1. Examples of enterprise systems

2. Core enterprise data: Mapping to application types
Orders
Purchases
Customers
Shipments
Marketing
Planning
Service
Supply Chain
Management
Customer
Relation ship
management
Billing
Inventory
Project management
Assets
ERP
Accounting HR
As an alternative to pure integration for some classes of application consolidation is chosen
In some cases, the solution is a mix of integration and consolidation
CRM, SCM and ERP are common examples of enterprise applications

3. Example 1: ERP Systems

4. What is ERP?
ERP stands for Enterprise Resource Planning, which is a software system that:
Takes an enterprise approach to integrating and optimising business processes across departments (finance, HR, sales, etc).
Provides consistent information for timely decision-making and performance measurement

5. ERP vendors and market
The ERP market consolidated considerably leaving SAP and Oracle as leaders.
Oracle acquired PeopleSoft who had acquired JD Edwards
Typical of maturing technology markets which have 2 leaders and a few niche players
There are also specialised vendors
Infor (GEAC, SSA) – consolidator/vertical niches
Microsoft Dynamics - SME
Open source projects are not widely used
Unclear if they will gain ground
This lecture will cover general ERP issues but focus on SAP as an example.
This is not an advert for SAP!

6. Example Requirement: Customer service
Provide agent with a single point of access from which they can complete the order
Check information (availability of items, pricing and credit)
Request initiation of internal processes (manufacturing, delivery)
Provide reliable information to the customer (delivery date, price)
But associated data and processes relate to different functions within the organisation which may be in different systems.

7. Potential Solutions Integration of existing function based systems
EAI is the solution
Consolidation into a single application with a consistent set of process and data models
ERP is the solution
In most cases, an enterprise will combine both approaches
Consolidate in some places
Integrate in other places

8. Enterprise Resource Planning
An ERP deployment consists of
Integrated modules
Common process and data models and definitions
Common database
Update one module, automatically updates others
ERP is
More about business process change than technology
An approach to managing all resources and their use in the entire enterprise in a coordinated manner
A set of integrated business applications, or modules which carry out common business functions such as general ledger, accounting, or order management
An approach to supporting business through optimizing, maintaining, and tracking business functions
Focused on value chains, rather than individual functions

9. Typical Technical Architecture
N-tier architecture
Database server with a single data model (multiple servers hosting a distributed database )
Application logic servers with process models (multiple servers, distributed )
Web/Internet server
Presentation level (browsers)
Provides an integration layer to enable integration of external systems into the ERP system.

10. Functionality of an ERP e.g. mySAP

11. Functionality of an ERP e.g. mySAP
Integrate SAP systems
Portal
Data Warehouse
Technology to integrate people, information and business processes across technologies

12. Functionality of an ERP e.g. mySAP
Management of travel costs and expense claims
HR: Workforce compensation
Managing corporate liability
Management of property etc
Traditional ERP: Controlling areas of most expense

13. Functionality of an ERP e.g. mySAP
Traditional ERP: All the well-known value chain processes: Order to cash etc.

14. Functionality of an ERP e.g. mySAP
Human Capital Management: support of line management, retention/recruitment, global HR planning and management

15. Functionality of an ERP e.g. mySAP
Financials: Automation of finance functions to minimise costs. Speed up the preparation of financial information. Compliance, better management of free cash resources

16. Functionality of an ERP e.g. mySAP
Analytics: Optimisation and automation of planning, analysis of performance, management accounting support.

17. mySAP Business Suite Solutions
Cross-Industry Solutions
mySAP Workplace
mySAP CRM
mySAP SCM
mySAP Marketplace
mySAP E-Procurement
mySAP BI
mySAP PLM
mySAP HR
mySAP Financials
mySAP Mobile Business
Industry Solutions
mySAP Aerospace & Defense
mySAP Automotive
mySAP Banking
mySAP Chemicals
mySAP Consumer Products
mySAP Engineering & Construction
mySAP Financial Service Provider
mySAP Healthcare
mySAP High Tech
mySAP Higher Education & Research
mySAP Insurance
mySAP Media
mySAP Mill Products
mySAP Mining
mySAP Oil & Gas
mySAP Pharmaceuticals
mySAP Public Sector
mySAP Retail
mySAP Service Providers
mySAP Telecommunications
mySAP Utilities
Infrastructure and Services
mySAP Technology
mySAP Services
mySAP Hosted Solutions
Many variants of the horizontal ERP package are available for specific industy needs.
There are also some niche ERP vendors focusing exclusively on individual industries.

18. The user view of an ERP:
Login screen

19. The user view of an ERP:
Choose your options

20. The user view of an ERP:
Create a requisition

21. The user view of an ERP: Create a requisition (II)
ERP implementations may contain 1,000s of screens
ERP embeds knowledge of the organisation’s and industry’s terminology, processes and data

22. Benefits of ERP Common set of data
Removes consistency and synchronisation issues
Ready integration for decision support systems
Inter-department integration for all departments using the ERP
Library of available standard template processes and modules make integration easier
Forces Business Process Reengineering

23. Potential Limitations of ERP
Global ERP can be a never-ending project for large organisations
No organisation exists in isolation
There are always suppliers and clients who use different data models.
This means that the need for integration cannot be removed.
Inter-department integration relies on using the global ERP
Causes problems with anomalous departments, recently required, geographically isolated or with different business processes.
The software can drive the business rather than the other way around
Templates tend to impose the standard business process rather than your organisations business process. This is okay for commoditised processes but not for all.
Note: ERP requires similar types of organisational readiness as EAI
Only technology readiness is not relevant as technology is being replace

24. ERP and organisational readiness
ERP requires similar types of organisational readiness as EAI
Only technology readiness is not relevant as technology is being replace
Issues are more significant because
Cost and impact of the project is greater
Degree of process change is much more significant
User interface and interaction is totally changed
Impact on organisational and individual roles is greater

25. ERP Implementation Options
Green field
Create IS architecture from scratch
ERP by Function
Deploy one or a few ERP modules across all Business Units
Risk: May never extend beyond original function.
ERP by Business Unit
Deploy fully integrated ERP suite in one or more Business Units
Fully Integrated ERP
Full scale deployment across the enterprise

26. ERP and integration capabilities
All ERP implementations require integration with other systems
Supplier or customer systems
Legacy systems which cannot be retired.
As part of an incremental transition to a global ERP system
ERP Integration layers
Provide SOA or EAI type capabilities
Typically tightly coupled to the ERP and focus on integration into the ERP
E.g.
SAP NetWeaver
Oracle Fusion

27. Example: SAP XI SAP Exchange Infrastructure (SAP XI)
An integration server (EAI)
Integrates SAP applications and 3rd party applications
Integration server
Message routing
Message mapping/transformation
Integration adapters
Protocol and data format conversion (into/out of XML)

28. Implementing an ERP system

29. Impact of an EAI project on the organisation
ERP projects typically completely replace the existing applications
Change the user interface and workflows
Implements redesigned business processes impacting all aspects of the business using the new system
ERP systems change the way the organisation operates
ERP systems significantly impacts the work duties undertaken by individuals using the new system
ERP systems change the reports and information available to senior management
ERP systems replace existing ‘working applications’
While the new system should be an improvement, there is significant risk and inconvenience associated with the roll out of any new system

30. Implementing an ERP system
ERP is always a major project
Any ERP project requires significant time and cost.
It is likely to be disruptive and result in business process changes across the organisation.
To be successful
The project must have high priority and visibility within an organization.
Senior management commitment with regular progress reviews at the appropriate levels of management.
Risks
Many companies are unclear on the likely total project cost or return.
As with any enterprise level project, scope creep, organisational politics and change regularly cause failure.

31. ERP readiness
Most of the factors described as EAI readiness also apply to ERP projects
Exception is technology readiness as the applications are being replaced
Process readiness is particularly important for an ERP project
The core of an ERP project is the redesign of existing business processes
Culture
Processes
Technology
Employees
Structure
©2001, IT Catalysts, Inc.

32. SAP‘s ASAP – Rapid Implementation Methodology
Continuous
Change
Project
Preparation
Final
Preparation
Go Live & Support
Business
Blueprint
Realization
© SAP
Five step approach to implementation of SAP to address the potential challenges and ensure effective project management
Incorporates many standard concepts of project management

33. SAP‘s ASAP – Rapid Implementation Methodology
Phase 1: Project Preparation
Provides initial planning and preparation for project.
Gather requirements
Requirements workshops
Requirements documentation and control processes
Project success requires requirements gathering which
Is inclusive with representation and engagement from all participants.
Has clear and effective approval processes at senior management level.
Phase 2: Business Blueprint
Create the Business Blueprint
detailed documentation of the results gathered during requirements workshops.
documents the business process requirements of the company which creates a common understanding of how the company will operate.

34. Strengths/Weaknesses of Business Blueprints
Share a common understanding with everyone on the project
Formalises the agreement between
The IT project team and business
Different business departments
Reduced level of communication required during implementation
Supports impact analysis when requirement change occurs.
Weaknesses
Processes can be difficult to model
Business process can be poorly defined
Need to distinguish between real business process requirements and legacy “way we do business”
Must balance need to perfect definitions and need to complete the project.
Business processes can change rapidly

35. SAP‘s ASAP – Rapid Implementation Methodology
Phase 3: Realization
Implement all the business and process requirements based on the Business Blueprint.
Configure the system step by step in two work packages, Baseline and Final configuration.
Phase 4: Final Preparation
Complete testing, end user training, system management and cutover activities to achieve go-live readiness.
Final Preparation phase requires resolution of all critical open issues.

36. SAP‘s ASAP – Rapid Implementation Methodology
Phase 5 Go Live and Support:
Transition from a project-oriented, pre-production environment to live production operation.
Continuous Change:
Provide on-going support and assistance for post go-live.
Provide solutions for standard minor tweaks and changes
Provice solutions for evolution of the solution to support:
Business changes
Technology changes
Changes in the user community or
New business content.
ASAP covers these activities

37. Supporting Continuous Change
ASAP Continuous Change
Competitive Environment Changes
Implementation Release 3
New Business Content
New Analysis Requirements
Implementation Release 2
Market Technology Changes
New Functionality
Implementation Release 1
ASAP Implementation 5 4 1 2 3
Go Live &
Support
Project
Preparation
Final
Preparation
Business
Blueprint
Realiz-
ation

38. Comparing EAI and ERP

39. Comparing EAI and ERP:EAI
App1
App 3
App2
App1
App 3
App2
EAI integrates primarily behind the scenes
Most of the user interaction is unchanged
Process changes occur only for the integrated process

40. Benefits of EAI based process automaton
Integrates with existing process and data models – handling incompatibilities when necessary
Allows the high value integration problem to be addressed without disrupting the other applications
Minor/moderate changes to the user interaction causes minor/moderate changes to the business as a whole

41. Comparing EAI and ERP: ERP
App1
App 3
App2
Module2
Module1
Module3
ERP changes both user interaction and applicaton
All user interaction, data/process models are changed

42. Benefits of ERP based process automation
Creates a set of processes and associated data models which are mutually compatible and comprehensive
Equally effective at automation within a single department or across multiple departments
ERP vendor typically provides ‘standard’/template processes already proven for a particular industry

43. Penguin’s Global ERP Strategy – an example of a consolidation strategy

44. of Supply Chain Systems
28th International Supply Chain Specialist Meeting
The Globalization
of Supply Chain Systems
Anne Naramore
Vice President
International Technology Strategy
Pearson plc
Frankfurt Book Fair

45. Agenda Pearson Supply Chain Environment Today
Supply Chain Technology Strategy
Case Study: Asia
Summary

46. 2005 Adjusted Operating Profit: £509M / $875M
PEARSON A Good Read
Pearson is a world leading education and information company, helping people of all ages to live and learn.
2005 Sales: £4,096M / $7,045M
+9%
2005 Adjusted Operating Profit: £509M / $875M
+22%

47. Geographic Businesses
Main Businesses
Geographic Businesses
North America: 66%
£2,717M / $4,673M
Europe: 24%
£963M / $1,656M
Penguin: 20%
£804M / $1,383M
School: 32%
£1,295M / $2,227M
FT Group: 15%
£629M / $1,082M
Asia Pacific: 7%
£300M / $516M
Rest of World: 3%
£116M / $200M
Professional: 14%
£589M / $1,013M
Higher Education: 19%
£779M / $1,340M

48. Interesting Facts
18M
U.S. school students learning English and Math with a Pearson programme
3.5M
Professionals who qualified in our testing centres
250
New authors published by Penguin around the world

49. Interesting Facts 4.5M 0.5BN 3.6M
People learning English with Longman materials
3.6M
College students in America using a Pearson online service
4.5M
Readers reached by the Financial Times in print and online

50. Supply Chain: Environment Today
Pearson’s business strategy and organization culture has yielded a relatively diverse, decentralized portfolio of ERPs implemented at the region/operating company level.
Business process standardization within Pearson occurs largely at the region/operating company level due to market demands.
Consequently, Pearson has adopted a decentralized IT strategy, with implementations occurring at the region/operating company level.
Business processes: The life cycle of a product/title
Editorial & Production
Sales & Marketing
Inventory Management
Sales Order Processing
Financials
Distribution and Warehousing
eCommerce
Human Resources/Payroll
Business Intelligence (analysis and reporting)

51. Complex Environment: North America
ERP
Editorial & Production
Sales & Marketing
Inventory Mgmt
Order Mgmt
Finance
Distribution
eCommerce
HR/Payroll
Business Intelligence
Oracle
Assessment
SAP 4.6
Penguin
SAP 3.1i
School
Vista
Canada
Custom System
- Higher Education
Supported by ERP
Not supported by ERP
Legend:

52. Complex Environment: Europe
ERP
Editorial & Production
Sales & Marketing
Inventory Mgmt
Order Mgmt
Finance
Distribution
eCommerce
HR/Payroll
Business Intelligence
Vista - Dutch
JDE - Spain
Infos - Germany
Exact - Poland
Libris - France
Oracle - Italy
SAP UK
Vista - UK
Supported by ERP
Not supported by ERP
Legend:
Not in scope for business

53. Complex Environment: Latin America
ERP
Editorial & Production
Sales & Marketing
Inventory Mgmt
Order Mgmt
Finance
Distribution
eCommerce
HR/Payroll
Business Intelligence
JDE - Mexico
Siscorp - Brazil
Stradivarius - Argentina
JDE - Colombia
Saab - Chile
Figaro - Uruguay
Supported by ERP
Not supported by ERP
Legend:

54. Complex Environment: Pacific Rim
ERP
Editorial & Production
Sales & Marketing
Inventory Mgmt
Order Mgmt
Finance
Distribution
eCommerce
HR/Payroll
Business Intelligence
IBS Bookmaster - Hong Kong
- Singapore
Malaysia
Epicor - Taiwan
Korea
Custom System - Japan
IBS Bookmaster - Australia
Supported by ERP
Not supported by ERP
Legend:

55. Exercise What should Pearson do? Identify three strategies
Identify business risks with each strategy

56. Supply Chain Technology: Strategy
Pearson has adopted a decentralized strategy, with implementations occurring at the region/operating company level.
While supporting all the operating companies from a single ERP is desirable, the cost to consolidate is high and difficult to justify, and the process standardization required could inhibit business performance.
Pearson’s Roadmap sets a course to:
Maintain a decentralized approach
Allow ‘scope’ to meet regional /operating company requirements
Upgrade as versions go end-of-life
Govern introduction of new systems
Consolidate and standardize when cost justified

57. Case Study: Asia Goals: Scope (Locations):
September 2004: Consolidate business units into a single ERP instance
NPV: $954.9K | IRR: 37% | Payback: 1.3years
Goals:
Standardize business processes & operating procedures across the region
Reduce long-term costs (IT, Customer Service, Finance)
Improve utilization of IT systems & resources
Provide standard system platform for operation
Scope (Locations):
Hong Kong, Taiwan, Korea, Japan, Singapore and Malaysia
Hong Kong hosting location and support center
MPLS connectivity for each country access

58. Case Study: Asia Functionality:
Consolidate business units into a single ERP instance
Functionality:
Editorial & Production processing
Academic adoption management
Sales Order processing
Inventory management
Procurement
Distribution & warehousing
Financials (GL, AP, AR)
Royalty management
Business intelligence (analysis and reporting)

59. Taiwan (delayed 6 months)
Case Study: Asia
Consolidate business units into a single ERP instance
Rollout Timeline:
Malaysia
Singapore
Korea
Taiwan (delayed 6 months)
Japan
Apr 2006
May 2006
Jun 2006
Jul 2006
Aug 2006
Sep 2006
Oct 2006
Nov 2006
Dec 2006
Jan 2007
Feb 2007
Mar 2007
Apr 2007
May 2007
Jun 2007
Jul 2007
Aug 2007
Sep 2007
Hong Kong
2006
2007

60. Case Study: Asia Solution Provider: IBS Bookmaster
Consolidate business units into a single ERP instance
Solution Provider: IBS Bookmaster
Build upon existing implementation in Singapore
Build upon existing relationship with vendor
Singapore and Malaysia
Pearson Australia
South Africa (MML)
Most cost effective solution
Met majority of functionality needs

61. Case Study: Asia What We Learned: Replicate Success and Learnings:
Consolidate business units into a single ERP instance
What We Learned:
Partnership with vendor
Strong executive sponsorship and project governance
Thorough functionality requirements
Functionality gaps always found – accept it and manage closely
Dedicated and skilled project managers (internal & vendor)
Contingency: money, time and resources
Don’t underestimate language barriers and cultural styles: slows process down
Replicate Success and Learnings:
Taking approach to Europe

62. Summary: Environment today

63. Long-term strategy | Time, Money, and Strong Partners
Summary: Future environment
Long-term strategy | Time, Money, and Strong Partners