1.

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:

 Improved business insight—from real-time information generated by reports

 Lower operational costs—through defined and more streamlined business processes
 Enhanced collaboration From users sharing data in contracts, requisitions, and purchase
orders
 Improved efficiency/ productivity—through a common user experience across many business
functions and managed business processes
 Consistent infrastructure—from the back office to the front office, all business activities have
the same look and feel
 High user-adoption rates—from a common user experience and design
 Reduced risk—through improved data integrity and financial controls
 Lower management and operational costs—through improved data integrity and financial
controls
 Improve collaboration
 Better analytics
 Simplified Compliance and Risk Management
 Improved Production Planning and Resource Management and Inventory management
Disadvantages

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.

Facts about ERP implementation:

 Huge cost

 10 million dollars for a medium size enterprise

 300-500 million dollars for a large international corporation

 Long lead time

 A typical implementation may take many years

 No guarantee of the outcome

Why ERP fails?

The main reason why enterprise systems fail are not the technical challenges involved but the failure to
reconcile the technological imperatives of the enterprise system with the business needs of the
enterprise itself

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

 Failure to properly choose between cloud-based and on-premise software

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.

Benefits of using BPR are:

Shorten lead times: Outdated processes, such as the manual execution of administrative matters, can be
fully automated with an investment. The investments are recouped by the lower wage costs.

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

save costs increase customer focus increase their competitive position.

WHY BPR FAILS?

Lack of support from the top: without clear, direct and publicized support from the top will more than
likely result in either total failure of the initiative or the eventual outcomes not being everything that
they could be. Lack of support from the top can be perceived by staff as the initiative not being
important and not being deserving of the full time and effort that is required to ensure success.

Non-cooperative team members

Project team is not representative

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

Role of consultant in ERP implementation

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.

Sharing Industry Knowledge: The role of an ERP consultant is to offer experience

implementing ERP software in a specific industry or with other similar businesses. A good
consultant will also suggest best practices from outside of the industry that could be of help to
the business if incorporated.

Providing Specialized Skill Set: The role of an ERP consultant also involves project
management, functional expertise, risk mitigation and scores of other specific skills.

Leading Business Process Transformation: There’s value in obtaining unbiased opinions

about what’s working or not working regarding business processes. This expert outsider’s
perspective can be invaluable throughout the project to counter the team’s personal biases,
based on their job roles and how things have been done in the past.

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.

Managing Implementation: When the role of an ERP consultant is involved in implementation,

the project has a higher likelihood of success when led by resources with experience in setting
the plan, project management, ERP data conversion, and all aspects of ERP implementation.
Once again, the involvement of an independent resource helps keep the project on time, within
scope and on budget – and helps mitigate any conflicts with the vendor.

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

 ES must strengthen the competitive differentiation and not dissolve it.

 For companies that compete on cost it is important to weigh the short-term gains over long-term
gains
 ES use must strategically fit with the culture of the organization (Slide 24)
 Global Corporations the decision of the amount of globalization and localization across cultures
must be seen based on the impact on the company’s bottom line. (Slide 25)