Enterprise Business Processes and Applications (IS 6006)

1
Enterprise Business Processes and
Applications(IS 6006)

• Masters in Business Information Systems
• 24th Mar 2009

Fergal Carton Business Information Systems
2
Course Objective

• To understand the key processes underlying modern
  organisations and how enterprise wide systems
  support these processes

3
Topics from course outline

• What are business processes?
• Key demand and supply processes
• Integration and standardisation
• Different aims of organisational functions
• Key information resources shared by those
  functions
• What are enterprise applications (ERP / CRM)?
• Historical perspectives on enterprise
  applications
• Single instance implementations and data
  integrity
• Project management (Gap analysis, resources, )
• Reporting and data access in the enterprise

4
30 Sept

• What is a business process?
• Exercise getting a loan, document the process
• Meaning of integration
• Use of examples in assessed work

5
7 Oct

• Characteristics of a process
• Sustainability
• Efficiency
• Quality versus quantity
• How does it react under duress (eg. school run)
• Exercise getting a loan
• Current crisis related to inter-bank dealings
• Issues in loan process
• Cost / efficiency of credit checking?
• Relationship with bank manager?
• Risk assessment relies on non-structured
  information
• Process relies on data integrity
• Eg. purpose of loan often not validated

6
14 Oct

• Exercise bank loan process comments
• Purpose is communication
• There is no right answer
• Can over simplify
• Doesnt take into account human error
• Can be inflexible not matching reality
• Flags / metrics in place to monitor performance
• What does integration mean?

7
21 Oct

• Feedback on process mapping exercise
• Process map tells you what is being done, by
  whom, in what order
• Differentiates between flow of physical goods and
  virtual information
• Visual presentation is flexible, allows
  identification of bottlenecks
• Operational versus informational
• ERP captures transactions (SO, PO) at most
  granular level
• Managers need aggregated information (MIS) to
  support decision making
• Comparing plan to actual is critical to decision
  making
• Purchase Price Variance example
• ERP hardwires processes
• Ownership of data (as dear to you as your leave
  days)

8
28 Oct

• Discussion of Dearden / Vizard
• Examples of issues with OVOTT
• Wastage / discrepancies in inventory
• Plan, Buy, Make, Deliver model
• Bill of Materials links raw materials to finished
  goods

9
4 Nov

• MRP principles
• BOM crystallises connection between supply and
  demand
• Build process takes account of space, yield,
  time, cost, labour, equipment
• Outsource or not for sub-components, influence on
  BOM
• Lead time for customer and commit time for
  production
• MRP reduces buffer stocks
• Look up examples of Bills of Materials
• What is so difficult about connecting supply and
  demand?
• Why cant actual demand be forecasted?
• Dell, Aer Lingus, Glaxo SmithKline
• Fiat car design 18 months because of
  sub-contracting parts
• Work orders / process orders allow inventory to
  be consumed
• Mirror image of the sales order
• Drives customer demand through to batches in the
  production process
• Additional Reading
• Look at paper titles for relevance to this course
  (eg. Supply Chain)
• We focus on reality of using integrated systems
  and issues arising

10
11 Nov

• BOM example iPhone
• Product names (sales) versus model s (Mfg)
• Build to plan model
• Process versus discrete manufacturing
• Process manufacturing produces batches in larger
  volumes that are undifferentiated (eg. Coke,
  milk, oil, )
• Discreet manufacturing is characterised by
  separate unit production from outset of process
  (eg. toys, medical equipment, computers, cars)
• ERP modules (Sales, Finance, Logistics,
  Procurement, Manufacturing)
• ERP is single instance
• Key benefit for IT is common platform
• simplifies skills required (development and
  support)
• simplifies operations (release management,
  interfaces, security, )
• Production planning iPhone production planning
• Many sources of demand
• How can production be planned?

11
18 Nov

• SIT case discussion
• Hockey stick effect and causes (pricing strategy)
• Other causes of unplanned hikes in sales (new
  products hitting market, competitors products,
  natural or man-made disasters, )
• Configure to order model / assemble to order
• MRP principles can be applied without ERP
• Postponement strategies (delay configuration till
  latest possible time)
• Planning is about thinking ahead, managing
  business relationships
• If planning is well done, emergencies can be
  catered for
• Solutions to planning at SIT
• Incentivise early quarter sales
• product price most effective way to influence
  sale
• early payment incentives
• customer discounts
• commission payments
• Move towards a build to order model?
• Customers can only order what is currently being
  built
• Smart phone sales example (O2, Spectra and
  Vodaphone)
• Sample BOMs

12
7 Jan

• Review of topics covered in first term
• Integration how far IS supports decisions
• Decoupling point where IS stop
• Because it doesnt work / has broken down / is
  too slow (technical problem)
• Because human judgement necessary (decision
  complexity problem)
• Because people want some room for manoeuvre
  (behavioural problem)
• RICE development work for ERP projects
• Cost is in person days
• Comes in addition to software licence costs
• If it touches ERD, vendors wont do it or make it
  exorbitantly expensive
• Gap analysis (UCC example)
• Expense claim processing demo significance
• No power users, no training, frosty reception to
  change among depts
• Difference between package and requirements
• Highly detailed, relies on good faith of vendor,
  difficult to test in anger
• Difficult to identify in advance unique ways of
  doing things
• No sales orders at UCC for revenue
• Line item independence at EMC
• Shipping discounted line items instead of
  standard price

13
13 Jan

• Openings for graduates in ERP projects
• Catch-22 of application experience
• Business analysis role
• Data analysis role
• Moving away from systems based decisions
• Integration increases reliance on data
• In reality data integrity difficult to ensure
• Single instance ERP systems
• Hardwiring processes
• Impact for subsidiaries
• Finance and IS benefit
• Operationally, ERP often seen as an imposition
• Data integrity issues
• GSK / EMC / UCC

14
20 Jan

• Data integrity
• UCC revenue clarity
• EMC price updates
• GSK and uncertainty in demand and supply
• Scope definitions
• UCC Finance scope
• CRM is about awareness / communication
• WiFi charge for telephone call (Muiris)
• Good and bad customer stories (homework)

15
27 Jan

• What is CRM
• CRM principles
• Main CRM modules
• Check out vendor web-sites for modules
• Good / bad customer stories
• Stephen, Garry, Sinead, Chris, Ed, Ray, James

16
3 Feb

• Lessons from customer stories
• Call center technology
• Call center visit?
• CRM strategy assignment (7th March)
• Apple Exercise as homework

17
10 Feb

• Marketing
• Sales force automation
• Apple Exercise homework

18
17 Feb

• Managing demand complexity
• Apple Exercise
• Modelling customers and channels

19
24 Feb

• Apple Exercise
• Customers / channels
• On-line / not on-line
• Registered / not registered
• Products
• Hardware
• Software
• Service
• Talk from Miguel Lioittier, Institut Superieur de
  Commerce, Paris
• The current financial crisis and its causes
• CRM implementations
• eCRM
• Questions on strategy proposal for 9th March

20
3 Mar

• Apple fulfilment process and ERP impact
• View by stage in the process (Requirement, Sales
  Order, Distribution, Invoicing, CS)
• And by type of product
• Where is commonality in process?
• Where could ERP provide support?
• Where would an interface be required?

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Enterprise Business Processes and Applications

• First term production planning processes
  (Supply)
• Process mapping exercises
• Approaches to production planning
• Uncertainty of demand
• Functional goals and integration
• Data integrity and role of enterprise systems
• Single instance systems
• Second term customer processes (Demand)
• CRM
• Meeting of the two is what businesses struggle
  with

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Its about planning for demand

• Planners try to guess what to produce
• Build to plan / Build to stock
• Push approach
• In some markets this might be OK
• However, forecasts can be wrong
• Companies try to be lean
• Build to order
• Kanban
• Pull approach

23
Be analysts

• Why do we describe what companies do as
  processes?
• Why do companies use processes?
• What are the basic supply and demand processes?
• What happens to processes when the unexpected
  occurs?

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Why is business unpredictable?

• Customers dont behave the way we think
• Seasonality
• Trends
• Competitors
• Hockey stick
• Sales are over / under stating demand
• Quality issues result in long lead times
• Labour issues affect yield
• Plant and machinery is getting old

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Analysts use processes to understand what is
going on

• Organisations think and act in silos
• Upstream and downstream effects of their actions
  not always understood
• Analysts try to see the big picture
• Processes are a way of knitting together
  activities involving different functions
• At the end of the day, customer satisfaction is
  what keeps us in business

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Sales order and fulfilment
Manufacturing
Finance
Sales / CS
HR
Plan
Bill and collect
Recruit
Market
Buy
Approve Pay
Sell
Manage
Make
Report results
Install
Reward
Deliver
Maintain
Develop
Budget
Management information
Products
Cash
Customers
People

• Whats complicated about this?
• Why is it complicated?
• In what way can integration help?

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In-class work and homework

• Process mapping, lending process
• SAP and Oracle for documentation on Production
  Planning and Sales Order Processing
• iPhone Bill of Materials
• SIT production planning process and bottlenecks
• Customer service stories (Bad and good)
• Gap analysis
• UCC Finance office (Oracle implementation)
• Apple exercise (SOP and fulfilment)

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Sample questions

• SIT assignment Nov 08 (Production planning, MRP,
  hockey stick)
• PCB Feb 09 (CRM)

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SIT Ltd (Nov 08)

• Prepare a process map of production planning in
  the SIT case study.
• distinguish between the physical flow of
  inventory (both raw materials and finished
  goods), and the virtual flow of information.
• Describe areas of inefficiency or bottlenecks in
  the current process.
• Comment on how you would use this diagram in the
  meeting.
• What is your understanding of Material
  Requirements Planning, and why does it not work
  for SIT?
• Discuss how push-pull models apply to SIT,
  highlighting the problems that SIT planners must
  deal with in achieving their objectives.

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Feedback on assessment

• Difference between Kellogs and SIT?
• Other companies like Kellogs
• Other companies like SIT?
• How would we represent a framework for both?
• Is it OK to say no to a customer?
• Large order hits late in the quarter
• Separate flows for production at SIT
• Standard configurations
• Specific deals with particular configurations
• Why cant people use generic reports?
• Because its not saying what it should say
• Biggest problem of quarter end is resources
• Thats why we design processes, isnt it?

31
PCB (Mar 09)

• What is CRM, and how would it alleviate the
  problems raised by current processes?
• What would a CRM project involve, and how much
  would it cost?
• In what order should PCB go about implementing a
  CRM approach?

32
Apple Exercise

• SAP manages complexity in the demand fulfilment
  cycle, map out the demand fulfilment process
• Apple stores
• Apple.com
• Major accounts
• Retailer
• Indirect distributor

Products
Channels
Customers
Sales order fulfilment process
Services
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In your answers

• Use examples to illustrate your ideas
• Show that you can see past what happens to the
  customer and imagine the process issues behind
  the scenes
• You dont need to know how to fix things
• Be able to show how you would approach a problem

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Look for case studies

• ERP systems dont always work well
• Companies end up using spreadsheets
• Look for evidence of where
• ERP worked well (case studies, white papers, )
• ERP didnt work well (case studies, )
• What is the difference?
• Look at ERP vendor sites (SAP, Oracle, )
• Look at EBSCO, Google Scholar,
• Look at discussion forums regarding ERP, Supply
  Chain Management, CRM,

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MIS Reading

• Integration articles
• Dearden 72
• Chiasson 06
• Vizard 06
• Yarde 06
• IT and the value chain
• Porter Millar, 85

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CRM Reading

• A taxonomy for selecting global supply chain
  strategies
• Christopher, Peck Towill (2006)
• Customer Relationship Management Emerging
  Practice, Process, and Discipline
• Parvatiyar Sheth (2001)
• Using e-CRM for a unified view of the customer
• Pan and Lee (2003)

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ERP reading

• Sumner (2005), Chapters 4 and 6
• http//wps.prenhall.com/bp_sumner_erp_1
• Student resources
• Ellen Monk and Bret Wagner (2006)
• Concepts in Enterprise Resource Planning, 2nd ed,
  Thomson
• Davenport (1998)
• Boersma Kingma (2005)
• Ross (1998)
• Carton, Adam Sammon (2008)
• Bhattacherjee (1999)

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Sumner material

• http//wps.prenhall.com/bp_sumner_erp_1/25/6543/16
  75175.cw/index.html

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Your own research

• EBSCO, Google Scholar
• Vendor websites
• SAP, Oracle, Siebel, SalesForce.com
• Consulting web-sites
• EY, Accenture, Deloitte,

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Start with keywords
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Full article not available but
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Full article is available!
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Full article is available!
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Articles provide examples