Chapter 4 – Enterprise Resource Planning
Six Best Practices of Innovation.
Finding your Relevant Edge:
- Finding a competitive advantage. It is related to innovation because
innovation by definition is introducing something new (product, equipment).
- How could I differentiate myself by innovating? Going in a direction that I’m
not going into, and finding a new market.
Assemble Innovation Hothouses:
- Employees who are really motivated, or people who have specific skills and
are not afraid to take risks in the organization.
- Assemble people who are up for taking risks, and going into new areas who
would be afraid to go into those areas.
Reward Risk Takers:
- Reward the people who took risks and thought outside the box.
- Celebrate ideas, different cultures.
- You have to make sure you have a balance of cultures within the
- Look around for new opportunities.
- Look for new disciplines in new areas, and at your competitors to see what
kind of innovations they are coming up with.
- You look outside the industry and look outside in terms of groups and
- You want to make use of the expertise and innovation to adapt it to the
Mix Practitioners and Developers:
- The most significant risks you face when you embark on IT projects are:
o The translation of the users need versus what the programmers are
o Technology is high in terms of being risky.
Overview of Enterprise Applications:
- There are different functional areas in an organization, and different levels of
- You could go about implementing enterprise systems that span throughout
functional systems and organization.
Enterprise Resource Planning (ERP): • Enterprise resource planning – integrates all departments and functions
throughout an organization into a single IT system (or integrated set of
software modules and a single database) so that employees can make
enterprise-wide decisions by viewing enterprise-wide information on all
- Thousands of predefined business processes that are mapped by vendors
based on process knowledge and best practices
- Different software modules put together that use a single database.
- You look at different organizations, successful, unsuccessful, efficient,
inefficient, and you see what is out there, and base your system on the
What are the reasons why ERP solutions are important for organizations?
- Organizations still opt for these solutions despite the risks and challenges
they face because it allows departments to communicate, and improves
- ERP is a logical solution to the mess of incompatible applications that had
sprung up in most businesses
- ERP addresses the need for global information sharing and reporting.
- ERP is used to avoid the pain and expense of fixing legacy systems.
ERP Integration Data Flow
• At the heart of all ERP systems is a database
• When a user enters or updates information in one module, it is immediately
and automatically updated throughout the entire system.
• You can have many modules/applications (HR, Purchasing, Finance,
Marketing) in an Enterprise Resource Planning System