Operational, Management

and
Enterprise Systems(ERP)

Management Information
Systems
Jane P. Laudon, Kenneth C.
Laudon   
Prentice-Hall Inc., 5th edition
Business Process
• Definitions
• What are the business process?
• Types

 How they are related to Information systems

What is the role IT Department
• Programmers

• System Analysts

• Systems Managers

• Chief Information Officers

• Information Security officer

• Network Administrators

• Website Designers

• Data Scientist

• End Users
Systems for Linking Enterprise

 Supply Chain Management (SCM)

 Customer Relationship Management (CRM)

 Knowledge Management (KM)

 Intranets & Extranets

 E-Business, E-Commerce, E-Government

Collaboration - Social Business - Tools

• E-mail and instant messaging

• WiKis

• Virtual Worlds

• Virtual Meeting Systems

• Cloud Collaboration Services

• Microsoft SharePoint and IBM Notes

Enterprise Integration

Enterprise integration is concerned with facilitating information, control, and

material flows across organizational boundaries by connecting all the necessary
functions and heterogeneous functional entities in order to improve
communication, cooperation, and coordination within this enterprise so that the
enterprise behaves as an integrated whole, therefore enhancing its overall
productivity, flexibility, and capacity for management of change.
Getting to ERP II
Industry Class Industry
A Sector Q

ERP Declared
“Dead”
Industry X

EAS
ERP II
Industry
Extended Segment Z
ERP

ERP Functionality
Deepens Technology
MRP II Infrastructure

Functionality
MRP Widens Increasing External Connectivity
 ERP II Defined
What Where
an application and
deployment strategy
within the enterprise,
for collaborative,
and between the enterprise
operational and
and key external
financial processes
partners and markets

Who
traditional ERP vendors
with extensions ERP II in conjunction
with collaboration
When
(integrated or BOB)

migration from existing ERP

to provide deep, vertical-
vendors and integration with
specific functionality coupled
other enterprise-centric
with external connectivity
business applications
Why How
 How ERP II Evolves From ERP

ERP ERP II
Value chain participation/
Enterprise optimization Role c-commerce enablement

Manufacturing
and distribution Domain All sectors/segments

Manufacturing, sales and Cross-industry, industry sector

distribution, and finance Function and specific
processes industry processes

Internal, hidden Process Externally connected

Web-aware, Web-based, open,

closed, monolithic Architecture componentized

Internally
Internally generated
generated and
and Internally
Internally and
and externally
externally
consumed
consumed Data published
published and
and subscribed
subscribed
 ERP/ERP II Hype Cycle
1998 Year 2000 Fever
Visibility
ERP II is an application and deployment strategy
that expands out from ERP functions to achieve
integration of an enterprise’s key domain-specific, 2004
internal and external collaborative, operational
and financial processes (Gartner, 2002)
YE2001 ERP II:
A C-Commerce
1990 Client/Server Enabler

Peak of
Technology Inflated Trough of Slope of Plateau of
Trigger Expectations Disillusionment Enlightenment Productivity

Time
 ERP - Examples
•NetSuite ERP – A fully integrated ERP targeted at fast-growing companies that require
scalable financial management, fixed assets, billing, order management and inventory
management.

•Brightpearl –A retail management ERP that focuses on order management, inventory,

accounting, customer data and reporting.

•Intacct – One of the most popular cloud accounting solutions for small and medium
businesses that features ERP capabilities via integration, such as, financial management,
wholesale distribution and retail management.

•Odoo – Odoo is uniquely open-sourced, but it’s also a commercialized ERP aimed at
companies with an IT development team; it can integrate with third-party apps for MRP,
POS and ecommerce.

•PeopleSoft – An Oracle-owned HRM-focused ERP that specializes in workforce

forecasting and HR-related business strategies.
 Types of ERP software
Generalist ERP. Many legacy and cloud ERP solutions are generalists. They adapt to processes across
industries. These solutions have strong customization and integration to match varying industry
requirements. It’s also not a surprise given its large market generalist ERP vendors are also one of the
largest. Examples: Oracle, SAP, Netsuite, Focus 8

Vertical ERP. These are industry-specific ERPs. Often, vertical ERP vendors are startups or smaller
companies that try to focus on a niche, such as, construction, supermarket distribution or retail fashion.
Examples: Microsoft Dynamics AX, Brightpearl, Epicor Retail

Small Business ERP. These are off-the-shelf cloud or on premise ERP solutions. Often, the ERP is
modularized with pared-down features. Instead of delivering a fully integrated system, small business ERP
serves one or two business processes and leaves out the others. For instance, it features HRM and
accounting function only, with add-on options for CRM, inventory or supply chain management. For this,
small business ERP is also referred to as lightweight ERP. Example: PeopleSoft

Open-Source ERP. Open-source ERP solutions are still a tiny fraction of the total ERP market. But
solutions like Odoo ERP lend to companies with resident tech teams the flexibility to develop and
integrate their own apps into the ERP. For developers, open-source increases usability and user adoption
because the ERP can churn out highly customized processes. Example: Odoo
 Core ERP Modules
 Accounting management
 Financial management
 Manufacturing management
 Production management
 Transportation management
 Sales & distribution management
 Human resources management
 Supply chain management
 Customer relationship management
 E-Business
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 ERP Advantages
What benefits
Reliable information access
Avoid data and operations redundancy
Delivery and cycle time
reduction
Cost reduction
Easy adaptability
Improved scalability
Improved maintenance
Global outreach
E-Commerce, e-business
How
Common DBMS, consistent and accurate data, improved
reports.
Modules access same data from the central database,
avoids multiple data input and update operations.
Minimizes retrieving and reporting delays.
Time savings, improved control by enterprise-wide
analysis of organizational decisions
Changes in business processes easy to adapt and
restructure.
Structured and modular design with
Vendor-supported long-term contract as part of the system
procurement
Extended modules such as CRM and SCM
Internet commerce, collaborative culture
ERP Vendors

 There were five dominating ERP software suppliers: SAP,

Oracle, PeopleSoft, Baan and J.D. Edwards.
 They controlled more than 60% of the multi- billion dollar
global market.
 Each vendor had a specialty in one particular module area such
as
– Baan in manufacturing,
– PeopleSoft in human resources management,
– SAP in logistics, and
– Oracle in financials

17
SAP AG
 SAP AG (“Systeme, Anwendungen, und Produkte in Datenverarbeitung”), or Systems,
Applications and Products in Data Processing

 In 1979, SAP launched SAP R/2, a mainframe-based ERP and In 1992 SAP R/3 was
launched based on client/server

 By 1999 SAP became the third largest software vendor in the world and the largest in
the ERP sector with a market share of about 36% serving over 17,000 customers in
over 100 countries.

 In 1999 SAP extended the ERP functions by adding CRM, SCM, sales-force
automation and data warehousing
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Oracle Corporation
 Founded in 1977 in the USA, is best-known for its database software and
related applications and is the second largest software company in the
world after Microsoft

 Second to SAP in the enterprise systems category with over 5,000

customers in 140 countries

 Oracles ERP system is known as Oracle Applications, having more than

50 different modules in six major categories: finance, accounts payable,
human resources, manufacturing, supply chain, projects and front office

 Now taken over PeopleSoft and JD Edwards

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 PeopleSoft Inc.
 Started in 1987 in California, with specialization in human resource
management and financial services modules

 Enterprise solutions from PeopleSoft include modules for

manufacturing, materials management, distribution, finance, human
resources and supply chain planning

 One of the strengths of PeopleSoft is the recognition by its customers

that it is flexible and collaborative

 In 2005 PeopleSoft became a part of Oracle offering PeopleSoft 9

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 J.D.Edwards
 Founded in 1977 in Denver (cofounded by Jack Thompson, Dan Gregory and C.
Edward McVaney) with long experience of supplying software for the AS/400
market

 Its ERP product called OneWorld is “capable of running on multiple platforms and
with multiple databases, ... [and] revolutionizes enterprise software by liberating users
from inflexible, static technologies

 The product includes modules for finance, manufacturing, distribution/logistics and

human resources, quality management, maintenance management, data warehousing,
customer support and after-sales service

 Now a part of Oracle offering JD Edwards EnterpriseOne and JD Edwards World

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Baan
 Found in 1978 with expertise in software for the manufacturing
industry

 ERP solution areas that Baan covers include finance, procurement,

manufacturing, distribution, integration and implementation,
planning, sales, service and maintenance, business portals,
collaborative commerce and business intelligence

 Bought by Infor in 2006

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Recommendations
• Don’t count on a single vendor to meet all of your
domain and collaborative requirements.
• Make the ERP II elements of “integration” and
“domain specificity” key components of your strategy.
• Strive for seamless process enablement rather than general
point application solutions.
• Although there will be some degree of best-of-breed, evaluate
TCO to determine how much.
• Evaluate past successes/failures, compare to other
user experiences and don’t make the same
mistakes twice.