Running the Business: Enterprise Systems (ERP) Flashcards
Why should we care about ERPs?
Business people must understand them so they can make the best decisions for a company
What is an ERP system?
Business processes that span multiple functional areas
What benefits does ERP have for companies?
Gives global, real-time view of data that can enable companies to address concerns proactively and drive improvements
What effect does ERPs have on risk?
Improves financial compliance with regulatory standards and reduces risk
What things do ERPs automate?
Automate core business operations such as lead-to-cash, order-to-fulfillment, and procure-to-pay processes
What effect does ERP have on customer service?
Enhances customer service by providing one source for billing and relationship tracking
What sections of businesses can be included in ERPs?
CRM Sales Procurement Production Distribution Accounting HR Corporate performance/governance Business Intelligence e-Commerce Enterprise Asset Management
Legacy Systems
Sales, Warehouse, Accounting
What are some challenges of ERPs?
- Adoption: People hate change
- Complex configuration
- Complex implementation
- Cost
- High risk because failures lead to company loss
- Internally focused–need support of all
The decision to invest in an ERP is a _____
Business Decision
What are some benefits of ERPs?
- Single database providing real-time, data-driven decision making
- Standardizes business processes based on best practices
- Reduces operating costs
Who are some leaders in ERP space?
SAP
Oracle
Microsoft Dynamics
How does an ERP get implemented and become successful?
- Executive sponsor
- Driven by business, not IT
- Experts from all areas
- Top-tier integration partner
- Training
- Testing
- Not cutting corners
What is the central feature of an ERP?
Shared database that supports multiple functions used by different business units
Where does ERP come from?
Garter (1990) but roots to 1960s; 1970s Material Requirements Planning expanded beyond inventory control
What helped fuel the growth of ERP?
Software as a service; Makes ERP more affordable and easier to manage and real time report
Enterprise Resource Planning
Integrated management of core business processes, often in real time and mediated by software and technology
What does ERP do?
Continually updates view of core business processes; Tracks business resources such as cash, materials, payroll for various departments
What reasons cause ERPs to fail?
NOT technical challenges; Companies fail to reconcile the technological imperatives of the system
What problem do ERPs solve?
Fragmentation of information in large business organizations; No longer having information spread across several databases; Breaks down hierarchical structure allowing people to be more innovative and flexible
9 Tips for Selecting/Implementing an ERP System
- Get upper level support
- Make list of requirements
- Don’t forget about access through phone
- Evaluate options
- Get refrences
- Don’t always customize
- Factor in change management
- Appoint internal ERP person and surround with good people for job
- Provide necessary time, resources, training
What ERP systems work best for big/small organizations?
SAP/Oracle–big
Microsoft–small/mid
What is a legacy system?
Separate systems that are used in each of the functional areas; Sales, Warehouse, Accounting
Vanilla vs. Customization
- Vanilla is configuration change only
- Customization is changing the code that defines ERP
- Vanilla is best because it saves resources
Rohm & Haas and ERPs
Rohm and Haas spent 300 million over 3 years, but ended up saving 200 million/year after implementation
What happened with ERPs in the 1990s?
Mega-failures caused many companies to go out of business
Leaders/Uses in ERP
- SAP (manufacturing)
- Oracle (financial services)
- Microsoft Dynamics (small/midsize companies)
What does ERP not include?
- Customer Relationship Management
- Supply Chain Management
- Need other systems for these
