Course Name : M0034 Information and Business Process Year : 2011

Enterprise Information System

Session 23-24

Learning outcome
Integrate the whole model of business process Outlines the roles of Information Technology in Business Process and Organizational activities to achieve its goals

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Learning objectives
After studying this chapter, student will able to : Understand of Enterprise Information Systems Explain why organizations are motivated to implement or upgrade enterprise resource planning (ERP) systems. Outline the key busines processes that ERP systems support. Describe the modules in an ERP system. Discuss the considerations for evaluating, purchasing and implementing an ERP system.
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THE ENTERPRISE INFORMATION SYSTEMS MARKET Enterprise information systems are information systems software used by businesses to capture their transactions and to produce outputs that are used for planning, decision making and statutory reporting

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THE ENTERPRISE INFORMATION SYSTEMS MARKET The Software Framework

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ERP SYSTEMS

ERP systems: software designed to capture a wide range of information about all key business events including accounting, finance, HR, sales, marketing and manufacturing Development based on Porters value chain

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ERP SYSTEMS ERP Systems (cont..) The systems link:

Sales and marketing: the division of the organization that sells the products and services. Accounting and finance: the division of the organization that manages the businesss financial assets and maintains its financial records.

Manufacturing: the division of the organization that purchase raw material to be converted into products and services that provide customer value.
Human resources: the division of the organization that atrracts, develops and maintains the businesss labour resources and employee records. Suppliers: the businesses that provide direct and indiriect raw materials into the manufacturing division of the organization. Customers: the people that purchase products and services from the organization because they value those products and services. Bina Nusantara

ERP SYSTEMS Enterprise Value Chain A series of activities that link sales and marketing with manufacturing, accounting and finance, and human resources within an organization.

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Figure. 6.2. Enterpise Value Chain

ERP SYSTEMS ERP systems attempt to integrate all departments and functions across a company onto a single enterprise information system that can serve all those departments particular needs

ERP systems support key business processes: 1. Revenue, sales or order to cash 2. Payment, purchases or purchase to pay 3. Production, manufacturing or conversion 4. Human resources and payroll 5. General ledger and financial reporting

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ERP SYSTEMS
ERP System Functionality

Figure. 6.3 ERP system Functionality3

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ERP SYSTEMS Enterprise Systems Value Chain

Figure. 6.5 Value chain activities and key supporting functions

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ERP SYSTEMS

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SUPPORTING KEY BUSINESS PROCESSES Data capture The collection of the four dimension of any business activity (who, what, where and when) so that the organization can aggregate and summarize data in various forms to answer the questions that a decision maker is asking.

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SUPPORTING KEY BUSINESS PROCESSES

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SUPPORTING KEY BUSINESS PROCESSES

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ERP SYSTEM MODULES

Typical modules in ERP systems include: Sales and distribution module provides the ablility to capture and record customer orders, check the customerss ablility to pay, execute customer orders, ship products to customers and bill customers. Materials management module contains functions related to payment or purchase to pay process. Financial accounting module processes all the transactions in the business. Human resources module contains functions that relate to the recruitment, management and administration of personnel, payroll processing, and personnel training and travel.

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ERP SYSTEM MODULES

Typical modules in ERP systems include: (cont) Controlling and profitability analysis module handels analysis of sales, costs and budgets. These areas are analysed because they are most often the areas where managers ask questions about the performance of the business in order to make decisions to improve performance.

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ERP SYSTEM MODULES Typical modules in ERP systems include: (cont)

These systems extend the capability of ERP systems and include SCM and CRM software for financial and nonfinancial information exchange between organizations. Additional modules : Supply chain management (SCM) covers applications designed for use in purchasing departments by staff for finding the best suppliers and timing the supplies for sourcing direct and indirect materials at minimum cost. Customer relationship management (CRM) allows customer-facing employees in sales, support and marketing to make quick, informed decisions on crossselling and up-selling opportunities to target marketing strategies.
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ERP SYSTEM CONSIDERATIONS Single-source ERP systems: systems provided by a single vendor for an organisation that capture all the organisations business requirements Best-of-breed ERP systems: systems provided by vendors that have the best modules for organisation-specific functional requirements. These modules must be integrated to function and coexist with other selected modules

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ERP SYSTEM CONSIDERATIONS ERP Evaluation Criteria The following criteria are suggested for comparing different ERP vendors: Database technology Functional fit Security Tight integration Configuration Flexibility Customisation Scalability Local support User friendliness Reference sites Implementation time Total cost Database technology
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ERP SYSTEM CONSIDERATIONS

ERP Benefits
ERP systems allow easier global integration by reducing the barriers of currency, exchange rates, language and culture ERP systems eliminate the requirement to update and repair many separate computer systems Benefits can be divided into two groups: Quantifiable benefits Intangible benefits
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Continued to session 25

Thank you

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