IS5313

Foundations of Information &

Electronic Business Systems
Semester A 16/17

Week 8
Chapter 7: Enhancing Business
Processes Using Enterprise Information
Systems

Agenda
Core Business Processes and Organizational Value Chains
Explain core business processes that are common in organizations.

Enterprise Systems
Describe what enterprise systems are and how they have evolved.

Enterprise Resource Planning

Describe enterprise resource planning systems and how they help to improve
internal business processes.

Achieving Enterprise System Success

Understand and utilize the keys to successfully implementing enterprise
systems.
2

Objectives
Explain core business processes that are
common in organizations
Describe what enterprise systems are and how
they have evolved
Describe enterprise resource planning systems
and how they help to improve internal
business processes
Understand and utilize the keys to successfully
implementing enterprise systems
3

Core Business Processes

Traditional business functions:

Marketing and sales
Supply chain management
Manufacturing and operations
Accounting and finance
Human resources

Not distinct independent silos, but instead highly

interrelated
Business processes cross boundaries of business
functions
Workflow Management Visualized:
https://www.youtube.com/embed/3KJjKY8k9Lk

Car Garage Example: https://www.youtube.com/embed/1wp97hBLv_w

BPM Process Modelling https://www.youtube.com/embed/kq4JVkkCzKY

4

Order-to-Cash Process
The processes associated with selling a
product or service

Procure-to-Pay Process
The processes associated with procuring
goods from external vendors

Make-to-Stock /
Make-to-Order Process
The processes associated with producing
goods

Dells Make-to-Order Process

http://www.dell.com.hk
http://www.youtube.com/watch?v=EG5zd81emI
http://www.youtube.com/watch?v=3gAVyy
lIlb4 (long)

Supply Chain
Core business processes are conducted
everywhere along a supply chain
Resembles a river
Start at source
Move
downstream

Objectives
Explain core business processes that are
common in organizations
Describe what enterprise systems are and how
they have evolved
Describe enterprise resource planning systems
and how they help to improve internal
business processes
Understand and utilize the keys to successfully
implementing enterprise systems
10

Before Enterprise Systems

Stand-alone applications

Not designed to communicate with other system

Variety of computing hardware platforms
Enable departments to conduct daily business activities
Not helpful for other areas in the firm

Proprietary systems

From vendors
Not designed to share with other vendors systems
Problem of knitting together proprietary applications
Lack of integration

Compliance? Business Intelligence?

11

Before Enterprise Systems

Each department has its own systems
(Legacy Systems)
Infrastructure specific
Inefficient processes
Potential for
inaccuracies
Too many
rocks in
the river

12

Enterprise System Approach

Integrated suite of business applications for virtually
every department, process, and industry

Servora Example: *
http://www.youtube.com/watch?v=lNHR1AIRHUw

13

Internally Focused Systems

Support functional areas, business processes,
and decision making within an organization
New information (value) is added at every step

14

Externally Focused Systems

Interorganizational systems
Coordinate business activities with customers, suppliers, business
partners, and others who operate outside the organization
Streamline the flow of information between companies

15

Objectives
Explain core business processes that are
common in organizations
Describe what enterprise systems are and how
they have evolved
Describe enterprise resource planning systems
and how they help to improve internal
business processes
Understand and utilize the keys to successfully
implementing enterprise systems
16

Enterprise Resource Planning Systems

Why is ERP needed?
https://www.youtube.com/watch?v=lYCEQqSM08I

Example in Enterprise Systems

* Enterprise 21 Claimed to be Complete ERP
Solution (8:15 mins):
https://www.youtube.com/watch?v=w_9Eq2nfv1c

17

Improving Business Processes Through Enterprise Systems

Software Types
Packaged Software

Also called off-the-shelf

May or may not require significant configuration
Enterprise software often divided into modules
Special functionality may require customizing the
packaged (or vanilla) version

Custom Software
Designed and developed exclusively for a specific
organization (Chapter 9)
18

Improving Business Processes Through Enterprise Systems

Best Practices
Packaged Enterprise Software
Typically designed to operate with industry
standard best practices
May not accommodate unique organizational
practices that provide a competitive advantage
Modifying enterprise software can be a long
and costly process, depending on the inherent
flexibility of a given system
19

Improving Business Processes Through

Enterprise Systems:

BPM
Business Process
Management
Actively managing business
processes
Using a structured
approach
May be ongoing
May include radical
process reengineering

20

Enterprise Resource Planning (ERP)

Systems
Enterprise Resource PlanningApplications that
integrate business activities across departmental
boundaries
ERP evolved during the 1990s from
material/manufacturing requirements planning
packages
Emphasis has since shifted from resources and
planning to enterprise
Integrate legacy information on a company-wide
basis
21

Integrating Data to Integrate

Applications
Central information repository
ERP replaces stand-alone applications

22

Modules of Enterprise Systems

Each module in an enterprise system replaces a stand-alone
legacy system.
Modules based on
Common database
Similar application
interfaces

23

Example ERP Screen

An ERP system can provide employees with relevant, upto-date information

24

Core and Extended ERP Components

Core componentssupport primary internal
activities
Extended componentssupport primary external
activities

25

ERP Core Components

Financial Management
accounting, financial reporting, performance
management, corporate governance

Operations Management
simplify, standardize, and automate business
processes for inbound/outbound logistics, product
development, manufacturing, sales and service

Human Resource Management

employee recruitment, assignment tracking,
performance reviews, payroll, regulatory
requirements
26

Human Resources Management

27

Order-to-Cash

28

Procure-to-Pay

29

Production

30

Microsofts ERP
http://www.youtube.com/watch_popup?v=lm
w_48cgFrs

31

Objectives
Explain core business processes that are
common in organizations
Describe what enterprise systems are and how
they have evolved
Describe enterprise resource planning systems
and how they help to improve internal
business processes
Understand and utilize the keys to successfully
implementing enterprise systems
32

Best Practices-Based Software

Most vendors build best practices into their
enterprise systems
Identify business processes in need of change
Future updates are smoother if businesses change
their business processes to fit with the systems
Industry solutions:
http://www.youtube.com/watch?v=0gOm2gsw
fSE

33

Business Process Reengineering

Legacy system: build system to fit the
enterprise
Enterprise systems: modify the enterprise to
fit the system

34

Best Practices-Based Software

Is following the best practices always the best
strategy?
If companies have competitive advantage from
unique business processes, forcing best practices
may actually hurt

35

Vanilla Versus Customized Software

Vanilla version
This version contains features and modules that an
enterprise system comes with out of the box
Certain processes might not be supported

Customization
This version contains additional software or changes
to vanilla version
It always needs to be updated with new versions of
vanilla
36

ERP Installation
Configuration of the ERP systems is performed
during any ERP implementation
System must be configured to reflect business
processes and associated business rules
Organizations have to make countless decisions
on how to configure thousands of database
tables to fit the businesss needs
Organizations hire experienced business analysts
or outside consultants to assist with
implementation
37

ERP Failures
HBR study of 1,471 IT projects
Average cost: US$167 million
Average cost overrun: 27%
1/6 of projects had cost overrun of 200%, schedule overrun of
70%

Enterprise Software Failures and Causes:

http://argowiki.com/index.php?title=Enterprise_Software_Failu
res

10 Famous ERP Disasters, Dustups and Disappointments

http://www.cio.com/article/2429865/enterprise-resourceplanning/10-famous-erp-disasters--dustups-anddisappointments.html

38

Should Businesses Tackle Large IT

Projects?
Cant improve business processes without IT
Companies dont want to start IT projects, they
want to fix something
Distribution, pricing, logistics

39

Lessons Learned
Its a business endeavor, not just a technical one
Business process will change, thats the whole point!
There will be resistance to change
Dont even try to impose business on the software

Resist changes in scope

Stick to schedule
Assemble the right team
Internal IT experts, outside experts, and vendors

Prevent turnover of team members

40

Lessons Learned
Focus on IT Governance & risk mitigation
Pay attention to the contracts
youll receive whats in there, nothing more and nothing
less!

Define functionality before selecting vendor

Salespeople are there to sell
They dont understand your business

Start smaller-scale projects (e.g., SaaS)

Tie large contracts to performance & outcomes
Share risks and rewards with vendors
41

Lessons Learned
Secure executive sponsorship
Most failures are due to lack of top-level management support

Get help from outside experts

Consultants are specifically trained
Implementation tends to happen faster

Thoroughly train users

Training is the most overlooked, underestimated, and poorly
budgeted expense
Training can prevent dissatisfaction

Take a multidisciplinary approach to implementations

Include end users from all functional areas in the
implementation

42

Summary
Explain core business processes that are common in
organizations
Describe what enterprise systems are and how they
have evolved
Describe enterprise resource planning systems and
how they help to improve internal business
processes
Understand and utilize the keys to successfully
implementing enterprise systems
43

Case Discussion - TAL

What is the strategic system used in TAL?
Why is the strategic system needed by TAL?
Is the strategic system successful? Why or
why not?
What kind of international business
strategy is used by TAL?

44

Case Discussion - TAL

TAL Case
Does IT matter?
What kinds of IT applications have been
used?
How did each kind of IT application help
in the firm performance?