REVIEW FOR EXAM 3

1. REVIEW FOR EXAM 3 BUS3500 - Abdou Illia, Fall 2007

2. Information Systems forBusiness Integration: ERP Systems Part 1

3. Business Integration? Suppliers Integration Vertical ProductionDepartment SalesDepartment LogisticsDepartment HorizontalIntegration Customers

4. Process1 Process1 Process1 Process1 Process1 Process1 Process2 Process2 Process2 Process2 Process2 Process2 Systems for Horizontal Integration • Enterprise Resource Planning (ERP) systems • integrate all the internal processes through a common information system (or an integrated set of info systems) ERP system ProductionDepartment Warehousing CommonDatabase SalesDepartment LogisticsDepartment MarketingDepartment AccountingDepartment

5. ERP Components (or Modules) • Two types of components • Core ERP Components • Extended ERP Components • Core ERP Components • Traditional components found in most ERP systems • They primarily focus on internal operations Finance &Accounting CommonDatabase HumanResource Manufacturing* * Also called Production & Material Management * Helps from new products development to actual production * Handles demand forecasting, production planning, production scheduling, quality control, etc.

6. ERP Components (or Modules) • Extended ERP Components • Extra components that might be included • They primarily focus on external operations Business Intelligence1 CustomerRelationshipManagement CommonDatabase SupplyChainManagement E-Business2 1 Provide information that help users in decision-making 1 Collects info used throughout the organization, organize it, and uses analytical tools to help decision-making process 2 Includes e-logistics (managing transportation & storage of goods over the Internet) and e-procurement (B2B purchase & sale of supplies & services over the Internet)

7. ERP Components (or Modules) • ERP mainly used by medium and large businesses • Average lifetime cost: $15 Million (2003 surveys) • Implementation process: up to 5 years The largest vendors worldwide in 2005 according to Gartner Dataquest * In January 2005, Oracle bought PeopleSoft the 3rd player until then.

8. Factors in ERP System Success • Active support of upper management • Having the best people on the implementation team • Managing the time line well • User involvement in the planning and implementing ERP systems

9. Summary Questions Refers to the slide # in class posted notes

10. Review Questions • Make sure you can answer the following questions about ERP: • Chapter 10 Review Questions available in the Notes’ section of the course web site. • Quiz 2 (Part 1/2)

11. Information Systems forBusiness Integration: EDI, SCM, CRM Systems Part 1 (Cont.)

12. Supply Chain Management SCM

13. Supply Chain • Supply Chain includes parties involved in the procurement of product or raw material • Upstream parties • Downstream parties

14. Supply Chain Management SCM • SCM implies the management of information flow between a company and upstream and downstream parties of the supply chain • Which of the following is NOT a potential benefit of SCM? • It helps avoid shortage of raw material • It could shorten the time for delivering finished products to distributors • It could help organizations better forecast their production of goods and services • It could help organizations better forecast the needs of their distributors • None of the above

15. SCM Process • Stages of SCM (SC Council’s Reference Model): • Planning: develop and implement processes that attempt to forecast demand for products and services • Goal: Balance demand with supply of raw material • Sourcing: determine who should supply the items required • Goal: Be supplied on time, within budget • Production: make the product • Schedule production • Ensure raw materials are on hand when needed • Product delivery (logistics) • Everything from receiving a customer inquiry to invoicing • Warehouse management is one very important factor • Returns: managing returns of raw materials as well as finished goods

16. Process1 Process1 Process1 Process2 Process2 Process2 ProductionDepartment SalesDepartment DeliveryDepartment EDI: a SCM Technology • Electronic Data Interchange (EDI): • A network technology that allows the transfer and processing of business documents (usually orders) between a company and its suppliers Suppliers EDI Sys. EDI System Value Added Network (VAN)orPrivate network connection Company’s Internal processes

17. EDI: SCM Technology • EDI documents must be formatted according to specific standards • ANSI X12 – used in North America • EDIFACT – international, but widely used in Europe • Advantages: • Eliminates paperwork • Reduces errors • Speeds supply process • Disadvantages: • Provides connection only between two companies • Limits freedom of comparing prices.

18. Suppliers Three main functions SCM Sys. Process1 Process1 Process1 Process2 Process2 Process2 - Forecast demand- Handle purchase of supply- Manage storage + shipping SCM System Company’s Internal processes ProductionDepartment SalesDepartment DeliveryDepartment SCM information system • Part of extended ERP components • Could be bought separately Network connection

19. Customer Relationship Management CRM

20. CRM systems • CRM systems are systems that can help manage all aspects of organizations’ relation with their customers. • Which of the following is NOT a potential benefit of CRM systems? • Provide better customer service • Make call centers more efficient • Help sales staff close deals faster • Simplify marketing and sales processes • Discover new customers • None of the above

21. Goals of CRM systems • Goal of CRM is to increase sales and repeat business by learning the customer • Determine the customer’s needs and preferences • Determine the customer’s satisfaction with service • Determine which customers are in the magic 20 percent (or have the potential to become part of it) • Recency, Frequency, Monetary value (RFM) at heart of CRM systems • How recently a customer purchased items (Recency) • How frequently a customer purchased items (Frequency) • How much a customer spends on each purchase (Monetary Value

22. Summary Questions Refers to the slide # in class posted notes

23. Review Questions • Make sure you can answer the following questions: • Quiz 2 (Part 2/2)

24. Managing Security Part 2

25. Best way to prepare • Review the ppt notes or chapter 4 in the book to make sure you can answer the following questions • Chapter 4 Review Questions available in the Notes section of course web site • Quiz 3 (1/2)

26. Managing the Development and Purchase of IS Part 3

27. Systems Development Methodology? • The process companies go through to develop and maintain an information system • Framework for successful IS development • A System Development Methodology is used • For building a new system • Or for modifying an existing system • Examples of SDM: • System Development Life Cycle ￭ Prototyping • Joint Application Development ￭ Rapid Application Development

28. Questions • Which of the following is true about SDM? • They provide guidelines for developing IS and maintaining them which includes upgrading and improving them. • SDM are needed when a brand new IS has to be developed, but you don’t need to use a SDM when it comes to modifying an existing IS. • When a company is engaged in developing an IS, the process involves the company’s employees who would be the future users of the IS, and IS professionals like system analysts and programmers. But it doesn’t involve the company’s management • All of the above

29. Traditional Systems Development Life Cycle (SDLC) Planning Analysis • Seven phases • Planning 5) Testing • Systems Analysis 6) Implementation • Systems Design 7) Maintenance • Development • Typically one phase needs to be completed before beginning the next • Problem in later phase may require return to previous phase Design Development Testing Implementation Maintenance

30. Question • In SDLC, the 7 phases are typically followed in a sequential order, which means we don’t return to a previous phase in any circumstances • True • False

31. Planning Feasibility Analyses System Development Schedule • Feasibility analyses • Technical Analysis • Do the technologies exist to develop the system? • Economic Analysis • Can the organization afford the system? • Will it provide an adequate Benefit? • Operational Analysis (i.e. assessing the human element of the proposed system) • Resistance to change • Organizational politics • System development schedule • Is the proposed development time line realistic? • Is the programming team available during Programming step? • Planning performed by Project Manager using • Search and investigation (e.g. for technical analysis step) • Total Cost of Ownership analysis • Project Management software

32. Systems Analysis Analyze current system Define new system requirement • Systems analyst works with company to understand the problem fully and to detail the requirements of the proposed system • Step 1: Analyze current system • Objectives: • Understand what things are done and how (business processes) • Identify any problems associated w/ current business processes • Techniques: • Observe employees at work • Talk to employees (potential users)

33. Systems Analysis Analyze current system Define new system requirements • Step 2: Define new system’s requirements • Main Objective: • Specify What need to be done (not how to do it) • To be defined: • Input requirements (nature of data, source, etc.) • Processing requirements • Output requirements (Types of reports, content, etc.) • Storage requirements • Tools and techniques • Data flow diagrams (DFD) • Start with high level process • Add more levels with increased levels of detail • Computer-Aided Software Engineering (CASE) tools • Software that eases the systems development process

34. Data Flow Diagrams (DFD) Data flow Shows data being passed from or to a process Process Action that transform or manipulate data External Entity Something (person, group, department, etc.) outside the system that interact with the system by providing or receiving data Data storage Used to store data in the system. Represents a file, a database, etc.

35. DFD Exercise • You should be able to answer Questions 1, 2, and 3 of the Lincoln Pizza’s ordering system DFD exercise. Hardcopies were given in class. You can also get a copy in the Review For Exam 3 web page on the course web site.

36. Systems Design • Using the requirements from Systems Analysis phase to design the new or modified system. • Logical systems design • Details the system’s functionality (what it should do?) • Uses Structure charts to create top-down representation of system’s modules • Uses System flowcharts to show relationships between modules • Physical systems design • Specifies all of the actual components (hardware, network, etc) used to implement the logical design • Design frozen at end of this phase • Scope creep • Feature creep • Performed by system designer or (system analyst in some case)

37. Process Pizza Order Order Entry Payment Processing InventoryManagement Delivery Module 1 WEEKLY SALES PROGRAM SALES DATA WEEKLY SALES REPORT System Flowchart: Graphical representation of all programs within the system and how they interrelate PAYROLL PROGRAM PAYROLL EXCEPTION REPORT PAYCHECKS PAYROLL SUMMARY REPORT Module 2 Systems Design tools Structure charts

38. Development • Programming process is usually the most difficult and time consuming in the Development process. • Development performed by programmers, database developers, and network engineers • Programmers use Program Development Cycle • Review the input, processing, output, and storage requirements • Develop the logic of the programs (using Flowcharts and Pseudo code) • Write the programs using code generators & programming languages • Test and debug the programs • Complete the programs documentation

39. Development tools Pseudocode: English-language statements that describe the processing steps of a program in paragraph form. Program Flowchart: Graphical illustration of the problem-solving logic within a program • Programming languages: • Java • C++ • Visual Basic • Etc.

40. Testing • Programmers test modules • Do they return proper outputs? • Do they handle incorrect data appropriately? • Development team do unittesting • i.e. testing how modules work together • System testing (software along with database and network component) • Verification: Testing system in simulated environment with simulated data • Validation: Testing system in real working environment with real data

41. Implementation • Implementation strategies • Direct cutover: Quick change to new system • Parallel conversion: Old and new systems used in parallel for a while. • Pilot testing: New system installed at only one location or one department • Staged conversion: Only one part of the system installed, then another part is installed. • User training

42. Maintenance • Maintenance counts for as much as 80% of the total cost of an information system • Tasks • Correct errors found during implementation • System enhancements • Incremental upgrades • Addition of major new features

43. Summary Questions

44. SDLC: Recap