1. Enterprise Resource Planning ERP Systems
Chapter 12 pages
Business Plug-In B10 pages
I from End to End

2. The organization before ERP ( systems)
SCM systems focus specifically on
CRM systems focus specifically on
The organization before ERP ( systems)
Isolated Information: their own systems
Update issues Redundant/
Inaccurate and different
Different in the different databases
Can’t access information maintained by another department
Can’t of the entire organization
In most organizations, information has traditionally been isolated within specific departments, whether on an individual database, in a file cabinet, or on an employee’s PC.
When reviewing this diagram demonstrate to the students how each department has its own database separate from all other organizational departments
Ask your student what types of problems could occur if all departments maintain their own database and systems?
Update issues
Redundancy
Inaccurate information across databases
Different formats of information in the different databases
Inability to access other department information and not being provided with a 360 degree view of the organization
Different customer information in different databases
Customer contact from multiple departments with different messages

3. ERP: Bringing the Organization Together
ERP – integrates (or integrated set of IT systems) so that employees can make enterprise wide decisions by viewing enterprise wide information on all business operations ( enterprise wide information)
An ERP system provides a method for effective planning and controlling of all the resources required to take, make, ship, and account for customer orders in a manufacturing, distribution, or service organization.
What happens when sales and marketing departments are working from two different sets of customer information and product information?
Would the marketing campaigns be accurate?
Would sales be able to deliver the products it sells to its customers?
Enterprise resource planning systems provide organizations with consistency.
The key word in enterprise resource planning is enterprise.
SCM systems focus specifically on suppliers
CRM systems focus specifically on customers
ERP systems focus on everything, all processes, departments, and operations for an enterprise
ERP systems encompass everything, including SCM and CRM.
ERP enables employees across the organization to share information across a single, centralized database. With extended portal capabilities, an organization can also involve its suppliers and customers to participate in the workflow process, allowing ERP to penetrate the entire value chain, and help the organization achieve greater operational efficiency
One database that supports the entire organization could eliminate many of the issues mentioned on the previous slide
However, there are also issues could be caused by having one database that supports the entire organization?
Not as flexible and far more difficult to change
Might not meet all department needs as well as an individual specific system
Multiple access levels increases security issues
Ethical dilemmas from accessing different department information – such as payroll
Keyword in ERP is “enterprise”
ERP systems focus on all processes, departments and operations for the entire enterprise

4. Sa l es
We don’t need this ERP stuff. We already have enterprise wide software that we are all using. It is called a SPREADSHEET.
Acctg
When displaying the sales database example and the accounting database be sure to point out the differences in the data
Correlating and making sense of these two similar, but different, spreadsheets, is going to be challenging.
How can you understand customers when one spreadsheet has customer name and one has customer ID?
How can you understand sales reps when one spreadsheet has sales rep names and one spreadsheet has sales rep ID?
Date format is different – will this cause problems?
One quantity is in units and one quantity has decimal points – what problems will this cause?
Unit price and unit cost is rounded to dollars in one spreadsheet and contains cents in another – what problems will this cause?

5. Enterprise Resource Planning
ERP systems and correlates the data generating an enterprise wide view that is consistent and real-time. involved in sourcing, producing and delivering a company’s product C
Complete
Real time
Consistent O
The true benefit of an ERP system is its ability take the many different forms of data from across the different organizational systems and correlate, aggregate, and provide an enterprise wide view of organizational information.
The two previous spreadsheets display examples of differences in data that can be fixed by using an ERP system.
Without understanding how all of the different divisions, products, departments, etc. are operating you cannot run the business

6. Components of ERP Software
Three core components focus on (accounting/finance, production/materials management and HR)
Extended components typically focus on and require interactions with customers, suppliers and business partners
Typically Internet enabled.
Core ERP components – traditional components included in most ERP systems and they primarily focus on internal operations
Extended ERP components – extra components that meet the organizational needs not covered by the core components and primarily focus on external operations
Make sure that you know what each component typically handles. Skipped details slides follow

7. CORE ERP COMPONENTS
Accounting and finance component – manages accounting data and financial processes within the enterprise with functions such as general ledger, accounts payable, accounts receivable, budgeting, and asset management
Human resource component – tracks employee information including payroll, benefits, compensation, performance assessment, and assumes compliance with the legal requirements of multiple jurisdictions and tax authorities

8. CORE ERP COMPONENTS
Production and materials management component – handles the various aspects of production planning and execution such as demand forecasting, production scheduling, job cost accounting, and quality control

9. Extended ERP Components
Extended ERP components include:
Business intelligence
Tools to help analyze your business information and better understand it so that you can better understand the business.
Customer relationship management
Supply chain management
E-business
E-logistics – manages the transportation and storage of goods
E-procurement – the business-to-business (B2B) purchase and sale of supplies and services over the Internet
Depending on when you cover this plug-in, these terms may or may not need to be reviewed
If you do want to review – simply cut and paste the definitions into the slide above
Business intelligence – describes information that people use to support their decision-making efforts
Customer relationship management – involves managing all aspects of a customer’s relationships with an organization to increase customer loyalty and retention and an organization's profitability
Supply chain management – involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability
E-business – means conducting business on the Internet, not only buying and selling, but also serving customers and collaborating with business partners

10. Enterprise Resource Planning (ERP)
At the heart of all ERP systems , when a user enters or updates information , it is
Why do organizations need integrations, if an ERP system contains one database that connects all applications together?
Most organizations operate functional “silos”, and each department typically has its own systems
A company might purchase an ERP and then all of the functional silos would be on one system, however, this doesn’t happen very often in the real world
Most organizations require anywhere from 10 to 100 to 1,000 different systems to run their business
Finding one system that could meet all the needs of an entire organization from billing to sales is almost impossible, “sort of a utopia”
An organization can purchase an ERP and still have other applications running parts of its business (for example, taxation packages) that are not supported, or not supported well, by the ERP system

11. Enterprise Resource Planning (ERP)
ERP systems automate business processes, for example, order fulfillment
When a CSR takes an order from a customer, he or she has all the information necessary to complete the order (the customer’s credit rating and order history, the company’s inventory levels, and the delivery schedule)
Since the company is using an ERP, everyone else in the company will automatically see the information that the CSR types into the ERP system
When one department finishes with the order, it is automatically routed via the ERP system to the next department
To determine where an order is at any point in time, a user only needs to login to the ERP system and track it down

12. ERP Benefits
Having integrated systems helps that many businesses had previously started to use (also didn’t have to fix those old legacy systems)
Integrate financial information and customer order information
Everyone working with the same information and removes misinformation
Standardize and speed up manufacturing processes, as well as reduce inventory
ERP addresses the
One of the greatest benefits of an ERP system is Provides organizations with information that was previously difficult (if not impossible) to obtain, allowing the organization to perform more efficiently and effectively.
1. Integrate financial information: To understand an organization’s overall performance, managers must have a single financial view.
2. Integrate customer order information: With all customer order information in a single system it is easier to coordinate manufacturing, inventory, and shipping to send a common message to customers regarding order status.
3. Standardize and speed up manufacturing processes: ERP systems provide standard methods for manufacturing companies to use when automating steps in the manufacturing process. Standardizing manufacturing processes across an organization saves time, increases production, and reduces head count.
4. Reduce inventory: With improved visibility in the order fulfillment process, an organization can reduce inventories and streamline deliveries to its customers.
5. Standardize human resource information: ERPs provide a unified method for tracking employees’ time, as well as communicating HR benefits and services.

13. ERP Risks (Costs) Employees Difficult to
Although there are great benefits to be realized from ERP systems, there are also failure stories. ERP systems are very expensive in terms of resources, such as time, money, and effort. Although they can help introduce good business processes, many companies implementing ERP software must change their business processes to match the software, which can cause employee resistance.
Costly in terms of One vendor risks: too costly to Company essentially held hostage.

14. Microsoft Business Solutions Great Plains Dynamics
SAP: market leader: #1
Oracle: #2 in market share. Has grown, in part, through acquisition
2005: Oracle acquired PeopleSoft
2003: PeopleSoft acquired JD Edwards
Oracle has enhanced their ERP product by acquiring the product’s of other companies and then integrating their products with the Oracle product.
2008: Oracle acquired BEA Systems
2007: Oracle acquired Hyperion Solutions
2005: Oracle acquired Siebel Systems
In June 2003, Baan was sold to SSA Global Technologies. In May 2006, SSA was acquired by Infor Global Solutions of Atlanta, which was a major ERP consolidator in the market.
In 2002, Microsoft acquired Great Plains Dynamics. Its products has gone under the name of Microsoft Business Solutions Great Plains Dynamics, as well as
Microsoft Dynamics
Microsoft Business Solutions Great Plains Dynamics