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Chapter06 The Integrated Enterprise 2019

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Chapter06 The Integrated Enterprise 2019

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Chapter06 The Integrated Enterprise 2019

  1. 1. 1Mohamed Louadi mlouadi@louadi.com The Integrated Enterprise & the Extended Enterprise Please discontinue use of cell phone and turn off ringer Winter session 2019
  2. 2. 2Mohamed Louadi mlouadi@louadi.com The integrated enterprise 1 MRP (1970) (Material Requirements Planning) Source: Kaplan, R. S. (2006). When Benchmarks Don’t Work, HBS Working Knowledge, Harvard Business School, January 9, http://hbswk.hbs.edu/item/5158.html What happened in the 1970s?
  3. 3. 3Mohamed Louadi mlouadi@louadi.com The integrated enterprise 0:0 3
  4. 4. 4Mohamed Louadi mlouadi@louadi.com The integrated enterprise
  5. 5. 5Mohamed Louadi mlouadi@louadi.com The integrated enterprise 1 MRP (1970) (Material Requirements Planning) Need to plan production: Determining net requirements from: Finished goods master production plan Inventory levels To schedule raw materials and parts purchases “In one dramatic benchmarking example, General Motors, in the early 1980s, learned that a Toyota assembly plant could change its stamping presses from one model to another in eight minutes, compared with the eight hours GM plants spent to change over the same basic equipment” Source: Kaplan, R. S. (2006). When Benchmarks Don’t Work, HBS Working Knowledge, Harvard Business School, January 9, http://hbswk.hbs.edu/item/5158.html “In one dramatic benchmarking example, General Motors, in the early 1980s, learned that a Toyota assembly plant could change its stamping presses from one model to another in eight minutes, compared with the eight hours GM plants spent to change over the same basic equipment”
  6. 6. 6Mohamed Louadi mlouadi@louadi.com The integrated enterprise 1 MRP (1970) (Material Requirements Planning) Need to plan production: Determining net requirements from: Finished goods master production plan Inventory levels To schedule raw materials and parts purchases Source: Kaplan, R. S. (2006). When Benchmarks Don’t Work, HBS Working Knowledge, Harvard Business School, January 9, http://hbswk.hbs.edu/item/5158.html
  7. 7. 7Mohamed Louadi mlouadi@louadi.com 1:10 The integrated enterprise
  8. 8. 8Mohamed Louadi mlouadi@louadi.com The integrated enterprise 1 MRP (1970) (Material Requirements Planning) Need to plan production: Determining net requirements from: Finished goods master production plan Inventory levels To schedule raw materials and parts purchases 2 MRP II (1980) (Manufacturing Resource Planning) Coordinating manufacturing processes, from product planning, parts purchasing, inventory control to product distribution 3 ERP (1990) (Enterprise Resource Planning) Integrates business activities across functional departments, from product planning, parts purchasing, inventory control, product distribution, fulfillment, to order tracking
  9. 9. 9Mohamed Louadi mlouadi@louadi.com The integrated enterprise 4:5
  10. 10. 10Mohamed Louadi mlouadi@louadi.com The integrated enterprise 1 MRP (1970) (Material Requirements Planning) Need to plan production: Determining net requirements from: Finished goods master production plan Inventory levels To schedule raw materials and parts purchases 2 MRP II (1980) (Manufacturing Resource Planning) Coordinating manufacturing processes, from product planning, parts purchasing, inventory control to product distribution 3 ERP (1990) (Enterprise Resource Planning) Integrates business activities across functional departments, from product planning, parts purchasing, inventory control, product distribution, fulfillment, to order tracking
  11. 11. 11Mohamed Louadi mlouadi@louadi.com The firm is broken down into sub-systems, and each sub-system is broken down into sub-sub-systems. The transformation of the firm
  12. 12. 12Mohamed Louadi mlouadi@louadi.com The firm is broken down into sub-systems, and each sub-system is broken down into sub-sub-systems. The transformation of the firm
  13. 13. 13Mohamed Louadi mlouadi@louadi.com The transformation of the firm
  14. 14. 14Mohamed Louadi mlouadi@louadi.com The transformation of the firm
  15. 15. 15Mohamed Louadi mlouadi@louadi.com Accounting Information Systems Accounts Receivable Accounts Payable Financial Reporting Sales Order Processing Billing Sales Analysis Cash Receipts Timekeeping Cash Disbursements General Ledger Payroll Purchases Inventory Processing The transformation of the firm
  16. 16. 16Mohamed Louadi mlouadi@louadi.com Payroll Transaction Processing System Cash Receipts and Disbursements Transaction Processing Systems Purchases Transaction Processing System Sales Transaction Processing System General Ledger Transaction Processing System Accounting Information Systems The transformation of the firm
  17. 17. 17Mohamed Louadi mlouadi@louadi.com Accounting Information Systems The transformation of the firm
  18. 18. 18Mohamed Louadi mlouadi@louadi.com Example: PCA (Peachtree Complete Accounting) – The integrated accounting software package of the 1990s
  19. 19. 19Mohamed Louadi mlouadi@louadi.com Example: PCA (Peachtree Complete Accounting) – The integrated accounting software package of the 1990s
  20. 20. 20Mohamed Louadi mlouadi@louadi.com Example: PCA (Peachtree Complete Accounting) – The integrated accounting software package of the 1990s
  21. 21. 21Mohamed Louadi mlouadi@louadi.com Example: PCA (Peachtree Complete Accounting) – The integrated accounting software package of the 1990s
  22. 22. 22Mohamed Louadi mlouadi@louadi.com Example: PCA (Peachtree Complete Accounting) – The integrated accounting software package of the 1990s
  23. 23. 23Mohamed Louadi mlouadi@louadi.com Example: PCA (Peachtree Complete Accounting) – The integrated accounting software package of the 1990s
  24. 24. 24Mohamed Louadi mlouadi@louadi.com Example: PCA (Peachtree Complete Accounting) – The integrated accounting software package of the 1990s
  25. 25. 25Mohamed Louadi mlouadi@louadi.com Example: PCA (Peachtree Complete Accounting) – The integrated accounting software package of the 1990s
  26. 26. 26Mohamed Louadi mlouadi@louadi.com Example: PCA (Peachtree Complete Accounting) – The integrated accounting software package of the 1990s
  27. 27. 27Mohamed Louadi mlouadi@louadi.com Example: ezAccounting Software
  28. 28. 28Mohamed Louadi mlouadi@louadi.com Current account balance Example: ezAccounting Software
  29. 29. 29Mohamed Louadi mlouadi@louadi.com Example: ezAccounting Software
  30. 30. 30Mohamed Louadi mlouadi@louadi.com Example: ezAccounting Software
  31. 31. 31Mohamed Louadi mlouadi@louadi.com Example: ezAccounting Software
  32. 32. 32Mohamed Louadi mlouadi@louadi.com Example: ezAccounting Software
  33. 33. 33Mohamed Louadi mlouadi@louadi.com Example: ezAccounting Software
  34. 34. 34Mohamed Louadi mlouadi@louadi.com Source: http://www.freeaccountingsoftware.net/onlinehelp.2.0.0.10/free_accounting_help/introduction/interface.htm The transformation of the firm
  35. 35. 35Mohamed Louadi mlouadi@louadi.com The transformation of the firm
  36. 36. 36Mohamed Louadi mlouadi@louadi.com The transformation of the firm
  37. 37. 37Mohamed Louadi mlouadi@louadi.com The transactional cycle CUSTOMERS order CUSTOMER SERVICE INVENTORY order CUSTOMERS order BILLING CUSTOMER SERVICE INVENTORY order purchasing requisition order PURCHASING CUSTOMERS order BILLING ACCOUNTS RECEIVABLE GOODS RECEPTION delivery, invoice CUSTOMER SERVICE INVENTORY customer invoice, delivery slip order purchasing requisition order order confirmation record of receipt order customer invoice order, bill supplier delivery slip order SUPPLIERS SHIPPING DEPARTMENT PURCHASING CUSTOMERS order BILLING ACCOUNTS RECEIVABLE GOODS RECEPTION delivery, invoice ACCOUNTS PAYABLE CUSTOMER SERVICE INVENTORY account statement customer invoice, delivery slip order purchasing requisition order order confirmation record of receipt order customer invoice supplier’s invoice payment to supplier order, bill supplier delivery slip order SUPPLIERS SHIPPING DEPARTMENT PURCHASING
  38. 38. 38Mohamed Louadi mlouadi@louadi.com A system of sub-systems each having its OWN IT.With all problems which that entails: • Double entry • Double data • Double control • etc. Organizational modeling (Anthony’s model)
  39. 39. 39Mohamed Louadi mlouadi@louadi.com ERP Systems Source: Andreu, R., Sieber, S. and Valor, J. (2003). Introduction to ERP, IESE, Universidad de Navarra, http://blog.iese.edu/valor/files/2010/07/Introduction-to-ERP.pdf Before the advent of ERP systems
  40. 40. 40Mohamed Louadi mlouadi@louadi.com ERP Systems Source: Andreu, R., Sieber, S. and Valor, J. (2003). Introduction to ERP, IESE, Universidad de Navarra, http://blog.iese.edu/valor/files/2010/07/Introduction-to-ERP.pdf Before the advent of ERP systems
  41. 41. 41Mohamed Louadi mlouadi@louadi.com ERP Systems Is it 4:47pm? Tozeur Before the advent of ERP systems
  42. 42. 42Mohamed Louadi mlouadi@louadi.com ERP Systems Is it 4:47pm or 4:30pm? Tozeur Before the advent of ERP systems
  43. 43. 43Mohamed Louadi mlouadi@louadi.com ERP Systems Is it 6:48am or 8:50pm? Redayef, Jan. 2012 Before the advent of ERP systems
  44. 44. 44Mohamed Louadi mlouadi@louadi.com Is it 6:56am? See https://terriermichel.wordpress.com/2013/09/24/retour-a-lheure-gmt-dimanche-29-septembre/, last accessed Jan 25, 2017.. Agadir, Sept. 2013 ERP Systems Before the advent of ERP systems
  45. 45. 45Mohamed Louadi mlouadi@louadi.com Is it 6:56am or 9:03am? Agadir, Sept. 2013 ERP Systems See https://terriermichel.wordpress.com/2013/09/24/retour-a-lheure-gmt-dimanche-29-septembre/, last accessed Jan 25, 2017.. Before the advent of ERP systems
  46. 46. 46Mohamed Louadi mlouadi@louadi.com Before the advent of ERP systems From the Program «Liman yajroo fakat» aired on Attounissya TV Channel (Tunis) Sunday, June 8, 2014. ERP Systems
  47. 47. 47Mohamed Louadi mlouadi@louadi.com Before the advent of ERP systems ERP Systems Vancouver, on Granville Str., nearby Waterfront Station.
  48. 48. 48Mohamed Louadi mlouadi@louadi.com Before the advent of ERP systems ERP Systems Vancouver, on Granville Str., nearby Waterfront Station.
  49. 49. 49Mohamed Louadi mlouadi@louadi.com ERP Systems http://ici.radio-canada.ca/regions/quebec/2014/10/02/006-horloge-jura-ajustement.shtml
  50. 50. 50Mohamed Louadi mlouadi@louadi.com 0:1 9 Vladimito (Jan 4, 2017). Entrada de Vladimir Putin no Kremlin, https://www.youtube.com/watch?v=HOPz83pdf7U, last accessed Nov 25, 2017 (@2:16-2:36). ERP Systems
  51. 51. 51Mohamed Louadi mlouadi@louadi.com Today, most organizations have information systems similar to this ERP Systems
  52. 52. 52Mohamed Louadi mlouadi@louadi.com ERP Systems The longest 2 km Taken in Ghar el Melh, May 1st, 2017.
  53. 53. 53Mohamed Louadi mlouadi@louadi.com It’s a fan It’s a snake It’s a spear It’s a wall It’s a tree It’s a rope The story of the elephant and the blind men ERP Systems
  54. 54. 54Mohamed Louadi mlouadi@louadi.com It’s a fan It’s a snake It’s a spear It’s a wall It’s a tree It’s a rope The story of the elephant and the blind men ERP Systems
  55. 55. 55Mohamed Louadi mlouadi@louadi.com The story of the elephant and the blind men ERP Systems
  56. 56. 56Mohamed Louadi mlouadi@louadi.com Cher client, merci de passer à l’agence Telecom la + proche muni de votre CIN pour identifier la ligne et gagner 1 recharge. Dépassé 15j votre ligne sera suspendue. TELECOM 12 août 2013 ERP Systems
  57. 57. 57Mohamed Louadi mlouadi@louadi.com Source http://archive.mosaiquefm.net/index/a/ActuDetail/Element/2889-Qu%E2%80%99est-ce-qui-se-passe-avec-Tunisiana.html ERP Systems
  58. 58. 58Mohamed Louadi mlouadi@louadi.com LOUADI, MOHAMED LOUADI, MOHAMED LOUADI, MOHAMED LOUADI, MOHAMED LOUADI, Mohammad LOUADI, Mohammad LOUAD, Mohammad Mohamed, LOUADI LOUADI, Mohammad Louadi, Mohamed Louadi, Mohamed LOUADI, Mohammad ERP Systems
  59. 59. 59Mohamed Louadi mlouadi@louadi.com ERP Systems
  60. 60. 60Mohamed Louadi mlouadi@louadi.com ERP Systems
  61. 61. 61Mohamed Louadi mlouadi@louadi.com An integrated software package: • Is issued by a unique editor• Is issued by a unique editor • Guarantees information uniqueness • Is issued by a unique editor • Guarantees information uniqueness • Guarantees real time updating of information in all the relevant modules • Is issued by a unique editor • Guarantees information uniqueness • Guarantees real time updating of information in all the relevant modules • Provides the necessary tools to ensure operations traceability • Is issued by a unique editor • Guarantees information uniqueness • Guarantees real time updating of information in all the relevant modules • Provides the necessary tools to ensure operations traceability • Covers ERP Systems • Is issued by a unique editor • Guarantees information uniqueness • Guarantees real time updating of information in all the relevant modules • Provides the necessary tools to ensure operations traceability • Covers o either a management function in its entirety
  62. 62. 62Mohamed Louadi mlouadi@louadi.com ERP Systems
  63. 63. 63Mohamed Louadi mlouadi@louadi.com • Is issued by a unique editor • Guarantees information uniqueness • Guarantees real time updating of information in all the relevant modules • Provides the necessary tools to ensure operations traceability • Covers o either a management function in its entirety An integrated software package: ERP Systems • Is issued by a unique editor • Guarantees information uniqueness • Guarantees real time updating of information in all the relevant modules • Provides the necessary tools to ensure operations traceability • Covers o either a management function in its entirety, o or several of its functions • Is issued by a unique editor • Guarantees information uniqueness • Guarantees real time updating of information in all the relevant modules • Provides the necessary tools to ensure operations traceability • Covers o either a management function in its entirety, o or several of its functions, o or all the firm’s IS.
  64. 64. 64Mohamed Louadi mlouadi@louadi.com ERP Systems
  65. 65. 65Mohamed Louadi mlouadi@louadi.com An ERP system «integrates internal and external management information across an entire organization, embracing finance / accounting, manufacturing, sales and service, etc. ERP systems automate this activity with an integrated software application. An ERP system «integrates internal and external management information across an entire organization, embracing finance / accounting, manufacturing, sales and service, etc. ERP systems automate this activity with an integrated software application. Its purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders» An ERP system «integrates internal and external management information across an entire organization, embracing finance / accounting, manufacturing, sales and service, etc. Source: Wikipedia (2011). Enterprise Resource Planning, http://en.wikipedia.org/wiki/Enterprise_resource_planning ERP Systems
  66. 66. 66Mohamed Louadi mlouadi@louadi.com Integrated processes Integrated data Integrated (unified) presentation interfaces and dialogues To “integrate” an enterprise Fixed code Integrated modules Customization - Flexible/adjustable functioning parameters Built on a “single” comprehensive database Interoperable modules To “integrate” an ERP The organizational view The IT view ERP Systems
  67. 67. 67Mohamed Louadi mlouadi@louadi.com Integrated processes Integrated data Integrated (unified) presentation interfaces and dialogues To “integrate” an enterprise The organizational view ERP Systems
  68. 68. 68Mohamed Louadi mlouadi@louadi.com Integrated processes Integrated data Integrated (unified) presentation interfaces and dialogues To “integrate” an enterprise The organizational view ERP Systems
  69. 69. 69Mohamed Louadi mlouadi@louadi.com Integrated processes Integrated data Integrated (unified) presentation interfaces and dialogues To “integrate” an enterprise The organizational view ERP Systems
  70. 70. 70Mohamed Louadi mlouadi@louadi.com Integrated processes Integrated data Integrated (unified) presentation interfaces and dialogues To “integrate” an enterprise The organizational view ERP Systems
  71. 71. 71Mohamed Louadi mlouadi@louadi.com Integrated processes Integrated data Integrated (unified) presentation interfaces and dialogues To “integrate” an enterprise Fixed code Integrated modules Customization - Flexible/adjustable functioning parameters Built on a “single” comprehensive database Interoperable modules To “integrate” an ERP The organizational view The IT view ERP Systems
  72. 72. 72Mohamed Louadi mlouadi@louadi.com Les ERP JD Edwards (1977) OneWorld (USA) Baan (1978) Baan IV (Holland) Oracle (1977) Oracle Applications PeopleSoft (1987) PeopleSoft (USA) SAP AG (1972) R/3 and mySAP All-In-One (Germany) 1. ERP Central Component ERP Editors: The JBOPS
  73. 73. 73Mohamed Louadi mlouadi@louadi.com Les ERP JD Edwards (1977) OneWorld (USA) Baan (1978) Baan IV (Holland) Oracle (1977) Oracle Applications PeopleSoft (1987) PeopleSoft (USA) SAP AG (1972) SAP ECC1 1. ERP Central Component ERP Editors: The JBOPS 2004
  74. 74. 74Mohamed Louadi mlouadi@louadi.com Les ERP JD Edwards (1977) OneWorld (USA) Baan (1978) Baan IV (Holland) Oracle (1977) Oracle Applications PeopleSoft (1987) PeopleSoft (USA) 2009 ERP Editors: The JBOPS SAP AG (1972) SAP Business Suite
  75. 75. 75Mohamed Louadi mlouadi@louadi.com SAP AG (Waldorf) ERP Editors: The JBOPS Fiscal year 2017 (Non-IFRS) (€ million) Total revenue Cloud and software Software licenses and support Operating profit Earnings per share, basic (in €) Number of employees 23,461 19,549 15,780 4,877 3.36 93,300 SAP Annual Report 2017, https://www.sap.com/docs/download/investors/2017/sap-2017-annual-report-form-20f.pdf, last accessed Aug 19, 2018.
  76. 76. 76Mohamed Louadi mlouadi@louadi.com Source: Mendelson et al. (2000). ERP Overview, http://faculty.ist.psu.edu/yen/421/erp.pdf. ERP by sector ERP packages and the industries that they serve.
  77. 77. 77Mohamed Louadi mlouadi@louadi.com Source: Mendelson et al. (2000). ERP Overview, http://faculty.ist.psu.edu/yen/421/erp.pdf. ERP by sector ERP packages and the industries that they serve.
  78. 78. 78Mohamed Louadi mlouadi@louadi.com Source: Mendelson et al. (2000). ERP Overview, http://faculty.ist.psu.edu/yen/421/erp.pdf. ERP by sector ERP packages and the industries that they serve.
  79. 79. 79Mohamed Louadi mlouadi@louadi.com Source: Mendelson et al. (2000). ERP Overview, http://faculty.ist.psu.edu/yen/421/erp.pdf. ERP by sector ERP packages and the industries that they serve.
  80. 80. 80Mohamed Louadi mlouadi@louadi.com Source: Mendelson et al. (2000). ERP Overview, http://faculty.ist.psu.edu/yen/421/erp.pdf. ERP by sector ERP packages and the industries that they serve.
  81. 81. 81Mohamed Louadi mlouadi@louadi.com Columbus, L. (May 12, 2014). Gartner's ERP Market Share Update Shows The Future Of Cloud ERP Is Now, http://www.forbes.com/sites/louiscolumbus/2014/05/12/gartners-erp-market-share-update-shows-the-future-of-cloud-erp-is- now/#5a9a657074a1, last accessed Feb 12, 2017. 2012 ERP market shares ($25.4 billion) ERP market shares
  82. 82. 82Mohamed Louadi mlouadi@louadi.com Pang, A. (June 28, 2016). Top 10 ERP Software Vendors and Market Forecast 2015-2020 - Worldwide ERP Applications Market to reach $84.1 billion by 2020, compared with $82.1 billion in 2015 at a compound annual growth rate of 0.8%, https://www.appsruntheworld.com/top-10-erp-software-vendors-and-market-forecast-2015-2020/, last accessed Feb 12, 2017. SAP 6% FIS Global 4% Oracle 3% Fiserv 3% Intuit 2% Cerner Corp. 2% Ericsson 2% Infor 2% McKesson 2% 2015 ERP market shares ($82.1 billion) In 2015, the top 10 ERP software vendors accounted for nearly 28% of the global ERP applications market ERP market shares Worldwide ERP Market to reach $84.1 billion by 2020, a compound annual growth rate of 0.6%!
  83. 83. 83Mohamed Louadi mlouadi@louadi.com Pang, A. (1er déc 2017). Top 10 ERP Software Vendors and Market Forecast 2016-2021 - Worldwide ERP Applications Market to reach $84.7 billion by 2021, compared with $82.2 billion in 2016 at a compound annual growth rate of 0.6%., https://www.appsruntheworld.com/top-10-erp-software-vendors-and-market-forecast/, consulté le 17 août 2018. 11% ERP market shares 2016 ERP market shares ($82.2 billion) Worldwide ERP Market to reach $84.7 billion by 2021, a compound annual growth rate of 0.6%!
  84. 84. 84Mohamed Louadi mlouadi@louadi.com See: http://www.top10erp.org/erp-software-comparison-health-and-medical-devices-industry-166 ERP by sector
  85. 85. 85Mohamed Louadi mlouadi@louadi.com See: http://www.top10erp.org/erp-software-comparison-health-and-medical-devices-industry-166 ERP by sector
  86. 86. 86Mohamed Louadi mlouadi@louadi.com ERP by sector See: http://www.top10erp.org/erp-software-comparison-health-and-medical-devices-industry-166
  87. 87. 87Mohamed Louadi mlouadi@louadi.com Very small enterprises Small and Medium-size Enterprises (SME) Very large firms ODM Technologies (2012). Services, Les ERP, entre mythes et réalité, http://www.odm- tech.com/services/category/erp/tutorials/Selection-ERP-PME/index.html, last accessed Dec 30, 2013. ERP by firm size
  88. 88. 88Mohamed Louadi mlouadi@louadi.com Optimization of management processes (economic and financial flows) Information consistency and homogeneity (one ARTICLES database, one CUSTOMERS database, etc.) A common information system facilitating internal and external communication Source: Arbelet, L., Landry, P. and Roberget, O. (2007). PGI, demandez l'addition!, 01 Informatique, No. 1884, Feb. 5. www.01net.com/editorial/340501/depenses/pgi-demandez-l-addition-. ERP Pros and ConsERP Pros and Cons ERP Pros (advantages)
  89. 89. 89Mohamed Louadi mlouadi@louadi.com ERP Pros and Cons
  90. 90. 90Mohamed Louadi mlouadi@louadi.com Software Consulting Hardware Steering Committee Training Misc. 30.2% 24.1% 17.8% 13.5% 10.9% 3.5% ERP Pros and Cons The cost of licenses is only 10-30% of the setup cost Source: Andreu, R., Sieber, S., andValor, J. (2003). Introduction to ERP, IESE Business School.
  91. 91. 91Mohamed Louadi mlouadi@louadi.com • Length and rigidity of the implementation varying o from 3 to 6 months for SMEs o from 8 to 24 months for bigger firms ERP Pros and Cons Source: Arbelet, L., Landry, P. and Roberget, O. (2007). PGI, demandez l'addition!, 01 Informatique, No. 1884, February. 5, www.01net.com/editorial/340501/depenses/pgi-demandez-l-addition-./, JDNET (2004). Appréhender l'Enterprise Resource Planning, http://www.journaldunet.com/html_externe3/style/journaldunet/solutions/tetiere.css and Thévenon, D. (2005). ERP pour PME: panorama des offres disponibles, Indexel, www.indexel.net/1_6_4182__3_/6/23/1/ERP_pour_PME___panorama_des_offres_disponibles.htm
  92. 92. 92Mohamed Louadi mlouadi@louadi.com ERP System Application domain ERP Pros and Cons
  93. 93. 93Mohamed Louadi mlouadi@louadi.com ERP System Application domain ERP Pros and Cons
  94. 94. 94Mohamed Louadi mlouadi@louadi.com ERP System Application domain Domain covered Unused functionalities Sub-domains not covered ERP Pros and Cons
  95. 95. 95Mohamed Louadi mlouadi@louadi.com ERP Pros and Cons Wheat Wheat Wheat Wheat Wheat Wheat Wheat Wheat
  96. 96. 96Mohamed Louadi mlouadi@louadi.com • Captivity with respect to the editor: the choice of a solution is often structuring for the company and a change of ERP can be extremely hard to achieve • A high failure risk ERP Pros and Cons Source: Arbelet, L., Landry, P., and Roberget, O. (2007). PGI, demandez l'addition!, 01 Informatique, No. 1884, Feb 5, www.01net.com/editorial/340501/depenses/pgi-demandez-l-addition-./
  97. 97. 97Mohamed Louadi mlouadi@louadi.com Captivity with respect to the editor: ERP Pros and Cons Baan (1978) Baan IV (Pays Bas) Oracle (1977) Oracle Applications JD Edwards (1977) PeopleSoft (1987) PeopleSoft (USA) SAP AG (1972) SAP ECC PeopleSoft Entreprise One 2003
  98. 98. 98Mohamed Louadi mlouadi@louadi.com ERP Pros and Cons Baan (1978) Baan IV (Pays Bas) Oracle (1977) Oracle Applications JD Edwards (1977) PeopleSoft (1987) PeopleSoft (USA) SAP AG (1972) SAP ECC SSA BPCS PeopleSoft Entreprise One 2004 2003
  99. 99. 99Mohamed Louadi mlouadi@louadi.com ERP Pros and Cons Baan (1978) SSA ERP LN Oracle (1977) Oracle Applications JD Edwards (1977) PeopleSoft (1987) PeopleSoft (USA) SAP AG (1972) SAP ECC SSA BPCS PeopleSoft Entreprise One 2003
  100. 100. 100Mohamed Louadi mlouadi@louadi.com ERP Pros and Cons Baan (1978) SSA ERP LN Oracle (1977) Oracle Applications JD Edwards (1977) PeopleSoft (1987) PeopleSoft (USA) SAP AG (1972) SAP ECC SSA BPCS PeopleSoft Entreprise One 2003 Infor Global Solution 2006
  101. 101. 101Mohamed Louadi mlouadi@louadi.com ERP Pros and Cons 2002 2002 2001 ERP +
  102. 102. 102Mohamed Louadi mlouadi@louadi.com ERP Pros and Cons ERP
  103. 103. 103Mohamed Louadi mlouadi@louadi.com • Captivity with respect to the editor: the choice of a solution is often structuring for the company and a change of ERP can be extremely hard to achieve • A high failure risk ERP Pros and Cons Source: Arbelet, L., Landry, P., and Roberget, O. (2007). PGI, demandez l'addition!, 01 Informatique, No. 1884, Feb 5, www.01net.com/editorial/340501/depenses/pgi-demandez-l-addition-./
  104. 104. 104Mohamed Louadi mlouadi@louadi.com • Hershey Foods: R/3  lost sales: $150 million • Tri Valley Growers: Oracle Applications  cost of errors: $20 million • Hershey Foods: R/3  lost sales: $150 million • Tri Valley Growers: Oracle Applications  cost of errors: $20 million • Fox Meyer: R/3  cost of errors: $1 billion • Hershey Foods: R/3  lost sales: $150 million • Tri Valley Growers: Oracle Applications  cost of errors: $20 million • Fox Meyer: R/3  cost of errors: $1 billion • Petsmart: R/3 Retail  deployment delay: 12 to 15 months • Jo-Ann Stores: R/3 Retail  serious inventory problems • Hershey Foods: R/3  lost sales: $150 million Notorious failure stories
  105. 105. 105Mohamed Louadi mlouadi@louadi.com The freeware - freeware is free software. The user can use it, copy it and distribute it without restriction from the author, but it cannot be resold. The shareware - a program which one uses before acquiring. At the end of the trial period, generally set by the author, the user, if satisfied, must pay for the software or remove it from his hard disk. Free software - though in English, free may also mean gratuitous, or free of charge, this word must rather be understood in the sense of “allowed”, or “open”. That said, free software is not necessarily less expensive than the other categories of software. Software packages also exist in various categories of which we can define three: Open source ERP Open Source Software
  106. 106. 106Mohamed Louadi mlouadi@louadi.com Is acquired without its source code. Users cannot modify it. Users must have a license from the vendor before installing the software. Users enjoy full support from the vendor. The vendor remains the owner of the software. The idea of copyright. Is acquired with its source code. Users can modify the source code of the software. Users can install the software on any computer. No one is responsible for the software. The idea of copyleft. Proprietary Software (sometimes referred to as “Closed Source Software”) Open Source Software Open source ERP
  107. 107. 107Mohamed Louadi mlouadi@louadi.com There are several open source or free offers in the market, of which: Tiny ERP ERP5 (of Nexedi) Lakshya (freeware) Compiere ERP Fisterra OFBiz (Open For Business) etc. See http://www.entreprise-erp.com/articles/erp-open-source.html Open source ERP
  108. 108. 108Mohamed Louadi mlouadi@louadi.com Integrated processes Integrated data Integrated (unified) presentation interfaces and dialogues To “integrate” an enterprise Fixed code Integrated modules Customization - Flexible/adjustable functioning parameters Built on a “single” comprehensive database Interoperable modules To “integrate” an ERP The organizational view The IT view Open source ERP
  109. 109. 109Mohamed Louadi mlouadi@louadi.com Integrated processes Integrated data Integrated (unified) presentation interfaces and dialogues To “integrate” an enterprise Open Source code Integrated modules Customization - Flexible/adjustable functioning parameters Built on a “single” comprehensive database Interoperable modules To “integrate” an ERP The organizational view The IT view Open source ERP
  110. 110. 110Mohamed Louadi mlouadi@louadi.com Open source ERP
  111. 111. 111Mohamed Louadi mlouadi@louadi.com Open source ERP
  112. 112. 112Mohamed Louadi mlouadi@louadi.com Open source ERP
  113. 113. 113Mohamed Louadi mlouadi@louadi.com Open source ERP
  114. 114. 114Mohamed Louadi mlouadi@louadi.com http://www.decidesoftware.com/free-open-source-enterprise-resource-planni Open source ERP
  115. 115. 115Mohamed Louadi mlouadi@louadi.com http://tech.gaeatimes.com/index.php/archive/10-best-open-source-erp-softwa Open source ERP
  116. 116. 116Mohamed Louadi mlouadi@louadi.com 1 MRP (1970) (Material Requirements Planning) Need to plan production: Determining net requirements from: • Finished goods master production plan • Inventory levels To schedule raw materials and parts purchases 2 MRP II (1980) (Manufacturing Resource Planning) Coordinating manufacturing processes, from product planning, parts purchasing, inventory control to product distribution 3 ERP (1990) (Enterprise Resource Planning) Integrates business activities across functional departments, from product planning, parts purchasing, inventory control, product distribution, fulfillment, to order tracking The ERP II Systems
  117. 117. 117Mohamed Louadi mlouadi@louadi.com 2 MRP II (1980) (Manufacturing Resource Planning) Coordinating manufacturing processes, from product planning, parts purchasing, inventory control to product distribution 3 ERP (1990) (Enterprise Resource Planning) Integrates business activities across functional departments, from product planning, parts purchasing, inventory control, product distribution, fulfillment, to order tracking 4 ERP II / X-ERP Are to be distinguished from classical ERP by three major evolutions: • A larger functional scope • A greater integration flexibility • A new technological architecture, which is more service oriented (EAI, SOA1) rather than client-server oriented 1 Service Oriented Architecture The ERP II Systems
  118. 118. 118Mohamed Louadi mlouadi@louadi.com 1970 1980 1990 2000+ MRP II Accounts receivable Accounts payable General Ledger Payroll MRP Accounts receivable Accounts payable General Ledger HR ManagmtPayrollPayroll Planning Scheduling Distribution EDI Financial Management HR Managmt Financial Management ERP Planning Scheduling Distribution SCM EDI eCommerce CRM SFA ERP SCM B2B CRM SFA ERP II The ERP II Systems
  119. 119. 119Mohamed Louadi mlouadi@louadi.com The ERP II Systems Sales Distribution PurchasingFinancialsMRP Prod. Monitoring & Control Human Resources ERP E-Procurement Partner Relationship Mgmt. Supply Chain Execution Customer Relationship Mgmt.Private Marketplace Collaborative Product Commerce Supply Chain Planning Integrated Plant Systems ERP IISource: Andreu, R., Sieber, S. and Valor, J. (2003). Introduction to ERP, IESE, Universidad de Navarra, http://blog.iese.edu/valor/files/2010/07/Introduction-to-ERP.pdf
  120. 120. 120Mohamed Louadi mlouadi@louadi.com ERP II systems include : • Functions related to the supply chain (SCM) • Functions related to Business Intelligence (BI) • Functions related to human capital management • Functions related to customer management (CRM) • Functions related to electronic commerce (e- commerce and Web Services) The ERP II Systems
  121. 121. 121Mohamed Louadi mlouadi@louadi.com SCM: Supply Chain Management Source: D8 - Roadmap for Digital Business BRIDGE Consortium, 2002. The six elements of the supply chain: Production Purchasing (procurement) Inventory Distribution Transportation Information SCM Systems
  122. 122. 122Mohamed Louadi mlouadi@louadi.com Inventory manager Sales manager SCM Systems Objective: Zero inventory Objective: Maximum sales
  123. 123. 123Mohamed Louadi mlouadi@louadi.com SCM: Supply Chain Management Source: D8 - Roadmap for Digital Business BRIDGE Consortium, 2002. The six elements of the supply chain: Production Purchasing (procurement) Inventory Distribution Transportation Information SCM Systems Production Purchasing (procurement) Inventory
  124. 124. 124Mohamed Louadi mlouadi@louadi.com SCM Systems
  125. 125. 125Mohamed Louadi mlouadi@louadi.com Reduce storage costs by optimizing the ratio production capacity / demand Reduce total production costs by improving the circulation of material and of information in the production chains Improve customer satisfaction by reducing the TTM The first three objectives of an SCM system are to: SCM Systems
  126. 126. 126Mohamed Louadi mlouadi@louadi.com What (which item) to supply? When to supply it? Of how many units to supply it? often have answers that are hard to get. SCM Systems “Simple” questions, such as:
  127. 127. 127Mohamed Louadi mlouadi@louadi.com SCM encompasses many traditionally separate functional areas such as sales, forecasting, purchasing, operations, information management, transportation and logistics. Sources: D8 - Roadmap for Digital Business BRIDGE Consortium, 2002 and Pitera T. Supply Chain Management: Strategies for Adding Value Throughout the Supply Chain, Pioneer-Standard Electronics, White Paper, 2000. SCM Systems SCM encompasses many traditionally separate functional areas such as sales, forecasting, purchasing, operations, information management, transportation and logistics. “[SCM] encompassing every effort involved in producing and delivering a final product, from the supplier’s supplier to the customer’s customer …”
  128. 128. 128Mohamed Louadi mlouadi@louadi.com Strategic Information Systems (SIS) – The Value Chain Model
  129. 129. 129Mohamed Louadi mlouadi@louadi.com Flow of materials Monetary flowMonetary and information flows SCM Systems
  130. 130. 130Mohamed Louadi mlouadi@louadi.com SCM Systems 1:09
  131. 131. 131Mohamed Louadi mlouadi@louadi.com Raw Material Suppliers End CustomersDistribution Warehouses Manufacturing Plants Retailers SCM Systems
  132. 132. 132Mohamed Louadi mlouadi@louadi.com SCM Systems
  133. 133. 133Mohamed Louadi mlouadi@louadi.com CUSTOMER RETAILER DISTRIBUTOR FIRM SUPPLIER PLANT Step 1: The customer places an order on the Web site or directly Step 3: Back order in case of insufficient stock Step 4: Order of products in case of insufficient stock Step 5: Order of raw materials in case of out of stock Supply Chain SCM Systems Step 2: Back order in case of insufficient stock Source: Corsten, D. & Kumar, N. (2003). Profits in the Pie of the Beholder, Harvard Busieness Review, May, Vol. 81, pp. 22-23. Better forecast of product demand More efficient use of store and warehouse space Decreased inventories and stock- outs Reduced expenses for product promotions Fewer new product failures Lower administrative costs
  134. 134. 134Mohamed Louadi mlouadi@louadi.com Columbus, L. (May 18, 2015). Gartner Supply Chain Management Market Share Update: SAP Dominates With 25.8% Share, http://www.forbes.com/sites/louiscolumbus/2015/05/18/gartner-supply-chain-management-market-share-update-sap-dominates-with- 25-8-share/#7e55c49377a8, last accessed Feb 12, 2017. 2014 SCM market shares SCM market shares
  135. 135. 135Mohamed Louadi mlouadi@louadi.com 2016-2017 SCM market shares SCM market shares Source: https://www.forbes.com/sites/louiscolumbus/2018/07/28/sap-leading-the-fast-growing-scm-market-with-26-share/, last accessed Dec 20, 2018.
  136. 136. 136Mohamed Louadi mlouadi@louadi.com CRM Systems CRM is a new approach, a new technique, and a new management concept for managing customers. CRM is a new approach, a new technique, and a new management concept for managing customers. It focuses a business on creating a technological environment that integrates marketing, sales, service, back-office and supply-chain functions in order to allow an enterprise to take a complete view of its customers, and to provide customization, personalized attention, and focused after sales support to its customers. It focuses a business on creating a technological environment that integrates marketing, sales, service, back-office and supply-chain functions in order to allow an enterprise to take a complete view of its customers, and to provide customization, personalized attention, and focused after sales support to its customers. Source: D8 - Roadmap for Digital Business BRIDGE Consortium, 2002.
  137. 137. 137Mohamed Louadi mlouadi@louadi.com CRM Systems Source: http://gkkv.com/game/8794.html on April 16, 2012
  138. 138. 138Mohamed Louadi mlouadi@louadi.com 0:4 CRM Systems
  139. 139. 139Mohamed Louadi mlouadi@louadi.com CRM Systems 0:4 9
  140. 140. 140Mohamed Louadi mlouadi@louadi.com Another video shows a device, Kinect for Windows, which makes it even easier to try things out more easily: CRM Systems – The Magic Mirror
  141. 141. 141Mohamed Louadi mlouadi@louadi.com 2:0 8See https://www.youtube.com/watch?v=Mr71jrkzWq8 CRM Systems – The Magic Mirror Another video shows a device, Kinect for Windows, which makes it even easier to try things out more easily:
  142. 142. 142Mohamed Louadi mlouadi@louadi.com 0:50 CRM Systems – Land’s End
  143. 143. 143Mohamed Louadi mlouadi@louadi.com CRM Systems – Toys R Us
  144. 144. 144Mohamed Louadi mlouadi@louadi.com CRM Systems – Toys R Us
  145. 145. 145Mohamed Louadi mlouadi@louadi.com Kosur, J. (November 27, 2014). When Does Toys R Us Open For Black Friday and Thanksgiving? Plus More Details, http://www.business2community.com/us-news/toys-r-us-open-black-friday-thanksgiving-plus-details-01080834, last accessed Jan 28, 2015. Lacroix, L. (18 nov. 2014). Target & Toys R Us Offer Mobile In-Store Maps for Easy Wayfinding, https://www.linkedin.com/pulse/20141118153011-32383930-target-toys-r-us-offer-digital-store-maps-for-smartphone-shoppers, last accessed Jan 28, 2015. CRM Systems – Toys R Us
  146. 146. 146Mohamed Louadi mlouadi@louadi.com Perez, S. (Nov 17, 2014 ). Target’s Mobile App Gets Indoor Mapping, Interactive Black Friday Maps, http://techcrunch.com/2014/11/17/targets-mobile-app-gets-indoor-mapping-interactive-black-friday-maps/, last accessed Jan 28 2015. CRM Systems – Target
  147. 147. 147Mohamed Louadi mlouadi@louadi.com 1. Operational CRM 2. Collaborative CRM 3. Analytical CRM In analytical CRM, data gathered within operational CRM are analyzed to segment customers or to identify cross- and up- selling potential. Collaborative CRM facilitates interactions with customers through all channels (personal, letter, fax, phone, web, e-mail) and supports co-ordination of employee teams and channels. Operational CRM supports the "front office" business processes, which include customer contact (sales, marketing and service). Source: CRM Definition, CIO Magazine, January 15, 2006 and Wikipedia, The Free Encyclopedia, http://www.mariosalexandrou.com/definition/crm.asp. Three types of CRM Systems
  148. 148. 148Mohamed Louadi mlouadi@louadi.com Operational CRM supports the “front office” business processes, which include customer contact (sales, marketing and service). Tasks resulting from these processes are forwarded to employees responsible for them, as well as the information necessary for carrying out the tasks and interfaces to back-end applications are being provided and activities with customers are being documented for further reference. 1. Operational CRM Operational CRM supports the “front office” business processes, which include customer contact (sales, marketing and service). Three types of CRM Systems Source: CRM Definition, CIO Magazine, January 15, 2006 and Wikipedia, The Free Encyclopedia, http://www.mariosalexandrou.com/definition/crm.asp.
  149. 149. 149Mohamed Louadi mlouadi@louadi.com 2. Collaborative CRM Collaborative CRM facilitates interactions with customers through all channels (personal, letter, fax, phone, web, e-mail) and supports co-ordination of employee teams and channels. Three types of CRM Systems Collaborative CRM facilitates interactions with customers through all channels (personal, letter, fax, phone, web, e-mail) and supports co-ordination of employee teams and channels. It is a solution that brings people, processes and data together so companies can better serve and retain their customers. The data/activities can be structured, unstructured, conversational, and/or transactional in nature. Collaborative CRM facilitates interactions with customers through all channels (personal, letter, fax, phone, web, e-mail) and supports co-ordination of employee teams and channels. It is a solution that brings people, processes and data together so companies can better serve and retain their customers. The data/activities can be structured, unstructured, conversational, and/or transactional in nature. Source: CRM Definition, CIO Magazine, January 15, 2006 and Wikipedia, The Free Encyclopedia, http://www.mariosalexandrou.com/definition/crm.asp.
  150. 150. 150Mohamed Louadi mlouadi@louadi.com 2. Collaborative CRM (cont’d) Three types of CRM Systems Collaborative CRM provides the following benefits: • Enables efficient productive customer interactions across all communications channels. • Enables web collaboration to reduce customer service costs. • Integrates call centers enabling multi-channel personal customer interaction. • Integrates view of the customer while interaction at the transaction level. Source: CRM Definition, CIO Magazine, January 15, 2006 and Wikipedia, The Free Encyclopedia, http://www.mariosalexandrou.com/definition/crm.asp.
  151. 151. 151Mohamed Louadi mlouadi@louadi.com 3. Analytical CRM Three types of CRM Systems In analytical CRM, data gathered within operational CRM are analyzed to segment customers or to identify cross- and up- selling potential. In analytical CRM, data gathered within operational CRM are analyzed to segment customers or to identify cross- and up- selling potential. Data collection and analysis is viewed as a continuing and iterative process. Ideally, business decisions are refined over time, based on feedback from earlier analysis and decisions. Business Intelligence offers some more functionality as separate application software. Source: CRM Definition, CIO Magazine, January 15, 2006 and Wikipedia, The Free Encyclopedia, http://www.mariosalexandrou.com/definition/crm.asp.
  152. 152. 152Mohamed Louadi mlouadi@louadi.com See: http://www.independent.co.uk/news/world/europe/blood-donors-in-sweden-get-a-text-message-whenever-someone-is-helped- with-their-blood-10310101.html CRM and the ICT
  153. 153. 153Mohamed Louadi mlouadi@louadi.com CRM and the ICT: An example, STEG
  154. 154. 154Mohamed Louadi mlouadi@louadi.com Type of CRM Main supporting ICT Operational Customer databases Telephone Electronic mail (e-mail) Fax Call center Electronic document management (EDM) Customer Support Services (CSS) Sales Force Automation (SFA) Web Automated Order Management CRM and the ICT Type of CRM Main supporting ICT Operational Customer databases Telephone Electronic mail (e-mail) Fax Call center Electronic document management (EDM) Customer Support Services (CSS) Sales Force Automation (SFA) Web Automated Order Management Collaborative Workflow Electronic mail (e-mail) Intranets Type of CRM Main supporting ICT Operational Customer databases Telephone Electronic mail (e-mail) Fax Call center Electronic document management (EDM) Customer Support Services (CSS) Sales Force Automation (SFA) Web Automated Order Management Collaborative Workflow Electronic mail (e-mail) Intranets Analytical Datawarehouse Datamining
  155. 155. 155Mohamed Louadi mlouadi@louadi.com The value of customer data
  156. 156. 156Mohamed Louadi mlouadi@louadi.com The value of customer data
  157. 157. 157Mohamed Louadi mlouadi@louadi.com The value of customer data 157
  158. 158. 158Mohamed Louadi mlouadi@louadi.com 2014 CRM market shares ($23.1 billion) Source: https://ledgeviewpartners.com/blog/market-share-analysis-from-gartner-shows-47-of-crm-systems-saas-based/, last accessed Dec 20, 2018. CRM market shares
  159. 159. 159Mohamed Louadi mlouadi@louadi.com Columbus, L. (May 28, 2016). 2015 Gartner CRM Market Share Analysis Shows Salesforce In The Lead, Growing Faster Than Market, http://www.forbes.com/sites/louiscolumbus/2016/05/28/2015-gartner-crm-market-share-analysis-shows-salesforce-in-the- lead-growing-faster-than-market/#58ed058825ae, last accessed Feb 12, 2017. 2015 CRM market shares ($26.2 billion) CRM market shares
  160. 160. 160Mohamed Louadi mlouadi@louadi.com Columbus, L. (May 28, 2016). 2015 Gartner CRM Market Share Analysis Shows Salesforce In The Lead, Growing Faster Than Market, http://www.forbes.com/sites/louiscolumbus/2016/05/28/2015-gartner-crm-market-share-analysis-shows-salesforce-in-the- lead-growing-faster-than-market/#58ed058825ae, last accessed Feb 12, 2017. 2016-2021 CRM market shares forecast ($26.6 billion) CRM market shares
  161. 161. 161Mohamed Louadi mlouadi@louadi.com ERP The extended enterprise
  162. 162. 162Mohamed Louadi mlouadi@louadi.com CRM Customer Relationship Management SCM Supply Chain Management ERP The extended enterprise
  163. 163. 163Mohamed Louadi mlouadi@louadi.com ERP SCM Supply Chain Management CRM Customer Relationship Management The extended enterprise
  164. 164. 164Mohamed Louadi mlouadi@louadi.com The extended enterprise
  165. 165. 165Mohamed Louadi mlouadi@louadi.com Customers Intranet Extranet Internet Suppliers Intranet Extranet Internet The extended enterprise
  166. 166. 166Mohamed Louadi mlouadi@louadi.com Customer Payement Gateway Inventory Management Order Management System Bank Web Commercial Center Back OfficeFrontal Internet Web Catalogue Integration between the inside and the outside of the firm Accounting System The extended enterprise
  167. 167. 167Mohamed Louadi mlouadi@louadi.com Customer Payement Gateway Inventory Management Order Management System Bank Web Commercial Center Back OfficeFrontal Internet Web Catalogue Integration between the inside and the outside of the firm Accounting System ERP The extended enterprise
  168. 168. 168Mohamed Louadi mlouadi@louadi.com Customer Payement Gateway Inventory Management Order Management System Bank Web Commercial Center Back OfficeFrontal Internet Web Catalogue Integration between the inside and the outside of the firm Accounting System ERPERP II The extended enterprise
  169. 169. 169Mohamed Louadi mlouadi@louadi.com Columbus, L. (2013). Gartner Predicts CRM Will Be A $36B Market By 2017, June 18, http://www.forbes.com/sites/louiscolumbus/2013/06/18/gartner-predicts-crm-will-be-a-36b-market-by-2017/, last accessed March 7, 2015. Summary ERP CRM SCM
  170. 170. 170Mohamed Louadi mlouadi@louadi.com For now….

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