Information Systems in Organizations Running the Business: Enterprise Systems (ERP)

Order to Cash (Sales Order Processing): involves customer, sales department, warehouse, accounting Customer places order with the company (Process begins) Sales Department processes order: creates Sales Order Accounting reviews sales order & customer: credit limit, verifies customer ID and details. Approves/Denies Order. Warehouse fulfills order: “Pick, Pack, and Ship”. Ships material/product to customer. Generates “Bill of Material/Bill of Lading” which shows everything that was shipped to customer. Accounting sends Invoice to customer Customer pays invoice; money received and logged by accounting Sales Order Closed (End of process)

Purchase to Pay Employee submits a Requisition (form asking for permission to buy something) Requisition reviewed: ( If OK, sent to purchasing; If declined, returned to employee and end of process.) Purchasing creates Purchase Order, sends to supplier. Supplier processes order, “picks, packs and ships” material to company. Supplier invoices company. Company Warehouse receives material, generates a Receipt of Goods (Confirmation that Company got everything it ordered and that everything is correct.) Accounting receives invoice from supplier, and does a 3-Way Match. (Compares purchase order, Invoice, and receipt of goods to confirm that everything is correct.) Accounting approves invoice for payment. When invoice is paid, purchase order closed. (End of Process.)

Build Your Own Study Guide What Is ERP? What Is ERP? What are 3 key points from this reading? What are 3 important details from this reading? Students will be called upon at random

Build Your Own Study Guide Wikipedia: ERP Wikipedia: ERP What are 3 key points from this reading? What are 3 important details from this reading? Students will be called upon at random

What is an ERP system? Business processes that span multiple functional areas Single System Single Database Many modules One copy of data Costs Benefits Risks Integration Partner Executive Support Change SAP, Oracle and Microsoft ?

Remember Swim Lane Diagram? Who does what and when?

Legacy Systems SalesWarehouse Accounting

What kind of non-value added work is created when inventory data or credit data is old? Does your customer view your organization as the “well oiled machine”?

Enterprise System Sales + Warehouse + Accounting How many copies of data do I have? How much better is my decision making with a single copy of all data? How much non-value added work do I eliminate when inventory and credit data are current? How much happier are your customers when they are dealing with the “well oiled machine”?

Exercise On the following slide, identify all of the system interfaces: – What system needs to talk to what other system – One line per data flow

ENTERPRISE SYSTEMS In-Class Activity…

ERP Challenges Adoption – People HATE change! Configuration is extremely complex – Vanilla (config change only) vs. Customization Implementation is extremely complex Costs – Rohm and Haas spend $300 million over a period of three years – What else could they have done with $300 million? Risks – Mega-failures with ERP implementations in the mid-90s – Many companies went out of business as a result Internally focused – Need supply chain and customer relationship management too

Build Your Own Study Guide Putting the Enterprise into the Enterprise System Putting the Enterprise into the Enterprise System What are 3 key points from this reading? What are 3 important details from this reading? Students will be called upon at random

ERP Benefits A single database providing superior, real- time, data-driven decision making Standardizing business processes based on industry best practices – Force business process reengineering Reduced operating costs – Rohm and Haas saved $200 million/year

Leaders in the ERP Space SAP Oracle Microsoft Dynamics New cloud based ERP providers?

SAP ERPSAP CRMSAP SCM

Build Your Own Study Guide 9 Tips for Selecting and Implementing an ERP System 9 Tips for Selecting and Implementing an ERP System What are 3 key points from this reading? What are 3 important details from this reading? Students will be called upon at random

Making it Happen Executive Sponsor Driven by the business, not by IT Requires experts from all of the functional areas Top-tier Integration Partner Training, training, training Testing, testing, testing Don’t cut corners! – It could cost you a fortune – It could cost you your business

P2P EXERCISE In-Class Activity…