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Dr. S. Anthony Raj, Faculty - KUBS. 9976097779; [email protected]

MANAGEMENT INFORMATION SYSTEM

Unit III

E-COMMERCE & FUNCTIONAL BUSINESS SYSTEMS: E-commerce: Scope, processes, Trends - Functional systems like manufacturing system, marketing system - Human resources system, Accounting systems. ERP: Meaning - Benefits/Challenges in implementing /trends/causes of ERP failures.

E-COMMERCE:

Electronic commerce is an emerging model of new selling and merchandising tools in which buyers are able to participate in all phases of a purchase decision, while stepping through those processes electronically rather than in a physical store or by phone (with a physical catalog). The processes in electronic commerce include enabling a customer to access product information, select items to purchase, purchase items securely, and have the purchase settled financially.

It is an emerging concept that describes the process of buying and selling or exchanging of products, services; and information via computer networks including the Internet.

From a communications perspective, EC is the delivery of information, products/services, or payments over telephone lines, computer networks, or any other electronic means.

From a business process perspective, EC is the application of technology to-ward the automation of business transactions and work flow.

From a service perspective, EC is a tool that addresses the desire of firms, consumers, and management to cut service costs while improving the quality of goods and increasing the speed of service delivery.

From an online perspective, EC provides the capability of buying and selling products and information on the Internet and other online services.

The term commerce is viewed by some as transactions conducted between business partners. Therefore, the term electronic commerce seems to be fairly narrow to some people. Thus, many use the term e-business. It refers to a broader definition of EC, not just buying and selling but also servicing customers and collaborating

with business partners, and conducting electronic transactions within an organization

THE SCOPE OF ELECTRONIC COMMERCE

Electronic Commerce (e-Commerce) is a term popularized by the advent of commercial services on the Internet. Internet e-Commerce is however, only one part of the overall sphere of e-Commerce. The commercial use of the Internet is perhaps typified by once-off sales to consumers. Other types of transactions use other technologies. Electronic Markets (EMs) are in use in a number of trade segments with an emphasis on search facilities and Electronic Data Interchange (EDI) is used for regular and standardized transactions between organizations. The mainstream of e-Commerce consists of these three areas;

1. Electronic Markets

An electronic market is the use of information and communications technology to present a range of offerings available in a market segment so that the purchaser can compare the prices (and other attributes) of the offerings and make a purchase decision. The usual example of an electronic market is an airline booking system.

2. Electronic Data Interchange (EDI)

EDI provides a standardized system for coding trade transactions so that they can be communicated directly from one computer system to another without the need for printed orders and invoices and the delays and errors implicit in paper handling. EDI is used by organizations that make a large number of

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regular transactions. One sector where EDI is extensively used is the large supermarket chains, which use EDI for transactions with their suppliers.

3. Internet Commerce

Information and communications technologies can also be used to advertise and make once-off sales of a wide range of goods and services. This type of e-Commerce is typified by the commercial use of the Internet. The Internet can, for example, be used for the purchase of books that are then delivered by post or the booking of tickets that can be picked up by the clients when they arrive at the event. It is to be noted that the Internet is not the

only technology used for this type of service and this is not the only use of the Internet in e-Commerce.

USAGE OF ELECTRONIC MARKETS

Electronic markets are exampled by the airline booking systems. Electronic markets are also used in the financial and commodity markets and again the dealing is done via intermediaries; to buy stocks and shares a member of the public uses the services of a stockbroker. Arguably the use of electronic markets has served the customer well. With the assistance of a good travel agent the airline customer can be informed of all the flights available for an intended journey and then select, on the basis of price, convenience, loyalty scheme, etc. the flight that they wish to book.

CATEGORIES OF E-COMMERCE:

we will divide categorize E commerce according to the parties involved in the business.

1. Business-to-business (B2B). Most of EC today is of this type. It includes the EDI transactions described earlier and electronic market transactions between organizations.

2. Business-to-consumer (B2C). These are retailing transactions with individual shoppers. The typical shopper at

Amazon.com is a consumer, or customer.

3. Consumer-to-consumer (C2C). In this category consumer sells directly to consumers. Examples are individuals selling in classified ads (e.g., www.clas-sified2000.com) and selling residential property, cars, and so on. Advertising personal services on the Internet and selling knowledge and expertise is another example of C2C. Several auction sites allow individuals to put items up for auctions. Finally, many individuals are using intranets and other organizational internal networks to advertise items for sale or services.

4. Consumer-to-business (C2B). This category includes individuals who sell products or services to organizations, as well as individuals who seek sellers, interact with them, and conclude a transaction.

5. Nonbusiness EC. An increased number of non-business institutions such as academic institutions, not-for-profit organizations, religious organizations, social organizations, and government agencies are using various types of EC to reduce their expenses (e.g., improve purchasing) or to improve their operations and customer service. (Note that in the previous categories one can usually replace the word business with organization.)

6. Intrabusiness (organizational) EC. In this category we include all internal organizational activities, usually performed on intranets that involve exchange of goods, services or information. Activities can range from selling corporate products to Employees to online training and cost reduction activities.

BENEFITS AND LIMITATIONS

The Benefits of EC

Few innovations in human history encompass as many potential benefits as EC does. The global nature of the technology, low cost, opportunity to reach hundreds of millions of people (projected within 10

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years), interactive nature, variety of possibilities, and resourcefulness and rapid growth of the supporting infrastructures (especially the Web) result in many potential benefits to organizations, individuals, and society. These benefits are just starting to materialize, but they will increase significantly as EC expands.

A. Benefits to Organizations

Electronic commerce expands the marketplace to national and international markets. With minimal capital outlay, a company can easily and quickly locate more customers, the best suppliers, and the most suitable business partners

worldwide. For example, in 1997, Boeing Corporation reported a savings of 20 percent after a request for a proposal

to manufacture a subsystem was posted on the Internet. A small vendor in Hungary answered the request and won the electronic bid. Not only was the subsystem cheaper, but it was delivered quickly.

Electronic commerce decreases the cost of creating, processing, distributing, storing, and retrieving paper-based information. For example, by introducing an electronic procurement system, companies can cut the purchasing administrative costs by as much as 85 percent. Another example is benefit payments. For the U.S. federal government, the cost of issuing a paper check is 430. The cost of electronic payment is 20.

Ability for creating highly specialized businesses. For example, dog toys which can be purchased only in pet shops

or department and discount e-stores in the physical world, are sold now in a specialized www.dogtoys.com (also see

www.cattoys.com).

Electronic commerce allows reduced inventories and overhead by facilitating pull-type supply chain management. In a pull-type system the process starts from customer orders and uses just-in-time manufacturing.

The pull-type processing enables expensive customization of products and services, which provides competitive

advantage to its implementers. A classic example is Dell Computer Corp., whose case will be described later.

Electronic commerce reduces the time between the outlay of capital and the receipt of products and services. Electronic commerce initiates business processes reengineering projects. By changing processes, productivity of salespeople, knowledge workers, and administrators can increase by 100 percent or more.

Electronic commerce lowers telecommunications cost-the Internet is much cheaper than VANs.

Other benefits include improved image, improved customer service, newfound business partners, simplified processes, compressed cycle and delivery time, increased productivity, eliminating paper, expediting access to information, reduced transportation costs, and increased flexibility.

B. Benefits to Consumers

The benefits of EC to consumers are as follows:

Electronic commerce enables customers to shop or do other transactions 24 hours a day, all year round, from almost any location.

Electronic commerce provides customers with more choices; they can select Electronic commerce frequently provides customers with less expensive products and services by allowing them to shop in many places and conduct quick comparisons.

In some cases, especially with digitized products, EC allows quick delivery.

Customers can receive relevant and detailed information in seconds, rather than days or weeks.

Electronic commerce makes it possible to participate in virtual auctions.

Electronic commerce allows customers to interact with other customers in electronic communities and exchange ideas as well as compare experiences.

Electronic commerce facilitates competition, which results in substantial discounts.

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C. Benefits to Society

The benefits of EC to society are as follows:

Electronic commerce enables more individuals to work at home and to do less traveling for shopping, resulting in less traffic on the roads and lower air pollution.

Electronic commerce allows some merchandise to be sold at lower prices, so less affluent people can buy more and increase their standard of living.

Electronic commerce enables people in Third World countries and rural areas to enjoy products and services that

otherwise are not available to them.

This includes opportunities to learn professions and earn college degrees.

Electronic commerce facilitates delivery of public services, such as health care, education, and distribution of government social services at a reduced cost and/or improved quality. Health- care services, for example, can reach

patients in rural areas.

The Limitations of EC

The limitations of EC can be grouped into technical and nontechnical categories.

A. Technical Limitations of EC

The technical limitations of EC are as follows:

There is a lack of system security, reliability, standards, and some communication protocols.

There is insufficient telecommunication bandwidth.

The software development tools are still evolving and changing rapidly.

It is difficult to integrate the Internet and EC software with some existing applications and databases.

Vendors may need special Web servers and other infrastructures, in addition to the network servers.

Some EC software might not fit with some hardware, or may be incompatible with some operating systems or other components.

As time passes, these limitations will lessen or be overcome; appropriate planning can minimize their impact.

B. Non-Technical Limitations

Of the many nontechnical limitations that slow the spread of EC, the following are the major ones.

Cost and justification. The cost of developing EC in-house can be very high, and mistakes due to lack of experience may result in delays. There are many opportunities for outsourcing, but where and how to do it is not a simple issue. Furthermore, to justify the system one must deal with some intangible benefits (such as improved customer service and the value of advertisement), which are difficult to quantify.

Security and privacy. These issues are especially important in the B2C area, especially security issues which are perceived to be more serious than they really are when appropriate encryption is used. Privacy measures are constantly improved. Yet, the customers perceive these issues as very important, and, the EC industry has a very long and difficult task of convincing customers that online transactions and privacy are, in fact, very secure.

Lack of trust and user resistance Customers do not trust an unknown faceless seller (sometimes they do not trust even known ones), paperless transactions, and electronic money. So switching from physical to virtual stores may be difficult.

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Other limiting factors. Lack of touch and feel online. Some customers like to touch items such as clothes and like to know exactly what they are buying.

Many legal issues are as yet unresolved, and government regulations and standards are not refined enough for many circumstances.

Electronic commerce, as a discipline, is still evolving and changing rapidly. Many people are looking for a stable area before they enter into it.

There are not enough support services. For example, copyright clearance centers for EC transactions do not exist,

and high-quality evaluators, or qualified EC tax experts, are rare.

In most applications there are not yet enough sellers and buyers for profitable EC operations.

Electronic commerce could result in a breakdown of human relationships.

Accessibility to the Internet is still expensive and/or inconvenient for many potential customers. (With Web TV, cell telephone access, kiosks, and constant media attention, the critical mass will eventually develop.)

FUNCTIONAL BUSINESS SYSTEMS

Supporting Business Functions in an Enterprise with Information

The principal business functions in a business firm are:

1. Marketing and sales

2. Production

3. Accounting and finance

4. Human resources

Emphasize that management support systems (MRS), decision support systems (DSS), and executive information systems (EIS), rest on the foundation of transaction processing systems (TPS) that support business operations. TPSs are the major source of data used by the higher-level systems to derive information. Professional support systems (PSS) and office information systems (OIS), which support individual and group knowledge work, are also a part of this foundation.

I. Marketing Information Systems:

Marketing activities are directed toward planning, promoting, and selling goods and services to satisfy the needs of customers and the objectives of the organization. Marketing information systems support decision making regarding the marketing mix. These include:

1. Product

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2. Price

3. Place

4. Promotion

In order to support decision making on the marketing mix, a marketing information system draws on several sources of data and information.

Sources of Data and Information for Marketing: Boundary-Spanning and Transaction Processing Subsystems

A marketing information system relies on external information to a far greater degree than other organizational information systems. It includes two subsystems designed for boundary spanning - bringing into the firm data and information about the marketplace.

The objective of marketing research is to collect data on the actual customers and the potential customers, known as prospects. The identification of the needs of the customer is a fundamental starting point for total quality management (TQM). Electronic commerce on the WEB makes it easy to compile statistics on actual buyer behaviour.

Marketing research software supports statistical analysis of data. It enables the firm to correlate buyer behaviour with very detailed geographic variables, demographic variables, and psychographic variables.

Marketing (competitive) intelligence is responsible for the gathering and interpretation of data regarding the firm's competitors, and for the dissemination of the competitive information to the appropriate users. Most of the competitor information comes from corporate annual reports, media-tracking services, and from reports purchased from external providers, including on-line database services. The Internet has become a major source of competitive intelligence.

Marketing Mix Subsystems

The marketing mix subsystems support decision making regarding product introduction, pricing, promotion (advertising and personal selling), and distribution. These decisions are integrated into the sales forecast and marketing plans against which the ongoing sales results are compared.

Marketing mix subsystems include:

1. Product subsystem

2. Place subsystem

3. Promotion subsystem

4. Price subsystem

5. Sales forecasting

Product Subsystem

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The product subsystem helps to plan the introduction of new products. Continually bringing new products to market is vital in today's competitive environment of rapid change. The product subsystem should support balancing the degree of risk in the overall new-product portfolio, with more aggressive competitors assuming higher degrees of risk for a potentially higher payoff.

Although decisions regarding the introduction of new products are unstructured, information systems support this process in several ways:

1. Professional support systems assist designers in their knowledge work

2. DSSs are used to evaluate proposed new products

3. With a DSS, a marketing manager can score the desirability of a new product.

4. Electronic meeting systems help bring the expertise of people dispersed in space and time to bear on the problem

5. Information derived from marketing intelligence and research is vital in evaluating new product ideas.

Place Subsystem

The place subsystem assists the decision makers in making the product available to the customer at the right place at the right time. The place subsystem helps plan the distribution channels for the product and track their performance.

The use of information technology has dramatically increased the availability of information on product movement in the distribution channel. Examples include:

1. Bar-coded Universal Product Code (UPC)

2. Point-of-sale (POS) scanning

3. Electronic data interchange (EDI)

4. Supports just-in-time product delivery and customized delivery

Promotion Subsystem

The promotion subsystem is often the most elaborate in the marketing information system, since it supports both personal selling and advertising. Media selection packages assist in selecting a mix of avenues to persuade the potential purchaser, including direct mail, television, print media, and the electronic media such as the Internet and the WEB in particular. The effectiveness of the selected media mix is monitored and its composition is continually adjusted.

Database marketing relies on the accumulation and use of extensive databases to segment potential customers and reach tem with personalized promotional information.

The role of telemarketing, marketing over the telephone, has increased. Telemarketing calls are well supported by information technology.

Sales management is thoroughly supported with information technology. Customer profitability analysis help identify high-profit and high-growth customers and target marketing efforts in order to retain and develop these accounts.

Sales force automation, involves equipping salespeople with portable computers tied into the corporate information systems. This gives the salespeople instantaneous access to information and frees them from the reporting paperwork. This increases selling time and the level of performance. Access to corporate databases is sometimes accompanied by access to corporate expertise, either by being able to contact the experts or by using expert systems that help specify the product meeting customer requirements.

Price Subsystem

Pricing decisions find a degree of support from DSSs and access to databases that contain industry prices. These highly unstructured decisions are made in pursuit of the companys pricing objectives. General strategies range from profit maximization to forgoing a part of the profit in order to increase a market share.

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Information systems provide an opportunity to finely segment customer groups, and charge different prices depending on the combination of products and services provided, as well as the circumstances of the sale transaction.

Sales Forecasting

Based on the planned marketing mix and outstanding orders, sales are forecast and a full marketing plan is developed. Sale forecasting is an area where any quantitative methods employed must be tempered with human insight and experience. The actual sales will depend to a large degree on the dynamics of the environment.

Qualitative techniques are generally used for environmental forecasting - an attempt to predict the social, economic, legal, and technological environment in which the company will try to realize its plans. Sales forecasting uses numerous techniques, which include:

1. Group decision making techniques are used to elicit broad expert opinion

2. Scenario analysis in which each scenario in this process is a plausible future environment

3. Extrapolation of trends and cycles through a time-series analysis.

II. Manufacturing Information Systems

Global competitive pressures of the information society have been highly pronounced in manufacturing and have radically changed it. The new marketplace calls for manufacturing that are:

1. Lean - highly efficient, using fewer input resources in production through better engineering and through production processes that rely on low inventories and result in less waste.

2. Agile - fit for time-based competition. Both the new product design and order fulfilment are drastically shortened.

3. Flexible - able to adjust the product to a customer's preferences rapidly and cost effectively.

4. Managed for quality - by measuring quality throughout the production process and following world standards, manufacturers treat quality as a necessity and not a high-price option.

Structure of Manufacturing Information Systems

Information technology must play a vital role in the design and manufacturing processes. Manufacturing information systems are among the most difficult both to develop and to implement.

TPSs are embedded in the production process or in other company processes. The data provided by the transaction processing systems are used by management support subsystems, which are tightly integrated and interdependent.

Manufacturing information subsystems include:

1. Product design and engineering

2. Product scheduling

3. Quality control

4. Facilities planning, production costing, logistics and inventory subsystems

Product Design and Engineering

Product design and engineering are widely supported today by computer-aided design (CAD) and computer-aided engineering (CAE) systems. CAD systems assist the designer with automatic calculations and display of surfaces while storing the design information in databases. The produced designs are subject to processing with CAE systems to ensure their quality, safety, manufacturability, and cost-effectiveness. CAD/CAE systems increasingly eliminate paperwork from the design process, while speeding up the process itself. As well, the combined techniques of CAD/CAE and rapid prototyping cut time to market.

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Product Scheduling

Production scheduling is the heart of the manufacturing information system. This complex subsystem has to ensure that an appropriate combination of human, machinery, and material resources will be provided at an appropriate time in order to manufacture the goods.

Production scheduling and the ancillary processes are today frequently controlled with a manufacturing resource planning system as the main informational tool. This elaborate software converts the sales forecast for the plants products into a detailed production plan and further into a master schedule of production.

Computer integrated manufacturing (CIM) is a strategy through which a manufacturer takes control of the entire manufacturing process. The process starts with CAD and CAE and continues on the factory floor where robots and numerically controlled machinery are installed - and thus computer-aided manufacturing (CAM) is implemented. A manufacturing system based on this concept can turn out very small batches of a particular product as cost-effectively as a traditional production line can turn out millions of identical products. A full-fledged CIM is extremely difficult to implement; indeed, many firms have failed in their attempts to do so.

Quality Control

The quality control subsystem of a manufacturing information system relies on the data collected on the shop floor by the sensors embedded in the process control systems.

Total quality management (TQM) is a management technique for continuously improving the performance of all members and units of a firm to ensure customer satisfaction. In particular, the principles of TQM state that quality comes from improving the design and manufacturing process, rather than Ainspecting out@ defective products. The foundation of quality is also understanding and reducing variation in the overall manufacturing process.

Facilities Planning, Production Costing, Logistics and Inventory Subsystems

Among the higher-level decision making supported by manufacturing information systems are facilities planning - locating the sites for manufacturing plants, deciding on their production capacities, and laying out the plant floors.

Manufacturing management requires a cost control program, relying on the information systems. Among the informational outputs of the production costing subsystem are labor and equipment productivity reports, performance of plants as cost centers, and schedules for equipment maintenance and replacement.

Managing the raw-materials, packaging, and the work in progress inventory is a responsibility of the manufacturing function. In some cases, inventory management is combined with the general logistics systems, which plan and control the arrival of purchased goods into the firm as well as shipments to the customers.

III. Accounting and Financial Information Systems

The financial function of the enterprise consists in taking stock of the flows of money and other assets into and out of an organization, ensuring that its available resources are properly used and that the organization is financially fit. The components of the accounting system include:

1. Accounts receivable records

2. Accounts payable records

3. Payroll records

4. Inventory control records

5. General ledgers

Financial information systems rely on external sources, such as on-line databases and custom produced reports, particularly in the areas of financial forecasting and funds management. The essential functions that financial information systems perform include:

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1. Financial forecasting and planning

2. Financial control

3. Funds management

4. Internal auditing

Financial Forecasting

Financial forecasting is the process of predicting the inflows of funds into the company and the outflows of funds from it for a long term into the future. Outflows of funds must be balanced over the long term with the inflows. With the globalization of business, the function of financial forecasting has become more complex, since the activities in multiple national markets have to be consolidated, taking into consideration the vagaries of multiple national currencies. Scenario analysis is frequently employed in order to prepare the firm for various contingencies.

Financial forecasts are based on computerized models known as cash-flow models. They range from rather simple spreadsheet templates to sophisticated models developed for the given industry and customized for the firm or, in the case of large corporations to specify modeling of their financial operations. Financial forecasting serves to identify the need for funds and their sources.

Financial Control

The primary tools of financial control are budgets. A budget specifies the resources committed to a plan for a given project or time period. Fixed budgets are independent of the level of activity of the unit for which the budget is drawn up. Flexible budgets commit resources depending on the level of activity.

Spreadsheet programs are the main budgeting tools. Spreadsheets are the personal productivity tools in use today in budget preparation.

In the systems-theoretic view, budgets serve as the standard against which managers can compare the actual results by using information systems. Performance reports are used to monitor budgets of various managerial levels. A performance report states the actual financial results achieved by the unit and compares them with the planned results.

Along with budgets and performance reports, financial control employs a number of financial ratios indicating the performance of the business unit. A widely employed financial ratio is return on investment (ROI). ROS shows how well a business unit uses its resources. Its value is obtained by dividing the earnings of the business unit by its total assets.

Funds Management

Financial information systems help to manage the organization's liquid assets, such as cash or securities, for high yields with the lowest degree of loss risk. Some firms deploy computerized systems to manage their securities portfolios and automatically generate buy or sell orders.

Internal Auditing

The audit function provides an independent appraisal of an organization's accounting, financial, and operational procedures and information. All large firms have internal auditors, answerable only to the audit committee of the board of directors. The staff of the chief financial officer of the company performs financial and operational audits. During a financial audit, an appraisal is made of the reliability and integrity of the company's financial information and of the means used to process it. An operational audit is an appraisal of how well management utilizes company resources and how well corporate plans are being carried out.

IV. Human Resource Information Systems

A human resource information system (HRIS) supports the human resources function of an organization with information. The name of this function reflects the recognition that people who work in a firm are frequently its most valuable resources. The complexity of human resource management has grown immensely over recent years, primary due to the need to conform with new laws and regulations.

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A HRIS has to ensure the appropriate degree of access to a great variety of internal stakeholders, including:

1. The employees of the Human Resources department in performance of their duties

2. All the employees of the firm wishing ti inspect their own records

3. All the employees of the firm seeking information regarding open positions or available benefit plans

4. Employees availing themselves of the computer-assisted training and evaluation opportunities

5. Managers throughout the firm in the process of evaluating their subordinates and making personnel decisions

6. Corporate executives involved in tactical and strategic planning and control

Transaction Processing Subsystems and Databases of Human Resource Information Systems

At the heart of HRIS are its databases, which are in some cases integrated into a single human resource database. The record of each employee in a sophisticated employee database may contain 150 to 200 data items, including the personal data, educational history and skills, occupational background, and the history of occupied positions, salary, and performance in the firm. Richer multimedia databases are not assembled by some firms in order to facilitate fast formation of compatible teams of people with complementary skills.

Other HRIS databases include:

1. Applicant databases

2. Position inventory

3. Skills inventory

4. Benefit databases

5. External databases

Information Subsystems for Human Resource Management

The information subsystems of HRIS reflect the flow of human resources through the firm, from planning and recruitment to termination. A sophisticated HRIS includes the following subsystems:

1. Human resource planning

2. Recruiting and workforce management

3. Compensation and benefits

4. Government reporting and labour relations support

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Human Resource Planning

To identify the human resources necessary to accomplish the long-term objectives of a firm, we need to project the skills, knowledge, and experience of the future employees.

Recruiting and Workforce Management

Based on the long-term resource plan, a recruitment plan is developed. The plan lists the currently unfilled positions and those expected to become vacant due to turnover.

The life-cycle transitions of the firm's workforce - hiring, promotion and transfer, and termination - have to be supported with the appropriate information system components.

Compensation and Benefits

Two principal external stakeholders have an abiding interest in the human resource policies of organizations. These are:

1. Various levels of government

2. Labor unions

V. Integrating Functional Systems for Superior Organizational Performance

Functional information systems rarely stand alone. This reflects the fact that the functions they support should, as much as possible, connect with each other seamlessly in order to serve the firms customers. Customers expect timely order delivery, often on a just-in-time schedule; quality inspection to their own standards; flexible credit terms; post-delivery service; and often, participation in the product design process.

Information technology provides vital support for integrating internal business processes, cutting across functional lines, and for integrating operations with the firm's business partners, its customers and suppliers.

Enterprise Resource Planning - ERP

Enterprise resource planning (ERP) is business process management software that allows an organization to use a system of integrated applications to manage the business and automate back office functions. ERP software integrates all facets of an operation, including product planning, development, manufacturing processes, sales and marketing.

Enterprise resource planning systems or enterprise systems are software systems for business management, encompassing modules supporting functional areas such as planning, manufacturing, sales, marketing, distribution, accounting, financial, human resource management, project management, inventory management, service and maintenance, transportation and e-business. The architecture of the software facilitates transparent integration of modules, providing flow of information between all functions within the enterprise in a consistently visible manner. Corporate computing with ERPs allows companies to implement a single integrated system by replacing or re-engineering their mostly incompatible legacy information systems.

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Challenges of ERP implementation

Lack of senior manager commitment

Ineffective communications with users

Insufficient training of end-users

Failure to get user support

Lack of effective project management methodology

Attempts to build bridges to legacy applications

Conflicts between user departments

Composition of project team members

Failure to redesign business process

Misunderstanding of change requirements

ERP Software Modules

ERP software typically consists of multiple enterprise software modules that are individually purchased, based on what best meets the specific needs and technical capabilities of the organization. Each ERP module is focused on one area of business processes, such as product development or marketing. A busines scan use ERP software to manage back-office activities and tasks including the following:

Top ERP Trends

The ERP field can be slow to change, but the last couple of years have unleashed forces which are fundamentally shifting the entire area. According to Enterprise Apps Today, the following new and continuing trends affect enterprise ERP software:

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1. Mobile ERP

Mobility continues to be a big trend. Executives and employees want real-time access to information, regardless of where they are. It is expected that businesses will quickly embrace mobile ERP, not just for reports and dashboards, but for conducting key business processes.

2. Cloud ERP

The cloud has been advancing steadily into the enterprise for some time, but many ERP users have been reluctant to place data cloud. Those reservations have gradually been evaporating, however, as the advantages of the cloud become apparent.

3. Social ERP

There has been much hype around social media and how important or not -- it is to add to ERP systems. Certainly, vendors have been quick to seize the initiative, adding social media packages to their ERP systems with much fanfare. But some wonder if there is really much gain to be had by integrating social media with ERP.

4. Two-tier ERP

Enterprises once attempted to build an all-encompassing ERP system to take care of every aspect of organizational systems. But some expensive failures have gradually brought about a change in strategy adopting two tiers of ERP.

ERP Vendors

Depending on your organization's size and needs there are a number of enterprise resource planning software vendors to choose from in the large enterprise, mid-market and the small business ERP market.

Large Enterprise ERP (ERP Tier I)

The ERP market for large enterprises is dominated by three companies: SAP, Oracle and Microsoft. (Source: EnterpriseAppsToday; Enterprise ERP Buyer's Guide: SAP, Oracle and Microsoft; Drew Robb)

Mid Market ERP (ERP Tier II)

For the midmarket vendors include Infor, QAD, Lawson, Epicor, Sage and IFS. (Source: EnterpriseAppsToday; Midmarket ERP Buyer's Guide; Drew Robb)

Small Business ERP (ERP Tier III)

Exact Globe, Syspro, NetSuite, Visibility, Consona, CDC Software and Activant Solutions round out the ERP vendors for small businesses. (Source: EnterpriseAppsToday; ERP Buyer's Guide for Small Businesses; Drew Robb)

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UNIT IV

NETWORKS AND SECURITY MANAGEMENT: Types of Telecommunications Networks:- LAN,MAN,WAN-Application of network-Topology- Meaning and uses of cloud computing in business- Business use of Internet Role of intranet, extranet in business-Wireless technologies Role of WiFi and challenges-Internetworked security defences - Other Security measures (Security code, backup files, security monitors , biometric, computer failure control, disaster recovery, Information system control& audit).

NETWORK AND SECURITY MANAGEMENT

Network management refers to the broad subject of managing computer networks. There exists a wide variety of software and hardware products that help network system administrators manage a network. Network management covers a wide area, including:

Security: Ensuring that the network is protected from unauthorized users.

Performance: Eliminating bottlenecks in the network.

Reliability: Making sure the network is available to users and responding to hardware and software malfunctions.

Network security consists of the provisions and policies adopted by a network administrator to prevent and monitor unauthorized access, misuse, modification, or denial of a computer network and network-accessible resources. Network security involves the authorization of access to data in a network, which is controlled by the network administrator. Users choose or are assigned an ID and password or other authenticating information that allows them access to information and programs within their authority. Network security covers a variety of computer networks, both public and private, that are used in everyday jobs conducting transactions and communications among businesses, government agencies and individuals. Networks can be private, such as within a company, and others which might be open to public access. Network security is involved in organizations, enterprises, and other types of institutions. It does as its title explains: It secures the network, as well as protecting and overseeing operations being done. The most common and simple way of protecting a network resource is by assigning it a unique name and a corresponding password.

Network security concepts

Network security starts with authenticating, commonly with a username and a password. Since this requires just one detail authenticating the user name i.e. the password this is sometimes termed one-factor authentication. With two-factor authentication, something the user 'has' is also used (e.g. a security token or 'dongle', an ATM card, or a mobile phone); and with three-factor authentication, something the user 'is' is also used (e.g. a fingerprint or retinal scan).

Once authenticated, a firewall enforces access policies such as what services are allowed to be accessed by the network users.[2] Though effective to prevent unauthorized access, this component may fail to check potentially harmful content such as computer worms or Trojans being transmitted over the network. Anti-virus software or an intrusion prevention system (IPS)[3] help detect and inhibit the action of such malware. An anomaly-based intrusion detection system may also monitor the network like wireshark traffic and may be logged for audit purposes and for later high-level analysis.

Communication between two hosts using a network may be encrypted to maintain privacy.

Honeypots, essentially decoy network-accessible resources, may be deployed in a network as surveillance and early-warning tools, as the honeypots are not normally accessed for legitimate purposes. Techniques used by the attackers that attempt to compromise these decoy resources are studied during

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and after an attack to keep an eye on new exploitation techniques. Such analysis may be used to further tighten security of the actual network being protected by the honeypot.A honeypot can also direct an attacker s attention away from legitimate servers. A honeypot encourages attackers to spend their time and energy on the decoy server while distracting their attention from the data on the real server. Similar to a honeypot, a honeynet is a network set up with intentional vulnerabilities. Its purpose is also to invite attacks so that the attacker s methods can be studied and that information can be used to increase network security. A honeynet typically contains one or more honeypots.[4]

Security management

Security management for networks is different for all kinds of situations. A home or small office may only require basic security while large businesses may require high-maintenance and advanced software and hardware to prevent malicious attacks from hacking and spamming.

Homes & Small Businesses

basic firewall or a unified threat management system.

For Windows users, basic Antivirus software. An anti-spyware program would also be a good idea. There are many other types of antivirus or anti-spyware programs available.

When using a wireless connection, use a robust password. Also one could try to use the strongest security supported by their wireless devices, such as WPA2 with AES. TKIP may be more widely supported by their devices and should only be considered in cases where they are NOT compliant with AES.

If using Wireless: Change the default SSID network name, also disable SSID Broadcast; as this function is unnecessary for home use. (Security experts consider this to be easily bypassed with modern technology and some knowledge of how wireless traffic is detected by software).[5]

Enable MAC Address filtering to keep track of all home network MAC devices connecting to one's router. (This is not a security feature per se; However it can be used to limit and strictly monitor one's DHCP address pool for unwanted intruders if not just by exclusion, but by AP association.)

Assign STATIC IP addresses to network devices. (This is not a security feature per se; However it may be used, in conjunction with other features, to make one's AP less desirable to would-be intruders.)

Disable ICMP ping on router.

Review router or firewall logs to help identify abnormal network connections or traffic to the Internet.

Use passwords for all accounts.

For Windows users, Have multiple accounts per family member and use non-administrative accounts for day-to-day activities.

Raise awareness about information security to children.[6]

Medium businesses

A fairly strong firewall or Unified Threat Management System

Strong Antivirus software and Internet Security Software.

For authentication, use strong passwords and change them on a bi-weekly/monthly basis.

When using a wireless connection, use a robust password.

Raise awareness about physical security to employees.

Use an optional network analyzer or network monitor.

An enlightened administrator or manager.

Use a VPN, or Virtual Private Network, to communicate between a main office and satellite offices using the Internet as a connectivity medium. A VPN offers a solution to the expense of leasing a data line while providing a secure network for the offices to communicate. A VPN

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provides the business with a way to communicate between two in a way mimics a private leased line. Although the Internet is used, it is private because the link is encrypted and convenient to use. A medium sized business needing a secure way to connect several offices will find this a good choice.[7]

Clear employee guidelines should be implemented for using the Internet, including access to non-work related websites, sending and receiving information.

Individual accounts to log on and access company intranet and Internet with monitoring for accountability.

Have a back-up policy to recover data in the event of a hardware failure or a security breach that changes, damages or deletes data.

Disable Messenger.

Assign several employees to monitor a group like CERT[8] which studies Internet security vulnerabilities and develops training to help improve security.

Large businesses

A strong firewall and proxy, or network Guard, to keep unwanted people out.

A strong Antivirus software package and Internet Security Software package.

For authentication, use strong passwords and change it on a weekly/bi-weekly basis.

When using a wireless connection, use a robust password.

Exercise physical security precautions to employees.

Prepare a network analyzer or network monitor and use it when needed.

Implement physical security management like closed circuit television for entry areas and restricted zones.

Security fencing to mark the company's perimeter.

Fire extinguishers for fire-sensitive areas like server rooms and security rooms.

Security guards can help to maximize physical security.

Types of Telecommunications Networks:- LAN,MAN,WAN

-Application of network-Topology- Meaning and uses of cloud computing in business- Business use of Internet Role of intranet, extranet in business-Wireless technologies Role of WiFi and challenges-Internetworked security defences - Other Security measures (Security code, backup files, security monitors , biometric, computer failure control, disaster recovery, Information system control& audit).

(Kindly refer the files)

Documents

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