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Chapter 12 : Integrating the Organization from End to End- Enterprise Resource Planning

Enterprise Resource Planning (ERP)

• ERP systems is a database, when a user enters or updates information in one module, it is immediately and automatically updated throughout the entire system. 
• Automate business processes. The evolution of ERP system is as in the figure below.

• It serves as the organization’s backbone in providing fundamental decision making support.
• It enables people in different business areas to communicate. 
• ERP system helps an organization to obtain operational efficiencies, lower costs, improve supplier and customer relations, and increase revenues and market share.
• The heart of an ERP system is a central database that collects information from and feeds information into all the ERP system’s individual application components (called modules), supporting diverse business function such as accounting, manufacturing, marketing, and human resources. 
•  ERP automates business processes such as order fulfillment- taking an order from a customer, shipping the purchase, and then billing for it. 

Bringing the Organization Together

•  ERP enables employees across the organization to share information across a single, centralized database.
• With extended portal capabilities, an organization can also involve its suppliers and customers to participate in the workflow process, allowing ERP to penetrate the entire value chain, and help the organization achieve greater operational efficiency.

Organization before ERP 

The Evolution of ERP 

Although ERP solutions were developed to deliver automation across multiple units of an organization, to help facilitate the manufacturing process and address issues such as raw materials, inventory, order entry, and distribution, ERP was unable to extend to other functional areas of the company such as sales, marketing, and shipping. It could not tie to any CRM capabilities that would allow organizations to capture customer-specific information, nor did it work with websites or portals used for customer service or order fulfillment

     The SCM, CRM and ERP are the backbone of e-business.

Integration of these applications is the key to success for many companies and it allows the unlocking of information to make it available to any user, anywhere and anytime. Below is the general audience and purpose of SCM, CRM and ERP.

PRIMARY USERS AND BUSINESS BENEFITS OF STRATEGIC INITIATIVES :

Integration Tools

An integrated enterprise infuses support areas, such as finance with a a strong customer orientation.

 Integration are achieved using:

•  Middleware - several different types of software that sit in the middle of and provide connectivity between two or more software applications. It translates information between disparate systems.

In order to qualify as a true ERP solution, System not only must integrate various organization processes, but also must be:

• Flexible – must be able to quickly respond to the changing needs of the organization

• Modular and open – must have an open system architecture, meaning that any module can be interface, with or detached whenever required without affecting the other modules. 

• Comprehensive – must be able to support a variety of organizational functions for a wide range of businesses

• Beyond the company – must support external partnerships and collaboration efforts