Session 3

Enterprise
Resource
Planning
for B.Sc. (IT)
Third Year
5th Semester

By

Vinod Vaze
B.Tech.(IIT/Kanpur), PGDFM(Bom.)
C.C.N.A. CISCO Certified Network Associate
Tel. No. 9820358746 Res. 25441310
Email: cexcel@vsnl.com
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 Session 3

Enterprise Resource Planning

Session 0
ERP and Related Technologies

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 Session 3

Agenda
ERP and Related Technologies:
for the
• Business Process Reengineering (BPR), Day
• Management Information System (MIS),
• Executive Information System (EIS),
• Decision Support System (DSS),
• Data Ware Housing,
• Data Mining,
• On-line Analytical Processing,
• Supply Chain Management (SCM)

3
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 Session 3

ERP vs MIS E.R

.P.
.
• Enterprise resource Planning or M.I.S
Management Information System?

?
• Enterprise resource Planning or
Management Information System?
• Enterprise resource Planning or
Management Information System?
• Enterprise resource Planning or
Management Information System?
• Enterprise resource Planning or
Management Information System?
• Enterprise resource Planning or
Management Information System?
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M.I.S. v/s E.R.P.

M.I.S. Stands for Management E.R.P. stands for Enterprise
Information System Resource Planning

Here we will learn: Here we will learn:

Role and importance of
Management ,
Roles of a Manager
Functions of a Manager
MIS: Support to the
Management
Planning, Organising, Staffing,
Coordinating Directing
controlling with MIS
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Introduction, Evolution,
Reasons for the growth of
ERP, Scenario and
Justification of ERP in India,
Evaluation of ERP,
Various modules of ERP and
Advantages of ERP

M.I.S.
Here we will learn:
DSS (Decision Support
System, EIS (Executive
Information System) and of
course M.I.S.
Here we will learn:
MIS: A tool for management
Process
MIS: in Business Planning
MIS: Decision making
concept
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Session 3
v/s E.R.P.
Here we will learn:
ERP Related Technologies:
BPR : Business Process Re-
engineering , EIS (Executive
Information System) DSS
(Decision Support System,
SCM (Supply chain
Management) & including
MIS (Management Information
System)
Here we will learn:
ERP Modules: such as:
 Session 3

M.I.S. v/s E.R.P.

Here we will learn: Modules:
MIS: and system concepts Finance, Plant Management,
MIS: and system analysis Quality Management,
MIS: Factors of success and Material Management
failure
Here we will learn:
Here we will learn: ERP Market: SAP-AG, Baan,
MIS Application in Oracle, People Soft,
Manufacturing sector JD Edwards,
MIS application in Service Here we will learn:
Sector ERP Implementation
EMS: Enterprise Management Life cycle,
System issues in implementation
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M.I.S. v/s
MIS: MIS is a system which
provides information support
for decision making in the
organisation
MIS is a computer based
Information System which
support the management in
taking decisions
MIS integrates the existing
academics (Mech., Electrical
Engineering, Maths Science &
Commerce) with computer
and Information system
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Session 3
E.R.P.
E.R.P. covers the techniques
and concepts employed for the
integrated management of
business as a whole, from the
view point of the effective use
of management resources, to
improve the efficiency of the
enterprise.
ERP also integrates
information systems:
ERP started with
Manufacturing industry and
then expanded to others
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M.I.S. v/s E.R.P.

MIS: utilises the latest E.R.P.: Also utilises the latest
Information technology Information technology
MIS: Believes on data sharing MIS: Also believes on data
and availability sharing and availability
Both solutions focus on the automation of business processes,
data transfer, and information sharing across the organization.
MIS = Enhanced Management Wider scope and slowly
skills with Integration and expanding and the benefits of
Information Technology.(IT). MIS now integrated with ERP
Limited scope and MIS is Worldwide spread and good
slowly replaced by ERP scope in future.
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ERP and Related Technologies

predecesso
r
• MIS, DSS and EIS are forerunners
• Once Data Warehousing and Data Mining ERP Market
are integrated with ERP the former (MIS / SAP-AG,
DSS / EIS would be redundant Oracle
• Everything has to change People Soft
Baan
• So does ERP
J.D. Edward
• Any ERP too, has to compete with about half
a dozen other ERP packages in the market
•Now let us see the other technologies one by one.
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Business Process Reengineering

(BPR),
• One of the definitions:
• “…… the fundamental re-thinking and radical re-design of
business process to achieve dramatic improvements in
critical, contemporary measures of performance such as:
– Cost, • Is it just a “buzzword”?
– Quality, • Is is going backwards
– Service and or learning from history?
• “post industrial” age
– Speed” after the “industrial
• BPR without “IT” will not work revolution”
•Should not try to “re-invent the wheel”
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Business Process Reengineering

(BPR),
• The era of 1950s to 1970s : Industries on the top
• From “sellers” market to “buyers” market
• Examples This shift has
• Whatever was manufactured was sold created social,
• Automobile Industries in India technological and
• “ NOCIL” flame market changes”
• Globalisation
• Now “Information Revolution”
• Highly competitive market• Machinery driven productivity
• Effect on S.S.I. sector – now knowledge driven
•Now we live in the age of information
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Business Process Reengineering

(BPR)
• Major Principles of Business Engineering:
– Customer has become wiser
– Customer has access to the latest prices and trend
– Customers today, are more selective
– Prices where “ever increasing” – less of obsolesce
– “Durability” come down on the preference list
– “Use and throw” concept • Business Engineering
– People want to change. makes the companies more
– Repairs became costlier “Customer” focused.
Customer relation doesn’t end at the buying and selling transaction – It begins !
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Business Process Reengineering

(BPR)
• BPR has been around for a quite some time now
• Much talked about by: BPR, without integrating
– Practitioner Trade Press & Information Technology,
– Academic Research Journals IT options, and IT
• Is it just a hype? Solutions – is bound to
• “Changes are inevitable” crash during takeoff
• Does it undervalue your achievement in the past?
• Best is to learn from the history, avoid mistakes
• Need radical changes – not just cosmetic !
Many organisation start with BPR initiatives
and end up with ERP implementation !
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Evolution v/s re-engineering

EVOLUTION Never Looks Back

RE-engineering not only looks back but also makes a
re-assessment of the values and situation and priorities
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Management Information System

(MIS),
• MIS is a computer based system
• That optimises Compare in details
– the collection, Collect & put in order
– collation,
– transfer and
– presentation
• of information throughout an organisation,
– through an integrated structure of
– databases and information flow

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Decision Support System (DSS)

• Designed to address semi-structured
and unstructured problems What is
• DSS mainly supports decision making structured?
at the top level of management Any
• DSS is interactive, user friendly and information
can be used by decision makers with obtained
little or no assistance from a computer from
professions something
• DSS makes a general purpose model, similar
simulation capabilities and other tools which has
available to the decision making. happened
before.
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Unstructured • Top Level

The decisions guided
decisions
•Top Manager by rules but considered
as exceptions
More • Middle Manager The decisions may not
responsibility & have any
Accountability
• Junior Manager Structured
“Precedence”

– An Officer v/s
– An Executive Officer

Less
unstructured
Responsibility • Clerical Personnel
& accountability – An Assistant The decisions
– Clerk have rules to
follow
Structured Bottom Level The decisions
Decisions have
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Executive Information System

(EIS)
• Line dividing DSS and EIS is very thin
• EIS can be considered as better and
•Needs outside
more sophisticated DSS
information:
• EIS takes the following into • Competitors,
consideration • Government
– The overall vision and mission of • Trade groups and
the company and the company goals • Associations
– Strategic planning and objectives
– Organisation structure
– Crisis Management / contingency planning
– Strategic control and monitoring of overall operations
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M.I.S.
MIS manager not completely
understanding the nature of
the decision
Emphasis on efficiency
MIS is suitable for
Programmed decisions for
structured problems and
routine decisions.
These kind of decisions are
made especially by lower-level
mangers and non-managers
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Session 3
v/s D.S.S.
Manager knowing decision
environment
Emphasis on effectiveness
DSS is more suitable for non-
programmed decisions for
unstructured problems
and non-routine decisions
and are made especially by
upper-level managers.
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M.I.S. v/s D.S.S.

Problem  Information
Data  Information System System  Generate
 Reports alternatives  Discuss Pros &
Cons  Take Decision

Precedence or previously Precedence or previously

established criteria is normally established criteria may or
available. may not be available

Used for objective judgments Used for subjective judgments

Designers of MIS are Designers of DSS are
technical (Computer) people Company Managers

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Supply Chain Management (SCM)

• Network of facilities and distribution options hat performs
the function of:
– Procurement of material
– Transformation to intermediates
– Finished product
• Need for a mechanism to integrates all these functions
– Supply Chain Management is a strategy through which
such integration can be achieved.
• Marketing, Distribution, Planning, Manufacturing and
purchasing need be integrated and the conflicts solved.

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Evolution of Database Technology

• 1960s:
Data collection and database creation (for records)
• ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

• 1970s:
Relational data model, relational DBMS implementation
(for references)
• ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

• 1980s:
Advanced data models and application-oriented DBMS,
OLAP Tools (statistical, scientific, engineering etc.)
(for analysis)
• ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

• 1990s—2000s:
Data mining and data warehousing
(for management decision).
• ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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What Is Data Mining?

• Data mining (Knowledge Discovery in Databases)
Extraction of interesting (previously unknown and
potentially useful) information or patterns from data in
large databases (data warehouse)
• Alternative names to data mining
• Knowledge Discovery (mining) in Databases (KDD),
• knowledge extraction,
• data/pattern analysis,
• data archaeology,
• information harvesting,
• business intelligence, etc.

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Data Mining:
On What Kind of Data?
• Relational databases
– collection of tables, each of which is assigned a unique name,
each table consist of a set of attributes (columns or fields)
and usually stores a large set of tuples (records or rows)
• Data warehouses
– repository of information collected from multiple sources,
stored under a unified schema, which resides at a single site
• Transactional databases
– file where each record represent a transaction, a transaction
typically includes a unique transaction identity number
(trans_ID), and a list of items making up the transaction
(such as items purchased in a store)
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Data Mining: A KDD Process

Data mining: the core Pattern Evaluation
of knowledge
discovery process. Data Mining

Task-relevant Data

Data Warehouse Selection

Data Cleaning

Data Integration

Databases
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 Session 3
Architecture of
A Typical Data Mining System
Graphical user interface

Pattern evaluation

Data mining engine

Data mining
Database or data
warehouse server functionalities
Data cleaning & Filtering
data integration
Data
Databases Warehouse

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Data Mining Functionalities (1)

• What kind of patterns can be mined?

• Association Analysis
– showing attribute-value conditions that occur
frequently together in a given set of data
– E.g. to find group of salary account customers whose
income is in range (Rs.10,000 to Rs.20,000)

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Data Mining Functionalities (2)

• What kind of patterns can be mined?

• Classification and Prediction

– Finding a set of models (functions) that describe and
distinguish classes or concepts for future prediction
(classify countries based on climate, or classify cars
based on gas mileage)
– Prediction: predict some unknown or missing
numerical values

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Data Mining Functionalities (3)

• What kind of patterns can be mined?
• Cluster analysis
– Class label is unknown: Group data to form new
classes, e.g., cluster houses to find distribution patterns
– Clustering based on the principle: maximizing the intra-
class similarity and minimizing the interclass similarity

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Data Mining:
mixture of Multiple Disciplines
Database
Statistics
Technology

Machine
Learning
Data Mining Visualization

Information Other
Science Disciplines

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Data Mining Applications

• Management Decision support applications
– Market analysis and management
– Risk analysis and management
– Fraud detection and management

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Market Analysis and Management

• Where are the data sources for analysis?
– Credit card transactions, loyalty cards, discount
coupons, customer complaint calls, plus (public)
lifestyle studies
• Target marketing
– Find clusters of “model” customers who share the same
characteristics: interest, income level, spending habits,
etc.(E.g decision of giving credit cards to customers)
• Determine customer purchasing patterns over time
– E.g to identify items frequently purchased by a group
of customers

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Market Analysis and Management

• Customer profiling
– data mining can tell you what types of customers buy
what products (clustering or classification)
• Identifying customer requirements
– identifying the best products for different customers
– use prediction to find what factors will attract new
customers
• Provides summary information
– various multidimensional summary reports
– statistical summary information (data central tendency
and variation)
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Risk analysis and management

• Finance planning and asset evaluation
– cash flow analysis and prediction
– cross-sectional and time series analysis (financial-ratio,
trend analysis, etc.)
• Resource planning
– summarize and compare the resources
• Competition
– monitor competitors and market directions
– group customers into classes and a class-based pricing
procedure
– set pricing strategy in a highly competitive market
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Fraud Detection and Management

• Applications
– widely used in health care, retail, credit card services,
telecommunications (phone card fraud), etc.
• Approach
– use historical data to build models of fraudulent
behaviour and use data mining to help identify similar
instances
• Example:
– auto insurance: detect a group of people who stage
accidents to collect on insurance

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Conclusion
• It is a powerful tool for decision making
• Use of data mining is to take decisions like
– Budgeting
– Investing
– Financing
– Production forecasting.
– Make or Buy decision

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Thanks.
• Hope you enjoyed
the presentation.
• Have a nice day !

Volunteer for a
RECAP ?
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Let us have a break !

• We shall meet here again after 5 minutes

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 Session 3

Home Work

Read & understand

• Section 3 from AL page Nos. 22 to 32
• Section 3 from SS

• Assignment 3:
• Fill in the Blanks and Review questions
• on page No. 32 in AL

AL = Enterprise Resource Planning - Alexis Leon (Tata McGraw-Hill Edition)

SS = A Managerial Perspective - S. Sadagopan, (Tata McGraw Hill )
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