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7/25/2019 Basics of ERP Concept
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Introduction to ERPsystemsLeonard Walletzk
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Who am I
Leonard Walletzky
Assistant Professor of Service Science,Management and Engineering study program
- Master (Ing.) - Faculty of Economics andAdministration, Masaryk University, Brno, CZ(thesis: Accounting software in trade company)
- PhD (Economics) Faculty of Economics andAdministration, Masaryk University, Brno, CZ(doctoral thesis: Economics of information)
Fields of the research: Service Science, ERPsystems, Management by Competencies
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Masaryk University
Brno
Prague
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Masaryk university
is the second largest university in the Czech Republic.
is a respected research university
is the second largest employer in the South Moravian
Region, currently providing work for a total of 5.000employees
consists of 9 faculties and over 200 departments, institutesand clinics.
about 50.000 students are enrolled at MU
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Faculty of informatics
Founded in 1994
More than 2.200 students
25 bachelor and master branches
Increasing cooperation with the Brno Silicon Valley
IBM
AT&T
Red Hat
Motorola
Intensive cooperation with more than 200 IT companies
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Who are you?
How familiar are you with ERP?
What do you expect from this course?
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What is the course about?
Originally designed for non-ITs to understand IT market
For ESIEE rebuiltfor IT to understand IT market
The difficulty of communication with customers
How to understand client s needs
Is there any difference in selling ERP systems and apples?
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What is IT?
IT = information technology
Definition (techterms.com)
Stands for "Information Technology," and is pronounced "I.T." It
refers to anything related to computing technology, such asnetworking, hardware, software, the Internet, or the people thatwork with these technologies. Many companies now have ITdepartments for managing the computers, networks, and othertechnical areas of their businesses. IT jobs include computerprogramming, network administration, computer engineering,Web development, technical support, and many other related
occupations. Since we live in the "information age," informationtechnology has become a part of our everyday lives. Thatmeans the term "IT," already highly overused, is here to stay.
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But what is the sense of IT?
What is the essence of IT?
What is the purpose of its existence?
What can be called IT and why?
How is IT perceived by non-IT population?
Try to make your own definition to be understandable fornon-IT manager
5 min individual task
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IT definition
IT is
The service
Unique
Helping with the most economic, social and inter-humanactivities
Inseparable from those activities
IT is only instrument to provide any kind of activityincluding itself.
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Services Services have become a driving force in economics around the world
Services represent more than 70% of global GDP.
The services sector in EU accounts for almost 70% of EU GDP.
Also manufacturing industries include more and more services. Thereare becoming part of tangible and intangible products
Services are more and more knowledge and information intensive
Service innovation is recognized as key for the economic growth andcompetitiveness
Academic programs and research activities in engineering and businessschools didnt meet the needs of this sector.
Universities, governments and industry start to work together to ensure
that service become a distinct and legitimate area for research andteaching.
ICT plays a major role in services innovation and realization
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Conclusion
Can we live without services?
Try to name all services you have used before you cometo the class today.
We live more in the world of services than in the world ofproducts.
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Why we are talking about
services? ERP (Enterprise Resource Planning) is part of the IT market
It is one of the services offered by IT companies
Without understanding basic consequences of the global IT market noone is able to provide proper service
ERP are on the border between IT and non-IT sector
We need to use a different view to the problems
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Goods or services?
Is the goods the aim of exchange or it is a service theirprovide?
The new logic says
Everything is a service! There is no goods, only services! How is it possible?
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Providing goods
The process is considered as an ownership transfer
The producer and buyer are not closely connected
They are in touch only in the moment of ownership transfer
The product is tangible and it is easy to convert it to moneyThe major task in production is an optimization of product
quantity according to fixed and variable costs
The main goal is to achieve maximum profit in short term
Only difference for the services is immateriality
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The emphasis is not on tangible product
Is on services the customer can get
No matter if the service is realized through the product or
someone else to perform the service
Ownership is not important
The customer obtain benefits by renting to:
use a physical object
hire the labour and expertise
pay for access to facilities and networks
Providing services16
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Relation to information
Work of informatics specialists is about work withinformation
Do they know all semantics and consequences?
SeS is the reaction to moral hazard problem on IT market a tendency to take undue risks because the costs are not
born by the party taking the risk
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Moral hazard example
IT example
Organization has a problem
This problem can be solved by a IT solution (tools)
There is a lot of IT companies able to supply this kind ofsolution
Questions
How would IT expert recognize the right identification ofcustomers problem?
How does customer recognize the IT expert offers the rightsolution for his company?
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Description of MHP19
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Solution of the Moral Hazard
problem To be able to answer both questions we need:
IT expert that has knowledge from both sides
Is able to analyse problem on customers side
He knows proper IT tools Has multidisciplinary knowledge
IT expert is able to act on any side of the market (customer orsupplier)
This kind of expert needs
Servicethinking multidisciplinary education.
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Formalizing the difference
We will speak about dominant logic
It means the point of view we use
Product dominant logic
Service dominant logic
To formalize those systems we need a few fundamentals
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Product dominant logic
Products are tangible
Product is developed by producer
Consumer has no power to affect the product
development Value for customer is based on product ownership
By using the product the value is destroyed
The difference for services is immateriality, other point areused appropriatelly
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Service dominant logic
Service is the fundamental basis of exchange
The customer is always a co-creator of the value
All social and economics actors are the resource integrators
Value is always uniquely and phenomenologically determined
by the beneficiaryThe enterprise cannot deliver value, but only valueproposition
Operant resources are the fundamental source ofcompetitive advantage
All economies are service economies
A service-centered view is inherently customer oriented andrelational
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Service is the fundamental basis of exchange
The application of operant resources
The seller uses his resources to provide the service
The basis for all exchange
There is not possible to simply exchange the product
without using services or this possibility is only marginal
Service is exchanged for service
Services are used on both sides of the market to finish
the transaction
Example: Credit cards transactions
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The customer is always a co-creator of the value
The role of the customer is interactional
The customer can not be ignored
Without interaction with the customer the transaction can
not be finished
Value creation is interactional
Example:
You can not provide the cloud service without
communication with the customer and analysing of his/her
needs
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The enterprise cannot deliver value,but only value proposition
Not only enterprise, generally every entity providing aservice (provider)
School, university, state
Provider can offer their applied resources for the valuecreation
Collaborate on value creation following acceptance ofvalue propositions
Can not create and/or deliver value independently
Example: University and its study programs
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All social and economics actors are the resourceintegrators
Value creation is network of networks
The sellers needs to buy other services
The are customers for other providers
They also participate on value creation
The integration of the resources is kind of the service
Example
Internet provider needs to integrate:
Wired infrastructure rent from the other company
Power supply from electricity company
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Value is always uniquely and phenomenologicallydetermined by the beneficiary
Value is
Idiosyncratic
Designed for particular customer
Experiential
The knowledge and information are not static
Contextual
The combination of knowledge and information is
unique in every particular case
Meaning laden
Client and provider should understand the meaning of
the value (must see the value for both)
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Operant resources are thefundamental source ofcompetitive advantage We speak bout knowledge an information intensive
services
The services are provided by combination of specializedknowledge, ownership of information and combination of
other resources (labour, capital)
The comparative ability to cause desired change drivescompetition
Example:
Apple and iPhonesnew way of communication
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All economies are service
economies Present economics systems can not exist without services
Even developing countries are dependent on services
Example: Payments are done by mobile phones
Services are now becoming more apparent withincreased specialization and outsourcing
X as a Service, where X could be
Infrastructure
Software
Payment
Anything else
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A service-centered view is inherentlycustomer oriented and relational
Service is defined in terms of customer-determined benefit
Service is co-created with the customer
Only customer decide the final version of the service
Co-creation is inherently customer oriented and relational
Example
Development of the IT serv ices
Always need to ask about the basic of the problem they aresolving
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Comparison:
Product Dominant Logic:
Customer is value destroyer
Customer has limited power
to impact quality or features
Customer is motivated todestroy goods to buy new
one
Seller is maximizing short
time profit
Service Dominant Logic:
Customer is value co-creator
Customer communicate with
seller about all features of the
serviceLong time relationship is
preferred
Seller is maximizing the longtime profit
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Using service thinking
Group work
manage team with at least 4 members.
make a research on the internet
find examples of the offer of Product and Servicedominant logic
Does not matter on focusing of company or organization
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Final conclusion
What to remember
IT is a service
We live in world of services
Providing ERP (whatever it is) is a service
Service and product dominant logic examples
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