Topic 4 -enterprize_system

MANAGEMENT INFORMATION SYSTEMS

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Management Information System

Enterprise systems

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APPLICATION AREAS

• Systems that span organizational boundaries• e-Business applications

– B2C – link businesses with their end consumers– B2B – link businesses with other business

customers or suppliers• Electronic data interchange (EDI) systems

Interorganizational systems


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APPLICATION AREASIntraorganizational systems

• Systems that support all or most of the organization

Enterprise Systems

• Systems that support a specific manager or group ofmanagers

Managerial Support Systems

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APPLICATION AREASIntraorganizational systems (cont’d)


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CRITICAL CONCEPTS

• A group (or batch) of transactions areaccumulated, then processed all at one time

Batch processing

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CRITICAL CONCEPTS

• In the early days of computers, all processeswere batched

• Major problem is the time delay before themaster file is updated

Batch processing (cont’d)


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CRITICAL CONCEPTS

• Each transaction is entered directly intocomputer when it occurs

Online processing

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CRITICAL CONCEPTS

Batch processing vs. Online processing

Batch Processing 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 beprocessed in real time

Note: given the tradeoffs, hybrid systems that combine onlinedata entry with batch processing are very common


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CRITICAL CONCEPTSOnline processing

• A fully implemented online system where userinteracts directly with the computer

Interactive System

• Provides for online data entry, but processing oftransactions is deferred for batch processing

In-line System

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CRITICAL CONCEPTS

• Information systems that support one of anorganization’s primary business functions

Functional information systems

Example Business Functions and Subsystems

Marketing Accounting Personnel

SalesForecasting

ProductionPlanning

ProductionScheduling Etc.

Personnel Engineering


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CRITICAL CONCEPTS

• Serve more than onevertical level in anorganization or industry

Vertically integrated information systems

Capture initial sales data

Produce invoices

Middle ManagementWeekly data analysis totrack slow-moving items

and productive salespeople

Top ManagementLong-term trend analysis

Example Sales System

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CRITICAL CONCEPTS

• Refers to mode of delivery rather than traditionalclass of applications

• Processing power is distributed to multiple sites,which are then tied together viatelecommunications lines

Distributed systems


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CRITICAL CONCEPTS

• A type of distributed system where processingpower is distributed between a central servercomputer and a number of client computers(usually PCs)

Client/server systems

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CRITICAL CONCEPTSClient/server systems (cont’d)

MiddlewareClient Server

• Handles userinterface

• Accesses distributedservices through anetwork

• Runs on bigger machine• Handles data storage

for applications …– Databases– Web pages– Groupware

• Software to supportclients and serverinteraction

• Three categories:– Server operating systems– Transport stack software– Service-specific software


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CRITICAL CONCEPTS

Two-tier system• Original client/server

systems

Client/server systems (cont’d)Three-tier system

• Became popular inthe mid-1990’s

Server

Client

ApplicationServer

Client

DatabaseServer

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CRITICAL CONCEPTS

• Two models:– Fat client/thin server: most processing done on

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

the server

• In general…– Web and groupware servers are fat servers– Database servers are thin servers

Client/server systems


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CRITICAL CONCEPTS

• Application architecture based on a collectionof functions, or services, where these servicescan communicate (or be connected) with oneanother

• Advantages:– Once a service is created, it can be used over and

over again– Services can be created internally or obtained

externally

Service-oriented architecture (SOA)

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CRITICAL CONCEPTS

• A particular collection of technologies built around the XML standard ofcommunicating

• XML is used to tag the data• Other protocols used in web services include:

– Web Services Description Language (WSDL) describes the servicesavailable

– Universal Description, Discovery, and Integration (UDDI) lists theservices available

– SOAP (originally Simple Object Access Protocol, but now just the initials)transfers the data

• Web services is often the means by which SOA services communicate withone another

Web services


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TRANSACTION PROCESSING SYSTEMS

• Process thousands of transactions each day inmost organizations

• Examples: sales, payments made and received,inventory shipped and received, payingemployees

• Typical outputs: invoices, checks, orders, reports• Critical to business operations

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• Common systemused to producepayroll checks

• Also containsnumerous othersubsystems

Payroll system


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• Basic idea…– Orders received and entered into system– System updates files and prints invoice

• Also contains numerous other subsystems

Order entry system

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TRANSACTION PROCESSING SYSTEMSOrder entry system (cont’d)• Transaction begins with an entry of a Sales Order or a

Query


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ENTERPRISE RESOURCEPLANNING (ERP) SYSTEMS

• Set of integrated business applications (modules)that carry out common business functions– The same transaction data is accessible to people

working in multiple functional units within theorganization (sales + accounting +…)

• ERP modules reflect a process-oriented way ofdoing business– Not separate systems for separate functions– Support for “Order fulfillment,” not just Sales

• Usually purchased from a software vendor• “First wave” of enterprise system packages

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ERP SYSTEMS

CUSTOMERS

ProductionProcurement Distribution

MaterialsManagement modules

Production/Operations modules

Sales/Distribution modules

Financials/Accounting modules

Human Resources modules

SUPPLIERS

3 Modules for Value-Chain Activities

2 Modules for Enterprise Support Activities

SAP and other vendors designed “suites” of integrated modules for “back-office”transaction processing that eliminated the need for custom-developed interfaces.


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ERP SYSTEMS

• Choosing the right software is important– From one vendor or multiple vendors (“best of breed”)

• Implementing multiple modules at once is difficult– Requires large investment of money and people

resources

Source: Gartner Dataquest

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ERP SYSTEMSToday’s vendors offer modulesbeyond the “back-office” modules


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ENTERPRISE RESOURCE PLANNING SYSTEMS

• Support for Cross-Functional processes– Modules were designed to support business processes that

involved multiple business functions and multiple geographiclocations

• 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 asingle 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 own languages

Benefits for Business Operations and Decision-Making

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ENTERPRISE RESOURCE PLANNING 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– Companies can avoid high costs of customized system enhancements

• Standard IT platform for external transactions and regulatorycompliance– Enables transactions with external suppliers and customers– Costs avoided for updating legacy systems (e.g., Y2K and Euro

compliance)

Benefits for Managing the IT Infrastructure


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DATA WAREHOUSING

• Is the establishment and maintenance of a largedata storage facility containing data on all (or atleast many) aspects of the enterprise

• Provides users data access and analysiscapabilities without endangering operationalsystems

• Designed for analysis of data, not efficientoperational performance

• Summary reports may be automaticallygenerated on periodic basis

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DATA WAREHOUSING


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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

overwritten or updated

Key characteristics of data in a data warehouse

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DATA WAREHOUSING• Establishing a data warehouse:

– Is time-consuming and expensive– Requires software tools to:

• Construct warehouse• Operate warehouse• Access and analyze data from the warehouse

• Average project costs based on study of 33 DW projects(from Journal of Data Warehousing)

Average 1st-year costs $1,560,371Data extraction and transformation 200,000

DBMS software 105,000

DW Administration 588,000

System staff and system integration 222,000

EIS, DSS, and Data mining software 272,000


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CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS

• A business strategy directed at customerrelationships that involves new businessprocesses for execution and communication– Customer interactions focused on customer needs

• Integrated approach to customer channels formarketing, sales, and support– Cross-functional vs. single functional view

Customer relationship management (CRM)

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• A new way to compete using IT: service-baseddifferentiation– 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 andpartners

• Retail dealer networks/business partners

• Communications via wirelessdevices


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• Many players in the CRM systems marketplace• Most of the top CRM enterprise vendors offer:

– Traditional out-of-the-box CRM– Traditional CRM with templates for specific

vertical industries• Major ERP software vendors also offer CRM

modules (e.g., SAP and Oracle)• Salesforce.com offers an on-demand solution

– Vendor is also the software host– Recently purchased by Oracle

CRM systems (cont’d)

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Types of purchased CRM systems

CRMSuites e-CRM

ERPExtensions

Ex. Siebel, Clarify Ex. NetPerceptions(automated customer interactions)

Ex. mySAP, PeopleSoft/Vantive


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1: Implementing CRM before creating a businessstrategy for how data will be used

2: Rolling out a CRM system before changing internalprocesses to support the data collection and usage

3: Assuming that “more [CRM technology] is better”

4: Stalking, not “wooing,” Customers

CRM Implementations: 4 “Perils” to Avoid*

*Rigby et al., “Avoid the Four Perils of CRM,” Harvard Business Review, Feb. 2002, 101-109.

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DATA WAREHOUSE &CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS

• CRM systems often pull data that is stored in adata 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 dealsaimed at generating repeat business

CRM system supported by a data warehouse


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OFFICE AUTOMATION

• A set of office-related applications that might ormight not be integrated into a single system

Most Common Office Applications

• Word processing • Desktop publishing

• Electronic mail • Electronic calendaring

• Telephony • Document imaging

• Voice mail • Document preparation,storage, and sharing

• Copying

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OFFICE AUTOMATION

• Many word processing applications available– Market leader is Microsoft Word– Some others are free:

• OpenOffice (free office suite)• Zoho (free online office suite)

Word processing and application suites


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OFFICE AUTOMATION

• Word processors typically sold as part of anapplication (office) suite– Microsoft Word is part of MS-Office

• Includes spreadsheet, presentation, database, e-mail,collaboration, and publishing applications

• Microsoft Office 2008 for Mac recently released

– Advantage is the ability to copy and paste fromone application to another in the same suite

Word processing and application suites (cont’d)

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OFFICE AUTOMATION

• Internet (VoIP) telephony:– Allows users to make telephone calls using their

workstations– Increasing interdependence between telephone and

computer networks because both are now using thesame lines

• Faxes/copies will be sent over office network• Business documents will be stored digitally• Videoconferencing between individuals and

teams will become more common

Future developments


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OFFICE AUTOMATION

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GROUPWARE

• Industry term that refers to software designed tosupport groups by facilitating:– Collaboration– Communication– Coordination

• Also called collaboration or collaborativeenvironment

• Products vary in the features they provide


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GROUPWARE

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

• Desktopvideoconferencing

• Learning managementsystems

• Electronic whiteboards • Instant messaging

• Shared workspace

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GROUPWARE

Groupware Products• Microsoft Exchange • EMC Documentum eRoom

• Lotus Notes • Microsoft Office Groove

• Oracle Collaboration Suite • Microsoft SharePoint Server

• Novell GroupWise • Thruport Technologies HotOffice

• Microsoft Office CommunicationsServer

• IBM Workplace CollaborationServices

• Web Crossing


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GROUPWARE• Lotus Notes was purchased by IBM in 1995

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GROUPWARE


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INTRANETS AND PORTALS

• Intranet: a network operating within an organizationthat employs the same TCP/IP protocol used on theInternet

• Advantages:– Implementation is relatively easy (Web technologies)– Web browser acts as “universal client” that works with

heterogeneous platforms– Little, if any, user training required– E-mail and document sharing available to all in the

organization– Low cost due to common technologies and little training

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INTRANETS AND PORTALS

• Portals: software that provides intranets with astructure and easier access to internalinformation via a Web browser– Initial intranets had lots of documents, but little structure to

help users find them


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FACTORY AUTOMATION

• Traditional factory automation:– Numerically controlled machines, which use a

computer program or a tape with punched holes tocontrol movement of tools on machines

– Material requirements planning (MRP) uses datainput to produce a production schedule for the factoryand a schedule of needed raw materials

• Computer-integrated manufacturing (CIM)– Combines MRP with the ability to carry out schedules

through computer controlled machines

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FACTORY AUTOMATION

• Three major categories of CIM systems1. Engineering systems2. Manufacturing administration3. Factory operations


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FACTORY AUTOMATION

• Computer-aided design (CAD) – use of two and three-dimensional computer graphics to create and modifyengineering designs

• Computer-aided engineering (CAE) – system that analyzesfunctional characteristics of a design and simulates theproduct performance under various conditions

• Group technology (GT) – systems that logically group partsaccording to physical characteristics, machine routings, andother machine operations

• Computer-aided process planning (CAPP) – systems thatplan the sequence of processes that produce or assemble apart

Engineering systems

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FACTORY AUTOMATION

• Manufacturing resources planning (MRP II)– A system that usually has three components:

1. Master production schedule2. Material requirements planning3. Shop floor control

– Attempts to implement just-in-time (JIT) production– Does not directly control machines on the shop floor– An information system that tries to minimize

inventory and employ machines efficiently andeffectively

Manufacturing administration


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FACTORY AUTOMATION

• Supply chain management (SCM)– Systems to deal with distribution and

transportation of raw materials and finishedproducts throughout the supply chain

– Are often interorganizational systems thatcommunicate with suppliers and/or distributors

Manufacturing administration (cont’d)

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SUPPLY CHAINMANAGEMENT (SCM) SYSTEMS

• Designed to deal with the procurement ofcomponents needed to make a product or serviceand movement and distribution of finishedproducts through the supply chain

• Five basic components of SCM system:1. Plan: developing strategy for managing resources2. Source: choosing suppliers3. Make: manufacturing the product4. Deliver: logistics of getting product to the customer5. Return: procedure for handling defective products


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FACTORY AUTOMATION

• Computer-aided manufacturing (CAM) – useof computers to control manufacturingprocesses– 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

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FACTORY AUTOMATION

• Manufacturing automation protocol (MAP) –communications protocol to ensure an openmanufacturing 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

Factory operations (cont’d)


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FACTORY AUTOMATION

• A branch of artificial intelligence (AI) wherescientists and engineers build machines toaccomplish coordinated physical tasks likehumans do

• Advantages:– Perform repetitive tasks tirelessly– Produce consistent high-quality output– Avoid putting humans at risk (subject to dangers such

as paint inhalation or retinal damage)

Robotics

Technology

Topic 4 -enterprize_system