Transcript Enterprise Systems

Using MIS 4e
Chapter 7
Enterprise Systems
“But Nobody Told Me”
Fox Lake Country Club has a problem
• Defective business processes could result in
unhappy customers
• Fox Lake’s business processes needs fixing
• Mike Stone (facilities manager) plans renovation
that interferes with scheduled weddings
• Nobody told Anne Foster, the wedding planner
Scenario Video
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Study Questions
Q1
How do information systems vary by scope?
Q2
When are information silos a problem?
Q3
How do enterprise information systems eliminate silos?
Q4
How do CRM, ERP, and EAI support enterprise systems?
Q5
What are the elements of an ERP system?
Q6
Q7
How do the major ERP vendors compare?
What are the challenges when implementing new
enterprise systems?
Q8
2021?
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Q1: How Do Information Systems Vary By
Scope?
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Q2: When Are Information Silos a Problem?
Data isolated in separated
information systems
Created over time as
personal and workgroup
support applications
implemented
As organizations grow, silos
duplicate data and become
serious problems
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Fox Lake Country Club Departmental Goals
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Islands of Automation
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What Are Common Departmental
Applications?
Department
Applications
Sales & Marketing
• Lead generation
• Lead tracking
• Customer management
Operations
• Order entry
• Order management
Manufacturing
• Inventory (raw materials,
goods-in-process)
• Planning
Customer Service
• Order tracking
• Account tracking
• Customer support and training
Human Resources
• Recruiting
• Compensation
• Assessment
• HR Planning
Accounting
•
•
•
•
General ledger
Financial reporting
Cost accounting
Accounts receivable
• Sales forecasting
• Product and brand management
• Finished-goods inventory mgmt.
• Scheduling
• Operations
•
•
•
•
Accounts payable
Cash management
Budgeting
Treasure management
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Some of the Departments Involved in
Patient Discharge
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Problems of Silos Created in Isolation
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Q3: How Do Enterprise Information Systems
Eliminate Silos?
An Enterprise System at Fox Lake
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An Enterprise System for Patient Discharge
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Business Process Reengineering
“Analysis and design of
workflows and processes
within an organization.”
(www.wikipedia.org)
Enterprise systems not
feasible until network,
data communication, and
database technologies
reached sufficient level of
capability and maturity in
late 1980s and early
1990s.
Identify
Processes
Review,
Update,
Analyze As
Is
Test &
Implement
To Be
Design To
Be
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Business Process Reengineering (cont’d)
Enterprise systems enabled the creation of
stronger, faster, more effective linkages among
value chains.
BPR is difficult, slow, and exceedingly expensive.
Systems analysts need to interview key personnel
throughout the organization to determine how best
to use new technology.
Require high-level and expensive skills and
considerable time.
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Q4: How Do CRM, ERP, and EAI Support
Enterprise Systems?
Help organizations fundamentally rethink how
they do work to dramatically improve
customer service, cut operational costs, and
become world-class competitors.
Complex, in-house developed applications
became too costly to build and maintain.
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Q4: How Do CRM, ERP, and EAI Support
Enterprise Systems? (cont’d)
Inherent processes
• Pre-designed procedures for using software
products
• Saved organizations from expensive and timeconsuming business process reengineering
• Based on industry best practices
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Vendors
PeopleSoft—payroll and limited capability HRM
systems
Siebel—sales lead tracking and management
system
SAP—enterprise resource management
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Customer Relationship Management (CRM)
Purpose: Managing all the interactions with the
customer from lead generation to customer
service
Phases of customer life cycle
•Marketing
•Customer acquisition
•Relationship management
•Loss/churn
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Four Phases of Customer Life Cycle
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Major Components of a CRM Application
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Enterprise Resource Planning (ERP)
Suite of applications,
database, and set of
inherent processes
for consolidating
business operations
into a single,
consistent,
computing platform.
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Pre-ERP Information System: Bicycle
Manufacturer
Does not include accounting
Five non-integrated databases
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ERP Information System
All activity processed by ERP application programs and
consolidated data stored in centralized ERP database.
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Some Questions Procedures Need to Answer
or Resolve:
How does sales department determine that order is large? By
dollars? By volume?
Who approves customer credit (and how)?
Who approves production capacity (and how)?
Who approves schedule and terms (and how)?
What actions need to be taken if customer modifies order?
How does management obtain oversight on sales activity?
Many other questions must be answered as well.
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Sales Dashboard
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ERP Projects
Almost no organization develops its own
ERP software
Multi-year project involves millions of
dollars and hundreds of employees,
consultants, and vendor personnel
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Enterprise Application Integration (EAI)
Suite of software to integrate existing systems by providing
layers of software that connect applications together
Connects system “islands” via new software layer
Enables existing applications to communicate and share
data
Provides integrated information
Leverages existing systems—leaving functional applications
as is, but providing integration top layer
Enables a gradual move to ERP
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EAI Automatically Makes Data Conversions
Among Different Systems
Virtual Integrated Database
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Q5: What Are the Elements of an ERP
Solution?
ERP Application
Programs
ERP Training
and Consulting
ERP
ERP Databases
ERP Business
Process
Procedures
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ERP Include Applications that Integrate:
(www.erpsoftware360.com/erp-101.htm)
Supply chain (procurement, sales order processing, inventory
management, supplier management, and related activities)
Manufacturing (scheduling, capacity planning, quality control, bill
of materials, and related activities)
CRM (sales prospecting, customer management, marketing,
customer support, call center support)
Human resources (payroll, time and attendance, HR
management, commission calculations, benefits administration,
and related activities)
Accounting (general ledger, accounts receivable, accounts
payable, cash management, fixed asset accounting)
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Inherent Processes: SAP Ordering Business
Process
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Inherent Processes: SAP Ordering Business
Process (cont’d)
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Q6: How Do the Major ERP Vendors
Compare?
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ERP Vendor Market Ranking
Epicore
MS
Dynamics
Infor
Oracle
SAP
Revenue
(2009)
$410M+
$1.3B
~$2B
>$2B+
$11.9B
Market
Share
(2005)
1%
4%
2%
20%
42%
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ERP Products
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Q7: What Are the Challenges When
Implementing New Enterprise Systems?
Employee
Resistance
Requirements
Gaps
• Challenges
• Difficulty
• Expense
• Risk
Transition
Problems
Four Prime Factors
Collaborative
Management
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Challenges
Collaborative
Management
•No single manager in charge
•Committees and steering groups
Requirements
Gaps
•Licensed products never perfect fit
•Features and functions of complex
products like CRM or ERP not easy
to identify
•Change to adapt to new
application, or change application
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Challenges (cont’d)
Transition
problems
• Careful planning and
substantial training
Employee
resistance
• Change requires effort and it
engenders fear
• Senior level management needs to
communicate need for change to
organization, and must re-iterate
• Key users trained ahead of time to
create positive buzz about new system
• Video demonstrations of employees
successfully using new system
• Give extra inducements to change
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Q8: 2021?
Likely that all
new systems
and business
processes will
be developed
using SOA
principles
Service-oriented
architecture (SOA)
Design philosophy in which
every activity is modeled as
an encapsulated service and
exchanges among those
services are governed by
standards
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Q8: 2021 (cont’d)
Service
• A repeatable task that a
business needs to perform
• Reserve a tee time (start time)
on a golf course
• Reserve facilities for a wedding
• Bill a member’s account
• Cancel a wedding event
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Non-SOA Account Status Checking
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SOA Account Status Checking
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Q8: 2021 (cont’d)
Encapsulation
• Places the logic in one place
• Makes service implementations
easily adapted to new requirements,
technologies, or methodologies
SOA
standards
• Data/messages are exchanged
among services using standardized
formats and techniques
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Q8: 2021 (cont’d)
SOA will open up existing CRM and ERP
functionality to new applications
Many CRM and ERP functions will be performed in the
cloud, and may be companies will assemble their own,
individualized versions of CRM, ERP, and even EAI by
repackaging SOA services hosted in the cloud
Enterprise products will run as thin-client applications on
any computing device and will access data and programs
using virtualized servers in the cloud
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Guide: The Flavor-of-the-Month Club
Management
programs
introduced into
organizations
•Kick-off meetings
•Change management experts explain
programs
•HR amends annual review to include
changes
•Senior management seems to forget
about programs
•Program loses support and new one is
introduced
•Employees grow more cynical with
each failed program
•Employees want change from bottom
up
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Guide: ERP and the Standard, Standard
Blueprints
ERP packages
Benefits
•Software contains inherent processes that
integrate hundreds or thousands business
processes
•Customized to particular industries
•Saves time identifying needed processes
•Saves money—no software development
needed if firm adapts to standard blueprint of
ERP package
Organizations adapt its processes to
standard blueprint
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Guide: ERP and the Standard, Standard
Blueprints
Issues:
•If all firms in an industry use
same business processes, how
can a firm gain competitive
advantage?
•How will innovation occur?
•Does “commoditized” standard
blueprint prevent sustaining a
competitive advantage?
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Active Review
Q1
How do information systems vary by scope?
Q2
When are information silos a problem?
Q3
How do enterprise information systems eliminate silos?
Q4
How do CRM, ERP, and EAI support enterprise systems?
Q5
What are the elements of an ERP system?
Q6
Q7
How do the major ERP vendors compare?
What are the challenges when implementing new
enterprise systems?
Q8
2021?
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