IS312 Information Systems for Business

1. IS312 Information Systems for Business Lecture 7 Organizational Systems & Enterprise Applications (Ch. 8)

2. LEARNING OBJECTIVES Organizational Information Systems The Need for Integration in Modern Businesses Enterprise Resource Planning Supply Chain Management Customer Relationship Management

3. Decision-Making Levels of an Organization

4. Decision-Making Levels of an Organization • Executive level • Long-term decisions (Strategies) • Unstructured decisions • Managerial level • Decisions covering weeks and months (Tactics) • Semi-structured decisions • Operational level • Day-to-day decisions (Operations) • Structured decisions

5. Organizational Information Systems

6. Operational Level Day-to-day business processes Interactions with customers Information systems used to: Automate repetitive tasks Improve efficiency Decisions: Structured Recurring Can often be automated using IS

7. Managerial Level Functional managers Monitoring and controlling operational-level activities Providing information to executive level Midlevel managers Focus on effectively utilizing and deploying resources Goal of achieving strategic objectives Managers’ decisions Semi-structured Contained within business function Moderately complex Time horizon of few days to few months

8. Executive Level The president, CEO, vice presidents, board of directors Decisions Long-term strategic issues Complex and nonroutine problems Unstructured decisions Long-term ramifications

9. Functional Area Information Systems Cross-organizational-level IS Support specific functional area Focus on specific set of activities

10. Information Systems Supporting the Functional Areas

11. Enterprise Systems • Information Technology supporting business activities at enterprise level • Enterprise applications with internal and external focuses • Implementation of enterprise systems: ERP, CRM and SCM

12. Legacy System

13. Enterprise System

14. Internal Focus: Value Chain

15. External Focus : Value System

16. Internally Focused Systems Support functional areas, business processes and decision-making within an organization New information (value) is added at every step

17. Externally Focused Systems Coordinate business activities with customers, suppliers, business partners and others who operate outside the organization Streamline the flow of information between companies

18. Evolution of Enterprise Systems

19. ENTERPRISE RESOURCES PLANNING • Enterprise Resource Planning (ERP) in supporting business operations • Benefits, challenges, and future of ERP

20. ENTERPRISE RESOURCE PLANNING • Enterprise resource planning – Integrates all departments and functions throughout an organization into a single IT system (or integrated set of IT systems) so that employees can make enterprisewide decisions by viewing enterprisewide information on all business operations

21. ENTERPRISE RESOURCE PLANNING • Reasons ERP systems are powerful tools • ERP is a logical solution to incompatible applications • ERP addresses global information sharing and reporting • ERP avoids the pain and expense of fixing legacy systems

22. ENTERPRISE RESOURCE PLANNING • ERP systems collect data from across an organization and correlates the data generating an enterprisewide view

23. ENTERPRISE RESOURCE PLANNING ERP Systems Automate Business Processes

24. ENTERPRISE RESOURCE PLANNING The Organization Before ERP

25. ENTERPRISE RESOURCE PLANNING The major objective of ERP systems: integrate the functional areas of the organization by enabling seamless information flows across them.

26. Problems with Information Silos

27. ENTERPRISE RESOURCE PLANNING ERP Bringing The Organization Together

28. Enterprise Resource Planning Data warehouse Large, centralized data repository Single place for data storage and access

29. Building a Connected Corporation through Integrations A Central Information Repository Example

30. Building A Connected Corporation Through Integrations An Integration Example

31. Integration Tools • Enterprise system – Provide enterprise-wide support and data access for a firm’s operations and business processes • Enterprise application integration (EAI) – Connects the plans, methods, and tools aimed at integrating separate enterprise systems

32. Enterprise Resource Planning

33. Integration Tools • Middleware – Several different types of software that sit between and provide connectivity for two or more software applications • Enterprise application integration middleware – Takes a new approach to middleware by packaging commonly used applications together, reducing the time needed to integrate applications from multiple vendors

34. Enterprise Application Integration

35. Core ERP Modules Manufacturing & Production Module Customer Relationship Management Module Human Resources Module Accounting and Financial Module Supply Chain Management Module E-Business Module Suppliers Customers ERPPlatform & Database Business Intelligence Module Extended ERP Modules

36. Components of ERP • Core ERP component – Traditional components included in most ERP systems and they primarily focus on internal operations • Extended ERP component – Extra components that meet the organizational needs not covered by the core components and primarily focus on external operations

37. The Benefits of ERP

38. The Benefits of ERP

39. Accounting & Finance ERP Components • Accounting and finance ERP component – Manages accounting data and financial processes within the enterprise with functions such as general ledger, accounts payable, accounts receivable, budgeting, and asset management

40. Production & Materials Management ERP Components • Production and materials management ERP component – Handles the various aspects of production planning and execution such as demand forecasting, production scheduling, job cost accounting, and quality control

41. Human Resource ERP Component • Human resource ERP component – Tracks employee information including payroll, benefits, compensation, performance assessment, and assumes compliance with the legal requirements of multiple jurisdictions and tax authorities

42. Extended ERP Components • Extended ERP components include: • Business intelligence • Customer relationship management • Supply chain management • Ebusiness components include • Elogistics • Eprocurement

43. Measuring ERP Success • Balanced scorecard– Enables organizations to clarify their vision and strategy and translate them into action • Balanced scorecard views the organization from four perspectives • Learning and growth • Internal business process • Customer • Financial

44. Measuring ERP Success

45. THE CHALLENGE OF ERP • ERP systems contain multiple complex components that are not only expensive to purchase, but also expensive to implement • Costs include • Software • Consulting fees • Hardware expenses • Training fees

46. The Future of Enterprise Systems : Integrating SCM, CRM & ERP • SCM, CRM, and ERP are the backbone of ebusiness • Integration of these applications is the key to success for many companies • Integration allows the unlocking of information to make it available to any user, anywhere, anytime

47. Integrating SCM, CRM & ERP

48. Integrating SCM, CRM & ERP

49. SUPPLY CHAIN MANAGEMENT • Integrations in a corporation • Supply Chain Management (SCM) in supporting business operations • Benefits, challenges, and future of SCM

50. Building a Connected Corporation through Integrations • Integration – Allows separate systems to communicate directly with each other, eliminating the need for manual entry into multiple systems • Forward integration • Backward integration