PowerPoint PresentationCreate a 7- to 10- slide presentation comparing and contrasting two major ERP systems from different ERP softwareproviders. You may use various sources including the companies

MBA 5401, Management Information Systems 1

Course Learning Outcomes for Unit III Upon completion of this unit, students should be able to:

1. Explain the concepts and applications of Enterprise Resource Planning (ERP) systems.

2. Explain the critical concepts of distributed systems and client/server systems,

including the role of middleware and the distinction between two-tier and three-tier client/server systems.

3. Describe seven major types of organizational systems in use today.

4. Explain the concept of knowledge management and how it is implemented in

an organization.

5. Describe ten major types of managerial support systems in use today.

6. Differentiate the types of managerial support systems, and how they relate to the enterprise systems.

Unit Lesson Just What is ERP?

To answer this question, it helps to look back and consider how companies managed

before enterprise resource planning (ERP). Companies consist of a number of

functions that each work together to earn a profit. These include the creation of a

product, (Research and Development (R&D), the production of a product

(manufacturing), locating clients and offering the product for sale (Sales and

Marketing), shipping the product (warehouse functions), and finally, taking money and

accounting for the sale (Finance and Accounting). Prior to the advent of computer

systems in business, each function carried out their respective jobs on paper, and kept

detailed records in journals, file folders, and filing systems. As the technology became

available, some of these paper functions became computerized in order to make them

more efficient. However, computerization did not solve the fundamental problem of the

paper organization—the difficulty of sharing data.

In a paper organization, accounting kept the books in accounting journals, sales and

marketing made notes of contacts in pocket planners and wrote paper reports—or

perhaps even sent and received faxes. R&D kept records in engineering notebooks,

and finally, the warehouse function kept files and records of incoming and outgoing

transactions. ERP was a response to the problem of the intra-organizational sharing of

Reading Assignment Chapter 5:

Enterprise Systems

Chapter 6:

Managerial Support

Systems

Key Terms 1. Batch processing 2. Data mining 3. Data warehousing 4. Decision support

system (DSS) 5. Enterprise resource

planning (ERP) 6. Enterprise systems 7. Executive support

system (EIS) 8. Group support

system (GSS) 9. Groupware

10. Intranet 11. Managerial support

systems 12. Material requirements

planning (MRP) 13. Online processing

UNIT III STUDY GUIDE

Enterprise and Support Systems

MBA 5401, Management Information Systems 2

data that previously resided in a function so that companies could become more

focused and competitive. However, ERP was not born in a day—rather, it started in

one function, and it evolved into what we have today.

In the Beginning, There was Transaction Processing…

Computers began to assert themselves within the business arena by easing the

burden of the tedium associated with recording of data. Where was the recording of

data the most intense? This was in the areas of shipping and receiving, accounting,

and material control. It is easy to see why recording data in these functions would be

time consuming. When a sale was made, the sale would need to be captured on an

order form. The order form would typically need to be transferred to an internal

inventory “pick-list” or, forms that would pull the associated parts and components

forming the “kit” that would fulfill the customer’s order. When the components were

pulled, inventory would need to be manually decremented by updating the warehouse

books. Accounting would then need to record the sale, increment accounts

receivables, and decrement inventory. Invoices would be issued to the customer, and

if necessary, orders for new components would be placed to suppliers. This is quite a

bit of work, so why not automate the sequence of events? For example, why not enter

an order, and have the sequence of internal events and paperwork generate

automatically? This where MRP arrived at the scene.

MRP, the Precursor to ERP

MRP, or “material requirements planning” is a manufacturing centric system that

manages the warehouse, production floor, and material management books, and links

all of these with the internal accounting system. The benefits of such systems were

obvious to high-volume manufacturing companies who previously had to live with

implementing the internal processes by hand and on paper. However, as MRP

became more widely used, it became obvious that manufacturing, material control,

and accounting were not the entire company—and other company functions had data

processing needs, and such data would benefit from being integrated with the MRP

system. For example, the management of products from out of R&D into

Manufacturing generated part numbers, bills of materials (BOM), and work

instructions. Sales and Marketing would collect data on customer requirements and

deliver such information to engineering. In short, volumes of detailed data must flow

through all functions of a company, and it therefore makes sense to enter the data

only once, and use it where applicable. This is the essence of the ERP concept.

ERP: Common Database, Multiple Systems

As we have seen, each functional area has its unique data needs, and as a result,

each function tends to have systems that are optimized for the particular function,

Sales and Marketing, for instance, focuses on the management of sales leads, bids,

quotes, and competitive information. The optimal system to manage these functions is

the Customer Relationship Management, or CRM system. The R&D function relies on

computer aided design or CAD systems along with department intranets, and software

development tools. The accounting department relies on specialized accounting

software that records and manages transactions and updates the balance sheet,

income statement, and cash flow ledger. The beauty of ERP is that each of these

optimized systems is maintained, but the data can be shared and retrieved from a

MBA 5401, Management Information Systems 3

single database. In this way, a holistic view of company operations can be developed,

and the company’s strategy may be optimized.

Now that we have ERP, What do we do with it?

ERP created the centralized database and allowed for the sharing of data collected

from the functional systems in the organization. But, just because you have data

doesn’t mean you can keep it or make sense of it. Data must be stored somewhere,

and tools are needed to sift through the data equivalent of “grains of sand on the

seashore”. This need drove the evolution of important managerial support systems.

For example, the need to store volumes of data led to the data warehouse—a large,

long-term repository of massive amounts of data. Since large volumes of data are not

easy to use, data mining systems were created to enable the “slicing and dicing” of

data so that the patterns in the data that are not immediately obvious to the unaided

researcher could be observed clearly.

Last but not Least-the Tools of the Data Trade

Important trends that impact a business may be subtle at first and difficult to observe

directly. Often these trends lie buried in data that a firm has already captured in the

course of doing business. The raw data may be collected, stored, and mined, but it

takes additional tools to transform the mined data into decisions and company

strategy. A DSS, or decision support system, can take many forms and can be as

simple as using Microsoft Excel or Access to sort and make calculations with data.

Ultimately a DSS is intended to provide support for managerial decisions. Significant

trends associated with the macro-environment inhabited by the company require more

sophisticated analysis, and this is supported by executive information systems, or the

EIS. Further developments in data analysis seem to arrive on the market daily, but

what they all have in common is that they attempt to uncover and highlight deeper

nuances in the data using algorithms of increasingly advanced sophistication.

Managerial support systems are in essence the capstone on the ERP pyramid, in

which they are designed to aid businesses in fully realizing what ERP set out to

accomplish.