MANAGING INFORMATION TECHNOLOGY 7 EDITION

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

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MANAGING INFORMATION TECHNOLOGY

7
th

EDITION

CHAPTER 5

ENTERPRISE SYSTEMS


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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




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CHAPTERS 5 AND 6

Intra
-
Organizational systems

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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

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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

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CRITICAL CONCEPTS

Batch processing vs. Online processing

Batch Processing

Online 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

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CRITICAL CONCEPTS


Information systems that support one primary business
function or process of an organization



Functional information systems

Example Business Functions and Subsystems

Marketing

Accounting

Personnel

Sales
Forecasting

Production
Planning

Production
Scheduling

Etc.

Personnel

Engineering

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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

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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)

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CRITICAL CONCEPTS

Client/server systems and Middleware

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



Three categories:



Server operating systems



Transport stack software



Service
-
specific software

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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

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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

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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


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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
)

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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


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TRANSACTION PROCESSING SYSTEMS



System to produce
payroll checks also
contains numerous
subsystems

Payroll system

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TRANSACTION PROCESSING SYSTEMS


Sales Order Processing or a Query


Output includes invoices for sales orders


Linked to other subsystems



Order entry system

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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

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ENTERPRISE RESOURCE PLANNING (ERP)
SYSTEMS

C

U

S

T

O

M

E

R

S

Production

Procurement

Distribution

Materials

Management modules

Production/

Operations modules

Sales/

Distribution modules

Financials/Accounting modules

Human Resources modules

S

U

P

P

L

I

E

R

S

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


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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

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SAP BUSINESS SUITE

Today’s vendors offer modules

beyond
the “back
-
office” modules

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ENTERPRISE RESOURCE PL


ANNING
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

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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

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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




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DATA WAREHOUSING: KEY ELEMENTS

Requires software tools to:


-

Construct warehouse

-

Operate warehouse

-

Access and analyze data from the warehouse

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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

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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
)

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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 Channels

New Electronic Channels



Call centers



E
-
mail



Field reps



Web sites for consumers and


partners



Retail dealer networks/


business partners



Communications via wireless


devices

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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

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CUSTOMER RELATIONSHIP MANAGEMENT
SYSTEMS

Types of purchased CRM systems

CRM
Suites

e
-
CRM

ERP
Extensions

Ex. Siebel

Ex: Salesforce.com

Ex. mySAP

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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


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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

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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

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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



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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

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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


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GROUPWARE


Lotus Notes (purchased by IBM in 1995)

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GROUPWARE

Lotus Notes

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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

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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



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COMPUTER
-
INTEGRATED MANUFACTURING


Three major categories of

CIM
systems

1.
Engineering systems

2.
Manufacturing administration

3.
Factory automation



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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

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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

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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



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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


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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

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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

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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

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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.


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Publishing as Prentice Hall