Enterprise IT

Planning

CIS 2061 CIS2062

Email:
[email protected]
Web:
conradattard.com/about

By Dr Conrad Attard
 Enterprise IT Planning

Enterprise IT Planning
Objectives
 This lecture will address the following aspects of ERP:

1. Organisations Setup
2. Evolution of ERP system
3. Introduction to business process and business
function
4. Integrated information systems.
 Enterprise IT Planning

Enterprise IT Planning
Objectives
5. The importance of communication between
different stakeholders, being a developer, analyst
or manager of department within a company
adopting an ERP system.
6. Workshop – Exploring challenges of how different
department within companies decide how to
allocate resources during the expansion process.
CIS 2062

Assignment 20%

Project 40%

Computer-Assisted and Written Examination (1 40%

Hour and 30 Minutes)
CIS 2061

Project 50%
Computer-Assisted and 50%
Written Examination (1 Hour
and 30 Minutes)
 Enterprise IT Planning

Enterprise IT Planning
Recommended Book

 Integrated Business Processes with

ERP Systems

 By SIMHA R. MAGAL and JEFFREY WORD

ISBN 978-0-470-47844-8
 Enterprise IT Planning

Enterprise IT Planning

 Study Motivation:

1. Your Role
2. Outcome
3. References
4. Experience
5. You are already part of the ICT.
6. This is your LAB your simulator!
 Enterprise IT Planning

Enterprise IT Planning
Discussion
 Organisations Structures:

Challenges:
Local organisations – International organisations.

 TYPES: Services and Products.

 ERP versus different IT solutions.

 Enterprise IT Planning

Enterprise IT Planning
 Business person and Entrepreneur

 Discussion

 Are they the same?

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Enterprise IT Planning
Organisations Structures:

 We must think holistically about the

operations of a business.

 Most organistations have a what is known

as a function structure
 Enterprise IT Planning

ERP Explained
 ERP is the abbreviation Enterprise Resource Planning.

 ERP utilizes ERP software applications to improve the

performance of organizations' resource planning,
management control and operational control.

 ERP software is multi-module software that integrates

activities across functional departments, from product
planning, parts purchasing, inventory control, product
circulation, to order tracking.

 ERP software may include application modules for the

finance, accounting and human resources aspects of a
business.
 Enterprise IT Planning

Enterprise IT Planning
Organisations Structures:

 Organisations may opt for one ERP

Or

 Integrated Standalone applications.

 Enterprise IT Planning

Why ERP?
 Global E-commerce Sales:

 In 2020, global e-commerce sales amounted to approximately $4.28 trillion, and it was projected to
continue growing.
 E-commerce Market Share:

 E-commerce sales accounted for about 21.3% of total global retail sales in 2020, a significant
increase from previous years.

 Mobile Commerce (M-commerce):

 Mobile commerce constituted a substantial portion of e-commerce sales, with over 72.9% of e-
commerce sales taking place on mobile devices in 2020.

 Cross-Border E-commerce:

 Cross-border e-commerce was on the rise, with approximately 22% of online shoppers making
international purchases in 2020.

 Popular E-commerce Platforms:

 As of 2021, Amazon, Alibaba, and Walmart were some of the largest e-commerce platforms
globally, each with a significant market share.
Why ERP?
 E-commerce Growth During the COVID-19 Pandemic:

 The COVID-19 pandemic accelerated the shift to online shopping, leading to an increase in e-
commerce sales across various categories, including groceries, electronics, and fashion.
 E-commerce Payment Preferences:

 Credit/debit cards and digital wallets were the most preferred payment methods for online shoppers,
with an increasing trend toward contactless payments.
 E-commerce Market by Region:

 Asia-Pacific was the largest e-commerce market, with China being a major contributor to the region's
e-commerce growth. North America and Europe also had substantial e-commerce markets.
 E-commerce Fulfillment:

 Fulfillment options such as same-day delivery, curbside pickup, and buy-online-pickup-in-store (BOPIS)
gained popularity, particularly during the pandemic.
 E-commerce and Small Businesses:

 Many small and medium-sized businesses turned to e-commerce to reach a wider audience and
adapt to changing consumer behavior.
 Customer Reviews and Trust:

 Customer reviews and ratings continued to play a crucial role in influencing purchase decisions, with a
majority of online shoppers reading reviews before making a purchase.
 Sustainability in E-commerce:

 There was a growing emphasis on sustainability in e-commerce, with businesses adopting eco-friendly
practices and offering sustainable products.
 Enterprise IT Planning

ERP Statistics
The ERP software market size is expected to grow to $96.04 billion in 2022.
(EPC Group)

Up to 53% of IT executives say ERP is on the list of their investment priorities.

(Oracle Netsuite)

Using ERP software reduces administrative costs by 22%. (Learn 2G)

90% of companies use consultants for ERP implementation.
(Finances Online)

Anywhere from 55% to 75% of ERP projects fail.

(Deloitte)

Around 28% of companies reported positive ROI within a year of ERP software use.
(Learn 2G)

Around 26% of workers use the company’s ERP software.

(Netsuite)

Finance, accounting, and IT employees are the biggest influencers in buying ERP
software.
(Learn 2G)
About ERP
 ERP for All
 Cloud-based ERP solutions are more
flexible
 ERP can take over most of the
organization works
 Cloud-based ERP is more secure
 Cloud-based ERP requires little Investment
 Enterprise IT Planning

2015 States
 ERP Systems and Enterprise Software:
 1. 64% of companies are planning to implement ERP
within the next three years.
 The implementation of ERP software is becoming increasingly
popular in businesses all over the world. This growth can be
attributed to ERP’s multiple benefits, such as improved efficiency
and productivity.
 Up to 53% of IT executives included ERP on the list of priorities
next to CRM implementation, and 50% of organizations are
already on their way to buying, upgrading, or planning to update
their existing ERP systems.

Ref (EPC Group, Oracle Netsuite)

ERP Systems and Enterprise
Software:
 At least half of ERP projects fail to
meet their objectives.
 A Deloitte study found that even though
most businesses are able to meet or
exceed their goals, ERP projects often
fail. ERP failure statistics show the
percentage is anywhere between 55% and
75% depending on what type of ERP
analysis you do with your data.
ERP Systems and Enterprise
Software:
 Using ERP software reduces operational costs
by 23%.
 As for administrative costs, the savings go up to
22%, according to ERP data. As many as 95% of
companies meanwhile see major improvements
after implementing ERP software which
improves process times, boosts collaboration,
and centralizes data. ERP ROI assessment
further shows that 28% of companies using this
type of software achieved positive ROI within a
year, 58% did so within two years, and 15%
needed more than three years.
 Ref (Learn 2G)
ERP Systems and Enterprise
Software:
 Reasons for Implementing ERP:
1. 49% - to replace out-of-date ERP software
2. 16% - to replace home grown systems
3. 15% - to replace accounting software
4. 20% - to replace non-ERP systems / had no true
system
5. 35% reported implementation costs of 1- to 3-
percent of their organization’s annual revenue
6. 20% reported implementation costs of 3- to 5-
percent of their organization’s annual revenue.
7. On average, organizations spend 6.5-percent of
their annual revenue on their ERP project
Trends
 Cloud ERP Solutions
 Internet of Things
 Social Media integration
 Addressing ERP Security
Enterprise IT Planning
E-commerce Sales
 As analysts expect e-commerce sales in
the U.S. to continue growing by 10 to 12
percent a year, total e-commerce sales
are already at substantial levels as
traditional brick-and-mortar retailers have
expanded their online efforts.
 Enterprise IT Planning

Introduction - Online Websites

o1 Amazon.com Inc. o 6 The Home Depot Inc.
Mass Merchant Home Supplies

o2 Walmart.com o 7 Best Buy

Mass Merchant

o3Apple Inc. o 8 Sears Holdings Corp.

Computers / Electronics Mass Merchant

o 4 Staples Inc. o 9 Costco Wholesale

Office Supplies

o5 Macy’s o 10 Nordstrom
Computers / Electronics

Ref: Internet Retailer Top 500 Guide report

 Enterprise IT Planning

Introduction –
Amazon and Staples
Some figures…
 Amazon

Amazon net sales in 2017: $177.9 billion

Growth:20.60%

Ref: Internet Retailer Top 500 Guide report

 Enterprise IT Planning

ERP - Evolution

 Initially before 1980:

 Applications typically came from multiple Vendors and run on
multiple platforms.
 Companies are managed along functional lines
 Task oriented application.

 What follows:
 Functional applications
 Integration

 After 1980:
 Cross-Function Applications
 Integration applications.
 Versions for the client-server architecture.
 Enterprise IT Planning

ERP - Evolution
Overview and development of ERP.

1970s - MRP l Material Requirement Planning.

1980s – MRP ll Manufacturing Resources Planning

1990s – ERP Enterprise Resource Planning

2000 – ERP ll Enterprise Resource Planning ll

 Enterprise IT Planning

ERP - Evolution
 Enterprise IT Planning

ERP – Evolution
MRP 1 – Material Requirements Planning

 Main Focus is Bill Of Material of a particular

product.

“ Which Materials are needed in order to

produce the article”

Example: Components of a Bike

Consider the Time Factor: you cannot assume

that purchased materials will be in stock
immediately.
 Enterprise IT Planning

ERP – Evolution
MRP 1 – Material Requirements Planning
 Enterprise IT Planning

Components of a Bike
 Enterprise IT Planning

ERP – Evolution
MRP 1 – Material Requirements Planning

 Multi-level and Single BOM

Finished Finished
Good Good

Semi Finished Semi Finished

Good Good

Raw Raw Raw

Material Material Material
 Enterprise IT Planning

ERP – Evolution
MRP 1 – Material Requirements Planning

 BOEING

Boeing 747 aircraft

BOM
is exceedingly complex
Containing more than

6million materials
 Enterprise IT Planning

ERP – Evolution
MRP II – Manufacturing Resources Planning
 MRP ll methodology of production planning
enhances MRP l. It was no longer possible to use the
simplicity MRP l.

 What was MRP ll all about:

To manufacture a product you do not only need
MATERIALS but also ..

…Machines and People.

Resources
 Enterprise IT Planning

ERP – Evolution
MRP I – MRP II Boeing Manufacturing an aircraft

 BOEING CASE STUDY.

 Enterprise IT Planning

ERP – Evolution
MRP I – MRP II Problems????

 These software's were helpful in manufacturing

process.

 A lot of organisations used a lot of software

packages to administer their business process.

 As a result a lot of output data of one system had

to be put into another system. (manually)
 Enterprise IT Planning

 Systems were not always automatically

synchronized, so the data of different systems
were not always the same.

 Purchasing or paying too late or having less

stock then expected are some other problems.
 Enterprise IT Planning

ERP – Evolution
ERP

INTEGRATION!!!...
…into one single system and different
modules would have to
communicate easily with each
other.
 Enterprise IT Planning

ERP – Evolution
Discussion

ERP is about
Finance!!!

Case Study
 Enterprise IT Planning

ERP – Evolution
ERP

 When you integrate data you are extracting

data from different systems customised or off-
the- shelf that form a variety of different data.

 Into one single system and one single

database environment.

 ERP is characterised as a way of thinking

and a way of organising rather than just a
computer system.
 Enterprise IT Planning

ERP – Evolution
ERP II

 Its about organising business process and

people.

 ERP ll includes cooperation with other

enterprises such as vendors and customers.

 Advantage over ERP 1 is that companies can

get a better position in the chain of supply
from first material to finished products.
 Enterprise IT Planning

ERP – Evolution
ERP II

 Two main areas in ERP ll

1. CRM – Customer Relationship Management
Defn: It is about an enterprise knowing its
customers. Analysing data to understand the
customer by recording purchase behaviour
and data from external sources.

2. SCM – Supply Chain Management

Defn: It is the string of companies from natural
resources to a product that is sold to a final
customer.
 Enterprise IT Planning

ERP - Communication
 ERP Success Factor:

The Importance of Communications

 During every stage of setting up and ERP system

within an organisation.

 Training is required to ensure all stakeholders have a

solid understanding of the new system and how it
affects them. Therefore, it is important to include a
comprehensive communications plan as part of the
organizational change management and ERP
project planning activities
 Enterprise IT Planning

ERP - Communication
 Enterprise IT Planning

Business Functions to Business

Process
 A business function is an organisational unit
normally similar activities are performed. Another
name for business function is department.

 Business Process: In 1980 a new trend evolved in

company management.

Michael Porter Introduced the value chain.

Ref to Book
Competitive Advantage: Creating and sustaining superior
performance (1985)
 Enterprise IT Planning

Business Functions to Business Process

 Business processes within an organisation falls

into three levels:

1. Strategic planning
2. Management control
3. Operational control.

 ERP has been promoted as solutions for

sustaining or streamlining business processes
at all levels.
 Enterprise IT Planning

Business Function
 These systems grew as a natural expansion of the
capabilities of systems of the first era.
 Payroll expanded to become human resources.
 General ledger became financial reporting.
 Inventory was merged into operations or
manufacturing.
 Enterprise IT Planning

Business Functions to Business Process

 What is Value Chain?

A strategy: Sale order or product flows through a company

becomes leading for a business:

Creating a profit Margin.

Value in the Porter model is the total revenue that a customer is

willing to spend for a product or service.
 Enterprise IT Planning

The Value Chain

 Value is stressed rather than cost because an organization
that has a differentiation strategy may intentionally raise costs
in order to create value.
 Margin is the difference between cost and value .
 Enterprise IT Planning

Business Process

Functional Functional Functional

Area 1 Area 2 Area 3

Trigger Step1 Step2 Step3 Outcome

Generic Business Process

 Enterprise IT Planning

Discussion

Are ERP’s always the way forward for an

organisation?

 Knowing your strengths and future plans

help identify the best approach when
implementing IT systems.
 Enterprise IT Planning

What DO organisation expect

from IT solution?

 To Facilitate the flow of information.

 To Track a wide range of events in the
organisation.
 Plan future activity based on a number of
events.
 Enterprise IT Planning

What DO organisation expect

from IT solution?
 Supports analysis of trends in these events,
thus improving performance of respective
organistations.
 All data is stored and inputted in one
locations. Thus enabling data to be
processed and accessed as informational
reports in real – time.
 Re-engineer were necessary key
processes.
 Enterprise IT Planning

 To understand ERP, you must understand how a

business works
 Functional areas of operation
 Business processes
 Enterprise IT Planning

Workshop
Understanding how typical Companies work : (SMB)
Sales
Order

Order Entry

Ok Reject
? order
Order
Rejection
Availability

OK Reject
? Order

Send order Order

Confirmation Confirmation
 Enterprise IT Planning

Workshop
Understanding how typical Companies work : (SMB)
 Upgrading a company. (PC Maniacs)

 Shop that sells Computer Hardware including

peripherals and PC that are assembled using the
latest components.

 5 Managers representing 5 departments

1. Assembly/Repairs
2. Sales department/Delivery
3. Procurement/Orders
4. Finance
5. HR
 Enterprise IT Planning

Workshop 1
Understanding Organisations
 Objectives.

 1) Define the key functions of the department assigning roles to

the all members of team.

 2) Identify the module and data relate to your department.

 3) Identify the critical aspects, such as days or deadline that

would require resources
Example rush hours, job completion, agreement SLAs, end of day
report, AGM etc.

 4) Create a estimate budget required to match the process

identified and amount of employees required.

 Discuss how processes between departments will improve day

to day operations and minimise cost and data input.
 Enterprise IT Planning

ERP – Some software

packages
 Microsoft Dynamics

1. Dynamics NAV (25-250 users)

2. Microsoft Dynamics 365
3. Dynamics AX (100 – 500 users)
4. Dynamics GP – Mainly used in America
5. Dynamics CRM
 Enterprise IT Planning

ERP – Some software

packages
1. Oracle – Oracle E – business suite
2. SAP
3. Infor Global Solutions
4. The Sage Group – ACCPAC ERP, Sage Pro
ERP AND THE SMALLER Sage Business Vision.
5. Microsoft Dynamics - Dynamics NAV,
Dynamics AX, Dynamics GP and Dynamics
CRM.
6. Open Source ERP – Opentaps, Compiere,
ERP5, OpenMFG, OpenPro
7. ACCESS
 Enterprise IT Planning

ERP – Some software

packages
 SAP: largest vendor of ERP worldwide - 1972
 Oracle: mostly know for relational database. It
also has a ERP system based upon its own
database called ORACLE ebusiness suite. -
1979
 Sage which was founded in the UK providing
mid size and small companies with business
management software and related products
and services.
 Microsoft Dynamics aims at SMB.
 Enterprise IT Planning

ERP - Benefits
The following benefits when implementing the
ERP systems:
1. Integration: Provide an integrating working
environment.
2. Process Orientation: Enable automation
3. Openness: Availability of information from
field level until the management level.
 Enterprise IT Planning

ERP - Benefits
4. International Aspects: Flexibility and facility to standardizing
process or to accommodate changes and globalization.
5. A Balanced between people, process and technology
changes across all areas.
6. Apply planning and program management practices
throughout the program life cycle of a project.
7. One Vendor.
 Enterprise IT Planning

ERP – Disadvantages.
 Disadvantages of implementing the ERP systems:
1. High implementation cost.
2. Complexity, especially for new installations.
3. Delay on return on investment. The benefits of ERP
may not be shown until after companies have had
it running for some time.
4. No made to measure solutions