• 1.

Features of ERP Package-r2/r3 ke features

• 2. Project management considerations for ERP implementation
• 3. Implications for ERP adoption
• 4. Difference between "IT led improvement" and "improvement led IT"
• 5. Impact of ERP on learning and innovation at Wendley
FEATURES OF ERP PACKAGE-R2/R3 FEATURES

• Powerful and flexible computing technology

• Better GUI
• Ease of Use
• Ease of Integration
• Scalability
• More – Open standards
 FEATURES OF ERP PACKAGE-R2/R3 FEATURES

• SAP R/3 is one of the main product of SAP where R stands for Real
Time and the number 3 relates to three tier application architecture(Data
base ,Application Server and Client).
• Most of the business in today world runs on SAP R/3 system .About
80% of the companies implemented this software. -
The SAP R/3 System consists of application modules that support
all of a company’s business transactions and are integrated
interactively.
 CONTINUE…

• Because of the integration, a change in one application module will result in an

automatic update of the data in the other application modules involved.
• Application Modules
 Financials
• Financial Accounting (FI)
• Controlling (CO)
• Asset Management (AM)
• Project System (PS)
• Ease of use. Client-server applications often used personal computer-like graphical user
interfaces. They also ran on the familiar desktop machines used for spreadsheets and word
processing. 
• Ease of integration. The flexible client-server hardware and operating systems could be more
easily linked internally (to process control equipment, for example) and externally, to Wide-
area networks and the Internet.
• Scalability, or the ability to add computing power incrementally. Companies could easily
expand client-server networks by adding relatively small and cheap machines. With
mainframes, computing capacity had to be purchased in large ‘chunks.’
• More open standards. The operating systems most used for client-server computing were
non-proprietary, so hardware from different manufacturers could be combined. In
contrast, most mainframe technologies were proprietary, so a mainframe purchase from
IBM or Digital locked in the customer to that vendor.
 
 
• Client-server technology. As large firms moved from mainframe to client-server architectures in the early
1990s, the R/3 system was available to them. Meanwhile, many suppliers of existing ‘legacy systems’ did not
have client-server applications ready for market.
•  
• Modularity, functionality, and integration. R/3 functionality included financials, order management,
manufacturing, logistics, and human resources, as detailed in Exhibit 2. Prior to the arrival of ERP, these
functions would be scattered among several systems. R/3 integrated all of these tasks by allowing its modules
to share and transfer information freely, and by centralizing all information in a single database which all
modules accessed.
•  
IMPLICATIONS FOR ERP ADOPTION

• Since ERP system support business integration, they potentially

represent more than a change in technical infrastructure. Indeed, the
implementation of an ERP changes the way organizations do business
and how people carry out their work (Koch et al. 1999).
• Davenport suggests the benefits available from ERP implementation
come at great risk. These risks, which are especially high for projects
that are entered into without extensive planning, are both tangible and
intangible.
 CONTINUE…

• ERP systems impose their logic upon a business’ strategy, culture

and organization, often forcing companies to tailor its business
processes. Therefore the goal of implementing an ERP must be to
improve the business, not just to install the software (Martin, 1998).
In order to achieve this goal, it is imperative that company has a
clear understanding of the business implications of ERP
implementation before the onset of the project (Davenport, 1998).
 CONTINUE…

• Fragmentation of Existing System: Prior to the decision to implement

ERP system, each plant of Vandelay had its own system for
manufacturing resource planning. In addition to those various MRP
systems across the enterprise, many sites had their own specialized
software to help with other functions such as scheduling, capacity
planning and forecasting. Internal investigations of Vandelay had shown
that this fragmented information systems added time and expense to
their production cycle
 CONTINUE…

• Fragmentation of Existing System: Prior to the decision to implement

ERP system, each plant of Vandelay had its own system for
manufacturing resource planning. In addition to those various MRP
systems across the enterprise, many sites had their own specialized
software to help with other functions such as scheduling, capacity
planning and forecasting. Internal investigations of Vandelay had shown
that this fragmented information systems added time and expense to
their production cycle
 CONTINUE…

• Several business practices across the organization: For the past few
decades company has expanded across product lines and global borders,
manufacturing on four continents with 30,000 employees. Managing the
company had become a greater challenge as having an enterprise wide
view of company become extremely difficult. During this expansion,
typical Vandelay plants were allowed a high degree of independence as
long as they achieved an acceptable profit. Due to these facts, every plant
created its own way of business practices which would prevent to have the
opportunity to see the whole company as one unit.
PROJECT MANAGEMENT CONSIDERATIONS FOR
ERP IMPLEMENTATION
• Effort Estimate – Full time effort of 50 people including consultants( process re-designers
and SAP specialists) and employees – Part time involvement of many employee at each
site. • Initially, the project team would focus about 80% of its effort on designing the “to
be” process model of the organization, and 20% on issues related to system
implementation. • In the later phases, during the activities of system configuration,
testing, and delivery, the emphasis would be reversed: 80% concentration on SAP
implementation and 20% on process design
• Two team for managing the project – Steering committee – Project team • Steering
Committee, 8 member team, consisting of Division VPs. The team would meet monthly.
This team would address issues related to Business Strategy like sequence of site
installations, planned change in mfg. strategy. • Project team, 20 member team, consisting
of operations employees, e.g. planner/buyers, financial accountants. This team would
address implementation specifics.
• 1. Team Selection: Vandelay and ICS had decided to deploy two teams composed of a
joint of client members and consultants as the project requires a variety of skills.
However Kramer has not decided how to select participants from Vandelay. She could
either ask senior management to choose people who would best suit for the job or
mandate to contain one representative from each plant
• Centralization vs. Autonomy: There is no way to involve all users in the decisions for
implementation. However what should be the degree of centralization versus autonomy?
This decision is very challenging especially in an organization like Vandelay Industries,
which has promoted innovation and autonomy among its employees. Kramer had a strong
belief in “input by many, design by few” however how she will manage the culture and
resistance that would arise during the implementation. How will it affect the enthusiasm
towards change if people were not allowed to experiment with system as much as they
wanted
• Standardization and Capability of SAP: Although the R/3 system provided by SAP is
considered to be more functional when compared to other competing ERP softwares, it
could satisfy the specific business requirements of a company’s only up to the 80-95%.
The remaining functionality needed by the corporations are obtained in the ways of
interfacing R/3 to existing legacy systems, other software packages or developing custom
software that extend R/3. Given these options Kramer considers which one to deploy
when the functionality of the R/3 does not fit with the desired Vandelay process design.
• Timeline and the Budget for the Project: ERP is recognized as one of the largest, fastest
growing and most influential computer applications. Nonetheless, it bears some problems
as reports about cost overruns and lengthy delays in the press have shown. According a
research of the PA Consulting Group, 92 percent of companies were disappointed with
their ERP-systems in July 2000. The Conference Board survey result shows that when the
benefits were achieved, it took about six moths longer than expected. This lag was often
due to the pressure to ‘go live’. It resulted in substantial post implementation efforts to
detect and assess shortcomings and deficiencies (The Conference Board 2001).