Enterprise IS - Part 1 PDF

w2 Enterprise IS - Part 1 Explain the goals of ERP systems To make the information flow dynamic and immediate, therefore, increasing its usefulness and value. To integrate departments and functions across an organization into a single infrastructure that serves the needs of each department Describe...

w2 Enterprise IS - Part 1 Explain the goals of ERP systems To make the information flow dynamic and immediate, therefore, increasing its usefulness and value. To integrate departments and functions across an organization into a single infrastructure that serves the needs of each department Describe the features of ERP systems Single Infrastructure: ERP systems operate on a unified platform. Consistent GUI: They offer a uniform and user-friendly graphical interface. Integration Across Functions: ERP integrates various business functions. Centralized Database: Data is stored in a central, accessible database. Understand that ERP system implementation is an ongoing exercise Discuss the pros and cons of open source ERP systems Understand the concept of Total Cost of Ownership (TCO) for ERP systems Enterprise Resource Planning (ERP) w2 1 Enterprise Resource Planning (ERP) Systems are the first generation of enterprise systems meant to integrate data and support all the major functions of organizations. ERP systems integrate various functional aspects of the organization as well as systems within the organization of its partners and suppliers. Goals of ERP: To make the information flow dynamic and immediate, therefore, increasing its usefulness and value. To integrate departments and functions across an organization into a single infrastructure that serves the needs of each department ERP Modules The functionalities of ERP are delivered through modules to implement business policy and processes Modules are designed to support end-to-end business processes ERP systems are configured only with the modules that the organization requires Third Party Products Third party products are add-on software components either to make the system operational or to add missing functionality not offered by the ERP system. These products may be purchased or developed Integrating ERP with third party products Third party products may be made to work with ERP systems in a few ways: ERP systems come with pre-built integration capabilities (e.g. API) to work with some external software Develop own APIs or buy from third party vendors w2 2 ERP vendors may offer tools for facilitating integration (eg. Oracle cloud) Rely on third party integration platforms (e.g. MuleSoft, Boomi, Jitterbit) ERP vendors work with third party vendors in partnerships Types of ERP Systems Custom made vs off-the-shelf Custom ERP Custom ERP is developed based on your company’s requirements from scratch Development can be performed in-housed or outsourced E.g. Telsa Warp ERP w2 3 Off-the-shelf (Proprietary) vs Open Source Closed Sourced (Proprietary) systems are developed by ERP vendors who invested in developing and sells the executable versions of the application. The source code is protected and not accessible for view and modifications The systems are generic – designed to meet the needs of every company regardless of industry and size Features of OSS Supports development of open standards – enable other parties of provide extensions to existing software Uses open data formats able to access data and not being restricted by proprietary software Supports customizability – users able to modify software to meet specific requirements Supports improved quality – community of users are involved in working on the w2 4 software Speed up development process Generic vs Industry-specific On-premises vs Cloud ERP Marketplace Tiers Tier 1 Most Robust Most Complex Used by large Companies Global Tier 2 Midrange complex/size Robust and flexible enough Easier to implement w2 5 Used by mid to large sized coys. Tier 3 Tailored to specific -industry Less customisable Used by small to mid sized coys. Few locations/ simple operations Problems with T2/T3 solution vendors Too small to offer stability Easily affected by downturn in an industry Not scalable for company that may expand into operations beyond their industry e.g. manufacturing company wanting to expand into retail Industry Specific ERP Sources of variations in processes across companies could result from: Country specific processes: e.g. different regulations Common processes that vary across industry: e.g. difference in manufacturing a car vs a food product Industry Exclusive processes: e.g. exploration for oil and gas companies Industry specific ERP solutions cater for the needs of a specific industry, providing functionalities that are good fit with the needs of the specific industry. Costs How much does off-the-shelf ERP system costs? Number of users Subscription or perpetual licensing Deployment method (cloud-based or on-premise) w2 6 Customization (if necessary) Add-on modules (if available) Implementation plan User training and support Hardware upgrades Total Cost of Ownership (TCO) Total Cost of Ownership (TCO) for comparing between ERP systems Consists of: Costs of software or license Cost of hardware Cost of annual maintenance contract Cost of training Cost of implementation and customization Cost of acquiring special skills Advantages of ERP w2 7 w2 8