Information Systems Infrastructure (IS3314) 3 rd year BIS 2006 / 2007 Fergal Carton Business Information Systems

Review of course objectives Basic flows of information (Finance / HR / Sales) Understanding requirements for IS support Business processes & related applications Introduction to ERP systems ERP implementation projects IS issues in multi-national organisations

Last week Case study: average mark 60% MCQ: average mark 83% Pre-and Post ERP scenario at EMC Customer information stored in at least 6 different un-integrated systems Excel widely used: risk of duplication of data, but liked by users for user friendliness and flexibility ERP implementation reduces systems from 200 to 40 Transaction Processing Systems Single instance ERP systems : one centralised database Batch processing Concurrent manager deals with requests Systems Admin has to deal with conflicts and response time issues Akin to task manager on desktop machine Functional business systems E-business and e-commerce Overview of Information systems Evolution of ERP from MRP Davenport handout (discussion) SBP Retail Technology handout (27 Aug 2006) ERP and sales forecasting MCQ questions

This week Key benefits of ERP ERP: the state of play Key business decisions D 0 – D 6 Davenport handout (link sent) SBP Retail Technology handout (27 Aug 2006)

ERP Fit ERP poses Questionable Issues ERP poses Significant Issues Not part of initial scope 1.0 Develop New Products & Features 2.0 Position & Sell2.0 Position & Sell 2.0 Position & Sell2.0 Position & Sell 4.0 Fulfill Sales Order4.0 Fulfill Sales Order 4.0 Fulfill Sales Order4.0 Fulfill Sales Order 5.0 Service Aftermkt5.0 Service Aftermkt 5.0 Service Aftermkt5.0 Service Aftermkt 6.0 Exec. Planning Cycle6.0 Exec. Planning Cycle 6.0 Exec. Planning Cycle6.0 Exec. Planning Cycle 7.0 Support Enterprise7.0 Support Enterprise 7.0 Support Enterprise7.0 Support Enterprise 3.0 Source & Mfg. Inventory3.0 Source & Mfg. Inventory 3.0 Source & Mfg. Inventory3.0 Source & Mfg. Inventory 3.1 Develop strategic supplier relationships 3.2 Identify, qualify and select suppliers 3.3 Plan rqmts for product, spares, subassemblies & components 3.4 Procure product, spares, subassemblies & components 3.5 Expedite, receive and disposition materials 3.6 Manage the product RMA process 3.7 Approve and pay 1.1 Conceive new products 1.2 Design New Products & Features 1.3 Build Prototype for feasibility study & business case 1.4 Develop software & establish test procedures 1.5 Integrate new product into organization 1.6 Manage the product life cycle 2.1 Develop marketing strategy 2.2 Develop product strategy 2.3 Launch new products & features 2.4 Develop & conduct marketing programs 2.5 Establish strategic alliances & partnerships 2.6 Acquire, qualify and refer leads 2.7 Develop proposals, solicit orders and close deals 4.1 Assemble test & integrate products 4.2 Receive & process orders 4.3 Allocate, configure & ship customer orders 4.4 Install, establish final configuration and test equipment at customer site 4.5 Bill & collect money 5.1 Prepare svcs and spares strategy 5.2 Remotely monitor customer product performance; diagnose & remedy problems 5.3 Provide post- installation customer service 5.4 Manage customer warranty and maintenance programs 5.5 Provide customer training & education 6.1 Develop strategic plans and establish operating goals 6.2 Develop Budgets 6.3 Manage the BRM process 7.1 Forecast, measure and report financial & operating goals 7.2 Procure capital items/leases & other goods & services 7.3 Recruit, hire & retain employees 7.4 Deliver total compensation to employees 7.5 Acquire product patents & copyrights 7.6 Plan for and Deliver facility & infrastructure requirements BUSINESS FUNCTIONAL REQUIREMENTS CONSIDERATIONS Vanilla ERP Fit With core business processes PRELIMINARY In reality, because of some of the uniquenesses of the business, an ERP system alone will not provide the functionality required for many of its core business processes.

Key benefits of ERP? Single point of data entry (PO’s, SO’s, …) Inventory control Opportunity to re-design business processes Single technical platform (support) Common language, common pool of data SalesShippingCollect cash

Market Players: Revenues $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 SAP Oracle PeopleSoft JD Edwards Baan JBA International SSA Intentia QAD Lawson 1998 ERP Vendor Revenues (millions)

ERP : the state of play High penetration rate in large businesses ERP seen as panacea to lack of control in subs Centralising of expensive IS resources CEO’s are “disappointed” with results Reporting weakness : need for data warehouse

Critical Success Factors (Parr & Shanks, 2000) Top management Support Full-time release of business experts Empowered decision makers Realistic milestones and end date Steering Committee determines scope & goals Smaller scope Champion Vanilla ERP Balanced team Commitment to change Project Technology People

Research motivation Transactional efficiency ≠ better decision making (effectiveness) ERP cost: €50,000 per user to implement Succumbing to vendor hype and “best practice” Change to local competitiveness / empowerment Lack of post-implementation analysis

Centralised control Decentralised control Corporate Core team Local site Processes Information Responsibilities Expected findings and limitations

Key business decisions

Exercise: what are alternatives to ERP?

As-is Best of breed Custom solution Exercise: main arguments for / against?

As-is Best of breed Custom solution Are there alternatives? Scalability? Flexibility? Reliability?