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ERP

a book from wikipedia for GGSIPU

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Contents
Articles
UNIT 1 Introduction
Enterprise resource planning 1 2 2 9 10 10 14 17 19 24 31 33 38 41 42 43 43 55 67 79 91 95 100 103 104 109 109 111 117

UNIT 2 systems in ERP
Management information system Operations support system Operations management Decision support system Transaction processing system Online transaction processing Online analytical processing Object Process Methodology ERP modeling

UNIT 3 Resource Management
Customer relationship management Supply chain management Project management Access control Manufacturing resource planning Business process management Document automation Enterprise feedback management Enterprise planning systems Manufacturing operations management Warehouse management system Quality management Six Sigma

Quality control Quality investing Quality engineering Business process reengineering Product lifecycle management

126 128 130 130 137 146 147 147 150

UNIT 4 ERP Issues
ERP system selection methodology List of ERP software packages

References
Article Sources and Contributors Image Sources, Licenses and Contributors 155 159

Article Licenses
License 161

1 UNIT 1 .

purchasing. capacity. call center support Data services Various "self–service" interfaces for customers. receivables. Its purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. budgeting. billing. performance units.[1] ERP systems can run on a variety of hardware and network configurations. scheduling. consolidation Human resources payroll. benefits. service. A common database. manufacturing flow. sales and service. customer relationship management. ERP systems automate this activity with an integrated software application. training. cash management. payables. Installation of the system without elaborate application/data integration by the Information Technology (IT) department. embracing finance/accounting. inventory. product lifecycle management Supply chain management Order to cash. fixed assets. without relying on periodic updates. order entry. product configurator. workflow management. claim processing. supply chain planning. A consistent look and feel throughout each module. supplier scheduling. etc. inspection of goods. bill of materials. which supports all applications. suppliers and/or employees Access control Management of user privileges for various processes . commissions Project management Costing. commissions. time and expense. activity based costing. cost management. manufacturing projects. customer contact. manufacturing process. work orders. typically employing a database as a repository for information. recruiting.[2] Characteristics ERP systems typically include the following characteristics: • • • • An integrated system that operates in real time (or next to real time).[3] Finance/Accounting General ledger. diversity management Manufacturing Engineering.2 Introduction Enterprise resource planning Enterprise resource planning (ERP) integrates internal and external management information across an entire organization. 401K. quality control. activity management Customer relationship management Sales and marketing. manufacturing.

Enterprise resource planning

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History
Origin of "ERP"
In 1990 Gartner Group first employed the acronym ERP[4] as an extension of material requirements planning (MRP), later manufacturing resource planning[5] [6] and computer-integrated manufacturing. Without supplanting these terms, ERP came to represent a larger whole, reflecting the evolution of application integration beyond manufacturing.[7] Not all ERP packages were developed from a manufacturing core. Vendors variously began with accounting, maintenance and human resources. By the mid–1990s ERP systems addressed all core functions of an enterprise. Beyond corporations, governments and non–profit organizations also began to employ ERP systems.[8]

Expansion
ERP systems experienced rapid growth in the 1990s because of the year 2000 problem and introduction of the Euro disrupted legacy systems. Many companies took this opportunity to replace such systems with ERP. This rapid growth in sales was followed by a slump in 1999 after these issues had been addressed.[9] ERP systems initially focused on automating back office functions that did not directly affect customers and the general public. Front office functions such as customer relationship management (CRM) dealt directly with customers, or e–business systems such as e–commerce, e–government, e–telecom, and e–finance, or supplier relationship management (SRM) became integrated later, when the Internet simplified communicating with external parties. "ERP II" was coined in the early 2000s. It describes web–based software that allows both employees and partners (such as suppliers and customers) real–time access to the systems. "Enterprise application suite" is an alternate name for such systems.

Components
• • • • • • • • • Transactional database Management portal/dashboard Business intelligence system Customizable reporting External access via technology such as web services Search Document management Messaging/chat/wiki Workflow management

Best practices
Best practices are incorporated into most ERP systems. This means that the software reflects the vendor's interpretation of the most effective way to perform each business process. Systems vary in the convenience with which the customer can modify these practices.[10] Companies that implemented industry best practices reduced time–consuming project tasks such as configuration, documentation, testing and training. In addition, best practices reduced risk by 71% when compared to other software implementations.[11] The use of best practices eases compliance with requirements such as IFRS, Sarbanes-Oxley, or Basel II. They can also help comply with de facto industry standards, such as electronic funds transfer. This is because the procedure can be readily codified within the ERP software and replicated with confidence across multiple businesses who share that business requirement.

Enterprise resource planning

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Modularity
Most systems are modular to permit automating some functions but not others. Some common modules, such as finance and accounting, are adopted by nearly all users; others such as human resource management are not. For example, a service company probably has no need for a manufacturing module. Other companies already have a system that they believe to be adequate. Generally speaking, the greater the number of modules selected, the greater the integration benefits, but also the greater the costs, risks and changes involved.

Connectivity to plant floor information
ERP systems connect to real–time data and transaction data in a variety of ways. These systems are typically configured by systems integrators, who bring unique knowledge on process, equipment, and vendor solutions. Direct integration—ERP systems connectivity (communications to plant floor equipment) as part of their product offering. This requires the vendors to offer specific support for the plant floor equipment that their customers operate. ERP vendors must be expert in their own products, and connectivity to other vendor products, including competitors. Database integration—ERP systems connect to plant floor data sources through staging tables in a database. Plant floor systems deposit the necessary information into the database. The ERP system reads the information in the table. The benefit of staging is that ERP vendors do not need to master the complexities of equipment integration. Connectivity becomes the responsibility of the systems integrator. Enterprise appliance transaction modules (EATM)—These devices communicate directly with plant floor equipment and with the ERP system via methods supported by the ERP system. EATM can employ a staging table, Web Services, or system–specific program interfaces (APIs). The benefit of an EATM is that it offers an off–the–shelf solution. Custom–integration solutions—Many system integrators offer custom solutions. These systems tend to have the highest level of initial integration cost, and can have a higher long term maintenance and reliability costs. Long term costs can be minimized through careful system testing and thorough documentation. Custom–integrated solutions typically run on workstation or server class computers. Standard protocols—Communications drivers are available for plant floor equipment and separate products have the ability to log data to staging tables. Standards exist within the industry to support interoperability between software products, the most widely known being OPC[12]

Implementation
ERP's scope usually implies significant changes to staff work processes and practices.[13] Generally, three types of services are available to help implement such changes—consulting, customization, and support.[13] Implementation time depends on business size, number of modules, customization, the scope of process changes, and the readiness of the customer to take ownership for the project. Modular ERP systems can be implemented in stages. The typical project for a large enterprise consumes about 14 months and requires around 150 consultants.[14] Small projects can require months; multinational and other large implementations can take years. Customization can substantially increase implementation times.[14]

Enterprise resource planning

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Process preparation
Implementing ERP typically requires changes in existing business processes.[15] Poor understanding of needed process changes prior to starting implementation is a main reason for project failure.[16] It is therefore crucial that organizations thoroughly analyze business processes before implementation. This analysis can identify opportunities for process modernization. It also enables an assessment of the alignment of current processes with those provided by the ERP system. Research indicates that the risk of business process mismatch is decreased by: • linking current processes to the organization's strategy; • analyzing the effectiveness of each process; • understanding existing automated solutions.[17] [18] ERP implementation is considerably more difficult (and politically charged) in decentralized organizations, because they often have different processes, business rules, data semantics, authorization hierarchies and decision centers.[19] This may require migrating some business units before others, delaying implementation to work through the necessary changes for each unit, possibly reducing integration (e.g. linking via Master data management) or customizing the system to meet specific needs. A potential disadvantage is that adopting "standard" processes can lead to a loss of competitive advantage. While this has happened, losses in one area often offset by gains in other areas, increasing overall competitive advantage.[20]
[21]

Configuration
Configuring an ERP system is largely a matter of balancing the way the customer wants the system to work with the way it was designed to work. ERP systems typically build many changeable parameters that modify system operation. For example, an organization can select the type of inventory accounting—FIFO or LIFO—to employ, whether to recognize revenue by geographical unit, product line, or distribution channel and whether to pay for shipping costs when a customer returns a purchase.

Customization
ERP systems are theoretically based on industry best practices and are intended to be deployed "as is"[22] [23] . ERP vendors do offer customers configuration options that allow organizations to incorporate their own business rules but there are often functionality gaps remaining even after the configuration is complete. ERP customers have several options to reconcile functionality gaps, each with their own pros/cons. Technical solutions include rewriting part of the delivered functionality, writing a homegrown bolt-on/add-on module within the ERP system, or interfacing to an external system. All three of these options are varying degrees of system customization, with the first being the most invasive and costly to maintain[24] . Alternatively, there are non-technical options such as changing business practices and/or organizational policies to better match the delivered ERP functionality. Key differences between customization and configuration include: • Customization is always optional, whereas the software must always be configured before use (e.g., setting up cost/profit center structures, organisational trees, purchase approval rules, etc.) • The software was designed to handle various configurations, and behaves predictably in any allowed configuration. • The effect of configuration changes on system behavior and performance is predictable and is the responsibility of the ERP vendor. The effect of customization is less predictable, is the customer's responsibility and increases testing activities. • Configuration changes survive upgrades to new software versions. Some customizations (e.g. code that uses pre–defined "hooks" that are called before/after displaying data screens) survive upgrades, though they require retesting. Other customizations (e.g. those involving changes to fundamental data structures) are overwritten

6 Extensions ERP systems can be extended with third–party software. marketing and sales. using scanners. Tasks that benefit from this integration include[29] : • • • • Sales forecasting. human resource. tills or RFID • access to specialized data/capabilities. Data becomes visible across the organization. such as syndicated marketing data and associated trend analytics. Extensions offer features such as: • archiving. Comparison to special–purpose applications Advantages The fundamental advantage of ERP is that integrating the myriad processes by which businesses operate saves time and expense. it often receives insufficient attention.Enterprise resource planning during upgrades and must be reimplemented[25] . from invoice through cash receipt Matching purchase orders (what was ordered). • Inhibits seamless communication between suppliers and customers who use the same ERP system uncustomized. since migration is one of the final activities before the production phase. from acceptance through fulfillment Revenue tracking. • They provide a comprehensive enterprise view (no "islands of information"). ERP vendors typically provide access to data and functionality through published interfaces.g. • capturing transactional data. The following steps can structure migration planning:[28] • • • • • • Identify the data to be migrated Determine migration timing Generate the data templates Freeze the toolset Decide on migration-related setups Define data archiving policies and procedures. bringing the following benefits: • They eliminate the need to synchronize changes between multiple systems—consolidation of finance. Customization Disadvantages: • Increases time and resources required to both implement and maintain[27] . They make real–time information available to management anywhere. Decisions can be made more quickly and with fewer errors. • They protect sensitive data by consolidating multiple security systems into a single structure.[30] . and costing (what the vendor invoiced) ERP systems centralize business data. Customization Advantages: • Improves user acceptance[26] • Offers the potential to obtain competitive advantage vis-à-vis companies using only standard features. e. Data migration Data migration is the process of moving/copying and restructuring data from an existing system to the ERP system. Unfortunately. which allows inventory optimization Order tracking. inventory receipts (what arrived). Migration is critical to implementation success and requires significant planning. and manufacturing applications • They enable standard product naming/coding. any time to make proper decisions. reporting and republishing.

pp. vital-project. Interenterprise ERP and e-Business Suites. Transforming Organizations in the Digital Economy. sandiego. Wagner. maintenance and upgrade expenses. pp. Retrieved 2008-07-12. April 12. [23] Vilpola. C. (2008).. (2008). ISBN 0619216638 [10] Monk. • Re–engineering business processes to fit the ERP system may damage competitiveness and/or divert focus from other critical activities • ERP can cost more than less integrated and/or less comprehensive solutions. com/ erp. 359793). wlug. "A Delphi examination of public sector ERP implementation issues" (http:/ / portal. A. E–Business and ERP: Rapid Implementation and Project Planning. "Ensuring ERP implementation success. 2003 [22] Kraemmerand. 2003. ISBN 978-0-471-78712-9 [21] Dehning. Abthorpe. 87(3). (2001) John Wiley and Sons. creating a more flexible ERP. I. nz/ EnterpriseSpeak). [8] Chang. [9] Monk." International Journal of Production Economics. February 2004.' Journal of Strategic Information Systems. Massachusetts. . ISBN 1-59229-031-0. E-Business and ERP: Rapid Implementation and Project Planning. The limitations of ERP have been recognized sparking new trends in ERP application development. [17] King. • Integration of truly independent businesses can create unnecessary dependencies. com/ component/ content/ article/ 324-erp-archive/ 4407-erp. Vol. and M.2009 [11] "Enhanced Project Success Through SAP Best Practices – International Benchmarking Study". p. Information Technology for Management. Atlanta: Association for Information Systems. 'Determinants of a Sustainable Competitive Advantage Due to an IT-enabled Strategy.). and I. • Extensive training requirements take resources from daily operations. 12. References [1] Bidgoli. Greg Timbrell (2000). Hossein.. (2006). • Overcoming resistance to sharing sensitive information between departments can divert management attention. shtml [14] http:/ / carl. SI. [24] Fryling. [4] L. Emerging Trends and Challenges in Information Technology Management. [3] Sheilds. (2004). org. [13] What is ERP?.ed. Transforming Organizations in the Digital Economy. Enterprise Information Systems 4 (4): 391–421. . "MRP/MRPII/ERP/ERM — Confusting Terms and Definitions for a Murkey Alphabet Soup" (http:/ / www. Guy Gable. org/ citation. Inc. html). p. ISBN ICIS2000-X. John Wiley & Sons. erp.. "A Vision of Next Generation MRP II". International Conference on Information Systems. ISBN 978-0-471-78712-9 [16] Brown. • High switching costs increase vendor negotiating power vis a vis support. Mureell G. Inc. [18] Yusuf. [20] Turban et al." MIS Quarterly Executive. p.Course Technology Cengage Learning. Meg (2010). Summer 2005. Inc. Gunasekaran. Gartner Group. Wylie. "Enterprise Information Systems Project Implementation: A Case Study of ERP in Rolls-Royce."Concepts in Enterprise Resource Planning" 3rd. 9.. the four significant developments being made in ERP are. p. http:/ / www. "Estimating the impact of enterprise resource planning project management decisions on post-implementation maintenance costs: a case study using simulation modelling". Bret (2006). W.Boston. Retrieved September 9.. Inka Heidi (2008). et al. Boston: Thomson Course Technology. [7] Sheilds. Educause Quarterly 2: 52–57. "Managing the Next Wave of Enterprise Systems: Leveraging Lessons from ERP.. "A method for improving ERP implementation success by the principles and process of user-centred design". Mureell G.V. p. P. Enterprise Information Systems 2 (1): 47–76. Retrieved 2009-10-07. Brett. 707. acm. Vessey.Stratopoulos. Errol Smythe. Web-Enable ERP. Retrieved 2007-10-25 [6] "ERP" (http:/ / www. Inc. Volume 1. 9-10. (2001) John Wiley and Sons. University of Twente. cfm?id=359640. edu/ gba573/ critical_issues_affecting_an_erp.. Ellen and Wagner. Concepts in Enterprise Resource Planning (Second ed. 300–343. Ellen." Information Systems Management. [25] Yakovlev. Y. 1990 [5] Anderegg. 320. . Inc.. Massachusetts: John Wiley & Sons. Massachusetts: John Wiley & Sons. htm CRITICAL ISSUES AFFECTING AN ERP IMPLEMENTATION [15] Turban et al.Enterprise resource planning 7 Disadvantages • Customization is problematic.B. . Production Planning & Control 14 (4): 228–248. (2003). Mehdi. pdf) (PDF). [12] OPC is managed by the OPC Foundation. Information Technology for Management. 494–500. tech-faq. each of which will potential address the fallbacks of the current ERP. "ERP implementation: an integrated process of radical change and continuous learning". [2] Khosrow–Puor. 2(1). 865. 2009. (2002). Inc. Scenario S-300-339. org/ papers/ Daneva-Wieringa-Camera-Ready-RE-Paper. "An ERP implementation and business process reengineering at a Small University". Idea Group. . and T. Travis. The Internet Encyclopedia. [19] "Requirements Engineering for Cross-organizational ERP Implementation: Undocumented Assumptions and Potential Mismatches" (http:/ / www.

 403. [28] Ramaswamy V K (2007-09-27). ISBN 9782040198206. "IS for Sustainable Competitive Advantage". • Lequeux. • Shaul. David. Kimborough (1986). • Waldner. uk. Lenny Koh Siau Ching (September 2004). Nick Wailes. "Critical elements for a successful ERP implementation in SMEs". E. Jean-Louis (2008). Tauber Doron (September 2010). Principles of Computer Integrated Manufacturing. Christopher Wright (March 2006). com/ article/ 216940/ The_ERP_Security_Challenge).1016/0378-7206(86)90010-8. Meg (2010). Levi. . Architecture Orientée Services (SOA).softwareadvice. Richard Hall. • Waldner.: 79. Jean-Baptiste (1992). ISBN 978-0-85724-137-5. Work & Employment 21 (1): 2–15. 8 Further reading • Grant. Vikki (2010). Paris: DUNOD BORDAS.00159. "The ERP Security Challenge" (http:/ / www. "Hierarchical examination of success factors across ERP life cycle" (http://aisel. doi:10. Chichester: John Wiley & Sons Ltd. ISBN 0195179838. CXO Media Inc.. Tee Chiat.aisnet. ISBN 047193450X. Retrieved 2008-04-08. com/ white-papers/ backoffice/ erp/ data-migration-strategies-in-erp-4620/ ). [27] Fryling. Simon (2005). • Head. "Estimating the impact of enterprise resource planning project management decisions on post-implementation maintenance costs: a case study using simulation modelling". Total Cost of Ownership.com/article/40323) • History Of ERP (http://opensourceerpguru.com/articles/ enterprise/software-history-pt1-1082411/) . Information & Management 11 (3): 131–136. New Technology. Katherine (January 2008). Manager avec les ERP. doi:10. Ian ERP From the Frontline MBE ISBN 978-1-898822-05-9 Making ERP Work (http://www. "Data Migration Strategy in ERP" (http:/ / research. Oxford UP. The New Ruthless Economy. [30] Walsh. ProQuest Dissertations and Theses database. CSOonline.2006.1111/j. Emerald Group Publishing Limited. Paris: EDITIONS D'ORGANISATION. [29] Arnold.org/mcis2010/79/).K.x. .cio. International Journal of Production Research 42 (17): 3433–3455.com/html/erpfrontline. Emerald Group Publishing Limited. Les nouvelles perspectives de la production.htm) • Software Advice's 4-Part Series on the History of Enterprise Software (http://blog. doi:10.com/2009/02/25/erp-history/) • Clemons. System Acceptance and Perceived Success of Enterprise Resource Planning Software: Simulating a Dynamic Feedback Perspective of ERP in the Higher Education Environment. ISBN 9782212540949. Meg (2010). "The false promise of technological determinism: the case of enterprise resource planning systems". Retrieved 2008-01-17. • Henderson. MCIS 2010 Proceedings. Enterprise Information Systems 4 (4): 391–421. ISBN 9781109744286. • CIO Magazine's ABCs of ERP (http://www.1468-005X. pp. Work and Power in the Digital Age. • Loh. Jean-Baptiste (1990). csoonline. ittoolbox.Enterprise resource planning [26] Fryling.mlg.1080/00207540410001671679.

9 UNIT 2 .

"The five eras are general-purpose mainframe and minicomputer computing. Now for a relatively low cost anyone could have a computer in his own home. often without much detail. these applications became more complex and began to store increasing amount of information while also interlinking with previously separate information systems. Earlier. project management and database retrieval applications. This allowed for businesses to give their employees access to computing power that 10 years before would have cost tens of thousands of dollars. customer relationship management (CRM). The term "MIS" arose to describe these kinds of applications. and so instead of the collection of mass of data. data was distinguished from information.[2] Overview Initially in businesses and other organizations. This also decentralized computing power from large data centers to smaller offices. Prentice Hall/CourseSmart. It's important to recognize that while all three resources are key components when studying management information systems. As more and more data was stored and linked man began to analyze this information into further detail. the term is used broadly in a number of contexts and includes (but is not limited to): decision support systems. As technology advanced these computers were able to handle greater capacities and therefore reduce their cost.10 systems in ERP Management information system A management information system (MIS) is a system that provides information needed to manage organizations efficiently and effectively. documents.[2] Academically. inventories. and other data that would help in managing the enterprise. these computers would often take up whole rooms and require teams to run them. e. as a by-product of the accounting system and with some additional statistic(s). The first era was ruled by IBM and their mainframe computers. Over time. p. the most important resource is people. supply chain management (SCM). IBM supplied the hardware and the software. information. technologies. enterprise resource planning (ERP). Previously. and people. This technology allowed small desktop computers to do the same work that it previously would have taken a room full of computers. internal reporting was made manually and only periodically. enterprise computing. which were developed to provide managers with information about sales. and executive information systems. decision support systems. which cover the application of people. Management information systems are regarded as a subset of the overall internal controls procedures in a business. important and to the point data that is needed by the organization was stored. client/server networks. stored data. data had to be separated individually by the people as per the requirement and necessity of the organization. 164). resource and people management applications. and cloud computing. business computers were mostly used for relatively simple operations such as tracking sales or payroll data. and gave limited and delayed information on management performance. Today. service or a business-wide strategy. 12/30/2008. Later. the term is commonly used to refer to the group of information management methods tied to the automation or support of human decision making.[1] Management information systems involve three primary resources: technology. and procedures used by management accountants to solve business problems such as costing a product.g. creating entire management reports from the raw. personal computers."(Management Information Systems: Managing the Digital Firm. In the late 1970s minicomputer technology gave way to personal computers. enterprise performance management (EPM). By 1965 microprocessors began to take the market away from mainframe computers. expert systems. Management information systems are distinct from regular information systems in that they are used to analyze other information systems applied in operational activities in the organization. 11th Edition. This proliferation of computers also helped .

design. the result is an Expert System. testing and implementation. • Executive support systems (ESS) is a reporting tool that provides quick access to summarized reports coming from all company levels and departments such as accounting. tablet pc. • Transaction processing systems (TPS) collect and record the routine transactions of an organization. When we join the concept of artificial intelligence with information system. and distribute needed. • Decision-support systems (DSS) are computer program applications used by middle management to compile information from a wide range of sources to solve problems and make decisions. as information technology management. It must provide for reports based upon performance analysis in areas critical to that plan. this gave way to the client/server era. An 'MIS' is a planned system of the collection. with feedback loops that allow for titivation of every aspect of the business. in a restrictive sense. MIS has also some differences with ERP which incorporates elements that are not necessarily focused on decision support. • Management information systems (MIS) produce fixed. hotel reservations. and shipping. equipment. The successful MIS must support a business's Five Year Plan or its equivalent. This along with high speed networks has led to a much more mobile view of MIS. IT service management is a practitioner-focused discipline. The area of study called MIS is sometimes referred to. According to Philip Kotler "A marketing information system consists of people. analyze. storage and dissemination of data in the form of information needed to carry out the management functions. With this era computers on a common network were able to access shared information on a server.Management information system create a need to connect these computers together on a network giving birth to the Internet. download or upload. and accurate information to marketing decision makers. In effect. Any time a business is looking at implementing a new business system it is very important to use a system development method such as system development life cycle. and do so in such a way that identifies individual accountability. requirements. employee record keeping. and procedures to gather. . In a way. The latest evolution of Information Systems is cloud computing a recent development. sort. Information systems include systems that are not intended for decision making. The life cycle includes analysis. In cloud computing the manager does not have to be at a desk to see what their employees are working on but instead can be on a laptop. cloud computing lets users access data stored on a server. • Expert system (ES) is a knowledge about a specific area to act as an expert consultant to the user. It is no the replacement of human being rather they help them in using their expertise more efficiently and effectively. including recruitment and training regimens. 11 Types of management information systems There are many types of management information systems in the market that provide a wide range of benefits for companies. Examples of such systems are sales order entry. human resources and operations. MIS must not only indicate how things are going. save. it is a documented report of the activities that were planned and executed. regularly scheduled reports based on data extracted and summarized from the firm’s underlying transaction processing systems (TPS) to middle and operational level managers to provide answers to structured and semi-structured decision problems. where they can not only see the data but also edit. These reports would include performance relative to cost centers and projects that drive profit or loss. or even smartphone. payroll."[3] The terms MIS and information system are often confused. evaluate. As technology has increased and cheapened the need to share information across a large company had also grown. but why they are not going as well as planned where that is the case. and in virtual real-time. development. This allows for large amounts of data to be accessed by thousands and even millions of people simultaneously. timely. That area of study should not be confused with computer science. processing.

The designer will address all the managerial. 12 Advantages of management information systems The following are some of the benefits that can be attained for different types of management information systems. manufacturer. also known as enterprise resource planning (ERP) systems provide an organization with integrated software modules and a unified database which enable efficient planning. • Knowledge Management System (KMS) helps organizations facilitate the collection. practices and skills. recording. and service. production. • The availability of the customer data and feedback can help the company to align their business processes according to the needs of the customers. retrieval. The identification of these aspects can help the company to improve their business processes and operations. 2010)". Whoever accomplishes this step will identify the problem areas and outlines a solution through achievable objectives. • Customer relationship management (CRM) systems help businesses manage relationships with potential and current customers and business partners across marketing. marketing. testing. Developing Information Systems "The actions that are taken to create an information system that solves an organizational problem are called system development (Laudon & Laudon. These include system analysis. lacuna in the secretarial work. These actions usually take place in that specified order but some may need to repeat or be accomplished concurrently. The effective management of customer data can help the company to perform direct marketing and promotion activities. accounting. and dissemination of knowledge. and controlling of all core business processes across multiple locations. time and technology. programming. This process also lays out what the information requirement will be for the new system. System analysis is accomplished on the problem the company is facing and is trying to solve with the information system. conversion. retailers and final customers. inventory management and distribution. . Enterprise applications • Enterprise systems. • Giving an overall picture of the company and acting as a communication and planning tool.[4] • The company is able to highlight their strength and weaknesses due to the presence of revenue reports. accounting records.Management information system • Office automation systems (OAS) are meant for improving the communication and productivity of people in the enterprise. organizational and technological components the system will address and need. system design. production and finally maintenance. • Supply chain management (SCM) systems enable more efficient management of the supply chain by integrating the links in a supply chain. human resources. They attempt to automate office procedures and remove bottlenecks. These systems are helpful to all levels of management. System design shows how the system will fulfill the requirements and objectives laid out in the system analysis phase. This may include documents. managing. Essentially the feasibility study determines whether this solution is a good investment. and unrecorded procedures. employee performance records etc. This may include suppliers. sales. • Information is considered to be an important asset for any company in the modern competitive world. It is important to note that user information requirements drive the building effort. wholesalers. which determines the solutions feasibility based on money. The user of the system must be involved in the design process to ensure the system meets the users need and operations. This analysis will include a feasibility study. Modules of ERP systems may include finance. The consumer buying trends and behaviors can be predicted by the analysis of sales and revenue reports from each operating region of the company. organization.

Conversion also includes the training of all personnel that are required to use the system to perform their job. This can be done in four ways: Parallel strategy – Both old and new systems are run together until the new one functions correctly (this is the safest approach since you do not lose the old system until the new one is “bug” free). Information Resources Management Association International Conference. Maintain the system as it performs the function it was intended to meet. Boston: Irwin McGraw-Hill. (2010).Management information system Programming entails taking the design stage and translating that into software code. J (1999).edu. (11th ed. which tests each program in the system separately or system testing which tests the system as a whole. Testing can take on many different forms but is essential to the successful implementation of the new system.html) (Bournemouth University) • MIS Links (http://www.S. Production is when the new system is officially the system of record for the operation and maintenance is just that. Direct cutover – The new system replaces the old at an appointed time. (Management Information Systems: Managing the Digital Firm. pdf [2] O’Brien. S.). ISBN 0071123733. Department of Labor) • Index of Information Systems Journals (http://lamp. Also.ac.) Laudon. 11th Edition. Pearson Education. J. Philip.. External links • Computer and Information Systems Managers (http://www. Upper Saddle River. If good then the new system expands to the rest of the company. Pilot study – Introducing the new system to a small portion of the operation to see how it fares. The key is to make sure the software is user friendly and compatible with current systems.infosys. [4] Pant. This is usually out sourced to another company to write the required software or company’s buy existing software that meets the systems needs.com/Courses/mis/mis_links. Management information systems: Managing the digital firm.au/journals/) • MIS Web sites (http://www. gov/ handbook/ mis. Keller.deakin. Atlanta. Prentice Hall/CourseSmart. Phased approach – New system is introduced in stages.uk/library/resources/ism_web. Either way there should also be acceptance testing.). Management Information Systems – Managing Information Technology in the Internetworked Enterprise.chris-kimble. treas.bls. C.. [3] Kotler.. which provides a certification that the system is ready to use. Hsu. NJ: Pearson Prentice Hall. You can conduct unit testing. 12/30/2008. occ. regardless of the test a comprehensive test plan should be developed that identifies what is to be tested and what the expected outcome should be. Conversion is the process of changing or converting the old system into the new. 13 References [1] http:/ / www. (1995). Kevin Lane (2006).com/Research/ Executive-Information-Systems. & Laudon.chris-kimble.html) . Anyway you implement the conversion you must document the good and bad during the process to identify benchmarks and fix problems. May 21–24. Strategic Information Systems Planning: A Review.bournemouth.html) (University of York) • Executive Information Systems: Minimising the risk of development (http://www. Marketing Management (12 ed.gov/oco/ocos258. K.htm) (U.

the telephone companies created a number of computer systems (or software applications) which automated much of this activity. The two systems together are often abbreviated OSS/BSS. OSS systems from this era are described in the Bell System Technical Journal. BSS/OSS or simply B/OSS. Trunks Integrated Record Keeping System (TIRKS). including the network inventory. industry research institutions or BSS/OSS vendors own view. Different subdivisions of the BSS/OSS systems are made. depending on whether they follow the TM Forum's diagrams and terminology. supporting processes such as maintaining network inventory.Operations support system 14 Operations support system Operations support systems (also called operational support systems or OSS) are computer systems used by telecommunications service providers. However. activation and provisioning Service assurance • Customer care History and development of OSS Before about 1970. For example. This was one of the driving factors for the development of the Unix operating system and the C programming language. The term OSS most frequently describes "network systems" dealing with the telecom network itself. it became obvious that much of this activity could be replaced by computers. an OSS covers at least the application areas: • • • • Network management systems Service delivery Service fulfillment. The Bell System purchased their own product line of PDP 11 computers from Digital Equipment Corporation for a variety of OSS applications. processing bills. consider the case where a customer wants to order a new telephone service. Nevertheless in general. Switching Control Center System (SCCS). configuring network components. Details of the new service would need to be transferred from the order handling system to the switch management system — and this would normally be done by a technician re-keying the details from one screen into another — a process often referred to as "swivel chair integration". and collecting payments. Telcordia Notes on the Networks. and many more. but would not be able to configure the telephone exchange directly — this would be done by a switch management system. This was clearly another source of inefficiency. The complementary term business support systems or BSS is a newer term and typically refers to “business systems” dealing with customers. The ordering system would take the customer's details and details of their order. CSOBS. In the next 5 years or so. provisioning services. . Bell Labs Record. many OSS activities were performed by manual administrative processes. supporting processes such as taking orders. [1] Many OSS systems were initially not linked to each other and often required manual intervention. RMAS. and Telcordia Technologies (formerly Bellcore) Special Report SR-2275. Cheap and simple OSS integration remains a major goal of most telecom companies. and managing faults. EADAS. Service Evaluation System (SES). so the focus for the next few years was on creating automated interfaces between the OSS applications — OSS integration. OSS systems used in the Bell System include AMATPS.

This established a 4-layer model of TMN applicable within an OSS: • Business Management Level (BML) • Service Management Level (SML) • Network Management Level (NML) • Element Management Level (EML) (Note: a fifth level is mentioned at times being the elements themselves. TM Forum is regarded as the most authoritative source for standards and frameworks in OSS. TM Forum (formerly the TeleManagement Forum) TM Forum [2] is an international membership organization of communications service providers and suppliers to the communications industry.Fault. along with a set of models that provide standardized approaches.3599 series. Accounting. new OSS architecture definitions were done by the ITU-T in its TMN model.3000 . at the EML-NML communication level. Put simply. Performance and Security. suitable for managing home networks devices and terminals at the EML-NML interface. with the growth of the new broadband and VoIP services. it was adopted for use in the public networks run by telecommunication service providers adhering to ITU-T TMN standards. A big issue of network and service management is the ability to manage and control the network elements of the access and core networks.M. DSL Forum TR-069 specification has defined the CPE WAN Management Protocol (CWMP). Configuration. While OSS is generally dominated by proprietary and custom technologies. Network management was further defined by the ISO using the FCAPS model . Although the FCAPS model was originally conceived and is applicable for an IT enterprise network. . This basis was adopted by the ITU-T TMN standards as the Functional model for the technology base of the TMN standards M. but with no success and practical results. By 2005. Historically.Operations support system 15 A brief history of OSS architecture A lot of the work on OSS has been centered on defining its architecture. TM Forum has been active in proving a framework and discussion forum for advancements in OSS and BSS. From 2000 and beyond. This established a set of principles that OSS integration should adopt. there are four key elements of OSS: • Processes • the sequence of events • Data • the information that is acted upon • Applications • the components that implement processes to manage data • Technology • how we implement the applications During the 1990s. which was established in 2000. 3GPP) in order to define standard protocol for network management. though the standards speak of only four levels) This was a basis for later work. many efforts have been spent in standardization fora (ITU-T. the management of home networks is also entering the scope of OSS and network management. recent developments in OSS architecture were the results of the TM Forum's New Generation Operations Systems and Software (NGOSS) program. On the other hand IETF SNMP protocol (Simple Network Management Protocol) has become the de-facto standard for internet and telco management.

which are needed to support a business process driven and SOA styled approach to using model driven development for specifying the additional implementation stakeholder interface specs (for SOA Web Services. The behavior can be controlled through the use of process management and/or policy management to orchestrate the functionality provided by the services offered by the components. History The early focus of the TM Forum's NGOSS work was on building reference models to support a business stakeholder view on process. Web Services. • A process model (the enhanced Telecom Operation Map.g. e. EAI. • An application model (the Telecom Applications Map) .now known as the Application Framework. or eTOM) . These are required to meet the demands of Service Providers operating using the IMS architectural framework and NGN communications networks. The MTNM work evolved into a set of Web Services providing Multi-Technology Operations System Interfaces MTOSI. or SID) .Operations support system 16 NGOSS models • An information model (the Shared Information/Data model. information and application interaction.now more commonly known as the Business Process Framework. primarily in building out the system stakeholder reference models.. Running in parallel were activities that supported an implementation stakeholder view on interface specifications to provide access to OSS capability (primarily MTNM). Most recently. EJB and EAI). the OSS through Java initiative (OSS/J) [3] joined the TMF to provide NGOSS-based BSS/OSS APIs.now more commonly referred to as the Information Framework. EJB). Telcordia Notes on the Networks [1] . NGOSS architectural standards The TM Forum describes NGOSS as an architecture that is: • "loosely coupled" • distributed • component based The components interact through a common communications vehicle (using an information exchange infrastructure. External links • • • • • • • • • TeleManagement Forum [4] OSS through Java initiative [3] OSS News Review [5] OSS Observer landing page of Analysys Mason [6] Pipeline Magazine [7] InsideTelephony OSS/BSS [8] Billing & OSS World [9] OSS Line [10] Telcordia SR-2275. Future work Considerable work remains. an architecture (the Technology Neutral Architecture) and a lifecycle model.

billingworld. ossnewsreview. According to the U. productivity analysis and cost control. Operations management programs typically include instruction in principles of general management. operations management is the field concerned with managing and directing the physical and/or technical functions of a firm or organization. production control. lean manufacturing. designing. People skills. and redesigning business operations in the production of goods and/or services. program management. 19th. strategic manufacturing policy. particularly those relating to development. including the Industrial Revolution. experienced workers into the systems of equipment. while the line officers make tactical decisions in support of carrying out the strategy. com/ Research/ OSS-Observer-redirect-landing-page/ [7] http:/ / www. Key features of these production systems are the departure from craft production to a more thorough division of labor and the transfer of knowledge from within the minds of skilled. and management information systems all ideally inform optimal operations management. and materials planning. org/ [5] http:/ / www. the American system of manufacturing. creativity. The highest-level officers shape the strategy and revise it over time. the Toyota Production System.[1] [2] Management. analysysmason. com/ [10] http:/ / www. industrial and organizational psychology. systems engineering. com/ telecom-oss-bss/ [9] http:/ / www. Fayolism. com/ [6] http:/ / www. In business as in military affairs. industrial labor relations and skilled trades supervision. com/ [8] http:/ / www. telcordia. manufacturing engineering. com/ site-cgi/ ido/ docs2. and semiskilled workers. tmforum. pl?ID=& page=notn [2] http:/ / www. is like engineering in that it blends art with applied science. and energy) into outputs (in the form of goods and/or services). labor. tactical information dynamically informs strategy. and effective in terms of meeting customer requirements. It involves the responsibility of ensuring that business operations are efficient in terms of using as little resources as needed. The disciplines of organizational studies. tmforum. Origins The origins of operations management can be traced back through cultural changes of the 18th. project management. industrial engineering. ossj. the development of interchangeable manufacture. operations research.[3] the development of assembly line practice and mass production.S. equipment maintenance management. Combined. the Waltham-Lowell system. insidetelephony. and Six Sigma. manufacturing and production systems. often with an average of less tenure and less experience. plant management. It is concerned with managing the process that converts inputs (in the forms of materials. systems analysis. rational analysis. and 20th centuries. The relationship of operations management to senior management in commercial contexts can be compared to the relationship of line officers to the highest-level senior officers in military science. these ideas allow for the standardization of best practices balanced with room for further innovation through continuous improvement of production processes. the boundaries between levels are not always distinct. scientific management. including operations management. org [3] http:/ / www. and knowledge of technology are all required for success. production. and manufacturing. ossline. . com/ Operations management Operations management is an area of management concerned with overseeing. and individual people often move between roles over time. org/ [4] http:/ / www. pipelinepub. although most smart people who work in the corporate world can empirically observe that the reality often falls far short of the ideal in ways that the market nevertheless rewards. documentation.Operations support system 17 References [1] http:/ / telecom-info. Department of Education.

. Simeon North. Louis de Tousard. industry. and is central to operations management as used across diverse business sectors. Henri Fayol. was increasingly appreciated and addressed. 18 Organizations The following organizations support and promote operations management: • Association for Operations Management (APICS) which supports the Production and Inventory Management Journal • European Operations Management Association (EurOMA) which supports the International Journal of Operations & Production Management • Production and Operations Management Society (POMS) which supports the journal: Production and Operations Management • Institute for Operations Research and the Management Sciences (INFORMS) • The Manufacturing and Service Operations Management Society (MSOM) which supports the journal: Manufacturing & Service Operations Management • Institute of Operations Management (UK) • Association of Technology. Shigeo Shingo.Operations management based mostly on the fact that in markets. Management. Honoré Blanc. although its main systemic flaw is the Peter Principle. Tex Thornton and his Whiz Kids team. There are scores of people who can be viewed as thought leaders whose life's work laid the foundations for operations management (only some of which have name recognition among the general population). Kiichiro Toyoda. different clowns" problem). consulting and non-profit organizations. Edwards Deming and the developers of the Toyota Production System (Taiichi Ohno. over time the need to view production operations as sociotechnical systems. Sloan and Bill Knudsen of GM. Whereas some influences place primary importance on the equipment and too often viewed people as recalcitrant impediments to systems (e. Henry Gantt. "good-enough-to-scrape-by" methods tend to defeat "proper" ones on cost. Sakichi Toyoda.[4] [5] [6] Historically. Alfred P. and others). Henry Ford. One of the reasons why competition doesn't kill businesses that operate this way is that few operate in any more ideal way. and Applied Engineering (ATMAE) Publications The following academic journals are concerned with Operations Management issues: • • • • • • • Management Science Journal of Operations Management International Journal of Operations & Production Management Manufacturing & Service Operations Management Production and Operations Management Production and Inventory Management Journal Journal of Modelling in Operations Management . Hall. Typically the Peter Principle is so pervasive throughout an industry that similarly afflicted businesses face a field of competitors who are more or less equally hobbled by it (the "same circus. Eiji Toyoda. A very cursory list would include (in approximate chronological order) Adam Smith. duly considering both humans and machines. Frederick Winslow Taylor. There is a strong tradition of recruiting operations managers simply by promoting the most effective workers. Jean-Baptiste Vaquette de Gribeauval. the body of knowledge stemming from industrial engineering formed the basis of the first MBA programs. Eli Whitney. Taylor and Ford). which does work. and W. John H. Frank and Lillian Gilbreth.g.

James (1912). (2001). php?option=com_content& view=article& id=227& Itemid=48) [3] Alan Pilkington. ISBN 0072506369 [7] http:/ / scmresearch. Wilson. Operations Management for Competitive Advantage. DSSs serve the management. cubes. • comparative sales figures between one period and the next. . data warehouses. 0205) [2] ATMAE Membership Venn Diagram (http:/ / atmae. F. et al. pp.Operations management 19 Links • Operations management journal ranking [7] References [1] U. gov/ pubs2002/ cip2000/ occupationallookup6d.. ASP?CIP=52. 001) Journal of Operations Management. No. jom. ed. org/ 2011/ 09/ 19/ operations-management-journal-ranking/ Decision support system A decision support system (DSS) is a computer-based information system that supports business or organizational decision-making activities. • projected revenue figures based on product sales assumptions. google. Typical information that a decision support application might gather and present are: • inventories of information assets (including legacy and relational data sources. and data marts).185-202. org/ 10. 2008. 2009 from CIP 2000 . A properly designed DSS is an interactive software-based system intended to help decision makers compile useful information from a Example of a Decision Support System for John Day Reservoir. .CIP Lookup to Occupational Crosswalks (http:/ / nces. (1995) An historical perspective on Operations Management. org/ index. New York and London: McGraw-Hill. 27. DSSs include knowledge-based systems. 46) (ISBN 978-0879600471) [5] James M. doi. Jack Meredith. documents. which may be rapidly changing and not easily specified in advance. [4] Hartness. or business models to identify and solve problems and make decisions. Retrieved on October 26. Nicholas Aquilano.” (http:/ / dx.S. and planning levels of an organization and help to make decisions. Production and Inventory Management Journal [6] Richard Chase. com/ books?id=QB41AAAAMAAJ& printsec=frontcover& dq=James+ Hartness+ Human+ Factor+ in+ Works+ Management). “The Evolution of the Intellectual Structure of Operations Management—1980-2006: A Citation/Co-Citation Analysis. combination of raw data. Department of Education Institute of Education Sciences: Classification of Instructional Programs (CIP). no. personal knowledge. (2009) Vol. 3. operations. Republished by Hive Publishing Co (Hive management history series. Robert Jacobs. The Human Factor in Works Management (http:/ / books. 08. 1016/ j.

Another taxonomy for DSS has been created by Daniel Power. A passive DSS is a system that aids the process of decision making. knowledge-driven DSS. although hypertext researchers have generally been concerned with information overload. group decision support systems (GDSS). data warehousing and on-line analytical processing (OLAP) began broadening the realm of DSS.[2] In 1987 Texas Instruments completed development of the Gate Assignment Display System (GADS) for United Airlines. certain researchers. In the 1970s DSS was described as "a computer based system to aid decision making". Furthermore. mainly carried out at the Massachusetts Institute of Technology in the 1960s.[6] • A communication-driven DSS supports more than one person working on a shared task. Haettenschwiler[5] differentiates passive. until a consolidated solution is generated. and cooperative DSS. new Web-based analytical applications were introduced. It is considered that the concept of DSS became an area of research of its own in the middle of the 1970s.[3] [4] Beginning in about 1990. before gaining in intensity during the 1980s. external data. According to Sol (1987)[2] the definition and scope of DSS has been migrating over the years.Decision support system 20 History According to Keen (1978). As the turn of the millennium approached. active. Both the University of Vermont PROMIS system (for medical decision making) and the Carnegie Mellon ZOG/KMS system (for military and business decision making) were decision support systems which also were major breakthroughs in user interface research. A cooperative DSS allows the decision maker (or its advisor) to modify. but that cannot bring out explicit decision suggestions or solutions. Late 1970s the DSS movement started focusing on "interactive computer-based systems which help decision-makers utilize data bases and models to solve ill-structured problems". Different authors propose different classifications. and end 1980s DSS faced a new challenge towards the design of intelligent workstations. examples include integrated tools like Microsoft's NetMeeting or Groove[7] • A data-driven DSS or data-oriented DSS emphasizes access to and manipulation of a time series of internal company data and. sometimes. Power differentiates communication-driven DSS. In the middle and late 1980s. completes. data-driven DSS. or refine the decision suggestions provided by the system. In the 1980s DSS should provide systems "using suitable and available technology to improve effectiveness of managerial and professional activities". executive information systems (EIS). Using the mode of assistance as the criterion. complete. before sending them back to the system for validation. and model-driven DSS. The whole process then starts again. The advent of better and better reporting technologies has seen DSS start to emerge as a critical component of management design. and organizational decision support systems (ODSS) evolved from the single user and model-oriented DSS.[1] the concept of decision support has evolved from two main areas of research: The theoretical studies of organizational decision making done at the Carnegie Institute of Technology during the late 1950s and early 1960s. DSS also have a weak connection to the user interface paradigm of hypertext. The system again improves. This decision support system is credited with significantly reducing travel delays by aiding the management of ground operations at various airports. and the technical work on interactive computer systems. have been focused on decision makers in particular Taxonomies As with the definition. there is no universally-accepted taxonomy of DSS either. document-driven DSS. Examples of this can be seen in the intense amount of discussion of DSS in the education environment. An active DSS can bring out such decision suggestions or solutions. . and refines the suggestions of the decision maker and sends them back to him for validation. beginning with O'Hare International Airport in Chicago and Stapleton Airport in Denver Colorado. Using the relationship with the user as the criterion. notably Douglas Engelbart.

• A knowledge-driven DSS provides specialized problem-solving expertise stored as facts. or simulation model. Model-driven DSS use data and parameters provided by users to assist decision makers in analyzing a situation. technology. . and manipulates unstructured information in a variety of electronic formats.Decision support system • A document-driven DSS manages. the database (or knowledge base). Dicodess is an example of an open source model-driven DSS generator..[6] • A model-driven DSS emphasizes access to and manipulation of a statistical.e. retrieves. function libraries and linking modules An iterative developmental approach allows for the DSS to be changed and redesigned at various intervals. An enterprise-wide DSS is linked to large data warehouses and serves many managers in the company. Power[9] differentiates enterprise-wide DSS and desktop DSS. 2. and iThink.[8] Using scope as the criterion. rules. Generator contains Hardware/software environment that allows people to easily develop specific DSS applications. 21 Components Three fundamental components of a DSS architecture are:[5] [6] [10] [11] [12] 1. it will need to be tested and revised for the desired outcome. the user interface. 3. DSS technology levels (of hardware and software) may include: 1. the model (i. the decision context and user criteria). This is the part of the application that allows the decision maker to make decisions in a particular problem area. DSS generators including special languages. The users themselves important components architecture. AIMMS. This level makes use of case tools or systems such as Crystal. and 3.[10] Design of a Drought Mitigation Decision Support System. Once the system is designed. optimization. A desktop. procedures. Such a framework includes people. The actual application that will be used by the user.[5] [12] are of also the Development Frameworks DSS systems are not entirely different from other systems and require a structured approach. and the development approach. Tools include lower level hardware/software. financial. single-user DSS is a small system that runs on an individual manager's PC. they are not necessarily data-intensive. The user can act upon that particular problem. 2. or in similar structures.

All aspects of Forest management. Spreadsheet-oriented DSS. Other examples include a bank loan officer verifying the credit of a loan applicant or an engineering firm that has bids on several projects and wants to know if they can be competitive with their costs. Solver-oriented DSS. identification of negative trends.[17] DSS are also prevalent in forest management where the long planning time frame demands specific requirements. and techniques is in agricultural production. Database-oriented DSS. numbers. the DSSAT4 package. CN managed to decrease the incidence of derailments at the same time other companies were experiencing an increase. 2. DSS components may be classified as: 1. Not every DSS fits neatly into one of the categories. A problem faced by any railroad is worn-out or defective rails. and applies engineering principles such as Design and Quality assurance to an explicit representation of the elements that make up a decision. It is a hybrid system that includes two or more of the five basic structures described by Holsapple and Whinston. and better allocation of business resources.Decision support system 22 Classification There are several ways to classify DSS applications. and Compound DSS. 3. which tests its equipment on a regular basis using a decision support system. has allowed rapid assessment of several agricultural production systems around the world to facilitate decision-making at the farm and policy levels. there are theoretical possibilities of building such systems in any knowledge domain. marketing for sustainable development. One example is the clinical decision support system for medical diagnosis. from log transportation. A growing area of DSS application. For example. Group Support. and characteristics to analyze User Knowledge and Expertise: Inputs requiring manual analysis by the user Outputs: Transformed data from which DSS "decisions" are generated Decisions: Results generated by the DSS based on user criteria DSSs which perform selected cognitive decision-making functions and are based on artificial intelligence or intelligent agents technologies are called Intelligent Decision Support Systems (IDSS). principles. concepts. The nascent field of Decision engineering treats the decision itself as an engineered object. and Organizational Support. A comprehensive list and discussion of all available systems in forest management is being compiled under the COST action Forsys [18] A specific example concerns the Canadian National Railway system. Applications As mentioned above. Rule-oriented DSS. DSS is extensively used in business and management. interrelated categories[14] : Personal Support. however.[13] The support given by DSS can be separated into three distinct. Executive dashboard and other business performance software allow faster decision making. many constraints to the successful adoption on DSS in agriculture. harvest scheduling to sustainability and ecosystem protection have been addressed by modern DSSs. Inputs: Factors.[15] [16] developed through financial support of USAID during the 80's and 90's. which can result in hundreds of derailments per year. There are. Holsapple and Whinston[13] classify DSS into the following six frameworks: Text-oriented DSS. Under a DSS. A compound DSS is the most popular classification for a DSS. . 4. but may be a mix of two or more architectures.

Upper Saddle River. Donovan (2000). and Middleton.. José. Decision support systems: concepts and resources for managers. (1987). ISBN 0-324-03578-0 [14] Hackathorn. Decision support systems: an organizational perspective.computer. aglearn. C.1-2. • Gomes da Silva. Co. and A. Improves personal efficiency 2. ISBN 0-201-03667-3 [2] Henk G. Reveals new approaches to thinking about the problem space 11.. M. R. Westport.Decision support system 23 Benefits 1. [13] Holsapple." cscwd. Reading. Englewood Cliffs. What is a DSS? The On-Line Executive Journal for Data-Intensive Decision Support 1(3). Decision Support Systems: A Knowledge-Based Approach. VDF. Keen." MIS Quarterly. N. Prentice Hall. G. João. (1999). Neues anwenderfreundliches Konzept der Entscheidungsunterstützung. [5] Haettenschwiler. and E.. Ting-Peng Liang (2008). 5.J. [18] http:/ / fp0804. N.(2001) "An Approach to the Intelligent Decision Advisor (IDA) for Emergency Managers". Management Information Systems: For The Information Age. Jay E. Computer Business Review.L. P.. Why has the uptake of Decision Support Systems been so poor? In: Crop-soil simulation models in developing countries. McGraw-Hill Ryerson Limited: 136-140. Cummings. 574. European Journal of Operational Research.. H. Building Model-Driven Decision Support Systems with Dicodess. ISBN 9027724377.org/portal/web/csdl/doi/10. D. J. St. P. September). 1987.W..jsp?arnumber=938098).. Pinsonneault. 3/4. Encourages exploration and discovery on the part of the decision maker 5. Mass. net/ dssat/ ) [17] Stephens. Quorum Books. A. ISBN 0-072-81947-2 [12] Marakas. Nos. R. 17–20 November 1985. Generates new evidence in support of a decision 9. Sol et al. D. Paul: West Publishing. Prentice-Hall. [7] Stanhope. 129-148 (Eds R. (2001) "Towards an architecture for real-time decision support systems:challenges and solutions (http://ieeexplore. (1981. Increases organizational control 4. A. Expert systems and artificial intelligence in decision support systems: proceedings of the Second Mini Euroconference. The Netherlands. Douillet.1109/CSCWD. Promotes learning or training 8. J. • Diasio. Decision Support Systems and Intelligent Systems. J. (1978).B. icasa. (1997). [6] Power. Wallingford:CABI. et al. p. and Dayal. G. K. [9] Power. Zurich. Springer. W. [3] Efraim Turban. Speeds up problem solving in an organization 6.A. Aronson. D. (2004).J. P. Decision support systems in the twenty-first century. Hungry Minds [8] Gachet. Vol.ieee. Vol. Politik und Gesellschaft. vdf Hochschulverlag AG: 189-208.4968139 • Gadomski. Risk Assessment and Management. Clímaco. Matthews and William Stephens). pp. 13th International Conference on Computer Supported Cooperative Work in Design. http://www. Carlson (1982). McCubbrey. net/ resources/ isfm/ DSSAT. B.M. Facilitates interpersonal communication 7. p. T. . New York.2009. D.. [10] Sprague. Building effective decision support systems. Agell. W. 3. 2. Get in the Groove: building tools and peer-to-peer solutions with the Groove platform. Lunteren. and P. Speed up the process of decision making 3.org/xpl/freeabs_all. Helps automate managerial processes References [1] Keen. emu. U. (1996). Carlos. Figueira. Creates a competitive advantage over competition 10. (2002). . Addison-Wesley Pub. 1987-11-26. pdf) [16] The Decision Support System for Agrotechnology Transfer (http:/ / www. (2002). S. Gutes Entscheiden in Wirtschaft. (2002). Conn. 2009. [4] "Gate Delays at Airports Are Minimised for United by Texas Instruments' Explorer" (http:/ / www. N. com/ news/ gate_delays_at_airports_are_minimised_for_united_by_texas_instruments_explorer). Whinston. cbronline. "Organizational Strategies for Personal Computing in Decision Support Systems. ISBN 0-130-86215-0 [11] Haag. Zurich. 692–697. ee Further reading • Delic. [15] DSSAT4 (pdf) (http:/ / www. (1999). G. No. (2009) "The evolution of expertise in decision support technologies: A challenge for organizations. W. Int.

Decision support system • Ender. D. and retrieve the transactions of an organization. Prentice Hall. John Wiley. Web-based and model-driven decision support systems: concepts and issues. Ríos-Insua. it is particularly important for online processing: if e. . R. Vol.g. The 'journaled file system' provided with IBMs AIX Unix operating system employs similar techniques to maintain file system integrity. New York. problem solving. Kluwer Academic Publishers. the seat reservation data must be locked until the reservation is made.pdf • Jiménez. (1991). Agricultural Systems 47: 245-258. J.g. Either both must occur. p1-19. Sixto. and H. (1997). Adi. J. Antonio. Computers & Operations Research. California. modify. TPSs collect. • Jintrawet. in proceedings of the Americas Conference on Information Systems. Mateos. Download http://www. Kapeliuk. The essence of a transaction program is that it manages data that must be left in a consistent state.com/ OpenSpace-Online_eBook_en. In case of a failure preventing transaction completion. Systems that support decision makers: description and analysis. • Power. and transaction logging (in 'journals') for 'forward recovery' in case of massive failures. • Reich. double bookings may occur. N. including a journal. it cannot complete only one of those steps. 24 Transaction processing system A transaction processing system is a type of information system. N. Attachai (1995). an airline seat reservation system is accessed by multiple operators. H. Transaction Processing is not limited to application programs. L. Wiley. Decision support systems: an applied managerial approach. Without proper transaction monitoring. A Decision Support System for Rapid Assessment of Lowland Rice-based Cropping Alternatives in Thailand. Gabriela. Englewood Clifts. Chichester .F.. e. • Matsatsinis. • Sauter. otherwise another user may get the impression a seat is still free while it is actually being booked at the time. and Y.. Intelligent support systems for marketing decisions. Yoram.openspace-online. the partially executed transaction must be 'rolled back' by the TPS. the amount must be both withdrawn from one account and added to the other. Long Beach.J. To be considered a transaction processing system the computer must pass the ACID test. • Silver. results-oriented group dialogs about topics that matter with extensive conference documentation in real-time. 19p. if an electronic payment is made. Alfonso. M. V. New York. • Sprague. Nov2005. after an empty seat inquiry. Other transaction monitor functions include deadlock detection and resolution (deadlocks may be inevitable in certain cases of cross-dependence on data). or neither. A transaction is an event that generates or modifies data that is eventually stored in an information system. 41 Issue 1. Decision support systems: putting theory into practice. E-Book (2005–2011) about the OpenSpace-Online Real-Time Methodology: Knowledge-sharing. While this type of integrity must be provided also for batch transaction processing. store. Decision Support Systems. Siskos (2002). (2000). Watson (1993).

Real-time processing has fewer errors than batch processing. Real-time and batch processing There are a number of differences between real-time and batch processing. however. With batch processing. Real-time processing requires the master file to be available more often for updating and reference than batch processing. Features Rapid response Fast performance with a rapid response time is critical. as the operations are not centralised. Transactions in real-time processing are stand-alone both in the entry to the system and also in the handling of output. the data is organised and stored before the master file is updated. Errors can occur during these steps.HSC there is a time delay.Transaction processing system 25 Types Contrasted with batch processing Batch processing is not transaction processing. It is not part of a group of transactions. Transactions are accumulated for a certain period (say for day) where updates are made especially after work. . Reliability Many organizations rely heavily on their TPS. More computer operators are required in real-time processing. This makes well–designed backup and recovery procedures essential. even though those transactions are processed in the same manner. Infrequent errors may occur in real-time processing. the turnaround time from the input of the transaction to the production for the output must be a few seconds or less. a breakdown will disrupt operations or even stop the business. It is more difficult to maintain a real-time processing system than a batch processing system. Businesses cannot afford to have customers waiting for a TPS to respond. For a TPS to be effective its failure rate must be very low. and the results of each transaction are not immediately available when the transaction is being entered. they are often tolerated. then quick and accurate recovery must be possible. If a TPS does fail. as transaction data is validated and entered immediately. These are outlined below: Each transaction in real-time processing is unique. The database is not accessible all of the time for batch processing. It is not practical to shut down the system for infrequent errors. Batch processing involves processing several transactions at the same time.

Gray. but not both. a commercial airline needs to consistently accept airline reservations from a range of travel agents. The actions taken as a group do not violate any of the integrity constraints associated with the state. then the TPS should enforce and maintain this requirement. This requires that the transaction be a correct program![2] Isolation Even though transactions execute concurrently. the system must be well designed for its backup and recovery procedures.26ReuterTPOverview Consistency Consistency: A transaction is a correct transformation of the state. An example of this is an ATM transaction. if an airline ticket agent starts to reserve the last seat on a flight.Transaction processing system 26 Inflexibility A TPS wants every transaction to be processed in the same way regardless of the user. For example. accepting different transactions data from different travel agents would be a problem. for example. Storing and retrieving Storing and retrieving information from a TPS must be efficient and effective. then another agent cannot tell another passenger that a seat is available. For example if an organization allocates roles and responsibilities to particular employees. its changes to the state survive failures. one user cannot change a piece of data before another user has finished with it. The data are stored in warehouses or other databases. there would be too many opportunities for non-standard operations. That is. messages. and actions on transducers. Controlled processing The processing in a TPS must support an organization's operations.[2] Durability Once a transaction completes successfully (commits). the customer or the time for day.[2] Concurrency Ensures that two users cannot change the same data at the same time. it appears to each transaction T. If a TPS were flexible. ACID test properties: first definition Atomicity A transaction’s changes to the state are atomic: either all happen or none happen. . that others executed either before T or after T. These changes include database changes.

• Network structure: Similar to hierarchical. network structures also organizes data using nodes and branches. . so they usually have a restricted view of certain data. The following features are included in real time transaction processing systems: • Good data placement: The database should be designed to access patterns of data from many simultaneous users. A relational structure. • High normalization: This lowers redundant information to increase the speed and improve concurrency. • Report file: Contains data that has been formatted for presentation to a user. • Short transactions: Short transactions enables quick processing. In a TPS. there are 5 different types of files. • Good hardware configuration: Hardware must be able to handle many users and provide quick response times. This keeps tables small and also improves backup times. • Archiving of historical data: Uncommonly used data are moved into other databases or backed up tables. • Program file: Contains the instructions for the processing of data. • Hierarchical structure: organizes data in a series of levels. network or relational structures. A database is a collection of data neatly organized. A hierarchical structure. each child node has branches and is only linked to one higher level parent node. unlike hierarchical. A network structure. each child node can be linked to multiple. Its top to bottom like structure consists of nodes and branches. hence why it is called hierarchal. Databases are designed using hierarchical. a relational database organizes its data in a series of related tables. each structure is effective in its own sense. Databases are always protective of their delicate data. • Work file: Temporary files in the system used during the processing. This gives flexibility as relationships between the tables are built. Most transactions and databases are stored in the master file.Transaction processing system 27 Databases and files The storage and retrieval of data must be accurate as it is used many times throughout the day. • Relational structure: Unlike network and hierarchical. This avoids concurrency and paces the systems. higher parent nodes. But. It helps to update the master file and also serves as audit trails and transaction history. • Real-time backup: Backup should be scheduled between low times of activity to prevent lag of the server. The TPS uses the files to store and organize its transaction data: • Master file: Contains information about an organization’s business situation. which stores the accounting and operational records in the database. this also improves backups. • Transaction file: It is the collection of transaction records.

then the database system must start recovery from a previous successful checkpoint. is any identifier or other reference that identifies at a point in time the state of the database. Modifications to database pages are performed in memory and are not necessarily written to disk after every update. in general. It stores series of snapshots for an organisation's operational data generated over a period of time. a TPS must be able to cope with failures. software application errors or natural or man-made disasters. As it's not possible to prevent all TPS failures. unless it was incorrect. system failure. historical and read-only: • Consolidated: Data are organised with consistent naming conventions. It organizes only key business information from operational sources so that it's available for analysis. If a checkpoint is interrupted and a recovery is required. a breakdown in their TPS may stop the business' regular routines and thus stopping its operation for a certain amount of time. Checkpointing can be either transaction-consistent or non-transaction-consistent . computer viruses.Transaction processing system 28 Data warehouse A data warehouse is a database that collects information from different sources. Since it represents a snapshot of a certain time. • Read-only: Once data are moved into a data warehouse. hardware failure. In order to prevent data loss and minimize disruptions when a TPS breaks down a well-designed backup and recovery procedure is put into use. It provides data that are consolidated. the database system must perform a checkpoint to write these updates which are held in-memory to the storage disk. Therefore. checkpoint. and recovery manager: • Journal: A journal maintains an audit trail of transactions and database changes. • Historical: Real-time TPS represent the current value at any time. it must never be updated. a transaction log records all the essential data for each transactions. periodically. Backup procedures Since business organizations have become very dependent on TPSs. incorrect or invalid data. querying the database could return a different response. it involves the backup. The TPS must be able to detect and correct errors when they occur. journal. including data values. Transaction logs and Database change logs are used. time of transaction and terminal number. The recovery process can rebuild the system when it goes down. A checkpoint. Writing these updates to storage disk creates a point in time in which the database system can apply changes contained in a transaction log during recovery after an unexpected shut down or crash of the database system. It allows data from a data warehouse from across the organization to be effectively used in a consistent manner. • Subject-oriented: Large amounts of data are stored across an organization. • Checkpoint: The purpose of checkpointing is to provide a snapshot of the data within the database. A database change log contains before and after copies of records that have been modified by transactions. When it's gathered in real-time transactions it can be used for analysis efficiently if it's stored in a data warehouse. Recovery process A Dataflow Diagram of backup and recovery A TPS may fail for many reasons. These reasons could include a procedures. an example could be stock levels. A TPS will go through a recovery of the database to cope when the system fails. human errors. some data could be irrelevant for reports and makes querying the data difficult. If past data are kept. Only operations which occur in a data warehouse are loading and querying data. it becomes read-only. measurements. attributes and semantics. subject-oriented.

Organizations can have up to twenty generations of backup. A non-transaction-consistent checkpointing results in a persistent database image that is insufficient to perform a recovery of the database state. It's much faster and more accurate. thus. but all modifications made by transactions. To perform the database recovery. Completed transactions since the last backup are stored separately and are called journals. Types of back-up procedures There are two main types of Back-up Procedures: Grandfather-father-son and Partial backups: Grandfather-father-son This procedure refers to at least three generations of backup master files. the procedures involves restoring data that has been collected from a backup device and then running the transaction processing again. Two types of recovery are backward recovery and forward recovery: • Backward recovery: used to undo unwanted changes to the database. Generally. the master file is recreated by using the son backup and then restarting the batch. if that fails. Of course the older the generation. the oldest backup is the grandfather. typically contained in transaction logs. then the next generation up backup (father) is required. A non-consistent transaction refers to a checkpoint which is not necessarily a consistent database. The master file can be recreated from the journal files on the backup tape if the system is to fail.Transaction processing system (called also fuzzy checkpointing). or journal files. and can't be recovered to one without all log records generated for open transactions included in the checkpoint. Historically. Updating in a batch This is used when transactions are recorded on paper (such as bills and invoices) or when it's being stored on a magnetic tape. weekly or monthly. Partial backups This only occurs when parts of the master file are backed up. Likewise. If no indexes are incorporated into the checkpoint. It involves the logic of reprocessing each transaction. Transaction-consistent checkpointing produces a persistent database image that is sufficient to recover the database to the state that was externally perceived at the moment of starting the checkpointing. this was the most common method as the information technology did not exist to allow real-time processing. It reverses the changes made by transactions which have been aborted. Depending on how the system failed. that were committed at the time checkpoint creation was started. which doesn't necessarily include all the latest committed transactions. then the next generation up backup (grandfather) is required. additional information is needed. However if the son backup fails. which is very time-consuming. are fully present. is corrupted or destroyed. If the system fails during a batch run. the most recent backup is the son. the more the data may be out of date. • Forward recovery: it starts with a backup copy of the database. indexes and storage pages. Transaction consistent checkpointing refers to a consistent database. Transactions will be collected and updated as a batch at when it's convenient or economical to process them. The two stages in batch processing are: 29 . indexes must be created when the database is restored from the checkpoint image. Depending on the type of database management system implemented a checkpoint may incorporate indexes or storage pages (user data). The master file is usually backed up to magnetic tape at regular times. It's commonly used for a batch transaction processing system with a magnetic tape. • Recovery Manager: A recovery manager is a program which restores the database to a correct condition which can restart the transaction processing. there can be two different recovery procedures used. this could be daily. The transaction will then reprocess according to the transaction journal that occurred between the time the backup was made and the present time.

Because of advances in technology (such as the increase in the speed of data transmission and larger bandwidth).205. Steps in a real-time update involve the sending of a transaction data to an online database in a master file. TPS Example (http://web. If an error occurs. 30 References 1.pdf) 2.this involves sorting the data into sequential order. Updating in real-time uses direct access of data.Transaction processing system • Collecting and storage of the transaction data into a transaction file .edu/~gpollice/cs562-s05/TPS-1_990913. It provides instant confirmation of a transaction. 2002. A batch will start at the beginning of the tape.it doesn't even need a user interface. then reading it from the order it was stored. it will search through successive locations until it's found. this may involve data additions. The software used to collect data does not have to be online .cs. updates and deletions that may require to happen in a certain order.com/ ~gray/WICS_99_TP/01_WhirlwindTour. real-time updating is possible.microsoft.wpi. Morgan Kaufmann. The person providing information is usually able to help with error correction and receives confirmation of the transaction completion. then the entire batch fails.14.since it uses a magnetic tape this is the only way to access data. algorithms. Updating in batch requires sequential access . The storage device stores data in a particular location based on a mathematical procedure.104/search?q=cache:fK7dQdEJB7AJ:research. Transactional information systems: theory.ppt+"ACID+Properties:+First+Definition"&hl=en&gl=ca& ct=clnk&cd=1) Further reading • Gerhard Weikum. This will then be calculated to find an approximate location of the data. Gottfried Vossen. This occurs when data are accessed without accessing previous data items. Updating in real-time This is the immediate processing of data.which can be difficult. The information technology used includes a secondary storage medium which can store large quantities of data inexpensively (thus the common choice of a magnetic tape). it's very time-consuming to locate specific transactions. The information technology used could be a secondary storage medium that can store large amounts of data and provide quick access (thus the common choice of a magnetic disk). a b c  WICS TP Chapter 2 (http://72. If data are not found at this location. • Processing the data by updating the master file . ISBN 1558605088 . This involves a large amount of users who are simultaneously performing transactions to change data. and the practice of concurrency control and recovery.

For even more demanding Decentralized database systems. Online Analytical Processing Online transaction processing increasingly requires support for transactions that span a network and may include more than one company. OLTP is often integrated into service-oriented architecture (SOA) and Web services.Online transaction processing 31 Online transaction processing Online transaction processing. typically for data entry and retrieval transaction processing. or OLTP. In large applications. like many modern online information technology solutions. systems failure. Online transaction systems are generally more susceptible to direct attack and abuse than their offline counterparts. Additionally. Reduced paper trails and the faster. or network availability issues. . refers to a class of systems that facilitate and manage transaction-oriented applications. When organizations choose to rely on OLTP. new online transaction processing software uses client or server processing and brokering software that allows transactions to run on different computer platforms in a network. some systems require offline maintenance which further affects the cost-benefit analysis.[1] OLTP has also been used to refer to processing in which the system responds immediately to user requests. Disadvantages As with any information processing system. OLTP brokering programs can distribute transaction processing among multiple computers on a network. some understand a "transaction" in the context of computer or database transactions. Requirements OLAP (Online Analytical Processing) is a methodology to provide end users with access to large amounts of data in an intuitive and rapid manner to assist with deductions based on investigative reasoning. efficient OLTP may depend on sophisticated transaction management software (such as CICS) and/or database optimization tactics to facilitate the processing of large numbers of concurrent updates to an OLTP-oriented database. An automatic teller machine (ATM) for a bank is an example of a commercial transaction processing application. The term is somewhat ambiguous. Benefits Online Transaction Processing has two key benefits: simplicity and efficiency. security and reliability are considerations. more accurate forecasts for revenues and expenses are both examples of how OLTP makes things simpler for businesses. operations can be severely impacted if the transaction system or database is unavailable due to data corruption. For this reason. while others (such as the Transaction Processing Performance Council) define it in terms of business or commercial transactions.

com/What-is-Online-Transaction-Processing-(OLTP)-Schema/ a32p2) • Transaction Processing: Concepts & Techniques Management (http://www.tpc. org/ ) External links • H-store Project (http://db.cs.yale. tpc.ibm.com/cics) • Transaction Processing Performance Council (http://www.Online transaction processing 32 See Also • • • • • • • • • Data mart Data warehouse OLAP ETL Transaction processing Database transaction Derby in-memory Java Database IBM Customer Information Control System Pervasive DataRush Contrasted To • Batch Processing • Grid Computing References [1] Transaction Processing Performance Council website (http:/ / www.org/) • OLTP Schema (http://dbms.edu/hstore/) (architectural and application shifts affecting OLTP performance) • IBM CICS official website (http://www.com/dp/1558601902) .knowledgehills.amazon.

10| 1234 |---+ +---------+-------------------+ +-------------+----------+ | | time_id | timestamp | | +---------+-------------------+ +---->| 1234 | 20080902 12:35:43 | +---------+-------------------+ . Any number of dimensions can be added to the structure such as Store. For example: Sales Fact Table +-------------+----------+ | sale_amount | time_id | +-------------+----------+ Time Dimension | 2008.Online analytical processing 33 Online analytical processing In computing. Cashier. A simple example would be a cube that contains a store's sales as a measure. management reporting. is an approach to swiftly answer [1] multi-dimensional analytical (MDA) queries. OLAP is part of the broader category of business intelligence. which also encompasses relational reporting and data mining. or Customer by adding a foreign key column to the fact table.[4] The term OLAP was created as a slight modification of the traditional database term OLTP (Online Transaction Processing).[6] Consolidation involves the aggregation of data that can be accumulated and computed in one or more dimensions. Measures are derived from the records in the fact table and dimensions are derived from the dimension tables. The cube metadata is typically created from a star schema or snowflake schema of tables in a relational database. or OLAP (  /ˈoʊlæp/).[3] budgeting and forecasting. For instance. business process management (BPM). Each measure can be thought of as having a set of labels. [7] They borrow aspects of navigational databases. OLAP consists of three basic analytical operations: consolidation. and Date/Time as a dimension. This allows an analyst to view the measures along any combination of the dimensions. For example. In contrast. such as agriculture. online analytical processing. The core of any OLAP system is an OLAP cube (also called a 'multidimensional cube' or a hypercube).[2] Typical applications of OLAP include business reporting for sales. it provides information about the measure. It consists of numeric facts called measures which are categorized by dimensions. financial reporting and similar areas. and slicing and dicing. Slicing and dicing is a feature whereby users can take out (slicing) a specific set of data of the cube and view (dicing) the slices from different viewpoints.[5] OLAP tools enable users to interactively analyze multidimensional data from multiple perspectives. Each Sale has a Date/Time label that describes more about that sale. hierarchical databases and relational databases. marketing. allowing for complex analytical and ad-hoc queries with a rapid execution time. with new applications coming up. all sales offices are rolled up to the sales department or sales division to anticipate sales trends. Databases configured for OLAP use a multidimensional data model. drill-down. users can access to the sales by individual products that make up a region’s sales. the drill-down is a technique that allows users to navigate through the details. A dimension is what describes these labels. or meta-data associated with it.

[11] [12] The most important mechanism in OLAP which allows it to achieve such performance is the use of aggregations. Therefore it requires the pre-computation and storage of information in the cube . View selection is NP-Complete. often only a predetermined number are fully calculated.[9] Even when data is manipulated it remains easy to access and continues to constitute a compact database format. The problem of deciding which aggregations (views) to calculate is known as the view selection problem. the remainder are solved on demand. genetic algorithms and A* search algorithm. MOLAP stores this data in an optimized multi-dimensional array storage.[10] Aggregations It has been claimed that for complex queries OLAP cubes can produce an answer in around 0. although some studies also minimize the update time. “Each cell within a multidimensional structure contains aggregated data related to elements along each of its dimensions”. 2009).This methodology relies on manipulating the data stored in the relational database to give the appearance of traditional OLAP's slicing and dicing functionality. The objective of view selection is typically to minimize the average time to answer OLAP queries. Multidimensional structure is quite popular for analytical databases that use online analytical processing (OLAP) applications (O’Brien & Marakas. which gives a broader perspective of a problem unlike other models.[14] Multidimensional MOLAP is the 'classic' form of OLAP and is sometimes referred to as just OLAP. The data still remains interrelated. each action of slicing and dicing is equivalent to adding a "WHERE" clause in the SQL statement.Online analytical processing 34 Multidimensional databases Multidimensional structure is defined as “a variation of the relational model that uses multidimensional structures to organize data and express the relationships between data”.[13] Because usually there are many aggregations that can be calculated. rather than in a relational database. Types OLAP systems have been traditionally categorized using the following taxonomy. The combination of all possible aggregations and the base data contains the answers to every query which can be answered from the data .[8] The structure is broken into cubes and the cubes are able to store and access data within the confines of each cube. randomized search. The number of possible aggregations is determined by every possible combination of dimension granularities. View selection can be constrained by the total size of the selected set of aggregations. In essence. Relational ROLAP works directly with relational databases.the operation known as processing.1% of the time required for the same query on OLTP relational data. Aggregations are built from the fact table by changing the granularity on specific dimensions and aggregating up data along these dimensions. . The base data and the dimension tables are stored as relational tables and new tables are created to hold the aggregated information. or both. including greedy algorithms. Depends on a specialized schema design. Many approaches to the problem have been explored. Data can be viewed from different angles. Analytical databases use these databases because of their ability to deliver answers to complex business queries swiftly. the time to update them from changes in the base data.

which had SQL as the standard query language. it has more limitations in the specialized functions it can use. which was endorsed by most of the OLAP vendors. which was released in 1970 (and acquired by Oracle in 1995 from Information Resources). In 2001 Microsoft and Hyperion announced the XML for Analysis specification.NET[17] . a year . as a sort of marketing coup. pre-calculated results and sparse multidimensional data. who has been described as "the father of the relational database". and offer good function support. the term did not appear until 1993 when it was coined by Edgar F. MDX became the de-facto standard. Codd's paper[1] resulted from a short consulting assignment which Codd undertook for former Arbor Software (later Hyperion Solutions. • HOLAP encompasses a range of solutions that attempt to mix the best of ROLAP and MOLAP.[15] However. It can generally pre-process swiftly.Web-based OLAP • DOLAP . The company had released its own OLAP product. except that a database will divide data between relational and specialized storage.[16] Since September-2011 LINQ can be used to query SSAS OLAP cubes from Microsoft .Real-Time OLAP APIs and query languages Unlike relational databases.Online analytical processing 35 Hybrid There is no clear agreement across the industry as to what constitutes "Hybrid OLAP". • Some MOLAP implementations are prone to database explosion. and widespread APIs such as ODBC. The first real standard API was OLE DB for OLAP specification from Microsoft which appeared in 1997 and introduced the MDX query language. • MOLAP generally delivers better performance due to specialized indexing and storage optimizations. for some vendors. there was no such unification in the OLAP world for a long time. although they are not as widespread as the ones above: • WOLAP . ROLAP query performance can therefore suffer tremendously. Since this also used MDX as a query language. and in 2007 acquired by Oracle).adopted it. large volume pre-processing is difficult to implement efficiently so it is frequently skipped. although there is disagreement about the specifics of the benefits between providers. Several OLAP vendors .Desktop OLAP • RTOLAP . and use specialized storage for at least some aspects of the smaller quantities of more-aggregate or less-detailed data. Codd.both server and client . • Since ROLAP relies more on the database to perform calculations.[18] However. Products History The first product that performed OLAP queries was Express. JDBC and OLEDB. Other types The following acronyms are also sometimes used. scale well. a HOLAP database will use relational tables to hold the larger quantities of detailed data. Essbase. Comparison Each type has certain benefits.[15] • ROLAP is generally more scalable. For example. a phenomenon causing vast amounts of storage space to be used by MOLAP databases when certain common conditions are met: high number of dimensions. MOLAP also needs less storage space compared to ROLAP because the specialized storage typically includes compression techniques.

. "Data Warehousing and OLAP-A Research-Oriented Bibliography" [21]. "Encyclopedia of Database Systems [22].700 Microsoft was the only vendor that continuously exceeded the industrial average growth during 2000-2006. G. Hyperion has been acquired by Oracle. which drove wide adoption of OLAP technology and moved it into mainstream. In 1998. • O’Brien. Management information systems (9th ed. M. There was some ensuing controversy and when Computerworld learned that Codd was paid by Arbor. J. Boston. (1997). with figures in millions of US Dollars. it retracted the article. A. • Erik Thomsen.806 Hyperion Solutions Corporation 1. MA: McGraw-Hill/Irwin. Since the above data was collected.Microsoft Analysis Services.) (2009). 36 Product comparison See: Comparison of OLAP Servers. 4100 p. Applix by Cognos. OLAP market experienced strong growth in late 90s with dozens of commercial products going into market.Online analytical processing earlier. John Wiley & Sons. Cartesis by Business Objects. 2nd Edition..[20] Bibliography • Daniel Lemire (2007-12).). Microsoft released its first OLAP Server . ISBN 978-0471149316. and Cognos by IBM. As a result Codd's "twelve laws of online analytical processing" were explicit in their reference to Essbase. OLAP Solutions: Building Multidimensional Information Systems. & Marakas. Özsu (Eds. • Ling Liu and Tamer M. Market structure Below is a list of top OLAP vendors in 2006.[19] Vendor Microsoft Corporation Global Revenue 1.077 Cognos Business Objects MicroStrategy SAP AG Cartesis SA Applix Infor Oracle Corporation Others Total 735 416 416 330 210 205 199 159 152 5. 60 illus. ISBN 978-0-387-49616-0. Business Objects by SAP. (2009).

Codd & Date. Retrieved 2008-03-18. Retrieved 2008-03-20. com/ ?id=M-UOE1Cp9OEC). InfoWorld. . Chaudhuri. J. Garza. [14] Nigel Pendse (2006-06-27). Pellow. com/ market. dwreview. Data Mining and Knowledge Discovery 1 (1): 29–53. "Providing OLAP (On-line Analytical Processing) to User-Analysts: An IT Mandate" (http:/ / www. [5] "OLAP Council White Paper" (http:/ / www. Andrew. Jensen... Retrieved 2008-03-20. com/ Comment_APIs. Data Warehousing Review. . pp. Computers and Electronics in Agriculture 69 (1): 59–72. V. doi:10. com/ products?q=9783639222166). Incorporated (1995). . VDM Verlag Dr. doi:10. fpm. Dice and Drill!" (http:/ / www. . [18] Nigel Pendse (2007-08-23). html)..R. pg 177 [9] O'Brien & Marakas. 2007. [16] Nigel Pendse (2007-08-23). google. html). [20] Nigel Pendse (2008-03-07). OLAP Report. Inc. psu. 2009. Codd S. ac. Business Intelligence for Telecommunications (http:/ / books. [21] http:/ / www. htm). 402-403 [7] Hari Mailvaganam (2007). Müller e. htm). Pirahesh (1997). olapreport. Torben. 16(4) [11] MicroStrategy. Tucker.B. edu/ gray97data. "The origins of today’s OLAP products" (http:/ / olapreport. (ACM) 26 (1): 65. il/ ~dbm031/ dw042/ Papers/ microstrategy_211.. . 2011. Retrieved 2008-03-20. ieee. OLAP Report. p. Christian (December 2001).Online analytical processing 37 References [1] Codd E. Jim. Retrieved 2008-03-18. Retrieved 2008-03-05.K. "Multidimensional Database Technology" (http:/ / ieeexplore. . [2] Deepak Pareek (2007).07. com/ Products). Retrieved 2008-03-17..T. Venkatrao. Issue 1". C. org/ 10. agiledesignllc. pp. "OLAP architectures" (http:/ / www. pg 178 [10] Williams. . and Salley C. [17] "SSAS Entity Framework Provider for LINQ to SSAS OLAP" (http:/ / www. Reichart. Layman. "Commentary: OLAP API wars" (http:/ / www. com/ origins. "Introduction to OLAP . cs. Marcus. pdf) (PDF). springer. S. . "OLAP Market" (http:/ / www. ISSN 0018-9162. Hamid. com/ OLAP/ Introduction_OLAP. htm).M. OLAP Report. org/ iel5/ 2/ 20936/ 00970558. 2009. "An overview of data warehousing and OLAP technology" (http:/ / doi. SIGMOD Rec. . pdf) (PDF). "Analysis of mealybug incidence on the cotton crop using ADSS-OLAP (Online Analytical Processing) tool . pdf) (PDF). [13] Gray. January 24). Multidimensional models boost viewing options. symcorp. htm). Business Process Management:A Data Cube To Analyze Business Process Simulation Data For Decision Making (http:/ / www. com/ computer/ database+ management+ & + information+ retrieval/ book/ 978-0-387-49616-0 . [6] O'Brien & Marakas. html). OLAP Report. olapreport. com/ OLAP/ [22] http:/ / www.003. 1997. . [8] O'Brien & Marakas. [15] Bach Pedersen.compag. com/ consolidations. Retrieved 2008-03-17.1145/248603. [4] Abdullah. ist. Retrieved 2008-03-18. olapreport. "The Case for Relational OLAP" (http:/ / www. ISBN 978-3-639-22216-6. S. google.1016/j. Retrieved November 27. . (1994. "Consolidations in the BI industry" (http:/ / www. . htm). olapreport. [3] Apostolos Benisis (2010). A. Cross-Tab. com/ Architectures. 204 pp. CRC Press. [12] Surajit Chaudhuri and Umeshwar Dayal (1997). 248616). Retrieved 2008-03-18. ISBN 0849387922. . 294 pp. com/ downloads/ OLAP_CouncilWhitePaper. OLAP Council. Ahsan (2009). . and Sub-Totals" (http:/ / citeseer.2009. "Data Cube: {A} Relational Aggregation Operator Generalizing Group-By. com/ refer/ codd. Volume 69.Slice. 1145/ 248603.248616. bgu.F. acm. (1993). Retrieved 2008-03-18. . [19] Nigel Pendse (2006). Distributed Systems Online (IEEE): 40–46. Surajit. daniel-lemire.

states and processes. meaning a way to indicate to what extent two objects can relate to each other. The comprehensive resource is Dori's book Object-Process Methodology . An object is a thing existing for a period of time. A process is a phenomenon that transforms one or more objects by creating them.A Holistic Systems Paradigm[1] Language design Object-Process Methodology (OPM) is a modeling language. "systemic" or "environmental". Cardinality OPM supports cardinality constraints.in which case it indicates a change in the state of the object . Dov Dori. altering their states or destroying/consuming them. which improves exchangeability between different diagrams and even different methods. OPM was conceived and developed by Prof. at the Technion – Israel Institute of Technology. this methodology knows no multiplicity in depicting objects and processes.e. The links used in OPM are structural links and procedural links. A state is a situation an object can be in. The graphical representation of the OPM elements in an OPD is as follows: . OPM combines a minimal set of building blocks – stateful objects and processes that transform them – with a dual graphic-textual representation in a single diagram type. A paper that first presented ideas underlying OPM was published in 1995.in which case it indicates the launching of the second process when the first ends. i.[1] The entities used in OPM are objects.or to another process . A procedural link is used to link a process to an object . processes and links between them are depicted by using the Object Process Diagram (OPD). Entities are used to express "physical" or "informational" elements which can be inside or outside of the system being designed. The OPD treats complexity by using three refinement and abstraction mechanisms: • Zooming in and out • Folding and Unfolding • State expression and suppression Having only one diagram. A structural link forms a relation between two objects and is persistent. In OPM these constraints are called participation constraints. The following constraints can be formulated: • • • • • • 1 to 1 (Example: 1 man can marry 1 woman) 1 to many 1 to fixed number many to many fixed number to fixed number Optional (expressed as: ?) Features Object Process Diagram Objects.Object Process Methodology 38 Object Process Methodology Object Process Methodology (OPM) is an approach to designing information systems by depicting them using object models and process models. OPM uses two types of elements: entities and links.

C is an A OPM Procedural Links Symbol Meaning The source object/state is an agent of the target process The source object/state is an instrument of the target process The source/target process yields/consumes the target/source object The source object is The source process affected by the invocates the target target process process when it is finished .Object Process Methodology OPM Entities Object An object is a thing that exists. State A state is a situation an object can be at. 39 Process A process defines how objects are transformed. OPM Fundamental Structural Relations Symbol Meaning Relates a whole to its parts Relates an exhibitor to its attributes Relates a general thing to its specializations Example uses of the OPM structural links: Aggregation A consists of B and C Exhibition A exhibits B as well as C Generalization B is an A.

Dov Dori. Dori (2002).pdf) .an OPD can be translated in sentences. Reinhartz-Berger and D.Object Process Methodology 40 Object Process Language Another feature of Object Process Methodology is the Object Process Language . "Bridging the requirements/Design Gap in Dynamic Systems with Use Case Maps (UCMs)" (http://jucmnav.hevra. 5.il/~iris/research/Conferences/ OPMvsUML_EMMSAD04_elaborated. • D. softwareengineering. which are listed below. • OPL generator: Modeling an OPD automatically creates the corresponding natural text. 2. the creator can use the generated OPL additionally to check his work during the composition of the model. amazon. Gunter Mussbacher (2001). This way. New York. pp.[2] References [1] Object-Process Methodology (http:/ / www. 227-249. formatted in OPL. The application has several strong features. Dori (2004). • Daniel Amyot. ca/ twiki/ bin/ view/ UCM/ AboutUseCaseMaps) Further reading • D. • Syntax checking: The creator of an OPD is immediately warned when an illegal OPD construction is being created. Object-Process Methodology . telling the storyline of the diagram. Journal of Logic and Computation. Dori (1995).A Holistic Systems Paradigm.ac.filename=icse01. UML: A Code Generation Perspective" (http://mis. namely: • Use case diagram • Sequence diagram • • • • State diagram Class diagram Deployment diagram Activity diagram Further Use Case Maps (UCM) have some similar goals as OPM. Springer Verlag. The application refers to the issue and explains the error. Springer. The power of OPL lies in the fact that it is readable by humans but also interpretable by computers.ca/twiki/bin/viewfile/UCM/ VirLibICSE01?rev=1. 2002. Object-Process Analysis: Maintaining the Balance between System Structure and Behavior.pdf) • I. • Exchangeability with UML: The application has the capability to export an OPD to many UML diagrams.haifa. thus making it an inter-exchangeable language. com/ Object-Process-Methodology-Dov-Dori/ dp/ 3540654712).softwareengineering. [2] About Use Case Maps (http:/ / jucmnav. Object-Process Case Tool Modeling through OPM is possible with a specialized tool called Object-Process Case Tool.1. "Object-Process Methodology (OPM) vs.

com) ERP modeling ERP modeling.opcat. the choice cannot be made undone. meaning that options can easily be altered. The meta model below depicts the optionality levels of ERP modeling. abbreviated to ERP. OPM appears to be a usable methodology for modeling ERP systems. 4. presentation by Dov Dori. 5. The optionality on this level is more dynamic. regarding its organizational structure.edu/er2003/ slides/ER2003PT1Dori. The correct way to align both ERP and organizational models is as follows: 1.Object Process Methodology 41 External links • Object-Process Methodology and Its Application to the Visual Semantic Web (http://www. • www. Reverse engineering both ERP system and organizational structure to the same level of granularity makes both layers compatible for aligning the package in the organization. which scopes on high-level optionality on the entire system. this entry deals with ERP modeling using Object Process Methodology. • One level deeper is the Object Level. • The deepest level is the Occurrence level.byu.opcat. or OPM. which analyses single process occurrences. • The first level is the System Configuration Level. Because this level elaborates on object parameters. Usage Although ERP modeling could possibly be performed by several methodologies. The optionality leveling is used to reverse engineer the ERP system and the organizational structure to its full extent. This model is layered in 3 deeper levels. both aspects are fully alignable or at least compatible to be matched.pdf). Convert the ERP system database to an object model Construct a global business process model Identify the system configuration-level business process alternatives Identify the object-level variants of the business processes Expose the occurrence-level business process options .er. Option definition is therefore static: once a high-level option of the ERP system is chosen to be used within the organization. as the methodology focuses on optionality within objects and processes of an ERP system. 2.com (http://www. 3. the optionality is very dynamic. which scopes on single data objects. Theory A Global Business Process Model is created which represents the whole ERP software product. Once properly mapped. ERP modeling is done by analyzing the optionality within an ERP system to identify the different functions of the system that the end-using company needs. 2003. is the process of reverse engineering an Enterprise Resource Planning software package in order to align it to an organizational structure.

42 UNIT 3 .

use and support of customer relationship management systems can provide a significant advantage to the user. territories. offered as on-premises software that companies purchase and run on their own IT infrastructure. It involves using technology to organize. Software solutions then expanded to embrace deal tracking. Previously these tools were generally limited to simple CRM solutions which focused on monitoring and recording interactions and communications. while others may be pushed aside. This fragmented implementation can cause inherent challenges. and technical support. an interface that is difficult to navigate or understand can hinder the CRM’s effectiveness. and still are. entice former clients back into the fold.43 Resource Management Customer relationship management Customer relationship management (CRM) is a widely implemented strategy for managing a company’s interactions with customers. but also those for marketing. and the sales pipeline itself. . but often. especially for large businesses. and synchronize business processes—principally sales activities. clients and sales prospects. causing users to pick and choose which areas of the system to be used. Next came the advent of tools for other client-interface business functions. and reduce the costs of marketing and client service. attract. complex group of data can become cumbersome and difficult to understand for an ill-trained user. as described below. customer service. implementation. The increased use of customer relationship management software has also led to an industry-wide shift in evaluating the role of the developer in designing and maintaining its software.[1] The overall goals are to find. These tools have been. opportunities.[3] Measuring and valuing customer relationships is critical to implementing this strategy. there are obstacles that obstruct the user from using the system to its full potential. automate. nurture and retain those the company already has. Additionally. Complexity Tools and workflows can be complex. as only certain parts are used and the system is not fully functional. and win new clients.[4] Benefits of CRM A CRM system may be chosen because it is thought to provide the following advantages: • • • • • Quality and efficiency Decrease in overall costs Decision support Enterprise agility Customer Attention Challenges Successful development. Companies are urged to consider the overall impact of a viable CRM software suite and the potential for good or harm in its use.[2] Customer relationship management describes a company-wide business strategy including customer-interface departments as well as other departments. Instances of a CRM attempting to contain a large.

The outcome of internal fragmentation that is observed and commented upon by customers is now visible to the rest of the world in the era of the social customer. in the past.[7] Additionally. as companies choose not to use all the associated features factored when justifying the investment. Addressing the fragmentation requires a shift in philosophy and mindset in an organization so that everyone considers the impact to the customer of policy. A fragmented implementation can negate any financial benefit associated with a customer relationship management system. Systems that start disunited usually stay that way: siloed thinking and decision processes frequently lead to separate and incompatible systems.[12] .[6] This “ease of service” is paramount for developing a system that is usable.[9] Instead. With a difficult interface for a user to navigate. implementation can be fragmented or not entirely complete.[5] and there is an expectation that the usability of systems should be somewhat intuitive: “it helps make the machine an extension of the way I think — not how it wants me to think. upgrades and future editions of software. An overly complex computer system can result in an equally complex and non-friendly user interface.[12] Poor usability and low usage rates lead many companies to indicate that it was difficult to justify investment in the software without the potential for more tangible gains.[5] Customers are likely not as patient to work through malfunctions or gaps in user safety. thus not allowing the system to work as fully intended. it is important that support for the CRM system is companywide. Even one unhappy customer can deliver a body blow to a business.[9] The challenge of fragmented implementations may be mitigated with improvements in late-generation CRM systems. keeping the system from full use and potential.[11] Some developments and shifts have made companies more conscious of the life-cycle of a customer relationship management system.[7] In many cases. A series of 1998 research indicates that each item added to an information display can significantly affect the overall experience of the user.Customer relationship management 44 Poor usability One of the largest challenges that customer relationship management systems face is poor usability.[8] Fragmentation Often. poor usability can lead to implementations that are fragmented — isolated initiatives by individual departments to address their own needs.[7] Companies now consider the possibility of brand loyalty and persistence of its users to purchase updates. CRM systems face the challenge of producing viable financial profits. and dysfunctional processes. only employees or partners were aware of it. with a 2002 study suggesting that less than half of CRM projects are expected to provide a significant return on investment.[6] Two 2008 case studies show that the layout of a system provides a strong correlation to the ease of use for a system and that it proved more beneficial for the design to focus on presenting information in a way that reflected the most important goals and tasks of the user.[7] This bloated software can appear sluggish and/or overwhelming to the user. the growth of capabilities and complexities of systems has hampered the usability of a customer relationship management system. decisions and actions. rather than the structure of the organization. Human response at all levels of the organization can affect the customer experience for good or ill. The importance of usability in a system has developed over time.[10] Business reputation Building and maintaining a strong business reputation has become increasingly challenging.” An intuitive design can prove most effective in developing the content and layout of a customer relationship management system.

and product knowledge. Alternatively. need to be more open to flexibility of technical writers. a secure CRM system can become more usable.Customer relationship management 45 Security concerns A large challenge faced by developers and users is found in striking a balance between ease of use in the CRM interface and suitable and acceptable security measures and features. quote generation.[13] In many ways. in turn creating a more secure and stable CRM system. A series of 2008 research shows that CRM systems. deals.[13] Research and study show the importance of designing and developing technology that balances a positive user interface with security features that meet industry and corporate standards. territories.0 e-commerce and pricing are new. organizations create and track specific web activities that help develop the client relationship.[13] Technical writers can play a large role in developing customer relationship management systems that are secure and easy to use. leads. Modules for Web 2. sales forecasts and workflow automation. from initial contact to final disposition. often cutting out the active sales process altogether. Metrics monitored include clicks. This balance can be difficult. minimizing the time that sales representatives need to spend on each phase. security breaches are the result of user-error (such as unintentionally downloading and executing a computer virus). following the user’s orders to execute the file. as many believe that improvements in security come at the expense of system usability. in most cases. that security and usability can coexist harmoniously. Researchers have argued that. developing a system that allows users to easily access desired information and is secure and trusted by its users. These activities may include such activities as free downloads. the computer system acted as it should in identifying a file and then. and revenue. online video content. In a web-focused marketing CRM solution. A key marketing capability is tracking and measuring multichannel campaigns. Many SFA applications also include insights into opportunities. emerging interests in SFA. This allows a business to use fewer sales representatives to manage their clients. . Corporations investing in CRM software do so expecting a relative ease of use while also requiring that customer and other sensitive data remain secure. telephone and direct mail. social media. including email. exposed the computer and network to a harmful virus. Types/variations Sales force automation Sales force automation (SFA) involves using software to streamline all phases of the sales process. search.[15] These professionals can then gather information and use it at their preference. and online web presentations. In these events. responses.[14] A 2002 study shows. Prospect Relationship Management (PRM) solutions offer to track customer behaviour and nurture them from first contact to sale.[2] Marketing CRM systems for marketing help the enterprise identify and target potential clients and generate leads for the sales team. however. At the heart of SFA is a contact management system for tracking and recording every stage in the sales process for each prospective client. among others. Researchers argue that a more usable system creates less confusion and lessens the amount of potentially harmful errors. allowing these professionals to become content builders.

purpose-built applications for analytics and business intelligence. Sales analytics let companies monitor and understand client actions and preferences.Customer relationship management 46 Customer service and support Recognizing that service is an important factor in attracting and retaining customers. By evaluating “buy signals.[16] in order to correct problems before they affect satisfaction levels. This finds expression in the concept of collaborative systems that use technology to build bridges between departments. Marketing applications generally come with predictive analytics to improve segmentation and targeting. Integrated/collaborative Departments within enterprises — especially large enterprises — tend to function with little collaboration. and place it on the appropriate person's calendar. a 2009 study revealed that only 39% of corporate executives believe their employees have the right tools and authority to solve client problems. plus capabilities to measure and analyze response times.” marketers can see which prospects are most likely to transact and also identify those who are bogged down in a sales process and need assistance. customer support. marketing. Appointment CRM systems can be an origination point for a sales lead and are generally integrated with sales and marketing CRM systems to capture and store the interaction.[18] More recently. service quality. and the frequency of various issues. through sales forecasting and data quality. Support-focused applications typically include dashboards similar to those for sales. . Marketing and finance personnel also use analytics to assess the value of multi-faceted programs as a whole. Analytics Relevant analytics capabilities are often interwoven into applications for sales. organizations are increasingly turning to technology to help them improve their clients’ experience while aiming to increase efficiency and minimize costs. An automated process is used to schedule and confirm the appointment. offline. Appointment CRM is a relatively new CRM platform category in which an automated system is used to offer a suite of suitable appointment times to a customer via e-mail or through a web site. and service personnel regularly spend a portion of their time getting in touch with customers and prospects through a variety of means to agree on a time and place for meeting for a sales conversation or to deliver customer service.[17] Appointment Creating and scheduling appointments with customers is a central activity of most customer oriented businesses. and search marketing campaigns. These types of analytics are increasing in popularity as companies demand greater visibility into the performance of call centers and other service and support channels. Reps. service. and marketing. For example. and features for measuring the effectiveness of online. Sales. and service. agent performance. want to be able to pursue these opportunities without the burden of re-entering records and contact data into a separate SFA system. in their turn. Web analytics have evolved significantly from their starting point of merely tracking mouse clicks on Web sites. the development and adoption of these tools and services have fostered greater fluidity and cooperation among sales.[16] Even so. These features can be complemented and augmented with links to separate. feedback from a technical support center can enlighten marketers about specific services and product features clients are asking for.

small businesses are finding value in online solutions.Customer relationship management 47 Small business For small business. faxes. such as using online communities as a source of high-quality leads and a vehicle for crowd sourcing solutions to client-support problems. scheduling.[20] It is stated that people feel their interactions are peer-to-peer between them and their contacts. sales and support. making their buying decision without contacting the company. there may be some overlap between social/community driven tools and non-profit/membership tools. products and services. positive or negative. More than a few systems are now integrating to social networking sites. In light of the growth of social networking tools. Capabilities typically include tracking the following: fund-raising. documents. LinkedIn and Facebook are amplifying the voice of people in the marketplace and are having profound and far-reaching effects on the ways in which people buy. They also generally include opportunity insight for tracking sales pipelines plus added functionality for marketing and service. Non-profit and membership-based Systems for non-profit and membership-based organizations help track constituents and their involvement in the organization. As with larger enterprises. sometimes responding with negatives about that company. and resent company involvement. volunteering and communications with individuals. basic client service can be accomplished by a contact manager system: an integrated solution that lets organizations and individuals efficiently track and record interactions. including emails. especially for mobile and telecommuting workers. jobs.[19] Some analysts take the view that business-to-business marketers should proceed cautiously when weaving social media into their business processes. membership levels. demographics. . companies are looking to gain access to these conversations and take part in the dialogue. Social media Social media sites like Twitter. Increasingly. Many include tools for identifying potential donors based on previous donations and participation. These tools usually focus on accounts rather than on individual contacts. Social media promoters cite a number of business advantages. These observers recommend careful market research to determine if and where the phenomenon can provide measurable benefits for client interactions. People also use social media to share opinions and experiences on companies. membership directories. As social media is not as widely moderated or censored as mainstream media. Customers can now research companies online and then ask for recommendations through social media channels. and more. Companies can also leverage client stated habits and preferences to "hyper-target" their sales and marketing communications. individuals can say anything they want about a company or brand.

Pre-written software sometimes has missing functionality. The advantage of Custom CRM software is that it will have all required functionality. including the ability to deliver the right data to the right employees and sufficient ease of adoption and use. In this view. With Custom CRM software. without an accompanying rationale. • Toward a solution: overcoming siloed thinking. sales. Marketing staff should be able to leverage client information from . Senior executives need to be strong and visible advocates who can clearly state and support the case for change. exactly as a client needs it to be. internally-focused. They offer a less than complete client view and often lead to unsatisfactory user experiences. Strategy For larger-scale enterprises. Collaboration. and two-way communication should be encouraged across hierarchical boundaries. and significant savings in operating costs are some of the benefits to an enterprise. especially with respect to process improvement. and service. responsiveness. Experts advise organizations to recognize the immense value of integrating their client-facing operations. Platform selection is best undertaken by a carefully chosen group of executives who understand the business processes to be automated as well as the software issues. and support for the workforce. enterprises simply automate flawed client-facing processes rather than redesign them according to best practices. modifications will not be needed. a complete and detailed plan is required to obtain the funding. context. and cost quantified in three general areas: • Processes: Though these systems have many technological components.Customer relationship management 48 Custom CRM Custom CRM software is developed specifically for one client. For example.[23] In other instances. resources. Moreover. and company-wide support that can make the initiative of choosing and implementing a system successfully. and how best to employ them. It can be seen as a more client-centric way of doing business.[24] Such “point solutions” offer little or no integration or alignment with a company’s overall strategy. teamwork.[22] Implementations almost invariably fall short when one or more facets of this prescription are ignored: • Poor planning: Initiatives can easily fail when efforts are limited to choosing and deploying software. integrations are piecemeal initiatives that address a glaring need: improving a particular client-facing process or two or automating a favored sales or client support channel. an organization must convince its staff that the new technology and workflows will benefit employees as well as clients. causing companies to use multiple software systems. planners need to determine the types of client information that are most relevant. some will likely need re-engineering to better serve the overall goal of winning and satisfying clients. Benefits must be defined.[3] • People: For an initiative to be effective. higher rates of client satisfaction. Proponents emphasize that technology should be implemented only in the context of careful strategic and operational planning. marketing effectiveness. Therefore. business processes lie at its core. enabled by technology that consolidates and intelligently distributes pertinent information about clients.[21] • Technology: In evaluating technology. choosing an application can take anywhere from a few weeks to a year or more.[3] Implementation Implementation issues Increases in revenue. • Poor integration: For many companies. sales representatives need to know about current issues and relevant marketing promotions before attempting to cross-sell to a specific client. key factors include alignment with the company’s business process strategy and goals. risks assessed. a company must analyze its business workflows and processes before choosing a technology platform. and market trends. sales. department-centric views should be discarded in favor of reorienting processes toward information-sharing across marketing. Depending upon the size of the company and the breadth of data.

A CRM that uses a search box will keep assistance and immediate results quickly within the reach of a user. And support agents require quick and complete access to a client’s sales and service history. less than 40 percent of 1. the landscape is littered with instances of low adoption rates.[27] With expenditures expected to exceed $11 billion in 2010. your employees need to understand how the system works. These positive evaluations led to the increased use and more thorough implementation of the CRM system.[26] In a 2007 survey from the U.. Further.[12] Increasing usage and adoption rates Specialists offer these recommendations[25] for boosting adoptions rates and coaxing users to blend these tools into their daily workflow: Additionally.[27] enterprises need to address and overcome persistent adoption challenges. CRM training needs to cover two types of information: relational knowledge and technological knowledge. while perhaps less severe. thus missing opportunities for effective marketing and efficiency. usually at the top of a web or CRM page. This can prove useful for users who might find themselves lost or unsure how they got to the current screen in the CRM. 43 percent of respondents said they use less than half the functionality of their existing system. 51 percent cited data synchronization as a major issue. According to CSO Insights.K.[24] 49 Adoption issues Historically. a Gartner report estimated that more than $1 billion had been spent on software that was not being used. • Readily available search engine boxes: Research shows that users are quick to seek immediate results through the use of a search engine box. in many cases time. . Many of the challenges listed above offer a glimpse into some of the obstacles that corporations implementing a CRM suite face.275 participating companies had end-user adoption rates above 90 percent. four-fifths of senior executives reported that their biggest challenge is getting their staff to use the systems they had installed. resources and staffing do not allow for the troubleshooting necessary to tackle an issue and the system is shelved or sidestepped instead. More recent research indicates that the problem. many corporations only use CRM systems on a partial or fragmented basis. The amount of time needed for the development and implementation of a customer relationship management system can prove costly to the implementation as well. is a long way from being solved. Statistics In 2003. researchers found the following themes were common in systems that users evaluated favorably. 72 percent indicated they would trade functionality for ease of use. No doubt this process is time consuming. as you will be better able to understand and meet the needs of your clients. to return to the starting point of navigation. Research indicates that implementation timelines that are greater than 90 days in length run an increased risk in the CRM system failing to yield successful results. as well as understand the clients and their needs. Why is it so difficult sometimes to get employees up to date on rapidly developing new technology? Essentially. and 67 percent said that finding time to evaluate systems was a major problem.Customer relationship management sales and service to better target campaigns and offers. • Help Option Menu: An outlet for quick assistance or frequently asked questions can provide users with a lifeline that makes the customer relationship management software easier to use. Researchers suggest making this resource a large component of the CRM during the development stage.[25] Additionally. Further recommendations include[28] • “Breadcrumb Trail”: This offers the user a path. but it is well worth the time and effort.

[34] Technical communicators can play a significant role in developing software that is usable and easy to navigate. Individual users — and large corporations — find themselves equally stymied by a system that is not easily understood. abandoning the assistance if desired results weren’t found by that time.[32] A 2004 case study concluded that the proper use of screenshots can significantly support a user’s “developing a mental model of the program” and help in “identifying and locating window elements and objects. and learn in a shorter time frame. context-specific information.[29] Researchers noted a strong correlation between the design and layout of a user interface and the perceived level of trust from the user. development of software has become more important than ever. make fewer mistakes. intuitive design and overall usability of a system can influence the users’ opinions and preferences of systems.[31] Researchers believe that help menus can provide assistance to users through introducing additional screenshots and other visual and interactive aids.[35] Clarity One of the largest issues in developing a usable customer relationship management system comes in the form of clear and concise presentation.[31] Data show that CRM users are oftentimes unwilling to consult a help menu if it is not easily accessible and immediate in providing assistance. thus allowing a user to navigate the system with ease and confidence. A 1998 case study showed that software engineering majors who successfully completed a technical writing course created capstone .[31] A 1998 case study found that users would consult the help menu for an average of two or three screens. Strong writing skills can prove extremely beneficial for software development and creation. With shifts in competition and the increasing reliance by corporations to use a CRM system. Technical support in the form of a qualified and comprehensive help menu can provide significant improvement in implementation when providing focused.” which can certainly assist in increasing the time frame for full implementation of a CRM system with limited technical or human support.Customer relationship management A larger theme is found in that the responsiveness. 50 Help menus One of the largest issues surrounding the implementation and adoption of a CRM comes in the perceived lack of technical and user support in using the system. Developers are urged to consider the importance of creating software that is easy to understand and without unnecessary confusion.[30] The researchers found that users felt more comfortable on a system evaluated as usable and applied that comfort and trust into increased use and adoption.”[32] This research concluded that screen shots allowed users to “learn more.[32] Experts have identified five characteristics to make a help menu effective:[33] • “context-specific” — the help menu contains only the information relevant to the topic that is being discussed or sought • “useful“ — in conjunction with being context-specific. the help menu must be comprehensive in including all of the information that the user seeks • “obvious to invoke“ — the user must have no trouble in locating the help menu or how to gain access to its contents • “non-intrusive“ — the help menu must not interfere with the user’s primary path of work and must maintain a distance that allows for its use only when requested • “easily available“ — the information of the help menu must be accessible with little or few steps required Development Thoughtful and thorough development can avoid many of the challenges and obstacles faced in using and implementing a customer relationship management system.

[36] The case study yielded significant results: • Students who completed the technical writing course submitted capstone projects that contained more vivid and explicit detail in writing than their peers who did not complete the course. The researchers note that some of the best instances of usability adjustments can be made through casual conversation. researchers argue for the inclusion of technical writers in the development process of software systems.Customer relationship management experience projects that were more mindful of end user design than the projects completed by their peers. test users play a significant role in developing software. These users offer software developers an outside perspective of the project. Test users help developers discover which areas of the software perform well. as the culture of the industry and desired outcomes can affect the effect on CRM creation. • The faculty member overseeing the capstone submissions felt that students who did not enroll in the technical writing class were at a significant disadvantage when compared to their peers who did register for the course.[38] Research notes that test users can prove to be most effective in providing developers a structured overview of the software creation. Researchers note that the students appeared to weigh multiple implications on the potential user.[40] as a 2008 case study suggests that the responsiveness of test users can vary dramatically depending on the industry and field of the user. The study found that test users became discouraged when items flagged as needing attention were marked as lower priority by the software developers.[39] In this case study. Researchers note that the company had dedicated specific research space and staff focused exclusively on usability.[36] Technical writing can help build a unified resource for successful documentation. offering opportunities to cater the further development of the system. and that oftentimes usability is bypassed by developers because these individuals never think to consult test users. • Usability efforts must carry equal concern in the eyes of developers as other technology-related concerns in the creation stage. • Realistic expectations from both test users and software developers help maintain a productive environment. training and execution of customer relationship management systems. Test users can also provide feedback from a targeted audience: a software development team creating a customer relationship management software system for higher education can have a user with a similar profile explore the technology.[37] 51 Test users In many circumstances. Research suggests that test users can rate the importance or severity of potential software issues in a significantly different fashion than . and explained their decisions more thoroughly than their peers. researchers observed a Danish software company in the midst of new creating new software with usability in mind. A 2007 study suggests some important steps are needed in creating a quality and effective test environment for software development. These professionals can offer insight into usability in communication for software projects. In the case study. Researchers note that developers began to limit seeking input from test users after the test users suggested remedies the developers felt were improbable. The study found these four observations most appropriate: • The developers must make a conscious effort and commitment to the test user. oftentimes helping developers gain insight into potential areas of trouble that might have been overlooked or passed over because of familiarity with the system. and which areas require further attention.[38] These users can provide a fresh perspective that can reflect on the state of the CRM development without the typically narrow or invested focus of a software developer. leading the developers to believe consulting the test users would only prove to be more work. Students appeared sensitive of the user’s ability to understand the developed software. • Those participating in the writing course sought out test users more frequently to add a perspective outside their own as developer. Allowing users to test developing products can have its limits in effectiveness. • Developers must make themselves available to test users and colleagues alike throughout the creation process of a software system.

the language used by test users in many circumstances proves to be quite general and lacking the specific nature needed by developers to enact real change.319. LinkedIn.1 10.5 (-2.1 421.573.6 6. Some clients prefer assurances that their data will not be shared with third parties without their prior consent and that safeguards are in place to prevent illegal access by third parties.4 4. from revenue of $8. so that businesses may anticipate and innovate to better serve customers.5 6.8 451. as well as the legislative and cultural norms. with customers not needing to invest in purchasing and maintaining IT hardware. researchers note the potential for costly delay if developers spend too much time attempting to coerce hesitant test users from participating. The era of the "social customer"[44] refers to the use of social media (Twitter.147 Related trends Many CRM vendors offer Web-based tools (cloud computing) and software as a service (SaaS).7 5.6 100 2006 Revenue 1.[39] Additional research notes that test users may be able to identify an area that proves challenging in a software system.[41] The following table lists the top vendors in 2006-2008 (figures in millions of US dollars) published in Gartner studies. CRM philosophy and strategy has shifted to encompass social networks and user communities.3 8. and subscription fees are a fraction of the cost of purchasing software outright.8 676. but might have difficulty explaining the outcome.13 billion in 2007 to $9.3 16.089.65 43. 52 Privacy and data security system One of the primary functions of these tools is to collect information about clients.289. These applications are sold as subscriptions.Customer relationship management software developers.7 1. Facebook.3 4.5 332.6 15.0 3.881. advertising and webpage design.9 2. customer reviews in Amazon etc.016.6 6.15 billion in 2008.9 39. A related 2007 case study noted that test users were able to describe roughly a third of the usability problems.3 2007 Share (%) 25.) by customers in ways that allow other potential customers to glimpse real world experience of current customers with the seller's products and services. as customer expectations have risen.050.1 8.[38] Similarly so.[42] [43] Vendor SAP Oracle Salesforce. Yelp.620 9. involving too many test users can prove cumbersome and delay the development of a CRM system. referred to as "Social CRM".9 2.8) 16.8 1.[38] Further. and personalization in addition to internally generated marketing.6 100 2007 Revenue 2. This shift increases the power of customers to make purchase decisions that are informed by other parties sometimes outside of the control of the seller or seller's network.7 176.1 5. Market structures This market grew by 12. In response.com 2008 Revenue 2.2 40.055 1. . thus a company must consider the desire for privacy and data security. podcasting.681.475 965 2008 Share (%) 22. which are accessed via a secure Internet connection and displayed in a Web browser.5 percent in 2008. CRM as a philosophy and strategy is growing to encompass these broader components of the customer relationship.1 365. the user experience of a product or service requires increased attention to design and simplicity.7 100 Microsoft CRM 581 Amdocs Others Total 451 3.[39] Additionally.8 2006 Share (%) 26. With the spread of self-initiated customer reviews.

" (cover story). 53 Notes [1] Shaw. William. destinationcrm." Technical Communication Quarterly 17. "Conflicting Standards for Designing Data Displays: Following.Customer relationship management Another related development is vendor relationship management. sap." CPA Technology Advisor 16. Grace Bernhardt. defined and coined the term Extended Relationship Management (XRM). Industrial Management & Data Systems 95. (6 June 2009) What's 'Hot' in CRM Applications in 2009 (http:/ / www." Journal of Business & Technical Communication 21. B to B 87. Harvard Business Review. Charles. aspx) [4] Shaw. and Huang Zhenyu. Inc. no. aspx) [18] InsideCRM (2007) Get It Together with Collaborative CRM (http:/ / www. com/ Articles/ Columns-Departments/ Reality-Check/ Demystifying-CRM-Adoption-Rates-42496.net (2007) CRM Adoption ‘Biggest Problem’ in 83 Percent of Cases (http:/ / blog." Journal of Computer Information Systems 48. Usability: form that says function. sdn. "A Usability Analysis of Company Websites. 1995. destinationcrm. or VRM. 4 (November 1998): 473 [9] Pennington. 5:3-6. and Reconciling Them. epx?PressID=6250) [25] Jim Dickie. "You can learn from Dell Hell. 1: 10-34 [7] Desbarats. 2008. as well as by a growing number of startups and established companies. no.. com/ Articles/ Editorial/ Magazine-Features/ Sales-and-Social-Media-No-One’s-Social-(Yet)-54767. Measuring and Valuing Customer Relationships (2000) Business Intelligence ISBN 9781898085331 [5] Desbarats. asp) [28] Cappel. [15] Whittemore. Passionate and Profitable. Robert. "Understanding the Fatal Mistakes". gartner. 3 (March 11. "Usability: form that says function. Microsoft markets its Dynamics CRM as "xRM" for its extensibility for potential XRM-ish uses beyond customer data. com/ irj/ scn/ go/ portal/ prtroot/ docs/ library/ uuid/ e044e180-8375-2a10-a2b2-b5709ea68ccb) [17] Strativity Group. no. Martine Rife. John Wiley & Sons. com/ article/ you_can_learn_dell_hell_dell_did) [12] Goldberg. and Bob Gaby.. sap. aspx) [26] Joachim. destinationcrm. James J. [24] SAP white paper (2003) CRM Without Compromise (http:/ / www. "CRM tools improve access. as well as other secondary allies including government. strativity.com (2002) What Is CRM? (http:/ / www. tmcnet. aspx) [21] TechTarget (2009) Strategy Checklist: Planning for CRM and Customer Service Success (http:/ / searchcrm. META Group (now Gartner) analyst Doug Laney first proposed. Robert.[45] In a 2001 research note. "Metadata and Memory: Lessons from the Canon of Memoria for the Design of Content Management Systems. 8 (December 2006): 38. [8] Kostelnick. David. "CRM tools improve access. [10] Joachim. 1 (Fall2007 2007): 117-123. and industry consortia." Industrial Management & Data Systems 95." (cover story). David. [6] Hart-Davidson. B to B 87.[46] . no. 2007. 5:3-6. 17 (September 17." B to B 86. CSO Insights (2006) Demystifying CRM Adoption Rates (http:/ / www. Gus. Yee.com (2009) Who Owns the Social Customer? (http:/ / www. [13] Ka-Ping. 3 (March 11. 1 (Winter 2008): 88-109. Flouting. 2002): 1..com (2009) Sales and Social Media: No One’s social (Yet) (http:/ / www. com/ feature/ CRM-strategy-checklist-Planning-for-CRM-and-customer-service-success?offer=briefcaseCRM) [22] Lior Arussy (2005). ISBN 0471721344. DestinationCRM. [23] "Avoid the Four Perils of CRM". 1995. which is the customer-side counterpart of CRM: tools and services that equip customers to be both independent of vendors and better able to engage with them. VRM development has grown out of efforts by ProjectVRM at Harvard's Berkman Center for Internet & Society and Identity Commons' Internet Identity Workshops. insidecrm. usability. "Surviving the Design and Implementation of a Content-Management System. no. Harold. com/ Articles/ CRM-News/ Daily-News/ What-Is-CRM-46033. [14] Cieslak. "User Interaction Design for Secure Systems. com/ products/ 2009-05-26. Michael McLeod. no. 1:62-73. com/ about/ newsroom/ press. David. com/ Articles/ Editorial/ Magazine-Features/ Who-Owns-the-Social-Customer-54028." Technical Communication Quarterly 17. Inc. no. 2002): 1 [27] David Sims. aspx) [20] Clara Shih. Inc. and Jeffrey T. com/ DisplayDocument?& id=1004212) [3] DestinationCRM. Lori L. primarily partners. "Coming to Content Management: Inventing Infrastructure for Organizational Knowledge Work. customerthink. Stewart. employees and suppliers. com/ features/ collaborative-crm-112907/ ) [19] DestinationCRM. He defined XRM as the principle and practice of applying CRM disciplines and technologies to other core enterprise constituents. destinationcrm. Grabill. (2002): 278-290. no. [11] Mei Lin Fung. Dell did" customerthink." Technical Communication 45. . no. usability. "10 ways to avoid CRM pitfalls. no." Information and Communication Security 2513. TMC. (2009) Global Customer Experience Management Benchmark Study (http:/ / www. no. com/ telecom-crm/ 2007/ 11/ 30/ crm-adoption-biggest-problem-in-83-percent-of-cases-wigan-gets-crm-tre. techtarget. no. Computer Aided Marketing & Selling (1991) Butterworth Heinemann ISBN 9780750617079 [2] Gartner. press. VRM was the subject of a cover story in the May 2010 issue of CRM Magazine. 2001): 11. "Programs Provide Extensive Tools For Adaptability And Customization.com (http:/ / www. Gus.. [16] SAP Insider (15 November 2007) Still Struggling to Reduce Call Center Costs Without Losing Customers? (http:/ / www.

[32] Gellevij. "Fear and loathing of the help menu: A usability test of online help. Olivier. jsp?id=1074615) (Press release). no. [34] Desbarats. Industrial Management & Data Systems 95. Trevor. no. 5:388-398. htm) CRM Magazine: May. 2 (Spring98 1998): 197 [37] Pennington. no. Dewit. Olsen. David. "The impact of interface usability on trust in Web retailers. [31] Grayling. Benoit A. gartner. 2 (May 2002): 193. 2001. CRM at the Speed of Light. N. Surviving the Design and Implementation of a Content-Management System. 2007. 4 (July 2008): 301-306. 1995. . [39] Høegh. Gartner. no. 1 (Summer 2002): 47-69.com xRM Defined (http:/ / www. no. xrm. com/ it/ page. "Implementation Team Responsiveness and User Evaluation of Customer Relationship Management: A Quasi-Experimental Design Study of Social Exchange Theory. Inc. [30] Roy. destinationcrm. Inc." Behaviour & Information Technology 27. Trevor. [44] Greenberg. "Empirical Proof for Presenting Screen Captures in Software Documentation. 2008-09-12. no. 5:3-6 [35] Whittemore. 2 (May 1998): 168. Stewart. no. "If We Build It. [33] Grayling." Technical Communication Quarterly 7." Technical Communication 51. com/ Articles/ CRM-News/ Daily-News/ CRM-Market-Grows-for-Fifth-Straight-Year-55275. destinationcrm. and Janne Jul Jensen. [43] "Gartner Says Worldwide CRM Market Grew 12. jsp?id=715308) (Press release). McGraw Hill 4th Edition. 4 (July 2006): 635-664 [41] DestinationCRM. Mark. and Leslie A." Behaviour & Information Technology 27. Ridings. no. no. . 2010 [46] xRM." Technical Communication 45.com (2009) CRM Market Grows for Fifth Straight Year (http:/ / www. 1:62-73 [38] Høegh. Aubert. aspx) 54 . "A case study of three software projects: can software developers anticipate the usability problems in their software?. "Social and cognitive effects of professional communication on software usability. com/ it/ page. 1 (Winter2008 2008): 88-109 [36] Mirel." Technical Communication 49." Journal of Management Information Systems 19. and Catherine M. "Metadata and Memory: Lessons from the Canon of Memoria for the Design of Content Management Systems. Journal of Business & Technical Communication 21. "‘Representing the User’ in software development—a cultural analysis of usability work in the product development context. no. Th. gartner. Rune Thaarup. 2 (May 2004): 224-238. aspx) [42] "Gartner Says Worldwide Customer Relationship Management Market Grew 23 Percent in 2007" (http:/ / www. [40] Iivari." Internet Research 11. Will They Come? A Usability Test of Two Browser-based Embedded Help Systems. page 7 [45] Destinationcrm. and Hans Van Der Meij. Barbara. 2009-06-15. Retrieved 2008-08-15.5 Percent in 2008" (http:/ / www. R.com (http:/ / www." Technical Communication Quarterly 17." Interacting with Computers 18. Marie Christine. Gartner. no. no. Paul. com/ Issue/ 1776-May-2010. Lori L. "Case study: integrating usability activities in a software development process.Customer relationship management [29] Gefen. com/ xrm/ xrm_defined. 4 (July 2008): 307-312. Retrieved 2009-10-27. Usability: form that says function. Gus.

and logistics management. Wieland/Wallenburg..[5] • According to the Council of Supply Chain Management Professionals (CSCMP). . control.[2] Supply chain management spans all movement and storage of raw materials. procurement. synchronizing supply with demand and measuring performance globally."[4] • Global supply chain forum ." Definitions More common and accepted definitions of supply chain management are: • Supply chain management is the systematic. More recently. and customers. leveraging worldwide logistics. execution. As a consequence costs must be lowered throughout the chain by driving out unnecessary costs and focusing attention on adding value. the loosely coupled.Supply chain management 55 Supply chain management Supply chain management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers (Harland. The supply chain system must be responsive to customer requirements. supply chain management encompasses the planning and management of all activities involved in sourcing. Another definition is provided by the APICS Dictionary when it defines SCM as the "design. strategic coordination of the traditional business functions and the tactics across these business functions within a particular company and across businesses within the supply chain. Throughout efficiency must be increased. which can be suppliers. 1996). self-organizing network of businesses that cooperate to provide product and service offerings has been called the Extended Enterprise. 2011) objective of creating net value. planning. conversion. (cf. and finished goods from point of origin to point of consumption (supply chain). In essence. for the purposes of improving the long-term performance of the individual companies and the supply chain as a whole (Mentzer et al. It also includes the crucial components of coordination and collaboration with channel partners. 2001). and monitoring of Supply chain management is aimed at managing complex and dynamic supply and supply chain activities with the [1] demand networks. work-in-process inventory.[3] • A customer focused definition is given by Hines (2004:p76) "Supply chain strategies require a total systems view of the linkages in the chain that work together efficiently to create customer satisfaction at the end point of delivery to the consumer. 2008). building a competitive infrastructure.supply chain management is the integration of key business processes across the supply chain for the purpose of creating value for customers and stakeholders (Lambert. intermediaries. third-party service providers. supply chain management integrates supply and demand management within and across companies. bottlenecks removed and performance measurement must focus on total systems efficiency and equitable reward distribution to those in the supply chain adding value.

Less control and more supply chain partners led to the creation of supply chain management concepts. work-in-process (WIP) and finished goods. cross docking. private carrier.g. pull. It is therefore imperative to take a systems approach when planning logistical activities. transportation. 56 Problems addressed by supply chain management Supply chain management must address the following problems: • Distribution Network Configuration: number. they reduce their ownership of raw materials sources and distribution channels. owner-operated.[3] Supply chain management software includes tools or modules used to execute supply chain transactions. certain aspects of the internal processing of materials into finished goods. The effect is to increase the number of organizations involved in satisfying customer demand. Supply chain execution means managing and coordinating the movement of materials. These trade-offs are key to developing the most efficient and effective Logistics and SCM strategy. airfreight. and information from a source to a customer. Managing a supply chain is 'supply chain management' (Mentzer et al. inventory. decentralized or shared). e.g. • Information: Integration of processes through the supply chain to share valuable information. a full truckload of a product is ordered to reduce transportation costs. For example. Activities/functions Supply chain management is a cross-function approach including managing the movement of raw materials into an organization. and transportation control (e.. distribution centers. finances. Supply chain event management (abbreviated as SCEM) is a consideration of all possible events and factors that can disrupt a supply chain. pool point shipping. manage supplier relationships and control associated business processes. With SCEM possible scenarios can be created and solutions devised. • Distribution Strategy: questions of operating control (centralized. or 3PL). 2001). DSD (direct store delivery). LTL. common carrier. forecasts. including demand signals. full truckload (FTL) rates are more economical on a cost per pallet basis than less than truckload (LTL) shipments. Trade-offs may increase the total cost if only one of the activities is optimized.. delivery scheme. however. push or hybrid). services.g. intermodal transport. information and funds across the supply chain. • Trade-Offs in Logistical Activities: The above activities must be well coordinated in order to achieve the lowest total logistics cost. • Cash-Flow: Arranging the payment terms and methodologies for exchanging funds across entities within the supply chain... These functions are increasingly being outsourced to other entities that can perform the activities better or more cost effectively. motor carrier. ocean freight. production facilities. while reducing management control of daily logistics operations. warehouses. . including truckload.g. there will be an increase in inventory holding costs which may increase total logistics costs. including TOFC (trailer on flatcar) and COFC (container on flatcar). etc. closed loop shipping. contract carrier. direct shipment. The purpose of supply chain management is to improve trust and collaboration among supply chain partners. and the movement of finished goods out of the organization and toward the end-consumer. is a set of organizations directly linked by one or more of the upstream and downstream flows of products. As organizations strive to focus on core competencies and becoming more flexible. as opposed to supply chain management. potential collaboration. including raw materials.Supply chain management A supply chain. The flow is bi-directional. parcel. • Inventory Management: Quantity and location of inventory. location and network missions of suppliers.. railroad. thus improving inventory visibility and the velocity of inventory movement. replenishment strategy (e. e. mode of transportation. If. cross-docks and customers.

SCOR is a supply chain management model promoted by the Supply Chain Council. including contracting. . and other customers. scheduling. • Outbound operations. and planning process definition. • Order promising. including current inventory and forecast demand. industry-neutral enterprise process model that allows organizations to see their business processes from a cross-industry viewpoint. including all fulfillment activities. including quantity. location. • Milestone payments. Supply chain activities can be grouped into strategic. • Product life cycle management. and facilities. manufacturing facilities. • From production level to supply level accounting all transit damage cases & arrange to settlement at customer level by maintaining company loss through insurance company. in collaboration with all suppliers. and size of warehousing. direct shipping. • Production operations. distributors. • Sourcing planning. including transportation from suppliers and receiving inventory. Operational level • Daily production and distribution planning. • Strategic partnerships with suppliers. Inventory decisions. tactical. and operational levels. • Information technology chain operations. Transportation strategy. • Inbound operations. and customers. creating communication channels for critical information and operational improvements such as cross docking. and contracting. Another model is the SCM Model proposed by the Global Supply Chain Forum (GSCF). accounting for all constraints in the supply chain. distribution centers. Benchmarking of all operations against competitors and implementation of best practices throughout the enterprise. and third-party logistics. including the number. warehousing and transportation to customers. including all suppliers.[6] 57 Strategic level • Strategic network optimization.Supply chain management Several models have been proposed for understanding the activities required to manage material movements across organizational and functional boundaries. • Demand planning and forecasting. coordinating the demand forecast of all customers and sharing the forecast with all suppliers. • Where-to-make and make-buy decisions. routes. distribution centers. • Aligning overall organizational strategy with supply strategy. including the consumption of materials and flow of finished goods. Tactical level • • • • • Sourcing contracts and other purchasing decisions. • Focus on customer demand and Habits. including all nodes in the supply chain. so that new and existing products can be optimally integrated into the supply chain and capacity management activities. • Production scheduling for each manufacturing facility in the supply chain (minute by minute). • It is for long term and needs resource commitment. Production decisions. and quality of inventory. The CSCMP has adopted The American Productivity & Quality Center (APQC) Process Classification FrameworkSM a high-level. including frequency. location.

a complex network structure can be decomposed into individual component firms (Zhang and Dilts. downsizing driven by cost reduction programs. 1990). particularly the dramatic fall in information communication costs. This era has continued to develop into the 21st century with the expansion of internet-based collaborative systems. 2009). and "Next Generation Manufacturing System". companies in a supply network concentrate on the inputs and outputs of the processes. technological changes. using terms such as "Keiretsu". This era of supply chain evolution is characterized by both increasing value-adding and cost reductions through integration. which are a significant component of transaction costs. which collaborate in ever-changing constellations to serve one or more markets in order to achieve some business goal specific to that collaboration" (Akkermans. "Extended Enterprise".S. re-engineering. The security management system for supply chains is described in ISO/IEC 28000 and ISO/IEC 28001 and related standards published jointly by ISO and IEC. 2004). 1998). "Lean Manufacturing" and "Agile Manufacturing" practices. However. 1979). joint ventures. During the past decades. significant success factors were identified. globalization.0. From a systems perspective. 1993). 2001). the concept of a supply chain in management was of great importance long before. to successfully operate solid collaborative supply networks in which each specialized business partner focuses on only a few key strategic activities (Scott. especially with the creation of the assembly line. The characteristics of this era of supply chain management include the need for large-scale changes. such as Dell and Hewlett Packard. Traditionally. . the choice of an internal management control structure is known to impact local firm performance (Mintzberg. However. "Global Production Network". the network structure fits neither "market" nor "hierarchy" categories (Powell. "Virtual Corporation". as an outcome of globalization and the proliferation of multinational companies. This inter-organizational supply network can be acknowledged as a new form of organization. and SCM 2. to compete in the global market and networked economy.[8] Second. industry consultant in the early 1980s. Integration. strategic alliances and business partnerships.[7] In Peter Drucker's (1998) new management paradigms. with the complicated interactions among the players. and Globalization (Movahedi et al. and little is known about the coordination conditions and trade-offs that may exist among the players. Many researchers have recognized these kinds of supply network structures as a new organization form. 1. It is not clear what kind of performance impacts different supply network structures could have on firms. First. 2. such a structure can be defined as "a group of semi-independent organizations. Specialization Phases One and Two.. changes in the business environment have contributed to the development of supply chain networks. complementing the earlier "Just-In-Time". Historical developments in supply chain management Six major movements can be observed in the evolution of supply chain management studies: Creation. and widespread attention to the Japanese practice of management. Therefore. each with their capabilities.Supply chain management 58 Importance of supply chain management Organizations increasingly find that they must rely on effective supply chains. outsourcing and information technology have enabled many organizations. or networks. integration era This era of supply chain management studies was highlighted with the development of Electronic Data Interchange (EDI) systems in the 1960s and developed through the 1990s by the introduction of Enterprise Resource Planning (ERP) systems. with little concern for the internal management working of other individual players. creation era The term supply chain management was first coined by a U. have led to changes in coordination among the members of the supply chain network (Coase. in the early 20th century. this concept of business relationships extends beyond traditional enterprise boundaries and seeks to organize entire business processes throughout a value chain of multiple companies. In the 21st century.[9] In general.

each with its own unique characteristics and demands. and reducing costs through global sourcing. execution and performance management. This transition also re-focused the fundamental perspectives of each respective organization. 4. market. Storage.g.. can be characterized by the attention given to global systems of supplier relationships and the expansion of supply chains over national boundaries and into other continents. The set of partners may change according to a given market. Outsourced technology hosting for supply chain solutions debuted in the late 1990s and has taken root primarily in transportation and collaboration categories. best-in-class partners to contribute to the overall value chain itself. Although the use of global sources in the supply chain of organizations can be traced back several decades (e. In a stage 2 supply chain. market forces could demand changes from suppliers. Companies abandoned vertical integration. 5. This variability has significant effects on the supply chain infrastructure. thereby increasing overall performance and efficiency. In stage 1 type supply chain. industries began to focus on “core competencies” and adopted a specialization model. At any given moment. are not linked and are independent of each other. The specialization model creates manufacturing and distribution networks composed of multiple. They had to control the entire supply chain from above instead of from within. globalization era The third movement of supply chain management development. sold off non-core operations. An example of this kind of supply chain is Tesco. sell. distribute. these are integrated under one plan and is ERP enabled. and customers who work together to design. collaboration. This era is characterized by the globalization of supply chain management in organizations with the goal of increasing their competitive advantage. etc. This changed management requirements by extending the supply chain well beyond company walls and distributing management across specialized supply chain partnerships. 3. it was not until the late 1980s that a considerable number of organizations started to integrate global sources into their core business. Material control. locations and customers. Contract manufacturers had to manage bills of material with different part numbering schemes from multiple OEMs and support customer requests for work -in-process visibility and vendor-managed inventory (VMI).Supply chain management In fact a supply chain can be classified as a Stage 1. resulting in a proliferation of trading partner environments. A stage 3 supply chain is one in which vertical integration with the suppliers in upstream direction and customers in downstream direction is achieved. logistics providers. suppliers. or channel. from the foundation layers of establishing and managing the electronic communication between the trading partners to more complex requirements including the configuration of the processes and work flows that are essential to the management of the network itself. Distribution. various systems such as Make. specialization era—phase one: outsourced manufacturing and distribution In the 1990s. and service a product. value-adding. region. warehouse management. Supply chain specialization enables companies to improve their overall competencies in the same way that outsourced manufacturing and distribution has done. This has progressed from the Application Service Provider (ASP) model from approximately 1998 through 2003 to the On-Demand model from approximately 2003-2006 to the Software as 59 . OEMs became brand owners that needed deep visibility into their supply base. and from any number of these specialized participants as components of supply chain networks. specialization era—phase two: supply chain management as a service Specialization within the supply chain began in the 1980s with the inception of transportation brokerages. manufacture. the globalization era. The ability to quickly obtain and deploy this domain-specific supply chain expertise without developing and maintaining an entirely unique and complex competency in house is the leading reason why supply chain specialization is gaining popularity. in the oil industry). 2 or 3 network. and non-asset-based carriers and has matured beyond transportation and logistics into aspects of supply planning. it allows them to focus on their core competencies and assemble networks of specific. and outsourced those functions to other companies. individual supply chains specific to products.

6. the common attribute that Web 2. joint product development. management has reached the conclusion that optimizing the product flows cannot be accomplished without implementing a process approach to the business. An example scenario: the purchasing department places orders as requirements become known. near-/far. methods and tools that manage it in this new "era". Best-in-Class companies have similar characteristics.0 (SCM 2. It is the pathway to SCM results. in many companies.and off-shoring. a combination of the processes. such as no-touch via business process outsourcing. Procurement . or high touch in the traditional software deployment model. Supply chain business process integration involves collaborative work between buyers and suppliers. common systems and shared information.0 is defined as a trend in the use of the World Wide Web that is meant to increase creativity.0 follows this notion into supply chain operations. This is delivered through competency networks composed of best-of-breed supply chain domain expertise to understand which elements. Customer service management b. rapid price fluctuations. Finally. surging oil prices. are the critical few that deliver the results as well as through intimate understanding of how to manage these elements to achieve desired results. the term SCM 2. which include the following: a) Internal and external collaboration b) Lead time reduction initiatives c) Tighter feedback from customer and market demand d) Customer level forecasting One could suggest other key critical supply business processes which combine these processes stated by Lambert such as: a. operating an integrated supply chain requires a continuous information flow. supply chain management 2. 60 Supply chain business process integration Successful SCM requires a change from managing individual functions to integrating activities into key supply chain processes. SCM 2. short product life cycles. mid-touch via managed services and software as a service (SaaS). both operationally and organizationally. It is the notion of a usable pathway. information sharing.Supply chain management a Service (SaaS) model currently in focus today. responding to customer demand. methodologies. communicates with several distributors and retailers as it attempts to determine ways to satisfy this demand. SCM 2.0) Building on globalization and specialization. tools and delivery options to guide companies to their results quickly as the complexity and speed of the supply chain increase due to the effects of global competition. Web 2. the solutions are delivered in a variety of options.0 brings is to help navigate the vast amount of information available on the Web in order to find what is being sought. and talent scarcity. According to Lambert and Cooper (2000).0 leverages proven solutions designed to rapidly deliver results with the agility to quickly manage future change for continuous flexibility. expanded specialization. At its core. However. and collaboration among users. Information shared between supply chain partners can only be fully leveraged through process integration. value and success.0 has been coined to describe both the changes within the supply chain itself as well as the evolution of the processes. The key supply chain processes stated by Lambert (2004)[10] are: • • • • • • • • Customer relationship management Customer service management Demand management style Order fulfillment Manufacturing flow management Supplier relationship management Product development and commercialization Returns management Much has been written about demand management. The marketing department.

Also. Orders are processes operating on a just-in-time (JIT) basis in minimum lot sizes. Customer service is the source of customer information. It also provides the customer with real-time information on scheduling and product availability through interfaces with the company's production and distribution operations. managers of the product development and commercialization process must: 1. Also. Activities related to obtaining products and materials from outside suppliers involve resource planning. the purchasing function develops rapid communication systems. order placement. g. transportation. storage. e. Product development and commercialization Manufacturing flow management/support Physical distribution Outsourcing/partnerships Performance measurement Warehousing management 61 a) Customer service management process Customer Relationship Management concerns the relationship between the organization and its customers. and time phasing of components. 2. handling and quality assurance. the appropriate products must be developed and successfully launched with ever shorter time-schedules to remain competitive. handling. The desired outcome is a win-win relationship where both parties benefit. negotiation. changes in the manufacturing flow process lead to shorter cycle times. sourcing should be managed on a global basis. such as electronic data interchange (EDI) and Internet linkage to convey possible requirements more rapidly. supply continuity. Successful organizations use the following steps to build customer relationships: • determine mutually satisfying goals for organization and customers • establish and maintain customer rapport • produce positive feelings in the organization and the customers b) Procurement process Strategic plans are drawn up with suppliers to support the manufacturing flow management process and the development of new products. such as work-in-process storage. c) Product development and commercialization Here. Manufacturing processes must be flexible to respond to market changes and must accommodate mass customization. e) Physical distribution . As product life cycles shorten.Supply chain management c. According to Lambert and Cooper (2000). inventory at manufacturing sites and maximum flexibility in the coordination of geographic and final assemblies postponement of physical distribution operations. Activities related to planning. d. and 3. inbound transportation. f. coordinate with customer relationship management to identify customer-articulated needs. In firms where operations extend globally. select materials and suppliers in conjunction with procurement. supply sourcing. many of which include the responsibility to coordinate with suppliers on matters of scheduling. develop production technology in manufacturing flow to manufacture and integrate into the best supply chain flow for the product/market combination. d) Manufacturing flow management process The manufacturing process produces and supplies products to the distribution channels based on past forecasts. scheduling and supporting manufacturing operations. hedging. meaning improved responsiveness and efficiency in meeting customer demand. and research into new sources or programs. and a reduction in time required for the design cycle and product development. h. customers and suppliers must be integrated into the product development process in order to reduce time to market.

but also outsourcing of services that traditionally have been provided in-house. reducing manpower cost. 62 External performance measurement is examined through customer perception measures and "best practice" benchmarking.T. Also. warehousing and inventory control is increasingly subcontracted to specialists or logistics partners. 3. thus it links a marketing channel with its customers (e. Kearney Consultants (1985) noted that firms engaging in comprehensive performance measurement realized improvements in overall productivity. Postponement 3.g. links manufacturers. and the availability of the product/service is a vital part of each channel participant's marketing effort. The logic of this trend is that the company will increasingly focus on those activities in the value chain where it has a distinctive advantage. the customer is the final destination of a marketing channel. and 2) best practice benchmarking. with the monitoring and control of supplier performance and day-to-day liaison with logistics partners being best managed at a local level. Hence. retailers). 4. strategic decisions need to be taken centrally. 5. dispatching authority with on time delivery. and Quality. warehousing management is carrying the valuable role against operations. and includes 1) customer perception measurement.Supply chain management This concerns movement of a finished product/service to customers. 2. area for service station. stock management system etc. Taking advantage of supplier capabilities and emphasizing a long-term supply chain perspective in customer relationships can both be correlated with firm performance. Standardization 2. logistics measurement becomes increasingly important because the difference between profitable and unprofitable operations becomes more narrow. In physical distribution. A. f) Outsourcing/partnerships This is not just outsourcing the procurement of materials and components. As logistics competency becomes a more critical factor in creating and maintaining competitive advantage. In case of perfect storing & office with all convenient facilities in company level. Cost Customer Service Productivity measures Asset measurement. internal measures are generally collected and analyzed by the firm including 1. h) Warehousing management As a case of reducing company cost & expenses. It is also through the physical distribution process that the time and space of customer service become an integral part of marketing. wholesalers. According to experts. g) Performance measurement Experts found a strong relationship from the largest arcs of supplier and customer integration to market share and profitability. Customization . Components of supply chain management are as follows: 1. and outsource everything else. managing and controlling this network of partners and suppliers requires a blend of both central and local involvement.. loading & unloading facilities with proper area. This movement has been particularly evident in logistics where the provision of transport.

A centroid is a place that has a high proportion of a country’s population and a high proportion of its manufacturing. generally within 500 mi (805 km). one near Dayton.[11] Tax efficient supply chain management Tax Efficient Supply Chain Management is a business model which consider the effect of Tax in design and implementation of supply chain management. (2009) have tried to provide theoretical foundations for different areas related to supply chain by employing organizational theories.S. In the U.Supply chain management 63 Theories of supply chain management Currently there is a gap in the literature available on supply chain management studies: there is no theoretical support for explaining the existence and the boundaries of supply chain management. Of those.. Dayton is within 500 miles of 60% of the population and manufacturing capacity of the U.S.[11] The region includes the Interstate 70/75 interchange. two major supply chain centroids have been defined. In addition. Ketchen and Hult (2006) and Lavassani. anywhere between 30 percent and 35 percent are trucks hauling goods. the I-75 corridor is home to the busiest north-south rail route east of the Mississippi. Due to the differences. the concept of centroids has become an important economic consideration. et al. As the consequence of Globalization. A few authors such as Halldorsson. which is one of the busiest in the nation with 154. (2003). California.. global players have the opportunity to calculate and optimize supply chain based on tax efficiency[12] legally. . The centroid near Dayton is particularly important because it is closest to the population center of the US and Canada.000 vehicles passing through in a day. Ohio and a second near Riverside. et al. It is used as a method of gaining more profit for company which owns global supply chain. These theories include: • • • • • • • • • • • • • • • • • • • • Resource-Based View (RBV) Transaction Cost Analysis (TCA) Knowledge-Based View (KBV) Strategic Choice Theory (SCT) Agency Theory (AT) Institutional theory (InT) Systems Theory (ST) Network Perspective (NP) Materials Logistics Management (MLM) Just-in-Time (JIT) Material Requirements Planning (MRP) Theory of Constraints (TOC) Total Quality Management (TQM) Agile Manufacturing Time Based Competition (TBC) Quick Response Manufacturing (QRM) Customer Relationship Management (CRM) Requirements Chain Management (RCM) Available-to-promise (ATP) and many more Supply chain centroids In the study of supply chain management. business which is cross-nation should pay different tax rates in different countries. as well as 60 percent of Canada’s population.

the chain of suppliers/vendors to these reporting companies will be expected to provide appropriate supporting information. cultural and health footprints. 1985). that is.S. Bowersox and Closs states that the emphasis on cooperation represents the synergism leading to the highest level of joint achievement (Bowersox and Closs. are setting the agenda for transitions to organically-grown foods. The literature on business process re-engineering. ranging from low to high.[16] buyer-supplier relationships. A primary level channel participant is a business that . ethical. Houlihan. and create a report (available to the general public and SEC) detailing the supply chain due diligence efforts undertaken and the results of the audit. tantalum. This law requires SEC-regulated companies to conduct third party audits of the company supply chains. Lambert and Cooper (2000) identified the following components: • • • • • • • • • Planning and control Work structure Organization structure Product flow facility structure Information flow facility structure Management methods Power and leadership structure Risk and reward structure Culture and attitude However. what kind of relationship the components may have that are related to suppliers and customers. the "branches" of the previous identified supply chain business processes. 1990. anti-sweatshop labor codes and locally-produced goods that support independent and small businesses. the US Dodd-Frank Wall Street Reform and Consumer Protection Act[14] signed into law by President Obama in July 2010. adding more management components or increasing the level of each component can increase the level of integration of the business process link. 2009 the U. in July. The level of integration and management of a business process link is a function of the number and level. a more careful examination of the existing literature[19] leads to a more comprehensive understanding of what should be the key critical supply chain components. For example. along with non-governmental organizations(NGOs). The sustainability rating index is intended to create environmental accountability in Wal-Mart's supply chain. of components added to the link (Ellram and Cooper. SECH ratings are defined as social.[15] Of course. 1996).Supply chain management 64 Supply chain sustainability Supply chain sustainability is a business issue affecting an organization’s supply chain or logistics network and is frequently quantified by comparison with SECH ratings. Because supply chains frequently account for over 75% of a company’s carbon footprint many organizations are exploring how they can reduce this and thus improve their SECH rating. determine whether any tin. Components of supply chain management integration The management components of SCM The SCM components are the third element of the four-square circulation framework. tungsten or gold (together referred to as "conflict minerals") is made of up ore mined/sourced from the Democratic Republic of the Congo(DRC). Consumers have become more aware of the environmental impact of their purchases and companies’ SECH ratings and.[17] and SCM[18] suggests various possible components that must receive managerial attention when managing supply relationships. and provide the motivation and infrastructure for other retail industry companies to do the same. Consequently.[13] More recently. based Wal-Mart corporation announced its intentions to create a global sustainability index that would rate products according to the environmental and social impact made while the products were manufactured and distributed. contained a supply chain sustainability provision in the form of the Conflict Minerals law.

lack of transparency of cost and profit. which require increasingly global coordination and planning to achieve global optimums • Complex problems involve also midsized companies to an increasing degree. how should these components be structured in order to have a more comprehensive supply chain structure. Co-creating value and sharing the benefits appropriately to encourage effective participation is a key challenge for any supply system. different tax laws (Tax Efficient Supply Chain Management). In other words. 93). different trading protocols. Reverse supply chain Reverse logistics is the process of managing the return of goods. 4. what supply chain components should be viewed as primary or secondary. Lambert and Cooper's framework of supply chain components does not lead to any conclusion about what are the primary or secondary (specialized) level supply chain components (see Bowersox and Closs. 1996). Third level channel participants and components that support the primary level channel participants and are the fundamental branches of the secondary level components may also be included. That is. different policies and different laws. thus including primary level components (Bowersox and Closs. different currencies and valuations in different countries. infrastructure. Meanwhile. 3. Reverse logistics is also referred to as "Aftermarket Customer Services". including secondary level components. Furthermore. The consequent problems include:1. 1996. sophisticated OEM) for their products. Consequently. lower taxes. which support primary participants.Supply chain management is willing to participate in the inventory ownership responsibility or assume other aspects of financial risk. These trends have many benefits for manufacturers because they make possible larger lot sizes. 2. and how to examine the supply chain as an integrative one (See above sections 2. there will be many more challenges when the scope of supply chains is global. and better environments (culture. p. . A secondary level participant (specialized) is a business that participates in channel relationships by performing essential services for primary participants. Value is the additional revenue over and above the costs of building the network. This is because with a supply chain of a larger scope. Tony Hines defines value as follows: “Ultimately it is the customer who pays the price for service delivered that confirms value and not the producer who simply adds cost until that point”[4] Global supply chain management Global supply chains pose challenges regarding both quantity and value: Supply and value chain trends • • • • • Globalization Increased cross border sourcing Collaboration for parts of value chain with low-cost providers Shared service centers for logistical and administrative functions Increasingly global operations. on top of the problems recognized in supply chain management. any time money is taken from a company's warranty reserve or service logistics budget one can speak of a reverse logistics operation. there are more issues involved such as multi-currencies.1 and 3. special tax zones. the lead time is much longer. 65 Supply chain systems and value Supply chain systems configure value for those that organize the networks.1).

Logistics. 2004 . M. Agro-industrial supply chain management: Concepts and applications. 2003. [3] Mentzer. scm-institute. J. 1993. 2008. Vol. Christopher. In: Production and Operations Management. 1996. Wang. 15. T. Douglas M. 1997. (2006). Andreas Wieland. H. [12] Investor Words definition of "tax efficient" (http:/ / www. [2] Harland. 2002. Gunasekaran..T. Issue 3. 1996. Trends. D. wikipedia. Mikkola. investorwords. No. 1999 [9] Drucker. Berlin. T. Kotzab. Cummings. (2006): Supply Chain Management Research and Production and Operations Management: Review. In Seuring. Bowersox and Closs. T. Courtright et al. [11] Doug Page. & Hult. 1993. Industrial Marketing Management. 1999 [10] Lambert. S. H. html) [13] Wal-Mart's Sustainability Index and Supply Chain Green Standards (http:/ / retailindustry. (1996) Supply Chain Management. 3. Volume 12 Issue 4. Chambers. al. org/ wiki/ Dodd–Frank_Wall_Street_Reform_and_Consumer_Protection_Act [15] http:/ / en. 1974. C. 2000. & Pagh. Bowersox and Closs. Bowersox. (2004). & Cooper. Hewitt. • Kaushik K. org/ wiki/ Conflict_minerals [16] Macneil .fao. 1992. • Handfield and Bechtel. Dayton Daily News. Bridging organization theory and supply chain management: The case of best value supply chains. Turnbull. et. 2001. 1997... January 2000. Vol. Prater et al.C.M.org/ag/ags/publications/docs/AGSF_OccassionalPapers/agsfop17. Logistics versus supply chain management: an international survey.. pp. Herbert Kotzab & Tage Skjott-Larsen (2003). Pages 65–83 • Ketchen Jr. No. com/ business/ dayton-region-a-crucial-hub-for-supply-chain-managment-457836.). Ellram and Cooper. 284-296. Knowledge and Society. 1997 [6] CSCMP Supply Chain Management Process Standards [7] Baziotopoulos. McCubbrey. Oxford: Elsevier.Supply chain management 66 References [1] cf. 2007. and Halldorsson.) Blackwell Encyclopedic Dictionary of Operations Management. (2001): Defining Supply Chain Management.1996.. 2009-12-21. 1990. Issue 1. Journal of Operations Management.. 2001. Hemila. • Movahedi B. 25(2) 573-580... R. Iss 1. Dilts. html). T. J.. 1985 [18] Cooper et al. (2009) Transition to B2B e-Marketplace Enabled Supply Chain: Readiness Assessment and Success Factors. Arni. 1996. and Opportunities.. Pinsonneault. International Journal of Logistics: Research & Application. P.. Lambert.. 1990 [19] Zhang and Dilts. A. The International Journal of Technology. Partnerships. Vertical Integration. Materials Management and Supply Chain Dynamics. 1998. Stefan et al. (eds. 1989.M.. J. Womack and Jones. al.. pp. 1991.1975.. Strategy and Organization in Supply Chains. 2004. 1998. 1997. P. com/ 4893/ tax_efficient. Physica Verlag. • Halldorsson.). com/ b/ 2009/ 07/ 20/ u-s-green-retailing-update-will-wal-mart-profit-from-high-supply-chain-standards-while-its-own-environmental-standards-are-low. Houlihan. 17-31.. Purchasing and Supply Management. Williamson. Ellram and Cooper. Kern and Willcocks. C. Supply Chain Management: Processes. Lavassani K. Lambert et al.D.. Inter-organizational theories behind Supply Chain Management – discussion and applications. N (ed. about. Joyce et al. 3rd edition. pp. 1–25 [4] Hines.Vickery et al. AGSF Occasional Paper 17 Rome. (2006). Williamson. (http://www. in: Journal of Business Logistics. & Donovan. A. Issue 1. (2000)... • Kouvelis. 1978 • Cooper. 2. (1997) Supply Chain Management: More Than a New Name for Logistics. Volume 5... org). 1989 • Hines. wikipedia. The International Journal of Logistics Management Vol 8. Monden.. Supply chain strategies: Customer driven and customer focused. (2007). 7. M. 449–469. daytondailynews. D. 2001. Management Information Systems For the Information Age (3rd Canadian Ed. Complementary theories to supply chain management. pp 1–14 • FAO. H. Canada: McGraw Hill Ryerson ISBN 0-072-81947-2 • Halldorsson. Kumar V. Supply Chain Management: An International Journal. 2004.pdf) • Haag. Oxford: Elsevier. Christopher. [5] Cooper et.. Supply chain strategies: Customer driven and customer focused. A. • Larson. 1994 [17] Stevens. 1989. 1996. Performance (http:/ / www. htm) [14] http:/ / en. 22. In: Slack. M. Tapscott. Carl Marcus Wallenburg (2011): Supply-Chain-Management in stürmischen Zeiten. Hofstede.D. "Dayton Region a Crucial Hub for Supply Chain Management" (http:/ / www. 2004 [8] MacDuffie and Helper. Skjoett-Larsen. G. 75–88. UK: Blackwell. . Volume29.M. Vol.

J. Trajan's Column 113 AD .com/article/40940) Project management Project management is the discipline of planning. in: Journal of Business Logistics. and master builders themselves.[1] The secondary—and more ambitious—challenge is to optimize the allocation and integrate the inputs necessary to meet pre-defined objectives. No. Christopher Wren (1632–1723). Kumar V. 1–25 • Simchi-Levi D. In practice. and managing resources to achieve specific goals. History Project management has been practiced since early civilization. Vol. 2. securing. and as such requires the development of distinct technical skills and management strategies. Simchi-levi E. and budget. The International Journal of Knowledge. Volume 9. engineers. et al.Supply chain management • Lavassani K. Issue 6.[7] Roman soldiers building a fortress. or semi-permanent functional activities to produce products or services. organizing... 85–98. 22. pp.Kaminsky P.[6] It was in the 1950s that organizations started to systematically apply project management tools and techniques to complex engineering projects. third edition. The temporary nature of projects stands in contrast with business as usual (or operations). (2007). Until 1900 civil engineering projects were generally managed by creative architects..T. A project is a temporary endeavor with a defined beginning and end (usually time-constrained. 2001.[1] undertaken to meet unique goals and objectives. Movahedi B. pp. (2009) Developments in Theories of Supply Chain Management: The Case of B2B Electronic Marketplace Adoption. The primary challenge of project management is to achieve all of the project goals[4] and objectives while honoring the preconceived constraints. and often constrained by funding or deliverables). (2001): Defining Supply Chain Management.cio.[3] which are repetitive permanent.[2] typically to bring about beneficial change or added value.[5] Typical constraints are scope. Mcgraw Hill 67 External links • CIO Magazine's ABCs of supply chain management (http://www.. Culture and Change Management. • Mentzer. Thomas Telford (1757–1834) and Isambard Kingdom Brunel (1806–1859). the management of these two systems is often quite different. among those for example Vitruvius (1st century BC). time. Designing and Managing the Supply Chain.

management became recognized as a distinct discipline arising from the [11] management discipline with engineering model. and cost/schedule control (project control). and behavioral competences. the American Association of Cost Engineers (now AACE International." PMI also offers multiple certifications. The "Critical Path Method" (CPM) was developed as a joint venture between DuPont Corporation and Remington Rand Corporation for managing plant maintenance projects. which describes project management practices that are common to "most projects. . His work is the forerunner to modern project management tools including work breakdown structure (WBS) and resource allocation. and heavy defense activity. PERT network chart for a seven-month project with five milestones The International Project Management Association (IPMA) was founded in Europe in 1967. engineering.[12] These mathematical techniques quickly spread into many private enterprises.[14] The ICB covers technical competences. In the United States. with pioneering work by Hans Lang and others.[10] Both Gantt and Fayol were students of Frederick Winslow Taylor's theories of scientific management.[9] who is famous for his use of the Gantt chart as a project management tool. the Project Management Institute (PMI) was formed in the USA. and engineering economics was evolving. And the "Program Evaluation and Review Technique" or PERT. technology for project cost estimating. the father of planning and control techniques. and Henri Fayol for his creation of the 5 management functions which form the foundation of the body of knowledge associated with project and program management. most of the time. At the same time. Project Henry Gantt (1861–1919). AACE continued its pioneering work and in 2006 released the first integrated process for portfolio. At that time.[15] PMI publishes A Guide to the Project Management Body of Knowledge (PMBOK Guide). IPMA offers a Four Level Certification program based on the IPMA Competence Baseline (ICB). and informal techniques and tools. In 1956. the Association for the Advancement of Cost Engineering) was formed by early practitioners of project management and the associated specialties of planning and scheduling. projects were managed on an ad hoc basis using mostly Gantt Charts. as project-scheduling models were being developed. IPMA maintains its federal structure today and now includes member associations on every continent except Antarctica. In 1969. The 1950s marked the beginning of the modern Project Management era where core engineering fields come together working as one.Project management 68 As a discipline. contextual competences. Project Management developed from several fields of application including civil construction. called the father of planning and control techniques.[13] as a federation of several national project management associations.[8] Two forefathers of project management are Henry Gantt. cost estimating. two mathematical project-scheduling models were developed. was developed by Booz Allen Hamilton as part of the United States Navy's (in conjunction with the Lockheed Corporation) Polaris missile submarine program. cost management. program and project management (Total Cost Management Framework). prior to the 1950s.

interactive. the system constraint for all projects is identified as are the resources. this approach is often known as the waterfall model.Project management 69 Approaches There are a number of approaches to managing project activities including agile.[16] i. In the "traditional approach". Conceptual Design. and Construction Administration. tasks on the critical chain are given priority over all other activities. as well as the roles and responsibilities of all participants and stakeholders. The goal is to increase the rate of throughput (or completion rates) of projects in an organization. and the longest sequence of resource-constrained tasks should be identified as the critical chain. The most complex part involves engineering professionals of different fields (Civil. For example. Design Development. timeline. incremental. Schematic Design. projects will typically progress through stages like Pre-Planning. the actual stages typically follow common steps to problem solving—"defining the problem. • execution and construction. 3 and 4 multiple times. Not all the projects will visit every stage as projects can be terminated Typical development phases of an engineering project before they reach completion. five developmental components of a project can be distinguished (four stages plus control): • initiation. • monitoring and controlling systems. Waterfall development works well for small.. implementation and evaluation. Regardless of the methodology employed. This becomes especially true as software development is often the realization of a new or novel product." Critical chain project management Critical chain project management (CCPM) is a method of planning and managing projects that puts more emphasis on the resources (physical and human) needed in order to execute project tasks.e. Some projects will go through steps 2. In software development. Some projects do not follow a structured planning and/or monitoring stages. To exploit the constraint. The Cone of Uncertainty explains some of this as the planning made on the initial phase of the project suffers from a high degree of uncertainty. and cost. and phased approaches. choosing a path. Finally. weighing options. Applying the first three of the five focusing steps of TOC. • completion. The traditional approach A traditional phased approach identifies a sequence of steps to be completed. In software development many organizations have adapted the Rational Unified Process (RUP) to fit this methodology. subordinating all other resources to the critical chain. but often fails in larger projects of undefined and ambiguous nature. although RUP does not require or explicitly recommend this practice.[17] While the terms may differ from industry to industry. resource leveling . Regardless of project type. requirements management is used to develop an accurate and complete definition of the behavior of software that can serve as the basis for software development. In multi-project environments. well defined projects. projects are planned and managed to ensure that the resources are ready when the critical chain tasks must start. Mechanical etc. • planning and design.) working together. the project plan should undergo Resource leveling. one series of tasks after another in linear sequence. It is an application of the Theory of Constraints (TOC) to projects. when working on a brick and mortar design and construction. careful consideration must be given to the overall project objectives. Many industries use variations on these project stages. Construction Drawings (or Contract Documents). Electrical. In projects where requirements have not been finalized and can change.

it is still possible to refine information about future potential events and helps to forecast future project performance. • Event chains: Events can cause other events. These event chains can significantly affect the course of the project. Event chain methodology helps to mitigate the negative impact of psychological heuristics and biases.Project management should be performed across projects. Event chain methodology Event chain methodology is another method that complements critical path method and critical chain project management methodologies. . However. Event chain methodology is an uncertainty modeling and schedule network analysis technique that is focused on identifying and managing events and event chains that affect project schedules. and events occurred is available. such as Agile Project Management methods including Extreme Programming for software development and Scrum techniques. Instead. and currently all kinds of management are expressed in terms of projects. it is often enough to identify (or simply select) a single "drum" resource—a resource that acts as a constraint across projects—and stagger projects based on the availability of that single resource.” They can be determined by the analysis. which will create event chains. • Event chain visualization: Events and event chains can be visualized using event chain diagrams on a Gantt chart. 70 Extreme project management In critical studies of project management it has been noted that several PERT based models are not well suited for the multi-project company environment of today. which can occur at some point in the middle of the task. which may be used in combination with the process modeling and management principles of human interaction management. one-time. non-routine projects. Quantitative analysis is used to determine a cumulative effect of these event chains on the project schedule. • Project tracking with events: Even if a project is partially completed and data about the project duration. • Probabilistic moment of risk: An activity (task) in most real-life processes is not a continuous uniform process. Event chain methodology is based on the following principles. Using complex models for "projects" (or rather "tasks") spanning a few weeks has been proven to cause unnecessary costs and low maneuverability in several cases . Most of them are aimed at very large-scale. Tasks are affected by external events. cost. • Critical events or event chains: The single events or the event chains that have the most potential to affect the projects are the “critical events” or “critical chains of events. Planning and feedback loops in Extreme programming (XP) with the time frames of the multiple loops. The generalization of Extreme Programming to other kinds of projects is extreme project management. as well as to allow for easy modeling of uncertainties in the project schedules. project management experts try to identify different "lightweight" models.

On the basis of close monitoring. the method enables an efficient control of resources. the project is seen as a series of relatively small tasks conceived and executed as the situation demands in an adaptive manner. . and what to do if the project has to be adjusted if it does not develop as planned. each process is specified with its key inputs and outputs and with specific goals and activities to be carried out.[18] It combined the original PROMPT methodology (which evolved into the PRINCE methodology) with IBM's MITP (managing the implementation of the total project) methodology. This area has been driven by the use of Maturity models such as the CMMI (capability maturity model integration. This allows for automatic control of any deviations from the plan. released in 1996 as a generic project management method. PRINCE2 describes procedures to coordinate people and activities in a project. the project can be carried out in a controlled and organized way. how to design and supervise the project. In the agile software development or flexible product development approach. This contrasts sharply with the traditional approach. Process-based management Also furthering the concept of project control is the incorporation of process-based management. Divided into manageable stages. Agile project management Agile project management approaches based on the principles of human interaction management are founded on a process view of human collaboration. The PRINCE2 process model In the method. rather than as a completely pre-planned process. The various management roles and responsibilities involved in a project are fully described and are adaptable to suit the complexity of the project and skills of the organization. PRINCE2 provides a common language for all participants in the project. see this example of a predecessor) and ISO/IEC15504 (SPICE – software process improvement and capability estimation).Project management 71 PRINCE2 PRINCE2 is a structured approach to project management. PRINCE2 provides a method for managing projects within a clearly defined framework.

including users. Any deficiencies should be reported and a recommendation should be made to fix them. The project development stages [19] Initiating The initiating processes determine the nature and scope of the project.g.. Regardless of the methodology or terminology used. Major process groups generally include:[20] • • • • • initiation planning or development production or execution monitoring and controlling closing In project environments with a significant exploratory element (e. tasks.Project management 72 Processes Traditionally. and support personnel for the project project charter including costs. An example is the stage-gate model. The key project controls needed here are an understanding of the business environment and [19] Initiating process group processes making sure that all necessary controls are incorporated into the project. research and development). the same basic project management processes will be used.[21] If this stage is not performed well. The initiating stage should include a plan that encompasses the following areas: • • • • • analyzing the business needs/requirements in measurable goals reviewing of the current operations financial analysis of the costs and benefits including a budget stakeholder analysis. and schedule . and a control system. deliverables. these stages may be supplemented with decision points (go/no go decisions) at which the project's continuation is debated and decided. it is unlikely that the project will be successful in meeting the business’ needs. project management includes a number of elements: four to five process groups.

by level of detail or rolling wave). • gaining formal approval to begin work. selecting the planning team.g. developing the budget. Execution process involves coordinating people and resources. Executing Executing consists of the processes used to complete the work defined in the project plan to accomplish the project's requirements.Project management 73 Planning and design After the initiation stage. As with the Initiation process group. such as planning for communications and for scope management. identifying roles and responsibilities. For new product development projects. the project is planned to an appropriate level of detail (see example of a flow-chart). developing the scope statement. Project planning generally consists of[22] • • • • • • • • • • determining how to plan (e.[19] The main purpose is to plan time. estimating the resource requirements for the activities. conceptual design of the operation of the final product may be performed concurrent with the project planning activities. a failure to adequately plan greatly reduces the project's chances of successfully accomplishing its goals. risk planning. developing the schedule. estimating time and cost for activities. determining what to purchase for the project and holding a kick-off meeting are also generally advisable. identifying deliverables and creating the work breakdown structure. The deliverables are produced as outputs from the processes performed as defined in the project management plan and other frameworks that might be applicable to the type of project at hand. and may help to inform the planning team when identifying deliverables and planning activities. identifying the activities needed to complete those deliverables and networking the activities in their logical sequence. [19] Executing process group processes . as well as integrating and performing the activities of the project in accordance with the project management plan. Additional processes. cost and resources adequately to estimate the work needed and to effectively manage risk during project execution.

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Monitoring and controlling
Monitoring and controlling consists of those processes performed to observe project execution so that potential problems can be identified in a timely manner and corrective action can be taken, when necessary, to control the execution of the project. The key benefit is that project performance is observed and measured regularly to identify variances from the project management plan. Monitoring and controlling includes:[23]

Monitoring and controlling process group processes

[19]

• Measuring the ongoing project activities ('where we are'); • Monitoring the project variables (cost, effort, scope, etc.) against the project management plan and the project performance baseline (where we should be); • Identify corrective actions to address issues and risks properly (How can we get on track again); • Influencing the factors that could circumvent integrated change control so only approved changes are implemented In multi-phase projects, the monitoring and control process also provides feedback between project phases, in order to implement corrective or preventive actions to bring the project into compliance with the project management plan. Project maintenance is an ongoing process, and it includes:[20] • Continuing support of end-users • Correction of errors • Updates of the software over time In this stage, auditors should pay attention to how effectively and quickly user problems are resolved. Over the course of any construction project, the work scope may change. Change is a normal and expected part of the construction process. Changes can be the result of necessary design modifications, differing site conditions, material availability, contractor-requested changes, value engineering and impacts from third parties, to name a few. Beyond executing the change in the field, the change normally needs to be documented to show what was Monitoring and controlling cycle actually constructed. This is referred to as change management. Hence, the owner usually requires a final record to show all changes or, more specifically, any change that modifies the tangible portions of the finished work. The record is made on the contract documents – usually, but not necessarily limited to, the design drawings. The end product of this effort is what the industry terms as-built drawings, or more simply, “as built.” The requirement for providing them is a norm in construction contracts. When changes are introduced to the project, the viability of the project has to be re-assessed. It is important not to lose sight of the initial goals and targets of the projects. When the changes accumulate, the forecasted result may not justify the original proposed investment in the project.

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Closing
Closing includes the formal acceptance of the project and the ending thereof. Administrative activities include the archiving of the files and documenting lessons learned. This phase consists of:[20] • Project close: Finalize all activities across all of the process groups to formally close the project or a project phase
Closing process group processes. [19]

• Contract closure: Complete and settle each contract (including the resolution of any open items) and close each contract applicable to the project or project phase.

Project controlling and project control systems
Project controlling should be established as an independent function in project management. It implements verification and controlling function during the processing of a project in order to reinforce the defined performance and formal goals.[24] The tasks of project controlling are also: • the creation of infrastructure for the supply of the right information and its update • the establishment of a way to communicate disparities of project parameters • the development of project information technology based on an intranet or the determination of a project key performance index system (KPI) • divergence analyses and generation of proposals for potential project regulations[25] • the establishment of methods to accomplish an appropriate the project structure, project workflow organization, project control and governance • creation of transparency among the project parameters[26] Fulfillment and implementation of these tasks can be achieved by applying specific methods and instruments of project controlling. The following methods of project controlling can be applied: • • • • • • • • • • investment analysis cost–benefit analyses value benefit Analysis expert surveys simulation calculations risk-profile analyses surcharge calculations milestone trend analysis cost trend analysis target/actual-comparison[27]

Project control is that element of a project that keeps it on-track, on-time and within budget.[23] Project control begins early in the project with planning and ends late in the project with post-implementation review, having a thorough involvement of each step in the process. Each project should be assessed for the appropriate level of control needed: too much control is too time consuming, too little control is very risky. If project control is not implemented correctly, the cost to the business should be clarified in terms of errors, fixes, and additional audit fees. Control systems are needed for cost, risk, quality, communication, time, change, procurement, and human resources. In addition, auditors should consider how important the projects are to the financial statements, how reliant the stakeholders are on controls, and how many controls exist. Auditors should review the development process and procedures for how they are implemented. The process of development and the quality of the final product may also

Project management be assessed if needed or requested. A business may want the auditing firm to be involved throughout the process to catch problems earlier on so that they can be fixed more easily. An auditor can serve as a controls consultant as part of the development team or as an independent auditor as part of an audit. Businesses sometimes use formal systems development processes. These help assure that systems are developed successfully. A formal process is more effective in creating strong controls, and auditors should review this process to confirm that it is well designed and is followed in practice. A good formal systems development plan outlines: • • • • • A strategy to align development with the organization’s broader objectives Standards for new systems Project management policies for timing and budgeting Procedures describing the process Evaluation of quality of change

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Topics
Project managers
A project manager is a professional in the field of project management. Project managers can have the responsibility of the planning, execution, and closing of any project, typically relating to construction industry, engineering, architecture, computing, and telecommunications. Many other fields in the production engineering and design engineering and heavy industrial have project managers. A project manager is the person accountable for accomplishing the stated project objectives. Key project management responsibilities include creating clear and attainable project objectives, building the project requirements, and managing the triple constraint for projects, which is cost, time, and scope. A project manager is often a client representative and has to determine and implement the exact needs of the client, based on knowledge of the firm they are representing. The ability to adapt to the various internal procedures of the contracting party, and to form close links with the nominated representatives, is essential in ensuring that the key issues of cost, time, quality and above all, client satisfaction, can be realized.

Project management triangle
Like any human undertaking, projects need to be performed and delivered under certain constraints. Traditionally, these constraints have been listed as "scope," "time," and "cost".[1] These are also referred to as the "project management triangle", where each side represents a constraint. One side of the triangle cannot be changed without affecting the others. A further refinement of the constraints separates product "quality" or "performance" from scope, and turns quality into a fourth constraint. The time constraint refers to the amount of time available The project management triangle to complete a project. The cost constraint refers to the budgeted amount available for the project. The scope constraint refers to what must be done to produce the project's end result. These three constraints are often competing constraints: increased scope typically means increased time and increased cost, a tight time constraint could mean increased costs and reduced scope, and a tight budget could mean increased time and reduced scope.

and responsibility (e. and work packages). • The Logical framework approach.. duration. Global Alliance for Project Performance Standards – an open source standard describing COMPETENCIES for project and program managers. in the US United States Department of Veterans Affairs (VA) the program management life cycle is depicted and describe in the overall VA IT PROJECT MANAGEMENT FRAMEwork to address the integration of OMB Exhibit 300 project (investment) management activities and the overall project budgeting process.[17] The work breakdown structure provides a common framework for the natural development of the overall planning and control of a contract and is the basis for dividing work into definable increments from which the statement of work can be developed and technical. Swiss general project management method. . 77 Work breakdown structure The work breakdown structure (WBS) is a tree structure that shows a subdivision of effort required to achieve an objective—for example a program. • Total Cost Management Framework. which is popular in international development organizations. The figure illustrates the actions and associated artifacts of the VA IT Project and Program Management process. • V-Model. subsystems. subtasks. AACE International's Methodology for Integrated Portfolio.Project management The discipline of project management is about providing the tools and techniques that enable the project team (not just the project manager) to organize their work to meet these constraints.[28] Project management framework The Program (Investment) life cycle integrates the project management and system development life cycles with the activities directly associated with system deployment and operation.[28] A WBS can be developed by starting with the end objective and successively subdividing it into manageable components in terms of size. or process-oriented (see an example in a NASA reporting structure (2001). such as: • Capability Maturity Model from the Software Engineering Institute. and the ISO 10006:2003. For example. By design. cost. an original systems development method. The VA IT Project Management Framework diagram illustrates Milestone 4 which occurs following the deployment of a system and the closing of the project. • GAPPS. project. • The ISO standards ISO 9000. product-. schedule. The project closing phase activities at the VA continues through system deployment and into system operation for the purpose of illustrating and describing the system activities the VA considers part of the project. see figure. and labor hour reporting can be established. tasks. PRojects IN Controlled Environments.[19] International standards There have been several attempts to develop project management standards. service-. • A Guide to the Project Management Body of Knowledge • HERMES method. a family of standards for quality management systems. systems. • PRINCE2.g. The WBS may be hardware-. components. selected for use in Luxembourg and international organizations. Program and Project Management. • Association for Project Management Body of Knowledge[29] • Team Software Process (TSP) from the Software Engineering Institute. for Quality management systems and guidelines for quality management in projects. and contract. system operation management and related activities occur after the project is complete and are not documented within this guide[19] (see an example of an IT project management framework). which include all steps necessary to achieve the objective.

Nokes. aspx). FAZ Verlagsbereich Wirtschaftsbücher. 2003. pdf). 78 Project portfolio management An increasing number of organizations are using. Roland Gareis (2006). 2005. Lewis (2000). "A brief history of Project Management"..136–143 [28] NASA NPR 9501. [25] Bernhard Schlagheck (2000). nasa.) Gower Publishing. 2005. p. Riedl (1990). TTL Publishing. [26] Josef E.131. gov. Roland Gareis (2006). (9 eds). References [1] Chatfield. com/ en-us/ project/ HA102354821033. Scheduling. [2] *The Definitive Guide to Project Management. Carayannis et al. and systems. com/ aspm/ ). Los Angeles. [18] OGC – PRINCE2 – Background (http:/ / www. The International Association of Project & Program Management. Dinsmore et al (2005) The right projects done right! John Wiley and Sons. microsoft. 2001. Greenwood Publishing Group. project portfolio management (PPM) as a means of selecting the right projects and then using project management techniques[30] as the means for delivering the outcomes in the form of benefits to the performing private or not-for-profit organization. 2006. Global project management handbook. Project Management –." [12] Booz Allen Hamilton – History of Booz Allen 1950s (http:/ / www. com/ about/ history/ history_5) [13] Bjarne Kousholt (2007).. Ireland (2006) Project Management.2D (http:/ / nodis3. [4] Lewis R. pdf) in: In: Technical Papers of Western Electronic Show and Convention (WesCon) August 25–28. .59. L. Cleland. "Chapter 1: "The evolution of project management". Sebastian. Projektmanagement. Greene.185 [24] Jörg Becker. va.27-35 [21] Peter Nathan. ISBN 1-903494-13-3 [30] Albert Hamilton (2004). boozallen. [23] James P.99. ISBN 1-56720-506-2 [8] David I.34. McGraw-Hill Professional. PMP Project Management Professional Study Guide. Handbook of Project Management Procedures. oit. aspx) [15] F. 2006.63. ISBN 0-471-22577-0. p.. ISBN 978 0 273 71097 4 [3] Paul C. [29] Body of Knowledge 5th edition. ISBN 978-3824471621. Ltd. Applied Software Project Management (http:/ / www. gov/ docs/ VA_IT_PM_Guide. Project Management: A Systems Approach to Planning.1-4 states: "It was in the 1950s when project management was formally recognized as a distinct contribution arising from the management discipline. Projekt – Controlling in Forschung und Entwicklung. In: The story of managing projects. [20] PMI (2010). Routledge. ISBN 978-3540434993. Gerald Everett Jones (2003). p. Global project management handbook.und Projektcontrolling. 2006. Association for Project Management. p. Harrison. [6] Dennis Lock (2007) Project management (9e ed. Theory and practice. Process management: a guide for the design of business processes. Project Management Pathways. umd. Andrew. and Controlling (8th Ed. Carl. McGraw-Hill Professional. ISBN 0-7277-3258-7 . p. ipma. p. gov/ displayDir. scheduling. Ltd. uk/ methods_prince_2__background. [14] ipma. [17] Stellman. cs.). . [11] David I. Elias G. Royce (1970). 2nd Ed. March 3. 2007.ch (http:/ / www. 1970. Microsoft. evaluation. 2006. A Guide to the Project Management Body of Knowledge p. p. USA. Cleland. [5] Joseph Phillips (2003). Ltd. [16] Winston W.110. 2003.354. 2004. [27] Steinle. O'Reilly Media. Association for Project Management. "A short course in project management" (http:/ / office. Lawa (1995). ISBN 0-7879-7113-8. ppoe. 2005.Project management • IAPPM. p. ISBN 978-0-596-00948-9. McGraw-Hill Professional. ISBN 0-07-223062-2 p. edu/ class/ spring2003/ cmsc838p/ Process/ waterfall. what is referred to as. McGraw-Hill Professional.n. guide to project auditing and rescuing troubled projects. ISBN 0-566-07822-8. p. Grundlagen – Konstruktionen – Anwendungsmöglichkeiten. VA Office of Information and Technology. PMP certification for dummies. Bruch. ISBN 0-07-146045-4.xxii [10] Morgen Witzel (2003). ISBN 9783540519638. ed. stellman-greene. p. Jennifer (2005). Objektorientierte Referenzmodelle für das Prozess. Fifty key figures in management. Michael Rosemann (2003). . p. ISBN 0-415-36977-0.27. Nyt Teknisk Forlag. 96-101. May 23. [22] Harold Kerzner (2003). gsfc. ISBN 0-07-146045-4 [9] Martin Stevens (2002). London (Financial Times / Prentice Hall): 2007. 2002 ISBN 1-903494-01-X p. Dennis Lock (2004). ISBN 0-07-147160-X. ISBN 0-566-08772-3 [7] Young-Hoon Kwak (2005). Wiley. ISBN 87-571-2603-8. ogc.35 and further. p. cfm?Internal_ID=N_PR_9501_002D_& page_name=Chp2& format=PDF). "Managing the Development of Large Software Systems" (http:/ / www. The project manager's desk reference: : a comprehensive guide to project planning. Gower Publishing. APM Publishing Limited. ch/ publication/ Pages/ ICB-IPMACompetenceBaseline. Advanced project management: a structured approach. Martin Kugeler. asp) [19] "Project Management Guide" (http:/ / www.

An alternative of access control in the strict sense (physically controlling access itself) is a system of checking authorized presence.projectmanagement-training.berr. and when. Mechanical locks and keys do not allow restriction of the key holder to specific times or dates. Physical access control can be achieved by a human (a guard. group of buildings. e. and when they are allowed to enter or exit. Electronic access control uses computers to solve the limitations of mechanical locks and keys. Historically this was partially accomplished through keys and locks. a doorman. or sensitive information and equipment. or a room to authorized persons.pdf) from the UK Department for Business. physical key management may also be employed as a means of further managing and monitoring access to mechanically keyed areas or access to certain small assets. of a shop (checkout) or a country. a building. in reality. maxwideman.gov.net/book/) Access control Access control refers to exerting control over who can interact with a resource. see e. where they are allowed to exit or enter.g. The possession of access control is of prime importance when persons seek to secure important. Also there may be one-way traffic of people. an everyday phenomenon. A wide range of credentials can be used to replace mechanical keys. who does the controlling. Mechanical locks and keys do not provide records of the key used on any specific door and the keys can be easily copied or transferred to an unauthorized person. These can be enforced by personnel such as a border guard. Physical access control is a matter of who. a ticket checker. A lock on a car door is essentially a form of access control. The electronic access control system grants access based on the . the term access control refers to the practice of Subway system restricting entrance to a property. confidential. But it can also refer to a restroom stall where access is controlled by using a coin to open the door. bouncer.Project management 79 External links • Guidelines for Managing Projects (http://www.g. Often but not always. When a door is locked only someone with a key can enter through the door depending on how the lock is configured. or with a device such as a turnstile. through mechanical means such as locks and keys. A variant is exit control. this involves an authority.uk/files/file40647. There may be fences to avoid circumventing this access control. Item control or electronic key management is an area within (and possibly integrated with) an access control system which concerns the managing of possession and location of small assets or physical (mechanical) keys. Within these environments. authorization. etc.com/) • Open Source Project Management manual (http://www. the locks must be re-keyed. When a mechanical key is lost or the key holder is no longer authorized to use the protected area. etc. Underground entrance to the New York City In physical security. Physical access Physical access by a person may be allowed depending on payment. Ticket controller (transportation). or receptionist).. The resource can be a given building. or computer-based information system. A PIN on an ATM system at a bank is another means of access control. Enterprise and Regulatory Reform (BERR) • Max Wideman's "Open Source" Comparative Glossary of Project Management Terms (http://www. where. Access control is. An access control system determines who is allowed to enter or exit. or through technological means such as access control systems like the Access control vestibule.

to a control panel. e. thus subverting the access control list. Alice has access rights to the server room but Bob does not. Typically the access point is a door. When access is denied based on the access control list. another factor can be a PIN.g. it could be a card reader. In such a scenario. Credentials can be passed around. Wiegand. The system will also monitor the door and alarm if the door is forced open or held open too long after being unlocked. Alice either gives Bob her credential or Bob takes it. voice. An electronic access control door can contain several elements. a highly reliable processor. Often the reader provides feedback. To prevent this. The above description illustrates a single factor transaction. such as fingerprint.Access control credential presented. In addition. and three factors overall to allow access. that enables an individual access to a given physical facility or computer-based information system. key fob. operator intervention is replaced by a reader. The control panel compares the credential's number to an access control list. where another person who knows you can provide a human element of authentication in situations where systems have been set up to allow for such scenarios. There are three types (factors) of authenticating information: • something the user knows. turnstile. parking gate. elevator. The control panel also ignores a door open signal to prevent an alarm. something you are (such as a biometric feature) or some combination of these items. Typical biometric technologies include fingerprint. and sends a transaction log to a database. There are many card technologies including magnetic stripe. Also available are key-fobs which are more compact than ID cards and attach to a key ring. the presented credential and a second factor are needed for access to be granted. contact smart cards. a password. or a facet of a person's physical being. 80 Access control system operation When a credential is presented to a reader. two-factor authentication can be used. verified by biometric measurement Passwords are a common means of verifying a user's identity before access is given to information systems. At its most basic there is a stand-alone electric lock. usually a number. something you have (such as an access badge). To automate this. grants or denies the presented request. but have forgotten their smart card. and hand geometry. such as a flashing red LED for an access denied and a flashing green LED for an access granted. When access is refused. retinal scan. and contactless smart cards. the reader sends the credential’s information. the door remains locked. operator intervention. The reader could be a keypad where a code is entered. 125 kHz proximity. facial recognition. credentials can be something you know (such as number or PIN). For example. the door is unlocked for a predetermined time and the transaction is recorded. or other physical barrier where granting access can be electronically controlled. a piece of knowledge. the cohorts may provide their smart card and password in combination with the extant factor of the user in question and thus provide two factors for the user with missing credential. 26 bit card-swipe. the control panel operates a relay that in turn unlocks the door. he now has access to the server room. if the user is known to designated cohorts. For example. a second credential. The lock is unlocked by an operator with a switch. which can be a door. bar code. iris recognition. such as smart card • something the user is. a user may have their password. Readers do not usually make an access decision but send a card number to an access control panel that verifies the number against an access list. pass-phrase or PIN • something the user has. Typically. The typical credential is an access card. a fourth factor of authentication is now recognized: someone you know. or other key. or it could be a biometric reader. Access control system components An access control point. or a biometric input. If there is a match between the credential and the access control list. When access is granted. Credential A credential is a physical/tangible object. In a two factor transaction. the door remains locked and the attempted access is recorded. To .

. Examples of such readers are RF Tiny by RFLOGICS. the request-to-exit device also unlocks the door. Typically Wiegand protocol is used for transmitting data to the control panel. Some manufactures are pushing the decision making to the edge by placing a controller at the door. This is an important safety feature. 81 Access control topology Access control decisions are made by comparing the credential to an access control list. ProxPoint by HID. The controllers are IP enabled and connect to a host and database using standard networks. Typical access control door wiring • Semi-intelligent readers: have all inputs and outputs necessary to control door hardware (lock. Exiting a door without having to electrically unlock the door is called mechanical free egress. When the button is pushed or the motion detector detects motion at the door. In case of biometric identification. free exit. Types of readers Access control readers may be classified by functions they are able to perform: • Basic (non-intelligent) readers: simply read card number or PIN and forward it to a control panel. the reader sends information to the main controller and waits for its response.Access control monitor the door position a magnetic door switch is used. Examples of such readers are InfoProx Lite IPL200 by CEM Systems and AP-510 by Apollo. In cases where exit is not controlled. In cases where the lock must be electrically unlocked on exit. If the connection to the main controller is interrupted. Generally only entry is controlled and exit is uncontrolled. or the reader. exit button). door contact. the door alarm is temporarily ignored while the door is opened. In cases where exit is also controlled a second reader is used on the opposite side of the door. • Intelligent readers: have all inputs and outputs necessary to control door hardware. Request-to-exit devices can be a push-button or a motion detector. Same as semi-intelligent readers they are connected to a control panel via an RS-485 bus. The development of access control systems has seen a steady push of the lookup out from a central host to the edge of the system. by an access control panel. or by a reader. In concept the door switch is not unlike those on refrigerators or car doors. Systems with IP readers usually do not have traditional control panels and readers communicate directly to PC that acts as a host. There is also a new generation of intelligent readers referred to as "IP readers". but other options such as RS-232. This lookup can be done by a host or server. Usually semi-intelligent readers are connected to a control panel via an RS-485 bus. The lookup and control functions are by the control panel. such readers output ID number of a user. When a user presents a card or enters readers PIN. usually RS485. Examples of such readers could be InfoProx IPO200 by CEM Systems and AP-500 by Apollo. they also have memory and processing power necessary to make access decisions independently. such readers stop working or function in a degraded mode. This is the most popular type of access control readers. a device called a request-to-exit (RTE) is used. but do not Access control door wiring when using intelligent make any access decisions. and P300 by Farpointe Data. RS-485 and Clock/Data are not uncommon. The predominate topology circa 2009 is hub and spoke with a control panel as the hub and the readers as the spokes. The spokes communicate through a serial connection. The control panel sends configuration updates and retrieves events from the readers.

Access control system using serial main and sub-controllers . • Controllers cannot initiate communication in case of an alarm. and 4G V-Station by Bioscrypt Inc. which means that the host can frequently request status updates from each device and display events almost in real time. External RS-232/485 converters or internal RS-485 cards have to be installed as standard PCs do not have RS-485 communication ports. Serial main and sub-controllers.e. All door hardware is connected to sub-controllers (a. The highest possible throughput is 115. as sub-controllers are usually simple and inexpensive devices. Advantages: • Work load on the host PC is significantly reduced.k. • Separate RS-485 lines have to be installed instead of using an already existing network infrastructure. anti-passback) stop working.a. Sub-controllers usually do not make access decisions. Advantages: • RS-485 standard allows long cable runs. LogLock and UNiLOCK by ASPiSYS Ltd. ID08 by Solus has the built in webservice to make it user friendly. • RS-485 does not allow host PC to communicate with several controllers connected to the same port simultaneously. Serial controllers.e. camera/speaker/microphone for intercom. configuration and users). Main controllers usually support from 16 to 32 sub-controllers. clock-in/clock-out events for attendance reports). Some readers may have additional features such as LCD and function buttons for data collection purposes (i. because it only needs to communicate with a few main controllers. Access control readers may also be classified by the type of identification technology. • Special serial switches are required in order to build a redundant host PC setup. Disadvantages: • RS-485 does not allow Star-type wiring unless splitters are used • RS-485 is not well suited for transferring large amounts of data (i. and forward all requests to the main controllers. up to 4000 feet (1200 m) Access control system using serial controllers • Relatively short response time.2 kbit/s or less to increase reliability. events from controllers are not retrieved and functions that required interaction between controllers (i. In case the host PC fails.e. and smart card read/write support. but in most system it is downgraded to 56. • The overall cost of the system is lower. 82 Access control system topologies 1. BioEntry Plus reader by Suprema Inc. The maximum number of devices on an RS-485 line is limited to 32. door controllers or door interfaces). The host PC acts as a master on the RS-485 communication line and controllers have to wait till they are polled. 2. • Cable that meets RS-485 standards is significantly more expensive than the regular Category 5 UTP network cable.2 kbit/s. • Operation of the system is highly dependent on the host PC.Access control Examples of such readers are PowerNet IP Reader by Isonas Security Systems [1]. Therefore in large systems transfers of configuration and users to controllers may take a very long time and interfere with normal operations. • High reliability and security as the communication line is not shared with any other systems. Edge ER40 reader by HID Global. Controllers are connected to a host PC via a serial RS-485 communication line (or via 20mA current loop in some older systems).

• Serial communication link between the controller and the terminal Access control systems using serial controllers server acts as a bottleneck: even though the data between the host and terminal servers PC and the terminal server travels at the 10/100/1000Mbit/s network speed it then slows down to the serial speed of 112. the readers use their internal database to make access Access control system using serial main decisions and record events.5 kbit/s or less. Serial main controllers & intelligent readers.Access control • All other advantages listed in the first paragraph apply. If the main controller fails. 83 . Semi-intelligent reader that have no controller and intelligent readers database and cannot function without the main controller should be used only in areas that do not require high security. access control manufacturers remained conservative and did not rush to introduce network-enabled products. • Some models of sub-controllers (usually lower cost) have no memory and processing power to make access decisions independently.e. Serial controllers with terminal servers. When pressed for solutions with network connectivity. therefore such topology is not very well suited for systems with multiple remote locations that have only a few doors. sub-controllers change to degraded mode in which doors are either completely locked or unlocked and no events are recorded. In spite of the rapid development and increasing use of computer networks. Readers usually do not make access decisions. anti-passback) stop working. Disadvantages: • Operation of the system is highly dependent on main controllers. Disadvantages: • Increases complexity of the system. not through the interface of the access control software. • Main controllers tend to be expensive. 4. There are also additional delays introduced in the process of conversion between serial and network data. a device that converts serial data for transmission via LAN or WAN. Such sub-controllers should be avoided or used only in areas that do not require high security. All advantages and disadvantages are the same as the ones listed in the second paragraph. Only if the connection to the main controller is unavailable. • All other RS-485-related disadvantages listed in the first paragraph apply. All door hardware is connected directly to intelligent or semi-intelligent readers. In case one of the main controllers fails. many chose the option requiring less efforts: addition of a terminal server. and forward all requests to the main controller. All RS-485-related advantages and disadvantages also apply. • Provides convenient solution in cases when installation of an RS-485 line would be difficult or impossible. Advantages: • Allows utilizing existing network infrastructure for connecting separate segments of the system. • Creates additional work for installers: usually terminal servers have to be configured independently. events from its sub-controllers are not retrieved and functions that require interaction between sub controllers (i. 3. Main controllers usually support from 16 to 64 readers.

No special hardware is required in order to achieve redundant host PC setup: in case the primary host PC fails.Access control 84 5. • Simplifies installation of systems consisting of multiple sites separated by large distances.e. Some controllers. termination. the secondary host PC may start polling network controllers. wireless. The same advantages and disadvantages apply. which is important if transferring a lot of data (databases with thousands of users. Also it should be noted that most IP controllers utilize either Linux platform or proprietary operating systems. VPN. In case the host PC fails. . dual path. This makes the system more responsive and does not interrupt normal operations. Advantages: • An existing network infrastructure is fully utilized. Basic Internet link is sufficient to establish connections to remote locations. grounding and troubleshooting knowledge is not required. there is no need to install new communication lines. • Communication with controllers may be done at the full network speed. This ability is important in large systems because it allows to reduce network traffic caused by unnecessary polling. but the on-board network interface offers a couple valuable improvements. Network-enabled main controllers. • Maximum distance from a hub or a switch to the controller (if using a copper cable) is 100 meters (330 ft). such as delays in case of heavy traffic and network equipment failures. • In case of an alarm controllers may initiate connection to the host PC. Industry standard data encryption is also used. This threat may be eliminated by physically separating the access control network from the network of the organization. which makes them more difficult to hack. PoE) Disadvantages: • The system becomes susceptible to network related problems. Controllers are connected to a host PC via Ethernet LAN or WAN. • Operation of the system is dependent on the host PC. events from controllers are not retrieved and functions that require interaction between controllers (i. The disadvantages introduced by terminal servers (listed in the fourth paragraph) are also eliminated. possibly including biometric records). Access control system using network-enabled main controllers 6. have peer-to-peer communication option in order to reduce dependency on the host PC. • Access controllers and workstations may become accessible to hackers if the network of the organization is not well protected. IP controllers. however. Transmission of configuration and users to the main controllers is faster and may be done in parallel. • Wide selection of standard network equipment is available to provide connectivity in different situations (fiber. The topology is nearly the same as described in the second and third paragraphs. • There are no limitations regarding the number of controllers (32 per line in case of RS-485). Access control system using IP controllers • Special RS-485 installation. anti-passback) stop working.

A few manufacturers make such models. This is possible because card numbers are sent in the clear. Enterprising hackers have built portable readers that capture the card number from a user’s proximity card. including the locks and various types of detectors (if used). are also susceptible to this attack using a donut shaped magnet. and then presents the number to a reader securing the door. It is also possible to manipulate the power to the lock either by removing or adding current. A strong magnet can operate the solenoid controlling bolts in electric locking hardware. . sometimes called a security vestibule or mantrap where operator intervention is required presumably to assure valid identification. • Being more sophisticated than basic readers IP readers are also more expensive and sensitive. The hacker simply walks by the user. Advantages: • Most IP readers are PoE capable. This risk can be minimized through security awareness training of the user population or more active means such as turnstiles. Access control system using IP readers • There is no wasted capacity when using IP readers (i. • IP reader systems scale easily: there is no need to install new main or sub-controllers. Readers are connected to a host PC via Ethernet LAN or WAN. The lever could be as small as a screw driver or big as a crow bar. • IP readers eliminate the need for controller enclosures. Access cards themselves have proven vulnerable to sophisticated attacks. or lack of active intrusion monitoring. Security risks The most common security risk of intrusion of an access control system is simply following a legitimate user through a door. Access control door wiring when using intelligent readers and IO module Similar to levering is crashing through cheap partition walls. Often the legitimate user will hold the door for the intruder. Not all IP reader manufacturers have such modules available. no encryption being used. unless specifically designed for exterior installation. Spoofing locking hardware is fairly simple and more elegant than levering.e.Access control 85 7. IP readers. In very high security applications this risk is minimized by using a sally port. These vary in effectiveness usually failing from high false positive alarms. This feature makes it very easy to provide battery backed power to the entire system. Disadvantages: • In order to be used in high-security areas IP readers require special input/output modules to eliminate the possibility of intrusion by accessing lock and/or exit button wiring. In shared tenant spaces the divisional wall is a vulnerability. a 4-door controller would have 25% unused capacity if it was controlling only 3 doors). This is surprisingly simple and effective on most doors. Motor locks. reads the card. more prevalent in Europe than in the US. Fully implemented access control systems include forced door monitoring alarms. therefore they should not be installed outdoors in areas with harsh weather conditions or high possibility of vandalism. The second most common risk is from levering the door open. • Failure of one IP reader does not affect any other readers in the system. Along the same lines is breaking sidelights. The advantages and disadvantages of IP controllers apply to the IP readers as well. poor database configuration.

most electric locking hardware still have mechanical keys as a fail-over. In an ACL-based model. and the entities representing resources to which access may need to be controlled are called objects (see also Access Control Matrix). holding an unforgettable reference or capability to an object provides access to the object (roughly analogous to how possession of your house key grants you access to your house). and the association of users with the software subjects that they are able to control as a result of logging in. Various methods of identity proofing are available ranging from in person validation using government issued identification to anonymous methods that allow the claimant to remain anonymous. the entities that can perform actions in the system are called subjects. rather than as human users: any human user can only have an effect on the system via the software entities that they control. • accountability identifies what a subject (or all subjects associated with a user) did. (Different ACL systems have a variety of different conventions regarding who or what is responsible for editing the list and how it is edited. authorization and audit. The need-to-know principle The need to know principle can be enforced with user access controls and authorization procedures and its objective is to ensure that only authorized individuals gain access to information or systems necessary to undertake their duties. hidden paths.) Both capability-based and ACL-based models have mechanisms to allow access rights to be granted to all members of a group of subjects (often the group is itself modeled as a subject). access is conveyed by editing the list. Access control systems provide the essential services of identification and authentication (I&A). the . and accountability where: • identification and authentication determine who can log on to a system. Subsequently. Identification and authentication (I&A) Identification and authentication (I&A) is the process of verifying that an identity is bound to the entity that makes an assertion or claim of identity. authorization. The I&A process assumes that there was an initial validation of the identity. It also includes measures such as physical devices. so that all processes started by a user by default have the same authority. Mechanical key locks are vulnerable to bumping. See Principle of least privilege. Subjects and objects should both be considered as software entities. social barriers. commonly called identity proofing. digital signatures. 86 Computer security In computer security. this level of control is not fine-grained enough to satisfy the Principle of least privilege. In a capability-based model. access control includes authentication. any software entity can potentially act as both a subject and object. In any access control model. a subject's access to an object depends on whether its identity is on a list associated with the object (roughly analogous to how a bouncer at a private party would check your ID to see if your name is on the guest list). but known to the system if they return. for example the object-capability model. and arguably is responsible for the prevalence of malware in such systems (see computer insecurity). The method used for identity proofing and validation should provide an assurance level commensurate with the intended use of the identity within the system. • authorization determines what a subject can do. including biometric scans and metal locks. Although some systems equate subjects with user IDs. In some models.Access control Finally. encryption. and monitoring by humans and automated systems. Access control models used by current systems tend to fall into one of two classes: those based on capabilities and those based on access control lists (ACLs). access is conveyed to another party by transmitting such a capability over a secure channel.

the 'execute' permission doubles as a 'traverse directory' permission when granted for a directory. This assumes that only the owner of the account knows the password or PIN needed to access the account. This assumes that only the owner of the account has the necessary smart card or token needed to unlock the account. (In Unix systems. such as a password or a personal identification number (PIN). . Authenticators are commonly based on at least one of the following four factors: • Something you know. for example inside or outside a company firewall. such as fingerprint. such as a smart card or security token. Accountability Accountability uses such system components as audit trails (records) and logs to associate a subject with its actions. For example. Many systems can generate automated reports based on certain predefined criteria or thresholds. • Something you are. voice. or proximity of login location to a personal GPS device. known as clipping levels.Access control entity asserts an identity together with an authenticator as a means for validation. a clipping level may be set to generate a report for the following: • More than three failed logon attempts in a given period • Any attempt to use a disabled user account These reports help a system administrator or security administrator to more easily identify possible break-in attempts. retina. • Something you have. The only requirements for the identifier is that it must be unique within its security domain. they may not be admissible as evidence. Audit trails and logs are important for • Detecting security violations • Re-creating security incidents If no one is regularly reviewing your logs and they are not maintained in a secure and consistent manner. Most modern operating systems define sets of permissions that are variations or extensions of three basic types of access: • Read (R): The subject can • Read file contents • List directory contents • Write (W): The subject can change the contents of a file or directory with the following tasks: • Add • Create • Delete • Rename • Execute (X): If the file is a program.) These rights and permissions are implemented differently in systems based on discretionary access control (DAC) and mandatory access control (MAC). Authorization determines what a subject can do on the system. the subject can cause the program to be run. The information recorded should be sufficient to map the subject to a controlling user. 87 Authorization Authorization applies to subjects. or iris characteristics. • Where you are.

For instance the claim could be "older than 18" . • Data import and export: Controlling the import of information from other systems and export to other systems (including printers) is a critical function of these systems. (In capability-based systems. It is difficult to manage but its use is usually justified when used to protect highly sensitive information. Examples include certain government and military information. A Mandatory Access Control system implements a simple form of rule-based access control to determine whether access should be granted or denied by matching: • An object's sensitivity label • A subject's sensitivity label • Lattice-based access control: These can be used for complex access control decisions involving multiple objects and/or subjects. which must ensure that sensitivity labels are properly maintained and implemented so that sensitive information is appropriately protected at all times. The user has to prove so called claims about his attributes to the access control engine. but based on attributes of the user. Mandatory Access Control (MAC). • Access rights and permissions: These are the controls that an owner can assign to other subjects for specific resources. This can for instance be achieved using anonymous credentials or XACML (extensible access control markup language). there is usually no explicit concept of 'owner'. What makes the method "mandatory" is the use of either rules or sensitivity labels. Two methods are commonly used for applying mandatory access control: • Rule-based (or label-based) access control: This type of control further defines specific conditions for access to a requested object. or by implementing sensitivity labels. Any user that can prove this claim is granted access.Access control 88 Access control models Access control models are sometimes categorized as either discretionary or non-discretionary. and Role Based Access Control (RBAC). MAC and RBAC are both non-discretionary. An object's sensitivity label specifies the level of trust required for access. The access policy for an object is determined by its owner.) Mandatory access control Mandatory access control refers to allowing access to a resource if and only if rules exist that allow a given user to access the resource. A subject's sensitivity label specifies its level of trust. A lattice model is a mathematical structure that defines greatest lower-bound and least . Attribute-based access control In attribute-based access control (ABAC). Access controls may be discretionary in ACL-based or capability-based access control systems. • Sensitivity labels: In such a system subjects and objects must have labels assigned to them. Two important concepts in DAC are • File and data ownership: Every object in the system has an owner. Users can be anonymous as authentication and identification are not strictly required. Management is often simplified (over what can be required) if the information can be protected using hierarchical access control. The owner decides who is allowed to access the object and what privileges they have. each object's initial owner is the subject that caused it to be created. Discretionary access control Discretionary access control (DAC) is an access policy determined by the owner of an object. access is granted not based on the rights of the subject associated with a user after authentication. An attribute-based access control policy specifies which claims need to be satisfied in order to grant access to an object. In most DAC systems. One does however require means for proving claims anonymously. the subject must have a sensitivity level equal to or higher than the requested object. but the creator of an object has a similar degree of control over its access policy. In order to access a given object. The three most widely recognized models are Discretionary Access Control (DAC).

4. not the owner. A technique used to define or restrict the rights of individuals or application programs to obtain data from. Three primary rules are defined for RBAC: 1. or may be as simple as read or write. Role authorization: A subject's active role must be authorized for the subject. outside of the user's control. Federal Standard 1037C[2] with the following meanings: 1. processes. where multi-level security requirements may also exist. RBAC controls collections of permissions that may include complex operations such as an e-commerce transaction. This definition depends on several other technical terms from Federal Standard 1037C. this rule ensures that users can execute only transactions for which they are authorized. The definition or restriction of the rights of individuals or application programs to obtain data from. RBAC differs from DAC in that DAC allows users to control access to their resources. Few systems implement MAC. With rule 1 above. 2. MAC controls read and write permissions based on a user's clearance level and additional labels. or other systems.S. With rules 1 and 2. or place data onto. That function performed by the resource controller that allocates system resources to satisfy user requests. Role assignment: A subject can execute a transaction only if the subject has selected or been assigned a role. such as a subject and an object. access is controlled at the system level. XTS-400 and SELinux are examples of systems that do. Most IT vendors offer RBAC in one or more products. The computer system at the company in the movie Tron is an example from the prior century. A role in RBAC can be viewed as a set of permissions. 2. The process of limiting access to the resources of an AIS to authorized users. 3. 5.Access control upper-bound values for a pair of elements. programs. or place data into. while in RBAC. 3. Transaction authorization: A subject can execute a transaction only if the transaction is authorized for the subject's active role. this rule ensures that users can take on only roles for which they are authorized. 89 Telecommunication In telecommunication. RBAC is used in commercial applications and also in military systems. and roles can be combined in a hierarchy where higher-level roles subsume permissions owned by sub-roles. Although RBAC is non-discretionary. . Role-based access control Role-based access control (RBAC) is an access policy determined by the system. a storage device. a storage device. the term access control is defined in U. A service feature or technique used to permit or deny use of the components of a communication system. Additional constraints may be applied as well. it can be distinguished from MAC primarily in the way permissions are handled.

2005. .Access control 90 Public policy In public policy. pdf • "Integrated Security Systems Design" . access control to restrict access to systems ("authorization") or to track or monitor behavior within systems ("accountability") is an implementation feature of using trusted systems for security or social control. [1] http:/ / www.coverpages. Norman.Butterworth/Heinenmann . Federal Standard 1037C U. gov/ fs-1037/ other/ a. CPP/PSP/CSC Author • Government Open Source Access Control—Next Generation (GOSAC-N) (http://www.S. Shon. All-in-one CISSP Exam Guide. com [2] http:/ / www. MIL-STD-188 U.2007 . its. bldrdoc. isonas.S. California. (http://xml.html) An OASIS standard language/model for access control.Thomas L.org/xacml. Also XACML.S. National Information Systems Security Glossary Harris. Third Edition.gosac-n. Emeryville.org) External links • eXtensible Access Control Markup Language. References • • • • U. McGraw Hill Osborne.

Almost every MRP II system is modular in construction. It is a total company management concept for using human resources more productively. Characteristic basic modules in an MRP II system are: • Master production schedule (MPS) • Item master data (technical data) • Bill of materials (BOM) (technical data) • • • • • • • • Production resources data (manufacturing technical data) Inventories and orders (inventory control) Purchasing management Material requirements planning (MRP) Shop floor control (SFC) Capacity planning or capacity requirements planning (CRP) Standard costing (cost control) Cost reporting / management (cost control) Manufacturing Resource Planning (or MRP2) .Around 1980. over-frequent changes in sales forecasts. MRP 2) together with auxiliary systems such as: • • • • Business planning Lot traceability Contract management Tool management • Engineering change control • Configuration management .g. financial planning. it addresses operational planning in units. dedication to data base accuracy. and computer resources. Key functions and features MRP II is not a proprietary software system and can thus take many forms. entailing continual readjustments in production. led MRP (Material Requirement Planning) to evolve into a new concept : Manufacturing [1] Resource Planning (e. but a marriage of people skills. as well as the unsuitability of the parameters fixed by the system. It is almost impossible to visualize an MRP II system that does not use a computer.Manufacturing resource planning 91 Manufacturing resource planning Manufacturing resource planning (MRP II) is defined by APICS as a method for the effective planning of all resources of a manufacturing company. Ideally. This is not exclusively a software function. but an MRP II system can be based on either purchased–licensed or in-house software. and has a simulation capability to answer "what-if" questions and extension of closed-loop MRP.

Information systems that would assist managers with other parts of the manufacturing process. a business information integration system. where individual systems are deployed to help a company plan.g. Originally. manufacturers developed systems for calculating the resource requirements of a production run based on sales forecasts. lot traceability in regulated manufacturing such as pharmaceuticals or food. MRP information systems helped managers determine the quantity and timing of raw materials purchases. Both MRP and MRPII are still widely used. In order to calculate the raw materials needed to produce products and to schedule the purchase of those materials along with the machine and labor time needed. followed. MRP II is by definition fully integrated or at least fully interfaced.Manufacturing resource planning • Shop floor data collection • Sales analysis and forecasting • Finite capacity scheduling (FCS) and related systems such as: • • • • • • • • • • • General ledger Accounts payable (purchase ledger) Accounts receivable (sales ledger) Sales order management Distribution requirements planning (DRP) Automated warehouse management Project management Technical records Estimating Computer-aided design/computer-aided manufacturing (CAD/CAM) CAPP 92 The MRP II system integrates these modules together so that they use common data and freely exchange information.g. in a model of how a manufacturing enterprise should and can operate. the tableware industry has few starting materials – mainly clay – and does not need complex materials planning. MRPII. and it is in those that MRP II is less appropriate. Industry specifics MRP II systems have been implemented in most manufacturing industries. MRP and MRPII: History and evolution Material requirements planning (MRP) and manufacturing resource planning (MRPII) are predecessors of enterprise resource planning (ERP). In the 1980s. Material requirements planning (MRP) was an early iteration of the integrated information systems vision. Some industries need specialised functions e. While MRP was primarily concerned with materials. Capacity planning is the key to success in this as in many industries. independently and as modules of more comprehensive ERP systems. control or manage a specific activity. Other industries can afford to disregard facilities required by others e. MRPII was concerned with the integration of all aspects of the . production managers recognized that they would need to use computer and software technology to manage the information. but the original vision of integrated information systems as we know them today began with the development of MRP and MRPII in manufacturing. The vision for MRP and MRPII was to centralize and integrate business information in a way that would facilitate decision making for production line managers and increase the efficiency of the production line overall. The MRP II approach is therefore very different from the “point solution” approach. The development of these manufacturing coordination and integration methods and tools made today’s ERP systems possible. manufacturing operations built custom software programs that ran on mainframes.

as well as final production numbers. is provided from the MRPII system to accounting and finance (Monk and Wagner). Data about the cost of production. MRPII systems begin with MRP. MRPII facilitates the development of a detailed production schedule that accounts for machine and labor capacity. Paper-based information systems and non-integrated computer systems that provide paper or disk outputs result in many information errors. including materials. push & pull logistic rules. numerical errors that result from being incorrectly keyed into the system. configure planning. MRP is concerned primarily with manufacturing materials while MRPII is concerned with the coordination of the entire manufacturing production. incorrect calculations based on numerical errors. and relational database technology of the 1980s was not advanced enough to provide the speed and capacity to run these systems in real-time. launch purchase orders & reserve products in stock. MRP and MRPII systems draw on a master production schedule. including machine time. Nonetheless. ERP softwares are necessary. scheduling the production runs according to the arrival of materials. the vision had been established. finance. • Master Data OpenERP supports: multi-level Bill of Materials. material requirements planning. • Stock Alerts . the hardware. • Scheduling Schedulers automatically organise manufacturing orders. manage your manufacturing and work orders. including missing data. In addition. MRP allows for the input of sales forecasts from sales and marketing. some data is unreliable in non-integrated systems because the same data is categorized differently in the individual databases used by different functional areas. While MRP allows for the coordination of raw materials purchasing. the breakdown of specific plans for each product on a line. software. and bad decisions based on incorrect or old data. including materials. and human relations. 93 MRP and MRPII: General concepts Material requirements planning (MRP) and manufacturing resource planning (MRPII) are both incremental information integration business process strategies that are implemented using hardware and modular software applications linked to a central database that stores and delivers business data and information. In this respect. MRPII was designed to integrate a lot of information by way of a centralized database. advanced routings. • Manage materials and HR Define and plan efficiently the working time and capacity of your resources. The goal of MRPII is to provide consistent data to all players in the manufacturing process as the product moves through the production line. However. Manufacturing Management Software For the companies that want to integrate their other departments with their manufacturing management. labor time and materials used. An MRPII output is a final labor and machine schedule. OpenERP give companies the possibility to plan and control your supply chain through different applications in the Manufacturing module. redundant data.[2] and the cost of these systems was prohibitive for most businesses. finance and human relations. These forecasts determine the raw materials demand.Manufacturing resource planning manufacturing process. Personalize your master data. • Bar Code Support Use our bar code support to record time and operations on different work orders. and shifts in the underlying business processes along with rapid advances in technology led to the more affordable enterprise and application integration systems that big businesses and many medium and smaller businesses use today (Monk and Wagner). Like today’s ERP systems.

Australia: The International Journal of Knowledge. While they acknowledge that the use of heuristics. Laurence (2006). like those prescribed by MRP and MRP II. Canada: Thomson Course Technology. Editor. • Stock Track the evolution of the stock value. Production Planning by Mixed Integer Programming. ISBN 047193450X. B.Manufacturing resource planning Get your stock alerts generated in real time to avoid shortages at any given time. CIM: Principles of Computer Integrated Manufacturing (http:/ / en. 2006. usually integer programming models. pp. Paul (2003). . Knowledge and Innovation Culture as Determinants of Financial Performance in New Product Development (http:/ / ijm. php?title=Special:Booksources& isbn=047193450X). E. org/ w/ index. and Wagner. as well as the planning modules in current APS and ERP systems. are actually sets of heuristics. [2] Shum. p47. .. com/ product/ pub. [3] Wolsey. 2nd Edition. 94 Benefits MRP II systems can provide: • Better control of inventories • Improved scheduling • Productive relationships with suppliers For design / engineering: • Improved design control • Better quality and quality control For financial and costing: • Reduced working capital for inventory • Improved cash flow through quicker deliveries • Accurate inventory records Criticism Authors like Pochet and Wolsey [3] argue that MRP and MRP II. Chichester: John Wiley & Sons Ltd. this is no longer true. 422). wikipedia. according to the level of manufacturing activities as they progress in the transformation process. Mac Mendelsohn. Concepts in Enterprise Resource Planning. Jean-Baptiste (1992). • Monk. Springer. were necessary in the past due to lack of computational power to solve complex optimization models. References [1] Waldner. ISBN 978-0-387-29959-4. 28/ prod. cgpublisher. Culture and Change Management. Better production plans could be obtained by optimization over more powerful mathematical programming models.

with formal definitions and technical modeling. more effective and more capable of change than a functionally focused. When included in a process model. BPM enables business to respond to changing consumer. performed by their relevant roles or collaborators. ad-hoc. and improved to deliver value added products and services to clients. it goes far beyond automating business processes (software) or solving business problems (suite). Because BPM allows organizations to abstract business process from technology infrastructure. the term 'business process' is often used as synonymous of management of middleware processes. An empirical study by Kohlbacher (2009) indicates that BPM helps organizations to gain higher customer satisfaction. The current management and improvement approach. these relationships provide for advanced reporting and analysis. As of 2010 technology has allowed the coupling of BPM to other methodologies. market. outputs. BPM can be used to understand organizations through expanded views that would not otherwise be available to organize and present. For example (in workflow systems). As a managerial approach. BPM attempts to improve processes continuously. such as relationships between processes. or integrating application software tasks. In this case. As such. to purposefully achieve the common business goal.strategize functions and processes . product quality. More advanced forms such as human interaction management are in the complex interaction between human workers in performing a workgroup task. Although the initial focus of BPM was on the automation of business processes with the use of information technology. many BPM articles and pundits often discuss BPM from one of two viewpoints: people and/or technology. and integration with technology. Roughly speaking. BPM considers processes to be strategic assets of an organization that must be understood.[2] Overview A business process comprises a "series or network of value-added activities. flexibility. It can therefore be described as a "process optimization process.Business process management 95 Business process management Business process management (BPM) is a holistic management approach[1] focused on aligning all aspects of an organization with the wants and needs of clients. such as Six Sigma.a limitation to keep in mind when reading software engineering papers that refer to "business processes" or to "business process modeling". when individual steps in the business process require human intuition or judgment to be performed. BPM is an approach to integrate an organizational "change capability" that is both human and technological. the idea of business process is as traditional as concepts of tasks."[3] These processes are critical to any organization. through technology to ensure the viability of the managerial approach in times of stress and change." It is argued that BPM enables organizations to be more efficient. This viewpoint may be overly restrictive . traditional hierarchical management approach. Note that in the IT community. department. production. as they can generate revenue and often represent a significant proportion of costs. managed. delivery speed and time-to-market speed. and sometimes completely dynamic ways to complete one to many transactions. BPM tools allow users to: • Vision . In fact. BPM goes a step further by stating that this approach can be supported. This foundation is very similar to other Total Quality Management or Continuous Improvement Process methodologies or approaches. BPM is regarded by some as the backbone of enterprise content management. It promotes business effectiveness and efficiency while striving for innovation. these steps are assigned to appropriate members within the organization. many people and systems interact in structured. and regulatory demands faster than competitors .creating competitive advantage. has been around since the early 1990s (see business process modeling). or enabled. it has since been extended to integrate human-driven processes in which human interaction takes place in series or parallel with the use of technology.

the coupling of BPM to industry methodologies allows users to continually streamline and optimize the process to ensure that it is tuned to its market need. and system-to-system workflows. human-to-system. • Re-engineer . Service Level Agreements. Multiple processes are aggregated to function accomplishments and multiple functions are aggregated to and achieve organizational goals.Function plays a vital role. Each functional head in an organization is responsible for certain sets of processes made up of tasks which are to be executed and reported as planned.[4] 96 BPM life-cycle Business process management activities can be grouped into six categories: vision.Business process management • • • • • Define .deploy this implementation and by use of User defined dashboards monitor the improvement in real time and feed the performance information back into the simulation model in preparation for the next improvement iteration. Also. the actors within it. .simulate the change to the process. execution.select and implement the improvement Control . Design Process Design encompasses both the identification of existing processes and the design of "to-be" processes. and might target regulatory.Function are attached to the list of Process.revamp the processes from scratch for better results This brings with it the benefit of being able to simulate changes to business processes based on real-life data (not assumed knowledge). market. and optimization. Standard Operating Procedures. 2. Good design reduces the number of problems over the lifetime of the process. The proposed improvement could be in human-to-human. Each function is attached with a list of processes. 1. Whether or not existing processes are considered.compare the various simulations to determine an optimal improvement Improve . modeling. Areas of focus include representation of the process flow. Analyze . alerts & notifications. design. the aim of this step is to ensure that a correct and efficient theoretical design is prepared. or competitive challenges faced by the businesses. escalations. and task hand-over mechanisms.baseline the process or the process improvement Model . Vision Functions are designed around the strategic vision and goals of an organization. monitoring.

Compared to either of the previous approaches.g. however this approach is more complex.g. near real-time or ad-hoc. ordered arrived. Process mining allows process analysts to detect discrepancies between the actual process execution and the a priori model as well as to analyze bottlenecks. As a response to these problems. in real-time. directly executing a process definition can be more straightforward and therefore easier to improve. It also involves running "what-if analysis" on the processes: "What if I have 75% of resources to do the same task?" "What if I want to do the same job for 80% of the current cost?". Another approach is to use a combination of software and human intervention. In addition. awaiting delivery. An example of the tracking is being able to determine the state of a customer order (e. when a step is too complex to automate. The degree of monitoring depends on what information the business wants to evaluate and analyze and how business wants it to be monitored. changes in rent or materials costs. Business rules have been used by systems to provide definitions for governing behaviour. defect rate and productivity. making the documentation process difficult. and a business rule engine can be used to drive process execution and resolution. in practice. However. these applications rarely execute all the steps of the process accurately or completely. Examples of the statistics are the generation of measures on how quickly a customer order is processed or how many orders were processed in the last month. The system will either use services in connected applications to perform business operations (e. Here. this information can be used to work with customers and suppliers to improve their connected processes. invoice paid) so that problems in its operation can be identified and corrected. Execution One of the ways to automate processes is to develop or purchase an application that executes the required steps of the process. however. will ask for human input. software has been developed that enables the full business process (as developed in the process design activity) to be defined in a computer language which can be directly executed by the computer. These measures tend to fit into three categories: cycle time. business activity monitoring (BAM) extends and expands the monitoring tools generally provided by BPMS. Process mining is a collection of methods and tools related to process monitoring. calculating a repayment plan for a loan) or. so that information on their state can be easily seen. and statistics on the performance of one or more processes can be provided. automating a process definition requires flexible and comprehensive infrastructure.Business process management 97 Modeling Modeling takes the theoretical design and introduces combinations of variables (e. The aim of process mining is to analyze event logs extracted through process monitoring and to compare them with an a priori process model. which determine how the process might operate under different circumstances). which typically rules out implementing these systems in a legacy IT environment. Monitoring Monitoring encompasses the tracking of individual processes.g. ..

economic or time constraints are likely to limit the process to only a few iterations. it is recommended to re-engineer the entire process cycle. and ISO/IEC 15944 covers the operational aspects of the business. Practice While the steps can be viewed as a cycle. Example of Business Process Management (BPM) Service Pattern: This pattern shows how business process management (BPM) tools can be used to implement business [6] processes through the orchestration of activities between people and systems.[5] Re-engineering When the process becomes too noisy and optimization is not fetching the desire output. Microsoft BizTalk Server • document-centric BPM (Dynamic Case Management). Business Motivation Model). Software AG webMethods • integration-centric BPM (Enterprise Service Bus). this creates greater business value.Business process management 98 Optimization Process optimization includes retrieving process performance information from modeling or monitoring phase. and then. However. complexity will require enabling technology (see below) to support the process participants in these daily process management challenges. This is often the case when an organization uses the approach for short to medium term objectives rather than trying to transform the organizational culture. Enterprise Architecture.[8] Other standards are currently being worked upon to assist in BPM implementation (BPMN. standalone markets that include BPM plus much more. identifying the potential or actual bottlenecks and the potential opportunities for cost savings or other improvements. In a majority of organizations. BPM Suites on market Forrester Research. To date. BPR has become an integral part of manufacturing organization to achieve efficiency and productivity at work. standalone integration-centric and document-centric offerings have matured into separate. Inc recognize the BPM suite space through three different lenses: • human-centric BPM.g. the international standards for the task have limited BPM to the application in the IT sector.g. e. In the financial sector. some corporations with the culture of best practices do use standard operating procedures to regulate their operational process. Microsoft SharePoint Server However. many organizations often start a BPM project or program with the objective to optimize an area that has been identified as an area for improvement. . True iterations are only possible through the collaborative efforts of process participants. Overall.[7] Currently. e. over the past few years. applying those enhancements in the design of the process. e. BPM is critical to make sure the system delivers a quality service while maintaining regulatory compliance.g.

The BPMS term may not survive. including business rules • Business Analytics — enable managers to identify business issues.and interdepartmental communication barriers through discussion forums. collaboration. The BPMS should facilitate business process change throughout the life cycle stated above.Business process management 99 BPM technology Some define the BPM System or Suite (BPMS) as "the whole of BPM. The validation document usually can either be published officially or retained by users. actionable information. For instance. BPM is now considered a critical component of Operational Intelligence (OI) solutions to deliver real-time. OI solutions use real-time information to take automated action based on pre-defined rules so that security measures and or exception management processes can be initiated. images. integration with other systems. The BPMS should enable all stakeholders to have a firm understanding of an organization and its performance. In fact.[10] . the size and complexity of daily tasks often requires the use of technology to model efficiently. and message boards BPM also addresses many of the critical IT issues underpinning these business drivers. Still others limit the definition to "modeling" (see Business modeling). if regulatory compliance is mandatory. There are four critical components of a BPM Suite: • Process Engine – a robust platform for modeling and executing process-based applications.alerts can be sent or executive decisions can be made using real-time dashboards. These are partial answers and the technological offerings continue to evolve. customer-facing processes Consolidating data and increasing visibility into and access to associated data and information Increasing the flexibility and functionality of current infrastructure and data Integrating with existing systems and leveraging emerging service oriented architecture (SOAs) Establishing a common language for business-IT alignment Validation of BPMS is another technical issue that vendors and users need to be aware of. validation documentation will need to be generated. an argument can be made that this "holistic approach" bridges organizational and technological silos. trends. and opportunities with reports and dashboards and react accordingly • Content Management — provides a system for storing and securing electronic documents. including: • • • • • Managing end-to-end.[9] The validation task could be performed either by an authenticated third party or by the users themselves. As such. This real-time information can be acted upon in a variety of ways . and other files • Collaboration Tools — remove intra. These models facilitate automation and solutions to business problems.". etc." Others relate the important concept of information moving between enterprise software packages and immediately think of Service Oriented Architecture (SOA). integrating partners through the value chain. dynamic workspaces. some people view BPM as "the bridge between Information Technology (IT) and Business. Either way. Today it encompasses the concept of supporting the managerial approach through enabling technology. This assists in the automation of activities. These models can also become executable to assist in monitoring and controlling business processes.

People and Culture (http:/ / www. acm. Software that produce documents are. [10] Mettler Toledo Efficient system validation (http:/ / us. These documents are usually the contracts between the consignee and the consignor. L. [9] "Guidance for Industry. fda. packing lists/slips/sheets (manifests). com/ mt_ext_files/ Editorial/ Generic/ 6/ Datasheet_LabX_Validation_0x000248d2000263da00091312_files/ LabX_validation_datasheet_e. There are some manufacturers of high speed document automation systems that will automatically compare the laser printed document to the order and either insert or automatically apply an enclosed wallet/pouch to the shipping container (usually a flexible polybag or corrugated fiberboard/rigid container). bpm-handbook. cfm?id=1558897. Internet/Online shopping and Shopping channel (other. [3] Ryan K. . damaged goods.HKVJH & Rosemann. software and tabletop laser printers. Part 11. These include logic based systems that use segments of pre-existing text and/or data to assemble a new document. nih. (2009): The Effects of Process Orientation on Customer Satisfaction. mt. Accessed 17 march 2008. Automation systems allow companies to minimize data entry. Additional benefits include. Electronic Records.com Business Process Management in the Finance Sector (http:/ / www. storage. PDF) [5] S-Cube Knowledge Model: Business Process Optimization (http:/ / www. especially with the increase of e-Commerce. Handbook on Business Process Management: Strategic Alignment. Protection of Privacy and Identity Theft are major concerns. s-cube-network. returned goods. J. Washington DC. ERP. [8] NTAID (2008).g. delivery. postage/shipping. org/ citation. Conference Website (http:/ / dc. They are called. Invoice Processing Procedures for Contracts (http:/ / www. detailed/summary. com) (International Handbooks on Information Systems) (Vol. niaid. telephone. Governance. oracle. Document automation system can also be used to automate all conditional text. etc. document loading. Retrieved 2009-07-20. net). com/ common/ ssi/ sa/ wh/ n/ wsw14044usen/ WSW14044USEN. savings due less paper handling. and reduce the risks associated with human error. so they are very important for both parties and any intermediary. past references are catalogue shopping and mail order shopping) making it more important than ever to guarantee the correct document is married or associated to the correct order or shipment every time. . Business Process Management (BPM) Service Pattern (http:/ / enterprisearchitecture. htm). gov/ downloads/ Drugs/ GuidanceComplianceRegulatoryInformation/ Guidances/ UCM072322. supply chain management and distribution centers is usually performed manual labor or semiautomatically using bar code scanners. Food and Drug Administration. August 2003. TMS. reduce the time spent proof-reading. forms/reports of many types (e. pdf). bill of lading (BOL). October 11–14. Electronic Signatures — Scope and Application" (http:/ / www. faxes. ACM Press [4] Coupling BPM with Six Sigma (ftp:/ / ftp. Berlin: Springer [2] Kohlbacher. Document automation in supply chain management & logistics There are many documents used in logistics. Accessed 29 Nov 2008. ACM Crossroads 15(4). Ko (2009). [6] NIH (2007). 1558901& coll=ACM& dl=ACM& CFID=86325717& CFTOKEN=44883106). Paper presented at the 29th International Conference of the Strategic Management Society. M. ibm. M. labour and waste. htm) Accessed 17 Sept 2008. Document handling within logistics. invoices. nih. com/ industries/ financial_services/ BPM_WP_final. pdf) (PDF). variable text.). distribution. pdf). gov/ ArchLib/ AT/ TA/ WorkflowServicePattern. Document automation Document automation (also known as document assembly) is the design of systems and workflow that assist in the creation of electronic documents. legacy middleware and most accounting packages. pick tickets. 1). WMS. MSDS. strategicmanagement. (2010). Product Quality and Time-Based Performance. eu/ km/ terms/ b/ business-process-optimization). etc. software. contracts and letters. [7] Oracle. This process is increasingly used within certain industries to assemble legal documents. See below for external website video links showing these document automation systems. gov/ ncn/ sop/ contracts/ invoice.Business process management 100 References [1] vom Brocke. import/export. and data contained within a set of documents. Accessed 16 July 2008. A computer scientist's introductory guide to business process management (BPM) (http:/ / portal. like a third party logistics company (3PL) and governments.

it can be used in any industry that creates transaction-based documents. Document automation in the legal services market The role of automation technology in the production of legal documents has been widely recognised. such as complex term sheets and the first drafts of credit agreements[4] [5] . making updates and collaboration easy and fast. Simpler software applications that are easier to learn can also be used to automate the preparation of documents. low margin legal services being ‘packaged’ and provided to a mass-market audience[9] [10] [11] . Rapidocs and XpressDox. and risk management industries. This has been seen as heralding a trend towards commoditisation whereby technologies like document automation result in high volume. Popular document automation solutions on the market today include Xinnovation. A good example of how document automation software can be used is with commercial mortgage documents.[1] Today's more advanced document automation systems allow users to create their own data and rules (logic) without the need for programming. . organize them into logical groups. For example. HotDocs. The information collected then populates the document to form a good first draft'. Susskind regards Document Assembly as one of 10 'disruptive technologies' that are altering the face of the legal profession[3] . with hundreds of optional paragraphs and data elements. Intelledox. Business Integrity. Exari. While document automation software is used primarily in the legal. A typical commercial mortgage transaction can include several documents including: • • • • • promissory note environmental indemnity trust deed mortgage guaranty Some of these documents can contain as many as 80 to 100 pages. With the liberalisation of the UK legal services market spearheaded by the Legal Services Act 2007 large institutions have broadened their services to include legal assistance for their customers[6] [7] . Richard Susskind’s book ‘The End of Lawyers’ looks at the use of document automation software that enables clients to generate employment contracts and Wills with the use of an online interview or decision tree[2] . financial services. Document automation software has the ability to automatically fill in the correct document variables based on the transaction data. without undue complexity. Most of these companies use some element of document automation technology to provide legal document services over the Web[8] . and then quickly access them to paste into final documents. In large law firms document assembly systems are increasingly being used to systemise work.Document automation 101 The document automation/assembly industry Document assembly was pioneered in the late 1970s in Utah. In addition. Clipboard managers such as textBEAST allow the user to save frequently-used text fragments. The basic functions are to replace the cumbersome manual filling in of repetitive documents with template-based systems where the user answers software-driven interview questions or data entry screen. some document automation software has the ability to create a document suite where all related documents are encapsulated into one file.

com/loc2006. lawgazette. co. 0: eal019v1 [2] Article Who's afraid of computer generation? (http:/ / www. lawgazette. USA (January 15.Distance relationships (http:/ / www. uk/ blogs/ in-business-blog/ who039s-afraid-computer-generation) Eduardo Reyes (Thursday 28 October 2010) [3] The End of Lawyers?: Rethinking the Nature of Legal Services Richard Susskind OBE Oxford University Press. uk/ law/ 2010/ nov/ 02/ aa-saga-legal-services-solicitors) Neil Rose The Guardian (Tuesday 2 November 2010) [9] Article: Commoditisation of Legal Services . legaltechnologyjournal. Do No Harm (http://www.What It Means for the Future of Legal Practice (http:/ / www.capstonepractice. co.pmpnews. 2006. 2009) [4] Article: Swift Justice (http:/ / www. epoq. co. Int J Law Info Tech. com/ channels/ information-management/ features/ 1307743/ part_3/ swift-justice. uk/ content/ view/ 31/ 50/ ) Marc-Henri Chamay Legal Technology Journal [6] Article: Braced for the big bang and Tesco law (http:/ / business. org/ cgi/ content/ abstract/ 15/ 2/ 170) Mountain. uk/ tol/ business/ law/ article6921906.com/article/first-do-no-harm) article about documentation within Pharmaceutical Industry . ece) Jon Robins The Times [7] Article: A trip to the shops can end in divorce (http:/ / www. co. uk/ content/ view/ 21/ 51/ ) Professor Richard Susskind OBE Legal Technology Journal (2006) [11] Article: The commodities business (http:/ / www. guardian.Document automation 102 References [1] Article: Disrupting Conventional Law Firm Business Models using Document Assembly (http:/ / ijlit. legaltechnologyjournal. lawgazette. information-age. co.. uk/ features/ the-commodities-business) Professor Richard Susskind OBE The Law Society Gazette (Thursday 13 April 2006) Vendors • Epoq Group • Exari • HotDocs External links • Fall in Line With Document Assembly (http://www. thtml) Pete Swabey (20 December 2010) [5] Article: Client services . oxfordjournals. sg/ 2007-6/ legal. htm) Sylvia Lowe Law Gazette [10] Article: From bespoke to commodity (http:/ / www. timesonline. uk/ ep/ press-images/ 2007-07-08-HalifaxLegalServicesFTArticle. co.pdf) • First. com. co. pdf) Ellen Kelleher The Financial Times [8] Article: Why big brand legal services are bad news for solicitors (http:/ / www.

learn and react to the needs of their key stakeholders. providing decision makers with important data for increasing customer satisfaction. with features such as question and page rotation. The software typically offers advanced reporting with statistical analysis and centralized panel management. most typically with CRM systems but also with HRIS systems and generic web portals. survey software was typically deployed in departments and lacked user roles. Applications of EFM vary widely from HR. EFM applications are often integrated with external platforms. Management • • • • • • • Customer engagement Business intelligence Customers Customer Intelligence Customer relationship management Customer satisfaction Enterprise relationship management • Customer feedback management services • Customer data management . quota management and advanced skip patterns and branching.e. EFM applications provides a workflow process with user roles and permissions. EFM enables companies to look at customers "holistically" and to better respond to customer needs." The EFM market grew 60% to 70% in 2005 and 2006. loyalty and lifetime value.[1] Gartner projected that 40 percent of total feedback system deployments would be EFM solutions in 2008. EFM can help an organization establish a dialogue with employees. when a research director at Gartner. survey reporters and translators. A key part of the value of an EFM deployment is the development of the business rules (i. Sales and continues to expand on its corporate implementation and scope.Enterprise feedback management 103 Enterprise feedback management Enterprise feedback management (EFM) is a system of processes and software that enables organizations to centrally manage deployment of surveys while dispersing authoring and analysis throughout an organization. sharing results and gaining insights that enable the organization to listen. Departments within an organization can collaborate on feedback initiatives.[3] Background EFM applications support complex survey design. IT. EFM enables deployment across the enterprise. such as novice survey authors. EFM systems typically provide different roles and permission levels for different types of users. and customers regarding key issues and concerns and potentially make customer specific real time interventions. who needs to see what feedback info) and which parts of the customer / employee / partner facing process needs to be measured. It's going to jumpstart a bunch of acquisitions as larger vendors look to work EFM and surveying into their growth strategy. Esteban Kolsky. Such workflow ensures consistent survey quality and enforces respondent privacy and IT security policies. permissions and workflow. so that users may be able to author a survey but require another user to approve it before it is published. Marketing. described the market structure as follows: "The market for these tools is a highly fragmented one.[2] Its worth noting that the motivation to pilot/deploy EFM is often to reduce the reliance on (or reduce the costs of) traditional satisfaction research. partners. with no single provider. Prior to EFM. EFM consists of data collection. analysis and reporting. professional survey authors. Unlike low-end survey tools.

Enterprise feedback management 104 References [1] How to Improve the Customer Experience (http:/ / www.. | CFO. PESTLE refers to political. For instance.Corporations. com/ coms2/ summary_0286-15926678_ITM) Enterprise planning systems Enterprise planning systems cover the methods of planning for the internal and external factors that affect an enterprise. social. Meanwhile. com/ resources/ 154100/ 154195/ how_to_improve_the_customer__154195. sdcexec. enterprise planning systems have broader coverage. New technology may help. It also considers those factors that will positively or negatively affect the firm's ability to run these actions. Typically. enterprise planning systems are part of a firm's knowledge base or corporate structure whether it formally identified and structured or simply executed these when the need appeared.[1] . Enterprise planning system purposes An enterprise planning system will address at least three basic purposes to help the enterprise: • survive • compete • thrive Addressing survival An enterprise will plan for tactical moves for quick reaction to the PESTLE threats that affect its survival. addressing any event. accessmylibrary. Enterprise planning systems will tend to vary and are flexible. These will also have tactical aspects. economic. As opposed to enterprise resource planning (ERP). These are due to the periodic and adaptive nature of strategy formation.Article . Regularly addressing PESTLE factors fall under operations management. technological.. gartner. com/ web/ online/ Trends/ Corporations--Government-Adopt-Enterprise-Feedback-Management/ 20$6932) [3] Angry and bored? You must be a customer: finding out what customers really think is a crucial first step toward an improved bottom line. Enterprise planning systems address the resources that are available or not available to an enterprise and its ability to produce products or resources and/or provide services. These factors generally fall under PESTLE. opportunity or challenge in any one or many factors for the first time will involve project management. Government Adopt Enterprise Feedback Management (http:/ / www.com . right after Japan's Fukushima nuclear power plant has experienced explosions due to the earthquake and the tsunami that followed. (http:/ / www. legal and environmental factors. several enterprises (within and outside of Japan) have publicly announced their course of actions to address the emergency. pdf) [2] SDCExec. The Ma.

The profit and benefit motives justify most enterprise planning systems.[4] With changing real world conditions. team planning is crucial. In a sense. Thus. and organizational 'drift'" as the knowledge workers in the enterprise adapt to the realities of daily activities. These enable the firm to cope with the actions of its competitors. at least three components can structure enterprise strategy. systems variety and flexibility work to the advantage of a strategically adaptive or agile enterprise as PESTLE conditions change.[3] Addressing vulnerabilities A fourth noteworthy purpose for enterprise planning systems is preparedness against terrorist attacks. compliance to these rigid. nature of its operating environments.[6] . terrorist groups are likely to attack commercial infrastructure for economic sabotage. set budgets.[5] Here. technological risks abound as even enterprise software are prone to obsolescence and disruptive innovations. These are: • analytical frameworks for the evaluation of PESTLE data at a given time • geographic coverage of operations to manage risks or maximize benefits from macroeconomic forces or government regulations • projects integration to efficiently support enterprise operations Enterprise strategy via analysis Frameworks of analysis usually drive a firm's strategy. implement and use strategic information systems as “information systems or information technology investments can be a source of competitive advantage”. demands of its consumers or clients. an enterprise will plan for longer term strategic actions to address its competition or improve its competitiveness.Enterprise planning systems 105 Addressing competition Meanwhile. For instance. shadow systems. Technology is not stagnant. Managing the interrelation of PESTLE factors requires team work in the enterprise planning process. prescribed processes is often assumed rather than real. To illustrate this some more. an enterprise will plan for using the PESTLE opportunities that are available to it. Strategic planning guide for enterprises Two major characteristics of enterprise planning systems are: these are varied and flexible. effects of government regulations in the places where it does business. In many cases.[2] Addressing opportunities Most significantly. various forms of unintended improvisations. For instance. variety and flexibility in a standard ERP implementation will still manifest in many ways such as "workarounds. the ERP software is accepted but the practices within the enterprise reflect inconsistencies with the prescribed processes of the software. enterprises will plan for. However. As noted in the US Presidential Directive for Critical infrastructure protection. One group will normally specialize in one aspect like operations or government regulations. Enterprises that are providing products or services that are critical to the economic system of a nation are potential targets of extremists. Another is the Balanced Scorecard for performance measurement analysis. A sample framework for general analysis is the SWOT analysis. or opportunities that are available among other factors. ERP software prescribes processes to realize its promised benefits.

since management actions occur simultaneously in an enterprise. Enterprise planning and budgeting Enterprise planning and budgeting go hand-in-hand as the wherewithal to execute plans will determine the success or failure of an enterprise strategy.) international strategy global strategy global and local strategy[8] Enterprise strategy via projects integration Moreover. economic.[12] Hence.Enterprise planning systems 106 Enterprise strategy via geography Enterprise strategy can also refer to the mix of structured actions that address the political. the strategies that have been formed from the analytical framework processes of evaluating an enterprise's condition will lead to detailed plans which could be part of a firm's manual of operations or projects portfolio thrusts for funding and execution across the units or geographic coverage of the enterprise. the need to have strategic priorities across many projects in companies with multiple product development projects have made executives borrow principles from investment portfolio management to better manage the distribution of resources compared with the assessed risks for each project. cutting the RD&E project budget in half or increasing it twice will have profound effects in the long term direction of an enterprise as this will affect the other units of the firm undertaking projects that are linked to the RD&E project. PESTLE factors lead to strategy formation that will enable the enterprise to adapt to changing conditions. expanding or limiting the budget for a particular operations aspect of the enterprise or an ongoing project in favor of another will signal changes to an enterprise's strategy.[11] A market research project will trigger a research. planning and budgeting are integral parts of any enterprise planning systems as these impact the strategic directions of the enterprise. this RD&E project could trigger a production strategy project to manufacture the new product at the most efficient locations to bring it closer to its target consumers. etc.[9] Thus. transnational. development and engineering (RD&E) project for a new product. Asia-Pacific. enterprise projects tend to be mutually dependent with other projects to leverage a firm's engineering.[7] Hence. These structured actions can be local. Meanwhile. enterprises can have any of the following geographic strategies in their plans: • • • • • local strategy regional strategy (Europe. social. For instance. In turn. North America. In another light.[10] Hence. . financial and technology resources. strategic planners can consider operations or projects portfolio management (PPM) as crucial elements in an enterprise's strategic planning guide. technological. transnational or global. For instance. legal and environmental factors that affect a business or firm. global or combination of local.

In this set up. Executive management takes into account that the enterprise has knowledge workers that are experts in their respective fields.[13] [14] Enterprise group planning will usually manifest in regular board of directors' or management committee' meetings with varying frequencies such as monthly. enterprise plans and budgets can be detailed in a top-down approach. The transition plan will cover the elimination of redundant functions in the case of a merger or the incorporation of new processes into business operations in the case of a technology project. Enterprise group planning Enterprise group planning will typically refer to the involvement of the major units of an enterprise such as the finance. The Management Board approves the proposed strategic direction under certain financial constraints such as expected returns on investment or equity. plans and budgets are negotiated. or combined in a top-down and bottom-up approach. Troubleshooting that requires the major resources of the enterprise will also entail enterprise group planning. With improvements in telecommunications. enterprise planning systems take a tactical form rather than a strategic focus to preserve the stability or ensure the survival of the enterprise. marketing. Some enterprises also involve external parties in their group planning where inputs from the crucial parts of the supply chain. It will closely follow Frederick Winslow Taylor's Principles of Scientific Management. Headquarters or executive management directs all planning and budgets from the top then downwards in the organization hierarchy. Executive management determines and sets the strategic direction of the enterprise based on the inputs of middle managers and the rank and file. This will include planning-centric software and the tools to support strategic planning for and across the enterprise. interpersonal relations are part of the firm's culture. However. enterprise group planning can be conducted through video conferencing where participants may be dispersed geographically. quarterly or annually. Middle managers set plans effectively steering the enterprise's strategic direction. Enterprise transition plan Enterprise transition plans will generally refer to change management-related actions in the case of mergers or in the implementation of an enterprise-wide project. cooperation and collaboration.Enterprise planning systems 107 Classifications Enterprise planning and budgeting can be generally classified into: • centralized • devolved • hybrid Centralized. video conferencing still appears to be an inadequate substitute when warm. Hybrid. Essentially. or outsiders-looking-in are part of the firm's strategy. Here. Enterprise planning software Enterprise planning software will have varied or depth of coverage but will not essentially refer to enterprise resource planning software. generalized in a bottom-up approach. such as: • strategy formation software . It can also refer to the involvement of the geographic units of a transnational or global firm. Yet for fast-paced events like natural disasters or a meltdown of the financial markets that require immediate action from the enterprise. Devolved. video conferencing might be the only option. Traditional meetings have required the physical presences of representatives from the various business units of the enterprise. production or technology departments.

 107–108. Danail Ivanov and Betty Vandenbosch (2007). and Reduce Cycle Times. edu/ bitstream/ handle/ 1721. "Project Financial Evaluation" (http:/ / ocw. (2009). Global Strategic Management. 375 Hudson Street. Norton (January–February 1996).. (2004). HSBC Holdings plc 2011. 23–43. Michael A. WP-3609-93 BPS. [12] Fujimoto. guardian. Cut Costs. Next Generation Product Development: How to Increase Productivity. Retrieved March 3. Massachusetts Institute of Technology. David P. Richard (2001). K. and Economics to Achieve Business Success. "Process Compliance and Enterprise System Implementation". edu/ courses/ civil-and-environmental-engineering/ 1-040-project-management-spring-2009/ lecture-notes/ ). "Japan tsunami and nuclear alert . com/ 1/ 2/ ). uk/ world/ blog/ 2011/ mar/ 14/ japan-tsunami-nuclear-alert-live). ac. [10] Fraser. Physics. MIT Sloan School of Management.co. ISBN 9780199266159. Richard Adams and Ben Quinn. Strategic Planning for Information Systems 3rd Edition. pp. Kevan. Retrieved 16 March 2011. ISBN 0385501595. Retrieved 30 April 2011.Enterprise planning systems • • • • performance measurement and evaluation software project management software scenario planning software data warehouse or business intelligence software 108 References [1] Adam Gabbatt. Robert S. The Natural Laws of Business: How to Harness the Power of Evolution. Strategic Management. New York: Oxford University Press. et al. . [5] Williams. New York 10014. Chapter 17. Toronto. England: John Wiley & Sons Ltd. Guardian News and Media Limited. pp.Monday 14 March part two" (http:/ / www. 1 1: 242. New York. [8] HSBC. "Using the Balanced Scorecard as a Strategic Management System". [9] McGrath. J.. pp. P. "Multi-Project Management: Strategy and Organization in Automobile Product Development" (http:/ / dspace. Global Engineering Economics: Financial Decision Making for Engineers. Nicholas.G. pp. Retrieved April 27. University of Tokyo. Matthew Kuofie (December 2008). 2011. "The world's local bank" (http:/ / www. [11] Kentaro Nobeoka. 2011. pp. hsbc. [7] Mellahi. Harvard Business Review. Abel.uk.. Xiall M. (2005). [2] John Ward and Joe Peppard (2002). . . [13] Usoro. Retrieved 30 April 2011. u-tokyo. International Journal of Global Business. ISBN 0-470-84147-8. [4] Berente. pdf). mit. USA: Doubleday. Takahiro. 7–18.. pp. Random House Inc. ISBN 0071435123. Michael E. United States of America: McGraw-Hill. & Finlay. . Department of Economics. ISBN 9780132071611. . "Production Strategy" (http:/ / ocw. United States of America: DK Publishing. 16–32. Abbas Abid. 90–110. co. 229–232. New York. "Scales Construction for Organisational Variables that Influence the Use Of ICT for Global Planning". mit. [3] Massood Samii. 2011. jp/ wp-content/ uploads/ lecture-notes_eng/ Eco_02/ BusinessAdministration2_07. Cusumano (11). West Sussex PO19 1UD. Ontario: Pearson Education Canada. 1/ 2492/ SWP-3609-29056920. guardian. [14] Koch. Lecture Notes MIT OpenCourseWare. Frynas. pdf?sequence=1). ISBN 978-0-7566-4859-6. [6] Kaplan. IEEE Computer Society 40th Hawaii International Conference on System Sciences: 1530–1605. .

Part 3: Models of Manufacturing Operations Management (http://www. machine status. wireless LANs and potentially Radio-frequency identification (RFID) to efficiently monitor the flow of products. performance analysis. or modules of an ERP system or supply chain execution suite.). putaway and picking. In its simplest form. receiving. html). quality and compliance. HMI software is a form of manufacturing operations management (MOM) software that enables operators to manage industrial and process control machinery using a computer-based interface. The objective of a warehouse management system is to provide a set of computerized procedures to handle the receipt of stock and returns into a warehouse facility. plant and enterprise level for situational or historical analysis. Warehouse Management is not just managing within the . .g. traffic and shipping management. globalspec. including shipping. gartner. com/ LearnMore/ Industrial_Engineering_Software/ Manufacturing_Operations_Management_MOM_Software). labor and materials. is a key part of the supply chain and primarily aims to control the movement and storage of materials within a warehouse and process the associated transactions. and product shipments.cfm?Section=Standards8&template=/Ecommerce/ ProductDisplay. Performance analysis software displays metrics at the machine.03-2005 Enterprise-Control System Integration. such as barcode scanners. [2] "About Manufacturing Operations Management (MOM) Software" (http:/ / www. model and manage the logical representation of the physical storage facilities (e. Quality and compliance software is used to promote compliance with standards and specifications for operational processes and procedures. Once data has been collected. the WMS can data track products during the production process and act as an interpreter and message buffer between existing ERP and WMS systems. Gartner. there is either a batch synchronization with. External links • ANSI/ISA-95. including for production management. Warehouse management systems can be stand alone systems. mobile computers.00. The primary purpose of a WMS is to control the movement and storage of materials within a warehouse – you might even describe it as the legs at the end-of-the line which automates the store. and human machine interface (HMI). The database can then provide useful reports about the status of goods in the warehouse. manage the stock within the facility and enable a seamless link to order processing and logistics management in order to pick.isa.Manufacturing operations management 109 Manufacturing operations management Manufacturing operations management (MOM) is a methodology for viewing an end-to-end manufacturing process with a view to optimizing efficiency.cfm&ProductID=7906) Warehouse management system A warehouse management system.org/Template.[2] References [1] "Market Scope for Manufacturing Operations Management. Warehouse management systems often utilize Auto ID Data Capture (AIDC) technology. GlobalSpec. or a real-time wireless transmission to a central database. or WMS. racking etc. pack and ship product out of the facility. . 2007" (http:/ / mediaproducts.[1] There are many types of MOM software. line. com/ reprints/ oracle/ 152278. Production management software provides real-time information about jobs and orders. The systems also direct and optimize stock putaway based on real-time information about the status of bin utilization.

Manage your own internal locations. storage and movement of goods. It involves the physical warehouse infrastructure. Warehouse management = "Management of storage of products and services rendered on the products within the four walls of a warehouse" 110 Warehouse management software For the companies that want to integrate their other departments with their warehouse management. normally finished goods. External links • Building Business Case for Warehouse Management System [1] References [1] http:/ / logistics-book. it is much wider and goes beyond the physical boundaries. accounting links. com/ 2011/ 01/ wms-software-building-business-case-for. html . and communication between product stations. regional warehouses serviced by the central warehouses and retail warehouses serviced by the regional warehouses and so on. etc.Warehouse management today is part of SCM and demand management. blogspot. OpenERP supports multi-warehouse management based on hierarchical locational structure. IT applications & communication technology to be used are all related to warehouse management.Warehouse management system boundaries of a warehouse today. Warehouse management deals with receipt. In the multi-echelon model for distribution. to intermediate storage locations or to final customer. tracking systems. Efficient warehouse management gives a cutting edge to a retail chain distribution company. Warehouse management is part of Logistics and SCM. starting with the Central Warehouse(s). Warehouse Management monitors the progress of products through the warehouse. cost management. Wave Picking) is also part of warehouse management. The container storage. In this respect. ERP softwares are necessary. Warehouse design and process design within the warehouse (e.g. customers.inventory planning. OpenERP invented the double-entry inventory management system which allows to manage complex needs very easily: tracking stocks of suppliers/customers. external locations. The objective of warehouse management is to help in optimal cost of timely order fulfillment by managing the resources economically. there are levels of warehouses. Warehouse management does not just start with receipt of material but it actually starts with actual initial planning when container design is made for a product. Even production management is to a great extent dependent on warehouse management. Inventory management. suppliers or manufacturing inventories. loading and unloading are also covered by warehouse management today. full traceability.

often called the inventor of the motor car. He is sometimes called "the father of scientific management. quality control. This became the foundation for his ongoing work on statistical quality control. quality assurance and quality improvement.Quality management 111 Quality management The term Quality management has a specific meaning within many business sectors. For example. Karl Friedrich Benz. which are a high level abstraction of many of his deep insights. Japanese goods were synonymous with cheapness and low quality. but over time their quality initiatives began to be successful. Edwards Deming later applied statistical process control methods in the United States during World War II. Japanese cars regularly top the J.D. In Germany. Power customer satisfaction ratings. with Japan achieving very high levels of quality in products from the 1970s onward. After the second world war. amongst others. They should be interpreted by learning and understanding the deeper insights. These 14 points include key concepts such as: • • • • • Break down barriers between departments Management should learn their responsibilities. productivity. can be considered to have four main components: quality planning. The next step forward was promoted by several people including Frederick Winslow Taylor a mechanical engineer who sought to improve industrial efficiency. hence producing the identical components and creating a musket assembly line. He has formulated 14 points of attention for managers. The first proponent in the US for this approach was Eli Whitney who proposed (interchangeable) parts manufacture for muskets. and take on leadership Supervision should be to help people and machines and gadgets to do a better job Improve constantly and forever the system of production and service Institute a vigorous program of education and self-improvement In the 1950s and 1960s. first proposed in 1924. including aspects like standardization and adopting improved practices. From this period onwards. In societies where art responsibilities of a master craftsman (and similarly for artists) was to lead their studio. Quality management therefore uses quality assurance and control of processes as well as products to achieve more consistent quality. Henry Ford was also important in bringing process and quality management practices into operation in his assembly lines. Advanced civilizations that supported the arts and crafts allowed clients to choose goods meeting higher quality standards than normal goods. Edwards Deming championed Shewhart's ideas in Japan from 1950 onwards." He was one of the intellectual leaders of the Efficiency Movement and part of his approach laid a further foundation for quality management. although real mass production was properly initiated in Volkswagen after World War II. and competitive position. The aim was to produce large numbers of the same goods. which does not aim to assure 'good quality' by the more general definition (but rather to ensure that an organisation or product is consistent). was pursuing similar assembly and production practices. In the 1980s Deming . Quality management evolution Quality management is a recent phenomenon. North American companies focused predominantly upon production against lower cost with increased efficiency.[1] Quality management is focused not only on product/service quality. W. He is probably best known for his management philosophy establishing quality. Japan decided to make quality improvement a national imperative as part of rebuilding their economy. Deming and Juran. train and supervise the on. This specific definition. and sought the help of Shewhart. but also the means to achieve it. the importance of craftsmen was diminished as mass production and repetitive work practices were instituted. Walter A. W. Quality leadership from a national perspective has changed over the past five to six decades. thereby successfully improving quality in the manufacture of munitions and other strategically important products. Shewhart made a major step in the evolution towards quality management by creating a method for quality control for production. using statistical methods.

Disciplines like systems thinking are bringing more holistic approaches to quality so that people.[4] Involvement of people People at all levels of an organization are the essence of it. Customers recognize that quality is an important attribute in products and services.e. QFD. There are a huge number of books available on quality management. In the past two decades this quality gap has been greatly reduced between competitive products and services. The ISO 9000 series of standards are probably the best known International standards for quality management.[4] An organization attains customer focus when all people in the organization know both the internal and external customers and also what customer requirements must be met to ensure that both the internal and external customers are satisfied. Suppliers recognize that quality can be an important differentiator between their own offerings and those of competitors (quality differentiation is also called the quality gap). and the role of leadership in promoting and achieving high quality. The principles include: Customer focus Since the organizations depend on their customers. Their complete involvement enables their abilities to be used for the benefit of the organization. extending into service sectors and into areas such as sales. In recent times some themes have become more significant including quality culture. Many of the methods not only provide techniques but also have associated quality culture (i. They should go for creation and maintenance of such an internal environment. This is partly due to the contracting (also called outsourcing) of manufacture to countries like India and China. The influence of quality thinking has spread to non-traditional applications outside of walls of manufacturing. the importance of knowledge management.[4] .[5] Leadership Leaders of an organization establish unity of purpose and direction of it. should meet customer requirements and try to exceed the expectations of customers.[2] 112 Principles Quality management adopts a number of management principles[3] that can be used by top management to guide their organizations towards improved performance. These methods are now adopted by the same western countries that decades earlier derided Japanese methods. as well internationalization of trade and competition. marketing and customer service. process and products are considered together rather than independent factors in quality management. Toyota Production System. in which people can become fully involved in achieving the organization's quality objective. These countries amongst many others have raised their own standards of quality in order to meet International standards and customer demands. people factors). therefore they should understand current and future customer needs. A number of highly successful quality initiatives have been invented by the Japanese (see for example on this page: Taguchi.Quality management was asked by Ford Motor Company to start a quality initiative after they realized that they were falling behind Japanese manufacturers.

Quality management

113

Process approach
The desired result can be achieved when activities and related resources are managed in an organization as process.[4]

System approach to management
An organization's effectiveness and efficiency in achieving its quality objectives are contributed by identifying, understanding and managing all interrelated processes as a system.[4]

Continual improvement
One of the permanent quality objectives of an organization should be the continual improvement of its overall performance.[4]

Factual approach to decision making
Effective decisions are always based on the data analysis and information.[4]

Mutually beneficial supplier relationships
Since an organization and its suppliers are interdependent, therefore a mutually beneficial relationship between them increases the ability of both to add value.[4] These eight principles form the basis for the quality management system standard ISO 9001:2008.[4]

Quality improvement
There are many methods for quality improvement. These cover product improvement, process improvement and people based improvement. In the following list are methods of quality management and techniques that incorporate and drive quality improvement: 1. ISO 9004:2008 — guidelines for performance improvement. 2. ISO 15504-4: 2005 — information technology — process assessment — Part 4: Guidance on use for process improvement and process capability determination. 3. QFD — quality function deployment, also known as the house of quality approach. 4. Kaizen — 改善, Japanese for change for the better; the common English term is continuous improvement. 5. Zero Defect Program — created by NEC Corporation of Japan, based upon statistical process control and one of the inputs for the inventors of Six Sigma. 6. Six Sigma — 6σ, Six Sigma combines established methods such as statistical process control, design of experiments and failure mode and effects analysis (FMEA) in an overall framework. 7. PDCA — plan, do, check, act cycle for quality control purposes. (Six Sigma's DMAIC method (define, measure, analyze, improve, control) may be viewed as a particular implementation of this.) 8. Quality circle — a group (people oriented) approach to improvement. 9. Taguchi methods — statistical oriented methods including quality robustness, quality loss function, and target specifications. 10. The Toyota Production System — reworked in the west into lean manufacturing. 11. Kansei Engineering — an approach that focuses on capturing customer emotional feedback about products to drive improvement. 12. TQM — total quality management is a management strategy aimed at embedding awareness of quality in all organizational processes. First promoted in Japan with the Deming prize which was adopted and adapted in USA as the Malcolm Baldrige National Quality Award and in Europe as the European Foundation for Quality Management award (each with their own variations).

Quality management 13. TRIZ — meaning "theory of inventive problem solving" 14. BPR — business process reengineering, a management approach aiming at 'clean slate' improvements (That is, ignoring existing practices). 15. OQM — Object-oriented Quality Management, a model for quality management.[6] Proponents of each approach have sought to improve them as well as apply them for small, medium and large gains. Simple one is Process Approach, which forms the basis of ISO 9001:2008 Quality Management System standard, duly driven from the 'Eight principles of Quality managagement', process approach being one of them. Thareja[7] writes about the mechanism and benefits: "The process (proficiency) may be limited in words, but not in its applicability. While it fulfills the criteria of all-round gains: in terms of the competencies augmented by the participants; the organisation seeks newer directions to the business success, the individual brand image of both the people and the organisation, in turn, goes up. The competencies which were hitherto rated as being smaller, are better recognized and now acclaimed to be more potent and fruitful".[8] The more complex Quality improvement tools are tailored for enterprise types not originally targeted. For example, Six Sigma was designed for manufacturing but has spread to service enterprises. Each of these approaches and methods has met with success but also with failures. Some of the common differentiators between success and failure include commitment, knowledge and expertise to guide improvement, scope of change/improvement desired (Big Bang type changes tend to fail more often compared to smaller changes) and adaption to enterprise cultures. For example, quality circles do not work well in every enterprise (and are even discouraged by some managers), and relatively few TQM-participating enterprises have won the national quality awards. There have been well publicized failures of BPR, as well as Six Sigma. Enterprises therefore need to consider carefully which quality improvement methods to adopt, and certainly should not adopt all those listed here. It is important not to underestimate the people factors, such as culture, in selecting a quality improvement approach. Any improvement (change) takes time to implement, gain acceptance and stabilize as accepted practice. Improvement must allow pauses between implementing new changes so that the change is stabilized and assessed as a real improvement, before the next improvement is made (hence continual improvement, not continuous improvement). Improvements that change the culture take longer as they have to overcome greater resistance to change. It is easier and often more effective to work within the existing cultural boundaries and make small improvements (that is Kaizen) than to make major transformational changes. Use of Kaizen in Japan was a major reason for the creation of Japanese industrial and economic strength. On the other hand, transformational change works best when an enterprise faces a crisis and needs to make major changes in order to survive. In Japan, the land of Kaizen, Carlos Ghosn led a transformational change at Nissan Motor Company which was in a financial and operational crisis. Well organized quality improvement programs take all these factors into account when selecting the quality improvement methods.

114

Quality management

115

Quality standards
The International Organization for Standardization (ISO) created the Quality Management System (QMS) standards in 1987. They were the ISO 9000:1987 series of standards comprising ISO 9001:1987, ISO 9002:1987 and ISO 9003:1987; which were applicable in different types of industries, based on the type of activity or process: designing, production or service delivery. The standards are reviewed every few years by the International Organization for Standardization. The version in 1994 was called the ISO 9000:1994 series; consisting of the ISO 9001:1994, 9002:1994 and 9003:1994 versions. The last major revision was in the year 2008 and the series was called ISO 9000:2000 series. The ISO 9002 and 9003 standards were integrated into one single certifiable standard: ISO 9001:2008. After December 2003, organizations holding ISO 9002 or 9003 standards had to complete a transition to the new standard. ISO released a minor revision, ISO 9001:2008 on 14 October 2008. It contains no new requirements. Many of the changes were to improve consistency in grammar, facilitating translation of the standard into other languages for use by over 950,000 certified organisations in the 175 countries (as at Dec 2007) that use the standard. The ISO 9004:2009 document gives guidelines for performance improvement over and above the basic standard (ISO 9001:2000). This standard provides a measurement framework for improved quality management, similar to and based upon the measurement framework for process assessment. The Quality Management System standards created by ISO are meant to certify the processes and the system of an organization, not the product or service itself. ISO 9000 standards do not certify the quality of the product or service. In 2005 the International Organization for Standardization released a standard, ISO 22000, meant for the food industry. This standard covers the values and principles of ISO 9000 and the HACCP standards. It gives one single integrated standard for the food industry and is expected to become more popular in the coming years in such industry. ISO has also released standards for other industries. For example Technical Standard TS 16949 defines requirements in addition to those in ISO 9001:2008 specifically for the automotive industry. ISO has a number of standards that support quality management. One group describes processes (including ISO 12207 & ISO 15288) and another describes process assessment and improvement ISO 15504. The Software Engineering Institute has its own process assessment and improvement methods, called CMMi (Capability Maturity Model — integrated) and IDEAL respectively.

Quality software
The software used to track the three main components of quality management through the use of databases and/or charting applications.

Quality terms
• Quality Improvement can be distinguished from Quality Control in that Quality Improvement is the purposeful change of a process to improve the reliability of achieving an outcome. • Quality Control is the ongoing effort to maintain the integrity of a process to maintain the reliability of achieving an outcome. • Quality Assurance is the planned or systematic actions necessary to provide enough confidence that a product or service will satisfy the given requirements.

 17. "Total Quality Organization Thru’ People. 2003. ISBN 9780071629737 • Process Assessment and Improvement ISBN 0-387-23182-X • Pyzdek. "Juran's Quality Handbook". google. p. and Joseph A. google. ISBN 0824746147 . . Inderscience • International Journal of Quality & Reliability Management. ISSN 1746-6474. Cracking the Case of ISO 9001:2008 for Service: A Simple Guide to Implementing Quality Management to Service Organizations (http:/ / books. Florida: J. (July. pp. 5-€“7. Kenneth H. XX. ISBN 1-932159-48-7. Milwaukee: American Society for Quality. [2] Paul H. What and How (http:/ / books. 2010. De Feo. . com/ ?id=-XtbQNGhGmMC& pg=PA5& dq=quality+ management+ eight+ principles+ ISO+ 9001:2008#v=onepage& q=quality management eight principles ISO 9001:2008& f=false) (2nd ed. "Sales Process Engineering: An Emerging Quality Application". . (2009). The Hague. No. Quality Progress: 59–63. com/ quality-management-strategy). Ross Publishing. Charles A. 41. FOUNDRY. pdf).). [3] Quality Management Strategy (http:/ / www. google. p. May 2010 [4] Cianfrani. Vol. Joseph M. com/ abstract=1488690 "Thareja" [8] Thareja P(2008). ISBN 978-0-87389-762-4. ISBN 0-9713231-7-8. com/ ?id=zk-mlLY__wkC& pg=PA17& dq=ISO+ 9004+ Focus+ internal+ customer+ and+ external+ customers#v=onepage& q=ISO 9004 Focus internal customer and external customers& f=false). Statistics Netherlands. (2003). Stepping Up To ISO 9004: 2000 : A Practical Guide For Creating A World-class Oraganization (http:/ / books. Russell T. Emerald Publishing Group References [1] Rose. org/ unsd/ dnss/ QAF_comments/ Object Oriented Quality Management. Project Quality Management: Why. ISSN: 0265-671X. T. pmhut. Paton Press. . Each one is Capable". "Quality Engineering Handbook". 2005). July/Aug 2008 Further reading • Juran. a model for quality management. [6] "Object Oriented Quality Management.. John E. Fort Lauderdale.Quality management 116 Academic resources • International Journal of Productivity and Quality Management. un. West. 4. Selden (December 1998)." (http:/ / unstats. [5] Westcott. [7] http:/ / ssrn. com/ ?id=b5F08Z0QRosC& pg=PA41& dq=Quality+ management+ quality+ planning+ quality+ control#v=onepage& q=Quality management quality planning quality control& f=false).

4 defects per million).[1] [2] As of 2010.Six Sigma 117 Six Sigma The often-used Six Sigma symbol. etc.[3] Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified financial targets (cost reduction and/or profit increase).[3] The term Six Sigma originated from terminology associated with manufacturing. including statistical methods. or the percentage of defect-free products it creates.[3] It uses a set of quality management methods. Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes. A six sigma process is one in which 99. "Green Belts". it is widely used in many sectors of industry. and creates a special infrastructure of people within the organization ("Black Belts". .99966% of the products manufactured are statistically expected to be free of defects (3. although its use is not without controversy. Motorola set a goal of "six sigma" for all of its manufacturing operations.) who are experts in these methods. and this goal became a byword for the management and engineering practices used to achieve it. The maturity of a manufacturing process can be described by a sigma rating indicating its yield. USA in 1986. Part of a series of articles on Industry Manufacturing methods Batch production • Job production Continuous production Improvement methods LM • TPM • QRM • VDM TOC • Six Sigma • RCM Information & communication ISA-88 • ISA-95 • ERP SAP • IEC 62264 • B2MML Process control PLC • DCS Six Sigma is a business management strategy originally developed by Motorola. specifically terms associated with statistical modeling of manufacturing processes.

some practitioners have combined Six Sigma ideas with lean manufacturing to create a methodology named Lean Six Sigma. TQM. particularly from top-level management.[7] [8] based on the work of pioneers such as Shewhart.[1] Six Sigma was heavily inspired by the quality improvement methodologies of the six preceding decades.[3] • A clear commitment to making decisions on the basis of verifiable data.4 defects per million opportunities (DPMO). it reduced total costs by driving down the costs for repair or control. Ishikawa. In fact. and Zero Defects. Like its predecessors. to lead and implement the Six Sigma approach. as complementary disciplines aimed at promoting "business and operational excellence". or that could lead to creating an output that does not meet customer specifications. rather than assumptions and guesswork." "Master Black Belts. etc.Six Sigma 118 Historical overview Six Sigma originated as a set of practices designed to improve manufacturing processes and eliminate defects. the prevailing view was that quality costs extra money. where Jack Welch introduced the method.[4] In Six Sigma.e. with its focus on variation and design. it referred to the ability of manufacturing processes to produce a very high proportion of output within specification.[9] [10] Six Sigma's implicit goal is to improve all processes to that level of quality or better. At that time.[3] The core of Six Sigma was “born” at Motorola in the 1970s out of senior executive Art Sundry's criticism of Motorola’s bad quality. analyzed.[15] The Lean Six Sigma methodology views lean manufacturing.[14] In recent years. Processes that operate with "six sigma quality" over the short term are assumed to produce long-term defect levels below 3. from manufacturing and software development to sales and service delivery functions.[6] Bill Smith subsequently formulated the particulars of the methodology at Motorola in 1986.[3] The term "Six Sigma" comes from a field of statistics known as process capability studies. such as quality control. Features that set Six Sigma apart from previous quality improvement initiatives include: • A clear focus on achieving measurable and quantifiable financial returns from any Six Sigma project." "Black Belts." "Green Belts". It serves as a foundation for innovation throughout the organization. Six Sigma is a registered service mark and trademark of Motorola Inc. about two-thirds of the Fortune 500 organizations had begun Six Sigma initiatives with the aim of reducing costs and improving quality. • Manufacturing and business processes have characteristics that can be measured. Six Sigma doctrine asserts that: • Continuous efforts to achieve stable and predictable process results (i.[11] As of 2006 Motorola reported over US$17 billion in savings[12] from Six Sigma. Other early adopters of Six Sigma who achieved well-publicized success include Honeywell (previously known as AlliedSignal) and General Electric. which addresses process flow and waste issues. Taguchi and others. Deming.[15] Companies such as IBM use Lean Six Sigma to focus transformation efforts not just on efficiency but also on growth.[13] By the late 1990s.[3] • A special infrastructure of "Champions. Originally. Juran. and Six Sigma. . reduce process variation) are of vital importance to business success.[5] As a result of this criticism. but its application was subsequently extended to other types of business processes as well..[3] • An increased emphasis on strong and passionate management leadership and support. a defect is defined as any process output that does not meet customer specifications. the company discovered a connection between increases in quality and decreases in costs of production. improved and controlled. • Achieving sustained quality improvement requires commitment from the entire organization.

Implement control systems such as statistical process control. • DMADV is used for projects aimed at creating new product or process designs. future state process. This phase may require simulations. also known as DFSS ("Design For Six Sigma").[14] • DMAIC is used for projects aimed at improving an existing business process. • Measure key aspects of the current process and collect relevant data. specifically.Six Sigma 119 Methods Six Sigma projects follow two project methodologies inspired by Deming's Plan-Do-Check-Act Cycle. production process capability. • Analyze the data to investigate and verify cause-and-effect relationships. and standard work to create a new. implement the production process and hand it over to the process owner(s). bear the acronyms DMAIC and DMADV. • Control the future state process to ensure that any deviations from target are corrected before they result in defects. Seek out root cause of the defect under investigation. • Verify the design. Quality management tools and methods used in Six Sigma Within the individual phases of a DMAIC or DMADV project. • Improve or optimize the current process based upon data analysis using techniques such as design of experiments. the voice of the customer. The following table shows an overview of the main methods used. • Measure and identify CTQs (characteristics that are Critical To Quality). product capabilities. Determine what the relationships are. create a high-level design and evaluate design capability to select the best design.[14] DMADV is pronounced as "duh-mad-vee". . • Analyze to develop and design alternatives. DMAIC The DMAIC project methodology has five phases: • Define the problem. production boards .[14] features five phases: • Define design goals that are consistent with customer demands and the enterprise strategy. and the project goals. and continuously monitor the process. Set up pilot runs to establish process capability. Six Sigma utilizes many established quality-management tools that are also used outside of Six Sigma. set up pilot runs. These methodologies.[14] DMAIC is pronounced as "duh-may-ick". optimize the design. and attempt to ensure that all factors have been considered. poka yoke or mistake proofing. DMADV or DFSS The DMADV project methodology. and risks. composed of five phases each. and plan for design verification. • Design details. visual workplaces.

Process. Prior to Six Sigma. quality management in practice was largely relegated to the production floor and to statisticians in a separate quality department. Customers) Stratification Taguchi methods Taguchi Loss Function TRIZ Implementation roles One key innovation of Six Sigma involves the "professionalizing" of quality management functions. Inputs. They assist champions and guide Black Belts and Green Belts. Outputs. they spend their time on ensuring consistent application of Six Sigma across various functions and departments. such as Yellow Belts. They also empower the other role holders with the freedom and resources to explore new ideas for breakthrough improvements. . • Green Belts are the employees who take up Six Sigma implementation along with their other job responsibilities. They are responsible for setting up a vision for Six Sigma implementation. Some organizations use additional belt colours. They devote 100% of their time to Six Sigma. for employees that have basic training in Six Sigma tools. Formal Six Sigma programs adopt a ranking terminology (similar to some martial arts systems) to define a hierarchy (and career path) that cuts across all business functions. They devote 100% of their time to Six Sigma. operating under the guidance of Black Belts. • Master Black Belts. Six Sigma identifies several key roles for its successful implementation. • Champions take responsibility for Six Sigma implementation across the organization in an integrated manner. identified by champions. • Black Belts operate under Master Black Belts to apply Six Sigma methodology to specific projects.Six Sigma 120 • • • • • • • • • • • • • • • • • 5 Whys Accelerated life testing Analysis of variance ANOVA Gauge R&R Axiomatic design Business Process Mapping Cause & effects diagram (also known as fishbone or Ishikawa diagram) Check sheet Chi-squared test of independence and fits Control chart Correlation Cost-benefit analysis CTQ tree Design of experiments Failure mode and effects analysis (FMEA) General linear model Histograms • • • • • • • • • • • • • • • Pareto analysis Pareto chart Pick chart Process capability Quality Function Deployment (QFD) Quantitative marketing research through use of Enterprise Feedback Management (EFM) systems Regression analysis Root cause analysis Run charts Scatter diagram SIPOC analysis (Suppliers. They primarily focus on Six Sigma project execution.[16] • Executive Leadership includes the CEO and other members of top management. Apart from statistical tasks. whereas Champions and Master Black Belts focus on identifying projects/functions for Six Sigma. Champions also act as mentors to Black Belts. act as in-house coaches on Six Sigma. The Executive Leadership draws them from upper management.

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Certification
Corporations such as early Six Sigma pioneers General Electric and Motorola developed certification programs as part of their Six Sigma implementation, verifying individuals' command of the Six Sigma methods at the relevant skill level (Green Belt, Black Belt etc.). Following this approach, many organizations in the 1990s starting offering Six Sigma certifications to their employees.[14] [17] Criteria for Green Belt and Black Belt certification vary; some companies simply require participation in a course and a Six Sigma project.[17] There is no standard certification body, and different certification services are offered by various quality associations and other providers against a fee.[18] [19] The American Society for Quality for example requires Black Belt applicants to pass a written exam and to provide a signed affidavit stating that they have completed two projects, or one project combined with three years' practical experience in the body of knowledge.[17] [20] The International Quality Federation offers an online certification exam that organizations can use for their internal certification programs; it is statistically more demanding than the ASQ certification.[17] [19] Other providers offering certification services include the Juran Institute, Six Sigma Qualtec, Air Academy Associates and others.[18]

Origin and meaning of the term "six sigma process"
The term "six sigma process" comes from the notion that if one has six standard deviations between the process mean and the nearest specification limit, as shown in the graph, practically no items will fail to meet specifications.[10] This is based on the calculation method employed in process capability studies. Capability studies measure the number of standard deviations between the process mean and the nearest specification limit in sigma units. As process standard deviation goes up, or the mean of the process moves away from the center of the tolerance, fewer standard deviations will fit between the mean and the nearest specification limit, decreasing the sigma number and increasing the likelihood of items outside specification.[10]

Role of the 1.5 sigma shift

Experience has shown that processes usually do not perform as well in the long term as they do in the short term.[10] As a result, the number of sigmas that will fit between the process mean and the nearest specification limit may well drop over time, compared to an initial short-term study.[10] To account for this real-life increase in process variation over time, an empirically-based 1.5 sigma shift is introduced into the calculation.[10] [21] According to this idea, a process that fits 6 sigma between the process mean and the nearest specification limit in a short-term study will in the long term only fit 4.5 sigma – either because the process mean will move over time, or because the long-term standard deviation of the process will be greater than that observed in the short term, or both.[10] Hence the widely accepted definition of a six sigma process is a process that produces 3.4 defective parts per million opportunities (DPMO). This is based on the fact that a process that is normally distributed will have 3.4 parts per million beyond a point that is 4.5 standard deviations above or below the mean (one-sided capability study).[10] So the 3.4 DPMO of a six sigma process in fact corresponds to 4.5 sigma, namely 6 sigma minus the 1.5-sigma shift introduced to account for long-term variation.[10] This allows for the fact that special causes may result in a deterioration in process performance over time, and is designed to prevent underestimation of the defect levels likely to be encountered in real-life operation.[10]

Graph of the normal distribution, which underlies the statistical assumptions of the Six Sigma model. The Greek letter σ (sigma) marks the distance on the horizontal axis between the mean, µ, and the curve's inflection point. The greater this distance, the greater is the spread of values encountered. For the curve shown above, µ = 0 and σ = 1. The upper and lower specification limits (USL, LSL) are at a distance of 6σ from the mean. Because of the properties of the normal distribution, values lying that far away from the mean are extremely unlikely. Even if the mean were to move right or left by 1.5σ at some point in the future (1.5 sigma shift), there is still a good safety cushion. This is why Six Sigma aims to have processes where the mean is at least 6σ away from the nearest specification limit.

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Sigma levels
The table[22] [23] below gives long-term DPMO values corresponding to various short-term sigma levels. It must be understood that these figures assume that the process mean will shift by 1.5 sigma toward the side with the critical specification limit. In other words, they assume that after the initial study determining the short-term sigma level, the long-term Cpk value will turn out to be 0.5 less than the short-term Cpk value. So, for example, the DPMO figure given for 1 sigma assumes that the long-term process mean will be 0.5 sigma beyond the specification limit (Cpk = –0.17), rather than 1 sigma within it, as it was in the short-term study (Cpk = 0.33). Note that the defect percentages only indicate defects exceeding the specification limit to which the process mean is nearest. Defects beyond the far specification limit are not included in the percentages.
Sigma level 1 2 3 4 5 6 7

A control chart depicting a process that experienced a 1.5 sigma drift in the process mean toward the upper specification limit starting at midnight. Control charts are used to maintain 6 sigma quality by signaling when quality professionals should investigate a process to find and eliminate special-cause variation.

DPMO Percent defective 691,462 69% 308,538 31% 66,807 6,210 233 3.4 0.019 6.7% 0.62% 0.023% 0.00034% 0.0000019%

Percentage yield 31% 69% 93.3% 99.38% 99.977% 99.99966% 99.9999981%

Short-term Cpk Long-term Cpk 0.33 0.67 1.00 1.33 1.67 2.00 2.33 –0.17 0.17 0.5 0.83 1.17 1.5 1.83

Application
Six Sigma mostly finds application in large organizations.[24] An important factor in the spread of Six Sigma was GE's 1998 announcement of $350 million in savings thanks to Six Sigma, a figure that later grew to more than $1 billion.[24] According to industry consultants like Thomas Pyzdek and John Kullmann, companies with fewer than 500 employees are less suited to Six Sigma implementation, or need to adapt the standard approach to make it work for them.[24] This is due both to the infrastructure of Black Belts that Six Sigma requires, and to the fact that large organizations present more opportunities for the kinds of improvements Six Sigma is suited to bringing about.[24]

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Criticism
Lack of originality
Noted quality expert Joseph M. Juran has described Six Sigma as "a basic version of quality improvement", stating that "there is nothing new there. It includes what we used to call facilitators. They've adopted more flamboyant terms, like belts with different colors. I think that concept has merit to set apart, to create specialists who can be very helpful. Again, that's not a new idea. The American Society for Quality long ago established certificates, such as for reliability engineers."[25]

Role of consultants
The use of "Black Belts" as itinerant change agents has (controversially) fostered an industry of training and certification. Critics argue there is overselling of Six Sigma by too great a number of consulting firms, many of which claim expertise in Six Sigma when they only have a rudimentary understanding of the tools and techniques involved.[3]

Potential negative effects
A Fortune article stated that "of 58 large companies that have announced Six Sigma programs, 91 percent have trailed the S&P 500 since". The statement was attributed to "an analysis by Charles Holland of consulting firm Qualpro (which espouses a competing quality-improvement process)."[26] The summary of the article is that Six Sigma is effective at what it is intended to do, but that it is "narrowly designed to fix an existing process" and does not help in "coming up with new products or disruptive technologies." Advocates of Six Sigma have argued that many of these claims are in error or ill-informed.[27] [28] A BusinessWeek article says that James McNerney's introduction of Six Sigma at 3M had the effect of stifling creativity and reports its removal from the research function. It cites two Wharton School professors who say that Six Sigma leads to incremental innovation at the expense of blue skies research.[29] This phenomenon is further explored in the book, Going Lean, which describes a related approach known as lean dynamics and provides data to show that Ford's "6 Sigma" program did little to change its fortunes.[30]

Based on arbitrary standards
While 3.4 defects per million opportunities might work well for certain products/processes, it might not operate optimally or cost effectively for others. A pacemaker process might need higher standards, for example, whereas a direct mail advertising campaign might need lower standards. The basis and justification for choosing 6 (as opposed to 5 or 7, for example) as the number of standard deviations is not clearly explained. In addition, the Six Sigma model assumes that the process data always conform to the normal distribution. The calculation of defect rates for situations where the normal distribution model does not apply is not properly addressed in the current Six Sigma literature.[3]

Criticism of the 1.5 sigma shift
The statistician Donald J. Wheeler has dismissed the 1.5 sigma shift as "goofy" because of its arbitrary nature.[31] Its universal applicability is seen as doubtful.[3] The 1.5 sigma shift has also become contentious because it results in stated "sigma levels" that reflect short-term rather than long-term performance: a process that has long-term defect levels corresponding to 4.5 sigma performance is, by Six Sigma convention, described as a "six sigma process."[10] [32] The accepted Six Sigma scoring system thus cannot be equated to actual normal distribution probabilities for the stated number of standard deviations, and this has been a key bone of contention about how Six Sigma measures are defined.[32] The fact that it

2006. Quality Digest . Neil. Carl E. com/ node/ 7630) on July 23. 2008. motorola. ISBN 978-0-470-06909-7. Ltd.Six Sigma is rarely explained that a "6 sigma" process will have long-term defect rates corresponding to 4. Rendite radikal steigern. Six Sigma for Dummies. [18] Larry Webber. Retrieved May 22. ISBN 9781563272929. . asq. Suh.. 292–.ASQ" (http:/ / www. [19] R. Gower Publishing. Axiomatic Quality. D. . 23. Archived from the original (http:/ / www. OCLC 52775178. Leroy Coryea.. William (2005). 1. M. com/ books?id=IjBozd3KJ1cC& pg=PA175). Gower Publishing. Coryea (27 January 2006). in which management worked on identifying the cost of quality. 65.. ISBN 0-7645-6798-5. JURAN Institute's Six Sigma Breakthrough and Beyond .5 sigma performance rather than actual 6 sigma performance has led several commentators to express the opinion that Six Sigma is a confidence trick. Retrieved 20 September 2011. but they had little impact on quality and productivity improvement.What is Six Sigma?" (http:/ / www. NJ: Wiley Publishing. Inc. html) on December 22. edu/ public/ facts/ facs030624. 2005.. Bruce (2005). [21] Harry. com/ motorolauniversity). [4] "Motorola University . . Frankfurt / Main. ISBN 0566083744. [16] Harry. org/ web/ 20051222081924/ http:/ / www. .3074-5804. Richard A. Richard (2000). Retrieved 22 August 2011. "[. ISBN 0566083744. com/ books?id=nhYCH-69v7cC& pg=PA40). ISBN 0-385-49437-8." [9] "Motorola University Six Sigma Dictionary" (http:/ / web. Archived from the original (http:/ / www. Retrieved 20 September 2011. Geoff (2001). . and Tools. Pauline Jas (15 November 2010). onesixsigma. [22] Gygi. SIX SIGMA: SPC and TQM in Manufacturing and Services (http:/ / books. Mikel J. ISBN 978-0-521-19546-1.. Jiju. google. google. Retrieved 2011-09-09. . Basem. Gill Harvey. com/ content/ 0..3071-5801. p. com/ content/ 0. "Six Sigma Survey: Breaking Through the Six Sigma Hype" (http:/ / www. John Wiley and Sons. org/ certification/ index. com/ content/ 0. Six Sigma: The Breakthrough Management Strategy Revolutionizing the World's Top Corporations. MIKEL PHD HARRY (2006). . ISBN 9780471682738. Paul Keller (16 December 2010). . p. Sydney: Currency. html). New York. LeRoy R. html) on November 6.3088. Retrieved January 28. motorola. [3] Antony. Illinois: Motorola University Press. ISBN 9781569460092. p. 25. html#ss). [23] El-Haik. 2008. McGraw-Hill Professional. com/ node/ 7630). [14] De Feo.[10] 124 References [1] "The Inventors of Six Sigma" (http:/ / web.. . [24] Dirk Dusharme. Quality Control for Dummies (http:/ / books.00." [5] Schroeder. Mikel. . DeCarlo. Milwaukee. ISBN 978-1-4134-9681-9. Six Sigma Fundamentals: A Complete Guide to the System. Schroeder. one may define six sigma as "TQM on steroids.. The Nature of six sigma quality. 2006. [6] Harry. Joseph A.. ISBN 978-0-07-174679-3. p. motorola. Williams. Retrieved 20 September 2011. New York: Productivity Press.M1). qualitydigest. Archived from the original (http:/ / www. Retrieved January 29. google. [13] "Six Sigma: Where is it now?" (http:/ / scm. [12] "About Motorola University" (http:/ / web. .00. Rolling Meadows.. p... Xlibris Corporation. Michael Wallace (15 December 2006). . Tata McGraw-Hill Publishing Company Limited. In fact."" [8] Montgomery. Six Sigma – Prozesse optimieren. p. motorola. 9. p. org/ web/ 20080723015058/ http:/ / www. "Pros and cons of Six Sigma: an academic perspective" (http:/ / web. pp. [17] Paul A. Hoboken. org/ web/ 20060128110005/ http:/ / www. H. com/ content/ 0. SIX SIGMA: SPC and TQM in Manufacturing and Services (http:/ / books. . Douglas C. [2] Tennant. archive. For Dummies. Six Sigma. onesixsigma. [11] "Motorola Inc. Hoboken. 2006. html). motorola. com/ ?id=O6276jidG3IC& printsec=frontcover#PPA6.. archive. 2006. Champion's Practical Six Sigma Summary (http:/ / books. ncsu. Retrieved August 5. archive. google. com/ content/ 0. Null-Fehler-Qualität schaffen. (1988). "The practitioner of the six sigma methodology in any organization should expect to see the use of old and established tools and approaches in the pursuit of continual improvement and customer satisfaction. motorola. html). [15] Kieran Walshe. Nam P. html#ss) on January 28. Keller.3079.. ISBN 0-385-49438-6.M1). google. org/ web/ 20051106025733/ http:/ / www. html).. During the heyday of TQM in the 1980s. So much so that even TQM (total quality management) is revisited as a foundation of some of the approaches.). motorola. 10. Inc. R. . Front inside cover. [10] Tennant. Connecting Knowledge and Performance in Public Services: From Knowing to Doing (http:/ / books. ISBN 9780470233979. p. Cambridge University Press.3079. "During the 1950s and 1960s programs such as Zero Defects and Value Engineering abounded.. 175. [20] "Certification .Quality Performance Breakthrough Methods. Archived from the original (http:/ / www. another popular program was the Quality Is Free initiative. (2004). pp. . com/ nov01/ html/ sixsigmaarticle. Retrieved January 29.3074-5804. New Jersey: John Wiley & Sons. com/ ?id=O6276jidG3IC& printsec=frontcover#PPA25..00. Ltd. 40. 6. Retrieved 2009-09-14. archive. Barnard. Craig.00. Statistical Quality Control: A Modern Introduction (6 ed. Random House. OCLC 244727396. Six Sigma Demystified (http:/ / books.Motorola University" (http:/ / www. html). Retrieved January 29. Geoff (2001).00.3071-5801.00. motorola. com/ books?id=MugP3-3U_F8C& pg=PA65).. Wisconsin: American Society for Quality. 25. 23. Methods. (2009).] Six Sigma started as a defect reduction effort in manufacturing and was then applied to other business processes for the same purpose. 2010.. 2006. 2005. p. html). 2000 [7] Stamatis. Cordy. com/ books?id=9BWkxto2fcEC& pg=PA292). Schroeder. pp. com/ content/ 0.00. com/ content/ 0. google. ISBN 0-07-059881-9.

New York. No. Gerald (2008). ISBN 0930011848. 2007.google.google. (1999) The Impact of Six Sigma Improvement-A Glimpse into the Future of Statistics. New York. and Maximize Profits (http:/ / books. ISBN 0566083744. Retrieved 2009-04-01. Wilson (2003). com/ ?id=ybOuvzvcqTAC& pg=PA229& lpg=PA229& dq="key+ bones+ of+ contention+ amongst+ the+ statistical+ experts+ about+ how+ Six+ Sigma+ measures+ are+ defined").. ISBN 0-8144-1057-X. • Breyfogle. and Zinkgraf. sbtionline. pp. Wall Street Journal Online. 125 Further reading • Adams. Vol.. (2001).google. SIX SIGMA: SPC and TQM in Manufacturing and Services (http://books. [31] Wheeler. "Wall Street Journal SBTI Rebuttal" (http:/ / www. Stephen A. Peter S.com/ ?id=0lY_bhMBzLwC&printsec=frontcover&dq=Adams+Gupta). pdf) (PDF). Roland R. Cavanagh (2001).google. Costello. Motorola. Aldershot.com/?id=izjUAAAACAAJ&dq=Keller+Six+Sigma). 3. cnn. Retrieved 2006-11-26. Retrieved October 15. Roland R. J. p. Joe. W. ISBN 978-1604270068. Going Lean: How the Best Companies Apply Lean Manufacturing Principles to Shatter Uncertainty. Donald J. • Tennant. qualitydigest. Keller (2009). (2002). Paul A. • De Feo. (2004). Cavanagh. ISBN 0471265721. Juran: A Lifetime of Quality (http:/ / www. Tucson. Karen (2007-01-07). Charles E. htm?chan=top+ news_top+ news+ index_best+ of+ bw). New York. . wsj. . MA: Butterworth-Heinemann. ISBN 9780945320623. (2001). Ronald D.Six Sigma [25] Paton. Drive Innovation. htm). ISBN 0750675233. 19–23. . 307. Barnard. p. Sigma Breakthrough Technologies. [28] Ficalora.google. com/ aug02/ articles/ 01_article. UK: Gower Publishing. Lean Six Sigma Service Excellence: A Guide to Green Belt Certification and Bottom Line Improvement (http://books.google. NY: McGraw-Hill. "Tearing up the Jack Welch playbook" (http:/ / money. Geoff (2001). • Hahn. Implementing Six Sigma: Smarter Solutions Using Statistical Methods (http:// books. com/ article/ SB116787666577566679. ISBN 0071358064. Business Week. Fortune. Forrest W. Betsy (2006-07-11). NY: J.M1). ISBN 0071358064. fortune/ index. NY: McGraw-Hill Professional. New York. The Six Sigma Way: How GE. • Pande. pp. [30] Ruffa. New York: McGraw-Hill Professional. Gupta. . Burlington. G. ISBN 0071422277. AZ: Quality Publishing.. Brian (6 June 2007). Retrieved June 6. The Six Sigma Handbook. Peter S. google. ISBN 0130084573. Neuman. Cary W. and Other Top Companies are Honing Their Performance (http:/ / books. 2007. html). AMACOM (a division of American Management Association). [26] Morris. Joe. Retrieved October 15.com/?id=0VHaTb6LJ4QC&printsec=frontcover& dq="six+sigma"). com/ files/ Wall_Street_Journal_SBTI_Rebuttal. JURAN Institute's Six Sigma Breakthrough and Beyond .com/?id=_BRYIS31iwUC&printsec=frontcover& dq=Snee+Hoerl). The American Statistician.. NY: McGraw-Hill Professional. The Six Sigma Way: How GE. Motorola. Hoerl. 53. com/ ?id=_Q7OGDd61hkC). Hill.com/ ?id=O6276jidG3IC&printsec=frontcover#PPP1.. "At 3M.com/?id=1VdYNwAACAAJ&dq). W. Robert P. • Snee. Scott M. . [29] Hindo. Third Edition (http://books. Thomas and Paul A. businessweek. . NJ: FT Press. Roger W. ISBN 0071623388. Ltd. com/ magazine/ content/ 07_24/ b4038406. S.com/?id=leQvoUXM9L0C&printsec=frontcover&dq=Breyfogle+Implementing). .google. SPC Press..google. NY: John Wiley & Sons. 2007. Upper Saddle River. shtml). Neuman. The Six Sigma Practitioner's Guide to Data Analysis..com/ ?id=5CCcw4j2gkgC&printsec=frontcover&dq=Pyzdek+Six+Sigma&q=).. 208–215. 229. • Keller. [32] *Pande. Robert P.. New York. (August 2002). .com/?id=ybOuvzvcqTAC& pg=PP1&dq=Pande+Six+Sigma+Way). Six Sigma Deployment: A Guide for Implementing Six Sigma in Your Organization (http:// books.. Joseph A.Quality Performance Breakthrough Methods (http://books. a struggle between efficiency and creativity" (http:/ / www. III (1999). • Taylor. 22. Praveen. William (2005). R. [27] Richardson. Inc. and Other Top Companies are Honing Their Performance (http://books. A. Hoerl. Ross Publishing. com/ 2006/ 07/ 10/ magazines/ fortune/ rule4. "The 'Six Sigma' Factor for Home Depot" (http:/ / online.google. J. (2008). • Pyzdek. google. Leading Six Sigma: A Step-by-Step Guide Based on Experience with GE and Other Six Sigma Companies (http://books. Six Sigma Deployment (http://books.

is an approach that extends beyond ordinary statistical quality control X-ray zoom series of a network adapter card. confidence. quality control issues are among the top reasons for not renewing a contract. such as personnel integrity. techniques and quality improvement methods. defined and well managed processes. For contract work. quality cannot be inspected or manufactured into the product. whereas quality assurance attempts to improve and stabilize production (and associated processes) to avoid. job management. Total quality control "Total quality control". is a process by which entities review the quality of all factors involved in production. and quality relationships. motivation. team spirit. This approach places an emphasis on three aspects: 1. safety. Quality control emphasizes testing of products to uncover defects and reporting to management who make the decision to allow or deny product release. Navy aircraft.Quality control 126 Quality control Quality control. and documentation of findings about these requirements. environmental. For instance. organizational culture. or QC for short.[3] Maintenance check of electronic equipment on a U. Soft elements. also called total quality management.[1] [2] performance and integrity criteria. or at least minimize. and identification of records 2. experience. Competence. such as knowledge. the design of a pressure vessel should include not only the material and dimensions. The quality of the outputs is at risk if any of these three aspects is deficient in any way. It implies a complete overview and re-evaluation of the specification of a product. issues which led to the defect(s) in the first place. reliability and maintainability requirements. rather than just considering a more limited set of changeable features within an existing product. . particularly work awarded by government agencies. and qualifications 3. If the original specification does not reflect the correct quality requirements. skills.S. but also operating. Elements such as controls.

com/sak_feb/testing_services.htm) (in support of MIL-STD-188). Juran's Quality Handbook.com/sak_feb/testing_services. pmhut.archive. nationalcallcenters.com/front.com/journal/15634/home). htm). References •  This article incorporates public domain material from the General Services Administration document "Federal Standard 1037C" (http://www. • Godfrey. 01 April 2010. ISBN 007034003.gov/fs-1037/fs-1037c. archived from the original (http://www.osdl. retrieved 2 May 2010 . 3 March 2003. gov/ fedclass/ gs1910. http:/ / www.Quality control 127 Quality control in project management In project management.interscience. retrieved 2 May 2010 • Quality Progress Magazine (http://www.osdl.org/web/20040605173457/http://www.org/newsroom/press_releases/ 2003/2003_03_03_beaverton_backgrounder. Joseph (November 2008). (2007) What the call center industry can learn from manufacturing: Part I. Further reading • OSDL Data Base Test Suite Backgrounder (http://web.wiley. 2003.html).org/web/20040810002450/http://www.. Saksoft. In Queue.com/content/ q922ehvpaq49pw6q/). retrieved 29 June 2009 • QACity: Resources for Busy Testers (http://web.html) on 5 June 2004.springerlink. "Quality Control in Project Management" (http:/ / www. Quality Engineering Handbook.org/qualityprogress/index.bldrdoc. Open Source Development Labs. retrieved 2 May 2010 • Quality Assurance in the View of a Commercial Analytical Laboratory (http://www. org/ pubs/ In_Queue/ vol2no22.[4] In practice. projects typically have a dedicated quality control team which focuses on this area. 29 May 2004. ISBN 0824746147. Notes [1] Adsit.qacity.saksoft.archive. pdf [4] Phillips. D. org/ pubs/ In_Queue/ vol2no21. • Pyzdek. opm. D.asq. retrieved 29 June 2009 • Home (http://web.com/ front. 1999. 01 April 2010. org/newsroom/press_releases/2003/2003_03_03_beaverton_backgrounder. (2007) What the call center industry can learn from manufacturing: Part II. html [2] Adsit. T. quality control requires the project manager and the project team to inspect the accomplished work to ensure it's alignment with the project scope.archive.qacity. archived from the original (http://www. B.its. retrieved 29 June 2009 • The Quality Assurance Journal (http://www3. 01 April 2010.. archived from the original (http://www. Press releases. htm) on 10 August 2004.htm) on 9 October 2004.saksoft.htm). LogiGear.html). GS-1910. nationalcallcenters. html [3] Position Classification Standard for Quality Assurance Series. A. In Queue. http:/ / www.org/web/20041009213226/http://www. com/ quality-control-in-project-management). http:/ / www. .

He also observed that the greatest losses result not from buying quality at an excessively high price. "In Search of Excellence" by Thomas Peters and Robert Waterman[2] . systematic quality investors identify quality stocks using a defined schedule of criteria that they have generally developed themselves and revise continually. ageing population for pharmaceuticals industry) as tailwinds. Quality company has professional management. Later the concept was applied to enterprises in equity markets. Graham classified stocks as either quality or Low quality.Quality investing 128 Quality investing Quality investing is an investment strategy based on clearly defined fundamental factors that seeks to identify companies with outstanding quality characteristics. History The idea for quality investing originated in the bond and real estate investing.g. plausible and accordingly organized. Quality investing gained credence in particular after the burst of the Dot-com bubble in 2001 when investors witnessed the spectacular failures of companies such as Enron and Worldcom. the business model of a quality company is usually classified as star (growing business model. where both the quality and price of potential investments are determined by ratings and expert attestations. Investors started to pay more attention to quality of balance sheet. which distinguishes it from peers and allows to conquer leading market position. ability to generate ample cash flows are key attributes of quality company. for example. information transparency. Having a competitive advantage. The company operates in the industry which offers certain growth potential and has global trends (e. and "Good to Great" by Jim Collins[4] . The quality assessment is made based on soft (e. Quality company tends to demonstrate positive financial momentum for . well-established value chain and wide geographical span. high capital and sales profitability. Financial Strength: Solid balance sheet. Market Positioning: quality company possesses an economic moat. was the first to recognize the quality problem among equities back in the 1930s. balance sheet stability). management credibility) and hard criteria (e. Other important works on quality of corporate business can be found primarily among the US management literature. 4. Quality Investing supports best overall rather than best-in-class approach. which is limited in headcount (6-8 members in top management) and has a low turnover rate.g. but from buying Low quality at a price that seems good value. attractive dividend yield). the founding father of value investing.g. Selection criteria that demonstrably influence and/or explain a company's business success or otherwise can be broken down into five categories:[5] 1. Corporate Governance: Evaluation of corporate management execution is mainly based on soft-criteria assessment. These include. Using the two specific dimensions of life cycle and the experience curve concept. Business model: According to the BCG matrix. Benjamin Graham. corporate governance quality. the matrix allocates a company's products – and even companies themselves – to one of two quality classes (Cash Cows and Stars) or two Non-quality classes (question Marks and Dogs). earnings quality .[1] The quality issue in a corporate context attracted particular attention in the management economics literature following the development of the BCG matrix in 1970. ample cash flows. quality company offers good product portfolio. These corporate collapses focused investors’ awareness on quality. large capex) or cash cow (established business model. 3. "Built to Last" by Jim Collins and Jerry Porras[3] . which may vary from stock to stock. Its corporate governance structure is transparent. Identification of Corporate quality As a rule. 2.

Built to Last. (2006). ISBN 978-0-06-662099-2 Weckherlin. New York: Collins. inventories and accounts receivables not growing faster than sales etc. ISBN 0-06-055566-1. P. ISBN 3-03823-278-5. a Value investor will buy a company's stock because he believes that it is undervalued and that the company is a good one. and the fundamental basis for growth. such as the price/earnings and price/book ratios. References [1] [2] [3] [4] [5] Benjamin Graham (1949). meanwhile.Quality investing several years in a row. 5. meanwhile. 129 Comparison to other investment models Quality investing is an investment style that can be viewed independent of value investing and growth Investing. Attractive valuation. Attractive valuation: Valuation ultimately is related to quality. with operating cash flows exceeding net income. . Earnings are of high quality. According to a number of studies the company can sustain its quality for about 11 months in average. which means that quantitative and qualitative monitoring of the company is done systematically. ISBN 0-06-015042-4 Jim Collins and Jerry Porras (1994). Good to Great . regardless of their valuation. which is defined by high discounted cash flow (DCF). which is similar to investments in real estate. / Hepp. Modern Growth Investing centers primarily on Growth stocks. A quality portfolio may therefore also contain stocks with Growth and Value attributes. A quality investor. The investor's decision rests equally on experts' profit forecasts and the company's earnings per share. An analysis of the company's fundamentals is therefore secondary. Growth investors thus focus on stocks exhibiting strong earnings expansion and high profit expectations. Certain valuation coefficients. are key elements here. In Search of Excellence. The Intelligent Investor . low P/E ratio and P/B ratio. becomes an important factor in quality investing process. or as the opposite of Growth. will buy a company's stock because it is an excellent company that is also attractively valued. Value is defined either by valuation level relative to the overall market or to the sector. are secondary considerations. Consequently. favor stocks whose high earnings growth is rooted in a sound fundamental basis and whose price is justified. M. Thomas Peters and Robert Waterman (1982). Quality investors. Only stocks that are believed to generate high future profits and a strong growth in earnings per share are admitted to a Growth investor's portfolio. Nowadays. Verlag Neue Zürcher Zeitung. ISBN 978-0887307393 Jim Collins (2001). The share price at which these anticipated profits are bought. Systematische Investments in Corporate Excellence. Value Investing is based first and foremost on stock valuation.

Enterprise resource planning.[1] . Re-engineering is the basis for many recent developments in management. A key stimulus for re-engineering has been the continuing development and deployment of sophisticated information systems and networks. has become popular because of the desire to re-engineer separate functional tasks into complete cross-functional processes. The cross-functional team. Business Process Reengineering Cycle. knowledge management systems.Quality engineering 130 Quality engineering Quality engineering may refer to: • Quality assurance • Quality Engineering. supply chain management. cut operational costs. for example. or business process change management. and become world-class competitors. many recent management information systems developments aim to integrate a wide number of business functions. business transformation. rather than refining current ways of doing work. an academic journal Business process reengineering Business process re-engineering is the analysis and design of workflows and processes within an organization. Human Resource Management Systems and customer relationship management. Overview Business process re-engineering (BPR) began as a private sector technique to help organizations fundamentally rethink how they do their work in order to dramatically improve customer service. Also. Business process re-engineering is also known as business process redesign. groupware and collaborative systems. According to Davenport (1990) a business process is a set of logically related tasks performed to achieve a defined business outcome. Leading organizations are becoming bolder in using this technology to support innovative business processes.

This drive for realizing dramatic improvements by fundamentally re-thinking how the organization's work should be done distinguishes re-engineering from process improvement efforts that focus on functional or incremental improvement. Reengineering starts with a high-level assessment of the organization's mission. published an article in the Harvard Business Review. and goals. such as "Does our mission need to be redefined? Are our strategic goals aligned with our mission? Who are our customers?" An organization may find that it is operating on questionable assumptions. while minimizing the consumption of resources required for delivering their product or service. particularly in terms of the wants and needs of its customers. and more specifically information technology. Michael Hammer.[1] History In 1990. and customer needs. For that reason.[3] at that time a . and improved. service. such as cost.Business process reengineering 131 Business Process Re-engineering (BPR) is basically the fundamental re-thinking and radical re-design. in which he claimed that the major challenge for managers is to obliterate non-value adding work. quality.[1] Re-engineering recognizes that an organization's business processes are usually fragmented into subprocesses and tasks that are carried out by several specialized functional areas within the organization. namely that technology in general. It can also be completely redesigned or eliminated altogether. no one is responsible for the overall performance of the entire process. but cannot yield dramatic improvements if the process itself is fundamentally inefficient and outmoded. and this work should be removed. Only after the organization rethinks what it should be doing. has been used primarily for automating existing processes rather than using it as an enabler for making non-value adding work obsolete. made to an organization's existing resources. strategic goals. It is an approach for redesigning the way work is done to better support the organization's mission and reduce costs. a former professor of computer science at the Massachusetts Institute of Technology (MIT). analyzes.[1] Reengineering guidance and relationship of Mission and Work Within the framework of this basic assessment of mission Processes to Information Technology. rather than using technology for automating it. Basic questions are asked. a business process can be decomposed into specific activities. not accelerated through automation. Instead. Hammer's claim was simple: Most of the work being done does not add any value for customers. As a structured ordering of work steps across time and place. re-engineering focuses on the organization's business processes—the steps and procedures that govern how resources are used to create products and services that meet the needs of particular customers or markets. re-engineering focuses on re-designing the process as a whole in order to achieve the greatest possible benefits to the organization and their customers. It is more than just business improvising. and speed. companies should reconsider their processes in order to maximize customer value. Short in 1990. measured. Davenport and J. A similar idea was advocated by Thomas H. and re-designs an organization's core business processes with the aim of achieving dramatic improvements in critical performance measures. Re-engineering identifies.[2] This statement implicitly accused managers of having focused on the wrong issues. Often. modeled. Re-engineering maintains that optimizing the performance of subprocesses can result in some benefits. does it go on to decide how best to do it.

the actual process design activity. were dedicated to BPR. Equivalently to the critique brought forward against BPR.Business process reengineering member of the Ernst & Young research center. BPM is now accused of focusing on technology and disregarding the people aspects of change. coupled with abuses and misuses of the concept by others. service." Finally. i. More recently. conducted by MIT. as it is evenly driven by a striving for process efficiency supported by information technology. Despite this critique. to unbiasedly review a company’s business processes.[4] and a rebirth of Taylorism under a different label. It escalates the efforts of JIT and TQM to make process orientation a strategic tool and a core competence of the organization. a fast growing number of publications. quality. This trend was fueled by the fast adoption of BPR by the consulting industry. and their insufficient cost structure. Business process reengineering topics Definition Different definitions can be found. which were striving for renewed competitiveness. their inability to satisfy customer needs. when he states: "Today firms must seek not fractional. and the implementation of the change in all its complex technological.."[6] Additionally. 132 Development after 1995 With the publication of critiques in 1995 and 1996 by some of the early BPR proponents. the reengineering fervor in the U. while broadening the process vision. and speed. but is typically performed in a less radical way as originally proposed. and many consulting firms embarked on this trend and developed BPR methods. and state: • "Business Process Reengineering." .) points out the major difference between BPR and other approaches to organization development (OD). as many as 65% of the Fortune 500 companies claimed to either have initiated reengineering efforts. was rapidly adopted by a huge number of firms. Davenport (ibid. considering business processes as a starting point for business analysis and redesign has become a widely accepted approach and is a standard part of the change methodology portfolio. Even well established management thinkers. although a close relative. books as well as journal articles.e. increase managerial control. During the following years. and organizational dimensions. but multiplicative levels of improvement – 10x rather than 10%. were accepting and advocating BPR as a new tool for (re-)achieving success in a dynamic world. the concept of Business Process Management (BPM) has gained major attention in the corporate world and can be considered as a successor to the BPR wave of the 1990s. which they had lost due to the market entrance of foreign competitors. the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance. the critics were fast to claim that BPR was a way to dehumanize the work place. time-to-market and productivity. reengineering was adopted at an accelerating pace and by 1993. BPR concentrates on core business processes. such as cost. that showed how companies in many US industries had lagged behind their foreign counterparts in terms of competitiveness. especially the continuous improvement or TQM movement.S."[5] • "encompasses the envisioning of new work strategies. and to justify downsizing.. in a paper published in the Sloan Management Review This idea. This section contains the definition provided in notable publications in the field: • ". human. and uses the specific techniques within the JIT and TQM ”toolboxes” as enablers. began to wane. However. Since then. Johansson[7] provide a description of BPR relative to other process-oriented views. seeks radical rather than merely continuous improvement. or to have plans to do so. such as Peter Drucker and Tom Peters. but also by the study Made in America. major reductions of the work force. such as Total Quality Management (TQM) and Just-in-time (JIT).

where a process view is used as common framework for considering these dimensions. allowing things to tell where they are. i.Business process reengineering In order to achieve the major improvements BPR is seeking for.interrelated activities aiming at creating a value added output to a customer . allowing decision-making to be a part of everybody's job Wireless data communication and portable computers. For being able to reap the achievable benefits fully. Also ERP (Enterprise Resource Planning) vendors. the use of information technology (IT) is conceived as a major contributing factor. allowing organizations to be centralized and decentralized at the same time Decision-support tools. instead of requiring to be found High performance computing. Oracle. such as hierarchical levels. rather than supporting existing business functions.organization. such as SAP. JD Edwards. and cross-functionality. allowing field personnel to work office independent Interactive videodisk. The organization dimension reflects the structural elements of the company. BPR derives its existence from different disciplines. making information available at many places Expert systems. information technology is generally considered as playing a role as enabler of new forms of organizing and collaborating. . training.e. The people / human resources dimension deals with aspects such as education. customer focus. 133 The role of information technology Information technology (IT) has historically played an important role in the reengineering concept[9] . and four major areas can be identified as being subjected to change in BPR . motivation and reward systems. the change of structural organizational variables. It is considered by some as a major enabler for new forms of working and collaborating within an organization and across organizational borders. • • • • • • • • Shared databases. PeopleSoft. Early BPR literature [10] identified several so called disruptive technologies that were supposed to challenge traditional wisdom about how work should be performed. technology. value adding. and people . and other ways of managing and performing work is often considered as being insufficient. The approach can be graphically depicted by a modification of "Leavitt’s diamond". to get in immediate contact with potential buyers Automatic identification and tracking. While IT traditionally has been used for supporting the existing business functions. especially workflow management systems were considered as a significant contributor to improved process efficiency. positioned their solutions as vehicles for business process redesign and improvement. allowing on-the-fly planning and revisioning In the mid 1990s. In BPR.[8] Business strategy is the primary driver of BPR initiatives and the other dimensions are governed by strategy's encompassing role. allowing generalists to perform specialist tasks Telecommunication networks. and the distribution of work between them. The concept of business processes . it now plays a role as enabler of new organizational forms. Technology is concerned with the use of computer systems and other forms of communication technology in the business. strategy. These processes are characterized by a number of attributes: Process ownership. and patterns of collaboration within and between organizations. the composition of organizational units.is the basic underlying idea of BPR. it was used for increasing organizational efficiency.

Read Article by Faraz Rafique. was described by Lon Roberts (1994).[12] Critique Reengineering has earned a bad reputation because such projects have often resulted in massive layoffs.Business process reengineering 134 Research and methodology Although the labels and steps differ slightly. as opposed to an IT-centric. when Henry Ford implemented the assembly line in 1908. Some items to use on a process analysis checklist are: Reduce handoffs. This reputation is not altogether unwarranted. the label BPR was used for major workforce reductions. stated that: "When I wrote about "business process redesign" in 1990. the early methodologies that were rooted in IT-centric BPR solutions share many of the same basic principles and elements. Introduction of New Product Development as cross-functional process 3. The following outline is one such model. totally disregard the status quo. since companies have often downsized under the banner of re-engineering. The main reasons seem to be that: • Reengineering assumes that the factor that limits an organization's performance is the ineffectiveness of its processes (which may or may not be true) and offers no means of validating that assumption." i. One such methodology. an early BPR proponent. methodology. Dubois (2002) highlights the value of signaling terms as Reengineering. Structural organization with functional units 2. radically changing the way of thinking in an organization). some BPR practitioners advocated a change in emphasis to a customer-centric. Also within the management consulting industry. Goldratt (and his Theory of Constraints) reengineering does not provide an effective way to focus improvement efforts on the organization's constraint. he was in fact reengineering.g. giving it a name. There was considerable hype surrounding the introduction of Reengineering the Corporation (partially due to the fact that the authors of the book reportedly bought numbers of copies to promote it to the top of bestseller lists).e. Re-structuring and streamlining activities. that also incorporated a Risk and Impact Assessment to account for the impact that BPR can have on jobs and operations. They argue that Reengineering was in fact nothing new (as e. reengineering has not always lived up to its expectations. which for Reengineering peaked between 1993 and 1996 (Ponzi and Koenig 2002). • Reengineering assumes the need to start the process of performance improvement with a "clean slate. The most frequent and harsh critique against BPR concerns the strict focus on efficiency and technology and the disregard of people in the organization that is subjected to a reengineering initiative. Thomas Davenport. Centralize data. Further. And consultants Michael Hammer and James Champy. Roberts also stressed the use of change management tools to proactively address resistance to change—a factor linked to the demise of many reengineering initiatives that looked good on the drawing board.[11] Benefiting from lessons learned from the early adopters. Reduce delays. Free resources faster. a significant number of methodological approaches have been developed. At the same there can be a danger in usage of such fashionable concepts as mere ammunition to implement particular reform. removal of non-value adding tasks . I explicitly said that using it for cost reduction alone was not a sensible goal. examplified for pharmceutical R&D: 1. Very often. based on the PRLC (Process Reengineering Life Cycle) approach developed by Guha. • According to Eliyahu M. and stimulating it. the two Simplified schematic outline of using a business process approach. Abrahamson (1996) showed that fashionable management terms tend to follow a lifecycle. Combine similar activities.

" [14] Other criticism brought forward against the BPR concept include • It never changed management thinking. instant-science. I've learned that's critical. Davenport and J. html#axzz1VySiR5f7) [10] e. gov/ special. [2] (Hammer 1990) [3] (Thomas H.g. ft. pdf) [13] (Davenport. • overtrust in technology solutions. United States General Accounting Office. net/ pub/ bain. Hammer & Champy (1993). Lynne Munns and Andy Cross (http:/ / www. com/ cms/ s/ 0/ aca0b8dc-dfc0-11df-bed9-00144feabdc0. [11] Guha et al. outlining and comparing some of them can be found here. instant-science. net/ pub/ guidelines. featuring Ian Manocha. • underestimation of the resistance to change within the organization. (1993) [12] A set of short papers. instant-science. pdf) • Boston Consulting Group (http:/ / www. Davenport (1993) [7] Johansson et al. • poor project management. pubs/ bprag/ bprag. pdf). instant-science. once out of the bottle. the reengineering genie quickly turned ugly. net/ pub/ bcg. pdf) • Comparison (http:/ / www. But the fact is. pdf) • Guidelines for BPR consulting clients (http:/ / www. Industry Week 1994) [5] Hammer and Champy (1993) [6] Thomas H. instant-science. instant-science. actually the largest causes of failure in an organization • lack of management support for the initiative and thus poor acceptance in the organization. instant-science. [9] Business efficiency: IT can help paint a bigger picture. (http:/ / www. I was reflecting my engineering background and was insufficient appreciative of the human dimension. May 1997. 135 References [1] Business Process Re-engineering Assessment Guide (http:/ / www. 1996) . pdf) • Bain & Co. net/ pub/ mck." [13] Hammer similarly admitted that: "I wasn't smart enough about that. gao.Business process reengineering names most closely associated with reengineering. (1993) [8] (Leavitt 1965). pdf) • Andersen Consulting (now Accenture) (http:/ / www. • implementation of generic so-called best-practice processes that do not fit specific company needs. net/ pub/ comparison. • exaggerated expectations regarding the potential benefits from a BPR initiative and consequently failure to achieve the expected results. followed by some guidelines for companies considering to contract a consultancy for a BPR initiative: • Overview (http:/ / www. • performing BPR as a one-off project with limited strategy alignment and long-term perspective. have insisted all along that layoffs shouldn't be the point. pdf) • McKinsey & Co. Short. Financial Times. 1995) [14] (White. 1990) [4] (Greenbaum 1995. (http:/ / www. net/ pub/ intro. net/ pub/ ac.

John Wiley & Sons • Leavitt. no. (http:/ /www. E. Summer 1993 • Hammer. The New Industrial Engineering: Information Technology and Business Process Redesign. 10(2): pp. ISBN 0-7879-0090-7. S. and Stanton.com/papers/bpr. pp 66. Peter (1972).. Information Systems Management. 1993. Improving Performance: How to Manage the White Space in the Organization Chart. pp 11–27 • Davenport. July/August. IEEE Engineering Management Review.Y. Rand McNally. Financial Times. Fall 1998. et al. New York. A. The Economist.). in: James March (ed. 2 July 1994. and Brache.J. (1995).qmhcjournal. "PDF" (http://www. • Hammer.htm) • Ponzi. Harmonization of the European vaccination policy and the role TQM and reengineering could play. "The Reengineering Revolution". Technological and Humanistic Approaches.com/dp/3639087909) • Industry Week (1994). Management fashion. 1995. (1993). Work and Tools.jsessionid=FBLJvhQdtm2LjZ9gVv9nkLtcG2ptdJVgPn8pxtJWmRWc6Gw1Vkxk!-42534952!-949856144!8091!-1) • Greenbaum. • Hussein. Summer 1990. ISBN 0-06-662112-7. 4/18/94 • Johansson. London. 21.htm) . New York • White. Applied Organizational Change in Industry: Structural. • "Reengineering Reviewed". Lon (1994). 47–57. F. pg.. Wall Street Journal. November 1995. Kettinger. • Taylor (1911). Kranzberg and W. • Davenport. W. "Knowledge management: another management fad?". Prentice Hall.: Nov 26.. Academy of Management Review. Obliterate". Gregory (1993) "Automating Business Process Reengineering". J. Harper Business Books. Reengineering . and Koenig. Quality Press. Davenport (eds). Yogesh (1998). M. Harper Collins. Information Research. Tom (1994). Giants with Feet of Clay. The principles of scientific management. pp. Process Reengineering: The Key To Achieving Breakthrough Success.brint. (1995). New York (http://www. M. in: Sloan Management Review. 254-285. 104–112. p 8 • Malhotra.utoronto.00019514-200210020-00009. Harper & Row.J. 3. Thomas & Short. Alan P. • Roberts.: (1993) Reengineering the Corporation: A Manifesto for Business Revolution.html) • Thompson. Boston • Davenport. H. Reengineering Management. Business Process Reengineering: BreakPoint Strategies for Market Dominance. & Teng. vol. amazon.Business process reengineering 136 Further reading • Abrahamson. . • Champy.ca/~evans/teach363/fastco/reengin. Milwaukee. 1996. M. • Hansen. (1965). Thomas (1995). Process Innovation: Reengineering work through information technology. Joan (1995). L. Cornerstone • Guha. • Hammer.org/eldritch/fwt/ti. PRISM: Process Re-engineering Integrated Spiral Model.com/pt/ re/qmhc/abstract. 26. Handbook of Organizations. S. Henry J. Technology and Culture. JB (1996).1 • Business Process Redesign: An Overview (http://www. H. Fast Company. and Champy. T. Dec 5 1994.com/bpr. Business Process Redesign: An Overview. (1994). N. Harper Business Books.The Fad That Forgot People. Thomas (1993). in: W. (1990). J. James D. W. VDM Verlag (http://www. De-engineering the corporation. ibiblio. Bassam (2008). New York. htm.kmbook. 8(1). MacGraw-Hill. Harvard Business Review. J. (1996). (1969). M. Geary A.C. "Reengineering Work: Don't Automate. • Rummler. New York. New York • Dubois. Industry Week article.H. Harvard Business School Press. Quality Management in Health Care. (1990). (2002). A. IEEE Engineering Management Review.rotman. (2002). Business Process Reengineering: Building a Comprehensive Methodology. Frederick. Windows on the workplace. (http://www.htm) • Drucker. Organizations in Action. Chicago • Loyd.

to service and disposal. manufacturing engineering companies must also develop.institut.com/rpl1hammeringhammer) (A Critical Analysis of Michael Hammer's Process Enterprise approach. from managing descriptions and properties of a product through its development and useful life. describe. This has resulted in the extension of PLM into closed-loop lifecycle management (CL2M). As of 2009.com/Management_Science/Business_Process_Reengineering/) • Hammering Hammer (http://danwardonline.[1] PLM integrates people.bpubs.[2] Product lifecycle management (PLM) should be distinguished from 'Product life cycle management (marketing)' (PLCM).Business process reengineering 137 External links • BPR Articles (http://www. whereas. ICT development (EU-funded PROMISE project 2004–2008) has allowed PLM to extend beyond traditional PLM and integrate sensor data and real time 'lifecycle event data' into PLM. manage and communicate information about their products.htm) Product lifecycle management In industry. PLCM refers to the commercial management of life of a product in the business market with respect to costs and sales measures. data. PLM describes the engineering aspect of a product. processes and business systems and provides a product information backbone for companies and their extended enterprise. In addition. their suppliers (SCM-supply chain management). One form of PLM is called people-centric PLM. as well as allowing this information to be made available to different players in the total lifecycle of an individual product (closing the information loop).) • BPR : Decision engineering in a strained industrial and business environment (http://iegd. people-centric PLM targets the design phase. While traditional PLM tools have been deployed only on release or during the release phase.googlepages. through design and manufacture. their resources within the enterprise (ERP-enterprise resource planning) and their planning (SDLC-systems development life cycle).[3] All companies need to manage communications and information with their customers (CRM-customer relationship management). . A generic lifecycle of products Product lifecycle management is one of the four cornerstones of a corporation's information technology structure.fr/ ART02-B-ADSc-BPR-en. product lifecycle management (PLM) is the process of managing the entire lifecycle of a product from its conception.online.

Systems engineering is focused on meeting all requirements. plan for projects in the new product development projects that are in process (or in a holding status). 3.. Documentation that can assist in proving compliance for RoHS or Title 21 CFR Part 11 Ability to provide contract manufacturers with access to a centralized product record Areas of PLM Within PLM there are five primary areas. Product data management is focused on capturing and maintaining information on products and/or services through their development and useful life. Product and portfolio management is focused on managing resource allocation. 1. primary meeting customer needs. tracking progress vs. 2. the business complexity and rate of change requires organizations execute as rapidly as possible. 5. Portfolio management is a tool that assists management in tracking progress on new products and making trade-off decisions when allocating scarce resources.Product lifecycle management 138 Benefits Documented benefits of product lifecycle management include:[4] [5] • • • • • • • • • • • Reduced time to market Improved product quality Reduced prototyping costs More accurate and timely request for quote generation Ability to quickly identify potential sales opportunities and revenue contributions Savings through the re-use of original data A framework for product optimization Reduced waste Savings through the complete integration of engineering workflows. and coordinating the systems design process by involving all relevant disciplines. 4. . Systems engineering (SE) Product and portfolio management (PPM) Product design (CAx) Manufacturing process management (MPM) Product Data Management (PDM) Note: While application software is not required for PLM processes.

people and departments cannot perform their tasks in isolation and one activity cannot simply finish and the next activity start. or assemble to order. Design is an iterative process. . CAM and PDM.[7] For simplicity the stages described are shown in a traditional sequential engineering workflow. PLM as a discipline emerged from tools such as CAD.Product lifecycle management 139 Introduction to development process The core of PLM (product lifecycle management) is in the creations and central management of all product data and the technology used to access this information and knowledge.[6] It is not just about software technology but is also a business strategy. but can be viewed as the integration of these tools with methods. The exact order of event and tasks will vary according to the product and industry in question but the main processes are:[8] • Conceive • Specification • Concept design • Design • Detailed design • Validation and analysis (simulation) • Tool design • Realize • Plan manufacturing • Manufacture • Build/Assemble • Test (quality check) • Service • • • • Sell and deliver Use Maintain and support Dispose The major key point events are: • • • • • Order Idea Kick-off Design freeze Launch The reality is however more complex. whether the products are for example build to order. people and the processes through all stages of a product’s life. engineer to order. Where exactly a customer order fits into the time line depends on the industry type. often designs need to be modified due to manufacturing constraints or conflicting requirements.

However. many areas overlap and many software products cover more than one area or do not fit easily into one category. There are many examples to draw from. Parallel to the requirements specification the initial concept design work is carried out defining the aesthetics of the product together with its main functional aspects. Some applications can span many fields of PLM with different modules within the same data model.[9] After introducing its compact Jeep Cherokee (XJ). that after AMC was purchased by Chrysler. the investment of resources into research or analysis-of-options may be included in the conception phase – e. market and regulatory bodies’ viewpoints. work many different media are used from pencil and paper. Vice President for Product Engineering and Development. The second part in this effort was the new communication system that allowed conflicts to be resolved faster. according to François Castaing. that later came out as the Jeep Grand Cherokee. Chrysler was able to become the auto industry's lowest-cost producer. Styling. It should be noted however that the simple classifications do not always fit exactly. It is always possible that something doesn't work well in any phase enough to back up into a prior phase – perhaps all the way back to conception or research. while it emphasizes hardware-oriented products. The first part in its quest for faster product development was computer-aided design (CAD) software system that make engineers more productive. the system was expanded throughout the enterprise connecting everyone involved in designing and building products. Some software providers cover the whole PLM range while others a single niche application. It is about business processes.g. While an early adopter of PLM technology. An overview of the fields within PLM is covered here. specify. Although PLM is mainly associated with engineering tasks it also involves marketing activities such as product portfolio management (PPM). company.Product lifecycle management 140 History Inspiration for the burgeoning business process now known as PLM came when American Motors Corporation (AMC) was looking for a way to speed up its product development process to compete better against its larger competitors in 1985. In some concepts. What follows below is one possible life-cycle model. There are several life-cycle models in industry to consider. life-cycle engineering is iterative. people and methods as much as software application solutions. From this specification of the products major technical parameters can be defined. as well as reducing costly engineering changes because all drawings and documents were in a central database. AMC began development of a new model. particularly with regards to new product development (NPD).[9] Phases of product lifecycle and corresponding technologies Many software solutions have developed to organize and integrate the different phases of a product’s lifecycle. but most are rather similar. The product data management was so effective. similar phases would describe any form of product or service. PLM should not be seen as a single software product but a collection of software tools and working methods integrated together to address either single stages of the lifecycle or connect different tasks or manage the whole process. For the industrial design. plan. including non-technical or software-based products: Phase 1: Conceive Imagine. It should also not be forgotten that one of the main goals of PLM is to collect knowledge that can be reused for other projects and to coordinate simultaneous concurrent development of many products. recording development costs that were half of the industry average by the mid-1990s. the vehicle that launched the modern sport utility vehicle (SUV) market. . clay models to 3D CAID computer-aided industrial design software. innovate The first stage in idea is the definition of its requirements based on customer. bringing the technology to a level of maturity sufficent to move to the next phase.

Such software includes technology such as Hybrid Modeling. molding. For example: press-line simulation. This will also involve analysis tools for process simulation for operations such as casting. progressing to prototype testing. automotive. This could include transferring engineering data (geometry and part list data) to a web based sales configurator and other desktop publishing systems. Another task performed at this stage is the sourcing of bought out components. . support. retire. The main tool used for design and development is CAD. CAQ (computer-aided quality) is used for tasks such as Dimensional tolerance (engineering) analysis. Whether it be disposal or destruction of material objects or information. Simulation. define. It is easy to forget that there is an end-of-life to every product. It can also involve redesign and ramp for improvement to existing products as well as planned obsolescence. electronic. phase-out. FEA (finite element analysis). This involves CAPE (computer-aided production engineering) or CAP/CAPP – (production planning) tools for carrying out factory. Reverse Engineering. Providing customers and service engineers with support information for repair and maintenance. Parallel to the engineering tasks. and industrial ergonomics.. Along with the actual creation of geometry there is the analysis of the components and product assemblies. using integrated or separate CAM computer-aided manufacturing software. test. such as architectural. operate. as well as waste management/recycling information.Stress analysis. recycle and disposal The final phase of the lifecycle involves managing of in service information. Once components are manufactured their geometrical form and size can be checked against the original CAD data with the use of computer-aided inspection equipment and software. aerospace. computational fluid dynamics (CFD). produce.Product lifecycle management 141 Phase 2: Design Describe. procure. and domain-specific. make. this needs to be considered since it may not be free from ramifications. Phase 3: Realize Manufacture. analyze and validate This is where the detailed design and development of the product’s form starts. creation of CNC Machining instructions for the product’s parts as well as tools to manufacture those parts. NDT (Nondestructive testing). Phase 4: Service Use. sales product configuration and marketing documentation work will be taking place. electrical. This step covers many engineering disciplines including: mechanical. as well as tool selection management. validation and optimization tasks are carried out using CAE (computer-aided engineering) software either integrated in the CAD package or stand-alone. This involves using tools such as Maintenance. maintain. sustain. sell and deliver Once the design of the product’s components is complete the method of manufacturing is defined. through pilot release to full product launch. build. This can be simple 2D drawing / drafting or 3D parametric feature based solid/surface modeling.. plant and facility layout and production simulation. These are used to perform tasks such as:. . and die press forming. and mechanical event simulation (MES). Assembly construction. Once the manufacturing method has been identified CPM comes into play. software (embedded). possibly with the aid of procurement systems. Repair and Operations Management (MRO) software. kinematics. develop. KBE (knowledge-based engineering). This includes CAD tasks such as tool design.

Reducing lead times is a major factor as getting a product to market quicker than the competition will help with higher revenue and profit margins and increase market share... planning project resources and timescale and risk assessment. At the engineering departments level this is the domain of PDM – (product data management) software. the commands that are presented to users are appropriate to their function and expertise. Associated with these system are project management Systems for project/program planning. cross-training all personnel on the entire PLM tool-set has not proven to be practical. immersive virtual digital prototyping (virtual reality) and photo-realistic imaging. This central role is covered by numerous collaborative product development tools which run throughout the whole lifecycle and across organizations.Product lifecycle management 142 All phases: product lifecycle Communicate. these two definitions tend to blur however but it is typical to see two or more data management systems within an organization. For these tasks graphical. manufacturing engineers became highly skilled CAM users while analysts. CAx. manage and collaborate None of the above phases can be seen in isolation. they have been advanced to meet company goals such as reduced time to market and lower production costs.) were initially used by dedicated practitioners who invested time and effort to gain the required skills. CAM. administrators and managers fully mastered their support technologies. Designers and engineers worked wonders with CAD systems. advances are being made to address ease of use for all participants within the PLM arena. and ERP. at the corporate level EDM (enterprise data management) software. This requires many technology tools in the areas of conferencing..g. each requiring the ability to access and operate on the inputs and output of other participants. However. data sharing and data translation. however. document management. CRM. A major part of PLM is the co-ordination of and management of product definition data. text and metadata such as product bills of materials (BOMs) needs to be managed. This includes managing engineering changes and release status of components. Together with PLM digital engineering techniques. User skills The broad array of solutions that make up the tools used within a PLM solution-set (e. Despite the increased ease of use of PLM tools. CAD. In reality a project does not run sequentially or in isolation of other product development projects. Product development processes and methodologies A number of established methodologies have been adopted by PLM and been further advanced. Through tailorable UIs. achieving the full advantages of PLM requires the participation of many people of various skills from throughout an extended enterprise. These techniques include:• • • • • • • Concurrent engineering workflow Industrial design Bottom–up design Top–down design Front-loading design workflow Design in context Modular design • NPD new product development • DFSS design for Six Sigma • DFMA design for manufacture / assembly . Information is flowing between different people and systems. These systems are also linked to other corporate systems such as SCM. Now. configuration product variations. One such advance is the availability of “role” specific user interfaces. The field being product visualization which includes technologies such as DMU (digital mock-up).

implementing those solutions which this technology is most suited to. A part-centric top–down design may eliminate some of the risks of top–down design. Although this does not necessarily reduce the amount of manpower required for a project. Bottom–up design Bottom–up design (CAD-centric) occurs where the definition of 3D models of a product starts with the construction of individual components. bottom–up design can be much more efficient than top–down design. When these bottom–up solutions have real-world value. The geometry in the sub-systems is then used to define more detail in . This is sometimes known as the review structure showing what the product will look like. instead of working sequentially through stages. especially with respect to hardware implementation. The risk of bottom–up design is that it very efficiently provides solutions to low-value problems. oil and other materials commonly described as 'bulk items'. The focus of bottom–up design is "what can we most efficiently do with this technology?" rather than the focus of top–down which is "What is the most valuable thing to do?" Top–down design Top–down design is focused on high-level functional requirements. brings creative ideas to product development. glue. or starting on detail design solid models before the concept design surfaces models are complete. This starts with a layout model. A top level spec is decomposed into lower and lower level structures and specifications. For example: starting tool design before the detailed designs of the product are finished. Feature-based CAD systems have for many years allowed the simultaneous work on 3D solid model and the 2D drawing by means of two separate files. Concurrent engineering also has the added benefit of providing better and more immediate communication between departments. the copying of a part design into the files used by the tooling designer. Bulk items typically have mass and quantities but are not usually modelled with geometry.Product lifecycle management • • • • Digital simulation engineering Requirement-driven design Specification-managed validation Configuration management 143 Concurrent engineering workflow Concurrent engineering (British English: simultaneous engineering) is a workflow that. It adopts a problem prevention method as compared to the problem solving and re-designing method of traditional sequential engineering. when the model changes the drawing will associatively update. Geometry from this is associatively copied down to the next level. This allows. reducing the chance of costly. The manufacturing engineer can then start work on tools before the final design freeze. The positive value of top–down design is that it preserves a focus on the optimum solution requirements. late design changes. with the drawing looking at the data in the model. carries out a number of tasks in parallel. until the physical implementation layer is reached. it does drastically reduce lead times and thus time to market. The BOM contains all of the physical (solid) components. Bottom–up design tends to focus on the capabilities of available real-world physical technology. The risk of a top–down design is that it will not take advantage of the most efficient applications of current physical technology. for example. Industrial design. which represents different subsystems of the product. it may (but not also) contain other items required for the final product BOM such as paint. Some CAD packages also allow associative copying of geometry between files. often a simple 2D sketch defining basic sizes and some major defining parameters. when a design changes size or shape the tool geometry will then update. Top–down design sometimes results in excessive layers of lower-level abstraction and inefficient performance when the Top–down model has followed an abstraction path which does not efficiently fit available physical-level technology. These are then virtually brought together in sub-assemblies of more than one level until the full product is digitally defined. with relatively less focus on existing implementation technology.

This information is then associatively copied to component files. their geometry being translated from other CPD formats. Design in context Individual components cannot be constructed in isolation. The complete control structure and review structure. as well as downstream data such as drawings. and bottom–up design into one process. such as position and principal dimensions. CAD and CaiD models of components are designed within the context of part or all of the product being developed. the parameters of the product are entered into the template model and all the associated data is updated. as considerable engineering efforts are moved into “offline” development departments. In these files the components are detailed. Some assembly checking such as DMU is also carried out using product visualization software. . Such methods do however require organizational changes. BEATM offers even more powerful advantages. If a single file is used to define the layout and parameters for the review structure it is often known as a skeleton file. tooling development and CAM models. a number of levels of this assembly are created until the basic definition of components can be identified. This is achieved using assembly modelling techniques. A BEATM design process flow may begin with an emergent technology which suggests solutions which may have value. this is where the classic bottom–up assembly starts. 144 Both-ends-against-the-middle design Both-ends-against-the-middle (BEATM) design is a design process that endeavors to combine the best features of top–down design. The BEATM design process proceeds from both ends in search of an optimum merging somewhere between the top–down requirements. These assemblies of files constitute a template from which a family of products can be constructed. yet unconscious use of the BEATM methodology. or it may begin with a top–down view of an important problem which needs a solution.Product lifecycle management levels below. Defense engineering traditionally develops the product structure from the top down. Indeed some of the best success stories from either top–down or bottom–up have been successful because of an intuitive. A lot of knowledge is built into these templates to be reused on new products. It can be seen as an analogy to creating a concept car to test new technology for future products. Obviously predefined associative models will not be able to predict all possibilities and will require additional work. Front loading design and workflow Front loading is taking top–down design to the next stage. and a bottom–up view of the available technology which may offer promise of an efficient solution. but in this case the work is directly used for the next product generation. In this fashion. The main principle is that a lot of the experimental/investigative work has already been completed. The other components within the sub-assembly. Other components’ geometry can be seen and referenced within the CAD tool being used. When employed consciously. Depending on the complexity of the product. BEATM has been shown to genuinely offer the best of both methodologies. This does require additional resources “up front” but can drastically reduce the time between project kick-off and launch. The system engineering process[10] prescribes a functional decomposition of requirements and then physical allocation of product structure to the functions. In either case the key attribute of BEATM design methodology is to immediately focus at both ends of the design process flow: a top–down view of the solution requirements. and bottom–up efficient implementation. The top–down assembly is sometime known as a control structure. This top down approach would normally have lower levels of the product structure developed from CAD data as a bottom–up structure or design. are constructed before the product has been defined or a project kick-off has been authorized. When the decision has been made to go with a new product. may or may not have been constructed in the same system.

. "Additional ABCs About PLM" (http:/ / www. pg 358 [11] "Comprehensive Information and Analysis of the PLM Market" (http:/ / www. IndustryWeek.01.johnstark. Up 14%" (http:/ / www. 2008. . Sidney (2006. Manufacturing Business Technology.01). cfm). com/ archive/ 051503/ app. Dag (2009).. mbtmag. Cad Digest. . html). Lawrence (2002. Martyn (2002. Beth (2003. John (2004. Evans. autofieldguide. Springer.02). . asp?ArticleId=1558). PLM Technology Guide.xsql?pubid=92570). ISBN 3540781730. . John (1 edition (August 24. • SME Product Lifecycle Management Tech Group PLM Matrix (http://www. • Stark.05). CIMdata. PPLM seeks to manage information around the development of the process in a similar fashion that baseline PLM talks about managing information around development of the product.[11] growth estimates are in the 10% area.html). As such. com/ articles/ 120506.15). • Bergsjö..Product lifecycle management 145 Product and process lifecycle management (PPLM) Product and process lifecycle management (PPLM) is an alternate genre of PLM in which the process by which the product is made is just as important as the product itself. [6] Teresko.pdf) • Grieves. Chalmers University of Technology.lib. ISBN 1-85233-810-5. . [5] Hill. com/ the-plm-debate---outsourcing-upsets-the-it-integration-pillars). cimdata.johnstark. org/ coldfusion/ newsnet/ may03/ technology. John (1 edition (August 27. html) (Press release).se/cpl/record/index.0. Michael (1 edition (2006)). industryweek.org/downloads/communities/ techgroups/plm/matrix. CIO Magazine. [10] Incose SYSTEMS ENGINEERING HANDBOOK. Antti (3 edition (May. Day. [12] Market References [1] [2] [3] [4] "About PLM" (http:/ / www.html). Product Lifecycle Management and the Billion Customer Question (Hardcover) (http://www. asp?CategoryID=66). "A winning strategy" (http:/ / www. Jr. [8] Goul. Mike. Product Lifecycle Management: Driving the Next Generation of Lean Thinking (Hardcover). . Further reading • The Cost of PLM (http://plmtechnologyguide. Springer. com/ news_events/ press_release. ISBN 978-91-7385-257-9. Daratech. html). . July 2000. caddigest. The process behind the manufacture of a given compound is a key element of the regulatory filing for a new drug application. this is the life sciences and advanced specialty chemicals markets. "How To Be A Trendsetter: Dassault And IBM PLM Customers Swap Tales From The PLM Front" (http:/ / www. [12] "PLM Market Projected to Reach $12 Billion in 2006. CIMdata.chalmers. A “HOW TO” GUIDE For All Engineers. 2007)). "What is PLM?" (http:/ / plmtechnologyguide. com/My_Homepage_Files/Page2. com/ current_issues/ 2006/ sept/ coverstory1.com/PR_090307.15). "There's a New App in Town" (http:/ / www. Product Lifecycle Management(Hardcover) (http://www. com/ subjects/ PLM/ select/ day_plm.05. 2008)). cambashi. • Stark. "The PLM Debate" (http:/ / www. . Product Lifecycle Management – Architectural and Organisational Perspectives (http:// publications. com/ press/ releases/ 2006/ 060313a. Automotive Design and Production. cimdata. html).12. retrieved on March 28. 2004)). com/ CurrentArticles/ Asp/ articles. Product Lifecycle Management: 21st century Paradigm for Product Realisation (Hardcover) (http://www. com/ plm. htm). coe. . cio. com/ site/ ?page_id=435). Global Product: Strategy.com/site/?page_id=1184) • Saaksvuori.. "What is PLM" (http:/ / www. [9] Sidney Hill.html). Cambashi. .sme. McGraw-Hill. Springer. Version 2.06. daratech. 2006-10-11..04. Typically. ISBN 1-84628-914-9.com/PLM_Paradigm.plm-info. 2006-03-13. [7] Stackpole. Market size Total spending on PLM software and services was estimated in 2006 to be above $15 billion a year. html?press_release_ID=30) (Press release). "The PLM Revolution" (http:/ / www.

146 UNIT 4 .

through to financials. There are also packages that claim to be best of breed for certain processes [such as planning] and sold merely as an add-on to an ERP System. within time and budget. an ERP system that is best fit for the business processes and the user in an enterprise. The options are many and this. to create packages that assist in all aspects of running a business from manufacturing. can provide significant return on investment for the shareholders. that will get complete user acceptance. Accordingly. when there was widespread introduction of computer packages into leading companies to assist in material requirements planning [2] software companies have striven. . Since the mid-1970s. In the last decade. most importantly. and for the most part succeeded. it is not uncommon for companies to choose a system that is not the best fit for the business and this normally leads to a more expensive implementation. a significant number of packages purporting to be ERP systems have entered into the marketplace since 1990 [3] . in reality. creates a problem for the company who has to make a decision. Attempting to select an ERP system is further exacerbated by the fact that some systems are geared for discrete manufacturing environment where a distinct amount of items make up a finished product [4] while others are more suited to process industries such as chemical and food processing where the ingredients are not exact and where there might be re-work and byproducts of a process. supply chain management. it is understandable that "ERP Costs can run as high as two or three percent of revenues" [5] . the goal of system selection is to source a system that can provide functionality for all of the business processes. Given all of the potential solutions. Existing methodologies include:[1] • • • • SpecIT Independent Vendor Selection Management Kuiper's funnel method Dobrin's 3D decision support tool Clarkson Potomac method Overview Irrespective of whether the company is a multi-national. A proper ERP system selection methodology will deliver. There are packages at the upper end of the market and a vast quantity of other packages that vendors claim to be ERP Systems. human resources. companies have also become interested in enhanced functionality such as customer relationship management and electronic commerce capability.it is used in small scale Enterprises for implement their organization towards the MIS. This led to the evolution of ERP Systems. management approval and. multi-million dollar organization or a small company with single digit million turnover.147 ERP Issues ERP system selection methodology An ERP system selection methodology is a formal process for selecting an enterprise resource planning (ERP) system. Thus.

before and after the new system is installed). can assist the user in deciding whether a specific requirement would provide added value to the user and to the business. A typical demonstration shows an ideal order to cash process where a customer orders a quantity of product that is in stock. or processes that may be unique to a particular business. . formulas. underlying infrastructure [network & database]. it is worth noting that the professional help must be provided by objective consultants who have no affiliation with ERP system vendors. The company are also expected to extract the data from the old system. The reality in most businesses is that most customers have varying and more complex commercial arrangements. requires levels of data integrity far higher than most companies have ever achieved – or even considered. Reliance on vendor demos Vendor demonstrations tend to focus on very simplistic processes.[7] While the cost of an ERP system is significant for a company. A typical example of this would be the scenario where a vendor may offer 5 days of services for the purpose of data migration.ERP system selection methodology 148 Poor system selection Companies seldom use a fully objective selection methodology when choosing an ERP System.e. may be understressed. Experienced consultants can provide information on all of the packages that are available in the marketplace. to be successful. and products are not always in stock. The reality is that there is a huge amount of work required to input data onto a new system. complete and properly structured". Without detailed user requirements. not only for current processes. “The differential in purchase price between packages is unlikely to be the dominant factor". "If a consultancy has built up an expertise in the use of a particular package then it is in its interest to recommend that package to its client” [7] Inability to understand offering by ERP vendor "It is estimated that approximately 90% of enterprise system implementations are late or over budget" [8] . and other data need to become highly accurate. other important decision criteria. A plausible explanation for implementations being late and over budget is that the company did not understand the offering by the vendor before the contract was signed.[6] This typical scenario is one of many issues that cause implementations to be delayed and invariably lead to requests for more resources. such as functionality.. Selection bias It is not unusual that the decision on which system to purchase is made by one individual or by one department within the company. Failure to use objective professional services One of the main reasons for failure in system selection is the understandable lack of knowledge within the company. clean the data and add new data that is required by the new system. review of systems for functional best-fit rarely succeeds. routings. and e-commerce capability among others. However. the latest functionality available in the most common packages and. The requirements must go into sufficient detail for complex processes. it is very important to understand user requirements. Some common mistakes include: Incomplete requirements Because implementation of a new ERP system "requires people to do their job differently" (Wallace and Kremzar[6] ). The vendor will import the data into the new system but expects the company to put the data into a file that is easy to import into the system. Over-emphasis on system cost According to Finlay and Servant. "ERP. Inventory records. future proofing. recipes. In these situations. most importantly. an ERP system that may be excellent at one function but weak at other processes may be imposed on the entire enterprise with serious consequences for the business. but also future processes (i. bill of materials (BOM).

and R. some of which are listed hereunder: Structured approach The first step in selection of a new system is to adopt a structured approach to the process. and risk. Report No 9-699-020. Assist in the gathering of requirements. F. MA. 'An ERP Strategy'. the criteria and the scoring system must be agreed in advance prior to viewing any potential systems. page 96. David Sammon (2004). the format of demonstrations and the process for selecting the vendor. M. The enterprise resource planning decade (http:/ / books. [2] Orlicky's material requirements planning by Joseph Orlicky. Finlay and Terence Servant. [4] Thomas E. In no circumstance should people with affiliations to one or more systems be allowed to advise in this regard. George W.ERP system selection methodology 149 A proper system selection methodology To address the common mistakes that lead to a poor system selection it is important to apply key principles to the process. ISBN 9781591402626. Honolulu. Everyone needs to understand the method of gathering requirements. 2005. Objective decision process "Choosing which ERP to use is a complex decision that has significant economic consequences. google. "It requires top management leadership and participation… it involves virtually every department within the company". how potential vendors will be selected.[6] Representatives of all users should: • • • • Be involved in the project initiation phase where the decision making process is agreed. Wallace and Michael H. Firstly. [9] Oyku Alanbay. However. Focused demonstrations Demonstrations by potential vendors must be relevant to the business.. ISBN 0850125847. Berry. Harvard Business School. ISBN 0521791529. Cotteleer. There are two key points to note when the major decision makers are agreeing on selection criteria that will be used in evaluating potential vendors. pages 95–97. [7] Paul N. The set of practices are presented to all the stakeholders within the enterprise before the system selection process begins. Enterprise Resource Planning (ERP). Escalle. thus it requires a multi-criterion approach. References [1] Frédéric Adam. [5] C. each stakeholder is aware that the decision will be made on an objective and collective basis and this will always lead to a high level of co-operation within the process. Thus. July 8–10. 1999. 2005. 2 February 1998. invitation to tender. Have a significant participation in the short-listing and final selection of a vendor. USA. Austin. Therefore it is imperative that vendors are treated equally in requests for demonstrations and it is incumbent on the company [and the objective consultant assisting the company in the selection process] to identify sufficient demonstrations that will allow a proper decision to be made but will also ensure that vendors do not opt out of the selection process due to the extent of preparation required. William L. M. Kremzar. 1987. Plossi 1994 ISBN 0070504598 [3] Daniel Edmund O'Leary. ISAHP 2005. Clay Whyberk. ISBN 0471392014. [6] Thomas F. ERP: Making it Happen. Enterprise resource planning systems: systems. Manufacturing Planning and Control Systems for Supply Chain Management. life cycle. Cambridge University Press. The criteria must be wide-ranging and decided upon by as many objective people as possible within and external to the enterprise. 94. Cambridge. p. and Robert Jacobs. ." [9] . electronic commerce. Financial Packaging Systems. [8] Martin. 2000. Fortune. Full involvement by all personnel The decision on the system must be made by all stakeholders within the enterprise. Attend the Vendor Demonstrations. 'ERP Selection using Expert Choice Software'. Hawaii. it is important to understand that there is considerable amount of preparation required by vendors to perform demonstrations that are specific to a business. com/ ?id=dlAeqOOZ6WUC& pg=PA94). ISBN 007144033X. Vollman. D.

MySQL. PostgreSQL Python PHP. PostgreSQL Java GPL GPL GPL License Other Info Integrated ERP started as a fork of Compiere Developer Country Australia/New Zealand Spain Compiere GPL/Commercial Acquired by Consona Corporation in June 2010 ERP/CRM for SME. MySQL.cio. USA Opentaps AGPLv3 Can run in the Amazon EC2 [1] cloud Produced by XTuple.ERP system selection methodology 150 External links • ERP Definitions and Solutions (http://www. Japan Sénégal India Dolibarr PHP. MySQL CPAL SQL-Ledger Tryton WebERP GPL GPLv3 GPLv2 started as a fork of OpenERP LAMP based system . freelancers or foundations based on unified model US. Germany. a free software license based on the Mozilla Public License (MPL) AGPLv3. India. Belgium. MySQL MPL Openbravo Java Openbravo Public License (OBPL). uses Qt framework Worldwide Postbooks C++. OpenERP Public License formerly Tiny ERP Spain OpenERP Python. India. MySQL Ruby GPL ERP5 GPL Fedena Apache License GPL GPLv3 AGPL ERP for Schools/Universities Branched from WebERP FrontAccounting PHP. France. PostgreSQL Python. PostgreSQL Java Belgium. Argentina. MySQL GNU Enterprise HeliumV Python Java ERP for small and medium businesses Austria. Spain.com/article/40323/ERP_Definition_and_Solutions) List of ERP software packages Free and Open Source ERP software ERP Package Adaxa Suite Adempiere BlueErp Language Base Java Java PHP.0 ERP for small and medium businesses ERP for small and medium businesses USA OpenPro PHP. Germany JFire Kuali Foundation LedgerSMB OFBiz Java Java LGPL Perl Apache. Brazil.. Zope. PostgreSQL Perl. France. Java GPL Apache License 2.. JavaScript.

Enterprise) from Infor Global Solutions Infor10 Distribution Express (aka FACTS) from Infor Global Solutions Infor10 ERP Business (aka SyteLine) from Infor Global Solutions Infor10 ERP Express (aka Visual Enterprise) Infor Global Solutions Infor10 ERP Process Business (aka Adage) from Infor Global Solutions Infor ERP Blending (aka BLENDING) from Infor Global Solutions Intacct Intacct and Intacct Accountant Edition Intuitive ERP from Consona Corporation IRIS Exchequer from IRIS Software • JD Edwards EnterpriseOne from Oracle • JD Edwards World from Oracle • Jeeves from Jeeves Information Systems AB . Premium. Professional and Custom from 24SevenOffice A1 ERP from Alliance Technologies Accpac from The Sage Group Activant acquired by Epicor Acumatica from Acumatica AIVA 9001 from AIVA SISTEMA AddonSoftware from BASIS International AXIS ERP from Consona Corporation Agresso Business World from Unit4 Baan ERP) from Infor Global Solutions AMS Advantage from CGI Group (formerly American Management Systems) BatchMaster ERP from BatchMaster Software CGram Enterprise from CGram Software Cimnet Systems from Consona Corporation Clear Enterprise from Clear Objective CMiC from CMiC COA Solutions Ltd .List of ERP software packages 151 Proprietary ERP software • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 1C:Enterprise from 1C Company 24SevenOffice Start. Encompix ERP from Consona Corporation Epicor Enterprise from Epicor FinancialForce Accounting from FinancialForce.com Fishbowl Inventory from Fishbowl Global Shop Solutions One-System ERP Solutions IFS Applications from Industrial and Financial Systems Infor10 Barcode from Infor Global Solutions Infor10 Discrete iEnterprise (XA) (aka MAPICS) from Infor Global Solutions Infor10 Distribution Business (aka SX.Smart Business Suite Coda Financials from Unit4 Comarch Altum from Comarch Comarch Semiramis from Comarch Compass ERP from Transtek Compiere professional edition from Consona Corporation Comprehensive Patient Administrator EFACS from Exel Computer Systems and RAD Software.com FinancialForce Professional Services Automation (aka PSA) from FinancialForce.

Applications from Ramco Systems Ramco On Demand ERP from Ramco Systems Rapid Response Manufacturing from ProfitKey International Sage Business Vision from The Sage Group SAGE ERP ACCPAC from The Sage Group SAGE ERP X3 from The Sage Group Sage MAS 90. MAS 200 and Sage MAS 500 from The Sage Group SAGE PFW ERP from The Sage Group SAGE PRO ERP from The Sage Group SAP Business All-in-One from SAP SAP Business ByDesign from SAP SAP Business One from SAP SAP Business Suite from SAP SYSPRO from Syspro TaskHub from Synergix Technologies Technology One from Technology One UFIDA NC from UFIDA UFIDA ERP-U8 All-in-one from UFIDA UFIDA U9 from UFIDA Visibility.net from Visibility 152 • WorkBook Software from WorkBook Software A/S • WorkPLAN Enterprise from Sescoi .List of ERP software packages • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • Kingdee from Kingdee kVASy4 from SIV. Inc. Openda QX from Openda OpenMFG from xTuple OpenPro OpenERP Oracle e-Business Suite from Oracle PeopleSoft from Oracle Plex Online from Plex Systems QAD Enterprise Applications (formerly MFG/Pro) from QAD Inc Ramco Enterprise Series 4. Maximo (MRO) from IBM Made2Manage ERP from Consona Corporation MECOMS from Ferranti Computer Systems Microsoft Dynamics AX (formerly Axapta) from Microsoft Microsoft Dynamics GP (formerly Great Plains) from Microsoft Microsoft Dynamics NAV (formerly Navision) from Microsoft Microsoft Dynamics SL (formerly Solomon) from Microsoft Momentum from CGI Group mySAP from SAP MyWorkPLAN from Sescoi NetSuite from NetSuite Inc.x from Ramco Systems Ramco e.AG Lawson M3 from Lawson Software earlier * Movex from Intentia Lawson S3 from Lawson Software Log-net from LOG-NET.

907 million NOK 341 million USD 730 million PLN 225 million USD 180 million USD 50.8 million AUD 51.7 unknown 101 2008 54.0 2006 180 2008 98.33 21.2 2009 225.4 2006 14380.2 million EUR 108.47 2007 193.0 2006 465.25 7.8 2006 384.6 million EUR 409.38 billion USD 2.5 2005 341.AG Technology One Pronto Software Plex Systems Consona Corporation CMiC Syspro 12401.4 billion EUR 14.0 2006 2100.1 million USD 1.List of ERP software packages 153 ERP vendors The largest vendors worldwide in 2005 according to Gartner Dataquest: Market share 2005 according to Gartner Dataquest[2] # Vendor Revenue (million $) Market share (%) 30.0 2009 253.1 million USD 177 million SEK 14.776 million USD 384.1 2008 390.6 million GBP 44.2 2005 409.1 2010 26.22 1 2 3 4 5 SAP Oracle Applications The Sage Group Microsoft Dynamics SSA Global Technologies [3] 1949 1374 1121 916 464 Vendors of popular ERP software (total revenue for the whole company): Vendor [4] Revenue (Native currency) 9.5 million GBP 193.44 14.1 million AUD 22 million USD [5] Revenue (million $) Year SAP Oracle Applications Infor Global Solutions The Sage Group Microsoft Unit 4 Agresso CDC Software Lawson Software Epicor Visma Industrial and Financial Systems (IFS) Comarch QAD Cincom Systems COA Solutions Ltd NetSuite Jeeves SIV.3 billion USD 352.9 2008 22 2006 N/A (Private) USD N/A (Private) 1984 N/A (Private) USD N/A (Private) 1974 N/A (Private) USD N/A (Private) 2006 .5 2010 18.1 million USD 390.0 2006 1832.0 2006 44282.1 billion USD 935.1 2006 305.38 17.

Retrieved 2007-03-29.95815 $/£ USD:NOK = 0. "For CRM.31930 $/€ USD:GBP = 1. com/ articles/ default. [3] Now part of Infor Global Solutions [4] As given in Wikipedia for the complete company [5] Conversion rates (date 12/31/2006): USD:EUR = 1. and SCM. asp?ArticleID=6162). SAP Leads the Way" (http:/ / www. opentaps.List of ERP software packages 154 N/A (Private) USD N/A (Private) 1998 N/A (Private) USD N/A (Private) 2010 N/A (Private) USD N/A (Private) 2010 N/A (Private) USD N/A (Private) 2010 N/A (Private) USD N/A (Private) 2010 N/A (Private) USD N/A (Private) 1979 N/A (Private) USD N/A (Private) 1976 N/A (Private) DKK N/A (Private) 2000 OpenPro Openbravo OpenERP A1 ERP Dolibarr ProfitKey International Global Shop Solutions WorkBook Software A/S References [1] http:/ / www. Coreen (2006-07-05). destinationcrm.16017 $/NOK For Ramco Systems the conversion rate from the annual report is used . org/ cloud [2] Bailor. ERP. .

Chowbok. ThinkERP.. RB972. Versus22. Vipinhari. Uncle Milty. Mydogategodshat. R. Quarl. DARTH SIDIOUS 2. Topiarydan. DragonHawk. El C. Doubrown.openerp. Fly by Night. Ansumang. Shirik. The Thing That Should Not Be. Korg. Davidmorgan24. Van der Hoorn. Nicolokyle. Teles. RTNM. Wknight94. BeverlyCrusher. Jw lamp.:Ajvol:. The Thing That Should Not Be. BWeynants. CalcMan. G. Ronnyrave. Philip Trueman. ChanciOly. Aillema. Drsuebrown. Jafeluv. Jbrowning100. Maurreen. AlMac. Basu ayan3. J04n. Cyslo. Pinaghosh. Landroni. Modify. IvanLanin.C. Soliloquial. Cobaltbluetony. Ba8inz. Kuru. JJ Harrison. SamJohnston. Nazgul02. Taichi. AdeemM. Anilswayin. Michael Hardy. Cattons. Zedla. 125 anonymous edits Online transaction processing  Source: http://en. DXBari. Sam Hocevar. Secfan. Oxymoron83. William Avery. Aaronbrick. MER-C. Random name. Nekan. Renesis. Ohnoitsjamie. Deli nk.php?oldid=447496755  Contributors: 28nebraska. NetManage. Ohnoitsjamie. Prasad123. Materialscientist. Fredrik. Juan A Romero. Iridescent. Alkarex. Blainster. Dmozer1. Ekalbsevi. Capricorn42. Svetovid. Discospinster. Extransit. Ryuujin23. Gagan 3057. Berny.biz. Kubanczyk. Metalray. Antonmind. VeniWikiVici. Brianga. MrOllie. Flowanda. GregorB. Foxdude333. BinaryTed. Rsocol. Dialectric. Piet Delport. AlonB. Ilovshuz. Gnewf. Schzmo. Dylan Lake. Loren. Deviator13. EvanCarroll. HanH. Ghoughfner. Jackfork. Izgecen. Garion96.ooijer. 7. Chris lavigne. Leszek Jańczuk. Zoicon5. Prnay. Atlant. Tomnap.org/w/index. Ass12345. Rmp. Dangelow. Steven Zhang. Cathiehops. Wayward. Maltesedog. MBisanz. Ninc. Regancy42. Jasford. Utcursch. Mohannade. Manscher. Zoicon5. Zhou Yu. The. Shanes. Klausness. Uncle Milty. Jpbowen. Kubigula. Scriberius. Epbr123. Lankiveil. OEEGuru. Kshatriyasandy. Bobdc. AgnosticPreachersKid. JTN. Killer puma. Astronaut. Trbdavies. SMIC. SomeStranger. Euryalus. Paxse. Exit2DOS2000. Narayana vvss. Mpanosh. Kmsiever. Nsarthur. Lethe. Boris. Estherschindler. Camw. Epbr123. Kgorman-ucb. SluggoOne. Rfl. Craig Stuntz. Knguyeniii. Mr Fiscal. Cory Wilkie. Jgritz. Alansohn. Disaas. Shizane. Mistiehicks. Pfeller. Masgatotkaca. Adam McMaster. Instigator2222. Fish and karate. Mydogategodshat. Geni. Andreas. Sbamberger. Mh007.V. DXBari. Lbertybell. Andreas Kaufmann.ﺃﺣﻤﺪ‬anonymous edits Operations support system  Source: http://en. Allstarecho. Flewis. CRGreathouse. Nktrox. Snowded. Pointillist. Mudgen. Coolelle. Gscshoyru. DerHexer. Nivektrah. Adnanbukhari. SirIsaacBrock. W Nowicki. Zhenqinli. Nzd. Choclate97. Sailsbystars. Biblbroks. Sam Korn. Sempf. NawlinWiki. Kuru. fiend. 62 anonymous edits Operations management  Source: http://en. Vidram01.. Falcon8765. Nom du Clavier. Charles T. EdH. Ceo2000. Cdeverille. Simon South. PhilHibbs. Can't sleep. Vikingstad. Lowrykun. Derekcslater. WhiterRabbit. HexaChord. COnFlIcT. Mdd. Seglea. Ikiroid. Anna. JaGa. M. SQGibbon. Ronz. Cometstyles. LittleOldMe. The Thing That Should Not Be. Oneiros. JDiPierro. Andonic. Jim. Rhobite. Humdhan. Evert r. Olivier. 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