Module II: ERP & Related Technologies

I. Description
This module aims to help students to learn different ERP related technologies and their
components
II. Objective
To understand the other related technologies of Enterprise Resource Planning (ERP).
Duration
Start: Week 4
End: Week 5
III. Learning Contents

ERP AND RELATED TECHNOLOGIES

The ERP system is not a perfect system thus it comes with risks and limitations. The ERP system has
three significant limitations, namely:

• Managers cannot generate custom reports or queries without the help from a programmer
and this inhibits them from obtaining information quickly, which is essential for making a com-
petitive advantage.
• ERP systems provide current status only, such as open orders. Managers often need to look
past status to find trends and patterns that aid better decision-making.
• The data in the ERP application is not integrated with other enterprise or division systems and
does not include external intelligence.
ERP Related Technologies
ERP related technologies help overcome the limitations of the ERP system. When used in conjunction
with the ERP system, these related technologies help the company and its managers in making better
decisions by enabling the company to do business at internet speed. Some of these technologies are
as follows:
Business Process Re-engineering

1. Dr. Michael Hammer: “The fundamental rethinking and radical redesign of business processes
to achieve dramatic improvements in critical, contemporary measures of performance such as
cost, quality, service and speed.”
2. Invented by Dr. Michael Hammer and Thomas Davenport
3. set of activities that transform a set of inputs into a set of outputs (goods or services) for an-
other person or process using people and tools
PrE8: Enterprise Resource Planning and Management
Prof. Julius Estes Paris G. Manabat
 4. Business management strategy for redesigning the business process with the goal of analyzing
the work flows of the business.
Advantages of the BPR

5. It helps in integrating the various business processes of the organization.

6. With good ERP package, the organization will be able to achieve dramatic improvements in ar-
eas such as cost, quality, speed, etc. Hence, many BPR initiatives are used in ERP implementa-
tion
Phases of Business Process Re-engineering

1. Project Kick-off
• establishing common goals and purpose of the project
2. Process Identification and Data Gathering
• Data regarding the current processes are gathered and assembled on this phase.
3. Process Consulting
• BPR consultants define objectives, finalize scope, select procedures, process
champion, kick-off meeting.
4. Process Re-engineering
• Beginning of the actual re-engineering, wherein a number of brainstorming ses-
sions are held with the project team and other stakeholders.
5. Blueprint of New System
involves modelling workflow and information requirement of new business pro-
cesses o new system and processes are outlined using various modelling tools
6. Change Management
• preparing the organization for change
7. Transformation
• In this phase, the actual migration of the company from the current system to the
new system happens. This migration strategy is done either as a pilot, in phases,
or through big bang implementation.
8. Project Management
• BPR consultants plan awareness campaign, top management workshop, and
communication workshop.
• BPR consultants change characteristics, change readiness assessment, change
management plan, and implement change management plan.

PrE8: Enterprise Resource Planning and Management

Prof. Julius Estes Paris G. Manabat
Figure 1. Phases of BPR

Objectives of Business Process Re-engineering

- BPR enables the entity to increase effectiveness and thereby deliver higher quality products to
the customer.
- BPR enables the company to improve efficiency in the production processes involved.
- Cost saving can be achieved in the long run with the help of BPR.
- BPR provides more meaningful work to employees.
- BPR enables a company to be more adaptable and flexible towards changes in the future.
- BPR enables new business growth and expansion.
Seven Principles of BPR

- Organize around outcomes, not tasks

- Have those who use the outcomes of the process perform the process
- Integrate information-processing work into the real work that produces the information -
Treat geographically dispersed resources as though they were centralized.
- Link parallel activities instead of integrating their results.
- Put the decision points where the work is performed and build controls into the process.
PrE8: Enterprise Resource Planning and Management
Prof. Julius Estes Paris G. Manabat
 - Capture information once, at the source.

Data Warehouse and Data Mining

Data Warehouse

- William H. Inmon: “father of data warehouse”, a data warehouse is “a collection of integrated,

subject-oriented databases where each unit of data is specific to some period of time. Data
Warehouses can contain detailed data, lightly summarized data and highly summarized data,
all formatted for analysis and decision support”
- a database designed to support decision making in an organization
- a data warehouse is a collection of databases that work together and contains a wide variety
of data that present a coherent picture of business conditions at a single point in time
- a location where information can be proactively reported and queried against
- goal of data warehousing: creation of single logical view of data that may reside in many differ-
ent physical database
Types of Data Warehouse

1. Data Mart
- Simple form of data warehouse that is focused on the functional are such as sales, finance, or
marketing
- Often built and controlled by a single department within an organization
- Given their single-subject focus, data marts often draw data from a few sources
- These sources could be internal operation systems, a central data warehouse, or external data
2. Online Transaction Processing (OTPL)
- characterized by many short, online transactions
- OTPL systems emphasize very fast query processing and maintaining data integrity in multiac-
cess environments
- effectiveness is measured by the number of transactions per second
- OTPL databases contain detailed and current data
3. Online Analytical Processing
- characterized by relatively low volume of transactions, queries are often very complex and in-
volve aggregations
- For OLAP systems, response time is an effectiveness measure
- OLAP databases store aggregated, historical data in multi-dimensional schemas (usually star
schemas)
- OLAP systems typically have data latency of a few hours, as opposed to data marts, where la-
tency is expected to be closer to one day.

PrE8: Enterprise Resource Planning and Management

Prof. Julius Estes Paris G. Manabat
 Importance of OLAP
- OLAP technology is being used in an increasingly wide range of applications. The most
common are sales and marketing analysis, financial reporting and consolidation and
budgeting and planning.
- OLAP is being used for applications such as product profitability and pricing analysis,
activity- based costing, manpower planning, and quality analysis or for that matter any
management system that requires a flexible, top-down view of an organization.

Data Mining

- the process of identifying valid, novel, potentially useful and ultimately comprehensive
knowledge from database that is use to make crucial business decisions
- DM is sorting through data to identify patterns and establish relationships. Data mining is a
class of database applications that look for hidden patterns in a group of data that can be used
to predict future behavior.
- extraction of hidden predictive information from a large database
- Its goal is to extract information from a data set and transform it into an understandable struc-
ture for further use

Parameters of Data Mining

• Association – looking for patterns where one event is connected to another event
• Sequence or Path Analysis – looking for patterns where one event leads to another later
event
• Classification – looking for new patterns (may result in in the change of how data is orga-
nized)
• Clustering – finding visually documenting groups of facts not previously known
• Forecasting – discovering patterns in data that can lead to reasonable predictions about
the future (also known as predictive analysis)

Data Mining Techniques

- It extracts interesting patterns such as groups of data record (cluster analysis), and unusual
records (anomaly detection). These patterns can be seen as a kind of summary of the input
data, and may be used in further analysis (ex: machine learning and predictive analytics)
- Example: the data mining step might identify multiple groups in the data, which can be then
used to obtain more accurate prediction results by a decision support system.

PrE8: Enterprise Resource Planning and Management

Prof. Julius Estes Paris G. Manabat
 Five Major Elements of Data Mining

1. Extract, transform, and load transaction data onto the data warehouse system.
2. Store and manage the data in a multidimensional database system.
3. Provide data access to business analysts and information technology professionals.
4. Analyze the data by application software.
5. Present the data in a useful format, such as a graph or table.

Advantages of Data Mining

- A human expert is always a hostage of the previous experience of the investigating other
system. Sometimes this helps, sometimes this hurts but it is almost impossible to get rid of this
fact. While data mining does not eliminate human participation in solving the task completely, it
significantly simplifies the job and allows an analyst, who is not a professional in statistics and
programming to manage the process of extracting knowledge from data. Data Warehousing VS
Data Mining

Figure 2. Data Warehousing

Product Life Cycle Management (PLM)

- Product lifecycle management (PLM) refers to the management of data and processes used in
the design, engineering, manufacturing, sales, and service of a product across its entire lifecy-
cle and across the supply chain.
- Product lifecycle management has a long history in the manufacturing space, but as it stands
today, the term generally refers to a software solution and a broader use case beyond just the
manufacturing process.

PrE8: Enterprise Resource Planning and Management

Prof. Julius Estes Paris G. Manabat
 - Product Lifecycle Management (PLM) is involved more during the ideation, innovation, and
design processes of a product. ERP helps manage the quality, efficiency, and cost-control as-
pects of a product in its manufacturing and supply stages.
Brief History of PLM
Product life cycle management began in the 1980s as an attempt by the American Motors
Corporation (AMC) to compete against its beefier rivals Ford and General Motors, who had larger
revenues and bigger budgets.
The smart folks at the AMC took the following approach:
1. Focused their R&D efforts on enhancing the lives of their existing best-selling products that
were in the maturity phase of the life cycle
2. Used computer-aided design (CAD) to speed up product design and development efforts

3. Stored all product data and designs centrally (in a PLM software system), allowing for quicker
communication, version management, and conflict resolution
The result of all this effort was great for AMC. They launched new variants of Jeep, created a new
market segment for vehicles called sports utility vehicles (SUVs), and finally got bought out by
Chrysler who used these new techniques to reduce their development cost structure to 50% of
that of the competition. 50% reduction is insane by any standards.
Toyota came along later, and today Elon Musk’s Tesla seems to be on the top of the game, with a
larger market cap than that of the 6 largest car companies combined!
Importance of PLM in Companies
Companies that manufacture goods experience a range of issues outside of the scope of design
and manufacturing. Product lifecycle management (PLM) mitigates those issues and helps align
and integrate key resources, quickly making product information accessible to teams across the
organization.
Traditional Product Life Cycle

1. Introduction Phase
- The introduction phase of the traditional product life cycle begins with the actual launch of a
product.
- As a product manager, during the introduction phase, you should:
• Create awareness in the market and clarify features and benefits to the sales team.
• Get more insight on how customers are using your product. This may also mean spend-
ing funds on market research and trials during product development.
2. Growth Phase
- Once a product has been successfully introduced into the market and has survived, it reaches
the growth phase. The focus in the growth phase is on rapidly gaining new customers and in-
creasing market share as quickly as possible.

PrE8: Enterprise Resource Planning and Management

Prof. Julius Estes Paris G. Manabat
 - As product managers, you should:
• Grab market share as quickly as possible by pulling out all the stops: new feature, ad-
vertising, marketing, and distribution.
• Ensure that demand does not outstrip supply by a large margin.
• Keep an eye on competing products and optimizing price to ensure your product re-
mains competitive while protecting your margins.
3. Maturity Phase
- The beginning of the maturity phase of the product life cycle is marked by a reduction in the
rate of growth. In the maturity phase, the product marketing strategy is focused on differentia-
tion from competing products.
- As production managers, you should:
• Maximize profits by reducing costs. This will involve increasing the efficiency of your
production, supply chain, and distribution operations.
• Maximize the length of the maturity phase by differentiating the product, adding new
features, managing pricing, and keeping competitors at bay.
4. Decline Phase
- All products inevitably reach the decline phase of the product life cycle. A market-leading
product may last longer than others, but it too will reach decline. Reasons for this decline are
as follows:
• Changes in technology
• Product innovation coming in from around the world
• Changing habits and attitudes of newer generations of consumers
• Planned obsolescence to ensure that customers buy newer models as replacements.
There is a lot of debate around whether this approach is ethical, and the impact it has
on our planet.
- The start of the decline phase is marked by a reduction in sales figures.
- Ways on how to address the decline:
• Address a different market segment or market altogether (international markets are a
great way to do this)
• Add new features to make it a new-ish product
• Reduce prices, clear out the existing inventory, then put the product in end-of-life and
discontinue it
- As a product manager, you should:
• Figure out ways in which you can pivot the product to a new market segment or even a
new market altogether
• Manage the end-of-life stage of the product and ensure that you meet all legal com-
mitments while keeping costs to a minimum
• Upsell existing customers to newer products/variants

PrE8: Enterprise Resource Planning and Management

Prof. Julius Estes Paris G. Manabat
Figure 3. Traditional Product Lifecycle
Benefits of Product Life cycle Management

1. Improvements to development, engineering efficiency, and effectiveness

2. Elimination of errors during the engineering release process
3. Reduced time to market
4. Improved project delivery
5. Higher quality designs

Supply Chain Management (SCM)

- Supply chain management is the handling of the entire production flow of a good or service —
starting from the raw components all the way to delivering the final product to the consumer.
- Supply chain management (SCM) is the optimization of a product's creation and flow from raw
material sourcing to production, logistics and delivery to the final customer.
- The term supply chain management (SCM) covers all the activities associated with managing
an organization's procurement with the goal of:
• Reducing costs
• Improving efficiency
• Satisfying demand

PrE8: Enterprise Resource Planning and Management

Prof. Julius Estes Paris G. Manabat
 Components of a Traditional Supply Chain Management

- Planning: Plan and manage all resources required to meet customer demand for a company’s
product or service.
- Sourcing: Choose suppliers to provide the goods and services needed to create the product.
Then, establish processes to monitor and manage supplier relationships.
- Manufacturing: Organize the activities required to accept raw materials, manufacture the
product, test for quality, package for shipping and schedule for delivery.
- Delivery and Logistics: Coordinate customer orders, schedule deliveries, dispatch loads, in-
voice customers and receive payments.
- Returning: Create a network or process to take back defective, excess, or unwanted products.

Importance of Supply Chain Management

- Effective supply chain management systems minimize cost, waste and time in the production
cycle. The industry standard has become a just-in-time supply chain wherein retail sales auto-
matically signal replenishment orders to manufacturers. Retail shelves can then be restocked
almost as quickly as product is sold. One way to further improve on this process is to analyze
the data from supply chain partners to see where further improvements can be made.
- three scenarios where effective supply chain management increases value to the supply chain
cycle:
- Identifying potential problems
- Optimizing price dynamically
- Improving the allocation of “available to promise” inventory

Key Effective Features of SCM

- five “Cs” of the effective supply chain management of the future:

1. Connected
2. Collaborative
3. Cyber-aware
4. Cognitively enabled
5. Comprehensive

Customer Relationship Management

- CRM is defined as customer relationship management and is a software system that helps
business owners nurture their relationships with their clientele. A CRM also assists with organ-
ization, efficiency, time management, and impressing clients every step of the way.

- A CRM gathers customer interactions across all channels in one place. Managing centralized
data helps businesses improve customer experience, satisfaction, retention, and service.

PrE8: Enterprise Resource Planning and Management

Prof. Julius Estes Paris G. Manabat
 Importance of CRM

- CRM software is a special system with one primary purpose – improving relationships with
clients by providing businesses with smart tools to effectively develop a successful strategy. In
other words, CRM software can accelerate crucial business operations, such as marketing,
service, and sales activities, to boost customer experience and loyalty from initial contact to
repeat purchases.
Benefits of CRM

- Improves customer service

- Increase in sales
- Retain more customers
- Better Analytics
- Higher Efficiency
- Better knowledge sharing
- More transparency

Brief History of CRM

The ‘Uberization’ trend has hit the CRM market like a tidal wave. Developers have come into the
user, offering software with friendly user interfaces and appealing niche design language.
Simplicity and low friction usage now come standard.

That wasn’t always the case.

The history of the CRM reaches back to the [Link] bubble era. The first version of legacy
software SAP CRM, for example, was released way back in millennial year zero, aka 2000.

Back then, all CRMs had a big learning curve and required a complete retooling of the workflow.
First, you needed to train up. Then you’d have to import all your contacts onto a proprietary cloud
and plug away doing data entry. Things look a lot different today. A small business can now
implement CRM processes with minimal hassle, without hiring developers.
Cloud-based CRMs have become standard. Cloud storage, automated data entry, and web/mobile
cross-platform functionality have improved user experience (not to mention customer experience)
dramatically. Prices have dropped too, with free, open source, and affordable professional and
enterprise plans available across the market.
Legacy providers like Oracle, Microsoft Dynamics, and Salesforce have kept pace with trends, and
continue to command serious market shares. But an increasingly diverse cast of new wave
platforms have emerged to challenge them, too.

PrE8: Enterprise Resource Planning and Management

Prof. Julius Estes Paris G. Manabat
 Types of CRM

- Operational CRM
- Analytical CRM
- Collaborative CRM
Operational CRM

- An operational CRM gives you a complete view of each customer’s interactions with your com-
pany. These sales CRMs use sales and marketing automation to save you time — and make
sure no contacts or tasks fall through the cracks.
- Features and Benefits:
• Contact management
• Lead Scoring
• Sales Team Automation
• Marketing Automation
- Who should use an operational CRM?
• You should choose an operational CRM if…
 You spend too much time trying to keep contact information organized
➢ You need a clear view of each customer’s activity and profile
➢ You want to use lead scoring and win probability, but don’t know where to start
 You manually assign each task and lead to your sales team
 You want to scale your email marketing efforts and grow your database
• If you want to save time on sales and marketing and keep everything in one place, con-
sider an operational CRM.

Analytical CRM

- An analytical CRM gathers, organizes, and analyzes your customer data and sales data to help
you make better business decisions.
- This data can include the average deal cycle, customer retention rates, monthly recurring reve-
nue, and any other information you collect.
- Features and Benefits:
• Data Mining
• Cross-sell and upsell opportunities
• Buyer persona building
• Sales forecasting
• Attribution
- Who should use an analytical CRM?
• You should consider an analytical CRM if…
➢ You want to better understand why customers are (or aren’t) buying your prod-
ucts
PrE8: Enterprise Resource Planning and Management
Prof. Julius Estes Paris G. Manabat
  You want to gather more data about your target customer
 You want to build customer personas based on data
 You want to figure out which touchpoints drive the most revenue
➢ You spend too much time poring over spreadsheets — and not enough time
selling
 You want to track your sales KPIs
 You want to improve your sales process or strategy based on business intelli-
gence data
Collaborative CRM

- Collaborative CRMs (also called “strategic CRMs”) share customer information across teams.
This includes internal and external stakeholders, such as other departments, suppliers, ven-
dors, and distributors.
- Features and Benefits:
• Interaction management
• Relationship management
• Document management
- Who should use collaborative CRM?
• You should consider a collaborative CRM if…
 You need to improve communication between departments
 You want to focus on customer retention and loyalty
 Your customers often have specific preferences and needs
 You need to share customer information with vendors
 You want to organize and align customer-focused efforts across your business

PrE8: Enterprise Resource Planning and Management

Prof. Julius Estes Paris G. Manabat