B. Information Technology (IS) CISB434: Decision Support Systems

1. B. Information Technology (IS)CISB434: Decision Support Systems Chapter 8: Enterprise Systems

2. Learning Objectives • Discuss the concepts, definitions, and issues in Enterprise Information Systems (EIS) • Discuss the capabilities and charac-teristics of (Web-based) Enterprise Information Portals

3. Learning Objectives • Discuss the Supply-Chain Management (SCM) issues • How EIS handle them • Describe the following • Enterprise Resource Planning (ERP) • Supply Chain Management solutions

4. Learning Objectives • Discuss Customer Relationship Management (CRM) concepts and issues • Describe the emerging EIS of • Product Lifecycle Management (PLM) • Business Process Management (BPM) • Describe how EIS improved frontline decision making

5. Enterprise Systems Enterprise Information Systems (EIS)

6. Enterprise Information Systems Concepts & Definitions • Systems that serve an entire enterprise, or at least two functional departments

7. Enterprise Information Systems Concepts & Definitions • Consists one or more of: • Business Intelligence (BI) • Enterprise Resource Planning (ERP) • Knowledge Management (KM) • Supply-Chain Management (SCM) • Business Process Management (BPM) • Customer Relationship Management (CRM)

8. Enterprise Information Systems Enterprise Information Portals • Corporate (enterprise) portals • A system that integrates internal appli-cations • such as database management, document management, and e-mail • with external applications • such as news services, customer Web sites • A Web-based interface that gives users access to such applications

9. Enterprise Information Systems Enterprise Information Portals • Enterprise (information) portal • A corporate internal Web site • on the company’s intranet • that integrates many internal applica-tions with external ones • Users access this type of portal via a standard Web browser

10. Enterprise Information PortalsBenefits & Goals • Groupware/collaboration technologies • Presentation • Personalization and customization • Publishing and distribution • Search • Categorization • Integration

11. Enterprise Information PortalsTypes • Suppliers’ and other partners’ portals • Customers’ portals • Employee portals • Executives’ and supervisors’ portals • Functional portals

12. Enterprise Information PortalsPortal Applications • Knowledge bases and learning tools • Business process support • Customer-facing (frontline) sales, marketing, and services • Collaboration and project support • Access to data from disparate corporate systems • Personalized pages for various users

13. Enterprise Information PortalsPortal Applications • Effective search and indexing tools • Security applications • Best practices and lessons learned • Directories and bulletin boards • Identification of experts • News • Internet access

14. Enterprise Information PortalsIntegration with Enterprise Systems • Organizations deploy portals to support strategic business initiatives • Portals are used as tools for managing enterprise applications

15. Enterprise Information PortalsIntegration with Enterprise Systems • Portals provide the much-needed ability to integrate and unify access to a firm’s • applications • back-end systems • data sources • content repositories

16. Organizational DSS (ODSS)Concepts & Definitions • Organizational Decision Support Systems • A networked DSS that serves people at several locations • usually dealing with several decisions

17. Organizational DSS (ODSS)Characteristics • Focus of an ODSS • Organizational task, activity, or decision that affects several organizational units or corporate problems • An ODSS cuts across organizational functions or hierarchical layers

18. Organizational DSS (ODSS)Characteristics • An ODSS almost necessarily involves • computer-based technologies, and • communication technologies

19. Portal examples • Clarian Health Partners, an integrated health care company, developed an enterprise information portal for its three hospitals.The portal directly assists doctors, administrators, and consumers (see Ericson, 2002). • Bank One Corp.developed a foreign currency exchange portal to let its customers examine exchange rates,execute trades of foreign currency,confirm settlement, make cross-currency payments,and view account status (see Boyd,2001).

20. Enterprise Systems Supply-Chain Management (SCM)

21. TYPICAL SCM PROBLEMS-EXAMPLE • difficulty of fulfilling orders received electronically for toys during the holiday season of 1999–2000. • During the last months of 1999, online toy retailers, including eToys, Amazon.com, and Toys‘ ’ Us, conducted a massive advertising campaign for Internet orders featuring $20 to $30 discount vouchers. Customer response was overwhelming, but some retailers had underestimated the demand and as a result made incorrect ordering, inventory, and shipment decisions. • they were unable to obtain the necessary toys from manufacturing plants and warehouses and deliver them to customers by Christmas Eve. • Hershey’s Chocolates experienced a similar problem when the foundation of its ERP system for SCM was built on data of low quality and accuracy . This almost bankrupted the firm. Hershey’s finally got it right through a new ERP implementation.

22. Supply, Value Chains &Decision Support • Demand chain • The flow of materials from an operation to the final demand • includes order generation, taking, and fulfillment • has been integrated into the supply chain

23. Supply, Value Chains &Decision Support • Supply chain • The flow of materials, information, money • from the creation of raw materials to their final processing into a product, or service, • and the delivery of the product, or service, to end users • Includes all the organizational units, people, procedures that support the flow

24. Supply, Value Chains &Decision Support • Supply-chain Management (SCM) • The activities involved in managing supply chains, including • planning, organizing, staffing, and control

25. Supply, Value Chains &Decision Support • Benefits of SCM • Modern SCM methods and software reduce uncertainty and risks of supply chain • thereby positively affecting inventory levels cycle time, processes, and customer service • which contribute to increased profitability and competitiveness • In today’s competitive environment, • efficient and effective supply chains are critical for the survival of organizations • and are greatly dependent on the supporting information systems

26. Supply, Value Chains &Decision Support • The components of the supply • Upstream • Suppliers • e.g. manufacturers, assemblers, their suppliers

27. Supply, Value Chains &Decision Support • The components of the supply • Internal • processes used in transforming the inputs from suppliers to outputs • i.e. from the time materials enter an organiza-tion to the time the product(s) goes to distribu-tion outside the organization

28. Supply, Value Chains &Decision Support • The components of the supply • Downstream • processes involved in delivering the product to the final customers

29. Supply, Value Chains &Decision Support

30. Supply, Value Chains &Decision Support

31. Supply, Value Chains &Decision Support • Value Chain • The actual steps an item follows as it moves along the supply chain • describes how value is added when a product moves along the supply chain • primary activities - e.g., manufacturing, testing, storage - add value directly • secondary activities - e.g., accounting, personnel, engineering - support the primary activities • Value system • In a firm’s value chain, the suppliers and other business partners and their supply chains

32. Supply, Value Chains &Decision Support • Decision making and the supply chain • To maximize the value added along the supply chain, • it is necessary to make decisions and evaluate their potential impact • SCM software is available for decision support • for both primary and secondary activities, • including optimization of manufacturing processes

33. Supply, Value Chains &Decision Support • Decision making and the supply chain • Special DSS/BA models can determine the costs and benefits of investing in IT in an attempt to create value along the supply chain

34. Inventory Problems Along The Supply Chain. • Not enough • Too much • Wrong place, Wrong stage

35. Supply-Chain Problems • Problems along the supply chain stem mainly from • Uncertainties (i.e uncertainty in demand, cost, technology forecast, unforeseen quality problems, delay delivery etc) • the need to coordinate several activities • internal units and business partners

36. Supply-Chain Problems • The major source of uncertainties • demand forecast • can be influenced by several factors, • such as competition, prices, weather condi-tions and technological developments • Access to accurate, real-time SCM data is critical for a system to succeed

37. Supply-Chain Solutions • Effective SCM requires • that suppliers and customers • work together in a coordinated manner • by sharing and communicating the information necessary for decision making

38. Supply-Chain Solutions • Outsource rather than do-it-yourself during demand peaks • Buy rather than make when appro-priate • Configure optimal shipping plans • Optimize purchasing • Strategic partnerships with suppliers

39. Supply-Chain Solutions • Use just-in-time approach to pur-chasing • so that suppliers quickly deliver small quantities whenever supplies, mate-rials, and parts are needed • Reduce the number of intermediaries • which usually add to supply-chain costs • by using e-commerce for direct marketing

40. Supply-Chain Solutions • Reduce the lead time for buying and/or selling via automatic processing • by using EDI or extranets • Use fewer suppliers • Improve supplier–buyer relationship

41. Supply-Chain Solutions • Manufacture only after orders are in • Dell does with its custom-made com-puters • Achieve accurate demand by wor-king closely with suppliers • Apply true optimization and descrip-tive models to SCM

42. Enterprise Systems MRP, ERP & SCM Systems

43. MRP, ERP & SCM SystemsWhy Integrate Systems? • Tangible benefits • Inventory reduction • Personnel reduction • Productivity improvement • Order-management improvement • Financial close-cycle improvement • IT cost reduction

44. MRP, ERP & SCM Systems Why Integrate Systems? • Tangible benefits • Procurement-cost reduction • Cash-management improvement • Revenue and profit increase • Transportation logistics-cost reduction • Maintenance reduction, • On-time delivery improvement

45. MRP, ERP & SCM Systems Why Integrate Systems? • Intangible benefits • Information visibility • New and/or improved processes • Customer responsiveness • Standardization • Flexibility • Globalization • Business performance

46. Material Resource PlanningMRP • MRP system • Production plan for 100% capacity • Inventory models • Master production schedule • Component lists

47. Enterprise Resource PlanningERP • A process that integrates the infor-mation processing activities in an organization • e.g. ordering, billing, production sche-duling, budgeting, staffing • and among business partners • Also known as Enterprise Resource Management (ERM)

48. ERP & SCM Systems ERP Problems & Failures • ERP implementations report an un-usually high failure rate • Jeopardizing the core operations of the implementing organization • If the business processes do not match those modeled in the ERP • one or two things must be done for the implementation to proceed

49. ERP & SCM Systems ERP Problems & Failures • The actual business processes must be changed to match the model of the ERP system • Additional, software - generally expensive - must be written, to accommodate the differences

50. ERP & SCM Systems • There are three primary reasons for the failure of all IT-related projects • Poor planning or poor management • Change in business goals during the project • Lack of business management support