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• Market statistics
– US ERP sales grew from under $1 billion in
1993 to $8 billion in 1998 (Dataquest, $14.5
billion worldwide).
– In 1998 US companies spent $80 billion on
ERP systems integration.
– Industry analysts expect an average rate growth
of 37% per year for the next 5 years.
Why all the fuss about ERP?
• Market statistics
– AMR estimates worldwide ERP software sales
to grow to $52 billion by 2002.
– If systems integration costs stay constant firms
will be spending $552 billion by 2002.
– Firms also spend about 15-20% annually to
keep ERP systems up to date.
What is ERP offering?
• ERP is business process infrastructure
– ERP is a software mirror image of the major
business processes of a firm, such as customer
order fulfillment and manufacturing.
– ERP software automates and integrates the
basic processes of a firm, from finance to the
shop floor, and eliminate complex, expensive
links between computer systems that were
never meant to talk to each other.
What is ERP offering?
• BAAN www.baan.com
• JD Edwards www.jdedwards.com
• Oracle www.oracle.com
• PeopleSoft www.peoplesoft.com
• SAP www.sap.com
Motivation for Implementing ERP
Industry
Bargaining power competitors Bargaining power
of suppliers of buyers
Suppliers Buyers
Rivalry among
existing firms
Threat of substitute
products or services
Substitutes
Fiveforcesdrivingindustrycompetition(Porter ). 1980
Motivation for Implementing ERP
Switching Competitive
costs advantage
Internal
efficiency
Comparative
Interorganization efficiency
efficiency
Motivation for Implementing ERP-
(inter-organizational efficiency)
• Better Supply Chain Management
• Inbound Logistics
• Operations
• Outbound Logistics
• Marketing And Sales
• Service
• Disintermediation and Market Reach
• Online Store Front
• Internet Banking
• Allows an organization to Reengineer all their
processes.
Reasons for Not Adopting Enterprise Systems
in product delivered
15. Ignorance of industry best practices
What is ERP Success?
• An ERP success can be a complete success-
one in which everything, goes off without a
hitch
What is ERP Success?
• How do you measure success?
• What are we trying to achieve? Scope,
Vision.
• Project Metrics.
• Early Operational Metrics.
• Longer Term Business Results.
What is ERP Success?
• Success is multidimensional and relative to both time
and objectives.
• What is success today may not be success in two years.
(Or 6 months)
• An ERP system that gives competitive advantage today
may not do so when competitors catch up and this large
ERP system simply becomes a cost of doing business.
• Success is often judged relative to the organization’s
unique goals for the system.
Factors in ERP Success
Factors External to an Organization’s Control
Starting conditions: Competitive position, industry,
financial position, prior relevant experience, size,
structure, management systems.
These conditions may change over the course of the
implementation.
ERP Implementations are highly fluid and subject to
radical and unforeseen changes.
An organization’s goals and plans for the ERP system
may not be realistic when viewed objectively in light
of their starting conditions.
Tips for Success
11 factors that were critical tp ERP implementation success.
The 11 factors noted by them are: