ERP AND IMPLEMENTATION MADE BY:

LAIBA RIZWAN (20191-

FAILURE IN HP 26233)
FINAL TERM PROJECT
 WHAT IS ERP?
 ERP software integrates all departments and functions onto a single system
that can serve the needs of the entire company.
 Some of ERP’s functions include:
 Bookkeeping & Accounting
 Human Resource Management
 Planning Production
 Supply-Chain Management
 HISTORY OF ERP

• ERP has its roots in the MRP and MRPII systems of the 70’s and 80’s.
• Came about as companies realized that the management and flow of
information was just as important as materials and inventory management.
• ERP has also evolved considerably with computer and technology advances.
 MRP systems had been integrating the production aspects of companies long
before ERP. The idea for ERP came about as companies realized just how
important the information flow was throughout the entire company. Initially
ERP systems were implemented on the cumbersome mainframes of the 70’s
and early 80’s but as technology has changed more and more companies are
using client-server technology because of cost effectiveness.
 COMPONENTS OF ERP
 Accounting and Finance • This gathers and manage financial data and
financial processes from various functional departments and generates
valuable financial reports such as balance sheet, general ledger; trial balance
and quarterly financial statements.
 Human Resources This component maintains a employee database containing
information about employees contact information, salarydetails, attendance,
performance evaluation and promotion details.  This component helps the
management to make use of the employees best talent.
 Manufacturing • This component provides the information needed for the
manufacturing process to take place. • It contains number of manufacturing
methods, so that the organization can choose the best which fits for them •
Bills of Material, Scheduling, Capacity, Workflow Management, Quality
Control, Cost Management, Manufacturing Process, Manufacturing Projects,
Manufacturing Flow.
 COMPONENTS OF ERP

  Project management is the discipline of planning, organizing, motivating, and

controlling resources to achieve specific goals. • Costing, Billing, Time and
Expense, Activity Management  Customer Relationship Management •
Involves managing all aspects of a customer’s relationship with an
organization to increase customer loyalty and retention and an organization’s
profitability. • Sales and Marketing, Commissions, Service, Customer Contact
and Call Center support. 
 Supply Chain Management : Supply Chain Management (SCM), sometimes
referred to as logistics, improves the flow of materials through an organization
by managing planning, scheduling, procurement, and fulfillment, to maximize
customer satisfaction and profitability.
ADVANTAGE OF ERP

  Business Integration
 Improved customer service and order fulfillment
 Improved communication with suppliers and customers.
 One common system - less duplication, more efficient.
 Reduce inventory.
 Saves enormous time and effort in data entry.
 Improved business performance.
DISADVANTAGES OF ERP

  High Software cost

 Consulting Fees.
 Forced change of processes.
 Very complex software
 Lack of trained people
 Not Internet-ready
ERP IMPLEMENTATION AND PHASES
 Biggest IT project that most companies ever handle,
 Changes the entire company, and has repercussions in all departments and
divisions of the organization.
 It is essential that all the key players understand the scope of the project.
 Concept/initiation
 Development
 Implementation
 Closeout/Operation and maintenance 
CAUSES OF ERP FAILURE

 Business mangers and IT professionals underestimate the complexity of the

planning, development, and training needed
 Failure to involve affected employees in the planning and development phases
 Trying to do too much too fast in the conversion process
 Failure to do enough data conversion and testing 
 BACKGROUND
•HP was started by Bill Hewlett and David Packard in 1938 with the purpose
of providing electronic instruments.
•Itsfirst product was an audio oscillator that was used to check sound
instruments.
•During 1960s, HP designed its first ever computer for measuring instruments.
•In
1989 HP became the leader of the market after purchasing Apollo
Computers.
 After a decade of facing ups and downs HP became the second largest
computer manufacturer in 2001; offering a range of products globally
including storage media, computers, printers etc
 Since 1989 HP was partnered with SAP to provide consultation for
implementing the SAP and ERP software
 SAP R/3 was first installed on an HP 9000 Enterprise Server.
 SAP customers perceived HP’s consultancy services highly accountable as
more than half of total SAP’s customers used HP’s systems
 IMPLEMENTATION
 HP planned to implement the SAP R/3 with the initial goal of reducing
delivery times, saving costs and establishing a global distribution system.
 By 2000, HP had more than 20 SAP R/3 systems implemented along with
having various SAP Graphic User Interfaces.
 Due to difficulty in dealing with customer’s orders, HP considered
implementing the MySap solutions.
 MySAP would reduce cost, make it easier to access information, remove
the need of getting customized SAP interfaces.
 The first MySap SCM software was implemented in the European Imaging
and Printing Division.
 With the objective to integrate relevant data into a single system and
forecast future procedures accurately.
 After the successful implementation, Hp decided to implement MySAP
SCM into its several other manufacturing facilities.
FAILURES
The problems can be categorized into 3 major categories:
• Working across silos
• Problems related to data integration
• Higher demand
The internal investigations found the following causes in failure of ERP implementation::
 Project tea formation
 Demand Predication problem
 Poor planning and irregular testing
 Insufficient implementation, support and training
IMPACT OF FAILURE

 Due to information integrity issues and a surge in demand for HP's

Standardized Servers, the structure soon became unreliable.
 The above issue impacted not only the ISS sector but also the Business Critical
and Storage sectors. Since the firm was unable to meet all demands, sales were
destroyed.
 To help speed up order fulfillment, the firm had to handle direct instructions
through distributors and other instructions by airplane.
 The company's earnings were harmed as a result of the extra expenditures.
 Consumers were dissatisfied with HP, and there were frequent concerns about sluggish
production, incorrectly configured structures, and even repeated orders.
 HP officials were optimistic that the issue would be resolved by mid-August 2004.
 Many of HP's clients, however, objected to the above statement, and the firm's order processing
issues persisted till September 2004
 According to statements in the press, HP did not publicly accuse SAP of the
fiasco. Analysts speculated that since HP and SAP had collaborated on several
major sales transactions, HP would never blame SAP.
LEARNING
 The organization of HP realized that the implementation failure can have an
adverse effect on the performance of the firm as a whole.
 Moreover, they realized the importance of mapping in implementing the ERP.
 Also, planning is also considered as one of the major tools of success of ERP.
 There should be no cross-functional boundaries, and the whole enterprise
should be integrated at all levels by appropriate processes and teams.
 According to ERP researchers, the market evolution of ERP was more about
project management than software resources.
CONCLUSION

 HP has seen its share of failures in today's world, where having a fully
functioning ERP system is critical to an organization's growth. They've learned
from their past ERP deployment failures and are now a certified global partner
with SAP apps, which has over 2 million users around the world.
 The advantages of maintaining a well-defined, well-managed, and streamlined
supply chain boost the organization's overall productivity and effectiveness.