BUSINESS B5

Enterprise Resource Planning (ERP)

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Learning Outcomes

Compare core ERP components and extended ERP components

Describe the three primary components found in core ERP

Describe the four primary components found in extended ERP systems

Explain the benefits and risks associated with ERP systems

Assess the future of ERP systems

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Introduction

ERP – integrates all departments and functions throughout an organization into a single IT system so that employees can make enterprisewide decisions by viewing enterprisewide information on all business operations

Core ERP components – traditional components included in most ERP systems and they primarily focus on internal operations

Extended ERP components – extra components that meet the organizational needs not covered by the core components and primarily focus on external operations

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Accounting and Finance Components

manage accounting data and financial processes within the enterprise with functions such as general ledger, accounts payable, accounts receivable, budgeting, and asset management

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Production and Materials Management Components handle the various

aspects of production planning and execution such as demand forecasting, production scheduling, job cost accounting, and quality control

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Human Resource Components

track employee information including payroll, benefits, compensation, performance assessment, and assumes compliance with the legal requirements of multiple jurisdictions and tax authorities

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Extended ERP Components

Business intelligence - information that people use to support their decision-making efforts

CRM - involves managing all aspects of a customer’s relationship with an organization to increase customer loyalty and retention and an organization’s profitability

SCM - involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability

E-business - means conducting business on the Internet, not only buying and selling, but also serving customers and collaborating with business partners

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E-Business Components

E-logistics – manages the transportation and storage of goods

E-procurement – the business-to-business (B2B) purchase and sale of supplies and services over the Internet

ERP Benefits

ERP Risks

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The Future of ERP

Lines between SCM, CRM, and ERP will continue to blur

Internet – continue to help organizations integrate data and process across functional departments

Interface – customizable employee browsers Wireless technology – support a mobile

workforce

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Closing Case One:PepsiAmericas’ Enterprises PepsiAmericas generates $2.97 billion in

revenues yearly The company implemented PeopleSoft’s ERP

solution to provide complete integration between PepsiAmericas’ front-office and back-office systems

PepsiAmericas also implemented PeopleSoft’s supply chain management component to automate its inventory

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Closing Case Two Questions

1. How have core ERP components helped PepsiAmericas improve its business?

2. How have extended ERP components helped PepsiAmericas improve its business?

3. Explain how future ERP systems will help PepsiAmericas increase revenues

4. Assess the impact on PepsiAmericas’ business if it failed to implement the CRM component of PeopleSoft’s ERP system

5. Review the different PeopleSoft components in Figure B5.5. Which component would you recommend PepsiAmericas implement if it decides to purchase an additional PeopleSoft component?

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Closing Case Two: Demanding Chocolate

Ghirardelli is the longest continuously operating chocolate manufacturer in the Untied States

Ghirardelli improved inventory management and profitability through the implementation of an ERP system

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Closing Case Two Questions

1. Which additional core ERP components would you recommend Ghirardelli implement?

2. Which additional extended ERP components would you recommend Ghirardelli implement?

3. How can implementing an Advanced Planning ERP component help Ghirardelli’s business?