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BUSINESS PLUG-IN B10

Enterprise Resource Management

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LEARNING OUTCOMES

1. Compare core enterprise resource planning components and extended enterprise resource planning components

2. Describe the three primary components found in core enterprise resource planning

3. Describe the four primary components found in extended enterprise resource planning systems

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LEARNING OUTCOMES

4. Explain the benefits and risks associated with enterprise resource planning systems

5. Assess the future of enterprise resource planning systems

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INTRODUCTION

• 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

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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

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Core and Extended ERP Components

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CORE ERP COMPONENTS

• Three most common core ERP components

1. Accounting and finance

2. Production and materials management

3. Human resource

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CORE ERP COMPONENTS

• Accounting and finance component – manages accounting data and financial processes within the enterprise with functions such as general ledger, accounts payable, accounts receivable, budgeting, and asset management

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CORE ERP COMPONENTS

• Production and materials management component – handles the various aspects of production planning and execution such as demand forecasting, production scheduling, job cost accounting, and quality control

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CORE ERP COMPONENTS

• Human resource component – tracks employee information including payroll, benefits, compensation, performance assessment, and assumes compliance with the legal requirements of multiple jurisdictions and tax authorities

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Extended ERP Components

• Extended ERP components include:– Business intelligence– Customer relationship management– Supply chain management– Ebusiness

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Extended ERP Components

• Ebusiness components include elogistics and eprocurement – Elogistics – manages the transportation and

storage of goods– Eprocurement – the business-to-business

(B2B) purchase and sale of supplies and services over the Internet

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ERP Benefits and Risks (Costs)

• Common ERP benefits1. Integrate financial information

2. Integrate customer order information

3. Standardize and speed up manufacturing processes

4. Reduce inventory

5. Standardize human resource information

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ERP Benefits and Risks (Costs)

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The Future of ERP

• Lines between SCM, CRM, and ERP will continue to blur– Internet – continue to help organizations

integrate data and process across functional departments

– Interface – customizable employee browsers – Wireless technology – support a mobile

workforce

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CLOSING CASE ONEPepsiAmericas’ Enterprises

• PepsiAmericas generates $2.97 billion in revenues yearly

• The company implemented PeopleSoft’s ERP solution to provide complete integration between PepsiAmericas’ front-office and back-office systems

• PepsiAmericas also implemented PeopleSoft’s supply chain management component to automate its inventory

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CLOSING CASE ONE QUESTIONS

1. How have core ERP components helped PepsiAmericas improve its business?

2. How have extended ERP components helped PepsiAmericas improve its business?

3. Explain how future ERP systems will help PepsiAmericas increase revenues

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CLOSING CASE ONE QUESTIONS

4. Assess the impact on PepsiAmericas’ business if it failed to implement the CRM component of PeopleSoft’s ERP system

5. Review the different PeopleSoft components in Figure B10.6. Which component would you recommend PepsiAmericas implement if it decides to purchase an additional PeopleSoft component?

6. Compare PepsiAmericas experience with other ERP cases you can find in most business articles.

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CLOSING CASE TWOCampus ERP

• ERP implementations are difficult, even in very top-down corporate environments

• Getting them to work in colleges, which are essentially a conglomeration of decentralized fiefdoms, has been nearly impossible

• Nonprofit organizations generally lack the talent and financial resources to create and manage a robust enterprise system

B10-20

CLOSING CASE TWO QUESTIONS

1. How could core ERP components help improve business operations at your college?

2. How could extended ERP components help improve business operations at your college?

3. How can integrating SCM, CRM, and ERP help improve business operations at your college?

4. Review the different components in Figure B10.6. Which component would you recommend your college implement if it decided to purchase three components?