Principles of Information Systems, Thirteenth Edition PDF

Principles of Information Systems, Thirteenth Edition Chapter 8 Enterprise Systems © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in wh...

Principles of Information Systems, Thirteenth Edition Chapter 8 Enterprise Systems © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain 1 product or service or otherwise on a password-protected website for classroom use.  Objectives After completing this chapter, you will be able to: Identify the basic activities and business objectives common to all transaction processing systems Describe the transaction processing systems associated with the order processing, purchasing, and accounting business functions Identify the basic functions performed and benefits derived from implementing an enterprise resource planning system, customer resource management, and product lifecycle management system Identify tips for avoiding many of the common causes for failed enterprise system implementations © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.  Transaction Processing Systems Transaction processing systems (TPSs): Capture and process data about fundamental business operations A TPS provides valuable input to: Management information systems Decision support systems © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 3 or otherwise on a password-protected website for classroom use. Transaction Processing Systems © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 4 or otherwise on a password-protected website for classroom use.  TPS Categories based on the Nature of Transactions Batch processing systems Transactions are collected over a period and processed in batches at a scheduled time Essential characteristic: the delay between an event and the processing of the related transaction Examples: payroll processing (‫)الرواتب‬, monthly utility bill processing (‫)فواتير الكهرباء‬ Online transaction processing (OLTP) systems Real-Time transactions: handles individual transactions in real-time Immediate response: transaction is processed immediately At any time, the data in an OLTP system reflects the current status Examples: online banking transactions and e-commerce purchases © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 5 or otherwise on a password-protected website for classroom use. Traditional Transaction Processing Methods and Objectives © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 6 or otherwise on a password-protected website for classroom use.  Traditional Transaction Processing Methods and Objectives In the past, organizations used a mix of systems to do the tasks shown in Figure 8.4 These systems could be developed in-house, developed by outside contractors, or bought off-the-shelf Making all these systems work well together usually needed a lot of changes to the software In some cases, it was necessary to print data from one system and then manually reenter it into other systems - This increased the amount of effort required and increased the likelihood of processing delays and errors Today, the trend is to use one set of systems from one company for most or all of the tasks shown in Figure 8.4 Are easy to install and operate with a low total cost of ownership Have an initial cost of a few hundred to a few thousand dollars ‫رواء‬ © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 7 or otherwise on a password-protected website for classroom use.  Traditional Transaction Processing Methods and Objectives Organizations expect their TPSs to: Capture, process, and update databases Ensure that the data is processed accurately and completely Avoid processing fraudulent transactions - ‫ تجنب عمليات احتيالية بنكية‬،‫على سبيل المثال‬ Produce timely user responses and reports Help improve customer service Reduce labor requirements - For example, using self-checkout systems [link] - Ethical concern with self-checkout systems: accessibility [link] © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 8 or otherwise on a password-protected website for classroom use.  TPS Categories based on their Functionalities 1. Order processing systems Streamline the entire order lifecycle, from the placement of an order to its delivery - Taking Orders: It starts when a customer places an order - Checking Inventory: Next, the system looks at what's in stock to see if there's enough to fill the order (‫)هل المخزون كاف لتلبية الطلب؟‬ - Preparing the Order: If everything's available, a list is made of what needs to be gathered from the warehouse, and the inventory gets updated - Creating Invoices: Once the order is ready, the system makes a bill for the customer Examples: Amazon and Noon 2. Point of sale (POS) systems POS systems are used in retail stores (‫ )المتاجر‬and restaurants where transactions occur in-person Examples: Jarir and eXtra use POS systems in their physical stores POS systems usually include the following features: - Transaction processing: including item scanning, payment processing, and receipt generation - Inventory management - Sales reporting - Customer management (using loyalty cards for example) © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 9 or otherwise on a password-protected website for classroom use.  TPS Categories based on their Functionalities 3. Accounting systems Track the flow of data related to all the financial transactions that impact the organization 4. Purchasing systems Support the purchasing business function [link] Inventory control, purchase order processing, receiving, and accounts payable 5. Reservation systems Manage bookings and reservations, commonly used in industries like travel, hospitality, and entertainment © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 10 or otherwise on a password-protected website for classroom use.  Data Collection in Transaction Processing Systems Capturing and gathering all data necessary to complete the processing of transactions Data collection can be: Manual Automated via special input devices Source data automation Involves capturing data at its source and recording it accurately in a timely fashion with minimal manual effort and in an electronic or digital form so that it can be directly entered into the computer Example: a scanner reading a UPC code © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 11 or otherwise on a password-protected website for classroom use.  Enterprise Resource Planning (ERP) Systems An ERP system is central to organizations of all sizes Ensures that information can be shared across all business functions to support the running and managing of a business The ultimate goal is to: satisfy customers (by improving service) and to reduce costs Businesses rely on enterprise systems to perform daily activities in areas such as: Product supply and distribution Sales and marketing Human resources Manufacturing Accounting and taxes © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 12 or otherwise on a password-protected website for classroom use.  Enterprise Resource Planning Enterprise resource planning (ERP) A set of integrated programs that manage a company’s vital business operations for an entire organization Business process A series of interrelated tasks or activities performed within an organization to achieve a specific goal - ‫مثل اجراء اخالء طرف‬ ERP systems are designed to optimize and manage business processes effectively © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 13 or otherwise on a password-protected website for classroom use. Enterprise Resource Planning © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 14 or otherwise on a password-protected website for classroom use.  Advantages of ERP Improved access to quality data for operational decision making i.e., provide a global view of operational/planning data Improved business processes i.e., streamline core business operations ‫ التخلص من العمليات الغير ضرورية في اجراء العمل‬،‫على سبيل المثال‬ Improved customer service © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 15 or otherwise on a password-protected website for classroom use.  Leading ERP Systems ERP vendors are classified intro tiers: Tier I vendors – target large multinational firms Tier II vendors – target medium-sized firms Tier III vendors – target smaller firms © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 16 or otherwise on a password-protected website for classroom use.  Leading ERP Systems Large organizations were the first to take on the challenge of implementing ERP Lately, ERP software vendors created new solutions for smaller companies Cloud-based solutions are available ERP systems: SAP Oracle Microsoft Dynamics 365 Open-source ERP system: Odoo Customization might be required for many reasons such as: Integration with other existing systems Unique business processes/ business requirements © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 17 or otherwise on a password-protected website for classroom use.  Legal Compliance is Key for ERP System Adoption ‫ مثال محلي على‬:)e-Invoicing( ‫ الفوترة االلكترونية‬ ERP ‫تأثير التشريعات في تبني أنظمة ال‬ © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 18 or otherwise on a password-protected website for classroom use. Overcoming Challenges in Implementing Enterprise Systems © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 19 or otherwise on a password-protected website for classroom use.  Supply Chain Management Supply chain management (SCM) includes planning, executing, and controlling all activities involved in: Sourcing raw materials Converting raw materials to finished products Warehousing and delivering finished product to customers © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 20 or otherwise on a password-protected website for classroom use.  Supply Chain Management SCM manages materials, information, and finances as they move from: Supplier -> Manufacturer -> Wholesaler -> Retailer -> Consumer Supply chain organizations are “linked” together through both physical flows and information flows Physical: supplies and raw materials Information: participants communicating their plans regarding the efficient flow of goods and material The information system (i.e., the SCM system) plays an integral role in the supply chain process © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 21 or otherwise on a password-protected website for classroom use.  Customer Relationship Management CRM is used to capture and view data about customers and to improve communications CRM software: Automates and integrates the functions of sales, marketing, and service in an organization Examples: Salesforce Zoho CRM [link1, link2] © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 22 or otherwise on a password-protected website for classroom use.  Customer Relationship Management Key features of a CRM system include: Contact management - To store and manage customer contact information Sales management - The ability to organize data about customers and sales leads and then to prioritize the potential sales opportunities Customer support - The ability to support “customer service representatives” so that they can quickly and appropriately solve customer issues while collecting and storing data about those interactions Analysis - To identify the firm’s “best customers,” and determine how to retain and find more of them Social networking - To enable businesses to monitor and engage with customers on social networking platforms © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 23 or otherwise on a password-protected website for classroom use.  Product Lifecycle Management Product lifecycle management (PLM) software Manages the data and processes associated with the various phases of the lifecycle of a product © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 24 or otherwise on a password-protected website for classroom use.  Product Lifecycle Management The scope of PLM software may include CAD, CAE, and CAM Computer-aided design (CAD) The use of software to assist in the creation, analysis, and modification of the design of a component or product Computer-aided engineering (CAE) The use of software to analyze the robustness and performance of components Computer-aided manufacturing (CAM) The use of software to control machine tools (e.g., robots) in the manufacture of components and products © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 25 or otherwise on a password-protected website for classroom use. Product Lifecycle Management © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 26 or otherwise on a password-protected website for classroom use.  Example: Car Manufacturing CAD Creates digital 3D models of cars and their components Allows for precise design, visualization, and collaboration CAE Performs virtual simulations to analyze performance, safety, and functionality Helps identify and address potential issues before physical prototypes are built CAM Translates digital designs into instructions for automated manufacturing equipment Ensures precise and efficient production of car parts © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 27 or otherwise on a password-protected website for classroom use. Product Lifecycle Management © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 28 or otherwise on a password-protected website for classroom use.  Overcoming Challenges in Implementing Enterprise Systems Tips for avoiding a failed implementation Allow sufficient time to transition from the old way of doing things to the new system and new processes Allocate sufficient time and money training people Keep the scope of the project well defined and contained to essential business processes © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 29 or otherwise on a password-protected website for classroom use.  Hosted Software Model (i.e., SaaS) for Enterprise Software The goal is to help customers benefit from the new technology while avoiding much of the associated complexity and high start-up costs In other words, integrating cloud systems from different software companies can be challenging © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 30 or otherwise on a password-protected website for classroom use.  Summary An organization must have information systems 1) that support routine activities and 2) that help a company add value to its products and services An organization that implements an ERP system is creating a highly integrated set of systems, which can lead to many business benefits © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 31 or otherwise on a password-protected website for classroom use.