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ERP PERSPECTIVES. GMP FOR PGCIL 18/Aug/2001. Presented By NIRMALA APSINGIKAR I.T. AREA ASCI. ENTERPRISE-WIDE RESOURCE PLANNING - AGENDA. THE CASE FOR ERP : BUSINESS CASE THE I.T. ANGLE ERP DEFINITIONS, EVOLUTION ERP COMPONENTS INVESTING IN ERP IMPLEMENTATION ISSUES.

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slide1

ERP PERSPECTIVES

GMP FOR PGCIL

18/Aug/2001

Presented By

NIRMALA APSINGIKAR

I.T. AREA

ASCI

erp

enterprise wide resource planning agenda
ENTERPRISE-WIDE RESOURCE PLANNING- AGENDA
  • THE CASE FOR ERP :
    • BUSINESS CASE
    • THE I.T. ANGLE
  • ERP DEFINITIONS, EVOLUTION
  • ERP COMPONENTS
  • INVESTING IN ERP
  • IMPLEMENTATION ISSUES

erp

the business case for erp power sector
The Business Case for ERP-POWER SECTOR

THE BUSINESS ENVIRONMENT

    • Demand-Supply Gap growing
    • Unbundling of SEBs; Corporatization
    • Privatization
    • Increasing Competition (IPPs)
    • CERC & SERCs; Tariff Reform
    • Changing Customer Expectations
  • THE CHALLENGE:

TO ACHIEVE AND MAINTAIN SUSTAINABLE BUSINESS ADVANTAGE

erp

sustainable competitive advantage
SUSTAINABLE COMPETITIVE ADVANTAGE
  • Agility (Quick Response)
  • Continuous Innovation
  • Focus On Efficiencies

erp

power generation business major operational concerns
Power Generation Business - Major Operational Concerns
  • Cost Effectiveness
  • Project Management
  • Supply-Chain Performance
  • Receivables Management
  • Assets /Plant Maintenance
  • Environmental Compliance
  • Safety
  • Quality

erp

sustainable competitive advantage corporate initiatives
SUSTAINABLE COMPETITIVE ADVANTAGE CORPORATE INITIATIVES
  • Optimizing, improving, and Automating Business Processes
    • Project Management
    • Contracts;
    • Procurement / Materials Management
    • Spares Inventory Optimization
    • Receivables Management
  • BPR / Process Thinking /cross-functionality
  • Leveraging Information Technology

erp

business partners multiple roles

BUY-

FROM

SOLD-

TO

SUPPLIER

CUSTOMER

SHIP-

TO

SHIP-

FROM

INVOIC-

TO

INVOIC-

FROM

BUSINESS-

PARTNER

PAY-

TO

PAY-

BY

.......

......

.......

INTERNAL

Business Partners - multiple roles

erp

complex organization structures
COMPLEX ORGANIZATION STRUCTURES
  • Enterprise has evolved as a networked structure ,
  • consisting of many small/ medium-sized organisations ,
  • having their own specializations
  • , Working in tandem
  • To create value for their customers

erp

responses to business pull major implications
RESPONSES TO BUSINESS PULL:MAJOR IMPLICATIONS
  • NEED TO MANAGE HIGHER ORGANIZATIONAL COMPLEXITY
  • CHANGE IN STRUCTURES, ROLES, PROCESSES
  • MANAGING INTERDEPENDENCE
  • Need for information infrastructure to support changing business requirements

erp

slide10

TRENDS IN I.S. APPLICATIONS

OPTIMIZING AND AUTOMATING BUSINESS PROCESSES

  • On-line Transaction Processing (OLTP)
  • Integration Of Information Across Functions
  • Automation Of Work Flows;/ Groupware
  • Inter-organisational Systems
  • Electronic Data Interchange (EDI)/

E-commerce

ERP / SUPPLYCHAIN/E-BUSINESS

mispersp

enterprise wide applications

ENTERPRISE-WIDE APPLICATIONS

ENTERPRISE RESOURCE PLANNING :

ENABLING THE AGILE ORGANIZATION

erp

erp definition s
ERP DEFINITION(S)

APICS

  • AN ACCOUNTING ORIENTED INFORMATION SYSTEM
  • FOR IDENTIFYING AND PLANNING THE ENTERPRISE-WIDE RESOURCES
  • NEEDED TO TAKE MAKE,SHIP & ACCOUNT FOR CUSTOMER ORDERS

ERP DIFFERS FROM MRP -II SYSTEM IN TECHNICAL REQUIREMENTS LIKE, GUI, RDBMS,4 GL, CLIENT/SERVER ARCHITECHTURE, OPEN-SYSTEM PORTABILITY.

erp

erp definition s1
ERP DEFINITION(S)

GARTNER GRP.

  • ERP IS AN INTEGRATED APPLICATION SOFTWARE SUITE
  • THAT BALANCES MANUFACTURING, DISTRIBUTION AND FINANCIAL BUSINESS FUNCTIONS.
  • WHEN FULLY IMPLEMENTED , ERP CAN ENABLE ENTERPRISES
  • TO OPTIMISE THEIR BUSINESS PROCESSES AND ALLOW S FOR NECESSARY MANAGEMENT

ERP IS THE TECHNICAL EVOLUTION OF MRP-II THROUGH THE INTRODUCTION OF RDBMS, CASE, GUI, 4GL DEVELOPMENT TOOLS, AND C/S ARCHITECTURE.

erp

erp definition s 2000
ERP DEFINITION(S)….2000
  • ERP is a structured approach to optimizing a company’s internal value chain.
  • The software, if fully installed across the enterprise connects the various parts through logical transmission and sharing of common data
  • In an ERP implementation data and processes are organized, codified, and standardized

contd.

erp

erp definition s 20001
ERP DEFINITION(S)….2000
  • When data becomes available at one point in the business, it generates and processes related data in other areas
  • Transaction data are converted into useful information and analyses

erp

slide16

Enterprise planning : core process : Where does it fit?

inventory

information

demand

forecast

Inventory Plan

(safety stock)

Demand Plan

Enterprise planning engine

Item master plan

Resource master plan

Planned Orders

Distribution

Purchase

Orders

Production

Orders

Orders

erp

integrated enterprise

ERP

Integrated Enterprise

The 1990’s Enterprise

MFG

Distribution

Finance

Projects

Purchasing

Sales

erp

erp software
ERP SOFTWARE
  • BASED ON AN ENTERPRISE BUSINESS MODEL
  • APPLICATION SOFTWARE MODULES FOR FUNCTIONS SUCH AS :
    • MANUFACTURING
    • TRANSPORTATION, SALES AND DISTRIBUTION
    • MAINTENANCE MANAGEMENT
    • FINANCE
    • HUMAN RESOURCES
    • PROJECT MANAGEMENT
erp software1
ERP SOFTWARE
  • INTEGRATION AMONG FUNCTIONAL MODULES
  • WORKFLOW ENABLED
  • INTERNET/EDI , INTRANET ENABLED
  • CUSTOMIZABLE THROUGH IMPLEMENTATION TOOLS (SOFTWARE)
  • PRESENT SOLUTIONS INTEGRATE SUPPLYCHAIN MANAGEMENT AND CUSTOMER RELATIONSHIP MANAGEMENT
erp modules
ERP MODULES
  • FINANCIAL
  • Accounts Receivable and Payable
  • General Ledger
  • Asset Accounting
  • Financial Consolidation
  • Cash Management and Forecasting
  • Budgeting
  • Product Cost Accounting
  • Profitability Analysis
  • Activity Based Costing
  • EIS

erp

erp modules1
ERP MODULES

LOGISTICS / OPERATIONS

  • Enterprise Planning : (Demand forecast to Prodn. Planning)
  • Bill of Materials; Routing Management
  • MPS, MRP, CRP
  • Purchasing
  • Shop Floor Control
  • Quality Management
  • Warehousing
  • Transportation
  • Plant Maintenance
  • Field Service

erp

erp modules2
ERP MODULES
  • SALES AND MARKETING
  • Order Management
  • Pricing
  • Sales Planning
  • Sales Management
  • Customer Relationship Management
  • HUMAN RESOURCES
  • Human Resources : Time Accounting
  • Payroll
  • Personnel Management

erp

project solution
Project Solution

Master Data

Definition

Budget

Planning

Monitoring

Invoicing

Progress

Requirements

Central Invoicing

Order Management

Warehousing

Manufacturing

Configurator

Finance

Service

erp

project management solution

Project Monitoring

Project Control

Project

Setup

Project Execution

Project

Close Out

Project Administration

Project Invoicing

Project Management Solution

Business Control Diagram

erp

project modules
Project Definition

Project Budget

Project Planning

Project Requirements

Hours Accounting

Project Progress

Project Monitoring

Project Invoicing

Master Data Management

Project Modules

erp

project definition
Project Data :

Project-Specific Resources

Project-Specific Cost Breakdown Structures

Copying project data from Templates/ existing project

Project Definition

erp

project requirements planning
Project Requirements Planning
  • Manages the generation of:
    • Material (Purchased, manufactured; or from inventory)
    • Equipment
    • Subcontracting
  • Generates planned orders for Project Supply Chain (Warehouses, Suppliers, Production sites)
  • Confirmation->Release->transfer
  • Direct Delivery of Matl. To site, or to a Project Warehouse

erp

project requirements planning1

Manual Orders

Manual Orders

Project Requirements Planning

Project Budget

& Control Data

PRP

Purchase Orders

Warehouse Orders

Confirm & Transfer

to Purchasing

Confirm & Transfer

to Warehousing

erp

project progress
Project Progress
  • Information on actual execution
  • Milestone Completion;
  • Manufacturing operations progress
  • Actual Material Costs and Commitments updated thro’ integration with Order Management and Warehousing modules
  • Actual labour hours and costs are updated through integration with Hours Accounting Module
  • Project Revenues posted

erp

project monitoring performance measurement
Project Monitoring Performance Measurement
  • Scheduled Work = BCWS
  • Performed = BCWP
  • Actuals = ACWP
  • BAC = Budget at Completion
  • EAC = Estimate at Completion
  • Variances:
    • Schedule variances
    • Cost variances

erp

project invoicing
Project Invoicing
  • Upon selection of invoicing method, the invoicing amounts are calculated and generated through integration with Central Invoicing module

(Multi-currency is supported)

  • Invoicing methods supported include:
    • Fixed Price (Installments on basis of progress/milestones/predefined schedule
    • Cost-plus (Reimbursement, etc)
  • Accounting support for Customer advance payments, retention transactions

erp

slide32

ENTERPRISE RESOURCE PLANNING

(ERP)

  • Deployment of IT mechanisms for the best
  • use of Enterprise-wide resources and implementation of best business practices:
  • Evolved as a natural sequel to MRP (I & II)
  • Current solutions largely available to mfg. organisations
  • Manufacturing central to the solutions, HOWEVER,
  • solutions are being extended to cover services such as retailing, trading, healthcare, etc
slide33

TRENDS IN I.S. APPLICATIONS

Expected Benefits

SUPPORTING STREAMLINED BUSINESS PROCESSES THROUGH :

  • Upto-the minute information for improved
  • operating decisions and services
  • Intuitive, iterative use of information
  • by executives
  • Improved collaboration & coordination
  • Improved internal administration
  • Direct links to client/partners

mispersp

enterprise systems why are they important
ENTERPRISE SYSTEMSWHY ARE THEY IMPORTANT?
  • Provide Process and Information Integration
  • Support Industry “Best Practice”

(Enable Business Process Re-Engineering/Improvement)

  • Globalization : Support MNC Reporting; Control Requirements
  • Foundation for e-Business (e-Commerce, SCM,CRM)
  • Enable Managing Business Change Consistently

erp

the case for erp products the i t angle
THE CASE FOR ERP PRODUCTS:THE I.T. ANGLE
  • Rapid advances in I.T. (Computing : Hardware, software; and Connectivity)
  • Challenges in absorbing and effectively exploiting new information technologies
  • I.T. is not the Core Competence
  • Need for specialist companies who can assimilate new technologies and deploy them in products.

erp

making the case for enterprise systems compaq computers
MAKING THE CASE FOR ENTERPRISE SYSTEMS - COMPAQ COMPUTERS
  • Support the move to a Lean Production Strategy
  • Move from “Make to Stock” to “Build to Order”
  • Needed to tie together processes for Ordering, configuration, Manufacturing, inventory, and distribution
  • Post-ERP, can order materials from Suppliers on a daily basis;
  • Can plan Production on basis of week’s sales

erp

making the case for enterprise systems compaq computers 2
MAKING THE CASE FOR ENTERPRISE SYSTEMS - COMPAQ COMPUTERS…2

Initiatives Beyond ES

  • Outsourcing of Production
  • Resellers to customize the product to customer Specs
  • Exchanging data with Suppliers and Customers in Real time (using ERP with Internet)
  • Developed their own applications for production forecasting and order scheduling

erp

making the case for enterprise systems reebok
MAKING THE CASE FOR ENTERPRISE SYSTEMS - Reebok

Managing global integration

  • growth through acquisitions.
  • Acquired several disparate systems along with acquired companies.
  • Own in-house systems were too inflexible
  • Outsourcing of Production
  • Industry best practices in manufacturing and distribution
  • Consortium with VF and SAP to develop industry vertical solution for Apparel footwear industry
  • Product creation processes not in ES.

erp

putting the pieces together enterprise systems wth bolt ons vf corporation
PUTTING THE PIECES TOGETHER ENTERPRISE SYSTEMS WTH BOLT-ONs VF Corporation
  • Was a member of the SAP Consortium to develop the Industry solution for the Apparel Industry
  • SAP R/3 Backbone
  • Product Development Processes supported by another S/w package WebPDM
  • Warehouse Control and Manufacturing control : Custom applications developed in-house
  • Capacity and Raw matls plg. Using i2’s Rhythm package
  • Forecasting using Logility s/w
  • Micromarketing using other 3rd party products such as JDA software, Marketmax, etc.
  • All these were hooked on to SAP R/3 using Application Program Interfaces (APIs)

erp

making the case for enterprise systems others
MAKING THE CASE FOR ENTERPRISE SYSTEMS - Others

Intel :

  • ES was a way to standardize and integrate by getting rid of most legacy applications
  • Did not include manufacturing systems in the ES application.

Microsoft

  • Better Financial and Procurement Systems worldwide
  • Better management Control and reporting

erp

dovetailing erp with integrated resource management systems in the mining value chain
Dovetailing ERP with Integrated Resource Management Systems in the Mining value chain

Planning

Geology

Resource

Modelling

Mine

Design

Mine Plg.

& Budgeting

Process

Control

Environment Mgt.

ERP

Product

Shipping

Milling

Beneficiation

O

P

N

S

Reconcil.

Bus.

Intelligence

Prodn.

Mgt.

Eqpt.

Fleet Mgt.

Matl.

Movement

Mgt.

Supply

Chain Mgt.

Accounts

Receivable

Budget

Accounts

Payable

Human

Resource

General

Ledger

Mtce.

Mgt.

Sales

erp

slide43

Specialized Applications for the Power Generation/Wholesale supply Industry

  • Load Profiling and forecasting
  • Power System Planning
  • Generation Planning; Load Despatch
  • Plant Optimization
  • Pollution Control; Environment Mgt.
  • Engineering Data / Workflow Management

mispersp

utilities typical erp solution modules
UTILITIESTypical ERP SOLUTION MODULES
  • Enterprise Management
  • Customer Relationship Management
  • Generation
  • Transmission & Distribution
  • Installation Services
  • Energy Service
  • Energy Trading

erp

utilities typical erp solution modules1
UTILITIESTypical ERP SOLUTION MODULES
  • Enterprise Management
  • Strategic Planning Support
  • Business Intelligence and Data Warehousing
  • Managerial Accounting
  • Financial Accounting
  • Regulatory Reporting

erp

utilities typical erp solution modules2
UTILITIESTypical ERP SOLUTION MODULES
  • Generation
  • Support for various generation facilities
  • Engineering and Construction
  • MRO Procurement
  • Plant Maintenance
  • Work Management Systems
  • Safety Protocols : Work Clearance Management

erp

utilities typical erp solution modules3
UTILITIESTypical ERP SOLUTION MODULES
  • Transmission & Distribution
  • Engineering and Construction
  • Operations Management
  • Maintenance & Work Management
  • Outage Management Systems
  • Safety Protocols : Work Clearance Management

erp

utilities typical erp solution modules4
UTILITIESTypical ERP SOLUTION MODULES
  • Transmission & Distribution
  • Distribution Management Systems
  • Automated Meter Reading
  • Field Crew Management
  • Spatial Information System Planning

erp

utilities typical erp solution modules extend to trading systems
UTILITIESTypical ERP SOLUTION MODULES:- Extend to Trading Systems

Trading Systems

  • Internet-Based Trading Systems
  • Settlement Systems

Customer Relationship Management

  • Call Centres
  • Customer Information Systems
  • Billing

erp

slide50

Integrated Solutions for the Utilities Industry

  • Mincom Ellipse
  • SAP R/3 Utilities solution
  • Ramco Marshal

mispersp

slide51

ERP SOFTWAREADVANTAGES OF IMPLEMENTATION

  • OPPORTUNITY TO DESIGN AN AGILE, EFFICIENT ORGANIZATION
    • ENABLES BUSINESS RE-ENGINEERING:
    • MAKES INTEGRATED INFORMATION RAPIDLY AVAILABLE FOR DECISIONS:
    • ALLOWS EASY RECONFIGURING TO ADAPT TO CHANGES IN BUSINESS REQUIREMENTS

erp

erp software advantages of implementation
ERP SOFTWAREADVANTAGES OF IMPLEMENTATION
  • MAKES INTEGRATED INFORMATION RAPIDLY AVAILABLE FOR DECISIONS:
    • INTEGRATED SOFTWARE MODULES
    • SINGLE POINT DATA ENTRY
    • CUSTOMISED REPORTING
    • MIS SUPPORT THRU CONTROLLING/ BUDGETING MODULES
    • DECISION SUPPORT THRU BUILT-IN ALGORITHMS AND DATA WAREHOUSING CAPABILITY

erp

erp sources of benefits
ERP sources of benefits
  • BUSINESS PARAMETERS:
    • INVENTORY LEVELS AND TURNOVERS
    • DEBTOR DAYS
    • CUSTOMER SERVICE OR RESPONSE LEVELS
    • RESOURCE USAGE
    • FINANCIAL RISK AND EXPOSURE
  • SYSTEM PARAMETERS:
    • IMPROVED SECURITY; RESPONSE; CAPACITY, ETC

erp

investing in erp quantifying benefits
INVESTING IN ERPQUANTIFYING BENEFITS
  • Reduction in material costs through improved vendor management
  • Reduction in working capital requirements
  • Increased capacity utilization due to improved materials planning
  • Increased capacity utilization from improved production planning
  • Reduced downtime from improved maintenance

erp

limitations of erp
LIMITATIONS OF ERP
  • STRATEGIC THINKING
  • ENVIRONMENT SCANNING
  • INNOVATION
  • PRODUCT DESIGN

erp

erp trends
ERP : TRENDS
  • DATA WAREHOUSING SOLUTIONS
  • SUPPLY CHAIN SOLUTIONS : INTEGRATION; E-BUSINESS
  • INTEGRATION WITH CRM
  • INDUSTRY-SPECIFIC SOLUTIONS
  • PLUG-AND-PLAY ERP

erp

investing in erp product evaluation
INVESTING IN ERPPRODUCT EVALUATION
  • PRODUCT ASPECTS
    • Functionality
    • Technical Architecture
    • Cost Of Ownership
  • IMPLEMENTATION ASPECTS
    • Service And Support
    • Ability To Execute (Vendor, Implementor, In-house Team)
    • Process Changes Required
    • Change Management Effort Required
  • VENDOR
    • Vendor’s Technology Vision
    • Vendor’s Longevity

erp

investing in erp technical architecture
INVESTING IN ERPTECHNICAL ARCHITECTURE
  • NETWORK AND HARDWARE PLATFORM
  • RDBMS
  • AVAILABILITY OF DATA AND PROCESS MODELS
  • USER FRIENDLY INTERFACE
  • STABILITY OF PRODUCT

erp

approach to organization transformation
APPROACH TO ORGANIZATION TRANSFORMATION
  • IDENTIFY CORE/SUPPORT PROCESSES
  • ARTICULATE CUSTOMER-DRIVEN OBJECTIVES FOR THE IDENTIFIED PROCESSES
  • MAP AND MEASURE EXISTING PROCESSES
  • BENCHMARK FOR PROVEN AND INNOVATIVE ALTERNATIVES
  • REDESIGN PROCESSES WITH THE FEATURES OF A CHOSEN ERP PACKAGE
  • IMPLEMENT ERP

erp

erp implementation strategy
ERP IMPLEMENTATION STRATEGY
  • IMPLEMENTATION PLAN FOR ERP
  • BPR->ERP Selection->Implementation, or :
  • BPM->ERP->BPR
  • Choice of Pilot projects/Rollouts :
    • 1 Business Unit, 1 pilot site: all modules->all sites in BU
    • Parallelly in All Business Units, 1 pilot site in each; all modules->rollout to all sites
  • Choice of Pilot sites depends on :
    • Comprehensiveness of coverage;
    • Release of resources; assured focus; visible benefits

erp

implementation
IMPLEMENTATION
  • CONSULTANTS’ METHODOLOGIES
  • TYPICALLY:
  • STEERING COMMITTEE
  • PROJECT TEAM
  • CORE USER GROUPS
  • FUNCTIONAL GROUPS

erp

slide63

Project Organization

Steering Committee

Project Sponsor and

Management Committee

Business Process Approval Committee

SISL

Management

Project Manager

(DRL / SISL)

Project Team

DRL

Functional Team

SISL

Tech. Team

Expert

Optional Teams

DRL / SISL

SISL

Consultants

DRL

IT Team

erp

implementation success factors
IMPLEMENTATIONSUCCESS FACTORS
  • UNDERSTANDING OF INDUSTRY
  • BUSINESS RE-ENGINEERING
  • ERP PRODUCT KNOWLEDGE
  • ERP PACKAGE IMPLEMENTATION EXPERIENCE
  • PROJECT MANAGEMENT EXPERTISE
  • TOP MANAGEMENT COMMITMENT
  • EMPOWERMENT OF CORE TEAM
  • USER OWNERSHIP OF INSTALLED SYSTEMS AND SKILLS TRANSFER
  • EFFECTIVE CHANGE MANAGEMENT

erp

implementation resistance to change
IMPLEMENTATIONResistance to Change
  • Fear of Changed Business Roles
  • Dilution of Authority / Power
  • Recorded Accountability, Transparency
  • Discipline, Standardization

erp

implementation change management
IMPLEMENTATIONCHANGE MANAGEMENT
  • Comprehensive Change management, addressing :
    • Organization change
    • Individual
    • Technology assimilation
  • Effective communication within and outside project team
  • Identifying the Appropriate roles ; Set up appropriate forums

erp

implementation success factors1
IMPLEMENTATIONSUCCESS FACTORS
  • CEO CHAIRS Steering Committee
  • Other Top Managers actively participate in deciding and managing change process
  • Workshops to create appreciation of :
    • New IT-enabled Work Culture
    • Process Working, Teamwork, Cooperation, etc
    • Healthy Debate on Business Process Change Before Implementation
    • Training on the package / Software

erp

implementation change management key components
IMPLEMENTATIONChange management :Key components
  • Leadership
  • Ownership
  • Enablement
  • Navigation

erp

slide69
Enablement

focuses on factors that make change possible.

  • Policies and procedures
  • Training of people
  • Rewards/recognition for adapting to and adopting change
  • Clear definition of revised roles in the

changed environment

  • Time and resource investment in

infrastructure required to operate in the changed environment

erp

slide70

Successful Management of

Change Needs Four Forces

to Drive the Change

Top-down

commitment &

direction

Leadership

Navigation

Co-ordinated

change plan

Successful

Change

Management

Visible changes in

ways of working

Enablement

Bottom-up

involvement &

buy-in

Ownership

erp

implementation success factors2
IMPLEMENTATIONSUCCESS FACTORS
  • ERP Needs to be positioned properly in the total IS/IT Strategy
  • Bolt-ons are a fact of Life
  • Benefits remain on paper unless benefits management is addressed

erp

implementation success factors3
IMPLEMENTATIONSUCCESS FACTORS
  • Modifying the core ERP Code is Risky
  • Cleaning-up and streamlining data is a pre-requisite
  • Commitment from Top to Bottom
  • Change Management is the Key
  • Reward systems need to encourage use of ERP-generated data

erp