ENTERPRISE-WIDE INFORMATION
SYSTEMS
Chapter 7
SYSTEM CATEGORIES
Enterprise-wide Systems
aka ____________ ____________ are systems that
allow companies to integrate information across
operations on a company-wide basis
____________ Systems (IOS)
Systems that communicate across organizational
____________ whose goal it is to streamline
information flow from one company to another
7-2
ENTERPRISE SYSTEMS – WITHIN THE
ORGANIZATION
Example – Order Process and Information Flow
7-3
INTERORGANIZATIONAL SYSTEMS – ACROSS
ORGANIZATIONS
Example – Order Process and Information Flow
7-4
THE VALUE CHAIN – INTERNALLY FOCUSED
7-5
Used to identify the flow of information through a set of business activities. It identifies
two types of activities: primary and support.
THE VALUE CHAIN - ____________ ACTIVITIES
Functional areas within an organization that process inputs and produce outputs.
These activities may vary widely based on the unique requirements of a
company’s industry
7-6
Primary Activities include:
• ____________ Logistics – receiving and stocking raw
•
•
•
•
materials, parts, products
Operations/Manufacturing – processing orders and raw
materials into finished product
____________ Logistics – distribution of the finished
product to customers
Marketing and Sales – creating demand for the product (presales activities)
____________ Service – providing support for the product
or customer (post-sales activities)
THE VALUE CHAIN - ____________ ACTIVITIES
Support activities are business activities that enable Primary Activities. These
activities can be unique by industry but are generally more typical across industries.
7-7
Support Activities include:
• ____________ – hardware and software that must be
implemented to support applications for primary activities
• Human Resources – employee management activities: hiring,
interview scheduling, and benefits management
• Technology Development – the design and development of
applications that support the organization
• ____________ – purchase of goods or services that are required
as inputs to primary activities
A VALUE SYSTEM – EXTERNALLY FOCUSED
7-8
• A connection of value chains across organizations
• Allows the ____________ ____________ between
organizations to support business activities
• ____________ flow is information received from another
organization
• ____________ Flow is information sent to another
organization
OPTIONS FOR ENTERPRISE SYSTEMS –
PACKAGED VS. CUSTOM
Packaged Key Characteristics
• Best Use –
• Cost Effectiveness –
• Organizational Fit –
• Maintenance –
7-9
____________ Applications
“____________ ____________” computer applications purchased from a vendor or the
company that created the system (i.e. Quicken or MS Money for financial applications)
OPTIONS FOR ENTERPRISE SYSTEMS –
PACKAGED VS. CUSTOM
7-10
____________ Applications
“____________” computer applications created by the organization or a third party (e.g. a
consulting organization)
Custom Key Characteristics
• Best Use –
• Cost Effectiveness –
• Organizational Fit –
• Maintenance –
ENTERPRISE SYSTEM EVOLUTION
System Types
System Evolution
____________
Systems
Integrated Systems
____________)
Integrated Systems
(____________
7-11
ENTERPRISE SYSTEMS - ____________ SYSTEM
EXAMPLE
____________ Legacy (stand-alone) Systems – information is not readily shared
between systems (i.e. Inbound Logistics inventory information shared with
Operations)
7-12
ENTERPRISE ____________ PLANNING
Integrated Packages (Enterprise ____________ Planning)
Richly functional systems designed to support many organizational functions (e.g.
accounting and finance)
ERP Key Characteristics
• ____________ focused systems designed to support the internal
operations of the organization
• Highly integrated systems sharing a common data warehouse for
information sharing across functions, using real-time updates
• ____________ fit may be less for individual departments but the
integrated sharing of information usually outweighs these issues
• Usually packaged applications supported by the vendor utilizing a
common user interface
• ____________ is discouraged but these systems have the
flexibility to support other outside applications using the common
data repository and interfaces
7-13
ENTERPRISE SYSTEMS – INTEGRATED SYSTEM
EXAMPLE
In Tech We trust
Integrated Systems – Information is stored in a single data repository and can
be accessed and updated by all functional systems (e.g. Operations)
7-14
CHOOSING AN ERP SYSTEM - ISSUES
ERP Systems are:
• Supplied by ____________ ____________ including
SAP, Baan, Oracle, etc., with each having their own
unique features and structures
• ____________ ____________ that follow a one-size-fitsall strategy which means they may not support all
functions as well as a custom system does
• Similar but are also different. They should be selected
based on factors including control, business
requirements, and ____________ ____________
7-15
CHOOSING AN ERP SYSTEM – SELECTION
FACTORS
____________ refers to where the power lies related to computing and decision
support systems (centralized vs. decentralized) in selecting systems, developing
policies and procedures, etc. (Who will decide?)
____________ ____________ refers to the system’s capabilities and how they
meet organizational needs through the use of software modules or groups of
business functionality (What do you need?)
____________ ____________ refers to the degree to which the software
incorporates industry standard methods for doing business which can
cause a need for significant business processes reengineering (How much
change is required?)
7-16
ERP CAPABILITIES – SAP EXAMPLE
7-17
ERP AND _____________ PROCESS REENGINEERING
Hammer and Champy, (“Reenginerring the Corporation”)
“The radical redesign of an organization was sometimes necessary in order to
lower costs and increase quality and information technology was the key enabler
for that radical change.”
7-18
_____________ Process Reengineering
A systematic, structured improvement approach by all or part of an
organization whereby people critically examine, rethink, and redesign business
processes in order to achieve dramatic improvements in one or more performance
measures (e.g. quality, cycle time, cost)
EXAMPLE OF BPR
Elle Mae Mortgage
BUSINESS PROCESS REENGINEERING
• _____________ _____________ for the organization that specifies business
objectives (e.g. reduced costs, shorter time to market, improved quality, etc.)
• _____________ _____________ processes that are to be redesigned
• _____________ _____________ existing processes as a baseline for future
improvements
• Identify ways that information technology can be used to improve processes
• Design and implement a prototype of the new process(es)
7-20
Steps in Business Process Reengineering
BPR TODAY – OBSERVATIONS AND
RESEARCH
Large bodies of _____________ are available on the role of ERP and BPR
implementations. Some of this research has come to the following conclusions:
• Reengineering issues are as important as technical
implementation issues
• choose between making the ERP system fit the organization
or the organization fit the ERP system
• For an ERP system to help transform the organization and
gain new competitive capabilities, a full organizational and
operational change is required
• first transform the organization and then implement the ERP
system
7-21
ENTERPRISE SYSTEMS – INTEGRATED
(INTERORGANIZATIONAL)
_____________ _____________
Richly functional systems designed to support externally focused
functions
_____________ – Supply Chain Management
_____________ – Customer Relationship Management)
7-22
CUSTOMER RELATIONSHIP MANAGEMENT
_____________
Applications that help organizations attract new business and attract and encourage
repeat business
_____________ There are two primary functions in CRM systems:
• Sales – tools designed to assist in presales activities such as marketing and
prospecting (e.g. Sales Force Automation)
• Service – tools that help with the post-sales aspects of the business (e.g. call center
technology, analytics)
_____________ There are two primary sources of CRM systems:
• CRM Software Vendors – Siebel, FirePond, Onyx, E.Piphany
• ERP Vendors – SAP, Baan, Oracle, etc.
7-23
SALES SUPPORT – SALES FORCE
AUTOMATION (SFA)
Sales Force Automation provides salespeople and sales
managers with computerized support tools to assist in daily
routines
7-24
SUPPLY CHAIN MANAGEMENT
_____________
Applications that accelerate product development and reduce cost associated
with procuring raw materials, components, and services from its suppliers
• Supply Chain – the suppliers that an organization purchases from
directly
• Supply Network – the suppliers that an organization purchases from
directly and its suppliers
_____________
There are two primary sources of SCM systems. These systems
are built to tightly integrate with ERP systems
• SCM Software Vendors – Agile, Ariba, I2, Manugistics,
Commerce One, etc.
• ERP Vendors – SAP, Baan, Oracle, etc
7-25
SCM – EXAMPLE OF A SUPPLY NETWORK
7-26
Amazon.com
SCM APPLICATION FUNCTIONS
7-27
SCM APPLICATION FUNCTIONS 2ND HALF
7-28
SUPPLY CHAIN MANAGEMENT BENEFITS
Supply Chain Management _____________ can help
organizations to gain competitive advantage and provide
substantial payback in several ways by:
• Streamlining _____________ and increasing
_____________ productivity (i.e. efficiently managing
business travel, time, and expenses by collaborating with
suppliers in real time)
• Accelerating _____________ _____________ (i.e. enabled
by the ability of organizations to swiftly react to market
conditions)
• Streamlining _____________ and creating _____________
across the supply network (i.e., supporting contract
negotiation and measuring effectiveness of those agreements)
7-29
RECOMMENDATIONS FOR ENTERPRISE SYSTEM
SUCCESS
google
_____________ _____________ _____________
The highest level support is required to obtain resources and make and support difficult
reengineering decisions
_____________ _____________ _____________ _____________
Implementation success is enabled by deep application experience and access to
supporting tools and methods
Thoroughly Train Users
Training in organization, business process, and application functions is critical to
success and must be reinforced
Take a _____________ Approach to Implementations
Enterprise systems span the entire organization and as such require input and
participation from all functions
7-30