7-1 INTRODUCTION Successful IT systems provide an integrated view of: 1. Business 2. Extend analytical capabilities to users 3. Leverage a corporation's information and expertise 7-2 2007 The Companies, Inc. All rights reserved. INTRODUCTION Enterprises need to encompass a range of intelligence systems and analytical applications that include: Data warehouses and data marts Online analytical processing (OLAP) Decision support systems (DSSs) Executive information systems (EISs) 7-3 2007 The Companies, Inc. All rights reserved. 1
ENTERPRISE SYSTEMS An enterprise system (ES) - large software application that companies use to manage their operations Key way by which large organizations distribute content of all kinds to their: Workforce Suppliers Customers 7-4 2007 The Companies, Inc. All rights reserved. ENTERPRISE SYSTEMS 7-5 2007 The Companies, Inc. All rights reserved. ENTERPRISE SYSTEMS Enterprise systems are suited for information transactions They are the underlying information factory Enterprise systems offer the first great opportunity to achieve true connectivity A state in which everyone knows what everyone else is doing in the business all over the world at the same time 7-6 2007 The Companies, Inc. All rights reserved. 2
ERP Systems Enterprise resource planning (ERP) systems are software systems for business management, supporting areas such as planning, manufacturing, sales, marketing, distribution, accounting, financial, human resource management, project management, inventory management, service and maintenance, transportation, and e-business 7-7 2007 The Companies, Inc. All rights reserved. ERP Systems ERP systems allow companies to implement a single integrated system by replacing legacy information systems. Legacy information system (LIS) - represents a massive, long-term business investment; such systems are often brittle, slow, and nonextensible 7-8 2007 The Companies, Inc. All rights reserved. ERP Systems An ERP system is required to have the following characteristics: Modular design comprising many distinct business functions such as financial, manufacturing, distribution, and the like Centralized DBMS Integrated functions that provide seamless information flow among the functions Flexible, best business practices Functions that work in real-time Internet-enabled 7-9 2007 The Companies, Inc. All rights reserved. 3
Accounting Financial Manufacturing Production Transportation Core ERP Functions 7-10 Sales and distribution Human resource Supply chain Customer relationship E-business SAP (www.sap.com) Oracle/PeopleSoft (www.oracle.com) SSA Global (Baan) (www.ssaglobal.com) Microsoft (Great Plains) (www.microsoft.com) VENDOR/WEB ADDRESS ERP Systems 7-11 TARGET MARKET Large businesses Large businesses Large businesses Small-to-medium businesses 2007 The Companies, Inc. All rights reserved. ERP Systems ERP systems are big business At the top of the IT spending list is the ERP market The United States federal government will spend $7.7 billion on ERP products and services in fiscal year 2009 Up 37 percent from 2004 spending of $5.6 billion 7-12 2007 The Companies, Inc. All rights reserved. 4
Advantages ERP Systems Reliable information access Avoid redundant data and operations Cost reduction Disadvantages Time-consuming Expensive Vendor dependence Disruptive 7-13 2007 The Companies, Inc. All rights reserved. Evolution of ERP Systems 7-14 2007 The Companies, Inc. All rights reserved. ERP Vendors & Market Trends The top dominating ERP software suppliers are: SAP Oracle/PeopleSoft SSA Global Microsoft Together they control more than 70 % of the multi-billion dollar global market 7-15 2007 The Companies, Inc. All rights reserved. 5
ERP Vendors & Market Trends The ERP market has been growing at a rate more than 30 % The growth of the ERP market has been boosted both by business reasons as well as by technical reasons The main cited reason is globalization 7-16 2007 The Companies, Inc. All rights reserved. DEVELOPING AGILE IT SYSTEMS Business agility means being prepared for change at a moment s notice Factors to consider whenever you are developing an IT system - these are commonly referred to as the ilities : Availability Accessibility Reliability Scalability Flexibility Performance Capacity planning 7-17 2007 The Companies, Inc. All rights reserved. Availability Availability is determining when an IT system will be available for employees to access Most companies have IT systems available 24 x 7 x 365 7-18 2007 The Companies, Inc. All rights reserved. 6
Accessibility Accessibility is determining who has the right to access different types of IT systems and information Accessibility also means who can access or manipulate the information, whether they can create, read, update, and/or delete information 7-19 2007 The Companies, Inc. All rights reserved. Reliability Reliability ensures your IT systems are functioning correctly and providing accurate information Inaccurate information exists for many reasons: The information being entered incorrectly The information becoming corrupt 7-20 2007 The Companies, Inc. All rights reserved. Scalability Scalability refers to how well a system can adapt to increased demands A number of factors can affect organizational growth including: The market The industry The economy 7-21 2007 The Companies, Inc. All rights reserved. 7
Flexibility A single system can be designed in a number of different ways to perform exactly the same function When choosing which design to implement, think about the system s flexibility, or the system s ability to change quickly 7-22 2007 The Companies, Inc. All rights reserved. Performance Performance measures how quickly an IT system performs a certain process Benchmarks are baseline values a system seeks to attain Benchmarking is a process of continuously measuring system results, comparing those results to optimal system performance (benchmark values), and identifying steps and procedures to improve system performance 7-23 2007 The Companies, Inc. All rights reserved. Capacity Planning Capacity planning determines the future IT infrastructure requirements for new equipment and additional network capacity It s cheaper for an organization to implement an IT infrastructure that considers capacity growth at the beginning of a system deployment 7-24 2007 The Companies, Inc. All rights reserved. 8
INFORMATION SYSTEMS INFRASTRUCTURE An IT architecture is the blueprint for translating a business strategy into a plan An infrastructure is a relative term meaning the structure beneath a structure This definition implies different layers of structure, which provide support or services 7-25 2007 The Companies, Inc. All rights reserved. Why Architecture Matters The IT architecture identifies what information must be standardized corporate-wide and what will be standardized at a regional level An IT architecture specifies where and how information will be located and accessed 7-26 2007 The Companies, Inc. All rights reserved. Why Infrastructure Matters Global markets are creating enormous demands for increased information sharing A powerful, flexible IT infrastructure has become a prerequisite for doing business 7-27 2007 The Companies, Inc. All rights reserved. 9
Why Infrastructure Matters IT infrastructure should exhibit several key traits, such as: Efficiency Effectiveness Agility 7-28 2007 The Companies, Inc. All rights reserved. Why Infrastructure Matters Translating the architecture into an infrastructure entails creating details about certain technologies: Hardware Software Network Information 7-29 2007 The Companies, Inc. All rights reserved. INFORMATION TECHNOLOGY INFRASTRUCTURE There are four types of information technology infrastructures: 1. Decentralized infrastructure 2. Centralized infrastructure 3. Distributed infrastructure 4. Client/server infrastructure 7-30 2007 The Companies, Inc. All rights reserved. 10
Data location Management Ease Network performance Processing location User control INFORMATION TECHNOLOGY INFRASTRUCTURE Characteristics Cost efficiency Decentralized Moderate Distributed Simple Excellent Distributed Full 7-31 Centralized Excellent Centralized Easy Constrained Centralized Very limited Distributed Moderate Distributed Difficult Varies Distributed Varies Client/Server Very reasonable Distributed Moderate Constrained Shared Varies 2007 The Companies, Inc. All rights reserved. Decentralized Infrastructure A decentralized infrastructure involves little or no sharing of information systems Gives users the liberty to develop applications that meet their needs and maintain control over the applications they develop 7-32 2007 The Companies, Inc. All rights reserved. Decentralized Infrastructure 7-33 2007 The Companies, Inc. All rights reserved. 11
Centralized Infrastructure A centralized infrastructure involves sharing of information systems in one central area or one central mainframe Mainframes were originally the only computers available for business 7-34 2007 The Companies, Inc. All rights reserved. Centralized Infrastructure 7-35 2007 The Companies, Inc. All rights reserved. Distributed Infrastructure A distributed infrastructure involves distributing the information and processing power of IT systems via a network By connecting all the information systems via a distributed infrastructure, all locations can share information and applications 7-36 2007 The Companies, Inc. All rights reserved. 12
Distributed Infrastructure 7-37 2007 The Companies, Inc. All rights reserved. Client/Server Infrastructure A client/server infrastructure (or client/server network) has one or more computers that are servers which provide services to other computers, called clients The client/server infrastructure is a form of distributed infrastructure 7-38 2007 The Companies, Inc. All rights reserved. Client/Server Infrastructure 7-39 2007 The Companies, Inc. All rights reserved. 13
Disaster Recovery Plan A disaster recovery plan is a detailed process for recovering information or an IT system in the event of a catastrophic disaster such as a fire or flood A collocation facility is a company that rents space and telecommunications equipment from another company A disaster recovery cost curve charts (1) the cost of the unavailability of information and technology and (2) the cost of recovering from a disaster over time 7-40 2007 The Companies, Inc. All rights reserved. Disaster Recovery Plan 7-41 2007 The Companies, Inc. All rights reserved. INTEGRATING THE ENTERPRISE Integration allows separate applications to communicate directly with each other by automatically exporting data files from one application and importing them into another Building integrations between applications helps an organization maintain better control of its information 7-42 2007 The Companies, Inc. All rights reserved. 14
Why Integration Is Necessary Business process reengineering (BPR) is the analysis and redesign of workflow within and between enterprises Workflow defines all the steps or business rules, from beginning to end, required for a business process 7-43 2007 The Companies, Inc. All rights reserved. Motives for Integration An organization may choose to integrate because of its concerns about its operations, both with internal processes and external relationships Enterprise integration is viewed as a possible solution to a number of problems with internal organizational processes 7-44 2007 The Companies, Inc. All rights reserved. People Process Technology Integration Obstacles 7-45 2007 The Companies, Inc. All rights reserved. 15