Enterprise systems Integrating the enterprise through the information system INFORMATION FLOW CASH FLOW Transfer CustomerVendorManufacturingDistribution Einzelhandels- geschäft Store

Enterprise systems “While the rise of the Internet has received most of the media attention in recent years, the business world’s embrace of enterprise systems may in fact be the most important development in the corporate use of information technology in the 1990s.” Thomas Davenport

ERP vendors license revenues ,000 2,000 2,500 3,000 3, SAP AGOracle Applications J.D. EdwardsPeopleSoftBaan 1, ,719 2,321 3, , M USD

Organisational functions A function is a unit in an organisation that carries out a set of related activities. Usually, these activities require special competence or equipment. Examples: Marketing Sales Procurement R&D JanitorCourseregistryTeachingSystemsadministration

Processes A business process is a sequence of activities that result in value for a customer Typically resources from several functions are required to carry out a process

Processes cross functionsJanitorCourseregistryTeachingSystemsadministration Course

The Value Chain - Activities Firm infrastructure Human Resource Management Technology development Procurement Inbound logistics Outbound logistics Operations Marketing & Sales Service Primary activities Support activities

Stovepipe syndromeR&DMarket/SalesProductionServiceFinancialsPersonnel Functions in an organisation IT systems Each IT system supports its own function

Integrated IT support Order- handling Customer- service Financialreporting R&DMarket/SalesProductionService Financials Personnel Product- development

Enterprise Resource Planning ERP definition Software solution that addresses the enterprise needs taking the process view of an organisation to meet the organisational goals tightly integrating all functions of an enterprise

Scenario ERP General ledger Accounting Customer info Sales rep. Quote Order Customer Purchase order Supplier Production order Plant

ERP means integration zProcesses zDatabases zTools zApplications zInterfaces

Central database CustomersSuppliersSales force Customer service Back office Anatomy of an ES Human resource Employees Services Sales & delivery Finan- cials Manufac- turing Inventory Reporting Managers

Client server architecture WAN Presentation Application Database Create Production Orders Release Production Orders Schedule Production Accept Customer Order Confirm Delivery Build Products Explode Bill-of- Material Reserve Material Customer Service Rep Plant Personnel Production Order Customer Order Part Material Task Internet

Sales and distribution Order Administration GI Inquiry Quotation Delivery Invoice Invoicing Contracts Returns Delivery Schedules Product proposals Availibility & Credit check Completion check Pricing Bonus Grouping Invoice List Debit/Credit etc Financialupdate Service Financialupdate Transportplanning Quality SalesSupport Sales Order Processing Production Project CPU Profit.Analysis Purchase Picking/Packing Pricing Credit check Follow-up etc ShippingSupport Competitors & Products Mailings Calendar etc Pricing Configuration EDI Follow-up etc

Forces behind ERP Organisational forces zImprove customer satisfaction zShorten lead times zDownsize - reduce middle management IT forces zInternet enabling zDifficulties to maintain legacy systems

Adapt the system to the organisation? NO! zCosts in time and money zForgoing benefits from best practice zSuboptimal integration zComplicates upgrades

Drawbacks of ERP zCostly implementations zDependence on one vendor zForgoing “best-of-breed” solutions zCompetitive “equalizer”

From ERP to ES Transactional Analytical Knowledge Resource (ERP) Relationship CRM B2B HR DW SEM KM FI SD MM