Chapter 6 Supporting Processes with ERP Systems Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-1

What Problem Does an ERP System Solve? Information Silo Problem – Data isolated in separate information systems Solutions – Enterprise Application Integration (EAI) – Enterprise Resource Planning (ERP) Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-2

What Problem Does an ERP System Solve? EAI – Connects information silos via a new layer of software – Enables existing applications to communicate and share data – Provides integrated data Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-3

What Problem Does an ERP System Solve? EAI – Leverages existing systems, leaving departmental information systems as is, but providing an integration layer over the top – Enables a gradual move to ERP Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-4

What Problem Does an ERP System Solve? EAI Figure 6-1 EAI Architecture Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-5

What Problem Does an ERP System Solve? ERP – Integrates data and supports processes across departmental areas – Uses a single database – Is a single information system Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-6

What Problem Does an ERP System Solve? ERP Figure 6-2 Data Integration of Processes In Four Example Departments Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-7

What Are the Elements of an ERP System? ERP includes applications that integrate the processes for the following functions: – SCM (supply chain management – inbound logistics) – Manufacturing – CRM – Human Resources – Accounting Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-8

What Are the Elements of an ERP System? Five Components of an ERP System – Software – Hardware – Data – Procedures – People Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-9

What Are the Elements of an ERP System? ERP Software – Configuration ERP Databases – Over 25,000 tables Procedures – Train the trainer (in-house training) Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-10

What Are the Elements of an ERP System? Hardware – ERP Hardware Dilemma People – Users – Analysts – Consultants Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-11

What Are the Elements of an ERP System? Inherent Business Processes in ERP – System specified business processes, also called “Process blueprints” Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-12

What Are the Benefits of an ERP System? Figure 6-9 Benefits of Using an ERP Solution Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-13

What Are the Benefits of an ERP System? Figure 6-10 Example Measures of the Benefits of ERP Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-14

What Are the Challenges of Implementing an ERP System? Implementation Decisions – Details People Issues – Changes Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-15

What Are the Challenges of Implementing an ERP System? Implementation Decisions Figure 6-11 A Sample of Configuration Decisions Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-16

What Are the Challenges of Implementing an ERP System? People Issues Figure 6-12 People-Related Implementation Challenges Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-17

What Types of Organizations Use ERP? ERP by Industry Type ERP by Organization Size International ERP Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-18

What Types of Organizations Use ERP? Figure 6-13 ERP by Industry Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-19

Who Are the Major ERP Vendors? ERP Vendor Market Share Figure 6-14 Characteristics of Top Vendors Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-20

Who Are the Major ERP Vendors? ERP Products Figure 6-15 Vendors and Company Size Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-21