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Enterprise-Wide Information Systems. Chapter 7. System Categories. Enterprise-wide Systems aka Enterprise Systems , are systems that allow companies to integrate information across operations on a company-wide basis. Interorganizational Systems (IOS)

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system categories
System Categories

Enterprise-wide Systems

aka Enterprise Systems, are systems that allow companies to integrate information across operations on a company-wide basis

Interorganizational Systems (IOS)

Systems that communicate across organizational boundaries whose goal it is to streamline information flow from one company to another

the value chain internally focused
The Value Chain – Internally Focused

Used to identify the flow of information through a set of business activities. It identifies two types of activities: primary and support.

a value system externally focused
A Value System – Externally Focused
  • A connection of value chains across organizations
  • Allows the flow of information between organizations to support business activities
      • Upstream flow is information received from another organization
      • Downstream Flow is information sent to another organization
options for enterprise systems packaged vs custom
Options for Enterprise Systems – Packaged vs. Custom

Packaged Applications

“Off-the-Shelf” computer applications purchased from a vendor or the company that created the system (i.e. Quicken or MS Money for financial applications)

  • Packaged Key Characteristics
    • Best Use–
    • Cost Effectiveness–
    • Organizational Fit –
    • Maintenance –
options for enterprise systems packaged vs custom1
Options for Enterprise Systems –Packaged vs. Custom

Custom Applications

“Custom-built” computer applications created by the organization or a third party (e.g. a consulting organization)

  • Custom Key Characteristics
    • Best Use–
    • Cost Effectiveness–
    • Organizational Fit –
    • Maintenance –
enterprise system evolution
Enterprise System Evolution

System Types

System Evolution

Standalone Systems

Integrated Systems


Integrated Systems


enterprise systems legacy system example
Enterprise Systems - Legacy System Example

Legacy (stand-alone) Systems – information is not readily shared between systems (i.e. Inbound Logistics inventory information shared with Operations)

enterprise resource planning
Enterprise Resource Planning

Integrated Packages (Enterprise Resource Planning)

Richly functional systems designed to support many organizational functions (e.g. accounting and finance)

  • ERP Key Characteristics
    • Internally focused systems designed to support the internal operations of the organization
    • Highly integrated systems sharing a common data warehouse for information sharing across functions, using real-time updates
    • Organizational fit may be less for individual departments but the integrated sharing of information usually outweighs these issues
    • Usually packaged applications supported by the vendor utilizing a common user interface
    • Customization is discouraged but these systems have the flexibility to support other outside applications using the common data repository and interfaces
enterprise systems integrated system example

In Tech We trust

Enterprise Systems – Integrated System Example

Integrated Systems – Information is stored in a single data repository and can be accessed and updated by all functional systems (e.g. Operations)

choosing an erp system issues
Choosing an ERP System - Issues
  • ERP Systems are:
    • Supplied by multiple vendors including SAP, Baan, Oracle, etc., with each having their own unique features and structures
    • Packaged systems that follow a one-size-fits-all strategy which means they may not support all functions as well as a custom system does
    • Similar but are also different. They should be selected based on factors including control, business requirements, and best practices
choosing an erp system selection factors
Choosing an ERP System – Selection Factors

Control refers to where the power lies related to computing and decision support systems (centralized vs. decentralized) in selecting systems, developing policies and procedures, etc. (Who will decide?)

Business Requirements refers to the system’s capabilities and how they meet organizational needs through the use of software modules or groups of business functionality (What do you need?)

Best Practices refers to the degree to which the software incorporates industry standard methods for doing business which can cause a need for significant business processes reengineering (How much change is required?)

erp and business process reengineering
ERP and Business Process Reengineering

Business Process Reengineering

A systematic, structuredimprovement approach by all or part of an organization whereby people critically examine, rethink, and redesign business processes in order to achieve dramatic improvements in one or more performance measures (e.g. quality, cycle time, cost)

Hammer and Champy, (“Reenginerring the Corporation”)

“The radical redesign of an organization was sometimes necessary in order to lower costs and increase quality and information technology was the key enabler for that radical change.”

example of bpr
Example of BPR

Taco Bell created the K-Minus program

a retail service company

, not a manufacturing company

new process, meat, beans, corn shells, lettuce,

tomatoes and cheese for their products are prepared

outside of the restaurant in central commissaries

greater quality control, better employee morale,

fewer employee accidents and injuries (due to preparation task off-site),

big savings and more time to focus on the customer business processes

from a $500 million regional company to a $3 billion national company

business process reengineering

Elle Mae Mortgage

Business Process Reengineering
  • Steps in Business Process Reengineering
    • Develop a vision for the organization that specifies business objectives (e.g. reduced costs, shorter time to market, improved quality, etc.)
    • Identify critical processes that are to be redesigned
    • Understandand measure the existing processes as a baseline for future improvements
    • Identify ways that information technology can be used to improve processes
    • Design and implement a prototype of the new process(es)
enterprise systems integrated interorganizational
Enterprise Systems – Integrated (Interorganizational)

Integrated Packages

Richly functional systems designed to support externally focused functions

Upstream– Supply Chain Management

Downstream– Customer Relationship Management)

customer relationship management
Customer Relationship Management


Applications that help organizations attract new business and attract and encourage repeat business

  • Functions
  • There are two primary functions in CRM systems:
    • Sales – tools designed to assist in presales activities such as marketing and prospecting (e.g. Sales Force Automation)
    • Service – tools that help with the post-sales aspects of the business (e.g. call center technology, analytics)
  • Sources
  • There are two primary sources of CRM systems:
    • CRM Software Vendors – Siebel, FirePond, Onyx, E.Piphany
    • ERP Vendors – SAP, Baan, Oracle, etc.
sales support sales force automation sfa
Sales Support – Sales Force Automation (SFA)

Sales Force Automation provides salespeople and sales managers with computerized support tools to assist in daily routines

supply chain management
Supply Chain Management
  • Objective
  • Applications that accelerate product development and reduce cost associated with procuring raw materials, components, and services from its suppliers
    • Supply Chain – the suppliers that an organization purchases from directly
    • Supply Network – the suppliers that an organization purchases from directly and its suppliers
  • Sources
  • There are two primary sources of SCM systems. These systems are built to tightly integrate with ERP systems
    • SCM Software Vendors – Agile, Ariba, I2, Manugistics, Commerce One, etc.
    • ERP Vendors – SAP, Baan, Oracle, etc
supply chain management benefits
Supply Chain Management Benefits
  • Supply Chain Management applications can help organizations to gain competitive advantage and provide substantial payback in several ways by:
    • Streamlining workflow and increasing employee productivity (i.e. efficiently managing business travel, time, and expenses by collaborating with suppliers in real time)
    • Accelerating product development (i.e. enabled by the ability of organizations to swiftly react to market conditions)
    • Streamlining cost and creating efficiencies across the supply network (i.e., supporting contract negotiation and measuring effectiveness of those agreements)
recommendations for enterprise system success


Recommendations for Enterprise System Success

Secure Executive Sponsorship

The highest level support is required to obtain resources and make and support difficult reengineering decisions

Get Help from Outside Experts

Implementation success is enabled by deep application experience and access to supporting tools and methods

Thoroughly Train Users

Training in organization, business process, and application functions is critical to success and must be reinforced

Take a Multidisciplinary Approach to Implementations

Enterprise systems span the entire organization and as such require input and participation from all functions