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Enterprise Resource Planning

Enterprise Resource Planning. IST 421 Spring 2004 Lecture 8. ERP Evolution. Integrated applications seem obvious today Complex hardware and software system not feasible until the 1990’s ERP systems evolved as a result Development of hardware & software technology

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Enterprise Resource Planning

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  1. Enterprise Resource Planning IST 421 Spring 2004 Lecture 8

  2. ERP Evolution • Integrated applications seem obvious today • Complex hardware and software system not feasible until the 1990’s • ERP systems evolved as a result • Development of hardware & software technology • Development of a vision of integrated information systems

  3. ERP Evolution • Integrated Vision: Materials Requirements Planning (MRP) used for inventory tracking Electronic Data Interchange (EDI) enabled processing of purchases avoided paper purchase orders & invoicing systems Start of Supply-Chain Management

  4. ERP Evolution • Business model started in 1930’s by Alfred P. Sloan – Functional Model of Business Organization • During economic problems of 1980’s and 1990’s, view changed to cross-functional processes. • Michael Hammer’s 1993 book, Reengineering the Corporation: A Manifesto for Business Revolution

  5. ERP Evolution • ERP software was seen as a solution to business problems • Number of ERP vendors: • SAP (Systems Analysis and Program Development) • PeopleSoft • Oracle • Baan • J.D. Edwards

  6. ERP Applications • Best-of-Breed approach • Each ERP vendor has perceived specialty • SAP – Production Planning & Materials Management • PeopleSoft – Human Resources • As is install or customize?

  7. ERP Applications • Failed package installation projects • Dell Computers cancelled implementation • Owens-Corning lengthy implementation • FoxMeyer drug company (bankrupt) lawsuit • In a fortune 500 company, software, hardware and consulting fees exceed $100 million and take years to fully implement

  8. ERP Applications • Most use three-tier architecture • Presentation layer • Application server layer • Database layer • Various integration techniques • Proprietary • EDI, COM, CORBA, Java

  9. ERP Applications • Business Vision – What business problem is being addressed? • Adopt “best practices” addressed by software vs. customization?

  10. ERP Applications • Returns expected? • 33% of companies saw a cost savings in sales order management • 34% reduced personnel needs • More sales can be generated through streamlined process • Reduced frustration • Realized returns?

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