IST 600 ERP SYSTEMS:
Key Implementation Issues
Introduction to ERP Systems
SUMMER 2005
JUNE 6-10 2005
1
Introduction to ERP Systems
I. Course Intro
II. ERP Systems Intro
SUMMER 2005
JUNE 6-10 2005
2
Introduction – Who am I?
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Education:
 BS in Business Administration
 MS in Information Management
 MBA (specialized in Supply Chain & Global Entrepreneurship)
 Ph.D. in Information Science & Technology
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Certification:
 CPIM – Certified Production & Inventory Control Management
 PMP – Project Management Professional Certification (in
process)
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Experience:
 Strategy Consulting & Small business ownership in Turkey
 Technology Consulting (Booz Allen Hamilton)
 Web Consulting (U.S. Department of Transportation)
 SAP Implementation (Welch Allyn)
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Who are you?
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Your first name
Experience
Expectations for this class.
2 Truths and a Lie
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Expectations
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Student Expectations
My Expectations
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Enthusiasm about the course
Come prepared for the class (read the material!)
Try to visualize real world and apply what you
learned in class to real world situations
Course Goals (see syllabus)
Feedback Mechanisms For the Course
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WebCT (anonymous feedback)
Email/call/online chat/face to face conversation with me.
Surveys, etc.
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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My Teaching Philosophy
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Equip students with tools, methodologies and
principles that they can use in work settings.
Provide students with knowledge and ways of
thinking and acting that will enable them to
make successful strategic and tactical decisions
in work setting.
Motivate students to self-teach skills through
research and experimentation via the use of
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Assignments (structured, semi-structured, unstructured)
Research papers and other readings.
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Course Outline
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Day 1
 ERP Intro, ERP Lifecycle, Org Change Mgmt
Day 2
 Developing a Business Case for ERP Systems
 ERP Selection
Day 3
 ASAP Methodology Steps 1-2
 Business Process Reengineering
Day 4
 ASAP Methodology Steps 3-4
Day 5
 ASAP Methodology Step 5
 SAP Best Practices/ Lessons Learned
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Course Delivery Method
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Presentations
Case Studies (2)
Readings
Grades (Syllabus)
Assignments (Syllabus)
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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WebCT Usage
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Lessons & Readings
Calendar
Syllabus
Bulletin Boards
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Course Policy/Norms
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Grading Policy
Read the syllabus and check WebCT frequently!
Late assignments
Assignments– requested format/content, etc.
Feedback
Chat
Students vs. Professionals
How to Listen to Me and Guest Speakers
How to Read!
Teamwork –rules/grade, etc.
Sleeping / eating / drinking in class
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Team Break Out Session-I
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Team Building Exercise
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Strengths of each member.
When/where to meet for work.
Exchange phone numbers/email addresses.
Team rules
How will teams make sure there is fair contribution?
What will they do if somebody doesn't do his/her part?
Guidelines for grading team participation
Anything else?
Decide on the company you will work on for the course.
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Introduction to ERP Systems
I. Course Intro
II. ERP Systems Intro
SUMMER 2005
JUNE 6-10 2005
12
Introduction to ERP Systems
I. Course Intro
II. ERP Systems Intro
What is ERP?
Where Did ERP Come From?
What is SAP?
Some SAP Terminology
SUMMER 2005
JUNE 6-10 2005
13
So….What is an ERP System?
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Enterprise Resource Planning System (ERP)
Complete (?) Suite of Integrated Applications
Finance / Controlling
Accounting
Customer Service
Sales / Marketing
Human Resources
Engineering
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Single Integrated Database
Modular Structure
Similar Interfaces
Real-time updates
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Where Did ERP Come From?
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MRP
MRP-II
ERP
Material Requirements Planning
Manufacturing Resource Planning
Enterprise Resource Planning
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Manufacturing & Bills of Material
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Bicycle
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Frame
1
Seat
1
Rear Wheel Assy 1
Front Wheel Assy 1
Crank Assy
1
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Crank
1
Peddle Assembly 2
Nut
1
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Manufacturing Issues
Small Shop -> Number of items to order
 Larger Manufacturing company ->
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Mass production of many products.
Lots of parts to order and manage.
Procurement of some parts and
manufacturing of other sub-assemblies
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Material Requirements Planning
MPS - Bicycle
P/N 12345 - Gross Requirements
Summary of Forecasts and Actual Customer Orders
Period/ Work Days
QOH = 0
1
Gross Requirements
2
0
MRP - Front Wheel Assembly
QOH = 25
Order Lot Size 25
L/T = 1 Day
300
2
0
0
0
25
0
25
MRP - Tires
QOH = 25
Order Lot Size 200
L/T = 2 Days
300
300
0
25
0
0
5
250
6
50
7
0
200
8
9
100
10
0
0
3
0
0
0
25
225
4
5
250
0
225
0
50
6
50
0
50
0
0
0
0
0
0
200
7
200
0
200
0
100
8
9
100
0
100
0
0
10
0
0
0
0
0
0
0
0
0
0
P/N 23456 - Qty One Per on the Bill of Material
Period/ Work Days
1
Gross Requirements
Open Orders
Planned Due
Balance
ISTProjected
600 ERP
Systems:
Planned Orders
4
P/N 23456 - Qty One Per on the Bill of Material
Period/ Work Days
1
Gross Requirements
Open Orders
Planned Due
Projected Balance
Planned Orders
3
Key
0
0
0
25
25
Implementation
400
2
3
0
225
0
0
0
400
25
200
Issues
─
U.
0
0
4
50
0
0
150
Yeliz
200
5
0
0
0
150
Eseryel
0
6
200
0
200
150
0
7
100
0
0
50
0
8
9
0
0
0
50
0
10
0
0
0
50
0
0
0
0
50
0
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Big Picture: Planning At the Company Level
1
3
Strategic Business
Plan.
A 2-5 Year Horizon.
Annual Business Plan.
Annual Budget
process.
2
4
Sales Forecasts.
Actual Demands Customer Orders.)
Sales, Production &
Inventory Planning.
5
Master Production
Schedule.
(Anticipated build
schedule.)
5
5
5
Inventory Transactions
mrp Explosion.
(Demands thru BOMs
& inventory.)
Detailed Capacity
Planning.
5
5
Purchase Orders New PO Releases.
PO Reschedules.
Supplier Control
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Shop Floor Control.
Work Orders or JIT
Releases.
Reschedules.
19
Manufacturing Resource Planning.
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MRP II – 1980s
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Method for planning resources of a Mfg
company. It addresses operational planning in
units, financial planning in dollars, and has
simulation capability to answer “what if”
questions.
Links a variety of functions together integrated
with financial reports.
Result – one linked resource planning system.
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Product Lifecycle
1. Customer Orders – Customer
Service Rep. takes the order
 Do we have the inventory?
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If not- order parts or
manufacture them.
2. Order Manufactured
 The reduction in inventory
needs to be recorded.
3. Orders Packed
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Track packed orders,
packaging material, etc
4. Products Shipped
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Track shipped products.
5. Customer billed
6. Company financials and
customer payments
tracked
7. Repair
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Customer Service Rep
takes customer repair order
Checks info in the system.
8. Sales Rep- checks the
customer history from the
system.
9. Engineers- Store the
product designs, access
and change them.
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Enterprise Resource Planning
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ERP – Enterprise Resource Planning.
Late 90’s and 2000’s
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A new increased connection to suppliers.
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An increased connection to customers.
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Supply Chain Management.
Demand Management.
Customer Portals.
e-Business processes.
All linked to the ERP engine.
Better Integration of data and functionality
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Some ERP Systems
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Major Players
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BAAN
JD Edwards
PeopleSoft
Oracle
SAP
Smaller Ones
Open Source ones
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Compiere
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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What is SAP?
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Systems Applications Products
German Company with the Same Name (SAP)
SAP R/3
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Upgrades to the System -> Versions
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Release 3 of the software
3 Tier Client-Server Architecture
Version 4.6C
Version 4.7, etc.
Modular Structure
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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SAP Industry-Specific Solns
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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SAP Modules
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FI Financials
CO Controlling
MM Materials
Management
PP Production Planning
HR Human Resources
SD Sales & Distribution
CS Customer Service
PLM Production Lifecycle
Management
PS Project Systems, etc
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Terminology for
integration:
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Eg: PP-PI
Production Planning in
Process Industry
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Eg: SD-MM
Elements of Materials
Management that are
related to Sales and
Distribution
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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SAP Features
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Complete Suite of Integrated Applications
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Core business functions
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(Finance, Sales&Dist, Materials Management, etc.)
Industry specific solutions
Special solutions
Frequent new applications, upgrades and industry specific
bolt-ons
Open Systems Architecture
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Works with many hardware vendors (HP, IBM, DEC, etc)
Different Databases (Oracle, etc)
Various Operating Systems and GUIs.
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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SAP Features-continued
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Global Business Architecture
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Screens and Language
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>30 languages supported
Language is user driven
Multi-Currency
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Currency exchange rates
Tax issues based on country
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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SAP Features-continued
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Three-Tier Architecture
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Efficient use of processing power
Transparency between SAP apps. and PC apps.
Application
Data
Presentation
Client-Server Network
BASIS
Operating System
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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SAP Features-continued
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Audit Trail
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Very important for regulated industries
Can help you learn more about user behavior
Every person is accountable.
Data integrity
Connectivity
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Team Break Out Session-II
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Planning for “ERP Knowledge Portal”
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Work Breakdown Structure
Tasks
Resource Plan
Timeline
Risk Mitigation Plan
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Identify Risks
Categorize them by frequency and by criticality
Write mitigation steps.
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Introduction to ERP Systems
I. Course Intro
II. ERP Systems Intro
ERP Implementations:
Some Key Strategic Decisions
Implementation Methodology
SUMMER 2005
JUNE 6-10 2005
32
ERP Options
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Implementation Strategy
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Timeline
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Staff/Resources
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Pro’s and Con’s?
Big Bang Implementation
Phased (Roll Out) Implementation
Mini Big Bang (Combination of big bang and roll-out)
Outsourcing
In-house
Pro’s and Con’s?
Customization Level
Pro’s and Con’s?
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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ERP Timeline
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Can be used for any ERP implementation
Based on Project Management Methodology
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Project Initiation
Planning
Controlling
Execution
Closeout
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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ASAP Timeline
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Based on Accelerated SAP (ASAP) Implementation
Methodology
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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What is ASAP Methodology?
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Project Success With ASAP Meth.
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Phase-1 Project Preparation
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Phase- 2 Business Blueprint
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Phase-3 Realization
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Project Plan Outline for Realization
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Phase-4 Final Preparation
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Phase-5 Go Live & Support
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Sources
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Chris Keller- MRP Slides
Kenny Leung- SAP Summit 2005 Hong Kong
Doane, SAP Blue Book
SAP.com
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Questions?
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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Some Terminology
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Basis Software. The R/3 Basis is similar to an operating
system that specifically has the capability of processing
any of the SAP R/3 transactions. It’s a middleware
between the operating system and the servers that
allow for smooth operations across different servers,
operating systems, and databases.
ABAP: Advanced Business Application Programming
(ABAP/4), is a special-purpose, fourth generation
language developed by SAP, is used to write programs
for the specialized requirements of creating custom
reports, screens, user-defined functions, and special
industry solutions for use with the SAP R/3 System.
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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What is SAP Netweaver?
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A comprehensive integration and application platform,
SAP NetWeaver works with your existing IT
infrastructure to enable and manage change.
SAP NetWeaver embraces Internet standards such as
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HTTP,
XML, and
Web services.
Ensuring openness and interoperability with Microsoft .NET
and Java 2 Platform Enterprise Edition (J2EE) environments
such as IBM WebSphere.
IST 600 ERP Systems: Key Implementation Issues ─ U. Yeliz Eseryel
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