Chapter 6 Supporting Processes with ERP Systems Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-1

Administrivia Quizzes – I got quite a few s last night about the quizzes – This section contained some open ended information, hence pending instructor review – This will the only quiz with this setup – I will finish the marks this evening 8/22/2011 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-2

Administrivia Withdraw Date – The final day to withdraw from the course is Oct 21 st Syllabus – Updated Chapter Numbers for the ERP Section 8/22/2011 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-3

Administrivia Project 1 – Graded and posted. See me if you have a question Project 2 – Under final review. Will be posted soon – The instructors pool the iTAs for a help desk during this project Project 3 is posted – Note the idiosyncrasies of this project’s submission 8/22/2011 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-4

Exam 1 µ / σ – – Course Mean ~60-65, well done Median - 73 Mode - 75 Max 95 Results will be posted when I get back to my office 8/22/2011 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-5

A Map of Where We Are Societal Level Changes Facilitated By IT How This Influences Firm Positioning Executing Firm Strategy How do we know where we should be? Aligning the firm around the strategic objective Practical Application (ERP)

ERP 8/22/2011 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-7

What Problem Does an Enterprise System Solve? Information Silo Problem – Data isolated in separate information systems Two Enterprise Packages Which Do This – Enterprise Application Integration (EAI) – Enterprise Resource Planning (ERP) Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-10

What Problem Does an EAI System Solve? 6-11

What Problem Does an ERP System Solve? 6-12

8/22/2011 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-13

8/22/2011 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 14 5 information silos Where do we need to get information from if we need to know if we can fill an order for 1,000 bikes by next week?

8/22/2011 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 15 1 central database Where do we need to get information from if we need to know if we can fill an order for 1,000 bikes by next week?

Where did ERP systems come from? Grew out of manufacturing software – MRP – Manage inventory, production & labor – MRPII – adds in: Financial tracking of manufacturing processes Ability to schedule capacities Other drivers? – Y2K? – Sarbanes-Oxley (SarBox)? – IPv4? – 4,294,967,296 v 3.403×10 38 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-16

What Are the Elements of an ERP System? (Conceptual) Five Components of an ERP System – Software – Hardware – Data – Procedures – People Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-17

What Are the Elements of an ERP System? (People) People – Users – Self explanatory – Analysts – Responsible for maintenance and adaptation – Consultants – Initial and ongoing training and configuration Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-18

What Are the Elements of an ERP System? (Technical Requirements) ERP Software – Configuration ERP Databases – Over 25,000 tables Procedures – Train the trainer (in-house training) Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-19

What Are the Elements of an ERP System? Procedures? Inherent Business Processes in ERP – System specified business processes – Process blueprints – Is it better to change the software to conform to existing business processes or better to change business processes to match software? Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-20

What Are the Elements of an ERP System? (Modules) – SCM – P2P, O2C, inventory management, supplier management – Manufacturing – scheduling, capacity planning, quality control, BOM – CRM – sales prospecting, customer management, marketing, customer support, call center support – Human Resources – payroll, time and attendance, HR management, commission calculations, benefits admin – Accounting – GL, AR, AP, cash management, fixed-asset accounting Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-21

Note: If you are good at this you can make a lot of money. 8/22/2011 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 22

What Are the Benefits of an ERP System? Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-23

Time for a Break Today was quite a bit of recap on Valacich’s motivation of the ERP What we are trying to do is lock down the motivation for ERP and develop a framework of what it entails Key Takeaways – Why do we use it and what is the benefit? – How do the various pieces fit together? 8/22/2011 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 24

Chapter 6 Supporting Processes with ERP Systems Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-1

Administrivia Withdraw Date – The final day to withdraw from the course is TODAY! Project 3 (Phase 1) – URL is due by – Make sure you make your site on eportfolios.fox.temple.edu – else they may be deleted This does not apply to MIS majors 8/22/2011 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-26

Today is a lot more ERP 8/22/2011 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-27 Agenda

Recap of Last Time Why do we want to integrate the firm under a single database/software system? – What are the benefits for operational processes? – What is the benefit for executive management? – What is the effect on data integrity? 8/22/2011 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-28

Recall the bicycle example from last session… Take five minutes, look directly into your neighbor’s steely blue gaze (other colors acceptable) – 1) Do not be afraid – 2) Discuss the tangible benefits the firm would reap through EAI or ERP 8/22/2011 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 29

How would we know these are achieved? Think of the scenario on the first page of the chapter Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-30

What Are the Challenges of Implementing an ERP System? Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-31

Challenge One People People will be the ultimate source of trouble during any ERP project. We’ve talked about the horrors of routine change. To underscore this, later in the semester the quizzes will flip to being due Monday night. Not everyone will catch this, and I will receive many angry s. 8/22/2011 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-32

What Are the Challenges of Implementing an ERP System? People Issues Managing routine change Managing expectations TMT Meddling! Threats to departmental autonomy Scope Creep Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-33

ERP by Industry Type ERP by Organization Size Why would these types of firms leverage ERP more? How do the benefits differ across these organizations? What Types of Organizations Use ERP? Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-34

Who Are the Major ERP Vendors? ERP Vendor Market Share Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-35

Who Are the Major ERP Vendors? ERP Products Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-36

Why has SAP’s R/3 emerged as King? SAP Business Suite – think of the benefit of the MS Office Suite compared with other vendors – SAP CRM – Customer Relationship Management – SAP SRM – Supplier Relationship Management – SAP SCM – Supply Chain Management – SAP NetWeaver – Platform on which these modules run (in addition to non SAP integration) Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-37

What Makes SAP Different from Other ERP Systems? SAP Modules Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-38

Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 6-39