Enterprise Resource Planning (ERP) - Final Exam Reviewer PDF

**Chapter 9: Enterprise Resource Planning (Part 1)** **This chapter introduces the foundational concepts of ERP systems and highlights their integral role in various business processes, especially Marketing and Sales and Supply Chain Management.** **TOPIC:** 1. **ERP Programs** 2. **Business P...

**Chapter 9: Enterprise Resource Planning (Part 1)** **This chapter introduces the foundational concepts of ERP systems and highlights their integral role in various business processes, especially Marketing and Sales and Supply Chain Management.** **TOPIC:** 1. **ERP Programs** 2. **Business Process** 3. **Functional Areas and Business Processes** 4. **ERP Modules** 5. **ERP Modules from 3 Vendors** 6. **Marketing and Sales** 7. **M/S Inputs** 8. **M/S Outputs** 9. **Supply Chain Management (SCM)** 10. **Functions within SCM** 11. **Supply Chain Management data and records can:** 12. **Supply Chain Management interact in some ways with Human Resources** 13. **Inputs for SCM** 14. **Outputs for SCM** **1. ERP Programs** **ERP (Enterprise Resource Planning) programs integrate core business processes across departments into a single unified system.** **Key Features:** - **Centralized data storage.** - **Real-time information sharing.** - **Automation of routine processes.** - **Benefits:** - **Improved efficiency and collaboration.** - **Reduced operational costs.** - **Enhanced decision-making through data analytics.** **2. Business Process** **A series of steps performed by a group or department to achieve a specific organizational goal.** **Examples:** - **Order-to-Cash (O2C): Managing customer orders from creation to payment.** - **Procure-to-Pay (P2P): Managing procurement from purchasing to payment.** **Characteristics:** - **Should align with organizational goals.** - **Can be optimized using ERP systems.** **3. Functional Areas and Business Processes** **Functional Areas:** - **Accounting and Finance** - **Human Resources** - **Production/Operations** - **Sales and Marketing** - **Supply Chain Management** **Processes Across Areas:** **Example: Customer order involves sales, inventory, shipping, and invoicing.** **4. ERP Modules** **ERP software components designed to manage specific business functions.** **Common Modules:** - **Financial Management** - **Human Resource Management** - **Customer Relationship Management (CRM)** - **Supply Chain Management (SCM)** - **Manufacturing and Production** **5. ERP Modules from 3 Vendors** - **SAP Modules: Finance, Logistics, Human Capital Management.** - **Oracle Modules: Enterprise Performance Management, SCM, Customer Experience.** - **Microsoft Dynamics Modules: Project Service Automation, Retail, Finance and Operations.** **6. Marketing and Sales (M/S)** **ERP\'s role in M/S focuses on customer interaction, order management, and sales analysis.** **Key Functions:** - **Lead management** - **Sales forecasting** - **Campaign management** **7. M/S Inputs** - **Customer inquiries** - **Marketing campaign results** - **Sales forecasts** - **Customer data** **8. M/S Outputs** - **Sales reports** - **Customer feedback analysis** - **Performance metrics of campaigns** - **Order confirmation details** **9. Supply Chain Management (SCM)** **Managing the flow of goods, services, and information from raw material procurement to final product delivery.** **Key Goals:** - **Minimize costs.** - **Maximize efficiency and customer satisfaction.** **10. Functions within SCM** - **Procurement** - **Inventory Management** - **Logistics and Distribution** - **Demand Planning** **11. Supply Chain Management Data and Records Can:** - **Track inventory levels in real time.** - **Predict demand using historical data.** - **Optimize delivery routes.** - **Monitor supplier performance.** **12. SCM Interaction with Human Resources** - **Workforce allocation for production schedules.** - **Training requirements for new SCM systems.** - **Performance tracking for supply chain teams.** **13. Inputs for SCM** - **Supplier invoices** - **Customer orders** - **Inventory levels** - **Market demand forecasts** **14. Outputs for SCM** - **Inventory status reports** - **Delivery schedules** - **Supplier performance analysis** - **Cost breakdowns** **\ ** **Chapter 9: Enterprise Resource Planning (Part 2)** **This section of the chapter emphasizes the significance of the Accounting and Finance module in managing and leveraging financial data. By integrating A/F with M/S and CRM, organizations can achieve better financial visibility and customer engagement.** **TOPIC:** 1. **Accounting and Finance (A/F)** 2. **Functions within A/F** 3. **Raw data: Numbers collected from those operations, without any manipulation, calculation, or arrangement for presentation.** 4. **Data from A/F used by M/S and CRM** **1. Accounting and Finance (A/F)** **The Accounting and Finance module in ERP systems is responsible for managing an organization's financial transactions and ensuring compliance with regulations.** **Role in ERP:** - **Centralizes financial data for accuracy and transparency.** - **Automates routine accounting tasks.** - **Generates financial insights for decision-making.** **2. Functions within A/F** **Key Functions:** **Accounts Payable: Managing outgoing payments and vendor invoices.** **Accounts Receivable: Tracking incoming payments and customer invoices.** **General Ledger: Recording all financial transactions in a centralized ledger.** **Budgeting and Forecasting: Analyzing financial trends and creating budget plans.** **Financial Reporting: Preparing reports such as balance sheets, income statements, and cash flow statements.** **Compliance Management: Ensuring adherence to tax laws, accounting standards, and other regulations.** **3. Raw Data in A/F** **Unprocessed numbers and records collected from financial operations, not yet organized or analyzed.** **Examples of Raw Data:** - **Daily transaction logs.** - **Payment receipts.** - **Invoice records.** - **Expense reports.** **Importance:** - **Serves as the foundation for generating reports and insights.** - **Must be accurate to ensure the integrity of processed data.** **4. Data from A/F Used by M/S and CRM** **Marketing and Sales (M/S):** **Use Cases:** - **Revenue tracking by product or service.** - **Assessing customer payment behavior.** - **Allocating budgets for marketing campaigns.** **Examples:** - **Customer profitability analysis.** - **Payment history for identifying high-value customers.** **Customer Relationship Management (CRM):** **Use Cases:** - **Linking customer transactions to CRM profiles for personalized service.** - **Identifying overdue accounts for follow-ups.** - **Segmenting customers based on financial interactions.** **Examples:** - **Tracking payment cycles to tailor customer interactions.** - **Flagging potential risks based on late payments or low engagement.** **\ ** **Chapter 9: Enterprise Resource Planning (Part 3)** **This section focuses on the broader scope of ERP modules, system architecture, and the integration of technology with business processes. It highlights the importance of structured frameworks like the three-tier architecture in enabling scalable and efficient enterprise operations.** **TOPIC:** 1. **Other ERP Modules** 2. **Functional Area of Information Systems** 3. **Components of the Enterprise Systems Architecture** 4. **Enterprise Systems Architecture** 5. **Three-Tier Architecture** 6. **The Tiers** 7. **A Three-Tier ERP Architecture** 8. **SAP - Sales and Distribution** 9. **Order Management Process** **1. Other ERP Modules** **Additional ERP Modules Beyond Core Areas:** - **Project Management: Tracks project timelines, resources, and budgets.** - **Product Lifecycle Management (PLM): Manages product design, development, and production.** - **Business Intelligence (BI): Provides data analytics and reporting tools.** - **Asset Management: Tracks and manages physical assets and maintenance schedules.** - **E-Commerce: Integrates online sales platforms with inventory and order systems.** **2. Functional Area of Information Systems** **The specific domain in which information systems are applied to enhance business processes.** **Examples in ERP:** - **Operations: Optimizing production workflows and supply chain logistics.** - **Marketing: Managing campaigns and customer data.** - **Finance: Automating transaction recording and financial analysis.** **3. Components of the Enterprise Systems Architecture** **Key Components:** - **Hardware: Servers, databases, and network infrastructure.** - **Software: ERP applications and operating systems.** - **Data: Centralized repository for organizational data.** - **Processes: Defined workflows automated by ERP.** - **People: Users and administrators interacting with the ERP system.** **4. Enterprise Systems Architecture** **A high-level framework that defines how business processes, data, applications, and technology integrate within an organization.** **Purpose:** - **Provides a roadmap for system integration.** - **Ensures scalability and adaptability.** **5. Three-Tier Architecture** **A software architecture that separates an application into three logical layers for improved scalability, security, and maintenance.** **Layers:** - **Presentation Layer: User interface (e.g., web browsers, mobile apps).** - **Application Layer: Business logic and application services.** - **Database Layer: Centralized data storage and management.** **6. The Tiers** **Presentation Tier:** - **Displays data to users.** - **Collects user input.** **Application Tier:** - **Processes user input.** - **Executes business logic.** **Database Tier:** - **Stores and retrieves data.** - **Manages data consistency and security.** **7. A Three-Tier ERP Architecture** **How It Works:** - **User accesses the system via the presentation layer.** - **Input is processed by the application layer, which interacts with the database.** - **The database layer retrieves or updates records based on the request.** **Advantages:** **Scalability: Each tier can be upgraded independently.** **Security: Data is protected in the database layer.** **Flexibility: Allows integration with other systems.** **8. SAP - Sales and Distribution** **A module within SAP ERP that manages order fulfillment and customer interactions.** **Key Functions:** - **Sales order processing.** - **Pricing and billing.** - **Customer account management.** - **Delivery scheduling.** **Integration: Works with other SAP modules like Finance (FI) and Materials Management (MM) for seamless operations.** **9. Order Management Process** **Steps:** - **Order Entry: Capturing customer orders and validating details.** - **Order Processing: Checking inventory and scheduling delivery.** - **Order Fulfillment: Picking, packing, and shipping the order.** - **Invoicing and Payment: Generating the invoice and processing payments.** - **Post-Sale Support: Handling returns, refunds, or customer queries.** **Benefits:** - **Streamlined workflow from order to delivery.** - **Improved customer satisfaction through efficient processes.** - **Real-time tracking and updates for stakeholders.**