Enterprise Resource Planning, management homework help

User Generated

FAF105

Business Finance

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Examine how tolerance groups (what are these) and financial transparency (what does this mean) are implemented (according to the experts) in an accounting information system (why is this important in this type system) within a company that you are familiar with. Based on your findings, how could these controls be optimized (which means and why should it be)?

Reference

  • Chapter 5 in Concepts in Enterprise Resource Planning (attached)
  • Need to have atleast 1 additional reference than the course book (i.e. Concepts in ERP).
  • Need to have inline citations.
  • Simple short essay format.
  • Most of my examples are based on ERP SAP, you could use the same.

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Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CONCEPTS IN ENTERPRISE RESOURCE PLANNING Fourth Edition Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. This is an electronic version of the print textbook. Due to electronic rights restrictions, some third party content may be suppressed. Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. The publisher reserves the right to remove content from this title at any time if subsequent rights restrictions require it. For valuable information on pricing, previous editions, changes to current editions, and alternate formats, please visit www.cengage.com/highered to search by ISBN#, author, title, or keyword for materials in your areas of interest. Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CONCEPTS IN ENTERPRISE RESOURCE PLANNING Fourth Edition Ellen F. Monk University of Delaware Bret J. Wagner Western Michigan University Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Concepts in Enterprise Resource Planning, Fourth Edition Ellen F. Monk and Bret J. Wagner Editor-in-Chief: Joe Sabatino Senior Acquisitions Editor: Charles McCormick, Jr. Senior Product Manager: Kate Mason Development Editor: Mary Pat Shaffer Senior Marketing Communications Manager: Libby Shipp Marketing Coordinator: Eileen Corcoran Design Direction, Production Management, and Composition: PreMediaGlobal Media Editor: Chris Valentine © 2013 Course Technology, Cengage Learning ALL RIGHTS RESERVED. No part of this work covered by the copyright herein may be reproduced, transmitted, stored, or used in any form or by any means graphic, electronic, or mechanical, including but not limited to photocopying, recording, scanning, digitizing, taping, Web distribution, information networks, or information storage and retrieval systems, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the publisher. 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Any fictional data related to persons or companies or URLs used throughout this book is intended for instructional purposes only. At the time this book was printed, any such data was fictional and not belonging to any real persons or companies. Cases in this book that mention company, organization, or individual person’s names were written using publicly available information to provide a setting for student learning. They are not intended to provide commentary on or evaluation of any party’s handling of the situation described. Microsoft and the Office logo are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. Course Technology, a part of Cengage Learning, is an independent entity from the Microsoft Corporation, and not affiliated with Microsoft in any manner. SAP is a registered trademark. Apple I, iPhone, iPad, and iPod are registered trademarks of Apple Inc. Course Technology, a part of Cengage Learning, reserves the right to revise this publication and make changes from time to time in its content without notice. Cengage Learning is a leading provider of customized learning solutions with office locations around the globe, including Singapore, the United Kingdom, Australia, Mexico, Brazil, and Japan. Locate your local office at: www.cengage.com/global Printed in the United States of America 1 2 3 4 5 6 7 16 15 14 13 12 Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. In memory of our colleague Majdi Najm. His support and friendship are sorely missed. Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. BRIEF CONTENTS Preface xv Chapter 1 Business Functions and Business Processes 1 Chapter 2 The Development of Enterprise Resource Planning Systems 19 Chapter 3 Marketing Information Systems and the Sales Order Process 49 Chapter 4 Production and Supply Chain Management Information Systems 77 Chapter 5 Accounting in ERP Systems 117 Chapter 6 Human Resources Processes with ERP 159 Chapter 7 Process Modeling, Process Improvement, and ERP Implementation 183 Chapter 8 RFID, Business Intelligence (BI), Mobile Computing, and the Cloud 215 Glossary 243 Index 249 Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. T A B L E OF CO N T E N T S Preface Chapter 1 xv Business Functions and Business Processes Functional Areas and Business Processes Functional Areas of Operation Business Processes Functional Areas and Business Processes of a Very Small Business Marketing and Sales Supply Chain Management Accounting and Finance Human Resources Functional Area Information Systems Marketing and Sales Supply Chain Management Accounting and Finance Human Resources Chapter Summary Key Terms Exercises For Further Study and Research Chapter 2 The Development of Enterprise Resource Planning Systems The Evolution of Information Systems Computer Hardware and Software Development Early Attempts to Share Resources The Manufacturing Roots of ERP Management’s Impetus to Adopt ERP ERP Software Emerges: SAP and R/3 SAP Begins Developing Software Modules SAP R/3 New Directions in ERP PeopleSoft Oracle SAP ERP SAP ERP Software Implementation Features of SAP ERP ERP for Midsized and Smaller Companies Responses of the Software to the Changing Market Choosing Consultants and Vendors The Significance and Benefits of ERP Software and Systems 1 2 2 3 6 6 7 7 8 8 9 10 12 13 16 16 16 17 19 20 21 22 22 23 25 26 26 27 27 28 28 31 33 34 34 35 36 Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. x Table of Contents Questions About ERP How Much Does an ERP System Cost? Should Every Business Buy an ERP Package? Is ERP Software Inflexible? What Return Can a Company Expect from Its ERP Investment? How Long Does It Take to See a Return on an ERP Investment? Why Do Some Companies Have More Success with ERP Than Others? The Continuing Evolution of ERP Chapter Summary Key Terms Exercises For Further Study and Research Chapter 3 Marketing Information Systems and the Sales Order Process Overview of Fitter Snacker Problems with Fitter Snacker’s Sales Process Sales Quotations and Orders Order Filling Accounting and Invoicing Payment and Returns Sales and Distribution in ERP Presales Activities Sales Order Processing Inventory Sourcing Delivery Billing Payment A Standard Order in SAP ERP Taking an Order in SAP ERP Discount Pricing in SAP ERP Integration of Sales and Accounting Customer Relationship Management (CRM) Core CRM Activities SAP’s CRM Software The Benefits of CRM Chapter Summary Key Terms Exercises For Further Study and Research Chapter 4 Production and Supply Chain Management Information Systems Production Overview Fitter’s Manufacturing Process Fitter’s Production Sequence Fitter’s Production Problems Communication Problems Inventory Problems Accounting and Purchasing Problems Exercise 4.1 36 36 37 38 39 39 40 41 44 44 45 45 49 50 51 52 53 55 55 56 56 56 57 57 57 57 58 58 64 65 66 67 68 72 74 74 75 76 77 78 79 79 80 80 80 81 82 Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Table of Contents The Production Planning Process The SAP ERP Approach to Production Planning Sales Forecasting Exercise 4.2 Sales and Operations Planning Sales and Operations Planning in SAP ERP Disaggregating the Sales and Operations Plan in SAP ERP Exercise 4.3 Demand Management Exercise 4.4 Materials Requirements Planning (MRP) Bill of Material Lead Times and Lot Sizing Exercise 4.5 Exercise 4.6 Materials Requirements Planning in SAP ERP Detailed Scheduling Providing Production Data to Accounting Exercise 4.7 ERP and Suppliers The Traditional Supply Chain EDI and ERP The Measures of Success Exercise 4.8 Chapter Summary Key Terms Exercises For Further Study and Research Chapter 5 Accounting in ERP Systems Accounting Activities Using ERP for Accounting Information Operational Decision-Making Problem: Credit Management Industrial Credit Management Fitter’s Credit Management Procedures Credit Management in SAP ERP Exercise 5.1 Product Profitability Analysis Inconsistent Record Keeping Inaccurate Inventory Costing Systems Inventory Cost Accounting Background ERP and Inventory Cost Accounting Product Costing Example Exercise 5.2 Product Cost Analysis in SAP ERP Activity-Based Costing and ERP 82 83 84 85 85 88 93 95 95 97 97 97 98 101 101 101 105 107 108 108 109 110 112 112 114 114 114 115 117 118 121 123 123 124 124 127 127 127 128 128 129 130 131 131 132 Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. xi xii Table of Contents Problems Consolidating Data from Subsidiaries Currency Translation Intercompany Transactions Management Reporting with ERP Systems Data Flows in ERP Systems Document Flow for Customer Service Built-In Management-Reporting and Analysis Tools The Enron Collapse Outcome of the Enron Scandal Key Features of the Sarbanes-Oxley Act of 2002 Implications of the Sarbanes-Oxley Act for ERP Systems Archiving User Authorizations Tolerance Groups Financial Transparency Exercise 5.3 Trends in Financial Reporting—XBRL Chapter Summary Key Terms Exercises For Further Study and Research Chapter 6 Human Resources Processes with ERP Problems with Fitter’s Human Resources Processes Recruiting Process The Interviewing and Hiring Process Human Resources Duties After Hiring Human Resources with ERP Software Advanced SAP ERP Human Resources Features Time Management Payroll Processing Travel Management Training and Development Coordination Additional Human Resources Features of SAP ERP Mobile Time Management Management of Family and Medical Leave Management of Domestic Partner Benefits Administration of Long-Term Incentives Personnel Cost Planning Management and Payroll for Global Employees Management by Objectives Chapter Summary Key Terms Exercises For Further Study and Research 133 134 135 136 136 137 138 139 140 141 142 143 145 146 147 150 150 151 152 152 157 159 160 161 162 164 167 172 172 173 173 175 177 177 177 177 177 178 178 178 180 180 180 181 Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Table of Contents Chapter 7 Process Modeling, Process Improvement, and ERP Implementation 183 Process Modeling Flowcharting Process Models Fitter Expense-Reporting Process Exercise 7.1 Extensions of Process Mapping Event Process Chain (EPC) Diagrams Exercise 7.2 Process Improvement Evaluating Process Improvement Prior to Implementation ERP Workflow Tools Implementing ERP Systems ERP System Costs and Benefits Implementation and Change Management Implementation Tools System Landscape Concept Chapter Summary Key Terms Exercises For Further Study and Research Chapter 8 RFID, Business Intelligence (BI), Mobile Computing, and the Cloud 215 Radio Frequency Identification (RFID) Technology Business Intelligence/Business Analytics In-Memory Computing Mobile Computing From Internet-Enabled to Cloud Computing SAP and the Internet NetWeaver NetWeaver Tools and Capabilities NetWeaver at Work for Fitter Exercise 8.1 SaaS: Software as a Service SAP Business ByDesign Advantages of Using SaaS Disadvantages of Using SaaS Exercise 8.2 Option 1: Buying Computers and Software Rights for an ERP System Option 2: Using an SaaS Provider to Deliver ERP Software Calculate the NPV and Make a Recommendation Chapter Summary Key Terms Exercises For Further Study and Research Glossary Index 184 184 185 187 187 189 196 197 198 200 203 205 206 206 210 211 211 211 214 216 219 220 224 226 226 226 227 228 228 229 229 230 231 233 234 235 235 238 238 238 239 243 249 Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. xiii Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. PREFACE This is a book about Enterprise Resource Planning (ERP) systems; it is also about how a business works and how information systems fit into business operations. More specifically, it is about looking at the processes that make up a business enterprise and seeing how ERP software can improve the performance of these business processes. ERP software is complicated and expensive. Unless a company uses it to become more efficient and effective in delivering goods and services to its customers, an ERP system will only be a drain on company resources. Our experience in teaching about ERP systems has revealed that undergraduate business students do not always understand how businesses operate, and advanced undergraduate students—and even many MBA students—do not truly grasp the problems inherent in unintegrated systems. These students also do not comprehend business processes and how different functional areas must work together to achieve company goals. As a result, many students do not understand how an information system should help business managers make decisions. Consequently, we set out to write a book that does the following: • • • Describes basic business functional areas and explains how they are related Illustrates how unintegrated information systems fail to support business functions and business processes that cut across functional area boundaries Demonstrates how integrated information systems can help a company prosper by improving business processes and by providing business managers with accurate, consistent, and current data We have found that our focus on business processes has been well received. The Approach of This Book A key feature of our book is the use of the fictitious Fitter Snacker Company, a manufacturer of nutritious snack bars, as an illustrative example throughout the book. We show how Fitter Snacker’s somewhat primitive and unintegrated information systems cause operational problems. We intentionally made the systems’ problems easy to understand, so the student could readily comprehend them. Potential solutions for solving integration problems are illustrated using SAP’s ERP software. The fourth edition of Concepts in Enterprise Resource Planning reflects the current state of the ERP software market and other areas of the information technology market that affect ERP systems, while adding updated examples of how companies are using integrated systems to solve business problems and achieve greater success. The book has eight chapters: • Chapter 1, “Business Functions and Business Processes,” explains the purposes for, and information systems requirements of, main business functional areas—Marketing and Sales, Supply Chain Management, Accounting and Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. xvi Preface • • • • • • • Finance, and Human Resources. This chapter also describes how a business process cuts across the activities within business functional areas and why managers need to think about making business processes work. Chapter 2, “The Development of Enterprise Resource Planning Systems,” provides a short history of business computing and the developments that led to today’s ERP systems. Chapter 2 concludes with an overview of ERP issues and an introduction to the SAP ERP software. Chapter 3, “Marketing Information Systems and the Sales Order Process,” describes the Marketing and Sales functional area, and it highlights the problems that arise with unintegrated information systems. To make concepts easy to understand, the Fitter Snacker running example is introduced. After explaining Fitter Snacker’s problems with its unintegrated systems, we show how an ERP system can help a company avoid these problems. Sample SAP ERP screens are used to illustrate the concepts. Because using ERP can naturally lead a company into ever-broadening systems’ integration, a discussion of customer-relationship management (CRM) software concludes the chapter. Chapter 4, “Production and Supply Chain Management Information Systems,” describes how ERP systems support Supply Chain Management—the coordinated activities of all the organizations involved in converting raw materials into consumer products on the retail shelf. As in Chapter 3, the problems caused by Fitter Snacker’s unintegrated information system are explored, followed by a discussion of how ERP software could help solve these problems. Chapter 5, “Accounting in ERP Systems,” describes accounting processes and how ERP systems support those processes. This chapter clearly distinguishes between financial accounting (FI) and managerial accounting (CO) issues. Included is an overview of the Enron collapse and the resulting SarbanesOxley Act along with the act’s impact on information systems, specifically management controls and audit capabilities. XBRL—and its relationship to ERP systems and financial reporting—is explored, along with the transition to the IFRS accounting standards. Chapter 6, “Human Resources Processes with ERP,” covers human resource management. While the Human Resource software module is the least integrated component of all ERP systems, it includes numerous processes that are critical to a company’s success, including strategic issues like succession planning. Chapter 7, “Process Modeling, Process Improvement, and ERP Implementation,” first presents flowcharting basics, followed by the highly structured EPC process model. Implementation issues conclude the chapter. We believe that process improvement, not large-scale implementation, should be the focus in an introductory ERP course. Chapter 8, “RFID, Business Intelligence (BI), Mobile Computing, and the Cloud,” covers current technologies that are impacting ERP systems. In this edition, the text covers radio frequency identification (RFID), business intelligence (BI) and in-memory computing, mobile computing, and the cloud. Because technology changes rapidly, this chapter provides an introduction to these current topics, rather than an exhaustive treatment of the subjects, and the instructor will likely want to provide current supplements. Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Preface xvii How Can You Use This Book? This fourth edition continues our goal of keeping the text at an introductory level. The book can be used in a number of ways: • • • • The book, or selected chapters, could be used for a three-week ERP treatment in undergraduate Management Information Systems, Accounting Information Systems, or Operations Management courses. Similarly, the book or selected chapters could be used in MBA courses, such as foundation Information Systems or Operations Management courses. Although the concepts presented here are basic, the astute instructor can build on them with more sophisticated material to challenge the advanced MBA student. Many of the exercises in the book require research for their solution, and the MBA student could do these in some depth. The book could serve as an introductory text in a course devoted wholly to ERP. It would provide the student with a basis in how ERP systems help companies to integrate different business functions. The instructor might use Chapter 8 as the starting point for teaching the higher-level strategic implications of ERP and related topics. The instructor can pursue these and related topics using his or her own resources, such as case studies and current articles. Because of the focus on fundamental business issues and business processes, the book can also be used in a sophomore-level Introduction to Business course. Except for a computer literacy course, we assume no particular educational or business background. Chapters 1 and 2 lay out most of the needed business and computing groundwork, and the rest of the chapters build on that base. Features of This Text To bring ERP concepts to life (and down to earth) this book uses sales, manufacturing, purchasing, human resources, and accounting examples for the Fitter Snacker company. Thus, the student can see problems, not just at an abstract level, but within the context of a company’s operations. We believe this approach makes business problems and the role ERP can play in solving them easier to understand. The book’s exercises have the student analyze aspects of Fitter Snacker’s information systems in various ways. The exercises vary in their difficulty; some can be solved in a straightforward way, and others require some research. Not all exercises need to be assigned. This gives the instructor flexibility in choosing which concepts to emphasize and how to assess students’ knowledge. Some exercises explore Fitter Snacker’s problems, and some ask the student to go beyond what is taught in the book and to research a subject. A solution might require the student to generate a spreadsheet, perform calculations, document higher-level reasoning, present the results of research in writing, or participate in a debate. The book includes an additional element designed to bring ERP concepts to life: Another Look features, which are short, detailed case studies that focus on problems faced by real-world companies. We have illustrated ERP concepts and applications by showing how SAP ERP would handle the problems discussed in the book. Screen shots of key SAP ERP tools are shown throughout to illustrate ERP concepts. Many of the book’s exercises ask the student to think about how a problem would be addressed using ERP software. Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. xviii Preface Instructor Materials The following supplemental materials are available when this book is used in a classroom setting. All of the teaching tools available with this book are provided to the instructor on a single CD-ROM. Most can also be found online at www.course.com. Instructor materials are password-protected. • • • • • • • • Electronic Instructor’s Manual—The Instructor’s Manual assists in class preparation by providing suggestions and strategies for teaching the text, chapter outlines, technical notes, quick quizzes, discussion topics, and key terms. Solutions—Answers to end-of-chapter questions and exercises are provided. Sample syllabi—The sample syllabi and course outlines are provided as a foundation to begin planning and organizing your course. ExamView Test Bank—ExamView allows instructors to create and administer printed, computer (LAN-based), and Internet exams. The Test Bank includes hundreds of questions that correspond to the topics covered in this text, enabling students to generate detailed study guides that include page references for further review. The computer-based and Internet testing components allow students to take exams at their computers, and also save the instructor time by grading each exam automatically. The Test Bank is also available in Blackboard and WebCT versions posted online at www.course.com. PowerPoint Presentations—Microsoft PowerPoint slides for each chapter are included as a teaching aid for classroom presentation, to make available to students on the network for chapter review, or to be printed for classroom distribution. Instructors can add their own slides for additional topics they introduce to the class. Distance learning—Course Technology is proud to present online test banks in WebCT and Blackboard to provide the most complete and dynamic learning experience possible. Instructors are encouraged to make the most of the course, both online and offline. For more information on how to access the online test bank, contact your local Course Technology sales representative. Figure files—Figure and table files from each chapter are provided for your use in the classroom. Hands-on SAP exercises—Exercises are available for member institutions through the SAP University Alliance. These exercises use a database that was built for the fictitious Fitter Snacker company. ACKNOWLEDGMENTS Our thanks go out to our development editor, Mary Pat Shaffer, whose attention to detail made much more work for us, but resulted in a much-improved text for this edition. We are grateful for the support and guidance of the entire MIS team at Course Technology, particularly Kate Mason, Senior Product Manager, and Aimee Poirier, MIS Product Manager, for working with authors who frequently had problems meeting deadlines. We would not have been able to continue on our journey to understand ERP systems without the continued support of SAP America through its University Alliance program, especially Heather Czech Matthews, John Baxter, Gale Corbitt, and Alex McLeod, Jr. And finally, we thank our students, whose honesty and desire to learn have inspired us. Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CHAPTER 1 BUSINESS FUNCTIONS AND BUSINESS PROCESSES LEARNING OBJECTIVES After completing this chapter, you will be able to: • Name the main functional areas of operation used in business • Differentiate between a business process and a business function • Identify the kinds of data each main functional area produces • Identify the kinds of data each main functional area needs • Define integrated information systems, and explain why they are essential in today’s globally competitive business environment INTRODUCTION Enterprise Resource Planning (ERP) systems are core software programs used by companies to integrate and coordinate information in every area of the business. ERP (pronounced “E-R-P”) programs help organizations manage company-wide business processes, using a common database and shared management reporting tools. A business process is a collection of activities that takes one or more kinds of input and creates an output, such as a report or forecast, that is of value to the customer. ERP software supports the efficient operation of business processes by integrating tasks related to sales, marketing, manufacturing, logistics, accounting, and staffing—throughout a business. In addition to this cross-functional integration, which is at the heart of an ERP system, companies connect their ERP systems, using various methods, to coordinate business processes Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Chapter 1 2 with their customers and suppliers. In later chapters, you will learn how successful businesspeople use ERP programs to improve how work is done within a company and between companies. Chapter 1 provides a background for learning about ERP software. FUNCTIONAL AREAS AND BUSINESS PROCESSES To understand ERP, you must first understand how a business works. Let’s begin by looking at a typical business’s areas of operation. These areas, called functional areas of operation, are broad categories of business activities. Functional Areas of Operation Most companies have four main functional areas of operation: Marketing and Sales (M/S), Supply Chain Management (SCM), Accounting and Finance (A/F), and Human Resources (HR). Each area is composed of a variety of narrower business functions, which are activities specific to that functional area of operation. Examples of the business functions of each area are shown in Figure 1-1. Functional area of operation Marketing and Sales Supply Chain Management Accounting and Finance Human Resources Marketing a product Purchasing goods and raw materials Financial accounting of payments from customers and to suppliers Recruiting and hiring Taking sales orders Receiving goods and raw materials Cost allocation and control Training Customer support Transportation and logistics Planning and budgeting Payroll Customer relationship management Scheduling Cash-flow production runs management Benefits Sales forecasting Manufacturing goods Government compliance Advertising Plant maintenance Business functions Source Line: Course Technology/Cengage Learning. FIGURE 1-1 Examples of functional areas of operation and their business functions Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Business Functions and Business Processes Historically, businesses have had organizational structures that separated the functional areas. Business schools have been similarly organized, so each functional area has been taught as a separate course. In a company separating functional areas in this way, Marketing and Sales might be completely isolated from Supply Chain Management, even though the Marketing and Sales staff sell what the employees in Supply Chain Management procure and produce. Thus, you might conclude that what happens in one functional area is not closely related to what happens in others. As you will learn in this chapter, however, functional areas are interdependent, each requiring data from the others. The better a company can integrate the activities of each functional area, the more successful it will be in today’s highly competitive environment. The Association to Advance Collegiate Schools of Business (AACSB)—the accreditation board of university business schools—is now promoting integration between functional areas of business for higher education. Integration also contributes to improvements in communication and workflow. Each area’s information system depends on data from other functional areas. An information system (IS) includes the people, procedures, software, and computers that store, organize, analyze, and deliver information. This chapter illustrates the need for information sharing between functional areas and the effects on the business if this information is not integrated. In later sections, you will also see some examples of typical business processes and how these processes routinely cross functional areas. 3 Business Processes More managers are now thinking in terms of business processes rather than business functions. Recall that a business process is a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer. The customer for a business process may be a traditional external customer (the person who buys the finished product), or it may be an internal customer (such as a colleague in another department). For example, what is sold through Marketing and Sales is linked to what is procured and produced by Supply Chain Management. This concept is illustrated in Figure 1-2. Source Line: Course Technology/Cengage Learning. FIGURE 1-2 Sample business processes related to the sale of a smartphone Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Chapter 1 4 Thinking in terms of business processes helps managers look at their organization from the customer’s perspective. Consider the example illustrated in Figure 1-2 of a customer who wants to purchase a new smartphone. The customer wants information about the company’s products so she can select a smartphone and various high-tech accessories for the phone. She wants to place her order quickly and easily, and perhaps even arrange for financing through the company. She expects quick delivery of the correct model of smartphone, and she wants 24-hour customer support for any problems. The customer is not concerned about how the smartphone was marketed, how its components were purchased, how it was built, or how the delivery truck will find the best route to her house. The customer wants the satisfaction of having the latest in mobile phone technology at a reasonable price. Businesses must always consider the customer’s viewpoint in any transaction. What is the difference between a business function and a business process from the customer’s point of view? Suppose the customer’s mobile phone is damaged during shipment. Because only one functional area is involved in accepting the return of the damaged item, receipt of the return is a business function—specifically, it is part of the customer relationship management function of Marketing and Sales. Because several functional areas are involved in the repair and return of the mobile phone back to the customer, the handling of the repair is a business process. Thus, in this example, the customer is dealing with many of the company’s functional areas in the process of buying and obtaining a smartphone. A successful customer interaction is one in which the customer (either internal or external) is not required to interact separately with each business function involved in the process. If companies are not coordinating their business functions, a customer could receive conflicting information and likely would quickly become dissatisfied. Successful business managers view their business operations from the perspective of a satisfied customer and strive to present one consistent (and positive) “face” to the customer. For the mobile phone company to satisfy its customers, it must make sure its functional areas of operation are integrated. Mobile phone technology changes rapidly, and the devices the phone company sells change frequently. To provide customers with accurate information, people performing the sales function must have up-to-date information about the latest mobile phones available for sale; otherwise, a customer might order a smartphone that the company’s manufacturing plant no longer produces. People performing the manufacturing function need to receive the details of a customer’s smartphone order quickly and accurately from the employee (or online ordering system) performing the sales function, so the right phone can be packaged and shipped on time to the customer. If the customer is financing the smartphone through the mobile phone company, the employees performing the sales order function must gather information about the customer and process it quickly, so financing can be approved in time to support shipping the phone. Sharing data effectively and efficiently between and within functional areas leads to more efficient business processes. Information systems that are designed so functional areas share data are called integrated information systems. Working through this textbook will help you understand the benefits of integrated information systems and the problems that can occur when information systems are not integrated. Research has shown that integrated information systems can help managers better control their organizations. With enhanced information flow, communication between parts of the company improves, Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Business Functions and Business Processes productivity increases, and costs decrease. In effect, integrating the information systems can make for a more effective overall organization—hence, more efficient business processes. Figure 1-3 illustrates the process view of business operations. 5 Logistics function Production function Purchasing function Accounting function Sales function Customer order process Material order process Source Line: Course Technology/Cengage Learning. FIGURE 1-3 A process view of business operations Businesses take inputs (resources) in the form of material, people, and equipment, and transform these inputs into goods and services for customers. Effectively managing these inputs and business processes requires accurate and up-to-date information. For example, the sales staff takes a customer’s order, and production employees schedule the manufacturing of the product. Logistics employees schedule and carry out the delivery of the product. If raw materials are needed to make the product, production prompts purchasing staff to arrange for their purchase and delivery. Logistics will receive the raw material, verify its receipt to accounting so the vendor can be paid, and deliver the goods to production. Throughout, accounting keeps appropriate transaction records. ANOTHER LOOK Integrated Information Systems The world today is information driven. Getting the right information to the right person can make a huge difference in terms of a company’s bottom line. But are some systems just too complicated to be fully integrated? Although the financial services industry spends more on information technology than any other industry ($500 billion worldwide in 2009), many financial institutions do not have fully integrated information systems. Why is this so? The reasons are many. Banks were the first organizations to adopt information systems, so many of their systems are legacy (old) systems that would be difficult and expensive to update. In addition, many banks have gone through multiple phases of acquisition, which in itself results in duplicate information systems. Government regulations on financial institutions have also brought about additional (continued) Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Chapter 1 6 systems. And many financial organizations write their own proprietary systems for market trading, thinking that gives them a leg up on their competition. Some of the more sophisticated financial products, such as hedge funds and derivatives, are generated via complex programs. In addition, a great deal of financial tracking is performed on spreadsheets, which may not be connected to any integrated system. The end result of these unintegrated systems is a lack of consistent data across systems, which can lead to an inaccurate assessment of risk. Most financial systems written today are honed for rapid trading, not for regulation or for tracking anomalies that could lead to problems. Some IT experts claim that the global financial networks are now unstable and that the fast quantitative trading programs in place could lead rapidly to potentially disastrous outcomes. Question: 1. Do you think some of the problems associated with the financial crisis of 2008 could have been avoided if financial firms had more integrated information? If so, how, or if not, why not? FUNCTIONAL AREAS AND BUSINESS PROCESSES OF A VERY SMALL BUSINESS Next, we will look at the way business processes involve more than one functional area, using a fictitious small business as an example—a coffee shop that you own. We will examine the business processes of the coffee shop and see why coordination of the functional areas helps achieve efficient and effective business processes. You will see the role that information plays in this coordination and how integration of the information system improves your business. Even though just a few people can run a small coffee shop, the operation of the business requires a number of processes. Coordinating the activities within different functional areas requires accurate and timely information. Marketing and Sales Marketing and Sales (M/S) functions include developing products, determining pricing, promoting products to customers, and taking customers’ orders. Marketing and Sales also helps create a sales forecast to ensure the successful operation of the coffee shop. For the most part, this is a cash business, but you still need to keep track of your customers so you can send flyers or occasional thank-you notes to repeat customers. Thus, your records must not only show the amount of sales, but also identify repeat customers. Product development can be done informally in such a simple business; you gather information about who buys which kind of coffee and note what customers say about each product. You also analyze historical sales records to spot trends that are not obvious. Deciding whether to sell a product also depends on how much it costs to produce the product. For example, some customers might be asking for a fair-trade decaffeinated coffee or a chai tea. To determine whether the new product could be profitably produced and sold, you could analyze data from Supply Chain Management, including production Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Business Functions and Business Processes information (such as the cost of purchasing an extra coffee machine to make the special fair-trade decaffeinated brew) and materials management data (the cost of decaffeinated coffee beans and chai tea). This is a very small coffee shop, and you know most of your clientele. Therefore, although you run a cash business, good repeat customers are allowed to run up a tab—up to a point. Thus, your records must show how much each customer owes as well as his or her available credit. It is very important that the data be available and accurate at the time of a customer’s credit request. Since Accounting and Finance records must be accessed as a part of the selling process, the accounting function has a critical role to play in the sales process. 7 Supply Chain Management The functions within Supply Chain Management (SCM) include developing production plans, ordering raw materials from suppliers, receiving the raw material into the facility, manufacturing products, maintaining facilities, and shipping products to customers. In our coffee shop example, Supply Chain Management functions involve making the coffee (manufacturing/production) and buying raw materials (purchasing). Production is planned so that, as much as possible, coffee is available when needed, without excess that must be disposed of. This planning requires sales forecasts from the Marketing and Sales functional area. Sales forecasts are estimates of future product demand, which is the amount of a product customers will want to buy. A forecast’s accuracy will be improved if it is based on historical sales figures (for example, factors such as cold weather or local downtown social events would impact the forecast for a given time period). Thus, forecasts from Marketing and Sales play an important role in the production planning process. Production plans are also used to develop requirements for raw materials (coffee beans, tea bags, sweeteners, cream, and milk) and packaging (cups, stirrers, straws, plates, and napkins). You must generate raw material and packaging orders from these requirements. If the forecasts are accurate, you will not lose sales because of material shortages, nor will you have excessive inventory that might spoil. Supply Chain Management and Marketing and Sales must choose a recipe for each beverage product sold, such as the quantity of coffee beans used to brew each pot of coffee. The standard recipe is a key input for deciding how much to order of each raw material, which is a purchasing function. Access to this recipe is also necessary for keeping good manufacturing records, allowing managers within the Supply Chain Management functional area (working with those in Accounting and Finance) to break down the costs to a per-cup cost. Managers can then compare how much it actually costs to make a cup of coffee, versus how much the recipe should have cost. Accounting and Finance Accounting and Finance (A/F) performs financial accounting to provide summaries of operational data in managerial reports, and it is also responsible for tasks such as controlling accounts, planning and budgeting, and cash-flow management. Accounting and Finance functions include recording raw data about sales transactions, raw material purchases, payroll, and receipt of cash from customers. Raw data are simply numbers collected from sales, manufacturing, and other operations—without any manipulation, Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Chapter 1 8 calculation, or arrangement for presentation. Those data are then summarized in meaningful ways to determine the profitability of the coffee shop and to support decision making. Note that data from Accounting and Finance are used by Marketing and Sales as well as by Supply Chain Management. The sales records are an important component of the sales forecast, which is used in making staffing decisions and in production planning. The records from accounts receivable, which you use to determine whether to grant credit to a particular customer, are also used to monitor the overall credit-granting policy of the coffee shop. You need to be sure you have enough cash on hand to purchase raw materials, as well as to finance the purchase of new equipment, such as an additional coffee machine for the fair-trade decaffeinated coffee. Human Resources Even a simple business needs employees to support the Marketing and Sales and Supply Chain Management functional areas, which means the business must recruit, train, evaluate, and compensate employees. These are the functions of Human Resources (HR). At the coffee shop, the number of employees needed and the timing of hiring depend on the level of coffee and tea sales. Human Resources uses sales forecasts to plan personnel needs. A part-time helper might be needed at forecasted peak hours or days, but how much should a part-time helper be paid? That depends on prevailing job market conditions and state laws, and it is Human Resources’ job to monitor those conditions. Would increased sales justify hiring a part-time worker at the prevailing wage? Or, should you think about acquiring more automated ways of making coffee, so a person working alone could run the shop? Resolving these questions requires input from Marketing and Sales, Supply Chain Management, and Accounting and Finance. The coffee shop, while a relatively simple business, has many of the processes needed in larger organizations, and these processes involve activities in more than one functional area. In fact, it is impossible to discuss the processes in one functional area without discussing the links to other functional areas—connections that invariably require the sharing of data. Systems that are integrated using ERP software provide the data sharing that is necessary between functional areas. FUNCTIONAL AREA INFORMATION SYSTEMS This section will describe potential inputs and outputs for each functional area of a business (refer back to Figure 1-2 to review sample inputs and outputs related to the sale of a smartphone). Note the kinds of data needed by each area and how people use the data. Also note that the information systems maintain relationships between all functional areas and processes. Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Business Functions and Business Processes Marketing and Sales 9 As shown in Figure 1-4, the Marketing and Sales (M/S) area needs information from all other functional areas to effectively complete the business activities for which it is responsible. Legal requirements and job information Customer HR Sales orders Hiring needs and personnel information Order status M/S Sales forecasts and sales orders Product availability data and order status Sales order data Cost/profit analysis A/F SCM Source Line: Course Technology/Cengage Learning. FIGURE 1-4 The Marketing and Sales functional area exchanges data with customers and with the Human Resources, Accounting and Finance, and Supply Chain Management functional areas Customers communicate their orders to sales staff in person or by telephone, email, fax, the Web, and so on. In the case of Web-based systems, customer and order data are stored automatically in the information system; otherwise, data must be entered manually, by typing data into a computer keyboard or point-of-sale system, or by using a bar-code reader or similar device. Sales orders must be passed to Supply Chain Management for planning purposes and to Accounting and Finance for billing. Sales order data are also valuable for analyzing sales trends for business decision making. For example, Marketing and Sales management might use a report showing the trend of a product’s sales to evaluate marketing efforts and to determine strategies for the sales force. Marketing and Sales also has a role in determining product prices, which requires an understanding of the market competition and the costs of manufacturing the product. Pricing might be determined based on a product’s unit cost, plus some percentage markup. For example, if a product costs $5 per unit to make, and management wants a 40 percent markup, the selling price must be $7 per unit. Where does the per-unit cost data come from? Determining the cost of manufacturing a product requires information from Accounting and Finance, which, in turn, relies on Supply Chain Management data. People are a valuable asset to the firm, and Marketing and Sales needs to interact with Human Resources to exchange information on hiring needs, legal requirements, and other matters. For example, when Marketing and Sales has an opening for a junior salesperson, Human Resources will do the advertising for the job vacancy. Human Resources might also Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Chapter 1 10 communicate information about expense reimbursement policies to salespeople whose jobs require travel. To summarize, inputs for Marketing and Sales could include the following: • • • • • Customer data Order data Sales trend data Per-unit cost Company travel expense policy Outputs for Marketing and Sales could include the following: • • • Sales strategies Product pricing Employment needs Supply Chain Management Supply Chain Management (SCM) also needs information from the various functional areas, as shown in Figure 1-5. Raw materials availability and delivery Legal requirements and job information HR Orders for raw materials and packaging Hiring needs and personnel information Production plans, materials, and inventory SCM Sales data and manufacturing cost analysis Product availability data and order status Sales forecasts and sales orders M/S A/F Source Line: Course Technology/Cengage Learning. FIGURE 1-5 The Supply Chain Management functional area exchanges data with suppliers and with the Human Resources, Marketing and Sales, and Accounting and Finance functional areas Manufacturing firms often develop production plans of varying length and detail, such as short-range, medium-range, and long-range plans. Plans could be developed for expanding manufacturing capacity (based on sales forecasts), hiring new workers, and paying extra overtime for existing workers. Production plans are based on information about product sales (actual and projected), which comes from Marketing and Sales. The purchasing function bases its orders of raw Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Business Functions and Business Processes materials on production plans, expected shipments, delivery lead times, and existing inventory levels. With accurate data about required production levels, raw material and packaging can be ordered as needed, and inventory levels can be kept low, saving money. On the other hand, if data are inaccurate or not current, manufacturing may run out of raw material or packaging; such a shortfall is called a stockout. Shortages of this type can shut down production and cause the company to miss delivery dates. To avoid stockouts, management might choose to carry extra raw material and packaging, known as safety stock, which can result in an overinvestment in inventory. If certain time-sensitive goods are held too long, they can spoil and will have to be destroyed rather than sold for profit. The accuracy of the forecast determines the amount of safety stock required to reduce the risk of a stockout to an acceptable level. The less accurate the forecast, the more safety stock is required. Accurate forecasting and production planning can reduce the need for extra inventory and manufacturing capacity. In addition, Supply Chain Management can share its planning information with the company’s suppliers so they can plan their operations more efficiently, which should allow the suppliers to reduce the price they charge the company for their products. Supply Chain Management records can provide the data needed by Accounting and Finance to determine how much of each resource (materials, labor, supplies, and overhead) was used to make completed products in inventory. Supply Chain Management data can support the Marketing and Sales function by providing information about what has been produced and shipped. For example, online retailers such as Amazon provide detailed information on customer orders through their Web sites, and some send automated emails to notify customers when their orders have shipped. Shipping companies, such as UPS and FedEx, provide online shipment-tracking information. By entering a tracking number, the customer can see each step of the shipping process by noting where the package’s bar code was scanned. Domino’s Pizza allows customers who order through their Web site to track the progress of their pizza order— from preparation to baking to delivery. Thus, accurate and timely production information supports the sales process and can increase customer satisfaction. In fact, Amazon ranked number one in the Temkin Group’s 2011 survey of customer experience. Two of the three survey components relate to business process: functional experience (how well the customer was able to do what they wanted to do) and accessiblility experience (how easy it was to interact with the company). Performing well in such a survey requires a smooth integration of the Marketing and Sales and Supply Chain Management processes. Supply Chain Management also interacts with Human Resources. For instance, Supply Chain Management passes hiring information to Human Resources, and Human Resources informs Supply Chain Management of the company’s layoff and recall policy, which might pertain to workers in the plant. To summarize, inputs for Supply Chain Management could include the following: • • • • 11 Product sales data Production plans Inventory levels Layoff and recall company policy Outputs for Supply Chain Management could include the following: • • Raw material orders Packaging orders Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Chapter 1 12 • • • Resource expenditure data Production and inventory reports Hiring information Accounting and Finance Accounting and Finance (A/F) needs information from all the other functional areas to complete its tasks accurately, as shown in Figure 1-6. Legal requirements and job information; payroll and benefit expense data Payments Customer HR Invoices and credit memos Hiring needs and personnel information Sales data and manufacturing cost analysis A/F Cost/profit analysis Production plans; materials and inventory data Sales order data SCM M/S Source Line: Course Technology/Cengage Learning. FIGURE 1-6 The Accounting and Finance functional area exchanges data with customers and with the Human Resources, Marketing and Sales, and Supply Chain Management functional areas Accounting and Finance personnel record the company’s transactions in the books of account (which often are computerized records). For example, they record accounts receivable when sales are made and cash receipts when customers send in payments. In addition, they record accounts payable when raw materials are purchased and cash outflows when they pay for materials. Finally, Accounting and Finance personnel summarize the transaction data to prepare reports about the company’s financial position and profitability. Employees in other functional areas provide data to Accounting and Finance: Marketing and Sales provides sales data, Supply Chain Management provides production and inventory data, and Human Resources provides payroll and benefit expense data. The accuracy and timeliness of Accounting and Finance data depend on the accuracy and timeliness of the data from the other functional areas. Marketing and Sales personnel require data from Accounting and Finance to evaluate customer credit. If an order will cause a customer to exceed his or her credit limit, Marketing and Sales should see that the customer’s accounts receivable balance Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Business Functions and Business Processes (the amount owed to the company) is too high and hold new orders until the customer’s balance is lowered. If Accounting and Finance is slow to record sales, the accounts receivable balances will be inaccurate, and Marketing and Sales might approve credit for customers who have already exceeded their credit limits and who might never pay off their accounts. If Accounting and Finance does not record customers’ payments promptly, the company could deny credit to customers who actually owe less than their credit limit, potentially damaging the company’s relationship with those customers. To summarize, inputs for Accounting and Finance could include the following: • • • • • • 13 Payments from customers Accounts receivable data Accounts payable data Sales data Production and inventory data Payroll and expense data Outputs for Accounting and Finance could include the following: • • • Payments to suppliers Financial reports Customer credit data Human Resources Like the other functional areas, Human Resources (HR) needs information from the other departments to efficiently complete its business activities, as shown in Figure 1-7. Hiring needs and personnel information A/F Payroll and benefit expense data; legal requirements and job information Legal requirements and job information Hiring needs and personnel information SCM Legal requirements and job information HR Hiring needs and personnel information M/S Source Line: Course Technology/Cengage Learning. FIGURE 1-7 The Human Resources functional area exchanges data with the Accounting and Finance, Marketing and Sales, and Supply Chain Management functional areas Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Chapter 1 14 Tasks related to employee hiring, benefits, training, and government compliance are all the responsibilities of a human resources department. Human Resources staff need accurate forecasts of personnel needs from all functional units. In addition, Human Resources needs to know what skills are required to perform a particular job and how much the company can afford to pay employees. These data also come from all functional units. State and federal laws require companies to observe many governmental regulations in recruiting, training, compensating, promoting, and terminating employees—and these regulations must be observed company-wide. Usually, it is also Human Resources’ responsibility to ensure that employees receive training in a timely manner and that they get certified (and recertified) in key skills, such as materials handling and equipment operation. Human Resources must also disburse wages, salaries, raises, and bonuses. For these and other reasons, corporate Human Resources needs timely and accurate data from other areas. Human Resources must create accurate and timely data and reports for management use. For example, Human Resources should maintain a database of skills required to do particular jobs as well as the prevailing pay rate for each position. When the company evaluates employees’ performance and compensation, analysis of these data can help to prevent the loss of valued employees because of low pay. To summarize, inputs for Human Resources could include the following: • • Personnel forecasts Skills data Outputs for Human Resources could include the following: • • • • Regulation compliance Employee training and certification Skills database Employee evaluation and compensation As shown in Figure 1-4 through Figure 1-7, a significant amount of data is maintained by and shared among the different functional areas. The timeliness and accuracy of these data are critical to each area’s success and to the company’s ability to make a profit and generate future growth. ERP software allows all the functional areas to share a common database so accurate, real-time information is available. In Chapter 2, we will trace the evolution of data management systems that led to ERP. Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Business Functions and Business Processes ANOTHER LOOK 15 Integrated Information Systems Large organizations dealing with hundreds or thousands of suppliers have a difficult task in keeping information flowing to the right person at the right time. At one point, Lockheed Martin Aeronautics, with $13.2 billion in sales (2010) and over 29,000 employees, was running 75 legacy systems, some dating from the 1970s. To stay efficient while keeping customers happy and taking on more aircraft orders, the company decided to implement an Enterprise Resource Planning system. Lockheed Martin’s final system allows suppliers to handle more of their own transactions by accessing the new ERP system through an existing secure Web portal. For example, using the portal, a supplier can now track each step of an order. In addition, the supplier can see the production trends at Lockheed Martin, and plan its own production to satisfy Lockheed Martin’s needs—in effect, anticipating orders. Through this integration of many systems into one large ERP system, Lockheed Martin was able to cut costs and connect suppliers worldwide into its system, enabling the company to become more efficient. In another industry, Tumi, Inc., the luggage and travel products company, was running several legacy systems that were written “in-house,” meaning they were programmed by company staff. The different systems covered processes such as taking an order, running the warehouse, and completing financial statements. None of the systems were linked; therefore, passing information from one system to another was a slow and cumbersome process. Tumi could not fill its orders on time, had excess inventory in the warehouse, and was frequently unable to meet customers’ shipping deadlines. To address these issues—and to better support the company’s expansion plans—Tumi made a conscious effort to make information technology a business driver, and the company brought in an ERP system to integrate the business functions. With the new integrated ERP system, Tumi has been able to expand its business, decrease inventory by 30 percent, cut its warehouse space by 38 percent, and increase sales by 25 percent. Tumi’s management believes that one of the company’s primary strengths lies in its integrated systems. Manufacturing is now quick to react when demand increases, and forecasting is more accurate. Question: 1. Using the Internet, research how many suppliers are typically used for manufacturing large commercial aircraft. List 10 such suppliers and what they do. How would an integrated ERP system, such as the one at Lockheed Martin, help manage all those suppliers? Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Chapter 1 16 Chapter Summary • Companies that make and sell products have business processes that involve four main functional areas: Marketing and Sales (M/S), Supply Chain Management (SCM), Accounting and Finance (A/F), and Human Resources (HR). These areas of operation perform the following functions: • Marketing and Sales develops products, sets product prices, promotes products through advertising and marketing, takes customer orders, supports customers, and creates sales forecasts. • Supply Chain Management develops production plans, orders raw materials from suppliers, receives the raw material into the facility, manufactures products, maintains facilities, and ships products to customers. • Accounting and Finance performs financial accounting to provide summaries of operational data in managerial reports, and also is responsible for tasks such as controlling accounts, planning and budgeting, and cash-flow management. • Human Resources recruits, hires, trains, and compensates employees, ensures compliance with government regulations, and oversees the evaluation of employees. • Each functional area is served by an information system. Information systems capture, process, and store data to provide information needed for decision making. • Employees working in one functional area often need data from other functional areas. Ideally, functional area information systems are integrated, so shared data are accurate and timely. • Today, business managers try to think in terms of business processes that integrate the functional areas, thus promoting efficiency and competitiveness. An important aspect of this integration is the need to share information between functional areas, and with business partners. ERP software provides this capability by means of a single common database. Key Terms Accounting and Finance (A/F) integrated information system business function Marketing and Sales (M/S) business process raw data Enterprise Resource Planning (ERP) safety stock functional areas of operation sales forecast Human Resources (HR) stockout information system (IS) Supply Chain Management (SCM) Exercises 1. Distinguish between a business function and a business process. Describe how a business process cuts across functional lines in an organization. How might a manager organize his or her staff in terms of business processes rather than functional departments? What benefits would there be with this type of organization? What challenges would it pose? Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Business Functions and Business Processes 2. How could a university organize its business education around business processes rather than business functions? What would be the benefits to students? 3. Assume your uncle raises bees for honey on his farm. You help him package the honey and sell it on the Internet. Reproduce Figure 1-1 for this small business example. Add a one-sentence description for each function as it relates to selling this artisan honey online. 4. Go to the Amazon Web site (http://www.amazon.com), and step through the process of buying an item without actually purchasing the item. Based on this experience, describe the flows of information between Marketing and Sales, Accounting and Finance, and Supply Chain Management at Amazon. How easy is it to buy that item? 5. Using the Internet, research your state’s regulations for employing teenagers—such as minimum age of employment. Do the same for a neighboring state. Are the two state regulations the same? Why would it be important for Human Resources to communicate this information to a hiring department? 6. Think of the last time you bought a high-tech electronic item. How does the process of buying that item cut across the store’s various functional lines? What information from your receipt would need to be available to the business functions? Which business functions would need that information? How could your receipt help in the process of returning that item? 7. Assume you own and run a small ice cream shop located on the grounds of a private pool. You want to maximize sales and decide that allowing customers to buy on credit could be a big driver of sales since most people come to the pool without cash. What information do you need to keep track of to make sure a given customer doesn’t go over their $20 credit limit. What problems might occur? 17 For Further Study and Research Amrani, Radouane E., Frantz Rowe, and Bénédicte Geffroy-Maronnat. “The Effects of Enterprise Resource Planning Implementation Strategy on Cross-Functionality.” Information Systems Journal 16, no. 1 (January 2006): 79. Aurand, Timothy W., Carol DeMoranville, and Geoffrey L. Gordon. “Cross-Functional Business Programs: Critical Design and Development Considerations.” Mid-American Journal of Business 16, no. 2 (Fall 2001): 21–30. Economist. “Silo But Deadly.” December 5, 2009. http://www.economist.com/node/15016132. Hannon, David. “Lockheed Martin Aeronautics Revolutionizes Its Supply Chain.” InsiderPROFILES 2, no. 2 (April 2011). http://insiderprofiles.wispubs.com/article.aspx? iArticleId=5706. Hannon, David. “How TUMI, Inc. Cut Inventory by 30% and Increased Sales by 25%.” InsiderPROFILES 2, no. 1 (January 2011). http://insiderprofiles.wispubs.com/article.aspx? iArticleId=5600. Temkin Group. “2011 Temkin Experience Ratings.” March 29, 2011. http://www.temkingroup. com/news/2011-temkin-experience-ratings. Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. CHAPTER 2 T H E DE V E L O P M E N T O F ENTERPRISE RESOURCE PLANNING SYSTEMS LEARNING OBJECTIVES After completing this chapter, you will be able to: • Identify the factors that led to the development of Enterprise Resource Planning (ERP) systems • Describe the distinguishing modular characteristics of ERP software • Discuss the pros and cons of implementing an ERP system • Summarize ongoing developments in ERP INTRODUCTION In today’s competitive business environment, companies try to provide customers with goods and services faster and less expensively than their competition. How do they do that? Often, the key is an efficient, integrated information system. Increasing the efficiency of information systems results in more efficient management of business processes. When companies have efficient business processes, they can be more competitive in the marketplace. An Enterprise Resource Planning (ERP) system can help a company integrate its operations by serving as a company-wide computing environment that includes a shared database—delivering consistent data across all business functions in real time. (The term real time refers to data and processes that are always current). Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Chapter 2 This chapter will help you to understand how and why ERP systems came into being and what 20 the future might hold for business information systems. The chapter follows this sequence: • Review of the evolution of information systems and related causes for the recent development of ERP systems • Discussion of the few ERP software vendors that dominate the market; the current industry leader, German software maker SAP AG’s industry-leading software product, SAP ERP, is discussed as an example of an ERP system. • Review of the factors influencing a company’s decision to purchase an ERP system • Description of ERP’s benefits • Overview of frequently asked questions related to ERP systems • Discussion of the future of ERP software, including the emphasis being placed on mobile applications and accessibility of data THE EVOLUTION OF INFORMATION SYSTEMS Until recently, most companies had unintegrated information systems that supported only the activities of individual business functional areas. Thus, a company would have a marketing information system, a production information system, and so on—each with its own hardware, software, and methods of processing data and information. Information systems configured in this way are known as a silos because each department has its own stack, or silo, of information that is unconnected to the next silo; silos are also known as stovepipes. Such unintegrated systems might work well within each individual functional area, but to be competitive, a company must share data among all the functional areas. When a company’s information systems are not integrated, costly inefficiencies can result. For example, suppose two functional areas have separate, unintegrated information systems. To share data, a clerk in one functional area needs to print out data from another area and then enter the data into her area’s information system. Not only does this data input take twice the time, it also significantly increases the chance for data entry errors. Alternatively, this process might be automated by having one information system write data to a file to be read by another information system. This would reduce the probability of errors, but it could only be done periodically (usually overnight or on a weekend) to minimize the disruption to normal business transactions. Because of the time lag in updating the system, the transferred data would rarely be up to date. In addition, data can be defined differently in different data systems; for instance, products might be Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. The Development of Enterprise Resource Planning Systems referred to by different part numbers in different systems. This variance can create further problems in timely and accurate information sharing between functional areas. It seems obvious today that a business should have integrated software to manage all functional areas. An integrated ERP system, however, is an incredibly complex hardware and software system that was not feasible until the 1990s. Current ERP systems evolved as a result of three things: (1) the advancement of the hardware and software technology (computing power, memory, and communications) needed to support the system, (2) the development of a vision of integrated information systems, and (3) the reengineering of companies to shift from a functional focus to a business-process focus. 21 Computer Hardware and Software Development Computer hardware and software developed rapidly in the 1960s and 1970s. The first practical business computers were the mainframe computers of the 1960s. Although these computers began to change the way business was conducted, they were not powerful enough to provide integrated, real-time data for business decision making. Over time, computers got faster, smaller, and cheaper—leading to today’s proliferation of mobile devices. The rapid development of computer hardware capabilities has been accurately described by Moore’s Law. In 1965, Intel employee Gordon Moore observed that the number of transistors that could be built into a computer chip doubled every 24 months. This meant that in the 1960s and 1970s the capabilities of computer hardware were doubling every 24 months, and this trend has continued, as shown in Figure 2-1. Intel Processors 1,000,000,000 Core i7 Itanium 2 100,000,000 Number of Transistors Pentium 4 10,000,000 Pentium II Pentium 80486 1,000,000 80386 80286 100,000 8086 10,000 4004 8080 1,000 1970 1975 1980 1985 1990 1995 2000 2005 2010 Year Source Line: “The Evolution of a Revolution,” ftp://download.intel.com/pressroom/kits/Intel ProcessorHistory.pdf,” Intel. FIGURE 2-1 The actual increase in transistors on a chip approximates Moore’s Law Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Chapter 2 22 During this time, computer software was also advancing to take advantage of the increasing capabilities of computer hardware. In the 1970s, relational database software was developed, providing businesses with the ability to store, retrieve, and analyze large volumes of data. Spreadsheet software, a fundamental business tool today, became popular in the 1980s. With spreadsheets, managers could perform complex business analyses without having to rely on a computer programmer to develop custom programs. The computer hardware and software developments of the 1960s, 1970s, and 1980s paved the way for the development of ERP systems. Early Attempts to Share Resources As PCs gained popularity in business in the 1980s, it became clear that users needed a way to share peripheral equipment (such as printers and hard disks, which were fairly expensive in the early 1980s) and, more importantly, data. At that point, important business information was being stored on individual PCs, but there was no easy way to share the information electronically. By the mid-1980s, telecommunications developments allowed users to share data and peripherals on local networks. Usually, these networks were groups of computers connected to one another within a single physical location. This meant that workers could download data from a central computer to their desktop PCs and work with the data at their desks. This central computer–local computer arrangement is now called a client-server architecture. Servers (central computers) became more powerful and less expensive and provided scalability. Scalability means that the capacity of a piece of equipment can be increased by adding new hardware. In the case of a client-server network, the ability to add servers makes the network scalable—thus extending the life of the hardware investment. Scalability is a characteristic of client-server networks, but usually not of mainframe-based systems. By the end of the 1980s, much of the hardware and software needed to support the development of ERP systems was in place: fast computers, networked access, and advanced database technology. Recall from Chapter 1 that ERP programs help organizations manage company-wide business processes using a common database, which holds a very large amount of data. The software that holds that data in an organized fashion, and that allows for the easy retrieval of data, is the database management system (DBMS). By the mid-1980s, the DBMS required to manage the development of complex ERP software existed. The final element required for the development of ERP software was understanding and acceptance from the business community. Many businesspeople did not yet recognize the benefits of integrated information systems nor were they willing to commit the resources to develop ERP software. The Manufacturing Roots of ERP The concept of an integrated information system took shape on the factory floor. Manufacturing software advanced during the 1960s and 1970s, evolving from simple Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. The Development of Enterprise Resource Planning Systems inventory-tracking systems to material requirements planning (MRP) software. MRP is a production-scheduling methodology that determines the timing and quantity of production runs and purchase-order releases to meet a master production schedule. MRP software allowed a plant manager to plan production and raw materials requirements by working backward from the sales forecast, the prediction of future sales. The plant manager first looked at Marketing and Sales’ forecast of customer demand, then looked at the production schedule needed to meet that demand, calculated the raw materials needed to meet the required production levels, and finally, projected the cost of those raw materials. For a company with many products, raw materials, and shared production resources, this kind of projection was impossible without a computer to keep track of various inputs. The basic functions of MRP could be handled by mainframe computers; however, the advent of electronic data interchange (EDI)—the direct computer-to-computer exchange of standard business documents—allowed companies to handle the purchasing process electronically, avoiding the cost and delays resulting from paper purchase order and invoice systems. The functional area now known as Supply Chain Management (SCM) began with the sharing of long-range production schedules between manufacturers and their suppliers. 23 Management’s Impetus to Adopt ERP The hard economic times of the late 1980s and early 1990s caused many companies to downsize and reorganize. These company overhauls were one stimulus for ERP development. Companies needed to find some way to avoid the following kind of situation (which they had tolerated for a long time): Imagine you are the CEO of Mountaineering, Inc., an outdoor outfitter catering to the young and trendy sportsperson. Mountaineering, Inc. is profitable and keeping pace with the competition, but the company’s information systems are unintegrated and inefficient (as are the systems of your competitors). The Marketing and Sales Department creates a time-consuming and unwieldy paper trail when negotiating and closing sales with retailers. To schedule factory production, however, the manager of the Manufacturing Department needs accurate, timely information about actual and projected sales orders from the Marketing and Sales manager. Without such information, the Manufacturing manager must make a guess about which products to produce—and how many—in order to keep goods moving through the production line. Sometimes a guess overestimates demand, and sometimes it underestimates demand. Overproduction of a certain product might mean your company is stuck with a product for which there is a diminishing market due to style changes or changes in seasonal demand. When your company stores product—such as hiking boots—as it waits for a buyer, you incur warehouse expense. On the other hand, underproduction of a certain style of boot might result in product not being ready for a promised delivery date, leading to unhappy customers and, possibly, canceled orders. If you try to catch up on orders, you’ll have to pay factory workers overtime or resort to the extra expense of rapid-delivery shipments. Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Chapter 2 Finance and Accounting Information flow Logistics Information flow Manufacturing Information flow Sales Information flow Marketing Top management Information flow 24 Eventually, the management of large companies decided they could no longer afford the type of inefficiencies illustrated by the Mountaineering example—inefficiencies caused by the functional model of business organization. This model had deep roots in U.S. business, starting with the General Motors organizational model developed by Alfred P. Sloan in the 1930s. The functional business model shown in Figure 2-2 illustrates the concept of silos of informatio...
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Running head: MANAGING ERP

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Managing ERP
Name of student
Name of institution

MANAGING ERP

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Managing ERP

Enterprise resource planning is the comprehensive management of the primary business
process, with the aid of a software and modern technology. The activities carried out under ERP
include manufacturing or service delivery, inventory management, product planning, and finance
among others (Jones, & Burger, 2009). ERP is a basic technique that an organization can use to
collect process and interpret data from daily activities. In the management of enterprise resource
planning, there are certain factors that must be defined in a clear manner for efficient
management...


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