ERP an Overview.ppt1

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ERP and E-Business- AnOverview

Based on the book Enterprise Resource

Planning Solutions and ManagementbyFlona Fui-Hoon Nah, Idea Group

Publishing 2001


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Contents

1. What is ERP?

2. The Evolution of ERP SystemsA Historical Perspective

3. ERP System Architecture

4. Extended ERP

5. Towards an ERP Life-Cycle Costs Model

6. Advantages and Disadvantages of ERP Systems

7. ERP From E-BUSINESS Perspective

8. Are You Ready for ERP?9. E-BUSINESS Pushes ERP To The Network Edge

10. Common ERP? E-Business Platform (Oracle & SAP)

11. Web Services and XML


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Topic 1: What Is ERP?

ERP = Enterprise Resource Planning

A software solution that addresses enterprise needs

taking the process view of an organization to meetthe organization goals.

-- It integrates all the departments and functions across

a company into a single computer system that canserve all those different departments particularneeds.


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What Is ERP?

An ERP system is analogous to the internal technological hub

of a company.it can be thought of as a company's central repository. The five

major processes in a typical ERP system are: finance, logistics,manufacturing, human resources and sales/marketing (refer toFigure next slide).

The focus of ERP systems is on the efficiency and effectivenessof the internal process

. It offers a way to streamline and align business processes,increase operational efficiencies and bring order out of chaos.
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ERP Systems Concept
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What Is ERP?

ERP Combines various department systems into a single,integrated software program that runs off a single database sothat the various departments can more easily share

information and communicate with each other. The best part of ERP is the way in which it improves the order

fulfillment process that is taking the customer order andprocess it into an invoice and revenue.

It doesnt handle the front-end that is handled by CRM(Customer Relationship Management).


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What Is ERP?

When a customer service representative enters a customer order intoan ERP system, he has all the information necessary to complete theorder such as customers credit rating and order history from thefinance module, the companys inventory levels from the warehouse

module and the shipping docks trucking schedule from the logisticsmodule.

How its being done: It integrates the financial information andcustomer order information . It does so by integrating the following:

DatabaseApplication

Interfaces

Tools


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What Is ERP?

It standardizes and speeds up the manufacturing process. Thissaves time, increases productivity and reduces head count.

It reduces the inventory. Due to the information availableabout all the orders it helps to maintain the right level of stockand smoothes the manufacturing process.


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Topic 2: The Evolution of ERPSystemsA Historical Perspective

The phenomenal growth of computing power and the Internet isbringing ever more challenges for the ERP vendors and thecustomers to redesign ERP products breaking the barrier ofproprietorship and customization, and embracing the collaborative

business over the Intranet, Extranet and the Internet in a seamlessmanner. The vendors already promise many "add-on" modules, someof which are already in the market as a sign of acceptance of thesechallenges by the ERP vendors. It is a never-ending process ofreengineering and development bringing new products andsolutions to the ERP market. ERP vendors and customers have

recognized the need for packages that follow open architecture,provide interchangeable modules and allow easy customization anduser interfacing.


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ERP Applications Take Hold

The 1990s saw, for the first time, many companiesembrace product offerings from companies such asSAP AG, Peoplesoft, and Oracle that provided (or at

least intended to provide) a single integratedpackage framework upon which most or all of acompany's core business processes could beimplemented, deployed, and used throughout the

enterprise.


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ERP Applications Take Hold

For example, supply chain automation applications beganappearing, and business-to-business (B2B)

e-commerce applications such as electronic procurement (e-

procurement) and buyer-to-seller electronic marketplaces aredirectly descended from these first-generation cross-enterprisesupply chain applications, which in turn owe a large portionof their growth to the tenacity of ERP proponents whopersevered throughout the decade and made successful large-scale, complex distributed computing systems a reality.


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Topic 3: ERP Systems Architecture

An ERP system is required to have the following characteristics:

Modular design comprising many distinct business modules such asfinancial, manufacturing, accounting, distribution etc.

Use centralized common database management system (DBMS) The modules are integrated and provide seamless dataflow among

the modules increasing operational transparency through standardinterfaces.

They are generally complex systems involving high cost

They are flexible and offer best business practices

The modules work in real-time with on-line and batch processingcapabilities


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Topic 4: Extended ERP

The proliferation of the Internet has shown tremendous impact onevery aspect of the IT sector including the ERP systems becoming moreand more Internet-enabled (Lawton, 2000). This environment ofaccessing systems resources from anywhere anytime has helped ERP

vendors extend their legacy ERP systems to integrate with newerexternal business modules such as supply-chain management,customer-relationship management, sales force automation (SFA),advanced planning and scheduling (APS), business intelligence (BI),and e-business capabilities. In fact ERP is becoming E-businessbackbone for organizations doing on-line business transactions overthe Internet. Internet-based solutions are destined to improve customer

satisfaction, increase marketing and sales opportunities, expanddistribution channels, provide more cost-effective billing and paymentmethods.


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Disadvantages of ERP Systems

Feature and complexity

Scalability and globaloutreach

Extended ERP capability

ERP system may have too manyfeatures and modules that theuser needs to consider carefullyand implement the needfulonly.

Look for vendor investment inR&D, long term commitment toproduct and services, considerInternet-enabled systems.

Consider middle-ware "add-on"facilities and extended modulessuch as CRM and SCM.

Disadvantages How to overcome


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Topic 7: ERP From E-BUSINESSPerspective

E-business stands for "electronic business," which involvescommunications and doing business electronically throughthe Internet. E-business is defined as "the use of electronicallyenabled communication networks that allow businessenterprises to transmit and receive information" (Fellensteinand Wood, 2000).


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Metrics You Can Use to Gaugeyour ERP Readiness

Check the hardware configuration details

Analyze the existing process

Fine turn the process to be inline with those of ERD defined

Prototype it and present it Refine the prototype and freeze the specifications


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Topic 10: Common ERP/E-BUSINESSPlatform (ORACLE & SAP)

Today, customers expect more than ever before. To meet theseexpectations, companies need to reach out and bringcustomers closer to their information systems and have themengage in product configuration, selection and Internet self-service (Economist, 1999, p.32). Also, it is essential for thevendors to set up a compatible e-business platform for systemintegration. Some major ERP vendors launched their Web-enabled ERP in the early part of the year 2000 to create the B2Band B2C solutions. Both Oracle and SAP set up Internet portal

(hub) and use eXtensible Markup Language (XML) tomanipulate data from internal ERP and push informationflow across the value chain (refer to Figure 3).
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SAP (SAP, 2000)

Established in Germany in 1972, SAP possesses 33% market shareworldwide. With more than 20,000 employees and an increase inrevenue of 60% per year, SAP is another major ERP provider in theworld. SAP uses the front-office market with a number of new Web-

based applications covering B2B procurement, B2C selling and B2Bsellingall designed to integrate with its market-leading R/3 suite.SAP believes this will be the key to extending its franchise into e-business.

R/3 is a client/server architecture product that uses the "best"enterprise business practices and supports immediate response to

change throughout the organization on a global scale. R/3 currentlycontains modules for more than 1,000 business processes that may beselected from the SAP library and included within installed SAPapplications, tailoring the application solution to the customer.


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SAP Contains the FollowingFunctions

Open business document exchange over the Internet

The SAP Business Connector is based on open Internet

communication standards. It uses the widely availablehypertext transfer protocol (HTTP) to exchange XML-basedbusiness documents over the Internet. XML defines commonbusiness semantics to business documents such as orders,invoices, etc. With XML, the lingua franca of the Internet,business documents exchange across applications and systemsare easily available.


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Topic 11: Web Services and XML

Web services

are units of application logic that provide data and servicesto other applications

represent black box functionality that can be reusedwithout worrying about how the service is implemented

The online store example

Authentication

Personalization

Credit card processing Sales tax calculation

Package tracking from shipping companies

In house catalog connected to an internal inventoryapplication


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Web Services Generic Architecture

Web Service

Listener

Data

DataAcces

s

BusinessLo

gic

BusinessFac

ade

Service Request

Service Response


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ERP an Overview.ppt1