unit 9 executive information systems; enterprise information systems; & information resources...
TRANSCRIPT
Unit 9Executive Information Systems;Executive Information Systems;Enterprise Information Systems;Enterprise Information Systems;
&&Information Resources Information SystemsInformation Resources Information Systems
1-1
Chapter 16Executive Information SystemsExecutive Information Systems
Copyrigh 2001 Prentice-Hall, Inc.16-2
The Executive PositionThe Executive Position
Unique demands of the executive positionUnique demands of the executive position
Executives require unique information Executives require unique information processingprocessing
An executive is not just a lower-level manager on a higher level!
16-3
Marketinginformation
system
Manufacturinginformation
system
Financialinformation
system
Human resource
informationsystem
Environmental information and data
Environmental information and data
Top-levelmanagers
A Firm Without An EIS
16-4
Environmental Information and data
Environmental Information and data
Marketinginformation
system
Manufacturinginformation
system
Financialinformation
system
Human resource
informationsystem
Executive information
system
A Firm With An EIS
16-5
What Do Executives Do?What Do Executives Do?
Term executive is loosely appliedTerm executive is loosely applied– No clear dividing line between executives and No clear dividing line between executives and
other managersother managers Executive manager on the upper level of the Executive manager on the upper level of the
organizational hierarchy who exerts a organizational hierarchy who exerts a strong influence on the firmstrong influence on the firm
Long term planning horizonLong term planning horizon
16-6
Fayol's Management Fayol's Management FunctionsFunctions
PlanPlan OrganizeOrganize StaffStaff DirectDirect ControlControl
16-7
Mintzberg's Managerial Mintzberg's Managerial RolesRoles
Different levels of management perform Different levels of management perform same roles but relative time spent on each same roles but relative time spent on each differsdiffers
High-level management focusHigh-level management focus– Long-range, entrepreneurial improvementsLong-range, entrepreneurial improvements– Responding to unanticipated situations Responding to unanticipated situations
16-8
Kotter's Agenda and Kotter's Agenda and NetworksNetworks
John P. Kotter, Harvard professorJohn P. Kotter, Harvard professor Executives follow a three step strategyExecutives follow a three step strategy
– Agenda -- objectives the firm is to achieveAgenda -- objectives the firm is to achieve– Networks -- cooperative relationshipsNetworks -- cooperative relationships
» Hundreds or thousandsHundreds or thousands
» Inside and outside the firmInside and outside the firm
– Environment -- norms and values so the Environment -- norms and values so the network members can achieve agendasnetwork members can achieve agendas
16-9
How Do Executives Think?How Do Executives Think?
Daniel J. Isenberg, Harvard professorDaniel J. Isenberg, Harvard professor Studied more than one dozen executives Studied more than one dozen executives
over a 2-year periodover a 2-year period What they think aboutWhat they think about
1. How to get things done1. How to get things done
2. A few overriding issues2. A few overriding issues
16-10
How Do Executives Think? How Do Executives Think? (cont.)(cont.)
More concerned with process than solutionMore concerned with process than solution Thought processes do not always follow the Thought processes do not always follow the
step-by-step patterns of the systems step-by-step patterns of the systems approachapproach
Intuition is used at each stepIntuition is used at each step
16-11
Unique Information NeedsUnique Information Needs
Mintzberg was first to conduct a formal Mintzberg was first to conduct a formal study of executive information needsstudy of executive information needs
Studied 5 executives in early 1970s Studied 5 executives in early 1970s Five basic activitiesFive basic activities
– desk workdesk work– telephone callstelephone calls– unscheduled meetingsunscheduled meetings– scheduled meetingsscheduled meetings– tourstours
16-12
How Minzberg’s How Minzberg’s CEOs Spent TimeCEOs Spent Time
Legend:Interpersonal
Communication
Desk Work22%
Unscheduled Meetings
10%
Telephone Calls6%
Scheduled Meetings
59%
Tours3%
16-13
Unique Information NeedsUnique Information Needs
Jones & McLeod StudyJones & McLeod Study Studied 5 executives in early 1980sStudied 5 executives in early 1980s QuestionsQuestions
1) How much information reaches the executive ?1) How much information reaches the executive ?
2) What was the information value ?2) What was the information value ?
3) What are the information sources ?3) What are the information sources ?
4) What media are used to communicate the 4) What media are used to communicate the information ?information ?
5) What use is made of the information ?5) What use is made of the information ?
16-14
HIGHHIGH HIGHHIGH
HIGHHIGH HIGHHIGH
HIGHHIGH
AVGAVG
LOWLOW
AVGAVG
LOWLOWAVGAVG
LOWLOWAVGAVG
LOWLOW
BankCEO
VicePresidentof Tax
The Volume of Information Reaching the Executives
0
10
20
30
40
50
60
Retail ChainCEO
InsurancePresident
VicePresident ofFinance
AVGAVG
LOWLOW
Nu
mb
er
of
Tra
ns
ac
tio
ns
16-15
Jones & McLeod Study Jones & McLeod Study (cont.)(cont.)
How much information reaches the How much information reaches the executiveexecutive– A transaction - a communication involving any A transaction - a communication involving any
mediummedium– Daily volumeDaily volume
» Varies from executive to executiveVaries from executive to executive
» Varies from day to dayVaries from day to day
16-16
0
5
10
15
20
25
30
0 1 2 3 4 5 6 7 8 9 10
All fiveexecutives
Vice President of tax
Bank CEO
Value
Per
cen
tage
of
tran
sact
ion
sThe Value of Information Reaching
Executives
16-17
Sources of InformationSources of Information
Some executives went down 7 levels to Some executives went down 7 levels to gather informationgather information
Sources were internal and externalSources were internal and external External sources provided the most volume External sources provided the most volume
but also the lowest average valuebut also the lowest average value
16-18
EnvironmentEnvironment
Upper levelsUpper levels
The The executiveexecutive
CommitteesCommittees
Internal support units Internal support units and individualsand individuals
1 level down1 level down
2 levels down2 levels down
3 levels down3 levels down
4 levels down4 levels down
Legend:Legend:Percentage of Percentage of totaltotaltrans-trans-actionsactions
.43.433.83.8
.05.055.25.2
.20.205.25.2
.10.105.35.3
.06.064.34.3
.02.024.44.4
.02.027.57.5
.13.134.64.6
Average Average transactiontransaction
valuevalue16-19
The Sources of Information Reaching the The Sources of Information Reaching the ExecutivesExecutives
Media Used for Media Used for CommunicationCommunication
Written media accounts for 61% of the Written media accounts for 61% of the transactionstransactions– Computer reportsComputer reports– Letters and memosLetters and memos– PeriodicalsPeriodicals
Oral media is preferred by executivesOral media is preferred by executives– ToursTours– Business mealsBusiness meals– Telephone callsTelephone calls
16-20
The Executive Does not The Executive Does not Control:Control:
LettersLetters MemosMemos Telephone callsTelephone calls Unscheduled meetingsUnscheduled meetings
16-21
The Media Pie The Media Pie (in Percentages of Total Transactions)(in Percentages of Total Transactions)
WrittenWritten
OralOral
Note:Note:Percentages do not add to 1.00 due to rounding
Computer Computer Reports (.03)Reports (.03)
Noncomputer Noncomputer Reports (.09)Reports (.09)
Memos (.19)Memos (.19)
Letters (.20)Letters (.20)Periodicals (.10)Periodicals (.10)
Business Business Meals (.02)Meals (.02)
Telephone Telephone Calls (.21)Calls (.21)
UnscheduledUnscheduledMeetings (.06)Meetings (.06)
Scheduled Meetings (.05)Scheduled Meetings (.05)
Tours (.03)Tours (.03)
16-22
Ranking of Media by ValueRanking of Media by Value
Medium Mode Average ValueMedium Mode Average Value
Scheduled meetings Oral 7.4Scheduled meetings Oral 7.4
Unscheduled meetings Oral 6.2Unscheduled meetings Oral 6.2
Tours Oral 5.3Tours Oral 5.3
Social activity Oral 5.0Social activity Oral 5.0
Memos Written 4.8Memos Written 4.8
Computer reports Written 4.7Computer reports Written 4.7
Noncomputer reports Written 4.7Noncomputer reports Written 4.7
Letters Written 4.2Letters Written 4.2
Telephone calls Oral 3.7Telephone calls Oral 3.7
Business meals Oral 3.6Business meals Oral 3.6
Periodicals Written 3.1Periodicals Written 3.1
16-23
Information Use by Decisional Role
Disturbance handler (.42)
Entrepreneur (.32)
Resource allocator
(.17)
Unknown (.06)
Negotiator (.03) 16-24
Jones & McLeod Study Jones & McLeod Study FindingsFindings
Most executives’ information came from Most executives’ information came from environmental sources, but the internal environmental sources, but the internal information was valued higherinformation was valued higher
Most of the executives’ information came in Most of the executives’ information came in written form, but the oral information was written form, but the oral information was valued highervalued higher
Executives receive very little information Executives receive very little information directly from a computerdirectly from a computer
16-25
Disturbance handler .42
Entrepreneur .32
Resourceallocator
.17
Negotiator .03
Unknown.06
Environment.43
Lowerlevels
.38
Internal support units & individuals .13
Upperlevels .05
Committees .02
Sources of Decisional InformationSources of Decisional Information
16-26
Unique Information NeedsUnique Information Needs
Study conducted by John Rockart and Study conducted by John Rockart and Michael Treacy, both of MITMichael Treacy, both of MIT
Studied 16 companies in early 1980sStudied 16 companies in early 1980s Found many computer users Found many computer users Found some executives interested in detailFound some executives interested in detail Coined the term “executive information Coined the term “executive information
system”system”
16-27
EIS FeaturesEIS Features A central purposeA central purpose A common core of dataA common core of data Two principal methods of useTwo principal methods of use
– Retrieve reportsRetrieve reports
– Conduct analysesConduct analyses A support organizationA support organization
– EIS coachEIS coach
– EIS chauffeurEIS chauffeur
From Rockart and Treacy16-28
Putting Computer Use in Putting Computer Use in PerspectivePerspective
Two key points:Two key points:
1. Computer use is personal1. Computer use is personal
2. Computer produces only a portion of the 2. Computer produces only a portion of the
executive's informationexecutive's information
16-29
Suggestions to Improve Suggestions to Improve EISsEISs
1. Take an inventory1. Take an inventory
2. Stimulate high-value sources2. Stimulate high-value sources
3. Take advantage of opportunities3. Take advantage of opportunities
4. Tailor the system to the executive4. Tailor the system to the executive
5. Take advantage of technology5. Take advantage of technology
16-30
Personal computer
Make corporate
information available
Informationrequests
Executivedatabase
Corporatedatabase
Electronicmailboxes
Softwarelibrary
Current news,explanations
Externaldata and
information
Informationdisplays
Executive workstationExecutive workstation
Corporate mainframeCorporate mainframe
To otherexecutive
workstation
To otherexecutive
workstation
An EIS Model
16-31
Make corporate
information available
Informationrequests
Executivedatabase
Corporatedatabase
Electronicmailboxes
Softwarelibrary
Current news,explanations
Externaldata and
information
Informationdisplays
Executive workstation
Corporate mainframe
To otherexecutive
workstation
To otherexecutive
workstation
An EIS Model
16-32
Dialogue Between Dialogue Between Executive and EISExecutive and EIS
Typically by a series of menus, keyboarding Typically by a series of menus, keyboarding is minimizedis minimized
Drill down to specific information needed Drill down to specific information needed from the overview levelfrom the overview level
16-33
MEDIAL INTERNATIONAL GROUP MIGMEDIAL INTERNATIONAL GROUP MIG
N P U P0
100
200
300
400
500
N P U P
Actual/Planned
Product Profitability Product Profitability AnalysisAnalysis
Magazines in Europe have been Magazines in Europe have been performing poorly. While sales performing poorly. While sales are up, production costs have are up, production costs have soared. This is due to the labor soared. This is due to the labor disputes in the pulp and paper disputes in the pulp and paper industry. Starting next month, industry. Starting next month, costs should be back in line costs should be back in line with earlier projections.with earlier projections.
Actual Planned Variance %VarianceNewspapers 1,421,709 1,559,184 (137,475) (8.82)Magazines 490,855 518,687 (27,832) (5.37)Periodicals 1,912,564 2,077,872 (165,308) (7.96)
Actual Planned Variance %VarianceNewspapers 1,421,709 1,559,184 (137,475) (8.82)Magazines 490,855 518,687 (27,832) (5.37)Periodicals 1,912,564 2,077,872 (165,308) (7.96)
x100
An Information Display That Includes a An Information Display That Includes a Computer-Generated Narrative ExplanationComputer-Generated Narrative Explanation
16-34
Incorporation ofIncorporation ofManagement ConceptsManagement Concepts
Critical success factorsCritical success factors Management by exceptionManagement by exception Mental modelMental model
– Information compressionInformation compression
16-35
0
500
1000
1500
2000
90 91 92 93 94 J F M A M J J A S O N D 95 96 97 98 99
SALES - $ IN MILLIONS
AS OF NOVEMBER 1994
SOURCEGLORIA YANDERSBILL BLASS
SALESSALES
CURRENTHISTORY
YEAR TO DATE OVER/ UNDER MB
PROGRAM ACTUAL THIS MO LAST MOHERC $861.4 $30.7 $59.1C-5B 621.9 0.3 4.5OTHER 398.7 12.9 10.1 TOTAL $1,882.0 $43.9 $44.4
YEAR-END FORECAST CURRENT FORECAST Y-L O/U MB YR CURRENT O/ U PRIOR
$949.8 $28.6 95 $2102.6 $ 8.0 699.0 1.2 96 2400.0 105.0 458.8 13.6 97 3130.0 98.0 $2107.6 $43.4 98 3390.0 58.0 99 2110.0 281.0
COMMENTSCOMMENTS FAVORABLE VARIANCE PRIMARILY DUE TO TWO ADDITIONAL HERCULESFAVORABLE VARIANCE PRIMARILY DUE TO TWO ADDITIONAL HERCULESSALESSALES
FORECAST
BUDGETACTUAL
16-36
EIS Implementation EIS Implementation DecisionsDecisions
Three Key Questions:Three Key Questions:
1. Do we need an EIS?1. Do we need an EIS?
2. Is there application-development software 2. Is there application-development software available?available?
3. Should we purchase prewritten EIS 3. Should we purchase prewritten EIS
software?software?
16-37
Advantages of Prewritten Advantages of Prewritten SoftwareSoftware
1. Fast1. Fast
2. Doesn't strain information services2. Doesn't strain information services
3. Tailored to executives3. Tailored to executives
16-38
EIS Critical Success EIS Critical Success Factors Rockart and Factors Rockart and
DeLongDeLong1. Committed/informed executive sponsor1. Committed/informed executive sponsor
2. Operating sponsor2. Operating sponsor
3. Appropriate information services staff3. Appropriate information services staff
4. Appropriate information technology (IT)4. Appropriate information technology (IT)
5. Data management5. Data management
6. Link to business objectives6. Link to business objectives
7. Manage organizational resistance7. Manage organizational resistance
8. Manage the spread and evolution8. Manage the spread and evolution
16-39
Prerequisite Activities for the EIS
Purchasing andPerformance
Systems
Informationtechnology standards
Informationneeds
Analysis ofOrganization
InformationSystems Plan
Corporatedata model
EIS16-40
Future EIS TrendsFuture EIS Trends
Use will become commonplaceUse will become commonplace Decreasing software pricesDecreasing software prices Will influence MIS/DSSWill influence MIS/DSS The computer will always play a support The computer will always play a support
rolerole
16-41
SummarySummary
Executives have unique information needsExecutives have unique information needs– Need for EISNeed for EIS– Specific uses of EISSpecific uses of EIS
EIS developmentEIS development– Personal productivity softwarePersonal productivity software– PrewrittenPrewritten– CustomCustom
EIS success factorsEIS success factors
16-42
Chapter 15Enterprise Information SystemsEnterprise Information Systems
Copyright 2001 Prentice-Hall, Inc.15-43
What is an Enterprise What is an Enterprise Information System Information System
(EntIS)?(EntIS)? Computer-based system that can perform all Computer-based system that can perform all
standard accounting tasks for all of the standard accounting tasks for all of the organizational units in an integrated and organizational units in an integrated and coordinated fashioncoordinated fashion
System purpose is to collect and System purpose is to collect and disseminate data to all processes of the disseminate data to all processes of the organizationorganization
Also called enterprise resource planning Also called enterprise resource planning (ERP)(ERP)
15-44
EIS
EntIS
Mar
keti
ng I
nfor
mat
ion
Syst
ems
Info
rmat
ion
Res
ourc
es
Info
rmat
ion
Sys
tem
s
Hum
an R
eso u
rce
Info
rmat
ion
Sy s
t em
s
Fina
ncia
l Inf
orm
atio
n Sy
stem
s
Man
ufac
turi
ng I
nfor
mat
ion
Syst
ems
Planning and Control
Transaction Recording
Aggregation of Data
Data Details
EIS Sitting Atop Business Area ISs
15-45
Evolution of EntISEvolution of EntIS First ISs in 1960’s were TPSsFirst ISs in 1960’s were TPSs MISsMISs Manufacturing requirements planning (MRP)Manufacturing requirements planning (MRP)
– Developed to deal with complex issues of inventory Developed to deal with complex issues of inventory controlcontrol
MRP IIMRP II– Information systems that encompass the flow of Information systems that encompass the flow of
material from vendors, through manufacturing, and to material from vendors, through manufacturing, and to the firm’s customersthe firm’s customers
15-46
Evolution of EntIS (cont.)Evolution of EntIS (cont.) ERPs were next logical stepERPs were next logical step
– All information about organizational processes All information about organizational processes is consolidatedis consolidated
– Requires large commitment of hardware Requires large commitment of hardware resources, sophisticated software, database resources, sophisticated software, database management systems, and well-trained usersmanagement systems, and well-trained users
15-47
Driving Forces Driving Forces Behind ERP PopularityBehind ERP Popularity
Fears about Y2K problemsFears about Y2K problems Difficulty in achieving enterprisewide Difficulty in achieving enterprisewide
systemssystems Recent flurry of corporate mergersRecent flurry of corporate mergers Follow-the-leader competitive strategiesFollow-the-leader competitive strategies
15-48
ERP Software IndustryERP Software Industry
Only limited number of vendorsOnly limited number of vendors Five largest vendors had combined sales of Five largest vendors had combined sales of
$10 billion in 1998$10 billion in 1998 Largest vendor is SAP (www.sap.com)Largest vendor is SAP (www.sap.com) Training and consulting are also big Training and consulting are also big
expenditures in this areaexpenditures in this area
15-49
50%
21%
13%
9%
7%
SAP
Oracle
PeopleSoft
J.D. Edwards
Baan
15-50
1998 ERP Sales of Top Five Vendors
Back Office SystemsBack Office Systems
Another name for ERPAnother name for ERP Traditionally ERP focused on internal Traditionally ERP focused on internal
entitiesentities EntIS is evolving outside the firm EntIS is evolving outside the firm
15-51
EntIS FeasibilityEntIS Feasibility
ERP is a large investment and must be ERP is a large investment and must be treated as suchtreated as such
Investment entails more than cash outlaysInvestment entails more than cash outlays– Commitment to focus on interacting business Commitment to focus on interacting business
processesprocesses Benefits are not always economicBenefits are not always economic Many feasibility issues need considerationMany feasibility issues need consideration
15-52
Economic FeasibilityEconomic Feasibility Concerned with justifying an expenditure by Concerned with justifying an expenditure by
considering both costs and benefits in monetary considering both costs and benefits in monetary termsterms
Investment costs for ERPInvestment costs for ERP– Very high: $10 million for a moderate sized applicationVery high: $10 million for a moderate sized application– High likelihood of negative ROIHigh likelihood of negative ROI
Tangible and intangible benefits must be Tangible and intangible benefits must be consideredconsidered
Opportunity costs of NOT implementing ERPOpportunity costs of NOT implementing ERP
15-53
Technical FeasibilityTechnical Feasibility EntIS must be viewed as technically complex EntIS must be viewed as technically complex
systems resting organizational database systems resting organizational database management systemsmanagement systems
EntIS may reside on single computer or be EntIS may reside on single computer or be distributeddistributed– May strain computing resourcesMay strain computing resources– May strain communications resourcesMay strain communications resources
Usually requires latest technology particularly in Usually requires latest technology particularly in larger organizationslarger organizations
15-54
Operational FeasibilityOperational Feasibility
Persons in the organization must be willing Persons in the organization must be willing and able to achieve the change from current and able to achieve the change from current IS to an EntISIS to an EntIS
Is business process standardization Is business process standardization desirable?desirable?– Loss of personalization of customer dataLoss of personalization of customer data– Cultural changesCultural changes
Need for EntIS Champion Need for EntIS Champion
15-55
EntIS ChampionEntIS Champion
Person or group who serves as driving force Person or group who serves as driving force behind the organization’s change to EntISbehind the organization’s change to EntIS
Variety of people can be EntIS championVariety of people can be EntIS champion Lead the organization to a fundamental Lead the organization to a fundamental
revamping of core business processesrevamping of core business processes
15-56
Possible EntIS ChampionsPossible EntIS Champions1. Chief executive officer
2. Teams of senior management
a) Chief information officer
b) Vice president of manufacturing
c) Chief financial officer
d) Other senior managers
3. Collection of well-respected middle managers from a wide spectrum of organization operations
15-57
EntIS ImplementationEntIS Implementation
Particular attention must be paid to software Particular attention must be paid to software vendors, training, and cutovervendors, training, and cutover
Takes monthsTakes months– Average is about two yearsAverage is about two years– Due to complexity and legacy systems Due to complexity and legacy systems
developed years earlierdeveloped years earlier Variety of approaches can be takenVariety of approaches can be taken
15-58
EntIS Vendor SelectionEntIS Vendor Selection
Choice of vendor is importantChoice of vendor is important Underlying business concepts in vendor’s Underlying business concepts in vendor’s
system should be major criteriasystem should be major criteria After major ERP pieces are in place, firm After major ERP pieces are in place, firm
may want to consider bolt-on systemsmay want to consider bolt-on systems– Software that takes advantage of ERP featuresSoftware that takes advantage of ERP features
» Customer relations managementCustomer relations management
» Demand forecastingDemand forecasting
» LogisticsLogistics
15-59
User TrainingUser Training Cannot be an afterthoughtCannot be an afterthought Must be part of the initial designMust be part of the initial design Requires users to understand business Requires users to understand business
processes beyond their normal jobsprocesses beyond their normal jobs ERP vendors provide training servicesERP vendors provide training services SAP is a leader in TrainingSAP is a leader in Training
15-60
Training Related to Training Related to ERP SoftwareERP Software
Type of Training
Learning ERP Vendor Software
Training by ERP Vendor (or company specializing in ERP training)
Peer-to-peer training such as conferences
When Training Should Occur
Before the EntIS is planned and designed
As the is being designed and implemented; also after the system is implemented
Especially helpful after the implementation of EntIS projects
15-61
SAPPHIRESAPPHIRE
SAP’s user support groupSAP’s user support group Composed of SAP employees, customers, Composed of SAP employees, customers,
vendors of products that work with SAPvendors of products that work with SAP Purpose is NOT to sell SAPPurpose is NOT to sell SAP
– Learn its featuresLearn its features– Make better use of its capabilitiesMake better use of its capabilities
15-62
ERPWorld Organization ERPWorld Organization (www.erpworld.com) (www.erpworld.com)
15-63
ERPWORLD.COM is an International Industry Analyst group
focusing on eBusiness and Enterprise application projects
Not affiliated with any particular vendor
Promotes knowledge and understanding of ERP
EntIS Implementation EntIS Implementation Cutover ApproachesCutover Approaches
ImmediateImmediate– Extremely dangerousExtremely dangerous– Failure could stop all organizational Failure could stop all organizational
information processinginformation processing PhasedPhased
– Segments related to various business processes Segments related to various business processes are implemented in sequence of importanceare implemented in sequence of importance
– Most viable methodMost viable method
15-64
EntIS Implementation EntIS Implementation Cutover Approaches Cutover Approaches
(cont.)(cont.) Parallel, often proceeded with a pilot effortParallel, often proceeded with a pilot effort
– EntIS and original system operate together for a EntIS and original system operate together for a period of time until EntIS is proven to workperiod of time until EntIS is proven to work
– Often too costlyOften too costly– May require more computing resources than a May require more computing resources than a
firm can acquirefirm can acquire
15-65
Minimizing EntIS FailuresMinimizing EntIS Failures
1. Understand the organization’s span of complexity
2. Recognize processes where value cannot be maintained if standardization is imposed
3. Achieve a consensus in the organization before deciding to implement an enterprise information system
15-66
EntIS and the WebEntIS and the Web Ease of useEase of use
– Web browsers are a viable interface for EntISWeb browsers are a viable interface for EntIS– Users don’t have to learn a new interfaceUsers don’t have to learn a new interface– WWW can provide a portal for an ERP WWW can provide a portal for an ERP
vendor’s applicationsvendor’s applications– Organization can be given location in an Organization can be given location in an
electronic mall provided by vendorelectronic mall provided by vendor– Benefits entities outside the boundaries of the Benefits entities outside the boundaries of the
organizationorganization
15-67
EntIS and the Web (cont.)EntIS and the Web (cont.) Customer concernsCustomer concerns
– EntIS are large and complexEntIS are large and complex– Challenge to EntIS firms is to standardize sales Challenge to EntIS firms is to standardize sales
processesprocesses– Organizations may choose to only allow Organizations may choose to only allow
business-to-business transactions to interface business-to-business transactions to interface with their EntISwith their EntIS
15-68
Future of EntISFuture of EntIS
EntIS industry is currently growing at a rate EntIS industry is currently growing at a rate exceeding 30% per yearexceeding 30% per year
Two directions Two directions – Rapid developmentRapid development– Enterprise resource managementEnterprise resource management
User-friendly softwareUser-friendly software Converging database and Enterprise Converging database and Enterprise
systemssystems
15-69
Accelerated ERP Accelerated ERP Development ToolsDevelopment Tools
Two-year implementation efforts are just Two-year implementation efforts are just too longtoo long
Accelerated ERP model Accelerated ERP model – Simplification of the enterprise resource Simplification of the enterprise resource
planning stepsplanning steps– SAP’s is called ASAPSAP’s is called ASAP
First order of business is to become a First order of business is to become a competent user of ERP vendor’s softwarecompetent user of ERP vendor’s software
15-70
SummarySummary
EntIS EntIS – Integrates all organizational unitsIntegrates all organizational units
ERP enables the management of an ERP enables the management of an organization’s resourcesorganization’s resources– Deals with internal processesDeals with internal processes
EntIS historyEntIS history– Part of IS evolution beginning in 1960’sPart of IS evolution beginning in 1960’s– Currently growing at exceptional rateCurrently growing at exceptional rate
15-71
Summary [cont.]Summary [cont.]
EntIS considerationsEntIS considerations– CostCost– TrainingTraining– Success versus failureSuccess versus failure
EntIS futureEntIS future– Move beyond firm’s boundariesMove beyond firm’s boundaries– Focus on the Web environmentFocus on the Web environment
15-72
Chapter 18Information ResourcesInformation Resources
Information SystemsInformation Systems
MANAGEMENT INFORMATION SYSTEMS 8/ERaymond McLeod, Jr. and George Schell
Copyright 2001 Prentice-Hall, Inc.18-73
Information Resources Information Resources Include:Include:
Specialists Specialists – Systems analysts, programmers, database Systems analysts, programmers, database
administrators, network specialists, operations administrators, network specialists, operations personnel, and otherspersonnel, and others
Hardware Hardware SoftwareSoftware UsersUsers DataData InformationInformation
Represents a largeorganizationalinvestment!
18-74
Information SpecialistsInformation Specialists
Most located in the information services Most located in the information services unitunit
There is a trend to locate specialists There is a trend to locate specialists throughout the firmthroughout the firm
Actual organization chart depends on the Actual organization chart depends on the needs of the firmneeds of the firm
18-75
A Functional Organization StructureA Functional Organization Structurefor Information Servicesfor Information Services
Networkmanager
Managerof computeroperations
Managerof systems
maintenance
Managerof systems
administration
CIO
Managerof systems
development
Systemsanalyst
Systemsanalyst
Operationspersonnel
Databaseadministrators
Networkspecialists
Programmers Programmers
18-76
Information ResourcesInformation Resources
Most are located in information servicesMost are located in information services Most that are centrally located are CIO’s Most that are centrally located are CIO’s
responsibilityresponsibility Those located in functional areas are the Those located in functional areas are the
responsibility of the area managerresponsibility of the area manager
18-77
Model of an IRISModel of an IRIS Input subsystemsInput subsystems
– AISAIS– Information resources researchInformation resources research– Information resources intelligenceInformation resources intelligence
Output subsystemsOutput subsystems– HardwareHardware– SoftwareSoftware– Human resourcesHuman resources– Data and InformationData and Information– Integrated resourceIntegrated resource
18-78
A Model of an Information ResourcesA Model of an Information ResourcesInformation SystemInformation System
Dat
abas
e
Accountinginformation
system
Informationresourcesresearch
subsystem
Informationresources
intelligencesubsystem
Hardwaresubsystem
Softwaresubsystem
Human resourcessubsystem
Data andinformationsubsystem
Integratedresource
subsystem
Inte
rnal
so
urce
s
Env
iron
men
tal s
ourc
es Users
18-79
Information Resources Information Resources Research SubsystemResearch Subsystem
Describes functions involved in special Describes functions involved in special research projects within the firmresearch projects within the firm
Performed by systems analysts interacting Performed by systems analysts interacting with userswith users
18-80
Information Resources Information Resources Intelligence SubsystemIntelligence Subsystem
Describes functions involved in gathering Describes functions involved in gathering information from elements in the firm’s information from elements in the firm’s environmentenvironment– GovernmentGovernment
– SuppliersSuppliers
– Labor unionsLabor unions
– Global communityGlobal community
– CustomersCustomers
– CompetitorsCompetitors
18-81
CIO ResponsibilitiesCIO Responsibilities Can be top-level executive who participates on Can be top-level executive who participates on
executive and MIS steering committeeexecutive and MIS steering committee Contributes to strategic planning for firm and IS Contributes to strategic planning for firm and IS
functionsfunctions Primary source of leadership for:Primary source of leadership for:
– Achieving and maintaining information qualityAchieving and maintaining information quality– Keeping information resources secureKeeping information resources secure– Planning for contingenciesPlanning for contingencies– Keeping information costs under controlKeeping information costs under control
18-82
Achieving Quality Products Achieving Quality Products and Servicesand Services
1) Identify IS customers1) Identify IS customers– MIS steering committeeMIS steering committee– Use of a formal system works bestUse of a formal system works best
2) Define customer quality needs2) Define customer quality needs– Product quality needsProduct quality needs– Service quality needsService quality needs
18-83
IS Takes Six Basic Steps inIS Takes Six Basic Steps inAchieving Quality ManagementAchieving Quality Management
11
22
33
44
55
66
Identify IS customers
Define customer quality needs
Establish quality metrics
Define quality strategy
Implement IS quality programs
Monitor IS quality performance
18-84
Comparison of How IS and Middle-LevelComparison of How IS and Middle-LevelManager-Users Perceive Product QualityManager-Users Perceive Product Quality
Accurate 4.91 4.88 4.89Trusts output 4.90 4.86 4.87Works as specified 4.75 4.73 4.73User friendly 4.50 4.75 4.68Relevant 4.59 4.53 4.53Fast response time 4.12 4.55 4.42Meets all user needs 4.22 4.48 4.41No downtime 3.96 4.25 4.16Delivered on time 3.80 4.16 4.05Has user documentation 4.21 3.93 4.01Can be changed quickly 3.84 4.04 3.98Delivered on budget 3.45 3.67 3.61Low cost of operation 3.19 3.49 3.40Has programmer documentation 3.74 3.23 3.39Uses new technology 3.04 3.28 3.21
Dimension IS User AggregatePerceived Value
18-85
Achieving Quality Products Achieving Quality Products
and Services [cont.]and Services [cont.]3) Establish quality metrics3) Establish quality metrics
– Information Information productproduct quality quality– Information Information serviceservice quality quality
4) Define the IS quality strategy4) Define the IS quality strategy– Recruiting and trainingRecruiting and training– User-oriented systems development User-oriented systems development
» Market analysisMarket analysis» Product acceptance analysisProduct acceptance analysis» Task analysisTask analysis» Prototype testsPrototype tests» Operational Systems testsOperational Systems tests
18-86
See Table 18.2
Basic Competencies ExpectedBasic Competencies Expectedof IS Job Applicantsof IS Job Applicants
1. Concern for effectiveness 2. Initiative 3. Enthusiasm for work 4. Self-confidence 5. Concern with impact 6. Interpersonal astuteness 7. Conceptual thinking 8. Analytical thinking 9. Effective communication10. Flexibility
18-87
Special Attention to Human FactorsSpecial Attention to Human FactorsEnsures That Users’ Needs are Ensures That Users’ Needs are
IncorporatedIncorporatedinto Systems Designsinto Systems Designs1.
Planningphase
2.Analysis phase
3.Designphase
4.Implementation
phase
5.Use phase
Conduct amarket analysis
Conduct a productacceptance analysis
Conduct atask analysis
Conductprototype tests
Conductoperational
system tests
18-88
Achieving Quality Products Achieving Quality Products
and Services [cont.]and Services [cont.]
5) Implement IS quality programs5) Implement IS quality programs– Implementation varies with firmImplementation varies with firm
6) Monitor IS quality6) Monitor IS quality– Performance of IS specialists and the unitPerformance of IS specialists and the unit
18-89
Security ObjectivesSecurity Objectives
ConfidentialityConfidentiality AvailabilityAvailability IntegrityIntegrity
Current attention is focused on malicious software such as
computer viruses.
18-90
IntegrityIntegrityAvailabilityAvailability
InformationInformationUnauthorizedUnauthorized useuse
UnauthorizedUnauthorizeddisclosure disclosure and theftand theft
UnauthorizedUnauthorizeddestruction and destruction and denial of servicedenial of service
UnauthorizedUnauthorizedmodificationmodification
SecuritySecurity
ConfidentialityConfidentiality
Unauthorized Acts Threaten System Security Unauthorized Acts Threaten System Security ObjectivesObjectives
18-91
Identification
Authentication
Authorization
UserProfiles
Accesscontrol
files
DatabaseSoftwarelibrary
Auditlog
Reportwriter
Securityreports
Users
Access Control Functions18-92
Access ControlAccess Control Identification Identification
– What you know (password) or What you know (password) or – Where you are (terminal location)Where you are (terminal location)
Authentication Authentication – What you have (badge)What you have (badge)
Authorization Authorization – Level of useLevel of use
High-grade threats are from sophisticated computer criminals 18-93
Contingency PlanningContingency Planning
Emergency planEmergency plan Backup planBackup plan
– RedundancyRedundancy– DiversityDiversity– MobilityMobility
» Reciprocal agreementReciprocal agreement» Hot siteHot site» Cold siteCold site» Empty shellEmpty shell
18-94
Vital Records PlanVital Records Plan Electronic vaultingElectronic vaulting
– Day end backup of files electronicallyDay end backup of files electronically
Remote journalingRemote journaling– Transmission of transaction data as the transactions Transmission of transaction data as the transactions
occuroccur
– Used to update remote database in batch form laterUsed to update remote database in batch form later
Database shadowingDatabase shadowing– Involves updating of duplicate database at remote site Involves updating of duplicate database at remote site
as transaction occuras transaction occur
18-95
Cost-Reduction StrategiesCost-Reduction Strategies
ConsolidationConsolidation– Reduces number of separate locations for Reduces number of separate locations for
information resourcesinformation resources– Easiest to achieve in terms of information Easiest to achieve in terms of information
resourcesresources– More difficult by end-user computing needsMore difficult by end-user computing needs
18-96
Cost-Reduction Strategies Cost-Reduction Strategies [cont.][cont.]
DownsizingDownsizing– Migrating to smaller platformsMigrating to smaller platforms– Advantage of cost reductionAdvantage of cost reduction– Advantage of increased productivity with PCs Advantage of increased productivity with PCs
located in user areaslocated in user areas– Risk of lost securityRisk of lost security
18-97
Cost-Reduction Strategies Cost-Reduction Strategies [cont.][cont.]
OutsourcingOutsourcing– Data entry and simple processing (editing, Data entry and simple processing (editing,
formatting)formatting)– Contract programmingContract programming– Facilities management (FM)Facilities management (FM)– Systems integration (SI)Systems integration (SI)– Support for maintenance, service, or disaster Support for maintenance, service, or disaster
recoveryrecovery
18-98
Objectives of OutsourcingObjectives of Outsourcing
Manage costs betterManage costs better ReduceReduce ContainContain PredictPredict Obtain relief from systems maintenance so Obtain relief from systems maintenance so
as to concentrate on new system as to concentrate on new system developmentdevelopment
Acquire needed expertiseAcquire needed expertise
18-99
Information Management Information Management in Three Pacific Rim in Three Pacific Rim
CountriesCountries Countries were U.S., Korea, and MexicoCountries were U.S., Korea, and Mexico Centralization versus decentralizationCentralization versus decentralization
– Most firms were centralizedMost firms were centralized CIO participation in strategic business CIO participation in strategic business
planningplanning– CIO has a long way to go before achieving CIO has a long way to go before achieving
status as a top-level executivestatus as a top-level executive
18-100
Information Management Information Management in Three Pacific in Three Pacific
Rim Countries [cont.]Rim Countries [cont.] Information systems planningInformation systems planning
– Most firms have IS planMost firms have IS plan– CIO is primarily responsibleCIO is primarily responsible
Sharing information resources with usersSharing information resources with users– In general, CIOs support end-user computing In general, CIOs support end-user computing
trendstrends
18-101
Proactive CIO StrategyProactive CIO Strategy1) CIO must emphasize quality management 1) CIO must emphasize quality management
of the IS resourceof the IS resource2) Achieve strong user ties2) Achieve strong user ties3) Strengthen executive ties3) Strengthen executive ties4) Assemble an IS management team4) Assemble an IS management team5) Assemble staff competent in leading-edge 5) Assemble staff competent in leading-edge
technologies technologies andand methodologies methodologies6) Build an IRIS6) Build an IRIS
18-102
The Future of the CIOThe Future of the CIO Business computing is moving from centralized to Business computing is moving from centralized to
decentralized computing in terms of:decentralized computing in terms of:– EquipmentEquipment– DevelopmentDevelopment– Decision makingDecision making
CIO RolesCIO Roles– Big brotherBig brother– Helping handHelping hand– WatchdogWatchdog– NetworkerNetworker
18-103
Equipment
Big brotherA
B Helping hand
D Network
WatchdogC
DecentralizedCentralized
Decentralized
Dev
elop
men
t Decentralized
Decisi
on m
aking
Centralized
Donovan’s Four Stages of Decentralized Donovan’s Four Stages of Decentralized ComputingComputing
18-104
SummarySummary Information resources located in IS are the Information resources located in IS are the
responsibility of the CIOresponsibility of the CIO IRIS is used to manage information resources IRIS is used to manage information resources
within an organizationwithin an organization CIO must: CIO must:
– Promote quality information products and servicesPromote quality information products and services
– Ensure security of ISEnsure security of IS
– Prepare for disastersPrepare for disasters
18-105
Summary [cont.]Summary [cont.] IS cost cutting considerationsIS cost cutting considerations
– ConsolidationConsolidation– DownsizingDownsizing– OutsourcingOutsourcing
CIO can be proactiveCIO can be proactive
18-106