Enterprise Resource Planning (ERP)
Learning Outcomes
Compare core ERP components and extended ERP components
Describe the three primary components found in core ERP
Describe the four primary components found in extended ERP systems
Explain the benefits and risks associated with ERP systems
Assess the future of ERP systems
ERP -integrates all departments and functions throughout an organization into a single IT system so that employees can make enterprisewide decisions by viewing enterprisewide information on all business operations
Core ERP components -traditional components included in most ERP systems and they primarily focus on internal operations
Extended ERP components -extra components that meet the organizational needs not covered by the core components and primarily focus on external operations

Accounting and Finance Components
manage accounting data and financial processes within the enterprise with functions such as general ledger, accounts payable, accounts receivable, budgeting, and asset management
Production and Materials Management Components
handle the various aspects of production planning and execution such as demand forecasting, production scheduling, job cost accounting, and quality control
Human Resource Components
track employee information including payroll, benefits, compensation, performance assessment, and assumes compliance with the legal requirements of multiple jurisdictions and tax authorities
Extended ERP Components
Business intelligence – information that people use to support their decision-making efforts
CRM – involves managing all aspects of a customer’ s relationship with an organization to increase customer loyalty and retention and an organization’ s profitability
SCM – involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability
E-business – means conducting business on the Internet, not only buying and selling, but also serving customers and collaborating with business partners
E-Business Components
E-logistics -manages the transportation and storage of goods
E-procurement -the business-to-business (B2B) purchase and sale of supplies and services over the Internet

The Future of ERP
Lines between SCM, CRM, and ERP will continue to blur
Internet -continue to help organizations integrate data and process across functional departments
Interface -customizable employee browsers
Wireless technology -support a mobile workforce
Closing Case One: PepsiAmericas’ Enterprises
PepsiAmericas generates $2.97 billion in revenues yearly
The company implemented PeopleSoft’ s ERP solution to provide complete integration between PepsiAmericas’ front-office and back-office systems
PepsiAmericas also implemented PeopleSoft’ s supply chain management component to automate its inventory
Closing Case Two Questions
How have core ERP components helped PepsiAmericas improve its business?
How have extended ERP components helped PepsiAmericas improve its business?
Explain how future ERP systems will help PepsiAmericas increase revenues
Assess the impact on PepsiAmericas’ business if it failed to implement the CRM component of PeopleSoft’ s ERP system
Review the different PeopleSoft components in Figure B5.5. Which component would you recommend PepsiAmericas implement if it decides to purchase an additional PeopleSoft component?
Closing Case Two: Demanding Chocolate
Ghirardelli is the longest continuously operating chocolate manufacturer in the Untied States
Ghirardelli improved inventory management and profitability through the implementation of an ERP system
Closing Case Two Questions
Which additional core ERP components would you recommend Ghirardelli implement?
Which additional extended ERP components would you recommend Ghirardelli implement?
How can implementing an Advanced Planning ERP component help Ghirardelli’ s business?

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