Chapter 6

Report
Managing Information Technology
6th Edition
CHAPTER 6
ENTERPRISE SYSTEMS
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1
APPLICATION AREAS
Interorganizational systems
• 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
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APPLICATION AREAS
Intraorganizational systems
Enterprise Systems
• Systems that support all or most of the organization
Managerial Support Systems
• Systems that support a specific manager or group of
managers
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APPLICATION AREAS
Intraorganizational systems (cont’d)
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CRITICAL CONCEPTS
Batch processing vs. Online processing
Batch Processing
Online Processing
• Significant delay before master • Master file updated within a
file is updated (usually 1 day)
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
Note: given the tradeoffs, hybrid systems that combine online
data entry with batch processing are very common
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CRITICAL CONCEPTS
Online processing
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
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CRITICAL CONCEPTS
Functional information systems
• Information systems that support one of an
organization’s primary business functions
Example Business Functions and Subsystems
Marketing
Accounting
Production
Planning
Production
Scheduling
Personnel
Personnel
Engineering
Sales
Forecasting
Etc.
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CRITICAL CONCEPTS
Vertically integrated information systems
• Serve more than one
vertical level in an
organization or industry
Example Sales System
Top Management
Long-term trend analysis
Middle Management
Weekly data analysis to
track slow-moving items
and productive salespeople
Produce invoices
Capture initial sales data
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CRITICAL CONCEPTS
Distributed systems
• Refers to mode of delivery rather than traditional
class of applications
• Processing power is distributed to multiple sites,
which are then tied together via
telecommunications lines
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CRITICAL CONCEPTS
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)
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CRITICAL CONCEPTS
Client/server systems (cont’d)
Client
Middleware
Server
• Handles user
• Software to support
• Runs on bigger machine
interface
clients and server
• Handles data storage
• Accesses distributed interaction
for applications …
services through a
• Three categories:
– Databases
network
– Server operating systems
– Web pages
– Transport stack software
– Groupware
– Service-specific software
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CRITICAL CONCEPTS
Client/server systems (cont’d)
Two-tier system
Three-tier system
• Original client/server • Became popular in
systems
the mid-1990’s
Client
Client
Application
Server
Server
Database
Server
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CRITICAL CONCEPTS
Client/server systems
• 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
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CRITICAL CONCEPTS
Service-oriented architecture (SOA)
• 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, it can be used over and
over again
– Services can be created internally or obtained
externally
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CRITICAL CONCEPTS
Web services
• A particular collection of technologies built
around the XML standard of communicating
• XML is used to tag the data
• Other protocols used in web services include:
– Web Services Description Language (WSDL) describes the services
available
– Universal Description, Discovery, and Integration (UDDI) lists the
services available
– SOAP (originally Simple Object Access Protocol, but now just the
initials) transfers the data
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TRANSACTION PROCESSING SYSTEMS
• Process thousands of transactions each day in
most organizations
• Examples: sales, payments made and received,
inventory shipped and received, paying
employees
• Typical outputs: invoices, checks, orders, reports
• Examples: Payroll system, Order Entry systems
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ENTERPRISE RESOURCE
PLANNING (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 the
organization (sales + accounting +…)
• ERP modules reflect a process-oriented way of
doing business
– Not separate systems for separate functions
– Support for “Order fulfillment,” not just Sales
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ERP SYSTEMS
SAP and other vendors designed “suites” of integrated modules for “back-office”
transaction processing that eliminated the need for custom-developed interfaces.
3 Modules for Value-Chain Activities
S
U
P
P
L
I
E
R
S
Materials
Management modules
Production/
Operations modules
Procurement
Production
Sales/
Distribution modules
Distribution
Financials/Accounting modules
Human Resources modules
C
U
S
T
O
M
E
R
S
2 Modules for Enterprise Support Activities
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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 SYSTEMS
Today’s vendors offer modules
beyond the “back-office” modules
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ENTERPRISE RESOURCE PLANNING SYSTEMS
Benefits for Business Operations and Decision-Making
• 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
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ENTERPRISE RESOURCE PLANNING SYSTEMS
Benefits for Managing the IT Infrastructure
• 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)
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DATA WAREHOUSING
• Is 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
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DATA WAREHOUSING
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DATA WAREHOUSING
Key characteristics of data in a data warehouse
• 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
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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
$1,560,371
Data 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
Customer relationship management (CRM)
• 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
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CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
CRM systems
• A new way to compete using IT: service-based
differentiation
– Single-face-to-the-customer, no matter which channel
customer uses
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
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OFFICE AUTOMATION
• A set of office-related applications that might or
might 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
Word processing and application suites
• Many word processing applications available
– Market leader is Microsoft Word
– Some others are free:
• OpenOffice (free office suite)
• Zoho (free online office suite)
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OFFICE AUTOMATION
Future developments
• Internet (VoIP) telephony:
– Allows users to make telephone calls using their
workstations
– Increasing interdependence between telephone and
computer networks because both are now using the
same lines
• Faxes/copies will be sent over office network
• Business documents will be stored digitally
• Videoconferencing between individuals and
teams will become more common
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GROUPWARE
• Industry term that refers to software designed to
support groups by facilitating:
– Collaboration
– Communication
– Coordination
• Also called collaboration or collaborative
environment
• 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
• Desktop
videoconferencing
• Learning management
systems
• 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 Communications
Server
• IBM Workplace Collaboration
Services
• Web Crossing
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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
– 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 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
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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
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FACTORY AUTOMATION
• Three major categories of CIM systems
1. Engineering systems
2. Manufacturing administration
3. Factory operations
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FACTORY AUTOMATION
Engineering systems
• Computer-aided design (CAD) – use of two and threedimensional 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
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FACTORY AUTOMATION
Manufacturing administration
• Manufacturing resources planning (MRP II)
– A system that usually has three components:
1. Master production schedule
2. Material requirements planning
3. 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 and
effectively
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FACTORY AUTOMATION
Manufacturing administration (cont’d)
• Supply chain management (SCM)
– Systems to deal with distribution and
transportation of raw materials and finished
products throughout the supply chain
– Are often interorganizational systems that
communicate with suppliers and/or distributors
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SUPPLY CHAIN
MANAGEMENT (SCM) SYSTEMS
• Designed to deal with the 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.
2.
3.
4.
5.
Plan: developing strategy for managing resources
Source: choosing suppliers
Make: manufacturing the product
Deliver: logistics of getting product to the customer
Return: procedure for handling defective products
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