Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-1 MANAGING INFORMATION TECHNOLOGY 7 th EDITION CHAPTER 5 ENTERPRISE SYSTEMS

Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-1

MANAGING INFORMATION TECHNOLOGY7th EDITION

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

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 be processed in real time

Given these tradeoffs, hybrid systems that combine online data entry, with batch processing, are very common


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 Scheduling

Etc.

Personnel Engineering


Capture initial sales data

CRITICAL CONCEPTS

• Serve more than one vertical level in an organization or industry

Vertically integrated information systems

Produce invoices

Middle ManagementWeekly data analysis to track slow-moving items

and productive salespeople

Top ManagementLong-term trend

analysisSales 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)


CRITICAL CONCEPTS

Client/server systems and Middleware

MiddlewareClient Server

• Handles user interface

• Accesses distributed services through a

network

• Runs on bigger machine • Handles data storage

for applications …– Databases– Web pages– Groupware

• Software to support clients and server interaction

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


CRITICAL CONCEPTS

2-tier system

- Original model

2- tier vs. 3- tier Client/server systems

3-tier system

- Popular beginning mid-1990’s

Server

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

• System to produce payroll checks also contains numerous subsystems

Payroll system


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) - Supply chain management (SCM) systems


ENTERPRISE RESOURCE PLANNING (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

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

Source: Gartner Dataquest


SAP BUSINESS SUITE

Today’s vendors offer modules beyond the “back-office” modules

FinancialsFinancial Supply Chain ManagementFinancial AccountingManagement AccountingTreasury Applications

Human Capital ManagementTalent ManagementWorkforce Process ManagementWorkforce Deployment

OperationsProcurementInventory and Warehouse ManagementInbound and Outbound LogisticsTransportation ManagementProduction PlanningManufacturing ExecutionProduct DevelopmentLife-Cycle Data ManagementSales Order ManagementAftermarket Sales and ServiceProfessional-Service Delivery

Corporate ServicesReal Estate ManagementEnterprise Asset ManagementProject and Portfolio ManagementTravel ManagementEnvironment, Health, and Safety ManagementQuality ManagementGlobal Trade Services

End-User Service DeliveryManager PortalEmployee PortalEmployee Interaction Support Center

AnalyticsFinancial Analytics Operations AnalyticsWorkforce Analytics

Figure 5.6 Key Functional Areas of SAP ERP


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

own languages

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- Companies can avoid high costs of customized system enhancements

• 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

compliance)

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 overwritten or updated

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)



• 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 partners

• Retail dealer networks/ business partners

• Communications via wireless devices



• Some 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 positioned itself as an on-demand solution- Vendor is also the software host (ASP)

CRM systems, continued



Types of purchased CRM systems

CRM Suites

e-CRM

ERP Extensions

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


OFFICE AUTOMATION

E-Mail• Permits rapid, asynchronous communication between workstations on a

network, eliminating telephone tag • Emails allow the sending of notes to distribution lists and individuals, and

filing notes in electronic folders for later recall• 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-to-

face communication• 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

Groupware

• Software designed to support groups by facilitating:- Collaboration

- Communication

- Coordination• Also called collaboration or collaborative environment tools• Products vary in the features they provide


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

• Desktop videoconferencing

• Learning management systems

• Electronic whiteboards • Instant messaging

• Shared workspace


GROUPWARE

• Lotus Notes (purchased by IBM in 1995)


GROUPWARE

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

• Traditional 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

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

computer controlled machines


COMPUTER-INTEGRATED MANUFACTURING

• Three major categories of CIM systems1. Engineering systems

2. Manufacturing administration

3. Factory automation

TABLE 5.1 Abbreviations Used in Factory Automation

Acronym Full Name

CIM computer-integrated manufacturingCAD computer-aided designCAE computer-aided engineeringGT group technologyCAPP computer-aided process planningMRP material requirements planningMRP II manufacturing resources planningSCM supply chain management CAM computer-aided manufacturingAGV automated guided vehicleMAP Manufacturing Automation ProtocolSFC shop floor control



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

• Computer-aided engineering (CAE) – system that analyzes functional characteristics of a design and simulates the product performance under various conditions

• Group technology (GT) – systems that logically group parts according to physical characteristics, machine routings, and other machine operations

• Computer-aided process planning (CAPP) – systems that plan the sequence of processes that produce or assemble a part

Engineering systems



• Manufacturing Resources Planning systems (MRP II)

- 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



Supply Chain Management

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

- Are often inter-organizational systems that communicate with suppliers and/or distributors

Manufacturing Administration Systems, continued


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

• Computer-aided manufacturing (CAM) – use of computers to 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

• Manufacturing automation protocol (MAP) – communications 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

• Shop Floor Control (SFC) Systems

- Provides online, real-time control and monitoring of machines on the shop floor

- Allows for analyzing machine activity to take corrective measures

Factory operations


FACTORY AUTOMATION

• A branch of artificial intelligence (AI) where scientists and engineers build machines to accomplish coordinated physical tasks like humans 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


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Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-1 MANAGING INFORMATION TECHNOLOGY 7 th EDITION CHAPTER 5 ENTERPRISE SYSTEMS