Enterprise Information Systems Dr. Nor Zairah Ab.Rahim & Madam Rasimah ( MCM 2573)

EnterpriseInformation Systems

Dr. Nor Zairah Ab.Rahim

&

Madam Rasimah

(MCM 2573)

• Explain how organizations can be structured according to five functions and three management levels

• Describe how information flows in an organization• Distinguish among a

transaction processing system, a management information system, a decision support system, and an executive support system

Competencies (Page 1 of 2)

Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

• Distinguish between office automation systems and knowledge work systems

• Explain the difference between data workers and knowledge workers

Competencies (Page 2 of 2)


Enterprise

• Enterprise commonly describes a business or venture of any size.

• Refer to as large-scale organizational – corporations, universities, hospitals, research laboratories and government organizations.

Enterprise System

• Enterprise Systems are large-scale organizational systems (people, processes and IT) built around packaged enterprise system software

Information Systems in the Enterprise

• An information system is a collection of people, procedures, software, hardware, and data .

• They all work together to provide information essential to running an organization

An Information System

• Supports daily, short-term and long-term activities.

• Some are used exclusively by only one type of department or functional unit within the enterprise.

• General purpose IS –used by almost any department.

• Integrated IS/Enterprise System Software – used by multiple departments and facilitate information sharing and communication.

An Information System

• Information flows vertically and horizontally throughout an organization

• Information Systems support the natural flow of information within an organization’s structure

• 5 Functions• Management Levels• Information Flow


Organizational Information Flow

• Accounting & Finance

• Marketing

• Human Resources

• Production

• Research

(++ Sales, Distribution,

Customer Service, IS

Dept)Return


Functions of an Organizational

Management Level

(tactical decision)

(strategic decision)

(operational decision)

Information Flow

• Each level of management has different information needs and the information flow supports meeting these needs– Top Management

• Vertical, horizontal & external – Middle Management

• Vertical & horizontal – Supervisor

• Vertical-primarily


11-12

Information Flow

General Purpose Information System

(Enterprise Wide System)

General Purpose Information Systems (enterprise-wide systems)

• TPS is an information system that captures and processes data from day-to-day business activities.

• A transaction is an individual business activity.• Examples of transactions are deposits, payments,

orders and reservation.

i. Transaction Processing Systems (TPS)


When you make a purchase with a credit card, you are using a transaction processing system


• Tracks operations• Creates and records

events in databases• Also called data processing

systems (DPS)• One of the most essential

uses of a TPS are accounting activities



Accounting Activities TPS

• Sales order processing• Accounts receivable• Inventory and

purchasing

• Accounts payable • Payroll • General ledger


11-19

• Generates accurate, timely and organized information.

• Used to support middle managers• Integrates data across areas• Produces predetermined reports

– Periodic /detailed reports– Summary report– Exception reports

ii. Management Information Systems (MIS)

Management information system report


List of transactions

Consolidates data with totals, tables or Graph for managers to quickly review

Data outside normal conditions (reorder etc)

Part No

Description Customers Quantity Purchased

93814 Dorm Refrigerator Union BookstoreUniversity Bookstore

52

88732 Hot Plate Eddes RentalsMiddleton Furnishings

36

30021 Closet organizer Eddes RentalsLilac Imports

34

Part No

Description Quantity Sold

Supplier

93814 Dorm refrigerator

7 Van Electric

88732 Hot Plate 9 Chen Imports

30021 Closet organizer

7 Wilson Ent.

Part No

Description Quantity On Hand

Reorder

93814 Dorm refrigerator

2 5

30021 Closet organizer 7 10

Detailed Report

Summary Report Exception Report

• DSS is a flexible tool that helps users to analyze data

and make decisions.

• Enables managers to get answers to problems– Produces reports that do not have a fixed format

• Has four parts


iii. Decision Support System

• A variety of DSS – OLAP (online analytical

processing), EIS (executive information system)

• Instead of buying DSS, users can use their

productivity software to perform decision support

• Example, using Microsoft Excel

@ Access to create what-if scenario

Query results for SALES < QUOTACopyright © 2010 by The McGraw-Hill

Companies, Inc. All rights reserved.

iii. Decision Support System

• User– Someone who makes decisions

• System software– Operating system– Easy to use

• Data– Internal data– External data

• Decision models

4 Parts of a DSS


• Strategic models- assists top level management and long-range planning

• Tactical models - assists middle-management, financial and sales promotional planning

• Operational models - assists lower-level managers

Decision Models


1-27Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

Ms Chip, our Decision Support System tells Us we have 2,000 shirts to sew by tomorrow.Since that is our sewing machine…Would you like to do some overtime!

iv. Executive Support Systems (ESS)

• (ESS) is a reporting tool (software) that allows you to turn

your organization's data into useful summarized reports.

• These reports are generally used by top management

level.

• Quick access to reports coming from all company levels

and departments such as billing, cost accounting ,

staffing, scheduling, and more.

• Provides immediate access to a company's performance


11-28

iv. Executive Support Systems (ESS)


11-29

Summary of Information System

Other Information Systems

• Information workers– Data workers

• Secretaries• Clerks

– Knowledge workers• Engineers• Scientist

• Office automation systems (OASs)– Project managers– Videoconferencing systems

• Knowledge work systems (KWSs)– Use

specialized systems

– CAD/CAM


11-31

A Look to the FutureOftentimes, More Information is Too

Much Information?• Information overload

– Could have a negative effect on getting work done

– According to recent studies e-mail is the major source of information overload

• How to handle e-mail– Be selective– Remove– Protect– Be brief – Stop spam– Don't respond


11-32

• Name and discuss the five common functions of most organizations.

• Discuss the roles of the three kinds of management in a corporation.

• What are the four most common computer-based information systems?

• Describe the different reports and their roles in managerial decision making.

• What is the difference between an office automation system and a knowledge work system?

Discussion Questions


Enterprise System Software

(Integrated System Software)

• Packaged application software that integrates data, processes and IT

• Include deep knowledge of business practices, influence process design within client companies

• Are generic products that must be configured, customised and integrated with other IS to meet business needs

Enterprise-system Software


Process Integration Overview

Software Integration Worksheet

Integrated processes Integrated Software

ERP

•Enterprise Resource Planning

CRM

•Customer Relationship Management

SCM

•Supply Chain Management

EAI)

•Enterprise Application Integration

DW

•Data Warehousing


i. Enterprise Resource Planning Systems

MCM 126238

• Automates and integrates business processes• Shares common data and practices across the entire

enterprise• Produces and accesses information in a real-time

environment• Represents an expanded effort to integrate

standardized record-keeping that will permit information sharing among different areas of an organization in order to manage the system more effectively

(Deloitte Consulting 1999)

• Integrates all data and processes of an organization into a unified system.

• A typical ERP system will use multiple components of computer software and hardware to achieve this objective.

• A key ingredient of most ERP systems is the use of a unified database to store data for the various system modules.

• ERP systems typically attempt to cover all basic functions of an organization, regardless of the organization's business or charter.

i. ERP Systems (cont..)

Standard Modules :• Financial Management • Production Management• Stores (Inventory) Management • Sales and Marketing Management• Human Resource Management • Fixed Asset Management • Customer Relationship Management • Maintenance and Repair Management

i. ERP Systems (cont..)

ERP

Sales and Distribution Human Resources Product Configuration New Product Engineering Cost Management Quality Management Supply Management Product Planning and Classification Hours Expense and Control Project Requirements Planning Sales Quotations Distribution Requirements Planning

MCM 126244

Transportation Fleet Management Electronic Data Interchange Sales and Marketing Information Inventory Location Control Invoicing Project Estimation Packing Control Sales and Purchase Control Capacity Requirements Planning Sales Contracts Project Budget

ERP in the Real World

MCM 126245

Organizations today confront new markets, new competitionand increasing customer expectations. Along with those scenarios, organizations have moved into a time of slow growth and smaller profit margins. This has put a tremendous demand on organizations to:

• Lower total costs in the complete supply chain

• Shorten throughput times

• Reduce stock to a minimum

• Improve Product quality

• Provide more reliable and better service to the customer

• Efficiently coordinate demand, supply and production

Why ERP System?

• Reduced redundancy in entering data• Allow everyone to share same source of info• Allow everyone to access same source info• Allow everyone to see and update instantly• Identify problem more quickly• Create single version about financial, revenue and sales

numbers to CEO and BOD• Allow standardization of business processes• Allow standardization of enterprise's info

MCM 126246

Advantages of ERP

• Takes a lot of effort and time• Difficult to implement the system• Very expensive• Requires a lot of training

MCM 126247

Disadvantages of ERP

• How ERP can improve a company’s business performance?

• How long will an ERP project takes?• What will ERP fix in my business?• Will ERP fit the way I do business?• What does ERP really cost?• When will I get payback from ERP?• What are the unforeseen cost of ERP?• How do you configure ERP software?• How do companies organize their ERP projects?

MCM 126248

Common Questions of ERP

The Hidden Costs of ERP

• Training • Integration and Testing • Data conversion • Consultants • Replacing Your Best and Brightest • Implementation Teams Can Never Stop • Post-ERP Depression

MCM 126249

MCM 126250

ERP System in Information Processing Space

Issues with ERP Systems

Implementation Critical success factors Variations in process models

Achieving benefits Knowledge transfer Cultural issues Future scenarios for ERP systems

MCM 126251

How and Why of 'ERP Failure‘

• Cost overrun while implementing• Schedule go haywire• Quality is falling short of user expectations

• Lack of preparation• ERP requires massive efforts in short span of time• Consultants from implementation partners arrived to start “as is” study

of existing business process and the company cannot spare the key users to spend adequate time with the consultant.

• Needs good planning and scheduling• Ensure that right person is available at the right time• Senior – experience – person should spend time to spell out the

business processes and requirements• If the ERP implementation is initiated without proper planning, trouble

is inevitable

How & Why of ERP Failure

• Lack of top management commitment• Faulty selection process• Ignorance of the human aspect

• A negative attitude or a negative mind-set in the user community can adversely affect the success rate of the ERP package

» Training and education to create the right mind-set and a positive attitude towards ERP is required

» Fully integrated systems demand change in the work pattern


• Too high expectation• Unrealistic expectation will create problem

» Find out what ERP will NOT do» User who actually have to key-in business transactions often complain

about slow response for screen updates and longer time to enter the data

» Check infrastructure – RAM, CPU speed, etc.

• Too much customization• ERP packages are tightly integrated• Making change in source code at one location may result in snowballing

effect in other modules within ERP.• New version comes with new features – but if too much changes are

done, you can not accept new version…..• Keep the customization minimum – do only ‘essential customization’


• Improper implementation• Most cases the software package is OK• Wrong implementation is responsible for unsatisfactory results• Mistakes in implementing a good ERP package turns dreams into

nightmare and results in considerable investment and efforts going down the drain


• SAP• Maximo• MIMS• Peoplesoft• Baan

ERP module 6Page 57

ERP Products Evaluation

• Length of ERP vendor in business• Proven manufacturing expertise• Functional fit with the Company's business processes• Degree of integration between the various components of the ERP

system• Flexibility and scalability• Complexity; user friendliness• Quick implementation; shortened ROI period• Ability to support multi-site planning and control• Technology; client/server capabilities, database independence,

security• Availability of regular upgrades

ERP module 6Page 58

Attributes for ERP Software Evaluation

• Amount of customization required• Local support infrastructure• Availability of reference sites• Total costs, including cost of license, training, implementation,

maintenance, customisations• Hardware requirements

ERP module 6Page 59

Attributes for ERP Software Evaluation

ii. Customer Relationship Management

MCM 126260

– CRM system manages information about customers, interaction with customers, past purchases, and interest.

– Customer relationship management mainly is used across sales, marketing, and customer service department.

iii. Supply Chain Management

MCM 126261

• All facilities, functions, activities, associated with flow and transformation of goods and services from raw materials to customer, as well as the associated information flows

• An integrated group of processes to “source,” “make,” and “deliver” products

Copyright 2006 John Wiley & Sons, Inc.

Supply Chain Illustration


10-63

Supply Chain

for Denim

Jeans


10-64

Supply Chain

for Denim Jeans (cont.)

iv. Enterprise Application Integration

MCM 126265

– EAI is the use of software and computer systems architectural principles to integrate a set of enterprise computer applications.

– SCM, CRM and other applications typically cannot communicate with one another in order to share data or business rules.

– EAI is the process of linking such applications within a single organization together in order to simplify and automate business processes to the greatest extent possible, while at the same time avoiding having to make sweeping changes to the existing applications or data structures.

v. Data Warehousing

MCM 126267

– A huge database that stores and manages the data required to analyze historical and current transactions.

– Software such as ERP and Manufacturing Resource Planning store and access data in the data warehouse.

A data warehouse receive data from a variety of sources, including company transactions, The Internet and web site visitor click streams

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Enterprise Information Systems Dr. Nor Zairah Ab.Rahim & Madam Rasimah ( MCM 2573)

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