CHAPTER 12
Enterprise Resource
Planning (ERP)
Learning Outcomes
Describe the role information plays in
enterprise resource planning systems
Identify the primary forces driving the
explosive growth of enterprise resource
planning systems
Explain the business value of integrating
supply chain management, customer
relationship management, and enterprise
resource planning systems
2
Overview
Enterprise resource planning systems serve
as the organization's backbone in providing
fundamental decision-making support
This chapter discusses
ERP’s explosive growth
Using ERP to connect corporations
Integrating SCM, CRM, and ERP
3
Overview
At the heart of an ERP system is a database, when a
user enters or updates information in one module, it is
immediately and automatically updated throughout the
entire system
4
ERP systems can automate business processes
Overview
ERP systems must integrate various
organization processes and be:
Flexible
Modular and open
Comprehensive
Beyond the company
6
ERP Growth
There are an estimated 70,000 ERP installations
worldwide with over 35 million users. 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
7
Top ERP vendors & their major components
The Connected Corporation
SCM, CRM, and ERP are the backbone of e-
business
Integration of these applications is the key to
success for many companies
Integration allows the unlocking of information
to make it available to any user, anywhere,
anytime
9
SCM and CRM market overviews
Integrating SCM, CRM, & ERP
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
– packaging together commonly used functionality, such
as providing pre-built links to popular enterprise
applications, which reduced the time necessary to
develop solutions that integrate applications from
multiple vendors
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General audience & purpose of SCM, CRM & ERP
Data points where SCM, CRM, and ERP integrate
Revving Up Sales at Harley-Davidson
1. Explain how an ERP system can help
Harley-Davidson gain business intelligence
in its operations
2. Assess the business benefit for Harley-
Davidson in integrating its CRM, SCM, and
ERP systems
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Hilton Purchases New Suite
Hilton deployed a new ERP that cost $4
million
The ERP system has increased processing
efficiency by a factor of six
The ERP system is saving the company
between $4.5 and $5 million annually
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Case Questions
1. Summarize why the merger of two separate
corporations can cause significant issues for the
integration of information
2. Which component would you recommend if Hilton
wanted to add an additional PeopleSoft
component? Evaluate the business benefit of this
additional component
3. Analyze why it is critical for an organization like
Hilton Hotels to have an enterprisewide system
4. Assess the benefits Hilton Hotels Corporation could
receive from implementing an integrated SCM,
CRM, and ERP solution
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