ERP

eBusiness: The Hope, the Hype, the Power, the Pain

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Enterprise Resource Planning

“officer.

Enterprise Resource Planning hits the net!

What is ERP?

Enterprise Resource Planning programs

· Have (70’s) roots in Materials Resource Planning

· Enabled by Data Base Management systems

· IDMS or IMS (IBM) or DBMS (DEC –Cullinet)

· Planning and Scheduling of Resources

Enterprise Resource Planning (ERP)

AMR Research predicts that ERP market growth will slow, growing at only a 5 percent CAGR from $16.9 Billion in 1999 to $21.4 Billion in 2004. Leading vendors, including SAP, Oracle, Peoplesoft, JD Edwards, and GEAC SmartEnterprise Solutions, are in flux and being challenged by new market dynamics, allowing new players to gain ground. These 5 market leaders account for 62% percent of the total market revenue, and will find new opportunities in ERM, SCM and e-commerce markets.

What Resources?

· Financial

· Human – employee

· Customers

· Materials

· Property, Plant, and Equipment

· Distribution Systems

· Corporate Strategy

The Hope?

· What Problem does it solve?

o The “interface” problem

o Lack of integration of disparate systems

o Difficulty of reconciling data from disparate systems

o Delay in processing transactions

o Reduce cost of interfaces

The Hype?

· One system: integrates all data from all sources

· Seamless interfaces

· Frictionless transactions

· Instantaneous data

The Pain?

· Very high cost of implementation

– Dollars

– Person Power

· Often forces a change in process

· Requires extensive training of employees

· Takes a long time to implement

Why does it fail so often?

· Failure to define requirements going in.

– War stories (AIP, FAIMS, SCT)

· Poor selection of package and platform

– Software, hardware, DB

· Inadequate resources budgeted for the transition

– Money and People

· Resistance to Change

– Easier for you to adapt to it, than it to you.

– Some processes will need to change

– Lack of end user “buy-in.” Stake holders.

What leads to success?

· The RFP: A company that understands and carefully documents its needs.

· Adequate resourcing of the project

· Flexibility- adapt processes

· Change management

– Enlist, empower, communicate, lead, listen, train

· Train and train some more.

What are some of the parts?

· General ledger

· Budgeting

· Human resource, benefits, and payroll

· Customer Relationship Man. (CRM)

· Manufacturing

– Forecasting, materials requirements, planning and purchasing

· Supply Chain Management

· Order Processing, inventory management

· Logistics, distribution, fulfillment

· Training

The ERP Players

· Oracle

· SAP

· J. D. Edwards

· I2 and IBM

· PeopleSoft

· Baan

· Siebel

Oracle (ORCL)

· www.Oracle.com

· Price/Earnings (ttm) 31.31

· Price/Sales (ttm) 19.67

· Mkt Cap $192.5B

SAP : (SAP)

· www.SAP.com or www.mySAP.com

· Price/Earnings 118.4

· Price/Sales 13.5

· Mkt Cap $62.5 B

J. D. Edwards (JDEC)

· www.jdedwards.com

· Price/Earnings (-)

· Price/Sales 2.39

· Mkt Cap $ 2.42 B

I2 / IBM / Ariba Alliance

· I2 Technologies Inc. will provide components to manage retail collaboration, supply chain visibility and catalog management services.

· Ariba Inc.'s Marketplace, Dynamic Trade and Buyer apps linked to commerce services ranging from logistics to financial services such as e-payments.

· IBM P/E 22.8

· IBM P/Sales 1.9

· IBM MarketCap $164.9

PeopleSoft (PSFT)

· www.PeopleSoft.com

· Price/Earnings 136.4

· Price/Sales 8.22

· Mkt Cap $ 12.6B

PeopleSoft: With PeopleSoft 8 a success, the ERP vendor sets its sights on the customer-relationship management market.[1]

PeopleSoft 8, with its complement of 108 traditional ERP apps and 59 new E-business apps--all fully integrated, requiring only a Web browser to run on the client, and fluent in multiple languages and currencies--is key to both efforts, as is the vendor's CRM software.

Merrill Lynch projects PeopleSoft will grow as much as 40% to more than $2 billion

Siebel (SEBL)

· Price/Earnings 324.2

· Price/Sales 33.5

· Mkt Cap $ 43.3B

Invensys PLC / Baan

· May 2000

· Price/Earnings (-)

· Price/Sales 0.88

· Mkt Cap $ 453 million

· For the three months ended 3/31/00, total revenues decreased 40% to $106.1 million. Net loss increased 35% to $25.7 million.

Baan is now out of business! They were purchase by Invensys for $709 million in May of 2000.

“Invensys Sees Bright Future For Baan Software; Little-known U.K. company expects to spend $1.5 billion to make ERP vendor profitable;” InformationWeek; November 27, 2000.

The mySAP Suite

· The mySAP.com collaborative e-business platform:

o mySAP Workplace

o mySAP E-Business Solutions:

o mySAP Industry Solutions

o mySAP Collaborative Business Scenarios

o mySAP Mobile Business

o mySAP Services

o mySAP Technology

o mySAP Application Hosting by SAP Hosting

o mySAP Marketplace by SAPMarkets

mySAP eBusiness Solutions

· mySAP Supply Chain Management

· mySAP Customer Relationship Management

· mySAP E-Commerce

· mySAP Product Life-Cycle Management

· mySAP Business Intelligence

· mySAP Financials

· mySAP Human Resources