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ERP and Related Technologies

ERP is an abbreviation for Enterprise Resource Planning


and means, the techniques and concepts for the
integrated management of businesses as a whole, from
the viewpoint of the effective use of management
resources, to improve the efficiency of an enterprise.
ERP systems serve an important function by integrating
separate business.
functions - materials management, product planning,
sales, distribution, finance
and accounting and others-into a single application.
Howevert ERP systems have three significant
limitations: .
1.managers cannot generate custom reports or queries
without help from a programmer and this inhibits them
from obtaining information quickly, which is essential for
maintaining a competitive advantage.
2. ERP systems provide current status only, such as open
orders. Managers often need to look past the current
status to find trends and patterns that aid better decision
making.
3. The data in the ERP application is not integrated with
other enterprise or division systems and does not include
external intelligence.

There are many technologies that help to overcome these


limitations. These technologies, when used' in
conjunction with the ERP package, will help in
overcoming the limitations of a standalone ERP system
and thus, help the employees to m.ake better.decisions.
Some of these technologies are BPR, Data Warehousing,
Data Mining, Online Analytical Processing (OLAP), Supply
Chain Management and so on. With the competition in
the ERP market getting hotter and hotter, and ERP
vendors $earching for ways to penetrate new market
segments and expand the existing ones, tomorrows ERP
systems will have most of these technologies integrated
into them. In this chapter, we will see how each of these
technologies are related to ERP systems
ERP is an abbreviation for Enterprise Resource
Planning and means the techniques and concepts for
the integrated management of business as a whole, from
the viewpoint of the effective use of management
resources, to improve the efficiency of an enterprise.
ERP systems serve an important function by integrating
separate business functions-materials
management, product planning, sales, distribution,
finance and accounting and others-into a single
application.
However, ERP systems have three significant
limitations:
1. Managers cannot generate custom reports or queries
without help from a programmer and this inhibits them
from obtaining information quickly, which is essential for
maintaining a competitive advantage.
2. ERP systems provide current status only, such as

open orders. Managers often need to look past the


current status to find trends and patterns that aid better
decision-making.
3. the data in the ERP application is not integrated with
other enterprise or division systems and does not include
external intelligence.
There are many technologies that help to overcome
these limitations. These technologies, when used in
conjunction with the ERP package, help in overcoming
the limitations of a standalone ERP system and thus, help
the employees to make better decisions. Some of these
technologies are:
Business Process Reengineering (BPR)
Management Information System (MIS)
Decision Support Systems ( DSS)
Executive Information Systems (EIS)
Data warehousing
Data Mining
On-line Analytical Processing (OLAP)
Supply Chain Management
1. Business Process Reengineering (BPR)
Business processes are: simply a set of activities that
transform a set of inputs into a set of outputs (goods or
services) for another person or process using people and
tools. We all do them, and at one time or another play the
role of customer or supplier.
So why business process improvement?
Improving business processes is paramount for
businesses to stay competitive in today's
marketplace. Over the last 10 to 15 years companies
have been forced to improve their business

processes because we, as customers, are demanding


better and better products and services.
And if we do not receive what we want from one
supplier, we have many others to choose from
(hence the competitive issue for businesses). Many
companies began business process improvement with a
continuous improvement model. This model attempts to
understand and measure the current process, and make
performance improvements accordingly.
Definition of BPR.
Corporate Reengineering
The most common definition used in the private sector
comes from the book entitled, Reengineering the
Corporation, a Manifesto for Business Revolution, by MIT
professors Michael Hammer and James Champy. Hammer
and Champy defined business process reengineering as:
The fundamental rethinking and radical redesign of
business processes to bring about dramatic
improvements in critical, contemporary measures of
performance, such as cost, quality, service, and speed.
(Reengineering the Corporation, Hammer and Champy,
1993)
2. Management Information System (MIS)
Management Information Systems (MIS), are
information systems, typically computer based, that
are used within an organization. WordNet described an
information system as "a system consisting of the
network of all communication channels used within an
organization".
3. Decision Support Systems ( DSS)

In the course of their decision activities managers work


with many pieces of knowledge. Some of this knowledge
is descriptive, characterizing the state of past, present,
future,
or hypothetical worlds.
Such knowledge is commonly called information or
data. Other pieces of knowledge are procedural in nature,
specifying how to accomplish various tasks.
In addition to "know what" (information) and "know
how" (procedures), a manager may work with reasoning
knowledge on the way toward reaching a decision.
4. Executive Information Systems (EIS)
Definitions for Executive Information Systems
A computerized system intended to provide current and
appropriate information to support executive decision
making for managers using a networked workstation.
The emphasis is on graphical displays and an easy to
use interface that present information from the corporate
database.
They are tools to provide canned reports or briefing
books to top-level executives. They offer strong reporting
and drill-down capabilities. An early term for a
sophisticated data-driven DSS targeted to senior
executives.
5. Data warehousing
Introduction
Increasingly, organizations are analyzing current and
historical data to identify useful
Patterns and support business strategies. Emphasis is
on complex, interactive, exploratory analysis of very
large datasets created by integrating data from across all

parts of an enterprise; data is fairly static.


6. Data Mining
Exploratory search for interesting trends and
anomalies.
7. Supply chain management (SCM)
Supply chain management (SCM) is the process of
planning, implementing, and controlling the
operations of the supply chain with the purpose to satisfy
customer requirements as efficiently as
possible. Supply chain management spans all movement
and storage of raw materials, work-inprocess inventory,
and finished goods from point-oforigin to point-ofconsumption.

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