How do enterprise systems help businesses achieve operational excellence PDF

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Enterprise Systems from Management Information Systems Textbook Laudon....

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How do enterprise systems help businesses achieve operational excellence? -

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Enterprise Systems: Based on a central database that collects data from many divisions and departments in a firm and from a large number of key business processes in manufacturing and production, finance and accounting, sales and marketing, and human resources. When new information is entered, it is immediately available to other business processes.

Enterprise softwares are built around thousands of predefined business processes that reflect best practices. - When companies want to implement enterprise softwares, they have to: o Select functions of the system they wish to use o Map their business process to the predefined business process in the software o If enterprise software does not support the way the organization does business, the companies can rewrite some of the software to support the way their business processes work  But enterprise softwares are unusually complex so extensive customization can degrade system performance and compromise the information and process integration, which are the main benefits *Add in example of how to implement an enterprise software* Let’s take Sugar Sweet Bakery as an example. This growing company would like to implement an enterprise software into the firm. 1. They first need to identify their business processes: a. In finance and accounting, they need Accounts Receivable, customer credits, and note the revenue. b. In Human Resources, they need to note down their employee information, labour costs, hours worked, and so on… c. Manufacturing and Production needs to keep track of their materials, production schedules, shipment dates, etc… d. In sales and marking, they need to record their orders and prices, as well as being able to see the sales forecast or return requests. 2. They then need to find in the enterprise software functions that they can and wish to use. a. Accounts Receivable, recording customer credits, seeing revenues, HR master data, Payroll, expense accounts, revenue accounts, purchasing functions, etc… 3. Train users and implement slowly throughout the firm. Business values of enterprise systems: - Increase operational efficiency and provide firm-wide information to help managers make better decisions by providing them the whole picture. - For firms with many operating units in different locations, this allows the employees to do business the same way world-wide.

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o Coca-cola uses SAP to standardize and coordinate important business processes in 200 countries. ERP helps firms respond rapidly to customer requests for information or products Allows manufacturing team to work more cost effectively and accurately by producing only what the customers have ordered, procuring on materials that are needed, and minimizing the amount of time products stay in inventory. Allows senior management and corporate headquarters to find out at any moment how a particular organizational unit is performing and allows them to make better decisions.

Challenges of Enterprise Systems - Very costly: Average cost of an ERP project is $6.1 million and takes about 15.7 months to complete. o Approximately 58% of these projects exceed their planned budgets and 65% experience schedule overruns. - Employees need to accept new job functions and responsibilities and they need to learn how to perform a new set of work activities. o Employees working with the same system for 20+ years are thrown off by the technology upgrade and are bombarded with a new set of transactions that they need to learn. - Enterprise systems that are more flexible, mobile and capable of integration with other systems are succeeding and stand-alone systems are being a thing of the past. - Business intelligence is incorporated into enterprise applications. Instead of requiring users to leave the application and launch separate reporting and analytic tools, they can embed analytic tools into the enterprise systems themselves. o HANA in-memory computing technology for more rapid and complex data analysis. o Interactive dashboards o What-If Scenarios o Visualized data Questions: 1. What restricts the company from using certain functions in an enterprise system? a. The specialized business processes of the firm b. The functions that the enterprise system can offer c. Difficulties of user training 2. Where does an enterprise system collect its data from? a. Data entered from different departments in the firm b. Business process of the firm that reflect best practices c. A and B 3. What is one challenge of implementing an enterprise system? a. Difficulty of getting all employees to attend training sessions b. High costs c. Legacy systems overruling...