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Chapter 2
an ERP system is that it can reduce costs by streamlining business processes. If a company
is not prepared to change its business processes to make them more efficient, then it will
38 find itself with a large bill for software and consulting fees, with no improvement in
organizational performance.

ANOTHER LOOK

Sustainability and ERP
ERP systems are helping companies track their energy consumption. SAP and Walmart
are not only teaming up for the implementation of the retail giant’s financial software,
but they are also promoting a unified front on sustainability—focusing on reducing
pollution while increasing profits—through the use of ERP software. Many SAP
customers have cut energy usage; for example, 7-Eleven reduced its cooling energy usage
by 12 percent, Dannon cut its fuel costs by 22 percent with better management of its
transportation system, and Kendall-Jackson wine makers cut their lighting bill by
40 percent—all through the use of enhanced information from their ERP system.
Companies can use the software to track and report on their energy consumption;
however, in order to make changes, a company must determine the baseline of its energy
consumption. For instance, Walmart was surprised to find that only 8 percent of its carbon
footprint was under the direct control of the company, the remaining 92 percent was in the
company’s supply chain. Since 85 percent of Walmart’s suppliers run SAP, Walmart saw an
opportunity to encourage energy savings on the part of the companies that supply the
Walmart stores. SAP sustainability software application allows Walmart and its suppliers to
track their energy usage, emissions, and consumption of other natural resources.

Question:
1. How important is sustainability to a company’s bottom line? How about it
its image?

Is ERP Software Inflexible?
Although many people claim that ERP systems (especially the SAP ERP system) are
rigid, SAP ERP does offer numerous configuration options that help businesses customize
thesoftwaretofit theirunique needs.In addition, programmers can write specific
routines for special applications in SAP’s internal programming language, called
Advanced Business Application Programming (ABAP). The integration platform,
NetWeaver, offers further flexibility in adding both SAP and non-SAP components to a
company’s IT infrastructure. Companies need to be careful about how much custom
programming they include in their implementations, or they could find they have simply
re-created their existing information systems in a new software package instead of
gaining the benefits of improved, integrated business processes. In its implementation of
PeopleSoft, FedEx Corporation installed the systems for Financial and Human Resources
functions with little or no modification.
Once an ERP system is in place, trying to reconfigure it while retaining data integrity
is expensive and time consuming. That is why thorough pre-implementation planning is so

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