A complete guide of Oracle ERP System. It is the most advanced system of current market scenario. A brief written content with the help of researchers, scientists and engineers. Oracle is targeting the current ERP market and increasing their productivity and providing a better solution for Organizations to improve there business.
3. Outline:
Define ERP and understand
What is new about ERP today?
Characteristics of an ERP System
ERP Pitfalls
4. Define ERP
Enterprise Resource Planning (ERP) is a software that is
capable of managing and integrating the day-to-day activities of
your business. It streamlines and automates the various
processes and facilitating effective operation across functions
like procurement, inventory management, asset
management, sales management etc. In short, it will help you
to have a 360 degree view of your business. In current times, it
has become a much-needed solution to ensure better
productivity and business growth.
5. Understand
ERP
The main purpose of an ERP system is to increase
organizational efficiency of an organization by managing and
improving how company resources are utilized. Improving
and/or reducing the number of resources necessary without
sacrificing quality and performance are keys to effectively
improving business growth and profitability.
7. History of
ERP I
The term “ERP” was first used in the 1990s by the Gartner
Group, but enterprise resource planning software and systems
have been used in the manufacturing industry for over 100
years and continue to evolve as industry needs change and
grow.
ERP History/Timeline:
1913: An engineer named Ford Whitman Harris developed the
Economic Order Quantity (EOQ) model, a paper-based
manufacturing system for production scheduling.
8. History of
ERP II
• 1964: Toolmaker Black and Decker adopted the first Material
Requirements Planning (MRP) solution that combined EOQ
with a mainframe computer.
• 1970s-1980s: Computer technologies evolved and concept
software handled business activities outside of
manufacturing, including finance, human resources data, and
customer relationship management (CRM).
9. History of
ERP III
• 1983: MRP II was developed and featured “modules” and
integrated core manufacturing components, and integrated
manufacturing tasks into a common shared-data system.
• 1990s-2000s: Gartner Group coins term “ERP” to
differentiate from MRP-only systems. ERP systems expanded
to encompass business intelligence while handling other
functions such as sales force automation (SFA), marketing
automation and eCommerce.
10. History of
ERP till today
2000-2005: Cloud-based ERP software solutions arrive when
ERP software makers create “Internet Enabled” products,
providing an alternative to traditional on-premise client-server
models.
Today: Software-as-a-Service (SaaS) and Anything-as-a-
Service (XaaS) offer new delivery models for ERP. Remote
web-based access for cloud ERP solutions provide mobile
solutions, security, and integration with the changing
industries and smart technologies, including integrations with
the Internet of Things (IoT), Internet of Everything (IoE), and
even social media to provide comprehensive solutions for
every industry.
12. What is new
about ERP
today?
Cloud ERP—A new ERP delivery model
Software-as-a-service (SaaS)
Enter the cloud—specifically, the software-as-a-service
(SaaS) delivery model for ERP. When ERP software is
delivered as a service in the cloud, it runs on a network of
remote servers instead of inside a company’s server room. The
cloud provider patches, manages, and updates the software
several times a year—rather than an expensive upgrade every
5 to 10 years with an on-premises system.
13. What is new
about ERP
today?
The cloud can reduce both operational expenses (OpEx) and
capital expenses (CapEx) because it eliminates the need for
companies to purchase software and hardware, or hire
additional IT staff. These resources can instead be invested in
new business opportunities, and the organization is always up-
to-date on the most recent ERP software. Employees can shift
their focus from managing IT to more value-added tasks such
as innovation and growth.
15. Characteristic
s of an ERP
System
What are the main characteristics of an ERP system?
An integrated system
Before to maintain and keep track of all of a business’s
operations, a business may be using multiple systems like CRM
(customer relationship management) software, an HR software,
payroll software and so on. An ERP system can be customized to
fit in all the software in one place that will help run your business
in one uniformed program.
The system Operates in (or near) real-time
Depending on the job it is tasked with, most ERP systems
run on real time or close to real time. That means when inputting
data, or maybe even doing something as simple as an inventory
check, the system will be up to date.
16. Characteristic
s of an ERP
System
A consistent look and feel across modules
Having an all-in-one system helps so that you’re not having to
learn and remember where all the tools you need to get the job
done are located on what program. With ERP, a business only
has to worry about the one interface and the modules within.
Multiple Deployment options
On-Premises – servers would be located within the offices.
Hybrid – This means that there may be servers on site but the
system may also be hosted through a service online.
SaaS – SaaS (Software as a service) would have the ERP as
stored and accessible on a subscription-based service much like
the Cloud.
17. ERP Pitfalls
Some common pitfalls of ERP implementation
The decision to deploy a new ERP (Enterprise Resource
Planning) software solution takes not only monetary resources,
but expertise, effort and extensive communication.
A detailed plan goes a long way towards a successful ERP
software implementation and helps organization avoid the most
common pitfalls associated with ERP solution installs.
18. ERP Pitfalls
In order to achieve the full potential that a new ERP system
brings, it’s vital that time is taken to come up with a viable,
long-term plan of action to support it.
So, how can an organization avoid running into difficulty
when implementing an ERP solution? Using these
guidelines, you can alleviate some of the initial stress by
avoiding the most common obstacles.
19. List of
common ERP
pitfalls
1) Lack of planning
2) Resistance to change
3) Picking the right ERP software provider
4) Poor communication and feedback
5) Inadequate training
6) Time and resources
7) Neglecting maintenance / updates
20. 1) Lack of
planning
Whilst this might seem the most obvious piece of advice – a
properly planned venture is one that has accounted for both
enterprise-wide and individual needs. It is important to conduct
an in-house analysis of problems that need to be addressed by
the introduction of an ERP software solution. Once you have
regulated all policies and business processes, you will begin to
see the wider picture of requirements and capabilities you
desire from an ERP system.
21. 2) Resistance
to change
Organizational resistance can be one of the biggest barriers
when implementing a new ERP system. If the advantages of a
new system are not adequately and enthusiastically explained
to management and employees alike, it is unlikely that the
change will be accepted and incorporated into their everyday
working processes. It is important to combat user resistance as
it can be one of the biggest reasons that the benefits of a new
system are not fully felt and in turn, hinder deployment.
22. 3) Picking the
right ERP
software
provider
Whilst there are numerous ERP software providers and
systems it is important to source a partner that will be able to
confidently address your industry-specific problems. At
Syscom, we only provide software and support to clients where
we have precise industry knowledge and expertise. The
industries we implement into
are: manufacturing, distribution, furniture, and apparel.
We have even developed unique industry applications based
on feedback and collaboration from key industry players
(discover ApparelX for fashion manufacturers &
distributors and Syscom 365 Furniture for the furniture
manufacturing industry.)
23. 4) Poor
communicatio
n and
feedback
As previously addressed, a resistance to change can be one of
the pitfalls of ERP implementation. But that problem can be
amplified by poor communication with staff and feedback not
being listened to. If individual workflow changes aren’t
addressed throughout the process of implementing ERP
software, employees won’t be able to adapt to the system or
achieve the goals set for them and will quickly turn to what they
know best, or find workarounds. It is important to make sure
that employees who will be using the ERP system have their
comments or concerns heard.
24. 5) Inadequate
training
Dedicating time to educate users about the software is crucial
as it affects not only processes but the entire operation of the
business. Training can often be something that is thought about
much later in the progress of a project, but it is a reoccurring
theme within implementation failure as inadequate users aren’t
productive workers. Project teams and users need to be made
aware how their tasks will be made easier and be briefed on
how they can apply the software to their everyday role. A new
software system can appear overwhelming to begin with.
25. 6) Time and
resources
Most companies massively underestimate the complexity of an
ERP implementation and by not adequately assessing how
much time and resource an implementation will need, sets
unrealistic expectations surrounding the project. Often the
result of poor planning, if you underestimate what is required
throughout the duration of the project it will ultimately only
mean an extension on deadlines, a budget overspend and a
delay to going live.
26. 7) Neglecting
maintenance
/ updates
Once an ERP system is in place it is important to regularly
review how the system is supporting the processes of the
business. Organizations are constantly evolving, whether
opening a new warehouse or introducing new specifications to
product. An ERP software solution needs to be continually
refined to grow with the business to remain the effective tool
you bought. Keeping your system up to date will protect your
data within the software and maintain your current processes.
29. Outline:
Cost drivers to be considered for ERP
ERP Implementation
Typical Costs of Implementing a new ERP system, such as
initial acquisition & installation costs, and ongoing costs.
Benefits of an ERP system
Understanding importance of process in ERP systems, ASIS
and TOBE stages
31. Cost drivers
to be
considered
for ERP
1) Components of a budget
2) Justify the cost of new ERP Software
3) Decide which pricing model suits your company best
4) Decide which features you need
5) Calculate installation cost
6) Compile your budget
32. 1)
Components
of a budget
Even if you already have the green light to invest in a new
ERP system, you will need to set your budget and justify the
costs. While not all of these components will apply to all
implementations, they should all be considered in order for
you to decide which ERP is right for your business. Here are
some of the key components in planning the cost of ERP:
• Software licensing fees
• Additional servers and network hardware
• Data conversion and transfer to new ERP
33. 1)
Components
of a budget
• Customization if necessary
• Testing
• Training
• Vendor/consultancy support post implementation
These are the most tangible costs to include in your budget
but you also need to think ahead to budgetary banana skins
and make room for contingencies. We will go into the hidden
costs a little further on.
34. 2) Justify the
cost of new
ERP
Software
Speeding up order to cash cycle, increasing productivity,
improved business intelligence...ultimately though, ERP
software needs to be justified with a solid ROI projection.
There are many reasons a business would want to buy a new
ERP system. Among the most common are increasing
productivity, improving business intelligence resulting from
better data capture and analysis, accelerating order to cash
cycle and reducing labor costs.
35. 2) Justify the
cost of new
ERP
Software
However, when other business units are also shouting for
budget allocations, you need to be sure that you can not only
justify the expenditure now but that it will prove to be justified
later.
You will need to justify the ERP cost by choosing the right
pricing model for your business as well as being
meticulous about exactly which features and modules you
need and what you expect your ERP to deliver in financial
value. Not all modules will benefit all businesses, so make
your decision carefully.
36. 2) Justify the
cost of new
ERP
Software
• Financial management
• CRM
• Sales and marketing
• HR management
• Manufacturing/engineering/production
• SCM
• Inventory management
• Purchasing
37. 3) Decide
which pricing
model suits
your
company best
There are two readily accepted pricing models for ERP
purchase, each with their own set of pros and cons. There are
also hybrid options which borrow parts from each model, but
in order to grasp what will work best for your organization,
you need to understand the main differences between these
two.
38. 3) Decide
which pricing
model suits
your
company best
The perpetual licensing model (aka on-premise systems)
This model allows a business to host the software on their
own servers on-premise. It can be a wise choice for large
businesses but more difficult to manage for smaller
businesses without the infrastructure already being in place to
support it.
The initial outlay for sufficient hardware can make this model
challenging for small businesses but for those with existing
hardware capacity, it can actually be a cost-saver. Here are
the main pros and cons:
39. 3) Decide
which pricing
model suits
your
company best
Advantages
• Well-defined cost of ownership
• Allows permanent use of license without ongoing subscription
costs
• May offer lower total cost of ownership (TCO) for larger
businesses over time
40. 3) Decide
which pricing
model suits
your
company best
Disadvantages
• Upfront costs for onsite infrastructure can be prohibitive for
medium and small businesses
• Can be expensive to scale as a business grows due to the
need for further infrastructure upgrades
41. 3) Decide
which pricing
model suits
your
company best
The SaaS subscription model (aka cloud-based systems)
The SaaS model is increasingly popular with smaller
businesses with their eyes on growth and flexibility. Given
that this model incorporates cloud-based hosting, a small
business need not invest in a hefty infrastructure overhaul or
large upfront license fee. Of course, it is not the best fit for
every business so here is a quick snapshot of the SaaS pros
and cons:
42. 3) Decide
which pricing
model suits
your
company best
Advantages
• Subscription pricing can be based on user numbers or
transaction volumes to give greater flexibility and scalability
• Lower upfront costs due to lack of necessity for on-premise
hardware extension
• Lower initial outlay for license
43. 3) Decide
which pricing
model suits
your
company best
Disadvantages
• Ongoing subscription costs could outweigh the costs of
Perpetual License for larger businesses that could have
utilized existing infrastructure on-premise
• Sudden spikes in demand can increase costs under any on-
demand license agreement, making cost management more
complex over time
44. 3) Decide
which pricing
model suits
your
company best
In order to choose between the two, you will need to
undertake an audit of your existing infrastructure, project your
user/transaction growth rate and take other ERP
implementation costs into consideration.
45. 4) Decide
which feature
you need
One of the biggest pitfalls in any tech investment is the
potential to be oversold. There are many features that sound
exciting but you will never use, whereas some may be
needed later. To calculate the right ERP budget and invest
wisely, choose only the features that you need.
Must-haves will usually include accounting, financial
management tools and inventory management, but not all will
need a B2C commerce interface or CRM module, for
example.
46. 4) Decide
which feature
you need
There could also be features that you don’t need today but
might need in the near future. For example, you might not
need multi-currency or multilingual capabilities in your
financial module right now, but if you are soon to be launching
in new markets, it could be cheaper to include these features
from the outset rather than having to retrofit later.
47. 5) Cost
Installation
Cost
Installing the software itself will vary from provider to provider
and from enterprise to enterprise, especially if you are going
with an on-premise model but do not yet have sufficient
infrastructure to support it. In order to fully understand
installation costs, you will need to audit your current
infrastructure to see if it measures up to hosting the software
and then calculate the costs of expansion.
48. 5) Cost
Installation
Cost
Forecasting for hidden costs
The most common hidden, underestimated or just plain
forgotten costs of ERP implementation are staff training,
unanticipated customization and data conversion. You can
mitigate many of the ‘hidden costs’ by anticipating the extra
work, training, and features that your new ERP requires.
However, there are often costs that come along later, after
implementation, that you need to make provisions for.
49. 5) Cost
Installation
Cost
Sometimes, despite the best planning, you may find that you
need to re-engineer some of your internal processes; this can
take time and resources that you had not planned for. If this
won't work, then you may need to go back to your vendor for
customization that you didn’t originally budget for.
50. 5) Cost
Installation
Cost
This, in turn, can mean retraining too, meaning more time and
more resources you hadn’t planned for. However, there are
often hidden bonuses to implementation that will counteract
the costs, and having around 10% contingency budget built
into your ROI projections will stand you in good stead for any
unforeseen expenditure.
51. 6) Compile
your budget
Now that you have given some thought to what you expect
from your ERP, what you do and do not need and which
pricing model might be the best fit for your business, it is time
to start getting in the quotes. Vendors and consultants can
give you guidance and you can make comparisons
accordingly.
Use the vendor quotes to help hone your budget forecast but
always be mindful of future costs, agility and ensuring you
choose the features that will deliver a tangible benefit to your
organization.
52. 6) Compile
your budget
Forecasting your ROI
After much deliberation over budgets and costs, it is equally
important to project expected returns. Assigning a value to
your ERP implementation means going back to the original
reasons you started the project. Reporting on cost-savings
resulting from your ERP may even extend beyond those
original objectives. Here are some of the main areas to look
for an ROI:
53. 6) Compile
your budget
• Labor cost reductions: did you actually eliminate excess
resources or simply allow them more thumb-twiddling time?
• Improved cash to order cycle: have you seen the
improvements you projected when you first set out?
• Supply chain management: have you seen improved
quality, reduced prices, improved inventory management?
This guide should give you the starting blocks you need to
create a comprehensive ERP budget for your project, as well
as a good way to estimate your total ERP cost.
55. Phases of
ERP
Implementati
on
1) The Discovery Phase
2) The Project Planning Phase
3) The Service Selection & Evaluation Phase
4) The Customization and Testing Phase
5) The Deployment Phase (Go-Live)
56. 1) The
Discovery
Phase
Discovering the needs of ERP implementation is the first and
foremost step towards your process automation planning.
Before going through the multiple phases of ERP
implementation, the two most common yet important aspects
are 'When' and 'Why' ERP?
57. 1.1) When
should ERP
be
Implemented
?
There may be a global buzz towards business process
automation, tougher competition, and some process
optimization requirements that might bring up the thought of
ERP implementation but how we'll come to know when is the
best time for us to automate our business processes?
Well, multiple signs can help us decide this. There may be
multiple software on which different departments are running,
there may be less transparency and sync between processes
and require a manual tally mechanism to match up with data
from different departments, data becoming unmanageable,
scaling up of business, etc. and all of these shouts for the
requirement of a centralized ERP software needs.
58. 1.2) Why do
we need an
ERP
Implementati
on?
There may be a global buzz towards business process
automation, tougher competition, and some process
optimization requirements that might bring up the thought of
ERP implementation but how we'll come to know when is the
best time for us to automate our business processes?
Well, multiple signs can help us decide this. There may be
multiple software on which different departments are running,
there may be less transparency and sync between processes
and require a manual tally mechanism to match up with data
from different departments, data becoming unmanageable,
scaling up of business, etc. and all of these shouts for the
requirement of a centralized ERP software needs.
59. 2) The Project
Planning
Phase
A well-planned project is a must for ERP implementation.
From the appointment of an efficient project team to examine
all the current workflows and define goals for ERP service, to
budget allocation at first place, all becomes mandatory in the
project planning phase for ERP.
60. 2) The Project
Planning
Phase
The project team shall be appointed with the necessary
leadership to carry on with the ERP implementation process
journey. Such a team generally includes an executive for
budget allocation, project managers, business process
experts, or the concerned department representatives along
with IT leaders. From preparing the project plan, important
timelines, resource allocation, and daily management, the
project team shall be responsible.
61. 2) The Project
Planning
Phase
The business process experts (can be leaders from
concerned departments) in the project teams are mostly into
defining requirements for ERPs along with possible
improvements in the current workflow with all possibilities of
growth and scalability in the future.
The executives may help decide the budget allocation based
on the requirements set by the process leadership. The team
shall collaboratively document all the specifications and KPIs
based on which they can monitor the ERP service's benefits
and add-ons for the business.
62. 3) The
Service
Selection and
Evaluation
Phase
The requirement analysis will provide you with answers for
why an ERP system is required and for what goals. Along
with this, the requirement analysis will also speak up for the
type of service that is required in your case. Based on the
goals and timelines, there can be two categories in 2022 that
you can choose from, i.e. having an on-premise system or
subscribing to a Cloud-based ERP service.
If you are preferring to go for the robust Cloud-based ERP
services, the process will deviate accordingly and the next
step would possibly be the package selection.
63. 3) The
Service
Selection and
Evaluation
Phase
The twenty-twenties is a decade of a high trend for cloud-
based ERP solutions that are easily customizable, fastest to
implement with high flexibility and scalability as the super-
strengths. There are multiple service providers across the
globe with all needs brought on a single centralized system
for complete resource planning across all departments. But,
choosing the best ERP software for your business is highly
dependent on your business process.
64. 3) The
Service
Selection and
Evaluation
Phase
Once you are done with the service selection, the next thing
is the package selection that is desired. Service providers
have ERP solutions for all departments, but your
requirements may be more or less. The selection of the right
packages may help you to get the SaaS as required along
with the best subscription prices.
65. GAP Analysis
It's a crucial evaluation phase in the ERP implementation life
cycle. In this phase, the Gap analysis is done which speaks
up for the missing sync between the requirements and the
ERP offerings. This gap analysis shall be taken into account
with the leadership to ensure you get the ERP to meet all the
functional requirements for your business.
Service agreements with ERP vendors can be the final point
to discuss here. Your package selection with the number of
users may give you a clear idea regarding the subscription
price regularly and can help build your contract with the
service provider.
66. 4) The
Customizatio
n and Testing
Phase
After the software selection and evaluation phase, here starts
the job of your cloud ERP solutions provider. This phase
involves work mainly on the service vendor's end yet it may
involve multiple meetings and discussions for process
improvements and re-designing of customized modules.
Complete configuration with safe Data Migration is the critical
process involved here.
67. 4) The
Customizatio
n and Testing
Phase
Testing can go parallel with the development phase, as the
team can monitor and test-verify specific modules that are
ready. Various re-testing and amendments can be suggested
where required. The better you collaborate with your ERP
vendor in this phase; the best results can be brought up with
the project.
68. 4) The
Customizatio
n and Testing
Phase
Meanwhile, the team is supposed to work on necessary
documentation and training materials for their end-users. The
project team is not just responsible for carefully listening to
the end user's issues and concerns, but needs to also help
them understand the reason, goals, and benefits of ERP
implementation. ERP implementation is a complex process
and hence, you will have to look for well-organized ways of
training users, which is only possible with two-way
communication with them.
69. 5) The
Deployment
Phase
With the final testing of the ERP modules and training of end-
users, the ‘day’ has arrived, when you are finally ready for the
actual implementation process. Still, we need to keep all the
rush aside and be ready for the downtime and other issues
on our way. We shall be more patient at this phase and be
highly resistant to the changes.
The Various Trends in ERP Deployment
Organizations adopt different approaches when it comes to
going live with a new set of software. 3 key common
approaches that can be chosen for ERP implementation
include:
70. 5) The
Deployment
Phase
1. The big bang approach: A highly popular approach
among various big businesses. With the big-bang approach,
the software is installed in one-go on a go-live date for entire
teams of the organization including sales, finance, operations,
marketing, etc. Thus, requires a lot of planning, as a single
mistake has the potential of affecting all business functions.
71. 5) The
Deployment
Phase
2. The phased approach: As the name suggests, in this
approach organizations plan phased implementation as per
the department, location, manufacturing unit, etc. The risk is
lower as it will not have a huge impact on the entire business
at a time and things can be quickly tackled in case of faults.
72. 5) The
Deployment
Phase
3. The parallel approach: In this approach, teams integrate
a new parallel system, while the older one is already in
function. This again minimizes risks involved in
implementation, as you already have the old system running
parallel to back switch to. However, running two systems at a
time comes with its own set of technical glitches including
issues like data synchronization as well as issues with the
end-users.
73. How long
does it take to
Implement an
ERP System?
ERP implementations take six months? No way!
A lot of companies in the late-90’s, 2000’s and early-2010’s
thought they would get a company off the ground just by
picking up an ERP system from their local reseller and be
running smoothly three months after the installation.
74. How long
does it take to
Implement an
ERP System?
Those companies were wrong. Agile, ever-changing business
models require agile, ever-changing business software.
With today’s modern Cloud ERP Software technology
companies can expect quicker implementations with better
integration between their current systems and their new
business software.
75. The Essence
ERP implementation process is a major project that can be
an exciting and great learning experience for the whole
project team. The inside-out process journey and optimization
cycles can boost up the process knowledge along with the
real value i.e. automation. The implementation process
experiences shared by various industry leaders show how
they have gone through the unnoticed finer points of their
business process became added a great experience to their
profiles.
76. The Essence
Remember, it's always teamwork when it comes to
optimization and automation. Your ERP implementation cycle
if went well, can thrive the business process and help the
business touch skies with its real-time cost-cutting and saving
mechanism.
77. Benefits of an
ERP System
i. Enhanced Business Reporting
ii. Better Customer Service
iii. Improved Inventory Cost
iv. Boosted Cash Flow
v. Cost Savings
vi. Better Data & Cloud Security
vii. Business Process Improvements
viii. Supply Chain Management
78. 1.
Enhance
d Business
Reporting
• Better reporting tools with real-time information
• A single source of truth – one integrated database for all
business processes
79. 2. Better
Customer
Support
• Better access to customer information
• Faster response times
• Improved on-time delivery
• Improved order accuracy
80. 3. Improved
Inventory
Costs
• Only carry as much inventory as needed, avoid these
common issues
• Too much inventory, and higher overhead costs
• Too little inventory, and longer customer fulfillment times
81. 4. Boosted
Cash Flow
• Better invoicing and better collections tools to bring cash in
faster
• Faster cash means more cash on-hand for the business
