managing information technology 6 editionsilabus.fe.unila.ac.id/sim/pdf6-mit-martin/mit6e_ch06 -...

Managing Information Technology6th Edition

CHAPTER 6ENTERPRISE SYSTEMS

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1

APPLICATION AREASAPPLICATION AREASInterorganizational systems• Systems that span organizational boundaries• e‐Business applicationse Business applications

– B2C – link businesses with their end consumersB2B link businesses with other business– B2B – link businesses with other business customers or suppliers

• Electronic data interchange (EDI) systemsElectronic data interchange (EDI) systems


APPLICATION AREASAPPLICATION AREASIntraorganizational 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


APPLICATION AREASAPPLICATION AREASIntraorganizational systems (cont’d)


CRITICAL CONCEPTSCRITICAL CONCEPTSBatch processing• A group (or batch) of transactions are accumulated, then processed all at one time, p


CRITICAL CONCEPTSCRITICAL CONCEPTSBatch processing (cont’d)• In the early days of computers, all processes were batched

• Major problem is the time delay before the master file is updatedmaster file is updated


CRITICAL CONCEPTSCRITICAL CONCEPTSOnline processing• Each transaction is entered directly into computer when it occursp


CRITICAL CONCEPTSCRITICAL CONCEPTS

Batch processing vs. Online processing

Batch Processing Online Processing• Significant delay before master • Master file updated within aSignificant 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 operateoperate operate

• Some applications naturally suited for batch processing (e g payroll)

• Some applications need to be processed in real time

(e.g., payroll)

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


data entry with batch processing are very common

CRITICAL CONCEPTSCRITICAL CONCEPTSOnline 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


CRITICAL CONCEPTSCRITICAL CONCEPTSFunctional information systems• Information systems that support one of an organization’s primary business functionsg p y

Example Business Functions and Subsystems

Marketing Accounting Personnel

Production

Personnel Engineering

Sales Forecasting

Production Planning

Production Scheduling Etc


Scheduling Etc.

CRITICAL CONCEPTSCRITICAL CONCEPTSVertically integrated information systems

E l S l S t• Serve more than one vertical level in an

Top ManagementLong-term trend analysis

Example Sales System

organization or industryMiddle Management

Weekly data analysis to ee y da a a a ys s otrack slow-moving items

and productive salespeople

Produce invoices


Capture initial sales data

CRITICAL CONCEPTSCRITICAL CONCEPTSDistributed 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 linestelecommunications lines


CRITICAL CONCEPTSCRITICAL CONCEPTSClient/server systems• A type of distributed system where processing power is distributed between a central server pcomputer and a number of client computers (usually PCs)( y )


CRITICAL CONCEPTSCRITICAL CONCEPTSClient/server systems (cont’d)

MiddlewareClient Server

• Handles user interface Accesses distributed

• Runs on bigger machine • Handles data storage f li ti

• Software to support clients and server i t ti• Accesses distributed

services through a network

for applications …– Databases– Web pages– Groupware

interaction• Three categories:

– Server operating systems– Transport stack software


pp– Service-specific software

CRITICAL CONCEPTSCRITICAL CONCEPTSClient/server systems (cont’d)

Two‐tier system• Original client/server

Three‐tier system• Became popular inOriginal client/server

systemsBecame popular in the mid‐1990’s

Client

Application

Client

Server

ppServer

Database


Server

CRITICAL CONCEPTSCRITICAL CONCEPTSClient/server systems• Two models:

– Fat client/thin server: most processing done on / p gthe client

– Thin client/fat server:most processing done on /f p gthe server

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


Database servers are thin servers

CRITICAL CONCEPTSCRITICAL CONCEPTSService‐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

iover again– Services can be created internally or obtained externally


externally

CRITICAL CONCEPTSCRITICAL CONCEPTSWeb services• __________ __________ __ ____________ _____ ______

___ ________ __ _____________•

• A particular collection of technologies built around the XML standard of communicating__ ____ __ ___ ___ ____

• ____ _________ ____ __ ___ ________ _______ – __ _______ __________ _______ _________ ___

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

– ________ __________ ________ ___ __________ _____ ___ ________ _________

–

• Other protocols used in web services include:– Web Services Description Language (WSDL) describes the services available__________ _____ _____ _____ _______ ___ ___ _______ ________ _________ ___ ____

• __ ________ __ _____ ___ _____ __ _____ ________ ___________ ____ ___ _______

describes the services available– Universal Description, Discovery, and Integration (UDDI) lists the services available


___________ ____ ___ _______(UDDI) lists the services available – SOAP (originally Simple Object Access Protocol, but now just the initials) transfers the data

TRANSACTION PROCESSING SYSTEMSTRANSACTION PROCESSING SYSTEMS

• Process thousands of transactions each day inProcess thousands of transactions each day in most organizations

• Examples: sales payments made and receivedExamples: sales, payments made and received, inventory shipped and received, paying employeesemployees

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



Payroll system• Common system used to produce ppayroll checks

• Also containsAlso contains numerous other subsystemssubsystems



Order entry system• Basic idea…

– Orders received and entered into systemy– System updates files and prints invoice

• Also contains numerous other subsystems• Also contains numerous other subsystems


TRANSACTION PROCESSING SYSTEMSTRANSACTION PROCESSING SYSTEMSOrder entry system (cont’d)T ti b i ith t f S l O d• Transaction begins with an entry of a Sales Order or a Query


ENTERPRISE RESOURCE PLANNING (ERP) SYSTEMSPLANNING (ERP) SYSTEMS

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


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

ERP SYSTEMSERP SYSTEMSSAP 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

CUS

MaterialsManagement modules

Production/Operations modules

Sales/Distribution modules

SUPP T

OM

ProductionProcurement DistributionPLIE E

RS

Financials/Accounting modules

Human Resources modules

ERS


2 Modules for Enterprise Support Activities

ERP SYSTEMSERP SYSTEMS

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

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


Source: Gartner Dataquest

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


ENTERPRISE RESOURCE PLANNING SYSTEMSENTERPRISE 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


their own languages

ENTERPRISE RESOURCE PLANNING SYSTEMSENTERPRISE 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 enhancementsCompanies can avoid high costs of customized system enhancements

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

compliance)


DATA WAREHOUSINGDATA WAREHOUSING

• Is the establishment and maintenance of a large s t e estab s e t a d a te a ce o a a gedata storage facility containing data on all (or at least many) aspects of the enterprise

• Provides users data access and analysis capabilities without endangering operational

tsystems• Designed for analysis of data, not efficient operational performanceoperational performance

• Summary reports may be automatically generated on periodic basis


generated on periodic basis

DATA WAREHOUSINGDATA WAREHOUSING


DATA WAREHOUSINGDATA WAREHOUSINGKey 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– 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 timeData available for long periods of time

• Nonvolatile– Data warehouse is “read only”: existing data is not overwritten or updated


overwritten or updated

DATA WAREHOUSINGDATA WAREHOUSING• Establishing a data warehouse:

– Is time‐consuming and expensiveg p– 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)( f g)

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

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



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/ b

• Communications via wireless


business partners devices


CRM systems (cont’d)• ___ _______ __ ___ _______ ___________• ___ __ ___ ___ __________ _______ _____ • 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

d l ( SAP d O l )• _________ ___ ______ __ __ ______ ________– _____ __ ____ ___ ________ ____–

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


_______ _________ __ _____– Vendor is also the software host– Recently purchased by Oracle


Types of purchased CRM systems

CRMCRM Suites e‐CRM

Ex. Siebel, Clarify Ex. NetPerceptions

ERP

(automated customer interactions)

ERP Extensions

Ex. mySAP, PeopleSoft/Vantive


y p


CRM Implementations: 4 “Perils” to Avoid*1: Implementing CRM before creating a business

strategy for how data will be used

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

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

4: Stalking, not “wooing,” Customers


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

DATA WAREHOUSE &CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMSCUSTOMER RELATIONSHIP MANAGEMENT SYSTEMSCRM system 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)(including slot machines and game tables)

– Harrah’s can track who plays what games, where, when, and how often – and then offer special deals , paimed at generating repeat business


OFFICE AUTOMATIONOFFICE AUTOMATION

• A set of office‐related applications that might orA set of office related applications that might or might not be integrated into a single system

Most Common Office Applications

• Word processing • Desktop publishingWord processing Desktop publishing

• Electronic mail • Electronic calendaring• Telephony • Document imaging

V i il D t ti• Voice mail • Document preparation, storage, and sharing

• Copying


OFFICE AUTOMATIONOFFICE AUTOMATIONWord processing and application suites• Many word processing applications available

– Market leader is Microsoft Word– Some others are free:

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


OFFICE AUTOMATIONOFFICE AUTOMATIONWord processing and application suites (cont’d)• Word processors typically sold as part of an application (office) suitepp ( )– Microsoft Word is part of MS‐Office

• Includes spreadsheet, presentation, database, e‐mail, p pcollaboration, and publishing applications

• Microsoft Office 2008 for Mac recently released

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


OFFICE AUTOMATIONOFFICE AUTOMATIONFuture developments• Internet (VoIP) telephony:

– Allows users to make telephone calls using their workstationsworkstations

– Increasing interdependence between telephone and computer networks because both are now using the same linessame lines

• Faxes/copies will be sent over office network• Business documents will be stored digitallyBusiness documents will be stored digitally• Videoconferencing between individuals and teams will become more common


OFFICE AUTOMATION


GROUPWAREGROUPWARE

• Industry term that refers to software designed toIndustry 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


GROUPWAREGROUPWARE

Common Groupware FeaturesCommon Groupware Features• Electronic mail • Meeting support systems

• Electronic bulletin boards • Workflow routing

C t f i El t i f• Computer conferencing • Electronic forms

• Electronic calendaring • Internet telephony• Group scheduling • Sharing documents

• Desktop videoconferencing

• Learning management systems

• Electronic whiteboards • Instant messaging

• Shared workspace


GROUPWAREGROUPWARE

Groupware ProductsGroupware 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 • IBM Workplace Collaboration Server Services

• Web Crossing


GROUPWAREGROUPWARE• Lotus Notes was purchased by IBM in 1995


GROUPWAREGROUPWARE


INTRANETS AND PORTALSINTRANETS AND PORTALS

• Intranet: a network operating within an organization p g gthat employs the same TCP/IP protocol used on the Internetd• Advantages:

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


g g

INTRANETS AND PORTALSINTRANETS AND PORTALS

• Portals: software that provides intranets with aPortals: 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 AUTOMATIONFACTORY AUTOMATION

• Traditional factory automation:ad t o a acto y auto at o :– Numerically controlled machines, which use a computer program or a tape with punched holes to

t l t f t l hicontrol movement of tools on machines – Material requirements planning (MRP) uses data input to produce a production schedule for the factory p p p yand a schedule of needed raw materials

• Computer‐integrated manufacturing (CIM)– Combines MRP with the ability to carry out schedules through computer controlled machines


FACTORY AUTOMATIONFACTORY AUTOMATION

• Three major categories of CIM systemsThree major categories of CIM systems1. Engineering systems2. Manufacturing administration2. Manufacturing administration3. Factory operations


FACTORY AUTOMATIONFACTORY AUTOMATIONEngineering systems• 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 operationsp

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


p

FACTORY AUTOMATIONFACTORY AUTOMATIONManufacturing administration• Manufacturing resources planning (MRP II)

– A system that usually has three components:1. Master production schedule2. Material requirements planning3. Shop floor controlp

– 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


effectively

FACTORY AUTOMATIONFACTORY AUTOMATIONManufacturing administration (cont’d)• Supply chain management (SCM)

– Systems to deal with distribution and ytransportation of raw materials and finished products throughout the supply chain

– Are often interorganizational systems that communicate with suppliers and/or distributors


SUPPLY CHAIN ( )MANAGEMENT (SCM) SYSTEMS

• Designed to deal with the procurement ofDesigned 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: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


5. Return: procedure for handling defective products

FACTORY AUTOMATIONFACTORY AUTOMATIONFactory operations• Computer‐aided manufacturing (CAM) – use of computers to control manufacturing p gprocesses – Series of programs to control automated p gequipment on shop floor

– Includes guiding vehicles to move raw materials g gand finished products

– Requires a lot of input from other systems


FACTORY AUTOMATIONFACTORY AUTOMATIONFactory operations (cont’d)• Manufacturing automation protocol (MAP) –communications protocol to ensure an open p pmanufacturing system– Pioneered by General Motors and now accepted y pby nearly all manufacturers and vendors

– Allows for seamless communication between all equipment on the factory floor


FACTORY AUTOMATIONFACTORY AUTOMATIONRobotics• A branch of artificial intelligence (AI) where scientists and engineers build machines to

li h di d h i l k likaccomplish coordinated physical tasks like humans do

• Advantages:• Advantages:– Perform repetitive tasks tirelessly– Produce consistent high‐quality outputProduce consistent high quality output– Avoid putting humans at risk (subject to dangers such as paint inhalation or retinal damage)


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mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.p p

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall


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