Chapter 10

• Enterprise systems


  Information systems that support routine, day-to-day activities and help a company add value to its products and services
• Enterprise resource planning (ERP)


  Set of integrated programs that manage a company's vital business operations for an entire organization
• ERP system


  1. Integrates core business processes into a single system

  2. Simplifies IT and gives everyone an easier way to work

  3. Provides a shared database for all business functions to access current and consistent data
• Leading ERP systems


  SAP is the largest and most-recognized ERP solution provider among large organizations
• ERP for small and medium-size enterprises (SMEs)


  Many SMEs elect to implement open-source ERP systems

  Customization is often needed to integrate with other business systems, add data fields, and meet regulatory requirements
• Supply chain management (SCM)


  A system that includes planning, executing, and controlling all activities involved in raw material sourcing, production, and delivery to customers
• Process for developing a production plan

  1. Sales forecasting

  2. Sales and operations plan

  3. Demand management

  4. Detailed scheduling

  5. Materials requirement planning

  6. Purchasing

  7. Production

  8. Sales ordering
• Business intelligence (BI)


  Gathering the right information to monitor an organization's performance

  An essential component of an ERP system

  BI tools are used to access operational data, analyze performance, and monitor business strategies
• Customer relationship management (CRM)


  Goal is to understand and anticipate the needs of current and potential customers

  Used primarily by sales, marketing, and service organizations to capture and view data about customer and improve communications
• CRM system

  • Contact management
  • Sales management
  • Customer support
  • Marketing automation
  • Analysis
  • Social networking
  • Access by smartphones
  • Import contact data
• Hosted software model for enterprise software


  Software is installed, hosted, and accessed from a remote server, managed by a third-party vendor

  allows small businesses to use enterprise software without needing a full-time IT person
• Challenges for enterprise systems of multinational companies


  • Different languages and cultures
  • Disparities in IS infrastructure
  • Varying laws and customs rules
  • Multiple currencies
• Advantages of ERP

  • Decision Support: improves access to data for operational decision-making as ERP quickly provides vital, cross-functional information on business performance to managers, which significantly improves their ability of deciding quickly
• Advantages of ERP

  • Decreased Costs: elimination of costly, inflexible legacy systems.
  • improved inventory planning
• Advantages of ERP

  • Better efficiency and customer service: improvement of business processes as ERP creates a framework for and improving a compony's internal business processes.
  • by implementing smarter workflows, automation of manual or routine tasks to gain efficiency
  • have better access to customer information
  • faster response times to customers to provide better customer service
• Advantages of ERP

  • Enterprise Agility: is timely realisation of business value predictably, sustainability and with high quality. It it the ability of an organisation to rapidly adapt to market and environmental changees in productive and cost-effective way
• Advantages of ERP

  • Expand collabrations across different deparment
• CRM software


  Automates and integrates the functions of sales, marketing and service in an organisation.
• General ledger


  Main accounting record of a business
• Disadvantages of ERP Systems

  • Expenses (HW & SW costs) and time in implementation
• Disadvantages of ERP

  • Difficulty implementing change: the costs of developing new business processes (reengineering) and preparing employess for rhe new system (training and change management) make up the bulk of implementing a new ERP system
• Disadvantages of ERP

  • Difficulty integrating with other systems: with the systems that are not entirely compatible, a wide range of information can be lost in the changeover resulting in e.g. inventory that is in disarray, and workers that are unable to find the parts they needed in the new system
• Disadvantages of ERP

  • Difficulty in loading data into new ERP system: converting data from previous legacy systems to the new cross-functional ERP system is another major category of ERP implementation costs.
• Disadvantages of ERP

  • Risks in using one vendor: a software vendor with serious deficiencies can have a crippling impact on the company's operations
• Key features of a CRM system

  • Contact management
  • Marketing automation
  • Social networking
  • Sales management
• Challenges met by an enterprise system of a multinational company

  • Different languages and culture
  • Disparites in IS infrastructure
  • Varying laws and customs rules
  • Multiple currencies
• Different Languages and Cultures

  Some cultures, people don't routinely work in teams in a networked enviroment
• Disparities in IS Infrastructure

  • Lack of robust or a common information infrastructure can create problems
  • Many countries's telecommunications services are controlled by a central government or operated as a monopoly