Enterprise%20Information%20Systems%20and%20ERP%20systems

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Enterprise Information Systems and ERP systems

• Jing Shao

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What is ERP System
Letter meaning Enterprise Resource Planning
Systems Resource All resources in an
organization, including capital, equipment,
material, intelligence, and so on. What and how
to Plan
Definition ERP systems is a software
solution that addresses the enterprise needs. It
takes the process view of an organization to
meet the organizational goals and tightly
integrates all functions in that organization.
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Why Enterprise Have to Use ERP Systems -------Prob
lems in enterprise information system
1. Data exchange blocks Software
applications built to run on different operating
systems cannot be connected to run together on
the same operating system. We need to re-entry
data from one system to another system in order
to exchange information, thus leading to data
inconsistency 2.   Stove-piped operations and
stove-piped systems

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Why Enterprise Have to Use ERP Systems -------Prob
lems in enterprise information system (continue)

• Authorization
• It is not always the cast that the more
  communication, the better organizational
  performance
• business process reengineering.
• Examine the business process, question the
  necessity step by step

Q1
Q2
Price and demand curve
Optimistic
Q3
Expect
Pessimistic
P1
P2
P3
Analyze the purpose of those processes
Reengineering steps
Old processes
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Solution
Integrated enterprise information systems
It is a set of communication channels in a
business organization, combined together in such
a way as to form one network by which information
is gathered and disseminated. ERP System
Widely integrated information systems
covering all functional areas. It integrates
database, applications, interfaces, tools, and
business process reengineering ( BPR ).
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ERP Working Theory
Customers
ERP system Server
Network (data exchange)
Departments
Suppliers
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What ERP Systems Can Offer to an Enterprise?
Benefits

• ERP creates value through
• 1. integrating activates across a firm,
• 2. Implementing best practices for each
  business process
• 3. Standardizing processes within
  organizations
• 4. Creating one-source data
• 5. Providing on-line access to information
• ---facilitate better organizational
  planning,
• communication, and collaboration.

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Advantages and Disadvantages
Factor Pro Con
System Integration Improved understanding Less flexibility
  across users  
Data Integration Greater accuracy Harder to make corrections
Best Practices More efficient methods Imposition of how people do their work
    Less freedom and creativity
Cost of computing More efficient system planned Changing needs
    Under budgeted training expense
    Hidden costs of implementation
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ERP Modules

• Reasons of designing ERP systems in Modules
• 1. Obtain specific functionality
• 2. Cost
• 3. Implement the system in bits rather
• than bring entire massive system online
• at one time

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M o d u l e s
Module Degree of module used by companies
Financial and Accounting 91.5
Materials management 89.2
Production Planning 88.5
Order entry 87.7
Purchasing 86.9
Financial Control 81.5
Distribution/logistics 75.4
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Market Trend and Vendors

• Market
• 60 percent of Fortune 500 companies had adopted
  ERP systems before 2000.
• The market spending was 13.4Billion in 2003
• The predicted market spending is 15.8 Billion
  in 2008
• Vendors
• over fifty vendors, such as SAP, Oracle,
  Baan, and J.D. Edwards

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Ways to Developing ERP System
Method Advantages Disadvantages
Develop in-house Best fit with organizational needs Most difficult to develop, most expensive, Slowest
In house system with vendor supplements Gain commercial advantages combined with organizational fit Difficult to develop, Expensive, slow
Best-of-breed Theoretically gain best of all systems Difficult to link modules, slow, potentially inefficient
Customized vendor system Retain flexibility while keeping vendor expertise Slower, usually more expensive
Selected vendor modules Less risk, relatively fast, least expensive If expand, long run time and cost higher
Full vendor system Fast, less expensive, efficient Inflexible
Application service provider Least risk, least cost, fastest, least subject to vendor change At the mercy of the provider, no control, and subject to price increases
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ERP System Selection Risks

• The cost, time, and risk of an ERP project
  depends on following factors

• Project management ability
• Experience with this type of environment
• Experience with the programming environment
• Experience with the language or system used
• Familiarity with modern programming practices
• Availability of critical equipment, software, and
  programming language
• Completeness of project team
• Personnel turnover
• Relative control of project manager over project
  team.

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Questions from Last Discussion

• How the business processes are modeled in ERP
  systems ?
• 2. How ERP system installed in an organization?
  Is it simple replace old separated operation
  systems or it can be combined with old systems?
• 3. How to combine ERP system with business
  process?

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Measurement of ERP Project

• Intangible factors
• increases in market share
• improved customer service
• better corporation image
• employee satisfaction
• supply chain integration
• ability to support e-business operation
• Hidden outcomes
• change how people do their jobs
• The changing nature of information technology
• high dynamic technology and long-term
  project for implementing ERP

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ERP Project Management

• Cost
• time
• Tool Critical Path Method
• Right system

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Critical Success Factors in ERP

• 1. Clear understating of strategic goals
• 2. Commitment by top management
• 3. Excellent implementation project management
• 4. Great implementation team
• 5. Successful coping with technical issues
• 6. Organizational commitment to change
• 7. Extensive education and training
• 8. Data accuracy
• 9. Focused performance measures
• 10. Multisite issues resolved

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Open Source ERP

• Reasons of Choosing open source ERP
• 1. cost
• 2. Free redistribution
• 3. Available source code
• Available providers
• There are about 20 vendors providing open
  source ERP systems. For example
• 1. Open MFG
• 2. FISTERRA
• 3. ERP 5
• 4. Compiere

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Compiere Open Source ERP

• Architecture
• Compiere is a 100 pure Java solution based on
  Oracle database technology, and it is working on
  database independence.
• client application component is written entirely
  in Java
• The application server component is implemented
  in Java based on J2EE technology using the JBoss
  server infrastructure.

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Functionality

• Business processes rather than traditional
• departments drive Compiere's design.

Seven Modules
quote-to-cash, requisition-to-pay, partner
relationship management, supply chain management,
performance analysis, web store
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Quote-to-Cash
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Requisition-to-Pay
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Customer relations management
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Partner Relations Management
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Supply Chain Management
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Performance Analysis
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Web Store
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Thank You