Examples of enterprise systems
Dec 14, 2015
Core enterprise data: Mapping to application types
As an alternative to pure integration for some classes of application consolidation is chosen In some cases, the solution is a mix of integration and consolidation
CRM, SCM and ERP are common examples of enterprise applications2
Purchases
Shipments
Inventory
Orders Customers
Service
Billing
Accounting HR
Marketing
Planning
AssetsProject
management
Supply ChainManagement Customer
Relation shipmanagement
ERP
What is ERP?
ERP stands for Enterprise Resource Planning, which is a software system that: Takes an enterprise approach to integrating and optimising
business processes across departments (finance, HR, sales, etc).
Provides consistent information for timely decision-making and performance measurement
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ERP vendors and market The ERP market consolidated considerably leaving SAP and Oracle as
leaders. Oracle acquired PeopleSoft who had acquired JD Edwards Typical of maturing technology markets which have 2 leaders and a few niche
players
There are also specialised vendors Infor (GEAC, SSA) – consolidator/vertical niches Microsoft Dynamics - SME
Open source projects are not widely used Unclear if they will gain ground
This lecture will cover general ERP issues but focus on SAP as an example. This is not an advert for SAP!
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Example Requirement: Customer service
Provide agent with a single point of access from which they can complete the order Check information (availability of items, pricing and credit) Request initiation of internal processes (manufacturing, delivery) Provide reliable information to the customer (delivery date, price)
But associated data and processes relate to different functions within the organisation which may be in different systems.
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Potential Solutions
Integration of existing function based systems EAI is the solution
Consolidation into a single application with a consistent set of process and data models ERP is the solution
In most cases, an enterprise will combine both approaches Consolidate in some places Integrate in other places
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Enterprise Resource Planning
An ERP deployment consists of Integrated modules Common process and data models and definitions Common database
Update one module, automatically updates others
ERP is More about business process change than technology An approach to managing all resources and their use in the entire
enterprise in a coordinated manner A set of integrated business applications, or modules which carry out
common business functions such as general ledger, accounting, or order management
An approach to supporting business through optimizing, maintaining, and tracking business functions
Focused on value chains, rather than individual functions
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Typical Technical Architecture
N-tier architecture Database server with a single data model (multiple servers
hosting a distributed database ) Application logic servers with process models (multiple servers,
distributed ) Web/Internet server Presentation level (browsers)
Provides an integration layer to enable integration of external systems into the ERP system.
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Functionality of an ERP e.g. mySAP
Portal Data Warehouse
Technology to integrate people, information and business processes across technologies
Integrate SAP systems
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Functionality of an ERP e.g. mySAP
Management of travel costs and expense claims
Managing corporate liability
Traditional ERP: Controlling areas of most expense
Management of property etc
HR: Workforce compensation
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Functionality of an ERP e.g. mySAP
Traditional ERP: All the well-known value chain processes: Order to cash etc.
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Functionality of an ERP e.g. mySAP
Human Capital Management: support of line management, retention/recruitment, global HR planning and management
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Functionality of an ERP e.g. mySAP
Financials: Automation of finance functions to minimise costs. Speed up the preparation of financial information. Compliance, better management of free cash resources
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Functionality of an ERP e.g. mySAP
Analytics: Optimisation and automation of planning, analysis of performance, management accounting support.
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mySAP Business Suite Solutions
mySAP Insurance mySAP Media mySAP Mill Products mySAP Mining mySAP Oil & Gas 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
Many variants of the horizontal ERP package are available for specific industy needs.
There are also some niche ERP vendors focusing exclusively on individual industries.
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The user view of an ERP: Create a requisition
(II)
ERP implementations may contain 1,000s of screens
ERP embeds knowledge of the organisation’s and industry’s terminology, processes and data
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Benefits of ERP
Common set of data Removes consistency and synchronisation issues
Ready integration for decision support systems
Inter-department integration for all departments using the ERP
Library of available standard template processes and modules make integration easier
Forces Business Process Reengineering
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Potential Limitations of ERP
Global ERP can be a never-ending project for large organisations
No organisation exists in isolation There are always suppliers and clients who use different data models. This means that the need for integration cannot be removed.
Inter-department integration relies on using the global ERP Causes problems with anomalous departments, recently required,
geographically isolated or with different business processes.
The software can drive the business rather than the other way around Templates tend to impose the standard business process rather than your
organisations business process. This is okay for commoditised processes but not for all.
Note: ERP requires similar types of organisational readiness as EAI Only technology readiness is not relevant as technology is being replace
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ERP and organisational readiness
ERP requires similar types of organisational readiness as EAI Only technology readiness is not relevant as technology is being replace
Issues are more significant because Cost and impact of the project is greater Degree of process change is much more significant User interface and interaction is totally changed Impact on organisational and individual roles is greater
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ERP Implementation Options
Green field Create IS architecture from scratch
ERP by Function Deploy one or a few ERP modules across all Business Units Risk: May never extend beyond original function.
ERP by Business Unit Deploy fully integrated ERP suite in one or more Business Units
Fully Integrated ERP Full scale deployment across the enterprise
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ERP and integration capabilities
All ERP implementations require integration with other systems Supplier or customer systems Legacy systems which cannot be retired. As part of an incremental transition to a global ERP system
ERP Integration layers Provide SOA or EAI type capabilities Typically tightly coupled to the ERP and focus on integration into the ERP
E.g. SAP NetWeaver Oracle Fusion
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Example: SAP XI
SAP Exchange Infrastructure (SAP XI) An integration server (EAI) Integrates SAP applications and
3rd party applications Integration server
Message routing Message mapping/transformation
Integration adapters Protocol and data format
conversion (into/out of XML)
Impact of an EAI project on the organisation ERP projects typically completely replace the existing applications
Change the user interface and workflows Implements redesigned business processes impacting all aspects of the
business using the new system
ERP systems change the way the organisation operates ERP systems significantly impacts the work duties undertaken by
individuals using the new system ERP systems change the reports and information available to senior
management
ERP systems replace existing ‘working applications’ While the new system should be an improvement, there is significant risk
and inconvenience associated with the roll out of any new system29
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ERP is always a major project Any ERP project requires significant time and cost. It is likely to be disruptive and result in business process changes
across the organisation.
To be successful The project must have high priority and visibility within an
organization. Senior management commitment with regular progress reviews at
the appropriate levels of management.
Risks Many companies are unclear on the likely total project cost or
return. As with any enterprise level project, scope creep, organisational
politics and change regularly cause failure.
Implementing an ERP system
ERP readiness Most of the factors described as EAI readiness also apply
to ERP projects Exception is technology readiness as the applications
are being replaced Process readiness is particularly important for an ERP
project The core of an ERP project is the redesign of existing
business processes
ProcessesProcessesProcessesProcesses
EmployeesEmployeesEmployeesEmployees
CultureCulture
StructureStructure
©2001, IT Catalysts, Inc.
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SAP‘s ASAP – Rapid Implementation Methodology
ProjectPreparation
Business Blueprint
Realization
FinalPreparation Go Live &
Support
Continuous Change
© SAP Five step approach to implementation of SAP to address the potential challenges and ensure effective project management
Incorporates many standard concepts of project management
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SAP‘s ASAP – Rapid Implementation Methodology
Phase 1: Project Preparation Provides initial planning and preparation for project. Gather requirements
Requirements workshops Requirements documentation and control processes
Project success requires requirements gathering which Is inclusive with representation and engagement from all participants. Has clear and effective approval processes at senior management level.
Phase 2: Business Blueprint Create the Business Blueprint
detailed documentation of the results gathered during requirements workshops. documents the business process requirements of the company which creates a common understanding of how the company will operate.
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Strengths/Weaknesses of Business Blueprints
Strengths Share a common understanding with everyone on the project Formalises the agreement between
The IT project team and business Different business departments
Reduced level of communication required during implementation Supports impact analysis when requirement change occurs.
Weaknesses Processes can be difficult to model
Business process can be poorly defined Need to distinguish between real business process requirements and
legacy “way we do business” Must balance need to perfect definitions and need to complete the
project. Business processes can change rapidly
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SAP‘s ASAP – Rapid Implementation Methodology
Phase 3: Realization Implement all the business and process requirements based on the Business Blueprint. Configure the system step by step in two work packages, Baseline and Final configuration.
Phase 4: Final Preparation Complete testing, end user training, system management and cutover activities to achieve go-live readiness. Final Preparation phase requires resolution of all critical open issues.
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SAP‘s ASAP – Rapid Implementation Methodology
Phase 5 Go Live and Support: Transition from a project-oriented, pre-production environment to live production operation.
Continuous Change: Provide on-going support and assistance for post go-live. Provide solutions for standard minor tweaks and changes Provice solutions for evolution of the solution to support:
Business changes Technology changes Changes in the user community or New business content.
ASAP covers these activities
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Supporting Continuous Change
Market Technology Changes
11 22 33
5544
ProjectPreparation Business
BlueprintRealiz-ation
FinalPreparation
Go Live &Support
New Analysis RequirementsNew Business Content
Implementation Release 1Implementation Release 1
ASAP Implementation
ASAP Continuous Change
New Functionality
Implementation Release 2Implementation Release 2
Implementation Release 3Implementation Release 3Competitive Environment Changes
Comparing EAI and ERP:EAI
EAI integrates primarily behind the scenes Most of the user interaction is unchanged
Process changes occur only for the integrated process39
App1 App 3App2 App1 App 3App2
Benefits of EAI based process automaton Integrates with existing process and data models – handling
incompatibilities when necessary Allows the high value integration problem to be addressed without
disrupting the other applications Integrates with existing process and data models – handling
incompatibilities when necessary Minor/moderate changes to the user interaction causes
minor/moderate changes to the business as a whole
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Comparing EAI and ERP: ERP
ERP changes both user interaction and applicaton All user interaction, data/process models are changed
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App1 App 3App2
Module1
Module2
Module3
Benefits of ERP based process automation
Creates a set of processes and associated data models which are mutually compatible and comprehensive
Equally effective at automation within a single department or across multiple departments
ERP vendor typically provides ‘standard’/template processes already proven for a particular industry
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The Globalization of Supply Chain
Systems
Anne Naramore Vice President
International Technology StrategyPearson plc
Frankfurt Book Fair
28th International Supply Chain Specialist Meeting
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Agenda•Pearson
•Supply Chain Environment Today
•Supply Chain Technology Strategy
•Case Study: Asia
•Summary
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Pearson is a world leading education and information company, helping people of all ages to live and learn.
2005 Sales: £4,096M / $7,045M
+9%2005 Adjusted Operating Profit: £509M / $875M
+22%
PEARSON A Good Read
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Geographic Businesses
Penguin: 20%£804M / $1,383M
FT Group: 15%£629M / $1,082M
Professional: 14%£589M / $1,013M
Higher Education: 19%£779M / $1,340M
School: 32%£1,295M / $2,227M
North America: 66%£2,717M / $4,673M
Europe: 24%£963M / $1,656M
Asia Pacific: 7%£300M / $516M
Rest of World: 3%£116M / $200M
Main Businesses
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250 New authors published by Penguin around the
world
18M U.S. school
students learning English and Math
with a Pearson programme
3.5M
Professionals who qualified in
our testing centres
Interesting Facts
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4.5M Readers reached by the Financial Times in print and online
0.5BN People learning
English with Longman materials
3.6M
College students in America using a Pearson online
service
Interesting Facts
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Pearson’s business strategy and organization culture has yielded a relatively diverse, decentralized portfolio of ERPs implemented at the region/operating company level.
Business process standardization within Pearson occurs largely at the region/operating company level due to market demands.
Consequently, Pearson has adopted a decentralized IT strategy, with implementations occurring at the region/operating company level.
Supply Chain: Environment Today
Business processes: The life cycle of a product/title
•Editorial & Production•Sales & Marketing•Inventory Management•Sales Order Processing•Financials•Distribution and Warehousing•eCommerce•Human Resources/Payroll•Business Intelligence (analysis and reporting)
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ERP Editorial & Production
Sales & Marketing
Inventory Mgmt
Order Mgmt Finance Distribution eCommerce HR/PayrollBusiness
Intelligence
Oracle-
Assessment
SAP 4.6-Penguin
SAP 3.1i-School
Vista-Canada
Custom System
- Higher Education
Complex Environment: North America
Supported by ERP Not supported by ERPLegend:
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ERP Editorial & Production
Sales & Marketing
Inventory Mgmt
Order Mgmt Finance Distribution eCommerce HR/PayrollBusiness
Intelligence
Vista- Dutch
JDE- Spain
Infos-
Germany
Exact- Poland
Libris- France
Oracle- Italy
SAP 4.6- UK
Vista- UK
Complex Environment: Europe
Supported by ERP Not supported by ERPLegend: Not in scope for business
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Complex Environment: Latin America ERP Editorial &
ProductionSales &
MarketingInventory
MgmtOrder Mgmt Finance Distribution eCommerce HR/Payroll
Business Intelligence
JDE- Mexico
Siscorp- Brazil
Stradivarius- Argentina
JDE- Colombia
Saab- Chile
Figaro- Uruguay
Supported by ERP Not supported by ERPLegend:
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Complex Environment: Pacific Rim ERP Editorial &
ProductionSales &
MarketingInventory
MgmtOrder Mgmt Finance Distribution eCommerce HR/Payroll
Business Intelligence
IBS Bookmaster
- Hong Kong
- Singapore
-Malaysia
Epicor- Taiwan
-Korea
Custom System
- Japan
IBS Bookmaster- Australia
Supported by ERP Not supported by ERPLegend:
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Exercise
What should Pearson do? Identify three strategies
Identify business risks with each strategy
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Supply Chain Technology: Strategy
Pearson has adopted a decentralized strategy, with implementations occurring at the region/operating company level.
While supporting all the operating companies from a single ERP is desirable, the cost to consolidate is high and difficult to justify, and the process standardization required could inhibit business performance.
Pearson’s Roadmap sets a course to:
•Maintain a decentralized approach
•Allow ‘scope’ to meet regional /operating company requirements
•Upgrade as versions go end-of-life
•Govern introduction of new systems
•Consolidate and standardize when cost justified
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Case Study: AsiaSeptember 2004: Consolidate business units into a single ERP instance
NPV: $954.9K | IRR: 37% | Payback: 1.3years
Goals:
•Standardize business processes & operating procedures across the region
•Reduce long-term costs (IT, Customer Service, Finance)
•Improve utilization of IT systems & resources
•Provide standard system platform for operation
Scope (Locations):
•Hong Kong, Taiwan, Korea, Japan, Singapore and Malaysia
•Hong Kong hosting location and support center
•MPLS connectivity for each country access
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Case Study: AsiaConsolidate business units into a single ERP instance
Functionality:
•Editorial & Production processing
•Academic adoption management
•Sales Order processing
•Inventory management
•Procurement
•Distribution & warehousing
•Financials (GL, AP, AR)
•Royalty management
•Business intelligence (analysis and reporting)
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Case Study: AsiaConsolidate business units into a single ERP instance
Rollout Timeline:
Apr 200
6
May 200
6
Jun 200
6
Jul 2006
Aug 2006
Sep 2006
Oct 2006
Nov 200
6
Dec
2006
Jan 2007
Feb 2007
Mar 2007
Apr 2007
May 200
7
Jun 2007
Jul 2007
Aug 2007
Sep 200
7
Singapore
Malaysia
Hong Kong
KoreaTaiwan(delayed 6 months) Japan
2006 2007
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Case Study: AsiaConsolidate business units into a single ERP instance
Solution Provider: IBS Bookmaster•Build upon existing implementation in Singapore
•Build upon existing relationship with vendor
•Singapore and Malaysia
•Pearson Australia
•South Africa (MML)
•Most cost effective solution
•Met majority of functionality needs
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Case Study: AsiaConsolidate business units into a single ERP instance
What We Learned:
•Partnership with vendor
•Strong executive sponsorship and project governance
•Thorough functionality requirements
•Functionality gaps always found – accept it and manage closely
•Dedicated and skilled project managers (internal & vendor)
•Contingency: money, time and resources
•Don’t underestimate language barriers and cultural styles: slows process
down
Replicate Success and Learnings:
•Taking approach to Europe