Week 1

• Enterprise Resource Planning (ERP) programs


  Core software used by companies to coordinate information in every area of business
• Business Process


  Collection of activities that takes some input and creates an output that is of value to the customer
• Functional areas of operation


  • Marketing and Sales (M/S)
  • Supply Chain Management (SCM)
  • Accounting and Finance (A/F)
  • Human Resources (HR)

  
• Business functions


  Activities specific to a functional area of operation
• Sample business processes related to the sale of a personal smartphone

  • Customer order
  • Inventory check
  • Shipping
  • Billing
  • Payment
• Process view of business

  Thinking in terms of business processes helps managers to look at their organization from the customer's perspective
• Marketing and Sales (M/S)


  • Developing products
  • Determining pricing
  • Promoting products to customers
  • Taking customers' orders
  • Helping create a sales forecast

  
• Supply Chain Management (SCM)


  • Making the coffee (manufacturing/production)
  • Buying raw materials (purchasing)
  • Production planning requires sales forecasts from M/S functional area
• Sales forecasts


  Analyses that attempt to predict the future sales of a product
• Accounting and Finance (A/F)

  • Recording raw data about transactions (including sales), raw material purchases, payroll, and receipt of cash from customers
• Raw data

  Numbers collected from sales, manufacturing and other operations, without any manipulation, calculation, or arrangement for presentation
• Human Resources (HR)


  • Recruit, train, evaluate, and compensate employees
  • HR uses sales forecasts developed by the individual departments to plan personnel needs

  
• Systems integrated using ERP software provide the data sharing necessary between functional areas
• M/S needs to interact with Human Resources

  To exchange information on hiring needs, legal requirements, etc.
• Inputs for M/S

  • Customer data
  • Order data
  • Sales trend data
  • Per-unit cost
  • Company travel expense policy
• Outputs for M/S

  • Sales strategies
  • Product pricing
  • Employment needs
• Inputs for SCM


  • Product sales data
  • Production plans
  • Inventory levels
  • Layoff and recall company policy

  
• Outputs for SCM


  • Raw material orders
  • Packaging orders
  • Resource expenditure data
  • Production and inventory reports
  • Hiring information

  
• Inputs for A/F


  • Payments from customers
  • Accounts receivable data
  • Accounts payable data
  • Sales data
  • Production and inventory data
  • Payroll and expense data
• Outputs for A/F


  • Payments to suppliers
  • Financial reports
  • Customer credit data
• Human Resources (HR)


  • Observing governmental regulations in recruiting, training, compensating, promoting, and terminating employees
• Inputs for HR

  • Personnel forecasts
  • Skills data
• Outputs for HR


  • Regulation compliance
  • Employee training and certification
  • Skills database
  • Employee evaluation and compensation
• Employees working in one functional area need data from employees in other functional areas
• Functional area information systems should be integrated, so shared data are accurate and timely
• Managers think in terms of business processes that integrate the functional areas


  Need to share information between functions and functional areas
• ERP software


  Provides the capability to integrate functional areas by means of a single common database