Class 1 - Intro to ERP

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    MIS479W: ERP(Enterprise Resource Planning)

    What is an ERP system?

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    Information system for M/S Customer, Product data

    Information system for SCM Products, Inventory, BOM

    Multiple, separate databases Not integrated!!

    Traditional Decentralized Information Systems

    SCMM/S HR A/F

    IS for M/S IS for SCM IS for HR IS for A/F

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    Traditional Decentralized Systems

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    ERP System

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    ERP Systems help to Automate Business

    Processes: e.g. Order fulfillment

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    ERP Advantages

    Integration among different functional areas to improve

    communication, productivity and efficiency

    Order tracking from placement through payment

    Manage revenue cycle from invoice through cash receipt

    Manage inter-dependencies of complex bills of materials

    Shorten production lead time and delivery time

    Tracking and reconciliation of deliveries, payments, etc. Accurate forecasting Less inventoryMore profit

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    ERP Disadvantages

    Implementation cost can be very high

    ERPs are often seen as too rigid and too difficult to

    adapt to the specific workflow and business

    process major change in the way of doing business. Customization of the ERP software is limited.

    Most companies are forced to follow the "industry

    standard" prescribed by the ERP system

    Increased organizational politics

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    ERP Vendors

    SAP, the German juggernaut - www.sap.com

    Systeme, Anwendungen, Produkte in derDatenverarbeitung, or

    Systems, Analysis and Products in Data Processing.

    Oracle (merged with PeopleSoft/J. D. Edwards)

    - www.oracle.com

    Microsoft Great Plains, aimed at smallercompanies

    SAP Business One is competing product

    SYSPRO (Small Manufacturers) Banner: Universities

    Meditech: Hospital

    http://www.sap.com/http://www.oracle.com/http://www.oracle.com/http://www.sap.com/
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    SAP

    Founded 1972 in Waldorf, Germany

    Largest market share (approx. 30%)

    Used by most Fortune 500 companies

    Over 2.5 million users

    2011 Revenues approx. $13.7 billion.

    Over 9,000 implementations of R/3 at over 6,000

    companies Industry specific solutions

    Newer products: Business Objects One, SAP Hanna

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    2008 by SAP AG. All rightsreserved.

    Modules in SAP ERP System

    R/3Client / Server

    FI

    CO

    AM

    PS

    WF

    IS

    MM

    HR

    SD

    PP

    QM

    PM

    Sales &

    Distribution

    Material

    Management

    ProductionPlanning

    Quality

    Management

    Plant

    Maintenance

    Human

    Resources

    Financial

    Accounting

    Controlling

    Fixed Asset

    Management

    Project

    System

    Workflow

    Industry

    Solutions

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    ERP Supported Functions

    FinancialHuman

    Resources

    Operations &

    Logistics

    Sales &

    MarketingAccounts

    Receivable

    Time

    Accounting

    Inventory Order

    Processing

    Asset Account Payroll MRP Pricing

    Cash Forecast Personnel Plan Plant

    Maintenance

    Sales Reporting

    Cost Accounting Travel Expense Production

    Planning

    Sales Planning

    General Ledger Benefits Mgmt Manufacturing Catalog Mgmt

    Profit Analysis Purchasing

    Standard

    Costing

    Quality Mgmt.

    Shipping

    All of these functions. One software

    package. One database

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    Two views of Information Systems

    View 1 A company should have state-of-the-art IS

    Buy a state-of-the-art system even if it costs more

    IS folks need to be experts in the IS area only

    View 2

    A company should have adequate IS as per needs The cost of every IS investment must be justified

    IS folks must understand the business first

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    Course Objectives

    Learn:

    What is an ERP system?

    Why does a business need an ERP system?

    How does an ERP system affect business processes? Use of an ERP system in functional areas of business?

    SAP as an example of an ERP system

    How can data collected by an ERP system be analyzed?

    How does a business implement an ERP system?

    This course is as much about business as it is about technology