ERP Enterprise Resource Planning Ryan Loughlin Gustavo Rayo

ERP (Enterprise Resource Planning) Ryan Loughlin Gustavo Rayo Shannon Villarroel Khoung Nguyen HTM 304 Professor Fang May 10 th, 2007

What is ERP? An infrastructure that provides an overview about every function in the organization. l Provides a Cross-Functional, process view of the organization l Developed in 1990 l First develop business model according to the essence activities and processes. l l Draw interconnection of all subsystems l Underlying data model

ERP Software Price is variable l Specific softwares don’t implement fluently with the business l Send a RFP (Request for Proposal) to vendors l l Rank l vendor responses Outside firms assist in the managing, training and maintaining of the system and its employees

Who distributes ERP products? l l There are numerous different ERP vendors in today's market. Examples l l l SAP Oracle People. Soft Invensys Etc…

Implementation of ERP l Three major tasks that must take place: 1. 2. 3. Determine the system that is currently functioning and specific ERP system the company wishes to implement Removing all inconsistencies within company The implementation process itself. l Knowing what you wish to achieve is the most important part of ERP implementation l l Without a specific and consistent goal it is going to be hard to implement the system successfully Always remember that the post implementation process is just as critical l l Must not only create but MAINTAIN the system Be alert for company changes that could result in a system change

Why ERP (and why not)? l Why? l l l Improves Efficiency Reduces Inventory Shortens Lead Time Improved Customer Service Larger Profits Etc…. l Why Not? l Hard to Estimate l l Implementation Process l l Painstaking and costly Systems Must Be Specifically Designed l l Underestimate Cost and Time Otherwise won’t work properly Maintenance Cost l Often High

Real world implementation of ERP l l l Started implementation in 1996 Took about 4 years before the implementation process could be completed Meet most of their ERP goals by the year 2000

Texas Instruments Overview and Goals l Texas Instruments has: l l l 10, 000 Employees 45, 000 Products 120, 000 orders per month $250, 000 dollar budget for ERP implementation Needed a information technology system that could continually meet customer and business needs. l Specific Goals of ERP implementation into Texas Instruments: l l l To evolve process that support market trends Leverage E-commerce to link customers to Texas Instruments systems Base implementation on open hardware and software systems

Results of Implementation l Negative Results l Productivity Dip l l l Positive Results l Due to specific learning curves the productivity dip slightly in the initial phase On time Delivery l l A Global System l l Did not achieve its goal of on-time delivery Due to market conditions TI booked more orders then they could deliver Better Response l l l A single-instance, global system has transformed how TI does business 70% of business was conducted electronically Reduced order management costs by allowing all order access Inventory Reduction l l Increased out put by 510% Thus reducing inventory by up to 15%

Conclusions l Set out to achieve three goals: l l l Standardize process and information systems Integrate manufacturing, procurement and logistics to support market trends Provide product visibility to customers and suppliers via the internet All achieved and completed within four years Received Computer. World Smithsonian Award for their efforts. Achievements; l l l System response time under three about 90% of the time 10, 000 internal users 3, 000 external users 120, 000 processed orders 45, 000 devices

City of San Diego … Time for a Change? l l San Diego city government: 7 th largest employer in the county (11, 000 employees, 22 departments) The city’s IT is run by three different groups, with no specific one in charge l l l An IT department IT employees in different departments San Diego Data Processing Corp. l l l Current system was designed in 1978 Numerous functions currently run independently (i. e. accounting, human resources) SD Union Tribune audit findings: current system defies efficiency and accountability “a patchwork of mainframe computer programs, incompatible software and outdated machines”

The Proposed Solution: ERP l l Estimated Date of Full Installation: January 2009 Software Being Considered: Oracle and SAP The Cost: $36. 5 million Loan: $29. 5 million from IBM Credit, LLC l l l Payable over 7 years Interest rate matching that of a 7 -year treasury note $7 million cash from existing funds

Will It Work? l The acknowledged concerns: Cost overruns l Lack of budget control l Shortage of staff to support implementation l Will it work as advertised? l l If a successful implementation were not achieved, at whose expense would it be? ?

Any…. l Questions? l Comments? l Concerns? l Constructive Criticisms? If not…. Thank You!