1. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-1 MANAGING INFORMATION TECHNOLOGY 7 th EDITION CHAPTER 5 ENTERPRISE SYSTEMS

2. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-2 PART II - APPLICATION AREAS Inter-organizational systems: e-Business applications (Ch. 7) - B2C – link businesses with end consumers -B2B – link businesses with other businesses -Intermediaries Intra-organizational systems: Enterprise systems: (Ch. 5) support all or most of the organization Managerial Support systems (Ch. 6) support a specific manager or group of managers

3. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-3 CHAPTERS 5 AND 6 Intra-Organizational systems

4. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-4 CRITICAL CONCEPTS A group (or batch) of transactions are accumulated, then processed all at one time Key Disadvantage: Time delay before the master file updated Batch processing

5. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-5 CRITICAL CONCEPTS Each transaction is entered directly into computer when it occurs 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 Online processing

6. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-6 CRITICAL CONCEPTS Batch processing vs. Online processing Batch ProcessingOnline Processing Significant 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 operate Some applications naturally suited for batch processing (e.g., payroll) Some applications need to be processed in real time Given these tradeoffs, hybrid systems that combine online data entry, with batch processing, are very common

7. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-7 CRITICAL CONCEPTS Information systems that support one primary business function or process of an organization Functional information systems Example Business Functions and Subsystems MarketingAccountingPersonnel Sales Forecasting Production Planning Production Scheduling Etc. PersonnelEngineering

8. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-8 Capture initial sales data CRITICAL CONCEPTS Serve more than one vertical level in an organization or industry Vertically integrated information systems Produce invoices Middle Management Weekly data analysis to track slow-moving items and productive salespeople Top Management Long-term trend analysis Sales System Example

9. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-9 CRITICAL CONCEPTS Refers to mode of delivery: Processing power is distributed to multiple sites, which are linked via telecommunications Distributed systems 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)

10. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-10 CRITICAL CONCEPTS Client/server systems and Middleware Middleware ClientServer 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 Three categories: – Server operating systems – Transport stack software – Service-specific software

11. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-11 CRITICAL CONCEPTS 2-tier system - Original model 2- tier vs. 3- tier Client/server systems 3-tier system - Popular beginning mid-1990’s Server Client Application Server Client Database Server

12. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-12 CRITICAL CONCEPTS Fat client/thin server: most processing done on the client Ex: Web and groupware servers Thin client/fat server: most processing done on the server Ex: Database servers Client/server systems and Fat/Thin Models

13. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-13 CRITICAL CONCEPTS Virtualization Server Virtualization: - Physical server split in multiple virtual server - Each virtual server can run its own full fledged operating system - Physical server acts as a hypervisor program creating virtual servers - Each virtual server can be employed as a standalone physical server, reducing the number of physical servers needed Desktop Virtualization: - Implemented through a client server computing model - Virtualized desktop environment stored on a server then on local storage of desktop device - All the programs, application and data are kept on the server and all programs and applications are run on the server

14. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-14 CRITICAL CONCEPTS 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 (internally or externally) it can be used over and over again Service-oriented architecture (SOA ) Web services Collection of technologies built around the XML standard of communicating Other protocols used in web services include: - Web Services Description Language (WSDL) - Universal Description, Discovery, and Integration (UDDI) - SOAP (originally Simple Object Access Protocol )

15. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-15 TRANSACTION PROCESSING SYSTEMS (TPS) Thousands of transactions critical to business operations are processed each day in large organizations for sales, bills for sales and customer payments, inventory shipped and received, payments to employees, etc. Typical outputs: invoices, checks, orders, reports

16. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-16 TRANSACTION PROCESSING SYSTEMS System to produce payroll checks also contains numerous subsystems Payroll system

17. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-17 TRANSACTION PROCESSING SYSTEMS Sales Order Processing or a Query Output includes invoices for sales orders Linked to other subsystems Order entry system

18. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-18 ENTERPRISE RESOURCE PLANNING (ERP) SYSTEMS Enterprise Resource Planning (ERP) Systems Set of integrated business applications (modules) that carry out common business functions -Transaction data accessible to workers in multiple functional units (sales + accounting +…) 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 ERP = “First wave” of enterprise system packages “Later waves” of enterprise system packages -Customer relationship management (CRM) -Supply chain management (SCM) systems

19. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-19 ENTERPRISE RESOURCE PLANNING (ERP) SYSTEMS CUSTOMERSCUSTOMERS ProductionProcurementDistribution Materials Management modules Production/ Operations modules Sales/ Distribution modules Financials/Accounting modules Human Resources modules SUPPLIERSSUPPLIERS 3 Modules for Value-Chain Activities 2 Modules for Enterprise Support Activities By mid-1990s, SAP and other vendors designed “suites” of integrated modules for “back-office” transaction processing that eliminated the need for many custom-developed interfaces

20. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-20 ERP SYSTEMS, Continued Suite from one vendor OR “best of breed” from multiple vendors Some organizations implement Enterprise Support modules only ( Financials, HR) Value-Chain module implementations involve large investment of money and people resources because of impact on business Have become “essential” systems in many industries Source: Gartner Dataquest

21. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-21 SAP BUSINESS SUITE Today’s vendors offer modules beyond the “back-office” modules

22. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-22 ENTERPRISE RESOURCE PLANNING ERP SYSTEMS, continued 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 ERP Business Benefits

23. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-23 ENTERPRISE RESOURCEPLANNING SYSTEMS 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) ERP IT Infrastructure Benefits

24. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-24 DATA WAREHOUSING 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

25. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-25 DATA WAREHOUSING: KEY ELEMENTS Requires software tools to: - Construct warehouse - Operate warehouse - Access and analyze data from the warehouse

26. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-26 DATA WAREHOUSING 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 Key data concepts for Data Warehousing

27. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-27 CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS 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 Customer relationship management systems (CRM )

28. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-28 CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS A new way to compete using IT: service-based differentiation - Single-face-to-the-customer, no matter which channel customer uses CRM systems Traditional ChannelsNew Electronic Channels Call centers E-mail Field reps Web sites for consumers and partners Retail dealer networks/ business partners Communications via wireless devices

29. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-29 CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS Some 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 modules (e.g., SAP and Oracle) Salesforce.com positioned itself as an on-demand solution -Vendor is also the software host (ASP) CRM systems, continued

30. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-30 CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS Types of purchased CRM systems CRM Suites e-CRM ERP Extensions Ex. SiebelEx: Salesforce.com Ex. mySAP

31. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-31 CUSTOMER RELATIONSHIP MANAGEMENT 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) - Harrah’s can track who plays what games, where, when, and how often – and then offer special deals aimed at generating repeat business

32. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-32 OFFICE AUTOMATION Most Common Office Applications Word processing Desktop publishing Electronic mail Electronic calendaring Telephony/IM Document imaging Voice mail Document preparation, storage, and sharing

33. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-33 OFFICE AUTOMATION E-Mail Permits rapid, asynchronous communication between workstations on a network, eliminating telephone tag Emails allow the sending of notes to distribution lists and individuals, and filing notes in electronic folders for later recall Variants of E-mail include bulletin boards, listservs, computer conferencing, chat rooms, instant messaging (IM), blogs Drawbacks: Spam and volume of e-mail received can be overwhelming Some use offensive words on e-mails that they would never use in face-to- face communication Privacy issues due to electronic monitoring by supervisors However most often these drawbacks are overshadowed by the advantages of the rapid, asynchronous communication of e-mails

34. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-34 OFFICE AUTOMATION Video Conferencing Permits face-to-face meetings and conferences without need for costly and time-consuming travel Computer-generated reports and graphics (e.g., PowerPoint presentations) can be shared during the conference Videoconferencing can be used at the desktop level for a smaller audience and at conference room level for larger audience Polycom Inc is a worldwide leader in videoconferencing Skype has been one of the most popular ways of videoconferencing over the internet

35. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-35 GROUPWARE AND COLLABORATION Groupware Software designed to support groups by facilitating : - Collaboration - Communication - Coordination Also called collaboration or collaborative environment tools Products vary in the features they provide

36. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-36 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

37. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-37 GROUPWARE Lotus Notes (purchased by IBM in 1995)

38. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-38 GROUPWARE Lotus Notes

39. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-39 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 - E-mail and document sharing available to all employees. - Low cost due to common technologies and little training Web Portal 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

40. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-40 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

41. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-41 COMPUTER-INTEGRATED MANUFACTURING Three major categories of CIM systems 1.Engineering systems 2.Manufacturing administration 3.Factory automation

42. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-42 COMPUTER-INTEGRATED MANUFACTURING 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 Engineering systems

43. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-43 COMPUTER-INTEGRATED MANUFACTURING Manufacturing Resources Planning systems (MRP II) - A system that usually has three components: 1.Master production schedule 2.Material requirements planning 3.Shop floor control - May include just-in-time (JIT) production to minimize inventory - Does not directly control machines on the shop floor Manufacturing Administration Systems

44. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-44 COMPUTER-INTEGRATED MANUFACTURING Supply Chain Management -Systems to deal with distribution and transportation of raw materials and finished products throughout the supply chain - Are often inter-organizational systems that communicate with suppliers and/or distributors Manufacturing Administration Systems, continued

45. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-45 SUPPLY CHAIN MANAGEMENT (SCM) SYSTEMS Supports 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.Plan: developing strategy for managing resources 2.Source: choosing suppliers 3.Make: manufacturing the product 4.Deliver: logistics of getting product to the customer 5.Return: procedure for handling defective products

46. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-46 FACTORY AUTOMATION 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 Factory operations

47. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-47 FACTORY AUTOMATION Manufacturing automation protocol (MAP) – communications protocol to ensure an open manufacturing system - Pioneered by General Motors and now accepted by nearly all manufacturers and vendors -Allows for seamless communication between all equipment on the factory floor Shop Floor Control (SFC) Systems - Provides online, real-time control and monitoring of machines on the shop floor - Allows for analyzing machine activity to take corrective measures Factory operations

48. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-48 FACTORY AUTOMATION A branch of artificial intelligence (AI) where scientists and engineers build machines to accomplish coordinated physical tasks like humans do Advantages: - Perform repetitive tasks tirelessly - Produce consistent high-quality output - Avoid putting humans at risk (subject to dangers such as paint inhalation or retinal damage) Robotics

49. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-49 COPYRIGHT All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2012 Pearson Education, Inc. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall