EMERGING TRENDS ON ERP

Unit 5

Extended ERP systems and ERP add-ons -CRM, SCM, Business analytics - Future trends in ERP systems-web enabled, Wireless technologies, cloud computing.

Extended ERP systems (ERP 2)

• ERP systems have extended from intra-organizational system to inter-organizational system.

• It connects to the external stake holders like vendors, customers, bankers etc. Modules like CRM, SCM and SRM facilitate organizations to integrate with the external entities (Stakeholders) such as customers and suppliers

pp 558-563

EXTENDED ERP COMPONENTS

• Extended ERP components include:– Business intelligence– Customer relationship management– Supply chain management– E-business

ERP add-ons -CRM

Chapter 16

CRM History

• Pioneered by Robert and Kate Kestnbaum, database marketing collected and analyzed customer information. Using statistical modeling, that data was then used to help customize communications with other potential customers.

• In 1993, Tom Siebel left Oracle to create Siebel Systems.

CRM History

• By 1995, SFA and contact management had evolved to closely resemble modern CRM software. However, this emerging product still didn’t have a proper name. A number of terms like enterprise customer management (ECM) and customer information system (CIS) were in use. By the end of 1995, CRM won out.

CRM History

• Enterprise resource management (ERP) vendors like Oracle and Baan entered the CRM market, hoping to use their size and ERP in-roads to dominate the industry.

• The 90s came to an end with the debut of the first major Software as a Service (SaaS) vendor.

• The 2000s: From Near death to Floating on Clouds• Paul Greenberg’s book “CRM at the Speed of Light” • Software giant Microsoft entered the CRM market with

Dynamics CRM, and Oracle acquired Siebel and numerous other enterprise application vendors.

CRM History

• In 2007, Salesforce created the next big change in the CRM industry. Force.com introduced the world to cloud-based CRM. Force.com addressed the criticism that cloud-based applications weren’t customizable.

• Social CRM exploded onto the market with the introduction of Comcast Cares—an application that focused more on interaction than transaction.

Customer Relationship Management

• Gartner's (2010) defines CRM as "a business strategy whose outcomes optimize profitability, revenue, and customer satisfaction by organizing around customer segments, fostering customer satisfying behaviors, and implementing customer-centric processes.

• Handling interactions with past, existing or guture customers

CRM Definition

• CRM is the core business strategy that integrates internal processes and functions, and external networks, to create and deliver value to targeted customers at a profit. It is grounded on high quality customer-related data and enabled by information technology. (Buttle, 2009)

CRM Definition

• CRM is an integrated approach to identifying, acquiring, and retaining customers.

• By enabling organizations to manage and coordinate customer interactions across multiple channels, departments, lines of business, and geographies

• CRM helps organizations maximize the value of every customer interaction and drive superior corporate performance.

Conceptual Overview A shift in thinking …

• Transaction Learning relationship• Mass Marketing Individual marketing• Transaction Value Life time value• Conquest Marketing Retention marketing• Product Life Cycle Customer Life Cycle• Customer Satisfaction Customer Loyalty• Share of the market Share of the customer• Product differentiation Customer differentiation

Components of a CRM System

• Operational – automation of basic business process (Marketing, sales and services)

• Analytical – Analysis of customer data and behaviour using business intelligence

• Collaborative – communicating with clients.

OPERATIONAL AND ANALYTICAL CRM

Sales Force AutomationLead ManagementSales ConfigurationOrder ManagementPricing ManagementSales CompensationSales Performance Mgmt.

Sales

Field Service Information/

Infrastructure

CustomerService

E-Commerce

Analytics

Web StorefrontCatalog, Pricing

InventorySales Partner Mgmt.

Segmentation

Lead Mgmt.Loyalty Mgmt.

Marketing Resource Mgmt.Enterprise Marketing Mgmt.

Marketing Performance Mgmt.Partner Marketing

Data MiningPerformance Mgmt.

Dashboards/KPIsPersonal Productivity

Customer Value AnalysisSales, Service, Web

Field Service AnalyticsIn-Line, Event Driven

Marketing

Community ManagementService AnalyticsDesktop ProductivityContact Center/Call CenterWorkforce Optimization

•E-Learning•Workforce Mgmt.•Q/A, Monitoring

Self-Service/E-Service•Knowledge Mgmt.

•SurveysUnified CommunicationsTrouble Ticketing/Case Mgmt.Enterprise Feedback Mgmt.

Field Force OptimizationWireless Mobility

Parts PlanningContract/Warranty

Remote MonitoringFleet Management

Dispatch and RepairBusiness Process Mgmt.

•E-Mail Response

Customer Data Integration: CDI

Product Information Mgmt.: PIM

Business Process Mgmt.

Master Data Mgmt.: MDM

Enterprise Information Mgmt.

E-marketingCampaign Mgmt.

CRMApplicationMind Map

Most profitable customers

Least profitable customers

What segment spends more with us over time, costs less to maintain, spreads

positive word-of-mouth?

What segment costs us in time, effort and money yet does not provide the return we want? What segment is

difficult to do business with?

Gold

Iron

Lead

Platinum

The Customer Pyramid

CRM Overview– An application perspective of CRM

PeopleSoft CRM ViewMARKETING

– New product campaign• Email wave• Telesales wave• Free software offer

SALES Forecasts Leads/Opportunities Sales Reps

SUPPORT Installed Product

Agreement Warranty

Specialist Competencies Call Center Agent Resolution Database

FIELD SERVICE Service Order Technician

Competencies

HELPDESK Call Center Agent Resolution Database

INTERACTION MANAGEMENT

ANALYTICS

CRM Overview / Demos – An application perspective of CRM

Example Business Process:CRM Marketing and Sales Business Process Flow

Analyze Customer Performance and Generate Target Audience List Create Campaign

Create Wave

Lead Generation

Manage Leads

Create OpportunityGenerate Forecasts

and Rollup Forecasts

Measure Campaign

Measure Opportunity Performance

CRM MarketingBusiness Process

CRM SalesBusiness Process

Operational CRM tools that help customer acquisition

• lead management– The lead management process includes a number of sub-

processes, including lead generation, lead qualification, lead allocation and lead tracking

• campaign management– Campaign managers design, execute and measure marketing

campaigns with the support of CRM technologies. Sometimes these are multi-media campaigns across direct mail, email, fax, outbound telephony, and SMS platforms

• event-based marketing– EBM provides companies with opportunities to approach

prospects at times which have a higher probability of leading to a sale, e.g. important life-stage events

SFA functionality

account management pipeline management

activity management product encyclopaedias

contact management product configuration

contract management product visualization

document management proposal generation

event management quotation management

incentive management sales forecasting

lead management territory management

opportunity management work-flow engineering

order management

Functionality offered by MA software

Asset management Market segmentationCampaign management Marketing analyticsCustomer segmentation Marketing optimisationDirect mail campaign management

Marketing performance management

Document management Marketing resource management Email campaign management Partner marketingEnterprise marketing management

Product life-cycle management

Event-based marketing Search engine optimisationInternet marketing Tele-marketing Keyword marketing Trigger marketingLead generation Web analyticsLoyalty management Workflow engineering

Source: Francis Buttle

Analytical CRM

• Analytical CRM analyses data in an attempt to identify means to enhance a company’s relationship with its clients

• Acquisition – Cross-selling & Upselling• Retention – Retaining existing customers• Information – Providing timely and regular

information to customers

Strategies for customerretention

Positive retention strategies• Customer delight• Loyalty schemes• Customer clubs• Sales promotions• Build customer engagement

Collaborative CRM

• Collaborative CRM is communication with customers and covers direct interaction with customers including feedback and issue reporting. Interaction can take place through webpages, email, Automated Voice Response. Collaborative CRM greatly improves on services offered.

• Collaborative customer relationship management focus on exploiting interaction with customers through customer touch points for enhancing customer self service.

Applications of Collaborative CRM

• Online services for enhancement of convenience and cost reduction

• Effective communication through many channels including automated phone, email and internet.

• profiling customer information during customer interaction

Example: Web Page Personalization http://www.palgravejournals.com/dbm/journal/v15/n1/full/3250065a.html

Functions of CRM

• Identify factors important to clients• Promote a customer oriented philosophy• Adopt customer based measures• Develop end-to-end processes to serve customers• Customer support• Handle customer complaints• Track all aspects of sales• Create a holistic view of customers sales and

service information

Chapter 16, p186 Alexis Leon

Features and Functions of a CRM

• Technology Enabled Selling• Marketing Resource Management• Segment and List Management• Call Center Management• Campaign Management• Internet Protocol Telephony• Field Service Management• Trade Promotion Management• Lead Management• Marketing Analytics

Pp189-91

Uses of CRM

• Providing on-line access to product information and technical assistance around the clock

• Identifying what customer value and devising appropriate service strategies for each customer

• Providing mechanisms for managing and scheduling follow-up sales call.

• Tracking all contacts with a customer

Pp163-164

Uses of CRM

• Identifying potential problems before they occur

• Providing a user-friendly mechanism for registering customer complaints

• Mechanism for correcting service deficiencies• Storing customer interests in order to target

customers selectively

CRM – ERP Integration

• Inability to track customer interactions—because information is stored in two systems

• No single point of customer information—employees who want access to complete information about the customer’s interactions with the company must turn to two entirely different systems

CRM – ERP Integration

• Creation of an ERP customer Master Record from a CRM account record

• View customer financial summary information in CRM

• View Invoice History and Sales Order History in CRM

• CRM quote to ERP order

SAP – Salesforce Integration• Optimize your opportunity-to-order-to-cash process by synchronizing

opportunities in your Salesforce or other CRM system with orders in SAP in real-time

• Get a single view of customer, product and pricing master data in both your CRM system as well as SAP environments

• Fulfill orders in a timely manner and ensure that customers, sales reps, and operations are all on the same page

• Quote correct list prices to customers by having the most up-to-date prices from your SAP deployment flow into your Salesforce or other CRM system in real-time

• Enable customer service reps to view accurate billing, product, and warranty information about customers

• Maintain data integrity when building dashboards and KPIs for executives• Optimize business processes for heavily operations-oriented and

workflow-centric industries

Supply Chain Management (SCM)

Chapter 15

SCM Definitions

• Chain of activities describing the flow of material/goods from suppliers to the end users.

• Planning and control of the flow of goods and services through the supply chain from the acquisition of raw materials to the final product in the hands of the customers. (Sumner, 2012)

• SCM spans all movement and storage of raw materials, work-in-process inventory and finished goods from point or origin to point of consumption.

Supply chain management (SCM)

• Supply chain management (SCM) helps organizations deliver goods and services to the right place at the right time in appropriate quantity and at an acceptable cost.

• Managing the supply chain involves handling suppliers and customers, controlling inventory, getting feedback and forecasting demand at every link.

• Implementing an ERP application will ease the process and help make accurate decisions.

SUPPLY CHAIN MANAGEMENT

• Supply Chain Management (SCM) – The management of information flows between and among activities in a supply chain to maximize total supply chain effectiveness and profitability

SUPPLY CHAIN MANAGEMENT

The supply chain has three main links

1. Materials flow from suppliers and their “upstream” suppliers at all levels

2. Transformation of materials into semi-finished and finished products through the organization’s own production process

3. Distribution of products to customers and their “downstream” customers at all levels

Components and Elements

Source: Desai & Srivastava

The SAP ERP Approach to Production Planning

SCM Components

Warehouse Management:• Required raw materials, parts, sub assemblies and

other goods are to be kept adequately in order to handle uncertainties and emergency situations.

• The ERP application can help Inventory manager stay up-to-date about available inventory and further requirements.

• It also helps accurately project raw material requirements in near future, considering the data from other processes.

SCM Components

Production • Assembling the raw materials, packaging and

distributing the products are to be managed in order to know the total output of the plant(s). As the decisions and methods used in the production process have direct impact on the operational expenses, revenues and customer service.

SCM Components

Transportation:• Raw materials and parts are to be transported to the

place where they are assembled. Choosing the appropriate way to transport goods involves shipping as well as clearances.

• With the help of an ERP application, the inventory manager and the supply chain manager can decide the best and most cost effective way to transport the goods from inventory to production area – by air, sea, rail or road, depending on the distance and the type of goods that need to be transported.

ERP & SCM Basics• ERP:

– Holds master data for materials, plants, customers, vendors, purchasing information records

– Holds transactional data (e.g., sales orders, planned orders)– Is where plans get executed

• SCM:– Is where “advanced planning” happens– Imports master and transactional data from ERP– Sends plans back to ERP for execution

ERP SCMCore Interface (CIF)

Supply Chain Management (SCM) Systems

• The two basic types of SCM system software are:• Supply Chain Planning software (SCP): uses mathematical

models to predict inventory levels based on the efficient flow of resources into the supply chain

• Supply Chain Execution software (SCE): is used to automate different steps in the supply chain such as automatically sending purchase orders to vendors when inventories reach specified levels

ERP/SCM Helps JK Tyres Make Business Agile

• A lack of co-ordination between heterogeneous systems across head offices, its 4 plants and sales offices was causing information delays and discrepancies in sales and operation planning, demand visibility, forecast, collaboration and inventory management.

• the company deployed 16 conventional and new dimension ERP modules.

• These modules translated into a statistical demand forecasting system that gave rise to an accurate production plan.

Vendor-managed inventory (VMI)

• Vendor-managed inventory (VMI) is a family of business models in which the buyer of a product (business) provides certain information to a vendor (supply chain) supplier of that product and the supplier takes full responsibility for maintaining an agreed inventory of the material, usually at the buyer's consumption location (usually a store).

Vendor-managed inventory systems

• to replenish stocks• Wal-Mart transmitted sales data, orders of products,

delivery plan and reports of warehouse inventory status to them daily

• to plan inventory levels, generate purchase orders, and ship exactly what was needed

• both benefited from reduced inventory costs and increased sales

Business planning packets

• Each Wal-Mart department developed computerized, annual strategic business planning packets for its suppliers

• including: – department’s sales, profitability, and inventory targets,

macroeconomic and market trends, and Wal-Mart’s overall business focus

• Wal-Mart’s expectations on them• Suppliers’ recommendations

Information sharing

• Open its databases• Retail Link private extranet system: - to see exactly how its products are selling and

when it might need to up its production - to give more than 2000 suppliers computer access

to point-of-sale data• Advantages: - Gain more information about the customers. - Shelves will always be stocked with the right items

at the right time.

Electronic data interchange (EDI)

• Enabled an estimated 3600 suppliers (about 90% of Wal-Mart’s dollar volume) to receive orders and interact with Wal-Mart electronically.

• Later expanded to include forecasting, planning, replenishing, and shipping applications.

Sharing Data in SCM: Benefits

• Supply chain visibility – The ability to view all areas up and down the supply chain in real time– Lower inventories– Shorter receivables cycles– Optimal use of production resources– Faster response to market changes– Greater satisfaction and loyalty among customers– Greater profitability

pp 180 Alexis Leon

THE BENEFITS OF SCM: IMPROVED VISIBILITY

• Supply chain planning system – Uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain while reducing inventory

• Supply chain execution system – Automates the different activities of the supply chain

• Bullwhip effect – Occurs when distorted product demand information ripples from one partner to the next throughout the supply chain

Bullwhip Effect

THE BENEFITS OF SCM: IMPROVED PROFITABILITY

• Companies can respond faster and more effectively to consumer demands through supply chain enhances

• Demand planning system – Generates demand forecasts using statistical tools and forecasting techniques, so companies can respond faster and more effectively to consumer demands through supply chain enhancements

THE BENEFITS OF SCM: IMPROVED VISIBILITY

Supply Chain Planning and Execution

THE CHALLENGES OF SCM

• Primary challenges include

– Cost – An SCM system can cost millions of dollars for the software and millions more for help implementing the system

– Complexity - The move towards globalization is increasing complexity in the supply chain

Business Analytics

Chapter 9

BI vs BA• Business Intelligence - traditionally focuses on using a

consistent set of metrics to measure past performance and guide business planning. Business Intelligence consists of querying, reporting, OLAP (online analytical processing) and can answer questions including “what happened,” “how many,” and “how often.”

• Business Analytics — goes beyond Business Intelligence by using sophisticated modeling techniques to predict future events or discover patterns which cannot be detected otherwise. Advanced Analytics can answer questions including “why is this happening,” “what if these trends continue,” “what will happen next” (prediction), “what is the best that can happen” (optimization).

Types of Business Intelligence

• Ad hoc Querying and Reporting – using a query method users can obtain answers to questions and develop their own reports and graphs.

• Predefined reports – standard reports and graphs that come defined in the BI tool

• Scorecarding – metrics that communicate when business performance is satisfactory or needs attention

• Alerts – event notifications

Source: https://rapidminer.com/summarizing-differences-business-intelligence-advanced-analytics/

ERP and Business Intelligence

• ERP solutions provide prebuilt standard reports that meet the most basic transactional reporting needs of an organization.

• Business intelligence software is available in both stand-alone packages and as modules within Tier I, II, and III ERP solutions.

Business Analytics

• Business Analytics is the practice of iterative, methodical exploration of an organization’s data with emphasis on statistical analysis.

• BA focuses on developing new insights and understanding of business performance based on data and statistical methods.

What is Business Analytics?

• data, • information technology, • statistical analysis, • quantitative methods, and • mathematical or computer-based models to help managers gain improved insight about their business operations and make better, fact-based decisions.

• Business AnalyticsThe use of analytical methods, either manually or automatically, to derive relationships from data

• Remember that we defined business analytics (BA) to include the access, reporting, and analysis of data supported by software to drive business performance and decision making

The Business Analytics (BA) Field: An Overview

The Business Analytics (BA) Field: An Overview

Data Stores

• Data Warehouse – a large relational database that combines pertinent data in an aggregate, summarized form suitable for enterprise wide data analysis, reporting and management decision making.

• Data Mart – a subset of a data warehouse that is usualy designed for a specific set of users.

Chapter 12

Operational System

Data Warehouse

ReplaceChange

InsertDelete

DB

Legacy sources

Flat files

Data Sources

Analysis

Reporting

Data Mining

Data Warehouse Architecture

Data Mining

Data mining is the process of extracting patterns from data.

Generally is fed from a clean and relational Data source like a Data warehouse.

Uses various statistical analysis, techniques and algorithms.

Data analyzed in various ways like Trend Analysis, Forecasting, Predictive analytics.

Commonly used in a wide range of profiling practices, such as marketing, surveillance, fraud detection, scientific discovery, CRM, Churn Analysis etc.

Data Warehouse

Trends

Hidden Relationships

Dependencies

Data Mining Models and Tasks

Management of customer relationshipsFinancial and marketing activitiesSupply chain managementHuman resource planningPricing decisions

Business Analytics Applications

ANALYSIS INSIGHTS BUSINESS BENEFITS

Marketing & SalesMoment of Sales, Geographic distribution. Buying Patterns, Customer Segmentation , Most Preferred Products.

Take correct decisions regarding your promotion strategy, target market, Market placement , Inventory management etc.

FinancialActual to Estimated budget AnalysisCash flow trends over the yearsProfit centers and Cost Centre analysis.

Calculate your exact ROI . Keep close watch on your companies financial position and take corrective action.

Human ResourcesEvaluate trends in benefit program use .Performance Analysis.Determine Skill set levels and Training needs.

Assure Employee Delight and keep them motivated.Better trained employees mean better productivity.

Web

Analyze traffic on your web site Understand browsing PatternsMarket baskets analysis through shopping cartsCustomer Relationship Management

Keep you website on top of all the search engine.Increase your reach world wide in a systematic way.Retain you customers on such high churn business model.Expand or contract your product line for better selling opportunities.

What returns can I expect?

BA and the Web: Web Intelligence and Web Analytics • Clickstream analysis

The analysis of data that occur in the Web environment.

• Clickstream dataData that provide a trail of the user’s activities and show the user’s browsing patterns (e.g., which sites are visited, which pages, how long)

Retail Markdown OptimizationMost department stores clear seasonal inventory by

reducing prices.The question is: When to reduce the price and by how much?Descriptive analytics: examine historical data for similar

products (prices, units sold, advertising, …)Predictive analytics: predict sales based on pricePrescriptive analytics: find the best sets of pricing and

advertising to maximize sales revenue

Examples of Business Analytics

Future Trends in ERP System

Future trends in ERP systems-web enabled, Wireless technologies,

cloud computing.

Future Trends

• New Markets• New Channels• Faster Implementation Methodologies• Easier Customization Tools• Reduction in Implementation Time• Growth of Third-Party Service Providers• Acquisitions and Mergers

Chapter 58

Future Trends

• Growth of SaaS and Cloud ERP Market• Industry Specific Solutions• Mobile ERP Solutions• Growth of BA and BI solutions• Need-Based Applications• Reduce Expenditures• Open Source ERP• Enterprise Application Integration• Social Collaboration

Easier/Minimize Customization

• ERP systems are far more flexible and configurable than they've been in the past.

• Industry-specific ERP software for areas like banking, the public sector, and retail, also help minimize the need for customization

• Most vendors offer customization tool kits along with their products.

Reduction in Implementation Time

• Oracle Business Accelerators (OBA) cloud based rapid implementation tools developed and maintained by oracle to get the applications up and running on a wide range of Oracle Application, both quickly and reliably.

• The average ERP implementation for a mid-sized company is 14 months.

ERP Deployment Model

• On-premise ERP – Own the software and hardware

• Hosted Environment – Organizations procure all the requisite licenses and rent the premise and infrastructure services.

• ERP on private cloud• ERP on public cloud

Open Source ERP

• Open source is the freely available source code for the software that can be downloaded used, modified and redistributed by anyone.

• No license fees• An alternative ERP for SMB• Examples: Compiere, ERPNext, Openbravo,

OpenERP

ERP and New Technologies

• RFID – More ERP vendors are adopting RFID for inventory management, warehouse operations, tracking material movements.

• The Internet of Things - devices are available that can be attached to tools and even vehicles, feeding data back to applications hosted in the cloud.

• Internet - ERP now can be accessed from anywhere, anytime.

Mobile ERP Solutions

• All leading ERP vendors develop mobile applications for reporting and dash-boarding to systems so that the mobile employees can access the ERP system and data.

Enterprise Application Integration (EAI)

• EAI is an integration framework composed of a collection of technologies and services that form a middleware to enable integration of systems and applications across the enterprise.

• Most vendors are offering add-ons (like SCM, CRM,BI, BA etc) as a part of their ERP offerings.

EAI• EAI was an approach to integration of applications first developed in the

late 1990s.– Pre-dated widespread use of JEE, XML and Web Services.

• EAI currently has become subsumed into Service Oriented Architecture software stacks– However, the need for the underlying capabilities have not changed.

93

94/31

Middleware

• Allows communication– through a standard language– across different platforms– between legacy and moderm applications

• Takes care of– transactions between servers– data conversion– authentication– communications between computers

95

InterBankNetworks

ClearingHouse

CentralBank

InformationProvider

CardProcessor

BankNetwork

Consumer

Commercial

CorporateOtherBank

Mu

lti-

Ch

ann

el

CustomerRelationshipManagement

Pay

men

t S

yste

ms Accounts

DepositsLoansMortgagesPaymentsCustomer .... Call

Centre

SelfService

Branch

MobileSalesforce

Direct Banking

Internet

ExternalSystems

CoreSystems

InformationWarehouse

DeliverySystems

Customers

Internet

Diverse systems and channels

Example of a banking environment

96

Solution: Enterprise Application Integration (EAI)

• Devised ways to efficiently reuse legacy and existing apps and add new ones

• EAI products are built on combination of technologies– JEE– XML (eXtensible Markup Language) for enterprise-wide content and

data distribution using common DBs and Data Standards– Message queuing – Business Process Orchestration engine– Sometimes Web Services

97

Layers of an EAI Stack

EAI

Data Transformation

Business Activity Monitoring

Message Storage & Routing

Business ProcessOrchestration

AdapterAdapter

Provides real-time and historical data on performanceof processes and assists in making decisions.

Manages and tracks business transactions that mightspan multiple systems and last minutes to days.

Ensures the data is the correct format for delivery to The next system.

Provides “open” connectivity into data sources whileallowing filtering and transformations of data.

Ensures the reliability of data delivery across the Enterprise or between systems.

Cloud Computing

• Cloud computing refers to applications and services offered over the Internet.

• Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.

Chapter 26 p 309

Types of ERP Software

Characteristics of Cloud ERP

• An ERP system deployed over the cloud is more affordable than a traditional, on-premise package.

• SaaS ERP proposes a scalable infrastructure that can accommodate huge amounts of data.

• SaaS apps can be accessed at any time, from anywhere.

• Accelerated Implementation• ERP service providers making available SaaS

infrastructure offer a wide variety of customization capabilities to meet diverse industry-specific needs.

ERP Deployment Models

• On-premise ERP• Hosted Environment• ERP on private cloud• ERP on public cloud

ERP and E-business

SAP and the Internet

• In 1996, SAP introduced its joint Internet strategy with Microsoft. The core of SAP’s first effort to integrate the Internet with its products was the Internet Transaction Server (ITS) a server-based software system that enabled efficient communication between an SAP ERP system and the Internet.

SAP and the Internet

• In May 1999, SAP announced mySAP.com, a new strategy designed to completely realign the company and its product portfolio. The goal of this initiative was to combine e-commerce solutions with SAP’s existing ERP applications, using Web technology.

• In 2000, SAP began building on the mySAP.com vision by adding the capability for electronic marketplaces and corporate portals.

SAP and the Internet

• In 2004, SAP introduced its first version of SAP NetWeaver, a collection of components that support business transactions over the Internet by providing seamless connectivity of diverse applications.

• Planning its future initiatives around the concept of enterprise service-oriented architecture (enterprise SOA), with a goal of making all of its business applications service based—to provide its customers with the most flexibility possible.

SAP and the Internet

• E-commerce needs are driving companies to connect their business applications, such as ERP systems, both internally and externally through the Internet.

• Software designed with an SOA can be quickly deployed and reconfigured as business conditions require changes to the applications, databases, and other infrastructure hosted in data centers owned by a company.

Web Service / Service-oriented Architecture (SOA)

• Virtually all major vendors provide tools and entire platforms for building and integrating software applications using Web services.

Web Service

• Web services refer to a set of loosely coupled software components that exchange information with each other using universal Web communication standards and languages.

• The foundation technology for Web services is XML, which stands for Extensible Markup Language.

• Web browsers and computer programs, such as order processing or enterprise resource planning (ERP) software, can follow programmed rules for applying and displaying the data.

Service-oriented Architecture (SOA)

• A service oriented architecture (SOA) is set of self-contained services that communicate with each other to create a working software application.

• A loosely-coupled architecture designed to meet the business needs of the organization.

• SOA is an approach to designing, implementing and deploying information systems such that the system is created from components implementing discrete business functions.

Example SOA

• A purchase order process for an organisation can be broken to a set of services like creating purchase requisition, pricing, tax calculation, workflow for approval and creation of purchase order.

• A set of these services can be reused across many business processes like pricing is important for sales order process, service ordering, contract management etc.

• Xmethod (Web Service – share price)

Example

• Dollar Rent A Car’s systems use Web services for its online booking system with Southwest Airlines’ Web site. Although both companies’ systems are based on different technology platforms, a person booking a flight on Southwest.com can reserve a car from Dollar without leaving the airline’s Web site.

• Instead of struggling to get Dollar’s reservation system to share data with Southwest’s information systems, Dollar used Microsoft .NET Web services technology as an intermediary.

• Reservations from Southwest are translated into Web services protocols, which are then translated into formats that can be understood by Dollar’s computers.

Social ERP

• Social ERP tools can facilitate collaboration and communication among employees and partners using ERP system.

• Analysts are predicting that social media and social apps will become a more significant component of the ERP landscape

ERP Revenues

• Projected to bring in sales in the $50.3 billion dollar by 2015 (Forrester, 2013)

• In 2011, the SAP revenue from selling software licenses were 28% of the total revenue while the remaining 72% came from software support, subscription and other software related services, consulting and other services.

• Oracle – 43% from product support, 27% from software licenses

All the Best