The Challenge of Integration

Objectives define ERP system discuss the motivations for integration outline some of the obstacles to

integration review the major benefits to integration

What is an ERP system?

A packaged business system that allows a company to:

automate and integrate the majority of its business practices

share common data and practices across the entire enterprise

produce and access information in a real-time environment

Motivation for integration technological problems operational concerns

technology motivations

6

11

12

19

26

37

42Y2K

unable to supportgrowth

obsolete systems

difficulty integratingacquisitions

systems not integrated

poor quality ofinformation

disparate systems

operational motivations

10

15

15

20

21

24

27poor performance

inconsistentbusiness processes

globalization

unable to supportstrategies

complex processes

not responsiveto customers

high cost structure

change managementstaff inadequacytrainingresource allocation

Obstacles to integration

PROCESSPROCESS TECHNOLOGYTECHNOLOGY

program managementreengineeringtransition

software functionalityapplication managementdata & reporting

PEOPLEPEOPLE

Obstacles to integration constantly changing technology lack of standards political and organizational issues shift to distributed computing private ownership of data / code

Benefits of integration

11

11

12

14

19

20

26

27

32inventory reduction

personnel reduction

productivity improvements

order mgmt improvements

financial close cycleimprovements

IT cost reduction

procurementcost reduction

cash mgmt improvements

revenue/profit increases

Examples of benefits Service Merchandizing - cost per order from

$50 to $12 (saving $7.5 million/year) RJR - $5-10 million/year Westinghouse - elapsed time/order reduced

from 15 days to 1/2 day (cost from $90 to $10)

Levi-Strauss - replenishment cycle from 14 days to three days

Summary defined ERP system discussed the motivations for integration outlined some of the obstacles to

integration reviewed the major benefits to

integration