Overview and Implementing SAP Software in Organizations ...

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© Prof. Dr. H. KrcmarERP developmentCharacteristics of Enterprise SoftwareCriticality20042000sSOAExtended ERP or ERP IIhighInfrastructureSoftwareBusinessSoftware1990sEnterprise Resource Planning (ERP)1980sManufacturing Resources Planning (MRPII)1970s1960sMaterial Requirements Planning (MRP)Inventory Control PackageslowOfficeSoftwareSource: Extend version of Rashid et al. 2000© SAP AGlowhighAdaptability© Prof. Dr. H. KrcmarA Variety of Enterprise ApplicationsAnatomy of an Enterprise System (ERP I)• Customer RelationshipManagement• Enterprise Resource Planning• Supply Chain Management• E-Procurement & E-Markets• Data Warehousing and Analytics• Portals and KnowledgeManagementCallCenterERPTradingTechnicalsystemsDocument MgmtMarketAnalysisPLMSCMe-SalesE-Procurement© SAP AGSales forceCustomers and customerservice repsSource: Davenport, 1998Sales anddeliveryapplicationsServiceapplicationsManagers andStakeholdersReportingapplicationsCentraldatabaseHumanresourcemanagementApplicationsEmployeesFinancialapplicationsManufacturing Back-officeapplications Administratorsand workersInvetoryand supplyapplicationsSuppliers© Prof. Dr. H. Krcmar© Prof. Dr. H. KrcmarExtended ERPERP – Business View• Service oriented architecture• Integration of Middleware functionality• Support of more then one central DB• ERP II-System looks more like a open toolset rather than aclosed solution• The integration of all computing within anorganization such that:• all major business processes areencompassed and standardized and• all data is usable by all functionalareas of the business• Enterprise Resource Planning = ERP• Integrate many business functionsinto one seamless application• Usually are applications systemsthat run on top of a RDBMS• Replace 100s of legacy systems inorganizations who use an ERPSource: CSU Chico© Prof. Dr. H. Krcmar© Prof. Dr. H. Krcmar
© Prof. Dr. H. KrcmarERP – Technical ViewERP Suites• What are Enterprise Resource Planning (ERP) Systems?• Incredibly large, extensive software packages used to manage afirm’s business processes.• Standard software packages that must be configured to meet theneeds of a company• Database programs with the following functions:- Input- Storage/Retrieval28,610+ Tables in SAP- Manipulation- Output• Core Applications• Financials• Human Resources (HR)• Manufacturing• Project Management• Extended ERP• Business Intelligence• Customer Relationship Management (CRM)• Sales Force Automation (SFA)• Supply Chain Management (SCM)• E-Logistics• E-Procurement• Product Life-cycle Management (PLM)• Internet Transformation for ERP• Portals• Exchanges – B2B• Mobile Access© Prof. Dr. H. KrcmarERP functions: examplesWhat is Enterprise Resource Planning ?FinancialsAccounts payableAsset managementAccounts receivablebudgetingManufacturingProduction scheduling Quality controlShop floor executiongeneral ledgerDemand forecastingBill of materialsShop flow management Job cost accountingProject ManagementPlanning schedulesHRTracking project costEmployee informationContracts, resourcesDecision SupportExecutive ISSales &MarketingManufacturingSource: based on Mertens 2001, Abb. 1.1/3 S.5HRAccounting &FinanceStrategic InformationProcurementOne Integrated Information SystemManagerial InformationTransactionInformation© Prof. Dr. H. Krcmar© Prof. Dr. H. KrcmarAdvantages of ERP systemsDisadvantages of ERP systemsWhat benefitReliable information accessAvoid data and operationsredundancyDelivery and cycle timereductionCost reductionEasy adaptabilityImproved scalabilityImproved maintenanceGlobal outreachE-Commerce, e-businessSource: Rashid et al. 2000HowCommon DBMS, consistent and accurate data, improved reports.Modules access same data from the central database, avoid multipledata input and update operations.Minimizes retrieving and reporting delaysTime savings, improved control by enterprise-wide analysis oforganizational decisions.Changes in business processes easy to adapt and restructureStructured and modular design with “add-ons”Vendor-supported long-term contract as part of the system procurementExtended modules such as CRM and SCMInternet commerce, collaborative cultureDisadvantagesTime-consumingExpensiveConformity of the modulesVendor dependenceFeatures and complexityScalability and global outreachExtended ERP capabilitySource: Rashid et al. 2000How to overcomeMinimize sensitive issues, internal politics and raise generalconsensusCost may vary from thousands of dollars to millions. Businessprocess reengineering cost may be extremely high.The architecture and components of the selected system shouldconform to the business processes, culture and strategic goals ofthe organization.Single vendor vs. multi-vendor consideration, options for “best ofbreeds”, long-term committed support.ERP systems may have to many features and modules so the userneeds to consider carefully and implement the needful only.Look for vendor investment in R&D, long-term commitment toproduct and services, consider Internet enabled systems.Consider middle-ware “add-on” facilities and extend modules suchas CRM and SCM.© Prof. Dr. H. Krcmar© Prof. Dr. H. Krcmar
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