Pains and benefits Miki Skorkovský, PhD. for Department of Business Economics ESF MU Reasons for purchasing (buying) n Pain n Pain and vision distinction n Searching for the pains depends on : n market segment n size of the company n ownership n position in SCM n position of the person Reasons for purchasing (buying) n dormant (latent) pain : it exists, but it is not presumed Reasons for purchasing (buying) n real pain n a real pain (lack, deficiency, shortage), which are wittingly admitted by the customer Reasons for purchasing (buying) n vision n particular (tangible) idea of the pain killer Creation of the pain chain n General pain : difficult analysis reports from existing data n CEO view : owners push me hard every week to supply results n Inventory manager : I cannot optimise manipulation movement n IT manager : to get right data in right time I must transfer and modified a lot heterogeneous data in takes time and I am overloaded Reasons for purchasing (buying) n what is the reason for the change (buying) ? n what do you expect for the new solution ? n reason for investment to the solution ? n what do you think will be improved the most ? Creation of the vision Pains in the information processing n All what any competitors is doing could be easily copied anywhere all over the world (e.g. China) n You cannot duplicate culture (organization system, the way you manage people and relationship to information) n The unique enterprise is specified first and foremost by access and links the people and information n Work on computer is not the same as a work with information !! Learning to think.. n Indian Institute of Technology (IIT) n 300 000 people sit for entrance exams n 5 000 admitted (acceptance rate (AR) of 1,7 % compared to Harward, Yale and Princeton, where they have AR 9-10 % ) n IIT has n mediocre equipment n indifferent teachers n unimaginative class work n the quality of education remains extremely poor and many students leave the country to get trained abroad n India - PhD. in Computer Science per year : 35 – 50 n USA - PhD. in Computer Science per Year : 1000 Pains in the information processing • manual /batch processing • BAR code reader • heterogeneous databases • Homogeneous databases, XML ports,… • uncertain information • on-line data processing, automatic data integrity checking • errors • Total quality management (to avoid errors in the future) Pains in the information processing • shaky system • Transaction processing , stable DB , automatic backups • difficult implementation of add-ons, customization and upgrades • Tools for upgrade top object oriented development tools • complicated way of system usage • Standard commands for every application –unique user environment • too much IT managers • Modern ERP requires less of standard IT guys and more IT guys understanding methods used to control enterprise processes • High price/ low system performance • Long term TCO (Total Cost of Ownership) • TCO Pains in the financial management (accountancy) n late access to information, difficulties in finding the reason why any entry (transaction) was created n Navigation functions,workflow, dimension, Business Analytics, … n comparing actual and expected is a foolish dream only n Budget functionality, On-line data…. n difficulties in of applying (invoices<->payments) n Functionality allowing manual or automatic apply using unique entry numbers and possibility easily un-apply recently wrongly applied entries Pains in the financial management (accountancy) n difficult analysis of the customer or vendor balances n Flow field (calculated fields) n unconvincing repairs of wrongly posted documents n Necessity to generate corrective documents n futile / doubled operations n Integrated database- every record is written only once n unequal load of the users during the period of one month n Continuous accounting – decrease of number of the accountants and less stress during closing at the end of every period Pains in the financial management (accountancy) n out-of-date information n CRM directly connected of Sales, Purchase and Inventory n processes such are Sales, Inventory, Manufacturing, Purchase and Accounting are not connected n All above mentioned processes are connected n out – of - date or wrong information about customers n Questioners – evaluation of their profiles, connected to Sales n rigidity of sales processes n Tracking of the business opportunities, tasks and activities and follow up procedures n difficult substitutability of sales people n Work flow and better and flexible access to the information n no e-Shop n Integration with Outlook, e-Shop application, B2B, B2C, document management Pains in the manufacturing processes n processes such as Sales - Inventory-Production- Accounting-Purchase are not connected internally n Function Order tracking and Dynamics action tracking – see later n lack of information about Work In Progress n Automatic posting of 2140 (121|611 in Czech legislation) n lack of actual cost information n Good calculation setup, tracking of indirect costs – see value entries WIP Pains in the manufacturing processes n useless manual work spent to issue documents n Automatic Data Capture, XML data ports, PDA, touch screens n difficult planning/ changes in production n MPS (Master Production Schedule), MRP-II, JIT and direct link to sales and production orders for direct planning from sales orders (netting), manual MRP, automatic suggestion of replenishment and automatic issuing of purchase orders n difficulties in subcontracting management n Subcontracting worksheet in MS Dynamics n constrained capacities of resources in production n Graphical planning tools, TOC application Touch Screen application Master Production Schedule Graphical planning Pains in purchasing and inventory n Processes such as Purchase-Inventory-Production-Accounting are no connected internally n Dynamic tracking n A huge volume of stock (value , quantity) n Use of appropriate reordering policies, properly setup of safety stock, netting, prognosis (forecasts) n Purchase is not flexible n EDI, automatic price generation, use of substitutions and cross references n Insufficient information about vendors n CRM n Futile purchases/payments n Workflow and operation approve, netting, use of modifiers on the Item card n Difficult stock (inventory) management in different places n Use of location, bins and responsibility centers Bolesti ve skladu a v nákupu n Not even workload of purchasers n CRM, activities, tasks, business opportunities, priorities n E-Shop does not work or such a solution does not exist n Biz Talk n Difficulties in item tracking (lots, serial numbers, warranty expiration) n Item tracking functionality of MS Dynamics n Virtual stock (CD catalogues) does not exist n Non-stock Items functionality Implementation cycle Simplified diagram of ERP usage Others n Change log n Inter-company posting (More companies) n Business Notification n Menu modified by users e n Responsibility centres n User Portal – Internet / Intranet n Commerce Portal – B2C n Commerce Gateway – B2B n OLAP + Business Analytics