Chapter 7

Enterprise Information Systems

Enabling Innovation and Change

InventoryControl

MRP

MRP II

ERP

ERP II

1960 1970 1980 2000

1990

2010

Functional Information Systems(Financial Accounting)

Database Systems

A/R

G/L

A/P

ERP Systems• An integrated systems that allow information to enter at a single point in the process (e.g., at the materials receiving stage of a manufacturing process) and update a single, shared database for all functions that directly or indirectly depend on this information• This integration should take place in real-time, not through interfaces or programs that transfer information to one or more modules only after the information has already been processed and updated in the module through which it entered the system•Once placed into the system, the information should be available in all the necessary forms through which it may be accessed, throughout the system

CentralEnterpriseDatabase

FIFinancial Accounting

PPProduction Planning

HRHuman Resources

MMMaterials

Management

SDSales & Distribution

SMService Management

RMReports Management

QMQuality Management

AAAsset Accounting

COCosting & controlling

PSProject Systems

PMPlants Maintenance

ISIndustry Solutions

CSCountry Specific

Solutions

ERP: Functional View

What does ERP do for an Enterprise?

Work as a transactional Information Systems to - enable enterprise wide shared and integrated database for

i. improved decision makingii. improved MIS reporting

- enable enterprise wide cross functional work flow automation for:

i. improving intra-organizational transactionsii. reducing in business processes lead timesiii. improved inventory and working capital managementiv. improved financial reconciliation

ERP enables improving Business Process Performance

•Automation of business processes• Simplification of business processes• Elimination of non-value adding business processes • Reengineering of business processes

ERP

MRP

MRP II

Extended ERP

ERP Declared “Dead”

Industry X

Industry Class A

Industry Segment

Z

Industry Sector Q

Technology Infrastructure

Functionality Broadens

Functionality Deepens

Increasing External Connectivity

ERP II

Getting to ERP II

Source : Gartner Group

e-Business Scope

At Macro Level, Organizations can be viewed to have following four environments

Buy side Inside Sale side

(Supplier, Service Providerse.g. transporters)

(Customers, Dealers,Distributors)

As you move up beyond “Publish stage”- you need to deepen your Electronic interaction with customers, suppliers & business partners on a 24x7 basis

Marketing side

(Employee) (Customers, R&D Partners)

e-Business Buy Side Inside Sale side Marketing Models

e-Business Scope with examples

Enabler Model

BPCL, BHEL,TELCO, SAIL,TISCO, ICI, MUL,

HLL, M&M,BPCL, HPCL IOC, TATA, BHEL, ONGCReliance, etc.

Samsung, LG, HLL,MUL, HundaiICI, Sony

ICICI, HLL

Creator Model

Dell, Amazon, Fedex, eSteel, eBay, Expedia

Destroyer Model CISCO, Intel, British Petroleum, …

How does e-Procurement function?

E-Procurement

• Reverse Auction - companies are experimenting and tasted success with Reverse Auction using B2B Portals: FreeMarkets, Commerce One, Trade2Gain, 01 Markets, IndiaMarkets, MatexNet etc- reverse auction comes at the end of the procurement cycle and easy to implement - speeds up slow negotiation price process- entry cost low, low risk of exposing internal supply chain processes to the security concern of the Web. - effective in markets which are buyer led and supplier base is fragmented- transparent price setting mechanism- market making / new supplier validation process

CRM ‘Customer Relationship Management is the practice

of identifying, attracting and retaining the best customers to generate profitable revenue growth’

Why CRM ?1. Customer loyalty is the key differentiating factor as other factors like product quality, price, distribution, features, technology etc. are no more unfathomable.2. It costs 10 times as much to bring in a new customer than it is retain one. 3. The need for accurate and timely information to the sales team is really important. With sales representative’s mobility increasing by the day, it is difficult to expect the same person to come in contact with the customer all the time.

… IS infrastructure for e-CRM

PSTN

Contact Center

HostMainframeExtranet

Network

ATMs &KiosksEnterprise

Intranet

BranchOffices

Internet

Home/Office PC

Channel Integration Systems CTI applications Channel integration middleware Contact management software Messaging applications Security services Intelligent agents

Corporate Customers

RemoteAgents