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

Primary
PrimaryActivities
Activitiesinclude:
include:

____________
____________Logistics
Logisticsreceiving
receivingand
andstocking
stockingraw
raw

materials,
materials,parts,
parts,products
products
Operations/Manufacturing
Operations/Manufacturingprocessing
processingorders
ordersand
andraw
raw
materials
materialsinto
intofinished
finishedproduct
product
____________
____________Logistics
Logisticsdistribution
distributionof
ofthe
thefinished
finished
product
productto
tocustomers
customers
Marketing
Marketingand
andSales
Salescreating
creatingdemand
demandfor
forthe
theproduct
product(pre(presales
salesactivities)
activities)
____________
____________Service
Serviceproviding
providingsupport
supportfor
forthe
theproduct
product
or
orcustomer
customer(post-sales
(post-salesactivities)
activities)

7-6

Functional
Functionalareas
areaswithin
withinan
anorganization
organizationthat
thatprocess
processinputs
inputsand
andproduce
produceoutputs.
outputs.
These
Theseactivities
activitiesmay
mayvary
varywidely
widelybased
basedon
onthe
theunique
uniquerequirements
requirementsof
ofaa
companys
companysindustry
industry

THE VALUE CHAIN - ____________ ACTIVITIES

Support
Supportactivities
activitiesare
arebusiness
businessactivities
activitiesthat
thatenable
enablePrimary
PrimaryActivities.
Activities.These
These
activities
activitiescan
canbe
beunique
uniqueby
byindustry
industrybut
butare
aregenerally
generallymore
moretypical
typicalacross
acrossindustries.
industries.
7-7

Support
SupportActivities
Activitiesinclude:
include:

____________
____________hardware
hardwareand
andsoftware
softwarethat
thatmust
mustbe
be

implemented
implementedto
tosupport
supportapplications
applicationsfor
forprimary
primaryactivities
activities
Human
HumanResources
Resourcesemployee
employeemanagement
managementactivities:
activities:hiring,
hiring,
interview
interviewscheduling,
scheduling,and
andbenefits
benefitsmanagement
management
Technology
TechnologyDevelopment
Developmentthe
thedesign
designand
anddevelopment
developmentof
of
applications
applicationsthat
thatsupport
supportthe
theorganization
organization
____________
____________purchase
purchaseof
ofgoods
goodsor
orservices
servicesthat
thatare
arerequired
required
as
asinputs
inputsto
toprimary
primaryactivities
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
7-9

____________
____________Applications
Applications
____________
________________________
____________computer
computerapplications
applicationspurchased
purchasedfrom
fromaavendor
vendorororthe
the
company
that
created
the
system
(i.e.
Quicken
or
MS
Money
for
financial
applications)
company that created the system (i.e. Quicken or MS Money for financial applications)

Packaged
PackagedKey
KeyCharacteristics
Characteristics
Best
BestUse
Use
Cost
CostEffectiveness
Effectiveness
Organizational
OrganizationalFit
Fit
Maintenance
Maintenance

OPTIONS FOR ENTERPRISE SYSTEMS

PACKAGED VS. CUSTOM
7-10

____________
____________ Applications
Applications
____________
____________ computer
computer applications
applications created
created by
by the
the organization
organization or
or aa third
third party
party (e.g.
(e.g. aa
consulting
consulting organization)
organization)

Custom
CustomKey
KeyCharacteristics
Characteristics
Best
BestUse
Use
Cost
CostEffectiveness
Effectiveness
Organizational
OrganizationalFit
Fit
Maintenance
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
IntegratedPackages
Packages(Enterprise
(Enterprise____________
____________Planning)
Planning)
Richly
functional
systems
designed
to
support
many
Richly functional systems designed to support manyorganizational
organizationalfunctions
functions(e.g.
(e.g.
accounting
and
finance)
accounting and finance)
ERP
ERPKey
KeyCharacteristics
Characteristics

____________
____________focused
focusedsystems
systemsdesigned
designedto
tosupport
supportthe
theinternal
internal

operations
operationsof
ofthe
theorganization
organization
Highly
Highlyintegrated
integratedsystems
systemssharing
sharingaacommon
commondata
datawarehouse
warehousefor
for
information
informationsharing
sharingacross
acrossfunctions,
functions,using
usingreal-time
real-timeupdates
updates
____________
____________fit
fitmay
maybe
beless
lessfor
forindividual
individualdepartments
departmentsbut
butthe
the
integrated
integratedsharing
sharingof
ofinformation
informationusually
usuallyoutweighs
outweighsthese
theseissues
issues
Usually
Usuallypackaged
packagedapplications
applicationssupported
supportedby
bythe
thevendor
vendorutilizing
utilizingaa
common
commonuser
userinterface
interface
____________
____________isisdiscouraged
discouragedbut
butthese
thesesystems
systemshave
havethe
the
flexibility
flexibilityto
tosupport
supportother
otheroutside
outsideapplications
applicationsusing
usingthe
thecommon
common
data
datarepository
repositoryand
andinterfaces
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
ERPSystems
Systemsare:
are:
Supplied
Suppliedby
by ____________
________________________
____________including
including
SAP,
SAP,Baan,
Baan,Oracle,
Oracle,etc.,
etc.,with
witheach
eachhaving
havingtheir
theirown
own
unique
uniquefeatures
featuresand
andstructures
structures
____________
________________________
____________that
thatfollow
followaaone-size-fitsone-size-fitsall
allstrategy
strategy which
whichmeans
meansthey
they may
may not
notsupport
supportall
all
functions
functionsas
aswell
wellas
asaacustom
customsystem
systemdoes
does
Similar
Similarbut
butare
arealso
alsodifferent.
different.They
They should
shouldbe
beselected
selected
based
basedon
onfactors
factorsincluding
including control,
control,business
business
requirements,
requirements,and
and____________
________________________
____________
7-15

CHOOSING AN ERP SYSTEM SELECTION

FACTORS
____________
____________refers
referstotowhere
wherethe
thepower
powerlies
liesrelated
relatedtotocomputing
computingand
anddecision
decision
support
supportsystems
systems(centralized
(centralizedvs.
vs.decentralized)
decentralized)ininselecting
selectingsystems,
systems,developing
developing
policies
policiesand
andprocedures,
procedures,etc.
etc.(Who
(Whowill
willdecide?)
decide?)

____________
________________________
____________refers
referstotothe
thesystems
systemscapabilities
capabilitiesand
andhow
howthey
they
meet
meetorganizational
organizationalneeds
needsthrough
throughthe
theuse
useofofsoftware
softwaremodules
modulesororgroups
groupsofof
business
businessfunctionality
functionality(What
(Whatdo
doyou
youneed?)
need?)

____________
________________________
____________refers
referstotothe
thedegree
degreetotowhich
whichthe
thesoftware
software
incorporates
incorporatesindustry
industrystandard
standardmethods
methodsfor
fordoing
doingbusiness
businesswhich
whichcan
can
cause
causeaaneed
needfor
forsignificant
significantbusiness
businessprocesses
processesreengineering
reengineering(How
(Howmuch
much
change
changeisisrequired?)
required?)

7-16

ERP CAPABILITIES SAP EXAMPLE

7-17

ERP AND _____________ PROCESS

REENGINEERING

7-18

_____________
_____________Process
ProcessReengineering
Reengineering
AAsystematic,
systematic,structured
structuredimprovement
improvementapproach
approachby
byall
allororpart
partofofan
an
organization
organizationwhereby
wherebypeople
peoplecritically
criticallyexamine,
examine,rethink,
rethink,and
andredesign
redesignbusiness
business
processes
processesininorder
ordertotoachieve
achievedramatic
dramaticimprovements
improvementsininone
oneorormore
moreperformance
performance
measures
measures(e.g.
(e.g.quality,
quality,cycle
cycletime,
time,cost)
cost)

Hammer
Hammerand
andChampy,
Champy,(Reenginerring
(Reenginerringthe
theCorporation)
Corporation)
The
Theradical
radicalredesign
redesignof
ofan
anorganization
organizationwas
wassometimes
sometimesnecessary
necessaryininorder
ordertoto
lower
lowercosts
costsand
andincrease
increasequality
qualityand
andinformation
informationtechnology
technologywas
wasthe
thekey
keyenabler
enabler
for
forthat
thatradical
radicalchange.
change.

EXAMPLE OF BPR

Elle Mae Mortgage

BUSINESS PROCESS REENGINEERING

_____________
_____________ _____________
_____________ existing
existingprocesses
processesasasaabaseline
baselinefor
forfuture
future
improvements
improvements
Identify
Identifyways
waysthat
thatinformation
informationtechnology
technologycan
canbe
beused
usedtotoimprove
improveprocesses
processes
Design
Designand
andimplement
implementaaprototype
prototypeofofthe
thenew
newprocess(es)
process(es)

7-20

Steps
StepsininBusiness
BusinessProcess
ProcessReengineering
Reengineering
_____________
_____________ _____________
_____________for
forthe
theorganization
organizationthat
thatspecifies
specifiesbusiness
business
objectives
objectives(e.g.
(e.g.reduced
reducedcosts,
costs,shorter
shortertime
timetotomarket,
market,improved
improvedquality,
quality,etc.)
etc.)
_____________
_____________ _____________
_____________ processes
processesthat
thatare
aretotobe
beredesigned
redesigned

BPR TODAY OBSERVATIONS AND

RESEARCH
Large
Largebodies
bodiesof
of_____________
_____________are
areavailable
availableon
onthe
therole
roleof
ofERP
ERPand
andBPR
BPR
implementations.
implementations.Some
Someof
ofthis
thisresearch
researchhas
hascome
cometotothe
thefollowing
followingconclusions:
conclusions:

Reengineering
Reengineeringissues
issuesare
areas
asimportant
importantas
astechnical
technical
implementation
implementationissues
issues

choose
choosebetween
betweenmaking
makingthe
theERP
ERPsystem
systemfit
fitthe
theorganization
organization
or
orthe
theorganization
organizationfit
fitthe
theERP
ERPsystem
system
For
Foran
anERP
ERPsystem
systemto
tohelp
helptransform
transformthe
theorganization
organizationand
and
gain
gainnew
newcompetitive
competitivecapabilities,
capabilities,aafull
fullorganizational
organizationaland
and
operational
operationalchange
changeisisrequired
required
first
firsttransform
transformthe
theorganization
organizationand
andthen
thenimplement
implementthe
theERP
ERP
system
system
7-21

ENTERPRISE SYSTEMS INTEGRATED

(INTERORGANIZATIONAL)
_____________
__________________________
_____________
Richly
Richlyfunctional
functionalsystems
systemsdesigned
designedto
tosupport
supportexternally
externallyfocused
focused
functions
functions
_____________
_____________Supply
SupplyChain
ChainManagement
Management
_____________
_____________Customer
CustomerRelationship
RelationshipManagement)
Management)

7-22

CUSTOMER RELATIONSHIP
MANAGEMENT
_____________
_____________
Applications
Applicationsthat
thathelp
helporganizations
organizationsattract
attractnew
newbusiness
businessand
andattract
attractand
andencourage
encourage
repeat
repeatbusiness
business
_____________
_____________There
Thereare
aretwo
twoprimary
primaryfunctions
functionsininCRM
CRMsystems:
systems:
Sales
Salestools
toolsdesigned
designedtotoassist
assistininpresales
presalesactivities
activitiessuch
suchas
asmarketing
marketingand
and
prospecting
(e.g.
Sales
Force
Automation)
prospecting (e.g. Sales Force Automation)
Service
Servicetools
toolsthat
thathelp
helpwith
withthe
thepost-sales
post-salesaspects
aspectsof
ofthe
thebusiness
business(e.g.
(e.g.call
callcenter
center
technology,
analytics)
technology, analytics)

_____________
_____________There
Thereare
aretwo
twoprimary
primarysources
sourcesofofCRM
CRMsystems:
systems:

CRM
CRMSoftware
SoftwareVendors
VendorsSiebel,
Siebel,FirePond,
FirePond,Onyx,
Onyx,E.Piphany
E.Piphany
ERP
ERPVendors
VendorsSAP,
SAP,Baan,
Baan,Oracle,
Oracle,etc.
etc.
7-23

SALES SUPPORT SALES FORCE

AUTOMATION (SFA)

Sales
SalesForce
ForceAutomation
Automationprovides
providessalespeople
salespeopleand
andsales
sales
managers
managerswith
withcomputerized
computerizedsupport
supporttools
toolsto
toassist
assistin
indaily
daily
routines
routines

7-24

SUPPLY CHAIN MANAGEMENT

_____________
_____________
Applications
Applicationsthat
thataccelerate
accelerateproduct
productdevelopment
developmentand
andreduce
reducecost
costassociated
associated
with
withprocuring
procuringraw
rawmaterials,
materials,components,
components,and
andservices
servicesfrom
fromits
itssuppliers
suppliers
Supply
SupplyChain
Chainthe
thesuppliers
suppliersthat
thatan
anorganization
organizationpurchases
purchasesfrom
from
directly
directly
Supply
SupplyNetwork
Networkthe
thesuppliers
suppliersthat
thatan
anorganization
organizationpurchases
purchasesfrom
from
directly
directlyand
andits
itssuppliers
suppliers

_____________
_____________
There
Thereare
aretwo
twoprimary
primarysources
sourcesof
ofSCM
SCMsystems.
systems. These
Thesesystems
systems
are
arebuilt
builtto
totightly
tightlyintegrate
integratewith
withERP
ERPsystems
systems
SCM
SCMSoftware
SoftwareVendors
VendorsAgile,
Agile,Ariba,
Ariba,I2,
I2,Manugistics,
Manugistics,
Commerce
CommerceOne,
One,etc.
etc.
ERP
ERPVendors
VendorsSAP,
SAP,Baan,
Baan,Oracle,
Oracle,etc
etc
7-25

Amazon.com

SCM EXAMPLE OF A SUPPLY NETWORK

7-26

SCM APPLICATION FUNCTIONS

7-27

SCM APPLICATION FUNCTIONS 2ND HALF

7-28

SUPPLY CHAIN MANAGEMENT

BENEFITS
Supply
SupplyChain
ChainManagement
Management_____________
_____________can
canhelp
help
organizations
organizationsto
togain
gaincompetitive
competitiveadvantage
advantageand
andprovide
provide
substantial
substantialpayback
paybackin
inseveral
severalways
waysby:
by:
Streamlining
Streamlining_____________
_____________and
andincreasing
increasing
_____________
_____________productivity
productivity(i.e.
(i.e.efficiently
efficientlymanaging
managing
business
businesstravel,
travel,time,
time,and
andexpenses
expensesby
bycollaborating
collaboratingwith
with
suppliers
suppliersin
inreal
realtime)
time)
Accelerating
Accelerating_____________
__________________________
_____________(i.e.
(i.e.enabled
enabled
by
bythe
theability
abilityof
oforganizations
organizationsto
toswiftly
swiftlyreact
reactto
tomarket
market
conditions)
conditions)
Streamlining
Streamlining_____________
_____________and
andcreating
creating_____________
_____________
across
acrossthe
thesupply
supplynetwork
network(i.e.,
(i.e.,supporting
supportingcontract
contract
negotiation
negotiationand
andmeasuring
measuringeffectiveness
effectivenessof
ofthose
thoseagreements
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