BUSINESS PLUG-IN

B10

Enterprise Resource
Management
McGraw-Hill/Irwin

The McGraw-Hill Companies, All Rights Reserved

LEARNING OUTCOMES
1. Compare core enterprise resource planning
components and extended enterprise
resource planning components
2. Describe the three primary components found
in core enterprise resource planning
3. Describe the four primary components found
in extended enterprise resource planning
systems
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LEARNING OUTCOMES
4. Explain the benefits and risks
associated with enterprise resource
planning systems
5. Assess the future of enterprise resource
planning systems

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INTRODUCTION
Enterprise resource planning
integrates all departments and functions
throughout an organization into a single IT
system (or integrated set of IT systems)
so that employees can make
enterprisewide decisions by viewing
enterprisewide information on all business
operations
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Core and Extended ERP

Components
Core ERP component traditional components
included in most ERP systems and they
primarily focus on internal operations
Extended ERP component extra
components that meet the organizational needs
not covered by the core components and
primarily focus on external operations

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Core and Extended ERP

Components

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CORE ERP COMPONENTS

Three most common core ERP

components
1. Accounting and finance
2. Production and materials management
3. Human resource

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CORE ERP COMPONENTS

Accounting and finance component
manages accounting data and financial
processes within the enterprise with
functions such as general ledger,
accounts payable, accounts receivable,
budgeting, and asset management

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CORE ERP COMPONENTS

Production and
materials
management
component handles
the various aspects of
production planning and
execution such as
demand forecasting,
production scheduling,
job cost accounting,
and quality control
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CORE ERP COMPONENTS

Human resource component tracks
employee information including payroll, benefits,
compensation, performance assessment, and
assumes compliance with the legal
requirements of multiple jurisdictions and tax
authorities

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Extended ERP Components

Extended ERP components include:
Business intelligence
Customer relationship management
Supply chain management
Ebusiness

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Extended ERP Components

Ebusiness components include elogistics
and eprocurement
Elogistics manages the transportation and
storage of goods
Eprocurement the business-to-business
(B2B) purchase and sale of supplies and
services over the Internet

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ERP Benefits and Risks (Costs)

Common ERP benefits
1. Integrate financial information
2. Integrate customer order information
3. Standardize and speed up manufacturing
processes
4. Reduce inventory
5. Standardize human resource information

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ERP Benefits and Risks (Costs)

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The Future of ERP

Lines between SCM, CRM, and ERP will
continue to blur
Internet continue to help organizations
integrate data and process across functional
departments
Interface customizable employee browsers
Wireless technology support a mobile
workforce
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CLOSING CASE ONE

PepsiAmericas Enterprises

PepsiAmericas generates $2.97 billion in

revenues yearly

The company implemented PeopleSofts ERP

solution to provide complete integration
between PepsiAmericas front-office and backoffice systems

PepsiAmericas also implemented

PeopleSofts supply chain management
component to automate its inventory
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CLOSING CASE ONE QUESTIONS

1. How have core ERP components helped
PepsiAmericas improve its business?
2. How have extended ERP components
helped PepsiAmericas improve its business?
3. Explain how future ERP systems will help
PepsiAmericas increase revenues

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CLOSING CASE ONE QUESTIONS

4. Assess the impact on PepsiAmericas business
if it failed to implement the CRM component of
PeopleSofts ERP system
5. Review the different PeopleSoft components in
Figure B10.6. Which component would you
recommend PepsiAmericas implement if it
decides to purchase an additional PeopleSoft
component?
6. Compare PepsiAmericas experience with other
ERP cases you can find in most business
articles.
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CLOSING CASE TWO

Campus ERP

ERP implementations are difficult, even in very

top-down corporate environments

Getting them to work in colleges, which are

essentially a conglomeration of decentralized
fiefdoms, has been nearly impossible

Nonprofit organizations generally lack the

talent and financial resources to create and
manage a robust enterprise system
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CLOSING CASE TWO QUESTIONS

1.

How could core ERP components help improve

business operations at your college?

2.

How could extended ERP components help improve

business operations at your college?

3.

How can integrating SCM, CRM, and ERP help

improve business operations at your college?

4.

Review the different components in Figure B10.6.

Which component would you recommend your college
implement if it decided to purchase three
components?

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