Enterprise information systems

Transcription

1 Enterprise information systems Maurizio Morisio, 2016

2 1. Definitions

3 Definitions Organization Business function Business process Application Application portfolio Information system

4 Organization Group of people intentionally organized to accomplish an overall, common goal or set of goals enterprise, army, church, public administration, football team, hospital, university Organizations include and manage resources (people, machines, buildings) Organizations implement business processes to achieve the goals Enterprises/companies are organizations working for profit

5 Business process Set of activities (executed in some parallel or sequential order) performed by an organization, to deliver a service /product With defined inputs/outputs (information and things) Ex enroll student; sell product, produce car Activity: time spent by one or more people to do a task Activity is simpler and shorter than process

6 Business function Group of people (and other resources) in an organization performing functionally similar activities Major business functions Manufacturing Sales & marketing Finance Accounting Human resources 6

7 Application Application Software program to support an activity or process Application portfolio Set of applications used by an organization

8 Legacy (software /applications) Old software applications running in a company since years

9 Information system IS Definition, larger scope System to store and process information used by organizations Includes paper, people, computers and software (CB)IS Definition, reduced scope Computer based system to store and process information used by organizations Also known as CBIS (Computer based IS) 9

10 Warning in organizations lots of information and processes are, at least partially, on paper and in people IS CBIS Considering the CBIS only is a mistake

11 Information system IS Definition, Laudon Interrelated components working together to collect, process, store, and disseminate information to support decision making, coordination, control, analysis, and visualization in an organization 11

12 IS in short Essentially an IS is made of several applications that (read / write) on several databases The databases contain Master data (list of entities) Ex products, customers, suppliers Transactional data (events) Ex sale, purchase A business process uses one or more functions of one or more applications

13 Warning Ideally many applications read/write on one database Application integration problem In practice many databases are used Data integration problem Integration (of data / application) is a never ending problem in ISs

14 14

15 Goal High level models of organizations and business processes To classify processes To support analysis and search of IT applications to support processes 15

16 High level models Anthony s pyramid Business functions Organizational levels T Model Support Primary Managerial Business domains 16

17 Control loop model Customers ENVIRONMENT Suppliers INFORMATION SYSTEM ORGANIZATION INPUT PROCESS OUTPUT FEEDBACK Regulatory Stockholders Competitors Agencies 17

18 Input The capture or collection of raw data from within the organization or from its external environment for processing in an information system Output The distribution of processed information to the people who will use it or to the activities for which it will be used 18

19 Processing The conversion, manipulation, and analysis of raw input into a form that is more meaningful to humans Feedback Output that is returned to the appropriate members of the organization to help them evaluate or correct input 19

20 Very simplistic view on IS Processes information from input to output (cfr CRASO) Important view on context and environment Organizations (and the related IS) are influenced / interfaced with 5 types of actors 20

21 Anthony s model 21

22 Anthony s model (pyramid) Organizational level STRATEGIC LEVEL MANAGEMENT LEVEL KNOWLEDGE LEVEL KNOWLEDGE LEVEL OPERATIONAL LEVEL OPERATIONAL OPERATIONAL LEVEL SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN MARKETING RESOURCES Business functions 22

23 Mixes Functional view in terms of business functions Organizational view in terms of hierarchical levels At each intersection different IS functions are needed 23

24 Organizational view Organizational level Group served by IS STRATEGIC LEVEL SENIOR MANAGERS MANAGEMENT LEVEL MIDDLE MANAGERS KNOWLEDGE LEVEL KNOWLEDGE & DATA WORKERS OPERATIONAL LEVEL OPERATIONAL LEVEL MANAGERS 24

25 Example of process/levels City: Strategic - check costs and incomes of social services, definition of new prices, building plans Management payment control, reminders, monthly comparison of budget vs. actual income, pollution monitoring Operational- citizen payment accounting, road maintenance 25

26 Example of process/levels Bank: Operational management of accounts Management review of negative balances Strategic assess performance of a service, decision to activate a new service 26

27 Example of process/levels Company: Strategic select most promising market areas Management check weekly budget vs. actual Operational recording of orders 27

28 Operational level Importance of IS = f (IO, IP) IO Information intensity of product IP Information intensity of process [Porter Millar 1985] 28

29 Information intensity of product Operational level Information intensity of process Low High High Traditional editorial industries University & schools Medical labs Banks & Insurance Telephone companies PA Engineering companies Low Tobacco industry Traditional manufacturing industries Gas, electricity companies Distribution 29

30 Management level Supports the control loop Goal definition typically economical / budget Analisys of results Corrective actions Control Process

31 Management level Management IS: Information for control Type of values: effective, budget Indexes 2 nd semester values Year values EFF BDGT EFF BDGT PROD1 PROD1 Economic balance income acquisitions personnel Margin amortizations other costs other items GAIN Timing Aggregated and derived information 31

32 Operational vs. Management Usage Information Operational Continuous Simple, Current Management Periodic (eg. weekly) Aggregate, Historical

33 Strategic Analysis of very large data sets Customer analysis (profiling) Product analysis (dependability) Performance analysis (dashboard) Response time, quality level Cmp. Management level focused on costs

34 Strategic level Volumes of data available for analysis via business intelligence, data warehouse Sector Number of usual customers (order of magnitude) Example of analysis (indexes) Telephony (eg. EU monopolists) Bank (large banks) More than 10 Million More than 1 Million _ Profitability _ Behavior / preferences _ Profitability _ Behavior / preferences _ Electricity and gas Profitability (European monopoly) Between and 1 Million _ Behavior / preferences _ Sectorial study PA / Finance (Europe) More than 10 Million _ Segmentation of customer _ Identify potential Distribution Between and 1 Million _ Behavior / preferences 34

35 Major types of systems Executive support systems (ESS) Management information systems (MIS) Decision support systems (DSS) Knowledge work systems (KWS) Office automation systems (OAS) Transaction processing systems (TPS) 35

36 Major types of systems 36

37 Characteristics of IS System Input Processing Output User ESS Aggregate data (external, internal) simulation Projections Senior managers DSS Low-volume data (from optimized DBs), analytic models Simulation, analysis Special reports, decision analysis Professionals, staff managers MIS Transactions summaries, highvolume data Routine reports, low-level analysis Summary and exception reports Middle managers KWS Design spec, knowledge base Modeling, simulation Models, graphics Professionals, technical staff OAS Documents, schedules Document management, scheduling, communication Documents, schedules, mail Data workers TPS Transactions, events Sorting, listing, merging Detailed reports, lists, summaries Operational managers, supervisors 37

38 Business function view IS as high level business functions offered/supported SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN MARKETING RESOURCES Business functions 38

39 Services to business functions E.g. Manifacturing function Fulfill an order Look at status of order E.g. Sale function Accept an order Make a bid

40 Functional taxonomy Sales and Marketing Manufacturing and Production Finance and Accounting Human Resources 40

41 Sales and Marketing Marketing is concerned with identifying the customers determining what they need or want planning and developing products and services to meet their needs advertising and promoting these products and services Sales is concerned with contacting customers selling the products and services taking orders following up on sales 41

42 Sales & Marketing examples System Order processing Market analysis Pricing analysis Sales trend forcasting Description Enter, process and track orders Identify customers using demographics, markets, trends Determine price for product or service Prepare 5-year sales forcast Level Operational Knowledge Management Strategic 42

43 Manufacturing and Production Activities deal with Planning, development, and maintenance of production facilities The establishment of production goals The acquisition, storage, and availability of production materials Scheduling of equipment, facilities, materials, and labor required for finished products Integrate and control the production flow 43

44 M&P examples System Machine control Computer-aided design Production planning Facilities location Description Control action of machines Design new product Decide when and how many Decide where to locate new facilities Level Operational Knowledge Management Strategic 44

45 Finance and Accounting Finance function Managing the financial assets, such as cash, stocks, bonds, and other investments, in order to maximize the return Accounting function Maintaining and managing the firm s financial records/receipts, disbursements, payroll, to account for the flow of funds in a firm 45

46 Finance and Accounting System Account receivable Description Track money Level Operational Portfolio analysis Budgeting Profit planning Design portfolio of investments Prepare short-term budgets Plan long-term profits Knowledge Management Strategic 46

47 Human Resources HR function is responsible for Attracting workforce Developing workforce Maintaining workforce Human resources information systems support activities such as Identifying potential employees Maintaining complete records on employees Creating programs to develop employees skills 47

48 Human Resources System Training and development Career pathing Compensation analysis HR planning Description Track employees training, skills and extimate performance Design career paths for employees Monitor fairness in employees wages and benefits Plan long-term labor needs Level Operational Knowledge Management Strategic 48

49 T Model 49

50 Primary T Model Management Support 50

51 Process families Managerial processes Primary Processes Support Processes Strategic planning Control Business Intelligence Production and provisioning of products and services Accounting Resources management (human, investments, estate) Business support: (IT, general services) GOAL: Lead the organization GOAL: Serve the customers GOAL: Provide services to the organization and comply with law obligations

52 Process families Support IT, Human resources, Accounting, Firm infrastructure Management Business intelligence, strategy, management control Primary/Operational Produce service or product 52

53 Business domains Manufacturing Process industry Telecom Bank and insurance / Finance Retail Utilities Public administration Health 53

54 Vertical vs. Horizontal Vertical = specific to business domain Horizontal= not specific 54

55 Process families and v h Support IT, Human resources, Accounting, Firm infrastructure (horizontal) Managerial Business intelligence, strategy, management control (horizontal) Primary Produce service or product (vertical) 55

56 SUPPORT PROCESSES 56

57 Support processes SUPPORT PROCESSES ADMINISTRATION HUMAN RESOURCES INFORMATION SYSTEMS OTHER SECTIONAL ACCOUNTING PLANNING INDUSTRIAL RELATIONS PLANNING & STRATEGY CLIENT MANAGEMENT INSTITUTIONAL ACCOUNTING MANAGEMENT ADMINISTRATION PROJECTS & MAINTENANCE SYSTEMS MANAGERIAL ACCOUNTING OTHER PROCESSES PERFORMANCE MANAGEMENT OTHER PROCESSES OTHER ACCOUNTING 57

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59 Support processes - Accounting Very old Luca Pacioli, 1494, double entry bookkeeping Standards and norms available Standards: IAS/IFRS 59

60 Support processes Accounting Sectional Towards customers and suppliers Accounts payable, accounts receivable Institutional Towards stakeholders and law Balance sheet, public communications, consolidated balance (groups), certifications Management accounting Towards internal structure 60

61 Support processes HR Planning Understand what skills are needed Training, hiring Relationships With trade unions Administration Record working (leave) days Payroll Pension, health, insurance, taxes 61

62 Support processes HR Management Search skills Relationship management Record skills and history Training Evaluation and compensation systems Outplacement 62

63 Support processes - IT Planning Production Operation 63

64 MANAGERIAL PROCESSES 64

65 Managerial processes STRATEGIC LEVEL strategic planning (BSC) MANAGEMENT LEVEL Management control OPERATIONAL Operations control 65

66 Managerial processes Strategic Planning Management Control Operations Control IT has progessively automated managerial processes making large multinational organizations controllable 66

67 Strategic planning What: strategy (markets, products,..) When: as needed Output: strategic plan (projects that implement the strategy) Means: BSC See later: Strategy chapter See later: KPI BSC CSF 67

68 Management Control Goal definition (Planning) Outcome control (Delta analysis) Identification of corrective actions Information about outcomes EXECUTION / MONITORING 68

69 Management Control What Budget (overall, per organizational unit) When Planning (definition of planned budget), annual Control (actual vs. planned), monthly Similar for most domains 69

70 Operational control What Specific operational indicators (Depends strongly on domain) When Frequent (continuous) Very structured for domains with complex products (automotive, aerospace), loosely structured in other domains (engineering) 70

71 Decisions Simon (1958), Gorry and Scott Morton (1971) Structured: follows an algorithm and is repeatable Semistructured: output is defined, decision can be described as rule Unstructured: no algorithm, subjective

72 Decisions Decision Process Operational Level Managerial Strategic Structure Semistructured Stock resupply Maintenance Budget Bonds buy-sell Sale Budget Plant placement Fund raising Unstructured Select cover for magazine Manager hiring R&D strategy 72

73 Information Structuredness Low High Control and Decisions Building site planning Decision Structuredness Low High Stock management systems with fixed rules Partial automation (open loop) Full automation (closed loop) Document storage Decision whether to apply for a public tender Acceptance of food supply in a supermarket

74 PRIMARY PROCESSES 74

75 Primary by business domain Manufacturing companies Process industries (chemistry, metallurgy) Telecom operators Utilities Banks/insurances Retail Public Administration (PA) Health 75

76 Manufacturing Value chain AP SCOR Segmentation by vendors Segmentation by integrators Open segmentations 77

77 Value chain [Porter 80, Porter Miller 1985] Process view of a company Cfr. functional + org view in Antony Company implements sequence of processes/activities to deliver product/service Primary/support activities Value of product is how much the customer is willing to pay for it Cost!= price 78

78 Value Chain Drawing by Dinesh Pratap Singh

79 Value chain Value chain defined for manufacturing companies Value chain concept still high level to identify ESs 80

80 Application Portfolio Focus on vertical phases (inbound logistics, product design, operations, outbound logistics) Detail them (for manufacturing companies) and describe lower level processes 81

81 Process types Processes and subprocess types Planning Strategic analysis Planning Year, month, week Execution Process and product data Order management Material management Physical operations 82

82 Planning Goal Issues Horizon Strategic analysis Understand Market and technology trends Complex and heterogenous data Months years Plan 1 year Define requests and needs Scope: plants Plan 1 month Scope: plants and cells 2 months Plan 1 week Define request and needs Scope: cells 2 weeks 83

83 Execution Goal Issues Scope Product and process data Capture know how on product and how to produce it Complex and heterogenous data company Order flow Define store and process orders from customers. Large data volumes Order tracing Intercompany and interfunction Input to planning. Material flow Define, store, and process orders to suppliers. Monitor available materials. Large data volumes Material tracing Intercompany and interfunction Physical flow Monitor all events (materials, assemblies) Large data volumes Real time Intercompany and interfunction 84

84 Process type vs. Phase 85

85 Process type vs phase Phase/ Process type Product/p rocess design Procure Manufacture Distribute Plan Execute 86

86 Process type vs phase: AP Product/proces s design Supply Manufacture Distribute Strategic plan Plan 1 year Technology and market overview Plan new products/plants Survey suppliers -- Market studies. Customer studies Plan purchases Plan production Sales forecast and sales plan Plan 1 month Plan/assign design tasks Plan and assign purchases Plan production plant Plan distribution Plan 1 week Plan/assign design tasks Plan purchases. Expedite late supplies Plan production cells Plan / assign distribution tasks Process product data List of parts: specifications, designs List of suppliers. Bill of materials List of plants, machines, working cycles List of customers. Catalogue of products Physical flow Store and distribute designs, specs Move parts and assemblies. Monitor state of production. Manage and ship products. Manage inventories Orders flow Send orders to suppliers Send orders to production Receive orders Material flow Test and store received parts

87 Product and process data PLM tools: product lifecycle management Storage, retrieval, processing Change management Bill of Materials (BOM) For each end product, list of parts What supplies are needed for product Y? What is cost of supplies? What categories of supplies are needed for product Y? What parts are common between X and Y? Production cycle For each end or intermediate product, list of manufacturing / assembly operations 88

88 Ex. BoM Product (A) Part (1) Part (2) Part (3) Part (1.1) Part (1.2) Part (1.3) Part (3.1) Part (3.2) 89

89 Common acronyms and functions CAD CAM systems Product design PLM (Product Lifecycle Management) Store and process designs Planning (Manufacturing Resource Planning) From product data (BOM) and customer orders, define orders for suppliers Execution (CIM) From product data (production cycle) control manufacturing 90

90 CIM Computer Integrated Manufacturing Planning and execution specific to manufacturing phase Level Function Technologies Machine Execute physical process PLC (Prog. Logic Controller) base on microprocessors Cell Area Coordination of flows among machines/resources (sequencing, integration, resource sharing) Executive planning of area Physical movement of materials Microprocessor supervised by PCs or ad-hoc computers Local networks with medium sized servers Plant Production planning Local networks with plant servers Company Raw material procurement Inter-plant systems Company-wide network and servers

91 Manufacturing company 92

92 SCOR Supply Chain Operation Reference members Extension/variation of AP for manufacturing industries 93

93 SCOR - processes High level processes Plan Execute Source: supplies Make: production Deliver: shipping and distribution Return: defective products or supplies Enable Preparation storage and processing of information for Plan and Execute 94

94 SCOR - levels Three levels Top level (plan, source etc) Configuration level High level processes are configured to company. Ex: Make -> make to order vs make to inventory vs make to design Process element Low level processes 95

95 SCOR 97

96 Segmentations by vendors 98

97 Segmentation, car rental 99

98 Segmentation, waste management

99 Segmentation by vendor Previous example by SAP Similar available by Oracle,.. Of course Non neutral Non standard Non interoperable 101

100 Segmentation by integrators Accenture, HP, IBM, PriceWaterhouse.. Private non disclosed know how of the companies Often matching the ones of vendors 102

101 Open segmentations Efforts to define open, public segmentations Business process management initiative - EU Open process handbook initiative - US 103

102 Acronyms ES ERP CAD CAM PLM CIM SCM MRP.. CRM 104

103 Summary High level models classify business processes using different criteria Business functions and organization levels Support, management, primary Business domain Segmentations by domain Business process are not described in detail However these models are important to provide a holistic view, to drive analysis and design of ISs 105