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ERP

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ERP
Enterprise
Resource
Planning
Systems
1

Problems with Non-ERP Systems
 In-house design limits connectivity outside the company
 Tendency toward separate IS’s within firm
 lack of integration limits communication within the company

 Strategic decision-making not supported
 Long-term maintenance costs high
 Limits ability to engage in process reengineering 2

Traditional IS Model:
Closed Database Architecture
 Similar in concept to flat-file approach
 data remains the property of the application
 fragmentation limits communications

 Existence of numerous distinct and independent databases
 redundancy and anomaly problems

 Paper-based
 requires multiple entry of data
 status of information unknown at key points
3

Business Enterprise

Products

Customer

Materials

Orders

Order Entry
System

Customer
Sales
Account Rec

Customer Database

Manufacturing and Distribution
System

Production
Scheduling
Shipping

Manufacturing
Database

Procurement
System

Purchases

Vendor
Accts Pay
Inventory

Procurement
Database

Traditional Information System with Closed
Database Architecture

Supplier

What is ERP?
 Those activities supported by multi-module application software that help a company manage the important parts of its business in an integrated fashion.
 Key features include:
 Smooth and seamless flow of information across organizational boundaries
 Standardized environment with shared database independent of applications and integrated applications
5

ERP System

Business Enterprise
Legacy
Systems

Data Warehouse

ERP System
On-Line Analytical Processing
(OLAP)

Bolt-On Applications
(Industry Specific Functions)
Suppliers

Customers
Core Functions [On-Line Transaction Processing (OLTP)]
Sales
&
Distribution

Business
Planning

Shop Floor
Control

Operational Database
Customers, Production,
Vendor, Inventory, etc.

Logistics

Two Main ERP Applications
Core applications
 a.k.a. Online Transaction Processing (OLTP)
 transaction processing
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