Matakuliah
Tahun
: Sistem Informasi Manajemen
: 2008
POKOK BAHASAN
Pertemuan 8
Chapter 2
Information Technologies:
Concepts and Management
Information Technology For Management 6th Edition
Turban, Leidner, McLean, Wetherbe
Lecture Slides by L. Beaubien, Providence College
John Wiley & Sons, Inc.
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ERP
Enterprise Resource Planning (ERP):
•
•
•
An expanded effort to integrate marketing, financial, manufacturing
and human resources in a single information system.
Standardized record-keeping permits information sharing throughout
the organization.
A computer-based system designed to process an organization’s
transactions and facilitate integrated and real-time planning,
production, and customer response.
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Evolution of Information Systems
• Prior to 1960, all systems were paper-based
• Data entry, storage, retrieval were slow, labor-intensive
processes
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Computer Hardware and Software
Development
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The First Business Computers
Computers Smaller and Faster
Moore’s Law
Software Proliferates
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Early Attempts to Share Data
• Client/Server
• Scalability
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•
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Material Requirement Planning
Focus on stock reduction
MRPII
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–
•
ERP – The Evolution
MRP
Integration of logistic processes
Focus on stock reduction, decrease in number of stock-out, and more control
ERP (or MRPII plus)
–
Evolution of MRPII thanks to:
•
•
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–
•
better package coverage: multi-plant, quality, customer service, tracking, etc.
technological development: client/server architecture , RDBMS
Focus on customer services rather than inventories
Pro-active approach looking for the best allocation of financial, production and distribution
resources
eMarkets (Extended-ERP)
–
–
Pro-active resource allocation beyond the company’s boundaries: from enterprise to interenterprise
cross-enterprise process automation
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ERP – The Evolution
Extra-prize Collaboration
i.e.“The Networked Economy”
Degree of Collaboration/ Networking
High
Enterprise Integration
Computer Integrated
Manufacturing
ERP
MRP
1970
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(extended ERP)
MRP II
Islands of
Automation
Low
eMarkets
1980
1990
2000
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Why Implement ERP?
• Business Reasons
• Technological Reasons
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Common Business Reasons for Implementing ERP
poor performance
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high costs
not responsive
to customers
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21
complex processes
20
unable to support
strategies
globalization
inconsistent
business processes
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15
10
12
Technology Reasons for Implementing ERP
42
Y2K
disparate systems
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poor quality of
information
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systems not integrated
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difficulty integrating
acquisitions
obsolete systems
unable to support
growth
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11
6
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Profit
Profitability
3,000
2,500
2,000
1,500
1,000
500
0
2000
2001
2002
2003
2004
2005
Time
You have Two Choices :
Increase in Sales
OR
Reduce Cost
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- Say 30%
- Say by 5-10 %
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Business Requirements
• Businesses exist to make a profit
• Businesses strive to provide goods and services faster
and cheaper than competition
• More efficient ways of accessing and sharing information
will increase customer service and therefore profits
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Industry Demands
• Better products at lower cost.
• Tough competition.
• Need to analyze costs/revenues on a product or
customer basis.
• Flexibility to respond to changing business requirements.
• More informed management decision making.
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Healthy Operation
• Integration of Systems across the Functional Departments in a
Company as well as across the Enterprise as a Whole.
• Better Customer Service.
• Introduction of Latest Technologies as and when the are ready for
the Industry acceptance
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•
•
•
•
•
•
•
•
•
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What
IT
Department
shall
look?
Automatic Identification System
Hardware & Networking
Software DBMS/RDBMS
Communication
ERP
Supply Chain Management
EDI
Intranet
Internet
Etc…
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Typical Problems
• Unable to get accurate, timely information.
• Applications not complete for existing business
practices.
• Modification are time consuming or not feasible.
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Typical IT Stories
My growth
will be OK . No?
Manufacturing
Location 1
Finance
Corporate Office
Sales Group
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Manufacturing
Location 2 20
ERP enables to
• Global integration
• Eliminates updating and repairing separate computer
systems
• Systematic Look into your Systems & procedures.
• Optimizing the processes.
• Discipline across the functions.
• Allows managers to manage, not just monitor
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Benefits of Implementing ERP
• Integrated, real-time, business information and control
system.
• Standardize and improve Processes.
• Improve the level of Systems Integration.
• Improve Information Quality.
Good information → Good Decisions
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ERP Project Cost
• META Group (2000)
– Average cost of ownership is $15 Million
– Typically at a cost of $ 53,320 per user
• Escalle, Cotteleer, and Austin (1999)
– ERP cost can run as high as 2-3% of revenue
• Average Implementation Time
– 1-2 years for Medium Company
– 3-4 years for Big Company
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Questions about ERP
•
•
•
•
•
Is it for every company?
Is the software inflexible?
How much profit should you expect?
How long does it take to see an ROI?
Why do some have more success?
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Summary
• Several factors led to development of ERP:
–
–
–
–
speed and power of hardware increased, cost and size decreased
client/server architecture
sophisticated software development
growth of business size, complexity, and competition
• Purchasing ERP software is expensive, with spectacular payoffs and
challenging implementation
• The future of ERP will focus on:
– managing customer relationships
– improving planning and decision making
– linking operations to the Internet
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