Chapter 1 - 2 Weeks

Enterprise
Resource
Planning
CHAPTER 1 – INTRODUCTION
Dr. LE Song Thanh Quynh

Email: lstquynh@hcmut.edu.vn
Course Assessment
1. Class assignment: 20%;

2. Group presentation: 30%;
3. Final exam: 50% (10% for class attendance)
WHAT IS ERP?
3
Enterprise Resource Planning
THE PRACTICE OF CONSOLIDATING COMBINES ALL DATABASES ERP AUTOMATES THE TASKS
AN ENTERPRISE’S PLANNING, ACROSS DEPARTMENTS INTO A INVOLVED IN PERFORMING A
MANUFACTURING, SALES AND SINGLE DATABASE THAT CAN BE BUSINESS PROCESS.
MARKETING EFFORTS INTO ONE
ACCESSED BY ALL EMPLOYEES.
MANAGEMENT SYSTEM.
What are the resources in business planning?
Resource planning is the process of identifying, forecasting, and

allocating best-fit resources, i.e., human resources, equipment,
assets, facilities, and more, to the projects at the right time and
cost. It also ensures the efficient and effective utilization of
resources across the organization.
Customer Relationship Management
Supply Chain Management
The components of a supply CRM (customer relationship

management) is the combination of
chain include producers,
practices, strategies and
vendors, warehouses, technologies that companies use to
transportation companies, manage and analyze customer
distribution centers, and interactions and data throughout
retailers. The functions of a the customer lifecycle. The goal
supply chain include product is to improve customer service
development, marketing, relationships and assist with
operations, distribution, customer retention and drive sales
finance, and customer growth.
service.
How Do ERP System Work ?
7
ERP Stakeholders
• Creditors
• Directors
• Employees
• Government
• Owners
• Suppliers
• Unions
• The community from which the
business draws its resources.
ERP Components
Before ERP After ERP
10
Who are ERP vendors
11
ERP stands for Enterprise Resource Planning. In this case, the coordinated management
of large business processes, often in real time and mediated by software applications, is
enterprise resource planning.
12
To integrate financial data
To standardize manufacturing
Why processes.
ERP?
To standardize HR information.
ERP Project and Time
• Real transformational ( 1 to 3 years )
• Short implementations (3 to 6 months)
The important thing is not to focus on how long it

will take but to understand why you need ERP and
how you will use it to improve your business
Total Cost of Ownership of ERP
From 63 companies surveyed showed :
• The average TCO was $15 million .

• The average TCO per user was $53,320.
• It took 8 months after the system was in to see any benefits.
• but that the median annual savings from the system was
$1.6 million per year.
Training
Integration and testing
Data conversion
Hidden Data analysis
Costs of Consultants
ERP Replacing best and brightest staff after implementation
Implementation teams can never stop
Waiting for ROI (Return on Investment)

Data conversion in ERP
Data conversion consists in taking data from your old system (legacy), adding to it missing data,
and then transferring the entire set of data to your new ERP.
In addition to the migration of your current data, the new implementation will probably require
making several changes and/or improvements to your existing process. You should probably
consider data conversion as a project in itself or, at least, develop a thoroughly detailed plan for
it.
Analyze your baseline Assess your open Assess the historical

data taking into consideration transactional data. It data you wish to import to
related quantity, quality and includes all your open your new ERP over a
integrity. At this point in time, accounting transactions, for period of one year, two, or
we usually refer to your clients, example: purchase orders, all of it! This decision will
suppliers, products, general requisition forms, etc
have a direct effect on your
ledger accounts, etc data import project.
17
Benefits of ERP
Systems
Benefits of ERP
Systems
Improving integration, Improved speed and
Fewer errors.
flexibility. efficiency.
Lower total costs in

More complete access Shorten throughput
the complete supply
to information. times.
chain.
Sustained involvement
and commitment of
the top management.
Benefits of ERP Systems
Reduce stock to a Enlarge product

Improve product quality
minimum assortment
Provide more reliable Efficiently coordinate

delivery dates and higher global demand, supply
service to the customer and production
Risks with ERP
Implementation
Expensive (can costs 100 thousands to millions of dollars)
Time-consuming (can take months to years)
Great risk for the organization
Transfer of Knowledge
Acceptance with the company

Best Practices and what ERP
holds for the Future
Biggest IT project that most companies
ever handle.
Changes the entire company.
ERP Has repercussions in all departments and

Implementation divisions of the organization.
It is essential that all the key players
understand the scope of the project.
This is an IT-RelatedProject.
A Business Strategy aligned with Business Processes
Top-Down Project Support and commitment
Best Practices Change Management
of ERP
Implementation
Extensive Education and Training
Data Clean up and Data Integrity
Implementation is viewed as an ongoing process

A Business Strategy aligned with Business Processes
• Business strategy that will give you a competitive

advantage
• Analyze and map your current business processes
• Develop your objectives
• Evaluate your business strategy and ERP plan before you
commit to software acquisition and installation.
Top-Down Project Support and
commitment
• CEO(chief executive officer)
• support implementation costs
• champion the project.
• demand full integration and
cooperation.
• Most knowledgeable and valuable
staff
Change Management
• Changes in business procedures,

responsibilities, workload.
• As a result, ERP implementations are times of
high stress, long hours, and uncertainty.
• Mid-level managers must
• facilitate continual feedback from
employees.
• provide honest answers to their
questions.
• help resolve their problems.
Extensive Education and Training
• General education about the ERP

system for everyone.
• Massive amount of end users training
before and during implementation.
• Follow-up training after the
implementation.
• 10 to 15% of total ERP
implementation budget for training
will give an organization an 80%
chance of a successful
implementation.
Data Cleanup and Data
Integrity
• Clean-up data before cut-over.

• Near enough is no longer good
enough.
• To command trust, the data in the

system must be sufficiently
available and accurate.
• Eliminate the old systems,

including all informal systems
Implementation is viewed as
an ongoing process
• Ongoing need for training and

software support after
implementation.
• Ongoing need to keep in contact with
all system users and monitor the use
of the new system.
• Ongoing process of learning and
adaptation that continually evolves
over time.
Concept/initiation
Development
ERP
Implementation
Phases Implementation
Closeout/Operation and maintenance

ERP
II
Is it a conceptual framework for next-generation
enterprise system?
• The development of Enterprise
Systems (ES) have progressed
through almost fifty years in a
constant interaction between
changing business requirements,
technological and organizational
maturity and software vendors
capabilities.
ERP
IIERP II systems is a new concept introduced by
Gartner Group in 2000 in order to label the
latest extensions of the ERP-systems.
• solution for building of complex
information systems in large
and medium-sized
companies
• ERP II makes it easy to integrate all
business information in a unified
information environment and automate
processes in finance sales customer
relationship management procurement
inventory management and production
the business logic of the system
provides inopportunity to generate
standard reports
ERP II Architecture
37
A Revolutionary Change
A Revolutionary Change
• Technology
• Technology goals aligned with internal business processes and those of
diverse partners, customers, suppliers, and distributors.
• Business Process
• Implementation cannot be made without a change of business
processes.
• People
• ERP II implementation success depends on the business community’s cultural
acceptance of the system.
ERP to ERP
II• The most apparent change
from ERP to ERP II is a change in focus
from one that is totally enterprise-
centric and preoccupied with internal
resource optimization and transactional
processing to a new focus on process
integration and external
collaboration. ERP II application
deployment strategies relates to
information that is exchanged between
two or more businesses over the
Internet.
• Such a system can quickly, accurately and consistently operate an
entire organization. It delivers information in an instant to the
people who need it. It manages the access to that information by
establishing security roles and ratings that define which
employees can use certain pieces of information. It also
addresses the issue of multiple office locations by making the
solution web-based, so employees can access the system no
matter where they may be.
•
Businesses are utilizing the Internet more and more. It is no
longer just a tool for e-mail, research and single transaction
commerce. It is quickly becoming a tool for globalizing a business
– a tool that allows an organization to tie together its employees,
its suppliers and its customers. It enables the free flow of
information and the next generation of solution will be built
upon it.
• ERP II supports work through client
application and through the web client
on desktops and portable devices
which provides several advantages you
get access to all system functions by
the internet and interaction
efficiency with affiliates partners
and customers will significantly
increase you can easily integrate
1c ERP 2.0 with any information
system Enterprise Portal
specialized software a shop or bank.
Advantages of ERP II
• it has many advantages over most extant ERP systems which typically address Finance
and Administration issues with an emphasis on serving logistics, supply chain, and
warehousing functions.
• allows demonstrably greater flexibility with
Advantages of ERP II respect to integrating functions between
departments and even industries.
system is a much more “Web-friendly
Advantages of ERP II ”application that makes better use of the
Internet, especially as a means for support.
• brings to the feast is that it can engender
increased user participation, because it
should simplify dealings among site owners
and potential buyers.
Advantages of ERP II • In turn, that can eliminate a large
percentage, if not all, of the difficulties that
used to result from the exchange of
insufficient or incorrect communications.
Closing Case One:
PepsiAmericas’ Enterprises
 PepsiAmericas generates $2.97 billion in revenues yearly

 The company implemented PeopleSoft’s ERP solution to provide
complete integration between PepsiAmericas’ front-office and
back-office systems
 PepsiAmericas also implemented PeopleSoft’s supply chain
management component to automate its inventory
48
Closing Case Questions
1. How have core ERP components
helped PepsiAmericas improve its
business?
2. How have extended ERP
components helped
PepsiAmericas improve its business?
3. Explain how future ERP systems will
help PepsiAmericas increase
revenues
4. Assess the impact on PepsiAmericas’
business if it failed to implement the
CRM component of PeopleSoft’s ERP
system
5. Which component would you recommend
PepsiAmericas implement if it decides to
purchase an additional PeopleSoft component? 49
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Enterprise

Dr. LE Song Thanh Quynh

1. Class assignment: 20%;

Resource planning is the process of identifying, forecasting, and

The components of a supply CRM (customer relationship

• Real transformational ( 1 to 3 years )

• Short implementations (3 to 6 months)

The important thing is not to focus on how long it

From 63 companies surveyed showed :

• The average TCO was $15 million .

Integration and testing

Hidden Data analysis

ERP Replacing best and brightest staff after implementation

Implementation teams can never stop

Waiting for ROI (Return on Investment)

Analyze your baseline Assess your open Assess the historical

Lower total costs in

Reduce stock to a Enlarge product

Provide more reliable Efficiently coordinate

Time-consuming (can take months to years)

Great risk for the organization

Acceptance with the company

ERP Has repercussions in all departments and

Top-Down Project Support and commitment

Best Practices Change Management

Data Clean up and Data Integrity

Implementation is viewed as an ongoing process

• Business strategy that will give you a competitive

• Changes in business procedures,

• General education about the ERP

• Clean-up data before cut-over.

• To command trust, the data in the

• Eliminate the old systems,

• Ongoing need for training and

Closeout/Operation and maintenance

 PepsiAmericas generates $2.97 billion in revenues yearly

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