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Swatisudha Samantaray Roll. No. R060106013 UPES
What Makes The Business To Think:
The Challenges Of Globalization Unprecedented Levels Of Competition. Shifting Of Mass Production System To Mass Customization System Deals With Multiple Countries, Multiple Currencies Trade Barriers Are Falling Consumers Are In Demand Change Becomes Constant
Attention Goes To:
What Is Information System:
An Information System Is An Open, Purposive System That Produces Information By Using “Input-process-output” Cycle From The Available Data. Manpower Money Machines Technology Customer
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Why Information System:
• • •
To Remain Competitive, Desired Information Is Required To The Right People At The Right Time. Information Systems Used To Enable Information Flow Within And Between Processes Efficiently And Effectively. Through Information System Competitive Advantage Can Be Gained Via Cost Reduction, Product Enhancement, And Customer Service Improvements. Information Systems Are Useful Tools To Enable And Manage Business Transformation Or Change.
Management Information System # 1:
• According To Schwartz, MIS Is A System Of People, Equipment, Procedures, Documents And Communication That Collects, Validates, And Operates On Transformers, Stores, Retrieves And Present Data For Use In Planning, Budgeting, Accounting, Controlling, And Other Management Process. • The MIS Emphasizes: » » » » Organization-wide Information Decision Support Managerial Emphasis Computer Based Systems
Management Information System # 2:
Provide A System For Collecting, Processing, Storing, Retrieving, And Transmitting Information To The Users.
Source Source Source
Management Information System # 3:
Facilitates The Decision Making Processes By Furnishing Information This Helps Decision-maker To Select The Best Course Of Action.
Characteristics Of MIS:
• • • • • • • • • • Management Oriented: Management Directed: Integrated: Common Data Flow: Heavy Planning Element/ Long Term Planning: Sub-system Concept: Flexibility And Ease Of Use: Need Based: Exception Based: Future Oriented:
Limitations Of MIS:
• • • • • • • MIS Cannot Replace Managerial Judgments In Decision-making. The Quality Of Output Of An MIS Is Directly Proportional To The Quality Of Input And Processes. In A Fast Changing And Complex Environment, MIS May Not Have Enough Flexibility To Update Itself Quickly. MIS Takes Only Quantitative Factors Into Account. MIS Is Less Useful In Making Non-programmed Decisions. MIS Is Less Effective In Organizations Where Information Is Not Being Shared With Others. MIS Is Less Effective Due To Frequent Changes In Top Management, Organizational Structure And Operational Management.
Why Enterprise Resource Planning:
• • Information Systems Are Becoming More And More Complex Due To The Stumbling Blocks: Time, Cost, Objective Data, Unstructured Process Development Of A Vision Of Integrated Information System Dissimilar Systems Business Becomes Global Incoherent Business Process
• • • •
Current Business Scenario:
Customer Suppliers (China) Finance at Headquarters (Japan)
Human Resources / Payroll at Headquarters (Japan)
Planning Headquarter (Japan)
Manufacturing Product A (China)
Sales (North America )
Distribution (Logistics) Shipping and Transportation Foreign Trade
Planning at Manufacturing Plants (China & Indonesia)
Manufacturing Product B (Indonesia)
Finance at Manufacturing Plants (China and Indonesia)
Human Resources / Payroll at Manufacturing Plants (China and Indonesia)
Sales (China) Customer (Korea)
What Is ERP:
Serves As A Cross-functional Enterprise Backbone That Integrates & Automates Many Internal Business Processes And Information Systems Covering All Functional Areas.
Characteristics Of ERP:
Many Distinct Business Modules Such As Financial, Manufacturing, Accounting, Distribution, Etc. Use Centralized Common Database Management System (DBMS) The Modules Are Integrated And Provide Seamless Data Flow Among The Modules They Are Flexible And Offer Best Business Practices They Require Time-consuming Tailoring And Configuration Setups For Integrating With The Company’s Business Functions The Modules Work In Real Time With Online And Batch Processing Capabilities They Are Internet-enabled
Evolution Of ERP:
2000s 1990s 1980s 1970s 1960s
Web Extended ERP Enhanced ERP Enterprise Resource Planning Manufacturing Resources Planning ( MRP II ) Manufacturing Requirements Planning ( MRP )
Shifting Trends Of ERP:
The Number And Features Of The Modules Vary With The Package. Some Of The Most Common Modules Available In Almost All Packages Are: Finance/Accounting Mfg. Planning/Scheduling Plant Maintenance, Quality Management, Material Management Human Resources Distribution Management Customer Order Management Cost Management Shop-floor Management Inventory Management Procurement Management Production Control Transportation Management Supply Chain Management Customer Relationship Management E-business
Benefits Of ERP:
Gives A Company An Integrated Real-time View Of Its Core Business Processes Helps Improve The Quality And Efficiency Of Customer Service Reductions In Transaction Processing Costs And Hardware, Software, And It Staffs Leads To Improved Performance, Better Decision Making, Competitive Advantage Replaces A Multiplicity Of Different Systems And Databases Allows Replacement Of Disparate Systems E.G. Exxon Mobile Used ERP To Replace 300 Different Systems Increases Organizational Real Time Information Flow Process Reengineering -- Update Old Processes Foundation For New Processes, Such As E-procurement Lays Foundation For Electronic Commerce
MIS Vs. ERP:
Both MIS And ERP Systems Focus On The Automation Of Business Processes, Data Transfer, And Information Sharing Across The Organization. MIS Is An Information System Designed For Providing Information To Support Operational Control, Management Control, And Decisionmaking Functions In An Organization ERP Systems Are Some Of The Most Advanced, State-of-the-art Management Information Systems In Today’s Business World. An ERP System Integrates Information Systems And Business Processes To Enable Information Entered Once To Be Shared Throughout The Organization.
MIS Vs. ERP:
MIS’s Role: 1. 2. 3. To Generate Reports-for Example To Answer What-if Questions Asked By Management To Support Decision Making
ERP’s Role: 1. 2. 3. 4. 5. 6. 7. 8. 9. Staff Reduction Better Inventory Management Improve Customer Responsiveness Efficient Procurement Enhanced Financial Management And Corporate Governance: Software Security: E.G. Seradex ERP Encouraging Uniqueness Changing The Working Pattern Web-enable ERP
Why ERP Is The Best ? # 1
Why ERP Is The Best ? # 3
In What ? Reliable information access Avoid data and operation redundancy Delivery and cycle time reduction Cost reduction Easy adaptation Improve scalability Improve maintenance Global outreach E-commerce, e-business How ? Common database, consistent and accurate data, improved reports Avoids multiple data input to the central database Minimizing retrieving and reporting delays Time saving in decision making Changes in business processes easy to adapt and restructure Structured and modular design Vendor supported long term contracts as a part of procurement Extended modules like CRM and SCM Collaborative culture
Why ERP Is The Best ? # 4
BEFORE ERP Business Processes Proliferation of fragmented processes with duplication of effort Lack of openness to customers and suppliers Lack of integration Web based interfaces support isolated systems and their components Lack of tactical information for effective monitoring and control of organizational resources Lack of effective communications with customers and suppliers WITH ERP Re-engineering around a business models that conforms with “ best practices” Direct interactions with customer and suppliers by enhanced ERP modules like SCM and ERP Linkages with suppliers and customers Web based interfaces are front end to integrated system Allows cross functional access to the same data for planning and control. Facilitate organizational communications with customers and suppliers
Supply chain management eBusiness Information
ERP :Integration With E-Procurement and E-Commerce:
Many companies with ERP use e-commerce E-commerce needs to interface with ERP
ERP : Integration With CRM and SCM:
Key Process Integration via ERP
Product Lifecycle Management
Consumers and Channels
ERP : Integration With SCM:
2000 1990 1980 1970 1960
Inventory Purchasing MRP MRP II ERP
+ + +
Production scheduling Finance, labor All internal resources
MRP MRP II ERP
Production Management Major Manufacturing Resources Coordinated Manufacturing and Service Transactions
Internal customers + and suppliers
Internal Enhanced SCM ERP/SCM Extended Web Extended SCM ERP
Internal External suppliers + and customers ERP/SCM
ERP : Integration With CRM:
Back Office ERP
Front Office (CRM)
Front-end Function Like Managing, Acquiring And Retaining Customers Are Effectively Managed By CRM. They Effectively Capture The Customer Requirements At The Front End ERP, Integrated With All Functional Areas, Converts This Customer Requirement Into Feasible Finished Products In Time.
ERP And BPR:
• • Shift From Efficient To Effective, Passive To Active, Tactical To Strategic And Automation To Optimization, Is The Motto Of ERP. Business Process Re-engineering [BPR] Brings Out The Deficiencies Of The Existing Setup, Solves Old Problems, Redesigns Selected Processes, etc • • BPR And ERP Will Give Way To Implement New Systems And The Long Pending Improvements In The Existing Systems Implementing An ERP System Usually Requires A Company To Perform Business Process Reengineering (BPR) Or Business Process Re-design (BPRD).
The ERP market is expected to grow 8 percent until 2008 The leading ERP system providers are SAP and Oracle/PeopleSoft. SAP holds 40 percent of the $24 billion ERP market Oracle and PeopleSoft systems hold 10 percent and 12 percent respectively One Study Indicates that 33 % of companies said their ERP system significantly reduces personal requirement. A study of ERP implementations reports that benefits typically start 8 months after implementation with median annual savings of $1.6 million
Management Information System
Enterprise Resource Planning …Leads To Focusing On Creating Value And Improving Business Processes And Better Customer Satisfaction.
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