UNIT I

Introduction - Overview of enterprise systems – Evolution - Risks and benefits - Fundamental

technology - Issues to be consider in planning design and implementation of cross functional
integrated ERP systems

Overview of enterprise systems

What is an enterprise?
An enterprise is a group of people with a common goal, which has certain resources at its disposal to
achieve this goal. The enterprise acts as a single entity.

In the traditional approach, the organization is divided into different units based on the functions
they perform. These departments are compartmentalized based on their own goals and objectives,
which, from their point of view, is in line with the organization’s objectives.

The silo nature of the functional organizational structure and the cross-functional nature of the
business processes are at odds with each other. While workers focus on their specific function, each
business process involves workers located in multiple functional areas. A major challenge facing the
enterprises is to coordinate the activities of the different functional areas so that the organizational
goals are achieved.

In the enterprise way, the entire organization is considered as a system and all the departments are
its sub-systems. Information about all the aspects of the organization is stored centrally and is
available to all departments as shown in Fig. 1.3.

This transparency and access to information ensures that the departments no longer work in
isolation pursuing their own independent goals. Each subsystem knows what others are doing, why
they are doing it, and what should be done to push the company toward the common goal.

A Brief History Of ERP

ERP stands for enterprise resource planning—the techniques and concepts for integrated
management of businesses with the objective of efficient and effective use of management
resources and to improve the efficiency of enterprise management.
The evolution of ERP can be dated back to 1960’s with the introduction of Inventory management
and Control for managing the Inventory optimally. MRP evolved from Inventory management and
control. In the manufacturing industry, MRP became the fundamental concept of production
management and control in the mid-1970s.

At this stage, BOM, which is purchase order management that utilizes parts list management and
parts development, was the mainstream. And this concept unfolded from order inventory
management of materials to plant and personnel and distribution planning, which in turn became
MRP-II.

This incorporated financial accounting, human resource management, distribution management, and
management accounting functions came to globally cover all areas of enterprise mainstay business
and eventually came to be called ERP.

Inventory management and Control is a combination of IT and business process for maintaining the
appropriate level of stock in a warehouse. The activities of IM include identifying inventory
requirements, setting targets, provide replenishment techniques and options, monitoring usages,
reconciling the inventory balances and reporting inventory status.

Material Requirements Planning (MRP)

An MRP is an evolved version of the BOM processing. Material requirements planning (MRP) is
a production planning, scheduling, and inventory control system used to manage manufacturing
process.
The manufacturing and production planning people were searching for better and more efficient
methods of ordering materials and components. MRP answers the following questions:

• What products are we going to make? - Master production schedule

• What are the materials needed to make the products? - Bill of Materials
• What are the materials that we have in stock? Inventory Records
• What are the items that need to be purchased? Calculates from above 3 data

Closed-loop MRP
MRP supporters realized that MRP had more capabilities than producing material re-ordering
schedules. The MRP systems-maintained schedule dates and could be used to trace and alert when
an item did not arrive on the due date. Soon, techniques for planning capacity requirements were
merged into MRP. Tools were developed to support the planning of sales and production levels,
development of production schedules, forecasting, sales planning, capacity planning, and order
processing.

Various plants, production, and supplier scheduling techniques for automating the processes both
internal and external to the organization were built into the MRP system. These developments
resulted in the creation of closed-loop MRP.

Closed-loop MRP is not merely planning for the material requirements but involves a series of
functions for automating the production process. It contains tools and techniques to address both
priority and capacity and supports both planning and execution. It has provisions for accepting
feedback from the execution functions back to the planning function thus enabling the plans to be
revised and updated depending on the actual execution or changes in priorities.

Manufacturing Resource Planning (MRP II)

The third stage in the evolution of ERP is called MRP II. It is the next logical step of closed-loop MRP
and contains the following additional capabilities—sales and operational planning, financial
interface, and simulation capabilities (for better decision-making).

MRP II is a methodology adopted for effective planning of all the resources of a manufacturing
company. It addresses operational planning in units, financial planning in rupees, and has a
simulation capability to answer “what if” questions.

MRP II comprises a variety of functions, all of them interlinked:

• planning for business, sales and operations

• production, material requirements, and
• capacity requirement;
• master scheduling;
• demand management;
• execution support systems for capacity and material.

Output from these systems is integrated with financial reports such as the business plan, purchase
commitment report, shipping budget, inventory projections.

Enterprise Resource Planning (ERP)

The final step in the evolution is the emergence of ERP. f
ERP is a direct outgrowth and extension of MRP and, as such, includes all of MRP II’s capabilities. ERP
is more powerful, in that it applies a single set of resource planning tools across the entire
enterprise, provides real-time integration of sales, operations, and financial data and connects
resource planning approaches to the extended supply chain of customers and suppliers.

The ERP system is also capable of integrating with other tools like customer relationship
management, supply chain management, and so on, thereby supporting businesses across company
boundaries.

ERP predicts and balances demand and supply. It is an enterprise-wide set of forecasting, planning,
and scheduling tools, which links customers and suppliers into a complete supply chain, employs
proven processes for decision-making and co-ordinates sales, marketing, operations, logistics,
purchasing, finance, product development, and human resources.

Its goals include high levels of customer service, productivity, cost reduction, and inventory turnover,
and it provides the foundation for effective supply chain management and e-commerce.

From a business perspective, ERP has expanded from co-ordination of manufacturing processes to
the integration of enterprise-wide backend processes. From technological aspect, ERP has evolved
from legacy implementation to more flexible tiered client–server architecture.

The Benefits Of ERP

Installing an ERP system has many advantages—both direct and indirect. The direct advantages
include improved efficiency, information integration for better decision-making, faster response time
to customer queries, etc. The indirect benefits include better corporate image, improved customer
good will, customer satisfaction, and so on. The following are some of the direct benefits of an ERP
system:

QUANTIFIABLE BENEFITS FROM AN ERP SYSTEM

1. Reduced Inventory and Inventory Carrying Costs

Customers can perform a more complete inventory planning and status checking with the
ERP system. These checks and plans will be able to reveal surpluses or shortages in supplies.
Improved planning and scheduling practices typically lead to inventory reductions to the
 order of 20% or better. This provides not only a one-time reduction in assets (cost of the
material stocked), but also provides ongoing savings of the inventory carrying costs.
2. Reduced Manpower Costs
Improved manufacturing practices lead to fewer shortages and interruptions and to less re-
work and overtime. Typical labor savings from a successful ERP system are a 10% reduction
in direct and indirect labor costs.
3. Reduced Material Costs
Improved procurement practices lead to better vendor negotiations for prices, typically
resulting in cost reductions of 5% or better.
4. Improved Sales and Customer Satisfaction
Improved coordination of sales and production leads to better customer service and
increased sales. The sales department will be able to know what items are being produced
and when they could be delivered. Together, these improvements in customer service can
lead to fewer loss in sales and actual increases in sales, typically 10% or more.
5. Improved Production Throughput
ERP system makes the information flow between departments efficient and seamless. The
ERP system improves the production throughput by eliminating delays, obstacles, shortages,
interruptions, and rework by giving the concerned departments adequate time for planning
and automating most of the operations.
6. Shorter Order to Shipment Cycle and On-time Shipment
Since the production planning department, production department, accounting department,
and warehouse come to know about a customer order as soon as it is placed, the order
fulfilment process can be started immediately. This means that if the items are available,
they can be shipped immediately and the invoice could be sent to the customer as per the
terms and conditions of the sale. If the items are not in stock, then production runs could be
scheduled to meet the demand.
7. Efficient Financial Management
Improved collection procedures can reduce the number of days of outstanding receivables,
thereby generating additional revenue. Improved credit management and receivables
practices typically reduce the days of outstanding receivables by 18% or better.

THE INTANGIBLE EFFECTS OF ERP

1. Business Integration
The first and most important advantage lies in the promotion of integration. The reason ERP
packages are called integrated is because of its automatic data updating capacity (automatic
data exchange among applications) between related business components. For this reason,
one is able to grasp business details in real-time, and carry out various types of management
decisions in a timely manner based on the data.
2. Error Reduction and Improved Data Accuracy
ERP systems store all the data in a centralized database. The data entry happens at different
points. At each of these data entry points, the data is validated and ensured that it is error
free. Technology integration has made it possible to use gadgets to avoid the manual data
entry as far as possible. By using technology and proper data validation, ERP systems reduce
manual data entry and increase accuracy and efficiency of manually entered data.
3. Improved Quality of Information and Better Decisions
ERP system and the business intelligence tools help in analyzing the data in hundreds of
different ways, the quality of information that can be generated from the data would be
highly accurate, timely, and relevant. They could do an in-depth analysis to find out the
 reason for some anomaly or to discover some trend. They could do what-if analyses,
simulations, and projections to discover opportunities. They could use data mining tools to
find hidden patterns and generate new product ideas or find new markets.
4. Improved Customer Service
The customer service department acts as a liaison between the customer and the
organization. A proactive customer service department should interact with the customer
throughout the order fulfilment process keeping the customer informed about the status of
the order.
5. Accounting
With a common database from ERP, accounting no longer requires duplicate files and
redundant data entry. As manufacturing transactions are recorded, the financial equivalents
are automatically generated for updating the general ledger and provides a complete audit
trail from account totals to source documents, ensures accurate and up-to-date financial
information, and permits tracking of actual versus budgeted expenses.
6. Product and Process Design
The product structure database offers engineering much greater control over product and
process design, especially in terms of engineering change control. Planned changes can be
phased in and emergency changes can be communicated immediately. ERP systems offer
numerous analytical tools for the engineering function. ERP systems support custom product
configurations.
7. Production and Materials Management
ERP systems help establish realistic schedules for production and communicate consistent
priorities so that everyone knows the most important job to work on at all times. Visibility of
future requirements helps production prepare for capacity problems and also helps suppliers
anticipate and meet needs.
8. Sales
Making valid delivery promises and meeting those promises can help to improve customer
service. Custom product quotations can be developed faster and more accurately, and
improves job estimating.
9. MIS Function
The software package can offer a growth path from simple to comprehensive applications
built on top of a database management system. It can reduce the development time and cost
for software, documentation, and training classes. It provides an upgrade path to technology
and functional enhancements supported by the software vendor.

Risks Of ERP
ERP implementations are famously resource-intensive, highly complex, time consuming, and
unpredictable in terms of cost.

The primary challenge that often leaves companies stuck when it comes to ERP is that most
companies cannot handle a project of such complexity as it requires huge amounts of resources.

Lack of budget and skilled personnel prevent many companies from focusing on the steps necessary
to ensure that the new ERP is configured and rolled out in order to meet the best business needs of
the company. Then there are people, technological, business process, implementation, and
operational issues that increase the risk of ERP implementations.
People Issues
People—employees, management, implementation team, consultants, and vendors—are the most
crucial factors that decide the success or failure of an ERP system.

Implementing an ERP system is a change and it is human nature to resist change. Users will be
sceptical about the new system. But for an ERP implementation to succeed, the co-operation of
everyone involved is an absolute necessity. If employees are not convinced about the importance
and the benefits of using an ERP system, there is a danger of non-cooperation, which can result in
the failure of the system.

The main people issues are given below

1. Change management
The ERP system will definitely change the way companies do business and the way people
work. The way in which the organization functions will change, the planning, forecasting, and
decision-making capabilities will improve, information will get integrated, many processes
will be automated, and so on. Managing these changes is a very difficult task and if not done
properly can result in failure
2. Resistance to change
People always have a lot of misconceptions about ERP—it will increase workload, it will
hinder creative work, it will make people jobless, and so on. However, if the ERP
implementation team, backed by the management, spends a little time and effort in
educating users about ERP and how it will help them and the company, then user resistance
can be reduced if not fully eliminated
3. Internal staff adequacy
ERP implementation requires a large number of people—within the organization and from
outside. The external people are consultants and representatives of the hardware and
package vendors. It is a good idea to involve more employees for the implementation as it
will help in reducing employee resistance.
4. Staffing and turnover
The compensation package and other benefits should be fixed attractively as there will be
heavy workload during the implementation phase and also during the initial phases of the
operation or transition. Employee turnover—qualified and trained employees leaving the
 company—during the implementation and transition phases can affect the schedules and
can result in delayed implementation and cost overrun.
5. Project Implementation team
People with initiative, dedication, and enthusiasm are most preferred. People who can work
in coordination with the team and good in communication are most preferred.
6. Consultants
Consultants are experts in the implementation of the ERP package. They might not be
familiar with the internal workings and organizational culture. To minimize this risk, the
consultants should be assigned a liaison officer—a senior manager—who can familiarize
them with the company and its working.
7. Training
The greater part of training takes place toward the end of the implementation cycle, when it
looks like the overall cost will exceed the budget, training is the first activity to be
compromised. Lack of proper training will limit people and organizations from taking full
advantage of the ERP systems resulting in failed or flawed implementation
8. Employee re-location and re-training
The development of new processes will result in the emergence of new job descriptions. The
implications relating to changes in job descriptions need to be handled in an agreeable and
friendly manner. Throughout, the benefits of what is being pursued should be promoted
along with the well-being of those affected. I
9. Top management support
The complex nature of ERP projects makes it necessary to have huge resources at the
disposal of the implementation team. This requires the support and permission of the top
management. Another area where top management support is critical is in handling
employee resistance.
10. Discipline
The employees should learn how to properly use the system and then should use it properly.
The managers and decision-makers should use the information integration and availability to
make better and informed decision. All this requires discipline and determination—discipline
to learn and determination to practice what is learned.

Process Risks
The ERP system will introduce hundreds of new business processes and will eliminate a lot of existing
processes—to improve, streamline, and make the business process more efficient, productive, and
effective. Managing the implementation of the business processes is a factor that will decide the
success of the ERP implementation. The main areas of concern are given below:

1. Program management
The details of business processes and requirements are different for each industry, but all
require up-to-date information about the program or product. This translates into the
common requirements of information integrity and availability at the right time and in a right
manner. While some of this information is the domain of ERP systems, the rest is program
management information that has no place in ERP, but is essential for program execution.
2. Business process reengineering
BPR will impact every aspect of how the organization runs its business. Change on this scale
can cause results ranging from enviable success to complete breakdown and failure
3. Stage transition
 Stage transition or “who is responsible after we go live?”, is a question that needs to be
addressed very carefully and implemented very judiciously and diplomatically.
4. Benefit realization
Implementation can be a success, but if the operational phase is not planned and organized
properly with the support of all the people involved, then the promised benefits will not
materialize. Here, the most important factors are employee participation, training and re-
training, management support, and making full use of the capabilities of the system

Technological Risks
ERP vendors are bringing out products and features to keep pace with these technological
advancements to remain competitive. The organizations that have implemented ERP systems should
keep abreast of the latest technological developments and implement what is required to survive
and thrive.

The technological issues are:

1. Software functionality
Installing an ERP system that has hundreds of features that nobody is going to use is a waste
of time, effort, and money. Therefore, the management, in consultation with ERP experts
and vendors, should decide on what features are required by the company and then install
only those specific functionalities.
2. Technological obsolescence
The organization should select the packages, vendors, and technology that has the best
chance of returning the investment or ones that will not become obsolete in the near future.
Here the choice or technology, architecture of the product, ease of enhancements, ease of
upgrading, quality of vendor support, etc., are critical.
3. Application portfolio management
The application portfolio management processes focus on the selection of new business
applications and the projects required to deliver them. They also extend the boundaries of
the IT governance process to include the final products of IT—the deployed applications. By
bringing to light the sheer number of applications in the current portfolio, IT organizations
can begin to reduce duplication and complexity
4. Enhancement and upgrades
All patches and upgrades should be installed to ensure that the tools are working at their
maximum efficiency. Also, any enhancement requests like adding new features, new
modules, etc., should be done periodically. Care must be taken while selecting the vendor
and upgrade/support contracts should be signed to minimize the risks.

ERP Implementation Issues

ERP implementations are plagued with tales of lost millions and withdrawals after the
implementation. The major implementation issues are:

1. Project size
ERP implementation involves hundreds of people, encompasses the entire organization,
affects all the employees, and lasts years. Managing a project of such magnitude handling
the uncertainties and coordinating the activities of so many people is a very tough task and
involves considerable amount of risk.
2. Lengthy implementation time
 A typical ERP implementation takes anywhere between 1 and 4 years depending upon the
size of the organization and the methodology. Keeping the momentum high and enthusiasm
alive during such a long period is a very difficult task. Employee turnover is another problem
that increases the risk of the implementation
3. Unreasonable deadlines
Management can sometimes insist on unreasonable deadlines for the ERP implementation
project. the project management team should only accept reasonable deadlines and
achievable targets. Agreeing to something that is impossible and then taking shortcuts to
achieve those unattainable goals is a surefire recipe for disaster
4. High initial investment
ERP implementation involves huge initial investment and only after successful completion
and operation of the system, the costs are recovered. However, if the implementation fails or
falls short of expectations, the company will incur huge losses and can go bankrupt
5. Insufficient funding
There are a lot of hidden costs in an ERP implementation. If the budget is allocated without
proper homework and without consulting experts, then the implementation will have to be
stopped along the way, due to lack of funds.
6. Interface
Many interfaces to other systems still exist after ERP implementations. Interfacing with
legacy data may involve connections to all mainframes, UNIX, Windows NT, and other
systems. Other client/server systems must also exchange data with the ERP system. The ERP
software may interface with external business partners via electronic data interchange (EDI)
or electronic funds transfer (EFT) protocols. With e-commerce on the rise, ERP systems must
also be able to send and receive data over the web. Failing to create the necessary interfaces
could provide fatal for the ERP system.
7. Scope creep
The scope of an ERP project has several components. The ERP project team must decide
which business processes will be included in the implementation. This choice of the business
processes decides the ERP functional modules that are to be implemented. If an organization
has more than one business unit or line, the team must decide which divisions to include in
each phase of the rollout.
8. Unexpected gaps
No software, no matter how big and sophisticated fits every organization perfectly. These
gaps may be small, or extremely large and problematic. Start creating a gap document early,
because the gap analysis document is very useful for stakeholder management. The review
of gaps and design of the adapted implementation program should detail the change scope,
cost and benefit, as well as the adapted project plan.
9. Configuration difficulties
Whether to use the processes that come with the package (the best business practices) or to
customize the ERP package to suit the needs of the organization is a decision that should be
taken with a lot of thought, care, and consultation with experts—both in-house and external.
Also, many ERP systems are not fully customizable. There are many areas that cannot be
customized or are very difficult to customize. These aspects add to the risk of the ERP
implementation.
10. Organizational politics
Every organization has some number of internal politics. If the external consultants, vendor
representatives, and the implementation team members are caught between these internal
fights, it can affect the successful implementation of the project.
Mitigation of Risks
The variables that are most likely to reduce the business risk of your migration include the following.

1. Phased instead ‘big bang’ approach to migration—Cutting over your systems all at once
generally increases your risk, particularly on large projects across multiple
locations/countries.
2. Get management support—Get top management support for ERP implementation by
justifying the cost of the implementation by showing the benefits and ROI and establishing
strong project leadership.
3. Change management—Manage change through leadership and effective communications.
4. Sufficient training—The better the training you provide users, the fewer problems you will
face. Identify and implement strategies for re-skilling the existing IT workforce and acquire
external expertise through vendors and consultants when needed.
5. Use experts—Use consultants and business analysts who have both business and technology
knowledge.
6. Reengineer the organization—Reengineer business processes to ‘fit’ the package rather
than trying to modify the software to ‘fit’ the organization’s current business processes.
7. Legacy system planning—What are you going to do with your systems after go-live? Will you
run them parallel for a short period until you know the new ERP system is functional? If so,
have you budgeted for these costs in your ROI? Failure to answer these questions before go-
live will create significant problems at cutover.
8. Thorough testing—Unit and integration testing is very important; you significantly reduce
your implementation risk if you have thoroughly tested the solution with real data and real
user profiles before go-live.
9. Provide plenty of IT support—Expect more support center call volume and staff accordingly
during go-live. You will also want to make sure you have clearly defined escalation policies in
place for ERP issues that your support staff is not able to handle.
10. Develop a contingency plan—What will you do if your system does go down? Do you have
manual processes you can revert to if needed? By expecting the worst-case scenario, even
though it is unlikely, you will reduce the risk of a massive business failure.

Addressing the above issues will help minimize the level of risk your business is exposed to. It is
important to ensure that your project plan, budget, and staffing consider these items. You mitigate
risks by reducing either the probability or the impact. The probability can be reduced by action up
front to ensure that a particular risk is reduced. ERP and Related technology

The technologies that when integrated with the ERP system, will enable the companies to do
business at high speed. Some of these technologies are data warehousing and data marts, data
mining, on-line analytical processing (OLAP), supply chain management (SCM), customer relationship
management (CRM), geographical information systems (GIS), intranets and extranets, electronic data
interchange (EDI), digital cash, cryptography, etc
BUSINESS PROCESS REENGINEERING (BPR)

Dr. Michael Hammer defines BPR as “the fundamental rethinking and radical redesign of business
processes to achieve dramatic improvements in critical, contemporary measures of performance
such as cost, quality, service and speed

ERP systems help in integrating the various business processes of the organization with the help of
the latest developments in IT. With a good ERP package, the organization will have the capability of
achieving dramatic improvements in critical areas such as cost, quality, speed, and so on. Thus, many
BPR initiatives end up in the ERP implementation.

BUSINESS INTELLIGENCE (BI)

Business intelligence (BI) represents the tools and systems that play a key role in the strategic
planning process of the corporation. These systems allow a company to gather, store, access, and
analyse corporate data to aid in decision-making. These systems will display business intelligence in
the areas of customer profiling, customer support, market research, market segmentation, product
profitability, statistical analysis, and inventory and distribution analysis.

BUSINESS ANALYTICS (BA)

Business analytics (BA) is the practice of iterative, methodical exploration of an organization’s data
with emphasis on statistical analysis. Business analytics is used by companies committed to data-
driven decision-making. BA is used to gain insights that inform business decisions and can be used to
automate and optimize business processes. Data-driven companies treat their data as a corporate
asset and leverage it for competitive advantage. Examples of BA uses include:

• Exploring data to find new patterns and relationships

• Explaining why a certain result occurred
• Experimenting on previous decisions
• Forecasting future results

Data Warehousing
As time passes, the amount of data will increase and this will affect the performance of the ERP
system. Thus, it is better to archive the operational data once its use is over. The primary concept of
data warehousing is that the data stored for business analysis can most effectively be accessed, by
separating it from the data in the operational systems. High performance and quick response time is
almost universally critical for operational systems. In addition to producing standard reports, today’s
data warehousing systems support very sophisticated on-line analysis including multi-dimensional
analysis.

On-Line Analytical Processing (OLAP)

OLAP describes a class of technologies that are designed for live ad hoc data access and analysis.
While transaction processing (OLTP) generally relies solely on relational databases, OLAP has become
synonymous with multi-dimensional views of business data. OLAP technology is being used in an
increasingly wide range of applications. The most common are sales and marketing analysis, financial
reporting and consolidation, and budgeting and planning. Increasingly, OLAP is being used for
applications such as product profitability and pricing analysis, activity-based costing, manpower
planning, quality analysis, in fact for any management system that requires a flexible, top down view
of an organization.

Data Mining
Data mining is the process of identifying valid, novel, potentially useful, and ultimately
comprehensible knowledge from databases that is used to make crucial business decision. The
amount of data accumulated every day by various businesses, scientific, and governmental
organizations around the world is daunting. It becomes impossible for human analysts to cope with
such overwhelming amounts of data While data mining does not eliminate human participation in
solving the task completely, it significantly simplifies the job and allows an analyst who is not a
professional in statistics and programming to manage the process of extracting knowledge from data

Product Life Cycle Management (PLM)

Product life cycle management gives companies the power to plan, manage, and schedule Product
Life Cycle s by accelerating the introduction of new products, and optimizing life cycle phases of all
product. With PLM, organizations can optimize design resources, create product demand forecasts
based on the history of similar products, allocate production capacity across new and existing
products, and analyse inventory, capacity, and profit margins to determine the optimal end-of-life
timeframes.

Supply Chain Management (SCM)

A supply chain is a network of facilities and distribution options that performs the functions of
procurement of materials, transformation of these materials into intermediate and finished
products, and the distribution of these finished products to customers. Traditionally marketing,
distribution, planning, manufacturing, and the purchasing organizations along the supply chain
operated independently. There is a need for a mechanism through which these different functions
can be integrated together. Supply chain management is a strategy through which such integration
can be achieved

Customer Relationship Management (CRM)

Customer relationship management is a corporate level strategy, focusing on creating and
maintaining relationships with customers. CRM systems are integrated end-to-end across marketing,
sales and customer service. A CRM system should identify factors important to clients, promote a
customer-oriented philosophy, adopt customer-based measures, develop end-to-end processes to
serve customers, provide successful customer support, handle customer complaints, track all aspects
of sales, create a holistic view of customers’ sales and services information, and so on.

Geographic Information Systems (GIS)

The main functions of an organization like procurement, distribution, logistics management, etc., all
have a critical geographic dimension. Whether it is finding the shortest route to deliver the goods or
to compare the transportation cost involved in procurement most problems also have a geographical
component. GIS helps in creating maps, integrate information, visualize scenarios, solve complicated
problems, present powerful ideas, and develop effective solutions like never before.

Intranets And Extranets

First, intranets, extranets, and e-commerce have in common the use of Internet protocols to connect
business users. Second, intranets are more localized and can therefore move data faster than many
distributed extranets. Bandwidth limitations also apply to e-commerce. Third, the amount of control
that network managers can exert over users is different for the three technologies.

The company could then write intranet workflow applications that leverage the uniform computing
environment, over which it exercises strong control. On a business-to-business extranet, system
architects at each of the participating companies must collaborate to ensure a common interface and
consistent semantics (data meanings). e-commerce applications often support a level of security and
transactional integrity (for instance, non-repudiation of orders) not present in intranet or extranet
applications.