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Enterprise Systems & e-Business Systems

IS 630 : Accounting Information Systems http://www.csun.edu/~dn58412/IS630/IS630_F14.htm. Enterprise Systems & e-Business Systems. Lecture 2. Enterprise Systems. Organization value chain and value system Value of systems integration.

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Enterprise Systems & e-Business Systems

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  1. IS 630 : Accounting Information Systems http://www.csun.edu/~dn58412/IS630/IS630_F14.htm Enterprise Systems & e-Business Systems Lecture 2

  2. Enterprise Systems • Organization value chain and value system • Value of systems integration. • Enterprise systems and enterprise resources planning (ERP) systems. • How an enterprise system supports major business event processes. • Pros and cons of implementing enterprise systems. IS 630 : Lecture 2

  3. Enterprise Systems Value Chain • The value chain is the system of activities that transform inputs into outputs valued by the customer. • Enterprise systems facilitate value chain management. • The goal of an organization is to add the greatest value at the lowest cost thus increasing competitive advantage. IS 630 : Lecture 2

  4. Porter’s Value Chain VALUE FIRM INFRASTRUCTURE HUMAN RESOURCE MANAGEMENT TECHNOLOGY DEVELOPMENT PROCUREMENT INBOUND LOGISTICS OPERATIONS OUTBOUND LOGISTIC MARKETING & SALES LOGISTIC SERVICE MARGIN COST IS 630 : Lecture 2

  5. Value-Added Activities • Customer-Value-Added Activity(maximize) • a business process that a customer is willing to pay for • Business-Value-Added Activity (minimize) • a business process that is essential to managing an organization • Non-Value-Added Activity (eliminate) • customer will not pay for; business value will not be increased • Goals of a business system: effective, efficient, competitive. IS 630 : Lecture 2

  6. Internal Focus: Value Chain IS 630 : Lecture 2

  7. External Focus : Value System IS 630 : Lecture 2

  8. The Value of Systems Integration • Coordinate activities in the value chain. • Perform this coordination by sharing data across business processes. • The major objective of ERP systems: integrate the functional areas of the organization by enabling seamless information flows across them. IS 630 : Lecture 2

  9. Information Silos IS 630 : Lecture 2

  10. Problems With Information Silos IS 630 : Lecture 2

  11. Inefficient Customer Service IS 630 : Lecture 2

  12. Solution to Inefficient Customer Service • Enterprise system establishes ATP (available to promise) by checking warehouses and scheduled manufacturing. • Enterprise systems uses the central database to automatically determine price and creditworthiness. IS 630 : Lecture 2

  13. Data Maintenance: Create Customer Record IS 630 : Lecture 2

  14. Business Event Data Processing:Enter Customer Order IS 630 : Lecture 2

  15. Using Stored Data for Decision Making IS 630 : Lecture 2

  16. Enterprise Systems and ERPs • Enterprise systems: • Integrate business processes and information from all of an organization’s functional areas. • Helps coordinate the operation of business functions and provide a central information resource for the organization. • Enterprise Resource Planning (ERP) Systems: • Software packages that can be used for the core systems necessary to support enterprise systems. IS 630 : Lecture 2

  17. Integrate Business Process Functionality When purchasing office equipment an enterprise system might: • Provide an electronic order form. • Apply business rules. • Route the order for approvals. • Send the order to a buyer. • Connect to the vendor. • Use data to receive goods, project funding requirements, compare to budget, and analyze vendor performance. IS 630 : Lecture 2

  18. Enterprise Application : Enterprise Resource Planning IS 630 : Lecture 2

  19. Enterprise Application : Enterprise Application Integration (EAI) IS 630 : Lecture 2

  20. Selected ERP Vendors IS 630 : Lecture 2

  21. SAP Business Suite IS 630 : Lecture 2

  22. SAP NetWeaver IS 630 : Lecture 2

  23. Third-Party Modules • Customer relationship management (CRM) software: builds and maintains customer-related database. • Customer self-service (CSS) software:allows customers to complete tasks without aid of organization’s employees. • Sales force automation (SFA) software: automates sales tasks such as order processing and tracking. IS 630 : Lecture 2

  24. Third-Party Modules . . . • Supply Chain Management (SCM) software: plans and executes demand planning, inventory acquisition, manufacturing, distributing and selling. • Product Lifecycle Management (PLM) software: manages product data from design through disposal of product. • Supplier Relationship Management (SRM) software: manages the interactions with organizations that supply the goods and services to an enterprise; includes procurement and contract management. IS 630 : Lecture 2

  25. Connecting Third-Party Modules • Third-party modules are connected to ERP systems using middleware(software for connecting applications or modules): • Application programming interface (API), provided by the application developer. • Enterprise application integration (EAI), processes, software, standards, and hardware to link systems, allowing them to act as one. IS 630 : Lecture 2

  26. Other Methods for Systems Integration • Event-driven architecture (EDA), business events trigger messages sent by middleware between independent software modules. • Enterprise systems bus (ESB), communications-broker software that uses standardized protocols to let EDA applications communicate. • Business process management, comprehensive method for integrating manual and automated processes, applications, and systems. IS 630 : Lecture 2

  27. ERP System Components Core ERP Modules Manufacturing & Production Module Customer Relationship Management Module Human Resources Module Accounting and Financial Module Supply Chain Management Module E-Business Module Suppliers Customers ERP Platform & Database Business Intelligence Module Extended ERP Modules

  28. Major ERP Modules • Sales and Distribution (SD) • Record customer orders • Shipping • Billing • Connections to: • Materials management module (MM) • Financial accounting module (FI) • Controlling module (CO) IS 630 : Lecture 2

  29. Major ERP Modules . . . • Materials Management (MM) • Acquisition and management of goods from vendors • Purchase order preparation • Receiving • Recording invoice • Interacts with • Sales and distribution module (SD) • Financial accounting module (FI) • Controlling module (C0) IS 630 : Lecture 2

  30. Major ERP Modules . . . • Financial Accounting (FI) • Plays a central role in the SAP system. • Incorporates data from other modules into general ledger accounts and financial statements. • Business events from other modules are incorporated into the general ledger accounts and included in the external financial statements. • The FI module also includes accounts receivable and accounts payable functions to record and manage that data directly and to complete events begun in the SD and MM modules. IS 630 : Lecture 2

  31. Major ERP Modules . . . • Controlling (CO) • Often called Controlling and Profitability Analysis (CO/PA) • Handles internal accounting including: • Cost center accounting • Profitability analysis for sales • Activity-based accounting • Budgeting IS 630 : Lecture 2

  32. Major ERP Modules . . . • Human Resources (HR) • Recruiting, management and administration of personnel • Payroll processing • Training and travel • Benefits • Reports IS 630 : Lecture 2

  33. Order-to-Cash Process IS 630 : Lecture 2

  34. SD Menu Options in the SAP System IS 630 : Lecture 2

  35. SD Audit Trail for Completion of Steps in the SAP Sales Process IS 630 : Lecture 2

  36. Purchase-to-Pay Process IS 630 : Lecture 2

  37. MM Menu Options in the SAP System IS 630 : Lecture 2

  38. Audit Trail for Completion of Steps in the SAP Purchase Process IS 630 : Lecture 2

  39. Pros of Enterprise Systems IS 630 : Lecture 2

  40. Pros of ERP Packages IS 630 : Lecture 2

  41. Cons of Enterprise Systems and ERP Packages IS 630 : Lecture 2

  42. E-Business Systems • Changes to organizational processes that occur when e-business is introduced. • Major approaches used to transfer electronic data during business events processing. • Complexities surrounding (EDI) when linking two different organizations’ computer systems for joint business event data processing. • Challenges when organizations pursue direct business links with customers via the Internet or other networks. • Business advantages through effective use of e-business. IS 630 : Lecture 2

  43. Electronic Business (e-Business) • Electronic business (e-Business): application of electronic networks (including the Internet) to exchange information and link business processes among organizations and individuals. • Processes include interaction between back-office (i.e., internal) processes, such as distribution, manufacturing, and accounting, and front-office (i.e., external) processes, such as those that connect an organization to its customers and suppliers IS 630 : Lecture 2

  44. Journalizing, Posting, and Summarizing in a Manual Accounting System IS 630 : Lecture 2

  45. Automated Accounting System IS 630 : Lecture 2

  46. Batch Processing andPeriodic Mode • Batch processing:the aggregation of several business events over some period of time with the subsequent processing of these data as a group by the information system. • Periodic mode:processing mode with delay between the various data processing steps. • Business event occurs • Record business event data • Update master data • Generate outputs IS 630 : Lecture 2

  47. Online Transaction Entry (OLTE) • Enter business events directly, using computer input device or PC, into the information system at the time and place the event occurs. • Merges the traditional subprocesses of business event occurrence (usually eliminating a source document) and record business event data. • Considered online because the data entry device is connected to the computer. IS 630 : Lecture 2

  48. Online Real-Time (OLRT) • Gather and record business event data at time of occurrence. • Update master data instantaneously. • Provide results in real time. • Also known as immediate mode in which little or no delay occurs between any two data processing steps. IS 630 : Lecture 2

  49. Methods of Conducting E-business • E-mail – non-standardized messages • Electronic Document Management – capture, storage, management, and control of document images. • Electronic Data Interchange (EDI)- computer-to-computer exchange of business data in structured formats that allow direct processing of those electronic documents by the receiving computer system. • Internet Commerce - computer-to-computer exchange of business event data in structured or semi-structured formats via Internet communication that allows the initiation and consummation of business events IS 630 : Lecture 2

  50. Electronic Data Interchange (EDI) IS 630 : Lecture 2

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