Instructors Manual Enterprise Resource Planning, 1/E

CHAPTER 1: A FOU !ATIO FOR U !ER"TA !I # E TERPRI"E RE"OURCE P$A I # "%"TEM" CHAPTER O&'ECTI(E" 1. Develop an understanding of how ERP systems can improve the effectiveness of information systems in organizations. 2. Understand the business benefits of enterprise resource planning ERP! systems. ". Understand the history and evolution of ERP. CHAPTER OUT$I E 1. # $oundation for Understanding Enterprise Resource Planning %ystems a. &he Emergence of Enterprise Resource Planning %ystems 1. 'hat is ERP( 2. &he Evolution of ERP ". &he )ntegrated %ystems #pproach b. *usiness *enefits of ERP c. ERP +odules d. ERP Design #lternatives e. &he *usiness ,ase for ERP 1. ,ost-*enefit #nalysis for ERP 2. ,an ERP Provide a ,ompetitive #dvantage( f. &he ,hallenge of )mplementing an ERP %ystem g. %ummary A ")ER" TO E !*OF*CHAPTER +UE"TIO " +uestions ,or !iscussion: 1. Use on-line library databases to identify articles in trade publications which provide case studies of ERP implementations. &hese articles may provide some insight into each of these .uestions. a. /ow widespread is the use of ERP across certain industries( b. 'hat are the benefits reported from implementing ERP( c. 'hat are its limitations( 2. Research and learn about the implementation of ERP. Use trade publications and online library databases e.g. #*) )nform0 Pro1uest0 $irst %earch0 'ilson %elect Plus0 available through your library! to conduct a search for articles.

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a. $ind a success story of ERP implementation. 'hat factors contributed to the success of this implementation( b. $ind a story of problems encountered with an ERP implementation. 'hat factors contributed to the obstacles which were encountered(( Possi-le resources: #ustin0 Robert D.0 %ole0 Deborah0 and ,otteleer0 +ar2 3. 4/arley Davidson +otor ,ompany5 Enterprise %oftware %election.6 /arvard *usiness %chool case study 277"!5 1-2". #ustin0 Robert D.0 8olan0 Richard 9.0 and ,otteleer0 +ar2 3. 4,isco %ystems0 )nc.5)mplementing ERP.6 /arvard *usiness %chool case study 2772!5 1-1:. ;abriele /irt0 %abine and %wanson0 E. *urton. 4#dopting %#P at %iemens Power ,orporation.6 3ournal of )nformation &echnology 1< 1:::!5 2<"-2=1. 3esitus0 3ohn. 4*ro2en Promises( $o> +eyer?s pro@ect was a disaster. 'as the company too aggressive or was it misled(6 )ndustry 'ee2 1::A!5 "1-"A. %ongini0 +arc 9. 4/alloween 9ess /aunting $or /ershey &his Bear.6 ,omputerworld. Col. "< <=!0 p.1"-1<. %tedman0 ,raig. 4$ailed ERP ;amble /aunts /ershey.6 ,omputerworld. Col. "" <<!0 p. 1. 'eiss0 &odd R.0 %ongini0 +arc 9. 4/ershey Upgrades RD" ERP %ystem 'ithout /itches.6 ,omputerworld0 Col. "E "A!0 p. 2=-2F Case: &usiness Researc. Bou are a business analyst for +PG )ndustries0 a consulting firm that trac2s worldwide trends in information technology. Using suggested on-line databases and )nternet resources provide answers to the following .uestions. 1. 'hat is the e>pected future growth of the ERP mar2etplace in terms of overall sales( a. *rea2 this down by sales in the United %tates and international sales( b. *rea2 this down by $ortune =77 companies and mid-cap companies e.g. midcap companies are defined as having sales between H=7 and H<77 million per year!. 'hat is the relative mar2et share of the ma@or ERP vendors( a. *rea2 this down by sales in the U.%. and international sales. b. *rea2 this down by $ortune =77 companies and mid-cap companies.

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Possi-le Resources: )e- site www.amrresearch.com http5DDwww.technologyevaluation.com www.computerworld.comDsoftwaretopicsDerp www.erpfans.com www.apics.orgDresourcesDmagazineDcurrent ).at it pro/i0es Results of vendor surveys +ar2et research 9in2s to useful ERP sites0 articles0 publications0 and chat rooms 9in2s to support groups for many vendors 9in2s to current #P),% news

CHAPTER 1: RE*E #I EERI # A ! E TERPRI"E RE"OURCE P$A "%"TEM"

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CHAPTER O&'ECTI(E" 1. Recognize the factors associated with the evolution to enterprise systems0 including business process re-engineering0 client-server networ2ing0 and the emergence of integrated databases. 2. Understand the role of process modeling in re-designing business processes.

CHAPTER OUT$I E 2. Re-engineering and Enterprise Resource Planning %ystems a. *ac2ground b. *usiness Process Re-engineering c. Process +odeling d. Re-engineering at Reliable $inance ,ompany 1. *ac2ground of the *usiness 2. #nalysis of the ,urrent 9oan #pplication and %creening %ystem ". ,urrent Problems <. Ib@ectives e. +a2ing Re-engineering 'or2 f. /ow )nformation &echnology $acilitates ERP 1. Emergence of ,lient-%erver ,omputing 2. )ntegrated Databases g. &he Emergence of Process Enterprises 1. ERP and *usiness Process ,hange h. %ummary

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A ")ER" TO E !*OF*CHAPTER +UE"TIO " +uestions ,or !iscussion: 1. ,onduct a search to find a case in business re-engineering0 similar to some of the cases mentioned in this chapter e.g. $ord0 +utual *enefit 9ife0 /ewlett Pac2ard!. a. 'as an ERP system associated with the business-process re-engineering( +any ERP pro@ects reported in the trade @ournals will include a description and discussion of the re-engineering of business processes which occurred when the ERP system was implemented. 'hen an organization implements ERP0 it is important to re-engineer e>isting business processes to conform with the 4best practices6 which are supported by the ERP software. b. 'hat business benefits were derived from adopting 4best practices(? &he benefits of implementing the 4best practices6 which are supported by the ERP system include many of the benefits which were described in ,hapter 1. %ome of these benefits include5 .uic2ened response time0 improved order management0 decreased financial close cycles0 improved interaction with customers0 improved on-time delivery0 lowered inventory levels0 and reduced operating costs. c. 'hat obstacles needed to be overcome as a result of implementing changes in wor2flow0 wor2 methods0 and wor2 systems( Ine of the ma@or obstacles to be overcome is resistance by individuals who are affected by changes in wor2 methods and procedures. )t is important to communicate the benefits of the ERP implementation and to provide effective training for everyone who is affected by the change in business processes. 2. 'hy is business process re-engineering a critical component of the successful implementation of ERP( &he implementation of an ERP system provides an opportunity to re-engineer the organization?s business processes around the 4best practices6 which are supported by the ERP. )n most cases0 this provides better operating efficiency0 access to shared information across cross-functional units0 elimination of redundant processes0 and improved business productivity. ". /ow does information technology facilitate the process of business re-engineering. 'ithout information technology0 would business process change be possible( )nformation technology enables the transition to shared databases and business processes which depend upon 4networ26 access to these shared databases. $or e>ample0 the re-engineering of the #ccounts Payable process at $ord +otor ,ompany depended upon the creation of an integrated0 shared database among Purchasing0 Receiving and #ccounts Payable. )n another e>ample0 the re-engineering of /ewlett

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Pac2ard?s purchasing process re.uired remote access to a central shared database of negotiated vendor prices. Case E2ercise: 1. 'hat problems with business processes and information do you feel occur in the current payment processing system at Reliable $inance( Pro-le3s 4it. t.e current pa53ent processing s5ste3 inclu0e: a. 9ate and missing payment matters are causing a great deal of clerical overhead. b. #bout "7J of the payments are made in-person to the *ranch0 and these payments must be #PR?d to the /ome Iffice0 causing delays in posting these payments to the Iutstanding 9oans $ile in the /ome Iffice. c. #bout =7J of the payments are mailed to the *ranch0 and these payments must also be #PR?d to the /ome Iffice0 causing delays in posting these payments to the Iutstanding 9oans $ile. d. &he rest of the payments around 27J! are made to the /ome Iffice0 and this creates problems in tracing the loan payment to the appropriate loan account. 'hen payments are made to the /ome Iffice0 they need to be #PR?d to the branch. %ometimes0 unidentified payments are mailed to the wrong *ranch0 triggering more clerical wor2 and error detection. e. +any clerical people at the *ranches are involved in maintaining the local database0 pulling voucher copies0 recording payments0 and ma2ing out #PR?s. f. &he delays in posting payments to the central Iutstanding 9oans file sometimes cause overdue payment reminders to be sent to customers who have already paid on their accounts. &his causes additional clerical wor2 in answering .uestions and tracing payments. g. )t is difficult to follow-up on delin.uent payments0 since the e>isting bottlenec2s ma2e it difficult to isolate the loans which are legitimately delin.uent. h. *ottlenec2s and delays in payment processing complicate cash flow0 and it is difficult to identify revenues on a timely basis. 2. 'hat changes in process and information flow are needed to improve the payment processing system( Draw a new process model for a re-engineering payment processing system at Reliable $inance. C.anges in processes an0 in,or3ation: a. $orce all payments to be made directly to the *ranch. )n this way0 *ranch personnel can handle data entry and validation and transmit payment transactions to the /ome Iffice for overnight update. )n the /ome Iffice0 these payment transactions can be used to update the central Iutstanding 9oans $ile each night0 so that current balances appear each morning. b. Re.uiring that all payments be made directly to the *ranch eliminates the local *ranch files and eliminates the #PR paper chase between the *ranches and /ome Iffice and vice versa.

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c. )mprove screening for incoming loan applicants by setting up a delin.uency analysis system which identifies the characteristics of 4high potential for delin.uency6 accounts. %ee $igure 2-25 8ew Process +odel5 Payment Processing %ystem #ppendi>!. CHAPTER 6: P$A I #, !E"I# , A ! IMP$EME TATIO OF E TERPRI"E RE"OURCE P$A I # "%"TEM" CHAPTER O&'ECTI(E" Understand the information systems development process for enterprise systems0 including planning0 design0 and implementation. CHAPTER OUT$I E ". Planning0 Design0 and )mplementation of Enterprise Resource Planning %ystems a. &raditional %ystems Development b. 8ew #pproaches to %ystems Development c. &he ERP %ystems Development Process 1. Planning5 +a2ing the *usiness ,ase for ERP 2. Re.uirements #nalysis ". Design5 Re-engineering Cersus ,ustomizing <. #lternative ERP Design Iptions =. Detailed Design E. )mplementation d. ERP )mplementation %teps e. %ummary A ")ER" TO E !*OF*CHAPTER +UE"TIO " +uestions ,or !iscussion: 1. /ow does the traditional systems development life cycle differ from the ERP information systems design and implementation process( &he traditional systems development life cycle includes systems analysis0 design0 detailed design0 and implementation. *ased upon an analysis of the current system0 systems designers can ma2e changes in processes0 data0 and procedures to improve productivity and performance. &hese process and information changes become the basis for system implementation. )n ERP systems design0 the user selects a software pac2age which meets the organization?s re.uirements. )n most cases0 ERP implementation re.uires the organization to re-engineer its business processes to fit the pac2age and the 4best practices6 which the pac2age supports.

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2. 'hat are the advantages of the re-engineering method of implementing ERP( 'hat are its disadvantages( #dvantages of re-engineering5 )s supported by an ERP solutionK ta2es advantage of 4shared6 or 4generic6 processes within industries e.g. industry templates!K best practices may represent improved process changesK documents 4best practicesK6 wor2s well when there is minimal organizational change. Disadvantages of re-engineering5 Does not support 4strategic6 or uni.ue business processesK resistance occurs when there is e>tensive organizational change. ". 'hat are the advantages of the customizing method of implementing ERP( 'hat are its disadvantages( #dvantages of customizing5 %upports uni.ue business processesK 4strategic6 processes are maintained. Disadvantages of customizing5 #n ERP may not support these uni.ue business processesK re-inventing the wheelK customization is difficult0 since modules are integratedK difficult to upgrade the software to newer versions0 since upgrades are based on 4vanilla6 versions. <. Dell wanted a more fle>ible architecture and the opportunity to select software from various vendors. 'hat were the advantages and disadvantages to using this approach( %ee5 D. %later0 4#n ERP pac2age for you0 and you0 and even you0 ,)I +agazine0 $eb. 1=0 1:::. #dvantages of selecting software from a variety of vendors5 can select pac2ages which fit uni.ue re.uirementsK avoids in-house implementation. &his is also 2nown as a 4best of breed6 approach. Disadvantages of selecting software from a variety of vendors5 purchasing individual licenses for different pac2ages will be more costly than ac.uiring an integrated pac2ageK individual pac2ages may not be compatible with each other0 so the organization will not benefit from the data and process integration which an ERP supporting multiple business functions can provide. =. 'hat are the advantages and disadvantages of using an #pplication %ervice Provider to implement ERP( Using an #pplication %ervice Provider enables the client to have access to technological e>pertise and is more cost-effective than a full-scale internal ERP implementation. /owever0 using an #%P creates dependence upon the reliability and stability of the vendor0 and the organization can be vulnerable.

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CHAPTER 7: ERP "%"TEM": "A$E" A ! MAR8ETI # CHAPTER O&'ECTI(E" 1. Understand the sales and mar2eting module. 2. Recognize the interrelationships among business processes supporting sales and mar2eting0 production0 accounting and finance0 and human resources. CHAPTER OUT$I E <. ERP %ystems5 %ales and +ar2eting a. ,ase5 #tlantic +anufacturing b. %ales and +ar2eting Processes c. +anagement ,ontrol Processes in %ales and +ar2eting 1. %ales +anagement Processes 2. %ales $orecasting Processes ". #dvertising and Promotion <. Product Pricing %ystems d. %ales and +ar2eting +odules in ERP %ystems e. ERP and ,ustomer Relationship +anagement 1. ,ustomer %ervice f. )ntegration of %ales and +ar2eting with Ither +odules g. %ummary A ")ER" TO E !*OF*CHAPTER +UE"TIO " +uestions ,or !iscussion: 1. ;ather information about the best practices which are associated with the %ales and Distribution modules within an ERP pac2age. Bou can do this by 1! conducting research on the webK 2! interviewing a user of a %ales and +ar2eting pac2ageK "! using an on-line database to find an article in a trade publication which describes the effective use of a %ales and +ar2eting moduleK or <! using a %ales and +ar2eting module within an ERP system to identify new best practices. a. 'hat are the best practices0 associated with the %ales and +ar2eting module which you have discovered( &rac2s customer contacts Provides the customer with a timely price .uote ,onfigures .uantity discounts ,hec2s the inventory database to see if items can be delivered on time Updates the production planning database to avoid any shortfalls Updates accounting records Provides an interface with ,R+ customer relationship management!

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b. /ow do they contribute to overall productivity( Provides information for ,R+ Updates multiple databases with sales information Provides greater consistency of information and reduces redundancy c. 'hat information for decision ma2ing do they provide( %ales analysis0 by product %ales analysis0 by customer %ales forecasting0 by product %ales forecasting0 by customer 2. &he %ales and +ar2eting module within ERP is regarded as the module with the most interfaces to other modules0 including /uman Resources0 +aterials +anagement0 Production Planning0 and $inancial #ccounting. Describe the interfaces between the %ales and +ar2eting module and each of these other modules5 +odule /uman Resources +aterials +anagement Production Planning $inancial #ccounting 'hat information is shared with %ales and Distribution ,an match salesperson?s and service person?s .ualifications with specific customers re.uirements +aterial master describes spare parts which may be needed by customers %ales forecast becomes an input into production planning *ills customers for service and receives payments

CHAPTER 9: ERP "%"TEM": ACCOU TI # A ! FI A CE CHAPTER O&'ECTI(E" 1. Understand the accounting and financial systems within ERP. 2. Recognize the interrelationships among business processes supporting sales and mar2eting0 production0 accounting and finance0 and human resources. CHAPTER OUT$I E =. ERP %ystems5 #ccounting and $inance a. ,ase5 #tlantic +anufacturing b. #ccounting and $inance Processes c. +anagement ,ontrol Processes in #ccounting 1. ,ash +anagement Processes 2. ,apital *udgeting Processes d. #ccounting and $inance +odules in ERP %ystems 1. $inancial #ccounting +odules in ERP 2. +anagement #ccounting +odules in ERP %ystems e. &he 8ew Role for +anagement #ccounting

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f. %ummary A ")ER" TO E !*OF*CHAPTER +UE"TIO " +uestions ,or !iscussion: 1. ;ather information about the best practices which are associated with the $inancial #ccounting modules within an ERP pac2age. Bou can do this by 1! conducting research on the webK 2! interviewing a user of a $inancial #ccounting moduleK "! using an on-line database to find an article in a trade publication that describes the effective use of a $inancial #ccounting moduleK or <! using a $inancial #ccounting module within an ERP system to identify best practices. a. 'hat are the best practices you have discovered( #DR balances are automatically updated0 so that %ales has up-to-date information on customer credit limits. ERP automatically updates the increase in the monetary value of finished goods when finished goods are transferred to the warehouse. Determines the costs that accrue in producing a product or performing a serviceK helps provide information for price setting0 stoc2 valuation0 and inventory valuation. d. /ow do they contribute to overall productivity( ERP provides inter-connected document flow that establishes an audit trail and ma2es it possible to research and to lin2 source documents. e. 'hat information for decision ma2ing do they provide( Provides up-to-date information on cost variances0 which enables the company to establish prices that will enable it to sell products profitably. Provides profitability reports with planned vs. actual comparisons. Provides profitability reports with a comparison of current period vs. cumulative period. )dentifies which products or mar2ets have the highest contribution margins. 2. &he $inancial #ccounting module is often the first module to be implemented within an ERP system. 'hy do many companies start with the $inancial #ccounting module(

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&he $inancial #ccounting module supports highly structured accounting practices which are already familiar to the organization and will not re.uire significant process changes. &he $inancial #ccounting module within ERP is a 4central clearinghouse6 for accounting information that is updated and used by different functional areas of the business0 including materials management0 production planning0 human resources0 and sales and distribution. ". +any divisions of organizations see2 decentralized financial control. /ow can an ERP system be implemented to ensure local financial decision ma2ing and control( &he financial accounting module within the ERP system can be configured so that financial accounting processes remain under local control0 and so that data integrity is a local responsibility. <. &he +anagement #ccounting module within ERP has interfaces to many other modules0 including /uman Resources0 %ales and Distribution0 +aterials +anagement0 Production Planning0 and $inancial #ccounting. Describe the interfaces between the +anagement ,ontrol module and each of these other modules5 Mo0ule /uman Resources %ales and Distribution +aterials +anagement Production Planning $inancial #ccounting ).at in,or3ation is s.are0 4it. Manage3ent Accounting E>penses for payroll transactions Revenue from billing documents ,ost of goods to +anagement #ccounting ,ost of bills of materials which are created in Production Planning &he source of data for +anagement #ccounting e.g. revenue postings to the general ledger!

=. &he +id-9evel +ar2et for ERP &he high-end accounting software vendors %#P0 People%oft0 *##8 and Iracle0 for e>ample! see the potential of the midlevel mar2et0 and in order to edge into it0 theyLve been scaling down their e>pensive and comple> products. &he mid-level mar2et is variously described as organizations with annual revenue of between H2 million and H27 million or more than 177 employees 3ones0 2772!. *y removing some high-end functions and restricting usersL ability to customize the remaining ones0 the vendors can trim prices0 and0 they claim0 because the products are less complicated0 implementation can be speeded up from an average of two years to anywhere from three to si> months. $or a midsize organization0 that is a ma@or plus because they usually lac2 the information technology staff re.uired to customize an ERP pac2age.

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;ather research on ERP pac2ages which address the needs of the mid-level mar2et. 'hat challenges do mid-mar2et companies face in implementing ERP software( 3ones0 Roberta #nn0 4%potlight on midlevel ERP software06 3ournal of #ccountancy0 C. 1:"0 8o. =0 +ay 27720 pp. 2<-<A. )nstructor 8otes5 %tudents should identify ERP software options which address the needs of the mid-level mar2etplace. &hey can use on-line library databases to search for case studies of mid-mar2et companies which are implementing ERP software. &hey can also use search engines to learn about vendor options for supporting mid-mar2et companies. Iptions include5 ;reat Plains0 Peoplesoft0 Iracle0 and %#P. &he case studies of mid-mar2et companies which are implementing ERP will provide insight into the challenges of implementing this software. &hese challenges are li2ely to be similar to the challenges larger companies face in implementing ERP. ,hallenges typically include5 re-engineering business processes to fit the 4best practices6 supported by the ERP software0 training end-users0 obtaining relevant technical e>pertise0 and implementing the system within time and budgetary constraints. +id-mar2et companies are less li2ely to try to customize or modify ERP software0 and this may enable them to implement ERP within time and cost targets. ,ustomizing ERP software is a ma@or cause of pro@ect time and cost overruns. CHAPTER :: ERP "%"TEM": PRO!UCTIO A ! MATERIA$" MA A#EME T CHAPTER O&'ECTI(E" 1. Understand the production and materials management systems within ERP. 2. Recognize the interrelationships among business processes supporting sales and mar2eting0 production and materials management0 and accounting and finance. CHAPTER OUT$I E E. ERP %ystems5 Production and +aterials +anagement a. ,ase5 #tlantic +anufacturing b. *ac2ground c. Production Planning and +anufacturing Processes d. +anagement ,ontrol Processes in Production and +anufacturing 1. +aterial Re.uirements Planning +RP! 2. ,apacity Planning Processes e. Production Planning and +anufacturing +odules in ERP %ystems f. +aterials +anagement +odules in ERP %ystems g. &he $uture of ERP in +anufacturing and the %upply ,hain 1. +anufacturing E>ecution %ystems +E%! and ERP 2. #dvanced Planning and %cheduling %ystems ". Data ,ollection <. e*usiness %trategies in +anufacturing and ERP

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h. %ummary A ")ER" TO E !*OF*CHAPTER +UE"TIO " +uestions ,or !iscussion: 1. +any people argue that +RP is a precursor to ERP0 and that ERP systems were designed to integrate +RP systems with financial and accounting systems. a. ;iven the interrelationship between +RP and ERP0 does it ma2e sense for a non-manufacturing company to adopt an ERP system( # non-manufacturing company can benefit from the integration of ERP modules supporting %ales and +ar2eting0 $inancial #ccounting0 +anagement #ccounting0 +aterials +anagement0 and /uman Resources. ,ompanies can identify ERP modules that support their business functions and achieve significant benefits through process standardization0 data integration0 management reporting0 and operational productivity. )n addition0 ERP becomes a foundation for advanced applications0 including ,R+0 e*usiness0 and business intelligence. b. /ave manufacturing systems been the basis for all ERP systems( &he original +RP systems were precursors to ERP. ERP systems were instrumental in integrating manufacturing processes with other business processes. ERP systems manage continuous improvement of processes across the supply chain so that customers? needs for information about products and services are met. /owever0 ERP systems can effectively support any part of the supply chain by introducing 4best practices6 which improve operational effectiveness. +any of today?s ERP systems specialize in non-manufacturing applications0 such as /uman Resources and $inancial +anagement. &he broadened definition of ERP provides organizations with an opportunity to identify modules that best fit their needs. 2. ;ather information about the best practices which are associated with the Production Planning and +aterials +anagement modules within an ERP pac2age. Bou can do this in one of four ways 1! ,onduct research on the webK 2! )nterview a user of a Production PlanningD+aterials +anagement module within an ERP pac2ageK "! Use an on-line database to find an article in a trade publication which describes the effective use of a Production PlanningD+aterials +anagement moduleK or <! Use a module within an ERP system to identify new 4best practices.6 a. 'hat are the best practices you have discovered( %ales $orecasting5 Production has access to sales forecasts0 so that they can ad@ust production levels to actual sales if sales differ from e>pectations.

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%ales and Iperations Planning5 Determines if production facilities can produce enough to meet consumer demand. Demand +anagement5 *rea2s down the production plan into wee2ly productionK produces the +aster Production %chedule0 which is the production plan for finished goods. +RP5 Determines the amount and timing of raw materials orders or subassemblies to support the +aster Production %chedule. Demand %cheduling5 %chedules production based on demand e.g. need to ma2e sure there is not too much inventory!. +aterials +anagement Procurement!5 Determines needs0 based upon determining re-order point0 regular chec2ing of stoc20 and forecasting based upon usage. )dentifies potential sources of supply0 and compares alternative .uotations. b. /ow is the ERP system with Production and +aterials +anagement modules superior to a non-integrated +anufacturing system i.e.. where the $inancial %ystems and +RP systems are separate!. &he ERP system provides integration between production and materials management data and accounting data. )n Production Planning0 the inventory function posts components that are needed to fill Production Irders. *oth Purchasing and $inancial #ccounting share common vendor data. #ll Purchase Irders are assigned to a cost center in the +anagement #ccounting module. c. 'hat information for decision ma2ing does the integrated system provide( Provides information for forecasting re.uirements for +aster Production %cheduling and +aterial Re.uirements Planning. Provides information on what materials are needed0 in what .uantity0 and at what time for production. Provides information on replenishment schedules for all manufactured components0 purchased parts0 and raw materials. Provides information on due dates for production orders and purchase re.uisitions via lead-time scheduling. ". &he Production Planning and +aterials +anagement modules within ERP have interfaces to other modules0 including /uman Resources0 %ales and Distribution0 and $inancial #ccounting. Describe these interfaces5

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Mo0ule /uman Resources %ales and Distribution $inancial #ccounting

).at in,or3ation is s.are0 4it. Pro0uction Planning an0 Materials Manage3ent #vailable labor hours for production 'hen a Purchase Re.uisition is created0 it is assigned to a %ales Irder Purchasing maintains vendor data0 which is defined @ointly with $inancial #ccounting

CHAPTER ;: ERP "%"TEM": HUMA RE"OURCE" CHAPTER O&'ECTI(E" 1. Understand the human resources processes that are supported by an ERP system. 2. Recognize the interrelationships among business processes supporting human resources0 financial accounting0 and other modules. CHAPTER OUT$I E A. ERP %ystems5 /uman Resources a. ,ase5 #tlantic +anufacturing b. /uman Resource +anagement Processes c. /uman Resource )nformation %ystems d. /uman Resource +odules in ERP %ystems 1. #ttributes of /uman Resource +odules in ERP %ystems 2. +anagement ,ontrol +odules in ERP %ystems e. )ntegration of /R +odules with Ither +odules f. %ummary

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A ")ER" TO E !*OF*CHAPTER +UE"TIO " +uestions ,or !iscussion: 1. ,ompensation for sales representatives is an important issue in many industries. )f compensation pac2ages are inade.uate0 salespeople will move to other firms with more attractive compensation pac2ages. 'hat information can an /R module provide to enable managers to develop compensation strategies to attract and retain successful sales representatives( #n ERP system can provide data on5 'hat salaries and compensation pac2ages do we need to offer our sales representatives in order to be competitive in our industry( 'hat is the impact of various pay plans on retention and promotion of personnel( 'hat do e>ternal mar2et surveys say about @ob pricing( 2. /ow can an /R system enable an organization to meet reporting re.uirements that are consistent with the following government statutes( f. #ge Discrimination in Employment #ct g. E.ual Pay #ct h. $amily 9eave and +edical #ct i. Iccupational %afety and /ealth #ct I%/#! @. &itle C)) of the ,ivil Rights #ct of 1:AF 2. Cocational Rehabilitation #ct of 1:A" #n ERP system can maintain and update data needed for government reporting re.uirements for #ffirmative #ction0 I%/#0 and other statutes. ". ,ollect information about the best practices0 which are associated with the /R module within an ERP pac2age. Bou can do this by 1! conducting research on the webK 2! interviewing a user of an /R pac2ageK "! using an on-line database to find an article in a trade publication which describes the effective use of an /R moduleK or <! using an /R module within an ERP system. a. 'hat are the best practices you have discovered( #n ERP /R module supports a number of 4best practices06 including5 Defines each position within the organizationK provides 4common6 @ob categories0 @ob descriptions0 and @ob specifications which can be used across the organization. +aintains information for recruiting0 screening0 evaluating0 and selecting candidates for employment.

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+aintains personnel information0 including @ob history0 salary0 and retirement and benefit choices. +aintains employee compensation data and compensation changes0 e.g. salary increases0 salary history0 @ob evaluation results0 and appraisal results. +aintains performance appraisal data and productivity data. b. /ow do they contribute to overall productivity( #n ERP system can improve productivity by5 +aintaining information on special s2ills and wor2 e>perience0 so that internal candidates for new positions can be identified. )dentifying training deficits0 so that employees can be boo2ed in appropriate training. )dentifying what additional human resources are needed in the short- and long-term. )dentifying what new s2ill sets will be needed. Determining the implications of s2ill and 2nowledge re.uirements for training and development. Providing self-selection of benefits for employees. c. 'hat information for decision ma2ing do they provide( #n ERP system can provide information for ma2ing a number of decisions0 including5 'hat are our most effective recruiting sources( e.g. universities0 web sites0 referrals0 search firms0 etc.!( 'hat are the characteristics of our most effective managers e.g. educational bac2ground0 e>perience0 etc.!( 'hat are the characteristics of information technology professionals whom we retain( 'hat @ob categories e>perience the highest turnover( 'hat s2ill sets are missing among our human resources professionals( 'hat replacement personnel need to be planned for as a result of retirements(

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<. +any organizations purchase the /R module from one ERP vendor e.g.0 Peoplesoft! and the $inancial #ccounting modules from another ERP vendor e.g.0 %#P!. a. 'hat do you see as the advantages of this approach( &his follows the best-in-breed approach0 in which the organization selects the modules from a variety of vendors. &his approach enables the firm to purchase the modules that most closely fit its needs. b. 'hat do you see as the disadvantages of this approach( &he main disadvantage of this approach is that the modules from different vendors are not integrated with each other as a part of a total ERP suite. %ince integration among modules is an important @ustification for ERP implementation0 it may be difficult to ma2e a business case for ac.uiring modules from different vendors. &he costs of ac.uiring modules from different vendors will be greater than the costs of purchasing an integrated pac2age. Recurring costs0 including licenses and maintenance agreements0 will also be greater. )n addition0 upgrading modules to new versions will re.uire dealing with multiple upgrades and multiple vendor relationships. =. &urnover among )& professionals has been a big issue for many years. &here is a tremendous investment made in training )& professionals0 and this is why turnover represents a considerable cost. 'hat information will enable the manager to better understand turnover and to develop human resources strategies to minimize turnover among )& professionals( )nformation which might help managers determine the reasons for turnover among )& professionals might include5 # comparative analysis of competitive mar2et salary data and internal salary data for various positions within information technology. E>it interviews with information technology personnel. )nformation on the characteristics of information technology personnel who leave their positions. )nformation on the characteristics of information technology personnel who are retained. )nformation on what s2ill sets are of emerging importance in the information technology field. )nformation on what s2ill sets need to be developed by internal information technology personnel.

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)nformation on whether current training opportunities enable information technology professionals to maintain appropriate s2ill sets. CHAPTER <: MA A#I # A ERP PRO'ECT CHAPTER O&'ECTI(E" 1. Recognize the importance of pro@ect management and control in minimizing the ris2 factors associated with implementing ERP systems. 2. Understand the process of organizational change and its application to enterprise system development0 implementation0 and operations. CHAPTER OUT$I E F. +anaging an ERP Pro@ect a. 'hat Research %hows about ERP Pro@ect )mplementation %uccess b. ,auses of )nformation %ystems Pro@ect $ailures c. Ris2 $actors in )nformation %ystems Pro@ects d. Ris2s in )mplementing an ERP %ystem 1. &echnology Ris2s 2. Irganizational Ris2s ". People $actors <. Pro@ect %ize e. +anaging 9arge-%cale ERP Pro@ects 1. +anaging the Ris2 $actors in ERP Pro@ects 2. ,omparison of %uccessful Cersus Unsuccessful ERP Pro@ects a. Pro@ect-related $actors b. #ccidental $actors c. &wo Pro@ects5 $o>+eyer Cersus Dow ,hemical f. %ummary A ")ER" TO E !*OF*CHAPTER +UE"TIO " +uestions ,or !iscussion: 1. Use articles in trade publications which are available in the library or through on-line databases to e>plore factors contributing to the problems encountered in these ERP pro@ects the timeframes are given so that you can find articles during the appropriate timeframes5 a. b. c. d. $o> +eyer Drug pro@ect cancelled in 1::E! Dow ,hemical pro@ect cancelled in 1::F! Dell ,omputer pro@ect cancelled in 1::F! /ershey?s pro@ect in 1::: M 2777 timeframe!

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Possi-le resources: 3esitus0 3ohn. 4*ro2en Promises( $o> +eyer?s pro@ect was a disaster. 'as the company too #ggressive or was it misled(6 )ndustry 'ee2 1::A!5 "1-"A. %ongini0 +arc 9. 4/alloween 9ess /aunting $or /ershey &his Bear.6 ,omputerworld. Col. "< <=!0 pp.1"-1<. %tedman0 ,raig. 4$ailed ERP ;amble /aunts /ershey.6 ,omputerworld. Col "" <<!0 p. 1. 'eiss0 &odd R.0 %ongini0 +arc 9. 4/ershey Upgrades RD" ERP %ystem 'ithout /itches.6 ,omputerworld0 Col. "E "A!0 p. 2=-2F 2. Use articles in trade publications which are available in the library or through on-line databases to e>plore factors contributing to the successful implementation of ERP pro@ects. )n your analysis0 include5 a. &echnology factors b. Pro@ect management factors c. User-related factors Possi-le resources: *rown0 ,arol and Cessey0 )ris0 4+anaging the 8e>t 'ave of Enterprise %ystems5 9everaging 9essons from ERP.6 +)% 1uarterly E>ecutive0 Col. 20 8o. 10 +arch 277"0 pp. E=-AA. +otwani0 3.0 +irchandanai0 D.0 +adan0 +.0 and ;unase2aran0 #.0 4%uccessful implementation of ERP pro@ects06 Evidence from &wo ,ase %tudies06 )nternational 3ournal of Production Economics0 A=0 nos 1-2 3anuary 2772!0 pp. F"-:<. Parr0 #.8.K %han2s0 ;.K Dar2e0 P.0 N)dentification of 8ecessary $actors for %uccessful )mplementation of ERP %ystems0N in 8gwerryama0 I@elan2iK )ntrona0 9ucasK +yers0 +ichaelK De;ross0 3anice0 N8ew )nformation &echnologies in Irganizational Processes5 $ield %tudies and &heoretical Reflections on the $uture of 'or2.N )$)P &,F ';*F.2 )nternational 'or2ing ,onference on 8ew )nformation &echnology in Irganizational Processes5 $ield %tudies and &heoretical Reflections on the $uture of 'or2. #ugust 21220 1:::0 %t. 9ouis0 +issouri0 U%#. Ross0 3eanne0 Citale0 +ichael0 'illcoc2s0 9eslie0 4&he ,ontinuing ERP Revolution5 %ustainable 9essons0 8ew +odes of Delivery06 %econd-'ave Enterprise Resource Planning %ystems0 ed. ;raeme %han2s0 Peter %eddon0 and 9eslie 'illcoc2s0 ,ambridge University Press0 277"0 pp. 172-1"2.

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%cott0 3udy and Cessey0 )ris0 4+anaging Ris2s in Enterprise %ystems )mplementations06 ,ommunications of the #,+0 Col. <=0 8o. <0 #pril 27720 pp A<-F1. %umner0 +ary0 4Ris2 $actors in +anaging Enterprise-wideDERP Pro@ects06 3ournal of )nformation &echnology0 2777! 1=0 "1A-"2A. 'illcoc2s0 9. P. and %y2es0 R.0 4&he Role of the ,)I and the )& $unction in ERP06 ,ommunications of the #,+ <"0 no. <0 27770 pp. 22-2F. ". Using +icrosoft Pro@ect0 do the following5 a. Bou will see a pro@ect management schedule for an ERP pro@ect below. &his pro@ect management plan has been created using +icrosoft Pro@ect. "ee Figure <*1: Pro=ect Manage3ent Plan b. ,reate a pro@ect management schedule for an ERP selection decision using +icrosoft Pro@ect. Use these parameters5 I! # * , D E $ ; / ) Acti/it5 ,reate a list of software features which are needed ,reate a list of ERP software candidates 8arrow choices down to " or < candidates Develop a Re.uest for Proposal Participate in Cendor Presentations Review Cendor Proposals Evaluate and %elect the *est #lternative 8egotiate for Pricing and 9icensing #greements Develop implementation schedule !uration " months " months " months 1 month " months 1 month 1 month 2 months 2 months

ote: Use an appropriate Microso,t Pro=ect tutorial to .elp stu0ents 0o t.is pro=ect> CHAPTER ?: "UPP$% CHAI MA A#EME T A ! THE eMAR8ETP$ACE CHAPTER O&'ECTI(E" 1. Understand the lin2s in the supply chain from raw materials to the retail customer. 2. Recognize the interrelationships among business processes supporting sales and mar2eting0 production and materials management0 and accounting and finance which e>ist in order to support the supply chain. ". Recognize the role of ERP in supporting e*usiness applications. <. Understand how business intelligence tools are used decision analysis and management reporting.

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Enterprise Resource Planning/Sumner

CHAPTER OUT$I E :. %upply ,hain +anagement and the e+ar2etplace a. %upply ,hain +anagement 1. )mpact of %upply ,hain +anagement on Productivity 2. &he Evolution of Partnerships b. e*usiness and ERP 1. )ntroduction to e*usiness 2. *usiness-to-*usiness *2*! +ar2etplaces in the %upply ,hain ". e%upply ,hain and ERP <. %#P?s my%#P.com =. %upplier Relationship +anagement5 %#P?s eProcurement c. *usiness )ntelligence with ERP 1. Data warehouses 2. Data marts ". Data mining <. *usiness )ntelligence Cendors d. $uture Directions for ERP 1. )ncreased )ntegration through the %upply ,hain 2. Use of %hared %ervices and #pplication %ervice Providers ". #pplication %oftware )ntegration e. %ummary A ")ER" TO E !*OF*CHAPTER +UE"TIO " +uestions ,or !iscussion: 1. /ow can an ERP system improve %upply ,hain +anagement by enabling firms to participate in on-line mar2etplaces( Provide e>amples of5 a. 9in2ages between suppliers and manufacturers. Proctor and ;amble the supplier! lin2s into 'al-+art?s point-of-sale system and decides when to re-supply 'al-+art? inventory. #uto manufacturers $ord0 ;+! have on-line lin2s to suppliers? orderentry systems. b. 9in2ages between customers and manufacturers. #uto manufacturers *+'0 etc.! provide customers with web-based0 customized automobile configuration. c. 9in2ages between manufacturers and retailers. /allmar2 the manufacturer! uses a continuous replenishment system to ensure that retailers have the right products in stores.

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2.

)nvestigate the use of data warehouse and data mining strategies in these industries by conducting on-line research in trade publications to find relevant e>amples. a. *an2ing Data warehousing strategies can help answer these .uestions5 'ho are the most profitable customers( 'hat is the effectiveness of various mar2eting programs( 'hich customers are good prospects for a new service( 'hich customers can benefit by having a chance to lower their mortgage rates( b. *ro2erage firms Data warehousing strategies can help answer these .uestions5 'hich customers are best prospects for credit card promotions( 'hat credit limits should be established for various applicants( 'hat services are customers most li2ely to be interested in( 'hat is the long-term value of various customers( c. &elecommunications service providers Data warehousing strategies can help answer these .uestions5 /ow do we reduce 4churn6 switching carriers! due to poor service( /ow can we detect and fi> poor service before customers complain(

".

/ow is the use of data warehousing and data mining facilitated by ERP( ERP databases provide the foundation for creating data warehouses. %pecifically0 data in the ERP database is used to create data e>tracts copies of the database! which are used to create the data warehouse. #t regular intervals daily0 wee2ly0 monthly!0 these data are refreshed based upon updates to the database.

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<.

/ow do ERP systems supporting %upply ,hain +anagement and ,ustomer Relationship +anagement provide a foundation for e*usiness( %upply chain management %,+! deals with the interchange of data between the supplier and the manufacturer. ,ustomer relationship management ,R+! deals with the interchange of data between the manufacturer and the customer. ERP systems provide the 4shared data6 which is needed to support these e>changes of data.

=.

'hat are the ma@or ris2s of a netsourcing arrangement for ERP( 'hat strategies can be used to minimize these ris2s( +a@or ris2s of a netsourcing venture from the viewpoint of potential customers are5 %ervice and *usiness %tability0 %ecurity0 Reliability0 the 8etsourcing #rrangement?s 9ongevity and E>istence0 and the 8etsourcing #rrangement?s dependency on other parties. +a@or ris2s of netsourcing venture from the viewpoint of e>isting customers are5 the 8etsourcing #rrangement?s longevity and e>istence0 Reliability0 the 8etsourcing provider?s service and business stability. %ecurity issues0 and integrating the netsourcing solution with e>isting applications. )nternal )& people should maintain responsibility for ERP development. )n the process of migrating to the ERP system0 it is important to retain internal technical e>pertise and troubleshooting capability. )n postcontract operations of the netsourcing contract0 internal )& capability must be maintained Ross0 Citale0 'illcoc2s0 277"!.

Cases: 1. Data %olutions Data %olutions is a company specializing in networ2 implementation and management. )t provides networ2ing services to mid-sized companies0 which do not have an internal networ2ing analyst or )& manager. &hese organizations include real estate companies0 law offices0 medical practices0 architecturalDengineering firms0 construction companies0 business services providers0 country clubs0 community organizations0 and churches. Data %olutions uses a legacy accounting system to handle its financial accounting and financial management functions. )t has added on a billing pac2age for client services. &he ne>t step is to obtain a ,R+ capability to manage information about current and prospective customers more effectively.

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Case E2ercises Bou have been assigned to identify potential sources for a netsourcing arrangement with an ERP vendor0 which provides ,R+ capability. a. )dentify potential sources of the software. #s2 students to conduct )nternet searches to identify potential sources of ,R+ software via netsourcing arrangements. %tudents will be able to find detailed product information0 including features0 technical support0 and demonstrations. %ince software offerings vary so rapidly0 it is best to let the students e>plore the possibilities. b. )dentify three alternative providers. #s2 students to select three alternative netsourcing software providers. Ine rule of thumb is to select a high-end alternative e.g. most e>pensive0 most features!0 a midrange alternative0 and an ine>pensivealternative. c. Determine five criteria you will recommend be used to evaluate each of these alternative providers. #s2 students to identify at least five criteria to use to evaluate these alternatives. E>amples of criteria are5 price0 availability of technical support0 vendor reputation0 product features0 ease of use0 maintenance agreements0 licensing fees0 upgrade capability0 and system compatibility. %tudents should try to locate articles describing and evaluating ,R+ software alternatives0 using product evaluation sites and articles in trade publications0 such as )nformation 'ee20 P, +agazine0 and industry-specific trade publications. &hey can search for articles using on-line library databases0 such as #*) )nform0 Pro1uest0 and $irst %earch. d. Evaluate each of the alternatives with respect to the criteria for evaluation. &here are a number of methods for evaluating alternative design options. %tudents should select three alternatives0 including a 4high-end6 alternative0 a 4mid-range6 alternative0 and an ine>pensive alternate. &hen they should list the advantages and disadvantages of each of these alternatives. &here are many helpful resources which students can use to help evaluate these alternative design options. #rticles in trade publications provide in-depth analysis of alternative software options and these articles can provide an ob@ective review of each pac2age0 including e>pert analysis and user reviews. &hese software reviews in trade publications may identify the features which can be used to compare alternative software pac2ages with each other. &hey may also score or rate each alternative software pac2age with respect to each of these features.

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#nother method of analyzing alternative design options for the ,R+ software is to establish criteria for evaluating each pac2age and ran2 each pac2age with respect to the e>tent to which the pac2age meets the minimum criteria. e. +a2e a recommendation to management. 2. *ased upon the information they have collected0 students can evaluate the alternatives and select the best option.&echGnowledge &echGnowledge is a start-up founded in 1::A by Robert &hyer. &he company is a distributor of presentation technologies0 including computer-based pro@ection systems0 video e.uipment0 and various display technologies. &he firm has 2= employees and does H= million in sales. )t is growing rapidly. &he owner0 Robert &hyer0 would li2e to netsource the bac2-office functions of the firm because the company does not have an internal )& capability. &he applications to be netsourced would include5 sales and distribution0 financial accounting0 and inventory management. &echGnowledge would li2e to source %#P or another ERP vendor via a hosting arrangement. )t does not e>pect to do much customization0 and it does not have any legacy systems. Case E2ercise )nvestigate at least three netsourcing hosts for &echGnowledge to consider. 1. 'hat factors should it use to evaluate each of these potential hosts( #s2 students to read articles on netsourcing which they can locate via web-based information sources and on-line library databases e.g. #*) )nform0 Pro1uest0 $irst %earch!. &hese articles will describe the features of net-based software systems and services0 and this information will provide the bac2ground needed to develop a list of criteria for evaluation. 2. 'hat agreements need to be put into place in advance of implementing the hosting arrangement( &his is a topic for further research. %tudents can gain an understanding of net systems service agreements using te>tboo2s0 articles in on-line databases0 and web-based information sites. ". 'hat controls should be put into place to monitor the hosting arrangement %ome of the controls which should govern a successful netsourcing arrangement include5 development of a service agreement which details the roles and responsibilities of the

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host and of the user organization and development of service performance measures on the part of the host. &he arrangement needs to be continuously monitored using these performance measures. )n addition0 it is important to maintain internal technical e>pertise0 to provide end-user training0 and to establish overall pro@ect leadership. <. 'hat )& capabilities should be developed and maintained in-house( #nswers to these .uestions can also be gained through research using te>tboo2s0 articles in on-line databases0 and web-based information sites.

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&an0on #roup, Inc> Case Instructor otes: In,or3ation "5ste3s "tu05 &an0on #roup, Inc> !ocu3entation, T.ings to !o, Instructor otes: "trateg5 Purpose and %cope of %tudy %tep 1! Document /igh-9evel *usiness Direction %tep 2! )dentify Gey )nformation 8eeds and +easures %tep "! Determine Detailed *usiness Re.uirements %tep <! Document ,urrent )& %ituationO )nternal %tep =! Document ,urrent )& %ituationO E>ternal %tep E! !ocu3entation Purpose and scope of the +)% study E>ecutive +anagement )nterviews T.ings to !o Instructor otes Review the purpose and scope of the study. #ssign teams. #s2 each team to summarize the 4common6 problems and opportunities among divisions. #s2 each team to summarize the 4common6 ,%$s and )& needs among divisions. #s2 each team to report on the 4common6 priorities among divisions. Evaluate the current )& infrastructure.

+atri>5 ;oals0 ,ritical %uccess $actors0 +easures0 )& 8eeds )nterview findings5 Problems0 ;oalsDopportunit ies0 )& needs0 Priorities )& infrastructure

'rite a summary of ma@or problems and opportunities defined by management. $ocus on 4common6 problemsDopportunities. 'rite a summary of 4common6 or 4shared6 ,%$s0 measures0 )& needs. 'rite a summary of 4common6 or 4shared6 priorities.

,ollect information on what competitors are doing with )&.

Review competitive dealer web sites to determine what webbased services are offered service call entry0 meter reading submission0 supply ordering!. )dentify 4common6 )& priorities among divisions by completing the chart.

Determine ;ap between ,urrent )& %ituation and Desired )&

9ist of )& priorities

8ote5 Use vendor web sites to identify national dealers e.g. Gyocera +ita0 ,anon0 +inolta0 %harp!. %tudents should be able to find lin2s to company web sites that mar2et each of these vendors? digital imaging product lines. #s2 teams to report on common )& priorities.

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Direction step A! Determine $easibility of an ERP %ystem %tep F!

'eb-based resources on ERP and ,R+K #rticles in trade publicationsK Cendor resources. %ee 4$urther 8otes6 below.P E>ternal research on ERP pac2ages with integrated ,R+ capabilities e.g. trade publications0 vendor reports0 'eb-based materials!

ERP Design )ssues %tep :!

'rite a recommendation to address these .uestions5 1! %hould *andon ;roup pursue an ERP solution( 2! %hould they pursue a ,R+ solution( and "! )n what order should they plan to ac.uire ERP( ,R+( Evaluate alternative ERP and ,R+ pac2ages for *andon ;roup e.g. +icrosoft ;reat Plains0 %#P0 etc.! and ma2e a recommendation for a solution which will meet their needs.

)dentify the business benefits of 1! ERPK 2! ,R+K and "! an integrated ERP providing ,R+ capability.

)nvestigate alternative 4mid-mar2et6 ERP and ,R+ solutions. &eams can use the selection criteria that were given in ,hapter " in the e>ercise5 4Response to Re.uest for Proposal for an ERP %ystem.6 &able 15 %election ,ommittee %core %heet!.

P$urther notes5 Ine of the deterrents to obtaining an ERP system is the 4meter billing subsystem.6 &he current software0 I+D0 supports meter-based billing0 but most ERP systems do not support this functionality. +eter-based billing in the copier industry is similar to meterbased billing in the utilities e.g. gas0 electric! industries. )n most cases0 customers obtain a contract for a certain number of copies per month0 and their bill is based upon this contract volume. &o monitor usage0 customers report their meter readings0 and any overage above contract volume! is additionally billed. &he 4meter-based billing6 system within I+D is ade.uate0 but I+D is not an ERP system and cannot support add-on applications such as customer relationship management ,R+! and supply chain management %,+!. )n addition0 web-based ERP applications are not available via I+D. )f *andon ;roup were to purchase a 4vanilla6 ERP pac2age0 it would have to customize the ERP system to provide the meter-based billing functionality. &his would entail a great deal of cost and effort0 and this has been the ma@or deterrent to purchasing an ERP system.

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&hree alternatives which *andon ;roup needs to investigate are5 +aintaining the current legacy I+D! system and ac.uiring a new ,R+ customer relationship management! pac2age. )n this alternative0 data will need to be migrated from the legacy I+D database to the new ,R+ system. #c.uiring an ERP system to support administrative functions. )n this alternative0 the meter-based billing application will need to be customized. # ,R+ system which is compatible with the ERP system can be ac.uired once the ERP system is up and running. #c.uiring an ERP system to support administrative functions0 and customizing the meterbased billing application. ,R+ capability can be purchased via a netsourcing application. Appen0i2 $igure 2-25 8ew Process +odel5 Payment Processing %ystem

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