Advanced Business System

Chap 5
 ERP
• Streamlining the business transaction processing in
an organization.
• SCM
• CRM
• Globalization
• Quality
 Need of ERP
• companies are trying to utilize their all resources
effectively to make business more efficient and effective.
• companies are looking for enterprise software and other
quality techniques.
• In the absences of seamless integration efforts were
required to facilitate information interchange between
such independently designed functional software
systems.
 Evolutionof integrated system
• Data island was a problem.
• Islands of Data describes a situation in which departments
within an enterprise each use their own software applications
from disparate vendors, none of which integrate with one
another.
• A common database is used or different databases are being
shared by different components of the integrated system.
• ERP is enterprise wide integrated information system that
helps in planning and monitoring of business activities.
• A set of application integrating information from
manufacturing,finance,distribution for final decision making.
 Scope
• Aims at creating a common database across organization used
by different departments.
• Brings different functions including
material,manufacturing,distribution and marketing under one
umbrella using common database.
• Helps in creating robust backbone of transaction processing
layer on IS in an enterprise.
 Benifits
• Seamlessly integrate business processes that ensures
reducton in inventories and writing down on cycle
times.(Cycle time is the time between placement of the order
and delivery of the product.)
• Improves white collar productivity, information support for
operational level and decision making at senior mgmt mevel.
 Vendors
• Many vendors from different countries have started offering ERP
solutions.
• Initially they made use of high end computers such as mainframes,
superminis etc.
• ERP solutions were mostly hardware platform dependant.
• To anticipate the changes in information technology vendors started
offering ERP products that work with different hardware platforms
and OS environments.
• Today's vendors use satellite communications, internet and e-
commerce for offering their solutions.
 Functional Architecture
• Sales
• Distribution and Traspotation
• Service
• Finance and Accounting
• Costing
• Tresury
• Project
• Materials
• Manufacturing
• Plant Maintenance
• Human Resource
• Quality
• Logistics
 Modules
• Centralized database(Heart of ERP solution)
• Interface with external entities like
supplier,employees,managers,and shareholders.
• Addressing business requirements at transaction processing
and reporting layer.
 Selecting ERP Software
• Either implement all the modules or only selected modules.
• May adopt phased approach of implementing some modules
in first phase and taking up remaining in subsequent phases.
 SCM
• Entities involved:
• Customer buys a finihshed product of a company that the
retailer sales it to a customer.
• Retailer gets product from wholesaler or a distributor who in
turn gets it from manufacturer.
• Manufacturer procures the product required as a raw
material that are supplied from vendor who in turn produce it
from another vendor or manufacturer.
 SCM
• The process that covers all the activities pertaining to creation
of products for customers.
• Synchronized set of integrated resource systems that cover all
business entities involved in making product available to
customer.
• Process of managing assets and relational ships between
business entities in order to transform raw material into
product of value to customers in most effective and efficient
manner.
 Flows
• Three distinct elements:
– Material
– Money
– Information

• Constantly occurring and vital ingredients of supply chain.

• Information about “what” is required
“Where” and at “Which” point in time is very imp to ensure that the
required material are manufactured and transported at the time
and place when they are required.
For this purpose money has to flow from one business entity to the
other as per agreed term.
 Activities
• Planning
• Buying
• Make
• Store
• Move
• Sell
 Use of Information Technology in SCM
• The information flow across the SCM helps in ensuring that all
activities are planned and carefully monitored such that any
corrective actions are taken without time lag.
• The innovative concepts such as WAN and VPN are possile to
give seamless connectivity between business partners in
SCM,in case they are situated over wide geographical
locations.
• Some enterpries have their own WANs to connect different
locations through leased lines.
• And some have created VPN using internet.
 CRM
• A more recent Information Technology initiative that is
helping a wide range of enterprises representing different
segments in an industry.
• In reality, CRM is not confined to s/w or h/w but includes
entire marketing and sales functions of organization people
working in different departments.
 Selection of CRM software
• Some considerations :
– Scalability
– Flexibility
– Pricing policy of vendor
– Estimate about the stability of vendor
– Periodic upgrades and integration with other information system.
 CRM Process
• It’s a software to collect information and use the same within
the enterprise in order to improve the interaction with
customers.
• 2 modules:
– Customer Interace module.
– Usage
 International Business Management
• Globalization-sourcing and supplying from and to the bearless
world. Is a process by which an activity or undertaking
becomes worldwide in scope.
• Macro forces of globalization:
– Globalization of capital market
– Declining cost of transportation and growth and reach of IT.
– Growth of regional and international trading arrangements.
– The development of Eurocurrency markets in 1960s
 TQM and Six Sigma
• Quality:the totality of features and characteristics of a product
or service that bears on its ability to satisfy given needs.
• Quality is multidimensional, functional,reliable,durable,and
safe.
• Quality improves profitability,image and repuataion of
company, product liability, and international implications.
• Six Sigma: Is a comprehensive and a flexible system for
achieving, sustaining and maximizing business process.
• Six sigma is uniquely driven b close understanding of
customer needs, disciplined use of facts, data and statistical
analysis and attention to managing, improving and
reinventing business process.
• 5 phases of improvement process:
– Define
Define the problem, process, and customer requirements
– Measure
Defines measures, then collect ,compile and display data.
– Analyze
Scrutinize process details to find improvement opportunities.
– Improve
generate solutions and ideas for improving the problem.
– Control
Track and verify the stability of the improvement and the predictability
of the solution.