What is ERP?
Enterprise resource planning (ERP) system is defined as an integrated computer-based system which manages both internal and external resources such as financial resources and human resources. This article explains what is ERP and also discusses about its benefits, limitations and technical issues.
SAP is the worlds’ leading provide of e-business software solutions which helps to improve relationships with customer and partner, streamlining operations and achieving significant effectiveness through their supply chain. The SAP ERP application supports all required functions and features for business processes and operations efficiency depending specific needs of the industry.
“We chose SAP in the mid-nineties as the leading integrated software for covering all business across the whole of Shell. Upstream, downstream marketing in chemicals and of course as time went on we needed more and more significant programs for implementing SAP.” said David Lee, chief architect for the SAP global initiative at Shell.
Shell Exploration and Production Co, (Shell EP) teamed up with Accenture to develop one singe IT platform based on SAP R/3. This would make it possible for all users around the world to access the new system which leads to increasing performance and more profit for the company. The reason that Shell chosen Accenture was for their leading expertise on both on-shore consultants and off-shore development work.
Also Shell has teamed up with LogicCMG secures IT services and the first project worth up to 20 million Euros was for the implementation of a SAP solution to help standardise the operational processes within Shell Europe Oil products.
“Standardisation and simplification of our processes and systems in a cost effective manner is more important than ever. We have therefore initiated a programme to achieve these objectives in Europe. LogicaCMG has given us consultancy and programme services in the past and we are convinced that they will be an excellent business partner to us for the future and therefore will help us to achieve our ambitions.” said: Jos Steeman, responsible for business process standardisation
Implementation of ERP was the company’s need to integrate it’s information system. The major benefit of this implementation is allowing employees to have quick and easy access to a wide range of key enterprise systems including emails, databases, searches and notification systems globally. According to Sap shell press release, approximately 85,000 Shell employees around the world got access to use all these features by logging into one system and via a single interface. For security reasons by using roles which is defined in the ERP system, employees get limited access to the features depending on their access levels.
The new solution enables Shell EP to increase operational performance and efficiency by sharing best practices, greater transparency, compatibility of information process across organizations and standardization of business processes. Using the new flexible foundation enabled the company in achieving its current priorities such as resource base growth, operational excellence, competitive cost structure, stronger ability to enable new technologies, processes and business initiatives as they merge to help the organization lead its industry.
“We see an employee portal as an enabler to improve our employee value proposition, as well as improving employee effectiveness in the business context,” said Alan Matula, Oil Products CIO of Shell.
Using one ERP package will cause fewer data errors and improving decision making processes for Shell management which all lead to reduce spending cost of the company significantly and successful conversion of new business opportunities.
The Shell blue-print program delivered first value in consolidating the infrastructure to provide one system which support team and provide common practices globally.
“Real big benefits intended to be from the standardization of the processes globally that effort is still continuing and will go on for a number of years.” said Alan Lomax, head of process improvement–work management and integration.
Now Shell is producing an integration of Primavera with SAP to integrate the planning; So the SAP is act as a work management system and also a procurement system as well as finance system all in a single solution.
Problems and technical issues
Local processes and a multitude of bespoke systems and stand alone instances of SAP, complexity and cost of which threatened to impair the efficiently of the company operations. Existing Shell EP systems required implementation of standard processes to increase performance and also consolidation and harmonizing was necessary.
To implement the SAP, company required experience related in different areas such as: data centre infrastructure, Network infrastructure, server configuration, disk subsystem design, installation, and configuration, infrastructure security, high availability and disaster recovery, database backup, operations and SAP technology.
- Wikipedia, Enterprise resource planing [Online], available: http://en.wikipedia.org/wiki/Enterprise_resource_planning [15 Dec 2010]
- Accenture, Shell Exploration and Production Co.: SAP Solutions [Online], available: http://accenture.com/Global/Technology/Enterprise_Solutions/SAP_Solutions/Client_Successes/Shell.htm [28 Dec 2010]
- Accenture, Teaming with Shell to drive business value [Online], available: http://www.accenture.com/NR/rdonlyres/CAFC5179-0728-4046-BD97-6EB781A9D875/0/Accenture_Teaming_with_Shell_to_Drive_Business_Value.pdf
- LogicaCMG, LogicaCMG secures IT services partner status with Shell [Online], available:
http://www.logica.com/we-are-logica/media-centre/news/2003/logicacmg-secures-it-services-partner-status-with-shell/ [1 Jan 2010]