ORGANIZATIONS, PROCESSES, AND INFORMATION SYSTEMS Summer 2010 Fundamentals of Business Information Systems Fundamental purpose of a business Sustain ongoing business operations by meeting a need of a targeted customer base in a mutually beneficial manner. Maintaining or enhancing investment of owners. Progressively evolving to meet the demands of an ever-changing customer. Often, having a profit focus. 1
Global Business Increased competition Diverse sourcing and selling Focus on efficiency Distributed business operations IT embedded throughout processes Transactional support (OLTP) vs. Analytics (improvement/strategic) support (OLAP) Workforce demands : routine, structured tasks. : less structured work that involves processing or acting on information. Creates, receives, processes, or interprets information. 2
Business structure Functional areas Based on division-of-labor, specialization principles Isolated Kingdoms 3
Business Processes, Business Models : A collection of activities each taking in input and creating output performed by 1 or more functional areas that creates value for a customer. A distinct method of structuring business processes:. : description of and related employed by a company and its partners leading to for a customer and sustaining ongoing operation. Encompasses what a business is doing, how, and why. Cross-functional Business Processes Essentials of Business Processes and Information Systems by Magal and Word 4
Sales Order Process (Order-to-Cash) Process Integration Sales Order Entry Determine Needed Materials Check Availability Purchase Requisition Procurement Process Purchase Order Goods of Payment Sales Order Process Pick Materials Payment to Vendor Invoice Invoice Customer Post Goods Issue Based on material in Intro to ERP, SAP University Alliances Curriculum 5
Process Integration Purchase Requisition Convert Production Proposal Schedule and Release Run MPS w/mrp Production Check Process Completion Availability Sales Order Confirmation Entry Quality Sales Order Goods Pick Inspection Process Materials of Payment Invoice Customer Post Goods Issue Order Settlement Purchase Order Procurement Process Goods Issue Payment to Vendor Goods Invoice Based on material in Intro to ERP, SAP University Alliances Curriculum Information Silos Historically, functional areas maintained independent information systems. Systems not designed to interface with one another. Information exchange often paper based. Coordinating information exchange and cross-functional handoffs problematic. Unified system for data handling can provide efficiencies and permit more effective management. 6
Paper-based Process Essentials of Business Processes and Information Systems by Magal and Word Unified Process with EIS Essentials of Business Processes and Information Systems by Magal and Word 7
Key process flows Essentials of Business Processes and Information Systems by Magal and Word SAP History "I think the most profound effect R/3 has had is the general availability of real-time information. Within a company, somebody is fulfilling a task. The task ends. And all information that was affected by this task is available immediately in the new form. That means you can improve workflow significantly. In conventional organizations, it's a sequential process. You have to pass the work forward. Something changed, and somebody else has to react to that. From the beginning, it was our idea that everyone could do everything at once. You would have access to current information wherever you were and could get everything that you wanted to know. We had to struggle for years on end. People debated this and said that is not the right way of looking at things. Now that has changed because of the Internet." Hasso Plattner, CEO, co-chairman, and co-founder of SAP AG Anticipating Change: Secrets Behind the SAP Empire 8
Role of Enterprise Systems/ERP Helps companies Providing supporting automation Information handling embedded in the process Automatic capture (internal and external sources) ERP is as much a philosophy and way of doing business as it is a technology. Copyrights Microsoft, Windows, Excel, Outlook, and PowerPoint are registered trademarks of Microsoft Corporation. IBM, DB2, DB2 Universal Database, System i, System i5, System p, System p5, System x, System z, System z10, System z9, z10, z9, iseries, pseries, xseries, zseries, eserver, z/vm, z/os, i5/os, S/390, OS/390, OS/400, AS/400, S/390 Parallel Enterprise Server, PowerVM, Power Architecture, POWER6+, POWER6, POWER5+, POWER5, POWER, OpenPower, PowerPC, BatchPipes, BladeCenter, System Storage, GPFS, HACMP, RETAIN, DB2 Connect, RACF, Redbooks, OS/2, Parallel Sysplex, MVS/ESA, AIX, Intelligent Miner, WebSphere, Netfinity, Tivoli and Informix are trademarks or registered trademarks of IBM Corporation. Linux is the registered trademark of Linus Torvalds in the U.S. and other countries. Oracle is a registered trademark of Oracle Corporation. HTML, XML, XHTML and W3C are trademarks or registered trademarks of W3C, World Wide Web Consortium, Massachusetts Institute of Technology. Java is a registered trademark of Sun Microsystems, Inc. Presentation prepared by and copyright of Dr. Tony Pittarese, East Tennessee State University, Computer and Information Sciences Dept. (pittares@etsu.edu) Podcast lecture related to this presentation available via ETSU itunesu. JavaScript is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by Netscape. SAP, R/3, SAP NetWeaver, Duet, PartnerEdge, ByDesign, SAP Business ByDesign, and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Business Objects and the Business Objects logo, BusinessObjects, Crystal Reports, Crystal Decisions, Web Intelligence, Xcelsius, and other Business Objects products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of Business Objects S.A. in the United States and in other countries. Business Objects is an SAP company. Other products mentioned in this presentation are trademarks of their respective owners. 9