ERP Project Activities Skorkovský, ESF MU, KPH Main problem Main problem II Why we cannot manage it ? Level production Level production strategy Chase demand Chase demand strategy Aggregate planning A simple business case…. n Printing Company in Upper Lower Corner village somewhere in backwoods has a small problem : n They use for managing printing procedures : n a very basic economic system Sunshine written by Six grade student (a son of the owner) – written in Pascal n another different systems for quotes calculation, logistics, production planning and control written in : n v obsolete FOX PRO n by 3 different programmers from 3 different companies n MS Office A simple business case…. n Competitive market requires : n fast reaction to quotes n variable quotes and their immediate costing (calculation) n shortening of delivery times n shortening lead times n reduction of inventory values (paper) n quality improvement n processes driven by flexible workflow n exact evaluation of finished jobs (production orders) in order to know real costs n feed backs to external and internal signals such as : n reasons of quotes dismissals n reason of unexpected costs A simple business case…. n Competitive market requires : n Modern and efficient SW tools to control these processes : n prepress: desktop publishing, computer to plate, … n purchase of material (paper, colors,..) n imposition n printing using different technologies (sheets, rotary press,..) n production planning and shop floor control n finishing operations such as n cutting n gathering n stitching n flexible invoicing n on-line accounting and so on and so on Printing machine A simple business case…. n Bottlenecks (TOC) – Threats (SWOT) : n obsolete information system, which requires all time some changes, patches,… n all parts of information system form an heterogeneous is IT tools heterogeneous hydra (finance management, costing, production, inventory, HR,… ,which never provides user with real picture of the business n inaccurate data from one application is inherited by another one, so the picture of the business always late n Costing depends on human failing factors n one author of every single subsystem n these authors never meet each other to coordinate their efforts… A simple business case…. n Bottlenecks (TOC) – Threats (SWOT) : n internet auctions favour competitors which are cheaper and faster n the size of paper and colour purchase orders are based on inexact assessment of purchasers (if we have a lot of orders, types of papers, various machines and so on, the optimum assignment of the purchase batches sizes is beyond ability of human being with paper and pencil) A simple business case…. n Messiah arrives and says : “ I have for you this :“ n modern and flexible and standard ERP system n background of IT company with tradition and experience n background of global IT vendor n On the other hand an arriving messiah did not offer: n the knowledge of printing industry n printing application fully integrated with standard ERP n Arriving applicant must : n understand processes in printing industry n be able to write printing application using development tools (languages) of standard ERP system n implement the solution n OR instead of these three blue marked points to find already existing vertical solution for printing industry, which is used all over the globe A simple business case…. n Finding a vertical is right ! n Let say, that we have found a foreign company with Print SOLUTION ,which was implemented 100-times and in different languages A simple business case…. n Live Meeting: n application setup n basic functions and a „sweet points“ n business case workflow (all the stages) n Customer is happy and awaits consequential actions n Vendor signs a contract about localisation and selling in pre-determined geographical area A simple main form of printing application PRINT integrated to ERP Navision Another form of printing application PRINT integrated to ERP Navision (imposition and colours) A simple business case…. n Some reasons which persuaded ERP vendor to sign a contract with vendor of vertical solution PRINT: n local market analysis (SWOT,GAP Analysis) n expectation of repetitive sales – promising market segment n analysis of the competitors n possible co-operation with other PRINT experts abroad (sales of services) Project entries.. n Activities n acquire necessary printing industry knowledge n introduction training provided by supplier of PRINT application (vertical solution) n team building n budget (costs „business plan“- revenues) n language localization ENG->CZE n modification ERP and a Print for Czech conditions (market specifications and legislation) n cope with inner application Project entries.. n Activities n translation of marketing material (fact sheet) and its printing in compliance with predefined templates n creation of PWP presentation for selling n prospect prediction – segments of market n naming of benefits „selling against“ n presentation to chosen prospects and reaction to questions- use of feedbacks to improve knowledge of printing industry n Print price list generation Project entries.. n Activities n „Kick-Off“ meeting n when, who, what and why (Kick-Off) n PWP presentation n invitation, graphic design n selling invitation and follow-up n Kick-Off n mapping of interests, business strategy modification and resource planning Project entries…(will be part of Critical Chain theory, which will be show to students later) n Gantt Project entries… n Activities n contract signature with pilot customer n System implementation (only some important activities are mentioned here.. ) n feasibility study, analysis, target solution draft …… n introduction training n system customization n tests of introduced modifications n data transfers and setup of technological „master data“ n generation and selling licences and HW tools such as servers, … n change management Project entries… n Activities System implementation (only some important activities are mentioned here.. ) n training with real data in the ERP system n stock taking and transfer of balances on accounts n sharp start n support and surveillance Project successful ? (from Snapshot 0 ->Snapshot 1) Another possible project... n Hotel chain Rocco Forte * * * * * n Where? (Great Britain 2x, Scotland 1x, Germany 2x, Prague 1x, Rome, Florence, CH, Russia ….) n SW choice (chosen company for delivery standard accounting package of ERP and cooperation with author of hotel vertical solution : Serenissima Informatica, Padova) n Choice of local partner (CZ MS Dynamics NAV partner X : requirements -> stability, knowledge of international business, languages, references- testimonial abroad, ..) n Milano (server farm for all hotels ) n All hotels using same chart of account (USoA=Uniform System of Accounts) – simple consolidation (IFRS) n Choice of hotel SW and accounting SW Another possible project... Another possible project Basic Concept (survey) Translation of text strings used for communication Protel<->Dynamics NAV to Czech language (necessary knowledge of terminology and language) Balance sheet (generation using accounting schemes –will be introduced to students ) Uniform System of Accounts Accrued and Deferrals…(one of many helping letters) Another possible project –Automotive, Appliances, packaging industry Slitting and levelling of the steel Knowledge of methods, which are necessary for project management and process management n Theory of Constraint (will be introduced-72 slides) n Critical chain methodology n Thinking tools n Throughput accounting n Balanced Scorecard (will be introduced) n SWOT a Gap Analysis n MS Office (Word, Powerpoint a Excel) n ERP system and its logic (will be introduced- 28 hours) n Logistics n Finance Management and Controlling n Production Management (MRP,MRP-II, JIT and DBR) n Market analysis Knowledge of methods, which are necessary for project management and process management n Yield Management –YM (billing different rates for same service to different customers in order to reach maximum revenue) n Knowledge of the condition necessary pro use of YM tool : n relatively high % of the fixed costs to complete company costs n predictable demand n ephemeral product (passing, fleeting, n selling before service is provided n Some Yield management methods n e.g. Threshold method– see next slide Threshold curves (booking) Threshold curves (booking) Knowledge of methods, which are necessary for project management and process management n Legal aspects of contacts n Cost management n Foreign languages n Basic knowledge of IT architecture will be introduced n Methods used for project management n Business Analytics n Methods supporting decision making n Risk management n Basics of marketing n The data is not all in the ERP n The tools are rigid and hard to learn n The tools don’t reflect how we work today n They don’t span the continuum of needs Simplified diagram of ERP usage Information Overload What Users Need Managing Through the profit valley n Initially, most partners business are run by one or two founders, who manage every part of the business : sales and marketing, project management, service delivery management, accounting, sub-load and load, collection, HR and many many more…. Managing Through the profit valley n As their business grows over 10 employees, it is impossible to perform all their role properly. n Cash flow becomes erratic (chaos) n Projects go offside, n Filling pipeline is a struggle n Revenue stays still strong but profitability drops n Company is trapped in the „Profit Valley“ Managing Through the profit valley n How to escape the profit valley? n How to avoid it ? n First key n Maintain revenue velocity and the momentum of the new customer adds. You cannot afford to take the foot of the gas if you want to climb out of the valley n The portfolio of the customers must be some smaller and some larger n Second key n Maintain high level of service quality to avoid discounting and efficiency factor n Sure Step methodology of project Management n Help desk n Right tools and right people Managing Through the profit valley n Third key n Financial management control and cash flow is the king n Invoice quickly and pay consistently (but not early !!! ) n To maintaining Cash- to-cash cycle as short as possible n Fourth key n Software package handling all aspects of financial customer relationship and project management Managing Through the profit valley Thanks for Your Attention Will be placed on IS.MUNI.CZ in the tuition materials (studijní materiály)