Enterprise System - AIS
Transcript of Enterprise System - AIS
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Learning ObjectivesDescribe enterprise systemsDescribe enterprise resources planning (ERP)systems
Explain the organization value chainDescribe the relationship of the organization valuechain and an enterprise systemIllustrate the value of systems integrationDescribe how an enterprise system supports major business event processesEnumerate the pros and cons of implementingenterprise systems
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Enterprise System Integrates business processes and
information from entire enterprise Helps coordinate the operation of
business functions ERP systems are software packages
that can be used for the core systemsnecessary to support enterprisesystems
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ERP Systems Vendors
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SAPModules
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Third-Party Modules
C ustomer Relationship Management(C RM)builds and maintains customer
related dataC ustomer Self-Service ( C SS)allowscustomers to complete tasks withoutassistanceSales Force Automation (SFA)automates sales tasks such as order processing and tracking
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Third-Party Modules, Contd.
Supply C hain Management (S C M)plans andexecutes demand planning, inventory acquisition,manufacturing, distributing and sellingProduct Lifecycle Management (PLM)managesproduct data from design through disposal of productSupplier Relationship Management (SRM)
manages the interactions with the organizationsthat supply the goods and services to anenterprise. Includes procurement and contractmanagement.
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Enterprise Systems ValueC hain Enterprise systems facilitate value chain
managementT
he value chain is the system of activities that transform inputs intooutputs valued by the customer T he goal of an organization is to add the
greatest value with the lowest coststhereby increasing competitiveadvantage
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ValueC hain and
System
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T he Value of SystemsIntegration
One of the values provided by an enterprisesystem is the coordination of value activities
in the value chain.T he system performs this coordination bysharing data across business processes.
In the following slides we describe what lifewould be like without integrated systems andthen how enterprise systems solve some of those problems.
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Inefficient Customer Service1 . C heck if the customer exists in thesystem andhas goodcredit.
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Inefficient Customer Service2
. Find out if good can bepromised fromwarehousestock or if ithas to bescheduled for manufacturing.Tell thecustomer whenthey wouldreceivethe item. T hedate is knownas available topromise or AT P.
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Inefficient Customer Service3 . If item is not onthe shelf, when willit be releasedfrommanufacturing?Sally could reviewproduction
schedules and addthe time requiredto pick, pack, andship the item. T hiswould not,however, tell her if
the itemhad already beenallocated toanother customer.
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Inefficient Customer Service5 . How longwill it takevendors tosupply rawmaterials sothat
manufacturingcan takeplace?
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Inefficient Customer Service6 . What pricewill becharged tothis customer for thisorder?
T he price tocharge mustbe obtainedfrommarketing.
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Inefficient Customer Service7 . Needs tocheck ARbalance todetermine if customer hassufficient
credit.Without directaccess to theopen AR data,Sally willhave to callaccounting toapprove thisorder.
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Inefficient Customer Service8 . If credit isinsufficient,must checkwith creditdepartmentfor change in
credit line.
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InefficientC
ustomer Service Do you think that Sally wants to keep
the customer on the phone throughoutthis process?W ould you consider this to be goodcustomer service?
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Solution to Inefficient Customer Service
Enterprise system establishesavailable to promise (A T P) bychecking warehouses and scheduledmanufacturingPrice and creditworthiness
automatically determined fromdatabase
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Enterprise Systems Store Data inT ables
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Processing Orders Requires
MultipleT
ables
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Stored Data Used for Decisions
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Major ERP ModulesSales and Distribution
Records customer ordersShippingBillingC onnections to
Materials management module
Financial accounting moduleC ontrolling module
Based on SAP (best selling ERP)
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Major ERP Modules, Contd.Materials Management
Acquisition and management of goods from vendors
Purchase order preparationReceivingRecording invoice
Interacts withSales and distribution moduleFinancial accounting moduleC ontrolling module
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Major ERP Modules, Contd.Financial Accounting
Plays a central role in an ERP system andincorporates data from other modules intogeneral ledger accounts and financial statementsBusiness events from other modules, such as SDand MM, are incorporated by the FI module intothe general ledger accounts and included in theexternal account statements, the balance sheet,profit and loss statement, and statement of cashflows.T
he FI module also includes accounts receivableand accounts payable functions to record andmanage that data directly and to complete eventsbegun in the SD and MM modules.
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Major ERP Modules, C ontd.
Controlling and Profitability Analysis
Handles internal accounting including: Cost center accounting Profitability analysis for sales Activity-based accounting Budgeting
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Major ERP Modules, Contd.Human Resources
Recruiting, management andadministration of personnelPayroll processingT raining and travelBenefitsReports
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Order-to-Cash
1. Respond tocustomer inquiries andrequests for quotes(RFQs).
Somecompaniesadd onseparate CRMmodules
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Order-to-Cash2. Recordcustomer order including:check customer credit; checkinventorypricing; andcheck whereand wheninventory will beavailable tosend to thecustomer.
Triggers pickingof goods or
purchase of goods fromanother vendor.
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Order-to-Cash
3. Pick goodsfromwarehouseand pack for shipment.
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Order-to-Cash4. Ship goods
to the customer.ERP systemwould choosethe appropriaterouting andcarrier, recordthe cost of goods soldand inventoryreduction in thegeneral ledger.Some ERPsystems trigger the billingprocess when ashipment takesplace.
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Order-to-Cash5. Billing the
customer andrecording thesale in AR.ERP systemensures correctquantities,
prices, terms,addresses, etc.ERP systemcan be used toanalyze salesprofitability by
comparingproduct costs tosellingprice.
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Order-to-Cash6. Receive andrecord payment.Includes:recording cashreceipts andupdating cashand accountsreceivable.ERP data canthen be used tomanagecustomer creditand invest
available cash.
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Purchase-to-Pay1. Determinerequirements,completepurchaserequisition.
ERP system mayautomaticallygenerate thepurchaserequisition basedon quantity on-
hand, quantity-on-order, andexpecteddemand.
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Purchase-to-Pay2. Prepare andrecord purchaseorder.
An ERP systemassists the buyer in identifying
sources of supply for therequested item,preparing RFQsto vendors,analyzing
vendor quotes,comparingvendor prices,terms, and pastperformance
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Purchase-to-Pay3. Receive andrecord goods.Comparequantity orderedto quantityreceived.T he ERP routes
goods to thefunction thatrequested themor directs themthe warehousefor immediate
sale. It alsorecords vendor performancedata.
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Purchase-to-Pay4. Receivevendor invoice,match with POand receivingreport; recordpayable.If the three-waymatch fails, theenterprisesystem notifiesthe proper personnel toensure timelyreconciliation of differences.
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Purchase-to-Pay5. Prepare andrecord cashdisbursementand updateaccounts.
An ERPsystem usesvendor and APdata toschedulepayments in
accordancewith vendor terms and toreceivediscounts.