1. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 Managing Information Technology 6 th Edition CHAPTER 6 ENTERPRISE SYSTEMS

2. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 2 APPLICATION AREAS Systems that span organizational boundaries e-Business applications – B2C – link businesses with their end consumers – B2B – link businesses with other business customers or suppliers Electronic data interchange (EDI) systems Interorganizational systems

3. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 3 APPLICATION AREAS Intraorganizational systems Systems that support all or most of the organization Enterprise Systems Systems that support a specific manager or group of managers Managerial Support Systems

4. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 4 APPLICATION AREAS Intraorganizational systems (cont’d)

5. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 5 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 Note: given the tradeoffs, hybrid systems that combine online data entry with batch processing are very common

6. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 6 CRITICAL CONCEPTS Online processing A fully implemented online system where user interacts directly with the computer Interactive System Provides for online data entry, but processing of transactions is deferred for batch processing In-line System

7. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 7 CRITICAL CONCEPTS Information systems that support one of an organization’s primary business functions Functional information systems Example Business Functions and Subsystems MarketingAccountingPersonnel Sales Forecasting Production Planning Production Scheduling Etc. PersonnelEngineering

8. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 8 CRITICAL CONCEPTS Serve more than one vertical level in an organization or industry Vertically integrated information systems Capture initial sales data Produce invoices Middle Management Weekly data analysis to track slow-moving items and productive salespeople Top Management Long-term trend analysis Example Sales System

9. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 9 CRITICAL CONCEPTS 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 lines Distributed systems

10. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 10 CRITICAL CONCEPTS A type of distributed system where processing power is distributed between a central server computer and a number of client computers (usually PCs) Client/server systems

11. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 11 CRITICAL CONCEPTS Client/server systems (cont’d) MiddlewareClientServer 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

12. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 12 CRITICAL CONCEPTS Two-tier system Original client/server systems Client/server systems (cont’d) Three-tier system Became popular in the mid-1990’s Server Client Application Server Client Database Server

13. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 13 CRITICAL CONCEPTS Two models: – Fat client/thin server: most processing done on the client – Thin client/fat server: most processing done on the server In general… – Web and groupware servers are fat servers – Database servers are thin servers Client/server systems

14. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 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, it can be used over and over again – Services can be created internally or obtained externally Service-oriented architecture (SOA)

15. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 CRITICAL CONCEPTS A particular collection of technologies built around the XML standard of communicating XML is used to tag the data Other protocols used in web services include: – Web Services Description Language (WSDL) describes the services available – Universal Description, Discovery, and Integration (UDDI) lists the services available – SOAP (originally Simple Object Access Protocol, but now just the initials) transfers the data Web services

16. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 16 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 Examples: Payroll system, Order Entry systems

17. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 17 ENTERPRISE RESOURCE PLANNING (ERP) SYSTEMS Set of integrated business applications (modules) that carry out common business functions – The 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

18. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 18 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 SAP and other vendors designed “suites” of integrated modules for “back-office” transaction processing that eliminated the need for custom-developed interfaces.

19. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 19 ERP SYSTEMS Choosing the right software is important – From one vendor or multiple vendors (“best of breed”) Implementing multiple modules at once is difficult – Requires large investment of money and people resources Source: Gartner Dataquest

20. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 20 ERP SYSTEMS Today’s vendors offer modules beyond the “back-office” modules

21. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 21 ENTERPRISE RESOURCE PLANNING SYSTEMS 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 Benefits for Business Operations and Decision-Making

22. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 22 ENTERPRISE RESOURCE PLANNING 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) Benefits for Managing the IT Infrastructure

23. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 23 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 Designed for analysis of data, not efficient operational performance Summary reports may be automatically generated on periodic basis

24. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 24 DATA WAREHOUSING

25. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 25 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 characteristics of data in a data warehouse

26. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 26 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 Average project costs based on study of 33 DW projects (from Journal of Data Warehousing) Average 1 st -year costs$1,560,371 Data extraction and transformation200,000 DBMS software105,000 DW Administration588,000 System staff and system integration222,000 EIS, DSS, and Data mining software272,000

27. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 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 (CRM)

28. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 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 © 2009 Pearson Education, Inc. Publishing as Prentice Hall 29 OFFICE AUTOMATION A set of office-related applications that might or might not be integrated into a single system Most Common Office Applications Word processing Desktop publishing Electronic mail Electronic calendaring Telephony Document imaging Voice mail Document preparation, storage, and sharing Copying

30. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 30 OFFICE AUTOMATION Many word processing applications available – Market leader is Microsoft Word – Some others are free: OpenOffice (free office suite) Zoho (free online office suite) Word processing and application suites

31. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 31 OFFICE AUTOMATION Internet (VoIP) telephony: – Allows users to make telephone calls using their workstations – Increasing interdependence between telephone and computer networks because both are now using the same lines Faxes/copies will be sent over office network Business documents will be stored digitally Videoconferencing between individuals and teams will become more common Future developments

32. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 32 GROUPWARE Industry 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

33. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 33 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

34. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 34 GROUPWARE Groupware 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 Server IBM Workplace Collaboration Services Web Crossing

35. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 35 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 – 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

36. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 36 INTRANETS AND PORTALS Portals: 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

37. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 37 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

38. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 38 FACTORY AUTOMATION Three major categories of CIM systems 1.Engineering systems 2.Manufacturing administration 3.Factory operations

39. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 39 FACTORY AUTOMATION 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

40. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 40 FACTORY AUTOMATION Manufacturing resources planning (MRP II) – A system that usually has three components: 1.Master production schedule 2.Material requirements planning 3.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 Manufacturing administration

41. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 41 FACTORY AUTOMATION Supply chain management (SCM) – Systems to deal with distribution and transportation of raw materials and finished products throughout the supply chain – Are often interorganizational systems that communicate with suppliers and/or distributors Manufacturing administration (cont’d)

42. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 42 SUPPLY CHAIN MANAGEMENT (SCM) SYSTEMS Designed 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: 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