Presentation erp - copy

The whys of ‘ERP Product and Implementation Vendor’ Selection at M/S Penna Cements Limited

IntroductionConstruction Sector at its boom .In year 2006, Cement production grew 11% .Industrial and Infrastructure sectors, consumption of

cement rose upto 12%Andhra Pradesh with 18 Large and 16 mini cement

manufacturing facilities rank second in production of cement in the country .

Introduction of Penna Cement Industries LimitedLargest companies in the state.In August 1994, Penna Cement was incepted in

Anantapur District.Had access to finest quality Limestone.Capacity expanded to 1.7 million tonne per annum.1 million tonne plant at Ganeshpahad Village .

Penna Cement IT SystemDeveloped in house IT system since its establishment.It manages various business operations such as

purchase, sales and accounting operations.But due to tremendous growth of business IT system

was inefficient.

Legacy System at Penna Cement

Penna has developed an in house transaction processing system at their Head office in Hyderabad was developed by M/s Sindhu Corporate Services.

It includes following modules such as

I. Sales and Distribution

II. Accounting

III. Material Management

IV. PayrollAll Offices uses an Oracle Financials of their accounting

system processing

Challenges faced by the Legacy SystemThe Problem of Goods-in transit Identification.Paying sales tax on due date.Problem of limited scope.

Challenges in System Architecture.it consist of two layers- Client and Server.Each Client application requires its own session.It has restricted flexbility and choice of DBMS

Integrated Transaction Process SystemData for routine activity.The system which process transactions of all the

functional areas of business is called Integrated Transaction Process System.

Eg- Payroll, Accounting system

ERP Vendor Selection

ERP Vendor

Product Vendor Implementation Vendor

Steps in ERP process

Strategic plan

Readiness Assessment

Prepare for Vendor

selection

Vendor selection

Plan for implementatio

n

Implement the ERP Solution

Post Implementati

on Assessment

Focus on the case

Three things to focusComplete knowledge of business, its process and the

current system working on.ERP implemented companies in same industry, its

benefit and limitation andCollect the information of all the vendors available in

the market and what they offer.

Which to select?SAP- customize the module according to the

processes irrespective of the type of business.Oracle-keeps all the information and manages the

business in a single databaseBoth this software are costly, time consuming and

risky.

Best alternativeIndustry specefic ERP is preferred.The product of these vendors, target specefic areas of

the business to attract consumer.Provides better solution of having in depth

knowledge of industry needs and requirements.

IMPLEMENTATION VENDORThe management approached three vendors- SAP,

Oracle and Indice.All the functional departmental heads and technical

team of Penna were present.The company concentrated mainly on three factors:

- Price factor

- Licensing

- Implementation time

Cont..The price factor has made the global players SAP and

Oracle to get ruled out. Licensing is also an problem in case of installing

other leading ERP packages.

INDICEIt is the product of IC Infotech.It was choosen for implementation as the

management thought it would be better than SAP and Oracle.

IC Infotech is one of the fastest growing software services company.

It provides leading edge solutions for BFSI, Manufacturing, Retail and e-Governance verticals.

Indice has been successfully implemented at India Cements and Visaka Cement Industries.

Cont..Indice is an Integrated Information System specially

designed for the process industry, completely web based and following three- tier architecture.

It has its module in Sales and Distribution, Finance and Accounting, Material management, Plant/Factory Maintenance, Plant/Factory MIS, logistics Planning, Human resource management & Payroll etc.

Used for following industriesChemicalsMiscellaneous ManufacturingOil and GasOther transportationPharmaceuticalsPlastics and Rubber productsPulp and PaperTextiles and Apparel

Key featuresSecureSimpleComprehensiveReportsAdd- onWeb basedPlatform independent

ATTRIBUTES VENDORS

SAP ORACLE INDICE

PRICE Very expensive Expensive but compared to SAP, it is lower

Less expensive

AFFORDABILITY Not affordable Not affordable Affordable

ARCHITECTURE 3- tier architectureDatabase layer Application layer Presentation layer

3- tier architectureDatabase layerApplication layerPresentation layer

3- tier architectureData tier, Business tier and User interface tier

LICENSING Per- user Per- user Blanket licensing

INDUSTRY SPECIFIC Not specially designed for cement industry

Not specially designed for cement industry

Specially designed for cement industry

EXAMPLES OF SUCCESSFUL IMPLEMENTATION

Ultra Tech Cement Ltd., Ambuja Cements Ltd.

Not implemented India Cements and Visaka Cement Industries

COMPLEXITY High Medium Low

TECHNOLOGY Primarily ABAP PL/ SQL Java, Java scripts

USER FRIENDLINESS Low Low High

EASE OF CUSTOMIZATION

Not easy Not easy Easy

The Battalion for implementation

Project Coordinator

Experts from Penna

Experts from Indice

Project Manager and project Lead

Coordinates all Functional Heads

HR S&D FI CO PM MM

Selection of ModulesImportant task in implementation of ERP.Depends on the company’s requirement, affordability,

size and type of business.Penna decided to go for S&D, F&A, MM, P&P, PM

and HRM modules.

ConclusionThe case emphasizes the importance of an appropriate

vendor selection in ERP process.Vendor selection depends on number of factors.It is not always true that all large scale companies opt

for leading vendors. Sometimes local vendors also suit company’s business processes in a more appropriate manner.