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Concepts in Enterprise Resource Planning Fourth EditionChapter EightRFID, Business Intelligence (BI), Mobile Computing, and the Cloud

Concepts in Enterprise Resource Planning, Fourth Edition

Concepts in Enterprise Resource Planning, Fourth Edition*Concepts in Enterprise Resource Planning, Fourth Edition*ObjectivesAfter completing this chapter, you will be able to:Define RFID and its role in logistics and salesDefine business intelligence (BI), and provide examples of its usesExplain how in-memory computing will change the use of BIDiscuss the importance of mobile applications to businessesDescribe cloud computing and why it is becoming important for ERP providers


Concepts in Enterprise Resource Planning, Fourth Edition*Concepts in Enterprise Resource Planning, Fourth Edition*Objectives (contd.)Explain how the service-oriented architecture (SOA) concept has changed ERP developmentDescribe Web services, and outline the unique components of NetWeaverDefine software as a service (SaaS), and identify the advantages and disadvantages of using this software delivery model


Concepts in Enterprise Resource Planning, Fourth Edition*IntroductionAn Enterprise Resource Planning (ERP) system allows a company to accomplish tasks that cannot be done well, if at all, without such a systemTraditionally:ERP systems have been software applications that are run on a companys own computer systemsFocus of ERP has been on managing business transactions


Concepts in Enterprise Resource Planning, Fourth Edition*Introduction (contd.)Technologies, such as radio frequency identification (RFID), are increasing the amount of data that is contained in ERP systemsBusiness intelligence technologies are turning data in ERP systems into valuable informationCloud computing and mobile technologies are changing where ERP data is stored and how it is delivered


Radio Frequency Identification (RFID) TechnologyRadio frequency identification technologyKnown commonly as RFIDBecoming an increasingly efficient tool for tracking items through a supply chainRFID deviceCan be attached to productsA small package (or tag) made up of a microprocessor and an antennaConcepts in Enterprise Resource Planning, Fourth Edition*


Radio Frequency Identification (RFID) Technology (contd.)RFID readerCan determine location of an item with an RFID tagEmits radio waves and receives signals back from the tagSometimes called an interrogatorAdvantages of RFID technology:Does not need a line-of-sight connectionCan withstand most environmental stressesConcepts in Enterprise Resource Planning, Fourth Edition*


Radio Frequency Identification (RFID) Technology (contd.)Walmart is on the leading edge of the move to integrate RFID technology into the supply chainPharmaceutical firms are evaluating the use of RFID technologyRFID technology is being employed to track medical devicesSpectrum Healths Meijer Heart Center is using RFID technology to track stentsConcepts in Enterprise Resource Planning, Fourth Edition*


Business Intelligence/Business AnalyticsBusiness intelligence (BI)Also referred to as business analyticsA range of different applications and technologies used to extract and analyze large amounts of data to aid in decision makingIncludes data-mining tools and querying toolsOften interactive and visualThere has been significant growth in the BI market in recent yearsConcepts in Enterprise Resource Planning, Fourth Edition*


Concepts in Enterprise Resource Planning, Fourth Edition*Figure 8-1 SAP Business Intelligence (BI) framework


Business Intelligence/Business Analytics (contd.)Analytic applications and business intelligenceSimilar sets of data analysis toolsAnalytic applicationsData analysis tools applied to specific industriesEnterprise performance managementConcept of developing strategic goals for the organizationGathering data to evaluate how the organization is performing in relation to those goalsConcepts in Enterprise Resource Planning, Fourth Edition*


Business Intelligence/Business Analytics (contd.)Governance, risk, and compliance categoryA group of activities focused on ensuring an organization is functioning ethically and legallyData warehousingTechnology used to store the large volumes of data used in the analysisEnterprise information managementDescribes the business and technology functions that manage information as a corporate assetConcepts in Enterprise Resource Planning, Fourth Edition*


In-Memory ComputingData in a data warehouse are structured as multidimensional data cubesAllow for relationships in the data to be analyzed quicklyTwo main challenges with using a multidimensional cube structureA significant level of technical expertise is needed to construct a cubeA multidimensional cube necessarily restricts how the data can be analyzedConcepts in Enterprise Resource Planning, Fourth Edition*


In-Memory Computing (contd.)Accessing data from memory much faster than accessing data from a hard diskReason why data warehouses use disk memory: storage capacityHard disks can store one thousand times more data than memory for a comparable costData compression provided by column storageMakes it possible to store large volumes of data in memory without aggregationMultidimensional cubes are not requiredConcepts in Enterprise Resource Planning, Fourth Edition*


Concepts in Enterprise Resource Planning, Fourth Edition*Figure 8-2 Material master data table


In-Memory Computing (contd.)Both SAPs and Oracles in-memory solutions are designed to analyze big dataBig dataEnormous amount of data that is now available for BI use from all the available sources, including:ERP systems, Web sites, corporate databases, scientific research, Twitter, and other social networking applicationsBI analytics was the top technology priority for CIOs in 2012Concepts in Enterprise Resource Planning, Fourth Edition*


Mobile ComputingIncreasing use of smartphones, tablet computers, and other mobile computing devicesMobile applications need to be developed for different kinds of smartphones, with different operating systemsCompanies need to make many decisions about the use of mobile devices by employeesMobile devices provide users with information and can also be sources of informationConcepts in Enterprise Resource Planning, Fourth Edition*


From Internet-Enabled to Cloud ComputingCloud computingDelivery of a software product to a user via the InternetThe user typically accesses the cloud product through a Web browser or a lightweight (meaning small and simple) application for a computer or mobile deviceCloud computing is not a completely new conceptIt represents the latest stage of the development of computing and the InternetConcepts in Enterprise Resource Planning, Fourth Edition*


SAP and the Internet1996: SAP introduced its joint Internet strategy with MicrosoftInternet Transaction Server (ITS)A server-based software system that enabled efficient communication between an SAP ERP system and the InternetCore of SAPs first effort to integrate the Internet with its products

Concepts in Enterprise Resource Planning, Fourth Edition*


SAP and the Internet (contd.)May 1999: SAP announced mySAP.comA new strategy designed to completely realign the company and its product portfolioGoal: combine e-commerce solutions with SAPs existing ERP applications, using cutting-edge Web technology2000: SAP began building on the mySAP.com visionAdded the capability for electronic marketplaces and corporate portalsConcepts in Enterprise Resource Planning, Fourth Edition*


NetWeaver2004: SAP introduced its first version of SAP NetWeaverA collection of components that support business transactions over the InternetProvide seamless connectivity of diverse applicationsSAPs enterprise service-oriented architecture (enterprise SOA)Goal of making all of its business applications service basedConcepts in Enterprise Resource Planning, Fourth Edition*


NetWeaver (contd.)Web servicesCombination of software tools that enables an organizations various systems and applications to communicate with other applicationsSAPs NetWeaverA Web services platform that allows various vendor applications to share data over the InternetConcepts in Enterprise Resource Planning, Fourth Edition*


NetWeaver (contd.)One benefit of adopting SOAAbility to quickly add new applications, making the organization more responsiveUse of open standardsImplementing SOA is not easyReturn on an SOA investment is often difficult to determineConcepts in Enterprise Resource Planning, Fourth Edition*


NetWeaver Tools and CapabilitiesSAPs NetWeaver platform is a collection of modules, including:Enterprise PortalMobile InfrastructureBusiness IntelligenceMaster Data ManagementExchange Infrastructure



NetWeaver Tools and Capabilities (contd.)SAP Enterprise Portal gives users complete access to all their work on a single screenAll information is available through the Web services provided by NetWeaverNetWeavers Mobile Infrastructure module allows users to access and work with data through mobile devices such as smartphones and pagersConcepts in Enterprise Resource Planning, Fourth Edition*


NetWeaver Tools and Capabilities (contd.)Business Intelligence (BI) works with any database management software and any operating system that is running NetWeaverMaster Data Management provides data consistency within a companys SAP systemNetWeavers Exchange Infrastructure module allows different applications to share dataConcepts in Enterprise Resource Planning, Fourth Edition*


NetWeaver at Work for FitterExamining how NetWeaver can help FitterFitter has an SAP ERP systemFitters two top salespeople, Amy Sanchez and Donald Brown, are busy selling NRG bars directly to customers and to distributorsConcepts in Enterprise Resource Planning, Fourth Edition*


SaaS: Software As A ServiceA software delivery modelA software product is hosted by a companysuch as SAPon its servers and is accessed by customers via a Web browserSometimes described as a utilityA subset of cloud computingConcepts in Enterprise Resource Planning, Fourth Edition*


SAP Business ByDesignAn example of SaaS for the ERP marketFirst released in 2007A full ERP system delivered to customers via the cloudFor small to medium-sized companies:Lowers the total cost of ownership of the softwareEnables a rapid and smooth implementationConcepts in Enterprise Resource Planning, Fourth Edition*


Concepts in Enterprise Resource Planning, Fourth Edition*Figure 8-4 SAP Business ByDesign main screen


SAP Business ByDesign (contd.)PlaNet FinanceA small organization that offers microloans to customers in 30 international officesFinds Business ByDesign is a good fit for its needs



Concepts in Enterprise Resource Planning, Fourth Edition*FIGURE 8-5 SAP Business ByDesigns key capabilities


Advantages of Using SaaSInitial affordabilityLower cost to implement software provided through SaaSShorter implementation timeImplementation time usually shorter as the user does not have to worry about technical issuesLower support costs and complexityDo not need to hire additional IT personnel to implement new systems and applicationsConcepts in Enterprise Resource Planning, Fourth Edition*


Disadvantages of Using SaaSSecurityBandwidth/response timeFlexibilityNo frillsTechnical, not business focusExercise 8.2Fitter has made the decision to acquire an ERP system



Concepts in Enterprise Resource Planning, Fourth Edition*FIGURE 8-7 Arguments for purchasing ERP system and software versus using SaaS


Option 1: Buying Computers and Software Rights for an ERP SystemEstimated costs to set up its own ERP system:Database serverApplication serverPCsComputer maintenanceLicensing rightsInstallationUser trainingOngoing consultingNetwork and database administratorConcepts in Enterprise Resource Planning, Fourth Edition*


Option 2: Using an SaaS Provider to Deliver ERP SoftwareEstimated costs for using an SaaS provider to deliver ERP software:PCsComputer maintenanceSoftware through the SaaS providerUser trainingConcepts in Enterprise Resource Planning, Fourth Edition*


Calculate the NPV and Make a RecommendationYou will set up a spreadsheet to total all the costs of each optionIn each scenario, you must deal with the net present value (NPV) of moneyNPVA way to figure out whether an investment is profitableIn this case, to compare outlay of funds from one method to anotherAddresses the time value of moneyConcepts in Enterprise Resource Planning, Fourth Edition*


Calculate the NPV and Make a Recommendation (contd.)When calculating two different investment options, NPV calculation allows:Different future expenses or earnings to be calculated as an equivalent amount in the present timeNPV can be calculated over a number of yearsIn example: we need a five-year outlay of funds for the ERP projectConcepts in Enterprise Resource Planning, Fourth Edition*


Calculate the NPV and Make a Recommendation (contd.)In an Excel spreadsheet, the syntax of NPV calculation: =NPV (hurdle rate percentage, range of values)Values in range can be positive or negative numbersHurdle rateRate of discount over the periodMinimum acceptable rate of return on a project that a company will accept



Concepts in Enterprise Resource Planning, Fourth Edition*Figure 8-8 Cost comparisons: buying versus SaaS


Calculate the NPV and Make a Recommendation (contd.)Perform the following steps:Calculate the cost of the two methods of implementing an ERP system for five yearsConsider using different hurdle rates for each optionWhy might varying hurdle rates be applicable for this decision?Write a memo, with your spreadsheet attached, to the CIOAnswer this question: Which method should Fitter choose, and why?Concepts in Enterprise Resource Planning, Fourth Edition*


SummaryTechnologies such as radio frequency identification (RFID) and smartphones are fueling explosive growth in the amount of data available for businesses to processBusiness intelligence (BI) tools are growing in sophistication and powerTechnologies such as in-memory computing will provide greater speed and flexibility to BI usersMobile computing technology is increasing the use of ERP and BI dataConcepts in Enterprise Resource Planning, Fourth Edition*


Summary (contd.)Cloud computing is the delivery of a software product to a user via the InternetWeb services and service-oriented architecture offer a combination of software tools that enables various programs within an organization to communicate with other applicationsSAPs Web services platform is NetWeaverA collection of components that support business transactions over the Internet by providing seamless connectivity of diverse applications through the InternetConcepts in Enterprise Resource Planning, Fourth Edition*


Summary (contd.)Software as a service (SaaS) is a software delivery model in which a software product is hosted by a companysuch as SAPon its servers and is accessed by customers via a Web browserSaaS model allows companies to use ERP without a large initial investmentSaaS solutions allow for more rapid improvements in the software through user communitiesThere are some risks associated with using an SaaS providerConcepts in Enterprise Resource Planning, Fourth Edition*


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