Download An Enterprise System

GBS 789 – LECTURE NOTES 9
MANAGEMENT INFORMATION SYSTEMS
UNIVERSITY OF LUSAKA
N. MOOLA
+260 977 781975
[email protected]
Enterprise Systems Concepts
An Enterprise System is an overall combination of computer
hardware and software that a business uses to organize and
run its operations. It must be able to be used by all parts and all
levels of an enterprise.
Enterprise Systems are normally large-scale application
software that support business processes, information flows,
reporting, and data analytics in complex organizations.
For example, an integrated enterprise system will generally
handle more than one operation for a company to facilitate its
business operations and management reporting needs.
The word enterprise can have various connotations. Frequently
the term is used only to refer to very large organizations such
as multi-national companies or public-sector organizations.
However, the term may also be used to mean business entity or
organization.
Enterprise Resource Planning
Enterprise Resource Planning (ERP)
Enterprise Resource Planning (ERP) is a cross-functional
enterprise system driven by an integrated suite of software
modules that supports the basic business processes of a company.
Enterprise Resource Planning (ERP) gives a company an
integrated real-time view of its core business processes such as
production, order processing, and inventory management, tied
together by ERP applications software and a common database
maintained by a database management systems.
Enterprise Resource Planning (ERP) systems track business
resources (such as cash, raw materials, and production capacity)
and the status of commitments made by the business (such as
customer orders, purchase orders, and employee payroll), no
matter which department (manufacturing, purchasing, sales,
accounting, projects, human resources and so on) has entered the
data into the system.
Enterprise Resource Planning (ERP) facilitates information
flow between all business functions inside the organization, and
manages connections to outside stakeholders.
Building a single software program that serves the needs of
people in finance as well as it does the people in human
resources and in the warehouse is a tall order. Each of those
departments would normally have their own computer systems,
optimized for a particular way that the department does its work.
However, ERP combines them all together into a single,
integrated software program that runs off a single database so
that the various departments can more easily share information
and communicate with each other.
That integrated approach can have a tremendous payback if
companies implement and manage the software correctly.
Take a customer order, for example. Typically, when a customer
places an order, that order begins a mostly paper-based journey
from one in-basket to another in-basket around the company,
often being keyed and rekeyed into different departments’
computer systems along the way.
All that lounging around in in-baskets causes delays and lost
orders, and all the keying into different computer systems
invites errors.
Meanwhile, no one in the company truly knows what the status
of a particular order is at any given point because there is no
way for the finance department, for example, to get into the
warehouse’s computer system to see whether the item has
been shipped.
ERP vanquishes the old standalone computer systems in
finance, HR, manufacturing and the warehouse, and replaces
them with a single unified software program divided into
software modules that roughly approximate the old standalone
systems.
Finance, manufacturing and the warehouse all still get their own
software, except now the software is linked together so that
someone in finance can look into the warehouse software to
see if an order has been shipped.
For example, when a customer service representative enters a
customer order into an ERP system, he has all the information
necessary to complete the order, such as the customer’s credit
rating and order history from the finance module, the company’s
inventory levels from the warehouse module and the shipping
dock’s trucking schedule from the logistics module.
People in different departments all see the same information
and can update it. When one department finishes with the order
it is automatically routed via the ERP system to the next
department.
To find out where the order is at any point, you need only log in
to the ERP system and track it down. With luck, the order
process moves like a bolt of lightning through the organization,
and customers get their orders faster and with fewer errors than
before.
ERP can apply that same magic to the other major business
processes, such as employee benefits or financial reporting.
That, at least, is the dream of ERP. The reality is much harsher.
Let’s go back to those inboxes for a minute. That process may
not have been efficient, but it was simple.
Finance did its job, the warehouse did its job, and if anything
went wrong outside of the department’s walls, it was somebody
else’s problem. Not anymore.
With ERP, the customer service representatives are no longer
just typists entering someone’s name into a computer and
hitting the return key. The ERP screen makes them business
people.
It flickers with the customer’s credit rating from the finance
department and the product inventory levels from the
warehouse. Will the customer pay on time? Will we be able to
ship the order on time?
These are decisions that customer service representatives have
never had to make before, and the answers affect the customer
and every other department in the company.
But it’s not just the customer service representatives who have
to wake up. People in the warehouse who used to keep
inventory in their heads or on scraps of paper now need to put
that information online.
If they don’t, customer service representative will see low
inventory levels on their screens and tell customers that their
requested item is not in stock.
Accountability, responsibility and communication have to be
observed by all the participating departments.
People don’t like to change, and ERP asks them to change how
they do their jobs. That is why the value of ERP is so hard to pin
down.
The software is less important than the changes companies
make in the ways they do business. If you use ERP to improve
the ways your people take orders, manufacture goods, ship
them and bill for them, you will see value from the software.
If you simply install the software without changing the ways
people do their jobs, you may not see any value at all—indeed,
the new software could slow you down by simply replacing the
old software that everyone knew with new software that no one
knows.
Most vendors’ ERP software is flexible enough that you can
install some modules without buying the whole package.
Many companies, for example, will just install an ERP finance or
HR module and leave the rest of the functions for another day.
Digital Firms
Digital Firms
With the creation of an appropriate Information Technology
Infrastructure, we could facilitate an integration of information
across an enterprise, in which information flows seamlessly
from one part of the organization to another and from one
organization to its customers, suppliers, and business partners.
This level of information integration and flow leads to the
creation of digital firms.
Digital Firm is a general term for organizations that have
enabled core business relationships with employees,
customers, suppliers, and other external business partners
through digital networks.
Companies are increasingly beginning to depend on such an
infrastructure today to remain efficient and competitive.
Internet technology has emerged as the key enabling
technology for this digital integration.
The Internet is rapidly becoming the infrastructure of choice for
e-commerce because it offers businesses with an even easier
way to link with other businesses and individuals at a very low
cost.
It provides a universal and easy-to-use set of technologies and
technology standards for all organizations, no matter which
computer system or IT platform the organization is using.
Vendors of products and services now use the Internet to
distribute the information surrounding their wares, such as
product pricing, options, availability, and including delivery time.
The Internet can replace existing distribution channels or extend
them, creating outlets for attracting and serving customers who
otherwise would not patronize the company.
Internet technology is helping companies radically reduce their
transaction costs. Transaction costs include the cost of
searching for buyers and sellers, collecting information on
products, negotiating terms, writing contracts, and transporting
merchandise.
This information can easily be made available on web pages of
the firm.
Consumers and business owners/managers nowadays can now
get and do what they want without leaving the confines of their
rooms as long as they are connected to the internet.
E-Commerce
E-commerce
Electronic Commerce, commonly known as e-commerce or
eCommerce, consists of the buying and selling of products or
services over electronic systems such as the Internet and other
computer networks.
Electronic Commerce (e-commerce) is a general concept
covering any form of business transaction or information exchange
executed using information and communication technologies
(ICTs).
Electronic commerce or ecommerce is a term for any type of
business, or commercial transaction, whose transactions are done
across the Internet. It covers a range of different types of
businesses, from consumer based retail sites, through auction or
music sites, to business exchanges trading goods and services
between corporations. It is currently one of the most important
aspects of the Internet to emerge.
E-commerce
Ecommerce allows consumers to electronically exchange goods
and services with no barriers of time or distance. Electronic
commerce has expanded rapidly over the past years and is
predicted to continue at this rate, or even accelerate. In the near
future the boundaries between "conventional" and "electronic"
commerce will become increasingly blurred as more and more
businesses move sections of their operations onto the Internet.
Business to Business (B2B) refers to electronic commerce
between businesses. The other electronic commerce applications
are those of Business-to-Consumer (B2C) transactions. Carrying
out these transactions electronically provides vast competitive
advantages over traditional methods. When implemented properly,
ecommerce is often faster, cheaper and more convenient than the
traditional methods of bartering goods and services.
Characteristics of a Good E-Commerce Site
Accessibility – e-commerce sites should be working and
useable. Accessibility is about making sure that users are
able to browse the web, they can point and click, visually
skip over content they don't want to read, listen and watch a
video clip, and flick through for what they are looking for.
Simplicity – e-commerce sites should be easy to navigate
through and find the relevant services, products, and
information. Users should be able to easily read reviews,
view product information, check technical specifications, find
out what other people have purchased, etc.
Speed – e-commerce sites should loads fast. The web pages
should be light so as to open quickly even when the link /
connection to the internet is bad. Heavy pages that require
more bandwidth just to open will frustrate users.
Organization – e-commerce sites should have a well designed
structure that will make it easy for users to easily navigate
through and find the relevant information. Its search
functionality should also enable users to easily search within
its main categories.
Information – e-commerce sites should contain all the
information that the users may need, so as to make well
informed decisions. This can be provided in different format
such as text (summarized and detailed), pictures, video and
even chatting or talking to a sales person.
Customer Service – e-commerce site procedures, including
those for the return of purchased merchandise, should be
easy to do. Simply clicking on one’s account should bring
self-service screen that would enable users to handle a wide
range of customer service tasks.
General Benefits of E-Commerce
The benefits associated to e-commerce in relation to
conventional retail store can be summarized into three
categories as indicated below:
1. Convenience – Online stores are usually available 24 hours
a day, and many consumers have Internet access both at
work and at home; and on their phones. In addition, internet
kiosks are now quite wide spread.
Shopping can therefore be done anywhere and at any time.
In contrast, visiting a conventional retail store requires travel
and must take place during business hours.
2. Information and reviews – Online stores describe products
for sale with text, photos, live chatting, and multimedia files
(Multimedia includes a combination of text, audio, still
images, animation, video, or interactivity content forms).
Some online stores provide or link to supplemental product
information, such as instructions, safety procedures,
demonstrations, or manufacturer specifications. Some
provide background information, advice, or how-to guides
designed to help consumers decide which product to buy.
Some stores even allow customers to comment or rate their
items. There are also dedicated review sites that host user
reviews for different products.
3. Price and Selection – One benefit of shopping online is
being able to quickly seek out deals for items or services
provided by many different vendors. Search engines, online
price comparison services and discovery shopping engines
can be used to look up sellers of a particular product or
service.
Shipping a small number of items, especially from another
country, may be more expensive than making larger
shipments. However, shipping costs are not normally
applicable on soft goods and services.
Another major benefit for retailers is the ability to rapidly
switch suppliers and vendors without disrupting users'
shopping experience.
General Problems with E-Commerce
There are a number of current problems and issues with ecommerce, but the common ones are:
Fraud and Security Concerns – Given the lack of ability to
inspect merchandise before purchase, consumers are at higher
risk of fraud than when they engage in a face-to-face
transactions. Merchants also risk fraudulent purchases using
stolen credit cards or other related fraudulent online purchases.
Trust and Privacy – Many people do not trust e-commerce in
the sense that they will refrain from purchasing high-value
goods and services using this medium. Such mistrust seems
focused around issues such as the reluctance to release
personal information over the internet. This is an issue of
information privacy.
E-Business Versus E-Commerce?
E-Business Versus E-Commerce?
The terms e-business and e-commerce are now often seen and
used interchangeably. However, though related, they have
different meanings.
The “e” prefix means “electronic” which imply any activity or
transaction done without any physical exchanges or contact.
The dealings are done electronically or digitally, a thing made
possible with the rise / increase of digital communications.
E-commerce implies business transactions over the internet
where the parties involved are either selling or buying. The
transactions conducted in e-commerce basically involve the
transfer or handing over ownership and rights to products or
services.
E-Business Versus E-Commerce?
Technically, e-commerce is only a part of e-business because,
by definition, e-business refers to all online business
transactions including selling directly to consumers (ecommerce), dealing with manufacturers and suppliers, and
conducting interactions with partners.
E-commerce principally involves money exchanges in the
transactions. In e-business, as it is broader, it is not limited to
monetary transactions. All aspects in business are included like
marketing, product design, supply management, etc.
E-business is more about making great products,
brainstorming and giving quality service, planning about product
exposure and executing it.
E-Business Versus E-Commerce?
Well, of course, e-commerce is an integral part of the ebusiness process but in strict terms, it is the activity of selling
and buying.
In the same way that all squares are rectangles, but not all
rectangles are squares, all e-commerce companies are ebusinesses, but not vice versa.
E-business includes e-commerce but also covers internal
processes such as production, inventory management, product
development, risk management, finance, knowledge
management and human resources.
E-business strategy is more complex, more focused on internal
processes, and aimed at improvements in efficiency,
productivity and cost savings.
E-Business Versus E-Commerce?
E-Business is the overall strategy that includes E-commerce.
We can summarize the two terms as follows:
1. E-business is broader in scope and e-commerce is just an
aspect or a subset of it.
2. E-commerce only covers business transactions such as
buying and selling of goods and services over the internet.
3. E-business involves marketing, product design, consumer
service evaluation, and more.
The Internet and electronic networks are too important to
ignore in today's economy, so every business should have
some form of e-commerce strategy.
As your business grows, you can slowly start working on
an implementation for an e-business strategy as they can
be complicated to put into place.
After you gain experience and knowledge in the field of ecommerce, you have a much greater chance of success in
the e-business world.
Cloud Computing
Cloud Computing
Cloud Computing
Cloud computing is a computing model in which you access
software, server, storage, development and other computing
resources over the Internet, in a self-service manner,
Cloud Computing
In cloud computing, the word "cloud" (also phrased as "the
cloud") is used as a metaphor for "the Internet“. Therefore, the
phrase cloud computing means a type of Internet-based
computing, where different services (such as servers, storage
and applications) are delivered to an organization's computers
and devices through the Internet.
Cloud computing is an on-demand service that is obtaining
mass appeal in corporate data centres. The cloud enables the
data centre to operate like the Internet; and computing
resources to be accessed and shared as virtual resources in a
secure and scalable manner. Like most technologies, trends
start in the enterprise and shift to adoption by small business
owners.
In cloud computing, the services are delivered and used over
the Internet and are paid for by cloud customer (your business)
-- typically on an "as-needed, pay-per-use" business model.
The cloud infrastructure is maintained by the cloud provider, not
the individual cloud customer.
Cloud computing networks are large groups of servers and
cloud service providers that usually take advantage of low-cost
computing technology, with specialized connections to spread
data-processing chores across them.
This shared IT infrastructure contains large pools of systems
that are linked together.
The benefits of cloud computing is currently driving adoption.
In some companies, there is often a lack of time and financial
resources to purchase, deploy and maintain an infrastructure
(e.g. the software, server and storage).
In cloud computing, the companies can access these resources
using an Internet connection and Web browser.
You can expand (or shrink) services as your business needs
change.
The common pay-as-you-go subscription model is designed to
let companies easily add or remove services and you typically
will only pay for what you do use.
The concerns that people raise about cloud computing have not
changed much either.
They continue to revolve around reliability, security and
support questions, such as how do providers protect your
data? What happens if a service goes down, and you can’t
access the application or your data?
Even highly reputable cloud providers, including Amazon,
Google, Intuit and Microsoft, have experienced outages.
Customers still need to do their homework and get details from
providers on uptime guarantees, data protection, service levels
and other policies and practices.
To prevent unauthorized access to data, users are increasingly
adopting intelligent third-party key management systems to help
secure their data.
Cloud Computing – Common Service Models
The cloud is a very broad concept, and it covers just about
every possible sort of online service.
However, when businesses refer to cloud procurement, there
are usually three main models of cloud service under
consideration:
- Infrastructure as a Service (IaaS),
- Platform as a Service (PaaS), and
- Software as a Service (SaaS).
We shall look at each of the three models and also explore the
difference among them.
1. Infrastructure as a Service (IaaS)
Providers of IaaS offer computers – physical or (more often)
virtual machines – and other resources.
IaaS cloud providers supply these resources on-demand from
their large pools installed in data centers.
For wide-area connectivity, customers can use either the
Internet or carrier clouds (dedicated virtual private networks).
To deploy their applications, cloud users install operatingsystem images and their application software on the cloud
infrastructure.
In this model, the cloud user patches and maintains the
operating systems and the application software.
2. Platform as a Service (PaaS)
In the PaaS models, cloud providers deliver a computing
platform, typically including operating system, programming
language execution environment, database, and web server.
Application developers can develop and run their software
solutions on a cloud platform without the cost and complexity of
buying and managing the underlying hardware and software
layers.
With some PaaS offers like Microsoft Azure and Google App
Engine, the underlying computer and storage resources scale
automatically to match application demand so that the cloud
user does not have to allocate resources manually.
Platform as a service (PaaS) provides a computing platform.
3. Software as a Service (SaaS)
In the business model using software as a service (SaaS),
users are provided access to application software and
databases. Cloud providers manage the infrastructure and
platforms that run the applications.
In the SaaS model, cloud providers install and operate
application software in the cloud and cloud users access the
software from cloud clients (thin-client model arrangement).
Cloud users do not manage the cloud infrastructure and
platform where the application runs.
This eliminates the need to install and run the application on the
cloud user's own computers, which simplifies maintenance and
support. To accommodate a large number of cloud users, cloud
applications can be multitenant, that is, any machine serves
more than one cloud user organization.
Cloud Computing – Common Deployment Models
1. Private Cloud
Private cloud is cloud infrastructure operated solely for a
single organization, whether managed internally or by a thirdparty, and hosted either internally or externally.
Undertaking a private cloud project requires a significant
level and degree of engagement to virtualize the business
environment, and requires the organization to re-evaluate
decisions about existing resources.
When done right, it can improve business, but every step in
the project raises security issues that must be addressed to
prevent serious vulnerabilities.
2. Public Cloud
A cloud is called a "public cloud" when the services are
rendered over a network that is open for public use. Public
cloud services may be free or offered on a pay-per-usage
model.
Technically there may be little or no difference between
public and private cloud architecture, however, security
consideration may be substantially different for services
(applications, storage, and other resources) that are made
available by a service provider for a public audience and
when communication is effected over a non-trusted network.
Generally, public cloud service providers like Amazon AWS,
Microsoft and Google own and operate the infrastructure at
their data center and access is generally via the Internet.
3. Hybrid Cloud
Hybrid cloud is a composition of two or more clouds (private,
community or public) that remain distinct entities but are
bound together, offering the benefits of multiple deployment
models.
It can also be defined as a cloud computing service that is
composed of some combination of private, public and
community cloud services, from different service providers.
A hybrid cloud service crosses isolation and provider
boundaries so that it can’t be simply put in one category of
private, public, or community cloud service.
Varied use cases for hybrid cloud composition exist.
i)
For example, an organization may store sensitive client
data on a private cloud application, but interconnect that
application to a business intelligence application provided
on a public cloud as a software service.
ii) Another example, an organization might use a public cloud
service, such as Amazon Simple Storage Service (Amazon
S3) for archived / analytical data but continue to maintain
the private cloud for operational customer data.
The hybrid approach allows a business to take advantage of the
scalability and cost-effectiveness that are offered by different
cloud models.
4. Community Cloud
Community Cloud shares infrastructure between several
organizations from a specific community with common
concerns (security, compliance, jurisdiction, etc.), whether
managed internally or by a third-party, and either hosted
internally or externally.
The costs are spread over fewer users than a public cloud
(but more than a private cloud), so only some of the cost
savings potential of cloud computing are realized.
5. Other Deployment Models
Other common deployment models include distributed cloud,
intercloud, multicloud, etc.
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