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Putting the Enterprise into the

Enterprise System &

Other ERP Insights

Presented by Your Friends at Team Gold

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Big Picture

Enterprise Resource Planning (ERP)systems enable companies to Integrate

data throughout the entire organization.Typically Modular

FinanceMost popular

Human Resources

Operations and Logistics

Sales and Marketing

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CentralDatabase

Inventory and

Supply

Applications

Manufacturing

Applications

Financial

Applications

Back

Office

Sales and

Delivery

Applications

Service

Applications

Sales

Force

Human

Resource

Applications

Employees

ReportingApplications

Managers

Custom

ers

Sup

pliers

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Fast Facts

$10 billion per year industry

Major Software Suppliers/Integrators

SAP (e.g., NIKE, Weyerhaeuser/Norpac)

Baan

Oracle ( Used by Tektronix & Cisco in Cases)

PeopleSoft

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The Promised Land

Autodesk 2 weeks shipping to 24 hours

IBMs Storage Systems Division Reprice time from 5 days to 5 minutes

22 day shipping to 3 days

Credit check from 20 min. to 3 sec.

Fujitsu Order filling from 18 days to 1.5 days

Close financials from 8 days to 4 days

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The Dark Side

FoxMeyer Drug

Blames bankruptcy on ERP implementation

Mobil Europe

Abandoned implementation after $100 million

Dow Chemical

7 years, $500 million, then started over

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Only Three to Six Months, Huh

Time Issues

Be leery of short implementation estimates

Size of company Modules to be installed

Standardization vs. Customization and timeimplications

How long to train staff after the initialimplementation?

If, and how long, to run parallel legacy systems?

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They have the time if you have the $$$

Cost of implementation

Modular Decisions

Big Bang

Franchising Success Slam Dunk

Hidden Costs

Training of staff often miscalculated

Integration & Testing

Customization Conversion of Existing data

Data Warehousing Costs

What is Ed Warnocks true earning potential?

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To customize or not to customize

Standardization Easier implementation (in relative terms!)

Consultancy less likely to be indefinite

Software upgrades and module additions handled in less time andexpense

Is this really how we want out company to run though? Possiblesacrifice of a competitive advantage!

Customization Extended implementation (as well as maintenanceif it ever works)

Consultants will most likely move in for good

With upgrades or add-ons, the customization matrix has got to bereworked

Its great, but can our people really work with this?

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CIO ERP Thought: Why did I do it??

Organizational implications

Initial productivity losses

This doesnt work like the old system!! Panic by staffers.

Implementation is only the first step

Additional coding for reports, etc.

Ongoing maintenance

Employee retention

Positions backfilled

Poached by consulting firms

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ROI? Yeah, not for a while yet

Investment returns on ERP

Misconceptions of management

Possible positives (it could happen)

Integrated financial data great for roll-up

Heightened management of supply chain

Highly integrated information allow for greatdata mining and CRM by Sales & Marketing

departments

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CEO Thought: What

Happened?!?

The most successful ERP deployments involvedcompanies that viewed them in strategic terms.

They stressed the enterprise, not thesystem.

Main reason for failures is that companies fail

to reconcile the technological needs of the ERPwith the business needs of the enterprise.

The logic of the system may conflict with the logic of

the business.

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Key Learnings: Summary

If the development of an

enterprise system is not carefullycontrolled by management,

management may soon find itself

under control of the system.

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Questions to ask BEFORE an ERP

How will an ERP strengthen, or erode, our

competitive advantage?

What will be the effect on our organization?Do we need to implement the system across all

functions, or can we implement only certain

modules?

Are there other Enterprise systems which might

suit our needs better?

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What an ERP Wont DO!

ERP on its own wil l notimprove processes

ERP wil l notreduce inventory

ERP wil l notembrace customization with

easy upgrades

ERP wil l notyield immediate results

ERP wil l notrevolutionize or revitalize

your business

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ERPWrap up

Benefits:

Seamless integration of all company data -

integration of data from all functional areas Streamlines the companys data flows and

allows direct access to real time information

Costs:

Expensive Hidden costs

High costs to reorganize or redesign companyprocesses

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ERPFuture Highlights

Growth is forecasted to continue, although at aslower rate.

CRM and APS (advanced demand planningsoftware) will be the new functional nichecategories

ERP solutions will attempt to simplify their

product offerings and implementation approachesas they move to smaller markets

ERP solutions will offer web-enhancements totheir current systems