Full Study Flashcards
What is a business process?
A business process is a series of related tasks that accomplish some goal. For example, hiring a new employee is a business process.
What are the 3 business processes with an explanation?
Core - Processes that directly affect the customer and profit e.g. marketing and sales.
Support - These do not directly link to profit or the customer but are necessary for the business e.g. HR and admin
Manage - These plan, monitor, and control all other processes e.g. controlling processes to increase profits by 5%.
What are the functional areas of a business?
Sales
Marketing
Distribution
Manufacturing
Accounting
HR Management
Service and Maintenance
Planning
What is a ERP?
Enterprise resource planning (ERP) is a company-wide computer software system that optimizes the flow of information, materials, and finances throughout an organization. This software can run on an immense scale and can provide seamless integration across all departments to support the functional areas of the enterprise.
What does a company look like with an ERP compared to without?
With an ERP:
Each department still uses a system which is optimized for their function. However, all departments are linked. They all have access to the same data via a single application.
Without an ERP:
Each department uses their own system which is optimized for their function. However, these departments are separate, and each department has its own data and software.
What was the 3 phases of ERP history?
Phase 1:
Originally, ERP software was designed to manage inventory and co-ordinate manufacturing.
Phase 2:
As technology and businesses developed, additional functionality was required and the ERP system became modular.
Phase 3:
Software shifted from being a product to being a service. Integration and inter-operability between different systems improved
What is a modular design? and how does is help?
The modular design allows a business to add or reconfigure modules (perhaps from different vendors) while preserving data integrity in one shared database that may be centralized or distributed.
What are the benefits of using the modular system?
An ERP system can be extremely expensive. A business can only buy the modules they need. As the business grows or their needs change, they can simply purchase additional modules that easily fit into their current system.
Third-party developers are also able to develop compatible software that can integrate with an existing ERP system.
What are the 6 modules that a company can purchase?
Finance
Manufacturing
Human Resources
Warehouse Management
Supply Chain Management
Customer Relationship Management
What does the Finance Module do?
It gives the business an idea of its financial position.
Includes important financial features such as the general ledger and accounts payable/receivable.
Can automate billing and vendor payments as well.
This module also allows the organization to get an immediate view of their financial situation.
It also facilitates financial analysis and planning.
What does the Manufacturing Module do?
Can check if your forecasted output will be met
Calculate the average production time for an item.
Can provide reporting on a status such as “in-progress” or “completed” and can then link to inventory to keep it updated.
A significant advantage of this module is called Material Requirements Planning. This calculates the materials required to manufacture a product. It can check what is needed, whether there is stock, and can then either schedule manufacturing to be done or materials to be purchased.
What does the Human Resources Module do?
This module (also known as Human Capital) manages all aspects surrounding employees. It keeps their information and documents such as performance reviews, attendance, warnings, job descriptions, and hours worked.
What does the warehouse management module do?
This module covers all components from checking which shipments arrived to locating, packing, and shipping an order.
It can also guide employees on the most efficient route to take while picking up all items for an order as well as determining the ideal type of order picking.
What does the Customer Relationship Management (CRM) Module do?
Sales and marketing, commissions, service, customer contact and call canter support, linking to data warehouse and various self-service interfaces for customers, suppliers, and employees.
This module contains customer information such as all communication, their purchase history, quotes, and can even suggest which customers to target for certain promotions.
While most ERP systems provide their own CRM module, the most popular CRM software worldwide is Salesforce and it is often integrated with an existing ERP system.
What does the Supply Chain Management (SCM) Module do?
This module can include other modules as well since it can track each step of the entire process from supplier to manufacturer to distributor to retailer/customer. It can therefore also link to inventory, orders, procurement, or warehouse modules.
Some manufacturers prefer using a standalone SCM that integrates with an existing ERP system since it can often provide much greater functionality.
What is a supply chain?
The supply chain is a network of all parts needed to get a product into the hands of the customer
What are the Advantages of using an ERP system?
Reduced Operating Costs
Facilitate day-to-day management
Scalability
Real-time Reporting
Improved Customer Service
Forecasting
What are the advantages of using a central database?
Every Module Uses the same data.
This greatly reduces data redundancy
Maximizes data integrity since everyone across all departments is accessing the same data.
What are the factors when calculating ERP costs?
Choice of Modules
Deployment Method
External Assistance
Non-Monetary Costs
Hidden Costs
When is it time to consider upgrading to an ERP?
Struggling to meet customer demands
Complicated inventory management
Disorganized data from multiple sources
Too many manual processes
Software integration issues
What is Business Process Reengineering (BPR)?
Business process reengineering is the main way in which organizations become more efficient and modernize. A process is identified that needs a radical redesign in order to benefit the organization in some way. When a business adopts a new ERP system, that could be seen as part of BPR.
What are the steps in Business Process Reengineering?
1) Identify Process
2) Review, Update and Analyze current process
3) Design the new Process
4) Implement the new process
By who and when was Business Process Reengineering created?
developed by Michael Hammer, a former MIT professor, in the 1990s.
What does the origination need to decide in the Manufacturing Challenge?
How many products to make
When to make these products
What materials are needed
Which suppliers to use (bear in mind multiple suppliers will be used and they may all have different lead times) all based on customer demand and current inventory levels while spending minimum cash
What is a Management Information System (MIS)?
MIS is a planned system of the collecting, processing, storing and disseminating data in the form of information needed to carry out the functions of management.
As a business grows, more and more data becomes available and more tasks are required. People on a management level need to be able to view data and perform these functions. This can be done via an MIS. As they identify gaps in the company, they might need to develop a new system.
What are the types of Management Information System (MIS)?
Accounting management information systems
Financial management information systems
Manufacturing management information systems
Marketing management information systems
Decision support systems
Executive information system
What is a Executive Information System (EIS)?
An EIS is a type of management information system intended to facilitate and support the information and decision-making needs of senior executives by providing easy access to both internal and external information relevant to meeting the strategic goals of the organization. It centralises reports that come from finance, HR, and other departments. Many ERP systems come with an EIS module as well.
What are the main points of a Executive Information System (EIS)?
Designed with Management in mind
Presented through either text, visuals or Audio
Allows access to large amount of data
Support strategy through identifying risks and trends
What are the Advantages of Executive Information System (EIS)?
Easy for upper-level executives to use, extensive computer experience is not required
Allows for in-depth examination of critical success factors
Greatly reduces time to find relevant information
Supports management’s leadership skills
What are the Disadvantages of Executive Information System (EIS)?
Functions are limited, cannot perform complex calculations
Smaller companies might not be able to afford it
Executives may encounter information overload
System may become slow, large, and hard to manage
What is Decision Support Systems (DSS)?
They are a specific class of computerized information systems that supports business and organizational decision-making activities
What is the information that a Decision Support System gather?
An inventory of all of your current information assets (including relational data sources, data warehouses)
Comparative sales figures between one week and the next,
Projected revenue figures based on new product sales assumptions.
The consequences of different decision alternatives, given past experience in a context that is described.
What are the Advantages of a Decision Support System?
Improves efficiency by reducing time needed to make decisions
Faster problem solving
Generates new evidence in support of a decision.
Creates a competitive advantage over competition.
Encourages exploration and discovery on the part of the decision maker.
Reveals new approaches to thinking about the problem.
Compare DSS and EIS
DSS:
- Aimed at executives
- Provides information across all platforms
- Used to track, control and identify risks and
opportunities
EIS:
- Aimed at managers, analysists and professionals
- Additional tools to aid in analysis to support
decision making
- Used to analyze, plan and organize
