ERP261 - Enterprise Resource Planning Introduction PDF

1 BELGIUM CAMPUS © BELGIUM CAMPUS 2025  IMPORTANT INFORMATION Assignment Summative Summative Test Test Assignment week...

1 BELGIUM CAMPUS © BELGIUM CAMPUS 2025  IMPORTANT INFORMATION Assignment Summative Summative Test Test Assignment week Exam © BELGIUM CAMPUS 2025 TEXTBOOKS We will be using a few textbooks throughout this module. The first textbook is Information Systems: What a Business Student Needs to Know by Efrem Mallach. The link to this book is available on BC Connect. We will refer to this book as Mallach. The second book that will be used is Information Systems, IT Architecture, Data Governance, and Cloud Computing by Efraim Turban, Carol Pollard, and Gregory Wood. This book is on the O’Reilly platform and you can find the link to the O’Reilly playlist on BC Connect. We will refer to this book as Turban et al. © BELGIUM CAMPUS 2024 SYSTEMS SYSTEMS According to the Mallach textbook, a system is a group of components that interact for a purpose. It also states that a system has a boundary. Consider a social media platform. This is a system. What would the components be? What would fall inside or outside the boundary? © BELGIUM CAMPUS 2024 An Information System: Definition A system that processes information is an information system (IS). Mallach (2020) states five components while Turban et al. (2018) name six. Which definition is more suitable? Why? Do you agree that data is the heart of an IS? Provide examples of the components in the contexts of a hospital, a public school, a fast-food restaurant, and a clothing retailer. NB: Ensure you study the explanations and diagrams in both textbooks. © BELGIUM CAMPUS 2025 COMPONENT Consider a system that processes orders. A company such as Takealot or Amazon has a well-developed and efficient order processing system. Identify the hardware, software, procedures, people, and data. © BELGIUM CAMPUS 2024 SYSTEMS SYSTEMS A system takes inputs, processes them, and then produces an output. A student would be input, classes and assessments would be processes, and graduates would be the output. An important part of any system is feedback. In the diagram you can see the feedback loop where output becomes input. For example, if fewer students graduate, that becomes input to the system which will lead to processes being adjusted. © BELGIUM CAMPUS 2024 OPEN CLOSED SYSTEMS What kind of interactions does an aquarium have? If you have your own tropical fish tank, how does the external environment affect the system (the aquarium ecosystem)? Most systems are open systems. The closest example to a closed system would be a terrarium. Would a spacecraft in deep space be a closed system? © BELGIUM CAMPUS 2024 This would be an open system. The ecosystem The output of the system (dying animals) become interacts with sunlight and weather patterns and inputs for the system (nutrients). The feedback loop adapts accordingly. There is also a cycle at work stays within the system and is therefore known as here. If an animal dies, they become nutrients for internal feedback. plants. This is known as internal feedback. © BELGIUM CAMPUS 2024 A new species is introduced to curb the The output of the system (the reduction in rabbits) rampant growth of the rabbit population. has now become an input to the system. The rabbit However, this new species wipes out the population growth (output) leads to a new species entire rabbit population. How is the system being introduced from an external source. It is an going to respond to this? external response to a system output and is known as external feedback. © BELGIUM CAMPUS 2024 Question What do you think is the common thread that connects every aspect of a business, from marketing strategies to product development, customer service, and financial planning? It's not something tangible like products or services, nor is it solely about profits. Instead, it's something that underlies every decision and action taken within a company, shaping its direction and success. © BELGIUM CAMPUS 2025 INFORMATION See Mallach for the definitions of data, information, and knowledge. Identify the data, information, and knowledge in each of the below scenarios. The first one is provided as an example. Data: The current temperature, humidity, wind speed, etc. Information: A weather report that presents the data in a structured format. Knowledge: Predicting a 70% chance of rain tomorrow based on the current data and historical weather patterns. © BELGIUM CAMPUS 2024  The data-information-knowledge- wisdom pyramid shows how data becomes more and more valuable as it is processed and transformed (McDowell, 2021). Cotton (2024) from DataCamp provides an insightful description. Return to the previous set of scenarios and consider how wisdom could be applied. Refer to Turban et al. for a description of each of these. © BELGIUM CAMPUS 2024  Turban also states that information answers the “who”, “what”, “where”, and “when” questions. How does wisdom fit into this? Refer to Turban et al. and read through the examples they use from the Ford company. Think of a large company and take a few minutes to come up with examples of data, information, knowledge, and wisdom. © BELGIUM CAMPUS 2024 Do some research about the below items. How did data/information/knowledge play a role? Mars climate orbiter Chernobyl nuclear disaster Y2K bug Operation Barbarossa Dewey defeats Truman The Titanic What kind of data moves around the Coca-Cola company? Think about things from various perspectives and departments. What kind of data is shared among departments? What kind of data determines actions taken in another department? What could go wrong in these situations? © BELGIUM CAMPUS 2025  Data is vital. How does Netflix come up with its suggestions on what you’d like to watch? How does Dischem decide when to have a sale? How do movie studios decide when to release a movie? On the opposing side, in which cases should data not be shared and should rather be kept separate? © BELGIUM CAMPUS 2025  Data is vital. Having access to your data is one thing. Ensuring that data is usable is something completely different. Depending on a person’s role in a company, they need access to the information relevant to their tasks. How does the data differ in terms of what a student should have access to compared to a lecturer, the finance department, or the Department of Higher Education? © BELGIUM CAMPUS 2025  EFFECTIVENES ICIENCY Look at the definitions of these on Mallach page 3. An informal description is: doing the right things vs doing things right. In both effectiveness and efficiency, it’s vital to know what the objectives are. Imagine you have a travel business and are planning a road trip from Johannesburg to Cape Town for tourists. What would be an effective route and what would be an efficient route? Does effectiveness preclude efficiency? How do you measure effectiveness in this example? © BELGIUM CAMPUS 2024 List numbers = new List { 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 }; List numbers = new List { 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 }; int evenSum = 0; int evenCount = 0; var evenNumbers = numbers.Where(number => number % 2 == 0); foreach (int number in numbers) if (evenNumbers.Any()) { { if (number % 2 == 0) double evenAverage = evenNumbers.Average(); { Console.WriteLine("The average of even numbers is: " + evenAverage); evenSum += number; } evenCount++; else } { } Console.WriteLine("No even numbers found."); } if (evenCount > 0) { double evenAverage = (double)evenSum / evenCount; Console.WriteLine("The average of even numbers: " + evenAverage); } else { Console.WriteLine("No even numbers found."); } © BELGIUM CAMPUS 2024 Read through the section on BC Connect on Dimensions of Data Quality. Poor quality data causes companies to lose an average of $15 million annually (Gartner, 2021). How would you differentiate between information/data that is high quality and low quality? Think about people applying to BC via the web-based application form. What can be done to ensure incoming data has as few errors as possible? © BELGIUM CAMPUS 2024  In a healthcare setting, a nurse is responsible for administering medication to patients. The medication records provide unclear dosing instructions. The nurse, uncertain about the appropriate dosage, administers a higher amount of medication than intended to a patient. The vague instructions in the medication records result in a medication error, leading to adverse effects for the patient, including side effects and potential health complications. Identify the information quality In a financial services company, an analyst is preparing a quarterly financial report for a client. The report contains a critical error in the calculations of the company's earnings per share factor in each of these scenarios (EPS). The analyst mistakenly used the wrong data points for the calculation, resulting in incorrect financial figures. The error goes unnoticed, and the report is sent to the client, leading to misinformed investment decisions and a loss in the client's portfolio value. In a city where weather forecasts held great importance, meteorologists diligently worked to provide reliable temperature predictions. On a particular day, their forecast projected a high temperature of 27 degrees Celsius. As the day unfolded, the actual temperature reached 26.5 degrees Celsius, demonstrating the meteorologists' ability to offer closely aligned temperature estimations, aiding residents in planning their outdoor activities and ensuring their comfort. © BELGIUM CAMPUS 2024 Which of the below options are not information systems? Why not? © BELGIUM CAMPUS 2025 Information Systems There are many kinds of information systems. As we’ve seen, anything the revolves around data and includes the other four components could be viewed as an IS. Some types of IS have become quite specialised and one IS can also perform various functions. In other words, one larger information system can contain multiple information systems. We’ll now look at three types of information systems: Management Information Systems Executive Information Systems Decision Support Systems © BELGIUM CAMPUS 2025 Executives What kind of information should an executive have access to? Conversely, what kind of information would be irrelevant to an executive? We looked at a manager at a construction site. How does the data needed differ comparing the site manager to the construction company CEO or CFO? © BELGIUM CAMPUS 2025 Executive Information System Note on Information Systems Big companies with lots of data and departments need a One information system can perform specific tool called an Executive Information System (EIS). many functions. In a company one It helps senior executives make strategic decisions by large IS can perform the functions of gathering and organizing both internal and external an MIS, an EIS, a DSS, accounting, and information from different departments like finance and inventory management. HR. The system includes a user-friendly visual display for executives who may not be tech-savvy. This visual format is commonly used in various fields dealing with data and is known as a dashboard. © BELGIUM CAMPUS 2025 © BELGIUM CAMPUS 2025  Executive Information System Characteristics Supports strategy Designed with Presented through either Allows access to large through identifying risks management in mind text, visuals, or tables quantities of data and trends Management is often Depending on the Data from various The use of Business not very technically data, it can be easier departments are Intelligence (BI) can also inclined. This system to interpret when centralized and data help in forecasting and therefore needs to be presented in a is available quickly predicting. Allows users a bit more user- certain way. and accurately. to drill down – obtain friendly. more detail about a certain data point. © BELGIUM CAMPUS 2025 How does Google Maps determine the various routes? © BELGIUM CAMPUS 2025 What kind of data would help McDonald’s make decisions for 2025? © BELGIUM CAMPUS 2025 Decision Support System Decision Support Systems (DSS) are a specific class of information systems that supports business and organizational decision-making activities. Typical information that a decision support application might gather, and present would be: An inventory of all of your current information assets (including relational data sources, data warehouses) Comparative sales figures between one week and the next, Projected revenue figures based on new product sales assumptions, The consequences of different decision alternatives, given past experience in a context that is described. © BELGIUM CAMPUS 2025  Decision Support System The DSS, which could be seen as a type of EIS and MIS, operates on a high level and takes data from the entire organization. Below is an example of how information flows toward a DSS that helps executives make decisions. DSS/ERP Production Order Sales Quote Sales Quote Production Execution Purchase Order Sales Order CUSTOMER SUPPLIER Received INVENTORY Shipment Supplier Invoice FINANCES Sales Invoice Payment Payment © BELGIUM CAMPUS 2025 There are various DSSs available. We saw that a GPS route planner is a DSS. Quickly do research on a clinical decision support system? Would you trust it? © BELGIUM CAMPUS 2025  Benefits of a DSS Improves efficiency by reducing Faster problem solving Generates new evidence in time needed to make decisions support of a decision. Creates a competitive Encourages exploration and Reveals new approaches to advantage over competition. discovery. thinking about the problem. One system There are various information systems. Large companies, also known as enterprises, have to manage their resources very carefully. This is known as Enterprise Resource Planning. Implementing this into software gives us ERP software. This software can operate on a massive scale and can function as an EIS, an MIS, a DSS, and many more. © BELGIUM CAMPUS 2025  Enterprise Resource Planning Enterprise resource planning (ERP) software is a company-wide computer software system that optimizes the flow of information, materials, and finances throughout an organization. It is a type of information system. This software can run on an immense scale and can provide seamless integration across all departments to support the enterprise. A key aspect is that all departments share the same data. On the next slide you’ll see a short explanation from Oracle, one of the largest ERP software companies. © BELGIUM CAMPUS 2025  The value of information The importance of data in an ERP system cannot be emphasised enough. Raw data comes in from all over the company and is organised for storage in the database. This data is then extracted from the database within a certain context and used as information e.g. retrieving a customer’s information. The people making decisions such as managers or executives need to know how to use this information i.e. they need to have the knowledge. Whether they are able to apply wisdom is uncertain. © BELGIUM CAMPUS 2025 ERP Systems Concept ERP software is highly customisable. Here is an example of how a basic ERP system could look. Front office Back office Corporate Reporting Financial Applications Sales & Distribution CUSTOMER SUPPLIERS Manufacturing Database Applications Customer Service Applications Inventory Management Human Resources Management  What are the most popular ERP systems currently in use? There are many ERP systems available but among the largest are Oracle, SAP, Microsoft, and Infor. What information can you find on each of these companies in terms of their ERP offerings? Take SAP as an example. They have a dizzying number of products and services available as they try to cater to as many companies as possible. Similarly, they have a variety of pricing models. SAP Products and Solutions SAP Products and Solutions © BELGIUM CAMPUS 2025  Smaller ERP vendors ACS Embrace is a South African ERP vendor. Visit their website and answer these questions: What types of products do they have? Which businesses are using their ERP system? What do you think the challenges are for a smaller business when considering the large companies? In which situations would a company prefer to use a smaller ERP vendor over one of the big companies? SAP Products and Solutions SAP Products and Solutions © BELGIUM CAMPUS 2025  How does a company access ERP software? The various providers have many options. Traditionally, software is purchased and installed on computers. The company bought it, and the company owns it. Recently, however, there has been a major shift to cloud-based hosting and licensing. The ERP software is hosted on the internet and your employees access it via a browser. This is cloud- based hosting. You pay a subscription fee and have access to the software i.e., the software is not a product but is instead a service. This is known as Software as a Service (SaaS). You don’t own your games Cloud ERP: The Future of Enterprise Resource Planning | SAP Cloud ERP: The Future of Enterprise Resource Planning | SAP © BELGIUM CAMPUS 2025  How does a company access ERP software? In the ERP software market SaaS has become increasingly popular. Some companies though, might prefer to install the software offline. The company then runs the software on- premises. In some cases, a company might decide to have certain parts of the software delivered as SaaS while other parts that contain sensitive information, is rather kept on-premises. This is a hybrid approach. Cloud ERP: The Future of Enterprise Resource Planning | SAP Cloud ERP: The Future of Enterprise Resource Planning | SAP © BELGIUM CAMPUS 2025  44 Barker, T. and Frolick, M.N. (2003) ‘Erp Implementation Failure: a Case Study’, Information Systems Management, 20(4), pp. 43–49. doi:10.1201/1078/43647.20.4.20030901/77292.7. Chuck C.H. Law, A. (2019) Managing Enterprise Resource Planning Adoption and Business Processes: A Holistic Approach. Newcastle upon Tyne, UK: Cambridge Scholars Publishing. Available at: https://search.ebscohost.com/login.aspx?direct=true&db=nlebk&AN=2098074&site=ehost-live Cotton, R. (2023) The data-information-knowledge-wisdom pyramid, DataCamp. Available at: https://www.datacamp.com/cheat-sheet/the-data-information-knowledge-wisdom-pyramid Lambert, D.M. (2014) “Supply chain management – processes, partnerships, performance,” Dimensionen der Logistik, pp. 553–572. Available at: https://doi.org/10.1007/978-3-8349-6515-8_29. Mallach, E.G. (2020). Information Systems: What Every Business Student Needs to Know, Second Edition (2nd ed.). CRC Press. https://doi.org/10.1201/9780429061011 McDowell, K., 2021. Storytelling wisdom: Story, information, and DIKW. Journal of the Association for Information Science and Technology, 72(10), pp.1223-1233. Sanjay Kumar, Jose Esteves and Elliot Bendoly (2011) Handbook of Research in Enterprise Systems. New Delhi, India: Sage Publications Pvt. Ltd (Response Books). Available at: https://search.ebscohost.com/login.aspx?direct=true&db=nlebk&AN=385314&site=ehost-live Turban, E, Pollard, C & Wood, GR. 2018. Information technology for management: on-demand strategies for performance, growth and sustainability. Eleventh edition ed. Hoboken, NJ: Wiley. Unless otherwise stated all images are obtained under the Creative Commons License from www.unsplash.com and www.pexels.com