Enterprise Systems

(ITC-2072)

Muhammad Naeem
Lecture, Department of Computer Science
National Textile University, Faisalabad.
 Course Learning Outcomes
Understand the fundamentals of an Enterprise, business process, and
resource.
Understand the implementation life cycle, architecture, design and
modeling of enterprise systems.
Describe the security, data migration and integration to implement
business modules.
Apply the concepts and tools of designing and implementing enterprise
system and compare the emerging trends.
Required Learning Resources
Text Book(s): 1. Designing Enterprise Information Systems:
(Title, Author, Merging Enterprise Modeling and Software
Edition, Publisher) Specification
Boris Shishkov (Springer-2019)

Reference 1. Enterprise Resource Planning

Book(s): Rajesh Ray, Tata McGraw Hill Education Private Limited,
New Delhi, 2011
(Title, Author,
2. Design of Industrial Information Systems
Edition, Publisher)
Thomas O. Boucher, Ali Yalcin, Elsevier 2006
Chapter 1
ERP Overview
 Definition of ERP
Enterprise:

• The enterprise is any organization that has a set of common goals.

• An organization, especially a business, with a difficult and important plan, especially one that will earn money

• A project or undertaking that is especially difficult, complicated, or risky

Resource
• Human resource (manpower),

• Capacity (machine, plants, warehouses),

• Inventory resources (finished goods and raw materials stock),

Biggest challenge is the utilization of these resources effectively
Planning
• Enterprise needs to plan
• Planning activities
• Demand planning, distribution planning, production
planning, capacity planning, material planning, maintenance
planning, financial planning and budgeting, quality planning,
new product planning, etc.

ERP is an integrated information system built on a centralized

database and having a common computing platform that helps in
effective usage of enterprise’s resources and facilitates the flow of
information between all business functions of the enterprise
Major ERP Vendors in World
 NEED FOR AN ERP
• Emergence of many management theories like BPR, TQM, JIT, Six
Sigma, but much less effectiveness
• ERP is need to grow in corporate world.
• Changes incorporated by ERP
• From Department to Enterprise
• Structured around the departments, organizational goals are achieved
through these departments individual goals.
• Goals may not be well aligned
• The whole enterprise has a set of objectives.
• Objective/KPI of every department is derived from organizational objective.
The whole enterprise works like a system
• From function to process:
• Start measuring process efficiency as a whole instead of functional KPIs.
• ERPs are designed around processes and facilitates process thinking.
• Organizations had first redesigned their future TO BE processes for order to
cash or procure to pay and then took help of ERP to enable these processes.

• From Information Silos to Integrated Information System

• Duplication of data: Multiple departmental systems need entering a lot of
redundant data in different systems
• No integration between these different systems:
• Systems can not update online all relevant information (CIO)
From Departmental Database to
Companywide Integrated Database
• ERP is an integrated information system
• No duplication
• Data Standardization
• Uniqueness
• Particular formats
• Data Tracking:
• ERP covers a complete life cycle of a data process
• Single system for whole organization
 Functions of ERP
• Supports BPI.
• Improves capital planning and helps in executing organizational
plans and strategies.
• Speed up the decision-making process.
• Business network to wider domains.
• Identifies operational risks to improve governance.
• Provides protection against organizational data breaches and
security threats to leakage of information.
• Gives long-term profit by providing means to increase the
customer base.
 BENEFITS FROM AN ERP SYSTEM
• Bring Best Practices
• Integration
• ERP amalgamates the organization in terms of processes, data and
information.
• Intra-organization Communication
• Departmental Communication
• Inter-organization Collaboration
• Supplier, Customer, partners collaboration SRM, CRM.
• ERP Provides Online Real Time Information
• Chief Information officer, Information about procurement, inventory, sale,
finance and other such issues.
BENEFITS FROM AN ERP SYSTEM
(Continue…)
• ERP Facilitates BPR
• ERP makes it possible to run this TO BE design. Often TO BE
process design is not enabled by information technology and fails
• E.g. owner wants get a tool for checking inventory
• Transaction-oriented Processes
• Accounts
• Payroll
• sale/purchased orders
• ERP make it faster and error free
BENEFITS FROM AN ERP SYSTEM
(Continue…)
• ERP helps in better data management and reduces the need for data
redundancy

• ERP can reduce cash to cash cycle time or order fulfillment cycle time

• ERP can provide better customer satisfaction

• ERP helps in better planning, analysis and decision making

 ERP Challenges
• Challenges During ERP Implementation
• Scope
• Several organizations do not follow any scientific method of project scoping
• Scopes keep on changing during the life cycle of the project.
• Change in requirements during implementation
• Need to be managed by project managers
• Large budget and Long timeline
• Millions of rupees (License, hardware, software, consultation, training, maintenance process
changes and other)
• Project Team
• Months and even years
• Organizational commitments
ERP Challenges (Continue…)
• Business process redesign:
• Some amount of BPR exercise and the corresponding risks.
• Full blown BPR exercise prior to ERP implementation was not fruitful in some cases.
• Should adopt an ERP-driven BPR approach, i.e. to design the process in a way that
selected ERP package can support.
• Reduces overall project risk.
• Unrealistic expectation and infeasible deadlines
• Need to solve all issues organization facing now a days
• Too many things to be achieved with the short duration of time
• ERP system need to interface with several other systems:
• Depends on how well the project scoping is done,
• Challenge at the beginning of the project to estimate how complex it could be
• Build those interfaces and in some cases even their technical feasibility.
• Results in time and cost overrun and can impact the overall project timeline.
Challenges for Ongoing Maintenance and
Operation of ERP System
• Life time support required
• Having right people to do the support job
• Organization want maintenance jobs out sourced.
• Even costly IT organizations
• Managing multiple vendors:
• Separate vendors for EPR, Hardware and Networking Supports
• Collaboration between vendors become challenge
• All tries to put garbage in another's bag
• Managing regular upgrades:
• Updates are frequent, stop supporting older versions
• Need to be update with technical support
• Consume financial and other organization resources
Challenges for Ongoing Maintenance
and Operation of ERP System
• Technology obsolence and rapid emergence of new technology:
• SaaS, Cloud, Android, collaborations among companies
• Developing new models in terms of SOA
• Challenge of managing large application portfolios:
• Managing multiple vendors, having different support skills
• Different vendors: ERP from SAP, CRM from Siebel and SRM from Ariba
• Challenges of realizing benefits:
• Bigger challenge is to get real benefits from the system
• Measuring the success, no defined KPIs
• Need to define a quantitative scale.
Challenges of Managing People
• Managing changes:
• Take out fear from employees
• Lot of resistance, need trainings and other activities
• Managing large project team:
• Venders, Consultants and H/W, S/W support venders from across the globe
• Managing employee retention and relocation:
• During the implementation and Go-Live phases
• Challenges of ensuring support from top management throughout
the project:
• Top management in any organization has hundreds of other priorities
• Tons of data need to be migrated to the new application within short time;