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ENTERPRISE A N O VERVIEW

M.C.A. SEM. I Enterprise Resource Planning (ERP) - 2610002. ENTERPRISE A N O VERVIEW. Chapter-01. What is an Enterprise?.

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ENTERPRISE A N O VERVIEW

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  1. M.C.A. SEM. I Enterprise Resource Planning (ERP) - 2610002 ENTERPRISE AN OVERVIEW Chapter-01

  2. What is an Enterprise? • An enterprise is a group of people with a common goal, which has certain resources (people, money, energy, materials, space, time) at its disposal to achieve this goal. • Examples: IBM, Ford, Tata Motors, Accenture, Microsoft, Indian Railways, Ramu’s Teashop, etc. • The enterprise acts as a single entity.

  3. The resources are considered the inputs, and the attainment of the goals the output of the process. • The degree of success of the enterprise is often measured by the ratio between the outputs and inputs. This ratio is called productivity.

  4. Enterprise The Enterprise

  5. Traditional Organization • The organization is divided into different units based on the functions they perform— finance, manufacturing, production planning, purchasing, sales and distribution, R&D, HR, etc. • The various departments have their own goals. • The different departments function in isolation and have their own data collection & analysis systems. • So the information that is created or generated by the various departments, in most case is available only to the top management (that too as summary reports) and not to the other departments.

  6. The result is that, instead of taking the organization towards the common goal the various departments end up pulling it in different directions as one department does not know what the other does and for what purpose. • Also sometimes departmental objectives can be conflicting. • For example, the sales and marketing people will want more product variety to satisfy the varying needs of the customers. • But the production department will want to limit the product variety to cut down production costs.

  7. So unless all the departments know what the others are doing and for what purpose, the inter-departmental conflicts will arise thus disrupting the normal functioning of the organization. • The solution is to have a centralized information storage and management facility.

  8. Traditional Organization Organization where there is no or little Communication between Departments

  9. Enterprise Way… • In the enterprise way, the entire organization is considered as a single system. • Information about all the aspects of the organization is stored centrally and is available to all departments, thus avoiding conflicts. • ERP systems help to make this task easier by integrating the information systems, enabling smooth and seamless flow of information across departmental barriers, and automating business process and functions. • ERP systems help the organization to work and move forward as a single entity.

  10. Enterprise Way… An Enterprise where all Departments Know what others are Doing

  11. Business Function… • Make and save money • Grow and expand operations • Grow and expand human/inter-enterprise associations • Share information throughout enterprise • Leverage existing infrastructure • Manage change and risk • respond to customers, technology, climate

  12. Business Modeling • Creation of business model is must in ERP systems- First activities in ERP. • It should mirror the business processes. • It is built on the basis of organization’s goal, objective and strategic plan.

  13. A business model is a representation of the business as one large system, showing the interconnections and interdependencies of the various sub-systems and business processes. • Based on the business model, the ERP system is developed with the aim of providing the required information and necessary assistance to the various individuals to perform their business processes more effectively and efficiently.

  14. The business is modeled as an integrated system. • Information is a very important resource and is very critical in managing all the other resources. • The business model is usually represented in the graphical form using flowcharts and flow diagrams.

  15. Business Modeling (contd) Real-world and Business Model

  16. Business Process Example

  17. Integrated Data Model • Critical step in ERP implementation- creation of Integrated Data Model. • Organization can use this integrated data for analysis and decision making. • No departmental information system and no departmental database • Has to be in integrated database.

  18. Data modeling is a method used to define and analyze data requirements needed to support the business process of an organization. • Data Models support data and Computer Systems by providing the definition and format of data. • It specifies how data is stored and accessed.

  19. The integrated database will reduce data redundancy and give all employees access to the updated and up-to-the minute information about the entire organization. • When designing the data model for the ERP system, the most important thing that should be kept in mind is the information integration and the process/ procedure automation. • The data model should reflect the entire organization and should successfully depict and integrate the data structures of the entire organization.

  20. Integrated Data Model Data Model and its Relationship with the Real World

  21. Business Process Modeling

  22. Activities / Business Process • Preserving resources/assets • Durability/Maintenance • Protecting/granting accessibility to resources/assets • Security • Growing/expanding resources/assets • Development • Improving efficiencies • Performance/Scalability • Detecting and responding to changes • Flexibility

  23. Enterprise Application Qualities • extensible -- allows for future changes with minimal impact • scalable -- gracefully handles expansion/contraction in number of clients • usable/reliable -- functions as advertised, including error-handling • available -- can be used whenever needed • configurable -- can be adapted to diverse environments • deployable -- can be easily distributed to users • durable -- necessary information lasts/persists over time • efficient/responsive -- uses minimal resources/performs well for clients • unobtrusive -- doesn’t get in the way of getting things done • secure -- only authorized clients can access • reusable -- many parts can be reused rather than re-created • maintainable -- can be fixed with minimal impact • timely -- is ready to use productively during window of opportunity

  24. Review Questions • What is an enterprise? What is the role of the enterprise? Discuss with examples. • Discuss the disadvantages of information islands, where each department has it own data collection and analysis system? • Why is the availability of timely, relevant and accurate information necessary for business success? Discuss with examples. • Why is it important to have integrated management information? Explain with examples. • What is business modeling? Discuss its purpose. • What do you mean by integrated data model? How is it created? • Discuss how ERP helps in better decision-making? • Discuss the working of a typical manufacturing organization? Is it fundamentally different from a service organization? Compare and contrast.

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