Convergence: Enterprise Resource Planning for Business Steve Reames, Ph.D. Professor-Management Information Systems Angelo State University 2602 West Ave. N.- Rassman #205 San Angelo, Texas U.S.A. Telephone: Ext. 233 Fax:
What is Convergence?
Converge… to tend to meet in a point or line; incline toward each other, as lines that are not parallel to tend to a common result, conclusion, etc. Convergence… an act or instance of converging. a convergent state or quality. the degree or point at which lines, objects, etc., converge.
Five Forms of Convergence Functional convergence Technological convergence Economic convergence Political convergence Geographical convergence Technological convergence converges into one. The availability of carrier technology with high bandwidth utilizing single carrier fiber optic cabling and satellite. Internet. The Internet combines all known communication media into one singel service on a computer screen.
Technology has led to global convergence The world as a global village, where interactions and communication are no longer hindered by distance. Nations around the world are gradually converging into regional blocs, driven by the ambition of pragmatic economic and social concerns. The tendency towards a globalized society is a typical instance of a political convergence.
Ubiquitous existing or being everywhere, esp. at the same time; omnipresent. …we exist today in a ubiquitous technological society Ubiquitous Computing Concept; technology support at anytime, anywhere, with access to any needed information Decentralized computing Shared information Mobile computing
Information Technology Business Vision IT use must support a business vision IT strategy must be integrated with that business vision Results: Competitive advantage – providing product/service that customers value more than your competition Top line versus bottom line Database support Decision-making support Business initiative support Run, grow, transform
Top Line Versus Bottom Line Top line – competitive advantage focus to increase revenue Bottom line – competitive advantage focus to decrease costs IT can support both top-line and bottom-line initiatives
Run, Grow, Transform Your Technology Framework for percentage allocation of IT dollars toward… Running a business – optimize activity execution (you will receive a greater bottom line) Growing a business – increase your market reach with greater product offerings, etc (increases your top line) Transform – innovate your business technology process.
Enterprise Business Successful IT systems provide an integrated view of: Business Extend analytical capabilities to your user Leverage a corporation's information and expertise …and your system will need to encompass a range of intelligence systems and analytical applications that include: Data warehouses and data marts Online analytical processing (OLAP) Decision support systems (DSSs) Executive information systems (EISs)
Enterprise Systems An enterprise system (ES) - large software application that companies use to manage their operations Key way by which large and small organizations distribute content of all kinds to their: Workforce Suppliers Customers
Enterprise Systems
Evolution of ERP Systems The early stage of ERP was carried out in the 1970’s through a system called Materials Requirement Planning (MRP) Early 1980s MRP was reengineered under the name of Manufacturing Resources Planning or MRPII
Evolution of ERP Systems The beginning of the 1990’s came enterprise resource planning (ERP) ERP systems have evolved into what is now commonly referred to as ERPII
Evolution of ERP Systems
Enterprise Systems Enterprise systems are suited for information transactions They are the underlying information “factory” Enterprise systems offer the first great opportunity to achieve true connectivity A state in which everyone knows what everyone else is doing in the business all over the world at the same time
ERP Systems
ERP systems allow companies to implement a single integrated system by replacing legacy/ ubiquitous information systems. Legacy/Ubiquitous information systems - represents a massive, long-term business investment; such systems are often brittle, slow, and nonextensible
ERP Systems Enterprise Resource Planning (ERP)..systems that are software systems for business management, supporting areas such as planning, manufacturing, sales, marketing, distribution, accounting, financial, human resource management, project management, inventory management, service and maintenance, transportation, and e-business
ERP Systems An ERP system is required to have the following characteristics: Modular design comprising many distinct business functions such as financial, manufacturing, distribution, and the like. Centralized DBMS Integrated functions that provide seamless information flow among the functions Flexible, best business practices Functions that work in real-time Internet-enabled
Core ERP Functions Accounting Financial Manufacturing Production Transportation Sales and distribution Human resource Supply chain Customer relationship E-business
ERP Systems Advantages… Reliable information access Avoid redundant data and operations Cost reduction
ERP Systems VENDOR/WEB ADDRESSTARGET MARKET SAP ( businesses Oracle/PeopleSoft ( Large businesses SSA Global (Baan) ( Large businesses Microsoft (Great Plains) ( Small-to-medium businesses
ERP Systems ERP systems are big business At the top of the IT spending list is the ERP market The United States federal government will spend $7.7 billion on ERP products and services in fiscal year 2009 Up 37 percent from 2004 spending of $5.6 billion
ERP Vendors & Market Trends The top dominating ERP software suppliers are: SAP Oracle/PeopleSoft SSA Global Microsoft Together they control more than 70 % of the multibillion dollar global market
ERP Vendors & Market Trends Complete list is very long Invensys ( Epicor ( Mapics ( Navison ( Deltek (
ERP Vendors & Market Trends The ERP market has been growing at a rate more than 30 % The growth of the ERP market has been boosted both by business reasons as well as by technical reasons The main cited reason is globalization
Conclusion A good ERP/ IT infrastructure will support all of an organization’s business and information needs. It will provide an integrated view of business, extend analytical capabilities to users, and leverage a corporation's information and expertise – regardless of where that information and expertise may reside. Enterprises need to encompass a range of intelligence systems and analytical applications. These include data warehouses, data marts, online analytical processing (OLAP), decision support systems (DSSs), and executive information systems (EISs).
Conclusion Enterprise systems (ES) are a large software application that companies use to manage their operations. These systems have become a key way by which large organizations distribute content of all kinds to their workforce, to their suppliers and to their customers. Enterprise resource planning (ERP) systems are software systems for business management, encompassing functions supporting areas such as planning, manufacturing, sales, marketing, distribution, accounting, financial, human resource management, project management, inventory management, service and maintenance, transportation, and e-business. Implementation of an Enterprise System will provide effective solutions and cost savings for intra business activities, external business requirements, and a window of opportunity for global convergence.
Conclusion As more intelligent, smaller digital machines are developed, as digital circuits evolve, and as digital communications becomes ever-more pervasive, they will continue to converge with computers, televisions, security systems, electric appliances, and many other devices, to provide new and useful functions for both the home and work environments. This is Digital Enterprise Convergence, and is the tip of the iceberg - the symbiotic coalescence of technologies, markets, and functions forming the foundation for present and future innovation and growth in business.
Questions?