Thursday, April 10, 2008
There one thing that i will keep in mind: the elevator speech. i know there is almost no link with the class but i think that this technique is very useful and i will use it in mi future life!! thank you !
during the cession we learned about the phase to implement an ERP system.
There are 5 phases to make it right.
The sucess of the implementation can be resume by 4 points:
it has to meet the original objective
to be on time
to cost what was expected
to use the ressources we have.
70% of the failure is because one of those criteria is not done.
When you implement an ERP you have to keep in mind : the bussiness objectives, the critical sucess factors, the key performance indicators and the benefits for each of the area.
I liked when you ask us to contest our own questions of the first scession. It was good to realize that we actually learn many staffs.
We started by focusing on the different step of the implementation on an ERP like SAP. I retained five major steps. Those steps have not the obligation to be finished to start another one.
So, the first step consists of the Project Preparation: teams are created to implement together SAP, before they will be trained. In this step, you decide which system you'll implement, what are the key objectives? What are your resources?
The second step is the Business Blueprint: you work on matching SAP with processes. Teams have to know exactly how the system works. In this step, you try to map processes.
The third step is the Realization of the implementation: you make it real! This is a huge part in the implementation. You need to test transactions, to correct possible errors (doubles), to clean the old database, and ti train the trainer (who are actually employees using SAP).
The fourth step is the Final Preparation: just before the Go Live, you do the last tests and last changes.
Last, the Go Live & Support, you can use SAP, it might fit exactly your organisation and its needs. But you should check every month if the software is working well or not (avoid errors).
This week I discover Information System which I knew very few....I said the first day that I wasn't an expert in IT, I still mean it! However, I learnt a lot on ERP. This system can't work without the help of "human". It has the advantage of improving the efficiency of the company when it is implemented correctly but I was astonished on the 70% of failure due to reluctance to change, to high cost or to a problem of resources. You never implement an ERP system to save money! It has to be implemented for strategic reasons (goal of growth, possible return on investment). The project will be a success if needs are turned to met objectives, if time is respected, if cost and resources are not overspent.
As a student in master degree, I'll be able to analyse the business of an organisation, its strategy and the situation. In a company, I'll have to ask questions, to understand key needs. I shouldn't be reluctant to being involved in implementation of an ERP because I know that I could bring my skills and knowledge to the organisation. As future manager, we have to step up and be volunteer to take tasks, to help. Now, I have basic ideas about the modules, I'll be able to give my opinion but I should be open to training.....we always have to learn! This would be my conclusion.
I really enjoy this dynamic class, made by great exchange moments! THANKS
This morning we had a closer look to the implementation phase. What have I learnt?
First the basic implementation is composed of five phases: first the project initiation (to decide which systems to implement, to define a team, the goal), the planning step (how to plan the project and to know the aim of each step), the controlling phase, the execution one (to reach milestones and test takes part of this step) and then the closeout. These phases can be used for any kind of project; not only an IT project and you don’t need to finish a step in order to start a new one. The lifecycle of an ERP system has been studied by some researchers and according to them there are different phases to consider. But never forget that the project phase composed of the planning, control and execution is not enough to be successful. You have to take into account phases after the project one: this step is to check what is wrong in the system because there are still bugs and to fix it. The last step is to let the system living and to try to improve it (onward and upward phases). The graph was very useful to understand the different phases!
Concerning the SAP implementation timeline, this is closely the same but we had much more details. By the way, the idea when meeting consultants is to always be objective of what they will show: some graphs concerning their job can seem very persuasive but you have to wonder what the reason of these conclusions is. Thus the good news they will show are not complete and sometimes their graph tell you nothing about the success or the failure of their implementation. And I was very surprised about the percentage of failure implementations! What are the different parts of the SAP implementation?
· First the project preparation in which the team is formed and trained and in which the team plan the implementation. The milestones are to organize the work and to make sure that the budget is well running
· The business blueprint is to make sure that your process is matching with SAP. You need to start the mapping of your process and understand how SAP works.
· The realization is the huge part of the implementation since it takes the most effort. The key activities are unit test, integration test, data cleaning, preparation, collection validation and testing and the training of the trainer (the key managers will train the employees but they are to be trained first to understand what they are talking about, this will improve relationships and they will learn more by themselves)
· The final preparation is to resolve and complete all opened issues
· Finally Go Live & support phase.
But I learnt that if I am a good business analyst, if I have the competencies to analyse and make decisions thanks to my analysis, I would be involved in an implementation project. And I think this is exciting if I don’t like my future auditor internship! Every business analyst can be involved in an implementation even if you are not an IT expert, that’s good! Why? Because you have the competencies to understand the needs of the company (that is the basic thing to do), you can go to ask questions to key functional persons and translate it to technical people. You need to be volunteer to work, to participate, to open your mind and so on, that’s the basic ideas when being in enterprise: be open to learn more! (In US you have to step up! New words!!). This is a challenge. As an intern people, you can participate a lot in this implementation: test transaction by transaction, write the test script, be involved in the train the trainer, and schedule the rules and the material for instance.
But never forget that you never implement an ERP system to save money, you execute it for a strategic reason.
Finally, I would say that the overview of the questions we had the first day was a very good recap and I enjoy it! I also take pleasure in reading some articles that you provide to us. I realize that the culture is a considerable issue to have in mind thanks to the article on ERP in China and once again I become aware of one of the ERP difficulty: this is not only an IT issue! Thank you for your happiness and your willing to teach your professional and life experience!
Today we saw various things:
First, the ASAP method to implement an ERP project:
This is an ERP implementation method developed by SAP. It is based on 5 different steps. The first one is the project preparation. As the name indicates, all the actions needed to prepare the future implementation must be taken like training of the team, getting the hardware, making the final budget... Then, the second stage is called business blueprint. During this phase, the managers and the consultants must figure out which modules will be necessary and how the current processes of the company will fit into the software. To achieve that, all the different end-to-end processes inside the company must be written down. The third step is the realization in itself. It is the biggest part because it is made of the testing of all the different transactions possible, the cleaning of the old database but also the training of managers who will be in charge of training the employees. Then, during the final preparation, the ultimate tests must be performed as well as the training of the employees. After that level, the ERP must be operational to perform all the different tasks inside the company. At last, the last part is going live, which actually corresponds to the daily using of the ERP environment and support, which must be provided by the consultants in case of problems.
Criteria for success:
After going live, the impact of the ERP is to be assessed. There are 4 major criteria for success. Obviously, we must identify whether we met our objectives or not. But it is also important to check if the duration, the money spent and the resources (human & materials) are coherent with what have been planned. If not, depending on the gap between the required and current situation, we can decide whether the project is a success or not.
Reasons to implement an ERP:
A company might want to use an ERP for several reasons. It could be to better manage the information and increase their data integrity thanks to the unique database, or to improve their processes through the “best practices” provided by the ERP, or to gain time using only one system… But implanting an ERP because one’s major competitor did is not a purpose and can be a reason for failure!
Reasons not to implement an ERP:
A firm may be reluctant to implement an ERP because the cost may not worth it. If the processes are actually competitive, there is no need to change them just for the good of changing. But the company may also not have enough resources (time, money, people…)
-ERP is not a competitive advantage:
It is not a good system for all the firms because it is a question of needing a particular organization in the transaction of the data. It is just a tool that will improve the firm efficiency if the firm needs it really, and finally the return on investment will be visible on the very long term. The issues of the implementation and the difficult phase of transition can impede the profit of the firm during few weeks so comparing with the competition is not a good option.
But because it exists 5 major softwares, the firms can find the best solution for its own organisation. The firms can work with PeopleSoft, Oracle, SAP... with all the modules or only the one that are useful for them, can choose their own way of implementing or for example its own timeline (Big bang or phased or both)
I think that the results provide facilities for the employees when they have integrated the method of using the ERP but the transition and the adaptation will be very hard. People will feel very confuse and discomforted with a system that is changing their ways and habits of working. They will need trainee and open-mindedness to go up the human natural protection: the “resistance to change”.
Implementing an ERP system is a big and wearying decision that have to be taken in order to met precise objectives with a strategic goal and mission. The board of directors have to take in consideration that this implementation will involve and should imply all the staff, a number of external consultants, time, money, etc : all the resources of the firm at the external and internal level.
-Do we will become good business analysts?
Since of our school and professional formations, we have the capacity of adaptation. We can understand and explain a problem more than other actors of a company because we have now a global overview of the main basic sectors of a firm. From this idea, we can learn quickly because we know how and where to search information. We can improve our knowledge to understand a problem and after share it with the others by asking questions or communicate on the subject.
We should have a strength will power to document and be very deeply informed on the subject. We can make the difference by being a step ahead, by stepping up, by put in action our desire of being better every time and outperform what we did just good. To give the good message to the staff we have to be more than comfortable with the subject, we have to pass the motivation and the feeling that we are the specialists to ensure them of the rightness of the board of directors decision. We may be the precious link between them and the employees.
Wednesday, April 09, 2008
I was there physically, but not enough with my brain!
But I keep in mind some notions.
It was interested to think together about the different akternatives to implement an ERP in a big company such as Decathlon. We find more than 6 different options and there are maybe more. To find the good solution it depends (!!!) :
-if the internal organisation is centralized or not
-of the existing systems into the company
The we talked about resources involved in ERP (internal or external) and finally the level of costumisation of ERP (code, table or module).
I was excited to use SAP, we tolk a lot about it and Iwas very curious! But, because the lack of time and many little problems, I feel a little bite frustrated. I am happy because, we saw the software, but I did not have the time to use it and to be used of it. I think that, for next year, it would be good to past much more time on it and do individually a little case after an overall presentation of SAP.
Thank you very much for your patience, motivation and smile!
I feel tied, go sleep!
See you tomorrow!
First, the implementation team is to be chosen. It must be a mix between in-house and outside staff. The team is made of functional technical experts, a project manager, the key managers from each departments, some trusted employees and a champion. The four last categories are made by internal staff. They are principally the future users of the ERP, the people in charge of the implementation, but also some facilitators who will help the project to be correctly accepted by the employees.
Then, we must choose the level of customization we want. Two types of configurations are possible: technical & processes. The first one consists of adapting the software to your processes and consequently, makes some changes inside the table or the codes of the modules. The second one consists of making your processes fit with the features of the ERP, so the way the employees are doing business will deeply change. Obviously, the prior step of every configuration is the selection of the appropriate modules you want to include in your ERP.
As we are talking of implementing an ERP, here is the point of view of Derek Slater (who apparently is a US teacher) on ERP projects. Maybe David Newlands has read it before giving its courses ;-)
"ERP Implementation in 10 Easy Steps
Ask the board of directors for an arbitrary but large sum of money. (Suggestion: $300 million.)
Give half the money to consultants. Ask them to select an appropriate ERP package for your company. Consultants will audit your business processes for six months and then select SAP, which they happen to resell.
Form cross-functional implementation teams. Hold meetings.
Reengineer all your business processes to match the software's model.
Give the other half of the money to consultants.
Install the software.
Train end users repeatedly.
Cross your fingers.
Turn on the software.
If you're still in business, immediately return to Step 1 because it's time for an upgrade."
We used the example of Decathlon.
We analyse issues such as the implementation team. Who should it be composed of?
- a functional technical expert
o in house: you need someone very skilled. you set up a new role in the organisation. The person will know the needs of the organisation and will have the control o the implementation.
o Outsourced: the person will have the technical competence to do the job. It will use the resources of the ERP company.
- Key developer from each department: a person in house who will be in charge to adapt the software to the specific needs of the operational level of each department. He will make the decision. You will need to train him to make him able to handle the project.
- A trusted employee at all the hierarchical level of the organisation. He will assume the role of leader in the implementation. It has to be a person able to motivate its pair to accept the changes.
- Super user (or power user). These persons will be employees with the will to understand how it works and they will be the reference in the ERP for all the other users. This ability to know the system will give them a real power in the company as they will know techniques and the solutions to the basic issues the company will face: they will become specialists . They will be the contact point , closer to the direct users of the ERP than the IT manager.
- A person from the top management to support the project. It will make you sure that the direction of the company is with you, even if you face issues. He can use his influence to convince the employees or managers who are resistant to the change.
Outsource a part of the team will allows a better efficiency even though it can frustrate some IT managers.
You will have to train all the users: you will use outsourced specialists.
An ERP software need most of the time a customisation to be adapted to your needs.
It can be a process customisation or a technical customisation or both or none( when you didn’t have any system).
The process customisation consist in modifying the way you are doing things to adapt to the ERP.
Sometimes, the ERP needs to make a process more complex but the global benefits of the ERP worth it. It is then the role of the IT department to find solutions to readapt the process.
The software customisation consist in modifying functions of the software to adapt it with your way of doing things. The software customisation is needed in almost all the cases.
You can do 3 types of customisation:
The module selection (no customisation at all, you just load the program and use it as it is)
The table configuration: you change options on the program, add some of your old ones, delete some that was existed and are useless for you. ( eg: had or delete some bolt-on’s which are additional software for your ERP).
The code modification: is creating new thing on the program and changing it in a huge way to make it fit to your needs.
Customizing is useful but there are some con’t the code modification:
- it is costly as you need skilled people to do it and you need to buy other software to fit with so it will be efficient for you. Moreover, as you change things , you will have to maintenance it for a long time to check if it really works.
- If your technicians change everything and make errors, you won’t be able to come back to the old version and all the system can be destroy.
- As you make changes, the company of the ERP is no more responsible for the errors and won’t support you technically in case of mistakes or wrong utilisation.
You have to keep in mind that when you implement your ERP, to prevent from errors, your old system will be still in place. So all your employees will have to double enter the data (which is a loss of time). Your implementation has to be very fast, very organised and tested.
You can test the ERP as a mini big bang on a small part of your organisation to see what will happen, the mistake to avoid, the solution found to the possible issues and keep in mind all this analysis before implemented it on the whole organisation.
The decision of the area test depend of the way the organisation is formed. If it is centralised or decentralized.
In the computer room, we used the SAP software. This system is complex to get used to but is very efficient when it is well used. The training lessons are compulsory and stressful for the employees because they know that if they don’t understand how to use it, they will not be able to do their work.
We manage to enter a data in the software.
We try to fill and order and to search for a client and quantities he asks.
Employees use specific codes to each transaction they want to do (create an order, search a client...)
We saw that the program is totally integrated in the sense that anybody (if it is unlocked) can have access to any part of the software. It improve the communication within the company and avoid phone call between the different areas.
the lecture today was separated in two parts. The first one occurs in class and the 2nd one was in front of our laptop, confronting to this, now famous, SAP!
Firstly we worked about our case: Decathlon. How should we implement an ERP in Decatlon, these multinational companies present in 14 countries and havng 350 shops?
Even if the head quarter is in Lille, if the most of the shops are in France do we need to implement first an ERP in France?
Or should we implement only one module in each countries? what about he culture?
We did not find one good solution to our case and thanks to the whole groups we found out more than 6 solutions!! We are going to work more about and make lot of assumptions to take our decision
Secondly, we worked about the customization to know how we have to implement the ERP system. In fact, some characteristic can be changed but various levels are proposed. If you just do a module selection, it will means that there is almost no cutsomization. Only few things will be changed. The table configuration means that you change the modules and fially, the more customized possible is the code modification: these one were the "background" is changed to fit as closed as possible the needs of the users. These are the 3 diferent levels.
To customize more deeply, bolt-on's can be used too. Thus, you can add various application on the system to reach your needs.
I remember that thanks to Workflow programming you can change the orders of things and ABAP is the programming language to change things onSAP.
One of the key question was about the people needed to implement a SAP. ONly a consulting firm and a complete outsourcing, half from the company and half from consultant or only It department of the company?
For eachsolution, key people are needed to get the acceptance of the employees.
There is two type of customization: the code modification or the process customization. The process customization is when you adapt your business to fit the software.
The technical customization is when you change the software to be sure it will fit to your business.
in the practical part, I did not really understand the goal. I was just following the instructions but I do not know how to o it again!
However, now we know what SAP is! It seems more concrete even if each actions do not seems all the time really logical..
Tomorrow maybe we will nderstand more about and find out a solution for our case....
Lessons today were focused first on the implementation phase with the following questions: who will compose the implementation team, which modules you need to implement, is it a centralized or a decentralized organization and so on, what and how the company needs to customize. Secondly we had the lab session. Did you enjoy it?
Have a look at the lessons learned from our assignment.
The implementation team has to be composed of in-house and outsourcing people because expert people are not sufficient and companies that use only consultants will fail to implement ERP. Never forget that the management has to choose an IT company which will best fit the relationships between the consulting firms and the employees. Employees also have to be involved in this process because they will be the users of it and consultants have to take into account their considerations and their needs. A problem can happen because of this collaboration: employees can be jealous or they can think that these external persons will take their job and maybe they will be less confident because they will not understand why the managers have decided to use consultant skills rather than theirs. They will feel less powerful compared to the consultants and frustrated. The managers have to make them understood that it is required to have a mix of people to better implement and they have to change their attitude concerning this group project: the attitude they have to adopt is to wonder what they are going to learn, where they can be useful, how can they be involved and how they can learn as much as possible.
The implementation team is composed of functional technical experts (who have good competencies of the modules which the company is going to implement, excellent knowledge of the code phase …), a project manager, key manager from each department (they have the ability to know what the companies’ needs are, what it is the more considerable change to execute and so on), trusted employee (to be sure that they will be pledged in this process) and this teams needs the support of a powerful person who is seen as the “champion” of the team! What is funny is that every business people can pretend to be a project manager (even I!) but in practice (as I saw this morning during the lab session!) it is more complicated and you need to have much more competencies than an overview of this subject. I know what it is about but after to implement it is more complex! By the way, I am glad that this course is not so practical because I realized this morning that you have to be very patient and attentive and thus it would be boring. But the Lab session was a perfect occasion to understand that each company needs its own system because the whole organization is engaged with this system and as each company has its own manufacturing process, HR process and so on, it would be stupid to copy from your competitor.
Another issue concerns the distinction between technical and process customization. Each of these two steps has consequences on the implementation. A technical customization consists of a change in the software whereas the aim of a process customization is to change the way the company does things.
Finally, it was very interesting to go through all team assignments because I realize that lots of questions have to be raised in order to make the right decisions and it is very difficult when we don’t have the background of the company. The solution: to make assumptions! The subject is so complex because of its technical part of course but also the implementation of ERP has so much impact on the company: its employees, its system, its stakeholders, the motivation, the various multifaceted relationships, … I like it!
(It's getting hard to find original ways to say "hi" as time passes by.)
Today's class had basically two big parts:
1) The discussion.
2) The labsession.
1) Every group has its own chosen company, and we have to decide: do we implement the ERP as an in-house operation or do we outsource?
The first important element to consider is to divide the ERP implementation in very specific elements:
-Functional technical experts
-Key managers from each department
-CEO/CFO ==> The Champion
So what are the possibilities? In the end, only the two first elements were designated as being potentially externalized.
-So what do I do now ?
-Well, it depends... ^^
... on the company, on its culture, on its I.T. service, etc etc.
Another interesting issue was about the I.T. department. I never thought about that before, but I guess they would really feel annoyed if consultants arrive, bringing their whole new set of softwares, telling them "OK, we do it this way". I would really be angry at those who took this decision.
Anyway, what I'll remember is that precious advice from Master Eseryel: "take part in the implementation you must do, and an ERP master you shall become. Essential to the company you shall be."
2) The labsession:
Despite the technical problems, and the short time available, I kind of enjoyed this session:
FINALLY, we get to encounter the St Graal of the ERP: SAP!
This was quite basic, but anyway, if I get to a job interview and that I'm asked:
"Have you ever been using SAP?", I'll be able to answer "Yes, I did!".
I wish there could be some tutorial about this software, or any useful software for ERP. I'm sure it can't be a loss of time.
Even though people tend to recall that we'll learn everything in the company, I just think that for me, using is the best way to understand. "Learning by doing".
Great evening to everyone!
Well, In my first day of classes I didn't know exactly what was gonna be about the class, but for the end of the day I knew this was about a system that helps the companies to be more efficient and to don't loose time, with an ERP system, the companies can have the control over the organization.
But it is important to think about all the consequences that comes with the implementation of this system. In first place I should say that not all companies are ready to implement an ERP system, they need to think about their employees and the reaction this could have with the implementation of a new system, after the employees feel comfortable with this, the company need experts to train the people who will use this system. At the same time, they need to be sure what they want to implement and which part of the company want to be more productive. A really important factor is the cost, the company needs to be able to afford all cost that this means, from the cost of the system, to the cost of training. Finally they need to think about the time it requires to implement the system and to be ready to star working with it.
After all this is consider is possible to implement the ERP system and this will offer some advantages like:
* It is possible to share data with another departments of the organization.
* The system is integrated, this means all the information goes to the center of the system.
* The customers will feel satisfied because of the efficient service the company have.
* The company become more efficient
But as everything we can find some disadvantages from an ERP system like:
* The customization can be limited
* The company needs to go through a reeingineeration of the processes.
* It could be a sever impact for the employees.
After considering all that a system helps or can not help in an organization, the company is ready to implement an ERP system.
Tuesday, April 08, 2008
- What is ERP?
- What are its benefits?
- What are its challenges?
- What are its potential reasons of failure?
- What do we have to take care about to implement an ERP?
Today, I learn that there are many kind of ERP tools. Before the course, I thought ERP are private tools and I just knew SAP, whereas there are 3 kinds of ERP systems :
- Major Players
with the 3 famous ERP : SAP, Oracle, SSA Global
- Smaller ones
-Open sources ones
ERP systems accessible online
The little work of specificities of each highlighted that there each systems are usefull and depend of the size of company, the money to invest and the number of departements focused.
In understood better what is SAP. SAP (System Application Products) comes from German company who has the same name. It is the ERP software the more used by company. Company like it because of its simplicity and interface.
This part was to theoritical, I am excited to be tomorrow and used it!
Finally, we talk about different ways to implement an ERP and balanced there Pros's and con's thanks to an exercice.
The ERP in entreprise can follow :
- a big bang implementation
- a phased implemention
- a mini big bang implementation
To chose a solution, its important to understand the culture of the company, if they are used to change or if they are flexible, the time to do it and the urgency of it.
Firm has to chose employees to implement it : internal (CIO, managers..) or external (consultant, IS manager...).
Finaly, it has to know the level of customization.
Theoritical part is done, now let's see what is a SAP!!!
I learned that an ERP is a system which is set up to help companies in the way they deal with the information (internal communication, relation with clients, with customers...)
An ERP is a system that a company has to adapt to its particular needs. One of the most important thing on ERP is that it has to fit with the need of the company: having an ERP just to have one is totally useless. (and most of the time costly)
ERP were implemented in the first place in mass in the year 1999 when person from the IT department thought that all their system will turn off when it will pass to the year 2000; they decided to change everything in the same time.
At this time, most of the ERP implementations failed. Why? Because top managers of the companies let all the responsability of the change in the hands of the person of the IT department.They had to face alone, without the support of anyone, all the problems and difficulties that the changes created.
We know now that employees have a big resistance to change. That is why , there are two techniques of implementation of an ERP system:
-The big bang one
-The Rool out one
Each technique has its pro's and it's con's.
The big bang technique is the technique of radical change. All the system is change everywhere in the company at one moment.
This technique need to be really well organised.Everything need to be studied and prepared very carefully. The communication to the employee has to be very good to make them know exactly what will happen.
It is a risky technique because if the system fail (if it doesn't really fit the activity , if employees don't like it ) there will be no possibility to go back.
Moreover, it is a huge investment at the same time for companies.
In an other hand, this technique is efficient in the way of it is fast and let no choice.
The rool out technique consists in changing the system module by module . It allows the company to see the reactions of the employees and to adapt itself to those reactions and its needs. If there are issues, they can be solutionated more easily.
A con’s for this technique is that it takes a long time to implement all the ERP and sometimes it don’t go until the end.
A pro’s will be that the investment is spread on a long time view so it is easilier for companies to buy it.
Companies can choice to implement it in an outsourced way or in an in-house way .
The outsourced what has the advantage of the objectivity: consultant implement the system has it has to be implemented and don’t ocus on the internal issues. More over, consultant have the technical skills and the time to do it.
In an other hand, consultant in in house implementation allow the ERP to be more adapted to the real needs of the company . Moreover, they can support the implementing of the ERP in their own team and diminue the resistance to change.
In both case, you need fonctional expert to implement it at the operational level . And you need leaders to support the project.
ERP system are divided in 3 categories:
The major ERP systems such as Oracle, SAP
The little ERP systems
The open sources one
The major ERP systems represents a lower risk for company in the sense that they have been already tested before by severals companies. As they are serious, they have a competent after sales services and consultant will be there to help in case of an issue.
As they are famous, your customers and proveedors might have this system so having it will allows you to fit with them.
The only bad point is that it is very costly.
We insisted on SAP (Systems Aplications Products) a very know system. It is divided and many modules (one from each kind of activity in the company eg: mkt; rh, pp...)
It is composed in a three-tier architecture:
The operating system (the hardware), thaebasis (sap specifics) and the client-server Network ) in the vertical way.
The Application( the sofware itself), the data( acces to the data from the different applications) and the presentation (the bolt-on’s..) in the horizontal way.
The smaller one are cheaper than the first one. They have a good quality and if you find the one which fits with your need you will be satisfied.
As the ERP is small, the communication between the IT department and the consulting company is better.
The open sources system is the more interresting in my opinion because if it it well used, it can fit exaclty to the company needs and really improve the management of the information (which is one of the major aims of the ERP systems).
Moreover it is free.
You can benefit from the community support (anyone in the web can help you if you have a problem (the best thing is to have anyway an in house developping department).
With the open source sotfware, you can customize the system to have your own version. It is flexible and easi to develop. It avoid changing your system in its globality.
ERP is a huge subject, we will need all the minutes we have to cover it entierly!
Hi each of you!
Today was a course with a different target from yesterday. We begin to have a more technical point of view by having a look in various ERP system which can be implemented. We can divided them in 3 part: The major players, the smaller ones and the open sources.
The major players of the market is essentially proposed to large and even multinational companies. these one have a good financial health and need to have a good implementation. Moreover, the most of the time, big companies prefer to deal with big IT/ consultant company as well. They decrease the risk of being obliged to change their ERP because of repurchase. In fact, it happens that major players buy a smaller player to increase its performance, win some marketshares and to be more specified. In this case, the customers of the smaller player have to change their ERP system.
In addition, when you deal with major players it allows you to have various type of implementors: these one who know how modules work together and these who are expert in one of them and know deeply how it works.
Thanks to that, all your chances of good implementation are in the hands of customers.
Good trainings for employees are needed and can be provided by the IT company.
The last point about the these well known players is that it can provided a type of conformity with the other companies of the same sector... or a comparative advantage...everthing depending on the implementation!!The smaller players are mostly for the company with smaller size. One of the main advantage is this good communication between the IT/Consultant company and their customer. The customer is waiting for something which answer to their needs and can find it in this type of group. The communication can be one to one and it is always reassuring for a customer to have all the time the same interlocutor. This one knows exactly your history, the culture of your firms and so on. These are crucial to think a bout a good implementation.
The differences between one ERP system to another is not only the branding and the image. It depends on what the comapny want, what are the feature of the ERP, the industry of the customers, their target but also, like every type of purchase from Business to Business it depends on the saler, the interface of the system.... these little “stuffs” which can change everything.We also speak about the SAP features. SAP has various fonctions for more or less each dpeartment of the company. You can use all of them or just choose one. It is also possible to use various ERP in the same company. It is called “Best of Breed”..this expression that I did not remember from yesterday!
SAP is adapted for each countries and propose various languages, currencies, taxes issues and so on. We can deduce that it will be interesting for multi national companies.
Another feature which is crucial in frim is the audit trail which let transparency inside the enterprise: Everything can be checked as the name of who did what, when and so on...
But another key point which was relevant was about the limited access which is proposed by SAP. If employees do not have enough access to information, ERP system is useless!!!
....that was the first step of the technical point of view...let s wait for tomorrow to see how it is in real!!!
Have a good night and SAPly dreams!!
I understood that the industry of ERP was composed of three different groups. Let's have a look on those three:
First, there are major players. Big companies are likely to use this kind of software, SAP is one of those. They usually use SAP, Oracle PeopleSoft because it is safer for them, it provides security for information transmitted from all the department of the company. Those softwares are known and accepted by expert. They have a good reputation. Using this SAP can increase the efficiency of the organisation thanks to an after-sale service. Most of companies using this kind of softwares have a financial support and are multinational.
Second, an organisation can decide by implementing a smaller ERP system for different reasons: because the corporation is smaller, because it will be cheaper, because it will be more adapted to specific needs of the company (better customization). Small company can choose this kind of software because there will be a better communication between the IT and the consulting firm and the company (exchange of needs).
Third, an organisation can decide to implement an Open Sources is a free software which everyone can use and provide advices to everyone (like firefox). The advantages of using an open sources is that it is free to start (but the implementation still has a cost....high cost! time, optional services). The organisation receives the community support which can prevent them using a consulting firm. The company will have its in house people who will develop the ERP system. This system is quicker to implement.
There many possibilities when an organisation wants to implement an ERP system, it can combine both system (a major player and an open sources one) but costs will be higher. Managers won't understand why using two different models.
However, ERP doesn't provide competitive advantage because it has to fit the organisation and can be adapted to one but not to the other.
The ERP system is customized according to the needs of the company, this is called BEST of BREED: a mix of best modules in the same ERP. One advantage of SAP is that it is a software that global companies can use because it supports different currencies and languages.
To implement an ERP there are three point to take into account: first is the human ressources one, who will implement the system? Will it be a consulting firm or directly the employees? Is it better to outsource and have an external and objective view? or if employees are in-house they might know exactly their needs. Then, it is important to define a time schedule for the implementation, will the implementation be a radical one or an incremental one? This depends on the strategy of the company, but a Big Bang is often difficult.
The third level concerns the degree of customization of the system, if it fits the needs of the company or sees what parameters should be changed to improve benefits.
The implementation of an ERP really depends on the motivation of employees to get involved in changes.
Today we learned what SAP is.
SAP is an ERP software product capable of integrating multiple business applications, with each application representing a specific business area. These applications update and process transactions in real time mode. It has the ability to be configured to meets the needs of the business.
Also we learned The ERP implementation choices such as Implementation Time line, Staff and resources and level of Customization.
· Big Bang Implementation: All modules at the same time.
· Faces or rollout implementation: Modules or business sectors are put in play sequentially.
Staff and resources:
· Outsourcing such as External consultants
· In-house the company uses its best resources inside of the company.
Level of customization: The amount of changes in the company processes to meet the needs of the system.
What we learnt today can be summed up in two words: SAP & implementation
SAP is an ERP software based on a three-tier (application, data & presentation are different). This software consists of core activity functions (like finance & control, sale & marketing…) but also bolt-ons (additional applications connected to the ERP). It has several features including the possibility to track down what has been done (audit trail)
Before deciding to implement of an ERP, three major options must be considered: the time frame, the human resources and the level of customization. The implementation can be radical (bigbang) or more incremental (phased or mini bigbang). The human resources can come from inside or outside the company. And at last, you can choose the level of customization you want for the technical environment or the processes of your software. Every option depends on the type, the processes, the sector, the financial and human resources of the company.
As somebody asked on Monday, I had a look at some previous courses and found out some data concerning the potential costs of an ERP. This information provided here is a translation from a 2006 course of M.Saada. Take the figures as they are: approximations!
The minimum cost offered by the major ERP developers for the IT infrastructure, using licences of the softwares and staff training is $500 000 but cheaper packaging with simpler modules are available for SMEs.
Smaller suppliers offer softwares from $75 000 and $500 000
In average, large corporations spend US$ 15 million. This represents $ 53 000 for each users (for hardware, software, implementing & consulting staff, 2-years support). The implementation lasts from 6 months to several years depending on the width of the project.
These expenses can approximately be divided into hardware for 14%, software for 17,5%, internal staff for 23% and 45,5% for professional services.
As I know everyone is soooo eager to know how instructive this morning could be to me, I thought it would be nice to share all this flow of knowledge that we have the chance to experience.
Well, before writing this comment, I ended up on two websites: SAP's website and OFBiz's one. I wanted to get a quick overview of the spirit of these two.
It appears that SAP's website clearly shows the way on the very home page and once you land there, you can choose either to be a:
This illustrates on the lesson we should get from this class: any system has to suit to the specifities of the business.
As I entered the website of OFBiz (Open For Business), the first thing I wanted to do was download the software, its free after all!!
But not as easy as downloading Open Office, I encountered weird things such as "building from SVN " or "you will need to have a Java 1.5 series J2SDK" or "J2EE Containers" etc... All of these did sap my moral... So I just gave up, wandering on their website.
I have the feeling that OpenSource is really made for Geeks, I feel so excluded from this world. Maybe it just requires time to get into it.
However, it was kind of interesting to realise that the company 1800 flowers (http://ww12.1800flowers.com/) is currently using OFBiz. So if they can do it, I bet we could! This means they gather all the information: Customer database, addresses, tastes, names, etc... but also all the flower types, the stocks, the conservation period before the flowers fade, etc etc...
Now the next step is to be able to identify which software will therefore suit the company's structure. That seems to be a tough job.
As we saw today, they are other crucial choices such as:
-choosing the pace of implementation:
either everything in one shot (Big Bang)
-or a phased implementation.
Then, there should be no barriers whatsoever between departments during the ERP system design or re-design: everything is interrelated and we need a strong communication so as to avoid one's actions to disturb the equilibrium with others.
I hope we can get a clearer image of these interdependencies during the lab-session.
Also some concrete examples of bolt-ons would be nice, so as to really get what are these kind of external tools you can add on your system.
As a final advice I would highlight for this comment, I'd like to recall the huge importance(!!) of INCLUDING YOUR MANAGER in the design of the processes!!!
Otherwise, there will be no strategic use out of this new tool, and it may not even be able to operate properly! ==> If you miss the implementation, you may get into such a mess and sap the company's confidence in ERP system.
This morning after a brief recap we studied the most important ERP systems. And I can now classify three different ERP systems: the major players, the smaller ones and the open source ones.
Why does a company decide to use major players? I would say that it is safer to use those because they have been used for a while and experts have solved many errors or problems concerning these systems; thus they are more confident. The after sale services can be more efficient than smaller companies but the problem is that as it will be a big company you will be a customer number 653 and I think this relationship will not be personal. But as these systems are frequently used by big companies with good financial results, employees don’t need as much friendship as some smaller companies want (not only be a customer number!).
Why is a company more interested in smaller systems? First, the initial cost is cheaper and it can have an impact on the top management (but I don’t forget that the costs that a company has to take into account when implementing such a system are not only the initial cost! Keep in mind that the implementation cost and maintenance cost are huge!). These systems are more set up in small companies because it can easily be customized to their needs.
Last but not least! The open source systems as Open office or Firefox can be popular because they are free, they can be simple to use, you can ask to community support. However, you need to have within your company IT specialists: in-house people will are able to customizable a system and they will be have the support of the community if they need some help to improve it.
Thus, it’s physically possible to use two of these systems but it doesn’t make sense because employees will have to manage two interfaces (it takes time, too much complicated). And as I said before you need additional support to implement SAP for example: in-house people are not sufficient to correctly implement ERP; the company needs to hire people who have some specific IT skills and competencies about this implementation and the different modules. However, key employees need to be involved in this process. If key managers are not involved this can be a reason of failure of the implementation. Thus if managers are engaged they will help IT people to make key decisions. First the company has to pick the managers who know what is necessary and never forget that communication should start at the beginning of the implementation across the departments. HR implementation therefore consists in engaging key persons to the project and companies have to avoid asking to less powerful people to do this step rather than to use key persons because it will not be a good solution to the prosperity of the company. Consequently, ERP implementation is not only an IT process but HR issues have to be considered as well.
In an IT or consulting companies, there are lots of jobs and each person has a specific role: when implementing ERP lost of persons intervene such as a project manager, a developer, a coder and so on.
The characteristics of a SAP are that SAP supports multiple languages and multiple currencies, everything done within the system can be trailed. In theory there is no specific SAP database and thus you can use ACCES but it will not fit your needs. But this is one benefit of this system: ERP system can be customized according to the needs of the company. This concept is called Best-of Breed (the best solution adapted to your needs, or the decision you make according to your needs).
Finally, I realized that copying the ERP system of your competitor is not the good solution to increase your market share because the most important is to fit the software to your needs. ERP systems don’t provide any competitive advantage by itself but the management of a company can lead to a better implementation.
Monday, April 07, 2008
Well, What I learned today was the concept of ERP system.
ERP is a way to put together the information and processes of a business into one system for various functions through the organization. Also I learned that by implementing this system we have to think about key points in order to have a success in the implementation of the ERP.Those key points are : Considerations that would be helpful to adopt the ERP:
- Initial cost,
- how much to implement,
- internal culture,
- Change management
- error reduction
- increase customer satisfaction
- better data improvement of the information,
- Future growths
- Bad training
- Change MGMT failure
- lack of MGMT process and technology
- solution doesn't match the company needs.
Well today was quite interesting class, combined with free breakfast, what could we ask more than that?
ERP is interesting topic: I have the feeling that it is such a powerful tool. So powerful that consultants and software designers can make a whole lot of money out of it! ^^
Risky, powerful, complex, tricky, expensive, convenient, dangerous, etc... It seems ERP has billions of faces, good ones and bad ones.
I think the most important part I'll focus on for today's class is that implementing it is not the most useful part: despite the fact that it can really ease data storage and information sharing, there is a second step in ERP that makes it worth all the pain: use it as a strategic tool!
It really looks POWERFUL if you use it that way to better orientate and implement your strategy and be the Winner! ^^
PS: 16 "I know" appeared in the previous post :D
To introduce me and help you to remember who I am: Anne-Laure, the French short hair student!
So what did I learn today ... I knew already some of things thanks to the internship I did two years ago. I was looking for new customers and calling SME’s to know if they already has an ERP system, if yes which one, if not why and so on...
The main goal was to find new companies which did not know a lot about it but were ready and open to do the first step: Meet one of our commercial.
So I already knew what the goal of ERP was and what the benefits were.
However I did not know even what does ERP means. Now, I can speak about Enterprise Resources Planning!
I knew that it was a kind of software to link information. Today I know that the "system" links data of people, information, orders and processes.
I knew that it was time effective. But I did not realise that it was only after a long time of implementation, and time of adaptation from each type of employees.
I knew that it cost money but I did not realise that it was not only for the software but more abut the time "waste" of entire the information, trainings employees..
I imagined that it was not perfect but I had no ideas about failures. Now I understand that reticence from the employees, and mainly absence of good processes can be causes of failures.
I knew I knew that it was really efficient but I did not know that a simple "click" let the supplier receive an email to order new raw materials regarding to stocks
I expect that thanks to ERP, companies were able to save money, but I did not realise that job security can decrease.
I knew that all employees did not agree to implement an ERP but I was not aware of the fact that they prefer to keep data and did not want to share information to be sure hat their tips will be only for them for instance.
I knew that reticence exist in companies and especially trade-unions but I did not realise that if you do not explain the goal and that it could be better for them they can not guess it.
I knew that it was made of modules and you can implement one or another. But I did not know that you can implement to different ERP in the same firm (Oracle and SAP for instance)
I knew that it was useful for a company which have a long term view but I did not expect that it can help you to change all your strategies: for instance, thanks to report you can notice which product you have to sell more, or sell with an lower price and so on thanks to statistic and curves which can help you!
I knew that you can avoid doubloon but I did not imagine that you can get all the information of each customers from one department to another. (Accounting from After Sales Services)
I knew that ERP can improve communication but I did not imagine that it was also to improve the transparency in a company.
I knew that ERP has to be customizing for each type of company but I did not though about the cultural aspect.
I knew that it was to have an idea of what you have in your stocks but I did not expect that it let you to forecast your sales too.
I knew that Syracuse was a city of Sicily, island of Italy but I did not expect that it was also in New York State!
But there are some ideas that I did not really understand...for instance about the Three-Tier Architecture and I wrote the word "Best of Breed" without any comments I do not know remember what it was for!
That is why I am coming tomorrow!
This morning, I realized that during my internship the company asked to a consulting company to implement this kind of tools within the company and I didn’t know exactly what it was about. I understood as well why it was crucial for the company. The system they wanted to implement was necessary to the prosperity of the company because the firm was not well organized and all data was occasionally collected twice and sometimes data were missing. It will collect data from different departments of the company and key persons will have access to the right data. I am curious and would like to come back to China to see how it works today!
I believe that even if somebody convinces me to take this class this subject is a lot more interesting than I was thinking before coming. To me it is so exciting to use various issues as HR issues or finance issues when implementing this kind of system. I do not regret!
Originally I planned to attend another class named "luxury marketing", completely different with where I am this week! I am specializing myself in Audit and Management Control.
I decided to take this class because I am curious! Before today I didn't know much about ERP, only that it is a usefull tool for companies and that being able to use SAP when you are management controller is a plus!
This morning was nice and not boring! Not like some class of management control. I liked the way it was taught, going forward then going back and going forward! It might not be the best way to always follow the idea but it is more dynamic and makes us more thinking.
So, what is an ERP system? What are the benefits/failure of this system? What considerations should be taken into account? Lot's of questions that I am wondering about this Information System.
Actually, ERP is what I thought to be but my definition was to narrow at 8:OO pm this morning(a tool for company to be more efficient by gathering data)
ERP is indeed more than a tool, it is a system that gather all data that a company needs to work. Data coming from every department of the organisation, data can be orders, information, processes and sometimes people. ERP can be implemented totally (in all the company) or partially (just one part of the organisation).
Implementing an ERP system is a long term work, it easier said than done. It requires time and money. Stakeholders (employees and managers) have to be trained and accept the huge project. In case, communication isn't done, employees might be reluctant to change and won't be efficient.
ERP can be useful for the strategy of the company, the loss of information will be reduced, managers will have a better overview of the needs of the organisation and so will be able to readjust their strategy.
ERP system aims at improving the communication between each service of the organisation, it will save time for employees.
However, ERP can't work if employees aren't enough trained and involved in changing their habit. A bad diagnosis of the needs of the organisation can lead the implementation to failure or won't match the organisation's expectation.
I think that to implement this kind of system, there are several dimensions that managers have to take into account, the individual dimension (employees), the industry / sector dimension (services or manufacturing company), the number of stakeholders, the time scale, the cost, the culture of the organisation. Implementing an ERP system can be a great JUMP for organisations but it can worth it in case it is done correctly.
Tomorrow Tuesday, I still have lots of question:
How long does it take to implement this kind of system? In which kind of organisation? Does it fit exactly the organisation or it is the same for every kind of industry?
This morning, somebody asked for the definition of a system on the whiteboard. I thought for myself: “No problem, let’s have a look at Wikipedia, it will do it!”
Here it is:
“A system is a set of interacting or interdependent entities, real or abstract, forming an integrated whole. The concept of an 'integrated whole' can also be stated in terms of a system embodying a set of relationships which are differentiated from relationships of the set to other elements, and from relationships between an element of the set and elements not a part of the relational regime.”
I spent a bit more than one hour an a half to figure out what they want to mean by “integrated whole”. Here is the result of my reflection:
An “integrated whole” is a set of relationships which is more than:
1. The relationships between this set of elements and other sets of elements
2. The relationships between an element of the set and other elements from other sets
… Like a cake is more than the result of the mix of flour, eggs, sugar and butter!
So, an ERP system is a set of interacting modules (such as finance, customer service, accounting, marketing, HR, manufacturing, etc.) which is more than strictly the combination of the relationships between these modules. But what is included inside this “more”?
In fact, an ERP is also characterised by the concept of a single database, the idea of “best practices”, the possibilities of real-time updates…