Presentation Overview
About ERP
Evolution of ERP
Implementation Issues
What is the State of the ERP Market?
Case Study:An ERP success: NESTLE
ERP and Business Process Modelling
Business Process Restructuring
ERP Systems: SAP
How to customize ERP systems?
About ERP
About ERP
A collection of software systems that help to manage business processes for an entire organization.
About ERP
About ERP
Cross-Functional Business Processes
Implementation normally involves Business Process Reengineering (BPR).
Evolution of ERP
1960’s: Inventory Control Systems 1970’s: MRP: Material Requirement
Planning
1980’s: MRPII: MRP & Distribution
Today:
Interenterprise ERP,
Implementation Issues
ERP means:
Single customer, product and supplier data
Information captured only once
Visibility through the business process
Workflow management and
event-triggered processes
Empowered users
Informed management decisions
Globalisation of the business
Rapid change capability
Implementation Issues
Difficult to build:
Require fundamental changes in the
way the business operates
Technology:
Require complex pieces of software and
large investments of time, money, and
expertise
Implementation Issues
• 35% ERP projects are cancelled
• 55% overrun their budgets
• Less than 10% are on time and under
budget
• Implementation averages
• Cost: 178% over budget
• Schedule: 230% longer
• Functionality: only 41%
Implementation Issues
…..
So why do it?
Some firms recognize benefit in $10 to
$100 million +
e.g. Competitive advantage in international
supply chains
Standardize and improve processes
Improve level of systems integration –
replacement of outdated “legacy” systems
Improve IT responsiveness and
information quality
Year 2000 and the Euro
Reporting requirements of Sarbanes-Oxley
and International Accounting Standards
Mergers and Acquisitions
Implementation Issues
…..
What is the State of the ERP
Market?
Mature market in U.S. and parts of Europe -
ERP Systems firmly entrenched in infrastructure
Continued growth in implementations
worldwide
Implementing CRM, SCM ERP Applications
Business Process Management
What is the State of the ERP
Market?
Linking ERP’s to Web
Web Services, Web Services Integration
SOA – service oriented architecture
Public Sector Growth laggards
Midmarket growth
In 1999, the five biggest ERP vendors--SAP, PeopleSoft, Oracle, Baan, and J.D.
Edwards--accounted for 59% of the
market.
In 2009, the two biggest ERP
vendors--SAP, Oracle (which bought PeopleSoft
and J.D. Edwards), accounted about 70%
of the revenues.
ERP and Business
Process Modelling
Where does ERP fit in a business process
class?
It is arguably the most common cause of
process redesign in business today.
But – the thinking is inverted. Instead of
designing a process and building the
support structure – including IT – you start
with the software and modify your processes to fit.
ERP and Business
Process Modelling
We have a component-based ERP
(Enterprise Resource Planning) system that
consists of independent modules
can be customized to the organization’s needs
How can we investigate
if this system can support our business?
how it can make our business processes more
efficient?
which modules are needed?
ERP and Business
Process Modelling
BPR - Steps
Step 1 Step 2 Step 3
Understand Simplify/Improve Automate
Understand the existing
systems
associated with all the
functionalities
Draft & frame the possibilities & ways to simplify, or
improve, or eliminate the processes
ERP Systems: SAP
SAP (Systems - Applications - Products):
One of leading software vendors for ERP
systems
SAP R/3: Separate modules
Each module
contains a number of transactions (>5,000 all together)
can be used independently of others
must be configured (customized)
mySAP.com Solutions
mySAP Pharmaceuticals mySAP Public Sector mySAP Retail
mySAP Service Providers mySAP Telecommunications mySAP Utilities
Industry Solutions
mySAP Aerospace & Defense mySAP Automotive
mySAP Banking mySAP Chemicals
mySAP Consumer Products mySAP Engineering &
Construction
mySAP Financial Service Provider mySAP Healthcare
mySAP High Tech
mySAP Higher Education & Research
Cross-Industry Solutions
mySAP Workplace mySAP CRM
mySAP SCM
mySAP Marketplace* mySAP E-Procurement mySAP BI
mySAP PLM mySAP HR
mySAP Financials
mySAP Mobile Business
mySAP Hosted Solutions mySAP Services
Infrastructure and Services
mySAP Technology
*mySAP Marketplace is delivered through MarketSet™,
a joint solution from SAPMarkets & Commerce One.
How to customize ERP systems?
ARIS = Architecture of Integrated
Information Systems
Toolset for modeling, analysis and
optimization of business processes
Specially tailored to the needs in SAP
projects
System described
with respect to different views (organization,
data, function)
at different implementation levels
Organization View
Establish ownership of data and
responsibility for processes
Analysis of resource usage and
workflow (at different organizational levels)
Model of organization structures
(company, departments, etc.)
Linked to processes and data
structures
purchaser
John Smith
Function View
Shows the main business
processes, but not the order of
execution or who carries them out
Shows the relationship between
high-level tasks/application areas and individual low-level tasks
Hierarchical model of functions
(function tree)
Function can be application area,
high-level processes, tasks or individual process steps
Purchase order processing
Data View
Analysis of information needed
to carry out tasks
Specification of information
generated in the system
Non-hierarchical static model
with entities (objects),
relationships, and attributes
May distinguish between data
elements and information objects
Purchase order
Process View
Combination of views
Business model portraying the
interconnections between functions, data, and organizational units
The logical time sequence is involved
The Advantage?...
From Architecture to Configuration to Execution
Carries out & Supports Carries out & Supp... Carries out & Supports Carries out & Supports Carries out & Supports
Ap
GCSS-A PLM+
Decide if Backorder or New Source Requirement
Decide if Backorder or New Source Requirement Item is
Physically On Hand
Item is Physically Not On Hand
Create and Send MRO
Receive
Stock Not On-hand (System)
Block Stock
Resource from New Source
Process Backorder
Resource from New Source
Process New Source New Source Pick Item
Adjust Inventory Balance Send Status to Customer Process copied from LMP -> needs to be confirmed
Update
Create / Process Stock Transport Order i...
Post Goods Issue
Enter Count Results Print Physical Inventory Document
Adjust Inventory Balance Send IDoc
(Refusal Notification)
Send IDoc (Denial Notification)
Receive IDoc (Refusal/Deni al)
Send IDoc (Inventory Results)
Receive IDoc (Inventory Results) Send IDoc (Status)
Customer
Business Process supported by ERP components (and others)
Release
Scenarios Processes
Process Steps
Carries out & Supports Carries out & Supp... Carries out & Supports Carries out & Supports Carries out & Supports
O
GCSS-A PLM+
Decide if Backorder or New Source Requirement
Decide if Backorder or New Source Requirement Block Stock Initiate Inventory includes all reasons for physical inventory Post
Inventory
Create and Send MRO
Item is Physically On Hand
Item is Physically Not On Hand
Create and Send MRO
Send Refusal Notification
Not valid On-hand Syste...
Block Stock Block Stock
Resource from New Source
Process Backorder
Resource from New Source
Process Backorder Backorder Processing ProcessingBackorder New Source New Source Pick Item
Adjust Send Status to Customer Send Statusto Customer
Process copied from LMP -> needs to be confirmed
Update
ReceiveStatus
Customer
Business Process
ERP Configuration Model
XI Execution Model
Solution Manager
Exchange Infrastructure
BPEL
Business Architect users
Business Server
Create customer order Delivery must becreated
Order processing
dep. Create delivery Customer order
must be created
Pick order must be created
Sales team
Corporate Process Portal
How does the Integration Work???
•O/S: Windows / Unix
•D/B: Oracle / SQL / DB2
mySAP Business Suite
SAP Solution Manager Sync. using Remote
Function Call of SAP
ARIS for SAP NetWeaver Architecture
There is not one correct answer for this
assignment. Everybody’s diagram will have
differences, but it should handle all the
assumptions listed above and make use of the
information available in Timberjack’s ERP system.
The only deliverable is a process diagram (Hand
drawn is OK if it is neat). You are required to use
information symbols and organization unit
symbols.
a teamwork, ~10 minutes
