Discussion/ IT
Masak K
Chapter8-EnterpriseSystems1.pptxPrinciples of Information Systems, Thirteenth Edition
Chapter 8
Enterprise Systems
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Principles of Information Systems, Thirteenth Edition
Chapter 8
Enterprise Systems
Objectives
After completing this chapter, you will be able to:
Identify the basic activities and business objectives common to all transaction processing systems
Describe the transaction processing systems associated with the order processing, purchasing, and accounting business functions
Identify the basic functions performed and benefits derived from implementing an enterprise resource planning system, customer resource management, and product lifecycle management system
Objectives
After completing this chapter, you will be able to:
Identify the basic activities and business objectives common to all transaction processing systems
Describe the transaction processing systems associated with the order processing, purchasing, and accounting business functions
Identify the basic functions performed and benefits derived from implementing an enterprise resource planning system, customer resource management, and product lifecycle management system
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Objectives
After completing this chapter, you will be able to (cont’d):
Describe the hosted software model for enterprise systems and explain why this approach is so appealing to SMEs
Identify the challenges that organizations face in planning, building, and operating their enterprise systems
Identify tips for avoiding many of the common causes for failed enterprise system implementations
Objectives
After completing this chapter, you will be able to (cont’d):
Describe the hosted software model for enterprise systems and explain why this approach is so appealing to SMEs
Identify the challenges that organizations face in planning, building, and operating their enterprise systems
Identify tips for avoiding many of the common causes for failed enterprise system implementations
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Transaction Processing Systems
Transaction processing systems (TPSs):
Capture and process detailed data necessary to update the organization’s records about fundamental business operations
Include order entry, inventory control, payroll, accounts payable, accounts receivable, general ledger, etc.
A TPS provides valuable input to:
Management information systems
Decision support systems
Knowledge management systems
Transaction Processing Systems
Transaction processing systems (TPSs):
Capture and process detailed data necessary to update the organization’s records about fundamental business operations
Include order entry, inventory control, payroll, accounts payable, accounts receivable, general ledger, etc.
A TPS provides valuable input to:
Management information systems
Decision support systems
Knowledge management systems
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Transaction Processing Systems
Transaction Processing Systems
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Traditional Transaction Processing Methods and Objectives
Batch processing system
Business transactions are accumulated over a period of time and prepared for processing as a single unit or batch
Essential characteristic: the delay between an event and the processing of the related transaction to update the organization’s records
Online transaction processing (OLTP)
Data processing in which each transaction is processed immediately
At any time, the data in an online system reflects the current status
Many organizations find that OLTP enables them to provide faster, more efficient service
Traditional Transaction Processing Methods and Objectives
Batch processing system
Business transactions are accumulated over a period of time and prepared for processing as a single unit or batch
Essential characteristic: the delay between an event and the processing of the related transaction to update the organization’s records
Online transaction processing (OLTP)
Data processing in which each transaction is processed immediately
At any time, the data in an online system reflects the current status
Many organizations find that OLTP enables them to provide faster, more efficient service
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Traditional Transaction Processing Methods and Objectives
Traditional Transaction Processing Methods and Objectives
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Traditional Transaction Processing Methods and Objectives
Traditional Transaction Processing Methods and Objectives
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Traditional Transaction Processing Methods and Objectives
Organizations expect their TPSs to:
Capture, process, and update databases
Ensure that the data is processed accurately and completely
Avoid processing fraudulent transactions
Produce timely user responses and reports
Reduce clerical and other labor requirements
Help improve customer service
Achieve competitive advantage
Traditional Transaction Processing Methods and Objectives
Organizations expect their TPSs to:
Capture, process, and update databases
Ensure that the data is processed accurately and completely
Avoid processing fraudulent transactions
Produce timely user responses and reports
Reduce clerical and other labor requirements
Help improve customer service
Achieve competitive advantage
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Traditional Transaction Processing Methods and Objectives
A TPS includes:
Order processing systems
Processing flow begins with receipt of customer order, then finished product inventory is checked to see if sufficient inventory is on hand to fill the order
Product pick list is printed at the warehouse and inventory is adjusted
Customer invoice is created and copy included in the customer shipment
Accounting systems
Must track the flow of data related to all the cash follows that affect the organization
Purchasing systems
Systems that support the purchasing business function
Inventory control, purchase order processing, receiving, and accounts payable
Traditional Transaction Processing Methods and Objectives
A TPS includes:
Order processing systems
Processing flow begins with receipt of customer order, then finished product inventory is checked to see if sufficient inventory is on hand to fill the order
Product pick list is printed at the warehouse and inventory is adjusted
Customer invoice is created and copy included in the customer shipment
Accounting systems
Must track the flow of data related to all the cash follows that affect the organization
Purchasing systems
Systems that support the purchasing business function
Inventory control, purchase order processing, receiving, and accounts payable
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Traditional Transaction Processing Methods and Objectives
Traditional Transaction Processing Methods and Objectives
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Transaction Processing Systems for Entrepreneurs and Small and Medium-Sized Enterprises
Many software packages:
Provide integrated transaction processing system solutions for small and medium-size enterprises (SMEs)
Are easy to install and operate with a low total cost of ownership
Have an initial cost of a few hundred to a few thousand dollars
Transaction Processing Systems for Entrepreneurs and Small and Medium-Sized Enterprises
Many software packages:
Provide integrated transaction processing system solutions for small and medium-size enterprises (SMEs)
Are easy to install and operate with a low total cost of ownership
Have an initial cost of a few hundred to a few thousand dollars
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Transaction Processing Activities
The transaction processing cycle
Data collection
Data editing
Data correction
Data manipulation
Data storage
Document production
Transaction Processing Activities
The transaction processing cycle
Data collection
Data editing
Data correction
Data manipulation
Data storage
Document production
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Data Collection
Capturing and gathering all data necessary to complete the processing of transactions
Data collection can be:
Manual
Automated via special input devices
Source data automation
Involves capturing data at its source and recording it accurately in a timely fashion with minimal manual effort and in an electronic or digital form so that it can be directly entered into the computer
Example: a scanner reading a UPC code
Cloud-based POS systems provide a range of capabilities
Including advanced integration with digital loyalty programs, various accounting tools, and the ability to generate gift cards and coupons
Data Collection
Capturing and gathering all data necessary to complete the processing of transactions
Data collection can be:
Manual
Automated via special input devices
Source data automation
Involves capturing data at its source and recording it accurately in a timely fashion with minimal manual effort and in an electronic or digital form so that it can be directly entered into the computer
Example: a scanner reading a UPC code
Cloud-based POS systems provide a range of capabilities
Including advanced integration with digital loyalty programs, various accounting tools, and the ability to generate gift cards and coupons
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Data Collection
Data Collection
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Data Editing
Data editing
Checking data for validity and completeness to detect any problems
Examples
Quantity and cost data must be numeric
Names must be alphabetic
Codes associated with an individual transaction are edited against a database containing valid codes
Data Editing
Data editing
Checking data for validity and completeness to detect any problems
Examples
Quantity and cost data must be numeric
Names must be alphabetic
Codes associated with an individual transaction are edited against a database containing valid codes
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Data Correction
Systems should provide error messages that alert those responsible for editing the data
Error messages should specify the problem so proper corrections can be made
Data correction involves reentering data that was not typed or scanned properly
Data Correction
Systems should provide error messages that alert those responsible for editing the data
Error messages should specify the problem so proper corrections can be made
Data correction involves reentering data that was not typed or scanned properly
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Data Processing
Performing calculations and other data transformations related to business transactions including:
Classifying data
Sorting data into categories
Performing calculations
Summarizing results
Storing data in the organization’s database for further processing
Data Processing
Performing calculations and other data transformations related to business transactions including:
Classifying data
Sorting data into categories
Performing calculations
Summarizing results
Storing data in the organization’s database for further processing
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Data Storage
Data Storage
Involves updating one or more databases with new transactions
After being updated, this data can be further processed and manipulated by other systems
Data Storage
Data Storage
Involves updating one or more databases with new transactions
After being updated, this data can be further processed and manipulated by other systems
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Document Production
Document Production involves generating output records, documents, and reports
Hard-copy paper reports
Displays on computer screens (soft copy)
Results from one TPS can be input to another system
Most TPSs provide other useful management information, such as:
Printed or on-screen reports that help managers and employees perform various activities
Reports showing current inventory
Reports required by local, state, and federal agencies
Document Production
Document Production involves generating output records, documents, and reports
Hard-copy paper reports
Displays on computer screens (soft copy)
Results from one TPS can be input to another system
Most TPSs provide other useful management information, such as:
Printed or on-screen reports that help managers and employees perform various activities
Reports showing current inventory
Reports required by local, state, and federal agencies
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Enterprise Systems
An enterprise system is central to individuals and organizations of all sizes
Ensures that information can be shared across all business functions and all levels of management to support the running and managing of a business
The ultimate goal is to satisfy customers and provide significant benefits by reducing costs and improving service
Businesses rely on enterprise systems to perform daily activities in areas such as:
Product supply and distribution
Sales and marketing
Human resources
Manufacturing
Accounting and taxes
Enterprise Systems
An enterprise system is central to individuals and organizations of all sizes
Ensures that information can be shared across all business functions and all levels of management to support the running and managing of a business
The ultimate goal is to satisfy customers and provide significant benefits by reducing costs and improving service
Businesses rely on enterprise systems to perform daily activities in areas such as:
Product supply and distribution
Sales and marketing
Human resources
Manufacturing
Accounting and taxes
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Enterprise Resource Planning
Enterprise resource planning (ERP)
A set of integrated programs that manage a company’s vital business operations for an entire organization
Business process
A set of coordinated and related activities that takes one or more kinds of input and creates an output of value to the customer of that process
Enterprise Resource Planning
Enterprise resource planning (ERP)
A set of integrated programs that manage a company’s vital business operations for an entire organization
Business process
A set of coordinated and related activities that takes one or more kinds of input and creates an output of value to the customer of that process
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Enterprise Resource Planning
ERP systems evolved from materials requirement planning systems (MRP) developed in the 1970s
Large organizations were the first to take on the challenge of implementing ERP
Enterprise Resource Planning
ERP systems evolved from materials requirement planning systems (MRP) developed in the 1970s
Large organizations were the first to take on the challenge of implementing ERP
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Advantages of ERP
Improved access to quality data for operational decision making
Elimination of costly, inflexible legacy systems
Improvement of work processes
Opportunity to upgrade and standardize technology infrastructure
Advantages of ERP
Improved access to quality data for operational decision making
Elimination of costly, inflexible legacy systems
Improvement of work processes
Opportunity to upgrade and standardize technology infrastructure
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Leading ERP Systems
ERP vendors are classified as:
Tier I vendors – target large multinational firms with multiple geographic locations and annual revenues in excess of $1 billion
Tier II vendors – target medium-sized firms with annual revenues in the $50 million to $1 billion range operating out of one or more locations
Tier III vendors – target smaller firms with annual revenues in the $10 million to $50 million range that typically operate out of a single location
Leading ERP Systems
ERP vendors are classified as:
Tier I vendors – target large multinational firms with multiple geographic locations and annual revenues in excess of $1 billion
Tier II vendors – target medium-sized firms with annual revenues in the $50 million to $1 billion range operating out of one or more locations
Tier III vendors – target smaller firms with annual revenues in the $10 million to $50 million range that typically operate out of a single location
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Leading ERP Systems
Leading ERP Systems
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Leading ERP Systems
Many large companies employed ERP on large mainframe computers in the 2000s
ERP software vendors created new solutions for smaller companies
Cloud-based solutions are available
Examples: Plex and NetSuite
Compiere offers an open-source ERP system
Vendor’s ERP software may require customization to:
Integrate other business systems
Add data fields or change field sizes from those in the standard system
To meet regulatory requirements
Leading ERP Systems
Many large companies employed ERP on large mainframe computers in the 2000s
ERP software vendors created new solutions for smaller companies
Cloud-based solutions are available
Examples: Plex and NetSuite
Compiere offers an open-source ERP system
Vendor’s ERP software may require customization to:
Integrate other business systems
Add data fields or change field sizes from those in the standard system
To meet regulatory requirements
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Supply Chain Management
Supply chain management (SCM) is a system that includes planning, executing, and controlling all activities involved in:
Sourcing and procurement of raw materials
Converting raw materials to finished products
Warehousing and delivering finished product to customers
SCM manages materials, information, and finances as they move from:
Supplier -> Manufacturer -> Wholesaler -> Retailer -> Consumer
Supply Chain Management
Supply chain management (SCM) is a system that includes planning, executing, and controlling all activities involved in:
Sourcing and procurement of raw materials
Converting raw materials to finished products
Warehousing and delivering finished product to customers
SCM manages materials, information, and finances as they move from:
Supplier -> Manufacturer -> Wholesaler -> Retailer -> Consumer
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Supply Chain Management
Process for developing a production plan
Sales forecasting
Sales and operations plan (S&OP)
Demand management
Detailed scheduling
Materials requirement planning (MRP)
Purchasing
Production
Sales ordering
Supply Chain Management
Process for developing a production plan
Sales forecasting
Sales and operations plan (S&OP)
Demand management
Detailed scheduling
Materials requirement planning (MRP)
Purchasing
Production
Sales ordering
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Supply Chain Management
Supply Chain Management
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Supply Chain Management
ERP systems do not work directly with production machines
Data must be passed to the ERP accounting modules to keep an accurate count of finished product inventory
Retailers as well as manufacturers use demand forecasting to:
Match production to consumer demand
Allocate products to stores
Supply Chain Management
ERP systems do not work directly with production machines
Data must be passed to the ERP accounting modules to keep an accurate count of finished product inventory
Retailers as well as manufacturers use demand forecasting to:
Match production to consumer demand
Allocate products to stores
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Customer Relationship Management
Customer relationship management (CRM) system
Helps a company manage all aspects of customer encounters, including marketing, sales, distribution, accounting, and customer service
The goal of CRM is to understand and anticipate the needs of current and potential customers
CRM is used primarily in sales, marketing, and service organizations:
To capture and view data about customers and to improve communications
CRM software:
Automates and integrates the functions of sales, marketing, and service in an organization
Customer Relationship Management
Customer relationship management (CRM) system
Helps a company manage all aspects of customer encounters, including marketing, sales, distribution, accounting, and customer service
The goal of CRM is to understand and anticipate the needs of current and potential customers
CRM is used primarily in sales, marketing, and service organizations:
To capture and view data about customers and to improve communications
CRM software:
Automates and integrates the functions of sales, marketing, and service in an organization
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Customer Relationship Management
Customer Relationship Management
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Customer Relationship Management
Key features of a CRM system include:
Contact management
Sales management
Customer support
Marketing automation
Analysis
Social networking
Access by smartphones
Import contact data
Customer Relationship Management
Key features of a CRM system include:
Contact management
Sales management
Customer support
Marketing automation
Analysis
Social networking
Access by smartphones
Import contact data
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Customer Relationship Management
Customer Relationship Management
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Customer Relationship Management
Customer Relationship Management
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Customer Relationship Management
Due to the popularity of mobile devices
Shoppers can easily compare products and prices on their mobile phones
Shopper can also tweet their experiences with a brand to dozens of friends
Savvy retailers use their CRM systems to stay on top of what these customers are saying on social networks
Most CRM systems can now be accessed via smartphones
Customer Relationship Management
Due to the popularity of mobile devices
Shoppers can easily compare products and prices on their mobile phones
Shopper can also tweet their experiences with a brand to dozens of friends
Savvy retailers use their CRM systems to stay on top of what these customers are saying on social networks
Most CRM systems can now be accessed via smartphones
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Product Lifecycle Management
Product lifecycle management (PLM)
An enterprise business strategy that creates a common repository of product information and processes
Supports the collaborative creation, management, dissemination, and use of product and packaging definition information
Product lifecycle management (PLM) software
Provides a means for managing the data and processes associated with the various phases of the lifecycle of a product
The scope of PLM software may include computer-aided design, computer-aided engineering, and computer-aided manufacturing
Product Lifecycle Management
Product lifecycle management (PLM)
An enterprise business strategy that creates a common repository of product information and processes
Supports the collaborative creation, management, dissemination, and use of product and packaging definition information
Product lifecycle management (PLM) software
Provides a means for managing the data and processes associated with the various phases of the lifecycle of a product
The scope of PLM software may include computer-aided design, computer-aided engineering, and computer-aided manufacturing
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Product Lifecycle Management
Product Lifecycle Management
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Product Lifecycle Management
Computer-aided design (CAD):
The use of software to assist in the creation, analysis, and modification of the design of a component or product
Computer-aided engineering (CAE):
The use of software to analyze the robustness and performance of components and assemblies
Computer-aided manufacturing (CAM)
The use of software to control machine tools and related machinery in the manufacture of components and products
Product Lifecycle Management
Computer-aided design (CAD):
The use of software to assist in the creation, analysis, and modification of the design of a component or product
Computer-aided engineering (CAE):
The use of software to analyze the robustness and performance of components and assemblies
Computer-aided manufacturing (CAM)
The use of software to control machine tools and related machinery in the manufacture of components and products
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Product Lifecycle Management
Product Lifecycle Management
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Product Lifecycle Management
Product Lifecycle Management
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Product Lifecycle Management
Discrete manufacturing
The production of distinct items e.g., autos, airplanes, furniture, or toys that can be decomposed into their basic components
Process manufacturing
The production of products that are the result of a chemical process, e.g., gasoline and pharmaceutical drugs that cannot be easily decomposed into its basic components
Product Lifecycle Management
Discrete manufacturing
The production of distinct items e.g., autos, airplanes, furniture, or toys that can be decomposed into their basic components
Process manufacturing
The production of products that are the result of a chemical process, e.g., gasoline and pharmaceutical drugs that cannot be easily decomposed into its basic components
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Product Lifecycle Management
Product Lifecycle Management
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Overcoming Challenges in Implementing Enterprise Systems
Overcoming Challenges in Implementing Enterprise Systems
Tips for avoiding a failed implementation
Assign a full-time executive to manage the project
Appoint an experienced, independent resource to provide project over- sight and to verify and validate system performance
Allow sufficient time to transition from the old way of doing things to the new system and new processes
Allocate sufficient time and money training people
Define metrics to assess project progress and to identify project-related risks
Keep the scope of the project well defined and contained to essential business processes
Be wary of modifying the enterprise system software to conform to your firm’s business practices
Overcoming Challenges in Implementing Enterprise Systems
Tips for avoiding a failed implementation
Assign a full-time executive to manage the project
Appoint an experienced, independent resource to provide project over- sight and to verify and validate system performance
Allow sufficient time to transition from the old way of doing things to the new system and new processes
Allocate sufficient time and money training people
Define metrics to assess project progress and to identify project-related risks
Keep the scope of the project well defined and contained to essential business processes
Be wary of modifying the enterprise system software to conform to your firm’s business practices
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Hosted Software Model for Enterprise Software
Many business application software vendors are pushing the use of the hosted software model for businesses
The goal is to help customers acquire, use, and benefit from the new technology while avoiding much of the associated complexity and high start-up costs
Using the hosted software model enables businesses to:
Experiment with powerful software capabilities without making a major financial investment
Avoid employing a full-time IT person to maintain key business applications
Hosted Software Model for Enterprise Software
Many business application software vendors are pushing the use of the hosted software model for businesses
The goal is to help customers acquire, use, and benefit from the new technology while avoiding much of the associated complexity and high start-up costs
Using the hosted software model enables businesses to:
Experiment with powerful software capabilities without making a major financial investment
Avoid employing a full-time IT person to maintain key business applications
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Hosted Software Model for Enterprise Software
Hosted Software Model for Enterprise Software
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Summary
An organization must have information systems that support routine, day-to-day activities and that help a company add value to its products and services
An organization that implements an enterprise system is creating a highly integrated set of systems, which can lead to many business benefits
Summary
An organization must have information systems that support routine, day-to-day activities and that help a company add value to its products and services
An organization that implements an enterprise system is creating a highly integrated set of systems, which can lead to many business benefits
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