1. Manufacturing Roots of ERP
The vision of having an integrated IS began on the factory floor
MRP used inputs of forecast inventory levels and lead times
MRP II incorporated more links to other functions order processing and product costing
ERP is viewed as an extension of MRP II
provided better visibility of operational data

2. Business Processes & Org Design
Superficially, a given “functional” department is responsible for a high-level business process
CEO VP
Finance
and
Accounting
Human
Resource
Mgmt
Sales
Marketing
Planning
Information
Systems
Manufacturing
While a given functional department will be responsible for a given business process, when you decompose that process, you find that many other functional departments are own a part of the process, or are impacted by the process. (These are called "stakeholders.")
Develop
New
Products
Build
the
Product

3. Business Processes & Org Design
A closer look shows that the activities of any given business process will cut across multiple organizations
CEO VP
Finance
and
Accounting
Human
Resource
Mgmt
Sales
Marketing
Planning
Information
Systems
Manufacturing
Develop
New
Products
When you decompose the business process called "Develop New Products, you see that multiple departments play a significant role in each of the activities for the process.
The problem is that the vertical structure of the organizations is in conflict with the horizontal relationships. Functional organizations do not want to see the end-to-end flow of the business process.
Determine
the
Demand
Determine
the
Profit
Design
the
Product
Test
the
Market
Develop
Marketing
Campaign

4. There are more than a hundred ERP vendors, many of the systems are designed for paticular industries, and many are designed for small businesses.

5. ERPs
Eventually, companies realized that an ERP was needed to truly integrate the organization and allow reengineering of its business processes.
Manufacturing Processes
Design product
Build product
Assemble product
Test product
Order materials
Store materials
HR Processes
Hire
Fire
Pay
Train
ERP
Customer Data
Product Data
Location Data
Employee Data
Market Data
Cost Data
Billing Data
Order Data
Production Data
Financial Processes
Pay bills
Collect Bills
Pay taxes
Compute costs
Over time, more and more companies began to realize that an inegrated ERP could allow streamlining of both the organizaiton and its processes. Everybody could have a single source for all the data, and everybody could access this data over a single network, with instantaneous communcations concerning this database.
Marketing Processes
Determine price
Sell product
Take an order
Deliver product

6. ERPs
An integrated database must be based on a logical model of the company and its data  a data model.
Customer
Order
Employee
Invoice
Payment
Part
Product
Cost
Supplier
Site
Delivery
Has
Makes
Is for
Sends
Contains
Handles
Provides
Is on
Gets
Oracle
DB2
Informix
Sybase
SQL Server
Adabase
The major database management systems for ERPs are: Oracle, DB2, Informix, Sybase, and SQL Server.
Of these, the big three are Oracle, DB2, and SQL Server.

7. Properties of ERP
Integrated in nature – when data are entered into one of the functions, information in all related functions is changed
They are modular in structure. A company can implement all the modules or a subset of them (Ex: Hershey’s)
Best of Bread approach: Integrating modules from different vendors.
Implementing it is more complex because of the interfaces that need to be established. (EX: Peoplesoft (Oracle) + SAP)
Open architecture. Bolt-ons such as DSS can be integrated easily.
DSSs offered by ERP vendors are not good enough (Ex: SAP’s APO, data mining)

8. (They are very inflexible)
(The most common reason)
(They are very inflexible)
While system is in place, trying to reconfigure a system while retaining data integrity is expensive and time consuming.
ERP systems assume certain business practices.
Lower inventory levels and delivery cycles are reported most often after implementing ERP systems.
(The second most common reason)

10. Successful companies
involved their heavy end users through out the implementation process instead of providing training at very end
viewed ERP system as a business solution not an IT solution
analyzed their operations thoroughly before the implementation and identified any discrepancy between current practices and ERP system
(business processes and rules such as the those used in case of credit violation, pricing, and inventory sourcing)
formed implementation teams
Dedicated teams in large firms vs Small firms
Knowledge transfers

11. ERP and CRM
Prior to ERP company did not have the vast amount of information available in a single database
Ones ERP is in place, companies can run data mining software on the data warehouse
Stratifying customers (marketing afford is tailored to each group)
Salesforce automation