In middle market some specialized vendors comes into picture. They have modern software packages that have full extension capabilities running on platforms like Microsoft .NET. The paper ends with explaining some new challanges like returned products or reverse logistic applications that current ERPs are not capable of.
Buyer's Inside ERP software
This article tackles ERP software identification, benefits, drawbacks, vendors, costs and future prospects with the help of an example "The City of WinniPeg".
The main drawbacks it encounter are interesting.
The future improvement for this example will be to implement a business intelligence application that will help data mining purposes.
Decision Making in the Evaluation, Selection and Implementation of ERP Systems
The article is about ESI (evaluation, selection, implementation) of ERPs. It mentions how costly (over $100000) time consuming (6 to 24 months) an ERP implementation is. The article gives 6 decision making tools.
Initiation --> The political model
Requirement Analyses --> The adaptive model
Inviting vendors --> The political model
Vendor shortlisting --> both administrative and political
implementation --> adaptive model
post implemetation--> administrative model.
The ERP Purchase Decision: Influential Business and IT Factors
The article is about decision factors for ERP selection. There are four business factors (data integration, new ways of doing business, global capabilities, flexibility/agility) and four IT factors (IT purchasing, IT cost reduction, IT expertise, IT architecture) are defined.
The article reports the results of the first stage of the study, the identification of ERP package capabilities that influence ERP purchase decisions. There are mainly two categories, Business capabilities of ERP packages, IT capabilities of ERP packages.
The main business capabilities are ability to make faster responses to business change, reduced cycle times, consolidated ordering, improved marketplace agility, and workforce empowerment.
In this category article figures out that the business should be matched to the software rather than vice verse. And for me that is totally an It depends situation, and generally the other way is chosen for many companies. Best practices mentioned to replace current business processes are to general to rely on and totally eliminates company specific processes which are a great competitive advantage for a company.
The main IT capabilities mentioned here are desire to replace mainframes or legacy systems which is understandable. It mentions here current modern approaches of SAP system. The other factor mentioned is time and cost savings due to upgrade process. but that is also an "IT depends" situation. Because upgrade itself need a huge IT and managerial effort.
At the end article defines main categories and selection process, but it fails to give the results which was totally interesting and unexpected for such an article. To read all of the staff without acquring the main honey was a great suprise for me.
Generally companies seeks complete integrated ERP packages. This papers has some focus on Supply Chain Management and identifies some key issues such as lack of looking as a whole process to supply chain. another problem is when the sector is specialized some ERP vendors has shortages. That is supply chain contributors has already enterprise IT solutions, and these must be integrated with ERP solutions. The article mentions about SAP NetWeaver solution. In middle market some specialized vendors comes into picture. They have modern software packages that have full extension capabilities running on platforms like Microsoft .NET. The paper ends with explaining some new challanges like returned products or reverse logistic applications that current ERPs are not capable of.
Buyer's Inside ERP software
This article tackles ERP software identification, benefits, drawbacks, vendors, costs and future prospects with the help of an example "The City of WinniPeg".
The main drawbacks it encounter are interesting.
- Legacy system integration or replace is much much harder than it is supposed to be
- Duplication of data can not be easily figured out, so, ERP system can also have duplicate data.
- Information that is available after ERP implementation does nothing todo with ERP system, there is a need for huge managerial effort here.
- The implementation cost varies according to size of company and number of users, time to implement an ERP system generally takes longer than 2 years.
The future improvement for this example will be to implement a business intelligence application that will help data mining purposes.
Decision Making in the Evaluation, Selection and Implementation of ERP Systems
The article is about ESI (evaluation, selection, implementation) of ERPs. It mentions how costly (over $100000) time consuming (6 to 24 months) an ERP implementation is. The article gives 6 decision making tools.
- The Classical model
- The Administrative Model
- The Incremental Model
- The Adaptive Model
- The Irrational model
- The Political Model
Initiation --> The political model
Requirement Analyses --> The adaptive model
Inviting vendors --> The political model
Vendor shortlisting --> both administrative and political
implementation --> adaptive model
post implemetation--> administrative model.
The ERP Purchase Decision: Influential Business and IT Factors
The article is about decision factors for ERP selection. There are four business factors (data integration, new ways of doing business, global capabilities, flexibility/agility) and four IT factors (IT purchasing, IT cost reduction, IT expertise, IT architecture) are defined.
The article reports the results of the first stage of the study, the identification of ERP package capabilities that influence ERP purchase decisions. There are mainly two categories, Business capabilities of ERP packages, IT capabilities of ERP packages.
The main business capabilities are ability to make faster responses to business change, reduced cycle times, consolidated ordering, improved marketplace agility, and workforce empowerment.
In this category article figures out that the business should be matched to the software rather than vice verse. And for me that is totally an It depends situation, and generally the other way is chosen for many companies. Best practices mentioned to replace current business processes are to general to rely on and totally eliminates company specific processes which are a great competitive advantage for a company.
The main IT capabilities mentioned here are desire to replace mainframes or legacy systems which is understandable. It mentions here current modern approaches of SAP system. The other factor mentioned is time and cost savings due to upgrade process. but that is also an "IT depends" situation. Because upgrade itself need a huge IT and managerial effort.
At the end article defines main categories and selection process, but it fails to give the results which was totally interesting and unexpected for such an article. To read all of the staff without acquring the main honey was a great suprise for me.
Day 2 Lessons Learned
After a general evaluation of first day,
We watched a webinar about CRM Siebel, Siebel is a CRM software from Oracle. The speech owner Kumar's english was not good enough to understnad and the software described was too slow for an evaluation purposes. Generally speaking a CRM is a software for customer satisfaction.
We learned about evaluation of ERP decision for a company,
First we evaluated first why a company can need to implement an ERP. The main causes can be
We watched a webinar about CRM Siebel, Siebel is a CRM software from Oracle. The speech owner Kumar's english was not good enough to understnad and the software described was too slow for an evaluation purposes. Generally speaking a CRM is a software for customer satisfaction.
We learned about evaluation of ERP decision for a company,
First we evaluated first why a company can need to implement an ERP. The main causes can be
- Share infot hrough company
- Process Innovation + Automation
- Data Integrity
- Fewer people to maintain the same function
- Entering data once use everywhere
- beware of human level integration
- Efficiency
- One system –easier to maintain, old legacy systems needs different kinds of human source
- Effective communication of data and processes
- Costs (always think of implementation, buying education and customization costs, these can be higher)
- Organization readiness (think of organizational processes if they are not ready or not utilized, first reengineer them to be competitive, ERPs are only tools, that is software can not manage companies, managers manage them.)
- Time consuming– not enough staff
- Knowledge or capability not accessable (need ERP consultance that is not cheap.)
- SWOT analyses --> which need to be done before and after of implementation process, to compare and contrast the benefits
- GAP analyses --> to see what needed functionality is not avaialble
- Elevation speech --> That is a new concept that we have learned, that is a short, charming, effective speech that must have a great first impact which can only long for 2-3 minutes.
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