Best Practices In ERP Overview What is Best
Best Practices In ERP
Overview • • • What is Best Practices? What is Benchmarking? How is Best Practices use? Why is Best Practices Important? SAP Best Practices-the downside
Best Practices • What is it? – “A method that has been judged to be superior to other methods” Or – The most efficient way to perform a task
Benchmarking • What is it? – “The search for industry best practices that an organization can utilize to improve its performance and productivity” – Compares and organizations methods with peer groups, with purpose of identifying the best practices that lead to superior performance. – Best practices usually identified through the benchmarking phase of a business process reengineering activity.
How is it Used? • Business process engineering is designed to identify a best practice. • Once a best practice is identified, it can be incorporated into an ERP system. – Often change the organizational climate – Attempts to bring about dramatic improvements in performance.
Why is it important? • ERP systems provide a better way of doing things – Essence of Best Practices • Key component of SAP ERP product – SAP devotes considerable research to identifying the best way of doing conventional ERP tasks – Between 800 and 1000 best practices are included in SAP’s R/3 software
SAP Best Practices • Benefits – Developed with partners and customers. – Provides a fully documented and reusable prototype that can be turned into a productive solution quickly. – Provides companies: • A proven methodology • Thoroughly documented scenarios (business and a technical) • Proven preconfigurations of SAP solutions
SAP Best Practices Industry-Specific Coverage Cross-Industry/ Generic Business Coverage • Agro-industries • Automotive • Chemicals • Fast-moving consumer goods • Fabricated metals • High tech • Industrial machinery and components • Logistic service providers • Retail • Professional services • Wholesale • Pharmaceuticals • Baseline package • Business intelligence • Customer relationship management • Enterprise portal • IAS/IFRS • Supply chain management
SAP Best Practices • Follow-up study showed that SAP helped: – Decrease the effort needed to conduct mission-critical project tasks. • Reduce overall project risk by 71 percent on average – Lower total cost of ownership (TCO). • By 11 percent on average. • One company reported that lowered TCO by more than 53 percent.
Best Practices • Downside – Takes a lot of effort to identify – Significantly changes the way organizations do their work • A large ERP system change will take between one and three years to implement – What is best by some is not by all • Changing the business practice to fit the software may hinder competitive advantages • People get lost
References • Irani, Zahir, & Themistocleous, Marinos. (2001) Benchmarking the benefits and barriers of application integration. Benchmarking, 317332. • Olson, David L. (2004). Managerial Issues of Enterprise Resource Planning Systems. New York: Mc. Graw-Hill. • SAP Best Practices: Empowering Your Company. Available: http: //www. sap. com/services/servsuptech/bestpractices/index. epx [2005, February 15]. • Schulz, John D. (2000, September 25). Hunt for best practices. Traffic World , 41 -42.
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