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ITEC6620 Enterprise Resource Planning Systems


ITEC6620 Enterprise Resource Planning Systems Supakorn Kungpisdan, Ph.D. ITEC6620 Enterprise Resource Planning Systems * Example of Architecture of ... – PowerPoint PPT presentation

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Title: ITEC6620 Enterprise Resource Planning Systems

ITEC6620Enterprise Resource Planning Systems
  • Supakorn Kungpisdan, Ph.D.

Supakorn Kungpisdan
  • Education
  • PhD (Computer Science and Software Engineering),
    Monash University, Australia
  • M.Eng. (Computer Engineering), KMUTT
  • Specializations
  • Information and Network Security, Electronic
    Commerce, Formal Methods, Computer Networking,
  • Experiences
  • Director, MUTs SAP University Alliance Program
  • Director, Master of Science in Network
    Engineering, MUT
  • External Research Advisor, Network Security
    Research Group, Monash University, Australia
  • http//

Course Descriptions
  • Saturday 3.30 PM 6.30 PM
  • Textbook
  • L. F. Motiwalla and J. Thompson, Enterprise
    Systems for Management, Pearson Prentice Hall,
    ISBN 978-0-13-207950-1
  • Supplementary materials
  • M. Sumner, Enterprise Resource Planning, Pearson
    Prentice Hall, ISBN 0-13-140343-5
  • SAP training materials SAP01, SAPTEC, ADM01
  • http//

Evaluation Criteria
  • Quizzes 10
  • Reports 20
  • Midterm exam 20
  • Final exam 50

Course Outlines
  • Introduction to Enterprise Information Systems
  • Enterprise Systems Development
  • Planning, Design, Development, Implementation,
    Post-implementation, Operations
  • Enterprise Systems Functions
  • Sales and Marketing, Accounting and Finance,
    Production and Materials, Human Resources, SCM,
    CRM, E-commerce
  • Ethics in Enterprise Systems
  • SAP Technical Administration and ABAP

Learning Objectives
  • Understand the information systems evolution and
    its historical role in the organization leading
    to systems integration and Enterprise Resource
    Planning (ERP).
  • Learn about ERP systems and evolution,
    components, and architecture understand the
    benefits and drawbacks of implementing ERP
    systems and how they can help an organization
    improve its efficiency and worker productivity.
  • Gain an overview of the implementation process
    (e.g., the ERP life cycle, business process
    reengineering, project and change management).
    Understand the role of people, vendors,
    consultants, and the organization in making the
    ERP implementation process successful.
  • Comprehend the ethical, global, and security
    challenges while implementing an ERP system, and
    look at the ERP vendors and industry trends.

Introduction to Enterprise Information
SystemsLecture 1
  • Supakorn Kungpisdan, Ph.D.

  • Information Systems in Organizations
  • Enterprise Resource Planning System
  • ERP Implementation
  • ERP Vendors

  • In the early days of ERP implementation, most
    management did not understand the magnitude of
    issues an organization has to consider before,
    during, and after implementation.
  • ERP systems are very different from conventional
    packaged software, such as Microsoft Office and
  • No shortcuts when it comes to implementing an
    enterprise system

Information Systems in Organizations
  • Information Systems are a critical component of a
    successful organization today.
  • Information Systems provide a high level of
    computer automation to support business functions
    such as
  • Accounting
  • Finance
  • Marketing
  • Customer Service
  • Human Resource Management
  • Operations
  • Information Systems play a major role in primary
    and secondary activities of an organizations
    value chain.

Supply Chain
source SAP Overview, SAP training materials
Value Chain
source L. Jessup and J. Valacich, Information
Systems Today Why IS Matters, 3rd Edition,
Pearson Prentice Hall
Value System
  • Coordination of multiple value chains

source L. Jessup and J. Valacich, Information
Systems Today Why IS Matters, 3rd Edition,
Pearson Prentice Hall
Information Systems in Organizations (Cont.)
  • Information systems include hardware, software,
    data processes, and people.
  • Information Technology includes only the hardware
    and software components.
  • The role of an information system is to process
    data into information using information
    technology, business processes, and people

Information System Components
Phases of an Information System
Role of Information Systems in the Enterprise
  • Business organizations have become more complex
    due to increased layer of management hierarchy
    and increased level of coordination across
  • Each department has different information needs.
  • No single information system can support all the
    business needs of an organization.
  • Management is generally categorized into three
    levels- Strategic, Middle, and Operational.
  • Each management level has different information

Management Pyramid with Information Requirements
Executive Information System
Management Information System
Transaction Processing System
What are Decision Support Systems located?
Information Silos and Systems Integration
  • Over time, Information Systems create a number of
    independent nonintegrated systems ultimately
    creating bottlenecks and interfering with
  • Organizations need to be agile and flexible and
    will require their information systems to have
    integrated data, applications, and resources from
    across the organization.
  • To compete effectively, organizations have to be
    customer focused.

Evolution of Enterprise Systems
Legacy Systems
  • Each department has its own system
  • Infrastructure specific
  • Inefficient processes
  • Potential for inaccuracies

Enterprise System Approach
Internally focused systems
  • Support functional areas, business processes and
    decision-making within an organization
  • New information (value) is added at every step

Externally Focused Systems
  • Coordinate business activities with customers,
    suppliers, business partners and others who
    operate outside the organization

The Rise of Enterprise Systems
  • Packaged applications
  • Written by third-party vendors
  • Used by many different organizations
  • Useful for standardized, repetitive tasks
  • Cost effective
  • E.g., Microsoft Money and Quicken
  • Custom applications
  • Developed exclusively for a specific organization
  • Designed for particular business needs
  • Higher development costs

Best Practices-Based Software
  • Most ERP vendors build best practices into their
    ERP systems
  • Identify business processes in need of change
  • Future updates are smoother if businesses change
    their business processes to fit with ERP systems
  • Is following the best practices always the best
  • If companies have competitive advantage from
    unique business processes

Enterprise Resource Planning (ERP) Systems
  • ERP Systems are the first generation of
    enterprise systems meant to integrate data and
    support all the major functions of organizations.
  • ERP systems integrate various functional aspects
    of the organization as well as systems within the
    organization of its partners and suppliers.
  • The goal of an ERP system is to make the
    information flow dynamic and immediate,
    therefore, increasing its usefulness and value.

Integrated Systems - ERP
Evolution of ERP
Timeline System Platform
1960s Inventory Management Control Mainframe legacy systems using third generation software-(Cobol, Fortran)
1970s Materials Requirements Planning (MRP) Mainframe legacy systems using third generation software-(Cobol, Fortran)
1980s Manufacturing Requirements Planning (MRP-II) Mainframe legacy systems using fourth generation database software and manufacturing applications.
1990s Enterprise Resource Planning Mainframe client-server systems using fourth generation database software and package software.
2000s Extended ERP or ERP-II Client-server systems using Web platform, open source with integration to fifth generation applications like SCM, CRM, SFA.
ERP Components
ERP Components (cont.)
Hardware Servers and peripherals
Software Process Operating systems and database
Information Organizational data from internal and external sources
Process Business processes, procedures, and policies
People End users and IT staff
ERP Components Integration
ERP Architecture
  • The architecture of an ERP system influences the
    cost, maintenance, and the use of the system.
  • The ERP architecture helps the implementation
    team build the ERP system for the organization.
  • If purchased, ERP architecture is often driven by
    the vendor (Package-Driven Architecture).
  • There are two types of architectures.
  • Logical focuses on the supporting needs of the
    end users.
  • Physical focuses on the efficiency of the system.

Example of Architecture of ERP at Large University
Logical Architecture of an ERP System
Physical Architecture of An ERP System
System Configuration
eBusiness and ERP
eBusiness and ERP (cont.)
  • eBusiness links a company with external partners
    and stakeholders, whereas ERP focuses on
    integrating the functional silos of an
    organization into an enterprise application.

System Benefits of an ERP System
  • Integration of data and applications across
    functional areas (i.e., data can be entered once
    and used by all applications).
  • Improvements in maintenance and support as IT
    staff is centralized.
  • Consistency of the user interface across various
  • less employee training, better productivity, and
    cross-functional job movements.
  • Security of data and applications is enhanced due
    to better controls and centralization of hardware.

System Limitations of an ERP System
  • Complexity of installing, configuring, and
    maintaining the system increases, thus requiring
    specialized IT staff, hardware, and network
  • Consolidation of IT hardware, software, and
    people resources can be cumbersome and difficult
    to attain.
  • Data conversion and transformation from an old
    system to a new one can be tedious and complex
  • Re-training of IT staff and end users of the new
    system can produce resistance and reduce

Business Benefits of an ERP System
  • Agility of the organization in terms of
    responding to changes in environment for growth
    and maintaining market share
  • Sharing of information across functional areas
    helps collaboration between employees.
  • Linking and exchanging information in real-time
    with supply-chain partners improves efficiency
    leading to lower costs.
  • Better customer service
  • Efficiency of business processes are enhanced due
    to the re-engineering of business processes.

Business Limitations of an ERP System
  • Retraining of all employees with the new system
    can be costly and time consuming.
  • Change of business roles and department
    boundaries can create upheaval and resistance to
    the new system.

ERP Implementation
  • Organization has to plan and understand the life
    cycle of these systems.
  • Key to a successful implementation is to use a
    proven methodology, take it one step at a time,
    and begin with an understanding of the ERP life
  • ERP system implementations are very risky, and
    using a well-defined project plan with a proven
    methodology will assist in managing those risks.

ERP Life Cycle
  • The key to a successful implementation is to use
    a proven technology, to take one step at a time,
    and to begin with an understanding of ERP life

ERP Implementation Methodology
ERP Implementation Strategies
  • Need to analyze existing business processes.
    Otherwise, the implementation will require
    significant system modifications after
  • Buy an off-the-shelf package or develop in-house
  • If modify off-the-shelf package to fit
    organization (chocolate implementation), an
    upgrade of the package will also need
    modification with even greater cost
  • Vanilla implementation minimally modify
    software ? require greater time to train users

Product Life Cycle
Software and Vendor Selection
  • Better to purchase an off-the-shelf ERP product
    if an organization that does not have the
    experience in developing ERP systems
  • Before selecting a vendor, the organization must
    carefully evaluate its current and future needs
    in enterprise management systems.
  • Review the organizations existing hardware,
    network, and software infrastructure, and the
    resources available for the implementation.

Vendor Evaluation
  • Business functions or modules supported by their
  • Features and integration capabilities of the
  • Financial viability of the vendor as well as
    length of time they have been in business
  • Licensing and upgrade policies
  • Customer service and help desk support
  • Total cost of ownership
  • IT infrastructure requirements
  • Third-party software integration
  • Legacy systems support and integration
  • Consulting and training services
  • Future goals and plans for the short and long term

Operations and Post-Implementation
  • Going live (Go-live) is one of the most
    critical points in a projects success.
  • It is vital to focus the efforts of all project
    teams to ensure that task and activities are
    completed before going live.
  • Stabilization is time from Go live to about 90
    days after, or until a number of issues an
    problems have been reduced

Operations and Post-Implementation (cont.)
  • Five areas of stabilization are important
  • Training for end-users
  • Reactive support (i.e., helpdesk for
  • Auditing support to make sure data quality is not
    compromised by new system
  • Data fix to resolve data migration and errors
    revealed by audits
  • New features and functionalities to support the
    evolving needs of the organization

ERP Vendors
  • There were five dominating ERP software
    suppliers SAP, Oracle, PeopleSoft, Baan and J.D.
  • They controlled more than 60 of the multi-
    billion dollar global market.
  • Each vendor had a specialty in one particular
    module area such as
  • Baan in manufacturing,
  • PeopleSoft in human resources management,
  • SAP in logistics, and
  • Oracle in financials

  • SAP AG (Systeme, Anwendungen, und Produkte in
    Datenverarbeitung), or Systems, Applications and
    Products in Data Processing
  • In 1979, SAP launched SAP R/2, a mainframe-based
  • In 1992 SAP R/3 was launched based on
  • By 1999 SAP became the third largest software
    vendor in the world and the largest in the ERP
    sector with a market share of about 36 serving
    over 17,000 customers in over 100 countries.
  • In 1999 SAP extended the ERP functions by adding
    CRM, SCM, sales-force automation and data
  • SAPs Internet-enabled ERP solutions are provided
    by the recently launched ERP product called

Oracle Corporation
  • founded in 1977 in the USA, is best-known for its
    database software and related applications and is
    the second largest software company in the world
    after Microsoft.
  • second to SAP in the enterprise systems category
    with over 5,000 customers in 140 countries.
  • Oracles ERP system is known as Oracle
    Applications, having more than 50 different
    modules in six major categories finance,
    accounts payable, human resources, manufacturing,
    supply chain, projects and front office.
  • Now has taken over PeopleSoft and JD Edwards

PeopleSoft Inc.
  • Started in 1987 in California, with
    specialization in human resource management and
    financial services modules.
  • Enterprise solutions from PeopleSoft include
    modules for manufacturing, materials management,
    distribution, finance, human resources and supply
    chain planning.
  • One of the strengths of PeopleSoft is the
    recognition by its customers that it is flexible
    and collaborative
  • In 2005 PeopleSoft became a part of Oracle
    offering PeopleSoft 9

  • founded in 1977 in Denver (cofounded by Jack
    Thompson, Dan Gregory and C. Edward McVaney) with
    long experience of supplying software for the
    AS/400 market.
  • Its ERP product called OneWorld is capable of
    running on multiple platforms and with multiple
    databases, ... and revolutionizes enterprise
    software by liberating users from inflexible,
    static technologies
  • The product includes modules for finance,
    manufacturing, distribution/logistics and human
    resources, quality management, maintenance
    management, data warehousing, customer support
    and after-sales service
  • Now a part of Oracle offering JD Edwards
    EnterpriseOne and JD Edwards World

Baan, Invensys, SSA ERP, Infor
  • Baan was found in 1978 with expertise in software
    for the manufacturing industry
  • ERP solution areas that Baan covers include
    finance, procurement, manufacturing,
    distribution, integration and implementation,
    planning, sales, service and maintenance,
    business portals, collaborative commerce and
    business intelligence.
  • Baan was bought by Invensys (in 2000), then SSA
    Global Technologies (in 2003) and changed the
    name to SSA ERP
  • SSA ERP was acquired by Infor in 2006
  • Now Infor becomes The worlds third largest
    provider of enterprise software. It delivers
    integrated enterprise solutions in supply chain,
    customer relationship and suppliers management.

Other ERP Vendors
  • Microsoft Dynamics
  • Formerly Microsoft Business Solutions or Great
    Plains, Microsoft Dynamics is a comprehensive
    business- management solution built on the
    Microsoft platform.
  • Lawson
  • Industry-tailored software solutions that
    include enterprise performance management,
    distribution, financials, human resources,
    procurement, and retail operations.

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