Sept. 7th, 2006 Business Process

This week’s class focused on a term called BP. Business process is a task of activities that takes input and generates a meaningful output, which has either a business or real value. The key to a successful business process is data sharing. The process of evaluating one’s own process against others in the same sector, is known as Benchmarking.
Processes like Inbound logistics, Operations, Outbound logistics, marketing and sales add real value to the business. Real value is the value earned directly from a customer and which shows profit.
Processes like HR management, Technology development, and procurement earn Business value to the organization. Business value is the value earned to keep the business rolling. Its earned from various sources as well as the consumer, but its earned indirectly. Business processes are different from Business Functions, which state “what” needs to be done rather than “how” it should be done. Key difference is that a business process is a Horizontal chain of command, where as a Business function has a Vertical chain of command. Functions are task centered where as processes are customer centered.

Aug. 31, 2006 ERP basics

Hi all !
Our first class (Aug. 31, 2006) covered the basics of ERP.
The underlying factor behind ERP is the Integration of various independent processes/systems within an organization. For e.g Independent process like Manufacturing, Supply chain, CRM, Human Resources can be run as modules in an ERP. It helps the information flow across various departments in a organization. The combination of indenpendent systems, provides a single database thereby eliminating problems like data redundancy and time lag between information interchange. It also provides a single and standard interface to various departments which is easy to maintain (low cost). Other benifits of implementing ERP would include improved communication, high products quality and cutomer satifaction.
With so many advantages and benifits to the organization, ERP comes with its own set of disadvantages. Major issues with ERP are high cost of implementation, time to implement, computer security, and complexity of the new system.
An interesting and equally surprising fact about ERP system is that "consulting" sums to approximately 30% of the total cost of the system, where as the software costs only 15%. Hardware, implementation and training account to 55%. (source: Introduction to ERP by Dr. Vijay)
ERP can be implemented by taking different modules from different vendors. This is sometimes the best way to develop an ERP system but might come for a price.