McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 5-1 BUSINESS DRIVEN TECHNOLOGY Business Plug-In B5 Enterprise Resource Planning

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 5-2 LEARNING OUTCOMES 1.Compare core enterprise resource planning components and extended enterprise resource planning components 2.Describe the three primary components found in core enterprise resource planning 3.Describe the four primary components found in extended enterprise resource planning systems

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 5-3 LEARNING OUTCOMES 4.Explain the benefits and risks associated with enterprise resource planning systems 5.Assess the future of enterprise resource planning systems

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 5-4 INTRODUCTION Enterprise resource planning – integrates all departments and functions throughout an organization into a single IT system (or integrated set of IT systems) so that employees can make enterprisewide decisions by viewing enterprisewide information on all business operations

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 5-5 Core and Extended ERP Components 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

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 5-6 Core and Extended ERP Components

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 5-7 CORE ERP COMPONENTS Three most common core ERP components 1.Accounting and finance 2.Production and materials management 3.Human resource

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 5-8 CORE ERP COMPONENTS Accounting and finance components – manage accounting data and financial processes within the enterprise with functions such as general ledger, accounts payable, accounts receivable, budgeting, and asset management

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 5-9 CORE ERP COMPONENTS Production and materials management components – handle the various aspects of production planning and execution such as demand forecasting, production scheduling, job cost accounting, and quality control

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved CORE ERP COMPONENTS Human resource components – track employee information including payroll, benefits, compensation, performance assessment, and assumes compliance with the legal requirements of multiple jurisdictions and tax authorities

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Extended ERP Components Extended ERP components include: – Business intelligence – Customer relationship management – Supply chain management – E-business

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Extended ERP Components E-business components include e-logistics and e- procurement – 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

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved ERP Benefits and Risks (Costs) ERP Benefits

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved ERP Benefits and Risks (Costs) ERP Risks

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved The Future of ERP Lines between SCM, CRM, and ERP will continue to blur – Internet – continue to help organizations integrate data and process across functional departments – Interface – customizable employee browsers – Wireless technology – support a mobile workforce

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Closing Case One PepsiAmericas’ Enterprises PepsiAmericas generates $2.97 billion in revenues yearly The company implemented PeopleSoft’s ERP solution to provide complete integration between PepsiAmericas’ front-office and back-office systems PepsiAmericas also implemented PeopleSoft’s supply chain management component to automate its inventory

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Closing Case One Questions 1.How have core ERP components helped PepsiAmericas improve its business? 2.How have extended ERP components helped PepsiAmericas improve its business? 3.Explain how future ERP systems will help PepsiAmericas increase revenues

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Closing Case One Questions 4.Assess the impact on PepsiAmericas’ business if it failed to implement the CRM component of PeopleSoft’s ERP system 5.Review the different PeopleSoft components in Figure B5.5. Which component would you recommend PepsiAmericas implement if it decides to purchase an additional PeopleSoft component?

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Closing Case Two Demanding Chocolate Ghirardelli is the longest continuously operating chocolate manufacturer in the Untied States Ghirardelli improved inventory management and profitability through the implementation of an ERP system

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Closing Case Two Questions 1.Which additional core ERP components would you recommend Ghirardelli implement? 2.Which additional extended ERP components would you recommend Ghirardelli implement? 3.How can implementing an Advanced Planning ERP component help Ghirardelli’s business?