7/3/2010

1

Chapter 3ERP and Related Technologies

Sonali Chauhan

UDIT

TYBSc IT

June 2008

ERP is an abbreviation for Enterprise Resource Planning

and means, the techniques and concepts for the integrated management of businesses as a whole, from the viewpoint

of the effective use of management resources, to improve

the efficiency of an enterprise

ERP systems serve an important function by integrating

separate business.functions - materials management, product planning, sales,

distribution, finance

and accounting and others-into a single application.

ERP systems have three significant limitations: .

1.managers cannot generate custom reports or queries without help from a programmer and this inhibits them

from obtaining information quickly, which is essential for

maintaining a competitive advantage.

2. ERP systems provide current status only, such as open orders. Managers often need to look past the current status

to find trends and patterns that aid better decision making.

3. The data in the ERP application is not integrated with

other enterprise or division systems and does not include external intelligence.

Cont…

7/3/2010

2

There are many technologies that help to

overcome these limitations.

These technologies, when used' in conjunction

with the ERP package, will help in overcoming the

limitations of a standalone ERP system and thus,

help the employees to make better decisions.

Cont…

Some of these technologies are

– BPR,

– Data Warehousing,

– Data Mining,

– Online Analytical Processing (OLAP),

– Supply Chain Management and so on.

Cont…

With the competition in the ERP market getting

hotter and hotter, and ERP vendors searching for

ways to penetrate new market segments and

expand the existing ones, tomorrows ERP systems

will have most of these technologies integrated into

them.

In this chapter, we will see how each of these

technologies are related to ERP systems

Cont…

7/3/2010

3

Business Process Re-engineering (BPR)

As Dr. Michael Hammer, the champion of BPR

puts it, business process re-engineering is the

fundamental rethinking and radical redesign of

business processes to achieve dramatic

improvements in critical, contemporary measures

of performance, such as cost, quality, service &

speed. And Thomas Davenport calls it a process

innovation.

Management Information System (MIS)

MIS is computer based system which transfer collection,

collation and presentation information throughout

organization.

Not concerned with day-to-day operation

– Eg: Ticket reservation System, is transaction or data processing

system (TPS) which takes order and print the ticket.

– Whereas MIS measures the performance of each of the agent who

will sell tickets and produces regular reports about agents

effectiveness

MIS processes data that is generated by TPS and

other internal information sources

Users will request for reports and request are

taken by MIS programs.

Cont…

7/3/2010

4

Advantage of MIS:

– MIS provides strong transaction supports and record

keeping facilities

– MIS supports different functional areas and uses

integrated database

– Provide Structural information at different level of

organization and support time management

– Flexible enough to adapt changing need in organization.

Cont…

Decision Support System (DSS)

Organization have to make several decision at

different level of management.

And managers use to spend lots of time in

analyzing and gathering information before making

decision.

To analyze certain certain complex decisions where involves many factors as well as to provide support to management, to make quality decision, Decision Support System is requires.

DSS assist managers to gather and analysis the information to meet certain decision.

DSS can make several forecasting and planned models along with s/w and h/w with latest technologies like Artificial intelligence.

Cont…

7/3/2010

5

DSS Characteristics:

DSS mainly supports decision making at the top management level to make certain complex decision

DSS is interactive , user friendly software which is useful for decision making.

DSS supports planning and forecasting model, which has simulation also analytical tools are available to decision makers to improve quality of their decision.

Cont…

Executive Information System (EIS)

DSS and SIS are support system of MIS

Both are decision making, difficult to make out

difference.

But EIS is more sophisticated and better than

DSS.

In today's competitive world, reaction is decreasing

and time to make decision is very less,

EIS can be more sophisticated solution.

It supports more senior level executives

– How decisions are taken by them which will affect

entire organization

Takes under consideration the outside information

from competitor, consultant, newsgathering so on

Cont…

7/3/2010

6

EIS takes following into consideration:

Overall vision and mission of company and of company

and company goal.

Planning and objectives

Strategic control and monitoring of overall operations

Crisis management

Cont…

ESS Program

External Data

OAS

Data

ESS

models

MIS

DATADSS

DATA

Graphs reports

Executive

workstation

Administrative

Support

workstation

TPS DATA

Architecture of EIS

Cont…

Data Warehousing

As time passes, the amount of data will increase

and this will affect the performance of ERp system.

So it is better to archive the operational dara once

its use is over.

Its is most valuable recourse so archive data is not

‘useless’ data.

7/3/2010

7

If work is over of operational data, it should be

removed from operational database.

– Eg: one financial year is over, daily transactional data

can be archived.

If volume of data increase in database,

performance of database and related application

decrease

Cont…

We should separated operational data form non

operational data.

We transfer this data in data warehouse

Data is stored for business analysis can be accessed

most effectively by separating it.

Cont…

Data Mining

Data warehouse stores huge amounts of data

whereas data mining process data into valid

potential useful information

This information can be further use to make

decision.

Allow analyst to manage the process of extracting

knowledge and meaningful information from data

7/3/2010

8

On-Line Analytical Processing (OLAP)

OLAP is designed for live ad-hoc data access and

analysis.

OLAP has multidimensional database technology

and provides the technical basis for calculation and

analysis required by business intelligence

application.

OLAP is design to deliver fast response to user.

Its takes few sec to analysis

Cont…

OLAP is define in following words:

FAST ANALYSIS OF SHARED

MULTIDIMENSIONAL

INFORMATION

Cont…

7/3/2010

9

FAST

– System delivers responses to users within few

seconds

ANALYSIS

– System copes with any business logic and

statistical analysis.

Cont…

SHARED

– System implements security to maintain confidentiality of important data at different levels.

MULTIDIMENSIONAL

– System must provide multidimensional conceptual view of data with multiple hierarchies

Cont…

INFORMATION

– Refine data that is accurate, timely and relevant to user.

Cont…

7/3/2010

10

Supply Chain Management

Supply chain is a network of facilities and

distribution options that performs the function of

procurement of materials, transformation of these

material into intermediate and finished products ,

distribution of these finished products to

customers.

Supply chain exist in both service and

manufacturing organization.