1 Lecture 11 Ch.4 Enterprise Resource Planning II

2 Agenda 1. ERP II 2. E-Commerce or E-Business 3. Integrated ERP and E-Business 4. E-Procurement 5. The Benefits of E-Business and ERP Integration 6. Successful Applications 7. Questions to Ponder (to p3) (to p9) (to p18) (to p8) (to p4) (to p19) (to p20)

3 1. ERP II The extension of the traditional ERP to include the e-marketplace is referred to as ERP II. SAP R/3 (Internal Efficiency) SAP SCM (Supply Chain Effectiveness) MySAP (e-community Collaboration) (to p2)

4 2. E-Commerce or E-Business comprisedE-commerce is comprised of e-storefront, e-billing, e-payment and the basic forms of e-procurement. consistsE-business on the other hand, consists of three stages: e-commerce, e-business, and e-partnering. Samples of e-Commerce operations (to p5)

5 Operations Typical E-commerce Operations As to opposite to e-Business (to p6)

6 holistic strategyE-business is therefore more holistic and would require a new kind of strategy to become efficient. Some of the activities that could be grouped under the e-business strategy are customer relationship management (CRM), e- procurement, and e-commerce. E-business integrates these activities through effective coordination to ensure that the customer receives a pleasant online experience. Optional Internal exercise (to p7)

7 E-Commerce Optional Internet Assignment: Go to the Boise e-commerce site (BoiseOffice.com) and write a brief report to summarize its e- partnering initiatives such as e- procurement with non-profit organizations (e.g. University, Hospital). (to p2)

8 3. Integrated ERP and E-Business Web Brower Entry MySAP. com Web Brower Entry (to p2)

9 4. E-Procurement E-procurement is an integral part of any e- Business or e-Commerce operation. E-procurement catalogues are of three types namely 1) buyer centric, 2) seller centric, and 3) system centric solutions. (to p16) (to p13) (to p10)

10 Buyer Centric Model The buyer in this case, is the hub that maintains the aggregated catalogue data and is connected to the suppliers at the end of the spokes. This allows the buyer to determine the performance measurement for suppliers and also to establish guidelines with which it will deal with its suppliers. Covisint – the auto industry e-marketplace initiative is an example of the buyer centric model. Semantic view (to p11)

11 Buyer Centric Model Advantages (to p12)

12 Buyer Centric Model - Advantages The buyer can leverage volume and major suppliers. This could help to control product costs. Costs containment can be achieved by tracking the sources of procurement expenditures. There is rapid response to user needs. (to p9)

13 Seller Centric Model The seller centric model is the opposite of the buyer centric model. The seller or sellers are the hub and the buyers are the spokes that need to connect to the seller’s network or Internet or web site to browse and purchase products. The seller assumes the responsibility of maintaining the catalogs and making them available to other intermediaries. This is akin to any of the online web stores where buyers log on to make purchases. Example: Amazon.com Semantic view (to p14)

14 Seller Centric Model Advantages (to p15)

15 Seller Centric Model - Advantages The sellers create and maintain their own catalogues and are responsible for updating them. It is easy to access the site and it is open to a wide range of buyers. This typically offers the e- Commerce service to customers. It eliminates the power and control wielded by the buyer as in the buyer centric model. The investment cost for buyers is very low. (to p9)

16 System Centric Model The system centric model involves an independent portal site where both buyers and sellers meet to transact business. Examples: eBay, Ubid.com Advantages (to p17)

17 System Centric Model - Advantages Multiple buyers and sellers can be accommodated and can negotiate prices online. The overall cost to both the buyer and the seller is reduced. Some of the concerns may include Transaction costs may be high Business rules and regulations are difficult to establish and maintain between buyers and sellers. (to p2)

18 5. The Benefits of E-Business and ERP Integration Competitiveness – use of information as a competitive tool Flexibility – enable to cater the need of varies customers’ needs and wants Speed – all trading partners can gain access of real-time data for decision making Efficiency – All information can be readily accessed by all trading partners Cost Management – minimize waste, shift of resources for better productivity (to p2)

19 6. Successful Applications Schneider Logistics One of General Motors Corp’s Suppliers. It handles all its orders electronically. IBMIt offers support information on the Web. As a result, 99 million calls to telephone help desks and sales representatives are eliminated. DellThrough the Internet, Dell delivers goods to customer on time. It maintains just five days of inventory on hand. Juniper NetworkJuniper Network outsources almost everything except design and selling of its products. The Net is used to glue all the outsourced tasks together. (to p2)

20 7. Questions to Ponder E-business sites emerge overnight. In your opinion, is adequate attention being paid to the essence of e-quality management in the digital age? (to p2)