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The Challenge of Integration

The Challenge of Integration. Objectives. define ERP system discuss the motivations for integration outline some of the obstacles to integration review the major benefits to integration. What is an ERP system?. A packaged business system that allows a company to:

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The Challenge of Integration

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  1. The Challenge of Integration

  2. Objectives • define ERP system • discuss the motivations for integration • outline some of the obstacles to integration • review the major benefits to integration

  3. What is an ERP system? A packaged business system that allows a company to: • automate and integrate the majority of its business practices • share common data and practices across the entire enterprise • produce and access information in a real-time environment

  4. Motivation for integration • technological problems • operational concerns

  5. technology motivations 42 Y2K disparate systems 37 poor quality of information 26 systems not integrated 19 difficulty integrating acquisitions 12 obsolete systems 11 unable to support growth 6

  6. operational motivations 27 poor performance 24 high cost structure not responsive to customers 21 20 complex processes unable to support strategies 15 15 globalization inconsistent business processes 10

  7. change management staff inadequacy training resource allocation Obstacles to integration PEOPLE TECHNOLOGY PROCESS software functionality application management data & reporting program management reengineering transition

  8. Obstacles to integration • constantly changing technology • lack of standards • political and organizational issues • shift to distributed computing • private ownership of data / code

  9. Benefits of integration 32 inventory reduction personnel reduction 27 productivity improvements 26 order mgmt improvements 20 financial close cycle improvements 19 IT cost reduction 14 procurement cost reduction 12 11 cash mgmt improvements revenue/profit increases 11

  10. Examples of benefits • Service Merchandizing - cost per order from $50 to $12 (saving $7.5 million/year) • RJR - $5-10 million/year • Westinghouse - elapsed time/order reduced from 15 days to 1/2 day (cost from $90 to $10) • Levi-Strauss - replenishment cycle from 14 days to three days

  11. Summary • defined ERP system • discussed the motivations for integration • outlined some of the obstacles to integration • reviewed the major benefits to integration

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