EIM and it’s main types Lecture 5 Wurood H.

Financial & accounting system Every accounting systems stores data in two ways: Master Data and Non-Master Data (or Transaction Data) as shown in the Fig. Master Data: Relatively permanent data not expected to change frequently ( e.g. employee name, account no., …etc).
Non-Master Data: Non-permanent data and expected to change frequently( the amount of money, student degree, quantity of a material in store, …etc.).<br>

Front End & Back End

These two words are used by software people again and again. Let us understand these two words in a simple language.
 Front End – It is part of the overall software which actually interacts with the user who is using the software.

Back End – It is a part of the overall
software which does not directly interact
with the user, but interact with Front End only.<br>

A Non-Integrated System

is a system of maintaining data in a decentralized way. Each department in an enterprise shall maintain its own data separately and not in an integrated way. This is the major problem with non-integrated systems. The problems that could occurs in non integrated system are:
Communication Gaps
Mismatched Data
Communication between different business units is a major aspect for success of any organization.<br>

Main types of EIM Enterprise information management (EIM) is defined as the optimization, storage and processing of data within an enterprise through the combined power of business intelligence or analytics and content management.
There are three main types of enterprise systems:<br>

CRM is a term applied to processes implemented by a company to handle its contact with its customers.

Information in the system can be accessed and entered by employees in different departments, such as sales, marketing, customer service, training, professional development, performance management, human resource development, and compensation.

Details on any customer contacts can also be stored in the system. The rationale behind this approach is to improve services provided directly to customers and to use the information in the system for targeted marketing. Customer Relationship Management (CRM):<br>

Customer relationships management (CRM) The CRM system is designed to collect customer data and forecast sales and market opportunities. It tracks all communications with clients, assists with lead management, can enhance customer service and boost sales. CRM usually closely integrates with the sales and marketing module.
The sales module 
handles workflows like inquiries, quotations, orders, and invoices. It helps boost leads, speed up the sales cycle, and increase revenue.

Marketing module 
helps build highly personalized marketing promotions, automate communications via social media, email, and advertisements based on customer segmentation features.<br>

key benefits of CRM platforms Enhanced customer service. 
Sales automation. 
Customer segmentation: Allows you to identify and segment customers based on a many attributes, preferences, behaviors, and buying patterns.
Customer retention:  Helps in retaining customers by tracking their interactions with the company and offering personalized services.
Up-Selling: Enables more effective cross-selling and up-selling<br>

Supply chain management (SCM) The SCM software streamlines your entire supply chain, ensures a smooth flow of goods from supplier to customer, and makes these processes adjustable to market shifts.

This module helps employees, such as purchasing agents, inventory planners, warehouse managers and senior supply chain leaders, to get detailed information and optimize inventory levels, prioritize orders, maximize on-time shipments, avoid supply chain disruptions and identify inefficient processes.

The SCM system includes such modules as procurement (or purchasing), inventory management, warehousing (WMS), and transportation (TMS). procurement (or purchasing) Helps assess the needs of an organization in terms of goods consumption. It provides automation, tracking, and quotes analysis, along with invoice management, contracts, and billing.<br>

Enables inventory control by tracking item quantities and location, offering a complete picture of current and incoming inventory and preventing stock-outs and delays. The module can also compare sales trends with the available products to help a company make informed decisions, boosting margins and increasing inventory turn.

Primarily aims to control the movement and storage of materials within a warehouse, including the receipt, storage and movement of goods to intermediate storage locations or to the final customer.


Assists with the logistics within the SCM by optimizing loads and delivery routes, tracking freight across local and global routes, along with automating previously time-consuming tasks, such as trade compliance documentation and freight billing. Transport management system (TMS) warehousing (WMS) inventory management<br>

Enterprise resource Planning (ERP) is an integrated information system which consist of different modules. It make all internal process work in harmony.

It designed to coordinate all the resources, information, and activities needed to complete business processes.

Accounting and Finance function is considered as backbone for any business. Hence Financial & Accounting Systems ( modules) are an important and integral part of ERP systems.
data are gathered+ collect+sort and store data from all modules in centerized data warehouses<br>

An ERP system is based on a common database and a modular software design.
The common database allows storing and retrieving information in real-time.
The modular software design mean a business can select the modules they need, mix and match modules, and add new modules of their own to improve business performance.
In practice the ERP system may comprise a set of applications, each maintaining a data store within one physical database.
An ideal ERP system is that system where a single database is utilized and contains all data for various software modules ERP Design<br>

The software modules can include the following:

Manufacturing: Some of the functions include engineering, capacity, workflow management, quality control, bills of material, manufacturing process, etc.
Financials: Accounts payable, accounts receivable, fixed assets, general ledger and cash management, etc.
Human Resources: Benefits, training, payroll, time and attendance, etc.
Supply Chain Management: Inventory, supply chain planning, supplier scheduling, claim processing, order entry, purchasing, etc.
Projects: Costing, billing, activity management, time and expense, etc.<br>

Advantages of an ERP System

Ability to customize an organization's requirements;
Integrate business operations with accounting and financial reporting functions;
Increased data security and application controls;
Build strong access and segregation of duties controls;
Automate many manual processes thus eliminating errors;
Process huge volumes of data within short time frames; and
Strong reporting capabilities which aids management and other stakeholders in appropriate decision making.<br>

What is the risk of ERP Major feature of an ERP System is central database. As the complete data is stored centrally at one place, ensuring safety of data and minimizing risk of loss of data is a big challenge. From other hand, In Non-Integrated System, data is stored by each department separately, hence this risk is low in such an environment

In an ERP environment, all the persons in the organization access the same set of data on a day to day basis. This poses the risk of leakage of information or access of information to non-related people ( unauthorized) . E.g. A person from sales department checking salary of a person in production.

Again, as there is central database, all users shall use the same data for recording of transactions. Hence there is one more risk of putting incorrect data in the system by unrelated users. E.g. a person in human resource department recording a purchase order.

Physical safety of data : Risk of total loss of data and Risk of partial loss of data How to minimize such lose How to minimize such lose What is the solution here?<br>

Enterprise Resource Planning(ERP) Systems Today's ERP systems can cover a wide range of functions and integrate them into one unified database. For instance, functions such as Human Resources, Supply Chain Management, Customer Relations Management, Financials, Manufacturing functions and Warehouse Management functions were all once stand-alone software applications, usually housed with their own database and network, today, they can all fit under one umbrella – the ERP system.
Some of the well-known ERPs in the market today include SAP, Oracle, MFG Pro, MS Axapta etc.<br>

Example SAP ERP systems can cover a wide range of functions and integrate them into one unified database
By centralizing data management, SAP software provides multiple business functions with a single view of the truth. This helps companies better manage complex business processes by giving employees of different departments easy access to real-time insights across the enterprise. As a result, businesses can accelerate workflows, improve operational efficiency, raise productivity, enhance customer experiences – and ultimately increase profits.<br>

ERP CASE STUDY OF A CHARTERED ACCOUNTANT FIRM The working environment in CA(a Chartered Accountant ) firm ( service company) let us consider possibility of implementing ERP system in a CA Firm.
Case 1 –)Nirman Infrastructures Pvt. Ltd. (a client of a service company provider ( CA Firm)) receives a notice for inspection assessment from Income Tax Department. Following shall be the events in normal case.
Client informs about receipt of notice to CA. the partner (Pankaj Deshpande) on phone and sends the copy of notice to CA Firm.
Notice is received at CA firm, read and understood. A task for giving reply to Income Tax Department is assigned to an employee1 ( Sachi Dongre, an article clerk).
Emplyee1 (Sachi )asks for some original documents (PAN, Memorandum of Articls, Agreements etc.) from client for working. These documents need to returned to client after the work.
Sachi works on this task, prepare the reply and submits it with Income Tax Department. Also he updates CA. Pankaj Deshpande and Mayura (Accountant) about it.<br>

Bill is prepared by Mayura and approved by CA. Pankaj Deshpande.
Bill is submitted with client.
Documents are returned to client.
Cheque received from client against the bill submitted.
Receipt is recorded in books of accounts.
This is how a simple case is handled in a CA Firm. Let us now discuss important points regarding this case.
In case of any ERP System, two aspects are very important.
Communication (Internal and External)
Documentation<br>

Work Flow using Integrated System Communication in this case is starting from client
Instead of client calling his CA, he should put the information as a service request in the central database maintained by CA Firm.
As soon as service request is put by client into the system, one or more partner should be informed by the system about new service request.
Partner shall convert this request into the task and allot it to one of the assistant.<br>

To be done in class In this whole process, two important aspects,
i.e. Communication and Documentation
are taken care of in the best possible manner. Instead of a person communicating with other, system is communicating automatically after every updating. Fig. below shows different people connected to central database<br>

Things to remembered In case of Integrated System, there shall be only one system of communication with others
But in case of non-integrated system people use multiple modes for communication like making a phone call, sending SMS, Email, WhatsApp or personal meeting. The major problem with these multiple option is that there is no inter- connectivity between these modes and hence track of the overall process is not available.<br>

ERP case study #2: Hershey Candies – failure Not every ERP ends in success, this case study reviews the failure of Hershey, a 147 year-old confectioner, headquartered in Hershey Pennsylvania. The enterprise saw the implementation of an ERP platform as being central to its future growth.
Consequently, rather than approaching its business challenge on the basis of an iterative approach ( or continuous improving) , it decided to execute a holistic plan, involving every operating centre in the company ( redesign /reengineering). Subsequently SAP was engaged to implement a $10 million systems<br>

The impact of this decision represented complete chaos, where the company was unable to conduct business, because virtually every process, policy, and operating mechanism was in flux simultaneously.
The consequent result was the loss of $150 million in revenue, a 19% reduction in share price, and the loss of 12% in international market share.<br>

ERP case study #3: - success Nestle SA As a enormous international candy-maker, Nestle SA headquartered in Konicki Switzerland, had harboured a goal of integrating ERP across all three of its operating companies; Nestle SA, Nestle UK, and Nestle USA.

The latter operation had been working toward complete integration of a set of ERP solutions since in the late 90s, but various requirements, organizational, and policy problems had plagued the complete initiation.

By the turn of the millennium, its management finally decided that a holistic re-approach to its business<br>

By the turn of the millennium, its management finally decided that a complete re-approach to its business requirements were in order. Consequently, this effort paid dividends that allowed SAP to finally get the $200 million job done.

Ultimately, positive business impacts included :
the merging of an outdated accounting structure,
better and more efficient communications throughout its supply-chain,
and a much more confident workforce.<br>

ORGANIZATION STRUCTURE AND RESPONSIBILITIES Organizations require structure to distribute responsibility to groups of people with specific skills and knowledge. The structure of an organization is called an organization chart (org chart).Organizing and maintaining an organization structure requires that many factors be considered
Several roles and responsibilities fall upon all individuals throughout the organization
Executive management: The most senior managers and executives in an organization are responsible for developing the organization’s mission, objectives, and goals, as well as policy.
CEO- A chief executive officer (CEO) is the highest-ranking executive in a company., a chief executive officer’s primary responsibilities include making major corporate decisions, managing the overall operations and resources of a company, acting as the main point of communication between the board of directors and corporate operations. In many cases, the chief executive officer serves as the public face of the company. 
Owner: An owner is an individual (usually but not necessarily a manager) who is the designated owner of an asset. Depending upon the organization’s security policy, an owner may be responsible for the maintenance and integrity of the asset, as well as for deciding who is permitted to access the asset.
Manager: A manager is responsible for obtaining policies and procedures and making them available to their staff members. They should also, to some extent, be responsible for their staff members’ behavior.
User: are individuals (at any level of the organization) who use assets in the performance of their job duties.
CIO (Chief Information Officer): This is the title of the top most leader in a larger IT organization.<br>