2. What is BPR
The fundamental rethinking and radically redesign of business
processes to achieve dramatic improvement in critical,
contemporary measures of performance such as cost, quality,
service and speed.
The implementation of deliberate and fundamental change in
business processes to achieve breakthrough improvements in
performance.
Enabled by IT
Also known as Reengineering or Process Innovation is offered
as an enabler of organizational transformation.
3. BPR Objectives:
To dramatically reduce cost
Reduce time
To dramatically improve customer services or to improve
employee quality of life
To reinvent the basic rules of the business e.g.
the airline industry
Customer satisfaction
Organizational learning
4. BPR
Change:
To transform an organization, a deep change must occur in
the key behavior levels of the organization:
jobs, skills, structure, shared values, measurement systems
and information technology.
Role of IT
BPR is commonly facilitated by IT e.g.
Organizational efficiency
Effectiveness
Transformation
5. BPR
Transformation
Applications in the transformation category change the basic ways
that people and departments work and may even change the very
nature of the business enterprise itself.
A major change in the organization, including structure, culture, and
compensation schemes
Efficiency
Applications in the efficiency category allow users to work faster and
often at measurable lower cost
Mere automation of manual tasks, resulting in efficiency gains
Effectiveness
Applications in the effectiveness category allow users to work better
and often to produce higher quality work.
Requires changes not only in technology, but in skills, job roles,
and work flow (deeper).
6. Process
A process is set of logically related tasks performed to
achieve a defined business outcome
A collection of activities that, taken together, create value
for customer e.g. new product for customer. This tasks are
inter-related tasks
7. How can Companies Identify
their Business Processes.
Manufacturing: As the procurement-to-shipment process
Product development as the concept-to-prototype process
Sales as the prospect-to-order process
Order fulfillment as the the order-to-payment process
Service as the inquiry-to-resolution process
8. Identify the need - consultant
Simple Rules
Start with a clean sheet of paper.
With my current experience what can I do today
If I were to re-create this company today, given what
I know and current technology, what would it look
like.
How will I be focusing, organizing and managing the
company?
9. Simple Rules - Consultant
Listen to customer
Enhance those things that bring value to the customer or
eliminate those that don’t
Be ambitious, focus your commitment to radical change on
the process
10. What is an enterprise
An enterprise is a
group of people with
a common goal,
which has certain
resources at its
disposal to achieve
this goal.
(ERP – Alexis Leon)
11. What is ERP
“Enterprise resource planning software, or ERP,
doesn't live up to its acronym. Forget about
planning—it doesn't do that—and forget about
resource, a throwaway term. But remember the
enterprise part. This is ERP's true ambition. It
attempts to integrate all departments and
functions across a company onto a single
computer system…”
From the Darwin “Executive Guide” reading
12. Basic Idea
Unification of all key operational systems
Integration is
„
Geographic (multiple sites in USA, Europe & Asia
for many large firms)
Functional, with modules for
„
Logistics
„
Financial
„
Human Resources
„
And more specialized areas, such as real estate
16. Advantages
„
Lower cost
„
Data entered only once, used by all processes
and departments
„
Better customer service
„
Current data accessible to all participants
E.g. customer service rep can see stock levels
in other divisions, progress on order, etc.
„
Allows management of processes across
organizational boundaries
17. Issues
Project cost is 2 to 10 times software price
High profile implementation failures
Inflexibility
Can’t find better ways to do things
Loss of supports for distinctive culture
Inherent complexity of global project
Training costs for users easy to underestimate.
18. Issues
Integration
When doesn’t work well in one area
Problems in integrating into other systems
Dependence
How to deal with things it won’t support?
Upgrade
Like all software, frequent new releases can cause
major disruption
19. Latest Trends
Increased Modularization of suites
Shift to web based front ends
Broadening to focus corporate portals,
external links.
20. ERP History
MRP
Began its life in 1970
MRP asks the following
What products are we going to make
What are the materials needed to make these products
What are the materials that are presently available in stock
What are the items that are need to be purchased
21. Closed Loop MRP
Planning of sales and Production levels
Development of production schedules
Forecasting sales planning
Capacity planning and order processing
MRP II
Sales and Operational Planning
Financial interface and simulation capabilities
(Decision Making)
22. ERP Myths
MYTH: “Our project is not progressing as
planned because it lacks management
commitment”
FACT: Progress is often not achieved because of
management burn-out. People involved can be
disillusioned by promises made and expectations
that were built-up by overzealous vendor reps,
consultants who collect exorbitant fees as the
project lingers and IT personnel who were
looking for big budgets and the opportunity to
rub shoulders with the “big boys.”
23. MYTH: “Our system went live in just a few
months”
FACT: It is more likely that the financial part
of the ERP went live in a few months rather
than the whole system. Corporate financials
are fairly straight forward to implement
24. MYTH: “Once we finished getting our ERP system
up and running, our expenses went down
drastically.”
FACT: Outside consulting fees may have been
reduced and the initial costs for setting up the
system are paid off, but companies often fail to take
ongoing internal implementation investment into
consideration. In the words of one CIO, “we planned
for $600,000 and a 6 months project; we reached
both and then stopped counting.” An ERP
implementation extends over long periods of time,
and any worth its salt will take years, not months
25. MYTH: “Consultants are professionals who
can guide the selection process and manage
the project while maintaining an objective
stance.”
FACT: Its all
26. Myth: You Must Use Only the Latest ERP
Technology
Fact: Although the latest ERP integration
technologies offer many advantages to small
business owners, they have their own share
of problems. The biggest problem is the
integration of new technology to the old. In
some systems, you will find that retaining
older applications may be more useful than
overhauling it completely
27. Myth: Installing ERP System Means That You
Can Keep Fewer IT Staff
Fact: The ERP system is not meant to replace
your IT staff, it is there to help them with dayto-day problems related to maintenance and
troubleshooting.
28. ERP and Related Technologies
BPR
Dataware Housing
Data Mining
OLAP
Product Life Cycle Management
Supply Chain Management
CRM
GIS
Intranets and Extranes
29. Dataware Housing
Data warehouse is a repository of an
organization's electronically stored data.
Data warehouses are designed to facilitate
reporting and analysis.
30. Data Mining
Data mining is the process of extracting
hidden patterns from data. As more data are
gathered, with the amount of data doubling
every three years, data mining is becoming
an increasingly important tool to transform
this data into information
31. OLAP
is an approach to quickly answer multi-
dimensional analytical queries
OLAP is part of the broader category of
business intelligence, which also
encompasses relational reporting and data
mining
32. Product Life Cycle Mgmt
The product life cycle goes through many phases,
involves many professional disciplines, and requires
many skills, tools and processes.
Product life cycle (PLC) has to do with the life of a
product in the market with respect to
business/commercial costs and sales measures;
whereas product lifecycle management (PLM) has
more to do with managing descriptions and
properties of a product through its development and
useful life, mainly from a business/engineering point
of view. To say that a product has a life cycle is to
assert four things: 1) that products have a limited life
33. Supply Chain Management
Supply Chain Management spans all
movement and storage of raw materials,
work-in-process inventory, and finished
goods from point-of-origin to point-ofconsumption (supply chain).
34. GIS
A geographic information system (GIS)
captures, stores, analyzes, manages, and
presents data that refers to or is linked to
location.
In the strictest sense, the term describes any
information system that integrates, stores,
edits, analyzes, shares, and displays
geographic information
35. CRM
Customer relationship management (CRM)
consists of the processes a company uses to
track and organize its contacts with its
current and prospective customers.
36. Security and ERP
Data Security:
Computer owners and administrator use a variety
of security techniques like low-tech locks to
hightech software scrambling
Passwords, use of firewalls, encryption of audits,
creating backups, etc
Physical Security:
Physical protection could be of human access to
buildings and information stored in critical rooms,
in much the same way a bank are secured.
37. Crime and Security
A Dismissed employeee
Employee with over all access
Unauthorised access by a criminial(hacking)
Virus
Worms, trojans etc.
39. Finance Module
Gather Financial Data from different
departments
Generates valuable financial reports such
balance sheet, general ledger, trail balance,
and quarterly financial statements.
41. Manufacturing Module
It Provides the information base upon which the
entire operation should be run.
It contains the necessary business rules to
manage the entire supply chain process.
Sub-Systems
Material and capacity Planning
Shop floor control
Quality management
JIT/Repetetive management
Engineering data management
Engineering change control
Configuration management
42. HR Module
Streamlines the management of human
resources and human capitals.
Maintain complete employee database
Sub-systems
Personnel Management
Organizational Management
Payroll accounting
Time management
Personnel development
43. Materials Management
Maintains the appropriate level of stock in a
ware house.
Activities
Identifying inventory requirement
Monitoring item usages
Reporting inventory status
Integrating inventory control to sales , purchase
and finance modules and generate executive level
reports.
44. Production planning Module
Optimizes the utilization of
manufacturing capacity,
parts,
components material resourcing using historical
production data and sales forecasting.
45. Plant maintenance module
Provides technical and business reports and
various presentation options
Eg: organization unit, location, execution period
for the tasks.
This info helps to reduce the duration and costs of
plant down times
Subsystems
Preventive maintenance control
Equipment tracking
Component tracking etc.
46. Quality Management Module
Supports different quality management
Modules
Quality Planning
Quality Inspection
Quality Control
47. Purchasing Module
Streamlines the procurement of required raw
materials.
Automates the processes of identifying
potential suppliers
Negotiating price
Awarding the purchase orders to the supplier
Billing process.
48. Marketing module
Maximize the efficiencies of marketing resources
Empowers marketers to acquire and develop
long term customer relation ship.
Marketing resource management
Segment management
Campaign management
Email marketing
Trade promotion management
Lead management
Marketing analytics
Web based marketing surveys
49. Sales and Distribution
Implements functions of
Order placement
Order scheduling
Shipping and invoicing
Closely integrate with the ecommerce
websites
50. Sales related business transaction
Sales queries such as inquiries and quotations
Sales orders
Outline agreements ( Contracts and scheduling
aggmnts)
Delivery/shipment
Invoicing/billing
After sales support
51. Basic Functions
Inquiry handling
Quotation preparation and processing
Contract and contact management
Monitoring the sales transactions
Checking the availability
Transferring requirements to material planning
Scheduling the delivery
Calculating prices/taxes
Checking credit limits
invoicing/billing
Printing/edocuments
52. Phases of ERP Implementation
Pre – Evaluation screening
Package evaluation
Project Planning Phase
GAP Analysis
Re-engineering
Customization
Implementation team training
Going Live
End user training
Post-implementation
54. Big Bang Strategy
Installation of all modules will happen at once
Promised to reduce the implementation cost
Higher failure rate
Not many organizations dare to attempt
anymore
Requires careful preparation and sound
planning
55. Advantages
Overall cost of implementation is less ( No
interface app)
Eliminates all the sequencing and decision making
of implementing one module at a time
Well designed for rapid implementations
Avoid complex integration issues
56. Disadvantages
Amount and cost of planning and preparation is high
Bottlenecks are high ( Lack of funds and resources etc)
Recovery process is very difficult if something goes
wrong
Consequences of failed implementations are huge may
lead to shut down of business itself
57. Variants in big bang
Mini big bang
Takes single big bang approach and break into
multiple sections ( based on few modules)
Mega big bang
With multiple sites, all going live at a time
Do or die situation
Multi mega big bang
Multiple big bangs for multiple geographical locations
For large companies which are located in different
geographical locations
58. Phased implementation
Implements one module at a time
Limits scope for one functional department
at a time
Suits to companies that do not share many
common processes across departments and
units
Integration will be done later part
Reduces the risk of implementation,
customization and operation of system
59. Advantages
Allows to implement module at time
Risk of implementation failure is less
Total number of resources required is less at a
time
Scheduling of people is convenient
60. Disadvantages
Large number of resources required , because of
conversion and interface problems.
Overall and cost of implementation is high
High turn over rate because of the length of
duration.
61. Parallel Implementation
Keeps both the legacy system and new
system simultaneously active for some time
Have good recovery options in case
something goes wrong
Gives good psychological cushion as both the
systems running parallel
62. Advantages
Ideally suited for mission critical situations that cannot
survive major malfunctions
Advantageous for the business environments which
require utmost stability like finance, pharma,
insurance etc
Disadvantages
But requires more resources
Confusion may erupt when people don’t interact with
the both the systems
Not suitable for which the legacy system has an
expiration date ( y2k issue)
63. Process Line Transition Strategy
Conceptually similar to mini big bang
But breaks implementation strategy to
manage parallel business flows and product
lines
Mainly utilized by small and mid sized
companies which have less critical processes
The smaller process lines, which pose less risk
and have a higher probability of success,
usually go first. Increasing its overall
probability of success.
64. Hybrid Transition strategy
Combination of process line, phasing and
parallel implementation.
Tend to evolve into the needed configuration
as ERP team members learn and analyze
information.
Small single site ERP implementations tend
to have a simple hybrid strategies
Flexible in adapting to the specific needs of
the situation.
65. Choosing a strategy
Technical resource availability
Number of users
Consultant availability
Structure of erp team
Deadlines
Reliability
Hardware resources
66. ERP Implementation Process
Before you leap consider
How do we want to run our business?
What problems need to be resolved?
Do we know and understand our priorities?
Have we defined an action plan for pre-implemntation
activities
What tasks will be accomplished and by what dates?
What are the missing links in our software of choice?
What are real costs, benefits, and timetable
Do you have an executive level ERP champion that provides
link to top management
Who will implement ERP and make it work?
67. Pre-implementation planning session
Assembling the participants – stakeholders
Need analysis review
Project vision and mission statements creation
Determination of organization structure
Determination of modules to be implemented
Creating the core team
Establishing the training needs
Establishing the data conversion strategy
Establishing interface
Determining work estimates
Cost of consultants
Calculation of implementation time
Identifying constraints
Establishing policies and guidelines
69. Organization of the project team
CEO
Steering committee
Project Manager
Project team
Consultants
Vendors
70. Implementation strategy
Speed or urgency of implementation
Availability of people for carrying out the
implementation tasks
Availability of time for training all users
Cost
Confidence in the new system
Disruption to operations
Total timescale
76. Performance measurement
Performance Related Measures
Costs, time and benefits, deliverables
Objectives vs actual
Asses the variation
Learn
Apply in further phases
77. Problem Resolution
Issues which are raised and which will require
resolution
Agreed procedure to resolve issues and their
resolution
Keep the track of problems
Close the issues which are resolved.
78. System Issues
How does the system perform when the erp app is
under heavy use?
How quickly will space be consumed when the system
is live
What is the backup procedure
Can production server be maintained?
What happens when two persons try retrieve the same
data
Does the system locked, if so, how it can be unlocked
Do the locations of pcs and printers required to be
changed
79. How secure the system
How will be the user access be selectively
restricted
How are passwords managed
Automated logout facility
Disaster recovery procedure
80. Implementation methodologies by
vendors and consulting firms
Methodology is a road map to
implementation
Diff vendors have diff methods
Mainly used for marketing purposes
Now methods used in implementation based
on their experience.
81. Hidden Costs
Eights areas most likely result in budget
overruns
Training
Customization
Integration and testing
Data conversion
Data analysis
Consultants
Employee turnover
Continuing maintenance
82. Training and education
Define Learning Objectives
Determine Content
Plan
Deliver
Asses Learner
Review effectiveness of the training program
83. Data migration
Translating data from one format to another
Good data migration solution
Reduce risk
Low operational expenses
Improve data quality