BUSINESS B5

Enterprise Resource Planning (ERP)

Learning Outcomes
Compare core ERP components and

extended ERP components Describe the three primary components found in core ERP Describe the four primary components found in extended ERP systems Explain the benefits and risks associated with ERP systems Assess the future of ERP systems
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Introduction
ERP integrates all departments and functions

throughout an organization into a single IT system so that employees can make enterprisewide decisions by viewing enterprisewide information on all business operations
Core ERP components traditional components

included in most ERP systems and they primarily focus on internal operations
Extended ERP components extra components

that meet the organizational needs not covered by the core components and primarily focus on external operations

Accounting and Finance Components

manage accounting data and financial

processes within the enterprise with functions such as general ledger, accounts payable, accounts receivable, budgeting, and asset management

Production and Materials Management Components

handle the various

aspects of production planning and execution such as demand forecasting, production scheduling, job cost accounting, and quality control
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Human Resource Components

track employee information including payroll,

benefits, compensation, performance assessment, and assumes compliance with the legal requirements of multiple jurisdictions and tax authorities

Extended ERP Components

Business intelligence - information that people use

to support their decision-making efforts CRM - involves managing all aspects of a customers relationship with an organization to increase customer loyalty and retention and an organizations profitability SCM - involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability E-business - means conducting business on the Internet, not only buying and selling, but also serving customers and collaborating with business partners
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E-Business Components
E-logistics manages the transportation and

storage of goods
E-procurement the business-to-business

(B2B) purchase and sale of supplies and services over the Internet

ERP Benefits

ERP Risks

The Future of ERP

Lines between SCM, CRM, and ERP will continue to blur Internet continue to help organizations integrate data and process across functional departments Interface customizable employee browsers Wireless technology support a mobile workforce

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Closing Case One: PepsiAmericas Enterprises

PepsiAmericas generates $2.97 billion in

revenues yearly The company implemented PeopleSofts ERP solution to provide complete integration between PepsiAmericas front-office and back-office systems PepsiAmericas also implemented PeopleSofts supply chain management component to automate its inventory
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Closing Case Two Questions

1. 2. 3.

4.

5.

How have core ERP components helped PepsiAmericas improve its business? How have extended ERP components helped PepsiAmericas improve its business? Explain how future ERP systems will help PepsiAmericas increase revenues Assess the impact on PepsiAmericas business if it failed to implement the CRM component of PeopleSofts ERP system Review the different PeopleSoft components in Figure B5.5. Which component would you recommend PepsiAmericas implement if it decides to purchase an additional PeopleSoft component?
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Closing Case Two: Demanding Chocolate

Ghirardelli is the longest continuously

operating chocolate manufacturer in the Untied States Ghirardelli improved inventory management and profitability through the implementation of an ERP system

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Closing Case Two Questions

1. Which additional core ERP components

would you recommend Ghirardelli implement? 2. Which additional extended ERP components would you recommend Ghirardelli implement? 3. How can implementing an Advanced Planning ERP component help Ghirardellis business?
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