Beyond ERP

INF10003 Introduction to Business

Information Systems
Mark Dale and Rohan Bennett
February 2022
 Week 1 : Making a Start

1. Introduction and Overview

Week 2 to 4 : What and Who are Information Systems?

Assignment 1 and 2
2. Digital Age 3. Think Like a Process 4. The Tech Sector

Week 5 to 8 : How do we do Information Systems?

5. Beyond ERP 6. IT Infrastructure 7. Data & Analytics 8. SDLC & Agile Assignment 3

Week 9 to 11 : Where to next with Information Systems?

Assignment 4
9. Liquid Enterprises 10. Cybersecurity 11. Global and Green

Week 12 : Close Out

12. Wrap-Up
Business Information Systems
Issues Issues Issues
What will we cover today?

Learn what Enterprize Resource Planning (ERP) systems

are and why you need to know about them

Unpack why ERPs emerged and became so embedded

as organisational information systems

Review the two generations of ERPs in terms of

strengths and weaknesses

Explore what is coming next with ERPs and what that

means for business, and you

Slide
ERPs basics
What? Why? How?
What are ERPs?

ERPs are large-scale, integrated packaged software

applications

They connect and manage processes and information

flows across complex organisations into a single IT
system (or integrated set of IT systems)

ERPs enable employees to make decisions by viewing

enterprise wide information on all business operations

They are often available as a generic, but highly

customisable, group of programs to integrate business
functions such as accounting, manufacturing and
marketing.

5
Why ERPs?

Business leaders need significant amounts

of information, accessible, in real-time
enabling decisions, without the added time
of tracking data and generating reports.

In the past most organisations, information

had traditionally been isolated within
specific departments, whether on an
individual database, in a filing cabinet or on
an employee’s PC

This created problems data duplication, data

inaccuracies, disjointed processes, errors,
lack of accountability and increased costs

(Baltzan, Lynch & Blakey 2015, p.310)

6
Are there different types of ERPs?

1st Generation 2nd Generation

Local and internally hosted ERP (1990-2010) ‘In Cloud’ ERP (2010 onwards)

Organisation buys their own copy of an ERP product and hosts and ERP solutions are hosted in Cloud environments
maintains it themselves
Full ERP, all modules without the management overhead
Supports key business functions:
Vendor: patches, upgrades, administers, secures platform
Corporate: Finance/ Accounting, warehousing/ inventory
management Software as a Service (SaaS) products

Operations: Manufacturing production, Retail, Subscription/ leasing modelCompanies often running hybrid ERP
solutions: on-premise and in-cloud
Still going abd vendors continue to produce

In industry, these are generally referred to as ‘on-prem’ solutions

8

Disclaimer! What disclaimer?

Distinction between 1st Generation and 2nd Generation ERP is arbitrary

For the purposes of illustrating two different types of ERP solutions i.e., On-premise, internally
hosted vs. Cloud based ERP

In industry, organisations run both types – hybrid ERP environments

Don’t think that 2nd Generation replaced 1st Generation ERP

1 Generation
st
Purpose, parts and problems
10

What was the focus?

ERP was business management software pre-Cloud

It allowed an organisation to leverage a suite of functionally

integrated applications

Accounting and Financials (Accounts Payable, accounts

Receivable, General Ledger, Fixed Assets, Procurement)

HR (payroll, performance mgt, training, recruitment, ….)

Production and Materials management

There were extensions, for a price, of course

What was the core functionality?

(Baltzan, Lynch & Blakey 2015, p.311

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12

What could they do?

The focus of ERP vendors is process efficiency, accuracy of data, one

time data entry and data propagation,

ERPs streamline and automate business processes

Replace manual, and error-prone processes

Division of responsibility managed within the app. App controls who

has access and visibility of sensitive data – financials

Reporting is made much easier – single source of truth. Data is

mastered within the ERP
Who were the main players?

Oracle
SAP
Infor
Microsoft
Sage
..,.

https://www.forbes.com/sites/louiscolumbus/2014/05/12/gartners-erp-market-share-update-shows-the-
future-of-cloud-erp-is-now/?sh=81711591fae9
14

What were the benefits?

15

Was acquisition an issue?

The ERP acquisition process could be very complicated and protracted

16

What about the costs?

Expensive - one of the key limitations of Enterprise Resource Planning (ERP) systems is that they
can be extremely costly to buy and maintain\

ERPs were internally hosted and organisations had to build teams of people to administer and
maintain their ERP systems

ERPs added to the diversity of organisational application portfolios and were difficult to integrate
with existing systems

Critical functions were supported by ERPs and organisations had to invest in adding additional
data and infrastructure security, data storage and disaster recovery planning
17

Were there issues with customization?

Some organisations customized their ERP to meet existing business processes and rules

Sometimes these customizations were so extensive they voided vendor and product warranties
or made vendor patches and upgrades unworkable

In some extreme cases, organisations re-wrote the source code and tried to make their ERP do
what is was NOT natively designed to do
HR systems became student administration!
Financial systems became data analytics platforms

These initiatives literally cost tens and hundreds of millions of dollars

18

What about capacity to implement?

Learning Curve - it was difficult for organisations to become proficient and self-reliant in the use
of their ERP systems

Availability of Appropriate Skills/ Resources - experience, manpower, and optimum utilization of

resources are key within a manufacturing operation

Implementation Times – the time it took organisations to implement their ERPs could be 18
months – 2/3 years resulting in a lot of waste and missed business opportunities

Business were not ready for ERP - inter-connectivity between various departments in an
organization was a key driver, but if there were inefficiencies in one department this lead to
inefficiencies in other departments
19

What is ‘tech debt’?

Consequence or cost over time of choosing an easier

course of action or choosing a particular trade-off

Consequence of choosing one vendor’s products and

then swapping to a new vendor and a new set of
products

A large source of pain for CIOs and managers

20

What does tech debt do over time?

ERP systems ‘locked’ organisations into large,

complex monolithic applications that made it
difficult for organisations to evolve

Organisations had to develop software that

allowed ERPs to talk to other applications esp.
apps from another vendors
21

So, were there ERP regrets?

Yep, you bet ya… difficult to replace, upgrade

High infrastructure investment

Hosted in data centers
Other asset investments: data warehouses, operational data stores, data marts,
analytics tools

High resources investments

People specifically skilled in ERP

Organisations restructured themselves to align with ERPs

Changing to a new ERP would involve organisational change
22

What about scaling and renewing?

Business also had issues on what to do with the data and the add-on platforms/ applications –
like data warehouses, data marts, data analytics tools, data cleansing processes and tools that
were used to support data analytics

Legacy ERP Solutions were very difficult to scale and integrate with more modern applications
and platforms

Merger and acquisition activities also become very difficult i.e, integrating new businesses or
decouple existing businesses
23

But, what was perhaps the biggest constraint?

Earlt ERPs were difficult to integrate with other business applications and platforms and could
not give organisations end-to-end views of their business processes
Quote-to-Cash (QTC)
Order-to-Cash (OTC)
Procure-to-Pay (P2P)

Organisations now want a 360-degree end-to-end view of the customer journey for key processes

…
Want to have visibility of process bottlenecks, points where processes are falling over

Businesses focusing on value-adding to customers/ “delighting the customer"

24

Hang on! What is an End-to-End Process?

Goes from beginning of the customer interaction, to the very end and delivers a product/service
to a customer.

Example is Order-to-Cash: “is the entirety of a company’s order processing system. It begins the
moment a customer places an order. Everything before that time is related to some function of
branding, marketing, or sales. It’s important to note, however, that branding, marketing, and
sales functions do not immediately cease when a customer places an order”

The contract systems is linked quotation systems, linked to ordering linked to product,
purchasing, payments, scheduling, transport, customer service and complaints systems

ERPs need to connect: Contract systems, quotation systems, ordering, product, purchasing,
payments, scheduling, transport, customer service, complaints and customer communications
systems

https://www.salesforce.com/products/cpq/resources/what-to-know-about-order-to-cash-process
 Customer

Scenario: An end
customer of Company A
orders directly from
Company A.

Customer
2 Generation
nd
Purpose, parts and problems
27

What is the focus?

2nd Generation ERP is sometimes called Software as

a Service (SaaS)
Allows users access to ERP software that runs on
shared computing resources via the Internet
Computing resources are maintained in remote data
centers dedicated to hosting various applications on
multiple platforms
Cloud ERP generally has much lower upfront costs,
because computing resources are leased by the
month rather than purchased outright and
maintained on premises
Companies have access to their business-critical
applications at any time from any location
https://www.appsruntheworld.com/top-10-cloud-erp-software-vendors-market-size-and-market-forecast/
https://www.byteant.com/blog/top-10-erp-software-how-to-select-the-right-system-in-2020/
30

What are the benefits?

31

What is Cloud ERP?

ERP products have now standardised around the three cloud services providers
AWS, Azure or SAP (e.g., Salesforce hosted on Azure)

Organisations purchase a cloud instance of an ERP and arrange with vendor to host on AWS,
Azure, SAP DC

Maturity and greater connectivity within cloud environments supports greater connectivity to a
range of different ERP solutions
API connections
SAP and Salesforce and scheduling applications
SAP and data analytics platforms – Power BI, Business Objects
32

What is also supported?

Cloud ERP products support mobile and desktop platform

”omni-channel”
1st gen ERP did not – internally hosted and not external facing

Support different browsers, and operating systems

IOS, Android, Windows

Can be integrated with customer communication platforms

Email, Sms, Chatbots/ Livechat
33

How about an example?

Company A ERP Environment

Example of Hybrid 1st and 2nd Generation ERP Environment

Customer

Customer
Representative

Azure
SAP D/C
SAP Commerce (Retail Front End)
SAP C4C (interrnal Portal)
API

Response
Customers Orders Payments Invoicing Inventory Delivery Service call
Customer Account
Comms Inventory Marketing
Service Mgt Analysts

API
Call
AWS
Response
Response

Call SAP BW/BO

Proxy
Non ERP
Sydney
AWS
Call
Used to connect
on-premise ERP Cloud Connector
with Cloud ERP Response
Response

Call

San Jose SAP ECC (On-Premise)

Customers Materials Pricing Sales Billing

Summary
Beyond ERPs
What will we cover today?

We covered…
Enterprize Resource Planning (ERP) systems are and why you need to know about them
Why ERPs emerged and became so embedded as organisational information systems
The 2 generations of ERPs in terms of strengths and weaknesses
Explored what is coming next with ERPs and what that means for business, and you

What next?
Assignment 1 – Stay tuned for results
Assignment 2 – Submission is coming!

Slide
Thanks.
Questions