CHAPTER 12 : INTEGRATIING THE ORGANIZATION FROM END TO END- ENTERPRISE RESOURCE PLANNING

CHAPTER 12 : INTEGRATIING THE ORGANIZATION FROM END TO END- ENTERPRISE RESOURCE PLANNING

QUESTION FROM THIS CHAPTER: 

• Describe the role information plays in enterprise resource planning systems
• Identify the primary forces driving the explosive growth of enterprise resource planning systems
• Explain the business value of integrating supply chain management, customer relationship management, and enterprise resource planning systems

ENTERPRISE RESOURCE PLANNING
    

 Enterprise resource planning systems (ERP) serve as the organization’s backbone in providing fundamental decision-making support. In the past, departments made decisions independent of each other.
     ERP systems provide a foundation for collaboration between departments, enabling people in different business areas to communicate. ERP systems have been widely adopted in large organizations to score critical knowledge use to make the decisions that drive performance.
    At heart of all ERP systems is a database, when a user enters or updates information in one module, it is immediately and automatically updated throughout the entire system. 

ERP system automate business process

Describe the role information plays in enterprise resource planning systems:

• The primary purpose of an ERP is to collect, update, and maintain enterprisewide information 
• All of the functional departments access the same information when making decisions and solving problems 

BRINGING THE ORGANIZATION TOGETHER 

In most organizations, information has traditionally been isolated within specific department, whether on an individual database, in a file cabinet, or on an employee’s pc. ERP enables employees across a single, centralized database.

 

DISADVANTAGES BEFORE ERP: 

•  Update issues 
•  Redundancy 
•  Inaccurate information across databases 
•  Different formats of information in the different databases 
•  Inability to access other department information and nit being provided with a 360 degree  view of the organization 
•  Different customer information in different databases 
•  Customer contact from multiple departments with different messages 

DISADVANTAGES BRINGING THE ORGANIZATION TOGETHER: 

• Not as flexible and far more difficult to change
• Might not meet all department needs as well as an individual specific system
• Multiple access levels increases security issue
• Ethical dilemmas from accessing different department information such as payroll

THE EVOLUTION OF ERP 

ERP solutions were develop to deliver automation across multiple units of an organization, to help facilitate the manufacturing process and address issues such as raw material, inventory, order entry distribution.

INTEGRATING SCM, CRM, AND ERP 

SCM, CRM, and ERP are the backbone of ebusiness. Integration of these applications is key to success for many companies. Integration allows the unlocking of information to make it available to any user, anywhere, anytime. 

INTEGRATION TOOLS 

Effectively managing the transformation to an integrated enterprise will be critical to the success of the 21st century organization. The key is the integration of the disparate it applications. An integrated enterprise infuses support areas, such as finance and human resources, with a strong customer orientation.

 Data points where SCM, CRM and ERP integrate

Many companies purchase modules from an ERP vendor, an SCM vendor and a CRM vendor must integrate the different modules together 

• Middleware- several different types of software which sit in the middle of and provide connectivity between two or more software applications
• Enterprise application integration (EAI) middleware- packages together commonly used functionally which reduced the time necessary to develop solutions that integrate applications from multiple vendors

ERP systems must integrate various organization processes and be:

1. Flexible

2. Modular and open

3. Comprehensive

4. Beyond the company

Flexible – must be able to quickly respond to the changing needs of the organization
Modular and open – must have an open system architecture, meaning that any module can be interface, with or detached whenever required without affecting the other modules.
Comprehensive – must be able to support a variety of organizational functions for a wide range of business
Beyond the company – must support external partnerships and collaboration efforts

Identify the primary forces driving the explosive growth of enterprise resource planning systems: 

• ERP is a logical solution to the mess of incompatible applications that had sprung up in most business 
• ERP is addresses the need for global information sharing and reporting 
• ERP is used to avoid the pain and expense of fixing legacy systems 

Explain the business value of integrating supply chain management, customer relationship management, and enterprise resource planning systems:

• Most organizations piecemeal their applications together since no one vendor can respond to every organization’s needs; hence, customers purchase multiple applications from multiple vendors.