Enterprise Resource Planning - PowerPoint PPT Presentation

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Enterprise Resource Planning

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Enterprise Resource Planning Mike Sullivan Jeff Frederick Karen Grubbs Melissa Orlando ... & Microsoft Case Studies: Spartech, Lone Star Steel, & Data2 Corp. – PowerPoint PPT presentation

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Title: Enterprise Resource Planning


1
Enterprise Resource Planning
  • Mike Sullivan
  • Jeff Frederick
  • Karen Grubbs
  • Melissa Orlando

2
What is ERP?
  • ERP systems are software packages that integrate
    all the enterprises data, and provide information
    based on this data on a real time basis.
  • Gefen, David and Arik Rogowsky A Multi-Level
    approach to measuring the benefits of an ERP
    system in A Manufacturing firm

3
Tonights Topics
  • Overview of ERP
  • How it works and why use it
  • ERP software suppliers Oracle, SAP, Microsoft
  • Case Studies Spartech, Lone Star Steel, Data2
    Corp.
  • Take-Aways

4
Data Flow within ERP
Help Desk
Call Center
Workflow
ERP System
Data Warehouse
CRMCustomer Relationship Management
Supply Chain Management
Knowledge Management
E-BusinessE-Commerce
http//www.cs.nccu.edu.tw/lien/Lib/Image/BCC2/er
p-relationship.gif viewed 4/15/2006
5
ERP approach
ERP package selection
Implementation plan
Solution Inquiry
Extending The Enterprise
Lifecycle of ERP
Sandbox
Operations
ERP design deployment
IT infrastructure
ERP integration
www.developer.ibm.com/partnerworld/pwhome.nsf/webl
ook/pe_sc_solutions_erp.html viewed 4/15/2006
6
Payroll Example
http//icsun.ithaca.edu88/jbarr/312205/312205cc?
DA viewed 4/15/2006
7
Payroll Example (old method)
Supervisor collects timecard
Get OK From Mom
Employee fills out time card
Accuracy check
Supervisor gives time sheets to HR
Checks given to employees
Supervisor gets paychecks from HR
Checks distributed to employees
HR produces paychecks
http//www.professorsearch.com/search/payroll
viewed 4/15/2006
8
Payroll Example (ERP method)
http//www.wellesley.edu/Computing/Binders/Common
/payroll.html viewed 4/15/2006 http//www.cometcon
structionsoftware.com/images/prcheck.gif viewed
4/15/2006
9
Benefits of ERP
Revenue/Profit Enhancement
Greater Customer Satisfaction
Lower distribution costs
Benefits
Lower procurement costs
Inventory Reduction
Cycle Time Reduction
Personnel reduction
Improved information quality, better business
processes, and increased integration
Production Improvements
Supply Chain Efficiencies
Process Efficiency
Lower infrastructure costs
Improved Efficiency
Organizational Effectiveness
Enterprise Transformation
Time
http//www.blog.ebiznis.info/wp-images/blog/ERP20
Benefits_web.jpg viewed 4/15/2006
10
Costs of ERP
  • Training
  • Integration and Testing
  • Customization
  • Data Conversion
  • Outside Consultants
  • Replacing employees
  • Never ending implementation
  • Drop in Performance

http//www.cio.com/research/erp/edit/erpbasics.ht
ml viewed 4/9/2006
11
How will ERP affect our processes?
  • Financial processes
  • Real-time cost and performance analysis
  • Across projects and divisions
  • Better financial planning
  • Logistics processes
  • Supports all phases of procurement process
  • Integrates transportation management across the
    supply chain
  • Sales processes
  • Complex pricing and profitability analysis
  • Real-time inventory control

www91.homepage.villanova.edu/william.wagner/MBA85
56/erplec1.ppt viewed 4/15/2006
12
Vendors of ERP software
www.oracle.com viewed 4/15/2006,
www.sap.com/usa/index.epx viewed 4/15/2006,
www.ibm.com viewed 4/15/2006
13
Big Three Market ShareRelative Peer Group
Sharerolling 4 quarters based on software
revenues
Siebel 9
Microsoft 13
SAP 62
Oracle 16
http//www.sap.com/company/investor/pdf/Misc_IR_F
actSheet_04_06_06.pdf, viewed 4-18-2005
14
Oracle (Nasdaq ORCL)
  • World's leading supplier of software for
    information management, and the world's 2nd
    largest independent software company.
  • Founded in 1977, now has 40,000 employees in
    over 100 countries
  • Focuses on enterprise software
  • Database Middleware
  • Applications

http//www.oracle.com/corporate/story.html,
viewed 4-13-2005
15
Enterprise Initiatives
  • Attempting to capture larger portion of the
    Enterprise Application market
  • 18 Acquisitions in the past 16 months (over 18
    billion)
  • PeopleSoft (JD Edwards)
  • Siebel
  • Portal Software
  • Retek

http//www.oracle.com/corporate/acquisition.html,
viewed 4-17-2005
16
  • 2000 ERP Software Product of the Year
  • Oracle E-Business Suite
  • Oracle E-Business Suite is a fully integrated,
    comprehensive suite of business applications for
    the enterprise.
  • Benefits
  • Oracle E-Business Suite helps businesses protect
    their existing investment, extend the value of
    their applications, evolve to the next
    generation of business applications.

http//www.oracle.com/applications/e-business-sui
te.html viewed 4/15/2006
17
  • Fusion Application Suite
  • Aims to integrate solutions software from
    acquisitions with preexisting applications and
    databases
  • In the pipeline, with 2008 release target

http//searchsap.techtarget.com/generic/0,295582,
sid21_gci1166780,00.html, viewed 4-17-06
18
  • Oracle Certifies PeopleSoft Applications with
    Oracle Fusion Middleware PeopleSoft Customers
    to Benefit from Oracles Hot pluggable service
    oriented software
  • REDWOOD SHORES, Calif.,   13-DEC-2005  Oracle
    today announced it has certified Oracle's
    PeopleSoft Enterprise applications with Oracle(r)
    Fusion Middleware 10g Release 2. This marks a key
    milestone in the delivery of the Oracle fusion
    software.

http//www.oracle.com/corporate/press/2005_dec/of
m_psft_certification.html viewed 4/15/2006
19
(NYSE SAP)
  • World's largest inter-enterprise software company
    and 3rd largest software supplier overall
  • Founded in 1972, with a vision to develop
    standard application software for real-time
    business processing.
  • Currently employs 32,000 people in over 120
    countries

http//www.sap.com/usa/company/index.epx, viewed
4-17-06
20
Enterprise Initiatives
  • Focus on less expensive, organic growth
  • Capture market share through business migration
  • Safe Passage program
  • mySAP

http//www.sap.com/usa/solutions/safepassage/index
.epx, http//searchsap.techtarget.com/originalCont
ent/0,289142,sid21_gci1135873,00.html?trackNL-137
ad530635USCA, Both Viewed on 4-18-2006
21
  • mySAP and SAP NetWeaver
  • Gain new market insights and adapt quickly to
    market changes.
  • Sense and respond to customer requirements in
    real time.
  • Extend processes beyond the organization to
    include customers, suppliers, and partners.
  • plus support for systems management -- all
    powered by the SAP NetWeaver platform.
  • That's the power of mySAP ERP.

http//www.sap.com/solutions/business-suite/erp/i
ndex.epx viewed 4/15/2006
22
An Efficient ERP System Based on SAP
Sales Order
QC
Storage
Delivery
Post Sales Service
Financial Management
Manufacture
MPS
Material Management
MRP
Purchase
QC
http//www.kongyue.com.cn/corporate/system.htm
viewed 4/15/2006c
23

(NYSE MSFT)
  • Expected to be the most purchased ERP solution in
    2006
  • Dynamics Business Suite
  • Replaced the Microsoft Business Solutions
    software this year
  • Less costly than the other two competitors
  • Ready to use with other Microsoft
    office-productivity applications

http//www.microsoft.com/dynamics/overview.mspx,
viewed 4/17/2006
24
Big Three Comparison
www.XXXXX.com, viewed XXXXX
25
Financial Comparison
http//finance.yahoo.com, viewed 4-22-06
26
Business Application Revenue to Total Revenue
http//www.sap.com/company/investor/reports/annual
report/2005/pdf/2005_SAP_Annual_Report.pdf,
viewed 4-22-06, http//www.oracle.com/corporate/in
vestor_relations/4q05_pressrelease.pdf, viewed
4-22-06 Microsoft 2005 Annual Report, HTML
version, viewed 4-22-06
27
Case Studies
  • Spartech Corporation
  • Lone Star Steel
  • Data 2 Corporation

28
Industries and Products
  • Products
  • Extruded thermoplastic sheet and rollstock
  • Polymeric compounds
  • Custom engineered plastic products
  • Industries
  • Packaging
  • Transportation
  • Building and Construction
  • Recreation and Leisure
  • Sign and Advertising
  • Lawn and Garden
  • Appliance and Electronics

Spartech 2005 Annual Report
29
Company Background
  • Global plastics manufacturer headquartered in St.
    Louis, MO with plants in the US, Canada, Mexico,
    France.
  • 3,500 employees
  • 14 billion in sales for 2005
  • 12.2 million in profit for 2005
  • 25-30 IT employees
  • CIO reports directly to CFO with 4 managers
    reporting to the CIO
  • 8 million IT budget for 2005

Spartech 2005 Annual Report
Tim Landrum, Manager of Applications, Spartech
Corporation St. Louis, Interviewed in person by
Karen Grubbs, April 7, 2006
30
Innovative Products
  • Low-E Poly
  • material that virtually eliminates the
    evaporative emissions of gasoline in fuel tanks.
  • Polyactide
  • corn based-biodegradable material that is safe
    for food packaging.

Spartech 2005 Annual Report
31
Products and Applications
  • Products
  • Steel for oil field products.
  • Specialty tubing products.
  • Cold-drawn carbon and alloy tubing.
  • Applications
  • Energy
  • Industry
  • Mechanical
  • Automotive
  • Construction
  • Communications

Lone Star Technologies 2005 Annual Report,
http//www.lonestarsteel.com viewed 4/8/2006
32
Company Background
  • Parent company is Lone Star Technologies, Inc.
  • Headquarters near Dallas, Texas
  • 3,500 employees
  • 1.3 billion in sales for 2005
  • 272 million in profits for 2005
  • 25-30 IT employees

Lone Star Technologies 2005 Annual Report,
http//www.lonestarsteel.com viewed 4/8/2006,
Tim Landrum, Manager of Applications, Spartech
Corporation St. Louis, Interviewed in person by
Karen Grubbs, April 7, 2006
33
Products and Services
  • Miniaturized UPC barcode labels
  • Specialty labels
  • EDI and internet ordering system
  • SKU database system interfaces
  • Blank labels

Personal knowledge of Data2 as an employee per
Melissa Orlando
34
Company Background
  • Operations began in 1960, incorporated in 1989,
    and in 2003 completed a downstream merger to
    create Data2 Corp.
  • Corporate headquarters and production in St.
    Peters, MO with marketing and sales in Concord,
    CA.
  • 12 million in revenue for 2004
  • Customer base throughout the U.S. and 22
    countries worldwide.
  • Operates under a JIT process.
  • 65 employees

Data2 Corporation Company Profile internal
document accessed as an employee by Melissa
Orlando
35
Market Channel Matrix
Accessed from Data2 Marketing file, as an
employee per Melissa Orlando
36
Product Examples
Accessed from Data2 Marketing file, as an
employee per Melissa Orlando
37
Need for ERP
Tim Landrum, Manager of Applications, Spartech
Corporation St. Louis, Interviewed in person by
Karen Grubbs, April 7, 2006
Mike Borgna, VP CFO of Data2 Corporation,
interviewed in person by Melissa Orlando, April
13, 2006.
38
Spartechs Need for ERP
  • Decision made in 2003 to implement ERP
  • Passage of Sarbanes-Oxley
  • 8 -10 different systems running among 43
    locations with no common platform. Impossible to
    see inventory from plant to plant.

Tim Landrum, Manager of Applications, Spartech
Corporation St. Louis, Interviewed in person by
Karen Grubbs, April 7, 2006
39
Lone Stars Need for ERP
  • Specific business reason
  • Lead time on products too long competition at
    two weeks while Lone Star offered four weeks.
  • Current software in place was as efficient as
    possible.
  • CEO Go find a system and implement it

Tim Landrum, Manager of Applications, Spartech
Corporation St. Louis, Interviewed in person by
Karen Grubbs, April 7, 2006
40
Data2s Need for ERP
  • Operating two independent systems that did not
    share data.
  • Difficult to access and analyze critical
    information.
  • Limited functionality in current systems.
  • Outdated, character-based non-graphical
    interfaces.
  • Navigation within each system was not intuitive
    no help or reference manuals.

Mike Borgna, VP CFO of Data2 Corporation,
interviewed in person by Melissa Orlando, April
13, 2006.
41
Selection Criteria
  • Software / Hardware implementation costs.
  • Annual maintenance costs.
  • Vendor qualifications.
  • Implementation lead times.
  • Technology platforms.
  • Integration capabilities.
  • User interface.
  • Required software features.

Mike Borgna, VP CFO of Data2 Corporation,
interviewed in person by Melissa Orlando, April
13, 2006.
42
ERP Implementation
Mike Borgna, VP CFO of Data2 Corporation,
interviewed in person by Melissa Orlando, April
13, 2006.
Tim Landrum, Manager of Applications, Spartech
Corporation St. Louis, Interviewed in person by
Karen Grubbs, April 7, 2006
43
ERP Implementation
  • Formal process began in 2005 with budget of 10
    million
  • Implementation team of 25 14 Spartech employees
    and 11 outside consultants.
  • Phase I Defining and mapping business processes
    at Spartech.
  • Phase II Implementation of a pilot in
    Stratford, Ontario. Live date is May 30, 2006.
  • Phase III Roll-out plan to implement in system
    in remaining 42 sites.

Tim Landrum, Manager of Applications, Spartech
Corporation St. Louis, Interviewed in person by
Karen Grubbs, April 7, 2006
44
ERP Implementation
  • Depended heavily on a consulting company because
    no internal ERP or Oracle experience.
  • Internal timeframe 1.5 years with a budget of
    6-7 million.
  • Total process 3 years with a budget of 13.2
    million.
  • Over time and over budget, yet still called the
    project successful.

Tim Landrum, Manager of Applications, Spartech
Corporation St. Louis, Interviewed in person by
Karen Grubbs, April 7, 2006
45
ERP Implementation
  • Original consultant was acquired by another
    company after implementation.
  • Original consultant outsourced manufacturing
    aspect.
  • Only found 65 out of box software relevant
    still needed 35 customization.
  • Consultant did not have capabilities to fully
    understand Data2s manufacturing processes and
    the customization needed for efficiency purposes.
  • Employees did not fully grasp the software after
    the suggested training was completed.

Mike Borgna, VP CFO of Data2 Corporation,
interviewed in person by Melissa Orlando, April
13, 2006.
46
Planned vs. Actual
  • Original budget 350K vs. final expenses of
    550K.
  • Original timeframe was 6 month from start to
    finish vs. actual of 18 months.

Mike Borgna, VP CFO of Data2 Corporation,
interviewed in person by Melissa Orlando, April
13, 2006.
47
Project Outcomes
Mike Borgna, VP CFO of Data2 Corporation,
interviewed in person by Melissa Orlando, April
13, 2006.
Tim Landrum, Manager of Applications, Spartech
Corporation St. Louis, Interviewed in person by
Karen Grubbs, April 7, 2006
48
Success Factors
  • Largely attributed to team leads previous
    experience with ERP. All team members have had
    experience with Oracle.
  • Change management activities end-user acceptance
    testing throughout.

Tim Landrum, Manager of Applications, Spartech
Corporation St. Louis, Interviewed in person by
Karen Grubbs, April 7, 2006
49
Lessons Learned
  • Make sure ERP implementation process has
    corporate sponsorship.
  • Make sure employees are involved in initial
    planning stages. Decision makers for time and
    budget must be familiar with business processes
    and the company.
  • User testing and training is one of the most
    important aspects. Success is dependent upon it.
  • Try to avoid extensive customizations.

Tim Landrum, Manager of Applications, Spartech
Corporation St. Louis, Interviewed in person by
Karen Grubbs, April 7, 2006
50
Final Results
  • Customers receive acknowledgement of orders and
    shipments electronically.
  • Packing slips and invoices are more straight
    forward and provide essential information.
  • On-time shipping to customers has improved.
  • Order accuracy has improved.
  • Customers able to access order status information
    themselves.
  • Suppliers are provided more accurate projections
    of material requirements.
  • Ordering patterns with suppliers are more stable
    based upon ROP / ROQ analysis.

Mike Borgna, VP CFO of Data2 Corporation,
interviewed in person by Melissa Orlando, April
13, 2006.
51
The Future of ERP
  • 71 of 271 polled organizations plan to increase
    ERP spending in 2006
  • ERP budget growth is expected to be 14.6 in 2006
  • 50 of that being application software

PR Newswire Europe. New York Jan 24, 2006.
Pg. n/a
52
ERP Take Aways
  • ERP integrates business information across
    departments
  • Can be very beneficial, but costly
  • Many different software providers
  • Lessons from the case studies.
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