1-1 • ERP Business Benefits • Quality and efficiency: ERP creates a framework for integrating and improving a company’s internal business processes that results in significant improvements in the quality and efficiency of customer service, production, and distribution • Decreased costs: Significant reductions in transaction processing costs and hardware, software, and IT support staff • Decision support: Provides vital cross-functional information on business performance quickly to managers to significantly improve their ability to make better decisions in a timely manner • Enterprise agility: ERP breaks down many former departmental and functional walls of business processes, information systems, and information resources • ERP Costs • Risks and costs are considerable • Hardware and software are a small part of total costs • Failure can cripple or kill a business Benefits and Challenges of ERP

1-1 ERP Business Benefits Quality and efficiency: ERP creates a framework for integrating and improving a company’s internal business processes that results

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1-3 Causes of ERP Failures Most common causes of ERP failure Under-estimating the complexity of planning, development, training Failure to involve affected employees in planning and development Trying to do too much too fast Insufficient training Insufficient data conversion and testing Over-reliance on ERP vendor or consultants

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1-1

• ERP Business Benefits• Quality and efficiency: ERP creates a framework for integrating and

improving a company’s internal business processes that results in significant improvements in the quality and efficiency of customer service, production, and distribution

• Decreased costs: Significant reductions in transaction processing costs and hardware, software, and IT support staff

• Decision support: Provides vital cross-functional information on business performance quickly to managers to significantly improve their ability to make better decisions in a timely manner

• Enterprise agility: ERP breaks down many former departmental and functional walls of business processes, information systems, and information resources

• ERP Costs• Risks and costs are considerable• Hardware and software are a small part of total costs• Failure can cripple or kill a business

Benefits and Challenges of ERP

Page 2: 1-1 ERP Business Benefits Quality and efficiency: ERP creates a framework for integrating and improving a company’s internal business processes that results

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Costs of Implementing a New ERP

Page 3: 1-1 ERP Business Benefits Quality and efficiency: ERP creates a framework for integrating and improving a company’s internal business processes that results

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Causes of ERP Failures

• Most common causes of ERP failure• Under-estimating the complexity of planning,

development, training• Failure to involve affected employees in planning and

development• Trying to do too much too fast• Insufficient training• Insufficient data conversion and testing• Over-reliance on ERP vendor or consultants

Page 4: 1-1 ERP Business Benefits Quality and efficiency: ERP creates a framework for integrating and improving a company’s internal business processes that results

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Trends in ERP

Page 5: 1-1 ERP Business Benefits Quality and efficiency: ERP creates a framework for integrating and improving a company’s internal business processes that results

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Trends in ERP

• Flexible ERP: This makes the software easier to integrate with other application programs of business users, as well as making it easer to make minor modifications to suit a company’s business processes.

• Web-enabled ERP: These features make ERP system easier to use and connect to other internal application as well as to the systems of company’s business partners.

• Interenterprise ERP: This Internet connectivity has led to the development of interenterprise ERP systems that provide WEB-enabled links between key business systems (such as inventory and production) of a company and its customers, suppliers, distributors and others.

Page 6: 1-1 ERP Business Benefits Quality and efficiency: ERP creates a framework for integrating and improving a company’s internal business processes that results

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• E-business Suites: The major ERP software companies have developed modular, Web-enabled software suites that integrate ERP, customer relationship management, supply chain management, procurement, decision support, enterprise portals, and other business applications and functions. Example: Oracle’s e-business suite and Sap’s mySAP.

Trends in ERP