Integrating the Organization from End to End – Enterprise Resource Planning

Enterprise Resource Planning (ERP)

•At the heart of all ERP systems is a database, when a user enters or updates information in one module, it is immediately and automatically updated throughout the entire system

Integration Tools

•Many companies purchase modules from an ERP vendor, an SCM vendor, and a CRM vendor and must integrate the different modules together

–Middleware – several different types of software which sit in the middle of and provide connectivity between two or more software applications

–Enterprise application integration (EAI) middleware – packages together commonly used functionality which reduced the time necessary to develop solutions that integrate applications from multiple vendors

Enterprise Resource Planning (ERP)

•ERP systems must integrate various organization processes and be:

–Flexible

–Modular and open

–Comprehensive

–Beyond the company

Enterprise Resource Planning’s Explosive Growth

•SAP boasts 20,000 installations and 10 million users worldwide

•

•ERP solutions are growing because:

–ERP is a logical solution to the mess of incompatible applications that had sprung  up in most businesses

–ERP addresses the need for global information sharing and reporting

–ERP is used to avoid the pain and expense of fixing legacy systems

Building a Customer-Centric Organization – Customer Relationship Management

Customer Relationship Management (CRM)

•CRM enables an organization to:

–Provide better customer service

–Make call centers more efficient

–Cross sell products more effectively

–Help sales staff close deals faster

–Simplify marketing and sales processes

–Discover new customers

–Increase customer revenues

Recency, Frequency, and Monetary Value

•Organizations can find their most valuable customers through “RFM” - Recency, Frequency, and Monetary value

–How recently a customer purchased items (Recency)

–How frequently a customer purchased items (Frequency)

–How much a customer spends on each purchase (Monetary Value)

The Evolution of CRM

•CRM reporting technology – help organizations identify their customers across other applications

•CRM analysis technologies – help organization segment their customers into categories such as best and worst customers

•CRM predicting technologies – help organizations make predictions regarding customer behavior such as which customers are at risk of leaving

  

Extending the Organization – Supply Chain Management

Consumer Behavior

•Companies can respond faster and more effectively to consumer demands through supply chain enhances

•Demand planning software – generates demand forecasts using statistical tools and forecasting techniques

Competition

•Supply chain planning (SCP) software– uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain

•Supply chain execution (SCE) software – automates the different steps and stages of the supply chain

Enabling the Organization – Decision Making

Decision Making

•Reasons for the growth of decision-making information systems

–People need to analyze large amounts of information

–People must make decisions quickly

–People must apply sophisticated analysis techniques, such as modeling and forecasting, to make good decisions

–People must protect the corporate asset of organizational information

Transaction Processing Systems

•Transaction processing system - the basic business system that serves the operational level (analysts) in an organization

•Online transaction processing (OLTP) – the capturing of transaction and event information using technology to (1) process the information according to defined business rules, (2) store the information, (3) update existing information to reflect the new information

•Online analytical processing (OLAP) – the manipulation of information to create business intelligence in support of strategic decision making

Decision Support Systems

•Decision support system (DSS) – models information to support managers and business professionals during the decision-making process

•

•Three quantitative models used by DSSs include:

1.Sensitivity analysis – the study of the impact that changes in one (or more) parts of the model have on other parts of the model

2.What-if analysis – checks the impact of a change in an assumption on the proposed solution

3.Goal-seeking analysis – finds the inputs necessary to achieve a goal such as a desired level of output

  Executive Information Systems

•Executive information system (EIS) – a specialized DSS that supports senior level executives within the organization

•Most EISs offering the following capabilities:

–Consolidation – involves the aggregation of information and features simple roll-ups to complex groupings of interrelated information

–Drill-down – enables users to get details, and details of details, of information

–Slice-and-dice – looks at information from different perspectives

  Artificial Intelligence (AI)

•Intelligent system – various commercial applications of artificial intelligence

•Artificial intelligence (AI) – simulates human intelligence such as the ability to reason and learn

 

Accessing Organizational Information – Data Warehouse

History of Data Warehousing

•Data warehouses extend the transformation of data into information

•In the 1990’s executives became less concerned with the day-to-day business operations and more concerned with overall business functions

•The data warehouse provided the ability to support decision making without disrupting the day-to-day operations

Data Warehouse Fundamentals

•Data warehouse – a logical collection of information – gathered from many different operational databases – that supports business analysis activities and decision-making tasks

•The primary purpose of a data warehouse is to aggregate information throughout an organization into a single repository for decision-making purposes

•Extraction, transformation, and loading (ETL) – a process that extracts information from internal and external databases, transforms the information using a common set of enterprise definitions, and loads the information into a data warehouse

•Data mart – contains a subset of data warehouse information

 

Storing Organizational Information - Databases

Relational Database Fundamentals

•Information is everywhere in an organization

•Information is stored in databases

–Database – maintains information about various types of objects (inventory), events (transactions), people (employees), and places (warehouses)

•

•Database models include:

–Hierarchical database model – information is organized into a tree-like structure (using parent/child relationships) in such a way that it cannot have too many relationships

–Network database model – a flexible way of representing objects and their relationships

–Relational database model – stores information in the form of logically related two-dimensional tables

 Entities and Attributes

•Entity – a person, place, thing, transaction, or event about which information is stored

–The rows in each table contain the entities

–In Figure 7.1 CUSTOMER includes Dave’s Sub Shop and Pizza Palace entities

–

•Attributes (fields, columns) – characteristics or properties of an entity class

–The columns in each table contain the attributes

–In Figure 7.1 attributes for CUSTOMER include Customer ID, Customer Name, Contact Name

 Keys and Relationships

•Primary keys and foreign keys identify the various entity classes (tables) in the database

–Primary key – a field (or group of fields) that uniquely identifies a given entity in a table

–Foreign key – a primary key of one table that appears an attribute in another table and acts to provide a logical relationship among the two tables

Exploring Business Initiatives

The Value of Timely Information 

•Timeliness is an aspect of information that depends on the situation

–Real-time information – immediate, up-to-date information

–Real-time system – provides real-time information in response to query requests

•Characteristics of high-quality information include:

–Accuracy- Are all the values correct? For example, is the name spelled correctly? Is the dollar amount recorded properly?

–Completeness - Are any of the values missing? For example, is the address complete including street, city, state, and zip code?

–Consistency - Is aggregate or summary information in agreement with detailed information? For example, do all total fields equal the true total of the individual fields?

–Uniqueness - Is each transaction, entity, and event represented only once in the information? For example, are there any duplicate customers?

–Timeliness - Is the information current with respect to the business requirements? For example, is information updated weekly, daily, or hourly?

–