CHAPTER 6 ENTERPRISE SYSTEMS

APPLICATION AREAS Interorganizational Systems e-Business applications B2C – link businesses with their end consumers B2B – link businesses with other business customers or suppliers Electronic data interchange (EDI) systems © 2005 Pearson Prentice-Hall Chapter 6 - 2 Page 182

APPLICATION AREAS Intraorganizational Systems Enterprise systems – support all or most of the organization Managerial support systems – support a specific manager or group of managers © 2005 Pearson Prentice-Hall Chapter 6 - 3 Figure 6.1 Types of Application Systems Page 182

CRITICAL CONCEPTS Batch Processing versus Online Processing Batch Processing – group (or batch) of transactions are accumulated, then processed all at one time © 2005 Pearson Prentice-Hall Chapter 6 - 4 Figure 6.2 Batch Processing (simplified) Page 183

CRITICAL CONCEPTS Batch Processing versus Online Processing Online Processing – each transaction is entered directly into computer when it occurs © 2005 Pearson Prentice-Hall Chapter 6 - 5 Figure 6.3 Online Processing Page 183

CRITICAL CONCEPTS Batch Processing versus Online Processing Interactive system – a fully functional online system where computer quickly provides a user response In-line system – provides for online data entry, but processing of transactions deferred for batch processing © 2005 Pearson Prentice-Hall Chapter 6 - 6 Figure 6.1 Types of Application Systems Page 183

CRITICAL CONCEPTS Functional Information Systems Functional information systems – information systems framework based on organization’s primary business functions © 2005 Pearson Prentice-Hall Chapter 6 - 7 Page 184

CRITICAL CONCEPTS Vertical Integration of Systems 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 Example Sales System Vertically integrated information system – serves more than one vertical level in an organization or industry © 2005 Pearson Prentice-Hall Chapter 6 - 8 Page 184

CRITICAL CONCEPTS Distributed Systems and Client/Server Systems Distributed systems – mode of delivery where processing power is distributed to multiple sites, which are then tied together via telecommunication lines Client-server system – a type of distributed system where processing power is distributed between a central server computer and a number of client computers (usually PCs) © 2005 Pearson Prentice-Hall Chapter 6 - 9 Page 185

CRITICAL CONCEPTS Client/Server Systems Handles user interface Middleware Client 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 Microsoft Windows 2003 Server Novell NetWare UNIX, Linux © 2005 Pearson Prentice-Hall Chapter 6 - 10 Page 185

CRITICAL CONCEPTS Client/Server Systems Two-tier configuration Three-tier configuration Client Client Server Application Server Database Server © 2005 Pearson Prentice-Hall Chapter 6 - 11 Page 186

A three-tier client/server application

CRITICAL CONCEPTS Client/Server Systems Fat client/thin server – most processing done on client Thin client/fat server – most processing done on server Note: Web and groupware servers usually thin clients Database servers usually thin servers © 2005 Pearson Prentice-Hall Chapter 6 - 13 Page 186

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 Critical to business operations © 2005 Pearson Prentice-Hall Chapter 6 - 14 Page 186-187

TRANSACTION PROCESSING SYSTEMS Payroll System © 2005 Pearson Prentice-Hall Chapter 6 - 15 Figure 6.4 Components of a Payroll System Page 187

TRANSACTION PROCESSING SYSTEMS Order Entry System © 2005 Pearson Prentice-Hall Chapter 6 - 16 Figure 6.5 Online Order Entry System Page 188

ENTERPRISE RESOURCE PLANNING SYSTEMS Also include transaction processing systems Set of integrated business applications (modules) that carry out common business functions: General ledger, accounts payable, accounts receivable, material requirements planning, order management, inventory control, human resources management Usually purchased from software vendor © 2005 Pearson Prentice-Hall Chapter 6 - 17 Page 188-189

ENTERPRISE RESOURCE PLANNING SYSTEMS How they differ: ERP modules are integrated ERP modules reflect a particular way of doing business © 2005 Pearson Prentice-Hall Chapter 6 - 18 Page 189

ENTERPRISE RESOURCE PLANNING SYSTEMS Choosing right software and implementation difficult and expensive Requires large investment of money and people resources Leading ERP software vendors: SAP PeopleSoft, Inc. (bought J.D. Edwards) Oracle Baan © 2005 Pearson Prentice-Hall Chapter 6 - 19 Page 190

Enterprise resource planning (ERP) ERP integrates all departments and functions throughout an organization into a single IT system so that employees can make enterprise wide decisions by viewing enterprise wide information on all business operations ERP’s goal – every department or functional area work together sharing common information and not be a “silo”

Supply Chain Management SCM involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability The steps typically taken when a customer buys a bike from Trek Basic components of SCM include: Supply chain partners – partners throughout the supply chain that deliver finished products, raw materials, and services. Supply chain operation – schedule for production activities Supply chain logistics – product delivery process

Trek orders materials from its suppliers, such as packaging material, metal, & accessories Trek sends payments to suppliers Trek receives materials from Trek assembles the bike Trek ships the bike to the store Customer picks up the Trek bike from the store Customer places an order for a Trek bike with a store Store (such as local sporting goods store) receives the order Store receives the payment from the customer Store orders the bike from Trek Store sends payment to Trek

Wal-Mart and Procter & Gamble SCM

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 © 2005 Pearson Prentice-Hall Chapter 6 - 24 Page 192

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 © 2005 Pearson Prentice-Hall Chapter 6 - 25 Page 192-193

DATA WAREHOUSING Page 193 Figure 6.8 Key Elements of Data Warehousing © 2005 Pearson Prentice-Hall Chapter 6 - 26 Figure 6.8 Key Elements of Data Warehousing Page 193

CUSTOMER RELATIONSHIP MANAGEMENT CRM system – provides integrated approach to all aspects of company-customer interaction Marketing Sales Support © 2005 Pearson Prentice-Hall Chapter 6 - 27 Page 194

Customer Relationship Management CRM – involves managing all aspects of a customer’s relationship with an organization to increase customer loyalty and retention and an organization's profitability CRM is not just technology, but a strategy, process, and business goal that an organization must embrace on an enterprise wide level CRM can enable an organization to: Identify types of customers Design individual customer marketing campaigns Treat each customer as an individual Understand customer buying behaviors

CUSTOMER RELATIONSHIP MANAGEMENT CRM market segments: Traditional out-of-the-box CRM Traditional CRM with templates for specific vertical industries Traditional out-of-the-box CRM with application development hooks Industry-specific vertical CRM packages Custom solutions from vertical systems integrators © 2005 Pearson Prentice-Hall Chapter 6 - 30 Page 195-196

The Evolution of CRM

Briefly explain the differences between SCM, CRM, and ERP SCM systems focus specifically on suppliers CRM systems focus specifically on customers ERP systems focus on everything, all processes, departments, and operations for an enterprise

OFFICE AUTOMATION Office automation – a set of office-related applications that may or may not be integrated into a single system Electronic mail Work processing Voice mail Copying Desktop publishing Electronic calendaring Document imaging Document preparation, storage, and sharing © 2005 Pearson Prentice-Hall Chapter 6 - 33 Page 196

OFFICE AUTOMATION Variants of e-mail: Electronic Mail Electronic bulletin boards Listservs Computer conferencing Chat rooms Instant messaging (IM) © 2005 Pearson Prentice-Hall Chapter 6 - 34 Page 197

Future Developments Page 198 Figure 6.9 Office of the Future Network © 2005 Pearson Prentice-Hall Chapter 6 - 35 Figure 6.9 Office of the Future Network Page 198

GROUPWARE Groupware – industry term that refers to software designed to support groups by facilitating: collaboration communication coordination © 2005 Pearson Prentice-Hall Chapter 6 - 36 Page 201

GROUPWARE Typical Features: Electronic mail Electronic bulletin boards Computer conferencing Electronic calendaring Group scheduling Sharing documents Electronic whiteboards Meeting support systems Learning management systems Workflow routing Electronic forms Desktop videoconferencing Instant messaging © 2005 Pearson Prentice-Hall Chapter 6 - 37 Page 201

GROUPWARE Software vendors: Lotus Notes Novell GroupWise Microsoft Exchange Oracle Collaboration Suite Thruport Technologies’ HotOffice Groove Network’s Groove Workspace © 2005 Pearson Prentice-Hall Chapter 6 - 38 Page 201

Page 203 Figure 6.10 Lotus Notes® Welcome Page (Copyright © 2004 IBM Lotus Software. Lotus Notes is a registered trademark of IBM Lotus Software. Used with permission of IBM Lotus Software.) © 2005 Pearson Prentice-Hall Chapter 6 - 39 Figure 6.10 Lotus Notes® Welcome Page Page 203

INTRANETS Advantages: Intranet – a network operating within an organization that employs the TCP/IP protocol used on the Internet Advantages: Implementation is relatively easy E-mail and document sharing available to all in the organization Web browser acts as “universal client” that works with heterogeneous platforms Little, if any, user training required Low cost © 2005 Pearson Prentice-Hall Chapter 6 - 40 Page 206

INTRANETS Portal – software that provides intranets with a structure and easier access to internal information via a Web browser Extranet – an Internet-based application that permits key trading partners to access another organization’s intranet © 2005 Pearson Prentice-Hall Chapter 6 - 41 Page 206-207

FACTORY AUTOMATION Factory automation – involves 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) – includes MRP functions, but also has the compute carry out the schedules through control of various machines involved © 2005 Pearson Prentice-Hall Chapter 6 - 42 Page 207-208

FACTORY AUTOMATION Page 208 Table 6.1 Abbreviations Used © 2005 Pearson Prentice-Hall Chapter 6 - 43 Table 6.1 Abbreviations Used in Factory Automation Page 208

FACTORY AUTOMATION Engineering 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 operations Computer-aided process planning (CAPP) – systems that plan the sequence of processes that produce or assemble a part © 2005 Pearson Prentice-Hall Chapter 6 - 44 Page 208

FACTORY AUTOMATION Manufacturing resources planning (MRP II) Manufacturing Administration Manufacturing resources planning (MRP II) A system that usually has three components: Master production schedule Material requirements planning 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 © 2005 Pearson Prentice-Hall Chapter 6 - 45 Page 208

FACTORY AUTOMATION Supply chain management (SCM) Manufacturing Administration Supply chain management (SCM) Systems to deal with distribution and transportation of raw materials and finished products throughout the supply chain Are often interorganizational © 2005 Pearson Prentice-Hall Chapter 6 - 46 Page 209

FACTORY AUTOMATION Factory Operations 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 © 2005 Pearson Prentice-Hall Chapter 6 - 47 Page 209

FACTORY AUTOMATION Robotics Robotics – a branch of artificial intelligence (AI) where scientists and engineers build machines to accomplish coordinated physical tasks like humans do © 2005 Pearson Prentice-Hall Chapter 6 - 48 Page 209-210