Enterprise Information
Systems and ERP systems
Jing Shao
What is ERP System
Letter meaning: Enterprise Resource Planning Systems
Resource: All resources in an organization, including:
capital, equipment, material, intelligence, and so on.
What and how to Plan
Definition : ERP systems is a software solution that addresses
the enterprise needs. It takes the process view of an organization to
meet the organizational goals and tightly integrates all functions in
that organization.
Why Enterprise Have to Use ERP Systems
-------Problems in enterprise information system
1. Data exchange blocks;
Software applications built to run on different operating
systems cannot be connected to run together on the same
operating system. We need to re-entry data from one system to
another system in order to exchange information, thus leading to
data inconsistency;
2. Stove-piped operations and stove-piped systems;
Why Enterprise Have to Use ERP Systems
-------Problems in enterprise information system
(continue…)
3. Authorization;
It is not always the cast that the more communication, the
better organizational performance
Q1
Q2
Price and demand curve
Optimistic
Expect
Pessimistic
Q3
4. business process reengineering.
P1
P2
P3
Examine the business process, question the necessity step
by step
Analyze the
Reengineering
Old
purpose
steps
processes
of those processes
Solution
Integrated enterprise information systems
It is a set of communication channels in a
business organization, combined together in such a
way as to form one network by which information is
gathered and disseminated.
======ERP System
Widely
integrated
information
systems
covering all functional areas. It integrates database,
applications, interfaces, tools, and business process
reengineering ( BPR ).
ERP Working Theory
Customers
Departments
Suppliers
Network
(data
exchange)
ERP
system
Server
What ERP Systems Can Offer to an
Enterprise? – Benefits
 ERP creates value through
1. integrating activates across a firm,
2. Implementing best practices for each business
process
3. Standardizing processes within organizations
4. Creating one-source data
5. Providing on-line access to information
---facilitate better organizational planning,
communication, and collaboration.
Advantages and Disadvantages
Factor
System
Integration
Pro
Improved understanding
Con
Less flexibility
across users
Data Integration
Best Practices
Greater accuracy
Harder to make corrections
More efficient methods
Imposition of how people do their
work
Less freedom and creativity
More efficient system
Cost of computing
planned
Changing needs
Under budgeted training expense
Hidden costs of implementation
ERP Modules
Reasons of designing ERP systems in Modules
 1. Obtain specific functionality

2. Cost

3. Implement the system in bits rather
than bring entire massive system online
at one time
Modules
Module
Degree of module used by
companies
Financial and Accounting
91.5%
Materials management
89.2%
Production Planning
88.5%
Order entry
87.7%
Purchasing
86.9%
Financial Control
81.5%
Distribution/logistics
75.4%
Market Trend and Vendors
Market:
1.
60 percent of Fortune 500 companies had adopted
ERP systems before 2000.
2.
The market spending was $13.4Billion in 2003
3.
The predicted market spending is $15.8 Billion in
2008
Vendors:
over fifty vendors, such as SAP, Oracle, Baan, and J.D.
Edwards
Ways to Developing ERP System
Method
Advantages
Disadvantages
Develop in-house
Best fit with organizational
needs
Most difficult to develop,
most expensive, Slowest
In house system with
vendor supplements
Gain commercial advantages
combined with organizational fit
Difficult to develop,
Expensive, slow
Best-of-breed
Theoretically gain best of all
systems
Difficult to link modules,
slow, potentially inefficient
Customized vendor
system
Retain flexibility while keeping
vendor expertise
Slower, usually more
expensive
Selected vendor modules
Less risk, relatively fast, least
expensive
If expand, long run time and
cost higher
Full vendor system
Fast, less expensive, efficient
Inflexible
Application service
provider
Least risk, least cost, fastest,
least subject to vendor change
At the mercy of the provider,
no control, and subject to
price increases
ERP System Selection Risks

The cost, time, and risk of an ERP project depends on
following factors:
1.
Project management ability;
2.
Experience with this type of environment;
3.
Experience with the programming environment;
4.
Experience with the language or system used;
5.
Familiarity with modern programming practices;
6.
Availability of critical equipment, software, and
programming language;
7.
Completeness of project team;
8.
Personnel turnover;
9.
Relative control of project manager over project team.
Questions from Last Discussion
1. How the business processes are modeled in
ERP systems ?
2. How ERP system installed in an organization?
Is it simple replace old separated operation
systems or it can be combined with old systems?
3. How to combine ERP system with business
process?
Measurement of ERP Project
• Intangible factors
increases in market share
improved customer service
better corporation image
employee satisfaction
supply chain integration
ability to support e-business operation
• Hidden outcomes
change how people do their jobs
• The changing nature of information technology
high dynamic technology and long-term project for
implementing ERP
ERP Project Management
 Cost

time
Tool – Critical Path Method

Right system
Critical Success Factors in ERP










1. Clear understating of strategic goals
2. Commitment by top management
3. Excellent implementation project management
4. Great implementation team
5. Successful coping with technical issues
6. Organizational commitment to change
7. Extensive education and training
8. Data accuracy
9. Focused performance measures
10. Multisite issues resolved
Open Source ERP
Reasons of Choosing open source ERP
1. cost
2. Free redistribution
3. Available source code
Available providers
There are about 20 vendors providing open source ERP
systems. For example:
1. Open MFG
2. FISTERRA
3. ERP 5
4. Compiere
Compiere Open Source ERP
Architecture

Compiere is a 100% pure Java
solution based on Oracle database
technology, and it is working on
database independence.

client application component is
written entirely in Java

The application server component
is implemented in Java based on
J2EE technology using the JBoss
server infrastructure.
Functionality
Business processes rather than traditional
departments drive Compiere's design.
Seven Modules:
quote-to-cash, requisition-to-pay, partner relationship management,
supply chain management, performance analysis, web store
Requisition-to-Pay
Partner Relations Management
Supply Chain Management
Performance Analysis
Web Store
Thank You