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Systems Analysis and Design in a Changing World, 2nd Edition, Satzinger, Jackson, & Burd

Chapter 14

Packaged Software and Enterprise Resource

Planning

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Objectives

Discuss three major analysis and design issues associated more often with packages than with custom software

Name the three types of package customization and explain when each would be necessary

Identify and explain the four major characteristics of ERP systems and discuss several reasons for adopting ERP

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Objectives

Identify and explain several critical success factors for ERP implementation

Distinguish the three major approaches to ERP system development

Discuss how methods used for ERP systems deployment differ from those for conventional systems development

Identify and explain the four major steps to ERP package selection

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Objectives

Discuss the major areas of expansion for ERP

Identify the four high-level work areas of SAP R/3

Identify and discuss the five types of master data in SAP R/3

Describe the function of R/3 Basis software

Describe how transactions are entered in SAP R/3

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IS Components Serving Multiple Business Functions

Figure 14-1

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Key Players in Enterprise ComputingFigure 14-2

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Packaged Software

Traditionally focused on isolated business functions

ERP focuses on integrated software solutions

Current trends show increase in packaged software and decrease in in-house software development

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Three Critical Issues of Packaged Software Spanning All Phases of the SDLC

Figure 14-3

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Customization

Desire is to minimize customization Best practices built-in already Unique requirements may exist

Customization types Configuration Modification Enhancement

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Integration

Standardize data so all functions can access it in real time

Enterprise application integration (EAI) is the process of linking applications to support the flow of information across multiple business units and IT systems Middleware ERP with built-in middleware

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Obstacles to IntegrationFigure 14-4

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Upgrading Packages

Upgrades can be challenging Frequency Existing level of customization Integration

Must be planned and documented

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ERP

Process of using integrated application software to improve the effectiveness and efficiency of the entire enterprise

Objectives of ERP Provide best practice functionality within

departments and high level of integration across all enterprise functions

Bridge gap in value chain

Included in ERP:TPS, MIS, DSS

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Nonintegrated ISFigure 14-5a

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Integrated IS in an ERP SystemFigure 14-5b

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Major Characteristics of ERPFigure 14-6

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Major ERP Vendors

SAP AG, Peoplesoft, Oracle, J.D. Edwards, Baan

Began as integrated packages for core business function management Finance Manufacturing Human resources

Expanded to extended business functions Sales-force automation E-commerce Business intelligence

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Why ERP?

Reduces workforce in core transaction processing systems

Supports global business

Achieves economies of scale

Reduces information systems development staff

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Why ERP?

Improves customer service

Improves data integrity

Improves decision support

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Costs and Benefits

ERP may cost several hundred thousand dollars for a mid-sized firm

Cost competitive among major vendors

Payback usually 6-30 months

Savings based on 30% reduction in administrative and IS costs

Consider operating costs

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Critical Success Factors of ERP

Strong top management support

Centralized project management

Strong IT management and staff support

Heavy user involvement

Standardized business process reengineering on software capabilities

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Retraining of existing software developers in ERP

Extensive training of end users

Use of consultants to lead implementation and training

A respected and effective champion of ERP within the organization

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Effective and continuous communication

Top-notch systems analysts

Retention of analysts throughout project and beyond

Sensitivity to user resistance with new systems

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Three Approaches to ERPFigure 14-7

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Organizational Structure for an ERP ProjectFigure 14-8

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ERP Development Methodology

Phase 1: Planning ERP oversight committee

Phase 2: Analysis Collection of requirements from in-house

work groups Identify business reengineering initiatives Select vendors

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ERP Development Methodology

Phase 3: Design Interfaces determined Hardware design Middleware issues

Phase 4: Implementation Installation Configuration into cohesive system

Phase 5: Support Training Maintenance

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Special Topics on ERP Development

Select a comprehensive package Preliminary evaluation Detailed evaluation Vendor presentations On-site visits Final decision

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Special Topics on ERP Development

Linking applications to an ERP package Purchasing middleware Select software vendors that partner with ERP

packages Vendor-provided or in-house link development

Using ERP packages for application development Investigate vendor-supplied development

tools

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ERP Future

Areas of expansion Supply chain management Business intelligence

Continued integration of various business functions

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SAP R/3

SAP AG is a German software development firm

SAP R/3 is current ERP system

SAP R/3 Organization Logistics Accounting Human resources Business tools

Designed to meet business needs across entire enterprise

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SAP Industry Solutions

SAP includes common core business functions plus Industrial Business Units (IBUs) to provide “best practices” for specific industries Automotive Electronics Public sector Retail

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Five Master Databases for SAP R/3Figure 14-10

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Implementing SAP R/3

Three-tier client server system

R/3 Basis Middleware that enables integration of R/3

applications on various computing platforms

Accelerated SAP (ASAP) Small to mid-sized business applications of SAP RMO would be a good candidate

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Three-Tier Architecture of SAP R/3Figure 14-11

Documents

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