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Enterprise - Overview

Enterprise is a group of people with a common goal, which has certain resources to achieve this goal. Enterprise acts as a single entity. In traditional system organizations is divided into different units base on the functions they perform. So we have a manufacturing ( or production ), purchasing , sales , distribution , finance department, R & D department and so on. These departments function in isolation. So information that is created by the various departments available to the top management and not to the other departments. So instead of taking the organization to common goal the departments tend to pull it in different directions since one department does not know what the other department does. e.g. Marketing department may want more product variety to satisfy the varying needs of customer while the production department will want to limit the product variety in order to cut down production cost.

In the enterprise entire organization is considered as one system and departments are sub system. Information of the organization stored centrally and is available to all the departments. So the benefits of this idea is sub-system knows what others are doing, why they are doing it and what should be done to move the company towards the common goal.

Business Function and Business Processes

Organization have the following functional areas of operation marketing, sales, production , accounting , finance , human resources etc. Each functional area comprises of business functions. A Business process is a collection of activities that takes one or more kind of input and creates and output that is of value to the customer. The difference between a business function and business process is that a process cuts across more than one business functions to get a task done.

E.g. Car is damaged during delivery. It is Business Function of customer service department to repair it or replace it depending upon the damage. The actual repair of replacement of the car is a Business Process that involves several functional areas and functions. Sharing data effectively and efficiently between and within functional area leads to more efficient Business Processes. E.g. the people in sales and marketing should have up-todate details of the latest products so that they can provide this info to customer. People in manufacturing plants should know which models are being ordered in large quantities so that they can buy the necessary materials and manufacture those items for delivery to customers.


An information system produce information using the input process output cycle. It consists of three elements - people , procedure and data. People follow procedures to manipulate data to produce information. Management Information System also called information reporting systems. Reports, charts, graphs produced by this systems provide information that managers have specified in advance.

The problem with these information system is that they operate at department level so each department will have its own database and information systems which produce different reports that were specified when the systems where built. Two major disadvantages. 1) The people in one department do not have any information about what is happening in the other departments. 2) These systems only provide the information that they are designed to produce at the time they were built.

These systems as mentioned, lack the integrated approach. There will be accounting system for finance department, production planning system for the production department, an inventory management system for the stores department and so on. All these systems will perform in isolation. If manager wanted some information which has to be derived from any of these two systems, he would have to get the necessary reports from both systems and then correlate and combine the data. No decision-maker can take good decisions with isolated data that he can obtain from the various reports produced by individual departments. In reality, an organization cannot function as islands of different departments. If all the info islands integrated into single systems, the impact would be dramatic.

For e.g. if the purchase department can see the production details, it can make the purchasing schedule. If finance department can see the purchase details they can plan for the cash flow for the purchases. If the decision-makers do not have right info at right time then the chances of that organization succeeding are very remote. The three fundamental characteristics of info are accuracy , relevancy and timeliness. It means info has to be accurate, it must be relevant and it must be available to the decision-maker when he needs it.

It is first step in ERP project. ERP systems should mirror the business processes. A business model is not mathematical model but representation of the business as one large system showing the interconnections and interdependencies of the various subsystem and business processes. The business model is usually represented in the graphical form using flowcharts and flow diagrams.


Customer Order




Thus the business model is a representation of the actual business. The data model of the system is created from the business model.


Critical step in ERP. One of the advantages of having ERP system is that all the employee from the different department get access to the data the integrated data. Company uses this integrated data for analysis and decision-making. With the implementation of ERP the departmental information systems and the departmental database will have to go. There can no longer be isolated database. All the data has to be from the integrated database. It reduce redundancy and provide updated and upto the minute information about the entire organization to all employees. Integrated Database should reflect day to day transactions and be updated continuously. E. g. if orders are entered the sales are executed and the goods are dispatched, then the inventory should be reduced and the account receivables should be increased.

All this must happen instantly and automatically. When designing the data model for the ERP system the most important thing that should be kept in mind is the data model should reflect the entire organization and should successfully integrate the data structures of the entire organization.
DATA MODEL Tables Fields Views Etc.