Unit-5

Chapter: ERP, SAP, Business Intelligences, E-Governance

ERP: Enterprise Resource Planning

Meaning and Definition:
Enterprise Resource Planning term is derived from the Material Resource
Planning (MRP), Aim of ERP is to integrate all the data and processes into a single
system.
To perform the integration (all data and processes into a single system), ERP
system uses the multiple software and hardware components. Unified database is
one of the key components of an ERP system. These databases store the data for
various system modules. ERP system uses various techniques and concepts to
increase the use of organizational resources in order to improve the working process
of entire organization.
According to James O'Brien, “ERP is the technological backbone of E-
business, an enterprise-wide transaction framework with links into sales order
processing, inventory management and control, production and distribution planning,
and finance.”
Enterprise resource planning promises:
 one database,
 one application,
 one user interface
ERP Characteristics:
Any system has to possess few key characteristics to qualify for a true ERP
solution, these features are:
1. Flexibility: An ERP system should be flexible to respond to the changing needs
of an enterprise. The client server technology enables ERP to run across
various database back ends through Open Database Connectivity (ODBC).
2. Modular and Open: ERP system has to have open system architecture. This
means that any module can be interfaced or detached whenever required
without affecting the other modules. It should support multiple hardware

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 platforms for the companies having heterogeneous collection of systems. It
must support some third party add-ons also.
3. Comprehensive: It should be able to support variety of organizational functions
and must be suitable for a wide range of business organizations.
4. Beyond The Company: It should not be confined to the organizational
boundaries, rather support the on-line connectivity to the other business entities
of the organization.
5. Best Business Practices: It must have a collection of the best business
processes applicable worldwide. An ERP package imposes its own logic on a
company's strategy, culture and organization.

Why Companies should go for ERP:

1. Integration of Financial Information: As the CEO tries to understand the
company's overall performance, he may find many different versions of real
data. ERP creates a single version that cannot be questioned because
everyone is using the same system.
2. Integration of Customer Order Information: ERP systems can become the
place where the customer order detail is available from the time a customer
service representative receives the order until the loading dock ships the
merchandise and finance sends an invoice. By having - this information in one
software system companies can keep track of orders more easily, and
coordinate manufacturing, inventory and shipping among many different
locations simultaneously with more efficiency.
3. Standardize and Speed Up Manufacturing Processes: Manufacturing
companies especially those with a want for mergers and acquisition often find
that multiple business units across the company make the same
transaction/recording/report using different methods and systems. ERP systems
are blended with standard methods for automating some of the steps of a
manufacturing process.
4. Reduces Inventory: ERP helps the manufacturing process flow more smoothly,
and it improves visibility of the order fulfilment process inside the company
timely. That can lead to reduced inventories of the materials used to make

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 products and it can help users better plan deliveries to customers, reducing the
finished good inventory at the warehouses and shipping docks.
5. Standardise the HR Information: Especially in companies with multiple
business units, HR may not have a unified, simple method for tracking
employees’ information related to time and other information for communicating
with them about benefits and services. Using ERP can fix this problem and
standardize the functioning.

ERP Functions: -
The main functions of ERP are as follows:
1. Information Storing and Flowing: In a business process, huge volumes of
information inflow take place, which can be used by various departments if this
information is properly stored. ERP helps organizations store all the information
and enables flow of information throughout the different functional areas in order
to take better decisions.
2. Job Mediating: ERP works as an enabling tool to help users do their job better,
as it formalizes all the business processes and the workflow of an organization.
ERP automates takes and jobs, which saves effort, time and energy. Many of
the repetitive, monotonous and tedious procedures, tasks and processes are
automatically performed in ERP.
3. Functions Integrating: Various functional units such as finance, production,
marketing, sales and distribution and human resources must operate in unison
without losing their individual flexibility. ERP integrates all the functional areas
through a strong network and reliable communication channels and fulfils their
information needs by providing consolidated information.
4. Productivity Improving: An organization's constrained resources, that is,
personnel, materials, machines and money, are used optimally by ERP. Various
pieces of information regarding different functional areas are also provided by
ERP on time and accurately. It improves long-range planning and day-to-day
operational planning of an organization, leading to more productivity of
constrained resources. It also balances demand and supply to enable an
organization to remain competitiveness.

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 5. Business Controlling: An ERP system enables managers to let the top-down
view of the enterprise as ‘no island of information' is kept. Real-time information
can be accessed from anywhere and at any time, which helps management
establish effective control on the business processes and employees. Moreover,
this system permits control of business activities that cross-functional
boundaries.

SAP Applications
One of the most popular business process-oriented ERP solutions can be
considered as SAP. An integrated system which facilitates the major business
operations such as sales, production and financial accounting are offered by this.
Every business field is supported by the vast functionality provided by SAP without
having any compromise with the convenience of an integrated system.
The real time updating and processing of transactions are facilitated by these
applications which allow the effortless integration and communication between the
various fields of a business. For example, a bill can be easily created and released
to the accounting, and these can be spontaneously used in the customer analysis
process after being updated the billing values and thus one need not to wait for day-
end or month-end processing.
Time to time, new versions with enriched features are released by SAP. SAP
ERP System is the new form of older SAP R/3.
SAP Application Modules
SAP business structure consists of following modules:
1. FI (Financial Accounting): It is mainly used for collecting the important
corporate data related to accounting. It facilitates the service of full
documentation and latest information for enterprise wide planning and control
activities.
2. CO (Control): These are the compatible planning and control instrument for
organization wide controlling systems having s uniform reporting system for the
coordination of various contents and processes of internal process of any firm.

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 3. PP (Product Planning): This feature is mainly used for facilitating the overall
processes for entire manufacturing including from make-to-order, lot and make-
to-stock manufacturing, repetitive to integrated supply chain management.
4. MM (Materials Management): This is mainly implemented for optimizing the
various purchasing process having workflow driven processing functions,
allowing automated supplier evaluation, minimizing procurement and the cost of
warehousing with exact inventory and warehouse management.
5. SD (Sales and Distribution): This element helps in sales and distribution
activities with outstanding functions for prompt order processing, pricing,
interactive multi-level variant configuration, and on-time delivery.
6. HR (Human Resources Management): It uses in planning and management of
human resources of a firm so that various activities of personnel management
can be made easily.
Advantages of SAP:
1. It allows easier global integration.
2. It allows bridging some barriers like currency exchange rates, language, and
culture automatically.
3. It provides real time information.
4. It reduces the possibility of redundancy errors.
5. By using it the company or enterprise have more efficient work environment.
6. It provides a good knowledge, like an expert about building and implementation
of a system.
Disadvantages of SAP:
1. A contract is required to sign by the company to use SAP software and it holds
that companies to the vendor until the expiry of the contract.
2. It is inflexible because sometimes the vendor package does not fit a company's
business model.
3. To implement and use SAP can be very expensive.

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 Business Intelligence
Introduction: The combination of different types of systems and tools which are vital
for strategic planning process of an organization is known as Business Intelligence.
An organization can store, gather, access and analyse the various corporate data for
supporting the decision making process with the help of these systems. Various
types of business intelligence in the fields of customer support, market
segmentation, statistical analysis, inventory and distribution analysis, customer
profiling are collected through BI systems.
A large variety of data is collected from different sources in a BI System and it
helps in a significant manner in decision making process if these are implemented in
an accurate manner by using advanced reporting and analytics.
The various technologies which are employed in Business Intelligence are
given below:
1. Data warehousing, data stores and data marts.
2. Query and report writing technologies.
3. Decision support systems(DSS).
4. Enterprise resource planning (ERP) systems.
5. Product lifecycle and supply chain management systems.
6. Database systems and database integration
7. Customer relation management software.
8. Data mining and analytics tools.

Steps to implement Business Intelligence systems in any business for efficient

and intelligent functioning are:
Step-1. Raw Data from corporate databases is extracted and collected. The data
could be spread across multiple heterogeneous systems.
Step-2. The data is cleaned and transformed into the data warehouse using various
BI based techniques. The pivot table can be linked, and data cubes are formed.
Step-3. Using BI system, the user can ask queries, request ad-hoc reports or
conduct any other analysis and decision making.

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Business Intelligence Components:
A business intelligence system is usually not a single application but consists
of different components closely related to each other, enabling users to select and
analyse data. make aggregations and display the results in a form that is easy to use
and understand. In most cases Business Intelligence involves the use of
multidimensional analysis and reporting. By providing multidimensional analysis and
reporting the company often builds a Company Data Warehouse to assemble the
needed data.
However, the term Business Intelligence covers at least the following five
components:
1. Multidimensional analysis
2. Reporting
3. Data mining
4. Financial consolidation and budgeting
5. Key Performance Indicators

1. Multidimensional Analysis: This area covers the possibility to slice-and-dice

data in multiple possible dimensions as per the need. For many this is known as
pivoting data. A pivot table is something that you can build and use in most
spreadsheets including Excel.
From a more technical perspective most database suppliers and Business
Intelligence suppliers support multidimensional analysis with a special
multidimensional database. A multidimensional database is often also called a
CUBE which is often presented as 3-dimensional data information storage.
2. Reporting: Most companies have a need for different type of reports with
different dimensions. In many cases hundreds of different type of reports and
occasionally often more are required in an organization for its efficient
functioning.
Business Intelligence software often has comprehensive reporting tools
available that can extract and present data in many different media types, Excel
file format, PDF format etc. In many cases these reporting facilities will be

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 controlled by parameters that can be chosen real time or historical and present
a report that has been run directly against data.
3. Data Mining: Data mining is the process of extracting patterns from large data
sets by combining methods from statistics and artificial intelligence with
database management. In many cases Business Intelligence also covers some
functionality to perform Data Mining on the data of company.
4. Financial Consolidation and Budgeting: In many cases the Business
Intelligence area also covers systems and functionality for Groups to perform
financial group consolidation and budgeting. This area covers the whole aspect
of elimination of inter-company transactions within a group to present the
financial figures as these inter-company transactions had never happened and
that the group is presented as one entity.
5. Key Performance Indicators: Key Performance Indicators are metrics to
measure things periodically that can be weekly, Monthly, Yearly or any other
time frames and often keeps track of historical trends as well as a goal or target.
In some cases Business Intelligence also supports setting goals for specific
metrics in the data set as well as calculating and presenting trends.

Advantages and Disadvantages of Business Intelligence:

Advantages:
1. Enhances productivity: With the use of BI, it is possible for businesses to
create reports with a single click thus saves time, energy and resources. It also
allows employees to be more productive in their tasks.
2. Enhances visibility: BI also helps to improve the visibility of these processes
and make it possible to identify any areas which need attention for the efficient
working and profitability. BI system also helps organizations as decision makers
get an overall bird's eye view through typical BI features like dashboards and
score cards.
3. Fix Accountability: BI system assigns accountability in the organization as
there must be someone who should own accountability and ownership for the
organization's performance against its set goals.

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 4. Eliminates Waste: A business intelligence system can point out areas of waste
or loss that may have previously gone unnoticed in a large organization. Since a
company-wide business intelligence system works as a single, unified whole, it
can analyze transactions between subsidiaries and departments to identify
areas of overlap or inefficiency. According to the CIO website, in 2000 "with the
help of [business intelligence] tools, Toyota realized it had been double-paying
its shippers to the tune of $812,000."
5. It Streamlines Business Processes: BI takes out all complexity associated
with business processes and lineup the tasks as per the priority. It also
automates analytics by offering predictive analysis, computer modeling, bench
marking and other methodologies.
6. Fact Based and Easy Analytics: BI software has democratized its usage,
allowing:
even nontechnical or non-analysts users to collect and process data quickly. This
also allows putting the power of analytics from the hand's many people.

Disadvantages:
1. Cost: Business intelligence can prove costly for small as well as for medium-
sized enterprises looking into the various hardware and software
implementations. The use of such type of system may be expensive for routine
business transactions.
2. Complexity: Another drawback of BI is its complexity in implementation in any
business. It can be so complex that it can make business techniques rigid to
deal with and require extensive training too.
3. Narrow Range of Use: Like all improved technologies, BI was first established
keeping in consideration the buying competence of rich firms. Therefore, BI
system is yet not affordable for many small and medium size companies.
4. Time Consuming Implementation: It takes almost one and half year for data
warehousing system to be completely implemented. Therefore, it is a time-
consuming process.

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Trends in Business Intelligence:
The following are some business intelligence and analytics trends that in use
in present scenario:
 Artificial Intelligence: Gartner' report indicates that Al and machine learning
now take on complex tasks done by human intelligence. This capability is
being leveraged to come up with real-time data analysis and dashboard
reporting.
 Collaborative BI: BI software combined with collaboration tools, including
social media. and other latest technologies enhance the working and sharing
by teams for collaborative decision making.
 Embedded BI: Embedded BI allows the integration of BI software or some of
its features into another business application for enhancing and extending it's
reporting functionality
 Cloud Analytics: BI applications will be soon offered in the cloud, and more
businesses will be shifting to this technology. As per the predictions within a
couple of years, the spending on cloud-based analytics will grow 4.5 times
faster.

E-Governance
Introduction: Governance literally means the exercise authority and the use of
institutional resources ton problems and affairs.
E-governance is the application of information and communication
technologies to transform the efficiency, effectiveness, transparency, and
accountability of informational and transactional exchanges within government,
between governments agencies of National, State, Municipal, and Local levels,
citizen and businesses, and to empower citizens through access and use of
information.
E-governance is a form of E-business in governance comprising of
processes and structures involved in deliverance of electronic services to the public,
viz., citizens.

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 “E-governance is the transformation of (governance) processes (resulting
from) the continual and exponential introduction me society of more advanced digital
technologies. E-governance focuses on how these new technologies can be used to
strengthen the public's voice as a force to reshape the democratic processes, and
refocus the management. structure, and over government to better serve the public
interest".
Objectives of E-Governance:
Following are the objectives/aims of E-Governance:
1. To Build an Informed Society: An informed society is an empowered society.
Only informed people can make a Government responsible. So providing
access to all every piece of information the Government and of public
importance is one of the basic objectives of E-Governance.
2. To Increase Government and Citizen Interaction: In the physical world, the
Government and Citizens hardly interact. The amount of feedback from and to
the citizens is very negligible. E-Governance aims at build a feedback
framework, to get feedback from the people and to make the Government aware
of people's problems.
3. To Encourage Citizen Participation: True democracy requires participation of
each individual citizen. Increased population has led to representative
democracy, which is not democracy in the true sense. E-governance aims to
restore democracy to its true meaning by improving citizen participation in the
Governing process, by improving the feedback, access to information and
overall participation of the citizens in the decision-making.
4. To Bring Transparency in Governing Process: E-governance carries an
objective to make the Governing process transparent by making all the
Government data and information available to the people for access. It is to
make people know the decisions, and policies of the Government.
5. To Make the Government Accountable: Government is responsible and
answerable for every act decision taken by it. E-Governance aims and will help
make the Government more accountable than now by bringing transparency's
and making the citizens more informed.

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Significance of E-Governance:
ICT applications puts impact upon the structures of public administration
systems. Technological advancements facilitate the administrative systems by
enabling:
(a) Administrative Development.
(b) Effective Service Delivery
(a) Administrative Development:
1. Automation of Administrative Processes: A truly e-governed system would
require minimum human intervention and would rather be system driven. While
initially the solutions that were offered were quite primitive with poor information
layout, inadequate navigation provisions, al disruption in services, periodic
outdated content and little or no 'back office' support.
2. Paper Work Reduction: An immediate impact of automation can be seen on
reduction of paperwork. Paperwork is reduced to a greater extent with
communication being enabled via electronic route and storage and retrieval of
information in the electronic form. All this has led to emergence of 'less paper
office'.
3. Quality of Services: ICT helps governments to deliver services to the citizens
with greater accountability, responsiveness and sensitivity. Quality of services
improves, as now the people are able to get services efficiently and
instantaneously.
4. Elimination of Hierarchy: ICT has reduced procedural delays caused by
hierarchical processes in the organisation. Through Intranet and LAN, it has
become possible to send information and data across various levels in the
organisation at the same time. Computerization and communication patterns
facilitated by ICT have increased efficiency and have led to the involvement of
all levels in decision-making.
5. Change in Administrative Culture: Bureaucratic structures have been
plagued by characteristics aptly described by Victor Thompson as 'bureau-
pathology'. From the days of New Public Administration, efforts have been
made to find ways to deal with the pathological or dysfunctional aspects of
bureaucratic behaviour and to make delivery of public services effective and

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 efficient. With e-governance, public actions coming under public glare would
certainly induce norms and values of accountability, openness, integrity,
fairness, equity, responsibility and justice in the administrative culture. Rather,
administration would become efficient and responsive.
(b) Effective Service Delivery:
ICTS play an important role in effectively delivering services to the
people. ICTs ensure:
1. Transparency by dissemination and publication of information on the web:
This provides easy access to information and subsequently makes the system
publicly accountable. Also as web enables free flow of information, it can be
easily accessed by all without any discrimination.
2. Economic Development: The deployment of ICTs reduces the transaction
costs, which makes services cheaper. For example, rural areas suffer on
account of lack of information regarding markets, products, agriculture, health,
education, weather, etc. and if all this could be accessed online would lead to
better and more opportunities and thereby prosperity in these areas.
3. Social Development: The access to information empowers the citizens.
Informed citizenry can participate and voice their concerns, which can be
accommodated in the Programme/project formulation, implementation,
monitoring and service delivery. Web enabled participation will counter the
discriminatory factors affecting our societal behaviour.
4. Strategic Information System: Changing organisational environment and
increasing competitiveness have put pressures on the performance of the
functionaries. Information regarding all aspects need to be made available to
the management at every point to make routine as well as strategic decisions.
ICTs effectively enable putting such strategic information systems in place. After
the above-mentioned discussion on the significance of ICTs in governance, we
will now highlight certain measures that will enable its effective implementation.

Models of E-Governance:
Prof. Dr. ArieHalachmi in his paper, namely, 'E-Government Theory and
Practice: The Evidence from Tennessee (USA),' has given five important models of

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e-governance, which can be used as a guide in designing e government initiatives
depending on the local situation and governance activities that are expected to be
performed.
These models are:
1. The Broadcasting Model
2. The Critical Flow Model
3. The Comparative Analysis Model
4. The E-Advocacy/Mobilization and Lobbying Model
5. The Interactive-Service Model We will now discuss these models individually.
1. The Broadcasting Model: The model is based on dissemination/broadcasting of
useful governance information, which is in the public domain into the wider public
domain with ICT and convergent media. The strength of the model rests upon the
fact that a more informed citizenry is able to judge the functioning of existing
governance mechanisms and make an informed about them. Consequently, they
become more empowered to exercise their rights and liabilities.
2. The Critical Flow Model: The model is based on disseminating/channeling
information of critical value to the targeted audience or into the wider public
domain with ICT and convergent media. The strength of this model is that ICT
makes the concept of 'distance' and 'time' redundant when information is hosted
on a digital network, and this could be used advantageously by instantly
transferring the critical information to its strategic user group located anywhere or
by making it freely available in the wider public domain.
3. The Comparative Analysis Model: This model is highly significant model for
developing countries and can be used for empowering people. Essentially, the
model continuously assimilates best practices in the areas of governance and
then uses them as benchmarks to evaluate other governance practices. It then
uses the result to advocate positive changes or to influence 'public' opinion on
these governance practices. The comparison could be made over a time scale to
get a snapshot of the past and present situation or could be used to compare the
effectiveness of an intervention by comparing two similar situations. The strength
of this model lie in the infinite capacity of digital networks to store varied

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 information and retrieve and transmit it instantly across all geographical and
hierarchal barriers.
4. The E-Advocacy/Mobilisation and Lobbying Model: This model builds the
momentum of real-world processes by adding the opinions and concerns
expressed by virtual communities. This model helps the global civil society to
impact on global decision-making processes. It is based on setting up a planned,
directed flow of information to build strong virtual allies to complement actions in
the real world. Virtual communities are formed which share similar values and
concerns and these communities in turn link up with or support real-life
groups/activities for concerted action. Hence, it creates a diversity of virtual
community and the ideas, expertise and resources are accumulated through this
virtual form of networking. In addition, it is able to mobilise and leverage human
resources and information beyond geographical, institutional and bureaucratic
barriers and use it for concerted action.
5. The Interactive-Service Model: It opens avenues for direct participation of
individuals in governance processes and brings in greater objectivity and
transparency in decision-making processes through ICT. Fundamentally, ICT has
the potential to bring in every individual in a digital network and enable interactive
(two-way) flows of information among them. Under this model, the various
services offered by the Government become directly available to its citizens in an
interactive manner. It does so by opening up an interactive Government to
Consumer to government (G2C2G) channel in various aspects of governance,
such as election of government officials (e-ballots); redressing online of specific
grievances; sharing of concerns and providing expertise; opinion polls on various
issues; etc.

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