Managing information systems 7th edition brow ch05

Online processing • Significant delay before master file is updated usually 1 day • Master file updated within a fraction of a second • Much less expensive to operate • Much more expensi

MANAGEMENT INFORMATION SYSTEMS

CHAPTER 5 ENTERPRISE SYSTEMS

PART II - APPLICATION AREAS

Inter-organizational systems:

• e-Business applications (Ch 7)

- B2C – link businesses with end consumers

- B2B – link businesses with other businesses

- Intermediaries

Intra-organizational systems:

• Enterprise systems: (Ch 5)

support all or most of the organization

• Managerial Support systems (Ch 6)

support a specific manager or group of managers

CHAPTERS 5 AND 6

Intra-Organizational systems

CRITICAL CONCEPTS

• A group (or batch) of transactions are accumulated, then

processed all at one time

• Key Disadvantage: Time delay before the master file updated

Batch processing

CRITICAL CONCEPTS

• Each transaction is entered directly into computer when it occurs

• Interactive System: A fully implemented online system where

user interacts directly with the computer

• In-Line System: Provides for online data entry, but processing of

transactions is deferred for batch processing

Online processing

CRITICAL CONCEPTS

Batch processing vs Online processing

• Significant delay before master file is updated (usually 1 day)

• Master file updated within a fraction of a second

• Much less expensive to operate

• Much more expensive to operate

• Some applications naturally suited for batch processing (e.g., payroll)

• Some applications need to be processed in real time

Given these tradeoffs, hybrid systems that combine online data entry,

CRITICAL CONCEPTS

• Information systems that support one primary business

function or process of an organization

Functional information systems

Example Business Functions and Subsystems

Marketing Accounting Personnel

Sales Forecasting

Production Planning

Production

Top Management

Long-term trend analysis

Sales System Example

CRITICAL CONCEPTS

• Refers to mode of delivery: Processing power is distributed to

multiple sites, which are linked via telecommunications

Distributed systems

Client/server systems

• A type of distributed system where processing power is

distributed between a central server computer and a number of client computers (usually PCs)

• Runs on bigger machine

• Handles data storage for applications … – Databases

– Web pages – Groupware

Client

Application Server Client

Database Server

CRITICAL CONCEPTS

• Fat client/thin server: most processing done on the client

Ex: Web and groupware servers

• Thin client/fat server: most processing done on the server

Ex: Database servers

Client/server systems and Fat/Thin Models

CRITICAL CONCEPTS

Virtualization

• Server Virtualization:

- Physical server split in multiple virtual server

- Each virtual server can run its own full fledged operating system

- Physical server acts as a hypervisor program creating virtual servers

- Each virtual server can be employed as a standalone physical server,

reducing the number of physical servers needed

• Desktop Virtualization:

- Implemented through a client server computing model

- Virtualized desktop environment stored on a server then on local storage

of desktop device

- All the programs, application and data are kept on the server and all

programs and applications are run on the server

CRITICAL CONCEPTS

• Application architecture based on a collection of functions, or services,

where these services can communicate (or be connected) with one

another

• Advantages:

- Once a service is created (internally or externally) it can be used over

and over again

Service-oriented architecture (SOA)

Web services

• Collection of technologies built around the XML standard of

communicating

• Other protocols used in web services include:

- Web Services Description Language (WSDL)

- Universal Description, Discovery, and Integration (UDDI)

- SOAP (originally Simple Object Access Protocol)

TRANSACTION PROCESSING SYSTEMS (TPS)

• Thousands of transactions critical to business operations are

processed each day in large organizations for sales, bills for sales and customer payments, inventory shipped and received,

payments to employees, etc

• Typical outputs: invoices, checks, orders, reports

TRANSACTION PROCESSING SYSTEMS

TRANSACTION PROCESSING SYSTEMS

• Sales Order Processing or a Query

• Output includes invoices for sales orders

• Linked to other subsystems

Order entry system

ENTERPRISE RESOURCE PLANNING (ERP)

SYSTEMS

Enterprise Resource Planning (ERP) Systems

• Set of integrated business applications (modules) that carry out

common business functions

- Transaction data accessible to workers in multiple functional

units (sales + accounting +…)

• Process-oriented way of doing business

- Not separate systems for separate functions

- Support for “Order fulfillment,” not just Sales

• Usually purchased from a software vendor

• ERP = “First wave” of enterprise system packages

“Later waves” of enterprise system packages

- Customer relationship management (CRM)

ENTERPRISE RESOURCE PLANNING (ERP)

SYSTEMS

C U S T O M E R S

Production Procurement Distribution

Materials Management modules

3 Modules for Value-Chain Activities

2 Modules for Enterprise Support Activities

By mid-1990s, SAP and other vendors designed “suites” of integrated modules for “back-office” transaction processing that eliminated the need

for many custom-developed interfaces

ERP SYSTEMS, Continued

• Suite from one vendor OR “best of breed” from multiple vendors

• Some organizations implement Enterprise Support modules only

( Financials, HR)

• Value-Chain module implementations involve large investment

of money and people resources because of impact on business

• Have become “essential” systems in many industries

SAP BUSINESS SUITE

Today’s vendors offer modules

beyond the “back-office” modules

Financials

Financial Supply Chain Management Financial Accounting

Management Accounting Treasury Applications

Human Capital Management

Talent Management Workforce Process Management Workforce Deployment

Operations

Procurement Inventory and Warehouse Management Inbound and Outbound Logistics Transportation Management Production Planning

Manufacturing Execution Product Development Life-Cycle Data Management Sales Order Management Aftermarket Sales and Service Professional-Service Delivery

Corporate Services

Real Estate Management Enterprise Asset Management Project and Portfolio Management Travel Management

Environment, Health, and Safety Management Quality Management

Global Trade Services

End-User Service Delivery

Manager Portal Employee Portal Employee Interaction Support Center

Analytics

Financial Analytics Operations Analytics Workforce Analytics

ENTERPRISE RESOURCE PL ANNING ERP

SYSTEMS, continued

• Support for Cross-Functional processes

- Modules were designed to support business processes that

involved multiple business functions and multiple geographic locations

• Access to Integrated Data via a unified platform

- Data entered into one module could be accessed in real-time by

other modules, by employees in dispersed business units, if a

single centralized database is implemented

• Support for Global Transactions

- National currencies are automatically converted to the parent

firm’s currency

- Employees in different countries can see the same screen in their

ERP Business Benefits

ENTERPRISE RESOURCEPLANNING SYSTEMS

• Centralized Database on Client/Server Architecture

- Many early adopters replaced legacy system applications (with separate databases) written for mainframe computers

• Software updates with increased functionality from the vendor

on a regular basis

• Standard IT platform for external transactions and regulatory

compliance

- Enables transactions with external suppliers and customers

- Costs avoided for updating legacy systems (e.g., Y2K and Euro

ERP IT Infrastructure Benefits

DATA WAREHOUSING

• The establishment and maintenance of a large data storage facility containing data on all (or at least many) aspects of the enterprise

• Provides users data access and analysis capabilities without

endangering operational systems

• Designed for analysis of data, not efficient operational performance

• Summary reports may be automatically generated on periodic basis

DATA WAREHOUSING: KEY ELEMENTS

Requires software tools to:

- Construct warehouse

- Operate warehouse

- Access and analyze data from the warehouse

DATA WAREHOUSING

• Subject-oriented

- Data stored by business subject, rather than by application

- Customer, Claims vs Order-Billing, Claims Processing

• Integrated

- Data stored once in a single integrated location

• Time-variant

- Data tagged with some element of time

- Data available for long periods of time

• Nonvolatile

- Data warehouse is “read only”: existing data is not

Key data concepts for Data Warehousing

CUSTOMER RELATIONSHIP MANAGEMENT

SYSTEMS

• A business strategy directed at customer relationships that

involves new business processes for execution and

communication

- Customer interactions focused on customer needs

• Integrated approach to customer channels for marketing,

sales, and support

- Cross-functional vs single functional view

Customer relationship management systems (CRM)

CUSTOMER RELATIONSHIP MANAGEMENT

SYSTEMS

• A new way to compete using IT: service-based differentiation

- Single-face-to-the-customer, no matter which channel customer uses

CRM systems

Traditional Channels New Electronic Channels

• Call centers • E-mail

• Field reps • Web sites for consumers and

CUSTOMER RELATIONSHIP MANAGEMENT

• Major ERP software vendors also offer CRM modules

(e.g., SAP and Oracle)

• Salesforce.com positioned itself as an on-demand solution

- Vendor is also the software host (ASP)

CRM systems, continued

CUSTOMER RELATIONSHIP MANAGEMENT

Ex Siebel Ex: Salesforce.com

Ex mySAP

CUSTOMER RELATIONSHIP MANAGEMENT

SUPPORTED BY A DATA WAREHOUSE

• CRM systems often pull data that is stored in a data

warehouse

• Example: Harrah’s Entertainment

- Total Rewards system captures all guest transactions (including slot machines and game tables)

- Harrah’s can track who plays what games, where, when, and how often – and then offer special deals aimed at generating repeat business

OFFICE AUTOMATION

Most Common Office Applications

• Word processing • Desktop publishing

• Electronic mail • Electronic calendaring

• Telephony/IM • Document imaging

• Voice mail • Document preparation,

storage, and sharing

• Variants of E-mail include bulletin boards, listservs, computer

conferencing, chat rooms, instant messaging (IM), blogs

Drawbacks:

• Spam and volume of e-mail received can be overwhelming

• Some use offensive words on e-mails that they would never use in face communication

face-to-• Privacy issues due to electronic monitoring by supervisors

• However most often these drawbacks are overshadowed by the advantages

of the rapid, asynchronous communication of e-mails

OFFICE AUTOMATION

Video Conferencing

• Permits face-to-face meetings and conferences without need for

costly and time-consuming travel

• Computer-generated reports and graphics (e.g., PowerPoint

presentations) can be shared during the conference

• Videoconferencing can be used at the desktop level for a smaller

audience and at conference room level for larger audience

• Polycom Inc is a worldwide leader in videoconferencing

• Skype has been one of the most popular ways of videoconferencing over the internet

GROUPWARE AND COLLABORATION

• Also called collaboration or collaborative environment tools

• Products vary in the features they provide

Common Groupware Features

• Electronic mail • Meeting support systems

• Electronic bulletin boards • Workflow routing

• Computer conferencing • Electronic forms

• Electronic calendaring • Internet telephony

• Group scheduling • Sharing documents

• Desktop videoconferencing

• Learning management systems

• Electronic whiteboards • Instant messaging

• Shared workspace

• Lotus Notes (purchased by IBM in 1995)

Lotus Notes

INTRANETS AND PORTALS

Intranet

• A network operating within an organization that employs the

same TCP/IP protocol used on the Internet

Advantages:

- Implementation is relatively easy (Web technologies)

- Web browser acts as “universal client” that works with

heterogeneous platforms

- E-mail and document sharing available to all employees

- Low cost due to common technologies and little training

Web Portal

• Software that provides intranets with a structure and easier

access to internal information via a Web browser

- Initial intranets had lots of documents, but little structure to help users find them

FACTORY AUTOMATION

- Numerically controlled machines, which use a computer

program or a tape with punched holes to control movement of tools on machines

- Material requirements planning (MRP) uses data input to

produce a production schedule for the factory and a schedule of needed raw materials

- Combines MRP with the ability to carry out schedules through

computer controlled machines

TABLE 5.1 Abbreviations Used in Factory Automation

CIM computer-integrated manufacturing

CAE computer-aided engineering

CAPP computer-aided process planning MRP material requirements planning MRP II manufacturing resources planning SCM supply chain management

CAM computer-aided manufacturing AGV automated guided vehicle

MAP Manufacturing Automation Protocol

COMPUTER-INTEGRATED MANUFACTURING

• Computer-aided design (CAD) – use of two and

three-dimensional computer graphics to create and modify

engineering designs

functional characteristics of a design and simulates the product performance under various conditions

according to physical characteristics, machine routings, and

other machine operations

plan the sequence of processes that produce or assemble a part

Engineering systems

COMPUTER-INTEGRATED MANUFACTURING

- A system that usually has three components:

1 Master production schedule

2 Material requirements planning

3 Shop floor control

- May include just-in-time (JIT) production to minimize inventory

- Does not directly control machines on the shop floor

Manufacturing Administration Systems

COMPUTER-INTEGRATED MANUFACTURING

Supply Chain Management

- Systems to deal with distribution and transportation of raw materials and finished products throughout the supply

SUPPLY CHAIN MANAGEMENT (SCM) SYSTEMS

• Supports procurement of components needed to make a product or service and movement and distribution of finished products through the supply chain

• Five basic components of SCM system:

1 Plan: developing strategy for managing resources

2 Source: choosing suppliers

3 Make: manufacturing the product

4 Deliver: logistics of getting product to the customer

5 Return: procedure for handling defective products

FACTORY AUTOMATION

control manufacturing processes

- Series of programs to control automated equipment on shop floor

- Includes guiding vehicles to move raw materials and finished

products

- Requires a lot of input from other systems

Factory operations

FACTORY AUTOMATION

protocol to ensure an open manufacturing system

- Pioneered by General Motors and now accepted by nearly all manufacturers and vendors

- Allows for seamless communication between all equipment on the factory floor

- Provides online, real-time control and monitoring of machines

on the shop floor

- Allows for analyzing machine activity to take corrective measures

Factory operations