Putting the Enterprise into

the Enterprise Systems

By : Abeer Shakir
Bhargav Mehta
John Chiao
Mukul Jain
Ramu Valliappan
Agenda Elf Atochem case study

Impact on Organization

System and Strategy Clash

Allure of Enterprise Systems

Scope of Enterprise Systems

 Executive Summery

“People don’t like to change, and ERP asks them to change how they do their jobs. That is why the value of ERP is so hard to pin down.
The software is less important than the changes companies make in the ways they do business.”

IMG : http://www8.informatik.umu.se/digitalAssets/1/1404_Davenport.pdf
Source : http://www.citicolumbia.org/B7217S/course/Accounting/Readings/supp1-07/theabcsoferp.pdf
Scope of Enterprise Systems
• The commercial software package promises the seamless integration of all the
company information is a dream come true.

• Though the business integrations looks attractive, are the enterprise systems
living up to the companies expectation?????

• Horror stories of : Fox Meyer, Mobil Europe, Dell computer, Applied materials,
Dow chemicals many more…

• Technical challenges, are not the main reason enterprise systems fail .
(BUSINESS PROBLEM)

• If you are not carful, the dream of integration can quickly turn into a
nightmare.

• It is certain that that enterprise systems can deliver great rewards, but the
risks they carry are equally great. When considering and implementing an
enterprise systems, managers need to be careful that their enthusiasm about
the benefits does not blind them to the hazards.

IMG : http://empresasdelmundo.org/2014/12/ventajas-de-usar-un-software-erp/
Scope of Enterprise System
Financials Human Resources Operations & Logistics Sales & Marketing

• Account Receivables • HR Time Accounting • Inventory Mgmt • Order Management

• Account Payables • MRP • Pricing
• Payroll • Materials Mgmt • Sales Management
• Asset Accounting
• Cash Mgmt. & • Personnel Planning • Plant Maintenance
Forecast • Sales Planning
• Cost-Center • Travel Expenses • Production Planning
Accounting
• Executive Info
System • Project Management
• Financial
Consolidation • Purchasing
• General Ledger

• Product-Cost Acct • Quality Management

• Profitability Analysis
• Routing Management
• Profit-Center Acct
• Period-Related
Costing • Shipping
• Standard costing • Vendor Evaluation
The Allure of Enterprise System
• Streamlines a company’s
Fragmentation
data flows
of information • Provides management with
in large
direct access to real-time
business
operating information
organizations

Enterprise
Business is Systems
Fragmented

IMG : http://image.shutterstock.com/z/stock-photo-problem-solution-searching-solutions-by-solving-problems-road-sign-301455950.jpg
Anatomy of an Enterprise System Did you
know ???

Company Task Before ES After ES

Deliver an order to a Average of 98%, within

customer 2 weeks 24 hours

Reprice Products 5 days 5 minutes

Ship a replacement part 22 days 3 days

Complete a credit check 20 minutes 3 seconds

Storage Division
Filling orders 18 days 1.5 days

Close financial books 8 days 4 days

Configuring an Enterprise System
• It a matter of making compromises, of balancing the way you want to work with the way the systems lets you work.

• Two configuration mechanism :

o Modules :

- For every function, there is a module to install

- It’s the customers choice which one to install

- Generally, the more modules , the greater the integration

o Configuration tables

• What happens when the options allowed by the system just aren’t good enough??

o Write ES’s code

o Continue to use an existing systems and build interfaces between it and ES’s integration benefits.

• The more customized an enterprise systems becomes, the less able it will be to communicate seamlessly with the
systems of suppliers and customers.
When System and Strategy Clash
Companies would first
decide how they wanted to
do business and then
choose a software package
Then Now
With enterprise systems, the
business often must be
that would support their modified to fit the system
proprietary processes

Enterprise System vendors try to structure the systems to reflect best practices,
but it is the vendor, not the customer, that is defining
what “best” means.

Do the system’s
Is it the best technical imperatives
way of doing SAP isn’t a
software coincide or conflict with
business ? the company’s business
package; it’s a
way of doing imperatives?
business
Case Study
Case : 1, Industrial
Products Manufacturer
Competitive Advantage:
deliver parts to customers
25% faster than its
competitors
If Enterprise System is
installed, the company
• has to follow a more
rational but less flexible
process for filling orders
• may Loose its service
edge, in turn, its
customers
Case : 2, Compaq Computer
Business Model: Build-to-stock
-> Build-to-order
Problem: Adopting processes
indistinguishable from those of
its competitors
Solution: Invested in writing its
own proprietary applications to
protect a potentially critical
source of advantage.
Case : 3, Air Products and
Chemicals
Evaluation result: Not to
install Enterprise System
Reasons:
• Cost of ES might for force
the company to raise its
prices, leading to lost sales.
• The existing system were
adequate to meets its needs.
• The company had no plans
to exchange information
electronically with
competitors.
Doing It Right at Elf Atochem

• $2 billion regional chemicals subsidiary of French company

• Fragmentation and no integration among 12 business units inefficient and untimely decisions
Background
Information

• Focus efforts on 4 key processes: materials management, production planning, order management, and
financial reporting
• Only installed the modules that were relevant to the processes
SAP R/3 System • Changes made in organizational structure
Implementation • Demand Manager position

• ES 75% complete & 9/12 business units back up and running

• Met all triple constraints of project management  on time, under budget, aligned with scope 
operating more efficiently and timely decisions being made
Results
The Role Of Management

• A speedy implementation of an enterprise

system may be a wise business move, but a
rash implementation is not.
• To view the installation of an enterprise
system as primarily a technological
challenge is particularly dangerous.
• If the development of an enterprise system
is not carefully controlled by management,
management may soon find itself under the
control of the system.
Job Search and Interviews
For the implementation and operation of ERP systems to be successful, a
knowledgeable staff is necessary. This includes end users, IT specialists,
and project manager(s).
IT specialists are staff members of the ERP implementation team. They
consist of database administrators, IT operations support, developers,
change managers, trainers, and others in the IT group that are involved
with the development and operation of the ERP system.
The project manager plays a very important role in the success or failure of
the ERP system. A good project manager is one that can put together a
harmonious team, work with top management in getting support and
resources for the project, and champion the system implementation and
communicate its benefits to the end users.
Questions for Audience
• When a company choose to implement an
Enterprise Systems, what questions should be
answered before any decision can be made??

• How similar can an organization’s information

flows and processes be to those of their
competitors before they begin to undermine
their own sources of differentiation in the
market?

IMG : http://worldartsme.com/images/free-idea-clipart-1.jpg
Thank you!!!