Reading 2: Introduction to Enterprise Systems

what is historical data?

Typically comprise of transaction data for processes that have been completed within months or years.

Information systems can be divided into three broad categories. What are they?

1. Logistics information system (LIS): Include purchasing IS, sales IS, inventory control IS (IWM processes), quality management IS, plant maintenance IS, and shop floor IS (production processes) 2. Financial information systems (FIS): Supports reporting related to the general ledger (e.g., balance sheet, income statement, statement of cash flows), accounts receivable, and accounts payable 3. Human resources information systems (HRIS): Used to retrieve information about different HR components such as personnel, positions, and jobs.

Typical ERP systems support

1. Operations (Production) 2. Human resources 3. Finance and Accounting 4. Sales and Distribution 5. Procurement

There are three types of data in an ERP system. What are they?

1. Organizational data 2. Master data 3. Transaction data

The four most common material types are

1. Raw materials (ROH): Purchased from external sources, a vendor, and used in the production process. The material master will contain data related to procurement and production but not fulfillment 2. Semifinished goods (HALB): Typically produced in-house from other materials and are used In the production of a finished good. 3. Finished goods (FERT): They are created by the production process from other materials such as raw materials and semifinished foods. 4. Trading goods (HAWA): Like raw materials are purchased from a vendor. Unlike raw materials, however, trading goods are resold to customers. The material master for trading goods will include data related to purchasing and selling but not production.

What are the two reporting options offered by SAP?

1. Simple lists of data and documents 2. Analytics

The two types of information structures under OLAP are

1. Standard: Predefined in the SAP ERP system, and they collect the data needed to generate the most commonly used reports 2. User-defined: SAP enables users to define their own structures, to meet specific reporting requirements.

Lists fall into two categories. What are they?

1. Work lists 2. Online lists

The collection of these inter-company systems and the underlying intra-company ERP system is called a/an

Application suite

Each information structure in the OLAP environment is defined in terms of three structures. What are they?

1. Characteristics: The objects for which data are collected. Typically organizational data such as plant and sales organization and master data such as materials, vendors, and customers. An information structure can include up to 9 characteristics 2. Key figures: Performance measures, such as quantities, and counts that are associated with characteristics. Examples are the number of orders, quantities ordered, order value, invoice amounts. Qualitative in nature because the selection of key figures is subjective 3. Period definition: represents a quantitative aggregation of data

What are the common ES architectures?

1. Client-Server Architecture 2. Service-Oriented Architecture

The three organizational data elements discussed in this chapter are

1. Client/Enterprise 2. Company 3. Plant

Information structure enables us to conduct two analyses. What are they?

1. Standard: Provides predefined analytics for data in standard information structures 2. Flexible: Allows users to define the content and format of the analysis. It enables users to combine available characteristics and key figures as needed and to create new key figures using user-specified formulas. I also provides users with several layout options

What is business intelligence?

A general term that refers to the overall capabilities a company uses to collect and analyze data from a variety of sources to better understand its operations and make better managerial decisions

What is reporting?

A general term used to describe the ways that users can view and analyze both transaction and historical data to help them make decisions and complete their tasks

What is the transactional environment of SAP ERP?

An online transaction processing (OLTP) system, which, as the name suggests, is designed to capture and store detailed transaction data. The primary function of OLTP is to execute process steps quickly and efficiently. Not used to generate sophisticated reports because it lacks the computing power to parse through and analyze the vast stores of data that most companies accumulate

What is a plant?

An organizational element that performs multiple functions and is relevant to several processes It is essentially a facility in which the following functions are performed: 1. Products and services are created 2. Materials are stored and used for distribution 3. Production planning is carried out 4. Service or maintenance is performed

What are transaction documents?

Documents that are created or utilized as a process is being executed Examples: Purchase orders, packing lists, and invoices

What is the world's largest and most complex ES

Enterprise resource planning systems (ERP)

To summarize, the OLTP component of the SAP ERP offers reporting in the form of work lists and online lists that are based on detailed transaction data

In contrast, the OLAP component offers reporting via information systems, based on aggregated data in information structures

What is material master

It contains all data required to define and manage material. it integrates data from different dept (engineering, manufacturing, etc.) The material master record is the central source for material-specific data.

What is an online list?

It displays lists of master data, such as materials, vendors, and purchasing info records, and documents, such as transaction documents, FI, CO, and material documents, that are generated during the execution of a process.

What is the architecture of an enterprise system?

It refers to the technical structure of the software, the ways that the users interact with the software, and the ways the software is physically managed on computer hardware

What is transaction data?

It reflects the consequences of executing process steps, or transactions. Examples of transaction data are dates, quantities, prices, and payment and delivery terms. They are a combination of organizational data, master data, and situational data

Aside from master data, the ________ is another factor that influences the type of data or view needed

Material type Determines which business processes are permitted to use the material

What is an ES application platform?

Much like the role of the operating system for your personal computer, application platforms serve as a type of "enterprise operating system" for a company's ES landscape by allowing all of the various systems to communicate seamlessly with one another as well as with systems outside the company

For detailed data analysis, SAP ERP includes an ___________ in the form of information systems

Online analytic processing (OLAP) These systems use information structures to provide analytic capabilities

A final factor that determines the type of data included in the material master is

Organizational Level: Materials can be defined differently for different organizational levels. For examples, the same material can be used in multiple plants, but the ways it is used can vary from one plant to another.

What is Scalability?

Refers to the ability of the hardware and software to support a greater number of users easily over time, typically at a decreased cost per user

What are material groups?

Related to material type, which includes materials with similar characteristics. Example: All of the materials used in the production of bicycles, such as tires, tubes, which are raw materials, can be included in one material group called production

What is a client/enterprise?

Represents an enterprise consisting of many companies or subsidiaries. Each company within the enterprise is represented by a company code

What is master data?

Represents entities associated with various processes For example, processes involve buying materials from vendors and selling materials to customers. In this example, customers, vendors, and materials are represented in an ERP system using master data

SAP's application platform is called

SAP NetWeaver

Examples of inter-company systems are

Supply chain management (SCM) and Supplier relationship management (SRM) systems, which connect a company's ERP to those of its supplier SCM connects a company to other companies that supply the materials it needs to make its products. Typical SCM systems help companies plan for their production requirements and optimize complex transportation and logistics for materials. SRM systems typically manage the overall relationships with the materials suppliers. SRM systems contain functionality to manage the quotation and contracts processes.

What is an organizational data?

They are used to represent the structure of an enterprise. Examples of organizational structure are companies, subsidiaries, factories, warehouses, storage areas, and sales region

What are work lists?

They identify tasks that are scheduled to be completed in a process In the fulfillment process, for example, once customer orders are recorded in the system by the salesperson, warehouse personnel can retrieve a list of orders that are ready for picking

What is client-server architecture?

Think of a desktop application that you routinely use, such as word processing, spreadsheet, or presentation software. These applications consist of three components, or layers: (1) Presentation layer: how you interact with the application (using menus, typing, and selecting); (2) Application layer: what the application allows you to do (create formulas or charts, compose a document); and (3) Data layer: where the application stores your work (on your hard drive or flash drive).

What is Service-oriented architecture or SOA?

a business-driven enterprise architecture that supports integrating a business as linked, repeatable activities, tasks, or services In the early 2000s, companies began to Web-enable their three-tier applications so that users could access the systems through a Web browser. During these years companies also benefited from new technologies that could help link, or integrate, many different client-server systems together in new and valuable ways. The fundamental concept behind SOA relates to the technical capabilities that allow systems to connect with one another through standardized interfaces called Web services

The shift to the three-tier client-server architecture in the early 1990's dramatically reduced the ________of acquiring, implementing and using an ES while significantly increasing the _______ of the systems.

cost, Scalability

The most commonly used master data in an organization is the

material master

Data in an ERP are used to represent the ________ system in which the process steps such as creating a purchase order and receiving goods are carried out

physical