Information Systems Drivers

Requirements for classes of applications

IT Drivers

Electronic Commerce Business to business Electronic retail

Data WarehousingEnterprise Management

SAP and others Supply chain management

Electronic Commerce

Interorganizational Systems:Business-to-businessElectronic storefront

Market ExchangeInterorganizational Structure

Vertical integrationMultiple activities in the same firm

Risk: range of expertise required

Selective sourcingSome outsourced activities

Risk: control of outsourcer

Virtual corporationCoordination of separate activities

Risk: loss of core competency

Questions

Do we benefit from electronic commerce?Do we use information to add value to customers?Are we managing the product/service channel?Have we redesigned business with our partners to

take advantage of technology and provide securityDo we have partners with shared vision and

common purpose?Do we have the right infrastructure?

External / Internal Hosting

Outside (Cheaper) minimize bandwidth and hardware problems use external experts installed infrastructure little additional staffing required

Inside (More Control) dependent on third party reliability possible single vendor software solutions possible single vendor payment scheme

External / Internal Hosting

External better at storefrontsbut requires close integration with core

businessInternal better at business to

businessbut often creates a self-contained

replicated system that can be outsourced

Payment

Credit CardsSET (Secure Electronic Transaction) with http

Electronic ChecksPublic/private key transactions with banks

Electronic Cash3rd party software to create virtual cash

EDI/EFTValue added network using 3rd party. Common

in business to business.

Data Warehousing

Building a database to support the decision making activities of a department or business unit

Data Warehouse

A read-only database for decision analysis

–Subject Oriented–Integrated–Time variant–Nonvolatile

consisting of time stamped operational and external data.

Data Warehouse Architecture

EnterpriseData

Warehouse

DataMarts

BusinessPackages

Two Approaches

Classical Enterprise DatabaseTypically contains operational data that integrates information from all areas of the organization.

Data MartExtracted and managerial support data designed for departmental or EUC applications

Data Warehouse vsOperational Databases

Highly tunedReal time DataDetailed recordsCurrent valuesAccesses small

amounts of data in a predictable manner

Flexible accessConsistent timingSummarized as

appropriateHistoricalAccess large

amounts of data in unexpected ways

Access

Tailored access programs in user form, usually client-server

Specialist interfacesGeneral purpose GUI products (e.g.

Access, PowerBuilder)Custom access routines

Strategic Partnerships

Outsourcing, etc.

Outsourcing of IT Functions

Traditional Outsourcing: removing IT from a function for a long term (10 years)

Transitional Outsourcing: using outside services to move to a new environment over a short term (1-3 years)

Product Acquisition: purchasing functionality rather than building it

Outsourcing Difficulties

Contracts are structured for long periods (10 years is normal)

Early benefits are clear for the customer; late benefits to the outsource supplier(When the benefits start building for the outsourcer,

the customer starts wanting change)

Few outsourcers large enough for big projects(EDS, CSC, IBM, AT&T)

Technology evolution changes strategic IT relevance

Outsourcing in the 1990’s

More than half of all firms are considering some sort of outsourcing activity

Acceptance of strategic alliancesWin-win alliances in many business areas

IT’s changing environmentFocus on networking and integration places

extraordinary pressures on legacy and state of the art systems management

Outsourcing Drivers

Management concern for cost and quality

Breakdown in IT performanceSupplier pressuresSimplified Company management

agendaFinancial FactorsCorporate culture

What Happens

Vendor specialistsCurrent IT organizationBasic services

Enterprise Resource Planning

ERP Reality

Complete systems can cost tens of millions of dollars

Implementation can take several years

Companies may lose flexibility

SAP

Systems, Applications and Products in Data Processing

What is SAP?

SAP is the leading global provider of client/server business application solutions

SAP is the number one vendor of standard business applications software

SAP is the fifth largest independent software supplier in the world

Facts About SAP:

Founded in 1972 in Walldorf, GermanySAP employs a workforce of over 7,000SAP has offices in over 40 countriesMore than 6,000 companies worldwide

have implemented SAPReported revenues for 1995 were 1.887

billion dollars

Infrastructure Drivers