Informaion Sysems for Business Inegraion: ERP Sysems (December 3, 2012) BUS3500 - Abdou Illia, Fall 2012 1 LEARNING GOALS Explain he difference beween horizonal and verical business inegraion. Describe how Enerprise Resource Planning sysems inegrae inernal business processes. Disinguish beween core and exended EPR componens. 2 Tradiional File Sysem: Inegraion problem Each sysem uses is own programs and files When sysems are no inegraed Inabiliy o share daa Difficul o mainain daa duplicaion (i.e. redundancy) Sysem 1 Sysem 2 3 1
Sysems: A Soluion o Inegraion problem Sysems share he same daabase allows sysems inegraion Sysems share he same daa Sysems are easy o mainain No (or less) redundancy Sysem 1 Sysem 2 DBMS 4 Business Inegraion? V e r i c a l I n e g r a i o n Producion Suppliers Cusomers Logisics Horizonal Inegraion 5 Why Horizonal Inegraion? Possible consequences of bad horizonal inegraion: Delivery personnel no available when needed Sold producs no delivered on ime Ec. Informaion Sysem Operaion & Delivery Informaion Sysem Lack of good inegraion means: - No reliable inerface - No effecive communicaions Q: Wha kind of soluion can provide business inegraion in his specific case? 6 2
Sysems for Horizonal Inegraion Enerprise Resource Planning (ERP) sysems inegrae all he inernal processes hrough a common informaion sysem (or an inegraed se of info sysems) Producion Process1 Process2 Warehousing Process1 Process2 Logisics Process1 Process2 Process1 Process2 Markeing ERP sysem Accouning Process1 Process2 Process1 Process2 7 Enerprise Resource Planning Sysems ERP sysems inegrae all he funcions and deparmens wihin an organizaion hrough a common informaion sysem A he hear of ERP sysems is a common daabase When a user eners or updaes informaion in one module, i is immediaely and auomaically updaed hroughou he enire sysem 8 Enerprise Resource Planning Sysems ERP sysems auomae business processes 9 3
ERP Componens (or Modules) Two ypes of componens Core ERP Componens Exended ERP Componens Core ERP Componens Tradiional componens found in mos ERP sysems Are primarily focused on inernal operaions: Finance, Accouning, manufacuring, HR. Finance & Accouning Manufacuring* Human Resource * Also called Producion & Maerial Managemen * Helps from producs developmen o producion * Handles demand forecasing, producion planning, producion scheduling, qualiy conrol, ec. 10 ERP Componens (or Modules) Exended ERP Componens Exra componens ha migh be included They primarily focus on exernal operaions: CRM, SCM, E-Business, Business Inelligence. Cusomer Relaionship Managemen Supply Chain Managemen Business Inelligence 1 E-Business 2 - e-logisics - e-procuremen 1 Provide informaion ha help users in decision-making 1 Collecs info used hroughou he organizaion, organize i, and uses analyical ools o help decision-making process 2 Includes e-logisics (managing ransporaion & sorage of goods over he Inerne) and e-procuremen (B2B purchase & sale of supplies & services over he Inerne) 11 ERP Componens (or Modules) ERP mainly used by medium and large businesses Average lifeime cos: $15 Million (2010 surveys) Implemenaion process: up o 5 years The larges vendors worldwide in 2012 # Vendor Revenue (million $) Marke share (%) 1 SAP 4726 28.7 2 Oracle Applicaions* 1674 10.2 3 The Sage Group 1221 7.4 4 Microsof Dynamics 616 3.7 5 SSA Global Technologies 464 2.8 * In January 2005 Oracle bough PeopleSof, hen he 3 rd player. 12 4
Cos of ERP Sysems 13 Facors in ERP Sysem Success Acive suppor of upper managemen Having he bes people on he implemenaion eam Managing he ime line well User involvemen in he planning and implemening ERP sysems 14 Summary Quesions Book Noes 1) Wha is he difference beween Horizonal inegraion 5,6 and Verical inegraion? Wha could be he consequences of a bad horizonal inegraion? 2) (a) Wha kind of informaion sysem is ypically used by 7 organizaions for horizonal inegraion? 3) (a) Wha are he core modules found in ERP sysems? 10 4) Wha does he Manufacuring ERP componen allow? 10 Name some of he aciviies i handles 5) Name he hree major ERP sofware vendors 12 6) Wha are he success facors of ERP implemenaion? 14 15 5