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Chapter 9 Achieving Operational Excellence and Customer Intimacy: Enterprise Applications 371

TABLE 9.1 BUSINESS PROCESSES SUPPORTED BY ENTERPRISE SYSTEMS

Financial and accounting processes, including general ledger, accounts payable, accounts receivable, fixed assets, cash management and
forecasting, product-cost accounting, cost-center accounting, asset accounting, tax accounting, credit management, and financial reporting
Human resources processes, including personnel administration, time accounting, payroll, personnel planning and development, benefits
accounting, applicant tracking, time management, compensation, workforce planning, performance management, and travel expense reporting

Manufacturing and production processes, including procurement, inventory management, purchasing, shipping, production planning,
production scheduling, material requirements planning, quality control, distribution, transportation execution, and plant and equipment
maintenance
Sales and marketing processes, including order processing, quotations, contracts, product configuration, pricing, billing, credit checking,
incentive and commission management, and sales planning

the system to the way it does business. For example, the firm could use these
tables to select whether it wants to track revenue by product line, geographical
unit, or distribution channel.
If the enterprise software does not support the way the organization does
business, companies can rewrite some of the software to support the way their
business processes work. However, enterprise software is unusually complex,
and extensive customization may degrade system performance, compromis-
ing the information and process integration that are the main benefits of the
system. If companies want to reap the maximum benefits from enterprise
software, they must change the way they work to conform to the business
processes defined by the software.
To implement a new enterprise system, Tasty Baking Company identified
its existing business processes and then translated them into the business
processes built into the SAP ERP software it had selected. To ensure it obtained
the maximum benefits from the enterprise software, Tasty Baking Company
deliberately planned for customizing less than 5 percent of the system and
made very few changes to the SAP software itself. It used as many tools and
features that were already built into the SAP software as it could. SAP has
more than 3,000 configuration tables for its enterprise software.
Leading enterprise software vendors include SAP, Oracle, IBM, Infor Global
Solutions, and Microsoft. There are versions of enterprise software packages
designed for small and medium-sized businesses and on-demand versions,
including software services running in the cloud (see Section 9.4).

BUSINESS VALUE OF ENTERPRISE SYSTEMS

Enterprise systems provide value both by increasing operational efficiency and
by providing firmwide information to help managers make better decisions.
Large companies with many operating units in different locations have used
enterprise systems to enforce standard practices and data so that everyone does
business the same way worldwide.
Coca-Cola, for instance, implemented a SAP enterprise system to standardize
and coordinate important business processes in 200 countries. Lack of standard,
company-wide business processes prevented the company from leveraging its
worldwide buying power to obtain lower prices for raw materials and from
reacting rapidly to market changes.
Enterprise systems help firms respond rapidly to customer requests for
information or products. Because the system integrates order, manufacturing,
and delivery data, manufacturing is better informed about producing only what

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