Lecture Slides 11 12 08
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    Lecture Slides 11 12 08 Lecture Slides 11 12 08 Presentation Transcript

    • ITM 309 Enterprise Resource Planning and Collaboration Dr. Frederick Rodammer Michigan State University Eli Broad College of Business [email_address] November 12, 2008
    • Today’s Learning Objectives
      • Describe Enterprise Resource Planning (ERP) and ERP components
      • Describe the three primary components found in core enterprise resource planning
      • Describe the four primary components found in extended enterprise resource planning systems
      • Explain ERP benefits, costs and risks
    • 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
    • Enterprise Resource Planning
      • Serves as a Cross-Functional Enterprise Backbone that Integrates and Automates Many Internal Business Processes and Information Systems
      • Helps Companies Gain the Efficiency, Agility, and Responsiveness Needed to Succeed Today
      • Gives a Company an Integrated Real-Time View of its Core Business Processes
      • ERP Software consists of many integrated modules and relies upon a common data base management system
    • ERP and Business Process Integration
      • ERP systems automate business processes
    • 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
    • CORE ERP COMPONENTS
      • Three most common core ERP components
        • Accounting and finance
        • Production and materials management
        • Human resource
    • 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
    • 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
    • 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
    • CORE AND EXTENDED ERP COMPONENTS
    • EXTENDED ERP COMPONENTS
      • Extended ERP components include:
        • Business intelligence
        • Customer relationship management
        • Supply chain management
        • E-business
    • ERP BENEFITS
      • Common ERP benefits
        • Integrate financial information
        • Integrate customer order information
        • Standardize and speed up manufacturing processes
        • Reduce inventory
        • Standardize human resource information
    • ERP Implementation Costs
    • ERP RISKS
    • Causes of ERP Failures
      • Business mangers and IT professionals underestimate the complexity of the planning , development, and training needed
      • Failure to involve affected employees in the planning and development phases
      • Trying to do too much too fast in the conversion process
      • Failure to do enough data conversion and testing
    • ERP SOFTWARE
      • Successful ERP projects share 3 attributes
        • Overall fit
          • Off the rack
          • Off the rack and tailored to fit
          • Custom made
        • Proper business analysis
          • Successful companies spend up to 10 percent of the project budget on a business analysis
        • Solid implementation plans
          • A plan is needed to monitor the quality, objectives, and timelines
    • ERP Process and Information Flows
    • ERP VENDOR OVERVIEW
      • 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
    • ERP Benefits
      • Quality and Efficiency – ERP creates a framework for integrating and improving a company’s internal business processes that results in significant improvements in the quality and efficiency of customer service, production, and distribution
      • Decreased Costs – Significant reductions in transaction processing costs and hardware, software, and IT support staff
      • Decision Support – Provides vital cross-functional information on business performance quickly to managers to significantly improve their ability to make better decisions in a timely manner
      • Enterprise Agility – ERP breaks down many former departmental and functional walls of business processes, information systems, and information resources
    • ITM 309 Homework
      • Assignment #5 due November 19-20