1. Chapter 2: Enterprise Systems
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

2. Learning objectives
Describe the different types of enterprise systems (ES) and their roles in managing business processes
Identify the different vendors that supply ES and analyze their market positions
Explain the architecture of a typical ES
Compare and contrast the different types of master data in an ES
Portray the hypothetical company Super skateboard Builders (SSB) in terms of its history and growth, products, customers, suppliers, and the types of information systems it uses
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

3. Enterprise Systems
Difficult to imagine today’s competitive global environment how large companies functioned without the aid of ES.
Three stages of evolution
Stage 1: Stand-alone Mainframe Systems
Stage 2: Client-Server Architecture
Stage 3: Service-Oriented Architecture (SOA)
Beginning 1960’s ES began to play a critical role in automating and managing repetitive manual activities in large businesses
These systems have evolved from stand-alone mainframe systems, to client-server architecture to the now service-oriented architecture
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

4. The New Stack – Process Is the Next Platform
Client
Mainframe
Client Server
SOA
Application
Data Management
Composites
OS and Database OS DB
Custom
Punch Card or Terminal
(10’s of users)
PC or Internet
(1000’s of users)
Request Form
Any Device
(Millions of users)
Applications
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

5. 3-tier Client Architecture
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

6. Types of Enterprise Systems
The ES Application Suite
Enterprise Resource Planning (ERP)
Focus on internal operations and integrate functional and cross-functional business processes
Supply Chain Management (SCM)
Supports connection to companies that supply materials
Helps companies plan production requirements
Supplier Relationship Management (SRM)
Manages the overall relationships with the materials suppliers. Quotations and contracts processes
Product Lifecycle Management (PLM)
Helps companies administer the processes of research, design and product management
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

7. The application suite
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

8. SAP ERP Solution Map
Shared Service Delivery
SAP NetWeaver
End-User Service Delivery
Analytics
Financial Analytics
Operations Analytics
Workforce Analytics
Financials
Financial Supply Chain Management
Treasury
Financial Accounting
Management Accounting
Corporate Governance
Human Capital Management
Talent Management
Workforce Process Management
Workforce Deployment
Procurement and Logistics Execution
Procurement
Inventory and Warehouse Management
Inbound and Outbound Logistics
Transportation Management
Product Development and Manufacturing
Production Planning
Manufacturing Execution
Product Development
Life-Cycle Data Management
Sales and Service
Sales Order Management
Aftermarket Sales and Service
Professional-Service Delivery
Corporate Services
Real Estate Management
Enterprise Asset Management
Project and Portfolio Management
Travel Management
Environment, Health, and Safety Compliance Mgmt.
Quality Management
Global Trade Services
Copyright SAP AG 2008
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

9. SAP Supply Chain Management
SAP NetWeaver
Demand & Supply Planning
Demand Planning & Forecasting
Safety Stock Planning
Supply Network Planning
Distribution Planning
Service Parts Planning
Procurement
Strategic Sourcing
Purchase Order Processing
Invoicing
Manufacturing
Production Planning & Detailed Scheduling
Manufacturing Visibility & Execution & Collaboration
MRP based Detailed Scheduling
Warehousing
Inbound Processing & Receipt Confirmation
Outbound Processing
Cross Docking
Warehousing & Storage
Physical Inventory
Order Fulfillment
Sales Order Processing
Billing
Service Parts Order Fulfillment
Transportation
Freight Management
Planning & Dispatching
Rating & Billing & Settlement
Driver & Asset Management
Network Collaboration
Real World Awareness
Supply Chain Event Management
Auto ID / RFID and Sensor Integration
Supply Chain Visibility
Strategic Supply Chain Design
Supply Chain Analytics
Supply Chain Risk Management
Sales & Operations Planning
Supply Network Collaboration
Supplier Collaboration
Customer Collaboration
Outsourced Manufacturing
Supply Chain Management with Duet
Demand Planning in MS Excel
Copyright SAP AG 2008
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

10. SAP Supplier Relationship Management
SAP NetWeaver
Purchasing Governance
Global Spend Analysis
Category Management
Compliance Management
Sourcing
Central Sourcing Hub
RFx / Auctioning
Bid Evaluation & Awarding
Contract Management
Legal Contract Repository
Contract Authoring
Contract Negotiation
Contract Execution
Contract Monitoring
Collaborative Procurement
Self-Service Procurement
Services Procurement
Direct / Plan-Driven Procurement
Catalog Content Management
Supplier Collaboration
Web-based Supplier Interaction
Direct Document Exchange
Supplier Network
Supply Base Management
Supplier Identification & Onboarding
Supplier Development & Performance Management
Supplier Portfolio Management
Copyright SAP AG 2008
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

11. SAP Product Lifecycle Management
SAP NetWeaver
Product Management
Product Strategy and Planning
Product Portfolio Management
Innovation Management
Requirements Management
Market Launch Management
Product Development and Collaboration
Engineering, R&D Collaboration
Supplier Collaboration
Manufacturing Collaboration
Service and Maintenance Collaboration
Product Quality Management
Product Change Management
Product Data Management
Product Master and Structure Management
Specification and Recipe Management
Service and Maintenance Structure Management
Visualization and Publications
Configuration Management
PLM Foundation
Product Compliance
Product Intelligence
Product Costing
Tool and Workgroup Integration
Project and Resource Management
Document Management
Copyright SAP AG 2008
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

12. SAP Customer Relationship Management
Web Channel
Interaction Center
Partner Channel Management
Trade Promotion Management
Business Communication Management
Marketing
Marketing Resource Management
Segmentation & List Management
Campaign Management
Real-Time Offer Management
Lead Management
Sales
Sales Planning & Forecasting
Sales Performance Management
Territory Management
Accounts & Contacts
Opportunity Management
Quotation & Order Management
Pricing & Contracts
Incentive & Commission Management
Time & Travel
Service
Service Order Management
Service Contract Management
Complaints & Returns
In-House Repair
Case Management
Installed Base Management
Warranty Management
Resource Planning
Copyright SAP AG 2008
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

13. Other classifications of ERP systems
Best of Breed - isolated to one process or part of a process. Typical company ES landscape will have one or two core ERP suite ES plus several best-of-breed applications.
Niche – Independent software vendors who offer useful process capabilities that sit on top of the ES. e.g. a pricing management tool from Vendavo to assist retailers in maximizing profit on retail sales.
Software as a Service – ES solutions that are delivered entirely from the web.
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

14. Types of Data in ES Organizational Data Master Data Transaction Data
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

15. Organizational Data
Defines the organizational structure of the enterprise
Includes definitions of:
Companies (subsidiaries, etc.)
Divisions based on, product or geographical hierarchy
Sales organizations
Purchasing organizations
Physical facilities: plants, warehouses, distribution centers
HR organization
Functional areas, reporting relationships
Data rarely changes
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

16. Master Data Define key entities in an organization Customers
Basic information: name, address, contact information
Financial information: payment terms, methods
Sales information: delivery terms
Vendors / suppliers
Similar information as customer
Products
Basic data: description, weight, color
Purchasing data
Sales data
Manufacturing data
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

17. Master Data Employees Data changes occasionally Basic data
Personal data: dependents
Payroll data
Tax data
Data changes occasionally
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

18. Transaction Data
Data that is the consequence of day-to-day transaction
Who, what, when, where, how, how much
Sales
Customer, products, quantities, dates and times, location (shipping, delivery), sales person
Purchase
Vendor, products, quantities, dates and times, location (delivery), sales person, requester
Production
Materials, quantities, facilities, resources (machine, people), dates and times, locations (storage, production)
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

19. Super Skateboard Builders, Inc.
History
Product Line
Customers
Vendors
Plant Layout
Employees
Information Systems
SSB was founded in 1997 by John Boeve “Z-boy”
Johns grandmother motivated john to go to college and to continue to pursue his skateboarding passion.
John used the money from the trust to buy the necessary shop and office equipment(storage bins, an assembly table, desks etc) and lease a small building that would house a skateboard assembly operation. Also invested in computer to store and track information.
Over the next decade the company thrived mainly due to his vision, his management style and his perserverance.
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

20. Standard Price (Manufacturing or Purchase Cost)
SSB, Inc. - Product List
Product Number
Product Description
Standard Price (Manufacturing or Purchase Cost)
Wholesale Price
MSRP
DXSB1000
Deluxe Skateboard
$58.00
$96.00
$160.00
STSB2000
Standard Skateboard
$40.00
$66.00
$110.00
ENSB3000
Entry-Level Skateboard
$34.00
$45.00
$75.00
HLMT5000
Helmet
$20.00
$27.00
SHRT4000
T-Shirt
$7.00
$10.00
$16.00
FAID6000
Skateboard First Aid Kit
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

21. SSB, Inc. - Customer List Customer Number Name Address City State Zip1
World Wide Skateboard Distributors
1229 Main Street
AnN arbor MI
48109 2
Extreme Skateboard Sports, Inc.
5000 Rensellear Ave
Detroit
48202 3
"Waldo" Autry
3012 Haslett Road
Lansing
48906 4
Sporting Goods, Inc.
th Street
Grand rapids
49508 5
Flying Acrobats, Inc.
274 Adams Street
Holland
49423 6
MI Sporting Company
3000 Alpine Ave
49544 7
Dawgs
4005 State Street SE
saginaw
48710
SSB sells its products only to retailer who resell the products directly to consumers.
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

22. SSB, Inc. - Vendor List Vendor Number Vendor Name City State Zip
Materials Supplied
100000
Nutcase Supplies
Grand Rapids MI
49525
Nuts, bolts
100001
Skatelubbers, Inc.
First aid kit, t-shirt, helmet
100002
Grand Skateboard Supplies
Trucks, riser pads, grip tape, decks, Entry level skateboard, First aid kit
100003
Black Widow Skateboards, Inc.
Holland
49424
Entry level skateboard, First aid kit, t-shirt, helmet
100004
Spotted Owl Lumber
Cascade
49546
Maple ply, Entry level skateboard
100005
Van Go Paint Supplies
Kentwood
49508
sealers, paints
100006
The Dutch Monster
49504
Boxes, labels, glue
100007
Whitewater Development Company
jonesboro AR
72401
Building space
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

23. SSB, Inc. - Plant Layout
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

24. SSB, Inc. - Organizational Chart
John Z. Boeve (President)
Catherine VanderBos (Plant Manager)
Charles Skivers (Shop Floor)
Mark McKendry (Shop Floor)
Patrick Stevens (Sales Manager)
Shana Smith (Accountant)
David Bloomberg (Warehouse Manager)
Tom Jones (Warehouse)
Martha Seward (Purchasing Manager)
Maria Rivera (Office Manager)
When the company was small all the work was done by five people, John, Maria and three people in the plant.
John and Maria handled all the purchasing and accounting tasks, while catherine supervised the warehouse.
Most of the work was done informally, eg when a customer order came in, it was handled – but no one could explain exactly how.
When a company needed material from its suppliers, catherine just figured out what they needed and called a supplier to order it.
John hired additional people to handle sales and purchasing and to manage the warehouse activities.
As the company expanded it became more and more difficult to keep up with the activities of all the employees as well as the ever-increasing volume of customer orders, purchases and so on.
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

25. SSB, Inc – Information systems
Three stand-alone (not networked) computers.
Spreadsheets and some database structures to manage information.
Employees had to run from computer to computer to swop information using disks.
Excess inventory
Depletion of cash resources
Unnecessary line of credit (interest charges)
Data was never in sync
The expanded company needed a better way to control operations.
Upgraded and installed SAP R/3
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009

26. SAP Overview
Copyright SAP AG 2008
Magal and Word ! Essentials of Business Processes and Information Systems | © 2009