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Information and Communication Technology

(ICT) -

ESP 1
What are enterprise wide systems?

• Information systems that allow organisations


to integrate information across operations on
an organisation-wide basis
• As opposed to various business processes
being supported by applications running on
different computing platforms
• DIFFERENCE: integration and communication

ESP 2
Enterprise wide systems:
• Allow organisations to wipe out some of
the inefficiencies created by separate
IS (known as legacy systems)
– Re entering information
– Inability to share data between systems
– Duplication of data in different
departments
• Adds a common data warehouse –
single place where all info is stored &
accessed
ESP 3
• Rather than information flowing from one department
to next, data is accessed and updated, so next
business activity can access whenever required
• Sharing gives access to accurate, real time
information
• Storing data in single place and making it available
empowers everyone to be aware of current state of
business and perform jobs better
• Central repository of info common to all users
• Common user interface – share info seamlessly
• Globablisation of customer and supplier networks
given new opportunities and methods to conduct
business
• The need to give good quality customer service
ESP 4
Recommendations for Success
Secure Executive Sponsorship
The highest level support is required to obtain resources and
make and support difficult reengineering decisions

Get Help from Outside Experts


Implementation success is enabled by deep application
experience and access to supporting tools and methods

Thoroughly Train Users


Training in organization, business process, and application
functions is critical to success and must be reinforced

Take a Multidisciplinary Approach to Implementations


Enterprise systems span the entire organization and as such
require input and participation from all functions
Thames Valley University
ESP 5
Enterprise Systems – Within the Organization

ESP 6
Interorganisational Systems

ESP 7
Types of Enterprise Systems
Packaged
Packaged Applications
Applications
“Off
“Off the
theShelf”
Shelf” computer
computer applications
applications purchased
purchasedfromfrom aavendor
vendor
or
orthe
thecompany
companythat thatcreated
createdthe
thesystem
system (i.e.
(i.e. Quicken
Quickenor
orMSMS
Money
Moneyforfor financial
financialapplications)
applications)
Key
KeyCharacteristics
Characteristicsof of packaged
packagedapplications
applications
••Best
BestUse
Use --standardized,
standardized, repetitive
repetitivetasks
tasks
••Cost
CostEffectiveness
Effectiveness––lower lowercost
costbecause
becausevendors
vendorscan
can
create
createonce
onceand
andthen
thensell
sellmany
manycopies
copiesto toothers
others
••Organizational
OrganizationalFitFit ––may
maynotnotbebewell
wellsuited
suitedfor
fortasks
tasksthat
that
are
areunique
uniqueto
toaaparticular
particularbusiness
businessor or industry
industry
••Maintenance
Maintenance––the thevendor
vendor makes
makesthethechanges
changesandandthen
then
sends
sendsthe
theupdates
updatesto toits
itscustomer
customeron onaaperiodic
periodicbasis.
basis. The
The
customer
customer does
does not
not control
control this
this schedule
schedule
ESP 8
Types of Enterprise Systems
Custom Applications
“Custom-built” computer applications created by the organization
or a third party (e.g. a consulting organization)

Key
KeyCharacteristics
Characteristics of
of Custom
Custom Applications
Applications
••Best
Best Use
Use-- unique
uniquebusiness
businessprocess
processto
to an
anorganization
organization
••Cost
CostEffectiveness
Effectiveness ––much
muchhigher
higher cost
costdue
dueto tothe
theone-time
one-time
creation
creationof
ofthe
theapplications
applications
••Organizational
Organizational Fit
Fit ––excellent
excellent as
asthey
theyare
aredesigned
designedto to fit
fit aa
specific
specificbusiness
businessprocess
process
••Maintenance
Maintenance ––all
allchanges
changesarearecreated
created and
and implemented
implemented by by
the
theorganization
organizationusing
usingthe
theapplication
application

ESP 9
Enterprise System Evolution
System Evolution System Types

Standalone Systems

Integrated Systems
(Intraorganizational)

Integrated Systems
(Interorganizational)

ESP 10
Enterprise Systems
Stand
StandAlone
Alone(Legacy)
(Legacy)Systems
Systems
AAsingle
singlesystem
system or or groups
groupsofofsystems,
systems, designed
designedto toeach
each
support
support one
oneor oraa few
few business
businessfunctions
functions (e.g.
(e.g. accounting
accounting
system
systemororaa manufacturing
manufacturingsystem,
system,etc.)
etc.)
Stand
StandAlone Alone(Legacy)
(Legacy) Systems
Systems
••Little
Littleor ornonointegration
integration with withother
other organizational
organizationalsystems.
systems.
IfIfintegration
integrationexists,
exists,itit isisusually
usuallyininbatch
batch(i.e.
(i.e.the
theaccounting
accounting
system
systemgets getsupdates
updatesfrom from manufacturing
manufacturingsystemsystemonce
onceaaday
day
or
orweek
week
••Organizational
Organizationalfit fit may
maybe bebetter
better than
than integrated
integrated packages
packages
due
dueto tothe
thefocus
focusononone
onefunction
functionand
and that
that they
theyhave
havebeen
been
highly
highlymodified
modified over
overtime time
••Customization
Customizationand andthe theage ageofofthese
thesesystems
systemsmake makethem
them
difficult
difficultto tosupport
support due dueto tothe
the complexity,
complexity, useuseofofolder
older or
or
obscure
obscure languages,
languages, etc.
etc.
ESP 11
Enterprise Systems

Legacy (stand-alone) Systems – information is not readily


shared between systems (i.e. Inbound Logistics inventory
information shared with Operations)
ESP 12
Enterprise Resource Planning
Integrated
IntegratedPackages
Packages(Enterprise
(EnterpriseResource
ResourcePlanning)
Planning)
Richly
Richly functional
functionalsystems
systemsdesigned
designedto
tosupport
supportmany
many
organizational
organizationalfunctions
functions (e.g.
(e.g.accounting
accounting and
andfinance)
finance)
ERP
ERPKey
KeyCharacteristics
Characteristics
••Internally
Internallyfocused
focusedsystems
systemsdesigned
designedto tosupport
supportthe
theinternal
internal
operations
operationsof ofthe
theorganization
organization
••Highly
Highlyintegrated
integratedsystems
systemssharing
sharingaacommon
commondata datawarehouse
warehouse
for
forinformation
informationsharing
sharingacross
acrossfunctions,
functions,using
usingreal-time
real-timeupdates
updates
••Organizational
Organizationalfit fitmay
maybe beless
lessfor
forindividual
individualdepartments
departmentsbut butthethe
integrated
integratedsharing
sharingof ofinformation
informationusually
usuallyoutweighs
outweighsthese
theseissues
issues
••Usually
Usuallypackaged
packagedapplications
applicationssupported
supportedby bythe
thevendor
vendorutilizing
utilizing
aacommon
commonuser userinterface
interface
••Customization
Customizationisisdiscouraged
discouragedbut butthese
thesesystems
systemshave
havethethe
flexibility
flexibilityto
tosupport
supportother
otheroutside
outsideapplications
applicationsusing
usingthe
thecommon
common
data
datarepository
repositoryand andinterfaces
interfaces

ESP 13
Integrated System Example

Integrated Systems – Information is stored in a single


data repository and can be accessed and updated by all
functional systems (e.g. Operations) 14
ESP
Applications of enterprise wide systems

• Legacy system integration within


organisation
• If external communication required
– Supply Chain Management to communicate
upstream (back to suppliers)
– Customer Relationship Management to
communicate downstream (on to distributors or
end consumers)

ESP 15
ENTERPRISE RESOURCE PLANNING

• ERP controls all major business processes resulting


in increased efficiency, improved quality,
productivity, profitability
• Integrates key business processes so that info can
flow freely between different parts of organisations
• Can extend to suppliers and customers
• Totally integrated – complex and expensive to
implement - many advantages but costly.

ESP 16
COSTS

• Large technological investment


• Fundamental change in way business
operates (Business Process Re-engineering)
• Rework business processes
• New tasks/responsibilities for employees
AND
• May lose unique business process to
standardisation

ESP 17
Choosing an ERP System - Issues

ERP
ERP Systems
Systems are: are:
••Supplied
Supplied by by multiple
multiple vendors
vendors including
including SAP,
SAP, SSA
SSA
Baan,
Baan, Oracle,
Oracle, etc.,
etc., with
with each
each having
having their
their own
own unique
unique
features
features and
and structures
structures
••Packaged
Packaged systems
systems thatthat are
are following
following aa one
one size-fits
size-fits
all
all strategy
strategy which
which means
means theythey may
may not
not support
support all
all
functions
functions asas well
well as
as aa custom
custom system
system
••Similar
Similar but
but are
are also
also different.
different. They
They should
should be be selected
selected
based
based on on factors
factors including
including control,
control, business
business
requirements,
requirements, and and best
best practices
practices

ESP 18
CUSTOMER RELATIONSHIP MANAGEMENT

• Manages all the ways businesses deal with existing


and potential customers
• Co-ordinates all of business processes related to
interaction with customer in sales, marketing and
servicing – end-to-end customer care
• Facilitates provision of better service/support, allows
customisation of offerings, provides ongoing value to
retain profitable customers

ESP 19
Customer Relationship Management
Objective
Objective
Applications
Applicationsthat
thathelp
helporganizations
organizationsattract
attractnew
newbusiness
businessand
and
attract
attractand
andencourage
encouragerepeat
repeat business
business
Functions
Functions
There
Thereare
aretwo
two primary
primaryfunctions
functionsininCRM
CRM systems:
systems:
••Sales
Sales––tools
toolsdesigned
designedto toassist
assistin
in presales
presales activities
activitiessuch
such as
as
marketing
marketing and
and prospecting
prospecting (e.g.
(e.g.Sales
SalesForce
Force Automation)
Automation)
••Service
Service ––tools
toolsthat
that help
helpwith
withthe
the post-sales
post-salesaspects
aspectsofofthe
the
business
business (e.g.
(e.g. call
callcenter
centertechnology,
technology, analytics)
analytics)

Sources
Sources
There
Thereare
aretwo
two primary
primarysources
sourcesof
ofCRM
CRMsystems:
systems:
••CRM
CRMSoftware
SoftwareVendors
Vendors––Siebel,
Siebel,FirePond,
FirePond,Onyx,
Onyx,E.Piphany
E.Piphany
••ERP
ERP Vendors
Vendors ––SAP,
SAP, Baan,
Baan, Oracle,
Oracle, etc.
etc. 20
ESP
SUPPLY CHAIN MANAGEMENT SYSTEMS

• Enable companies to collaborate with


suppliers and customers
– Forecast with greater accuracy
– Shorten product life cycle
– Reduce inventories
• Help to plan, source, manufacture and deliver
products in a cost effective way (source to
consumption in least time/lowest cost)
• One stop info access to sales/purchasing/
manufacturing/distribution/transport

ESP 21
Supply Chain Management
Objective
Objective
Applications
Applicationsthat
thataccelerate
accelerateproduct
productdevelopment
developmentand
andreduce
reduce
cost
costassociated
associatedwith
withprocuring
procuringrawrawmaterials,
materials, components,
components,and
and
services
servicesfrom
from its
itssuppliers
suppliers
••Supply
SupplyChain
Chain ––the
thesuppliers
suppliersthat
that an
anorganization
organization
purchases
purchasesfromfrom directly
directly
••Supply
SupplyNetwork
Network ––thethesuppliers
suppliersthat
thatan
anorganization
organization
purchases
purchasesfromfrom directly
directlyand
andits
itssuppliers
suppliers
Sources
Sources
There
Thereare
aretwo
two primary
primarysources
sourcesof ofSCM
SCMsystems.
systems. These
These
systems
systemsare
arebuilt
builtto
to tightly
tightlyintegrate
integratewith
withERP
ERPsystems
systems
••SCM
SCM Software
SoftwareVendors
Vendors ––Agile,
Agile,Ariba,
Ariba,I2,
I2, Manugistics,
Manugistics,
Commerce
CommerceOne,One, etc.
etc.
••ERP
ERPVendors
Vendors––SAP, SAP, Baan,
Baan,Oracle,
Oracle, etc
etc
ESP 22
SCM – Example of a Supply Network

ESP 23
Supply Chain Management Benefits

Supply
SupplyChainChainManagement
Management applications
applicationscancanhelp
help
organizations
organizationsto togain
gaincompetitive
competitiveadvantage
advantageand andprovide
provide
substantial
substantialpayback
paybackin inseveral
severalways
waysby:by:
••Streamlining
Streamliningworkflow
workflow and andincreasing
increasingemployee
employee
productivity
productivity (i.e.
(i.e.efficiently
efficientlymanaging
managingbusiness
businesstravel,
travel, time,
time,
and
andexpenses
expensesby bycollaborating
collaboratingwith
withsuppliers
suppliersin
inreal
realtime)
time)
••Accelerating
Acceleratingproduct
product development
development (i.e.(i.e.enabled
enabledbybythe
the
ability
abilityof
oforganizations
organizationsto toswiftly
swiftlyreact
react to
tomarket
marketconditions)
conditions)
••Streamlining
Streamliningcost
cost and andcreating
creating efficiencies
efficiencies across
acrossthe
the
supply
supplynetwork
network(i.e.,
(i.e.,supporting
supportingcontract
contract negotiation
negotiationand
and
measuring
measuringeffectiveness
effectivenessof ofthose
thoseagreements)
agreements)

ESP 24
SCM – Example of SAP SCM Offering

SAP
SAPisis the
theERP
ERPmarket
marketleader.
leader. They
Theyalso
alsooffer
offer SCM
SCM
applications
applicationswhose
whosecapabilities
capabilitiesinclude
includethe
thefollowing:
following:

ESP 25
OUTSOURCING

• Turning over responsibility of some/all of the


organisation’s IS development and operations to an
outside firm
– May develop and then house within their organisation
– May run your applications on their computers
– May develop systems to run on existing computers within
your organisation

ESP 26
Reasons for Outsourcing

• Accelerate re-engineering benefits


• Access to world-class capabilities
• Free resources for other purposes
• Function difficult to manage or out of control
• Improve company focus
• Make capital funds available
• Reduce operating costs
• Reduce risk
• Resources not available internally
Outsourcing Institute – www.outsourcing.com
ESP 27
EXAMPLES OF OUTSOURCING

• United Biscuits – Dec 06 – 5 year multi million pound managed


services contract for applications development and IT support
in UK (Indian company TCS)
• NFU Mutual – Dec 06 – 10 year contract to outsource data
centres and desktops – €130 m
• Govt criticised for wasting £8bn each year through not
outsourcing low skill back office civil servant jobs

ESP 28

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