Chapter 1 Flashcards
ERP systems
Are business systems that integrate and streamline data across an organization into one complete system that supports the needs of the entire enterprise
Characteristics of ERP
- Replace legacy systems: older, standalone, disparate business systems
- are cross -functional: support requirements of users across the organist.
- are process-centered: enable aclear, complete, logical, and precise view of the organization’s business processes
What is a business process?
A collection of activities that are linked and together add value to the organization
Span multiple departments and can traverse The boundaries of the organization
A best practice…
-A process that is generally recognized as more effective and efficient than others in a certain industry
_ ERP vendors will program thir software to mirror what they determine to be best practices
- buyers should pick an ERP system with the best practice that works for them
Vertical solutions
Specific versions of ERP software that are tailored towards an industry
Necessary because each industry sector has its own peculiarities
ERP modules
Modules are groups of related programs performing a major organizational function such as accounting on production
- modules that support a major business area are called a “suite” which comprises multiple sub modules, or components
Core ERP
Refers to the modules that support supply chain (operations), financials and hr
Examples of ERP modules
Logistics: plant maintenance, purchasing, sales and distributions, manufacturing
Financial accounting: General ledger, Ar, cash management
Management accounting; product costing, cost-center accounting, budgeting
Hr: payroll, benefits, time and attendance
ERP software categories
-Back-office software: software used to integrate internal operations of the company, not typically seen ley the public. Ex: accounting, payroll, etc.
- front-office software: company’s customer-facing modules collectively referred to as a customer relationship management (crm ) system
Who needs knowledge of ERP systems?
- End users; log in ERP daily to perform their role functions
- system integrators: consultants with both business and ERP knowledge that assists companies with the many activities required to deploy an ERP
- auditors: reed to understand now the ERP system processes and controls transactions and helps companies comply with regulations
Top reasons for implementing ERP?
To improve business performance, to position the company for growth, to improve working capital, to better serve customers
Drawbacks OF ERP systems?
- complex, time-consuming implementation
- people issues (soft-stuff) can make or break the implementation. Ex: resistance to change, sabotage, system work-arounds “shadow IT”
- initially expensive, and includes constant “care and feeding”
-Technical issues
-Standardization of business processes - best practices can level the playing field (need to be good at core competencies)
ERP evolution and trends
-Material requirements planning (mrp) determines raw materials needs based on production forecast
-MRP developed into manufacturing resource planning (mrpii) which incorporated more of the value stream
- mrpii evolved into ERP comprising many more modules
- extended ERP (erpii) includes modules to compliment core functionality
- Post modern ERP is a strategy whereby companies replace legacy ERP systems with cloud - based and on-premise modules
ERP market
- ERP vendors can be organized into tiers based on certain characteristics
- tier 1 ERP’S are known as Th enterprise class
- tier 2 and 3 vendors target small to medium sized enterprises (smE’s)
Tier 2= mid-market class
Tier 3= small business class - tier 1 ex: sap, oracle, infor
-Tier z ex: Microsoft,epicure, net suite
