Enterprise Resource Planning

UNIT-2
ERP AND TECHNOLOGY
Presented by
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Jawaharlal Institute of Technology
 Business Intelligence
BI refers to application and technology, which is
used to gather, provide access to, and analyze
data and information about the company
operations
BI is neither a product nor a system.
It is an architecture and a collection of
integrated operational as well as decision-
support applications and databases that provide
the business community easy access to business
data
 Business Intelligence
 The ultimate objective of business intelligence is to
improve the timeliness and quality of the
information.
BI reveals following
1. The position of the firm in comparison to its competitors
2. Changes in customer behaviour and spending patterns
3. The capabilities of the firm
4. Market conditions, future trends, demographic and
economic information
5. The social, regulatory and political environment
6. What other firms in market are doing
Factors of Business Intelligence
System design
Data quality
Security
Specified user access to the warehouse
Data volume (capacity),
How long data will be stored
Data retention
 Performance targets
Technological obsolescence
Organizational Changes
Communication Problems
 Technologies Supporting BI(Techniques for
integrating Business Intelligence with Business
Process)
Database systems and database integration
Data warehousing, data stores and data marts
Enterprise resource planning (ERP) systems
Dashboards
Data mining
Online analytical processing tools
Decision support systems
Customer relation management software
Product lifecycle and supply chain management
systems
 Database systems and database integration

A Database System is a set of computer programs that

controls the creation, maintenance, and the use of a
database. It allows organizations to place control of
database development in the hands of database
administrators (DBAs) and other specialists
 Data previously stored in separate files have been
integrated in to a single database structure. Also the
metadata that describe this data are shown residing in the
same structure.
 The DBMS provides the interface between the various
database applications for organizational users and the
database. The DBMS allows users to share the data and
to query access and update the stored data.
 Data warehousing, data stores and data
marts
A data warehouse stores data from current and previous
years that has been extracted from the various
operational databases of an organization. It is a central
source of data that has been screened, edited,
standardized, and integrated
 Data warehouses may be subdivided into data marts or
date stores, which hold specific subsets of data from the
warehouse.
Enterprise resource planning (ERP) systems
 Enterprise resource planning (ERP) is a company-
wide computer software system used to manage and
coordinate all the resources, information, and functions
of a business from shared data stores.
 Dashboards
 Typically, information is presented to the manager via a
graphics display called a Dashboard.
 A BIS (Business Intelligence System) Dashboard serves
the same function as a car’s dashboard.
 Specifically, it reports key organizational performance
data and options on a near real time and integrated basis.
 Dashboard based business intelligence systems do
provide managers with access to powerful analytical
systems and tools in a user friendly environment.
 Data mining
 Data mining is the process of extracting hidden patterns
from data. As more data is gathered, with the amount of
data doubling every three years data mining is becoming
an increasingly important tool to transform this data into
information.
 It is commonly used in a wide range of profiling
practices, such as marketing, surveillance, fraud
detection and scientific discovery
 Online analytical processing
 Online analytical processing, or OLAP is an approach
to quickly answer multi-dimensional analytical queries.
 OLAP is part of the broader category of business
intelligence, which also encompasses relational
reporting and data mining. 
 The typical applications of OLAP are in business
reporting for sales, marketing, management reporting,
business process management (BPM), budgeting and
forecasting, financial reporting and similar areas.
 The term OLAP was created as a slight modification of
the traditional database term OLTP (Online Transaction
Processing)
Decision support systems(DSS)
 DSS are a natural progression from information
reporting systems and transaction processing systems.
 Decision support system are interactive, computer
based Information systems that use decision models
and specialized databases to assist the decision
making processes of managerial end users..
 DSSs provide managerial end users with information
in an interactive session on an adhoc basis.
 A DSS provides managers with analytical modeling,
simulation, data retrieval and information presentation
capabilities.
 Customer Relationship management Software

 Customer relationship management (CRM) is a

widely-implemented strategy for managing a
company’s interactions with customers, clients and
sales prospects.
 It involves using technology to organize, automate, and
synchronize business processes—principally sales
activities, but also those for marketing, customer
service, and technical support.
 The overall goals are to find, attract, and win new
clients, nurture and retain those the company already
has, entice former clients back into the fold, and reduce
the costs of marketing and client service
 Product lifecycle and supply chain management systems

 Product life cycle management (or PLCM) is the

succession of strategies used by business management as a
product goes through its life cycle. The conditions in which
a product is sold (advertising, saturation) changes over time
and must be managed as it moves through its succession of
stages.
 Supply chain management (SCM) is the management of a
network of interconnected businesses involved in the
ultimate provision of product and service packages required
by end customers. Supply chain management spans all
movement and storage of raw materials, work-in-process
inventory, and finished goods from point of origin to point
of consumption (supply chain).
Integrating Business intelligence with Business Process
 Business Process Reengineering

◦The fundamental rethinking and radically redesign of business

processes to achieve dramatic improvement in critical,
contemporary measures of performance such as cost, quality,
service and speed.

◦The implementation of deliberate and fundamental change in

business processes to achieve breakthrough improvements in
performance.

◦Enabled by IT
 BPR Objectives
 To dramatically reduce cost
 Reduce time
 To dramatically improve customer services or to improve
employee quality of life
 To reinvent the basic rules of the business
 Customer satisfaction
 Organizational learning
 BPR Phases
Begin organizational change
Building the reengineering organization
Identifying BPR opportunities
Understanding the existing process
Reengineer the process
 Blueprint the new business system
 Perform the transformation
Phase 1: Begin organizational Change
 The first step is to take a long hard look how the organization
operates.
 The purpose of analysis should be to determine whether dramatic
changes are possible during BPR
 Next step is to look for harmful operating procedures, if, any within
the organization.
 BPR must begin with a communication campaign to educate all
those who will be impacted by this change.
 Without a common understanding about what is happening ,
confusion and uncertainty about the future can result in resistance
that is strong enough to stop any re engineering work.
 In order for change to be embraced , every one must understand
where the organization is today , what it needs to change , and where
it should be in order to survive, thrive and beat the competition
 Phase 2: Build the Reengineering organization

 Establish a BPR organization structure, establish the roles for performing

BPR and choose the personnel who will reengineer it.
 One of the most important members of reengineering effort is the executive
leader. He must be a high level executive who has necessary authority to
make people listen and motivational power to make them follow.
 The executive leader usually appoints process owners. A process owner is
responsible for a specific process and the reengineering effort focused on it.
 The reengineering team must be small, usually five to ten people and as they
will be ones who diagnose the existing process, and oversee the redesign
and implementation.
 In some BPR initiative it is helpful to institute a steering committee, which
can control the chaos by developing an overall reengineering strategy and
monitoring its progress.
 Lastly a reengineering specialist or consultant can be an invaluable addition
 Phase 3: Identify BPR Opportunities
This phase consists of following activities
Identify core/ high level processes
Recognize potential change enabler
Gather performance metrics within industry
Gather performance metrics out side industry
Select processes that should be reengineered
Prioritise selected processes
Evaluate pre existing business strategies
Consult with customers for their desires
Determine customer’s actual needs
Formulate new process performance objectives
Establish key process characteristics
Identify potential barriers to implementation
 Phase 4: Understanding the Existing Process

Main activities of the phase are

Understanding why current steps are performed
Model the current process
Understand how technology is currently used
Understand how information is currently used
Understand current organization structure
Compare current process with the new
objectives
 Phase 5: Re-engineer the Process

Major activities in this phase are

Ensure the diversity of reengineering team
Question current operating assumptions
Brainstorm using change levers
Brainstorm using BPR principles
Evaluate the impact of new technologies
Consider the perspectives of stakeholders
Use customer value as the focal point
 Phase 6: Blueprint the New Business System

Activities of the phase are

Define the new flow of work
Model the new process steps
Model the new information requirements
Document the new organizational structure
Describe the new technology specifications
Record the new personnel management
systems
Describe the new values and culture required
Phase 7: Perform the Transformation
The activities of the phase are
Develop a migration strategy and a migration action plan
Develop metrics for measuring performance during implementation

Involve the impacted staff

Implement in an iterative fashion

Establish the new organizational structure

Asses current skills and capabilities of workforce

Map new tasks and skills requirements to staff

Re-allocate workforce

Develop a training curriculum

Educate the staff about the new process and new technology

Educate management on facilitation skills

Decide how new technologies will be introduced

Transition to new technologies

Incorporate process improvement mechanism

Challenges in Implementing BPR

Resistance
Tradition
Time requirements
Cost
Scepticism (Uncertainty)
 Job losses