McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. BUSINESS DRIVEN TECHNOLOGY Chapter Twelve: Integrating the Organization from End to End – Enterprise Resource Planning

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved LEARNING OUTCOMES 12.1 Describe the role information plays in enterprise resource planning systems 12.2 Identify the primary forces driving the explosive growth of enterprise resource planning systems 12.3 Explain the business value of integrating supply chain management, customer relationship management, and enterprise resource planning systems

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved CHAPTER TWELEVE OVERVIEW Enterprise resource planning systems serve as the organization's backbone in providing fundamental decision-making support This chapter discusses – ERP’s explosive growth – Using ERP to connect corporations – Integrating SCM, CRM, and ERP

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved CHAPTER TWELEVE OVERVIEW At the heart of all ERP systems is a database, when a user enters or updates information in one module, it is immediately and automatically updated throughout the entire system

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved CHAPTER TWELEVE OVERVIEW ERP systems can automate business processes

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved CHAPTER TWELEVE OVERVIEW ERP systems must integrate various organization processes and be: – Flexible – Modular and open – Comprehensive – Beyond the company

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved ENTERPRISE RESOURCE PLANNING’S EXPLOSIVE GROWTH SAP boasts 20,000 installations and 10 million users worldwide ERP solutions are growing because: – ERP is a logical solution to the mess of incompatible applications that had sprung up in most businesses – ERP addresses the need for global information sharing and reporting – ERP is used to avoid the pain and expense of fixing legacy systems

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved THE CONNECTED CORPORATION Top three ERP vendors and their major components

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved THE CONNECTED CORPORATION SCM, CRM, and ERP are the backbone of e- business Integration of these applications is the key to success for many companies Integration allows the unlocking of information to make it available to any user, anywhere, anytime

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved THE CONNECTED CORPORATION SCM and CRM market overviews

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved INTEGRATING SCM, CRM, AND ERP Many companies purchase modules from an ERP vendor, an SCM vendor, and a CRM vendor and must integrate the different modules together – Middleware – several different types of software which sit in the middle of and provide connectivity between two or more software applications – Enterprise application integration (EAI) middleware – represents a new approach to middleware by packaging together commonly used functionality, such as providing prebuilt links to popular enterprise applications, which reduced the time necessary to develop solutions that integrate applications from multiple vendors

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved INTEGRATING SCM, CRM, AND ERP General audience and purpose of SCM, CRM and ERP

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved INTEGRATING SCM, CRM, AND ERP Data points where SCM, CRM, and ERP integrate

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Opening Case Study Questions Revving Up Sales at Harley-Davidson 1.Explain how an ERP system can help Harley-Davidson gain business intelligence in its operations 2.Assess the business benefit for Harley- Davidson in integrating its CRM, SCM, and ERP systems

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved CHAPTER TWELEVE CASE Hilton Purchases New Suite Hilton deployed a new ERP that cost $4 million The ERP system has increased processing efficiency by a factor of six The ERP system is saving the company between $4.5 and $5 million annually

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved CHAPTER TWELEVE CASE QUESTIONS 1.Summarize why the merger of two separate corporations can cause significant issues for the integration of information 2.Which component would you recommend if Hilton wanted to add an additional PeopleSoft component? Evaluate the business benefit of this additional component 3.Analyze why it is critical for an organization like Hilton Hotels to have an enterprisewide system 4.Assess the benefits Hilton Hotels Corporation could receive from implementing an integrated SCM, CRM, and ERP solution

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. BUSINESS DRIVEN TECHNOLOGY UNIT THREE CLOSING

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Unit Closing Case One Building LEGO’s IT Systems One Block at a Time 1.Summarize why LEGO’s managers and executives would want to use DSSs and EISs to gain business intelligence 2.Prototype a potential digital dashboard for a sales executive at LEGO 3.Describe a supply chain and explain why managing it is important to LEGO’s business

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Unit Closing Case One Building LEGO’s IT Systems One Block at a Time 4.Summarize customer relationship management and explain how LEGO could use CRM to enhance its business 5.Is it ethical for an employee at LEGO to sell the organizational information stored in its i2 system? 6.One of the challenges facing LEGO is its ability to forecast demand. Explain how implementing the ERP solution from i2 has helped the company improve its demand forecasting

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Unit Closing Case Two eBay’s Cosmos Business Intelligence System 1.Explain why eBay’s managers and executives decided to create the Business Intelligence Team 2.Define five types of information that eBay executives might want on their EISs 3.Determine the strategy eBay is taking regarding its supply chain 4.Assess the business benefits from implementing an analytical CRM solution at eBay

McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved Unit Closing Case Two eBay’s Cosmos Business Intelligence System 5.Which component would you recommend eBay purchase if the company was interested in adding an additional ERP component? 6.One of the key success factors of Cosmos is its ability to provide a better understanding of customer activity, which allows eBay to improve customer experiences making eBay a safer place to buy/sell practically anything. Explain why eBay’s unique business structure causes safety and security concerns for its customers 7.What types of security issues should eBay be concerned with and what can it do to protect itself?