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Enterprise Resource Planning (ERP) Ryan Armstrong Andrea Miller Alex Brown.

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1 Enterprise Resource Planning (ERP) Ryan Armstrong Andrea Miller Alex Brown

2 ERP ERP is a software package that tries to integrate all departments and functions of a business into a single system.

3 ERP From technological aspect, ERP has evolved from legacy implementation to more flexible tiered client-server architecture. From business perspective, ERP has expanded from coordination of manufacturing processes to the integration of enterprise-wide backend processes.

4 What is ERP? ERP replaces the standalone computers in finance, HR, manufacturing and the warehouse, and creates a single unified software program divided into software modules that roughly approximate the old standalone systems ERP allows less data entry which in turn creates more time to focus on customer satisfaction.

5 Advantages of ERP Helps reduce operating costs such as such as lower inventory control cost, lower production costs, lower marketing costs and lower help desk support costs. Facilitate day-to-day costs, ERP systems offer better accessibility to data so that management can have up-to-the- minute access to information for decision making and managerial control. Support strategic planning, a deliberate set of steps that assess needs and resources; define a target audience and a set of goals and objectives; plan and design coordinated strategies with evidence of success; logically connect these strategies to needs, assets, and desired outcomes; and measure and evaluate the process and outcomes.

6 Who Provides ERP?

7 Implementation Phase implementation (such as Geneva) All at once. (The Big Bang like Hershey)

8 Cost of ERP Called total cast of ownership (TCO) TCO include getting the software installed and the two years afterward. Among the 63 companies surveyed— including small, medium and large companies in a range of industries—the average TCO was $15 million (the highest was $300 million and lowest was $400,000)


10 Hidden cost Training Integrating and testing Customization Data conversion

11 Pitfalls of ERP Resource shortage Budgetary limitations Low margin for error for operational Disruptions Using wrong ERP system

12 Case Study: Geneva Pharmaceuticals North American hub for the generics division of Novartis International AG Looking to streamline operations and reinvent company process ◦ Razor thin margins due to high competition ◦ Troubles outside the US ◦ Competitive advantage limits ability to deal directly with consumers Looking to implement SAP’s R/3 ERP System

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