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ERP
It is business process management software that allows an organization to use a system
of integrated applications to manage the business and automate many back office functions related to
technology, services and human resources.
ERP software typically integrates all facets of an operation — including product planning, development,
manufacturing, sales and marketing — in a single database, application and user interface.
ERP systems tie together and define a plethora of business processes and enable the flow of data
between them. By collecting an organization’s shared transactional data from multiple sources, ERP
systems eliminate data duplication and provide data integrity with a “single source of truth.”
Enterprise system are designed to solve the fragmentation of information in large business organizations.
An ES streamlines a company’s data flows and provides management with direct access to a wealth of
real-time operating information
ERP systems are designed around a common, defined data structure (schema) that usually has a
common database
Benefits of ERP / WHY ERP/ WHY ES:
High initial investment – The initial implementation of ERP is difficult and not cost effective. The
system is complex and changing or transferring all the data from the present system to ERP will
slightly exhaust your money, resource and time.
System can be difficult to use – The team working for a project when ERP is being implemented
needs to be trained to develop a good understanding of how the new system will modify the entire
structure of the business in order to benefit from ERP. Hence, it is advisable to seek help from
external experts to prevent unnecessary expenditures and time consumption.
No immediate results – The benefits of ERP will not present itself immediately after its
implementation. It takes a while before its presence becomes more evident.
Vendor- lock in – Once the ERP is implemented, the company is locked in with a single vendor for
further upgrades and customization, which might make its negotiations for their service ineffective.
Additional expenditures – Implementing ERP incurs additional indirect costs like new IT
infrastructure, upgrading WAN links etc.
Enterprise system imposes its own logic on a company’s strategy, organization and culture and pushes
a company towards full integration even when a certain degree of business-unit segregation may be in
its best interests
Poorly Defined Goals for the ERP Software
Lack of Sufficient Management Commitment/poor overall management of project
Missing Expertise on Project Team
Lack of Open Communications
Production Processes Not Clearly Defined
Fear of Change
Over-reliance on the consultants.
Customization: This aspect makes it or breaks it for an ERP tool. Most companies these days
understand that customizing their ERP system adds risk, time, and cost to the project. In fact,
customizations, along with interfaces and data conversion, are the main areas of technical risk in
ERP implementations
Insufficient testing
Not enough user training.
Lack of investment/support for implementation team
Excluding users from decision making
2. BPR
It is a methodology and technique with which organizations radically change their business processes
with the aim of becoming more efficient and more modern. Proper execution of Business Process
Reengineering can be a game-changer to any business. If properly handled, it can perform miracles on a
failing or stagnating company, increasing the profits and driving growth.
Increase productivity: The goal of BPR is to modernise outdated processes and that often yields time-
saving results. For example, after performing BPR, the organisation can discover that a certain process
can be carried out by two employees instead of four.
Improve quality and customer focus: By changing task orientation to process orientation, the focus is
put on the customer. This has the advantage that all irrelevant processes quickly come to the foreground,
after which they can easily be removed or modified.
Improve competitive position: Normally, changes that an organization makes are only gradually noticed.
In order to keep up with the competition, and to satisfy customer needs, however, we must act
appropriately. BPR is ideally suited for this because the radical changes are implemented in a relatively
short period.
SUMMARY: Business Process Reengineering is a management strategy with which organizations can
Initiative is too IT-focused: Bear in mind that IT plays a supporting role in a company's process efforts;
it's not all about IT. What is important is leveraging technology assets in ways that optimize a company's
efforts.
BPR must explicitly address and manage these paradoxes. Slide 24 25 PPT 2
Factors Influencing Business Process Reengineering are:
Downsizing
Human resources (iii) Leadership (vi) Quantitative objectives (v) Resistance to change (vi)
Implementation time (vii) “Out-of-the-box” thinking (viii) Organisational culture (ix) Concept of human
capital (x) Behavioural change
3. R/3
The role of an ERP consultant serves to make the process go a lot smoother, accelerate
time to value, reduce the chance of risk and provide the organization with much needed
ongoing management and support.
Offering Experience, Independence: Drawing on decades of experience in enterprise
technology, the role of an ERP consultant is to view the project from an outside perspective
based on industry best practices. Independent consultants are not software resellers and do not
receive compensation from software companies. They keep up-to-date on the vendor
landscape, technology platforms and offerings of modern ERP and can provide unbiased and
vendor-neutral guidance.
Providing Specialized Skill Set: The role of an ERP consultant also involves project
management, functional expertise, risk mitigation and scores of other specific skills.
Driving Change Management: Selecting and implementing an ERP system results in big
changes for the entire business. These changes can be overwhelming for your team and the
rest of your workforce. An ERP consultant draws on organizational change management skills
to help in user adoption and acceptance of the project.
Providing Training: In many projects, the role of an ERP consultant is to help develop and
deliver user training, ERP education and support during the entire project – from selection to go-
live.
Clean slate vs technology enabled reengineering
Technology enabled: that companies who adopt this strategy will use ERP and at the same time, no
customizations is done onto the ERP system. The only thing that changes is the business processes - i.e.
Working around the system.
Clean Slate: On the other hand, for this approach, companies will adopt the ERP system but do
customisations onto the system so that it "fits" into the organisation based on their needs and
requirements - i.e. design the system so that it works for you.
Standardization and best practices and competitive advantage:PPT 4 slide 14 15
16
LEARNING : STRATEGIC FIT TO ORGANISATION