Introduction: Enterprise Resource Planning

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Chapter 1

• Introduction Enterprise Resource Planning

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Chapter 1 Learning Objectives

• Explain what a business is
• Name a businesss main functional areas of
  operation
• Differentiate a business process from a business
  function
• Identify the kinds of data that each main
  functional area produces
• Identify the kinds of data that each main
  functional area needs
• Define integrated information systems and state
  why they are important

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Definition of a Business

• A business is an organization that sells goods or
  services to customers (or clients) in exchange
  for money or other things of value.

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Introduction Enterprise Resource Planning

• Manage company-wide business operations
• Uses a common database and shared management
  reporting tools

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Functional areas of operation

• Marketing and Sales
• Production and Materials Management
• Accounting and Finance
• Human Resources

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Ex Procurement

• Cost
• Quality
• Availability
• Management

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Business Processes

• Managers now think in terms of business process
• Take the customers perspective
• Customer is always right
• If not reread rule 1

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Business Process

• A business process is a collection of activities
  that takes inputs and creates outputs that are a
  value to a customer

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Business Processes Cut Across Functional Lines
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Example Buying a new computer

• Information on products available
• Place order quickly, maybe obtain financing
• Quick delivery
• 24 Hour help

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To do this, company needs to

• Make sure functional areas are integrated
• Information on customer configuration must be
  up-to-date
• Manufacturing needs configuration from sales
• If financing is required, that information from
  sales is needed in accounting

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Functional Areas and Business Processes of a Very
Small Business

• Marketing and Sales
• Production and Materials Management
• Accounting and Finance
• Human Resources

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Basic business process are the same in large and
small business
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Functional Area Information Systems

• Potential inputs and outputs for each functional
  area
• Different kinds of data and usage of data

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Marketing and Sales

• Determine pricing
• Take customer orders
• Create sales forecast

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Production and Materials Management

• Planning
• Need accurate forecasts from Marketing and Sales
• Compare costs with Accounting

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Production and Materials Management Plan

• Long range
• Medium range
• Short range

• More than one year
• Number of months
• Individual products

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Accounting and Finance

• Record transactions
• Summarize data

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Human Resources

• Recruit
• Train
• Evaluate
• Compensate
• Dehire (retire or fire)

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Chapter Summary

• Companies that manufacture products to sell have
  these basic functional areas
• Marketing and Sales
• Production and Materials Management
• Accounting and Finance
• Human Resources
• Functional areas are served by information
  systems

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Chapter Summary Continued

• Employees in one functional area need information
  from another to do their job
• Today, business managers think in terms of
  business processes rather than functional areas.
  ERP software encourages this new thinking