McGraw-Hill/Irwin ©2008 The McGraw-Hill Companies, All Rights Reserved

SECTION 10.1SECTION 10.1

ENTERPRISE RESOURCE PLANNING

ENTERPRISE RESOURCE PLANNING

10-2

ENTERPRISE RESOURCE PLANNING

• Enterprise resource planning – integrates all departments and functions throughout an organization into a single IT system (or integrated set of IT systems) so that employees can make enterprisewide decisions by viewing enterprisewide information on all business operations

10-3

CORE AND EXTENDED ERP COMPONENTS

• Core ERP component – traditional components included in most ERP systems and they primarily focus on internal operations

• Extended ERP component – extra components that meet the organizational needs not covered by the core components and primarily focus on external operations

• Diagram on next slide

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CORE AND EXTENDED ERP COMPONENTS

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Accounting and Finance ERP Components

• Accounting and finance ERP component – manages accounting data and financial processes within the enterprise with functions such as general ledger, accounts payable, accounts receivable, budgeting, and asset management

10-6

Production and Materials Management ERP Components

• Production and materials management ERP component – handles the various aspects of production planning and execution such as demand forecasting, production scheduling, job cost accounting, and quality control

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Human Resource ERP Component

• Human resource ERP component – tracks employee information including payroll, benefits, compensation, performance assessment, and assumes compliance with the legal requirements of multiple jurisdictions and tax authorities

10-8

ERP Components

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ERP Vendor Overview

• SCM and CRM market overviews

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The ERP train

• The ERP can be one super software system, or it can be made up of many pieces, like a train has cars.

CRM | SCM | Accounting | Production | HR | E-Business

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Modular ERP Systems

• 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

• The piece that hooks the railroad cars together

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Common Functionality

– Enterprise application integration (EAI) middleware – packages together commonly used functionality which reduced the time necessary to develop solutions that integrate applications from multiple vendors

– All the cars in a train must have wheels that fit into the tracks.

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The Engine• At the heart of all

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

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Successful ERP Projects

1. Overall fit (Build Vs Buy Decision)• Off the rack• Off the rack and tailored to fit• Custom made

2. Proper business analysis• Successful companies spend up to 10 percent of the

project budget on a business analysis

3. Solid implementation plans• Tools that people do not know how to use can be as

useless as having no tools at all

McGraw-Hill/Irwin ©2008 The McGraw-Hill Companies, All Rights Reserved

SECTION 10.2SECTION 10.2

COLLABORATION SYSTEMS

COLLABORATION SYSTEMS

10-16

TEAMS, PARTNERSHIPS, AND ALLIANCES

• Organizations create and use teams, partnerships, and alliances to:– Undertake new initiatives– Address both minor and major problems– Capitalize on significant opportunities

• Organizations create teams, partnerships, and alliances both internally with employees and externally with other organizations

10-17

Business Partnership Strategies

– Core competency – an organization’s key strength, a business function that it does better than any of its competitors

– Core competency strategy – organization chooses to focus specifically on its core competency and forms partnerships with other organizations to handle nonstrategic business processes

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TEAMS, PARTNERSHIPS, AND ALLIANCES

• Collaboration system – supports the work of teams by facilitating the sharing and flow of information

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COLLABORATION SYSTEMS

• Collaboration solves specific business tasks such as telecommuting, online meetings, deploying applications, and remote project and sales management

• Collaboration system – an IT-based set of tools that supportsthe work of teams by facilitating the sharing and flow of information

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COLLABORATION SYSTEMS

• Two categories of collaboration1. Unstructured collaboration (information

collaboration) - includes document exchange, shared whiteboards, discussion forums, and e-mail

2. Structured collaboration (process collaboration) - involves shared participation in business processes such as workflow in which knowledge is hardcoded as rules

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COLLABORATION SYSTEMS

• Collaboration systems include:– Knowledge management systems– Content management systems– Workflow management systems– Groupware systems

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KNOWLEDGE MANAGEMENT

• Knowledge management (KM) – involves capturing, classifying, evaluating, retrieving, and sharing information assets in a way that provides context for effective decisions and actions

• Knowledge management system (KMS) – supports the capturing and use of an organization’s “know-how”

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Explicit and Tacit Knowledge

• Intellectual and knowledge-based assets fall into two categories

1. Explicit knowledge – consists of anything that can be documented, archived, and codified, often with the help of IT

2. Tacit knowledge - knowledge contained in people’s heads

10-24

Explicit and Tacit Knowledge

• The following are two best practices for transferring or recreating tacit knowledge– Shadowing – less experienced staff

observe more experienced staff to learn how their more experienced counterparts approach their work

– Joint problem solving – a novice and expert work together on a project

10-25

KM and Social Networking

• Finding out how information flows through an organization– Social networking analysis (SNA) – a

process of mapping a group’s contacts (whether personal or professional) to identify who knows whom and who works with whom

– SNA provides a clear picture of how employees and divisions work together and can help identify key experts

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CONTENT MANAGEMENT SYSTEMS

• Content management system (CMS) – provides tools to manage the creation, storage, editing, and publication of information in a collaborative environment

• CMS marketplace includes:– Document management system (DMS)– Digital asset management system (DAM)– Web content management system (WCM)

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WORKFLOW MANAGEMENT SYSTEMS

• Work activities can be performed in series or in parallel that involves people and automated computer systems

• Workflow – defines all the steps or business rules, from beginning to end, required for a business process

• Workflow management system – facilitates the automation and management of business processes and controls the movement of work through the business process

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WORKFLOW MANAGEMENT SYSTEMS

• Messaging-based workflow system – sends work assignments through an e-mail system

• Database-based workflow system – stores documents in a central location and automatically asks the team members to access the document when it is their turn to edit the document

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COLLABORATION TRENDS

• E-mail is the dominant form of collaboration application, but real-time collaboration tools like instant messaging are creating a new communication dynamic

• Instant messaging - type of communications service that enables someone to create a kind of private chat room with another individual to communicate in real-time over the Internet

10-30

COLLABORATION TRENDS

• Instant messaging application

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TEAMS, PARTNERSHIPS, AND ALLIANCES

• Collaboration system – supports the work of teams by facilitating the sharing and flow of information