Document

Report
Enterprise Resource
Planning (ERP)
The need for integrated
information in business
Learning Objectives





Name the main functional areas of operation
in a business
Identify the kinds of data that each main
functional area produces
Identify the kinds of data that each main
functional area needs
Define integrated information systems and
state why they are important
Understand what an ERP system is and how
it evolved
Introduction: Enterprise Resource
Planning
Manage company-wide business
operations
 Uses a common database and shared
management reporting tools

Key Functional Areas of Operation
Marketing and Sales
 Production and Materials Management
 Accounting and Finance
 Human Resources

Business Processes
Managers now think in terms of business
process - a collection of activities that
takes one or more kinds of input and
creates an output that is of value to the
customer
 Take the customer’s perspective

Business Processes Cut Across
Functional Lines

Purchasing a new computer - customer
is not concerned about how computer
was marketed or how its components
were purchased or how it was built, or
the route the delivery truck took - just
want a working computer at a
reasonable price!
Example: Buying a new PC




Information on
products available
Place order quickly,
maybe obtain
financing
Quick delivery
24 Hour help
To do this, company needs to:
Make sure functional areas are integrated
 Information on customer configuration
must be up-to-date
 Manufacturing needs configuration from
sales
 If financing is required, that information
from sales is needed in accounting

Functional Areas and Business
Processes of a Very Small
Business
Marketing and Sales
 Production and Materials Management
 Accounting and Finance
 Human Resources

Functional Area Information
Systems
Potential inputs and outputs for each
functional area
 Different kinds of data and usage of data

Marketing and Sales



Determine pricing
Take customer orders
Create sales forecast
Production and Materials
Management



Planning
Need accurate
forecasts from
Marketing and Sales
Compare costs with
Accounting
Accounting and Finance


Record transactions
Summarize data
Human Resources




Recruit
Train
Evaluate
Compensate
Evolution of Information Systems
to Meet Integration Needs of
Business
Prior to 1960, all systems were paperbased
 Data entry, storage, retrieval were slow,
labor-intensive processes

Computer Hardware and
Software Development
The first business computers mainframes (huge computers)
performed repetitious data processing
tasks
 Computers smaller and faster
- the PC is born!
 Software proliferates - release of PC
software gave people control over
their own computing

Early Attempts to Share Data


You may have heard the term Client/Server
architecture: this was and is a way to share data
residing on individual PCs
By the end of the 1980s, the hardware and
software needed to support the development of
integrated systems, like ERP systems, was in
place: fast computers, network access and
centralized database capability
ERP Systems




Software to allow all business areas to be
integrated -- finance, sales, production, etc.
Interactive and real-time processing
Users interact with computer screen, not printed
data
Major advantage: access to common data
across business functions -- eliminated
redundant data and communications lags
Questions about ERP
Is it for every company?
 Is the software flexible?
 How long does it take to implement?
 How costly is it?
 How much profit should you expect?
 How long does it take to see an ROI?
 Why do some have more success while
others fail?


similar documents