RATIONALE, HISTORY, AND NECESSITY

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1 RATIONALE, HISTORY, AND NECESSITY OFENTERPRISESYSTEM INTEGRATION Fall 2009 CSCI 5720 Enterprise & e Business Integration In the beginning Technology came to business tied to functional areas. splitting business activities into groups of related tasks, allowing workers to focus on limited set of tasks and develop expertise. traditional groupings of personnel and resources based on business activities. Accounting, Human Resources, Finance, Production, Information Technology, Payroll, Sales, Marketing, etc. 1

2 there were silos and isolation Applications focused on data processing within a functional area. Applications were independent and tightly coupled to a given functional area. Structure not reflective of business needs activities by an organization to achieve corporate goals that cut across functional areas. Information passing between functional areas Functional or temporal dependencies Need for coordination Need for unified data and understanding Enterprise Information Systems needed to support this environment of collaboration. 2

3 Supporting Business Processes Enterprise Resource Planning (ERP) programs: Core software used by companies to coordinate information throughout business processes. To (successfully) employ ERP, businesses processes must be defined and standardized. ERP is as much a "way of doing business" as it is a technology. ERP systems support a company's application of an ERP strategy. What is Enterprise Resource Planning (ERP)? Enterprise wide set of management tools providing ability to link suppliers and customers into a complete chain,, employing proven business processes, supporting effective decision making, and providing high cross functional integration among sales, marketing, manufacturing, operations, logistics, purchasing, finance, and human resources, enabling people to run their businesses with high levels of customer service and productivity, while simultaneously lowering costs and inventories. Based on ERP: Making it Happen by Wallace and Kremzar 3

4 Potential Value of ERP Promotes organizational discipline defined methods of workflow, establishment of business rules. Better coordination of activities explicit roles and responsibilities. Unified information handling effective master data sharing, data integrity throughout processes. Faster transaction processing. Improved operational efficiency. (Eliminating redundant effort and duplicated data.) Improved financial management and customer service. Improved dinformation flow with suppliers and customers. Improved decision making due to information availability and accuracy. Better support for global operations. Challenges of Implementing ERP 4

5 Other types of Enterprise Applications BI Business data and analysis software to improve decision making. CRM Facilitates customer interaction (customer sales and service) SCA BI applied to resource acquisition and distribution. SCE Automatingexecutionof of manufacturingprocess process. SCM Integration of entire manufacturing process from resource acquisition to final distribution. Other types of Enterprise Applications SCP APS BIfocused on strategic forecasting of demand for goods and effective inventory management. SEM BI focused on strategic execution, i.e. translating company goals into operational decisions. TMS Shipping and routing of outbound goods. WMS Raw and finished goods storage management. 5

6 ERP History and Development SAP pioneered the ERP software market. Five former IBM employees in Manhheim, Germany founded SAP in Systemanalyse und Programmentwicklung Systems Applications and Products (now), System Analysis Program Development (then) Goals: SAP Software Timeline 1973 "System R" (real time data processing) released to market. (Later came to be called "R/1") 1978 "R/2" history.asp 6

7 SAP Software Timeline 1992/93 SAP R/3 3 3 tiered architecture Database, application, user interface (client) Open architecture Improved user interface Client server system Database and Application Server Within SAP GUI nothing important is saved on your PC. Only things saved on the server are saved, and they are saved for good. 7

8 SAP Software Timeline 1998 SAP R/3 4.0 (minor increments in number for next 5 years) 2003 SAP R/3Enterprise 4.7 In early 2000s mysap, mysap ERP, and mysap.com names begin to appear as marketing names SAP ERP ECC 5.0 (Enterprise Core/Central Component) 2005 SAP ERP ECC SAP Business Suite 7 SAP ERP Modules 8

9 SAP NetWeaver SAP NetWeaver 2004 (2004) SAP NetWeaver 7.0 / SAP NetWeaver 2004s (2005) SAP NetWeaver 72(due 7.2 by EOY 2009) mysap PLM SAP SRM SAP ERP ECC 6.0 SAP CRM SAP SCM SAP NetWeaver SAP NetWeaver Set of cooperative technologies that underpin SAP ERP and related technology, and provide internal connectivity between SAP modules and external connectivity with other systems. NetWeaver Web Application Server NetWeaver Exchange Infrastructure (NetWeaver XI) (in 7.2 release renamed PI Process Integration) NetWeaver Enterprise Portal NetWeaver Business Intelligence (NetWeaver BI) Composite Application Framework (CAF) allows services to be abstracted and joined together into a customized process. 9

10 Other SAP ERP Applications Small & Medium Size Solutions: Business One 1 50 employees. SE (Small Enterprise) focus. Bought (not made) by SAP. Not sold by SAP directly. Business by Design /500 employees. SME (Small, Medium Enterprise) focus. Based on Service Oriented Architecture (SOA). SAP All in One 100/ employees. ME (Medium Enterprise) focus. Who is SAP today? SAP AG World s Largest Business Software Company World s Third largest Independent Software Provider Annual revenues exceeding $10 billion. Company Statistics 51,400 employees in more then 50 countries 1,500 Business Partners 75,000 customers in more then 120 countries ti 12 million users 100,600 installations Source: SAP AG website 10

11 SAP Industry Solutions Best Practices Aerospace & Defense Automotive Banking Chemicals Consumer Products Defense & Security Engineering, Construction Healthcare High Tech Higher Education Industrial Machinery Insurance Life Sciences Logistics Service Media Mill Products Mining Oil & Gas Pharmaceuticals Postal Services Professional Services Public Sector Railways Retail Telecommunications Utilities Wholesale Distribution Other ERP software vendors Oracle Applications Oracle, JD Edwards, PeopleSoft, Siebel, Retek MicrosoftBusiness Solutions Dynamics (Great Plains), Navision, Axapta, Solomon The Sage Group Sage Software Accpac ERP, PeachTree SSA Global Technologies BAAN 11

12 Return to Premise Rationale History Necessity References and Links Wallace, T.F. and M.H. Kremzar, ERP: Making It Happen: The Implementers' Guide to Success with Enterprise Resource Planning. 2001: Wiley enterprise one.html enterprise.html big fuss over little Retek/ _ html p

13 Copyrights Presentation prepared by and copyright of Dr. Tony Pittarese, East Tennessee State University, Computer and Information Sciences Dept. Podcast lecture related to this presentation available via ETSU itunesu. Microsoft, Windows, Excel, Outlook, and PowerPoint are registered trademarks of Microsoft Corporation. IBM, DB2, DB2 Universal Database, System i, System i5, System p, System p5, System x, System z, System z10, System z9, z10, z9, iseries, pseries, xseries, zseries, eserver, z/vm, z/os, i5/os, S/390, OS/390, OS/400, AS/400, S/390 Parallel Enterprise Server, PowerVM, Power Architecture, POWER6+, POWER6, POWER5+, POWER5, POWER, OpenPower, PowerPC, BatchPipes, BladeCenter, System Storage, GPFS, HACMP, RETAIN, DB2 Connect, RACF, Redbooks, OS/2, Parallel Sysplex, MVS/ESA, AIX, Intelligent Miner, WebSphere, Netfinity, Tivoli and Informix are trademarks or registered trademarks of IBM Corporation. Linux is the registered trademark of Linus Torvalds in the U.S. and other countries. Oracle is a registered trademark of Oracle Corporation. HTML, XML, XHTML and W3C are trademarks or registered trademarks of W3C, World Wide Web Consortium, Massachusetts Institute of Technology. Java is a registered trademark of Sun Microsystems, Inc. JavaScript is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by Netscape. SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP Business ByDesign, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Business Objects S.A. in the United States and in other countries. Business Objects is an SAP company. Other products mentioned in this presentation are trademarks of their respective owners. 13

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