SE CHAPTER
10
ENTERPRI RESOURCE PLANNI NG
AND
COLLABORATI ON SYSTEM S
LEARNING OUTCOMES
1. Compare core enterprise resource planning
components and extended enterprise
resource planning components
2. Explain the business value of integrating
supply chain management, customer
relationship management, and enterprise
resource planning systems
3. Explain how an organization can use the
balanced scorecard to measure ERP
success
ENTERPRISE RESOURCE PLANNING
Enterprise resource planning integrates all
departments and functions throughout an
organization into a single IT system (or
integrated set of IT systems) so that
employees can make enterprisewide decisions
by viewing enterprisewide information on all
business operations
ENTERPRISE RESOURCE PLANNING
Reasons ERP systems are powerful tools
ERP is a logical solution to incompatible
applications
ERP addresses global information sharing and
reporting
ERP avoids the pain and expense of fixing
legacy systems
http://www.microsoft.com/dynamics/ax/product/gia
The Heart of ERP
The organization before ERP
ENTERPRISE RESOURCE
PLANNING
ERP systems collect data from across an
organization and correlates the data
generating an enterprisewide view
The Heart of ERP
ERP bringing the organization together
http://www.onlinenewsheardnow.com/google-unleashes-driverless-car/560/
The Heart of ERP
At the heart of all ERP systems is a database
The Heart of ERP
ERP systems automate business processes
Process - the act of
taking an input (raw
material, product)
through an
established and
usually routine set of
procedures
(process) to convert
it from one form to
another form many
times adding value
The Evolution of ERP
Core and Extended ERP Components
Core ERP component traditional components
included in most ERP systems and they
primarily focus on internal operations
Extended ERP component extra components
that meet the organizational needs not
covered by the core components and
primarily focus on external operations
Core and Extended ERP Components
CORE ERP COMPONENTS
Three most common core ERP components
1. Accounting and finance
2. Production and materials management
3. Human resource
EXTENDED ERP COMPONENTS
Extended ERP components include:
Business intelligence
Customer relationship management
Supply chain management
E-business - components include:
Elogistics
Eprocurement
INTEGRATING SCM, CRM, AND ERP
SCM, CRM, and ERP are the backbone of e-
business
Integration of these applications is the key to
success for many companies
Integration allows the unlocking of information
to make it available to any user, anywhere,
anytime
INTEGRATING SCM, CRM, AND ERP
General audience and purpose of SCM, CRM and
ERP
Integration Tools
Many companies purchase modules from an ERP
vendor, an SCM vendor, and a CRM vendor and
must integrate the different modules together
Middleware
Enterprise application integration (EAI ) middleware
Integration Tools
Data points where SCM, CRM, and ERP integrate
Middleware
MEASURING ERP
SUCCESS
Balanced scorecard enables organizations to clarify their
vision and strategy and translate them into action
How are we doing?
Balanced scorecard views the organization from
four perspectives
Learning and growth
Internal business process
Customer
Financial
Balanced Scorecard
metrics
MEASURING ERP
SUCCESS
Views the organization from 4 perspectives
CHOOSING ERP SOFTWARE
Successful ERP projects share 3 attributes
1. Overall fit
2.
Proper business analysis
3.
Off the rack
Off the rack and tailored to fit
Custom made
Successful companies spend up to 10 percent of the
project budget on a business analysis
Solid implementation plans
A plan is needed to monitor the quality, objectives,
and timelines
Frequently spend over 20% of implementation cost
on training
ERP
Who are the big ERP vendors?
SAP, the German juggernaut
Systeme, Anwendungen, Produkte in der
Datenverarbeitung, or
Systems, Analysis and Products in Data Processing.
Dont
be a sap!
Oracle/PeopleSoft/J. D. Edwards
Microsoft Great Plains, aimed at
smaller companies Called Axapta or
Dynamics AX
SAP
Business One is competing product
24
http://www.sap-tv.com/
08/30/11
25
SAP
Systemanalyse und Programmentwicklung
(SAP) was formed in Mannheim,
Germany in 1972 by five former IBM
systems analysts
SAPs goal was to develop a standard
business software product that could be
configured to meet the needs of a
company
SAPs founders wanted
Data to be available in real time
Users to work on a computer screen, not
with paper
Lofty goals in 1972
26
SAP
Worlds # 3 Software maker
Microsoft #1 and IBM #2
52K worldwide employees
In over 150 countries
2K Service Partners that deliver SAP
89,000 installations
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27
SAP is Well Positioned for Growth
Trusted business partner
for ~92,000 companies
the largest installed base in the
enterprise software sector
Deep vertical expertise
with strategic solutions for more
than 25 industries
Great innovation power
with 15,000+ developers
Largest ecosystem in the industry
system integrators, ISVs, OEMs,
resellers, partners
One of the top brands globally
#31 according to BusinessWeek
SAP
2009 /
SAP understands your industry
35 years of collaboration and expertise
Trading
Industries
Consumer
Industries
Financial
Services
85% of the
Process Manufacturing
Forbes 500
run SAP
Discrete
Manufacturing
Services
Public
Services
SAP's Performance in the Last 10
Years
CAGR total revenues:
51,536
10%
43,861
CAGR operating income*: 15%
39,355
35,873
28,410
24,178
20,975
7,341
28,797
7,413
29,610
32,205
9,402
10,242
11,567
8,513
7,514
7,025
6,265
5,110
2,842
2,735
2,705
2,410
1,688
1,471
1,880
2,086
1,244
796
1999
SAP
2009 /
2000
2001
2002
Revenue
2003
2004
Employees
2005
2006
2007
Operating income*
2008
SAP
Originally designed for sale to companies
with annual sales of $250M and up
SAP R/1 and R/2 were developed to run on
Mainframes only
The R designation stands for Real Time System
SAP R/2 had an installed base of approximately
1600
SAP R/3 was the first version developed to
run in the client server environment
Between 1992 and 1996 there were approximately
5000 R/3 installations completed
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32
SAP ERP
Client-server architecture
USERPCs
w/SAPGUI
Application
Server
Application
Server
USERPCs
w/SAPGUI
Database
Server
Application
Server
Application
Server
SAP Portfolio
SAP Business Suite 7
including SAP ERP 6.0
> 2,500
employees
~ $30 billion
market
SAP Business All-in-One
< 2,500
employees
~ $15 billion
market
100-500
employees
NEW Focus
~ $15 billion
market
< 100
employees
~ $15 billion
market
SAP Business ByDesign
SAP Business One
SAP 2007 / Page 34
BASIC SAP ERP MODULES
FI
Financial
Accounting
QM
PM
PS
Plant
Maint.
Quality
Mgmt.
Workflow
Project
System
PP
SD
MM
Prod.
Planning
Sales &
Distrib.
Materials
Mgmt.
AM
HR
Asset
Mgmt.
Human
Resources
CO
Controlling
35
SAP ERP
FI
Financial
Accounting
QM
Workflow
PM
PS
Quality
Mgmt.
Project
System
Plant
Maint.
PP
SD
MM
Prod.
Planning
Sales &
Distrib.
Materials
Mgmt.
AM
HR
Human
Resources
Asset
Mgmt.
CO
Controlling
SAP can use a
number of
database programs
to actually store
the data.
Oracle
MS SQL
SAP MaxDB
36
SAP History
72/73
79
92/93
2000
37
ERP System Costs
The cost of an ERP system:
Depends on the size and complexity of the
software package, which is a function of the
size of the firm
Includes new hardware required to run the
system
Includes consultant and business analyst fees
Includes the time required for implementation
(disruption of business)
Includes training costs (cost to develop and
deploy training plus employees time away from
their job)
A large company, with over 1,000
employees, can spend from $50 million to
$500 million on a complex implementation
38
ERP Software Benefits
Improved process (fewer FTEs, better
tracking)
Better decision-making
Global integration, including currency
exchange rates
Reduced IT maintenance: single
system is easier to maintain
Provides information so that a company
can be managed, not just monitored
39
SAP
SAP R/3 is based on multi-layered client /server
architecture
The database on R/3 contains all the company data
08/30/11
40
SAP
Some of SAP R/3 code is written in C++
All SAP applications are written in SAPs
proprietary language
Advanced Business Application Programming
(ABAP/4)
08/30/11
41
SAP
SAP R/3 provides its own set of management
tools for monitoring and tuning.
This system is referred to as Computing Center
Management System (CCMS)
CCMS includes tools for
Background job scheduling
Workload distribution
Printing and spooling services
Database administration
Performance monitoring
08/30/11
42
SAP
SAP is organized around business processes
which cut across business functions
SAP contains over 1800 business processes in its
Analyzer
Business Functions
Accounting
HR
IT
Business Processes
Financial Accounting
Order Processing
Customer Service
Financial Reporting
08/30/11
Marketing
And Sales
Manufacturing
43
Configuration
Configuration is the process of making
standard software fit your business.
SAP, as an example, has:
Over 8000 configuration decisions
Data structuring
Sales
divisions, distribution channels
Rewriting Code (Modifications)
Not recommended because of compatibility
problems when updated versions of the software
are installed.
Customization
Writing
code at SAP-specified user exits
Third-party software solutions
2008 by SAP AG. All rights reserved.
44
SAP
The basic R/3 system is divided into multiple
application areas called modules
Sales and Distribution
Materials Management
Financial Accounting
Production Planning
Human Resources
Plant Maintenance
Special industry solutions can also be integrated
08/30/11
45
SAP
Data in the R/3 system is sub-divided into
Master and Transaction data
Master data is the durable information on a
customer like name, address, etc.
Transaction data originates from operational
transactions such as orders, invoices, etc.
All data is stored in tables within a database
where it is available to individual applications
08/30/11
46
R/3 Software
Architecture
Computer Center Management System
(CCMS)
Implementation
Management Guild (CCMS)
System Configuration
- process/server assignment
- job/process priority
- user rights/privileges
Manages
data being
input by users
and
applications
processing
input data
Application Configuration Tables
- 8,000 entries
Allows for use of
special programs
using the ABAP/4
language
Tailors systems to
needs of the
Enterprise
Dispatcher Dialog and batch processes
Application and Queued Processes
- batch processor
User Interface
Dialog Manager
Master Data
Update Processor
Backup/Archive
Processor
08/30/11
Transactions
Archive
Files
Backup
Files
47
SAP
Entering an external document causes the
creation of an internal document
Each document is identified by a unique
document number
Using the unique customer and document
numbers, data can be transferred to other
corresponding modules
This Real-Time processing allows all users to
have the latest up-to-date information
08/30/11
48
SAP
To use SAP you will need to load SAP on your
personal computer or us in the Casey Computer
Center Lab
Access file consumes less than 1GB of space
File(s) for loading are located on Blackboard
In addition to the file to be loaded there is an
Installation and Navigation document and a sheet
with 6 questions to be answered
Question sheet to be turned in on Monday October 25
Loading can take up to 15 minutes
Steps for adding specific file are located in
Installation and Navigation document and this
PowerPoint
Loading SAP
Files for loading SAP on your computer are
found on Blackboard
Key file to use for PCs is the zip file
This file must be placed in C:/Windows
Then unzipped
Once unzipped you will need to install the file
starting with
Follow the directions in the Installation and
Navigation file to complete the installation
Loading SAP
Files for loading on MACs are also loaded on
Blackboard
MACs require 2 files to be loaded.
One file must be loaded prior to loading the
second file
There is also a help file for loading on a MAC
Installing SAP
Installing SAP
Once you have completed installing the file
you should see the SAP icon on your desktop
By double clicking on this icon you should be
taken to the following screen
Installing SAP
Installing SAP
Select the New icon from the menu bar on
the screen
New
Which will bring up the following screen
Installing SAP
Double click on User Specified System to get
the next screen
Enter data
as shown
on the next
screen
Perth SAP ERP 6.04
perth.cob.csuchico.edu
35
PER
When data is complete click
Finish will not be grayed out
SAP
The basic screen after log-in provides options
for various menus and sub-menus which allow
access to the various elements of R3
The menus can be customized to the individual
business
Every process flow is documented and the
diagram supporting the process and on-screen
actions is documented
08/30/11
59
Simulation Screen
08/30/11
60
One Transaction
that is generally
not found in SAP
is Delete
Key transactions
are:
Create
Change
Display
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61
ERP
What are Enterprise Resource Planning
(ERP) large, Systems?
Incredibly extensive software packages
used to manage a firms business processes.
Standard software packages that must be
configured to meet the needs of a company
Database programs with the following
functions:
28,610+ Tables in SAP
Input
Storage/Retrieval
Manipulation
Output
Table Example
63
SAP R/3 Enterprise
FI
Financial
Accounting
QM
PM
PS
Plant
Maint.
Quality
Mgmt.
Workflow
Project
System
PP
SD
MM
Prod.
Planning
Sales &
Distrib.
Materials
Mgmt.
AM
HR
Asset
Mgmt.
Human
Resources
CO
Controlling
2008 by SAP AG. All rights reserved.
64
SAP R/3 Enterprise
FI
Financial
Accounting
QM
Workflow
Project
System
Plant
Maint.
PP
SD
MM
Prod.
Planning
Sales &
Distrib.
Materials
Mgmt.
AM
HR
SAP can use a
number of
database programs
to actually store
the data.
PM
PS
Quality
Mgmt.
Human
Resources
Asset
Mgmt.
CO
Controlling
Oracle
DB2
MSSQL
2008 by SAP AG. All rights reserved.
65
Clients in SAP R/3
What is a client?
A way to separate data in the system
In some ways, a separate database
Also, a table entry
Column (attribute)
Mandt
Client
Row
(Record)
Field
201
201
201
202
202
2008 by SAP AG. All rights reserved.
66
TEAMS, PARTNERSHIPS, AND
ALLIANCES
Organizations create and use teams,
partnerships, and alliances to:
Incorporate new employees and maximize
training opportunities
Undertake new initiatives
Address both major and minor problems
Capitalize on significant opportunities
Incorporate knowledge from internal and
external sources
TEAMS, PARTNERSHIPS, AND
ALLIANCES
Collaboration system supports the work of teams by
facilitating the sharing and flow of information
Must develop SOFT SKILLS
TEAMS, PARTNERSHIPS, AND
ALLIANCES
Organizations form alliances and
partnerships with other
organizations based on their core
competency and needs
Core competency
What are core competencies for ..
Core competency strategy
Partnerships non-strategic for business processes
TEAMS, PARTNERSHIPS, AND
ALLIANCES
Information technology can make a business
partnership easier to establish and manage
The Internet has dramatically
increased the ease and availability
I nformation partnership example
for IT-enabled organizational
Amazon
alliances and partnerships
COLLABORATION SYSTEMS
Collaboration system an
IT-based set of tools
that supports the work
of teams by facilitating
the sharing and flow of
Information
Manufacturing
Collaboration
Boeing Dreamliner
Over 900 contractors
70% of plane outsourced
Companies with as few as 52 employees supplying
parts
Fewer first tier contractors
COLLABORATION SYSTEMS
Two categories of collaboration
1. Unstructured collaboration (information collaboration) includes document exchange, shared whiteboards,
discussion forums, and e-mail
2. Structured collaboration (process collaboration) - involves
shared participation in business processes such as workflow
in which knowledge is hardcoded as rules
1.
Documents, Drawings, Change Notices
COLLABORATION SYSTEMS
Collaborative business functions
What is Knowledge?
Expertise and Skills acquired by a person
through experience and education
Intellectual and knowledge-based assets fall
into two categories
1.
2.
Explicit knowledge consists of anything that can be
documented, archived, and codified, often with the help
of IT
Tacit knowledge - knowledge contained in peoples
heads
KNOWLEDGE MANAGEMENT
SYSTEMS
Knowledge management (KM) involves
capturing, classifying, evaluating,
retrieving, and sharing information assets
in a way that provides context for effective
decisions and actions
Knowledge management system (KMS) supports
the capturing and use of an organizations
know-how
Explicit and Tacit Knowledge
The following are two best practices for
transferring or recreating tacit knowledge
Shadowing less experienced staff observe
more experienced staff to learn how their more
experienced counterparts approach their work
Movie Down Periscope
Joint problem solving a novice and expert work
together on a project
Explicit and Tacit Knowledge
Reasons why organizations launch knowledge
management programs
KM Technologies
Knowledge management systems include:
Knowledge repositories (databases)
Expertise tools
E-learning applications
Blackboard
Discussion and chat technologies
Search and data mining tools
KM and Social Networking
Finding out how information flows through
an organization
Social networking analysis (SNA) a process of
mapping a groups contacts (whether personal or
professional) to identify who knows whom and who
works with whom
Finding Internships
Finding Group Members (ASUG)
Finding Jobs (Sorority/Fraternity former members)
CONTENT MANAGEMENT SYSTEMS
Content management system (CMS) provides
tools to manage the creation, storage,
editing, and publication of information in a
collaborative environment
Training for salespersons
Product Presentations
Electronic capturing, storage, distribution and
accessing of documents
WORKING WIKIS
Wikis - Web-based tools that make it easy for
users to add, remove, and change online
content
Business wikis - collaborative Web pages that
allow users to edit documents, share ideas, or
monitor the status of a project
Blogs
User communication
Agenda Management
WORKFLOW MANAGEMENT
SYSTEMS
Work activities can be performed in
series or in parallel that involves people
and automated computer systems
Workflow defines all the steps or business
r ules, from beginning to end, required for
a business process
Each organization makes thousands of
operational decisions each day to achieve a
strategic goal. Many of these decisions are
distributed throughout or embedded in IT
systems as business rules.
WORKFLOW MANAGEMENT
SYSTEMS
Messaging-based workflow system controls the
flow of information between workers, teams,
partners
Database-based workflow system stores
documents in a central location and
automatically asks the team members to
access the document when it is their turn to
edit the document
COLLABORATION SYSTEMS
Collaboration systems include:
Knowledge management systems
Content management systems
Workflow management systems
Groupware systems
GROUPWARE SYSTEMS
Groupware supports team interactions
Lotus Notes
http://www.youtube.com/watch?v=vnY_9OGT_6s
GROUPWARE SYSTEMS
Videoconferencing
Videoconference - a set of
interactive
telecommunication
technologies that allow two
or more locations to
interact via two-way video
and audio
Impact to other industries?
Web Conferencing
Web conferencing -
blends audio, video, and
document-sharing
technologies to create
virtual meeting rooms
Instant Messaging
E-mail is the dominant form of
collaboration application, but real-time
collaboration tools like instant messaging
are creating a new communication
dynamic
I nstant messaging - type of communications
service that enables someone to create a
kind of private chat room with another
individual to communicate in real-time
over the Internet
How do you use IM?
Instant Messaging
Instant messaging application
The End
OPENING CASE QUESTIONS
Campus ERP
1. How can a college campus achieve
business success through the use of
collaboration tools?
1. How can your college use knowledge
management systems to improve
operations?
1. How can your college use content
management systems to improve
OPENING CASE QUESTIONS
Campus ERP
1. How can a team of college students use a
workflow management system to complete
a group project?
1. If your college wanted to implement a
groupware system, what would be its
primary purpose?
CLOSING CASE ONE
DreamWorks
1. How can companies use Halo to increase
their business efficiency?
1. Explain how a company like PepsiCo can
use Halo to gain a competitive
advantage in its industry
1. How can knowledge management be
increased by using a product such as
Halo?
CLOSING CASE ONE
DreamWorks
1. Why would a company like DreamWorks,
that is not IT focused, be interested in
collaboration technology?
1. What are a few of the security issues
surrounding this type of technology?
CLOSING CASE TWO
Enterprise Content Management at Statoil
1. Why do you think content management is
such a critical part of Statoils strategy?
1. Comment on the utility and importance of
Statoils use of an information portal to
promote enterprisewide content
management?
CLOSING CASE TWO
Enterprise Content Management at Statoil
1. To what extent do you think Statoils
predicament of information overload is
typical for organizations?
1. What lessons learned and insights from
the chapters discussion on collaboration
tools could help promote Statoils
adoption and use of its content
management initiative?
CLOSING CASE THREE
Shell Canada Fuels Productivity with ERP
1. How did ERP help improve business
operations at Shell?
1. How important was training in helping roll out
the system to Shell personnel?
1. How could extended ERP components help
improve business operations at Shell?
CLOSING CASE THREE
Shell Canada Fuels Productivity with ERP
1. What advice would you give
Shell if it decided to choose a
different ERP software solution?
1. How can integrating SCM, CRM,
and ERP help improve business
operations at Shell?
OPENING CASE QUESTIONS
Campus ERP
1. How could core ERP components help
improve business operations at your
college?
1. How could extended ERP components help
improve business operations at your
college?
1. How can integrating SCM, CRM, and ERP
help improve business operations at your
college?
SAP5SystemLandscape
501
FSStudent
201
Config.
502
FSStudent
202
CATTTest
503
FSStudent
203
FSMaster
2008 by SAP AG. All rights reserved.
105
ENTERPRISE RESOURCE
PLANNING
Sample data from a sales database
ENTERPRISE RESOURCE
PLANNING
Sample data from an accounting database
INTEGRATING SCM, CRM, AND ERP
SCM and CRM market overviews
SAP
R/3 programs are general, apply to many
types of firms
R/3 uses the term organizational elements
to describe functions of the company
Elements describe such things as factories,
warehouses, purchasing, sales
Each element has a code which can be sorted
and configured to get connections and data
08/30/11
109
SAP
The modules are also subdivided into
components and sub-components
Modules are functionally self contained units
This self containment allows for extension of
the system in a gradual manner
Several modules are generally used to obtain
cross functional, integrated processing
Modules may be subdivided into precise
subdivisions for specific business/company
requirements
08/30/11
110
Accounting and Finance ERP
Components
Accounting and finance ERP component manages
accounting data and financial processes within
the enterprise with functions such as general
ledger, accounts payable, accounts
receivable, budgeting, and asset management
Production and Materials
Management ERP Components
Production and materials
management ERP
component handles
the various aspects
of production
planning and
execution such as
demand forecasting,
production
scheduling, job cost
accounting, and
quality control
Human Resource ERP Component
Human resource ERP component tracks
employee information including payroll,
benefits, compensation, performance
assessment, and assumes compliance with
the legal requirements of multiple
jurisdictions and tax authorities
SAP
Managing Resources
Companies are dynamic and respond to peaks and
valleys of the business cycle
Companies try to anticipate needs based on past
history and planned future activities
One of the most unique capabilities of R/3 is its
extensive global deployment so that business
practices of many countries are built into the system
This means accounting practices, tax requirements, HR
management practices and manufacturing practices are all
built in, even currency conversion
08/30/11
114
SAP
Users initiate transactions through the SAP
graphical user interface
This identifies transaction codes pulled from
the application modules
08/30/11
115
SAP
Two new products aimed at smaller markets
Business One for companies with sales of $5M
up
Easily installed by business owner
mySap All-in-One for companies with sales of
$100M up
08/30/11
Products currently available in 14 industry segments
116
SAP
SAPs flagship software is mySAP.com
60% of functionality made up of
Customer Relationship Management
Supply Chain Management
Product Lifecycle Management
Majority of components from R/3 are migrating
to mySAP
Functionality in R/3 is replaced with updated
technology but old capabilities are not taken
away from customers.
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SAP NetWeaver
Demo
08/30/11
118
Three-tier Client/Server Architecture
USERPCs
Application
Server
Application
Server
USERPCs
Database
Server
Application
Server
2008 by SAP AG. All rights reserved.
Application
Server
119
TwoTierClient/ServerSystem
(TrainingConfiguration)
Databaseand
Application
Server
UserPCs
2008 by SAP AG. All rights reserved.
120
Data Types
Master Data
Data that is relatively stable
Materials, Customers, Vendors
Transaction Data
Data that is relatively temporary
Stored at various stages of a business process
Customer orders, purchase orders, production
orders, customer payments
2008 by SAP AG. All rights reserved.
121
Transaction Data
Transactions flow down
the river of time
122