Breathing Life into Business Concepts: Simulations in MIS Stephen Hendrix Instructor, Department of Computing East Tennessee State University

Agenda Introductions Research Practice in classroom Feedback from students Future goals

About Me Instructor, Department of Computing East Tennessee State University BS, MS Computer and Information Sciences, concentration Information Tech MBA SAP Certified Associate – Business Process Integrations with SAP ERP 6.0 EhP6 (TERP 10)

About Me

The situation Department of Computing to teach MIS course for business students Revitalize the course to place an emphasis on Enterprise Resource Planning (ERP) applications Expose students to SAP How can simulations help breathe life into business and technology concepts discussed in the course?

Researching the MIS Course What concepts are important (both business and technology)? Why expose students to ERP? Why use simulations? Why use ERPsim?

Example Concept in Course Porter’s Generic Strategies Source: Baltzan, 2015, p. 20

Why ERP? Léger (2006) identifies the lack of Information Technology (IT) experience as one of the major barriers in teaching ERP concepts to business students. In addition, students struggle with the understanding of the importance of business integration utilizing ERP systems.

Why ERP? Cronan and Douglas (2012) identified that students who graduate with ERP coursework receive an average salary of $4,056 more than students without ERP coursework.

Why Simulations in Education? Moratis, Hoff, and Reul (2006) identified relevance and development of innovate learning methods for educating students as two major challenges facing management education. Avramenko (2012) business schools are criticized on the irrelevance of the management theory being taught as well as the outdated processes used to teach the students.

Why Simulations in Education? Springer and Borthick (2004) - students need opportunities to learn to solve problems by constructing their own representation of the situation and creating their own understandings of what it means to develop and present acceptable solutions (p. 278).

Why Simulations in Education? Walters, Coalter, and Rasheed (1999) concluded from research that simulations are an effective tool in a classroom and allowed students in a business policy course to implement strategic concepts with some degree of realism. Furthermore, the study noted that “business games and simulations appear to be an effective pedagogical tool at the undergraduate level” (p. 174).

What is ERPsim? ERPsim games are an innovative “learning-by-doing” approach to teaching ERP concepts, and where actual systems are transformed into dynamic learning platforms. Participants must manage their business using a real-life ERP system (SAP ECC 6.07) in a competitive environment comprising other participants who are managing competing companies. ERPsim simulate and accelerate time to create a dynamic learning environment. It also automates clerical tasks to let participants focus on decision making and analytics. ERPsim supports real-time analytics, and can be combined with most analytical tools to provide a risk-free environment to develop analytical competencies. Source: Léger, P.-M., Robert, J., Babin, G., Pellerin, R. and Wagner, B. (2007)

Why ERPsim? This simulations operates on the SAP ECC platform and was awarded the 2005 academic prize for the best use of a technology in teaching (Léger, 2006) pedagogical objectives (Léger, 2006, p. 442): –Develop a hands-on understanding of the concepts underlying enterprise systems –Experience the benefits of enterprise integration –Develop technical skill at using ERP software

Why ERPsim? ERPsim was developed in 2004 and has been adopted by 832 various professors, lecturers, and professional trainers over 377 universities worldwide (Charland, Léger, Cronan, and Robert, 2015).

Why ERPsim? Offers students the opportunity to reflect, test and find out what works and what does not, and gain insight into business processes, information systems, business strategy, managerial decision making, analytics and team dynamics. This game provides students with process guidelines and tools that enable realtime collaboration and collection of process data and incorporates disciplined reflection, a key requirement for deep learning (Seethamraju, 2011, p. 21).

Using ERPsim in the Classroom The MIS course is comprised of: –Weekly lectures on business and technology concepts –Weekly lab meetings to participate in the ERPsim activities in three computer labs (90 students max)

Using ERPsim in the Classroom Lab Schedule: –Week 1Introduction to SAP using Global Bike –Week 2Introduction to ERPsim and ERPsim Sales –Week 3ERPsim Production and Sales –Week 4Data Visualization using Microsoft Excel and ERPsim Sales Data –Week 5ERPsim Procurement through Material Requirements Planning (MRP) –Week 6Advertising, Depreciation, Loan Repayment, Facility Improvements –Week 7Bill of Material (BOM) –Week 8Data Warehouse –Week 9Company Swap –Weeks 10-12ERPsim Competition –Weeks 13-14ERPsim Presentations

Using ERPsim in the Classroom Week 2 - ERPsim basics: –Teams of three to four students –Operate a cash-to-cash make-to-stock manufacturing facility in Germany (Euro) –Handle planning, procurement, production, and sales of six muesli cereals

Using ERPsim in the Classroom Week 2 - ERPsim basics: –Location affects sales and product demand. –Demand from “customers” can change over time

Using ERPsim in the Classroom Week 2 - ERPsim basics:

Using ERPsim in the Classroom Week 2 - ERPsim basics: –Simulation runs for “30 days” in each round with one day = one minute in real life. –The goal: highest Net Income (not revenue) –Week 2 is only sales. In later weeks, we add other manufacturing components.

Using ERPsim in the Classroom Week 2 - ERPsim basics:

Using ERPsim in the Classroom Week 2 – ERPsim Sales: –COGS –Limited Qty. –Competition

Using ERPsim in the Classroom Week 2 – ERPsim Sales:

Using ERPsim in the Classroom Week 2 – ERPsim Sales:

Using ERPsim in the Classroom Week 2 – ERPsim Sales:

Using ERPsim in the Classroom Week 3 - Production: –Can only produce 25,000 / day –Once scheduled, cannot change –Still selling

Using ERPsim in the Classroom Week 4 – Data visualization with Excel:

Using ERPsim in the Classroom Week 5 – Procurement through Material Requirements Planning (MRP): –Students must: Estimate how many products they can sell over a given time period (i.e. we can sell 50,000 units of 1KG strawberry muesli in 15 days) Run MRP to calculate raw material requirements Convert purchase requisitions to orders (if needed) to procure materials When raw materials arrive, produce final goods

Using ERPsim in the Classroom Week 5 – Procurement through Material Requirements Planning (MRP):

Using ERPsim in the Classroom Week 5 – Procurement through Material Requirements Planning (MRP):

Using ERPsim in the Classroom Week 5 – Procurement through Material Requirements Planning (MRP):

Using ERPsim in the Classroom Week 6 – Advertising, Depreciation, Loan Repayment, Facility Improvements: –Up to this point, every team sold the same six products with same factory configurations (produce 25k / day with 12 hour delay between products) –Starting in week six, teams can start differentiating themselves.

Using ERPsim in the Classroom Week 7 – Bill of Material (BOM): –Teams can only sell six products. –However, they can change the recipe in a variety of ways: Premium vs cost savings product 1kg vs 0.5kg

Using ERPsim in the Classroom Week 7 – Bill of Material (BOM): –This is when I ask teams to think about Porter’s Generic Strategies:

Using ERPsim in the Classroom Week 8 – Data Warehouse: –Provide students a Microsoft Access database with all of the transactional data from the system, including: Financial – Balance Sheet Financial – Income Statement Inventory Pricing Production

Using ERPsim in the Classroom Week 8 – Data Warehouse: –Provide students a Microsoft Access database with all of the transactional data from the system, including: Sales Consolidated Weekly Inventory Data Consolidated Weekly Sales Data

Using ERPsim in the Classroom Week 8 – Data Warehouse: –We use Microsoft Excel to connect to Microsoft Access to use the data to create charts

Using ERPsim in the Classroom Week 8 – Data Warehouse:

Using ERPsim in the Classroom Week 9 – Team Swap: –They are now the owners of someone else’s team in the simulation. –Must use data warehouse, charts, and system data to make decisions on how to either improve or maintain their current company.

Using ERPsim in the Classroom Weeks – ERPsim Competition: –Teams will start from round one day one and compete for eight rounds to see who has the best net income at the end of round eight: Team in first place receives three points on final grade Team in second place receives two points on final grade Team in third place receives one point on final grade

Using ERPsim in the Classroom Weeks – ERPsim Competition Presentations: –Teams will prepare a seven to nine minute presentation reflecting on their experiences within the ERPsim competition. –Students are required to generate charts to provide a visual description of their experiences. –The charts are to have both an inward look into the company as well as a comparative look at their competition.

Feedback From Students Student Assessment of Instruction (SAI) anonymous feedback: –Of particular value is the training in SAP. This, I feel, is of tremendous value to business students when we enter the job market. –I actually learned a lot in this class. It was the most applicable to the business world because of the simulation competition. –I definitely learned a lot in this class. I think that the three SAP courses offered through the Department of Computing would be hugely helpful for business students also. If I weren't graduating this semester, I would take the other two classes so I could be SAP certified. Very helpful course. –The labs were the most helpful part of this course. I learned so much through the SAP simulation.

Feedback From Students Student Assessment of Instruction (SAI) anonymous feedback: –The aspect of this course that was most effective in helping me learn was the lab simulation each week. I learned more from this section of the course than I have in my four years of college. –The lab was the most effective. I learn by doing things not just by reading a slide so having the time to put my knowledge into real life was a big help. –The lab section of this course really helped expand my critical thinking skills. –Being able to apply what was learned through projects was really helpful in the retention of what I learned during lecture time.

Future Goals Some future goals for this course include: –Introduce the logistics simulation –Use additional data visualization tools: Tableau Business analytical tools using the simulation on SAP HANA.

Thank you! Questions? Stephen Hendrix Box ETSU Johnson City, TN 37614

References Avramenko, A. (2012). Enhancing students' employability through business simulation. Education & Training, 54(5), Baltzan, P. (2015) M: Information Systems, 3rd Edition. McGraw-Hill Higher Education CSM Archive, VitalSource Bookshelf Online. Charland, P., Léger, P., Cronan, T. P., & Robert, J. (2015). DEVELOPING AND ASSESSING ERP COMPETENCIES: BASIC AND COMPLEX KNOWLEDGE. The Journal of Computer Information Systems, 56(1), Cronan, T. P., & Douglas, D. E. (2012). A STUDENT ERP SIMULATION GAME: A LONGITUDINAL STUDY. The Journal of Computer Information Systems, 53(1), Léger, P. (2006). Using a simulation game approach to teach enterprise resource planning concepts. Journal of Information Systems Education, 17(4), Léger, P.-M., Robert, J., Babin, G., Pellerin, R. and Wagner, B. (2007), ERPsim, ERPsim Lab, HEC Montréal, Montréal, Qc. Moratis, L., Hoff, J., & Reul, B. (2006). A dual challenge facing management education: Simulation-based learning and learning about CSR. The Journal of Management Development, 25(3), Seethamraju, R. (2011). Enhancing student learning of enterprise integration and business process orientation through an ERP business simulation game. Journal of Information Systems Education, 22(1), Springer, C. W., & Borthick, A. F. (2004). Business simulation to stage critical thinking in introductory accounting: Rationale, design, and implementation. Issues in Accounting Education, 19(3), Walters, B. A., Coalter, T. M., & Rasheed, A. M. A. (1997). Simulation games in business policy courses: Is there value for students? Journal of Education for Business, 72(3),