Signs of the Times

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Signs of the Times
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Wuzzle
I E C Except
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Chapter 12

• INFS110
• Spring 2005

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Overview

• Evolution of Cross Functional Applications
• Hardware and Processing Issues
• Evolution of Enterprise Perspective
• Business Intelligence and Knowledge Management

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Nomenclature Cross Functional Applications

• Applications (Apps)
• Architecture
• Conceptual
• Application
• Taskoriented applications
• Application integration
• Enterprise applications

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Typical Organizational Structure
CEO/President
VP
VP
VP
VP
Operations
Sales
Marketing
Finance Accounting

• What would you expect to be automated first?

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Typical Organizational Structure
CEO/President
VP
VP
VP
VP
Operations
Sales
Marketing
Finance Accounting
A/P
Raw Materials costs
Contact Information
Customer Orders
Market Surveys
Inventory ordering
A/R Billing

• Stage 1 High Volume High Payoff Tasks
• What would you expect to be automated next?

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Typical Organizational Structure
CEO/President
VP
VP
VP
VP
Operations
Sales
Marketing
Finance Accounting
Sales Contact Management
Inventory Management
Accounting Packages
Marketing

• Stage 2 Functional Applications (tasks w/in
  function)
• What would you expect to be automated next?

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Typical Organizational Structure
CEO/President
VP
VP
VP
VP
Operations
Sales
Marketing
Finance Accounting
Inventory Management
Accounting Packages
Integrated Sales Marketing

• Stage 3 Cross Functional Applications
• What is driving this evolution? What is next step?

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Matrix Organizational Structure
CEO/President
VP
VP
VP
VP
Operations
Sales
Marketing
Finance Accounting
Customer Service
VP
Order Fulfillment
VP

• Process orientation allows one to see integration
  opportunities? What is necessary condition of
  IS/IT?

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Enterprise-wide data
CEO/President
VP
VP
VP
VP
Operations
Sales
Marketing
Finance Accounting
Customer Service
VP
Order Fulfillment
VP

• Ideal e-business architecture anticipates the
  need/use of enterprise wide availability of data.

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Evolution of Business Apps

• (Kalakotas 3 Stages)
• Stage 1 Simplification Segmentation
• Stage 2 Reintegration Transformation
• Stage 3 Cross-functional Integration Fluid
  Adaptability

Task Oriented
Functional
Cross Functional

• What would you expect the first thing to be
  automated in a traditional business? i.e. Airline
  companies, car companies, computer companies.

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Application ClusterCustomer Relationship
Management (CRM)

• Schwab

Customer
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Application ClusterEnterprise Resource Planning
(ERP)

• Nestle What about Hershey?

Customer
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Application ClusterSupply Chain Management
(SCM)

• Ford

Market Demand
Resource Constraints
Real Time Scheduling
Customer
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Application ClusterSelling Chain Management

• Whirlpool

Product Customization
Pricing Contract Management
Proposal Generation
Commission Management
Promotion Management
Customer
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Application Clusters

• How did companies decide what functions make up
  an application cluster?
• What are some common characteristics across the
  application clusters?
• Are the application clusters efficiency or
  effectiveness driven? Make your case?
• Are the apps discussed independent or
  interdependent? Explain?
• What is logical next step for applications in
  business?

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Enterprise Application Integration(EAI)

• Bay Networks

EAI
ERP
CRM
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Summary Cross Functional Applications

• There has been a natural progression of
  automation based upon integrating tasks and
  processes
• Transactions
• Functional Apps
• Cross Functional Apps
• Strategic Business Apps
• Enterprise-wide Apps
• Between Enterprises
• Inter Enterprise Communities
• The characteristics and assumptions used in this
  integration can be useful in analyzing business
  processes in general.

More Integration
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Overview ERP Perspective

• General Components of ERP
• Promises of ERPs
• ERP evolution
• ERPs are more than just software
• Customizable Off The Shelf (COTS)

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Nomenclature Enterprise Perspective

• ERP
• CRP
• COTS
• MRP II
• XRP
• big bang implementation

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Enterprise Resource Planning

• Defined as integrated application of suites. Not
  a single system, but a framework that includes
  administrative , human resource, and
  manufacturing apps .
• Typical Tasks
• Finance, accounting
• Payroll, benefits
• Procurement, product planning
• How are ERPs the holy grail of corporate
  computing?

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Interaction Matrix
One way to see/understand interactions between
business tasks or processes is to build an
interaction matrix. Simply, list the tasks or
processes on both axes. Now, simply look at the
intersection of the rows and columns and ask how
(with what people? What data? What processes?
What managers? What customers?) these two items
interact.
How do these Interact?
Accounting Payroll Benefits Production
Accounting Payroll Benefits Production
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The ERP PromiseThe First Wave (MRP)

• Support the customer order process
• Consolidate and unify business functions
• Manufacturing, logistics, distribution, human
  resources
• Integrate disparate technologies
• Provides workable foundation for future
• Fixes Y2K

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The ERP PromiseThe Second Wave

• Replace Legacy Systems
• Usually too functionally constrained
• Gaining Control
• integrated manually and therefore was not
  reliable (comment)
• Global Operations
• What are some concerns of a global business?
• Handling Regulations
• Improving Integration of Decisions

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The ERP PromiseWave 3

• Recognize change in business model
• CRP Customer-centric resource planning
• Make-to-stock to build-to-order
• Integrate business rules
• Order quantity points
• Replacing industry-specific middleware

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The ERP PromiseWave 4 Inter-enterprise
Integration

• Components not Modules in a system
• What again
• Incremental Migration
• Dynamic configuration of ERP systems
• Customization without associated costs
• Identify processes for potential automation
• Tied to Supply Chain Planning

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The ERP Decisions

• It is more than software
• Self diagnosis
• What you are what you do change readiness
• You will need help. Why?
• Build or buy the software

Customize ------------------ COTS
Advantages Disadvantages
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The ERP Decisions

• It is more than software
• Self diagnosis
• What you are what you do change readiness
• You will need help. Why?
• Build or buy the software

Customize ------------------ COTS
Can spec what you want Get competitive bids Get
best practice Get software from software
company Customization costs Upgrade
costs Change company process Short term
competitive edge
Get exactly what you want Software is geared to
YOU Little process change Costs Slow to
complete Software development may not be
core competency
Advantages Disadvantages
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The COTS Promise

• Consolidates back office
• Does a good job here where homegrown systems did
  not
• Supports multiple channels
• Facilitates change in business practices
• Facilitates change in technology
• simplifying software modification. really?

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The SAP/ERP Example

• Microsoft
• Replaces 20,000 batch jobs
• Owens-Corning
• Outgrown capacity
• p.181 Why did they have to come up with a single
  product list and single price list?
• Colgate-Palmolive
• Tangible benefits (75 to 2 data centers)

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ERP Implementation

• Leadership skills
• Project management
• Strategic thinking
• Process thinking
• Team management
• Change management
• Contract management

• Typical Implementation
• Project preparation
• feasibility
• Blueprint
• Process redesign
• Pilot
• Smoke test
• Go live
• Conversion
• Training
• testing
• Assessment
• Measure the benefits

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Summary Enterprise Perspective

• Integration of major business processes
• Accounting, finance
• Human resources
• Procurement, materials management
• Software driven change process
• 1st wave was legacy, Y2K driven
• 2nd wave is integration driven
• 3rd wave customer-centric
• 4th wave inter-enterprise
• ERP is a change in business process

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OverviewHardware and Processing Issues

• Same major components
• Computer, Input devices, Output devices
• Specialized components
• More configurations and decisions
• Where to store the data
• Where to perform the processing

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NomenclatureHardware and Processing

• RAID
• Mirroring
• Tier
• Grid system
• Legacy system
• Middleware

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• An enterprise computing system can include a
  diverse array of processing, storage, input, and
  output hardware

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Computers

• One or more fast servers
• A blade server is a modular electronic circuit
  board containing one or more processors, and,
  depending on the model, some storage
• Configured to perform a single dedicated task

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Specialized storage devices

• Enterprise systems may need to store many
  gigabytes or even terabytes of data

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Specialized storage devices

• RAID (redundant array of independent disks) is a
  storage system that uses a process called
  striping to break files into smaller blocks,
  which are stored across multiple hard disks
• Faster
• More Resilient

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Specialized storage devices

• A storage area network is a network of storage
  devices and data servers designed to function as
  a note on a wider network
• Storage management services

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Specialized storage devicesProcessing

• Mirroring is the process of creating a real-time
  mirror copy of a storage medium
• Network attached storage refers to storage
  devices designed to be attached directly to a
  network without requiring a server for management

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Input devices

• Data can be entered by a keyboard or a variety of
  other input devices
• MICR (magnetic ink character recognition)
• OCR (optical character recognition)

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Output devices

• An enterprise system can use just about any
  standard output device
• Speed and reliability are priorities
• A line printer prints an entire line of text at a
  time
• A print server organizes print jobs and manages
  them using a print queue
• Web-based output

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Legacy systems

• A legacy system is a computer system that has
  become outdated due to technology advances or
  changing organizational requirements
• May perform adequately even though newer
  technology exists
• Legacy systems present several challenges
• Repairs
• Upgrades

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Software used on a typical enterprise system

• Multiplatform availability
• Scalability
• Redundancy

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Software MUST integrate legacy applications

• Middleware is a type of software that acts as an
  intermediary between two other software packages,
  typically by formatting data from one software
  package so that it can be used by another
  software package

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Simplest architecture

• The primary processing device is typically a
  mainframe computer, referred to as a host
  computer
• A terminal is an input/output device with no
  storage capacity
• Terminal emulation software

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Simplest architecture

• A centralized computing system consists of one
  central computer surrounded by terminals

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Simple Architecture

• A distributed computer system is a collection of
  connected computers in which processing, data,
  and application software are dispersed among more
  than one physical computer

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Compare Centralized to Decentralized

• Advantages
• The host computer performs all processing
• No middleware required
• Terminal malfunctions have little effect on the
  functionality of the entire system
• Easy administration
• Disadvantages
• If host computer fails, entire system fails
• Scalability limits

• Advantages
• Scalable
• No geographic limits
• Standard Hardware Software
• Disadvantages
• Upgrades and maintenance more problematic
• More access points to system for viruses

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What is a tier?

• A tiered computer system can have two tiers,
  three tiers, four tiers, or more
• n-tier system
• Each tier consists of one or more computers
• Each tier in a distributed system can interact
  with one or more of the other tiers

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What is a tier?
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What are the advantages of tiered architecture?

• Each tier is independent of the others, and can
  be changed or upgraded without affecting the
  other tiers
• Allows an enterprise to switch software more
  easily

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What is a grid computing system?

• A grid computing system is a network of diverse
  computers in which each computer is treated as a
  generic and equal resource
• Grid systems require a connection to one or more
  computers running grid management software
• Each computer on the grid runs grid client
  software
• SETI_at_home project

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Summary Hardware and Processing

• The hardware and processing concepts for
  enterprise systems are more complex than the
  simple desktop systems.
• Data storage and processing can be performed
  distributed or centrally
• Legacy systems must be accounted for

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Overview

• Business Intelligence
• Purpose
• Trends
• Knowledge Management
• Evolution
• Elements
• Implications
• BI Architecture
• Data Warehousing
• Data Mining
• Blueprint for BI/KM Development

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NomenclatureBusiness Intelligence and Knowledge
Management

• Data Warehouse
• KM
• Group Memory
• Knowledge Portal
• Churn factor (as relates to telecom)
• KVA

• Data Mining
• BI
• Click Stream
• Real-time personalization
• OLAP
• KPIs

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Business Intelligence

• Purpose converting data information into
  knowledge.
• Example
• Data 10, 15, 20, 25, 30
• Information average ATM
  withdrawal is 22
• Knowledge If average ATM
  withdrawal is 22 then
• need to
  charge 1.50 to make money
• Knowledge is power
• Purpose is decision making
• about the business applications
• What are some trends that seem to drive the
  interest in BI?

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Trends Propelling Investments

• The amount of data
• Publish subscribe models
• RDBMS
• Lower costs on storage (EMC)
• Improved WEB
• More acceptance

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Knowledge Management Evolution

• Ultimately 1.) trying to make effective use of
  raw data and 2.) convert raw data into revenue.
  Five waves of KM
• Group Memory Systems
• Corporate Intranets Decision Support Portals
• Extranets
• E-Commerce areas
• Business Intelligence

Knowledge Managements negative stereotype
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Elements of Knowledge Management Applications
Data Collection Organization
Analysis Segmentation
Performance Monitoring Measurement
Real-time Personalization
Broadcast Interaction
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Implications of the KM Elements

• Data Organization Collection
• Scaleable Flexible Performance
• Analysis Segmentation
• Data Mining analytical tools
• Broadcast Infrastructure
• Delivers information to customers Push
• Performance Monitoring
• KPIs
• Real-Time Personalization
• User defined filters

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Personalization

• Intersection of e-commerce and traditional
  decision support application
• DEFINED Use of technology for the proactive
  capture, organization and delivery of information
  to individuals.
• Includes user-defined filters, trigger
  events,etc.
• Example National Weather Service

e-commerce DSS
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What is the Center of KM/BI Applications
Data Collection Organization
Analysis Segmentation
Performance Monitoring Measurement
?
Real-time Personalization
Broadcast Interaction
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Data Warehouse as Center of KM/BI Applications
Data Collection Organization
Data Warehouse
Analysis Segmentation
Performance Monitoring Measurement
Real-time Personalization
Broadcast Interaction
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Data Warehousing

• Goal identify trends, answer business questions
  and derive meaning from historical data

AR
Sales
Returns
Data from different channels and sources is
collected, cleaned and stored. Queries are run
against the data to gain answers or to derive new
information
Clean Format Query Report
What is OLAP? p375
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Guide for KM/BI Implementation

• Identify goal
• Where is knowledge
• Capture, clean and store information
• Use both inward and outward data
• Categorize with business relevance
• Learn how to mine data
• Validate, deploy and monitor the models
• Measure ROI

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Summary Business Intelligence and Knowledge
Management

• Business Intelligence (BI) or Knowledge
  Management (KM) applications are designed to mine
  the immense amount of data being collected and
  stored in data warehouses in order to answer
  business questions and uncover new information
  such as customer behavior trends. This process
  will ultimately lead to more revenue through the
  process of personalization.

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Chapter Summary

• ERPs have grown from applications clusters
• While the components are the same for ERP
  systems, the size and complexity create
  significant differences.
• Tiered systems GRID systems
• Distributed computing
• The data collected within an ERP can become a
  distinctive competence for a company

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Wuzzle
GEN
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