Information Technology Reference
In-Depth Information
enterprise. In many cases, these systems are decades old, the original developers are long gone,
and the systems are poorly documented. As a result, the systems are extremely difficult to fix
when they break, and adapting them to meet new business needs takes too long. They become
an anchor around the organization that keeps it from moving ahead and remaining com-
petitive. An ERP system helps match the capabilities of an organization's information systems
to its business needs—even as these needs evolve.
Gujarat Reclaim and Rubber Products Ltd (GRRP) is an India-based company that pro-
duces reclaimed rubber from the scrap of whole tires, tread peelings, natural rubber tubes,
butyl tubes, and other rubber products. The reclaimed rubber is then used to make other tire
and non-tire products. The company implemented an ERP system that improved its work
processes and eliminated dozens of separate systems. As a result, GRRP can now deliver
products to customers on time. The ERP system also provided support for the currencies
and financial laws of multiple countries, thus simplifying the firm's financial accounting
processes. Perhaps most importantly, the ERP system made it possible for GRRP to increase
the number of suppliers and customers as well as reduce its inventory of waste rubber.
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Improvement of Work Processes
Competition requires companies to structure their business processes to be as effective and
customer oriented as possible. ERP vendors do considerable research to define the best busi-
ness processes. They gather requirements of leading companies within the same industry and
combine them with research findings from research institutions and consultants. The indi-
vidual application modules included in the ERP system are then designed to support these
best practices
, the most efficient and effective ways to complete a business process. Thus,
implementation of an ERP system ensures good work processes based on best practices. For
example, for managing customer payments, the ERP system's finance module can be con-
figured to reflect the most efficient practices of leading companies in an industry. This
increased efficiency ensures that everyday business operations follow the optimal chain of
activities, with all users supplied the information and tools they need to complete each step.
Amgen is a human therapeutics company in the biotechnology industry. It pioneered the
development of innovative products based on advances in recombinant DNA and molecular
biology, and launched some of the biotechnology industry's first major medicines. The firm
is implementing a worldwide ERP program to manage business processes that are global,
standardized, cross-functional, and scalable. With success, Amgen will increase its produc-
tivity and improve decision making. It expects to modify some 800 business processes in the
areas of customer order to cash, finance, human resources, supply chain, and procurement,
affecting more than 18,000 employees working in 45 countries.
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best practices
The most efficient and effective
ways to complete a business
process.
Upgrade of Technology Infrastructure
When implementing an ERP system, an organization has an opportunity to upgrade the
information technology (hardware, operating systems, databases, etc.) that it uses. While
centralizing and formalizing these decisions, the organization can eliminate the hodgepodge
of multiple hardware platforms, operating systems, and databases it is currently using—most
likely from a variety of vendors. Standardizing on fewer technologies and vendors reduces
ongoing maintenance and support costs as well as the training load for those who must
support the infrastructure.
BNSF Railway Company is a subsidiary of Burlington Northern Santa Fe Corporation
and is in an industry that is anticipating an increase in demand for freight transportation of
some 67 percent over the next 20 years. According to Jeff Campbell, vice president of tech-
nology services and CIO at BNSF, “It was a business imperative that we transform our entire
back office to prepare for this kind of growth and to establish a fresh technology platform
that would serve this company for the next 15 years. So we decided to replace our legacy
systems with an ERP solution.” BNSF is replacing its core financial systems, human resources,
and payroll with an ERP system. When the implementation is complete, customers will be
able to view and pay their freight invoices online.
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