September 10, 2011

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A REPORT ON ERP IN DELL

Submitted to: Dr. V.M. Mathur Professor, Fore School Of Management.

Submitted By: Arjun Chikkara(201023) Arushi Agarwal(201025) Astha jain(201027) Gautam Goel(201041) Gulshan gupta(201042) Kapil Goyal(201057)

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Acknowledgement
We are indebted to Dr. V.M. Mathur , my project guide who has provided her invaluable help in reviewing the project at various stages and providing her constructive comments regularly. Also we would like to thank all the people , who in some way or the other, contributed towards and provided the moral and motivational support to complete this project on time.

Thank you

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Table of Contents CHAPTER 1 Introduction...4 What is ERP?........................................................................................4-5 Characteristics of ERP..5-6 How is it Implemented?.......................................................................6-9 Benefits that come with ERP Implementation.9-10 How can ERP Improve Company performance.10 Objectives..10 CHAPTER 2 Dells Background11-16 Dells Business Model...17 Direct Sales............17 Direct Customer Relationship17-18 Customer Segmentation for Sales and Service..18-19 Build-to-order production..19-20 Dells IT Architecture20-21 Dells IT Organization...21-22 Methodology...23 CHAPTER 3 Analysis of ERP in DELL .24 Enterprise Architecture issues24 ERP introduction: SAP R/324-26 SAP Implementation Methodologies and Strategies ..27-35 Implementation Methodology35-39 i2 Technology Introduction39-49 Case Findings..50 CHAPTER 4 Conclusion and recommendations..51 Conclusions.51 Recommendations51-52 REFERENCES..53

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CHAPTER 1 INTRODUCTION
WHAT IS ERP? ERP (Enterprise Resource Planning) is principally an integration of business management practices and modern technology. ERP integrates internal and external management information across an entire organization, embracing finance/accounting, manufacturing, sales and service, customer relationship management, etc. ERP systems automate this activity with an

integrated software application. Its purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. ERP systems can run on a variety of hardware and network configurations, typically employing a database as a repository for information. Integration is Key to ERP Systems Integration is an exceptionally significant ingredient to ERP systems. The integration between business processes helps develop communication and information distribution, leading to remarkable increase in productivity, speed, and performance. An ERP systems key objective is to integrate information and processes from all functional divisions of an organization and merge it for effortless access and structured work flow. The integration is typically accomplished by constructing a single database repository that communicates with multiple software applications, providing different divisions of an organization with various business statistics and information. Although the perfect configuration would be a single ERP system for an entire organization, many larger organizations usually deploy a single functional system and slowly interface it with other functional divisions. This type of deployment can really be time consuming and expensive.

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CHARACTERISTICS OF ERP SYSTEMS When most people refer to the core ERP applications or modules, they mean the back-office capabilities to manage human resources, accounting and finance, manufacturing, and projectmanagement functions. However, major ERP suites from Oracle, PeopleSoft, and SAP now provide much moreincluding modules for sales force automation, business intelligence, customer relationship management, and supply chain management. ERP systems typically include the following characteristics:

An integrated system that operates in real time (or next to real time), without relying on periodic updates. A common database, which supports all applications.

A consistent look and feel throughout each module. Installation of the system without elaborate application/data integration by the Information Technology (IT) department.

Functions: Finance/Accounting General ledger, payables, cash management, fixed

assets, receivables, budgeting, consolidation

Human resources - payroll, training, benefits, 401K, recruiting, diversity management

Manufacturing - Engineering, bill of materials, work orders, scheduling, capacity, workflow management, quality control, cost management, manufacturing process, manufacturing projects, manufacturing flow, activity based costing, product lifecycle management

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Supply chain management - Order to cash, inventory, order entry, purchasing, product configuration, supply chain planning, supplier scheduling, inspection of goods, claim processing, commissions

Project management - Costing, billing, time and expense, performance units, activity management

Customer relationship management - Sales and marketing, commissions, service, customer contact, call center support

Data services - Various "selfservice" interfaces for customers, suppliers and/or employees

Access control - Management of user privileges for various processes

HOW IS IT IMPLEMENTED? ERP's scope usually implies significant changes to staff work processes and practices. Generally, three types of services are available to help implement such changesconsulting, customization, and support. Implementation time depends on business size, number of modules, customization, the scope of process changes, and the readiness of the customer to take ownership for the project. Modular ERP systems can be implemented in stages. The typical project for a large enterprise consumes about 14 months and requires around 150 consultants. Small projects can require months; multinational and other large implementations can take years. Customization can substantially increase implementation times. Process preparation Implementing ERP typically requires changing existing business processes. Poor understanding of needed process changes prior to starting implementation is a main reason for project failure. It is therefore crucial that organizations thoroughly analyze business processes before implementation. This analysis can identify opportunities for process modernization. It also enables an assessment of the alignment of current processes with those provided by the ERP system. Configuration Configuring an ERP system is largely a matter of balancing the way the customer wants the system to work with the way it was designed to work. ERP systems typically build many changeable parameters that modify system operation. For example, an organization can select the type of inventory

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accountingFIFO or LIFOto employ, whether to recognize revenue by geographical unit, product line, or distribution channel and whether to pay for shipping costs when a customer returns a purchase. Customization ERP systems are theoretically based on industry best practices and are intended to be deployed "as is". ERP vendors do offer customers configuration options that allow organizations to incorporate their own business rules but there are often functionality gaps remaining even after the configuration is complete. ERP customers have several options to reconcile functionality gaps, each with their own pros/cons. Technical solutions include rewriting part of the delivered functionality, writing a homegrown bolt-on/add-on module within the ERP system, or interfacing to an external system. All three of these options are varying degrees of system customization, with the first being the most invasive and costly to maintain. Alternatively, there are non-technical options such as changing business practices and/or organizational policies to better match the delivered ERP functionality.

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Extensions ERP systems can be extended with thirdparty software. ERP vendors typically provide access to data and functionality through published interfaces. Extensions offer features such as:

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archiving, reporting and republishing; capturing transactional data, e.g. using scanners, tills or RFID Access to specialized data/capabilities, such as syndicated marketing data and associated trend analytics.

Data migration Data migration is the process of moving/copying and restructuring data from an existing system to the ERP system. Migration is critical to implementation success and requires significant planning. Unfortunately, since migration is one of the final activities before the production phase, it often receives insufficient attention. The following steps can structure migration planning:

Identify the data to be migrated Determine migration timing Generate the data templates Freeze the toolset Decide on migration-related setups Define data archiving policies and procedures.

BENEFITS THAT COME WITH ERP IMPLEMENTATION The fundamental advantage of ERP is that integrating the myriad processes by which businesses operate saves time and expense. Decisions can be made more quickly and with fewer errors. Data becomes visible across the organization. Tasks that benefit from this integration include:

Sales forecasting, which allows inventory optimization Order tracking, from acceptance through fulfillment Revenue tracking, from invoice through cash receipt Matching purchase orders (what was ordered), inventory receipts (what arrived),

and costing (what the vendor invoiced) ERP systems centralize business data, bringing the following benefits:

They eliminate the need to synchronize changes between multiple systemsconsolidation of finance, marketing and sales, human resource, and manufacturing applications

They enable standard product naming/coding. They provide a comprehensive enterprise view (no "islands of information"). They make real time information available to management anywhere, any time to make proper decisions.

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They protect sensitive data by consolidating multiple security systems into a single structure.

HOW CAN ERP IMPROVE A COMPANYS BUSINESS PERFORMANCE? ERPs best hope for demonstrating value is as a sort of battering ram for improving the way your company takes a customer order and processes it into an invoice and revenueotherwise known as the order fulfillment process. That is why ERP is often referred to as back-office software. It doesnt handle the up-front selling process (although most ERP vendors have developed CRM software or acquired pure-play CRM providers that can do this); rather, ERP takes a customer order and provides a software road map for automating the different steps along the path to fulfilling it. When a customer service representative enters a customer order into an ERP system, he has all the information necessary to complete the order (the customers credit rating and order history from the finance module, the companys inventory levels from the warehouse module and the shipping docks trucking schedule from the logistics module, for example). People in these different departments all see the same information and can update it. When one department finishes with the order it is automatically routed via the ERP system to the next department. To find out where the order is at any point, you need only log in to the ERP system and track it down. With luck, the order process moves like a bolt of lightning through the organization, and customers get their orders faster and with fewer errors than before. ERP can apply that same magic to the other major business processes, such as employee benefits or financial reporting. OBJECTIVE To make an integrated analysis of the implementation of ERP (Enterprise Resource Planning) in Dell and draw conclusions.

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CHAPTE 2 DELL BACKGROUND

Dell was founded by Michael Dell, who started selling personal computers out of his dorm room as a freshman at the University of Texas in Austin. Dell bought parts wholesale, assembled them into clones of IBM computers, and sold them by mail order to customers who did not want to pay the higher prices charged by computer stores. The scheme was an instant success. He was soon grossing $80,000 a month, and in 1984 he dropped out of school, incorporating his business as Dell Computer Corporation (though it would initially do business as PC's Limited). At the time, the PC industry was dominated by such large firms as IBM, while smaller, lesser known mail-order firms sold IBM clones at a steep discount. Dell used low-cost direct marketing to undersell the better known computers being sold through such high-overhead dealer networks. Dell placed ads in computer magazines, gearing his merchandise to buyers who were sophisticated enough to recognize high-quality merchandise at low prices. Customers placed orders to Dell by dialing a tollfree number. As a result of these methods, Dell's computers became the top brand name in the directmail market. Dell achieved sales of $6 million its first full year in business, approaching $40 million the next year. Dell hired former investment banker E. Lee Walker as president in 1986 to help deal with his firm's explosive growth. By 1987 Dell held a dominant position in the mail-order market, but it was clear that the firm had to move beyond mail order if it was to continue growing. To accomplish this goal the firm needed a larger professional management staff, and Dell hired a group of marketing executives from Tandy Corporation, another maker of low-cost PCs. The group built a sales force able to market to large corporations and put together a network of value-added resellers, who assembled packages of computer components to sell in specialized markets. The Tandy team soon helped raise gross margins to 31 percent, up from 23 percent a year earlier. Rather than merely undercutting the prices of competitors, they set prices in relation to the firm's costs. The new marketing department soon ran into trouble with Michael Dell, however. Battles erupted over advertising budgets and the number of salespeople required for corporations and resellers. While Dell believed that the new team did not understand direct selling and was trying to create a traditional marketing department with an overly large sales force, the Tandy group alleged that Dell lacked the patience to wait for the sales force to pay off. By early 1988, most of the Tandy group had resigned or been forced out. Regardless, the firm continued growing rapidly, opening a London office that sold $4 million worth of computers during one month in 1988. Dell also formed a Canadian subsidiary. Early in 1988 the firm formed various divisions to raise its profile among corporate, government, and educational buyers.

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With reported sales of $159 million in 1987, the firm went public in June 1988, selling 3.5 million shares at $8.50 a share.

Increased Competition in the Late 1980s The firm faced several challenges, however. Announcing their own clone of IBM's new PS/2 computer system well before it was actually ready, Dell later had trouble reproducing important aspects of the PS/2's architecture, and the computers were delayed significantly, embarrassing the young company. Furthermore, Dell faced competition from several Japanese manufacturers, which were offering IBM clones at low prices. Further, having had trouble meeting demand, Dell used money raised from its stock offering to expand capacity and warehouse space, leaving the company with little cash. When it overestimated demand during the fourth quarter of 1988, the firm suddenly had no cash and warehouses full of unsold computers. Dell responded to the increasing competition by increasing the level of technical sophistication in its computers. Half of its 1988 sales came from PCs using the Intel Corporation's 80386 microprocessor, the most powerful PC chip at the time, and the company began producing file servers using the sophisticated Unix operating system. Dell also hired computer scientist Glenn Henry away from IBM to work on product development. Scrapping the company's first attempts at cloning IBM's PS/2, Henry initiated new plans for producing clones. Henry built Dell's research and development staff from almost nothing to 150 engineers, who began working on ways to combine the function of several chips onto one chip. When Intel released its 486 microprocessor, Dell began speeding to market the computers that could use it. Another of Henry's goals was high-quality graphics, which required better monitors and special circuit boards. By mid-1989 Dell had finished initial attempts at graphics hardware, giving it inroads into the higher end of the PC market. Despite these advances, Dell still had a research and development budget of $7 million, compared with the hundreds of millions spent by such larger competitors as IBM. Dell's share of the PC market was only 1.8 percent, but it was still growing rapidly. U.S. sales for 1989 reached $257.8 million, while sales in Britain increased to $40 million and a branch in Western Germany realized the breakeven point. Dell considered itself as much a marketing company as a hardware company, and its sales staff played an important role in its successes. Dell's sales personnel trained for six weeks or more before taking their seats at the phonebanks, and, along with their managers, they held weekly meetings to discuss customer complaints and possible solutions. In addition to fielding questions and taking orders, sales staff were trained to promote products. They helped buyers customize orders, selling them more memory or built-in modems. Orders were then sent to Dell's nearby factory where they were filled within five days. The telemarketing system also allowed Dell to compile information on its customers, helping the firm spot opportunities and mistakes far more quickly than most other PC companies.

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In 1990 Dell set up subsidiaries in Italy and France as well as a manufacturing center in Limerick, Ireland, to serve customers in Europe, the Middle East, and Africa. It also began selling some computers through large computer stores, whose high-volume, low-margin strategy complemented Dell's established operations. The firm was making important corporate inroads as well, developing client/server computing systems with Andersen Consulting, for example, and introducing powerful servers using the Unix operating system. As a result, 40 percent of Dell's $546 million in 1990 sales came from the corporate world, up from 15 percent in 1987. Dell became the sixth largest PC maker in the United States--up from number 22 in 1989--and retained a staff of 2,100. Furthermore, the company's emphasis on customer satisfaction paid off, as it was rated number one in J.D. Powers Associates' first survey of PC customer satisfaction. That year, however, Dell purchased too many memory chips and was forced to abandon a project to start a line of workstations. As a result, 1990 profits fell 65 percent to $5 million, despite the doubling of the firm's sales.

Price Wars in the Early 1990s Also during this time, the traditional PC market channels were in flux. With a recession dampening sales, PC makers engaged in a furious price war that resulted in slumping profits nearly across the board. Compaq, IBM, and Apple all had profit declines or were forced to lay off employees. Furthermore, Compaq filed a lawsuit against Dell, which it eventually won, claiming that Dell's advertising made defamatory statements against Compaq. Nevertheless, the economic recession actually benefited Dell. While customers had less money, they still needed PCs, and they purchased Dell's inexpensive but technologically innovative IBM clones in record numbers. Consequently, annual sales shot up toward $1 billion. In the early 1990s, notebook-sized computers were the fastest growing segment of the PC market, and Dell devoted resources to producing its first notebook model, which it released in 1991. The following year it introduced a full-color notebook model and also marketed PCs using Intel's fast 486 microchip. As the PC wars continued, Compaq, which had been a higher priced manufacturer stressing its quality engineering, repositioned itself to take on Dell, releasing a low-end PC priced at just $899 and improving its customer services. The new competition affected Dell's margins, forcing it to cut its computer prices by up to $1,400 to keep its market share. Dell could afford such steep price cuts because its operating costs were only 18 percent of revenues, compared with Compaq's 36 percent. The competition also forced Dell away from its attempts to stress its engineering. Dell executives began speaking of computers as consumer products similar to appliances, downplaying the importance of technology. Reflecting this increased stress on marketing, Dell began selling a catalogue of computer peripherals and software made by other companies; it soon expanded into fax machines and compact discs. Dell's database, containing information on the buying habits of more than 750,000 of its customers, was instrumental in this effort.

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Toward the end of 1992 Dell's product line experienced technological difficulties, particularly in the notebook market. In 1993 quality problems forced the firm to cancel a series of notebook computers before they were even introduced, causing a $20 million charge against earnings. The firm was projected to hold a 3.5 percent share of the PC market in 1993, but Digital Equipment Corporation, whose focus was minicomputers, nevertheless topped Dell as the biggest computer mail-order company. To fight back against Compaq's inexpensive PC line, Dell introduced its Dimensions by Dell line of low-cost PCs. Sales for the year reached $2 billion, and Dell made a second, $148 million stock offering. During the early 1990s Dell also attempted a foray into retail marketing, the most popular venue with individual consumers. In 1990 Dell placed its products in Soft Warehouse Superstores (later renamed CompUSA) and in 1991 they moved into Staples, a discount office supply chain. Dell agreed to allow the stores to sell the products at mail-order prices, a policy that soon caused Dell a lot of grief. The value of existing computers on store shelves plummeted whenever Dell offered a new computer through its direct sales, and Dell had to compensate retailers for that loss. With its direct sales channel, Dell had never had inventories of old computers that it could not sell, because each of those computers was made specifically to fill a consumer's order. Dell abandoned the retail market late in 1993. With price wars continuing, Dell cut prices again in early 1993 and extended the period of its warranty. Increased competition and technical errors had hurt Dell, however, and despite growing sales, the firm announced a quarterly loss in excess of $75 million in 1993, its first loss ever. Dell attributed many of the problems to internal difficulties caused by its incredible growth. It responded by writing down PCs based on aging technology and restructuring its notebook division and European operations. Like most of its competitors, Dell was hurt by an industrywide consolidation taking place in the early 1990s. The consolidation also offered opportunity, however, as Dell fought to win market share from companies going out of business. Dell moved aggressively into markets outside of the United States, including Latin America, where Xerox began to sell Dell computers in 1992. By 1993, 36 percent of Dell's sales were abroad. That year, Dell entered the Asia-Pacific region by establishing subsidiaries in Australia and Japan.

Late 1990s Expansion After a loss of $36 million in 1994, Dell rebounded spectacularly, reporting profits of $149 million in 1995. That year, the company introduced Pentium-based notebook computers and a popular dualprocessor PC. The company grew by almost 50 percent that year and the next, raising its market share to approximately 4 percent and entering the company into the ranks of the top-five computer sellers in the world.

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Expansion continued on many fronts in 1996. Dell introduced a line of network servers and was soon the fastest-growing company in that sector. The company also opened a manufacturing facility in Penang, Malaysia. The most important development that year, however, was Dell's expansion into selling directly to consumers over the Internet. Within three years, Dell was selling $30 million a day over the Internet, which would come to account for 40 percent of the company's overall revenue. Dell achieved enviable efficiencies using the Internet to coordinate the orders of consumers with its own orders of parts from suppliers. The company's web site also provided technical support and allowed consumers to track their orders from manufacturing through delivery. Dell continued its exponential growth in 1997 and 1998, reaching profits of $944 million in 1998. The company introduced new products and services, including a line of workstations, a leasing program for individual consumers, and a line of storage products under the PowerVault brand. Dell also expanded its manufacturing facilities in the United States and in Europe. In 1998 it established a production and customer centre in Xiamen, China, raising the number of its overseas plants to three. By the time Dell sold its ten millionth computer in 1997, it was a close fourth behind IBM, HewlettPackard, and Compaq in the computer industry. By mid-1998, it had captured 9 percent of the market and the number two spot. Following on the success of its direct sales over the Internet, Dell opened an online superstore of computer-related products in 1999. Gigabuys.com offered low-priced computer hardware, software, and peripherals from various companies in the industry, although Dell continued to sell its own products at www.dell.com. The company also expanded its Internet offerings in 1999 with Dellnet, an Internet access service for Dell customers. Two more manufacturing facilities were added to the firm's global production network that year, located in Nashville, Tennessee; and Eldorado do Sul, Brazil. For the fiscal year ending in January 2000, Dell reported net income of $1.86 billion on total revenues of $25.26 billion.

Early 2000s: Surviving Global PC Downturn, Diversifying When the global PC industry fell into its worst slump ever during 2000, Dell responded by initiating a price war to which its rivals were slow to respond, providing Dell with a chance to further increase its market share. As a result, by 2001 Dell managed to gain for the first time the top spot globally in PC sales, with a 13 percent worldwide share. The downturn also triggered the creation of a more formidable competitor in the form of Hewlett-Packard, which acquired Compaq during this period. Dell also responded to the PC slump by aggressively pushing into the market for Internet servers, a more profitable sector than that of PCs. It launched another price war on the low end of the server market, which cut into its margins somewhat but enabled it to gain share. Dell targeted other highermargin sectors as well. It continued its push into the storage market in late 2001 by entering into an alliance with EMC Corporation to develop a new line of data-storage systems, and it entered the market for low-end networking gear used by small businesses, launching its PowerConnect line of

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network switches in 2001. Finally, Dell stayed solidly in the black--while its rivals were losing money--via a major cost-cutting program. The company made the first significant layoffs in its history, slashing 5,700 jobs from the payroll during 2001 and taking nearly $600 million in charges relating to restructuring actions. The charges reduced profits, but Dell still managed to record net income of $1.78 billion on revenues of $31.17 billion for 2002. Although Michael Dell remained firmly in charge of the company he had founded as chairman and CEO, Kevin B. Rollins was increasingly taking over the day-to-day operations at Dell Computer and had been instrumental in the maneuvers that had enabled the company to gain ground on its rivals during the industry slump. Rollins had consulted for Dell while employed with the consulting firm Bain & Company, before joining Dell in 1996 as a senior vice-president. He was named vicechairman in 1997 and then became president and chief operating officer in 2001. Rollins's assumption of the operating reins enabled Michael Dell to concentrate more on long-range, strategic planning. Continuing to seek new avenues for growth--as it aimed to double revenues to $60 billion by fiscal 2007--Dell Computer diversified further. During 2002 the company entered the handheld computer market by launching its Axim line of personal digital assistants (PDAs). Early in 2003 it debuted its own line of printers aimed at both businesses and consumers. Later that year Dell gained a toehold in the cutthroat consumer electronics industry by introducing LCD flat-panel televisions, digital music players, and an online music service. With businesses keeping a tight rein on their PC spending, Dell in 2002 attempted to gain further sales from consumers by setting up kiosks at shopping malls where customers could see and try out Dell computers, printers, and other products before placing their orders online or by phone. Early in 2003, in a trial run, the company set up its first Dell store-withina-store inside of a Sears, Roebuck & Company outlet. The corporation's widening interests took a quite concrete form in mid-2003 through the shortening of the firm's name to simply Dell Inc. Dell's diversification, coupled with large increases in shipments of high-profit-margin products such as servers, notebook computers, and storage equipment, propelled the company to new heights in 2004. Net income surged 25 percent that year, hitting $2.65 billion, while revenues jumped 17 percent, to $41.44 billion. Soon after these stellar results were released, Michael Dell, the person with the longest-running tenure as CEO of a major U.S. computer company, announced that he would relinquish his CEO title to Rollins in July 2004 but would remain actively involved in the company as chairman. With a smooth transition in leadership expected, it appeared likely that Dell would maintain its leadership position in computer systems and also continue to pursue its growth ambitions in the wider computer industry and into the realm of consumer electronics.

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September 10, 2011 Dells Business Model

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Dells direct distribution channel

Other than its unsuccessful venture into the retail channel, Dell has stayed faithful to its original business model, which combines direct sales and build-to-order production. This business model is simple in concept, but is quite complex in execution. While other PC makers rely on resellers, retailers, and other agents to carry much of the burden of marketing and sales, Dell has to reach out to customers largely through its own efforts. And while other PC makers can run high-volume assembly lines to achieve economies of scale, Dell must fill each order to meet customer specifications, a process that puts heavy demands on shop floor employees, suppliers, logistical systems, and information systems. It has taken Dell 15 years to achieve its present skill in making the direct model work, a point driven home by Michael Dell himself and by the difficulties other firms have had in trying to imitate parts of the model. A closer look at the direct sales and build-to-order processes helps illustrate how Dell makes them work individually and in concert with each other.

Direct Sales The direct sales approach is built on two key elements: direct customer relationships, and products and services targeted at distinct customer segments. Direct sales means that Dell must reach out to potential customers, either through its own sales force or through advertising and other marketing efforts. Dell does sell through resellers and integrators in some cases, especially outside the United States, but for the most part it does not use the services of the channel, nor does it support the profit margins of the channel.

Direct Customer Relationships Dells use of the direct approach reportedly provides it with nearly a 6% cost advantage compared to indirect sellers (Kirkpatrick, 1997). It also provides Dell with detailed knowledge about its customers.4 Vendors that sell through resellers and retailers often dont know who their final customers are, so they must rely on secondary market research to identify their own customer base. The direct approach also allows Dell to identify customer trends early so it can respond with the

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desired products before its competitors can.5 The direct approach allows Dell to build a relationship, which makes it quick and easy for customers to do business with Dell. IT staff at Boeing report that Dell has adapted its IT systems, user interfaces, and procurement processes to Boeings, making it easy for Boeing employees to buy Dell computers because they can use a familiar process. Dell uses EDI for processing orders directly into its order management system because Boeing is required to operate that way (rather than using the Internet) as a federal government/ Department of Defense contractor, and because Boeing staff are familiar with EDI. Dell also has incorporated its product information into Boeings in-house procurement catalog, again adjusting to Boeings way of doing business. As a result, Dell is able to capture new and replacement PC business because it is easy to do business with Dell, and contracting with another vendor would involve switching costs. The drawback of direct sales is that Dell lacks the extensive reach of the channel, which has thousands of large and small firms providing sales, marketing, service, and support to customers of all sizes in all markets. To overcome this problem, Dell has segmented the market by size and focused much of its own marketing efforts on large customers who could be reached directly by Dells sales force. Only after establishing a strong brand name with larger customers and developing the online infrastructure to reach new customers at a low marginal cost has Dell seriously targeted the widely diffused small business and consumer markets. Dell also sells to resellers and integrators in some cases and works with distributors to offer non-Dell products such as software and peripherals. For example, Dell is reported to be the second largest reseller of Hewlett-Packard printers (Schick, 1999). This flexibility helps Dell expand its marketing reach while maintaining its direct sales strategy for the bulk of its business.

Customer Segmentation for Sales and Service Dell segments its customers into Relationship, Transaction, and Public/International customers.6 Dells segmentation of customers helps it respond to changes in demand among different customers, to develop new customer segments, and to grow the most pro. table segments. Relationship customers are Fortune 1000 companies that purchase at least $1 million annually. They currently number about 50 companies, including Boeing, Exxon, Ford, Goldman Sachs, MCI, Microsoft, Mobil, Oracle, Procter &Gamble, Sears, Shell Oil, Toyota, and Wal-Mart. Relationship customers accounted for 70% of Dells sales in 1997, up from 59% in 1992, reflecting Dells emphasis on growing its business with large pro. table clients . Dell concentrates its resources on these customers, offering highly customized services to gain and keep their business. Relationship customers are serviced by field-based sales representatives in customer sites, and an equal number of telephone service representatives is dedicated to these accounts. Each sales representative is dedicated to

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a single customer (or a region in some instances), and is responsible for understanding its IT environment and service needs.

By selling directly, incorporating the right technology as it becomes available, and timing the changeover well, Dell can take advantage of higher profit margins on new technology while also taking advantage of falling prices on components.

Build-to-Order Production Dells production system applies principles of lean manufacturing and just-in-time production, which were first employed by Japanese manufacturers such as Toyota and have been applied extensively in the U.S. PC industry. These principles aim to minimize parts inventories by requiring suppliers to restock parts only as they are needed, and often to maintain ownership of parts until they are used. In effect, the PC company is pushing the upstream inventory problem onto the suppliers, a practice that is viable at least for larger vendors who have the clout to make such demands (Kraemer & Dedrick, 1998). Dells build-to-order strategy goes even farther than lean production, however, in order to achieve mass customization of products. Build-toorder requires Dell and its suppliers to have available specific components as they are needed to fill an incoming order. For instance, while Compaq or IBM might order hard drives in batches of different models for different production runs, Dell must have on hand enough of each drive model to quickly fill orders of varying and unpredictable sizes. This requires very close coordination between Dells sales and manufacturing arms and between Dell and its suppliers. It achieves this by refining its business processes, developing close relationships with a limited number of suppliers, and using IT to facilitate communication within and outside the company. Dell has continually worked to improve the speed and flexibility of its production system. The buildto-order production system is the focal point of Dells business operations, the common contact point for sales, procurement, logistics, manufacturing, and delivery. The process is illustrated by what happens when customers place an order via the Internet. They are aided by configuration management software that enables them to choose from a menu of hardware and software options. The configuror ensures the items chosen are compatible with the rest of the system and prices the system, permitting the customer to iterate through various choices. They also can call Customer Service, which can link directly into Dells inventory to determine whether the required components are available.

To sum up, using direct sales eliminates inventory in the channel, provides Dell with information on and access to the final customer, and allows Dell to offer other services to the customer. Using build-to-order allows Dell to offer the latest technologies, which carry a higher margin; allows it to customize its products to user specifications; and means that Dell doesnt lay out

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cash for parts until it receives payment for the PC. Together, direct sales and build-to-order help create a strong relationship between Dell and its customers, as both require direct interaction and allow Dell to gather information on its customers needs.

Dells IT Architecture

According to Gregoire, G-2 is a blueprint for how to architect systems, execute development, and implement rollout that delivers on the failed promises of client-server computing, that is, low cost to build and manage and easy to use. Gregoire says that in an environment of 60% annual growth in transactions processed, one cannot afford IT projects that take 2 years to implement. The G-2 architecture was designed to be flexible, meaning that changes could be made iteratively, without having to shut down whole systems or retrain workers. The G-2 architecture is layered, with a Web browser user interface sitting on top of an applications layer, a message broker, and a database (Figure 3). The key to this structure is the message broker layer, which is based on an IBM MQ series application integration system. It serves as an information bus, linking all applications and databases to each other, so they dont all have to talk to each other separately. It also allows new data engines or applications to be added to the system without having to make changes throughout the system. For instance, a new database on customers (e.g., how much they have spent on various products in the past) can be added at the data engine level and be linked via the message broker to Dells customer service representatives order management system. This information can bemade available as an extra button on theWeb browser interface without needing to change the users applications or retrain the users.

FIG. 3. Dells G-2 architecture.

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The G-2 architecture enables the company to run best-of-breed applications rather than only a single enterprise system. It also makes it possible to run Dell on Dell, using the products that Dell and its strategic partners sell: Dell servers, desktops, and laptops; Windows NT and the Explorer Web interface; and Oracle databases. The G-2 architecture has extended the life of Dells legacy applications, such as the DOMSandDell Product services (DPS), which are written for Tandem hardware, even as other applications are shifted to Windows NT servers, because the message broker layer allows these different systems to talk to each other. Also, migration from legacy applications to NT-based applications can be done incrementally, migrating individual functions over to new applications one at a time, rather than having to rewrite entire applications or move entire databases all at once. Such flexibility enables Dell to expand the capabilities of its information systems to meet the demands of rapid growth without major disruption to the businesss functioning. Creating and maintaining all of the linkages and interfaces required for this flexibility is reported to be complex and costly, and problems sometimes result, but Dells IT people seem to have made application integration work to serve the companys needs.

Dells IT Organization Like the company as a whole, the IT is decentralized. Gregoires management philosophy is that all IT is local. He argues that when companies have highly centralized IT departments, there are hundreds of other invisible IT departments scattered around the company, doing whatever they want with no coordination among them. He prefers to keep IT decentralized, and follows the 100-person rule, which states that whenever an IT department gets larger than 100 people, it is time to break it up. Such a structure is decentralized, yet is easier to coordinate than hundreds of invisible units. Still, Dells IT people admit that while their decentralized matrix structure is good for supporting growth and innovation, it can be hard to maintain control. There are clearly trade-offs, and Dell has decided that in such a fast-changing business, it is worth sacrificing some control in return for greater flexibility. The resulting complexity of Dells IT organization is illustrated by the Dell Americas IT structure in Figure 4. Dells IT subunits are organized in a matrix structure, cutting across business functions and markets, sitting on top of an integrated systems services layer and a functionally oriented applications layer. The few functions are product design, manufacturing, sales, service, and corporate systems, while the three business markets are relationship (large customers), transaction (consumers and small businesses)

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FIG. 4. Matrix structure of Dell Americas IT organization.

and international/public (non-U.S. markets; government, education, small- and medium-sized enterprise (SME)). Each of the three markets represents a subdivision of the Americas region, and each must be supported by applications in some or all of the five functional areas. The IT System Services functions are those that support the whole business, such as network services, the help desk, database administration, and the data center. The actual interactions within the matrix structure are less neat than the figure suggests. For instance, the DOMS application supports both customer services and sales, while sales commissions applications must be linked to finance and human resources. However, with Dells G-2 architecture, it is possible to link applications and data to the necessary functions via the message broker layer. IT is highly integrated within Dells regional operations, and less so across regions. Still there is a great deal of data sharing across regions to support corporate functions and to share useful information throughout the organization. Regional IT executives answer primarily to the regional business manager, who makes budget decisions and choices about what types of applications to develop or adopt. However, CIO Jerry Gregoire maintains the authority to enforce architectural standards across the company and to ensure that long-term infrastructure projects are carried out. The company must decide to what extent it wants to standardize applications across the company versus letting regions make their own choices as to what systems best suit their needs. So far, there are no hard rules, but in general, flexibility and decentralization are given priority over standardization. For instance, the DOMS, developed in the United States, is used in the United Kingdom but not in France or Germany, and a manufacturing system that was developed in Europe is used in Asia but not in the Americas.

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METHODOLOGY
Enterprise Resource Planning (ERP) System implementation is both an art and science that consists of planning, implementation, and ongoing maintenance. This methodology is designed to automate the drudgery of implementation and provide organized approaches to problem solving by listing, diagramming, and documenting all steps. Structured methodologies help to standardize and systemize ERP implementation and maintenance by approaching them as an engineering discipline rather than as whims of individual software developers. It is essential to understand structured methodologies in the implementation of ERP systems. The basic steps of structured methodologies are: Project Definition and Requirement Analysis. Defining the terms of reference, determining user needs and system constraints, generating a functional specification and a logical model for the best solutions. External Design. Detailing the design for a selected solution, including diagrams relating all programs, subroutines, and data flow.

Internal Design. Building, testing, installing, and tuning software. Pre-implementation. Evaluation and acceptance Implementation. Implementing systems . Post-implementation. Evaluation of controls and debugging.

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ANALYSIS OF ERP IN DELL :

Issuess corping in organisation :

Enterprise Architecture Issues Supply Chain Management: The purchase and number of transactions that Dell took in required a properly configured and concise business process. In-sourcing: To meet the demand of the market some parts of the process required the services of other companies that can be in partner with Dell. Quality Assurance: The computer industry is a very dynamic one, which makes quality products stand out when faced with technology-oriented consumers. Business Automation: As Dell advanced into online markets, its sales staff feared from losing their jobs in favour of automated sales transactions. Dynamic Industry: The technology industry requires closely monitoring consumers' trend to maintain a low gap between the point of demand and the point of supply.

To remove theses issues Dell decided to use ERP and first purchased the SAP software in 1994 to run its manufacturing operations. Over the next two years, the computer maker tried to implement the software across its multiple operations, but pulled back at the end of 1996. In the late 90s Dell Computer Corporation used first Escalle and Cotteleers model of single vendor, and began implementing SAP R/3 to run its manufacturing operations. However after implementing the HR modules, they stopped. Also, the process took a very long time, and as the company strategy changed from a global business strategy to more regionally segmented strategy. SAP was not able to adapt to Dells needs, and two years later, the company decided to abandon the SAP solution.

ERP introduction: SAP R/3

Towards the end of the 80's, client-server architecture became popular and SAP responded with the release of SAP R/3 (in 1992). This turned out to be another success for SAP, especially in the North American region into which SAP had expanded in 1988.

The growth of SAP R/3 in North America has been nothing short of stunning. Within a 5 year period, the North American market went from virtually zero to 44% of total SAP worldwide sales. SAP America alone employs more than 3,000 people and has added the names of many of the Fortune 500

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to its customer list (8 of the top 10 semiconductor companies, 7 of the top 10 pharmaceutical companies etc). SAP today is available in 46 country-specific versions, incorporating 28 languages. These solutions are tailored to meet the specific requirements of 23 different industry categories, from aerospace and defense to utilities, giving SAP a competitive advantage that no other company can match.

SAP R/3 is delivered to a customer with selected standard processes turned on, and many other optional processes and features turned off. At the heart of SAP R/3 are about 10,000 tables which control the way the processes are executed. Configuration is the process of adjusting the settings of these tables to get SAP to run the way you want it to. Functionality included ranges from financial accounting (e.g. general ledger, accounts receivable, accounts payable etc) and controlling (e.g. cost centers, profitability analysis etc) to sales and distribution, production planning and manufacturing, procurement and inventory management, and human resources.

SAP R/3 Functional Modules

SAP R/3 Master Data

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BUSINESS PROCESS REENGINEERING

SAP Implementation Methodologies and Strategies

Project management seeks to reach a previously defined result within the context of a given schedule, specific costs, and in the required quality. Within this definition, SAP Project Management provides an implementation methodology that adapts SAP functionality into the organization and its businesses. Various implementation methodologies and models have been developed over the years by SAP, the Big 4 and other SAP business partners, customers and consultants. Many projects take an existing methodology one step further and adopt it to their organization, introduce improvements and new tools to make the implementation task more efficient. The benefit of using a methodology is the risk reduction that comes from using a proven approach. Another benefit is the creation of a common framework for all teams to work with. This includes standard terms and the coordination of time lines.

It also provides a rough guide as the overall work effort that will be needed. This breakdown of tasks is very important for a smooth implementation. Most methodologies includes

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templates that show examples of normal project deliverables., which provide project teams with guidance for their detailed work.

Finally a methodology contains the collective wisdom of those who produced it, and may even contain this wisdom in the form if helpful tips.

According to [Norris, 1998] the top 10 risks to an SAP R/3 project are:

1. Inadequate sponsorship 2. Poor/slow decision making 3. Poor/no scope definition 4. Inadequate attention to change management 5. Lack of cooperation between business areas/departments 6. Poor use of consultants 7. Inappropriate resources 8. Unrealistic expectations 9. Inadequate knowledge transfer to your people 10. Poor project management

There are certain important things to remember when using a methodology. A methodology is a generic approach. It will not prescriptively solve all of a companys problems because, while it is generally true, it is never specifically accurate. Each company has some unique aspects, and every R/3 implementation will be affected by the particulars of the organization. 2. Because every organization is different in both its makeup and its reasons for

1.

implementing R/3, a methodology cannot be relied on to such a degree that flexibility is lost. 3. On the other hand, a methodology will not describe every necessary task; on the other hand following every detail of the methodology may result in unnecessary work.

In short a methodology must be put into context of the business and its needs. It should be used with an understanding of the needs by adopting those aspects that support the goals and

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by discarding those that do not.

Similarities in All R/3 Methodologies

All methodologies for implementing SAP software have a few common elements. First and most important, they are all structured. They consist of phases, which are broken down into tasks, further broken down into activities and finally into work steps. Almost all methodologies have four phases that can generally be thought of as follows, although with different names:

1- Initiate: This phase includes planning and costing the effort, determining the internal staff and outside help necessary, defining the scope of the implementation, and doing the initial business case justification for the undertaking. 2Think: This is the phase in which the current or as-is state of both systems and processes is analyzed and what is wanted from the to-be state determined.

3-

Work: In this phase, the R/3 program is actually configured to the specifics of a

companys business, then tested and deployed.

4-

Watch: The watch phase entails measuring the results achieved against the expectations,

and supporting , maintaining, and upgrading the system as necessary.

Another important aspect of an SAP implementation is the implementation strategy the business decides to pursue. A strategy defining the functional scope and regional coverage of the implementation is chosen by analyzing the cost, resource requirements, risks and expected returns of the implementation. At a high level, we can define three implementation strategies: Step-by-step functional implementation, Big Bang, and site rollout. Each one has its pros and cons, and selecting a strategy requires an in depth analysis of the above mentioned criteria. The strategy should also define the business approach and preference for technical development, i.e. adding customized code to core SAP, in form of user exits, custom transactions, and modifications. The quite opposite implementation strategy of using SAP as delivered is often referred to as Vanilla SAP. This is a big challenge for the business to adapt the processes to the software, but results generally in

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minimum cost and risk for the implementation, and minimum maintenance after go-live.

Let us compare the three major implementation strategies, by its advantages and disadvantages. Step-by-step implementation

A step-by-step implementation is characterized by the implementation of the software in small steps, and generally concentrates on the implementation of a few related modules at one time. Before adopting this approach, an overall concept must be established for all relevant business processes in order to avoid conflicts and constraints in subsequent implementations. For example, due to the complexity of its financial legacy system over several regions, a company might choose to implement certain logistics modules first (e.g. Materials Management, Sales and Distribution, Logistics Execution) and build interfaces between R/3 and the legacy systems.

Advantages The complexity for coordinating, controlling, and organizing the project and resources is

reduced A minimal amount of human resource is required for the project team and user community The quality of the projects improves because the project members increase their knowledge

and skills A team of internal consultants can be established over time, reducing the cost of the project There is a smoother changeover throughout the company: people have time to adapt to

changes Costs are spread over a longer period of time Modest organizational changes can be considered during the implementation

Disadvantages

There is a longer project throughput time Interfaces must be developed to maintain existing systems I Integration advantages of the project can only be used step by step

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Customizing may not be optimally set because integrating components have not yet been implemented Return on investment is generally delayed

Big Bang implementation

A big bang deployment of R/3 replaces all or most critical existing systems in a single operation with the new software. Fastest by definition, the big bang had emerged as the most cost-effective and also the riskiest solution. A majority of the SAP community would vote against simultaneous launch of all R/3 modules in conjunction with a new IT infrastructure. This approach is preferred by companies with a straightforward organizational structure or with too many systems to replace where the cost of developing interfaces would be too high.

Advantages Few or even no interfaces between legacy systems and the new application are needed

because all modules go live at the same time There is a short throughput time The project members motivation is high It is highly efficient, because redundant customizing is avoided There is optimal integration of all components under consideration of the integrated

business processes

Disadvantages The implementation is complex due to the increased need for coordination and integration It is resource intensive over a short period of time All employees are subject to higher stress levels at the same time A high degree of consulting support is required Organizational changes must be limited in order to overcome resistance to change among

employees .

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Roll-out

Roll-out refers to region or business specific extensions of an implementation after a model is created at one site or business unit, which is then used to implement to the other sites or business units. For example, a company operating in USA and Europe might choose to create a model for most of its functionality in USA and with a subsequent phase implement the tested approach in Europe. Similarly, a company operating multiple business units might choose to start the implementation with the one of the business units and leverage its experience. The roll-out approach can be combined with the other implementation strategies above limiting or enlarging its functional scope.

Advantages There is valuable experience gained by project members Expertise is available for a fast implementation Costs are kept low because only limited resources are needed Standard business processes can be achieved by using a model implementation and

leveraging the same design .

Disadvantages

Customization implementations

must

also

consider

company

standards

for

subsequent

Site-specific requirements can be overlooked

After the failure of the sap implementation by dell, it used the best-of-breed approach and deployed the Glovia G2 for manufacturing tasks such as inventory control, warehouse management, and materials management. Supply-chain vendor i2 Technologies Inc. was chosen last year to manage the flow of raw materials throughout the company; Oracle was selected for order management. Now let us see each component in details:-

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Glovia G2:
Proven Manufacturing Solution Extended ERP Glovia Solutions With Glovia, one can improve its operations no matter if

your business spans the world or only a few time zones. Deployed strategically, its solution scales to meet the enterprise-wide needs of global corporations. Deployed tactically, Glovia becomes a cost-effective platform for managing divisions or individual factories. Because glovias clients often have customers, suppliers, and operations around the world, it supports multiple languages, multiple currencies and complex business structures. It is a proven, comprehensive, integrated, and flexible solution that world class manufacturers use to manage their operations from product design, sales and procurement, to production, order management and post-sale service. Essential Glovia business benefits include: 1. Enterprise-Wide Visibility
It provides you with true supply chain transparency as it eliminates information silos, integrates systems and business processes, and links you to your customers and suppliers.

2. Unmatched Flexibility
Glovia supports your business, no matter what your industry or manufacturing mode, without forcing you to change your business processes Glovia is an investment in your future. 3. Real-time Responsiveness Glovia slashes order-to-fulfillment cycle times and helps you get the right product to the customer at the right time, place and price. 4. Improved Efficiency Glovia helps you reduce costs as it effectively eliminates excess inventories, boosts productivity and manages resources.

Extending Boundaries Extended ERP for Modern Manufacturers Glovia is the next-generation of enterprise solutions: Extended ERP. Extended ERP addresses the pressing business issues that manufacturers face today such as the coordination of global supply chains, management of complex product lifecycles, and growth of profitable service offerings.

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Glovia provides manufacturers with advanced capabilities to manage and improve their entire business from product design, procurement, planning and manufacturing to sales, fulfillment, installation and support. It streamlines operations within the four walls and beyond, integrates disparate internal systems, eliminates functional silos, and brings you closer to your customers and suppliers. The advantages are enormous. For example, one can respond quickly and accurately to customer demands, compress cycle times and information flow throughout the supply chain, transform the business into a lean organization, and allow demand to trigger production and procurement. Naturally, all of these benefits eliminate costs while they improve standing with customers and against competition. Glovias extended ERP suite includes more than 70 seamlessly integrated modules that allow you to run and refine your key business processes. Extended Demand: Manufacturing Management Comprehensive Solutions for Materials Management and Production Planning

Glovia Manufacturing Management business benefits include:

Increased visibility and operational control Reduced finished goods and work-in-progress inventories Increased resource utilization and lowered manufacturing costs Reduced production bottlenecks and idle equipment Improved on-time delivery performance

One thing is for sure: You need strength and flexibility. Glovia Manufacturing Management gives the control you need over all aspects of production planning and materials management so you can focus each day on increasing profits. Its flexible solution supports the entire spectrum of manufacturing styles-from High Volume to Engineer-to-Order-and coordinates orders, equipment, facilities, inventory, and work-inprogress to minimize costs and maximize on-time delivery. The solution includes powerful shop floor functionality to track and manage each step of the manufacturing process.

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Glovia Manufacturing Management translates the supply chain plan into an achievable production plan that balances the needs of sales, manufacturing, finance, and your customers. Glovia Manufacturing also includes both finite and infinite capacity planning capabilities that help you develop realistic schedules. Our manufacturing heritage provides us with true insights into your needs. Glovia Manufacturing Management helps one succeed by providing more visibility, flexibility, and control to make you highly responsive, integrated, and lean.You can deploy our solution strategically to manage a stand-alone company, an entire global business, or tactically to run a division or factory. Our customers often have customers, suppliers and operations that span the globe. Glovia supports multiple languages, currencies and complex business structures, so you can manage your enterprise around the clock, and around the world with a single, integrated solution.

Implementation Methodology Simplified Implementation with Maximized ROI

Glovia has built a tremendous track record, over the last 30 years, of very successful implementations. These implementations have always followed a guiding principle to provide immediate value to the customer while also ensuring that we achieve the highest level of expectations. Examples of these metrics are:

Meeting go-live objectives on time and on budget Deliver solution fit to customer requirements Manage scope of the overall project, both macro and detail level Minimizing risk Delivering best-in-class business consultation Delivering industry leading process improvements Limit customization and attempt best use of package implementation Effectively empower the customer user community

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All of these attributes lead to a major business benefit to our customers: the transfer of ownership of both the glovia G2 system and the new and improved processes to our customer's employees. Our objective is to provide a successful implementation however measured. The Glovia ERP system architecture is designed for scalability, easy implementation and rapid deployment. Our site-by-site implementation allows a gradual evolution of information systems without requiring complete systems replacement, minimizing business disruption and controlling implementation costs. We offer proven conversion procedures for a variety of legacy MRP, MRPII, & ERP systems, including MAN-MAN Classic, Mapics, and BPCS, among others. The basis of Glovia's implementation services to is built on a combination approach: a very strong 11-step implementation methodology coupled with utilization of customer resource and subject matter expertise. The benefits of the Glovia implementation methodology are:

Secures management involvement, governance and oversight Controls project costs and schedules Provides a high degree of project visibility and documentation Provides a system and business process architecture and platform that will support future improvement initiatives

Limits risk

Implementation Phases for the implementation of core glovia G2 Phase 1: Implementation Planning and Organization

Establish Customer/Glovia project management process and team Collate all background information and documentation Confirm the business objectives for the project Develop macro and micro plan for implementing glovia G2 Develop plan for supporting technology infrastructure and deployment Provide first level education to user and technical team members Confirm Customer Business Unit representatives participation and involvement

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Confirm Glovia Professional Services staffing and plans

Phase 2: Hardware and Technology Infrastructure

Acquire necessary hardware & network required Test and QA user response time and network loading Establish support model

Phase 3: glovia G2 Solution Definition to Requirements

Project team attends glovia G2 education and training sessions Team members practice with glovia G2 and develop internal customer knowledge and skills

Team designs, develops and refines new business processes where required Customization requirements are identified for development Decisions and conversion definitions for data mapping are provided Business flows and desktop procedures prepared, validated and documented for use in later project phases

Expose solution to the extended user community

Phase 4: Data Migration

Map legacy system(s) data to glovia G2 data schema Use the glovia G2 application EIF module and application adaptors to load programs or prepare custom programs

Prepare one-time programs to extract and format legacy data for the glovia G2 load programs

Prepare one time data load and field initialization programs, including all required parameters

Identify old, inaccurate, obsolete legacy data to be improved or eliminated before conversion

Assign teams to cleanse data

Phase 5: Customization & Interfaces

Customization requirements: special forms, custom reports, interfaces and customization are developed

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Provide technical programming skills to tailor the glovia G2 application software to meet unique customer requirements

Design and write specifications for customizations Make changes to programs following customer change control procedures Execute unit tests and QA scripts and correct as necessary Provide on going support during conference room pilot and integration test phases

Phase 6: Conference Room Pilot

Test, demonstrate and validate the glovia G2 solution Test; verify all setups, data migrations, processes and customizations Prove the glovia G2 solution meets the business requirements Resolve all issues, make necessary corrections before continuing Repeat the conference room pilot, if warranted, to prove the changes and the total solution

Final Customer Executive decision for go-live phases

Phase 7: Integration Test

Conduct an integration test as a "dress rehearsal" for go-live Validate all solution deliverables Assure all elements required to execute the conversion and loads system are in place and available

Select and train an extended user team to conduct the final testing Validate that glovia G2 fits the business requirements and can be used to run the business Make any required last minute, minor changes Confirm the go-live date

Phase 8: Readiness Activity

Project team and the business prepare for the go-live Final conversion and startup schedules are refined Changes in user procedures and documents for training are completed Deliver training to the extended user community Dates and schedule for cutover and implementation are communicated throughout the organization

Phase 9: Conversion and Cut-Over

A production environment for new system is initialized

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All data is converted and loaded into glovia G2 The team executes the detail conversion schedule with all validation steps to assure complete and correct data is loaded

Customer does final month-end close on legacy system Final infrastructure changes are made Legacy system(s) is restricted to inquiry only

Phase 10: Go-Live Support

When conversion is complete the new system is ready for production use User, IT and Glovia support teams provides round-the-clock on-site support for the new system

Any issues are logged and resolved as reported For the first weeks, the user, IT and Glovia team support the startup Help desk receives calls, resolves as many as they can; remainder is given to project team members to resolve on a priority basis

Support continues through the next 'x' months end close cycles-where 'x' is to be mutually agreed

Phase 11: Post-Implementation Audit

Evaluate the progress and effectiveness of the glovia G2 solution Review the operational effectiveness of the system as implemented Identify problems, performance or process issues Identify what is working well Review opportunities to further improve effectiveness with the users Eliminate short-term problems and obstacles Present a plan of longer term corrective actions and improvements if required

i2 Technology Introduction :
i2 provides best-of-breed supply chain management tools, as well as business-to-business (B2B) and collaborative commerce solutions, based on technologies and standards such as Extensible Markup Language (XML), Common Object Request Broker Architecture (CORBA ), and JavaTM . These solutions run on industry-leading application servers to provide scalability, reliability, and value to i2 users.1

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i2 offers a suite of solutions available on Windows NT to help customers make better decisions in every phase of business, including:

Direct and indirect procurement Dynamic sourcing Intelligent product allocation Collaborative demand planning and forecasting Inventory visibility and management Supply planning and optimization Intelligent order promising and real-time order status Collaborative logistics planning Collaborative product life cycle management (PLM)

TradeMatrix solutions and e-marketplaces Companies can focus on improving any part of the value chain-no matter how far a company has progressed in implementing an e-business strategy (see Figure 1 ). i2 TradeMatrixTM builds and supports digital marketplaces with services, content, and technology to optimize core business processes, connecting companies to their partners, customers, designers, content sources, and the entire i2 TradeMatrix community.

Figure 1. i2 TradeMatrix solutions

Supplier Relationship Management

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Many i2 customers begin by deploying the TradeMatrix Supplier Relationship Management (SRM) suite, focusing on reducing design, sourcing, and procurement time and costs (see Figure 2 ). The benefits of TradeMatrix SRM include:

Figure 2. SRM: design, sourcing, and procurement

Reduced product development costs Reduced time to volume Reduced materials costs Reduced inventory costs Increased assurance of supply

Supply Chain Management The i2 Supply Chain Management (SCM) planning and execution solutions maximize supply chain velocity by optimizing demand, supply, fulfillment, and service processes. The benefits of i2 SCM solutions include: The i2 Supply Chain Management (SCM) planning and execution solutions maximize supply chain velocity by optimising demand, supply, fulfillment, and service processes. The benefits of i2 SCM solutions include:

Improved customer satisfaction and loyalty Differentiated response to customers Increased throughput and better product mix Fewer stock shortages Reduced inventory and obsolescence

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Reduced warehousing, transportation, and returns costs

Customer Relationship Management The i2 Customer Relationship Management (CRM) solution provides planning and execution processes to optimize each phase of the customer life cycle. This includes marketing, sales, fulfillment, and service management processes that ensure customer satisfaction. The benefits of the TradeMatrix CRM solution include: Customer Relationship Management The i2 Customer Relationship Management (CRM) solution provides planning and execution processes to optimise each phase of the customer life cycle. This includes marketing, sales, fulfillment, and service management processes that ensure customer satisfaction. The benefits of the TradeMatrix CRM solution include:

Consistent and personalized interactions with customers Intelligent selling Improved service costs and execution

Content Significant resources, technology, and expertise are required to collect and manage content data from thousands of suppliers on tens of millions of products, spanning electronics, equipment, suppliers, and maintenance, repair, and operations (MRO). The TradeMatrix Content solution covers three areas: software, custom catalogs, and reference databases (with over 50 million parts in dozens of industries). The benefits of TradeMatrix Content include:

Reduced purchasing costs and inventory through data normalization, schemas, and cross-referencing

Supplier content tools and data services User acceptance and successful searches Decreased time-to-value through cleansed and complete reference content, schemas, and field-tested implementation experience

Platform i2 delivers the i2 TradeMatrix solutions on the i2 TradeMatrix Platformthe business and technology foundation that allows manufacturers, suppliers, distributors, and customers to interoperate in real time. The i2 TradeMatrix Platform manages transactions, messaging, and

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presentation of information to customers, and integrates with back-end Enterprise Resource Planning (ERP) systems (see Figure 3 ). Benefits of the i2 TradeMatrix Platform include:

Figure 3. i2 TradeMatrix Platform design

Synchronized multi-enterprise business processes Support for a wide breadth of services Distributed transaction management and decision support without replacing existing systems

A common platform for both i2 and non-i2 solutions compliant with open standards

Meeting the needs of e-business The basic principles for optimizing the value chain apply to every major industry: automotive, chemicals, consumer product goods, electronics and computers, energy, industrial, metals, paper and forest products, pharmaceuticals, soft goods,

telecommunications, and transportation. i2 solutions help meet the needs of e-business across this range of industries with quantifiable benefits. i2 Technologies provides a wide variety of collaborative e-services for both early-stage and next-generation e-business adoption, with each offering supported by decision optimization, transaction management, and content management solutions.

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Dells i2 Factory Planner Architecture

Striving to enhance and broaden the Dell Direct business model, Dell recently deployed a suite of software from i2 Technologies. The projects goals were to boost the efficiency of Dells supply chain and production planning and extend the scope of Web-enabled information available to factories and suppliers. Typical of such projects, Dell needed to overcome challenges such as constrained timelines, limited resources, and investments in legacy systems with established interface requirements. Prior to the deployment of these solutions, Dell undertook a comprehensive benchmarking and selection process to select the platform for the i2 applications. Dell ultimately chose to host all thei2 applications on Dell PowerEdge servers running Windows NT.1 he i2 TradeMat r ix suite includes Supplier Relationship Management, Supply Chain Management, Customer Relationship Management, and Content. Several specific application modules compose each of these solutions. This article focuses on the deployment of the Factory Planner (FP) and TradeMatrix Collaboration Planner (TCP) modules of the Supply Chain Management solution.

Factory production workflow To provide relevant information and optimized production schedules, the i2 solutions needed to adapt to the existing production workflow, procedures, and IT systems in Dell factories. This production workflow begins as orders are received and assigned to factories and extends to the picking of parts (kitting), building, and boxing of ordered systems on the factory lines. Dell assigns orders to factories based on two criteria: geography and product type. Geographic assignments primarily aim to minimize transportation expenses, but also involve considerations such as import/export laws and country-specific product requirements. The second criterion, product type, results from factories that specialize in producing a single type of product: desktops, laptops, servers, or storage subsystems. Once orders have been assigned to a factory, the challenge becomes weighing what should be builtor orders on handagainst the available supply of parts and manufacturing capacity. The availability and delivery of materials can complicate the decision of exactly what to build. Independently owned and operated Supply Logistics Centers (SLCs) or hubs usually deliver materials to factories. An SLC coordinates the delivery of components to maintain a timely, damage-free,

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and controlled flow of supplies to the assembly line. Figure 1 illustrates the factory production workflow, from the delivery of materials through the shipping of finished products. SLCs help improve efficiency and reduce inventory, but also introduce planning challenges. An SLC can service multiple factories;

each factory makes materials requests independently of the others. For planning purposes, each factory assumes an unlimited supply at the SLC in making materials requests. This procedure allows each SLC to track materials availability, determine which request sit can and cannot meet, and commit (or refuse) to deliver the requested materials.

Dells existing IT infrastructure The IT landscape at the beginning of the project included five major applications that needed to integrate with Factory Planner. Figure 2 illustrates the architecture of these five systems. Dell Order Management System (DOMS). This legacy application records all orders and releases them to manufacturing. Accessed via character-based terminal screens, several distinct systems actually fulfill DOMS functions, depending on the geographic region and type of order. DOMS manages several different types of transactions, from individual credit card transactions to business purchase orders. The largest customers frequently create blanket

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purchase orders and use Premier Dell.com to select products from a list of approved configurations. These orders are internally approved and then sent to Dell via the Internet. Work-in-Progress Tracking Coding System (WTCS). This system lies at the heart of the manufacturing process. Moving an order from DOMS to WTCS releases it to manufacturing.WTCS creates a bill of materials (BOM) and a unique service tag number for each system. The BOM and service tag number are printed on a production order called a traveler, which follows the order through the production process. The service tag number is also burned into each product and used for warranty and maintenance purposes. Engineering Materials Process and Cost Tracking (EMPACT). This inventory control program governs on-hand inventory. Generally, EMPACT tracks small parts that are ordered in quantity rather than delivered on demand by an SLC. These parts range from inexpensive screws to Intel processors. Value Chain (valuechain.dell.com). This extranet portal for suppliers provides direct, Internet-based access to Dell documentation, forms, tools, and supplier rating scorecards. Operational Data Store (ODS). This database is optimized to support nearly realtime manufacturing decision support queries. Typical queries might ask the location of a particular order on the manufacturing floor or what systems compose the order of a particular customer.Materials-related queries could include the quantity of a part on hand or in transit from an SLC. Because production plans were previously based on this data, the data used as input by Factory Planner is already cleaned. Several characteristics made ODS a successful tool. First, it contains only information about the current days production. Although substantial effort is made to update data in near real time, in practice, periodic updating is sufficient for successful operation. Second, the granularity of the ODS data is the same as the data in the transaction systems. Other true data marts aggregate data and integrate it with historical data for forecasting, sales trend analysis,

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and other queries across time. Next, the user interface supports several means of accessing data, such as reports and spreadsheets. Finally, because ODS is optimized as a read-only database, only a minimal number of operations write new data.

New i2 applications deployed Factory Planner/Advanced Scheduler, a client-server tool, optimizes the planning and scheduling of manufacturing production. Dell deployed Factory Planner version 4. Users access numerous FP functions through a graphical user interface (GUI). Complex but efficient algorithms simultaneously consider materials and capacity constraints and propose

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appropriate production schedules. Providing proper values to hundreds of switches tailors the algorithms to an individual customer, which simplifies implementation and future upgrades. The resulting configuration is referred to as the model. TradeMatrix Collaboration Planner was initially deployed as the workflow and communication application to provide supply chain visibility across multiple enterprises. TCP allows manufacturers and suppliers to collaborate dynamically on materials delivery agreements. A three-tiered application, TCP consists of a Web-based GUI, a business logic tier, and a database.

Hardware infrastructure For the TradeMatrix Collaboration Planner component for demand fulfillment, the infrastructure includes two PowerEdge 6350s running WLBS to support the application layer, two PowerEdge 6350s using MSCS and OFS for the database, PowerVault 650F and 630F storage, and an additional PowerEdge 6350 as a batch upload/download server. The Web layer of four PowerEdge 2450 servers running WLBS supports TCP for both demand fulfillment and global supply planning. The infrastructure for Factory Planner includes PowerEdge 6350s using a hot-swap backup method for the FP engine layer and two PowerEdge 6350s and a PowerVault 650F using MSCS and OFS for the staging databases. On the global supply planning side, TradeMatrix Collaboration Planner is powered by four PowerEdge 6350s using WLBS for the application layer, two PowerEdge 8450s using MSCS and OFS for the database, a PowerVault 650F and 630F for storage, and a PowerEdge 6350 as a batch upload/download server. The Supply Chain Planner function uses a PowerEdge 6350 as the engine. The Active Data Warehouse database includes a combination of PowerEdge 6350s and PowerVault 650Fs and 630Fs for storage under MSCS and OFS. The Metadata Warehouse uses two PowerEdge 8450s using MSCS and OFS, backed by a PowerVault 650F and five PowerVault 630Fs for storage.Figure 1 illustrates this architecture as it was deployed in the Americas region.

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Figure 1. i2 architecture for the Americas region

Driving supply chain efficiency One of the primary goals for the i2 implementation was optimizing delivery and inventory use in Dell factories. Dell is known for its leadership and innovation in supply chain management, and the i2 solution is driving even greater efficiency. This i2 solution on Dell hardwareincluding PowerEdge servers and PowerVault storage and Windows NT provides the performance, scalability, availability, and easy maintenance required to meet these goals.

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CASE FINDINGS
o

Glovia is at the heart of the most efficient system of "demand-driven manufacturing. "Dell leads the way in this style of manufacturing, including all facets of just-in-time inventory, efficient supply chains and true make-to-order philosophy. In line with Dell's global manufacturing strategy, today's announcement that all North American facilities have gone live builds on already successful implementations in Ireland, China, Brazil and Malaysia. The Glovia applications that were implemented at Dell operate on an industry-leading implementation of Dell NT servers around the clock. Dell has certified this configuration for more than 5,000 online users, making this one of the largest successful ERP implementations in history. The company's revenue for the past four quarters totaled $32.6 billion. Dell ranks No. 48 on the Fortune 500, No. 154 on the Fortune Global 500 and No. 7 on the Fortune Global "most admired" lists of companies. Dell, through its direct business model, designs, manufactures and customizes products and services to customer requirements, and offers an extensive selection of software and peripherals.

Measuring a successful project With i2 Factory Planner, TradeMatrix Collaboration Planner, and Active Data Warehouse, Dell produces realistic and successful production plans. The success of the Factory Planner deployment is evidenced by the significant reduction of work in progress on the manufacturing floor, thus minimizing the inventory investment and accelerating the velocity of work. In addition to work-inprogress reductions, the factories have seen significant reduction in raw inventory, improvement in order fulfillment cycle time, improved SLC delivery performance, and lower headcount in planning and replenishment. Furthermore, Factory Planner has improved the quality of information available for making decisions and the level of communication between Dell and its suppliers. These results have met Dells goalto enhance the Dell Direct business model by streamlining and strengthening production and supply chain planning.

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CHAPTER 4 CONCLUSIONS AND RECOMMENDATIONS

Conclusion
Initially to cope up with the arising problems, they had decided to implement SAP R/3 2.2 in there company, but due to continuous exponential growth of the company, and incapability of SAP to change with company lead to failure of the implementation, but it is still used in the HR department. In 1996 Dell took a call to upgrade its system using the Glovia G2 Soltuion and deployed it for the manufacturing department, which helped in improving visibility and operational control, reducing finished goods and work-in-progress inventories, increasing resource utilization and lowered manufacturing costs, Reducing production bottlenecks and idle equipment and improving on-time delivery performance Dell implemented i2 Technologies for its Supply Chain management for planning and execution solutions to maximize supply chain velocity by optimising demand, supply, fulfillment, and service processes. This lead to Improved customer satisfaction and loyalty, differentiated response to customers, increased throughput and better product mix, fewer stock shortages, reduced inventory and obsolescence, reduced warehousing, transportation, and returns cost.

Recommendations
Recommendations to ensure your ERP implementation is successful Documentation of the requirements and focusing primarily on the important requirements: If you just go into an ERP implementation without a clear definition of what you are trying to achieve you are going to fail. It is important you setup a baseline for what you want to achieve. However, ensure you dont go overboard with your requirements. Strong Internal Project Management organization: The project management team needs to have teeth to be able to manage scope. Scope has a direct tie to budget, project timeline and risk. You increase scope and budget, project timeline and risk

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increase. Often stakeholders will increase scope without increasing budget or timeline which means they increase their risk of failure exponentially. If the project management team doesnt have the teeth and ability to manage scope and change then you will end up with a project that never ends. Testing: Begin testing early and test often. You need to put your best users there and set expectations with them that they will find holes, gaps, and since you are in lab mode they will not find a perfect system. Proper training: The best approach to training is to do it several times. Once is not enough. Three recommend points of training are: 1. On Design. 2. Before test. 3. Post go-live.

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References
Bingi, P., Sharma, M.K. and Godia, J.K., 1999, Critical Issues Affecting and ERP Implementation, Information Systems Management 2. Chan, S.L., and Choi, C.F., 1997, A Conceptual and Analytic Framework for Business Process Reengineering, International Journal of Production Economics, 50(2/3). 3. Checkland, P., 1981, Systems Thinking, Systems Practice, John Wiley & Sons, London. 4. Curtis, B., Kellner, M. and Over, J., 1992, Process Modeling, Communications of the ACM 35(9). 5. Davenport, T.A., 1998, "Putting the Enterprise into the Enterprise System," Harvard Business Review, 76(4). 6. Holland, C.P., and Light, B., 1999, A Critical Success Factors Model for ERP Implementation, IEEE Software, 16(3). 7. Kamath, M., Dalal, N.P., Kolarik, W.J., Chaugule, A. Sivaraman, E., and Lau, A.H., ProcessModeling Techniques for Enterprise Analysis and Design: A Comparative Evaluation, Proc. of the 2001 Industrial Engineering Research Conf., May 20-22, Dallas, Texas. 8. Krumbholz, M., Galliers, J., Coulianos, N., and Maiden, N.A.M., 2000, Implementing Enterprise Resource Planning Packages in Different Corporate and National Cultures, Journal of Information Technology, 15(4). 9. Presley, A.R. Sarkis, J., and Liles,D.H., 2000, "A Soft Systems Methodology Approach for Product and Process Innovation," IEEE Transactions on Engineering Management, 47(3). 10. Somers, T.M. and Nelson, K.G., 1998, "Towards an Understanding of Enterprise Resource Planning implementations," Proc. of the Americas Conference on Information Systems, Baltimore, MD. 11. Winter, M. C., Brown, D. H. and Checkland, P. B., 1995, A Role for Soft Systems Methodology in Information Systems Development, European Journal of Information Systems, 4(3). 12. Zachman, J., 1987, A Framework for Information Systems Architecture, IBM Systems Journal, 26(3).

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