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Overview of Enterprise Resource Planning

Overview of Enterprise Resource Planning 44
IntroERPFactsRequirementsFrameworkModels . Lecture3: OverviewofEnterpriseResourcePlanning ...... 1 OranKittithreerapronchai 1 DepartmentofIndustrialEngineering,ChulalongkornUniversity Bangkok10330THAILAND lastupdated:November25,2013 ProMISv1.01/32IntroERPFactsRequirementsFrameworkModels Outline ... 1 IntroductionofERP ... 2 FundamentalFactsofERP ... 3 CreatingRequirementforInformationSystem Project ... 4 FrameworkforIS/ITProject ... 5 FundamentalofmodelsrelatedtoERP ProMISv1.02/32IntroERPFactsRequirementsFrameworkModels WhatisERP Standfor:EnterpriseResourcePlanning Keyfunction:informationsystemforintegrationandbackofficeoperations Keyrationales:standardbusinesspractice,strategiccompetitive, technologyenabler DetailedDefinition . Abusinessstrategyandsetofindustrydomainspecificapplicationsthatbuild customerandshareholdercommunitiesvaluenetworksystembyenablingand optimisingenterpriseandinterenterprisecollaborativeoperationalandfinancial processes ...... source:Gartner’sResearchNoteSPA120420 ProMISv1.03/32IntroERPFactsRequirementsFrameworkModels EvaluationofERP source:www.arhum.com ProMISv1.04/32IntroERPFactsRequirementsFrameworkModels OverviewofERPsystem:Module Financials Human Accounting Resources Central ............... BoltOnBoltOn Database EDI/webEDI/web CustomersSuppliers SalesInventory DistributionManufacturing Architecture IndustrySolutions source:Mabertetal.2001.“ERP:CommonMythsVersusEvolvingReality”. ProMISv1.05/32IntroERPFactsRequirementsFrameworkModels KeyERPmodulesandoperation source:Jacob.etal2011. ProMISv1.06/32IntroERPFactsRequirementsFrameworkModels KeyERPmodules SAPModule FIFinancialAccoutring COControling SDSalesandDistribution MMMaterialsManagement PPProductionPlanning HRHumanResources source:www.ceeitandtelecom.com source:http://www.hareshpradhan.com ProMISv1.07/32IntroERPFactsRequirementsFrameworkModels Big5ofERPvendors OriginKeyfeaturesMarketshare ♯ y 19992011 SAPGermanyPioneerandlargestfirm3228 OracleUSAFlexibility,Newcomer,but1315 quicklygainingshare PeopleSoftUSAOriginallyfocusedonHR9 BAANHollandEarlyERPVendor7 J.D.EdwardsUSAInternetemphasis7 MSDynamicUSASMEleader,.NET,good12 service InforUSASpecializinginSCM7 EpicorUSAExcellentinserviceindustry5 source:Olson,D.2004 ♯ AMRResearchmarketshare24.2billionUSD y ERPMarketShareandVendorEvaluation2011 ProMISv1.08/32IntroERPFactsRequirementsFrameworkModels ERPcostbreakdown AveragecostRange Consulting302060 Hardware25050 Implementationteam15520 Training151020 Software151020 source:Olson,D,2004 ProMISv1.09/32IntroERPFactsRequirementsFrameworkModels WhydoesacompanyimplementERP Streamlinefinancial:speedprocess(CUERP),developmentofsupply chain,eOrdering, Integratecustomerorderinformation:ordertracking(USAA– empowerment) Reduceinventory:consolidatedorder,visualizinginventory,reducingdead stock, StandardizeHRprocess:reducingmanhour Standardizemanufacturingprocess:enforcepractice TypicalERPImplementationObjective Integration:financial,customerorder,accounting,purchasing Standardization:HRinformation,mergeprocesses,eliminatevariation Visualizinginventory:realtimeinventory,Smoothbusinessprocessflow WIP, ProMISv1.010/32IntroERPFactsRequirementsFrameworkModels ERPmythsVSrealities MythsRealities •HolygrailofIS •no: ∃improvement/replacment, legacysystem •Simplifiedprocess •depend:lv.customization, adoptingofbestpractice •Reducingcostsworkers •depend:,BPR, •Integratingall,locallyglobally •depend:scopesscalesof implementation ProMISv1.011/32IntroERPFactsRequirementsFrameworkModels FailedERPprojects Hershey:aclassicalIT/ISfailure Effects:delayedshipments12saledecline29inventorycost Rootcauses:highexpectation,multipleITvendors,projectscheduling FoxMeyerDrug:aclassicalERPfailure Effects:lateorder,incorrectlostshipments15millionlose Rootcauses:highexpectation,projectmanagementscheduling Nike:ashoesgiantstumbled Effects:failedordersystem80100millionlosesales Rootcauses:highcustomization,notestingplan Whirlpool:ERPstumble(HersheyII) Effects:failureinfullscalesystemdelayshipmentsorderingmistake Rootcauses:highexpectation,communication ProMISv1.012/32IntroERPFactsRequirementsFrameworkModels ERPriskfactors Organizationfit:insufficientofresourcesfailuresofredesignprocessand dataintegration Skillmix:insufficienciesofstaffs,reskilling,internalexpertise,business analysis,andretainERPqualifieddeveloper Management:lacksofchampion,communication,andcontrol Softwaredesign:lacksofrequirementsintegration Involvementtraining:lackoffulltimecommitment,endusertraining, changemanagement Technologyintegration:attempttobuildbridgewithlegacysystem Projectmanagement:lackofmeasurementsystem Socialcommitment:inabilitytorecognizeproblem source:“Riskfactorsinenterprisewide/ERPproject”Sumner,M2000. ProMISv1.013/32IntroERPFactsRequirementsFrameworkModels ERPsuccessfactors 5mostImportantfactors 1Budgetreliability: 2Companyexpectation: 3Implementationtime: 4Schedulereliability: 5Processknowledge: ProMISv1.014/32 source:’ARoadmapforEBusinessImplementation’MingLing,CShaw,W.H.2005IntroERPFactsRequirementsFrameworkModels StrategicTacticalSuccessFactors StrategicTactical •Topmanagementsupport •BPRsoftwareconfiguration •Changemanagement •Trainingjobredesign •Implementationstrategy •Projectteam •Consultantselection •Balancedteam •Visioningplanning •Communicationplan •Projectchampion source:’ERPimplementation’Finny,SCorbett,M.2007 ProMISv1.015/32IntroERPFactsRequirementsFrameworkModels Terminology Bestpracticeapplicationdeemedthebestwayforacertainprocess(coined bySAP) BestofbreedmixingERPmodulesformdifferentvendor Positivedisastertechnicallysuccessful,butgetcriticismfromkeyusers Negativedisastertotalfailure(abandonmentormajorreversal)ofproject VanillaERPprojectabasicversionofERPwithnoorminimal customization Customizationmodifiedsoftwaretomeetspecificrequirementsofan organization FederalizationtailorERPdifferentlyforeachregionalunitofanorganization ProMISv1.016/32IntroERPFactsRequirementsFrameworkModels IT/ISprojectlifecycle Architecture WhattodoWhyStrategy Requirement Standard Howtodo;Cost;Justification Framework Model .................. Appropriationline WithintimebudgetImplementationProjectMgt Maintenance businesschangeSupportBPR HelpDesk source:Akeetal.2004.“InformationTechnologyforManufacturing.” ProMISv1.017/32IntroERPFactsRequirementsFrameworkModels SystemDevelopmentLifeCycle source:Motiwalla,L.andThompson,J. ProMISv1.018/32IntroERPFactsRequirementsFrameworkModels ImplantationMethod source:Motiwalla,L.andThompson,J. ProMISv1.019/32IntroERPFactsRequirementsFrameworkModels ThreetierArchitectures source:Motiwalla,L.andThompson,J. Pro:scalable,flexibility,security, Con:hardware,complexity ProMISv1.020/32IntroERPFactsRequirementsFrameworkModels Whatisrequirement . Specificationphysicallyandfunctionallythataparticularproductorservicemust beorperform(toensuesatisfactionandsuccessofclients) ...... Businessrequirements:whatvaluecreated Productrequirements:propertiesofproduct/servicecreated(howto accomplishbusinessrequirements) Processrequirements:activitiestodeliversuchproperties ProMISv1.021/32IntroERPFactsRequirementsFrameworkModels Whydoweneedrequirements Reducingprojectefforts:revealhiddenissueskeypersons Establishingfunctionalbaseline:agreementbetweenusersprojectteam Estimatingprojectcost:’peer’comparison Documentingthoughtprocessforfuturechanges: Definingtest,validation,andverification:milestones, source:Akeetal.2004.“InformationTechnologyforManufacturing.” “Onecanendupdoingaprefectjobofbuildingthewrongproduct” source:Wiegers,K.2004.’Insearchofexcellentrequirements.’ ProMISv1.022/32IntroERPFactsRequirementsFrameworkModels Keyquestionsinsoftwarerequirement Whoarestakeholderofthissoftware Whatthesoftwaremustdoandmustbetoaddvalueforthestakeholder Whatlimitationsandnecessarydocumentsthroughoutdevelopmentlife cycle Howsoftwarecomplimentwithsurroundingissues Howtovalidaterequirementusingpeerreview source:Westfall,L.2005.“SoftwareRequirementsEngineering” Goodrequirementshouldcover Strategic:expansion,practice,responsetime,control Analysistool:executivereport,decisions Functional:e.g.,supportSilverMeal Technological:e.g.,supportRF,RFID,users/group ProMISv1.023/32IntroERPFactsRequirementsFrameworkModels Techniquesforrequirementsgathering RequirementsDriven:mostpopular,slowestdefining SolutionDriven:rapidERPimplementations ConfigurationDriven:oldsystem⊆newsystem,goodforreplacement, existingsystemlimitations Iterativemethod: 1Listentoyourcustomer:highlevelrequirements→softwaresupporting business 2Leadyourcustomer:illustratesoftware,gatheringexceptions,validate businessrequirements 3Negotiatewithyourcustomer:definingvalueaddedbusiness requirements,addressingallbusinessexceptionsandscenarios source:BestapproachforgatheringERPrequirements. ProMISv1.024/32IntroERPFactsRequirementsFrameworkModels Whydoweneedframework ’Focus’scopetasks: Complywithstandard:existing,communication,flexibility Speedimplementationavoidpitfalls:selecting’right’projectconsulting softwarevendor Componentofagoodframework:understandinsideoutofframework Assumptionconstraint: Dataprocessflow: Datamigrationsachieving:storinghistoricaldatamakeuseofit Userinterface:prioritizeusers ProMISv1.025/32IntroERPFactsRequirementsFrameworkModels FrameworksofERPERPII Core(foundation):integrateddatabase→ERdiagram Central(process):businessprocess→documents Corporate(analytical):decisionsupport→datamining SCMproductiondistributionofgoods CRMcustomerservicepatterns SRMsupplierevaluationpatterns CPMKPImatrices,gapanalysis Collaborative(portal):tocustomers,tobusiness,toemployees, source:Moller.2005.“ERPII:aconceptualframeworkfornextgenerationenterprisesystem.” ProMISv1.026/32IntroERPFactsRequirementsFrameworkModels Standard:Doesitmatter Standard = ̸permanentlyestablishedpractices Standardistransient(constantlychange) Livewithintransientofstandards Staytunedtothemarket: Understandtechnologyinfrastructure:benefitsnecessity Establish’meaningful’companystandards:fewexceptions,nottoorigid, keyprocess, Avoidlastlegstechnology: source:Akeetal.2004.“InformationTechnologyforManufacturing.” ProMISv1.027/32IntroERPFactsRequirementsFrameworkModels Whydoweneedmodel Simplification:understand,removefactor,communication Conveymessages:showtradeoff,reasonconnection Prediction:captureidealworld ModelAwareness Modelisstartingpointandevaluationtool,notabsolute Model = ̸Realenvironment Model→ /Success Modelmustfitin’right’context Modelservesascommunicationandorganizationtool,checklist,ideal ProMISv1.028/32IntroERPFactsRequirementsFrameworkModels CIMPyramidmodel source:Akeetal.2004.“InformationTechnologyforManufacturing.” ProMISv1.029/32IntroERPFactsRequirementsFrameworkModels AMR3MESA source:Akeetal.2004.“InformationTechnologyforManufacturing.” ProMISv1.030/32IntroERPFactsRequirementsFrameworkModels SCORmodel:Overview source:Akeetal.2004.“InformationTechnologyforManufacturing.” What:hierarchybusinessprocessmodel Scopes:allcustomer’sinteraction,producttransactions,marketinteractions Benefit: ∃bestpractice,matricesforbenchmark,communication Issues:nodetailsoperation,ignoredsaleandmarkets,RD Trivial:developedbyPRTMandendorsedbytheSupplyChainCouncil ProMISv1.031/32IntroERPFactsRequirementsFrameworkModels SCORmodel:Level1Scope Plan:balanceaggregatedemandandsupplytoallrequirements balanceresourceswithrequirements managebusinessrules,data,performance,capital,transportation communicateplansforthewholesupplychain Sourceprocurecomponentsofgoods scheduledeliveries,receive,verify,transfer selectassesssuppliers Make:transformproducttoafinishedgoodstomeetdemands scheduleproduction Deliver:providefinishedgoodstomeetdemand performordermanagementi.e.,quote,warehouse,route,ship,verify Return:returningorreceivingreturnedproducts managereturnbusinessrules performreturn,substitution,refund,restock source:http://supplychain.org/scor ProMISv1.032/32
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