Lessons Learned Day 1

What is ERP?
ERP (Enterprise Resource Planning/Kurumsal Kaynak Planlama); is a software that connect/links each business unit/ each operation. Ii provides the right information to right people at the right time.
An ERP system has a modular structure and a similar interface for all modules; it can be regarded as a single integrated database for a company. The information is updated real time, there is no need to wait and update the information. Also the systems are modular like, Customer Service, Finance, Accounting, HR modules. The ERP system can consist of one single module, or numerous modules depending on the company’s needs, it is also possible to increase the modules later on.

Where Does ERP Come From?
The software supporting business activities started with MRP (Materials Resource Planning) which are designed for mainly production processes. The software includes the Bill of Materials, which brakes down the entire sub assemblies and parts required for the end product. Upon the entrance of the forecasts of sales or demand, the software works its way back in the production process and determines when and how much to order from the suppliers.
The MRP system provides lot sizes and timing of the orders however these systems were excluding financing and human resources aspects. Therefore the need for MRP II arose, now the question of the financing of the orders was also considered.
The picture becoming bigger and reaching company level ERP systems came into the business. These systems becoming broader in the application area the implementation became more difficult.
Implementing ERP and the Effects on a Company’s Processes
Prior to the implementation of an ERP system a company has to analyze its own operations very well, they have to be aware of their strengths and weaknesses, the bottlenecks must be clearly defined, and the system requirements (for the ERP System) must be determined carefully. Sometimes business process reengineering might be beneficial while adapting to the software. Changing the processes prior to an ERP implementation will not be so smart since it will be too hard to adopt since there will be two changes in parallel and due to the software implementation the business processes might have to be changed again.
The ERP software usually comes with “best practice” and for a company. There are industry specific solutions; eg. For Banking there is a different ERP system than for an automotive industry each one focusing on the industry activities.
Especially if small, it might be easier and more beneficial to adopt the process suggested by the software rather than changing the system and adopting it according to the business. Also if you do fewer changes on the software it will be easier to upgrade the system.
Which ERP Provider to Choose
There are different companies providing ERP Software; some are major very well known big, worldwide companies like SAP and Oracle which have industry specific solutions and a worldwide expertise in many areas. There are also smaller providers, local providers which are not that big, and therefore are cheaper. Another type of provider are the open source one which are available to everyone. The advantages and disadvantages of the providers are summarized below
Major Players (Oracle, SAP, etc..)
Pros
Strong support
Many consultants
High variety of applications
Competition forces good service
Cons
Expensive
Late support
Less flexible
Smaller Providers
Pros
Cheaper
Easier to adjust
Language is more flexible
Cons
Support takes time
The company might shut down

Open Source
Pros
Free
Code is good
Code is there
Possible to modify yourself
Support where available is cheap
Easy to customize
Cons
Weak documentation (or not free)
With increase of popularity, software starts costing
In house developers are needed
Service, support is bad
There are also On Demand ERP (SAAS) providers. These providers have their own servers and the software is installed there, also all your information is stored by them. When a company chooses this kind of ERP they will have lower costs for implementation the only need is an internet connection. However the major problem with these kind of providers is the security issues, since all the company’s information is stored on a database off site and is hosted by another company it will be more prone to attacks.
For all the ERP Systems there is a common problem “bugs”, the detection and time needed to fix the bug differs not according to the type of the provider, however bugs a more widely used ERP software are more likely to be detected.
Success of an IT Project
There are four basic criteria to measure the success of a project;
Meeting the requirements
Budget
Due date/time
Use (resistance to use, or anything else).
70% of IT projects do not succeed. However is a project meets the requirements and is used at the end even if budget and time constraints are not met it can be considered successful.
What to Do and Team Formation
Understand business process
Define system requirements
Investment decision, provide resources
Form an adequate team
Do not implement because competitors implement!
Team formation
People from the top management (people who are familiar with the workflow, have the power to decide on changes, avoid resistance to implementation)
Consultants (key consultants, who have expertise in the modules you need)
IT managers (to learn ABAP code and provide you with future assistance once you have started using the ERP system)
Champion (preferably someone high in management also familiar with the operations and close to the employees, assistant manager)
Staff end users (not in the core team but in the early stages)
CFO for the initial decision making process since he’ll be providing the money
Match key consultants with key managers, capabilities of the software, knowledge of how things in the company work/should work
SAP (System Application Products)
Modular, yet integrated
Three Tier Architecture
Upgrades come with versions
Industry specific solutions are provided
Global business architecture
Language is user driven
Multi currency
Tax issues can be handled on the basis of currency
Audit trail (everything is signed with your user name)

Data Mining vs. Data Warehouse
With the databases there is a huge amount of information saved. However just by collecting this data nothing happens. It is essential to analyze and draw meaningful conclusions.
Data mining is one approach; here you don’t know what you are really looking for (what kind of relationship among the data) but you try to form a relationship between variables.
Business warehouse is another approach where you define three dimensional data cubes and know what you are looking for. The business warehouse is a module that can be purchased separately and provides you with graphs, tables etc, from the data.Lessons Learned Day 1
What is ERP?
ERP (Enterprise Resource Planning/Kurumsal Kaynak Planlama); is a software that connect/links each business unit/ each operation. Ii provides the right information to right people at the right time.
An ERP system has a modular structure and a similar interface for all modules; it can be regarded as a single integrated database for a company. The information is updated real time, there is no need to wait and update the information. Also the systems are modular like, Customer Service, Finance, Accounting, HR modules. The ERP system can consist of one single module, or numerous modules depending on the company’s needs, it is also possible to increase the modules later on.
Where Does ERP Come From?
The software supporting business activities started with MRP (Materials Resource Planning) which are designed for mainly production processes. The software includes the Bill of Materials, which brakes down the entire sub assemblies and parts required for the end product. Upon the entrance of the forecasts of sales or demand, the software works its way back in the production process and determines when and how much to order from the suppliers.
The MRP system provides lot sizes and timing of the orders however these systems were excluding financing and human resources aspects. Therefore the need for MRP II arose, now the question of the financing of the orders was also considered.
The picture becoming bigger and reaching company level ERP systems came into the business. These systems becoming broader in the application area the implementation became more difficult.
Implementing ERP and the Effects on a Company’s Processes
Prior to the implementation of an ERP system a company has to analyze its own operations very well, they have to be aware of their strengths and weaknesses, the bottlenecks must be clearly defined, and the system requirements (for the ERP System) must be determined carefully. Sometimes business process reengineering might be beneficial while adapting to the software. Changing the processes prior to an ERP implementation will not be so smart since it will be too hard to adopt since there will be two changes in parallel and due to the software implementation the business processes might have to be changed again.
The ERP software usually comes with “best practice” and for a company. There are industry specific solutions; eg. For Banking there is a different ERP system than for an automotive industry each one focusing on the industry activities.
Especially if small, it might be easier and more beneficial to adopt the process suggested by the software rather than changing the system and adopting it according to the business. Also if you do fewer changes on the software it will be easier to upgrade the system.
Which ERP Provider to Choose
There are different companies providing ERP Software; some are major very well known big, worldwide companies like SAP and Oracle which have industry specific solutions and a worldwide expertise in many areas. There are also smaller providers, local providers which are not that big, and therefore are cheaper. Another type of provider are the open source one which are available to everyone. The advantages and disadvantages of the providers are summarized below
Major Players (Oracle, SAP, etc..)
Pros
Strong support
Many consultants
High variety of applications
Competition forces good service
Cons
Expensive
Late support
Less flexible
Smaller Providers
Pros
Cheaper
Easier to adjust
Language is more flexible
Cons
Support takes time
The company might shut down

Open Source
Pros
Free
Code is good
Code is there
Possible to modify yourself
Support where available is cheap
Easy to customize
Cons
Weak documentation (or not free)
With increase of popularity, software starts costing
In house developers are needed
Service, support is bad
There are also On Demand ERP (SAAS) providers. These providers have their own servers and the software is installed there, also all your information is stored by them. When a company chooses this kind of ERP they will have lower costs for implementation the only need is an internet connection. However the major problem with these kind of providers is the security issues, since all the company’s information is stored on a database off site and is hosted by another company it will be more prone to attacks.
For all the ERP Systems there is a common problem “bugs”, the detection and time needed to fix the bug differs not according to the type of the provider, however bugs a more widely used ERP software are more likely to be detected.
Success of an IT Project
There are four basic criteria to measure the success of a project;
Meeting the requirements
Budget
Due date/time
Use (resistance to use, or anything else).
70% of IT projects do not succeed. However is a project meets the requirements and is used at the end even if budget and time constraints are not met it can be considered successful.
What to Do and Team Formation
Understand business process
Define system requirements
Investment decision, provide resources
Form an adequate team
Do not implement because competitors implement!
Team formation
People from the top management (people who are familiar with the workflow, have the power to decide on changes, avoid resistance to implementation)
Consultants (key consultants, who have expertise in the modules you need)
IT managers (to learn ABAP code and provide you with future assistance once you have started using the ERP system)
Champion (preferably someone high in management also familiar with the operations and close to the employees, assistant manager)
Staff end users (not in the core team but in the early stages)
CFO for the initial decision making process since he’ll be providing the money
Match key consultants with key managers, capabilities of the software, knowledge of how things in the company work/should work
SAP (System Application Products)
Modular, yet integrated
Three Tier Architecture
Upgrades come with versions
Industry specific solutions are provided
Global business architecture
Language is user driven
Multi currency
Tax issues can be handled on the basis of currency
Audit trail (everything is signed with your user name)

Data Mining vs. Data Warehouse
With the databases there is a huge amount of information saved. However just by collecting this data nothing happens. It is essential to analyze and draw meaningful conclusions.
Data mining is one approach; here you don’t know what you are really looking for (what kind of relationship among the data) but you try to form a relationship between variables.
Business warehouse is another approach where you define three dimensional data cubes and know what you are looking for. The business warehouse is a module that can be purchased separately and provides you with graphs, tables etc, from the data.