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COLLEGE OF COMPUTING AND INFORMATICS

SCHOOL OF INFORMATION SYSTEMS

Enterprise Systems

Chapter 1
An Overview of Enterprise Systems

Meaning:
What is Enterprise systems?
Database in Enterprise systems
Business Process
Business Function
 Business Process integration
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Enterprise Systems
• Enterprise systems (ES)
are large, complex, highly integrated information systems designed
to meet the information needs of organizations
and are, in most cases, implemented to improve organizational
effectiveness.

Enterprise Systems….
 These are fully integrated software packages supporting automation of most
standard business processes in organizations including extended modules such as
supply chain management (SCM) or customer relationship management (CRM)
systems

 ES is a platform capable of supporting and integrating a wide range of activities

across an organization.

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Enterprise Systems….

ES applications connect and manage information flows

across complex organizations, allowing managers to make
decisions based on information that accurately reflects the
current state of their business .

Enterprise Systems….
 Enterprise systems is a category of information systems which have been adopted in practice

since the 1990s.

 ES is use a variety of information technologies to help people work together.

 Collects data from various key business processes in manufacturing and production, finance

and accounting, sales and marketing, and stores the data in a single data repository(stored

centrally) where they can be used. Or available to all departments, (information shared by

many users ) to support business processes.

 The degree of success of the enterprise is often measured by the ratio between the output and

inputs. This ratios is called productivity.

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Traditional Organization

The organization is divided into different units based on the

functions they perform -finance, manufacturing, production,
planning, purchasing, sales & distribution, etc.

The various department have their own goals.

The different department function in isolation and have their

own data collection and analysis system.
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Traditional Organization

The result is that, instead of taking the organization towards

the common goal the various departments does not know
what the other does and for what purpose.

The solution is to have a centralized information storage and

management facility.

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Traditional Organization…

Figure 1.1

Traditional view of systems

Organization where there is no or little communication between inter department

Enterprise systems help to make this task easier by integrating the information system,
smooth flow of information across departmental barriers, and automating business process
and functions.
Enterprise systems help the organization to work and move forward as a single entity.9

Enterprise Way…

Figure 1.2 Enterprise systems

An Enterprise where all departments know what other are doing

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Some Characteristics of ES
 Multiple Functional Modules :define the following modules and their functions
Includes:
 Enterprise Resource Planning (ERP),

 Customer Relationship Management(CRM),

 Sales Force Automation (SFA),

 Knowledge Management (KM) and

 Supply chain Management(SCM)

 Real-time operations

 A common database
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Cont’d
 Integrated:

 Business processes are integrated end to end department and business unit.

 Integration of all the information flowing through a company— financial and

accounting information, human resource information, supply chain information, and
customer information. Or

 are industry specific, customizable software packages (the software packages is a

commercial product that can be modified to suit the particular and unique needs of the
business) that integrate information and business process in organizations.

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Cont’d
 Complex:

 Complex systems that involve organization-wide resources and require many

changes.

 Evolving:

As the IT industry changes, software changes are also required.

Technology changes force the company to change as well in order to stay in business.

 So we must reexamine the software from time to time to see if it still supports the
business needs.

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Advantages of Enterprise Systems

 Allow for integration of data and applications of a business or organization process
through a system that supports different operating systems.

 All data are in electronic form and business processes are automated and linked.

 Allow for resource sharing through the network, which can be configured in various ways.

 Centralized Databases: Databases allow the user to access data through query and data
extraction programs.

 Interface with the databases are simple and menu- driven, which ask the individual
questions to help in the selection of data.

 provide the end user with various software applications or tools to perform tasks.
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Data in Enterprise systems

• Data used in ES can be classified in into three types
1. Organizational data
2. Master data
3. Transactional data

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Data in Enterprise systems: Organizational data

• Organizational Data:- defines the structure of the enterprise in terms
of legal or business purposes.
Examples include: Legal entities, plants, storage areas, sales organizations,
profit centers
• Data rarely changes.

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Data in Enterprise systems: Master data

• Master Data is long-term data that typically represent entities
associated with various processes
Customer
Vendor
Material
• Typically include
General data (across company codes)
Financial data (Customer specific)
Area-specific data (Sales, Purchasing, Plant)
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Data in Enterprise systems: Transactional data

Transaction data is a data generated during execution of process steps
Requires
Organizational data
Master data
Situational data
Example: Sales order creation
Organizational elements: Client, Company Code, Sales Area
Master Data: Customer, Material
Situational data: Date, Time, Person
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Disadvantages of Enterprise Systems

 Costs: Implementing and managing enterprise systems can be expensive, especially
for small and medium-sized businesses (SMBs). SMBs usually do not have the resources
and money. For example, companies need the right people to make sure that their data is
protected. Large companies can afford to hire the consultants who specialize in this
area.

 The costs to install enterprise systems, for multi- corporations, can range from
approximately $30,000 to $500 million.

 Costs: Another cost that companies face is licenses.

• Companies purchase licenses in order to receive services, such as getting software

patches(a small piece of code inserted to correct or enhance a program) or upgrades. 19

Disadvantages of Enterprise Systems…

 Finally, another cost can be where enterprise systems cannot integrate with the
company's legacy systems. These systems contains important data that the company still needs
and uses. In order to get the enterprise system to work with legacy applications, the
company might have to purchase new computers, servers, or applications. It might
also have to hire some additional consultants to complete this project.

 Training and Turnover: If the enterprise system is to be successful in an organization, it

must have employees who know how to use it.
– The company must provide comprehensive training.

– However, many companies have ignored this area because it is costly.

– Even if the employees have been trained, they could leave the company, taking the knowledge with them.

– The company may also hire new managers that do not know very much about the system.
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Business Process
 Business processes: are a collection of interrelated tasks (activities) which solve a
particular issue or for accomplishing a specific business result. It takes one or more kinds
of input and creates an output that has a value to the customer.

 Business processes are a series of steps performed by a group of stakeholders to achieve a

concrete goal.

 Business process are Activities specific to a functional area of operation

 Successful business managers view business operations from the perspective of customer.

 Customer (either internal or external) is not required to interact with each business
function involved in the process.
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BUSINESS PROCESS…

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business processes…..

The Order Fulfillment Process

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Examples of Business Processes

 Human Resources: Hiring employees, evaluating performance, enrolling employees

in benefits plans.

 Manufacturing and production: Assembling product, checking quality, ship of

materials.

 Finance and accounting: Paying creditors, creating financial statements, managing

cash accounts.

 Sales and marketing: Identifying customers, creating customer awareness, and

selling.
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Types of Business Processes

 There are three types of business processes- Management, Operational, and
Supporting.

1. Management processes govern the operation of a system. Typical management

processes include “corporate governance” and “ strategic management”.

2. Operational processes create the primary value stream and are part of core
business. Typical operational processes are purchasing , manufacturing, marketing
and sales.

3. Supporting processes support the core processes. Examples includes, recruitment,

IT –support.
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The steps of Business Process Lifecycle

 Step 1: Define your goals: What is the purpose of the process? Why was
it created? How will you know if it is successful?
 Step 2: Plan and map your process: What are the strategies needed to
achieve the goals? This is the broad roadmap for the process.
 Step 3: Set actions and assign stakeholders: Identify the individual tasks
of the teams and machines need to do in order to execute the plan.
 Step 4: Test the process: Run the process on a small scale to see how it
performs. Observe any gaps and make adjustments.
 Step 5: Implement the process: Start running the process in a live
environment. Properly communicate and train all stakeholders.
 Step 6: Monitor the results: Review the process and analyze its patterns.
Document the process history.
 Step 7: Repeat: If the process is able to achieve the goals set for it,
replicate it for future processes.
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BUSINESS FUNCTION
 Activities specific to a functional areas of operation

What are the functional areas?

• Marketing and Sales (M/S) . Human Resources (HR)

• Supply Chain Management (SCM) . Accounting and Finance (A/F)
• Organizations that make products to sell have the following functional areas of
operation- purchasing, production and material management, marketing and
sales, accounting and finance, human resources, etc.

• Earlier business systems functioned in isolation. What happens in one

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functional area was not communicated with other functions.

Functional Areas of Operation

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Examples of Functional Areas & Business processes(Coffee Shop)

Marketing and Sales Accounting and Finance
Supply Chain Management 1. Recording raw data about Human Resources
1. Identify customer
2. Determining pricing
1. Scheduling coffee transactions (including Recruit, train,
production run sales), raw material evaluate, and
3. Promoting products to customers
2. Buying raw materials purchases, payroll, and compensate
4. Taking customers’ orders
3. Packaging receipt of cash from employees
5. Helping create a sales forecast
customers
Sales Forecast

Sales Records
Sales Forecast

- Sales records are important component of sales

- Functional areas are forecast
- Sales forecast is used in making staffing decisions
Interdependent and in production planning
- Sales forecast is used to plan personel needs
- Each requires data from the others

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Business Process Integration

 Business Process Integration (BPI) is a combination of a company's internal operations -
divisions and partners which connects them all in real-time.

 It is essential for businesses looking to connect systems and information efficiently.

 It is the act of bringing together smaller components into a single system that function as
one.

 It helps your teams collaborate closely, and bridge the gaps between the system to yield
good out come.

 BPI allows for automation of business processes, integration of systems and services, and
secure sharing of data across numerous applications.
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Business Process Integration……………

 Previously, business process integration software was only available to large
enterprise companies that could afford it.

 Today, businesses of all sizes need a efficient integration solution to streamline

processes between marketing, sales, customer service, and supply chain
management, etc.

 Sharing data effectively and efficiently between and within functional areas leads
to more efficient business processes.

 For instance, the BPI could build a relationship between the sales and
invoice systems within an enterprise. 31

Benefits of Business Process Integration

 Implementing them brings a host of business benefits such as:

 Reduction of risks: helps prevent and fix errors thereby minimizing risks.

 Elimination of redundancies: Monitoring processes allows for identification and

elimination of duplicated tasks.

 Minimized costs: Improved visibility into processes helps zero in on wasteful

expenditure.

 Higher efficiency: It helps managers ensure that turnaround times are short and accuracy

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Benefits of Business Process Integration……………….

Improved collaboration: BP software boosts collaboration between
internal teams as well as external vendors and buyers.

Make better decision with richer insight into an integrated business.

Improved productivity: When processes are organized, approvals are

faster and information retrieval is easier. Tasks are routed
sequentially without human intervention. These benefits
significantly boost productivity of teams.
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Steps for implementing business process integration

 What are the steps for implementing business process integration?

 Four Steps are there:

A. Process Identification. In order to implement BPI, processes must first be identified.

B. Documenting and Mapping. Document an organization’s existing business processes.

C. Planning. Process simulation allow proposed change to be implemented in theory & observe
their effect and assesses before actual changes are made.

D. Design, Implementation, and Management. The design and implementation of BPI help
eliminate the need to duplicate data in different system & increase the efficiency of the
business’s operation. Properly design of BPI can save companies time and money
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Question
?
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