Chapter 15 Enterprise Resource Planning & Information Architecture Russell and Taylor Operations and Supply Chain Management, 8th Edition

This material is taken from Chapter 15, pp. 702 to 713 and my notes We will not be covering any of the material at the front of chapter 15—MRP and CRP –pp © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 15-2

Lecture Outline Enterprise Resource Planning (ERP) – Slide 58Enterprise Resource Planning (ERP) Customer Relationship Management (CRM) – Slide 63Customer Relationship Management (CRM) Supply Chain Management (SCM) – Slide 64Supply Chain Management (SCM Product Lifecycle Management (PLM) – Slide 65Product Lifecycle Management (PLM) © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 15-3

Learning Objectives Describe basic ERP systems and the scope of their implementations, including the connection to SCM, CRM and PLM Discuss the issues, advantages and drawbacks of the enterprise IT software systems that run today’s global businesses © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 15-4

Enterprise Resource Planning (ERP) Software that organizes and manages a company’s business processes by sharing information across functional areas integrating business processes facilitating customer interaction providing benefit to global companies © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 15-5

Organizational Data Flows © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 15-6

ERP’s Central Database © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 15-7

Components of any Software Application

Components in brief

Mainframe Architecture (circa 1993)

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The CRAY Supercomputer © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 15-15

Problems with Mainframe Architecture Absence of data integration, resulting in little enterprise visibility The applications are maintainable only by the centralized MIS shop, which is overloaded, resulting in 36 month lead times to get revisions effected Every application had to be built from scratch, line-by-line, resulting in large cost and long lead times to create new applications

More problems with Mainframe Architecture No reuse was possible These mainframe apps were accessed on networked PC’s via IBM 3278 terminal emulation software that was completely incompatible with the windows GUI applications—meaning no cut and paste Mainframes were computational bottlenecks Desktop PCs sat idle 99% of the time

First solution: Client/server architecture  Server (DM)  Clients (PM, BL)  Database

These were known as thick clients Because they contained both the presentation management (PM) and the business logic (BL) components of the application Notice how the application is distributed across the network, residing in two computing boxes— the client or desktop and the server

Advantages of Client/server architecture Data are all accessible behind the Server which runs the data management portion of the application—usually an Oracle Database engine Now the marketing guy can see where his customer’s job is, and whether the customer is current with his payments, among other ‘things’

Advantages of client/sever architecture The IT professional could sit shoulder-to- shoulder with the end-user and develop applications as well as make changes to existing software rapidly, without a 36 month backlog There are huge reuse opportunities—in particular, the IT professional does not have to create a DM component—the Oracle engine can be reused Reuse enables some code to not have to be created from scratch, resulting in huge savings of money and time.

Problems with Client/server It wasn’t Internet compatible It required an IT professional to install software on the end-user’s personal computer (the client) It required an IT professional to work closely with the non-IT professional This meant sitting in the adjacent carrel in the marketing department or finance department, etc.

Modern solution of today: N-TIER DISTRIBUTED This is a distributed architecture like client/server, but now the application is distributed across three or more computing boxes on the network

N-Tier distributed Architecture  Data Server (DM)  Thin Clients (1/2PM)  Database  Applic ationServer1  Applic ationServer2

Comments on N-Tier Distributed Architecture Clients are called ‘thin’ because the only thing running on them is the Internet Browser (MS Internet Explorer or Netscape Navigator) The IT professional doesn’t have to install anything on the client More re-use is possible—specifically that browser

Advantages of N-Tier Distributed Architecture Like Client/server, it accommodates enterprise visibility because the data are integrated Applications can be built rapidly because there are abundant reuse opportunities The DM module is reused Half of the PM component is reused There are reuse opportunities within the rest of the PM component and the BL component as well

More advantages of N-Tier Distributed Architecture IT Professional no longer has to be decentralized and a part of some non-IT group that doesn’t have a career path for him Now, IT can be centralized where there is a career path for the IT professional and where (s)he can effect changes to software from a centralized location. {Today, its possible for that IT professional to install things on your remote desktop computer, even to see what you are doing on your desktop, etc., from a remote location.}

Application Servers do Two things They serve out web pages upon request They do all of the business logic processing.

Selected Enterprise Software Vendors © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 15-29

ERP Implementation Analyze business processes Choose modules to implement Which processes have the biggest impact on customer relations? Which process would benefit the most from integration? Which processes should be standardized? Align level of sophistication Finalize delivery and access Link with external partners © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 15-30

Customer Relationship Management (CRM) Software that Plans and executes business processes Involves customer interaction Changes focus from managing products to managing customers Analyzes point-of-sale data for patterns used to predict future behavior © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 15-31

Supply Chain Management Software that plans and executes business processes related to supply chains Includes Supply chain planning Supply chain execution Supplier relationship management Distinctions between ERP and SCM are becoming increasingly blurred © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 15-32

Product Lifecycle Management (PLM) Software that Incorporates new product design and development and product life cycle management Integrates customers and suppliers in the design process though the entire product life cycle © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 15-33

ERP and Software Systems © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 15-34

Connectivity Application programming interfaces (APIs) give other programs well-defined ways of speaking to them Enterprise Application Integration (EAI) solutions EDI is being replaced by XML, business language of Internet Service-oriented architecture (SOA) collection of “services” that communicate with each other within software or between software © 2014 John Wiley & Sons, Inc. - Russell and Taylor 8e 15-35

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