Modern ERP

Marianne Bradford, Ph.D.

Professor

Poole College of

Management North Carolina

State University

Raleigh,

NC Copyright

2015

CDC CISA CISM CGEIT CRISC

Consona Epicor Exact Expandable Fujitsu IBM

Infor ISACA

LoadRunner

MicroStrategy NetSuite Oracle QuickScore SAP SE

SAP Business All-in-One Salesforce

SAS

SugarCRM SYSPRO

Tableau

vi

Credits

Figure 12-2. Copyright © 2012. SAS Institute Inc. All rights reserved. Reproduced with

permission of SAS Institute Inc., Cary, NC, USA.

Figure 12-3. Copyright © 2007. SAS Institute Inc. All rights reserved. Reproduced with

permission of SAS Institute Inc., Cary, NC, USA.

Figure 12-4. Copyright © 2014. SAS Institute Inc. All rights reserved. Reproduced with

permission of SAS Institute Inc., Cary, NC, USA.

This publication contains references to the products of SAP SE. SAP and SAP All-in-One

mentioned herein are trademarks of SAP SE in Germany and other countries. SAP SE is

neither the author nor the publisher of this publication and is not responsible for its content.

SAP Group shall not be liable for errors or omissions with respect to the materials. The

only warranties for SAP Group products and services are those that are set forth in the

express warranty statements accompanying such products and services, if any. Nothing

herein should be construed as constituting an additional warranty.

Clip art used with permission from

Microsoft. Copyright 2015

Dr. Marianne Bradford

ISBN: 978-1-312-66598-9

In memory of my brother Hudson

who never got to write his own

book You were so money

Contents

Preface xv

Acknowledgements xvi

About the Author xvii

Chapter 1: Introduction to Enterprise Resource Planning Systems 1

Objectives 1

Introduction 1

ERP Essentials 2

Who Needs Knowledge of ERP Systems? 4

When Does a Company Need an ERP System? 5

Advantages of ERP Systems 6

Disadvantages of ERP Systems 7

ERP Evolution and Trends 9

ERP Market 11

Summary 12

Keywords 13

Quick Review 13

Questions to Consider 14

Chapter 2: ERP Technology 17

Objectives 17

Introduction 17

Evolution of ERP Architecture 18

Relational Database Management Systems 21

Database Normalization 27

Structured Query Language (SQL) 29

ERP Data 30

Configuration 31

Customization 32

Best of Breed 32

System Landscape 33

Cloud Computing 34

Mobility 36

Summary 37

Keywords 38

Quick Review 39

Questions to Consider 39

Chapter 3: ERP and Business Process Redesign 43

Objectives 43

Introduction 43

Business Processes 44

Common Problems with Business Processes 45

Business Process Reengineering 47

Factors for Reengineering Success 50

Business Process Improvement 52

Business Process Improvement Model 53

Processes in Need of Change 55

Stakeholders for Business Process Transformation 58

Summary 59

Keywords 60

Quick Review 60

Questions to Consider 61

Chapter 4: ERP and Process Mapping 63

Objectives 63

Introduction 63

Systems Diagrams 64

The Process Map 64

Benefits of Process Mapping 66

Gathering Information for the Process Map 67

Process Mapping Roles 67

Steps for Drawing Process Maps 68

Process Map Example – Electric City 69

Extensions to the Electric City Process Map 70

Advanced Process Map Example – Fit Gear 72

Summary 75

Keywords 76

Quick Review 76

Questions to Consider 77

Chapter 5: ERP Life Cycle: Planning and Package Selection 79

Objectives 79

Introduction 79

ERP Life Cycle – Planning 80

ERP Life Cycle – Package Selection 89

Summary 99

Keywords 99

Quick Review 100

Questions to Consider 100

Chapter 6: ERP Life Cycle: Implementation and Operation and

Maintenance... 103

Objectives 103

Introduction 103

ERP Life Cycle – Implementation 104

ERP Life Cycle – Operation and Maintenance 122

Summary 125

Keywords 126

Quick Review 127

Questions to Consider 127

Chapter 7: ERP Financial Management 131

Objectives 131

Introduction 131

Financial Accounting 132

Management Accounting 137

Asset Management 142

Travel and Expense Management 144

Summary 145

Keywords 145

Quick Review 146

Questions to Consider 146

Chapter 8: ERP Sales, Customer Relationship Management, and

Knowledge Management 149

Objectives 149

Introduction 149

Sales Process 150

Point of Sale (POS) Systems 153

Customer Relationship Management 154

CRM vs. ERP 156

CRM Functionality 157

CRM Interaction Channels 159

Social CRM 160

Elements for CRM Success 161

CRM Metrics 162

CRM Analytics 162

Knowledge Management 164

CRM and Knowledge Management 164

Implementing a Knowledge Management System 165

Knowledge Management Metrics 167

Summary 167

Keywords 168

Quick Review 169

Questions to Consider 169

Chapter 9: ERP Supply Chain Management 173

Objectives 173

Introduction 173

What Is Supply Chain Management? 174

Purchasing and Sourcing 175

Supplier Relationship Management 178

Warehouse Management System 180

Transportation Management System 181

Manufacturing 182

Quality Assurance 186

Plant Maintenance 188

Environment, Health, and Safety 189

Supply Chain Technology 190

Summary 193

Keywords 194

Quick Review 195

Questions to Consider 196

Chapter 10: ERP Human Capital Management 199

Objectives 199

Introduction 199

Human Capital Management 200

Employee Self-Service 207

Outsourcing Human Capital Management Functions 208

Summary 210

Keywords 211

Quick Review 211

Questions to Consider 212

Chapter 11: ERP Security and Implementation Assurance 215

Objectives 215

Introduction 215

Internal Control 216

ERP and Internal Controls 218

IT Application Controls 219

IT General Controls 222

Logical Access Controls 225

System Implementation Assurance 227

ISACA Certifications for IT Professionals 230

Summary 233

Keywords 233

Quick Review 234