Enterprise Resource Planning

Building the e-business Backbone:

What is the difference between CRM and ERP?

CRM is the “front end” of a business, i.e., the part of the business that deals with customers and collecting revenue

ERP is the “back-end” of the business, the part of the business that deals with production and controlling costs

What is ERP?

Short for enterprise resource planning, a business management system that integrates all facets of the business, including production planning, integrated logistics, accounting and financials, human resources and sales distribution.

Production Planning

Its purpose is to minimize production time and costs, efficiently organize the use of resources and maximize efficiency in the workplace.

Logistics

Logistics is the management of the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers

Accounting and Financials The systematic recording, reporting, and

analysis of financial transactions of a business.

Sample reports include: Income statements Profit and loss statements Cash flow statements Assets/liabilities

Human Resources

The objective of human resources is to maximize the return on investment from the organization's human capital and minimize financial risk.

Sales Distribution

Sales distribution is all about how we can get the finished product delivered on time to the customer.

Evolution of ERP - MRP

Stage 1 – Manufacturing Integration (MRP) 1970s to 1980s MRP = Manufacturing Requirements Planning These applications focused on organizing materials

required for production There was little or no integration with other systems

Evolution of ERP –Enterprise Integration

Stage 2 – Enterprise Integration (ERP) Replacing separate systems that use old

technology with a single system Gaining more access to back end data through

integrated reporting Managing production in a global environment

Evolution of ERP – Customer Focus

Stage 3 - Customer Focused Integration As customer service became more critical,

businesses adapted their ERP applications to include front-office functions like sales and marketing

Evolution of ERP – Inter-enterprise Applications

Stage 4 – Inter-enterprise Applications Most organizations rely on other businesses to

supply at least part of their raw materials ERP applications that can span the supply chain

will help reduce costs and improve customer service

ERP Screen Example 1

ERP Screen Example 2

Journal Question

Choose an ERP function (Production Planning, HR, Logistics, Sales Distribution, Accounting) and discuss how this function is related to “front end” business applications. Provide examples.