Enterprise Business Processes and Reporting (IS 6214) MBS MIMAS 12 th Jan 2010 Fergal Carton Business Information Systems

This week ERP and control Evolution of ERP Integration is a question of design Main modules

Deliver CustomerMakeSupplier 1950’s: unlimited demand

Deliver CustomerMakeSupplier Bill of materials links demand to supply Raw materials Finished goods Plan, buy Bill of materials

Deliver CustomerMake Buy Supplier Plan 1960’s : inventory costs money!

Deliver CustomerMake Buy Supplier Plan MRP 1960’s : inventory costs money

MRP II Sell CustomerMake Buy Supplier Plan MRP Deliver 1970’s : first wave of integration

MRP II Sell CustomerMake Buy Supplier Plan MRP Deliver 1980’s : sales order processing SOP

MRP II Sell CustomerMake Buy Supplier Plan MRP Deliver 1990’s : back-office integration ERP Accounting & FinanceHuman Resources

Plan Buy Make Deliver Bill and collect Approve & Pay Report results Sell Install Maintain Recruit Manage Reward ManufacturingFinanceSales / CSHR Market DevelopBudget Management information ProductsCashCustomersPeople Integrated data (single point of entry) Managers require information

Key modules

ERP : it’s about control RevenuesSales Orders CostsPurchase Orders ProfitabilityP&L

Finance: eyes on the road ahead and on the rear-view mirror Control of costs and revenues Report on results to directors and shareholders Plan expenditure (budgets) Pay suppliers (including employees!) Collect cash from customers Manage cash flow and currency exposure Plan for financing requirements (eg. acquisitions)

Degrees of integration Integration is a matter of organisational design as well as procedure –first degree: people talk to one another (informal) –Second degree: exchange of documents –Third degree: integrated systems shared by several functional areas –Fourth degree: single integrated system shared by the whole firm Substantial preliminary work is required for setting this up