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Unit-I
Dr.M.Umasankar
• https://youtu.be/-34KXc7O8nI
Unit-1 System concepts and Information
systems Environment
1) Introduction
2) The system concept-Definition
3) Characteristics of a system - Important element
4) Dynamic personnel information system model
5) Information system- Activities, resources and trends
6) IT as key business enabler and driver
System Concept
• What is a System?
Definition
• Input
• Processing
• Output
• Feedback
• Control
Information System
• https://youtu.be/UKqpSngoK7E
Trends in
Information
System
Recent trends in Information System
• Cloud computing
• Mobile computing and application
• Big data analytics
• Automation
• Artificial intelligence
• Virtual reality / Augmented reality
• Blockchain technology
IT as a Key Business Enabler & Driver
IT IN BUSINESS
Unit - II
Business Process Management & IT
■ Introduction
■ Business Process Management
■ Need for BPM Implementation
■ Challenges in implementing BPA
■ Business Process reengineering
WHAT IS A PROCESS?
■ A process is defined as a sequence of events that uses inputs to produce
outputs.
WHAT IS BUSINESS PROCESS?
■ Business process is a prescribed sequence of work steps performed in order to
produce a desired result for the organisation.
■ To manage business process:
■ 1st task: Defining the steps & mapping the tasks involved in process.
■ 2nd task: Performance measures should be established which creates a basis
to improve the process.
■ 3rd task: Describe the organizational set up that enables the standardization to
the process throughout the organisation.
BUSINESS PROCESS
REENGINEERING
■ BPR is the fundamental rethinking & redesign of processes to achieve dramatic
improvement in critical, contemporary measures of performance such as cost,
quality, service & speed .
BUSINESS PROCESS
MANAGEMENT
■ The achievement of an organisation s objectives through the improvement,
management and control of essential business processes
IT in Business
■ Marketing System
■ Manufacturing System
■ Human Resource System
■ Accounting Systems
■ Financial Management Systems
Marketing System
Components of Targeted Marketing
Targeted Marketing
■ Community
– Community of Interest
■ Content
■ Context (People looking for information)
– Vacation Travel, car rental service
■ Demographic/Psychographic
– Unmarried
– Middle income
– Male
– College Graduate
■ Online Behaviour
– Web Cookie
Manufacturing System
■ CIM is an overall concept that emphasizes that the objectives of computer-
based systems in manufacturing must be to:
■ Simplify (reengineer) production processes, product designs, and factory
organization as a vital foundation to automation and integration.
■ Automate production processes and the business functions that support them
with computers, machines, and robots.
■ Integrate all production and support processes using computer networks,
crossfunctional business software, and other information technologies.
CIM Supports
■ Flexible manufacturing system
■ Agile manufacturing system
■ Total quality management
■ Computer Aided Engineering (CAE)
■ Computer Aided Design (CAD)
■ Material Requirement Planning (MRP)
■ Manufacturing Resource Planning (MRP)
Human Resource System
■ Human Resource Information Systems (HRIS) are designed to support
(1) planning to meet the personnel needs of the business,
(2) development of employees to their full potential,
(3) control of all personnel policies and programs.
Accounting System
■ Accounting information systems are the oldest and most widely used information
systems in business. They record and report business transactions and other
economic events
■ these systems include transaction processing systems such as
– order processing,
– inventory control,
– accounts receivable ,
– accounts payable,
– payroll,
– general ledger systems
Financial Management System
■ Computer-based financial management systems support business managers
and professionals in decisions concerning
(1) the financing of a business and
(2) the allocation and control of financial resources within a business.
Cross Functional Enterprise
Applications
■ cross the boundaries of traditional business functions in order to reengineer and
improve vital business processes all across the enterprise.
https://www.cnbc.com/2018/12/13/inside-apple-iphone-where-
parts-and-materials-come-from.html
§ supply chain management is a cross-functional
interenterprise system that uses information technology to
help support and manage the links between some of a
company’s key business processes and those of its
suppliers, customers, and business partners.
§ operations management
§ logistics
§ procurement
§ information technology
§ integrated business operations
§ To decrease inventory cost by more accurately predicting demand and scheduling
production to match it.
§ To reduce overall production cost by streamlining production and by improving
information flow.
§ To improve customer satisfaction.
§ Customer Relationship Management
§ Customer Service Management
§ Demand Management
§ Customer Order Fulfillment
§ Manufacturing Flow Management
§ Procurement Management
§ Product Development and Commercialization
§ Returns Management
§ To the suppliers −
§ Help in giving clear-cut instruction
§ Online data transfer reduce paper work
§ Inventory Economy −
§ Low cost of handling inventory
§ Low cost of stock outage by deciding optimum size of replenishment orders
§ Achieve excellent logistical performance such as just in time
§ Distribution Point −
§ Satisfied distributor and whole seller ensure that the right products reach the right place at
right time
§ Clear business processes subject to fewer errors
§ Easy accounting of stock and cost of stock
§ Channel Management −
§ Reduce total number of transactions required to provide product assortment
§ Organization is logically capable of performing customization requirements
§ Financial management −
§ Low cost
§ Realistic analysis
§ Operational performance −
§ It involves delivery speed and consistency.
§ External customer −
§ Conformance of product and services to their requirements
§ Competitive prices
§ Quality and reliability
§ Delivery
§ After sales services
§ To employees and internal customers −
§ Teamwork and cooperation
§ Efficient structure and system
§ Quality work
§ Delivery
§ https://www.youtube.com/watch?v=HxJ2_XgV2-w
§ Enterprise resource planning is a cross-functional enterprise system driven by an
integrated suite of software modules that supports the basic internal business
processes of a company.
§ An ERP system is an attempt to integrate all functions across a company to a single
computer system that can serve all those functions’ specific needs.
§ Support business through optimizing, maintaining, and tracking business functions
SAP - Systems Applications Products in
Data Processing
37.50% - Honda, IBM, Bank of Canada,P & G.
Oracle –
10.50% - USPS, CBS, Nike, Kodak, Toronto
Dominion Bank
PeopleSoft - - 16.50% - NBA, Adidas, Anderson Consulting,
Hilton Hotels, NYNEX
21% others.
§Quality and Efficiency
§Decreased Cost
§Decision Support
§Enterprise Agility
§ OPTION 1 – MAKE [Using Internal resources]
§ Developing a custom-built ERP package, specific to the requirements
of the organization, with the help of the in-house IT department
§ OPTION 2 - BUY
§ Going for Tailor-made ERP packages available in the market like SAP,
Oracle applications, Baan, PeopleSoft etc.
Flexibility of software system upgrades
Availability of internal technical knowledge and resources
Education and training
Need an outside consultant
Implementation strategy and execution
§ Business Integration
§ Improved customer service and order fulfillment
§ Improved communication with suppliers and customers.
§ One common system - less duplication, more efficient.
§ Reduce inventory.
§ Saves enormous time and effort in data entry. Improved business performance.
§ High Software cost
§ Consulting Fees.
§ Forced change of processes.
§ Very complex software
§ Lack of trained people
§ Not Internet-ready
Autodesk (computer aided design software maker)
§ Reduced delivery time from two weeks to less than 24 hours
IBM Storage Systems Division
§ Reduced time to re-price – 5 days to 5 minutes
§ Time to ship a replacement part – 22 to 3 days
§ Time to complete a credit check – 20 minutes to 3 seconds
Fujitsu Microelectronics
§ Reduced the cycle time for filling orders – from 18 days to
1.5 days
§ Time to close financial books – from 8 to 4 days
§ Systems can be very difficult to use.
§ Software logic and the company strategy may not match!
§ Inadequate training to end users.
§ Many companies cut costs by cutting user training.
§ ERP systems can be very expensive to install.
IT in BUSINESS
UNIT - III
Different Information system ant its application in
Business
• Transaction Processing System
• Decision Support System
• Management Information system
• Office Automation System
• Knowledge System
• Intelligence Data System
• Business Intelligence System
• Customer Relationship Management
• Supply Chain Management
• Enterprise Resource Planning
TRANSACTION PROCESSING SYSTEM
• Transaction Processing System is a type of information system that collects, stores,
modifies and retrieves the data transaction of an enterprise.
• Eg. Airline reservation system, electronic fund transfer, bank account processing sytem
• DESIGNED TO PROCESS ROUTINE BUSINESS TRANSACTIONS
• SEEKS TIME AND COST EFFICIENCY BY AUTOMATING REPETITIVE OPERATIONS
IN LARGE VOLUMES.
What is a Transaction?
• Transaction:
• •A business activity between seller and buy to exchange an asset for
payment.
• •Basic business operations such as customer orders, purchase orders,
receipts, time cards, invoices, and payroll checks in an organization.
Types of Transaction
• Internal Transaction
• Eg. : Recruitment, Promotion and Production
• External Transaction
• Eg. : Sales, Purchase etc.,
Qualifiers
• In order to qualify as a TPS, transactions made by the system must pass the ACID test.
The ACID tests refers to the following four pre-requisites:
1. Atomicity
Atomicity means that a transaction is either completed in full or not at all.
2. Consistency
TPS systems exist within a set of operating rules (or integrity constraints).
3. Isolation (Simultaneous)
Transactions must appear to take place in isolation.
4. Durability
Once the transaction is completed they cannot be undone
Features of Transaction Processing Systems
• Rapid response
• Continuous Availability
• Data Integrity
• Ease of use
Components of a Transaction System
• The User
• Participants
• People
Types of TPS
• Batch Processing system
• Batch processing is where the information is collected and stored as a batch but not
processed immediately.
• On-line transaction processing (OLTP)
• A system whereby each transaction is processed immediately, without the delay of
accumulating transactions into a batch.
• Real-time transaction –Mostly in Online shopping
• –Uses PCI cards (Payment Card Industry):
• –PayPal or World Pay, We Pay, e-Way, ICEPAY, ATM’s.
Data Processing Cycle
1. Data Entry
• Collecting and capturing transactions
• No longer manual:
–Old technologies : Bar Codes, Magnetic Strips (credit cards)
–New technologies : RFID, Smart Cards,
2. Database Maintenance
TPS helps ensure the databases are up-to-date and correct.
Multiple databases (internal & external)
Data Processing Cycle (Contd.)
• 3. Document/Report Generation
• Examples
–purchase orders
–pay checks
–sales receipts
–invoices
–bank statements
Data Processing Cycle (Contd.)
• 4. inquiry processing:
• examples
• when was a purchase made
• does a customer have any credits on their account
• was an item scheduled for delivery
• was a package signed for
DECISION SUPPORT SYSTEM
• Decision support systems (DSS) are interactive software-based systems intended to
help managers in decision-making by accessing large volumes of information generated
from various related information systems involved in organizational business processes,
such as office automation system, transaction processing system, etc.
DECISION SUPPORT SYSTEM
• DSS uses
the summary information, exceptions, patterns, and trends using the
analytical models.
• DSS helps
in decision-making but does not necessarily give a decision itself.
• The decision makers
compile useful information from raw data, documents, personal
knowledge, and/or business models to identify and solve problems and
make decisions.
Types of Decisions
• Programmed Decisions (automated processes, general routine work)
• These decisions have been taken several times.
• These decisions follow some guidelines or rules.
• Eg. Selecting a reorder level.
• Non-programmed Decisions (unusual and non-addressed situations)
• It would be a new decision.
• There will not be any rules to follow.
• These decisions are made based on the available information.
• These decisions are based on the manger's discretion, instinct, perception and judgment.
• Eg. Investing in new technology
Attributes of a DSS
• Adaptability and flexibility
• High level of Interactivity
• Ease of use
• Efficiency and effectiveness
• Complete control by decision-makers
• Ease of development
• Extendibility
• Support for modeling and analysis
• Support for data access
• Standalone, integrated, and Web-based
Characteristics of a DSS
• Support for decision-makers in semi-structured and unstructured problems.
• Support for managers at various managerial levels, ranging from top executive to line
managers.
• Support for individuals and groups.
• Support for interdependent or sequential decisions.
• Support for intelligence, design, choice, and implementation.
• Support for variety of decision processes and styles.
• DSSs are adaptive over time.
Benefits of DSS
• Improves efficiency and speed of decision-making activities.
• Increases the control, competitiveness and capability of futuristic decision-making of the
organization.
• Facilitates interpersonal communication.
• Encourages learning or training.
• Since it is mostly used in non-programmed decisions, it reveals new approaches and sets up
new evidences for an unusual decision.
• Helps automate managerial processes.
Components of a DSS
• Database Management System (DBMS)
• To solve a problem the necessary data may come from internal or external
database.
• Model Management System
• It stores and accesses models that managers use to make decisions.
• Support Tools
• Support tools like online help; pulls down menus, user interfaces, graphical
analysis, error correction mechanism, facilitates the user interactions with the
system.
Classification of DSS
• Text Oriented DSS
• It contains textually represented information that could have a bearing on decision. It allows
documents to be electronically created, revised and viewed as needed.
• Database Oriented DSS
• Database plays a major role here; it contains organized and highly structured data.
• Spreadsheet Oriented DSS
• It contains information in spread sheets that allows create, view, modify procedural knowledge and
also instructs the system to execute self-contained instructions. The most popular tool is Excel and
Lotus 1-2-3.
• Solver Oriented DSS
• It is based on a solver, which is an algorithm or procedure written for performing certain calculations
and particular program type.
• Rules Oriented DSS
• It follows certain procedures adopted as rules.
• Rules Oriented DSS
• Procedures are adopted in rules oriented DSS. Export system is the example.
• Compound DSS
• It is built by using two or more of the five structures explained above.
Types of DSS
• Status Inquiry System
• It helps in taking operational, management level, or middle level
management decisions, for example daily schedules of jobs to machines
or machines to operators.
• Data Analysis System
• It needs comparative analysis and makes use of formula or an algorithm,
for example cash flow analysis, inventory analysis etc.
• Information Analysis System
• In this system data is analyzed and the information report is generated.
For example, sales analysis, accounts receivable systems, market
analysis etc.
Types of DSS
• Accounting System
• It keeps track of accounting and finance related information, for example,
final account, accounts receivables, accounts payables, etc. that keep
track of the major aspects of the business.
• Model Based System
• Simulation models or optimization models used for decision-making are
used infrequently and creates general guidelines for operation or
management.
Office Automation System
• The system consists of both hardware and software solutions that enable the transfer of data
between systems absent human contributions or interventions.
• Office automation eases organizational workloads by simplifying and automating processes
like accounting, data management, training, facility management, and various administrative
tasks.
Why OAS?
• An office automation system doesn’t consist of just going paperless.
• For example, maintaining all work product and client correspondence in a document
management system.
• Yet, an office automation system offers organizations much more than going green by cutting
down on paper.
• It is a powerful tool that can be used to eliminate manual processes, identify inefficient
workflows, and facilitate informed decision-making.
Benefits of an Office Automation System
• IMPROVED ACCURACY
• REDUCED COSTS
• REDUCED TIME AND RESOURCES
• DATA STORAGE AND MANAGEMENT
• DATA INSIGHTS AND MORE INFORMED DECISIONS
• BUSINESS PROCESS IMPROVEMENT
How to implement an office automation system?
• Deciding what to automate
• Business process mapping
Key features of an office automation system
• Process modeling and workflow design
• Mobile compatibility
• Integration
• Managing tasks and deadlines
• Access control and security
• Communication
• Reporting and analytics
Knowledge Management System
• Knowledge management refers to the set of business processes developed in an
organization to create, store, transfer, and apply knowledge.
• Knowledge management increases the ability of the organization to learn from its
environment and to incorporate knowledge into its business processes.
Business Intelligence System
• Infrastructure for warehousing, integrating, reporting, and analyzing data that comes
from the business environment. The foundation infrastructure collects, stores, cleans,
and makes relevant information available to managers.
Business Intelligence System
• Business intelligence systems combine data gathering, data storage, and knowledge
management with data analysis to evaluate and transform complex data into meaningful,
actionable information, which can be used to support more effective strategic, tactical,
and operational insights and decision-making.
THE BUSINESS INTELLIGENCE
ENVIRONMENT
• Data from the business environment:
• Structured Data
• Unstructured Data
• Business intelligence infrastructure:
• Powerful Database System
• Business analytics toolset:
• Set of software tools
• Managerial users and methods:
• Delivery platform—MIS, DSS, ESS.
• User interface:
Business intelligence and analytics
capabilities
• Production reports: These are predefined reports based on industry-specific requirements
• Parameterized reports. Users enter several parameters as in a pivot table to filter data and isolate
impacts of parameters.
• Dashboards/scorecards: These are visual tools for presenting performance data defined by users
• Ad hoc query/search/report creation: These allow users to create their own reports based on
queries and searches
• Drill down: This is the ability to move from a high-level summary to a more detailed view
• Forecasts, scenarios, models: These include the ability to perform linear forecasting, what-if
scenario analysis, and analyze data using standard statistical tools.
CRM
• Customer Relationship Management (CRM) is an approach that helps businesses
improve existing customer relationships and acquire new customers faster.
• Customer relationship management is the process of managing interactions with existing
as well as past and potential customers. It is one of many different approaches that allow
a company to manage and analyse its own interactions with its past, current and
potential customers
Why CRM?
• To keep track of all present and future customers.
• To identify and target the best customers.
• To let the customers know about the existing as well as the new products and services.
• To provide real-time and personalized services based on the needs and habits of the
existing customers.
• To provide superior service and consistent customer experience.
• To implement a feedback system
Scope of CRM
CRM Examples
• Sending out a thank you when a customer makes a purchase.
• Upsell or cross-sell a client if they purchase a particular product.
• Offering a birthday greeting with a promo code.
• Sending a discount to a customer that hasn’t made a purchase recently.
• Tying a content download to a specific product pitch.
• Notifying current customers when a new product has been launched.
• Sending an email to people that abandon purchases in their shopping cart without buying.
• Offering “just in time” ordering.
• Notifying customers when an item on their wish list goes on sale.
• Providing after-the-sale support in the form of a helpful how-to or tips on how to upgrade.
• Sending customers information on new products they might be interested in, based on prior
purchases.
• Conducting customer satisfaction surveys.
SCM
• HTTPS://WWW.CNBC.COM/2018/12/13/INSIDE-APPLE-IPHONE-WHERE-PARTS-
AND-MATERIALS-COME-FROM.HTML
• HTTPS://WWW.YOUTUBE.COM/WATCH?V=HXJ2_XGV2-W