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企業(yè)資源管理ERPEnterpriseResourcePlanning-ERPKevinCowellNatthawutLertpitayakunIsabelleMerthaXiaoguangYou2WhatisERP?Thepracticeofconsolidatinganenterprise’splanning,manufacturing,salesandmarketingeffortsintoonemanagementsystem.1
Combinesalldatabasesacrossdepartmentsintoasingledatabasethatcanbeaccessedbyallemployees.2ERPautomatesthetasksinvolvedinperformingabusinessprocess.13EvolutionofERP4EmployeesManagersandStakeholdersHowDoERPSystemsWork?CentralDatabaseReportingApplicationsHumanResourceManagementApplicationsFinancialApplicationsManufacturingApplicationsInventoryAndSupplyApplicationsHumanResourceManagementApplicationsServiceApplicationsSalesandDeliveryApplicationsSalesForceAndCustomerServiceRepsCustomersBack-officeAdministratorsAndWorkersSuppliersSource:Davenport,Thomas,“PuttingtheEnterpriseintotheEnterpriseSystem”,HarvardBusinessReview,July-Aug.1998.5ERPComponentsFinance:modulesforbookeepingandmakingsurethebillsarepaidontime.Exles:GeneralledgerAccountsreceivableAccountspayableHR:softwareforhandlingpersonnel-relatedtasksforcorporatemanagersandindividualemployees.Exles:HRadministrationPayrollSelf-serviceHRManufacturingandLogistics:Agroupofapplicationsforplanningproduction,takingordersanddeliveringproductstothecustomer.Exles:ProductionplanningMaterialsmanagementOrderentryandprocessingWarehousemanagement6AnERPExle:BeforeERPCustomersCustomerDemographicFilesSalesDept.VendorOrdersPartsAccountingAccountingFilesPurchasingPurchasingFilesOrderisplacedwithVendorInvoicesaccountingInventoryFilesWarehouseChecksforPartsCallsback“Notinstock”“Weorderedtheparts”“WeNeedparts#XX”“Weorderedtheparts”SendsreportSendsreportSendsreportShipsparts7AnERPExle:AfterERPDatabaseCustomersSalesDept.PurchasingWarehouseAccountingVendorInventoryDataIfnoparts,orderisplacedthroughDBOrdersPartsOrderissubmittedtoPurchasing.PurchasingrecordorderinDBOrderisplacedwithVendorAndinvoicesaccountingFinancialDataexchange;BooksinvoiceagainstPOBooksinventoryagainstPOShipsparts8WhoarethemainERPvendors?BaanJDEdwardsOraclePeopleSoftSAP9ERPVendorsandIndustriesTheyServe10RevenueandProfitsofMajorERPVendors11RevenueandProfitsofMajorERPVendors12ERPMarketSource:AMRResearch,2001.13ERPInvestmentsSource:
AMRResearchSurveyof686companieswithannualrevenuesrangingfrom<$50Mto>$1B,October2001.Roughly65%ofcompaniessurveyedalreadyhaveERPinplace.Ofthose,manyarestillactivelyspendingtoupgradeexistingsystemsandtotakeadvantageofnewweb-orientedfeatures.14ERPInvestmentsn=666n=232Source:AMRResearchSurveyof686companieswithannualrevenuesrangingfrom<$50Mto>$1B,October200115WhyERP?3MajorReasons:Tointegratefinancialdata.Tostandardizemanufacturingprocesses.TostandardizeHRinformation.16ERPProjectandTimeRealtransformationalERPeffortswillusuallyrunbetween1to3years,onaverage.Shortimplementations(3to6months):smallcompanies,implementationlimitedtoasmallareaofthecompany,orthecompanyonlyusedthefinancialpiecesoftheERPsystem.TheimportantthingisnottofocusonhowlongitwilltakebuttounderstandwhyyouneedERPandhowyouwilluseittoimproveyourbusiness.17TotalCostofOwnershipofERPTotalcostofownership(TCO)
isamodeldevelopedbyGartnerGrouptoanalyzethedirectandindirectcostsofowningandusinghardwareandsoftware.TCOessentiallyhelpsacompanydeterminewhetheritwinsorlosesfromspecifictechnologyimplementations.
Metagroupstudyamong63companiessurveyedshowedthat:theaverageTCOwas$15million(thehighestwas$300millionandlowestwas$400k),theaverageTCOperuserwas$53,320.18TotalCostofOwnershipofERPItalsofoundthat:ittook8monthsafterthesystemwasintoseeanybenefits,butthatthemedianannualsavingsfromthesystemwas$1.6millionperyear.19HiddenCostsofERPTrainingIntegrationandtestingDataconversionDataanalysisConsultantsReplacingbestandbrighteststaffafterimplementationImplementationteamscanneverstopWaitingforROIPost-ERPdepression20BenefitsofERPSystemsImprovingintegration,flexibilityFewererrorsImprovedspeedandefficiencyMorecompleteaccesstoinformationLowertotalcostsinthecompletesupplychainShortenthroughputtimesSustainedinvolvementandcommitmentofthetopmanagement21BenefitsofERPSystems(cont’d)ReducestocktoaminimumEnlargeproductassortmentImproveproductqualityProvidemorereliabledeliverydatesandhigherservicetothecustomerEfficientlycoordinateglobaldemand,supplyandproduction22RiskswithERPImplementationExpensive(cancosts100thousandstomillionsofdollars)Time-consuming(cantakemonthstoyears)GreatriskfortheorganizationTransferofKnowledgeAcceptancewiththecompany23CaseStudyNestléUSA24NestléBackgroundFoundin1866,Switzerland.World'slargestfoodcompany,#50inFortunemagazine’s Globe500NestléUSAwasincorporatedin1990;HomeOfficeinGlendale,CA.33manufacturingfacilities,6distributioncentersand17salesofficesaroundthecountry,17,300employeesnationwide.$11.1billioninSales(2001)“…America'smostadmiredFoodCompanyforthefourthconsecutiveyear”-FortuneMagazine,February200125Milkproducts,dieteticfoods,infantfoods,chocolateandconfections,refrigeratedandfrozenitems,icecream,andpetfoods Nestlé'sproductsandbrands
26CompetitiveMarket USAFoodMarketin200127OrganizationalChart
JoeWellerChairman&CEOJeriDunnCIOOtherBoardmembersTomJamesDir.ofProcesschangeJoseIglesiasDir.ofISDickRamageVPofsupplychain
BenWorthen,“Nestlé'sERPOdyssey”,May15,2002IssueofCIOMagazine28BusinessChallengesAfterthebrandswereunifiedandreorganizedinto NestleUSA in1991,.Divisionsstillhadgeographicallydispersed.Forexle,NestleUSA’sbrandswerepaying29differentpricesforvanilla-tothesamevendor.1Ninedifferentgeneralledgersand28pointsofcustomersentry.Yearsofautonomousoperationprovidedanalmost“insurmountablehurdle”.“…Nestlewastheworld’sNO.1foodandbeveragecompany–butoneoftheleastefficient”229
ProjectScope–“BEST”FiveSAPModules–purchasing,financials, salesanddistribution,accountspayableandaccountsreceivableandManugistics’supplychainmoduleFromOctober1997to1stQuarterof2000.$210millionbudget50topbusinessexecutivesand10seniorITprofessionalsSource:Worthen,Ben,“Nestlé'sERPOdyssey”,May15,2002IssueofCIOMagazine.30
ProjectObjectives-
“OneNestle,underSAP”Transformingtheseparatebrandsinto onehighlyintegratedcompany.Internalalignedandunited,establishingacommonbusinessprocessarchitectureStandardizingmasterdataSource:Worthen,Ben,“Nestlé'sERPOdyssey”,May15,2002IssueofCIOMagazine.31
ProcessofSAPImplementation
Thenewbusinessprocessconfused mostofemployees,thenresistancegrewintorebellionin2000.ReconstructedinJune2000andcompletedin2001.Source:Worthen,Ben,“Nestlé'sERPOdyssey”,May15,2002IssueofCIOMagazine.32ConclusionofNestléCaseChangesandsuccessCommondatabaseandbusinessprocessesleadto moretrustworthydemandforecast.Acomprehensiveaccountplanningtool.Nestlecannowforecastdowntotheredistributioncenterlevel.Nestlehasimprovedforecastaccuracyby2%Higherfactoriesutilizationfewerfactories=biggainsinfactoriesUtilizationReduceinventorylevel33ConclusionofNestléCase586371Saved$$$-WithERPinpractice,$371millionhasbeensaveduntil2001.34ConclusionofNestléCaseLessonslearnedbyNestléDon’tstartaprojectwithadeadlineinmind.Updateyourbudgetprojectionatregularintervals.ERPisn’tonlyaboutthesoftware.
“Nomajorsoftwareimplementationisreallyaboutthesoftware.”FormerNestléCIOJeriDunnsays,“Youarechallengingtheirprinciples,theirbeliefsandthewayhavedonethingsformanymanyyears”
Keepthecommunicationlinesopen.Remembertheintegrationpoints.Source:Worthen,Ben,“Nestlé'sERPOdyssey”,May15,2002IssueofCIOMagazine.35NestléintheFutureTheGlobalBusinessExcellenceProgram SupportedbySAP,contractedinJune2000andbyIBMinJuly2002.Tobecompletedbytheendof2005TosavecostaroundCHF3billion,withbenefitsrealizedfrom2003.36CaseStudy37WhatisAgilentTechnologies?AgilentTechnologiesistheworld'sleadingdesigner,developer,andmanufacturerofelectronicandopticaltest,measurementandmonitoringsystems.SeparatedfromHewlettPackardandbecameapubliccompanyin1999WorldHQinPaloAlto,CASource:://we.home.agilent,viewed,viewedNovember3,2002.38AroundtheWorldAgilenthasfacilitiesinmorethan40countriesanddevelopsproductsatmanufacturingsitesintheU.S.,China,Germany,Japan,Malaysia,Singapore,AustraliaandtheU.K.Approximately37,000employeesthroughouttheworld39ProductsandServicesAgilentoperatesinthreebusinessgroups:TestandMeasurementTestinstrumentsandsystems,automatedtestequipment.SemiconductorProductsSemiconductorsolutionsforwiredandwirelesscommunications,informationprocessing.ChemicalAnalysis
Lifesciencesandanalyticalinstrumentsystems.40Agilentrevenuefor2001TestandMeasurement:$5.4billionSemiconductorProducts:$1.9billionChemicalAnalysis:$1.1billionTotalrevenue:$8.4billionSource:,viewedNovember3,2002.41Agilent’sCustomersServedcustomersinmorethan120countriesaroundtheworld1ElectroniccomponentmanufacturersPharmaceuticalcompaniesChemicalcompaniesCommunicationcompanies24243ProjectScopeOracle’sliE-BusinessSuitesoftwareStartedSeptember2000till2004Budgetroughly100OracleconsultantstoinstalltheprogramSource:Songini,MarcL.,“ERPeffortsinksAgilentrevenue”Computerworld,Framingham,August26,2002.44ERPProjectObjective“OneIT”organizationSupplychaincapability;forexle,-Suppliers-CustomersMigrating2,200legacyapplicationsthatitinheritedfromHPtoOracleSource:Gaither,Chris,“WatchingOracleForSignsOfStrength”BostonGlobe,Boston,Mass.,September16,2002.45OneITProject(Before)ITspendwas8-10%ofsales80%forbusinessoperations20%maint.&upgradinglegacysystemsFurtherautonomyovertheITportfoliowouldhaveledto50%costincrease46OneITProjectMartyChuck,CIO,developedaVisionforOneITorganizationinAugust2000Movedmorethan2,500ITprofessionalsinthedifferentsite,regionalanddivisionalITorganizations47OneITProjectObjectiveToconsolidatealargenumberofindependentoperatinggroupsintoasingleworldwideITfunctionToshareinformationquicklyandefficientlyTodrivetheoperationalcostsdownbymorethan20%TocombineallITbudgets48ChangesinSupplyChainProcess:SupplierMigratingfromallexistingERPsystemstoasingleOracle-basedinfrastructuresystemTheuseofbarcodeformaterialsreceivedfromsuppliersTheuseofEvaluatedReceiptSettlement(ERS)49TheprocessofmigratingERP
systemstoOracle50EvaluatedReceiptSettlement(ERS)AnautomatedinvoiceandpaymentsystemHowdoesERSwork?51ChangesinSupplyChainProcess:CustomersReal-timeinformationaboutinventoryandorderstatusEasiertounderstandinvoicingandpricingImprovedvisibilityonproductdeliveryleadtime52TroubleswithProjectEverestBecauseoftheconsolidationofits2,200softwaresystemstounder20,confusionmeantlostorderandrevenue.An$88millionreductioninthird-quarterordersOfthat,$38millionwaslostand$50millionwillbepulledthroughthefourthquarter.$105millioninlostrevenueand$70millioninoperatingprofitSource:Shah,JenniferB.,“Agilent’sERPRolloutExpensiveGlitches”EBN;Manhasset,August26,2002.53TroubleswithProjectEverestCFOAdrianDillonsaidtheproblemwastwofold:Softwarebug“Aswebegantohitsortofa50percentrofnormalcapacity,webegantogetconflictsinprioritiesofsystemsinstructions.Whenwehadthoseconflictsthatinevitablyshutthesystemdown.”54TroubleswithProjectEverestMistakesconvertingbacklog.
“Theotherproblemwehadwasconvertingbacklogfromlegacytonewsystems,especiallyforourhighlyconfiguredproductsinourtestandmeasurementoperation.”Extra$35milliontocovercostsofERPandCRMrollout.55LessonsLearnedbyAgilentERPimplementationsarealotmorethansoftwarepackages.People,processes,policiesandcultureareallfactorsthatshouldbetakenintoconsiderationwhenimplementingamajorenterprisesystem.ERPdisastersareoftencausedbyausercompanyitself.Source:Songini,MarcL.,“ERPeffortsinksAgilentrevenue”Computerworld,Framingham,August26,2002.56LessonsLearnedbyAgilentStudyERPwellbeforeimplementation
“Thedisruptionsaftergoingliveweremoreextensivethanweexpected”–CEONedBarnholtSource:Songini,MarcL.,“ERPeffortsinksAgilentrevenue”Computerworld,Framingham,August26,2002.57BestPracticesandwhatERPholdsfortheFuture58ERPImplementationBiggestITprojectthatmostcompanieseverhandle,Changestheentirecompany,andHasrepercussionsinalldepartmentsanddivisionsoftheorganization.Itisessentialthatallthekeyplayersunderstandthescopeoftheproject.ThisisanIT-RelatedProject.59BestPracticesofERPImplementationABusinessStrategyalignedwithBusinessProcessesTop-DownProjectSupportandcommitmentChangeManagementExtensiveEducationandTrainingDataCleanupandDataIntegrityImplementationisviewedasanongoingprocess60BestPracticesofERPImplementationABusinessStrategyalignedwithBusinessProcessesBusinessstrategythatwillgiveyouacompetitiveadvantageAnalyzeandmapyourcurrentbusinessprocessesDevelopyourobjectivesEvaluateyourbusinessstrategyandERPplanbeforeyoucommittosoftwareacquisitionandinstallation.61BestPracticesofERPImplementationTop-DownProjectSupportandcommitmentCEO1supportimplementationcostschiontheproject,anddemandfullintegrationandcooperation.Mostknowledgeableandvaluablestaff262BestPracticesofERPImplementationChangeManagementChangesinbusinessprocedures,responsibilities,
workload.1
Asaresult,ERPimplementationsaretimesofhighstress,longhours,anduncertainty.1Mid-levelmanagersmust2
facilitatecontinualfeedbackfromemployees,providehonestanswerstotheirquestions,andhelpresolvetheirproblems.Sources:
1.Yakovlev,I.V.,“AnERPImplementationandBusinessProcessReengineeringataSmallUniversity”,EducauseQuarterly,Number2,2002;2.Umble,M.Michael,“AvoidingERPImplementationFailure”,IndustrialManagement,Jan/Feb2002.63BestPracticesofERPImplementationExtensiveEducationandTrainingGeneraleducationabouttheERPsystemforeveryone.Massiveamountofenduserstrainingbeforeandduringimplementation.Follow-uptrainingaftertheimplementation.10to15%oftotalERPimplementationbudgetfortrainingwillgiveanorganizationan80%chanceofasuccessfulimplementation.Source:Umble,M.Michael,“AvoidingERPImplementationFailure”,IndustrialManagement,Jan/Feb2002.
64BestPracticesofERPImplementationDataCleanupandDataIntegrityClean-updatabeforecut-over.1“Nearenoughisnolongergoodenough.”2Tocommandtrust,thedatainthesystemmustbesufficientlyavailableandaccurate.3Eliminatetheoldsystems,includingallinformalsystems.365BestPracticesofERPImplementationImplementationisviewedasanongoingprocessOngoingneedfortrainingandsoftwaresupportafterimplementation.Ongoingneedtokeepincontactwithallsystemusersandmonitortheuseofthenewsystem.Ongoingprocessoflearningandadaptationthatcontinuallyevolvesovertime.Source:Umble,M.Michael,“AvoidingERPImplementationFailure”,Indust
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