1. Enterprise systems 2
ERP

2. Functional System Applications
Human resources System
Accounting and finance systems
Sales and marketing System
Operations management System
Manufacturing Systems
The following are some examples:

3. Human Resources Recruiting Compensation Job posting Resume processing
Hiring procedures
Compensation
Payroll
Vacation, health and benefits
Retirement plans and stock options
Employee contributions

4. Accounting and Finances
General Ledger
Shows balance in all asset, liability and equity accounts
Financial Reporting
Keeps records and reports financial results to investors, creditors and other external users
Cost Accounting
Determines for internal users how much it costs the company to provide specific products or services

5. Sales and Marketing Lead tracking Sales forecasting
Record potential customers
Track Interest
Maintain history of contacts
Sales forecasting
Add projections: individual/territory/region/county
Projection totals used for company planning and financial statement
Customer management
Credit status
Past order history

6. Operations Order Entry Order management Obtain customer data
Verify credit
Record payment method
Enter order for processing
Order management
Track order through fulfillment
Schedule shipping
Handle exceptions
Inform customer of order status

7. Manufacturing Manufacturing Operations Manufacturing Planning
Schedule and control machines in accordance with production schedules
Schedule and control manufacturing processes in accordance with production schedules
Manufacturing Planning
Create and maintain bill of materials
Create and maintain manufacturing requirements for equipment, persons and facilities

8. Example of a business process: purchase order process …

9. Purchase and payment process
1: Presales activity
Determine requirements and complete purchase requisition.
Generate the purchase requisition based on:
quantity on-hand,
quantity-on-order, a
expected demand.

10. Purchase and payment process
2: Prepare and record purchase order.
Assists the buyer in identifying sources of supply for the requested item, analyzing vendor quotes,
comparing vendor prices, terms, and past performance
3. Receive and record goods.
Compare quantity ordered to quantity received.
Routes goods to the function that requested them or directs them the warehouse for immediate sale. It also records vendor performance data.

11. Purchase and payment process
4: Receive vendor invoice, match with purchase order and receiving report; record payable.
If the three-way match fails, the enterprise system notifies the proper personnel to ensure timely reconciliation of differences.
5. Prepare and record cash payment and update accounts.
Uses vendor and account payment data to schedule payments in accordance with terms of sales agreement.

12. IT reality – “Islands of Computing”: functional based systems
Purchased Application Package(s) – etc.
Program
Program
Legacy Application System(s)
Program
New Web-based application(s)
Program
Program
Program
Program
Program
Program
Enterprise IT reflects the structure and history of each enterprise not the business processes required.
Departments have their own IT systems
Legacy systems are left in place and new systems built separately.

13. Problems with island of computing (functional) based applications:
Sharing of data between systems
Data duplication
Data inconsistency
Applications that don’t talk to one another
Limited or lack of integrated information
Isolated decisions lead to overall inefficiencies
Increased expenses

14. Potential Solutions to disparate systems
Semi automatic “tactical” Integration: point to point solutions
Full application integration (EAI). A comprehensive integration of application based on steps in business processes
Enterprise Resource Planning System

15. Ad-Hoc Tactical approach to integrating the Business information systems
Application
System B
Trans
action
File
Program
Extract
Program
Program
Down
Down
load
load
Program
Extract
File
File
Program
Load
Program
Load
Screen
Message
Program
Application
Scrape
Queue
Application
Database Replicator
System A
System C
Extract
Load
Program
Program
Down
Program
load
File
Program
Program
Program
Trans
Program
action
File
Program
Message
Queue
Each requirement is addressed with a point to point solution
Typically consisting of a data transfer mechanism and a data format converter.

16. Weaknesses of “islands of Computing” tactical approach
Numerous Point-to-Point Interfaces
Sharing of data between systems
Data duplication
Data inconsistency
Inconsistent Qualities of Service
Limited or lack of integrated information
Inconsistent Business Processes solutions (refer to the buying of a product business process) as they (the business processes) are not integrated

17. Layers of an EAI Stack Adapter Adapter
Provides real-time and historical data on performance
of processes and assists in making decisions.
EAI
Business Activity Monitoring
Manages and tracks business transactions that might
span multiple systems and last minutes to days.
Business Process
Orchestration
Data Transformation
Ensures the data is the correct format for delivery to
The next system.
Message Storage & Routing
Adapter
Ensures the reliability of data delivery between systems.
Adapter
Provides “open” connectivity between data sources: programs that interact with the underlying business application

18. Problems with integration of function based systems: EAI
Data Sharing (data transformation) between systems
Data duplication and inconsistencies
Data model inconsistencies
Partial information leads to isolated decisions lead to overall inefficiencies and so can lead to increased expenses

19. ERP-definitions ERP is:
a process of managing all resources (business function applications)and their use in the entire enterprise in a coordinated manner
ERP is a set of integrated business applications, or modules which carry out common business functions such as general ledger, sales forecasting….
Support business through optimizing, maintaining, and tracking business functions: HR, financial, manufacturing etc… involved in business processes

20. Requirements to automate the sales order process
Provide sales department with a single point of access from which they can complete the business order process
Obtain /record information (availability of items, record sales order)
Request initiation of internal processes (time to manufacture and deliver items)
Provide reliable information to the customer (delivery date, price)

21. What makes ERP different?
Integrated modules: purchasing module; financial module…
Common definitions
Common database
Update one module, automatically updates others
The focus is on the organisational value chains, rather than individual functions

22. Essence of ERP ERP software, among other things:
combines the data of formerly separate applications.
Keeps data in synchronization across the enterprise,
it simplifies the computer infrastructure within a large organization,
it standardises and reduced the number of software specialties required within larger organizations. ( e.g. no need for people maintain legacy systems or develop new links between applications…)
Therefore the benefits of ERP include:
Common set of data
Help in integrating applications for decision making and planning
Allow departments to talk to each other

23. Modularisation
Most systems are modular to permit automating some functions but not others.
Some common modules, such as finance and accounting, are adopted by nearly all users; others such as human resource management are not.
For example, a service company probably has no need for a manufacturing module.
Other companies already have a system that they believe to be adequate. Generally speaking, the greater the number of modules selected, the greater the integration benefits, but also the greater the costs, risks and changes involved.

24. ERP modules

25. ERP: Finance modules
All kind of organizations small scale, large scale organizations benefit from the implementation of ERP financial module.
The financial module is the core of many ERP software systems.
It can gather financial data from various functional departments, and generates valuable financial reports such general ledger, trail balance, as balance sheet and quarterly financial statements

26. ERP: Human Resource module
Human Resources is another widely implemented ERP module.
HR module streamlines the management of human resources and human capitals. HR modules routinely maintain a complete employee database including contact information, salary details, attendance, performance evaluation and promotion of all employees.
Advanced HR module is integrated with knowledge management systems to optimally utilize the expertise of all employees.

27. ERP purchasing module
Purchase module streamline procurement of required raw materials.
It automates the processes of identifying potential suppliers, negotiating price, awarding purchase order to the supplier, and billing processes.
Purchase module is tightly integrated with the inventory control and production planning modules. Purchasing module is often integrated with supply chain management software. 

28. ERP sales and marketing module
Sales module implements functions of order placement, order scheduling, shipping and invoicing.
Sales module is closely integrated with organizations' ecommerce websites.
Many ERP vendors offer online store front as part of the sales module.
ERP marketing module along with CRP supports lead generation, direct mailing campaign and other marketing works. Scheduling of the promotion is possible using this. 

29. Benefits of ERP Common set of data
Removes consistency and synchronisation issues
Inter-department integration for all departments using the ERP
Library of available standard template processes and modules make integration easier
The use of ERP I.S. systems encourages Business Process Reengineering :
is a business management strategy that focuses on analysing and designing the way business processes/workflows are performed. It does not look at business processes in isolation but in a more holistic way: like how to change the value chain to ensure/create greater core competencies; e.g. link the purchasing process to a supply chain management which in turn can communicate with customer relation management systems…
Can you think of any examples of a business process re-engineering

30. Potential Limitations of ERP
Global ERP can be a never-ending project for large organisations
No organisation exists in isolation: Value chain business processes
There are always suppliers and clients who use different data models.
This means that the need for integration cannot be removed.
Inter-department integration relies on using the global ERP
Causes problems with anomalous departments, recently required, geographically isolated or with different business processes.
Be aware: The software can drive the business rather than the other way around
Templates tend to impose the standard business process rather than your organisations business process. This is okay for commoditised processes but not for all.

31. ERP Implementation Options
Complete system.
Create IT architecture from scratch
Uncommon as there are few new companies which start off large enough to implement ERP
ERP by Process
Deploy one or a few ERP modules across all Business Units
Risk: May never extend beyond original process.
ERP by Business Unit
Deploy fully integrated ERP suite in one or more Business Units
Risk: May never extend beyond original function.
Fully Integrated ERP
Full scale deployment across the enterprise
Risk: Very expensive and could take a long time before getting a return/

32. Implementing an ERP system
ERP is always a major project
Any ERP project requires significant time and cost.
It is likely to be disruptive and result in business process changes across the organisation.
To be successful
The project must have high priority and all elements of the organisation must be aware and involved in it.
Senior management commitment with regular progress reviews at the appropriate levels of management.
Risks
Many companies are unclear on the likely total project cost or return.
As with any enterprise level project, scope, organisational politics and resistance to change regularly cause failure.

33. ERP Implementation Options
Complete system.
Create IT architecture from scratch
Uncommon as there are few new companies which start off large enough to implement ERP
ERP by Process
Deploy one or a few ERP modules across all Business Units
Risk: May never extend beyond original process.
ERP by Business Unit
Deploy fully integrated ERP suite in one or more Business Units
Risk: May never extend beyond original function.
Fully Integrated ERP
Full scale deployment across the enterprise
Risk: Very expensive and could take a long time before getting a return/

34. Stages in ERP implementation
Definition and analysis
Design
Build
Transition

35. Definition and analysis
Hold discussions (the ERP provider and organisation buying the ERP system) with various functional personnel to establish the actual number of systems operating at the clients site , what they are used for, why and how often
Produce the Project Scoping Document outlining current situation, proposed solution and budgeted time
Challenge : REQUISITE EXPERTISE - No two clients are the same

36. Design
Prepare various functional reports - specifies current scenario and wish list
Prepare Design document which specifies how the system is going to work
Prepare test scripts to be followed on system testing
Challenge : INFORMATION SHARING - Availability of staff

37. Build
Configure system as per set up document specifications i.e. transfer conceptual model into reality
Test system to verify accuracy (preliminary tests)
Challenge : TECHNICAL ENVIRONMENT - System functionality

38. Transition Train users on their specific areas
Assist in test data compilation and system testing by users
Finalise the Live system and captured opening balances (results of business processes)
Challenge : USER RESISTANCE Understanding and acceptance of ERP system; data preparation

39. Difficulty in implementation
Extremely costly and time intensive
Typical: over $10,000,000 and over a year to implement
Company may implement only certain modules of entire ERP system; due to lack of finance….
You will need an outside consultant

40. Some of the risk implementation Factors
No clear goal
Lack of clear planning
Under-estimating resources required
Customisations
Insufficient testing

41. Question
Describe, using a suitable example, the steps in a business process (6 Marks)
Explain the limitations of the “islands of computing” tactical approach and the EAI approach to implementing the above business process (6 Marks)
What is enterprise resource planning (ERP) (4 Marks)
What are the basic steps in implementing an ERP system. (6 marks)
how can a fully implemented ERP system overcome the limitations of other methods of implementing business processes. (8 Marks)
Describe the characteristics of 4 of the modules of an ERP system (8 marks)