CHAPTER 12

Enterprise Resource Planning (ERP)

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Learning Outcomes

Describe the role information plays in enterprise resource planning systems

Identify the primary forces driving the explosive growth of enterprise resource planning systems

Explain the business value of integrating supply chain management, customer relationship management, and enterprise resource planning systems

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Overview

Enterprise resource planning systems serve as the organization's backbone in providing fundamental decision-making support

This chapter discusses ERP’s explosive growth Using ERP to connect corporations Integrating SCM, CRM, and ERP

At the heart of an ERP system is a database, when a user enters or updates information in one module, it is immediately and automatically updated throughout the entire system

ERP systems can automate business processes

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Overview

ERP systems must integrate various organization processes and be:

Flexible

Modular and open

Comprehensive

Beyond the company

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ERP Growth

There are an estimated 70,000 ERP installations worldwide with over 35 million users. SAP boasts 20,000 installations and 10 million users worldwide

ERP solutions are growing because: ERP is a logical solution to the mess of

incompatible applications that had sprung up in most businesses

ERP addresses the need for global information sharing and reporting

ERP is used to avoid the pain and expense of fixing legacy systems

Top ERP vendors & their major components

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The Connected Corporation

SCM, CRM, and ERP are the backbone of e-business

Integration of these applications is the key to success for many companies

Integration allows the unlocking of information to make it available to any user, anywhere, anytime

SCM and CRM market overviews

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Integrating SCM, CRM, & ERP

Many companies purchase modules from an ERP vendor, an SCM vendor, and a CRM vendor and must integrate the different modules together Middleware – several different types of software which

sit in the middle of and provide connectivity between two or more software applications

Enterprise application integration (EAI) middleware – packaging together commonly used functionality, such as providing pre-built links to popular enterprise applications, which reduced the time necessary to develop solutions that integrate applications from multiple vendors

General audience & purpose of SCM, CRM & ERP

Data points where SCM, CRM, and ERP integrate

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Revving Up Sales at Harley-Davidson

1. Explain how an ERP system can help Harley-Davidson gain business intelligence in its operations

2. Assess the business benefit for Harley-Davidson in integrating its CRM, SCM, and ERP systems

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Hilton Purchases New Suite

Hilton deployed a new ERP that cost $4 million

The ERP system has increased processing efficiency by a factor of six

The ERP system is saving the company between $4.5 and $5 million annually