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1. Unit 3 ERP

2. syllabus Concepts of ERP Applications of ERP ERP Implementation concepts ERP lifecycle Concept of XRP (extended ERP) Features of commercial ERP software

3. What is a business process? A process is a series of tasks that are completed in order to accomplish a goal. A business process, therefore, is a process that is focused on achieving a goal for a business. Processes are something that businesses go through every day in order to accomplish their mission. The better their processes, the more effective the business.

4. Documenting a Process The simplest way to document a process is to simply create a list. How to create an account on eBay, might look like this: 1. Go to ebay.com.   2. Click on “register.”   3. Enter your contact information in the “Tell us about you” box.   4. Choose your user ID and password.   5. Agree to User Agreement and Privacy Policy by clicking on “Submit.”

5. Documenting a Process A list is not good enough for some processes. Below is a process diagram to determine if a new term should be added to Wikipedia.

6. Managing Business Process Documentation The requirement to manage process documentation has been one of the driving forces behind the creation of the document management system . A document management system stores and tracks documents and supports the following functions: Versions and timestamps. Approvals and workflows. Communication. A document management system will notify the appropriate people when a change to a document is approved.

7. ERP Systems An enterprise resource planning (ERP) system is a software application with a centralized database that can be used to run an entire company.

8. Simplified schema of ERP usage ERP Transaction- entries DB ERP Partners Reports Trends Information Information (trends) Knowledge of methods applied for process management Decision Enterprise Key knowledge Key decisions

9. What could be controlled …

10. ERP Components Finance: modules for bookeeping and making sure the bills are paid on time. Examples: General ledger Accounts receivable Accounts payable HR: software for handling personnel-related tasks for corporate managers and individual employees. Examples: HR administration Payroll Self-service HR Manufacturing and Logistics: A group of applications for planning production, taking orders and delivering products to the customer. Examples: Production planning Materials management Order entry and processing Warehouse management 10

11. An ERP Example: Before ERP 11 Customers Customer Demographic Files Sales Dept. Vendor Orders Parts Accounting Accounting Files Purchasing Purchasing Files Order is placed with Vendor Invoices accounting Inventory Files Warehouse Checks for Parts Calls back “Not in stock” “We ordered the parts” “We Need parts #XX” “We ordered the parts” Sends report Sends report Sends report Ships parts

12. An ERP Example: After ERP 12 Database Customers Sales Dept. Purchasing Warehouse Accounting Vendor Inventory Data If no parts, order is placed through DB Orders Parts Order is submitted to Purchasing. Purchasing record order in DB Order is placed with Vendor And invoices accounting Financial Data exchange; Books invoice against PO Books inventory against PO Ships parts

13. ERP The main objective of Enterprise Resource Planning , or ERP, is to integrate all departments and functions across a company into a single system by using a common database, the value of which is to be able to have only one correct set of data.

14. Isolated Data Islands 14 Management Marketing Accounting Customers Production Planning Sales Representatives Customer Orders Production Island Accounting Island Marketing & Sales Islands Quality Management Island Island of Deliveries Inventory and Production Quality Management Steel Service Center Vertical

15. 15 Management Marketing Accounting Customers Production Planning Quality management Internal Sales Customer support One Company Database One Solution One Database All Microsoft Steel Service Center Vertical Inventory and Production Sales Representatives

16. ISLAND SYSTEMS For example, records about inventory levels may be found in one database, while customer information may be found in its own separate database. Furthermore, these databases may be " island systems " (operating independently from each other and having no integration with other databases).

17. Architecture 2-tier (2-vrstvy)

18. Architecture 3 -tier (3-vrstvy) The second tier is the multithreaded middle tier. This is the service tier that is based on Web services .

19. From hell to paradise –ERP (see meaning) You can change a business in order to copy rigid functions of the software ERP You can change a software in order to support your business Programming Parameter setup

20. TECHNOLOGY REPORTING & ANALYTICS CRM FM SCM E- COMMERCE MICROSOFT BUSINESS SOLUTIONS - NAVISION Technological pyramid

21. Development Tools ISVs Customer Relationship Management Supply Chain Management Financial Management Analytics Integrated homogeneous solution

22. Unique architecture Externí aplikace Zákazníci & obchodní partneři Zaměstnanci Application Server GUI (Windows) Commerce Portal Commerce Gateway (B2B) Country-specific Objects Customer-specific Objects Worldwide Generic Objects Vertical Solutions Objects Integrated Development Environment Microsoft SQL Server 2000 Microsoft Navision Database Server Database

23. Relations among tables I

24. Relations among tables II

25. One table and its relations I

26. One table (Sales Line) and its relations II ERP NAV

27. Microsoft Dynamics NAV Sweet Points Windows compatible (menu, command, mutual relations to MS Office,..) Security ( ID, passwords, roles, protocols ) Menu and basic modules Shorthand keys and HELP Multilanguage Navigate and calculation (flow) fields, finding the reason why any document was created Reports Entries, dimensions

28. Calculation field and entries (transactions related to cards- tables) Example : Field Amount = Example :E.G. One million of entries Customer Card Balance ERP Item Card Invoice Credit Note Payment

29. Main form (menu, toolbar, forms)

30. Main forms ( card , list, form- > sub - form )

31. Main forms (card, list , form- > sub - form )

32. Main forms (card, list, form- > sub - form ) Partner What

33. Table->Form principle

34. Table x ->Table y relations X= Customer Y=Post Code

35. Business Case Principles Sales Order Header Item Chair 4 pcs 30 EURO Entries in General Ledger F11 Item Table 1 pcs 100 EURO Customer table Item Table Item Table Sales Entry in database (Type Invoice) Item Ledger Entries in database (Types Sales) Availability, Costs,… Balance, Payments,.. F11 = posting, booking to G/L,…

36. ERP Systems All data in an ERP system is stored in a single, central database. data entered in one part of the company can be immediately available to other parts of the company. An ERP can be used to manage an entire organization’s operations. Companies need to purchase modules for an ERP that represent different functions within the organization. Some companies choose to purchase many modules, others choose a subset of the modules.

37. ERP modules When an ERP vendor designs a module, it has to implement the rules for the associated business processes. These rules reflects the best practices for that process within a giving industry. The implementation of an ERP system is an excellent opportunity to improve their business practices.

38. ERP challenges Is the process embedded in the ERP really better than the process they are currently utilizing? Can a company differentiate from its competitors if they use the same ERP system? Can a ERP be customized to match a given organization processes? (Yes, but who “manage” the customized system?)

39. Applications of ERP

40. ERP vendors Some of the best-known ERP vendors are: SAP Microsoft ORACLE (People Soft) INFOR (mid size and small organizations)

41. ERP and organizational value ERP vendors combine subset of ERP modules to offer applications with high impact on the organizations. The most important ones are: Customer Relationship Management (CRM) systems Supply Chain Management (SCM) systems.

42. ERP and customer relationship management CRM systems allow to managing a company’s interaction with current and future customers. We are familiar with CRM systems from companies that we do business with: Your car dealer send you a letter (or card) letting you know that your card need service. Netflix recommends you new movies to watch. Expedia send you offers for cities you have visited. https://www.youtube.com/watch?v=XmnPlfJh7zM

43. Advantages of CRM Systems Allows track goals and metrics for sales, marketing, and customer services. Increase customer retention Increase profitability Facilitate to identify “who are your customers” Permits to know “what is important to your customers” Allows opportunity management

44. ERP and Supply Chain Management Supply chain management has been defined as the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally.” (APICS 2013). SCM draws heavily from the areas of operations management, logistics, procurement and information technology, and aims for an integrated approach to optimize the flow of good and services. ( Bartch 2013)

45. SCM examples Dell https://www.youtube.com/watch?v=owQzo82ac_M Walmart https://www.youtube.com/watch?v=yZC4neLax5o

46. Advantages of SCM Systems Secure accurate SCM metrics Help controlling bullwhip effect Facilitate visualization of SCM metrics Improve productivity Increase profitability Help to integrate value systems

47. Business Process Management The literature report three alternatives to business process manage: Automatize Streamlining Business process engineering

48. Automation While automation can make a business more efficient, it cannot be used to provide a competitive advantage. Simply automating a bad process does not make it better. Organizations that are serious about improving their business processes will also create structures to manage those processes. Business process management (BPM) can be thought of as an intentional effort to plan, document, implement, and distribute an organization’s business processes with the support of information technology.

49. Streamlining Streamlining has a better impact on efficiency and productivity, but it cannot warranty a competitive or sustainable advantage. It is a good strategy for process that are essential to the company but they cannot bring competitive advantage. Business process management will provide several key benefits to an organization, which can be used to contribute to competitive advantage.

50. Business process management The benefits of business process management include: • Empowering employees. • Built-in reporting. • Enforcing best practices.   • Enforcing consistency.  

51. Business process reengineering Organizations look to manage their processes to gain a competitive advantage. Companies should “blow up” their existing processes and develop new processes that take advantage of the new technologies and concepts. Do not optimize, obliterate (Hammer 1990.) BPR is fully understanding the goals of a process and then dramatically redesigning it from the ground up to achieve dramatic improvements in productivity and quality.

52. How to do BPR (Hammer) Organize around outcomes, not tasks. Have those who use the outcomes of the process perform the process. Subsume information-processing work into the real work that produces the information. Treat geographically dispersed resources as though they were centralized. Link parallel activities instead of integrating their results. Put the decision points where the work is performed, and build controls into the process. Capture information once, at the source.

53. Sidebar: Reengineering the College Bookstore