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CHAPTER 10

ENTERPRISE RESOURCE PLANNING

AND COLLABORATION SYSTEMS

CHAPTER 10


AND COLLABORATION SYSTEMS

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• Enterprise resource planning (ERP)– integrates all departments and functions throughout an organization into a single IT system (or integrated set of IT systems) so that employees can make enterprisewide decisions by viewing enterprisewide information on all business operations

• Keyword in ERP is “enterprise”

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• Sample data from a sales database

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• Sample data from an accounting database

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• Sample data from a sales database

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Enterprise Resource Planning Systems (ERP)

• Internally focused systems are designed to support the internal operations of the firm– Provide a central data repository common to all

corporate users– Share a common user interface– Allow the sharing of information regardless of

location

• Externally focused systems can streamline communications with customers and suppliers as well

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• Reasons ERP Systems are Powerful Organizational Tools– ERP is a logical solution to the mess of

incompatible applications that have sprung up in most businesses

– ERP is used to avoid the pain and expense of fixing legacy systems

– ERP addresses the need for global information sharing and reporting

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System TypesSystem Evolution

Standalone Systems

Integrated Systems(Intraorganizational)

Integrated Systems(Interorganizational)

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Standalone (Legacy) Systems

• Designed to support one or a few related business functions

• Little or no integration with other organizational systems so information is not readily shared between systems

• Often run on a variety of HW and SW platforms, also complicating compatibility

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Legacy (stand-alone) Systems – information is not readily shared between systems (i.e. Inbound Logistics inventory information is not shared with Operations)

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ERP Systems – Information is stored in a single data repository and can be accessed and updated by all functional systems

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The Heart of ERP

• At the heart of all ERP systems is a database

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The Heart of ERP

• ERP systems help automate business processes

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Core and Extended ERP Components

• Internally focused ERP Systems include:– Core ERP components– traditional

components included in most ERP systems - they primarily focus on internal operations (intraorganizational)

• Externally focused ERP Systems include:– Extended ERP components – extra

components that meet the organizational needs not covered by the core components - primarily focus on external operations (interorganizational)

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Core and Extended ERP Components

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CORE ERP COMPONENTS

• Three most common core ERP components

1. Accounting and finance

2. Production and materials management

3. Human resource

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Accounting and Finance ERP Components

• Accounting and finance ERP component – manages 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 ERP Components

• Production and materials management ERP component – handles 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 ERP Component

• Human Resource ERP component – tracks 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

• Extended ERP components include:– Business intelligence (BI)– Customer relationship management (CRM)– Supply chain management (SCM)– E-business

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EXTENDED ERP COMPONENTS

• Business Intelligence – information that people use to support their decision-making efforts

• Customer Relationship Management (CRM) - managing all aspects of a customer’s relationship with an organization to increase customer loyalty and retention and the organization’s profitability

• Supply Chain Management (SCM) – management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability

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E-Business Components

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

• E-business components include e-logistics and e-procurement – 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

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INTEGRATING SCM, CRM, AND ERP

• SCM, CRM, and ERP are the backbone of business!

• Integration of these applications is the key to success for many companies

• Integration allows the unlocking of information to make it available to any user, anywhere, anytime

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ERP VENDOR OVERVIEW

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• SCM and CRM market overviews

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• General audience and purpose of SCM, CRM and ERP

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THE CONNECTED CORPORATION

• Many companies purchase modules from an ERP vendor, an SCM vendor, and a CRM vendor and must integrate the different modules together– Middleware – several different types of software

which sit in the middle of and provide connectivity between two or more software applications

– Enterprise application integration (EAI) middleware – packages together commonly used functionality which reduces the time necessary to develop solutions that integrate applications from multiple vendors

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Integration Tools• Data points where SCM, CRM, and ERP integrate

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MEASURING ERP SUCCESS

• Balanced scorecard – a management and measurement system that enables organizations to clarify their vision and strategy and translate them into action

• Balanced scorecard views the organization from four perspectives– Learning and growth– Internal business process– Customer– Financial

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MEASURING ERP SUCCESS Using the Balanced Scorecard

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ERP SOFTWARE

• Successful ERP projects share 3 attributes1. Proper business analysis

• Successful companies spend up to 10% of the project budget on a business analysis

2. Overall fit• Off the rack• Off the rack and tailored to fit• Custom made/designed

3. Solid implementation plans• A plan is needed to monitor the quality, objectives,

and timelines

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ERP BENEFITS

Common ERP benefits:

1. Integrate financial information

2. Integrate customer order information

3. Standardize human resource information

4. Standardize and speed up manufacturing processes

5. Reduce inventory

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Common ERP Benefits, cont.

6. Eliminate costly, inflexible legacy systems - replace multiple systems with a single integrated set of applications

7. Improve work processes - supports best practices – the most efficient and effective ways to complete a business process

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Common ERP Benefits, cont.

8. Increase data access for decision making• Better customer service• Strengthening of customer/supplier

relationships• Generate new business opportunities

9. Upgrade your technology infrastructure• Upgrade and standardize HW, operating

systems, and databases• Reduce incompatibilities

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ERP RISKS/COSTS

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ERP RISKS/COSTS, cont.

• Expense & time– Can take years & millions of $$$– Many failures

• May require radical changes to conform with the best practices supported by the ERP system

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TEAMS, PARTNERSHIPS, AND ALLIANCES

• Organizations create and use teams, partnerships, and alliances to:– Undertake new initiatives– Address both minor and major problems– Capitalize on significant opportunities

• Organizations create teams, partnerships, and alliances both internally with employees and externally with other organizations

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• Organizations form alliances and partnerships with other organizations based on their core competencies– Core competency – an organization’s key

strength; a business function that it does better than any of its competitors

– Core competency strategy – a strategy in which the organization chooses to focus specifically on its core competency and forms partnerships with other organizations to handle nonstrategic business processes

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• Information technology can make a business partnership easier to establish and manage– Information partnership – occurs when two or more

organizations cooperate by integrating their IT systems, thereby providing customers with the best of what each can offer

• The Internet has dramatically increased the ease and availability for IT-enabled organizational alliances and partnerships

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COLLABORATION SYSTEMS

• Collaboration system – an IT-based set of tools that supports the work of teams by facilitating the sharing & flow of information

• Allow people, teams, and organizations to leverage and build upon the ideas of & talents of staff, suppliers, customers & business partners

• Support complex interactions between people across different functions, locations, time zones

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• Two categories of collaboration1. Unstructured collaboration (information

collaboration) – can improve personal productivity, reducing time spent searching for information; ex. document exchange, shared whiteboards, discussion forums, and e-mail

2. Structured collaboration (process collaboration) - involves shared participation in business processes such as workflow in which knowledge is hard coded as rules, improving automation and routing of information

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• Collaboration systems include:– Knowledge management systems– Content management systems– Workflow management systems– Groupware systems

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COLLABORATION: KNOWLEDGE MANAGEMENT

• Knowledge management (KM) – involves capturing, classifying, evaluating, retrieving, and sharing information assets in a way that provides context for effective decisions and actions

• Knowledge management system (KMS) – supports the capturing, organization, and dissemination (use) of knowledge (an organization’s “know-how”)

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• Knowledge Assets – all underlying skills, routines, practices, principles, formulas, heuristics, and intuitions

• Knowledge-based assets fall into two categories

1. Explicit knowledge – consists of anything that can be documented, archived, and codified, often with the help of IT

2. Tacit knowledge - knowledge contained in people’s heads

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• Best Practices - Procedures and processes that are widely accepted as being among the most effective and/or efficient

• Primary Objective of a KMS - how to recognize, generate, store, share, manage this tacit knowledge (Best Practices) for deployment and use

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• Two common practices for transferring or recreating tacit knowledge:– Shadowing – less experienced staff

observe more experienced staff to learn how their more experienced counterparts approach their work

– Joint problem solving – a novice and expert work together on a project

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• Knowledge management systems include:– Knowledge repositories (databases)– Expertise tools– E-learning applications– Discussion and chat technologies– Search and data mining tools

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• Finding out how information flows through an organization– Social networking analysis (SNA) – a

process of mapping a group’s contacts (whether personal or professional) to identify who knows whom and who works with whom

– SNA provides a clear picture of how employees and divisions work together and can help identify key experts/individuals who possess needed knowledge

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Knowledge Management Benefits

• Reasons why organizations launch knowledge management programs

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Knowledge Management Challenges

• Getting employee buy-in

• Focusing too much on technology

• Forgetting the goals

• Dealing with knowledge overload and obsolescence

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COLLABORATION: CONTENT MANAGEMENT

• Content management system (CMS) – provides tools to manage the creation, storage, editing, and publication of information in a collaborative environment

• Types of CMS systems include:– Document management systems (DMS)– Digital asset management systems (DAM)– Web content management systems (WCM)

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• Content management system vendor overview

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• Wikis - Web-based tools that make it easy for users to add, remove, and change online content

• Business wikis - collaborative Web pages that allow users to edit documents, share ideas, or monitor the status of a project

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COLLABORATION: WORKFLOW MANAGEMENT

• Work activities can be performed in series or in parallel that involves people and automated computer systems

• Workflow – defines all the steps or business rules, from beginning to end, required for a business process

• Workflow management system – facilitates the automation and management of business processes and controls the movement of work through the business process

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COLLABORATION: WORKFLOW MANAGEMENT

• Messaging-based workflow system – sends work assignments through an e-mail system

• Database-based workflow system – stores documents in a central location and automatically asks the team members to access the document when it is their turn to edit the document

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COLLABORATION: GROUPWARE

• Groupware – software that supports team interaction and dynamics including calendaring, scheduling, and videoconferencing; enables people to work together more effectively

• Dimensions of Groupware Support– Time Dimension– Location Dimension

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COLLABORATION: GROUPWARETime Dimension

• Asynchronous Groupware – Systems that do not require users to be on the system working at the same time; examples: e-mail, newsgroups, workflow automation, group calendars, collaborative writing tools

• Synchronous Groupware – Systems that allow and support simultaneous group interactions; examples: shared whiteboards, electronic meeting support systems, video communication systems

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COLLABORATION: GROUPWARELocation Dimension

• Co-located - Systems that support users working at the same place

• Distance - Systems that allow and support users working at different locations; different place

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• Groupware – supports team interactions

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• Same time (synchronous) & same place (co-located)– technological support for live meetings in

electronic meeting facilities• Decision rooms• “War” rooms

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COLLABORATION: GROUPWAREA DECISION ROOM

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General Characteristics/Features of a Groupware System to support decision

making• Idea generation/brainstorming• Parallel communication• Idea organization• Prioritization, ranking• Anonymous input• Voting• Reduction of negative group behaviors• Enables larger group size• Access to external information• Automated record keeping

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• Different time (asynchronous) & same place (co-located)– Asynchronous technologies to support

communication (e-mail, voice mail, fax, text messaging, newsgroups, group calendars, workflow management systems)

– Project room as “home base”

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• Same time (synchronous) & different place (distance)– Conference calls– Instant messaging– On-line chat– Videoconferences– Web conferences (Web Ex, web seminars)

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Videoconferencing

• Videoconference - a set of interactive telecommunication technologies that allow two or more locations to interact via two-way video and audio transmissions simultaneously

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Web Conferencing

• Web conferencing - blends audio, video, and document-sharing technologies to create virtual meeting rooms where people “gather” at a password-protected Web site

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• Different time (asynchronous) & different place (distance)– Asynchronous technologies to support

communication (e-mail, voice mail, fax, text messaging, newsgroups, group calendars, workflow management systems)

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• Groupware System Advantages:– Facilitate communication (faster, easier, clearer, more persuasive)– Enable telecommuting– Reduce travel costs– Share expertise– Allow formation of groups based on interest and expertise,

regardless of location of participants– Reduce time and cost of group work– Facilitate group problem solving

• Groupware System Disadvantages:– Cost– Complexity– Change

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New Collaboration Technologies

• DiamondTouch table – a multi-user, touch and gesture activated screen to support small group collaboration

• http://www.merl.com/projects/DiamondTouch • http://www.youtube.com/watch?v=t35HXAjNW6s • WarCraft Video clip http://

www.youtube.com/watch?v=LXAqdh4-hcw&search=Touchscreenwarcraft

• GoogleEarth Video Clip http://www.youtube.com/watch?v=J5ra4CxNb80

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New Collaboration Technologies

Milan MultiTouch Screen

• http://link.brightcove.com/services/link/bcpid932579976/bclid932553050/bctid933742930

Perceptive Pixel MultiTouch Screen

• http://link.brightcove.com/services/link/bcpid936988771/bclid933081120/bctid933203849

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