IT and Business Models Chapter 10 Value chain and organizational systems: activities and organization

Enterprise ressource planning ERP systems is part of VCO systems – Value Chain and Organization systems

ERP systems characteristics Long term systems – vendor specific Requiring business process re-enginering High complexity

Information systems strategy Efficiency Cost-benefit Competitive advantage Effectiveness Redefine the boundaries of particular industries Develop new products or services Change the relationships between suppliers and customers Establish barriers to deter new entrants to marketplaces

Information systems strategy Application areas: accounting, logistics and human resource management. Logistics Production Distribution Sales Materials management

Information systems strategy Application areas: accounting, logistics and human resource management. Accounting Financial Controlling Investment management

Information systems strategy Application areas: accounting, logistics and human resource management. Human resources Development Administration Payroll Workforce planning Time management Figure 10.2 Components of ERP systems.

Departments and ERP systems Marketing Customer service Production Procurement Inventory Accounting Human resources Sales

Paper based systems Sales personel  Writes order Sales manager  Checks order Manufactoring  Manufactures order Shipment  Deliver order Accounting  Invoice / Payment  Documents

ERP systems The information flow of order processing Figur 10.5

ERP systems – the chatch Falling implementation  bankrupcy

ERP systems – the business effect - 1 Business process improvement Integration among business units Real-time access to data and information Standardization of company processes Increased flexibility Increased customer satisfaction Optimization of the supply chain Reduction of rework Business growth

ERP systems – the business effect - 2 Improvement of order-to-cash time Competitive positioning ability Implementation af shared services Improved time to market cycles Improved product quality

ERP systems Re-think your business model