1. Enterprise Processes and Systems MIS 2000 Instructor: Bob Travica Updated 2016 Class 16

2. Outline Concept of Enterprise System (ES) / Enterprise Resource Planning System ES Design Databases for ES Purposes of ES Example of ES effects on CRM* DSS capability of ES ERP System Benefits and Costs Summary 2

3. Enterprise System Enterprise System (ES, ERPS)* is an integrated information system that carries business processes for several departments or in an entire organization. All data are in electronic form. Very high level automation. Human Resources Process Sales & Delivery Process Marketing Process Production Process Supply Process Management Process (operational, strategic) Accounting & Finance Process IS Development & Maintenance Process Organization Enterprise System Electronic Links to buyers Electronic Links to suppliers 3

4. Departments covered by ES: purchasing, inventory, production planning and scheduling, accounting, finance, HR, sales… almost any.* ES typically performs functions of TPS and MIS. With additional modules, ES works as data-driven DSS. ES are developed differently than other IS. Software is sold in packages, then configured to meet a company’s needs. ** 4 Enterprise System (TPS,MIS | DSS) Management Process Sales & Delivery Departments Marketing Dept.Production Dept. Accounting Dept. Info. Systems Dept. Purchasing Department HR Dept.

5. 5 Enterprise System Design The ES core is the module called ES Engine and Broker. Business processes are mapped in there. Centralized DBs used by ES supply data to business processes defined by ERP modules (accounting, finance, HR...) ES can be one brand (e.g., SAP) and use databases another (e.g., Oracle) Corporate centralized databases ES Engine & Broker User interfaces in organizational departments

6. Databases for Enterprise System 6 Databases that support ES may have tens of thousands of tables. High complexity. Benefit from centralized databases is that an entity is defined just once and so used across company departments. This improves data quality (next slide).

7. 7 Purposes of ES (ERPS): 1.The main purpose is to provide an integrated view of a company’s operations. This is possible owing to centralization in corporate data management. Primary beneficiary is executive managers. 2. The integrated view allows for more informed decision making because data are more consistent, complete, accurate, timely. Purposes of Enterprise System Accounting & Finance Human Resources Department-specific and Corporate-wide reporting

8. Customer Relationship Management - Sales & Marketing Processes 8 Community of Interest Marketing Sales Customer Order Management Billing Complaints/ Support Customer: Customer ID, Customer Type*, Name, Address, City*, Postal Code, Phone, Email Customer Order: Customer Order Number, Order Date, Quantity Product: Product ID, Product Type*, Description, Distribution Channel, List Price Sales Record: Sale Number, Sale Date, Salesperson*, Price Billing Record: CustomerBillingID, Date, Amount, Payment Method Customer Support: Customer ID, Complaint, Customer, Date Market management entities: Segment, Promotion, Campaign, Channel Entity (italics) Attributes Customer: Customer ID, Date, Comment, Contribution

9. System Support to Sales & Marketing Processes – Traditional vs. ES Model 9 Community of Interest Marketing Sales Customer Order Management Billing Complaints/ Support Mkt campaign TPS Mkt segmentation DSS Brand mgt MIS/DSS Customer Master TPS Sales TPS/MIS Customer Order Mgt TPS/MIS Billing TPS/MIS Support Desk TPS/MIS Communication sys, Group Support IS Old IS solution – separate system for each process New IS solution – a single system – Enterprise System* Marketing Sales Customer Order Management Billing Complaints/ Support ES Customer communities are not integrated into ES.

10. DSS Capability of ES 10 Corporate centralized Databases ES Engine & Broker User interfaces in organizational departments Data Warehouse Data Warehouse (DW) is a large repository of data extracted from corporate databases. This software is purchased separately from standard ES software. DW is not relational databases, but has its own tables, keys, and data models. DW is used for building data cubes.* The capability of data cubing makes ES a data-driven DSS. Data cubes

11. 11 Enterprise System Costs Initial tangible costs of an Enterprise System: Software and Hardware purchasing price Configuration cost (costs of setting up ES) Training cost (users need to be trained to use ES and new processes) ES (like SAP) may require big changes in business processes. This may stir up employees’ reluctance or rejection of ES  intangible costs. A large company, with over 1,000 employees, can spend from $50 million to $500 million on an ES. ES is a “Cadillac” of information systems – it may cost a lot! Management should have a clear picture of total cost of ownership though whole life of system* before deciding to invest in ES.

12. 12 ERP System Benefits Better process composition due to implementing best practice processes Better coordination in and between organizational processes – optimized processes & seamless data flows across enterprise. Increased speed of processes & process time savings. Customer value across the board. Improved management control (a business document or even a single piece of data can be tracked down)* Better decision-making based on better data (see before) - readily available and integrated data; reports covering entire company. (Management value).

13. Summary Enterprise System (ES) (or Enterprise Resource Planning System – ERPS) is an integrated information system that carries business processes for several departments or in an entire organization.. Data management is standardized to provide an integrated view of business – ES is a TPS/MIS for whole enterprise. With additions, ES works as a data-driven DSS. Databases for ES can be very complex and made by different vendors than is the ES software. ES costs can be large and should be accounted for the entire system life. Intangible costs include organizational change and employee resistance to it. ES improves process performance due to better coordination across the enterprise, elimination of complexity associated with separate departmental IS, time savings, more effective management control, and decision making using integrated view of enterprise. 13