MANAGEMENT INFORMATION
SYSTEMS
Prof. Witold Chmielarz, PhD
Oskar Szumski PhD
Management Faculty University of Warsaw
...from Aphorismus Book...
...Wisdom is nontransferable. The sage’ knowledge
which he try to communicate, sounds always like
nonsense...
...Study period is the time when you are instructing by
somebody you don’t want to know, about something
you don’t want to know...
W. Chmielarz: Faculty of Management University of Warsaw
2
COURSE OBJECTIVES
• Specialization of management information systems
development
• Identification of the main knowledge management elements
in information systems application,
• Introduction of the main directions of the knowledge
management systems development,
• Analyzing of the concept of knowledge managment
application
W. Chmielarz: Faculty of Management University of Warsaw
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A brief content:
•
•
•
•
•
•
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Basic definitions
Information Systems Development directions
Intro to Knowledge Management (KM)
Approaches to KM
Problems with KM implementation
BIS and KM
e-Commerce and e-Banking
W. Chmielarz: Faculty of Management University of Warsaw
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REFERENCES:
Books:
1. Bocij P., Chaffey D., Greasley A., Hickie S.: Business
Information Systems, 2-nd ed., Prentice Hall, Harlow,
2003,
2. Chmielarz W.: Selected problems of IT development,
Wydawnictwo Naukowe WZ UW, Warsaw, 2005,
3. Laudon K., Laudon J.: Management Information
Systems; Prentice Hall, 2010,
4. Turban E., Leidner D., McLean E., Wetherbe J. and
others: Information Technology for Management.
Transforming Organizations in the Digital Economy.
John Wiley and Sons Inc. 6-th ed., 2007,
W. Chmielarz: Faculty of Management University of Warsaw
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…Management Information Systems – refer
to a collection of computerized and nettechnologies whose objective is to support
managerial work and especially decision
making…
(Turban E., at all: IT for Management ... 2007)
• Information system:
– Set of interrelated components,
– Collect, process, store, and distribute information,
– Support decision making, coordination, and control.
• Information vs. data
– Data are streams of raw facts,
– Information is data shaped into meaningful form.
W. Chmielarz: Faculty of Management University of Warsaw
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• Information system: Three activities produce information
organizations need
– Input: Captures raw data from organization or external
environment,
– Processing: Converts raw data into meaningful form,
– Output: Transfers processed information to people or
activities that use it.
W. Chmielarz: Faculty of Management University of Warsaw
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• Feedback:
– Output returned to appropriate members of organization
to help evaluate or correct input stage
• Computer/Computer program vs. information system
– Computers and software are technical foundation and
tools, similar to the material and tools used to build a
house
W. Chmielarz: Faculty of Management University of Warsaw
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Perspectives on Information Systems
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Levels in a Firm
W. Chmielarz: Faculty of Management University of Warsaw
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• Business value of improved decision making
• Improving hundreds of thousands of “small” decisions adds up to
large annual value for the business
• Types of decisions:
• Unstructured: Decision maker must provide judgment,
evaluation, and insight to solve problem
• Structured: Repetitive and routine; involve definite procedure for
handling so they do not have to be treated each time as new
• Semistructured: Only part of problem has clear-cut answer
provided by accepted procedure
W. Chmielarz: Faculty of Management University of Warsaw
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• Senior managers:
• Make many unstructured decisions
• Should we enter a new market?
• Middle managers:
• Make more structured decisions but these may include
unstructured components
• Why is order fulfillment report showing decline in Płock?
• Operational managers, rank and file employees
• Make more structured decisions
• Does customer meet criteria for credit?
W. Chmielarz: Faculty of Management University of Warsaw
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Information Requirements of Key Decision-Making
Groups in a Firm
Senior managers, middle managers, operational managers, and employees have
different types of decisions and information requirements.
W. Chmielarz: Faculty of Management University of Warsaw
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•
Four stages of decision making
1.
Intelligence
•
2.
Design
•
3.
Identifying and exploring solutions to the problem
Choice
•
4.
Discovering, identifying, and understanding the problems occurring
in the organization
Choosing among solution alternatives
Implementation
•
Making chosen alternative work and continuing to monitor how
well solution is working
W. Chmielarz: Faculty of Management University of Warsaw
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Contemporary Approaches to Information Systems
W. Chmielarz: Faculty of Management University of Warsaw
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Some basis definitions…
• System – group of elements integrated with common
purpose of achieving an objective (...) by transforming
input resources to output resources…
• Information system – group of programs integrated in
three areas: programme, logical and technical…
• An application program – a set of computer instructions
written in a programming language, the purpose of
which is to provide functionality to a user…
W. Chmielarz: Faculty of Management University of Warsaw
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• Model:
• Abstract representation that illustrates components or
relationships of phenomenon; may be physical,
mathematical, or verbal model
• Statistical models
• Optimization models
• Forecasting models
• Sensitivity analysis models
W. Chmielarz: Faculty of Management University of Warsaw
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Some basis definitions…
• Management Information Systems
• Combines computer science, management science,
operations research and practical orientation with
behavioral issues
• Four main actors
• Suppliers of hardware and software,
• Business firms,
• Managers and employees,
• Firm’s environment (legal, social, cultural context).
W. Chmielarz: Faculty of Management University of Warsaw
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Some basis definitions…
• Business processes:
• Workflows of material, information, knowledge
• Sets of activities, steps
• May be tied to functional area or be cross-functional
• Businesses: Can be seen as collection of business
processes
• Business processes may be assets or liabilities
W. Chmielarz: Faculty of Management University of Warsaw
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Some basis definitions…
• Examples of functional business processes
– Manufacturing and production
• Assembling the product
– Sales and marketing
• Identifying customers
– Finance and accounting
• Creating financial statements
– Human resources
• Hiring employees
W. Chmielarz: Faculty of Management University of Warsaw
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Some basis definitions…
• Information technology enhances business processes in
two main ways:
• Increasing efficiency of existing processes
• Automating steps that were manual
• Enabling entirely new processes that are capable of
transforming the businesses
• Change flow of information
• Replace sequential steps with parallel steps
• Eliminate delays in decision making
W. Chmielarz: Faculty of Management University of Warsaw
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Some basic definitions…
•
Decision making – a process of choosing among
alternative courses of action for the purpose of
attainings a goal or goals:
What should be done?
When?
How?
Where?
By whom?
W. Chmielarz: Faculty of Management University of Warsaw
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Two main approaches to MIS:
• Broad - all computerized systems, which
supported management of companies the
application for decision making
Management Information Systems,
Decision Data Systems, Expert Systems,
Executive Support Systems, Executive
Information Systems, Artificial
Information Systems ans so on
• Narrow – integrated enterprise information
systems with elements of decison support
24
Tools for Management Information Systems
•
•
•
•
•
•
•
•
•
Transaction Processing Systems (TPS) 1965
Management Information Systems (MIS) 1970
Decision Support Systems (DSS) 1975-78
Expert Systems (ES) 1980
Executive Information Systems &Executive Support
Systems – 1980+
Artificial Intelligence (Artificial Neural Networks) 1985
(?) (ES II generation, Knowledge Based IS, Business
Intelligence Systems) 1995, 2000
Integrated Management Support Systems 1990+
Transformed into Digital Economy Systems 2000+
Digital economy systems (1991+)
25
THE INTEGRATION AND CONVERGENCE THEORY OF
INFORMATION SYSTEMS DEVELOPMENT
The main objective of this part of course is to present the idea
of the development of MIS consisting in the integration and
convergence approach by the analysis of three main paths of
development:
• increasing complexity of logical systems architecture,
• functional integration of Information Systems, tailored to the
current needs of the organization and the user within the
organization,
• expansion of spatial network infrastructure.
26
• Integration – in the ideological sense – consists in combining functional
elements using by means of relations, so as to constitute specific
structural components of the whole. Integration is here understood as
a process of consolidation and merging of particular different-class
characters and forms of interrelated elements in order to create a
functional entity, resulting in the usefulness and efficiency which are
greater than each of the parts acting separately
• Convergence in the development process – consists in the formation of
similar features with regard to construction, function and appearance
of various groups of systems functioning under the same
environmental conditions, regardless of adopted specific innovative
solutions.
1
C
o
n
v
e
r
g
e
n
c
e
TSP/APD
1950
1960
1970
1980
Integration
1990
2000
2010
Year
1
C
o
n
v
e
r
g
e
n
c
e
MIS
TSP/APD
1950
1960
1970
1980
Integration
1990
2000
2010
Year
Economic environment
MIS
Internet
Interior of organization
User
User interface
Database
Management System
Database
Ba
Applications:
- accounting
and finance,
- inventory
control,
- production
management,
- Human
relations.
Available for
decision
maker:
•knowledge,
•intuition,
•education,
•data.
1
C
o
n
v
e
r
g
e
n
c
e
DSS
MIS
TSP/APD
1950
1960
1970
1980
Integration
1990
2000
2010
Year
Economic environment
DSS
Internet
Interior of organization
User
User interface
Database System
Management
Model Base System
Management
Database
Model
Base
Ba
Applications:
- accounting and
finance,
- inventory
control,
- production
management,
- Human
relations.
Available for
decision maker:
• knowledge,
• Intuition,
• education,
• data,
• models,
methods.
Base of
Procedures
1
C
o
n
v
e
r
g
e
n
c
e
EIS/ESS
DSS
MIS
TSP/APD
1950
1960
1970
1980
Integration
1990
2000
2010
Year
Economic environment
EIS/ESS
Internet
Interior of organization
User
User interface
Model Base System
Management
Database System
Management
Database
Ba
Applications:
- accounting and
finance,
- inventory
control,
- production
management,
- Human
relations.
Available for
decision maker:
• knowledge,
• Intuition,
• education,
• data,
• models,
methods.
• prezentation,
vizualization,
extension.
Model Base
Base of
procedures
1
C
o
n
v
e
r
g
e
n
c
e
ES
EIS/ESS
DSS
MIS
TSP/APD
1950
1960
1970
1980
Integration
1990
2000
2010
Year
Economic environment
ES
Internet
Interior of organization
User
User interface
Model BaseSystem
Management
Database System
Management
Database
Ba
Applications:
- accounting and
finance,
- inventory
Available
for decision
control,
maker:
- production
management,
• intuition,
- Human
• education,
• data,relations.
• models, methods,
• prezentation,
vizualization, extension,
• knowledge.
Knowlede Base
System
Management
Knowledge
Base
Ba
Model
Base
Base of
Procedures
1
BIS
C
o
n
v
e
r
g
e
n
c
e
ES
EIS/ESS
DSS
MIS
TSP/APD
Internal integration - just combine different types of systems
Convergence - increasingly sophisticated systems to ever higher level
of development
1950
1960
1970
1980
Integration
1990
2000
2010
Year
Economic environment
BIS
Internet
Interior of organization
User
Mechanizms of data
wholesale management
User interface
Model Base System
Management
Database System
Management
Applications:
- accounting and finance,
- inventory control,
- production
Database
management,
- Human relations.
Mechanizms Business
Analytics
Knowledge Base
System
Management
Model
Base
Marts – branch wholesale
Knowledge
Base
Ba
Decison maker has at his disposal more then he needs!!!
Base of
Procedures
Economic environment
BIS
Internet
Interior of organization
User
Mechanizms of data
wholesale management
User interface
Model Base System
Management
Database System
Management
Applications:
- accounting and finance,
- inventory control,
- production
Database
management,
- Human relations.
Mechanizms Business
Analytics
Knowledge Base
System
Management
Model
Base
Marts – branch wholesale
Knowledge
Base
Ba
Base of
Procedures
Types of decision
• Structured decisions are repetitive and routine (strictly determined),
and they involve a definite procedure for handling them so that they do
not have to be treated each time as if they were new.
• Unstructured decisions are those in which the decision maker must
provide judgment, evaluation, and insight to solve the problem
(probablistic, undetermined). Each of these decisions is novel,
important, and non routine, and there is no well-understood or agreedon procedure for making them.
• Many decisions have elements of both types of decisions and are
semistructured, where only part of the problem has a clear-cut answer
provided by an accepted procedure. In general, structured decisions are
more prevalent at lower organizational levels, whereas unstructured
problems are more common at higher levels of the firm.
INFORMATION REQUIREMENTS OF KEY DECISIONMAKING GROUPS IN A FIRM
STAGES IN DECISION MAKING
• Intelligence consists of discovering, identifying, and
understanding the problems occurring in the organization why a problem exists, where, and what effects it is having
on the firm
• Design involves identifying and exploring various
solutions to the problem
• Choice consists of choosing among solution alternatives
• Implementation involves making the chosen alternative
work and continuing to monitor how well the solution is
working
Six elements in business intelligence environment
• Data from the business environment: Businesses must deal with both
structured and unstructured data from many different sources, including
mobile devices and the Internet. The data need to be integrated and
organized so that they can be analyzed and used by human decision
makers
• Business intelligence infrastructure: The underlying foundation of
business intelligence is a powerful database system that captures all the
relevant data to operate the business. The data may be stored in
transactional databases or combined and integrated into an enterprisedata warehouse or series of interrelated data marts
• Business analytics toolset: A set of software tools are used to analyze
data and produce reports, respond to questions posed by managers, and
track the progress of the business using key indicators of performance
Six elements in business intelligence environment
• Managerial users and methods: Business intelligence hardware and
software are only as intelligent as the human beings who use them.
o Managers impose order on the analysis of data using a variety of
managerial methods that define strategic business goals and specify how
progress will be measured.
o These include business performance management and balanced scorecard
approaches focusing on key performance indicators and industry strategic
analyses focusing on changes in the general business environment, with
special attention to competitors.
o Without strong senior management over-sight, business analytics can
produce a great deal of information, reports, and online screens that focus
on the wrong matters and divert attention from the real issues.
o You need to remember that, so far, only humans can ask intelligent
questions.
Six elements in business intelligence environment
•
•
Delivery platform - MIS, DSS, ESS. The results from business intelligence and
analytics are delivered to managers and employees in a variety of ways,
depending on what they need to know to perform their jobs. MIS, DSS, and ESS,
deliver information and knowledge to different people and levels in the firm—
operational employees, middle managers, and senior executives. In the past, these
systems could not share data and operated as independent systems. Today, one
suite of hardware and software tools in the form of a business intelligence and
analytics package is able to integrate all this information and bring it to managers’
desktop or mobile platforms.
User interface: Business people are no longer tied to their desks and desktops.
They often learn quicker from a visual representation of data than from a dry
report with columns and rows of information. Today’s business analytics software
suites emphasize visual techniques such as dashboards and scorecards. They also
are able to deliver reports on Blackberrys, iPhones, and other mobile handhelds as
well as on the firm’s Web portal. BA software is adding capabilities to post
information on Twitter, Facebook, or internal social media to support decision
making in an online group setting rather than in a face-to-face meeting.
Business Intelligence and Analytics for Decision Support
Business Intelligence Users
1
BIS
C
o
n
v
e
r
g
e
n
c
e
ES
EIS/ESS
2
DSS
MIS
TSP/APD
IC
1950
1960
1970
1980
Integration
1990
2000
2010
Year
Inventory
balance
IC
1
BIS
C
o
n
v
e
r
g
e
n
c
e
ES
EIS/ESS
2
DSS
MIS
TSP/APD
MRP
IC
1950
1960
1970
1980
Integration
1990
2000
2010
Year
Production
balance
Inventory
balance
IC
MRP
1
BIS
K
C
o
n
v
e
r
g
e
n
c
e
ES
EIS/ESS
2
DSS
MIS
TSP/APD
MRP II
MRP
IC
1950
1960
1970
1980
Integration
1990
2000
2010
Year
Production
Balance
Financial
Balance
Inventory
Balance
IC
MRP
MRP II
1
BIS
C
o
n
v
e
r
g
e
n
c
e
ES
EIS/ESS
2
DSS
MIS
TSP/APD
ERP
MRP II
MRP
IC
1950
1960
1970
1980
Integration
1990
2000
2010
Year
Production
Balans
Service Balans
Financial
Balans
Inventory
Balance
IC
MRP
MRP II
ERP
Functional integration - more and more utility functions
Convergence - in each, next step newer technology and better
adjust to needs of user
Diffusion patterns between tracks
1
BIS
C
o
n
v
e
r
g
e
n
c
e
ES
EIS/ESS
DSS
2
CRM
MIS
ERP II
TSP/APD
ERP
MRP II
SCM
MRP
IC
1950
1960
1970
1980
Integration
1990
2000
2010
Year
Production
Balance
Service Balans
Financial
Balance
Inventory
Balance
IC
MRP
Logistic Balans,
specializations and
mutations
MRP II
ERP
ERP
II
1
BIS
C
o
n
v
e
r
g
e
n
c
e
ES
EIS/ESS
DSS
2
CRM
MIS
ERP II
TSP/APD
ERP
MRP II
SCM
MRP
IC
1950
1960
1970
1980
Integration
1990
2000
2010
Year
Production
Balance
Service Balans
Financial
Balance
Inventory
Balance
IC
MRP
Logistic Balans,
specializations and
mutations
MRP II
ERP
ERP
II
C
o
m
m
u
n
i
c
a
t
i
o
n
B
a
l
a
n
s
eERP
1
BIS
C
o
n
v
e
r
g
e
n
c
e
ES
EIS/ESS
DSS
2
CRM
MIS
ERP II
TSP/APD
ERP
MRP II
SCM
3
MRP
IC
Private, corporate nets
1950
1960
1970
1980
Integration
1990
2000
2010
Year
Corporate solutions
based on EDI
standards, huge
organizations
Corporate networking
Private, corporate nets
1
BIS
C
o
n
v
e
r
g
e
n
c
e
ES
EIS/ESS
DSS
2
CRM
MIS
ERP II
TSP/APD
ERP
MRP II
SCM
3
MRP
IC
Commercial nets
Private, corporate nets
1950
1960
1970
1980
Integration
1990
2000
2010
Year
Commercial solutions
for large and
medium-sized
companies
Organizational nets
Commerce nets
Corporate solutions
based on EDI
standards, huge
organizations
Corporate networking
Private, corporate nets
Integration - the traditional systems and other networks
Convergence - the expansion of the subsequent users, connected with
increasing availability and ease of use
1
BIS
C
o
n
v
e
r
g
e
n
c
e
ES
EIS/ESS
DSS
2
CRM
MIS
ERP II
TSP/APD
ERP
MRP II
SCM
3
MRP
IC
Internet
Commercial nets
Private, corporate nets
1950
1960
1970
1980
Integration
1990
2000
2010
Year
Commercial solutions
for large and
medium-sized
companies
Organizational nets
Comprehensive and
global solution for all
(organizations,
customers, society)
Social nets
Commerce nets
Corporate solutions
based on EDI
standards, huge
organizations
Corporate networking
Private, corporate nets
Internet
1
BIS
C
o
n
v
e
r
g
e
n
c
e
ES
EIS/ESS
DSS
2
CRM
MIS
ERP II
TSP/APD
ERP
MRP II
SCM
3
MRP
IC
Internet
Commercial nets
Private, corporate nets
1950
1960
1970
1980
Integration
1990
2000
2010
Year
BIS
C
o
n
v
e
r
g
e
n
c
e
ES
EIS/ESS
DSS
CRM
MIS
ERP II
TSP/APD
ERP
MRP II
SCM
MRP
IC
Internet
C
o
r
p
o
r
a
t
e
1
2
P
l
a
t
f
o
r
m
3
Commercial nets
Private, corporate nets
1950
1960
1970
1980
Integration
1990
2000
2010
Year
Conclusions
•
•
•
•
The solution which under the conditions of the development of internet
systems started to be applied in lieu of internal integration was external
integration through external corporate portals.
A corporate portal is …a platform which integrates systems and information
technology, data, information and knowledge in an organization and its
environment in order to provide users with a personalised and convenient access
to data, information and knowledge, in accordance with the needs, at any time
and in any place, in a secure manner and through a unified web interface ….
The main objective of a corporate portal are improvements with regard to
access to data, information and knowledge and their sources according to user
requirements; regardless of time and location of the web interface, and in a
secure manner.
The main feature of corporate platforms is the integration of data from
internal resources with external data, their conversion into common and
jointly processed formats; integration of heterogeneous applications;
integration of communication between particular users and providing them
with personalized information and knowledge.
•
•
•
•
•
The emergence of corporate portals is connected with the development of
internet network technologies, and the portals operate mainly in an intranet
corporate environment. Through this environment – web interface - they are
distributed to users, as required information and knowledge.
The impression is that a corporate platform is both an integration instrument
and at the same time a convergence tool - on the level, cooperation of both
complementary and parallel systems is possible.
The author believed that this tendency was a process of intensifying of a
previously examined complexity of the logical architecture structure in
particular types of the systems, and therefore it does not require further
analysis.
Also, the author did not illustrate the development of particular internet tools
in such a great detail as in the article, assuming that they are still developing
very intensively.
Nevertheless, there is a clearly visible - possible thanks to a corporate platform
- tendency to connect everything with everything (multi-dimensional
integration) in terms of transmissivity of the idea of interaction between
various information systems on all presented development paths.
TRANSACTION (DATA) SYSTEMS PROCESSING (TSP)
or AUTOMATED DATA PROCESSING (ADP)
Definition:
• Transaction Processing Systems (TSP) - perform the
frequent routine external and internal transactions that
serve the operational level of organisation
• An information system that processes an organization’s
basic business transactions such as purchasing, billing
and payroll
• Previously based on batch processing – where processes
inputs at fixed intervals as a file and operates on it all
at once; interactive processing operates on a
transaction as soon as it occurs
71
• Transaction Systems Processing
– Perform and record daily routine transactions
necessary to conduct business
• Examples: sales order entry, payroll, shipping
– Allow managers to monitor status of operations and
relations with external environment
– Serve operational levels
– Serve predefined, structured goals and decision
making
W. Chmielarz: Faculty of Management University of Warsaw
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TRANSACTION SYSTEMS PROCESSING (TSP)
• Data processing – manipulation or transformation
numbers and letters for the purpose of increasing their
usefulness (data gathering, data manipulation –
classifying, sorting, selecting etc).
• TSP, D(data) PS or A(analytic)IS – the first single
simple systems made mainly for gathering and
processing data not for decision making, operating
separately in the frames of the firm; in the beginning
often without common data-base
73
TRANSACTION SYSTEMS PROCESSING (TSP)
• System tended to grow independently, and not according to some grand
plan.
• Each functional area tended to develop systems in an isolation from
other functional areas.
• Accounting, finance, manufacturing, human resources, and marketing
all developed their own systems and data files.
• Each application, of course, required its own files and its own computer
program to operate.
• For example, the human resources functional area might have:
•
•
•
•
a personnel master file,
a payroll file,
a medical insurance file,
a pension file and so forth until tens, perhaps hundreds, of files and programs existed.
• In the company as a whole, this process led to multiple master file
created, maintained, and operated by separate divisions or departments.
W. Chmielarz: Faculty of Management University of Warsaw
74
Nowadays definition
• Definition: A transaction processing stystem (TPS) supports:
 monitoring,




collection,
storage,
processing, and
dissemination of the organization’s basic business transactions.
(sometimes the same it’s said about MIS).
• It also provides the input data for other information systems.
Sometimes several TPSs exist in one company.
• TPSs are considered critical to the success of the organization
since they support core operations - such as purchasing of
materials, billing customers, preparing a payroll and shipping
goods to customers.
This is very similar to MIS category
75
A Payroll TPS
W. Chmielarz: Faculty of Management University of Warsaw
76
MIS – Management Information Systems
• Management information systems
– Serve middle management,
– Provide reports on firm’s current performance, based
on data from TPS,
– Provide answers to routine questions with predefined
procedure for answering them,
– Typically have little analytic capability.
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MIS – Management Information Systems
Definition:
• MIS - as a computer-based system that makes information
available to users with similar needs
• MIS - is designed to provide past, present and future routine
information appropriate for planning, organizing the operations of
a functional area in an organization
The information describes the firm or one of its major system in terms of what
has happened in the past and is happening now (sometimes in the future)
• MIS support functional managers by providing them with periodic
reports that include some summaries, comparisons and other
statistics
Consists of: user interface, database, database system management
and set of applications
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The main elements of MIS
• A database – is a collectionof files serving as a data resource for
computer based information systems (MIS),
• A batabase management system (DBMS) is a software program (or
group of programs) that managesand provides access to a
database
• Data warehouse – is a repository of historical data (millions of
records), subject oriented and organized, integrated from various
sources, that can easily be accessed and manipulated for decision
support for example by: data mining – process of searching for
unknown informationor relationships in large databases using
tools as neural computing or case-based reasoning.
• An application program – a set of computer instructions written in
a programming language, the purpose of which is to provide
functionality to a user…
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• Capabilities of Database Management Systems
• Data definition capability: Specifies structure of database content, used
to create tables and define characteristics of fields
• Data dictionary: Automated or manual file storing definitions of data
elements and their characteristics
• Data manipulation language: Used to add, change, delete, retrieve data
from database
• Structured Query Language (SQL)
• Microsoft Access user tools for generation SQL
• Many DBMS have report generation capabilities for creating polished
reports (Crystal Reports)
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• Data warehouse:
• Stores current and historical data from many core operational transaction
systems
• Consolidates and standardizes information for use across enterprise, but
data cannot be altered
• Data warehouse system will provide query, analysis, and reporting tools
• Data marts:
• Subset of data warehouse
• Summarized or highly focused portion of firm’s data for use by specific
population of users
• Typically focuses on single subject or line of business
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Components of a Data Warehouse
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• Databases and the Web
• Many companies use Web to make some internal databases
available to customers or partners
• Typical configuration includes:
• Web server
• Application server
• Database server
• Advantages of using Web for database access:
• Ease of use of browser software
• Web interface requires few or no changes to database
• Inexpensive to add Web interface to system
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Decision Support Systems - definitions
•
…Decision Support Systems couple the intellectual resources of
individuals with the capabilities of the computer to improve the
quality of decisions…
•
…It is a computer based support system for management
decision makers who deal with semistructural problems…
•
…It is a comptuer based information system that combines
models and data in an attempt to solve semistructured problems
with extensive user involvment…
Turban E. and R. Spraque
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Components of DSS
1. Data Management – includes the database, which contains
relevant data for the situation and is managed by software
called database management system (DBMS)
2. Model Management – includes financial, statistical,
management science or other models that provide the
system’s analytical capabilities and an appropriate software
management
3. Communication Subsystem - the user can communicate with
and command the DSS through this subsystem. It provides
the user interface
4. Procedure management. This optional subsystem can
support any of the other subsystem, mainly Model
Management
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The Data Management Subsystem
1.DSS database (the same as MIS)
2.Database management system (see MIS)
3.Query facility
The Database – collection of interrelated data organized in such a way
that it corresponds to the needs and structure of an organization and
can be used by more than one person for more than one application.
Database Management System – is a software program to establish,
update and use a model base; to screen each request for information
and determine that the person making the request is indeed an autorised
user.
Administrator can obtain reports about that activity of users. An
effective DBMS can provide support for many managerial activities,
general navigation among records, support for a diverse set of data
relationships, and report generation are typical examples.
Query facility – provides the basis for access to data. It accepts request
for data, determines how these request can be filled, formulates the
detailed request, returns the results to user
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Model Management Subsystem
1.
2.
3.
4.
5.
Model base
Modelbase management system
Model language
Model directory
Model execution, integration and command
All of them
are elements of:
BI or
KM systems
Model base – contains routine, standard and special statistical, financial, managerial
and other models that provide the analysis capabilities in the DSS. The ability
to invoke, run, change, combine and inspect models. The models in the Model
base can be divided into four main blocks: strategic, tactical, operational and
basic (model buiding blocks and subroutines)
Model base management – contains all tools for model management: modeling
commands – creation, maintenance-update, database interface, modeling
language
Model language - special set of commands which can make possible to conctruct the
model
Model directory – catalog of all models in the system, whenever used
Model execution, integration and command – rules of data management, dialog
management and knowledge management
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• Web-based customer decision-support systems (CDSS):
• Support decision-making process of existing or potential customer
• Use Web information resources and capabilities for interactivity and
personalization to help users select products and services
• E.g., search engines, intelligent agents, online catalogs, Web directories,
newsgroup discussions, other tools
• Automobile companies that use CDSS to allow Web site visitors to
configure desired car
• Financial services companies with Web-based asset-management tools
for customers
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• Web-based customer decision-support systems (CDSS):
• Support decision-making process of existing or potential customer
• Use Web information resources and capabilities for interactivity and
personalization to help users select products and services
• E.g., search engines, intelligent agents, online catalogs, Web directories,
newsgroup discussions, other tools
• Automobile companies that use CDSS to allow Web site visitors to
configure desired car
• Financial services companies with Web-based asset-management tools
for customers
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Information systems for Top Management: EIS and ESS
Definitions:
Information Systems for Managers - provide senior managers with
a system to assist them in taking strategic and tactical decisions.
Their purposeis to analyse, compare and highlight trends to help
govern the strategic direction of a company
There are commonly integrated with operational systems, giving
managers the facility to „drill down” to find out further
information on a problem
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Information Systems for top managers
Two categories:
• Executive Information Systems (EIS) – is a computer-based system
that serves the information needs of top executives. Rapid access to
timely information and direct access to management reports. Very
user-friendly, supported by graphics, and provides exceptions
reporting and drill-down capabilities (break down data for details:
daily report corporate rates can be drilled down to find the daily
sales in a region, or by product, or by salesperson.
• Executive Support System (ESS) – is a comprehensive support
system that goes beyond EIS to include communications, office
automation, analysis support and intelligence issues resolving.
There were somewere between a Final User and the other part of a
DSS –additional tools for better decision making process.
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• Role of ESS in the firm
• Used by both executives and subordinates
• Drill-down capability: Ability to move from summary information to
finer levels of detail
• Integrate data from different functional systems for firmwide view
• Incorporate external data, e.g. stock market news, competitor
information, industry trends, legislative action
• Include tools for modeling and analysis
• Primarily for status, comparison information about performance
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• Data visualization tools:
• Help users see patterns and relationships in large amounts of data that
would be difficult to discern if data were presented as traditional lists
of text
• Geographic information systems (GIS):
• Category of DSS that use data visualization technology to analyze and
display data in form of digitized maps
• Used for decisions that require knowledge about geographic
distribution of people or other resources, e.g.:
• Helping local governments calculate emergency response times to natural
disasters
• Help retail chains identify profitable new store locations
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Expert Systems
Definition:
Expert systems – is a computer system that applies
reasoning methodologies or knowledge in a specific domain
to render advice or recommendations – much like a human
expert
Two generations:
• Supported by mechanisms of DSS (from early 80.)
• Supported by knowledge base and knowledge management
(from the end of 80. – beginning of Business Information
Systems)
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Some usable definitions…
• Knowledge base – a collection of facts, rules, and procedures,
related to a specific problem, organized in one (the same)
place
• Knowledge discovery in databases – the process of extracting
knowledge from volumes of data in databases (e.g. in data
warehouse; includes data-mining
• Knowledge Management System – a system that organizes,
enhances and expedites intra- and inter-firm knowledge
management; centered around a corporate base or depository
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Expert Systems– structure and components
Components:
• Knowledge acquisition subsystem
• Knowledge Base
• Inference Engine
• User Interface
• Explanation justifier
• Knowledge Refining (Improving) Subsystem
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Expert systems – structure and components
•
Knowledge acquisition subsystem – accumulation,
transfer and transformation (conversion) of problem
solving expertise from some knowledge source to a
computer program for constructing or expanding the
knowledge base. Sources: human experts, textbooks,
databases, special research reports and pictures.
•
Knowledge Base – contains knowledge necessary for
understanding, formulate and solving problem.Consists
of:
facts - such as the problem situation and theory of the
problem area and
special rules that direct the use of knowledge to solve
specific problems in a particular domain,


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Expert Systems – structure and components
Inference Engine – brain of the ES, control structure or maybe
the ruler interpreter; a computer program that provides a
methodology for reasoning about information in the knowledge
base and for formulating conclusions.
It has three major elements:
• An interpreter – (rule interpreter) – which executes chosen items,
by applying the corresponding knowledge rules base,
• A scheduler – which maintains control over the agenda. It
estimates the effects of applying inference rules in light of item
priorities or other criteria,
• A consistency enforcer – which attempts to maintain a consistent
representation of the emerging solution.
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Expert Systems – structure and components
User Interface – expert system contain a language processor for
friendly, problem-oriented communication between the user and
the computer. Could be carried out in natural language or
supplemented by menus or graphics
•
•
•
•
Explanation Subsystem (Justifier) – can trace responsibility for
conclusions:
Why was a certain question asked by the expert system?
How was a certain conclusion reached?
Why was a certain alternative rejected?
What is a plan to reach the solution?
Knowledge Refining (Improving) System - can analyse their
performance, learn from it and improve it for future consultations
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Architecture of integrated „Ideal” Expert (almost BIS) System
User
High level query language
Access through the use of natural language, pictures etc.
Knowledge base
system
management
Intelligent
interface system
Management of problem
solving and conclusion
forming system
Knowledge
base
Access to
software level
Rule base
Intelligent
interface
system +
network
service system
Application
software level
Model base +
model base
management
system
Data base + Data
base management
system
Mechanism of intelligent access
Mechanism object
data base
Logic of communication
language
Relational
mechanism of
component
management
Operating system
and tools
software level
Adaptation and learning
mechanism
Structure of the highest level of integration
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Hardware
level
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Artificial Intelligence Systems
„. AIS are like YETI, nobody, never has seen it, but everybody has
heard about them ...”
Artificial Intelligence Systems – would be called intelligent; is the
study of how to make computers do things at which, at the
momment, people are better; subfield of computer science
concerned with symbolic reasoning and problem solving
Three objectives of AIS:
• Make machines smarter (primary goal),
• Understand what intelligence is (that’s Nobel laureate purpose),
• Make machines more useful (the entrepreneurial purpose).
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Artificial Intelligence Systems
…Artificial Intelligence - capability of a device, such as a
computer, to perform functions or tasks that would be regarded as
intelligent, if they were observed in humans…
•
•
•
•
•
•
•
•
Meanings of intelligent behaviour for IS:
learn or understand from experience
make sense out of ambigous or contradictory messages
respond quickly and successfully to a new situation
use reason in solving problems
deal with perplexing (uneasy) situations
understand and infer in ordinary, rational ways
acquire and apply knowledge,
recognize the relative importance of diffrerent elements in a
situation
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AIS – some benefits
• Pattern recognition for character, speech and visual recognition
• Systems that learn are more natural interfaces to the real world
than systems that must be programmed
• Hihg fault tolerance
• Generalization – in work with noisy, incomplet or previously
unsen input – generates reasonable response
• Adaptivity – learns in new environment.
In our XXI century AIS were divided into:
• BIS – Business Information Systems,
• APS – Automation of Production Systems (robots included)
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Intro to Knowledge Management (KM)
…A process that helps organizations identify, select, organize,
disseminate, and transfer important information and expertise
that are part of the organization’s memory and that typically
reside within the organization in an unstructured manner…
• Creating of knowledge enables effective and efficient problem
solving, dynamic learning, strategic planning and decision making
• Focus on identyfing knowledge, explicating it in formal manner
and exploiting by reuse,
• For success of organization must be exchangable among persons,
and able to grow.
E.Turban et al.: Information Technology for Management; J.Wiley and Sons, NY.., 2008
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• Knowledge Management Systems (KM)
• Support processes for acquiring, creating, storing,
distributing, applying, integrating knowledge
• Collect internal knowledge and link to external
knowledge
• Include enterprise-wide systems for:
• Managing documents, graphics and other digital knowledge
objects
• Directories of employees with expertise
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Knowledge Management (KM)
• Knowledge management: Set of business processes developed
in an organization to create, store, transfer, and apply
knowledge
• Knowledge management value chain:
– Each stage adds value to raw data and information as they
are transformed into usable knowledge
– Knowledge acquisition
– Knowledge storage
– Knowledge dissemination
– Knowledge application
Knowledge acquisition
• Documenting tacit and explicit knowledge
– Storing documents, reports, presentations, best
practices
– Unstructured documents (e.g., e-mails)
– Developing online expert networks
• Creating knowledge
• Tracking data from TPS and external sources
Knowledge storage
• Databases
• Document management systems
• Role of management:
– Support development of planned knowledge storage
systems
– Encourage development of corporate-wide schemas
for indexing documents
– Reward employees for taking time to update and store
documents properly
Knowledge dissemination
•
•
•
•
•
Portals
Push e-mail reports
Search engines
Collaboration tools
A deluge of information?
– Training programs, informal networks, and shared
management experience help managers focus
attention on important information
Knowledge application
• To provide return on investment, organizational
knowledge must become systematic part of management
decision making and become situated in decision-support
systems
– New business practices
– New products and services
– New markets
Relations – data – information – knowledge - wisdom
• Data – are a collection of facts, measurements, and statistics
• Information – is organized or processed data that are timely and
accurate (ready for use),
• Knowledge – is information that is contextual (connected with
particular conditions), relevant (closely connected with situation)
and actionable (supported by cases), shows how to use information
and data under current, given, defined situation in effective,
acceptable formal (visible knowledge) way,
• Wisdom – abbility to make sensible decisions and good advice
because of the experience and knowledge, how to use knowledge
and information in reasonable (optimal) way (hidden knowledge,
too)
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Wisdom – Knowledge triangle
Wisdom – collection of reasonable knowledge
Knowledge – collection of usable information
Information – collection of processed data
Data – collection of facts
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Charactristics of knowledge
• Extraordinary and increasing results – knowledge is not subject to
diminishing results. When it is used, it is not consumed. Its
consumers can add to it, thus increasing its value.
• Fragmentation, leakage and need to refresh – knowledge is
dynamic, it is information in action. Thus an organization must
continually refresh its knowledgebase to maintain it as a source of
competitive advantage,
• Uncertain value – it’s difficult to estimate the impact of an
investment in knowledge. There too many intengible aspects
• Uncertain value of sharing – it’s difficult to estimate the value of
sharing knowledge, or even who will benefit most,
• Rooted in time – the utility and validity of knowledge may change
with time.
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Transforming information into knowledge
• To transform information into knowledge, firm must expend
additional resources to discover patterns, rules, and contexts
where knowledge works
• Wisdom: Collective and individual experience of applying
knowledge to solve problems
– Involves where, when, and how to apply knowledge
• Knowing how to do things effectively and efficiently in ways
other organizations cannot duplicate is primary source of profit
and competitive advantage that cannot be purchased easily by
competitors
Business Intelligence
The process of transforming data into business intelligence.
The business intelligence tools do not necessarily find clear-cut answers, but
can find patterns and relationships in data that can greatly improve business
decisions and offer insight into the business environment.
Additionally we have a readyto use patern packages inside of Business
Analytics
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Some additional definitions
• Intellectual capital (or intellectusl assets) – the valuable knowledge
of employees, evolves with time and experience, which puts
connections among new situations and events in context.
• Tacit knowledge – usually in the domain of subjective, cognitive
and experimental learning (personal and difficult to formalize).
The cumulative store of an experiences, expertise, know-how,
trade secrets, skill sets, usually localized in the brain of individual
• Explicit knowledge – deals with more objective, rational, and
technical knowledge (date, procedures, software, documents).
Codyfied knowledge (documented) in the form can be distributed
to others or transformed into process without interpersonal
interaction (can leave person – leaky knowledge)
Organizations now recognize the need too integrate explicit and
tacit knowledge in formal information systems
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Important dimensions of knowledge
– Knowledge is a firm asset
• Intangible
• Creation of knowledge from data, information, requires
organizational resources
• As it is shared, experiences network effects
– Knowledge has different forms
•
•
•
•
May be explicit (documented) or tacit (residing in minds)
Know-how, craft, skill
How to follow procedure
Knowing why things happen (causality)
(taken from Laudon)
Important dimensions of knowledge
• Knowledge has a location
• Cognitive event
• Both social and individual
• “Sticky” (hard to move), situated (enmeshed in firm’s
culture), contextual (works only in certain situations)
Knowledge is situational
• Conditional: Knowing when to apply procedure
• Contextual: Knowing circumstances to use certain tool
Approaches to KM
• Process approach – attempts to codify organizational knowledge
through formalized controls, processes and technologies,
frequently involves the use of information technologies to enhance
the quality and speed of knowledge creation and distribution in the
organizations
• Practice approach – assumes that a great deal of organizational
knowledge is tacit in nature and that formal controls, processes
and technologies are not suitable for transmitting this type of
understanding. The focus of this approach is to build the social
environments or communities necessary to the sharing of tacit
knowledge.
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Approaches to KM
1.
2.
3.
•
Best practices – the activities and methods that the most effective
organizations use to operate and manage various functions. They
include:
A good idea that is not yet proven, but makes intuitive sense,
A good practice, an implemented technique, metodology,
procedure, or process that has improved business results,
A local best practice, a best approach for all or a large part of the
organization based on analysing hard data. The scope within
organization of the best practice is identified; can be used only in
a single department or geographical region, or across the
organization.
Hybrid approaches – in reality involve both process and practice
approaches.
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Information Technology in KM
Expert Systems based on Knowledge Management Systems
(early stage of BIS) are developed using three sets of
technologies: communication, total integration and database
managemnt systems (not only storage and retrieval but
data-mining et. ceatera)
Artificial Intelligence Systems – methods and tools are
embeded in a number of KM systems. AI can assist
identifiying expertise, eliciting knowledge, interfacing
through natural languages intelligent search through
intelligent systems
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Information Technology in KM
AI methods used in KM systems may to do the
following:
•
•
•
•
•
•
Assist in and enhance searching knowledge
Help establish knowledge profiles
Help determine the relative importance of knowledge
Identify patterns of data
Forecast future results using existing knowledge
Provide advice directly from knowledge by using ES
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Business Intelligence Systems (BIS)
•
•
•
•
BIS is an umbrella term that combines architectures, tools,
databases, applications, and methodologies for example:
data warehouse (with its „source” data),
business analytics (a collection of tools for manipulationg,
mining, and analyzing the external data in data warehouse),
business performance management (for monitoring and
analysis of performance),
user (intelligent) interface
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Components of Business Intelligence Systems
Data warehouse
environment
Data
Sources
Business Analytics
Environment
Technical staff
Build the data warehouse
Organizing
Data
Summarizing
warehouse
Standarizing
Future component
Intelligent Systems
Performance and
strategy
Business Users
Accesss
Manipulation
Results
Managers Executives
Business Performance
Management (BPM)
Strategies
User interface
Browser, portal
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Data Warehousing (see Data Base in MIS)
• Data flow from operational systems (CRM, ERP etc.) to a data
warehouse (DW) – which is a special database, or repository of
data, that has been prepared to support decision-making
applications, ranging from simple reporting and quering to
complex optimization
• The DW is constructed with methodologies, mainly metadata or
data marts (branch databases) which are databases for
departments (e.g marketing) or specific functions
• Originally included only a historical data that were organized and
summarized for end-users (for easily view or manipulate data)
• Today some data warehouses include current date (by net) for real
time decision support (collected in so called Data Marts (branch
DB or Micro DB)
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• Data mining:
• Finds hidden patterns, relationships in large databases and infers
rules to predict future behavior
• E.g., Finding patterns in customer data for one-to-one marketing
campaigns or to identify profitable customers.
• Types of information obtainable from data mining
• Associations
• Sequences
• Classification
• Clustering
• Forecasting
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• Predictive analysis
• Uses data mining techniques, historical data, and assumptions
about future conditions to predict outcomes of events
• E.g., Probability a customer will respond to an offer or
purchase a specific product
• Text mining
• Extracts key elements from large unstructured data sets (e.g.,
stored e-mails)
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• Databases and the Web
• Many companies use Web to make some internal databases
available to customers or partners
• Typical configuration includes:
• Web server
• Application server/middleware/CGI scripts
• Database server (hosting DBM)
• Advantages of using Web for database access:
• Ease of use of browser software
• Web interface requires few or no changes to database
• Inexpensive to add Web interface to system
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Business Analytics (see Models Base in DSS)
• There are many software tools for users to create on-demand
reports and queries and analyze data. (common name OLAP
online analytical processing)
• Users could analyse different dimensions of data and trends.
Business users easily identify performance trends by using trend
analysis and graphic tools There are three groups categories of
tools:
 Reporting and queries – we have to do with all types of queries, discovery
of information,multidimensional vew,drilldown to details and so on
 Advanced Analytics – include many statistical, finacial, mathematical and
other models used in analyzing data and information
 Data, Text and Web Mining – data mining is a process of searching for
unknown or nonobvious relationship or information in large databases
using intelligent tools (neural computing or advanced statistical methods)
on quantitative data, text, or web data.
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Business Performance Management (interpretation and advices)
The final component of the BI process is based on the balanced
scorecard methodology, which is a framework for defining,
implementing and managing and enterprise’s business strategy by
linking objectives with factual measures
User interface: Dashboard and Other Information
Broadcasting Tools
Dashboards (like in car) organize and present information in
the way that is easy to read. They present graphs, charts, and
tables that show actual performance vs. desired level of metrices
at the first glace (digital cockpits, corporate portals,
visualizations tools).
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The benefits of BIS
•
•
•
•
•
•
•
Time savings (60%)
Single version of the truth (59%)
Improve strategies and plans (57%)
Improved tactical decisions (56%)
More efficient process (55%)
Cost savings ((37%)
Improved customers and partners relationships (36%)
(Eckerson)
•
•
•
•
Faster, more accurate reporting (81%)
Improved decision making (78%)
Improved customer service (36%)
Increased revenue (49%)
(Thompson)
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U.S. Enterprise Knowledge Management
software Revenues, 2005-2012
Enterprise knowledge management software includes sales of content management and
portal licenses, which have been growing at a rate of 15 percent annually, making it
among the fastest-growing software applications
(taken from Laudon)
Integration of Management Information Systems
Integration of Management Information Systems
The relationship between the basic IS can be presented as:
 perceiving them through a perspective of separate IS,
 alternating meaningful and alter,
 tendency to evolution and adaptation as regards reality,
 interaction and coordination between systems as regards specific
applications.
134
Example: The BENEFITS RESULTING FROM LINKING –
MIS & ES
In this case Expert Systems supply:
supervision and review of the process of registration, retrieval and
execution of information processes,
simplification of a correct base management for operators,
optimization of questions and search paths as well as the amount of
transfer data,
intelligent-interfaces-like operation in commercial deposition
structured databases.
In such a kind of the architecture management information system
(MIS) - provides information for ES as well as simplifies core data
manipulation.
135
INTEGRATION: MIS & ES
User
Interface
Data Base and Data
Reports
Data Base
Applications
Screens
Base Management
Data
Models
System
Conckusions
Mechanism
Data
Gathering
Expert
System
Rules Base
Data Base
Transactions
Expert System
Fig.1. Combinaton Architecture Expert System and Management Information System (Intelligent
Data Base)
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Example: INTEGRATION ES & DSS
Cooperation gives the following effects:
• possibility of logical explanation of undertaken decisions and results
collected,
• faster accomplishment of operations, when the acquired results of the DSS
are input data for ES,
• proper identification of the reverse situation,
• an increase in possibility of choice for the user – using a system of two
types of compound databases as regards the required needs of the logical
decision process,
• generation of variant solutions (DSS) and linking to them alternative
functions, which should be undertaken for their retrieval.
There are three possibilities:
• Expert System as independent component of the Decision Support System
• Expert System expanding the decision making process in the Decision
Support System
• Expert System unified with the Decision Support System
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INTEGRATION ES & DSS
User
User Interface
Data Base
Management
System
Model Base
Management
System
Expert System
Data
Base
Model
Base
Fig.3. Expert System as Independent Component of Decision Support System
Here ES is quite a separate element of the combined system and the final user
can use it only under particular circumstances – only even it is quite impossible
to solve a particular problem operating on the database or model base. No direct
connections between them.
138
INTEGRATION ES & DSS
User
User Interface
Data Base
Management
System
Model Base
Management
System
Expert System
Data Base
Model
Base
Fig. 4. Expert System Expanding Decision Making Process in Decision Support System
The system has links not only with management systems but - directly - with date and
model bases, too. It means that the user has in fact three independent possibilities: to
work with database, with the model base and with the ES. ES has no background, so
the model and database in this situation acts as an additional support for its
characteristics.
139
INTEGRATION ES & DSS
User
User Interface
Expert System
Intelligent
Data Base
Management
System
Conclusion
Mechanism
Model Base
Management
System
Supervisory
Programme
System Management systemem
Data
Base
Knowledge
Base
Model
Base
Fig. 5. Expert System Unified with Decision Support System
Total unification of ES and DSS into an intelligent expert or knowledge
system.
140
Example: INTEGRATION EIS & DSS
The basic method of integrating systems, which inform management
and DSS is using them with the recent information generated by EIS
as input information.
In more complicated cases we expect to see a loop of the reverse
compound through a special intelligent interface which will allow for
the creation of questions to DSS, and in the opposite direction it will
send interpretations and recommendations obtained from DSS.
In short we can split this process into two parts:
• After introductory treatment in EIS data will be used as input data to
DSS,
• EIS is used for further interpretations of solutions achieved with the
help of DSS.
141
INTEGRATION EIS & DSS
User
Environment
External
Information
Reccomendations
for User
Querries
Executive
Information
System
User Interface
Responses
Reccomedations
Data
Base
Data Base
Management
System
Model Base
Management
System
Model
Base
Fig. 6. Connections Architecture between Executive Information System and Decision Support
System
142
INTEGRATION ES & EIS
• It seems that these two systems are seldom (only sometimes)
linked in practice
• EIS can return with questions to the ES in the hope of solving
particular, specialist problems which they have and changes of
obtaining appropriate solutions.
• EIS can also refer to the knowledge base or procedures base of
ES in situations when their user of interface is equipped with
communication mechanism, which allows them such a function.
• Now and again ES acts as a regular provider of reports (with a
substantial grade) generated on the basis of data sent from EIS.
143
INTEGRATION ES & EIS
User
Environment
External
Informations
Recommendations
for User
Information
Executive
Information
System
User Interface
(ES Class)
Odpowiedzi
Interpretations
Rekomendac
je
Data
Base
Data Base
Management
System
Knowledge
Base
Management
System
Knowledge
Base
Fig. 7. Connection Architecture between Executive Information System and Expert System
144
INTEGRATION BETWEEN SYSTEMS OF THE
SAME TYPE
This kind of linking applies mainly to:
• ES - information exchange between systems from various
categories or branches or
• DSS - strengthening of the functions of humble (small, weak)
systems through specialized transformation systems
145
Integrated Information Enterprise Systems derrive from MIS concept…
Benefits:
• More productive than forming a whole system (faster in construction
and correction),
• Eliminates completely manual handling of information,
• Owning a larger functionality than the simple sum of the
applications functions (synergy).
Scenarios:
• Integration of already existing applications,
• Building a new applications integrated with existing ones,
• Implementation of the „ready-for-use” integrated application
Typical problems:
• Cooperation needs a common language,
• Organizational problems: there are various levels/platforms:
• Organizations have various structures and development strategies
and therefore functional applications.
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• Integrated Enterprise Information Systems
• Collects data from different firm functions and stores data in
single central data repository,
• Resolves problem of fragmented, redundant data sets and
systems.
• Enable:
• Coordination of daily activities,
• Efficient response to customer orders (production,
inventory),
• Provide valuable information for improving management
decision making.
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• Enterprise Integrated Software
• Built around thousands of predefined business processes that
reflect best practices
• Finance/accounting: General ledger, accounts payable, etc.
• Human resources: Personnel administration, payroll, etc.
• Manufacturing/production: Purchasing, shipping, etc.
• Sales/marketing: Order processing, billing, sales planning, etc.
• To implement, firms:
• Select functions of system they wish to use
• Map business processes to software processes
• Use software’s configuration tables for customizing
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• Business Value of Enterprise Integrated Systems
• Increase operational efficiency,
• Provide firmwide information to support decision making,
• Enable rapid responses to customer requests for
information or products,
• Include analytical tools to evaluate overall organizational
performance
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Integration within Integrated Enterprise Systems
•
•
•
•
Therefore the basic characteristics of such systems are:
functional complexity – i.e. the inclusion of its whole range of functions
and processes going on in the organization (that does not disturb the
selling of one part of the system in practice)
structural compound – from one side a complex functional stimulation
(the size of the system would be enough!), from the other a joining of
various types of system as a whole one.
considerable ease of use – all new technical gadgets are quickly added to
existing systems or new versions are created which differ by, for example
a more attractive user interface (“Windows-style” interfaces)
common usage – all companies want to survive minimize costs. If
computer information system is used in the correct way, the substantial
effects cause an increase of technological interest, and with this comes an
increase in common usage of such systems.
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Integrated Information Enterprise Systems
•
•
•
•
•
Following conditions must be satisfied:
common information handling for the whole organization - the
information is collected only once, and sent to every processes to
use it,
unique collection system, transforming and information sending,
unique media collection and information handling,
common tools and system development procedures,
unique user dialogue procedures.
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Integrated Enterprise Information Systems development
•
•





•
Started in 1957 in the USA – when was established (APICS) American
Production & lnventory Control Society - for …maintaining standards of
computers application in production’ organizations management…
APICS made assesments for the first standard MRP (Material Requirements
Planning) in late 50. This standard let us compute accurate quantity of row
materials (resources) adequately for flexible demand on commodities
(assortment of products, articles) in time.
The main goal of MRP:
Inventory reduction (in warehouses and interoperational inventories),
Accurate defining supply time of row materials and semi-finished articles supply
Better usage of technical (production) infrastructure,
Faster reaction under environmental changes,
Control of individual stages of production.
1964 – Inventory Control System – the first information system with integrated
functions of purchase, storage and distribution of commodities; in next years
firstly created mainly for inwentory management in warehouses and for serial
industrial production, particulary in electro-machinery branch,
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Integrated Enterprise Information Systems development
• 1989 APICS create new standard MRP II (Manufacturing
Resource Planning commonly used in all great integrated
information systems.
• Standard MRP II was extended (in relation with the previous one)
about elements connected with sale (retail and wholesale) and
functions supported strategic production management
• In 90. – all functions and processes were included in standard
MRP II
• Now it takes into account all spheres of management of the firm
connected with preparation of production, production planning
and management and sale or distribution production goods.
• Besides of row materials - in MRP II there were human relations,
financial flows, auxiliary materials etc.
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Integrated Information Systems development
• Mid-90 standard ERP (Enterprise Resource Planning – not
approved) - Main purpose – complete integration of all levels of
management of the company.
• ERP included all proceses of production and distribution, which
integrating various areas of firm activity, implementing critical –
for success - information flows and let direct react for market
changes.
• Information updating - in real time and information for decision
making process is accesable in that momment.
• Additionally – procedures for simulationg variuos operations with
possible analysis of their results (financial included).
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Integrated Enterprise Information Systems development
ERP areas:
• Customer service – database about clients, orders processing, orders
service, EDI – transfer of e-documents, internet access,
• Production – wholesale servis, production costs calculating,
purchasing materials rows, establishing time-table of production,
forecasting of capabilities, calculating of critical level of inventories,
process production control etc.
• Finance – accounting, accounting documents flow control, preparing
reports according to customer needs etc.
• Logistic chain itegration - connection with next subsystems CRM
(Customer Relationship Management), SCM (Supply Chain
Management), VRM (Vendor Relationship Manegement)
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Integrated Enterprise Information Systems development
• Supply Chain Management systems
• Manage firm’s relationships with suppliers
• Share information about
• Orders, production, inventory levels, delivery of
products and services
• Goal: Right amount of products to destination with least
amount of time and lowest cost
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Integrated Enterprise Information Systems development
• Supply chain management systems
• Supply chain planning systems
•
Model existing supply chain
•
Demand planning
•
Optimize sourcing, manufacturing plans
•
Establish inventory levels
•
Identifying transportation modes
• Supply chain execution systems
•
Manage flow of products through distribution centers and warehouses
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• Global supply chains and the Internet
• Before Internet, supply chain coordination hampered by
difficulties of using disparate internal supply chain systems
• Enterprise systems supply some integration of internal supply
chain processes but not designed to deal with external supply
chain processes
• Intranets and Extranets
•
Intranets: To improve coordination among internal supply chain
processes
•
Extranets: To coordinate supply chain processes shared with their
business partners
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Intranets and Extranets for Supply Chain Management
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Business Value of Supply Chain Management
Systems
• Match supply to demand
• Reduce inventory levels
• Improve delivery service
• Speed product time to market
• Use assets more effectively
• Reduced supply chain costs
• Increased sales
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Integrated Enterprise Information Systems development
• Customer Relationship Management systems:
• Provide information to coordinate all of the business processes
that deal with customers in sales, marketing, and service to
optimize revenue, customer satisfaction, and customer retention
• Integrate firm’s customer-related processes and consolidate
customer information from multiple communication channels
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Integrated Enterprise Information Systems development
• What is customer relationship management?
• Knowing the customer
•
In large businesses, too many customers and too many ways customers
interact with firm
• Customer relationship management (CRM) systems
•
Capture and integrate customer data from all over the organization
•
Consolidate and analyze customer data
•
Distribute customer information to various systems and customer touch
points across enterprise
•
Provide single enterprise view of customers
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Customer Relationship Management (CRM)
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• Operational CRM:
• Customer-facing applications such as sales force automation, call
center and customer service support, and marketing automation
• Analytical CRM:
• Analyze customer data output from operational CRM applications
• Based on data warehouses populated by operational CRM systems
and customer touch points
• Customer lifetime value (CLTV)
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Evolution of Integrated Systems
166
ERP Diagram
167
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INTEGRATED OFFICE PACKAGES
In the functional range of such packages are programs like:
• text editors - Microsoft Word, Writer. Word Pro, WordPerfect,
• spreadsheets – Excel, Lotus, Calc
• data bases – Access,
• graphic presentation systems – PowerPoint, Harvard Graphics,
• desk top publishing programs – Corel Ventura, Page Maker, Quark Xpress,
• timetables – inside packages, WordPerfect Office, CaLANdar,
• document libraries – ProShare,
• electronic mail – Outlook Express, GroupWise, Outlook Express,
• automatic document circulation – WorkMan, WordPerfect InForms,
• specialist software serving office equipment – external faxes, scanners,
modems, pagers, multimedia, voice and picture recognition – WinFax,
OmniPage etc.
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INTEGRATED OFFICE PACKAGES
•
•
•
•
Additional characteristics of this software group are:
a smaller function scale than MRPII/ERP: they are limited to
office functions,
homogeneous programs, also taking into consideration the offered
functions as a method of communication with the user through
various programming producers,
cyclic development; the next step is assured - integration of
package systems to the next - adding applications,
accepting previous functions offered by the integrated
programming created for small companies.
170
e-Commerce and e-Banking
e-Commerce definitions
• …Electronic Commerce (E-Commerce) is an artificial
socio-economic structure, functioning based on widely
used virtual nets, dynamic complexity and specific
infrastructure. From this definition, it can be derived,
that this structure cannot be directly transferred to the
physical world, but some elements as payments and
commodities originate from this world. In some areas
of science, E-Commerce is defined as virtual commerce,
although the prior is considerably wider as it includes
processes such as telephone transactions… (B. Kubiak,
Korowicki A. 1999)
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e-Commerce definitions
• ... To include only business transactions that deal with
customers and suppliers, and it is often described in
terms of the Internet, implying that there are no other
communications alternatives ... (McLeod,...2001)
• ... E-commerce – exchange the information across
electronic networks, at any stage in the supply chain,
whether within an organization, between businesses
(B2B), between businesses and consumers (B2C), or
between the public and private sector, whether paid or
unpaid... (UK government),
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e-Commerce definitions
• ...An emerging concept that describes the process of buying and
selling or exchanging of products, services, and information via
computer networks including the Internet ... (Turban, at all 2000),
• ... The sharing of business information, maintainin business
relationships, and conducting business transactions by means of
telecommunications networks (Zwass, 1998),
• …E-business:
• Use of digital technology and Internet to execute major
business processes in the enterprise,
• Includes e-commerce (electronic commerce):
• Buying and selling of goods over Internet… (Laudon, 2010)
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The Growth of E-Commerce
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• Key concepts in e-commerce
• Digital markets reduce
• Information asymmetry
• Search costs
• Transaction costs
• Menu costs
• Digital markets enable
• Price discrimination
• Dynamic pricing
• Disintermediation
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• Key concepts in e-commerce (cont.)
• Digital goods
• Goods that can be delivered over a digital network
• E.g., Music tracks, video, software, newspapers, books
• Cost of producing first unit almost entire cost of product:
marginal cost of producing 2nd unit is about zero
• Costs of delivery over the Internet very low
• Marketing costs remain the same; pricing highly variable
• Industries with digital goods are undergoing revolutionary
changes (publishers, record labels, etc.)
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• Internet business models
• Pure-play models
• Clicks-and-mortar models
• Social Network
•
Online meeting place
•
Social shopping sites
•
Can provide ways for corporate clients to target customers through
banner ads and pop-up ads
• Online marketplace:
• Provides a digital environment where buyers and sellers can meet,
search for products, display products, and establish prices for
those products
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• Content provider
• Providing digital content, such as digital news, music, photos, or
video, over the Web
• Online syndicators: Aggregate content from multiple sources,
package for distribution, and resell to third-party Web sites
• Service provider
• Provides Web 2.0 applications such as photo sharing and
interactive maps, and services such as data storage
• Portal
• “Supersite” that provides comprehensive entry point for huge
array of resources and services on the Internet
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• Blogs
• Personal web pages that contain series of chronological entries by
author and links to related Web pages
• Has increasing influence in politics, news
• Corporate blogs: New channels for reaching customers,
introducing new products and services
• Blog analysis by marketers
• Customer self-service
• Web sites and e-mail to answer customer questions or to provide
customers with product information
• Reduces need for human customer-support expert
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• E – Enterprise - the most fundamental element of the ECommerce is E- Enterprise.
Most frequently it is be described as an institutional unit
possessing ability to exchange goods – capital,
information, products and services, in an electronic manner
In practice, it can be the source (producer), interacting part
of trade chain, as well as the organizer (online auctions for
example) of transactions taking place in the Internet.
• E – Marketplace is an online marketplace where buyers
and sellers meet to exchange products, services, or
information.
Internet electronic markets can be supplemented by intraorganizational (intranets) or inter-organizational
(extranets) information systems.
181
• Intranets:
• Internal networks built with same tools and standards as
Internet,
• Used for internal distribution of information to
employees,
• Typically utilize private portal providing single point of
access to several systems,
• May connect to company’s transaction systems.
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• Extranets:
• Intranets extended to authorized users outside the
company,
• Expedite flow of information between firm and its
suppliers and customers
• Can be used to allow different firms to collaborate on
product design, marketing, and production.
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• The Internet is rapidly becoming the medium through
which a large share of communications and commerce
takes place.
• Online transitions are the new means of conducting
business, which are taking over the traditional ones.
• Despite the recent dot.com bubble burst, online
transactions have become one of the main ways to do
business, to buy goods and services.
• They are an important mean of communication for
governmental institutions.
184
E-COMMERCE FROM PERSPECTIVES:
• Communication perspective – EC is delivery of information,
product/services, or payments over telephone lines, computer
networks, or any other electronic mesns,
• Business process perspective – EC is the application of technology
toward the automation of business transactional and work flow,
• Service perspective – EC – is a tool that addresses the desire of
firms, consumers, and management to cut service costs while
improving the quality of goods and increasing the speed of service
delivery,
• An online perspective – the buying and selling of products and
information online.
(Kalakota and Winston, 1997)
185
Types of e-transactions:
Business-to-Customer (B2C) – includes retail
transactions of products, services or information from
business to individual shoppers. The typical example is a
shopper at Amazon.com or Merlin.com.pl
Business-to-business (B2B) – trade contacts based not
only on search for new customers and target markets, but
also the search for:
– partners to invest jointly,
– building optimized supply chain,
– trade information,
– building cooperational nets, and
– acquiring know-how.
186
Types of e-transactions:
• Customer-to-customer (C2C) – in this type of
transaction, customers sell directly to other customers. A
great example of customer-to-customer is an online
auction, like Ebay.com or Allegro.pl, that faciliate trade
among individual customers.
• Mobile Commerce (M-Commerce) – transactions and
activities conducted entirely or partially in a wireless
environment.
187
Types of e-transactions:
• E-learning – training or education is provided online.
• E-Goverment – happens when governmental entity buys or
provides information, service or product to individual
citizens (G2C) or to businesses (G2B).The application of
Internet and networking technologies to digitally enable
government and public sector agencies’ relationships with
citizens, businesses, and other arms of government
188
Eight unique features of e-commerce technology
1.
Ubiquity
• Internet/Web technology available everywhere: work, home, etc.,
and anytime
2.
Global reach
• The technology reaches across national boundaries, around Earth
3.
Universal standards
• One set of technology standards: Internet standards
4.
Richness
• Supports video, audio, and text messages
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Eight unique features of e-commerce technology
5.
Interactivity
• The technology works through interaction with the user
6.
Information density
• Vast increases in information density—the total amount and
quality of information available to all market participants
7.
Personalization/Customization:
• Technology permits modification of messages, goods
8.
Social technology
• The technology promotes user content generation and social
networking
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IOS and Internet Systems
•
•
•
•
•
Customer relationship is determined in
advance with anticipation it will be an
ongoing relationship based on multiple
transactions
IOS may be built around private or
publicly accesible networks
Advance arrangements result in
agreements on the nature and format of
business documents that will be
exchanged and payments
Advance arrangements are made so
both parties know which communication
networks will be integral to the system
Joint guildelines and expectations of
each party are formulated so each knows
how the systemis to be used and when
transactions will be submited and
received by each business partner
THE BASE OF B2B
• Two types of relationships may exist:
 Customer/seller linkage is established in
time of transactions and may be for one
transaction only (just purchase),
 Customer/seller purchase agreement is
establish for a defined period (a
subscribtion transaction)
• Electronic markets are built around
publicly accesible networks
• Sellers determine, in conjunction with the
market maker which business
transactions they will provide
• Customers and sellers independently
determine which communication
networks they will use in participating in
the electronic market. The network used
may vary from transaction to transaction,
• No joint guideliness are drawn in advance
THE BASE OF B2C and the others
191
B2B e-commerce: New efficiencies and relationship
Electronic data interchange (EDI)
Computer-to-computer exchange of standard transactions such as
invoices, purchase orders
Major industries have EDI standards that define structure and information
fields of electronic documents for that industry
More companies increasingly moving away from private networks to
Internet for linking to other firms
E.g., Procurement: Businesses can now use Internet to locate most lowcost supplier, search online catalogs of supplier products, negotiate with
suppliers, place orders, etc.
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Electronic Data Interchange (EDI)
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THE BENEFITS OF EC (for organizations)
•
•
•
•
•
•
Expands the marketplace to national and international markets. With
minimal capital outlay, a company can easily and quickly locate more
customars, the best suppliers and business partners worldwide,
Decreases the costs of creating, processing, distributing, storing and
retriving paper-based information (administrative costs to 85%, electronic
payments are 95% cheaper and so on),
Allows reduced inventories and overhead by facilitationg current („pull”)
type supply management. In the system process starts from customer orders
and uses just-in-time manufacturing
This processing enables expensive customization of the products and
services which provides competitive advantage to its implementers.
Diminishing telecommunication cost (internet much cheaper than commerce
nets
Improved image, improved customer service, newfound business partners,
simplified processes, increased productivity, eliminating paper, expending
access to information, reduced transportation costs, increased flexibility.
194
THE BENEFITS OF EC (for customers)
• Enables customers to shop or do other transactions 24 hours a
day, all yer around, from almost any location,
• Provides customers with more choices, they can select from many
vendors and from mare products,
• Frequently provides customers with less expensive products and
services by allowing them to shop in many places and conduct
quick comparison,
• In some cases, especially with digitized products, EC allows quick
delivery,
• Makes it possible to participate in virtual auctions,
• Allows customers to interact with other customers in electronic
communities and exchange ideas as well as compare experiensces,
• Facilitates competition, which results in substantial discounts
195
THE BENEFITS OF EC (for society)
• Enables more individuals to work at home and to do less traveling
for shopping, resulting in less traffic on the roads and lower air
pollution,
• Allows some merchandise to be sold at lower prices, so less affluent
people can buy more and increase their standard of living,
• Enables people in Third World countries and rural areas to enjoy
product and services that othervise are not available for them,
This includes opportunities to learn professions and earn college
degrees.
• EC facilitates delivery of public services – health care, education,
distribution of government social services (cost reduction,
improved quality)
196
The Benefits of Disintermediation to the Consumer
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THE LIMITS OF EC - TECHNICAL
• There is a lack of system security, reliability, and some
communications protocols,
• The software development tools are still evolving and changing
rapidly,
• It’s difficult to integrate the Internet and EC software with some
existing applications and databases,
• Vendors may need special Web servers and other insfastructures,
in additions to the network servers,
• Some EC software might not fit with some hardware or may be
incompatible with some operating systems or other components
198
THE LIMITS OF EC – NON-TECHNICAL
•
•
•
•
•
•
•
•
•
Costs and justifications – in house it may be very high, and mistake due to lack of
experience may result in delays (34, 8%),
Security and privacy – specially important in B2C area, especially security issues
which are perceived to be more serious then they really are (17, 2%),
Lack of trust and user resistance – customers do not trust an unknown faceless
seller, paperless transactions and electronic money (4,4%).
Other limiting factors:
Many legal issues are as yet unresolved, and government regulations and
standards are not refined enough for many circumstances,
EC, as a discipline, is still evolving and changing rapidly. Many people are looking
for more stable area before they enter into it,
There are not enough support services (clearance centers for EC transactions, tax
centers etc.),
In most applicationss there are not yet enough sellers and buyers for profitable EC
operations,
EC could result in a breakdown of human relations,
Access to the Internet is still expensive and/or inconvenient for many potential
customers.
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The limits of New Technologies
• A certain feeling of intrusion and defiance.
• New channels of communication appeared thanks to
new technologies, which has resulted in a new
relationship with customers.
• From the customer’s point of view:
– Lack of familiarity with new technologies
– The web has sometimes become the only way of accessing and
giving information. What about the people who are not
connected?
• Changing consumption habits and modes takes time.
• Some reluctances may be explainable, other ones
illogical
200
The limits of New Technologies
Sociological limits - fears:
• Fear of viruses or infringement on privacy
• Fear of receiving executable files which would disrupt the
computer’s functions
• Fear of worms, likely to paralyse your computer
• Fear of Trojan horses likely to bypass your computer’s
security systems and allow it to be penetratedFear of
tracking: collecting information on a webuser with or
without his/her being aware of it
• Fear of spyware
• Multiplication of online questionnaireHacking of personal
data
201
E-Marketing
…Describes company effords to inform, communicate,
promote, and sell its productsand services over the
Internet…
(P. Kotler Marketing Management 11 ed. page 40)
202
E-COMMERCE INFRASTRUCTURE IN POLAND
some numbers and figures
• Approximately 98% of Polish companies have MIS,
97% - access to Internet and over 85% have their own
websites.
• Now in Poland we have more then 16 000 companies
sell goods on the Internet (dotcoms) and the value of
business-to-consumer Internet sales is about 11,3 mld zł
(eCard)
203
Share of e-commerce in market (2011-2012)
Prognoza na rok 2012
Rok 2011
Wielka Brytania
12%
Niemcy
9%
Szwajcaria
8,70%
Dania
8,10%
Francja
7,30%
Szwecja
6,90%
5,70%
5,10%
Benelux (Nl, B, Lux)
4,10%
3,50%
Hiszpania
3,80%
3,10%
Polska
Włochy
1,60%
1,30%
8%
9,90%
9,10%
8%
Norwegia
10%
9,10%
8,70%
13,20%
Internet companies in Poland 1996-2013
18000
15600
16000
14000
13200
11500
12000
10100
10000
8000
7100
6000
4700
Wg danych GUS – 3500
4000
Wg danych InternetStandard.pl – 5600
2000
30
100
204
530
800
850
800
750
660
660
1120
700 1000
1500
0
1996 1997 1998 1999 2000 2001 2001 2002 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
r.
r.
r.
r.
r.
r. i IV r.II IV
r.
r.
r.
r.
r.
r.
r.
r.
r.
r.
r.
kw. kw. kw. kw.
Internet customers in selected countries in Europe 2008
90%
81%
80%
71%
70%
64%
59%
60%
54%
50%
45%
40%
33%
30%
25%
19%
20%
10%
10%
6%
7%
Rumunia
Turcja
0%
Bułgaria
Hiszpania
Włochy
Polska
Holandia
Francja
Niemcy
Szwecja
Wielka
Brytania
Islandia
206
Expendings for IT in euro per capita in selected countries
2455
Szwecja
2422
Dania
Wielka Brytania
2000
Holandia
1998
1880
Finlandia
1752
Belgia/Luksemburg
1740
Austria
Niemcy
1597
Irlandia
1595
1563
Francja
Średnio UE
1376
Włochy
1196
1044
Hiszpania
896
Portugalia
758
Grecja
Słowenia
740
Węgry
639
575
Estonia
563
Czechy
Łotwa
432
Słowacja
422
403
Litwa
374
Polska
0
500
1000
1500
2000
2500
207
3000
Internet Users in the World by Region, 2012
208
www.internetworldstats.com/stats.htm
Internet Penetration Rates (users per capita citizens) by
Region, 2012
209
Perfumes,
cosmetics
Tickets
Toys
Automotive
Pharmacy
Books (eBooks),
music
Electronics
Multibranch
Oclothes and
shoes
The most popular shops - visits of
internauts in mln 2013 (Poland)
Value of eBooks market in Poland in mln
US$
Top 10 Internet Users in EU
Germany
55,2
United Kingdom
43,2
France
40,1
Italy
28,2
Spain
27,0
Poland
20,0
Netherlands
13,8
Romania
7,4
Sw eden
7,3
Belgium
7,0
0,0
10,0
20,0
30,0
40,0
50,0
60,0
milion of users
Source: Internet World Stats, www.internetworldstats.com
212
Internet penetration rate in EU 2010
85,40%
Netherlands
Denmark
84,20%
Finland
82,90%
Sweden
80,50%
United Kingdom
79,80%
70,60%
Spain
61,10%
AVERAGE
Poland
52,00%
Romania
0,00%
33,40%
10,00%
20,00%
30,00% 40,00%
50,00% 60,00%
percentage of penetration
70,00%
80,00%
90,00%
Source: Internet World Stats, www.internetworldstats.com
213
Dynamic of e-commerce progress
250,00%
200,00%
150,00%
shops on-line
100,00%
auctions on-line
shops & auctions
50,00%
0,00%
2002
2003
2004
2005
2006
2007
2008
source: Report: Polski Rynek e-commerce, SMB, 2009
214
e-Banking
e-Banking - form of bank services to facilitate access to customers’s
account with computer or the other electronic devices and connections
(Council of e-Banking)
-
Complex of information systems for maintenance:
home and office banking
tele-banking
credit cards
automatic teller machines ATM
virtual transactions.
(Janc, Kotlinski)
Electronic net and information bank systems usage for client’s
convenience in tradictional and modern payment systems.
The ultimate purpose is creation bank-accounting system without the
paper
(Chmielarz)
215
e-Banking
• Electronic banking (cyberbanking) – includes various banking
activities conducted from home, business, or on the road, instead
of at physical bank location.
• E-banking – has capabilities ranging from paying bills to securing
a loan electronically
• It started with the use of propriety software and private networks
but was not particularly popular until the emergence of the
Internet
• Allows customers to access their accounts and execute orders
through a simple-to-use Web site
• It is inexpensive alternative to branch banking and a chance to
enlist remote customers
(Turban)
216
Some of the advanteges:
•
•
•
•
•
•
•
•
•
•
Get current account balances at any time – you can easily check the status
of your checking, savings, and money market accounts
Obtain charge and credit card statements – you can even set up your
account to pay off cards automatically every month
Pay bills – electronic payments from your accounts are normally credited
the same day or the next. The cost of paying bills electronically may well
be less than the postage involved in sending out a large number of
payments each month
Download account transactions – it’s easy to import them directly with
the money transfer system
Transfer money between accounts
Balance your accounts
Send e-mail to your bank
A new meaning for „banker’s hours” – in any time, any place
Handle your finances when traveling
Additional services – for example free phone banking
217
Internet-banking: part of e-Banking services realized only by Internet
Virtual banking: part od e-banking realized ONLY and
EXCLUSIVELY by net (maybe Internet, too)
e-Banking
Internet
Banking
Virtual
Banking
218
e-Banking =
home-banking+
office-banking+
selfbanking+
interbanking+
POS (point of sales)+
finance transfere nets+
e-Payments
219
Phases of information systems in banks development
• Archaic phase, where the communication is based one by one on the mail,
telegraph, telephone - from the second-half of the XIX century to the secondhalf of the XX century,
• Preliminary phase of communication computer-support - 1956-1964,
• Early phase of the electronic data processing systems based on batch
processing - 1965-1969,
• Phase of the intense development of Management Information Systems 1970-1977,
• Productive phase of systems as: Decision Support Systems, Expert Systems,
Executive Information Systems, video-data - 1978-1985,
• Phase of technological changes - 1986-90,
• Phase of application integration on the basis of computer techniques and the
telecommunications on the basis of the modem communication - 1990-1995,
• Phase of remote systems - electronic banking - from 1992,
• Phase of global systems - online and virtual banking - from 1996;
220
•
•
•
•
•
•
Electronic banking based on communication channels
of distribution can be divided as follows:
Online banking (through viewer of web pages),
Dedicated computer banking (by specialist providing
software installed locally on a computer),
Telephone banking (verbal communication and IVR),
Portable banking (communication using WAP
technologies, SMS),
Terminal banking (cash machines, self-service stands,
POS),
Television banking (access by digital television);
221
On-line banking (internet banking)
• Its success is gained from Internet development all over the world.
• One of its main criteria is servicing bank accounts through World
Wide Web browsers.
• It is not necessary to install specific software as in PC banking
222
Dedicated computer banking (PC banking)
• Communication is set up between bank servers and dedicated
software installed on customer’s PC over modem line, ISDN, LAN
etc.
• Customer connected to bank system downloads data and execute
operations on his own PC.
• Generated operations are being sent to bank server.
• PC banking cannot be know as internet banking even if user is
connected to bank server via internet broadband connection.
• In technical literature there are lots of terms describing PC
banking: home banking, office banking and electronic corporate
banking.
W. Chmielarz: Faculty of Management University of Warsaw
223
Telephone banking
• Which uses voice communication to act bank
operations. T
• There are two main brands of this communication:
 Call center as two way voice communication and
 IVR (Interactive Voice Response) as one way voice
communication.
• Stationary and cell phones can be used for telephone
banking, but also it can be replaced by internet
telephony
• Portable banking differs from another communication
channels with special non-voice technologies prepared
for all kind of communicators, cell phones, PDA etc.
224
Terminal banking (self-banking)
• It is used on terminals provided by banks in public areas.
• It is used for cash withdraws, checking account balance
and executing account operations (bank transfers).
• Other and more functional terminals are multimedia
kiosks. It gives ability to use many communication
channels as internet banking (access to WWW),
telephone banking (free IVR and call center phone) with
possibility to cash withdraw. It can be said that
multimedia kiosk combines three of communication
channels, but main factor placing it to terminal banking
channel is that multimedia kiosks are offered in fixed
localizations.
• For the simplest terminal banking channel we classify
electronic points of sale (POS). POS services purchase
transactions in shops, trade markets which have card
readers. Its functionality is limited to authorize
payments.
225
The kinds of models of electronic banking are
next important criterion of identification:
• multi-channel model (using the network of bank units
and electronic channels),
• model of the virtual bank (not-using the net of bank
units),
• model of the financial bank-supermarket (aggregation
of financial services in the Internet)
226
• Multi-channel model (Bricks & Clicks) it is model of the
offering all channels of distribution. Most important
feature is that this model supports all kinds of
distribution channels.
• Model of the virtual bank (Clicks only) relies on basing
activity of the bank exclusively on electronic banking.
Therefore the most important feature favouring the
virtual banking is resignation from bank departments. In
this model, Internet and cash machines are main
channels of distribution.
• Definitely a model of the financial bank-supermarket is
different. This model consists taking the adviser and the
financial intermediary in the Internet. In this model its
brand and the transaction online service are basic capital
of the bank - often determined as “front end”. Bank is
using outsourcing.
227
Customers of e-Banking in Europe in mln
250
80%
202.1
70%
200
178.1
157.1
150
50%
139.1
124.1
100
79.5
89.4
97.1
103.1
60%
40%
112.1
30%
67.4
54.1
50
20%
41.2
10%
0
0%
Penetration of e-Business amongst all Internet users
e-Banking development in Europe 2001-2013
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
r.
r.
r.
r.
r.
r.
r.
r.
r.
r.
r.
r.
r.
Users
Penetration
228
Źródło: Jupiter Research, 2008
Bank’s cost transactions via different
channels of distribution
Channel
Cost of one transaction US$
Traditional bank branch
1,07
Phone banking
0,54
ATM
0,27
Electronic banking
0,015
Internet banking
0,01
(Booz, Allen & Hamilton (banking sector - USA))
229
Summary: types of Information Systems - examples
Type of System
Function
Example
Functional area IS
Support the activities within specific
functional area
System for processing payroll
Enterprise resource
planning system
Integrate all functional areas in
organization
Oracle, SAP, BaaN, IFS
Management Information
Systems
Produce reports summarized from
transactional data, usually in one
functional area
Report on total sales for each
customer
Decision Support System
Provide access to data and analytic
model tools
What if analysis of changes in
budget
Expert system
Mimic human expert in a particular
area and make a decision
Credit card approval analysis
Executive information
systems
Present structured, summarized
information about aspects of business
important to executives
Status of production by product
Electronic commerce
system
Enable transactions among
organizations and between
organizations and customers
www.dell.com
Supply chain management
system
Manage flows of products, services
and information among organizations
Wal-Mart Retail Link system
connecting suppliers with WalMart
230
Thank you for your attention!
Witold Chmielarz – Faculty of Management
University of Warsaw
vitec@post.pl
THE CONCEPT OF APPLICATION OF OF INTELLIGENTCASE (Computer Aided Systems Engineering) TOOLS FOR
ELIMINATION OF BARRIERS TO THE SYSTEM
IMPLEMENTATION
Purpose of presentation:
The main purpose of presentation is analysis and
identification of the possibilities of overcoming
barriers to the implementation of integrated systems
with the use of specialised software supporting the
implementation process (I-CASE class)
Brief contents:
• identification of the basic implementation problems
• discussion the possible steps to overcoming these
barriers with the use of I-CASE tools and knowledge
contained in reference models
• introduction the first concept of a knowledge
management system supporting implementation
process
W. Chmielarz: Faculty of Management University of Warsaw
233
Delays in the process of implementation
•
•
Empirical research shows that there is a simple relationship between the complexity and
innovativeness of a project and the feasibility of its implementation.
The more innovative and complex a project is, the more likely it is that its
implementation will be delayed or even discontinued. In the case of integrated systems,
this rule applies now to as many as 70% - 80% of the projects.
W. Chmielarz: Faculty of Management University of Warsaw
234
Average scale of effectiveness of management information
system implementation 1996-2008
Year
Success coefficient
Partial failure*
Total failure
Failures together
1996
16%
53%
31%
84%
1998
27%
33%
40%
73%
2000
26%
46%
28%
74%
2002
28%
49%
23%
72%
2004
34%
51%
15%
66%
2006
29%
53%
18%
71%
2008
35%
46%
19%
65%
Source: J. Johnson, CHAOS Rising, Standish Group, Materiały konferencyjne II-giej Krajowej
Konferencji Jakości Systemów Informatycznych, Computerworld, czerwiec 2005, s. 11; Standish Group,
The Standish Group Report 2007, West Yarmouth, Massachusetts, 2008 (intro version).
*higher budget, or longer time, or more narrow scope of implementation
W. Chmielarz: Faculty of Management University of Warsaw
235
The procedure in order to overcome barriers
and threats to the system implementation: :
• Identify the areas where such barriers appear, and the reasons why
they appear
• Define the methods of removing these barriers
• Identify the barriers which can be eliminated or at least significantly
reduced using the methods of knowledge management contained in
the intelligent tools
• Identify the tools and methods used to assist the designer and
implementator in this respect
• Create a concept of automation of the process of preventing barriers
to integrated systems implementation
W. Chmielarz: Faculty of Management University of Warsaw
236
Organisational barriers
Role of I-CASE tools in solving them
1. Problems with the correct assessment of a company’s condition
Preliminary training of end-users in CASE methodology helps them understand
the consultants’ expectations as to the scope and quality of the required data
2. Problems with the correct analysis of the needs
In-depth training of end-users in CASE methodology is recommended.
Subsequently, the main procedures describing the elementary business processes
at the client’s company should be prepared by the client in cooperation with the
consultants. Ideally, the client should develop such procedures using its own
resources (as much as possible) with as little assistance from the consultants as
possible. In this way, end-users are forced to get to know the tool well and, first
and foremost, study the existing and planned procedures in depth. This
approach has the following advantages: involvement of the client in the
implementation from the very beginning, understanding of the main ideas and
assumptions of the implementation – a common platform of understanding,
making the client partly responsible for the implementation and reduction of
involvement of the consultants
(on the base of my own research of implementation of IFS in 12 locations and branches in Poland)
W. Chmielarz: Faculty of Management University of Warsaw
237
Organisational barriers
Role of I-CASE tools in solving them
3. Problems with preparation of a reliable implementation schedule (plan)
CASE is used indirectly – the use of this tool for problems 1 and 2 has resulted
in obtaining good quality „as is” and „to be” analyses and ensured compliance
with the methodology
4. Problems with defining the necessary conditions of efficient implementation
5. Problems with application of implementation methodology
6. Problems with correct preparation of documentation
Problems with preparation of documentation – the application of CASE has
measurable advantages – the whole processes are automatically documented as
they are developed. All changes to the processes introduced during the
implementation are also documented. Moreover, the tools of certain vendors
allow automatic configuration of the system for end-users. As a result, a
considerable part of the documentation is automated.
7. Problems with users and their selection
W. Chmielarz: Faculty of Management University of Warsaw
238
Organisational barriers
Role of I-CASE tools in solving them
8. Problems with consultants and their selection
The use of CASE allows significant reduction of the time needed for
implementation and the time of work of the consultants. As a result, the
existing resources (the consultants) are utilised better
9. Problems with training
Problems with training. In this case, the use of CASE tools may be the
best solution. On the basis of the previously developed business processes
(item 2), the training needs of the client are defined, and the end-user
training is focused on the aforementioned processes only. In this case, it is
sufficient to study the implementation plan and determine when end-users
should be trained in the particular processes. Training is based on
previously prepared (item 2) models of business processes. This approach
allows elimination of unnecessary elements from training, thus increasing
the absorption of the remaining material. As a result, training becomes
more effective and can be shorter.
10. Problems with project execution
W. Chmielarz: Faculty of Management University of Warsaw
239
Psychological barriers
Role of I-CASE tools in solving them
11. Problems with reaching understanding between the consultants and end-users
Problems with understanding – end-users and other employees of the client
involved in the implementation, including the management (items 1 and 2),
obtain knowledge about the CASE tool used. Subsequently, a ready-made
(predefined) solution is presented and discussed. In this way, the existing and
modified business models containing all basic processes functioning at a given
company become a platform of understanding
12. A lack of understanding of the implementation needs
Presentation of processes subject to changes with the use of CASE helps the
employees understand the objectives and needs of the implementation
13. Hostile attitude of employees
If the implementation process becomes faster and more efficient, the results
are achieved earlier, which has an encouraging effect and increases faith in
success.
W. Chmielarz: Faculty of Management University of Warsaw
240
Financial and technological barriers
Role of I-CASE tools in solving them
14. A lack of financial means
15 . Pseudo-savings
16. Excessive customisation – tailoring of the system to the client’s needs
Excessive customisation – presentation of the existing and planned
business processes allows end-users to understand their nature and find
the optimum solution, which increases the chances for avoiding
unnecessary and costly customisations
17. A lack of security
W. Chmielarz: Faculty of Management University of Warsaw
241
Some conclussions
•
•
•
•
The analysis presented above shows that there are several
important factors which allow elimination of problems occurring
during system implementation:
the main one is the use of CASE tools, which is useful in 10 out of
17 cases.
the second important element is the application of the remaining
part of implementation methodology (which is often integrated
with a CASE tool).
the third factor concerns the HR issues to be considered during the
implementation.
the fourth one is finance factor
W. Chmielarz: Faculty of Management University of Warsaw
242
Transformation data into knowledge process
•
•
•
•
•
•
Data accumulation in database
Next by preliminary processing, it is
stored in data warehouses
The data undergoes transformation to
prepare it for a detailed analysis
Analysis is performed with the use of
automatic search tools
A comparison of data found with models
(of behaviour, reactions) stored in
intelligent systems
The ultimate outcome of such
comparisons is an assessment of
usefulness of generalised information
for management purposes and
accumulation of such information, along
with data, in the knowledge base
Table of identified
barriers
Table of reasons of
barriers occurence
Transformation
matrix
I-CASE
Blackboard of methods
of prevention or
reduction of the barriers
W. Chmielarz: Faculty of Management University of Warsaw
Decision
making
243
Architecture of system- concept
User
•
•
Questioner
•
Identyfier
DataBase
•
•
Selector
•
Evaluator
I-CASE
•
Stop
Solver
Solutions
Base
•
Interactive questioning mechanizm.
User language
Data collection. Problems described
by attributes and functions
Data categorisation (which are new
one)
Comparing with Database collection
(adding new)
Problem and proper solving method
connection
Automatic solving problem or switch
to proper I-CASE tool (when we
have no ready solution)
Modyfying system or making new
part of it
Solutions Base – methods collection
W. Chmielarz: Faculty of Management University of Warsaw
244
Summary
It’s still work in progress
The first part:
• identification of basic limitations of integrated system implementation,
• identification reasons of the problems,
• identification methods of their solving is over
The second part:
The conception is in the state of construction.
Development of this concept:
• will lead to construction of a tool supporting the decision-making process
for the end-user
• allowing automatic selection of a method minimising the limitations of the
integrated systems implementation process.
W. Chmielarz: Faculty of Management University of Warsaw
245