Enterprise Systems Using MIS 4e Chapter 7. Fox Lake Country Club has a problem Defective business...

Enterprise Systems

Using MIS 4e

Chapter 7

Fox Lake Country Club has a problem

• Defective business processes could result in unhappy customers

• Fox Lake’s business processes needs fixing• Mike Stone (facilities manager) plans

renovation that interferes with scheduled weddings

• Nobody told Anne Foster, the wedding planner

“But Nobody Told Me”

Scenario Video

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 7-2

Q1 How do information systems vary by scope?

Q2 When are information silos a problem?

Q3 How do enterprise information systems eliminate silos?

Q4 How do CRM, ERP, and EAI support enterprise systems?

Q5 What are the elements of an ERP system?

Q6 How do the major ERP vendors compare?

Q7 What are the challenges when implementing new enterprise systems?

Q8 2021?

Study Questions


Q1: How Do Information Systems Vary By Scope?


Data isolated in separated

information systems

Data isolated in separated

information systems

Created over time as personal and

workgroup support applications

implemented

Created over time as personal and

workgroup support applications

implemented As organizations

grow, silos duplicate data and

become serious problems

As organizations grow, silos

duplicate data and become serious

problems

Q2: When Are Information Silos a Problem?


Fox Lake Country Club Departmental Goals


Islands of Automation


What Are Common Departmental Applications?Department Applications

Sales & Marketing

• Lead generation• Lead tracking• Customer management

• Sales forecasting• Product and brand

management

Operations• Order entry• Order management

• Finished-goods inventory mgmt.

Manufacturing• Inventory (raw materials,

goods-in-process)• Planning

• Scheduling• Operations

Customer Service

• Order tracking• Account tracking

• Customer support and training

Human Resources

• Recruiting• Compensation

• Assessment• HR Planning

Accounting

• General ledger• Financial reporting• Cost accounting• Accounts receivable

• Accounts payable• Cash management• Budgeting• Treasure management


Some of the Departments Involved in Patient Discharge


Problems of Silos Created in Isolation


Q3: How Do Enterprise Information Systems Eliminate Silos?

An Enterprise System at Fox Lake


An Enterprise System for Patient Discharge


7-13

Business Process Reengineering

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Enterprise systems enabled the creation of stronger, faster, more effective linkages among value chains.

BPR is difficult, slow, and exceedingly expensive. Systems analysts need to interview key personnel throughout the organization to determine how best to use new technology. Require high-level and expensive skills and considerable time.

Business Process Reengineering (cont’d)


Q4: How Do CRM, ERP, and EAI Support Enterprise Systems?

Help organizations fundamentally rethink how they do work to dramatically improve customer service, cut operational costs, and become world-class competitors.

Complex, in-house developed applications became too costly to build and maintain.


Q4: How Do CRM, ERP, and EAI Support Enterprise Systems? (cont’d)

Inherent processes

• Pre-designed procedures for using software products

• Saved organizations from expensive and time-consuming business process reengineering

• Based on industry best practices


PeopleSoft—payroll and limited capability HRM systems

Siebel—sales lead tracking and management system

SAP—enterprise resource management

Vendors


Purpose: Managing all the interactions with the customer from lead generation to customer service

Phases of customer life cycle

•Marketing•Customer acquisition•Relationship management•Loss/churn

Customer Relationship Management (CRM)


Four Phases of Customer Life Cycle


Major Components of a CRM Application


Suite of applications, database, and set of inherent processes for consolidating business operations into a single, consistent, computing platform.

Enterprise Resource Planning (ERP)


Pre-ERP Information System: Bicycle Manufacturer

Does not include accounting Five non-integrated databases


ERP Information System

All activity processed by ERP application programs and consolidated data stored in centralized ERP

database.Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall 7-23

How does sales department determine that order is large? By dollars? By volume?

Who approves customer credit (and how)?

Who approves production capacity (and how)?

Who approves schedule and terms (and how)?

What actions need to be taken if customer modifies order?How does management obtain oversight on sales activity?

Many other questions must be answered as well.

Some Questions Procedures Need to Answer or Resolve:


Sales Dashboard


Almost no organization develops its own ERP software

Multi-year project involves millions of dollars and hundreds of employees, consultants, and vendor personnel

ERP Projects


Suite of software to integrate existing systems by providing layers of software that connect applications together

Connects system “islands” via new software layer

Enables existing applications to communicate and share data

Provides integrated informationLeverages existing systems—leaving functional applications as is, but providing integration top layerEnables a gradual move to ERP

Enterprise Application Integration (EAI)


EAI Automatically Makes Data Conversions Among Different Systems

Virtual Integrated Database


ERP Application Programs

ERP Databases

ERP Business Process

Procedures

ERP Training and

Consulting

Q5: What Are the Elements of an ERP Solution?

CE12-29Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

ERP

Supply chain (procurement, sales order processing, inventory management, supplier management, and related activities)

Manufacturing (scheduling, capacity planning, quality control, bill of materials, and related activities)

CRM (sales prospecting, customer management, marketing, customer support, call center support)

Human resources (payroll, time and attendance, HR management, commission calculations, benefits administration, and related activities) Accounting (general ledger, accounts receivable, accounts payable, cash management, fixed asset accounting)

ERP Include Applications that Integrate: (www.erpsoftware360.com/erp-101.htm)


Inherent Processes: SAP Ordering Business Process


Inherent Processes: SAP Ordering Business Process (cont’d)


Q6: How Do the Major ERP Vendors Compare?


Epicore

MS Dynamic

s Infor Oracle SAP

Revenue

(2009)

$410M+

$1.3B ~$2B >$2B+ $11.9B

Market Share (2005)

1% 4% 2% 20% 42%

ERP Vendor Market Ranking


ERP Products


Collaborative

Management

Requirements Gaps

Transition

Problems

Employee

Resistance

Q7: What Are the Challenges When Implementing New Enterprise Systems?

•Challenges

•Difficulty

•Expense

• Risk


Four Prime Factors

• No single manager in charge• Committees and steering

groups

Collaborative

Management

• Licensed products never perfect fit

• Features and functions of complex products like CRM or ERP not easy to identify

• Change to adapt to new application, or change application

Requirements Gaps

Challenges


• Careful planning and substantial training

Transition problems • Change requires effort and it

engenders fear• Senior level management needs

to communicate need for change to organization, and must re-iterate

• Key users trained ahead of time to create positive buzz about new system

• Video demonstrations of employees successfully using new system

• Give extra inducements to change

Employee resistanc

e

Challenges (cont’d)


Likely that all new

systems and business

processes will be

developed using SOA principles

Service-oriented architecture (SOA)

Design philosophy in which every activity is modeled as an encapsulated service and exchanges among those services are governed by standards

Q8: 2021?


• A repeatable task that a business needs to perform

• Reserve a tee time (start time) on a golf course

• Reserve facilities for a wedding

• Bill a member’s account• Cancel a wedding event

Service

Q8: 2021 (cont’d)


SOA Account Status Checking


• Places the logic in one place• Makes service

implementations easily adapted to new requirements, technologies, or methodologies

Encapsulation

• Data/messages are exchanged among services using standardized formats and techniques

SOA standards

Q8: 2021 (cont’d)


SOA will open up existing CRM and ERP functionality to new applications

Many CRM and ERP functions will be performed in the cloud, and may be companies will assemble their own, individualized versions of CRM, ERP, and even EAI by repackaging SOA services hosted in the cloudEnterprise products will run as thin-client applications on any computing device and will access data and programs using virtualized servers in the cloud

Q8: 2021 (cont’d)


Management programs introduced

into organizations

• Kick-off meetings• Change management experts

explain programs• HR amends annual review to

include changes• Senior management seems to

forget about programs• Program loses support and new

one is introduced• Employees grow more cynical

with each failed program• Employees want change from

bottom up

Guide: The Flavor-of-the-Month Club


•Software contains inherent processes that integrate hundreds or thousands business processes

•Customized to particular industries

ERP packages

•Saves time identifying needed processes

•Saves money—no software development needed if firm adapts to standard blueprint of ERP package

Benefits

Organizations adapt its processes to standard blueprint

Guide: ERP and the Standard, Standard Blueprints


•If all firms in an industry use same business processes, how can a firm gain competitive advantage?

•How will innovation occur?•Does “commoditized”

standard blueprint prevent sustaining a competitive advantage?

Issues:

Guide: ERP and the Standard, Standard Blueprints


Active Review

Q1 How do information systems vary by scope?

Q2 When are information silos a problem?

Q3 How do enterprise information systems eliminate silos?

Q4 How do CRM, ERP, and EAI support enterprise systems?

Q5 What are the elements of an ERP system?

Q6 How do the major ERP vendors compare?

Q7 What are the challenges when implementing new enterprise systems?

Q8 2021?


Enterprise Systems Using MIS 4e Chapter 7. Fox Lake Country Club has a problem Defective business...

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