MIS Applications: Enterprise Resource Planning (ERP), MIS and ERP, Business Process Re-engineering (BPR), MIS and BPR

1. Management Information System
MBA/107
(Unit -V)
MIS Applications:
Enterprise Resource Planning (ERP)
MIS & ERP
Business Process Re-engineering (BPR)
MIS & BPR

2. Management Information SystemManagement Information System
MBA/107MBA/107
Lecture – 1
Enterprise Resource Planning
(ERP)

3. What is ERP?What is ERP?
An ERP system is an attempt to integrate all
functions across a company to a single
computer system that can serve all those
functions’ specific needs.

4. “Integration” is the key word for ERP
implementation.
It may also integrate key customers and
suppliers as part of the enterprise’s
operation.
It provides integrated database and custom-
designed report systems.
It adopts a set of “best practices” for
carrying out all business processes.

5. Major Reasons for AdoptingMajor Reasons for Adopting
ERPERP
Integrate financial information
Integrate customer order information
Standardize and speed up operations
processes
Reduce inventory
Standardize Human Resources information

6. Benefits of ERPBenefits of ERP
Internal Benefits
– Integration of a single source of data
– Common data definition
– A real-time system
– Increased productivity
– Reduced operating costs
– Improved internal communication
– Foundation for future improvement

7. External Benefits
– Improved customer service and order
fulfillment
– Improved communication with suppliers and
customers
– Enhanced competitive position
– Increased sales and profits

8. ERP Implementation ApproachesERP Implementation Approaches
The Big Bang – Install a single ERP system
across the entire organization
Franchising – Independent ERP systems
are installed in different units linked by
common processes, e.g., Bookkeeping.
Slam dunk – Install one or more ERP
modules for phased implementation of key
business processes.

9. Major Phases of ERP ImplementationMajor Phases of ERP Implementation
Initiation – Develop business case, project
scope, and implementation strategy
Planning – Establish implementation team,
determine goals and objectives, establish
metrics
Analysis and process design – Analyze
and improve existing processes, map new
processes to be adopted by the system

10. Realization – Install a base system,
customization, and test the system
Transition – Replace the formal system
with the new system, data conversion
Operation – Monitor and improve system
performance, provide continued training
and technical support

11. Major Challenges to ERP ImplementationMajor Challenges to ERP Implementation
Limitations of ERP technical capabilities
Inconsistency with existing business processes
Costs - implementation (hardware, software,
training, consulting) and maintenance
Impact on organizational structure (front
office vs. back office, product lines, etc.)
Changes in employee responsibilities

12. Flexibility of software system upgrades
Implementation timelines (Delay)
Availability of internal technical knowledge
and resources
Education and training
Implementation strategy and execution
Resistance to change

13. How do ERP work?How do ERP work?

14. New Developments In ERPNew Developments In ERP
Availability of web-based and wireless ERP
systems
Adoption of easy-to-install ERP systems
Linkage to other software systems, e.g., supply
chain management system, e-commerce,
customer relationship management system

15. Before ERP Implementation

16. After ERP ImplementationAfter ERP Implementation

17. What can ERP do for theWhat can ERP do for the
Enterprise?Enterprise?
Management can act confidently
Improve operational efficiency
Give the enterprise the edge, it needs
to succeed
Even small and medium business
(SMB) units are using ERP software to
achieve a competitive advantage.

18. Better control & Higher profitsBetter control & Higher profits
ERP compels the staff to be organized
and disciplined, as it does not accept
any shortcuts.
Thus, it can provide online MIS for the
management to know the exact status
of the business at a click of the mouse
and enables it to take timely business
decisions
Cost control and cost reduction at every
stage and improvement in profitability.

19. Efficiency is improvedEfficiency is improved
Reduce manual work
No more inefficient paper-based
business processes
ERP makes the organization paperless,
or less-and less paper. Thus, becoming
more efficient.

20. What is the benefit of the supply chainWhat is the benefit of the supply chain
management module in ERP?management module in ERP?
 By deploying ERP, companies have been able to closely
integrate their business processes with those of their
trading partners
 Faster order processing.
 Extending the market reach.
 Increase sales.
 Better tracking of inventories.
 More accurate order fulfillment.
 Better customer service.
 Vendor relationship management (VRM)

21. FG inventory controlFG inventory control
 ERP has resulted in a faster response / delivery time.
For example, in the legacy system the Invoice
preparing was cumbersome and was taking lot of time

 In ERP, now users are making CCI (Challan-cum-
Invoice), in a very efficient manner, which is not only
faster but also ensures accuracy
 Stock is updated automatically when the item is
purchased and sold. This results in ensuring that the
stock figures are always up-to-date. Correct response
to customer about delivery commitment is now
possible.

22. Pre SalePre Sale
 Quotation Automation has resulted in proper
costing and capturing overheads
 The Sales Order is automatically created after
the quotation approval and subsequently the
Work Order is printed for the Production giving
information about the proper raw material (or
child items) requirement.

23. BOMBOM
The Bill Of Material (BOM) master is
automatically updated in the Sales Order
stage resulting into greater accuracy of
Item Master and very useful for MRP –
Material Requirement Planning.

24. Smart Business OperationsSmart Business Operations
 The Inspection Report is automatically printed after the
Invoice saving lot of time in documentation, which in turn
assures high Quality standards and customer satisfaction.
 Better customer reach has resulted into increased
revenue. Customer master data and actual sales data are
now available online.
 Purchase is entered online which gives the vendor wise
purchase information
 Serial number or batch number tracking keeps track of
the raw material.
 The Digital Nervous System provides top management,
the automated paper-less flow of information between
departments.
 Affordable client / server software eliminates data
corruption and RDBMS (e.g. MS SQL Server) increases

25. How to avoid failure inHow to avoid failure in
implementing ERP?implementing ERP?
 Not understanding what the new 'system' is designed to
achieve). At least 100 hrs of training is required for key
users. Preparing masters / transaction on practice
databases to get the comfort level and singing off is highly
recommended. The CEO can make this happen, if he /
she personally take interest, otherwise if left to users, the
quality training does not happen and then chances of
success are reduced
 In one company, the training was given after the system was ‘live’.
Users were busy with ISO implementation and most people saw the
data entry screen for the first time when the legacy was removed.

26. Lack of Top ManagementLack of Top Management
commitmentcommitment
 If the owner is not spending enough quality time, then
the ERP project is likely to be unsuccessful
 In one organization, the MD hardly took part in the
discussion with ERP vendor and delegated the task to
the General Manager, who in turn never wanted the
ERP system, so he created all the roadblocks, and the
vendor got frustrated and finally left

27. Inadequate SRSInadequate SRS
 Inadequate SRS or System Requirements Specification:
Current processes are not adequately addressed. User
must write down the requirements, which means
taking out time and extra effort. The user usually
explains casually, verbally, and hurriedly, then how the
ERP can succeed?
 If sufficient time is not given for preparing the SRS,
ERP is likely fail
 Chopping and changing of program codes after the ERP
goes Live is observed, if SRS exercise is not done
properly

28. Select ERP package carefullySelect ERP package carefully
Invest lot of time in the ERP selection process. It is not like
buying a mobile. If you do not like a cell phone, you can discard,
and buy new one. ERP is like a long-term partnership (marriage,
shall we say). There are going to be difference of opinion with the
spouse. This can be sorted out. Similarly, one cannot keep on
changing ERP
The package does not address the basic business functions of the
client. The package should be totally integrated, including
accounts
Some organizations are so comfortable with their Rs. 10,000 /-
wala account-centric package that they do inventory and other
functions in ERP but ask for data transfer from ERP to such
accounting package! So, Please do not connect bullocks to the

29. Internal ResistanceInternal Resistance
 Resistance to changing the 'old' processes. This is
perhaps human nature
 Unless proper confidence building is done (during
training) the user will still want to use the old method
(or the legacy way)
 One ERP user (in a company) was so adamant that the
MD had to ask him to resign (and he was the works
manager who was expert in fire fighting, but MD
wanted to prevent fire altogether).

30. Give me moonGive me moon

31. Unrealistic Expectations ofUnrealistic Expectations of
the ROIthe ROI
People forget to quantify the intangible
benefit or they simply expect returns
overnight
Most users do not know even, what the
ROI is
For Example:
ROI can be reducing inventory level by x percentage or ROI can
be preparing of Excise (TAX) Invoice quickly and accurately
or ROI is to get the correct material requirement planning.

32. Bottom up ApproachBottom up Approach
 In other words if architect has not shown the door and
window, the room will not have them. Due importance
to these documents should be given. For instance, ERP
has many different types of sales invoice and several
types of purchase vouchers, but which one is applicable
in a particular business is known to that businessperson
only. Some time should be spent in the test run known
as CRP run. Later, modification will not only cost in
term of money but also time.
 Moreover, that time blame game starts and project
suffers. It is strongly recommended that all key users
take the POC (Proof of Concept) seriously
 System Requirement Specification (SRS) should be
reflected in the reference guidelines. Every page of
this Business Blueprint document should be signed.

33. Long Term InvestmentLong Term Investment
 Another reason of ERP failure is that user ignores the
long-term business goals to be achieved and only
focuses on the immediate needs. As a result asks
for unnecessary customizations. For example, it is
necessary to enter correct opening stock for each item
for each location (including third party inventory)
 However, user takes a unilateral decision that this can
be done later. Users will start entering various
transactions and goes live. Even asks to remove
the negative issue lock from the system

34. ERP is not bed of roses.ERP is not bed of roses.
Business transformation is a painful
process. Do not underestimate. It
is like that scene of ‘Jurassic Park
II’ movie. She is amused when
she is looking at the Dinosaurs for
the first time. She is told that in
beginning, it is always ‘wah wah’
but it ends up in screaming!

35. MIS & ERP DifferenceMIS & ERP Difference

36.  MIS
Management Information System Generates reports on user
demand. MIS is for the Decision making reports. MIS
Collect data form all department then generate the report as
user require
 ERP
Enterprise Resource Planning Mostly used in Manufacturing
Organizations. Each Department have its own activity. User
friendly with high cost factor. All departments Modules are
separate activity w.r.t. their work

37.  MIS is a concept which gives the idea of storing information (whether
centralized or decentralized topology), making the information
available to be accessed. Using computers and latest technology tools,
providing the users to infer more information based on the resident
information and manage the flow of information from one location to
another appropriately.
 ERP
Is business management software that allows an
organization to use a system of integrated applications to
manage the business. ERP software integrates all facets of
an operation, including development, manufacturing, sales
and marketing.

38.  MIS
its management information system, which stores data of an
organization and helps them to manage their departments
and resources, while they will have to manually analyse the
future hurdles from reports provided by MIS.
 ERP
Used mostly in Manufacturing organizations, and gives a
prior knowledge of things(events or hurdles etc) that will
come in the way of ones business. while it fullfills
requirements of MIS.

39.  MIS
MIS is a concept to convert data into information to help in decision making
 ERP
is a software / application / program
that integrates modules like CRM, Accounting, etc.
An organisation e.g. Big Bazar uses ERP to record transactions related to
sales, inventory management, accounting etc... ERP in this case will store
every type of data in the databases.
Trough the ERP executives of Big Bazar have fed lot of data into the system.
Now the management wants to take a decision regarding the stock levels.
They can generate reports (data into information) to create the base of this
decision.
 That's how Big Bazar uses an ERP to support MIS.

40. ThanksThanks

41. Lecture - 3Lecture - 3
Business Process Re-engineering

42. What is BP?What is BP?
A business process may be defined as “a set of
logically related tasks performed to achieve a
defined business outcome” (Davenport,1990)
OR
“activities that takes one or more kinds of input and
create an output that is of value to customer”
(Hammer and Champy, 1993)
OR
“a set of business events that together enable the
creation and delivery of an organization’s products
or services to its customers”
(Gelinas et. al, 2004)

43. What is BPR?What is BPR?
Business process re-engineering is also
known as business process redesign,
business transformation, or business process
change management.
Reengineering business processes means
tossing aside existing process and starting
over.

44. Definition BPR:
Business Process Reengineering is defined as; “the
fundamental rethinking and radical redesign of
business processes to achieve dramatic
improvements in critical contemporary measures of
performance such as costs, quality and speed”.
(Hammer and Champy, 1993)

45. Meanings-Meanings-
Fundamental
Fundamental implies that everything – every
assumption, every reason, every activity – is
challenged by asking why it should be continued.
The implication is nothing should be accepted as
scared. Over time, practices that were once
required become obsolete and need to be removed.
Radical
Do not try to improve the existing situation, invent
(create/design) completely new ways of
accomplishing (complete/achieve) work.

46. Dramatic
Do not use business process redesign to obtain
marginal (small slight) improvements, aim at
order-of-magnitude improvements (ten times). If
the marginal gains – 5 to 10 percent – are the goal,
then continuous improvement is a more
appropriate path than reengineering.
Process
Focus on the business processes instead of
organizational structures.

47. Business Process Reengineering cycleBusiness Process Reengineering cycle
Identify
Processes
Review,
Update
As-Is
Design
To-BE
Test and
Implement
To-Be

48. Dimensions of Business Re-engineeringDimensions of Business Re-engineering
 Reengineering takes time, larger project takes even
more time. Reengineering requires process, organization
and technology changes. Reengineering also requires
infrastructure changes and cultural transformation).
 Once the “radical” changes takes place, they must
continuously improve the process, practices in the
business operation to prevent future deterioration and
ensure preventive maintenance.
Design Implementation Continuous Process Improvement
Time

49. Process
Structure
Technology
Structure
Organization
Structure
Reward
Structure
Measurement
Systems
Organizational
Culture
Political
Power
Management
Methods
Individual Belief
Systems
Infrastructure Layer
Value Layer
More concrete
easiest to
change
More difficult to
change less
concrete

50. Dimensions of BusinessDimensions of Business
ReengineeringReengineeringA. The Physical /Technical Dimensions are what people can
easily see and do. Include;
a. Process structure consists of the business processes, outcomes,
policies, practices and procedures that support the processes. (process
structure is what, when and how work is performed)
Process can be triggered by internal events, timing cycles, or external stimuli.
There are undocumented, inconsistently applied and personality dependent
processes. No single organization has the same processes
Process produce business outcomes.
True purpose is to produce a “quality” outcome in a timely and predictable manner.

51. b. Technology structure which consists of the
automated communications, networking, and computer
systems used to support the process structure.

c. Organization structure defines who performs,
manages, and is accountable for each business process.
When process and organization structures are out of
alignments, there are gaps in accountability.

52. B. The Infrastructure Dimensions refers to
interpretation of policies and procedures which
heavily influences how the physical/technical
dimensions on a day-to-day basis.
If the physical/technical dimensions change, the
infrastructure must also change.
Infrastructure Dimensions are-
a. Reward structure regulates behavior.
Rewards may be formal or informal, financial
or recognition based. Ideally, well-designed
jobs provide a work environment that is rewarding
in and of itself.

53. b. Measurement systems define the feedback that
provide information on process performance.
- enables people to improve process performance;
- must deliver appropriate information;
- should uncover the need for change;
- should be made available directly and
simultaneously (at once) to process performers and
managers.

54. c. Management methods consist of the practices
and techniques used to supervise, develop, and
support the people who perform the business
processes.
It is one of the most neglected (ignored) in
reengineering because it is seen as outside the
project scope.
Managers and supervisors must understand
and learn how to support the new
environment so as to gain benefits from the
reengineering process.

55. C. The Value Dimensions define the
organization’s culture and drive behavior.
Leadership and improvement philosophies must
emerge from these dimensions.
a. Organizational culture consists of the
unspoken, collective rules and beliefs of the
organization.
It can be discerned (perceive/see) through the
organization’s language, symbols, myths
legends) and rituals (ceremony).
It defines what is important to the organization
more forcefully than any memo from the CEO.
Changing embedded corporate value is perhaps
the most powerful form of change.

56. b. Political power refers to individual who
manipulate and shape the actions and behaviors
of others.
Both formal and informal leaders use power to
promulgate (broadcast) and reinforce power.
Formal authority – acquired through the
position held in the organization.
Personal power – acquired through expertise,
knowledge, or connections.

57.  c. Individual belief systems are the attitudes and
mental models that individuals apply to
themselves, those they work with, and the work
itself.
 Examples of mental models: Impatience,
skepticisms, openness, control, rigidity, and
flexibility
 Aligning the value dimensions to support the
reengineered organization requires organization
executives to demonstrate leadership.

58. BENEFIT OFBENEFIT OF
REENGINEERINGREENGINEERING
1. Increase the organization’s ability to customize
products and services while retaining mass-
production economics.
2. Increase customer satisfaction with products and
services so they prefer your products and services
over those of your competitors.
3. Make it easy and pleasant (enjoyable) for
customers to do business with your organizations.
4. Break organizational boundaries, bringing
customers into the information channels through
communication, networking, and computer
technologies.

59. 5. Decrease response time to customers, eliminate
errors and complaints, and reduce product and
service development and manufacturing cycle time.
6. Process more customer requests and higher volume
from each customer, and deliver “value-driven”
prices to customers without reducing profitability.
7. Improve the quality of work life and individual
capabilities for contribution so that people
experience ownership of their work and of
customers and see their contributions to the
organizations.
8. Improve the sharing and utilization of organization
knowledge so the organization does not become/
remain dependent on the expertise of a few people.

60. THE NEED FORTHE NEED FOR
REENGINEERINGREENGINEERING
WARNING SIGNS OF TROUBLE
1. The explosion of chaos and bureaucracy: Organizations’
work processes were not designed BUT they evolved out of the
chaos of doing business. Processes become habitualized. From
veteran to new staff without realising it was a mistake
(e.g. a team of headquarters accountants visiting a field billing
office found clerks misapplying account codes to expense
vouchers. The team asked a clerk why? She replied: “Listen,
I’ve been doing this job for 20 years, and you are not going to
tell me I’m doing it wrong”.)
2. Thinking of customers: Too many companies design
processes based on the assumption that they know what’s best
for customers, thus, organization becomes inflexible, driving
frustrated customers to competitors or regulatory commissions.
Employees who take the initiatives to help customer would be
penalised for bypassing official procedures.

61. 3. Automation of existing bureaucracy: Computerization
reinforced bureaucracy rather that breaking through it. (changing
paper documents to electronic document, BUT company only
duplicates existing processes, thus, maintaining both paper and
electronic forms of data. E.g. an insurance company’s claims
department, automation created paper printouts to replace
handwritten claim files, but paper continued to move from one
desk to another as the claim was processed).
4. Bottlenecks and disconnects in critical cross-functional
processes. Each unit operates as if it has no relationship to the
other units. (Each unit is part of the manufacturing stream, but
they each operates in costly and cumbersome processes
preparing work for processing, resolving problems and errors,
tracking the work in progress, thru, creating duplicate and
inaccurate data. E.g. large automobile manufacturing company
– each division reentered information about incoming work into
its own systems, and sent paper with the outgoing work. Each
department did not check with each other on what is going on in
the manufacturing process).

62. 5. Elusiveness of accountability: Most organizations are
structured by function (eg. Sales, manufacturing, etc.) but
essential business process (eg. Customer service and support)
cut across the functions. This makes it difficult, if not
impossible, to establish accountability for a complete business
process. (e.g. in a manufacturing firm, the sub-processes, each
assigned to different group. If any plans or budgets were late,
inaccurate, or incomplete, customers’ programs could not be
updated in time to avoid invoicing errors and deductions. As a
result, in 5-years time, the number of changes in plans and
budgets increased from 10 – 57%, and the process deteriorated
from lack of management, measurement and accountability.
 6. Chaos of downsizing: It leaves survivors demoralized, the
work environment inadequately staffed, and people with
inadequate skills performing the work, and tasks can no longer
be processed within their current configuration. (e.g. a large
government organization downsized its headquarters by 40%. 1
staff was left to take up a responsibility for 4 person, he has to
work 16 hours a day and before long, demanded to transfer to
another location.

63. 7. The turmoil of integration and merger: This creates
work processes that often duplicate or conflict with each
other. (e.g. Purchase of 4 companies gave the new
company 4 different sets of policies, procedures and
formula options for processing customer orders. In a 5-
year period, over $80 million would be wasted supporting
these overlapping redundant operations. Integrating the
customer’s order management process will create massive
difficulties as 3 of the 4 companies. Field work loads
tripled, errors increased 50%, and over 100 additional
clerical people were hired to prepare inputs and correct
errors.

64. CREATING A BUSINESS CASECREATING A BUSINESS CASE
Street-smart business reengineers know that it is critical to create a business case
because “it creates massive discomfort with status quo”.
The initial business case must sell executives on the VALUE OF THE
CHANGE.
- must show that “the cost of NOT changing is too high”.
- Street smart business reengineers don’t ask people to put up with inconvenient
and stressful changes without good reason. They makes two points:
1. The necessity for change.
Use quantitative data that translates “what everybody already knows”
into facts and numbers
2. The alternative to change.
Use hard and soft data to paint a picture of the future if the
organization doesn’t change

65. 3. Once the facts are on the table, reengineers advocates must get
commitments to:
- Frame the projects so it is fully defined and understood
- Create a reengineered vision of the business, its values, and
goals
- Build a detailed process redesign of the business operations
- Plan the implementation
- Conduct a proof of concept (if needed)
(**once this has been laid out, reengineer advocate can ask for the
“big bucks” for implementation)

66. CRITICAL SUCCESS FACTORSCRITICAL SUCCESS FACTORS
FOR BR PROJECTSFOR BR PROJECTS
To have a successful BR, requires a strategy that incorporates these CSF:
1. A business focus – a focus on all dimensions. Success depends on
integrating all three – process, technology, and organization, plus
supporting that integration with new infrastructure and values.
2. A methodology and project approach – requires discipline and
structure; methodology must be systematic and fact focused;
must articulate how to secure finding, manage power struggles,
and sell the new ideas.
3. Time - BR takes time. Executives must be able to stick with the
program.

67. 4. Partnership participation – BR is accomplished only as a result of
efforts by people from all over the organization. Requires flexible and
trained teams.
5. Visible, active leadership. This is the most important of all the
critical success factors. Requires long-term commitment to BR –
in terms of dollars, people and executive visibility. (leaders must be
careful not to use negative reinforcement, positive reinforcement is
much more effective).
 **Executive leaders and middle managers must:
 (1) enable people to step back and evaluate how the work is done, this may mean changing
work priorities,
 (2) resist the temptation to silence dissident voices,
 (3) simplify problem solving
 (4) remove barriers and obstacles to peformance,
 (5) reward and encourage ideas
 (6) allow people to have fun at work.

68.  BR begins the process of transforming a dysfunctional
organization into a learning, productive, quality-focused,
customer driven organization.
 BR must be customer driven.
 Quality is defined in terms of added value, cost sensitivity,
responsiveness, and functionality.
 BR must enable people to handle more change
successfully.

69. ThanksThanks

70. BPR & MISBPR & MIS

72. ThanksThanks

73. CASE on ERP – Unit VCASE on ERP – Unit V
 JCB India is one of the India’s largest manufactures of construction Equipment
Company fully owned subsidiary of JC Bamford Excavator of U.K. offered 21
different machines.
 JCB India launched their operations in 1980 with manufacturing site in
Ballaghadh near Delhi and in 2005-06, they constructed second manufacturing
site at Pune.
 Both manufacturing sites were running two separate entities and managing two
separate SAP landscapes and processing data on two different servers. The
account books closed on two different dates, making it difficult for organization
to present single consolidated report to their global headquarter at UK. The
transactions were happening in haphazard manners, its disturb business
alignment and threatened to dent company’s revenue loss.
 To fix this, JCB India’s management decided that the company would operate
one single entity. The company decided to install two ERP system to weed out
inefficiencies. Armed with action proof plan, company constituted cross
functional team with 18 people from different departments. The team is called as
project “SPANDAN”.

74.  However, project faced several problems in internal team and implementation
team. The team member shuffled down between two plants; conduct daily
meetings, weekly review meetings to track the progress. At last project team
got success to transfer the data of Pune server to Delhi server. Today
company has standardized the process for stock transfer, material receipt,
MRP process, end revenue leakage, timely closer account book. Now
company sent out consolidated report to UK. At last the company has been
able to leverage the technology to transform in business for current and future
growth.
 Questions:
 According to you, what type of challenges faced by the company before
implementation of ERP system?
 How would ERP system helped to resolve the issue of the company?
Justify the answer.
 Do you think that, MIS and ERP system is today’s need for facing to
global competition for multinational companies? Comment.