Lecture 13 - IT Infrastructure: Large (Enterprise) Applications, ERP, Metrics

Question 1

Supply chain management (SCM)
and
Supply chain management (SCM) system

Answer 1

Supply chain management (SCM) tracks the movement of raw materials, work-in-process inventory, and finished goods from suppliers to producers and finally to consumers.

• A supply chain management (SCM) system is an IT system that supports supply chain management .

Question 2

Supply chain management (SCM) system

Must Address:

Answer 2

1. Fulfillment (right quantity of parts at the right time)
2. Logistics (transportation costs low)
3. Production (production lines function smoothly)
4. Revenue and profit (no sales lost due to lack of inventory)
5. Cost and price (amounts kept at acceptable levels)

Question 3

Goal of SCM

Answer 3

• Squeeze every possible cost out of the supply chain.

Question 4

Supply chain management (SCM) system

Techniques:

Answer 4

1. Distribution chain (path from origin to customer. Eg. Dell)
2. Just-in-Time (ensure parts/materials available just when needed)
3. InterModal Transport (mix of plane/ship/train/truck, etc)

Question 5

Primary Value Processes

Answer 5

• Primary value processes take in raw materials and then make, deliver, market, sell and service the organization’s products/services.

Question 6

Primary Value Processes

5 Steps in Value Chain:

Answer 6

1. Inbound logistics – receiving, warehousing, distributing raw materials to manufacturing
2. Operations – processing raw materials into finished products/services
3. Outbound logistics – warehousing and distributing finished products/services
4. Marketing and sales of finished products/services
5. Service – supporting customers after the sale

Question 7

Support value processes

Answer 7

Support value processes support the primary value processes:

1. Firm Infrastructure
2. Human Resource Management
3. Technology Development
4. Procurement

Question 8

Enterprise Systems (ES)
What is it and what 4 things does it include:

Answer 8

An ES is an organization’s umbrella application, used to share information across all parts of the organization. It includes:

1. Supply Chain Management (SCM)
2. Customer relationship management (CRM)
3. E-collaboration
4. Enterprise resource planning (ERP)

They are complex

Question 9

Customer Relationship Management (CRM)

What is a CRM system?

Answer 9

A CRM system uses information about customers to gain insight into their needs, wants, and behaviors (to serve them better)

Customers can be tracked through ALL phases of the purchase-cycle, not just when they are “ready to buy”

Question 10

Multi-channel service delivery

Answer 10

Multi-channel service delivery describes a company’s offer to let customers do business in a variety of ways e.g. e-mail, fax, phone, website

Question 11

CRM Front-office systems

Answer 11

CRM Front-office systems address the interaction with customers e.g. taking orders over the phone

Question 12

CRM Back-office systems

Answer 12

CRM Back-office systems fulfill and support customer orders e.g. perform the service customer ordered

Question 13

E-collaboration

• E-collaboration is using technology to support: (5 things)

Answer 13

1. Work activities for employees who are working together on a project (Integrated collaboration environments, or “ICE”: eg. workflow, doc-mgt )
2. Capture, organize and disseminate knowledge (i.e. know-how) with knowledge management systems
3. Social networking
4. Learning with e-learning tools
5. Informal collaboration to support open-source information which is available to the public

Question 14

ERP – Enterprise Resource Planning

The Vision:

Answer 14

The Vision: an Enterprise System… One Unified Organizational InfoSys

Question 15

ERP – Enterprise Resource Planning
The Vision:
Method 1 - System Integration

Answer 15

o Automatically Exporting data files from one system and
o Automatically Converting/Translating their contents and
o Automatically Importing them into another

Question 16

ERP – Enterprise Resource Planning
The Vision:
Method 2 - Enterprise applications

Answer 16

o Converting separate data stores to one database and
o Converting separate application libraries into one repository

This is superior but it requires large one-time conversion effort

Question 17

Today’s ERP is an ES

Answer 17

Today, ERP Integrates all functions

• ERP systems integrate all the information processes in the organization’s various functional areas.

Question 18

Benchmarking

Answer 18

Benchmarking is continuously measuring system results and comparing them to benchmarks (baseline values that the system should meet). This should help identify ways the performance of a system could be improved.

Question 19

Efficiency & Effectiveness Metrics

• Efficiency

Answer 19

• Efficiency is doing something in the right way so that it takes the least time and money, results in the fewest errors, etc.

Question 20

Efficiency & Effectiveness Metrics

• Effectiveness

Answer 20

• Effectiveness is doing the right thing e.g. getting users to buy when they visit a website.

Question 21

Infrastructure-centric metrics measure the efficiency, speed, and/or capacity of technology:
(6 Things)

Answer 21

1. Throughput – amount of information that can pass through a system in a given amount of time e.g. bandwidth
2. Transaction speed – speed at which a system can process a transaction
3. System availability – amount of system downtime
4. Accuracy – measure of the number of errors per thousand/million
5. Response time – average time it takes to respond to a user’s request, a mouse click, etc.
6. Scalability – measure of how well a system can adapt to meet increasing demands

Question 22

Web-centric metrics are:

Answer 22

Web-centric metrics are used to determine the success of Web and e-business initiatives:
o	Unique visitors 
o	Total hits
o	Page exposures
o	Conversion rate
o	Click-through
o	Cost-per-thousand
o	Abandoned registrations
o	Abandoned shopping carts

Question 23

Call center metrics

Answer 23

Call center metrics measures the success of call centers. Measurements may include:
o Abandon rate – number of callers who hang up before their call is answered
o Average speed to answer (ASA) – average time it takes for a call to be answered by a person
o Time service factor (TSF) - percentage of calls answered within a specific time frame
e.g. within 90 seconds
o First call resolution (FCR) - percentage of calls that are resolved so the customer doesn’t have to call back

Question 24

Financial metrics

Answer 24

Financial metrics (capital analysis financial models) show the success of IT initiatives in terms of dollars and cents. Common financial metrics include:
o Payback method (number of years it takes to recoup costs based on the projected annual net cash flow)
o Cost-benefit ratio (comparison of benefits to costs)
o Return on investment (value compared to useful life expressed as a percentage)
o Net present value (total net present value of all cash flows over the life of the initiative)
o Internal rate of return (net present value expressed as percentage return)