Information Systems Drivers Requirements for classes of applications

IT Drivers zElectronic Commerce yBusiness to business yElectronic retail zData Warehousing zEnterprise Management ySAP and others ySupply chain management

Electronic Commerce Interorganizational Systems: zBusiness-to-business zElectronic storefront

Market Exchange Interorganizational Structure zVertical integration Multiple activities in the same firm xRisk: range of expertise required zSelective sourcing Some outsourced activities xRisk: control of outsourcer zVirtual corporation Coordination of separate activities xRisk: loss of core competency

Questions zDo we benefit from electronic commerce? zDo we use information to add value to customers? zAre we managing the product/service channel? zHave we redesigned business with our partners to take advantage of technology and provide security zDo we have partners with shared vision and common purpose? zDo we have the right infrastructure?

External / Internal Hosting zOutside (Cheaper) yminimize bandwidth and hardware problems yuse external experts yinstalled infrastructure ylittle additional staffing required zInside (More Control) ydependent on third party reliability ypossible single vendor software solutions ypossible single vendor payment scheme

External / Internal Hosting zExternal better at storefronts but requires close integration with core business zInternal better at business to business but often creates a self-contained replicated system that can be outsourced

Payment zCredit Cards SET (Secure Electronic Transaction) with http zElectronic Checks Public/private key transactions with banks zElectronic Cash 3rd party software to create virtual cash zEDI/EFT Value added network using 3rd party. Common in business to business.

Data Warehousing Building a database to support the decision making activities of a department or business unit

Data Warehouse A read-only database for decision analysis –Subject Oriented –Integrated –Time variant –Nonvolatile consisting of time stamped operational and external data.

Data Warehouse Architecture Enterprise Data Warehouse Data Marts Business Packages

Two Approaches zClassical Enterprise Database Typically contains operational data that integrates information from all areas of the organization. zData Mart Extracted and managerial support data designed for departmental or EUC applications

Data Warehouse vs Operational Databases zHighly tuned zReal time Data zDetailed records zCurrent values zAccesses small amounts of data in a predictable manner z Flexible access z Consistent timing z Summarized as appropriate z Historical z Access large amounts of data in unexpected ways

Access Tailored access programs in user form, usually client-server zSpecialist interfaces zGeneral purpose GUI products (e.g. Access, PowerBuilder) zCustom access routines

Strategic Partnerships Outsourcing, etc.

Outsourcing of IT Functions zTraditional Outsourcing: removing IT from a function for a long term (10 years) zTransitional Outsourcing: using outside services to move to a new environment over a short term (1-3 years) zProduct Acquisition: purchasing functionality rather than building it

Outsourcing Difficulties zContracts are structured for long periods (10 years is normal) zEarly benefits are clear for the customer; late benefits to the outsource supplier (When the benefits start building for the outsourcer, the customer starts wanting change) zFew outsourcers large enough for big projects (EDS, CSC, IBM, AT&T) zTechnology evolution changes strategic IT relevance

Outsourcing in the 1990’s More than half of all firms are considering some sort of outsourcing activity zAcceptance of strategic alliances Win-win alliances in many business areas zIT’s changing environment Focus on networking and integration places extraordinary pressures on legacy and state of the art systems management

Outsourcing Drivers zManagement concern for cost and quality zBreakdown in IT performance zSupplier pressures zSimplified Company management agenda zFinancial Factors zCorporate culture

What Happens zVendor specialists zCurrent IT organization zBasic services

Enterprise Resource Planning

ERP Reality zComplete systems can cost tens of millions of dollars zImplementation can take several years zCompanies may lose flexibility

SAP Systems, Applications and Products in Data Processing

What is SAP? zSAP is the leading global provider of client/server business application solutions zSAP is the number one vendor of standard business applications software zSAP is the fifth largest independent software supplier in the world

Facts About SAP: zFounded in 1972 in Walldorf, Germany zSAP employs a workforce of over 7,000 zSAP has offices in over 40 countries zMore than 6,000 companies worldwide have implemented SAP zReported revenues for 1995 were billion dollars

Infrastructure Drivers