BIS I - Enterprise Application Systems Flashcards
Enterprise Application Landscape: System types for all operational/management levels and functional areas of the business.
- On strategic level: AS supporting long-term planning of senior management. Target Group: Senior management. “Executive Support Systems”. Exemplary functionality: 5-year sales forecast, 5-year business plan
- On Management level: AS supporting management decisions, accounting and control, planning and administration. Target group: middle management. E.g. Management Information Systems (narrow sense), Decision Support Systems. Exemplary functionality: sales analysis.
- On Operative level: AS that execute and monitor the basic company operations and transactions. Target Group: Managers for operative tasks/teams. E.g. Transaction Processing Systems. Exemplary functionality: personnel accounting/accounts payable; material planning; order processing.
Transaction Processing Systems (TPS) – operative-level AS
- Serve operational managers and staff
- Perform and record daily routine transactions
- E.g. sales order entry, payroll, shipping
- Allow managers to monitor status of operations and relations with external environment
- Serve predefined, structured goals and decision making
Management Information Systems (MIS) – middle-management level
- Provide reports on firm’s current performance, based on data from TPS
- Provide answers to routine questions with predefined procedure for answering them
- Typically have little analytic capability
Decision support systems (DSS) – middle management level
- Support Non-routine decision making, e.g. “What is the impact on production schedule of December sales doubled?”
- May use external information as well as TPS/MIS data
- Model-driven DSS, e.g. voyage-estimating systems
- Data-driven DSS, e.g. marketing analysis systems
Executive Support Systems (ESS) – support senior management
- Address non-routine decisions, i.e. requiring judgement, evaluation, and insight
- Incorporate data about external events (e.g. new tax laws or competitors) as well as summarized information from internal MIS and DSS
- E.g.: digital dashboard with real-time view of firm’s financial performance: working capital, accounts receivable & - payable, cash flow, and inventory
Decision Support: decision-making groups and their information requirements
1) Decision characteristics on strategic level (senior management): unstructured, exemplary decision: entrance or exit from markets or approve capital budget
2) Decision characteristics on management level (middle management): semi-structured. Exemplary decision: design marketing plan or develop departmental budget.
3) Decision characteristics on operative level (operational management, teams, individual employees): structured. Exemplary decision: restock inventory, offer credit to customers, determine special offers to customers
Enterprise Application Landscape – Across Functional and Organizational Boundaries (!)
- On Strategic level: Business Intelligence Systems (BI) are used
- On the Management-level, Supply Chain Management Systems (SCM), Enterprise Resource Planning Systems (ERP) and Customer Relationship Management Systems (CRM) are used
- On Operative Level, Knowledge Management Systems (KMS) are used
- Other systems, e.g. E-Business, E-Commerce, E-Government, Social Networking (Business) and Enterprise Social Networking interfere with employees on all levels
Enterprise Resource Planning (ERP) Systems
- Suite of integrated software modules and a common central database
- Collects data from many divisions of a firm for use in nearly all of the firm’s internal business activities
- Information entered in one process is immediately available for other processes
- Standard ERP: built around thousands of predefined business processes that reflect best practices
- Implementation by (a) selecting system functions, (b) mapping business processes to software processes, (c) software configuration tables for customizing
Customer Relationship Management (CRM) Systems
- Examine customers from a multifaced perspective
- Use integrated applications to address all aspects of the customer relationship:
o Customer service: e.g. call center data, web self-service data
o Sales: e.g. telephone sales, web sales, etc.
o Marketing: e.g. campaign data, data analysis, etc.
Further Related Applications:
o Partner Relationship Management (PRM): integrating lead generation, pricing, promotions, order configurations, and availability; tools to assess partners’ performances
o Employee Relationship Management (ERM): setting objectives, employee performance management, performance-based compensation, employee training
o Sales force automation (SFA): sales prospect and contact information, sales quote generation capabilities
o Customer Service: assigning and managing customer service requests, web-based self-service capabilities
o Marketing: capturing prospect and customer data, scheduling and tracking direct-marketing mailings or e-mail, cross-selling
o Social CRM: integrating social media/services
Supply Chain Management (SCM) Systems
- Supply chain planning and execution systems
o Model existing supply chain
o Enable demand planning
o Optimize sourcing, manufacturing plans
o Identify transportation modes
o Manage flow of products through distribution centers and warehouses
Manufacturing Ecosystems
- Business value of SCM systems and systems for manufacturing ecosystems
o Match supply to demand; reduce inventory levels
o Improve delivery service; speed product time to market
o Use assets more efficiently
o Reduced supply chain costs lead to increased profitability
o The future internet-driven supply chain operates like a digital logistics nervous system:
Provides multidirectional communication among networks of firms, firms alone and e-marketplaces such that stakeholders can adjust inventories, orders and capacities in real-time
Business Value of Enterprise-wide application systems
1) Principle
a. Earlier AS oriented at business functions; result: “data islands”
b. Current AS are process-oriented:
i. Link decision and operational processes
ii. Information objects (e.g. customer order) cross various business functions
2) Benefits
a. Increase operational efficiency (coordination of internal/external processes; increased responsiveness in all business functions)
b. Provide firm-wide information to support decision-making
c. Enable rapid responses to customer requests for information or products
d. Include analytical tools to evaluate overall organizational performance
3) Challenges:
a. Expensive to purchase & implement enterprise applications
b. Technology & business process changes
c. Organizational learning & changes
d. Switching costs, dependence on software vendors
e. Data standardization, management, cleansing,
f. Standard software: often missing realization of strategic value due to incompatibility to own business processes
Integration (!): computer science definition
– linking people, tasks and technology into a unified whole, to counteract the consequences of the division of labor and specialization; and to transcend boundaries between functions, processes and departments
Electronic Data Interchange (EDI) – For transactions with suppliers
- Used to automate transactions for B2B e-commerce and continuous inventory replenishment
- Computer-to computer exchange of standard transactions, e.g. invoices
- Major industries have EDI standard, that define the structure and information fields of electronic documents, e.g. EDIFACT (EDI for administration, commerce, transport)
- Companies are increasingly moving toward private networks, that allow them to link a wider variety of firms than EDI allows and share a wider range of information in a single system
