MIS Notes Feb 18 th
Agenda
-Supply Chain
-ERP
-Discuss Exam 1
 Core Business Process
 Supply Chain/Operations management
 Human Resources
 Marketing and Sales
 Accounting and Finance
 Not distinct areas, should be interconnected, as they are extremely reliant upon each other- Need efficiency to make well oiled business.
 Example- Sales selling inventory that you don’t have, because operations and Sales don’t communicate.
Similar problems can be found between all four areas
 We want to shift to an interconnected system- where all parts of the firm can work off of a centralized database.
 Order-to-Cash
 Process associated with selling a product/service
 Requires different parts of firm to communicate with each other
 Procure to Pay
 Process associated with procuring goods from external vendors
 Supply Chain
 Beginning of all processes- Resembles a River (Upstream, towards
Source, Downstream is away from source)
 Systems of orgs, people, activities, resources required from moving a services/product from supplier to customer
 Efficient supply chain allows use to reduce waste+++Which increases profit-
 This results in value creation
 This is called the value chain
 Think of firm in abstract- Input  FIRM  Output (value chain changes inputs into more than sum of their parts, IE adds value)
 By Streamlining flow of information, we can make things efficient
 Core Activities and Support Activities

 Core Activities –functional areas that process inputs and produce outputs
 Value Chain Framework
 Inbound Logistics
 Operations and Manufacturing
 Outbound Logistics
 Marketing and Sales
 Customer Service
 All supported through Support activities, IE Admin, HR,
IT
 Externally Focused Applications
 Upstream Info Flow- Info from another company
 Example: Knowing what your supplier has in stock
 Downstream Info Flow- Info sent to another company
 Sharing info with your clients about what you have in stock
 Enterprise System
 Shares info across entire company
 Rise of Enterprise Systems
 Stand Alone Applications- Each department has its own system
 Finance has one, sales has another
 Not designed to communicate with each other
 ERPS Enterprise resources Planning
 Knits together one departments software with another’
 Terribly inefficient
 Legacy Systems
 What was used before-Older tech
 ERP Evolution
 MRP- Material Resource Planning- What to order
 MRPII – Automate the orders
 ERP- Automates everything
 Enterprise System Approach
 Integrated suite of apps that all communicate seamlessly
 Example- Microsoft Office, you can cut something from
MS Word, and it will past into MS Excel
 ERP looks to do the same thing across departments- Finance can talk to sales, etc
 Enterprise Resource Planning
 SAP- most important vendor, ORACLE, Microsoft also, IBM
 Supporting Business Process
 Can be internal or external
 SAP System- Major Modules
 There are main segments that reside on a SAP Server

 Other modules can then be plugged into this, or built off of the main major modules
 Vanilla ERP
 Simple version, the un-customized version
 COTS, Commercial Off The Shelf
 Problem with this is that basic software might not have all the supported processes, or isn’t specific enough
 VERSUS Customized ERP
 Vanilla is always better unless competitive advantage hinges on customization
 SAP builds vanilla ERP based on best practices
 One individual company is unlikely to do this process the best, unless that is where its specific competitive advantage is, in which case settling for a basic, vanilla version will hinder your advantage.
 ALL THIS Goes to explain the importance of Business Alignment
 Enterprise Resource Planning ERP Systems
 Applications that integrate business activities across department boundaries
 Began in 1990s when automation was needed
 Emphasis has since shifted from “resources” and “planning” to
“Enterprise”
 We want to integrate legacy systems- or replace with new system
 GOAL
 To standardize and integrate the processes of the organization to facilitate the org of the firm around the core competency
 Everything that is not of this core competency, the part that differentiates your firm, should be standardized
 Core and Extended Components
 Core components- Support primary internal activities
 Financial, Operations, and HR Management
 Extended Components- Support primary external activates
 Customer Relations and Supply Chain Managements
 ERP Core Components
 Financial Management
 Accounting, financial reporting, performance managements
 Operations management
 Simplify, standardize and automate
 Human Resources Management
 Processes
 Order-To-Cash

 ERP allows us to see all processes of firm in one location
 Procure-To-Pay
 ERP allows us to see where our suppliers and supplies stand
 ERP Installation
 Not Fun to do
 Requires Configuration
 System must be configured to reflect business process and associated business rules
 Lots of decisions on how to configure thousands of database tables to fit the business
 Organizations hire experienced business analysts to help with implementation
 ERP Limitations
 ERP is Static- As you implement, changes in business world continue to happen, but your ERP does not reflect this
 ERP falls short in communicating across organization boundaries
 Don’t do well with managing value systems
 This is where customization comes in
 Formula for Enterprise System Success
 Secure executive leadership
 Get people in charge on your side
 Get help from outside experts
 Consultants with specific training
 Will help implement system faster
 Thoroughly train Users
 Training is often overlooked
 Can prevent dissatisfaction
 Take a multidisciplinary approach to implementations
 Include end iser from all functional areas in the implementations
 Sample people from all the functional areas
 Marketing, Sales, Ops Management
 Initiate evolving ERP architecture
 Preempts the issue that business/market is ever changing
 How do we mitigate user resistance
 People don’t like change
 Two Key Properties
 Perceived usefulness
 Perceived Ease of Use
 Two ways we manipulate these
 Training

 Socialization
 Performance Expectancy
 User expectation
 Tell people why its good for firm, business, them
 All three of these things have a bigger importance when combined
 Effort Expectancy
 User Education
 How much work before? After change?
 Learning Curves
 Users don’t like relearning
 Have them use system in a classroom, instead of on their own
 Keys- make users feel empowered and confident
 Social Influence
 Buy-in from management
 Get people at top to say change is good
 Buy-in from gatekeepers
 The employees with influence above their position
 Buy-in from user base
 Facilitating conditions
 Make it easy to find information
 Increases ease of use
 Make uses feel empowered
 Not impotent
 Project 1
 CRM is major part of ERP
 Xbox model- Microsoft priced xbox lower in order to lock customers into their platform
 Idea is to remove waste
 Exam Number 1
 Study from book
 40 questions
 Multi choice
 Very hard- %60-65pt average
 Study from book
 Scantron
 No Aids