Information Systems Infrastructure (IS3314) 3rd year BIS 2006 / 2007 Fergal Carton Business Information Systems

Last 2 weeks 14 Nov Case Study 7 Nov Sales processes Marketing IS CRM Distribute Ch. 7 O’Brien, Section II Re-cap on all handouts

This week Feedback on case study Richness and reach Functional business systems E-business and e-commerce Overview of Information systems Evolution of ERP from MRP Key benefits of ERP ERP: the state of play Davenport handout

Trade-off between richness & reach Communicate rich information Proximity Dedicated channels Cost & physical constraints Limited size of audience Communicate “poor” information Mass market reach Generic Face to face sales pitch Direct mail TV ad

Electronic information & networks : richness & reach Information separated from physical carrier Existing value chains fragment (eg. Encyclopaedia Britannica) Creates new opportunities eg. Car sales Internet for options, price, benefit, finance Changes to physical location of dealerships Focus on after-sales service

Barriers to entry become liabilities Opportunities for bypassing middlemen High fixed costs of bricks & mortar Barnes & Noble Toys ‘R Us

Rethink business models Focus on single business activity and push into as many segments as possible Intel Microsoft Orchestrate supply chain relationships Dell Nike

Functional business systems Production Operations Marketing Human Resource Management Finance Accounting Functional Business Systems

Functional business systems Functional business systems are composed of a variety of types of information systems (transaction processing, management information, decision support, etc.) that support the business functions of: Accounting Finance Marketing Productions/operations management Human resource management Composite or cross-functional information systems cross the boundaries of traditional business functions in order to reengineer and improve vital business processes. Cross-functional information systems as a strategic way to share information resources and improve the efficiency and effectiveness of a business Internet technologies help integrate the flow of information among their internal business functions and their customers and suppliers. Companies are using the World Wide Web and their intranets and extranets as the technology platform for their cross-functional and interorganizational information systems.

E-business and e-commerce Distinction between e-commerce and e-business: e-Commerce is defined as buying and selling over digital media. e-Business encompasses e-commerce, but includes front- and back- office “e-business is the use of the Internet and other networks and information technologies to support electronic commerce, enterprise communications and collaboration, and Web-enabled business processes both within an internetworked enterprise, and with its customers and business partners”

Overview of information systems Support day to day transaction processing Back-office (SCM, ERP) Manufacturing (Scada, LIMS, …) Engineering (CAD, …) Front-office (CRM) Provide management information EIS Data warehouse Portal Collaborative tools for productivity (eg. MS-Office) Support links to business partners IOS, EDI, e-commerce, …

What is ERP? Educated Efficient Effective Enterprise Resource Planning Whole company Single point of entry Integrated Process oriented People Money Materials Inventory Transact Report Manage Plan Educated Efficient Effective

1950’s: unlimited demand Deliver Supplier Make Customer

1960’s : inventory costs money! Deliver Supplier Make Customer Plan Buy

1960’s : inventory costs money Deliver Supplier Make Customer Plan MRP Buy

1970’s : first wave of integration Deliver Supplier Make Customer Plan Sell MRP MRP II Buy

1980’s : sales order processing SOP Deliver Supplier Make Customer Plan Sell MRP MRP II Buy

1990’s : back-office integration Accounting & Finance Human Resources Deliver Supplier Make Customer Plan Sell MRP MRP II ERP Buy

What is ERP? A system for planning the resources to customer orders take make ship and account for customer orders Modular structure, relational database APICS – American Production and Inventory Control Society ERP systems are integrated enterprise-wide software packages designed to support the key functional areas of the firm Support the recording of all accounting transactions of the business from purchase orders to sales orders - they support the scheduling and monitoring of manufacturing activities and they help manage the firms most critical and expensive resources (O’Doherty and Adam, 1999) David Sammon © 2002

Key benefits of ERP? Single point of data entry (PO’s, SO’s, …) Inventory control Opportunity to re-design business processes Single technical platform (support) Common language, common pool of data Sales Shipping Collect cash

ERP : the state of play High penetration rate in large businesses ERP seen as panacea to lack of control in subs Centralising of expensive IS resources CEO’s are “disappointed” with results Reporting weakness : need for data warehouse

Are there alternatives? Scalability? As-is Best of breed Flexibility? 4