Vocabulary and concepts to categorize different Information Systems
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• Part I: Foundations
– Chapter 1: Introduction
– Chapter 2: Information Systems Defined
– Chapter 3: Organizational Information Systems and Their
Impact
• Part II: Competing in the Internet Age
• Part III: The Strategic use of Information Systems
• Part IV: Getting IT Done
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1.
How to categorize systems according to the hierarchical, functional, and process perspectives. You will also learn the rationale for each perspective and its limitations.
2.
The definition, underlying principles, and applications of business process reengineering (BPR), as well as the advantages and disadvantages of BPR.
3.
The definition of integration and its role in the modern firm. We will explore the pressures toward integration and the challenges integration creates. We will also discuss business and systems integration trends and the relationship between the two.
4.
The genesis of the enterprise systems (ES) trend and why so many companies are employing or introducing them.
You will also learn to articulate the principal benefits and risks associated with these systems.
5.
The definition of the term supply chain management and how to explain the role that supply chain management applications play in modern organizations.
6.
The definition of the term best of breed and how to describe the benefits and drawbacks of this approach to systems integration. You will also learn to draw comparisons between the best-of-breed and enterprise systems approaches.
7.
How to describe what is meant by knowledge management, how to categorize the different types of knowledge commonly found in organizations, and how to explain why organizations feel the need to employ knowledge management applications.
8.
The definition of the terms business intelligence (BI) and BI infrastructure. You will also learn how to identify and describe the role of the technologies that comprise a modern BI infrastructure.
9.
The definition of the term customer relationship management (CRM) and how to articulate both its benefits and limitations. You will also learn how the CRM and BI trends relate to one another.
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• Understanding how I/S is classified and organized is a prerequisite to becoming a successful manager and being able to navigate the infrastructure of the modern firm
• The impetus behind organizational change comes from the introduction of new IT and the implementation of information systems
• It is therefore paramount you have a solid understanding of what classes of software programs underpin information systems in modern organizations.
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• The Hierarchical Perspective
• The Functional Perspective
• The Process Perspective
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• Decision making and activities in organizations occur at different levels.
• Individuals
– have different responsibilities
– make different types of decisions
– carry out different types of activities
• Having the correct information is important
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Activity
Time horizon Hierarchical level Characteristics
Strategic Long term
Tactical Mid term
Operational Short term
General management
Functional management

Externally focused

Ad-hoc

Highly unstructured
Middle management
Front line employees

Repeatable

Semi-structured

Recurrent

Low discretion

Highly structured

Transaction focused

• Concerned with short-term activities, typically those that occur in the immediate term
• Operational personnel are focused on performing the day-to-day activities that deliver the firm’s value proposition
• Decision making at the operational level is typically highly structured by means of detailed procedures
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Atomicity Transactions are atomic. If one part of the transaction fails, the system must cancel the transaction. For example, if while withdrawing money at the ATM the cash dispenser jams, your balance should not be debited.
Consistency Transactions are consistent. In other words, only valid data is committed to long term memory and stored in the system. For example, if the airline seat assignment system requires only letters in the first name field, no transaction with numbers in the field is accepted.
Isolation Transactions are non-concurrent. If the system has yet to store the results of a transaction while writing the results of a second transaction, its database may end up holding invalid data. For example, if you are withdrawing money from and ATM while your sister at home is moving money electronically, the resulting balance may be invalid unless the system maintains isolation of the two transactions.
Durability Transactions are durable when they can be recovered in the face of system failure. In other words, once the system has successfully processed the transaction, it will no longer lose it. For example, once the agent has changed your seat, the change is recorded in a transaction log. If anything were to go wrong with the database, the current state could be re-created by reprocessing the transactions from the log.
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• The activities performed tend to be semi structured, having both well-known components and some degree of uncertainty
• Decision making at this level is typically semi structured, but characterized by repeatable patterns and established methods
• The objective is to improve the effectiveness of the organization, or one of its functions, within the broad strategic guidelines set by the executive team
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• Decision making at this level is highly unstructured
• Reliant on internal as well as external data sources
• Focus on making decisions by evaluating trends
• Little structure and formal methodologies exist for activities at this level.
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• Adoption of flatter hierarchies between frontline operations and strategic decision-making
– Empowerment
• Limitation:
– Difficult to neatly separate information systems in clear cut categories
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• Functional systems are expressly designed to support the specific needs of individuals in the same functional area
• Functional systems are based that information processing needs are unique and homogeneous within a functional area
• Optimal systems are tailored to those highly specific needs and use a language that is familiar to the professionals in that area.
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– Lack of integration of separate systems
– Leading to:
• Redundancy
• Inefficiency
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• Business processes are inherently cross-functional
• BPR is a managerial approach that employs a process view of organizational activities
• BPR seeks to break down the organizational silos
• BRP achieves internal business integration increases performance
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• Series of steps that a firm performs in order to complete an economic activity
– Inputs
– Steps / Activities
– Outputs
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• BPR requires radical 3 rd order change
• BPR sees that operational processes are not “glamorous” or highly valued
• Significant downsizing and layoffs follow BPR initiatives
• Very expensive to implement
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• As organizations and technology evolve over time, traditional business processes may become obsolete and need to be reevaluated
• Evaluation takes time
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• The history of lack of integration
– Coordination costs
– Mergers and acquisitions
• Integration: The process of unifying, or joining together, some tangible or intangible assets
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• Locus:
– Internal
– External
• Object:
– The assets the organization seeks to combine
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• The introduction of cohesive, streamlined business processes that encompass previously separate activities
• Objective:
– Presenting “one face” to the customer
– Providing solutions
– Achieving global inventory visibility
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• Unification or tight linkage of IT-enabled information systems and databases
• Primary focus:
– Technological component of the IS
• Types of systems integration:
– Internal
– External
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• Benefits
– Reduction of duplication and redundancy
– Access to information
– Speed
– Response time
• Drawbacks
– Increased coordinate costs
– Reduced local flexibility
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• Class of standardized software applications that would enable and support integrated business processes
• Firms typically live and die by their enterprise systems
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Financials
Accounts receivable and payable
Asset accounting
Cash management and forecasting
Financial consolidation
General ledger
Product-cost accounting
Profit-center accounting
Human Resources
Payroll
Personnel planning
Travel expenses
Operations and Logistics
Inventory management
Material requirements planning
Materials management
Plant maintenance
Production planning
Routing management
Shipping
Sales and Marketing
Order management
Pricing
Sales management
Sales planning
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Advantages
• Efficiency
• Responsiveness
• Knowledge infusion
• Adaptability
Disadvantages
• Standardization and flexibility
• Is the best practice embedded in the enterprise system really the best?
• Strategic clash
• High costs and Risks
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Year ERP Vendor
2010 JDA Software (i2)
2010 SAP and Deloitte
Consulting
2010 Capgemini and
SAP
2009 Epicor Software
Corporation
2009 SAP and Axon
2009 Lawson Software
2008 SAP
2008 Oracle
2008 SAP
2004 PeopleSoft
2003 EDS
2001 Oracle Corporation and KPMG
2001 SAP (R/3) and
Accenture
2000 J.D. Edwards and
IBM
ERP Customer
Dillard's, Inc.
Marin County,
California
Dorset County in the
UK
Ferazzoli Imports of
New England
City of San Diego
Public Health
Foundation Enterprises
Levi Strauss
Overstock.com
City of Portland
Cleveland State
University
British Sky
Broadcasting
University of
Cambridge
FoxMeyer Corp.
Evans Industries Inc.
Reason for ERP Failure and/or Lawsuit
Dillard's had alleged i2 failed to meet obligations regarding two softwarelicense agreements for which the department-store operator had paid $8 million.
The lawsuit alleges that Deloitte committed fraud and “misrepresented its skills and experience.”
A job which previously only took a minute is now alleged to take an hour.
The system has to shut down a few days each month to allow data to be processed.
Epicor's system never worked as intended or promised. Initial budget:
$184,443, Cost to date: $224,656.
The city of San Diego, CA terminated its software implementation contract with services provider, Axon. The project was $11 million over budget.
Failed ERP implementation.
The company was forced to take shipping systems at its three massive US distribution centers off line for a full week with ensuing loss of business.
ERP implementation problems blamed for losses during the 2005
Christmas season and extending into 2006.
Portland’s SAP project, budgeted at $31 million in 2006 for a 2007 go-live date, is now estimated to be nearly $50 million.
A faulty installation of the company's ERP applications. The lawsuit charges PeopleSoft with breach of contract and negligent misrepresentation.
Late delivery of the project and lost benefits that amount to estimated
£709m.
ERP project considered “faulty” after spending $13 million in the implementation.
The company claimed that a botched SAP R/3 implementation in the mid-
1990s ruined them, driving them to bankruptcy.
The suit alleged that OneWorld was "defective and failed to operate and function as promised by the defendants."
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• is the set of logistical and financial processes associated with the planning, executing, and monitoring of supply chain operations.
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• Set of activities and processes used to create, codify, gather, and disseminate knowledge within the organization
– Creating Knowledge
• employees generate new information, devise novel solutions to handle existing problems, and identify new explanations for recurrent events.
– Capturing and Storing Knowledge
• enables the organization to codify new knowledge and maintain an organizational memory
– Disseminating Knowledge
• investments made in knowledge creation and storage pay off
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• Ability to gather and make sense of information about your business
• Encompasses the set of techniques, processes, and technologies designed to enable managers to gain superior insight and understanding of their business and thus make better decisions
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• Models the progression of data
• From its inception in transaction processing systems
• To its storage in data repositories
• To its use in analytical tools
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• Data Warehouse
– Data repository that collects and consolidates data from multiple source systems with the purpose of enabling analysis
• Data Mart
– Scaled-down version of a data warehouse that focuses on the needs of a specific audience
• Online Analytical Processing (OLAP)
– Class of software programs that enable a knowledge worker to easily and selectively extract and view data from analytical database
• Data Mining
– Process of automatically discovering non-obvious relationships in large databases
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• CRM is a strategic initiative, not a technology.
Information technology is an essential enabler of all but the smallest CRM initiatives
• CRM relies on customer personal and transactional data, and is designed to help the firm learn about them
• The ultimate objective of a CRM initiative is to help the firm use customer data to make inferences about customer behaviors, needs, and value to the firm so as to increase its profitability
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• CRM Is Firm Centric
– a firm’s CRM strategy only relies on transactional and behavioral customer data pertaining to the interactions of the customer with the firm
• CRM Has Limited Predictive Ability
– Some events are unforeseeable and only the customer knows about their occurrence or future plans about them
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• Different organizational information systems can be characterized through a hierarchical perspective or functional perspective
• BPR is as a managerial approach calling for a process view of organizational activities
• Enterprise systems are modular, integrated software applications that span (all) organizational functions and rely on one database at the core
• Enterprise systems have traditionally focused on internal organizational processes
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• Knowledge management is the set of activities and processes that an organization enacts to manage the wealth of knowledge it possesses and ensure that such knowledge is properly safeguarded and put to use to help the firm achieve its objectives
• Business intelligence encompasses the set of techniques, processes, and technologies designed to enable managers to gain superior insight and understanding of their business and thus make better decisions.
• Customer relationship management (CRM)is strategic orientation that calls for iterative processes designed to turn customer data into customer relationships through an active use of, and learning from, the information collected
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1.
How to categorize systems according to the hierarchical, functional, and process perspectives. You will also learn the rationale for each perspective and its limitations.
2.
The definition, underlying principles, and applications of business process reengineering (BPR), as well as the advantages and disadvantages of BPR.
3.
The definition of integration and its role in the modern firm. We will explore the pressures toward integration and the challenges integration creates. We will also discuss business and systems integration trends and the relationship between the two.
4.
The genesis of the enterprise systems (ES) trend and why so many companies are employing or introducing them. You will also learn to articulate the principal benefits and risks associated with these systems.
5.
The definition of the term supply chain management and how to explain the role that supply chain management applications play in modern organizations.
6.
The definition of the term best of breed and how to describe the benefits and drawbacks of this approach to systems integration. You will also learn to draw comparisons between the best-of-breed and enterprise systems approaches.
7.
How to describe what is meant by knowledge management, how to categorize the different types of knowledge commonly found in organizations, and how to explain why organizations feel the need to employ knowledge management applications.
8.
The definition of the terms business intelligence (BI) and BI infrastructure. You will also learn how to identify and describe the role of the technologies that comprise a modern BI infrastructure.
9.
The definition of the term customer relationship management (CRM) and how to articulate both its benefits and limitations. You will also learn how the CRM and BI trends relate to one another.
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