Table of Contents

Introduction to ERP .................................................................................................................................... 5

1.1. What is an ERP Software ........................................................................................................... 5
1.2. Advantages of ERP Software .................................................................................................... 5
1.3. Types of ERP Software .............................................................................................................. 5
1.4. Choosing an ERP Software ....................................................................................................... 6
ERP Requirements ..................................................................................................................................... 8
2.1. Requirements Gathering Techniques ...................................................................................... 8
2.2. Requirements Gathering Considerations ................................................................................ 9
2.2.1. People .................................................................................................................................. 9
2.2.2. Processes ............................................................................................................................ 9
2.2.3. Priorities .............................................................................................................................10
2.3. ERP Functional Requirements ................................................................................................10
How Software Supports Accounting .....................................................................................................14
3.1. What are Accounting Information Systems ..........................................................................14
3.2. AIS Features ..............................................................................................................................14
3.2.1. Processing Features ........................................................................................................14
3.2.2. Reporting Features ...........................................................................................................17
3.2.3. Advanced Features ..........................................................................................................18
Cost Accounting & Manufacturing .........................................................................................................20
4.1. What is Cost Accounting .........................................................................................................20
4.2. Types of Costs ..........................................................................................................................20
4.3. Types of Cost Accounting .......................................................................................................21
4.3.1. Standard Costing ..............................................................................................................21
4.3.2. Activity-Based Costing .....................................................................................................22
4.3.3. Lean Accounting ...............................................................................................................22
4.3.4. Marginal Costing ...............................................................................................................23
4.4. Cost Accounting VS. Financial Accounting ..........................................................................23
Human Resources & Information Technology .....................................................................................24
5.1. Human Resources Management ............................................................................................24
5.1.1. Staffing ...............................................................................................................................24
5.1.2. Developing Workplace Policies ......................................................................................25
 5.1.3. Compensation and Benefits Administration..................................................................25
5.1.4. Retention ............................................................................................................................26
5.1.5. Training and Development ..............................................................................................26
5.1.6. Dealing with Employment Laws ......................................................................................26
5.1.7. Worker Protection.............................................................................................................27
5.2. Topics in HRM ...........................................................................................................................27
5.3. A Short History of Human Resources Management Systems ...........................................28
5.4. HRMS Functions .......................................................................................................................28
5.5. Trends in HR .............................................................................................................................30
Customer Relationship Management ....................................................................................................32
6.1. Understanding Customer Relationship Management .........................................................32
6.2. CRM Systems............................................................................................................................32
6.2.1. Goal of CRM ......................................................................................................................33
6.2.2. Benefits of CRM ................................................................................................................34
6.2.3. Types of CRM....................................................................................................................35
6.2.4. B2C VS B2B CRM ............................................................................................................37
6.3. Trends in CRM Technology ....................................................................................................38
6.4. CRM VS. Marketing Automation.............................................................................................40
6.5. Features of CRM .......................................................................................................................41
Supply Chain Management .....................................................................................................................44
7.1. What is Supply Chain Management .......................................................................................44
7.1.1. Key Components of SCM ................................................................................................44
7.1.2. Evolution of SCM ..............................................................................................................45
7.1.3. Importance of SCM ..........................................................................................................45
7.1.4. Types of SC Models .........................................................................................................46
7.2. Industry 4.0 and SCM ..............................................................................................................47
7.3. Effective SCM............................................................................................................................47
7.4. Key Features of SCM ...............................................................................................................48
Point of Sale Systems ..............................................................................................................................54
8.1. What is POS Software .............................................................................................................54
8.2. Benefits of POS.........................................................................................................................54
8.3. Elements of POS Systems ......................................................................................................55
8.4. Features of POS Systems .......................................................................................................55
IT Management Systems .........................................................................................................................57
9.1. Information Technology and Business ..................................................................................57
9.2. IT Department Responsibilities ...............................................................................................57
9.2.1. Administration ...................................................................................................................57
9.2.2. Technical Support ............................................................................................................58
9.2.3. Communication .................................................................................................................58
9.2.4. Programming.....................................................................................................................59
9.2.5. Company Website ............................................................................................................59
9.2.6. Application Development ................................................................................................59
9.3. IT Management Software ........................................................................................................60
9.3.1. Introduction .......................................................................................................................60
9.3.2. Asset Management Software ..........................................................................................61
9.3.3. Business Continuity Software .........................................................................................61
9.3.4. Database Software ...........................................................................................................62
9.3.5. File Analysis Software ......................................................................................................62
9.3.6. Incident Response Software ...........................................................................................62
9.3.7. IT Services Management Software ................................................................................63
9.3.8. Mobile Device Management Software...........................................................................63
9.3.9. Networking Management Software................................................................................63
9.3.10. Project Management Software .......................................................................................64
9.3.11. Remote Desktop Software ..............................................................................................64
9.3.12. Service Desk Software ....................................................................................................64
9.3.13. Task Management Software ...........................................................................................65
9.3.14. Telecom Expense Management Software ....................................................................65
9.3.15. Ticketing Systems ............................................................................................................65
Support Ticket Systems ..........................................................................................................................67
10.1. What are Support Ticket Systems .....................................................................................67
10.2. Support Ticketing System Key Features ...........................................................................67
Business Intelligence Software...............................................................................................................69
11.1. What is Business Intelligence .............................................................................................69
11.2. Benefits of Business Intelligence ........................................................................................69
11.3. Business Intelligence Versus ..............................................................................................71
11.3.1. Business Analytics ............................................................................................................71
 11.3.2. Big Data..............................................................................................................................72
11.3.3. Data Mining........................................................................................................................73
11.4. Key Elements of Business Intelligence ..............................................................................74
11.4.1. Data Warehouses and Data Marts .................................................................................75
11.4.2. ETL......................................................................................................................................75
11.4.3. OLAP ..................................................................................................................................75
11.5. Emerging Business Intelligence Capabilities ....................................................................76
11.6. Features of Business Intelligence Software ......................................................................77
11.6.1. Reporting ...........................................................................................................................77
11.6.2. Querying ............................................................................................................................77
11.6.3. Dashboards .......................................................................................................................78
11.6.4. Data Visualization..............................................................................................................78
11.6.5. OLAP ..................................................................................................................................78
11.6.6. Data Preparation ...............................................................................................................78
11.6.7. Data Warehousing ............................................................................................................78
11.7. Dashboard Design ................................................................................................................79
11.7.1. Introduction .......................................................................................................................79
11.7.2. Key Characteristics ..........................................................................................................79
11.7.3. Dashboard Design Decisions ..........................................................................................80
References ................................................................................................................................................82
Introduction to ERP
1.1. What is an ERP Software
Enterprise resource planning (ERP) is business process management software that allows an
organization to use a system of integrated applications to manage the business, and automate
many back-office functions. ERP software integrates all facets of an operation. For many
businesses, ERP is an ideal solution for data analysis, automation, and full-scale infrastructure
integration.

1.2. Advantages of ERP Software

Beyond being a central database for your entire company and yielding valuable reporting
capabilities, ERP implementations come with a number of notable advantages:

• Increased productivity. ERPs automate many of the repetitive manual tasks that
otherwise occupy employees, and freeing them to pursue other projects often brings
more value to the organization. Additionally, it reduces the amount of time needed for a
variety of tasks by bringing the information needed to complete them to the forefront.

• Improved data security. Having data centralized, rather than spread across multiple
systems with myriad security levels, inherently increases the level of protection. Instead
of residing in numerous spreadsheets and documents, ERP distributes the information
across multiple remote servers to establish redundancies and protect against a single
point of failure.

• Compliance is simpler. Updated records and customizable reporting tools make it easier
to track compliance and adjust when needed. This also makes the audit process easier,
as any information an auditor may need is easy to access.

1.3. Types of ERP Software

There are two main types of ERP software: cloud-based and on-premises:

• Cloud-based ERP solutions have a lower upfront cost because organizations don’t
need to install hardware to use them. Users access cloud-based ERP through the
internet on a browser and these solutions are generally provided on a subscription
basis, an approach known as Software-as-a-Service (SaaS). Cloud-based ERP
implementations also tend to be quicker and easier than on-premises
 implementations. With cloud ERP, the provider also automatically updates the
software with new releases.

• With an on-premises ERP system, companies take on all the responsibility for
maintaining and upgrading the system. Companies that choose on-premises software
usually pay a large licensing fee at the time of purchase along with ongoing
maintenance fees rather than a subscription. This type of ERP implementation may
be attractive to companies with significant IT resources and that are determined to
keep their data on-site.

Some companies develop “homegrown” solutions to manage the business. However, this
approach has become far less popular over time as an increasing number of vendors
release affordable systems that can adapt to the needs of several types and sizes of
businesses.

1.4. Choosing an ERP Software

When choosing an ERP Software to use, there are many considerations to take into account:

• Business Requirements - When evaluating the different alternatives the organization

must decide on metrics to judge how well the system serves and supports the
business’ needs and structure.

• Integration - How well does the system integrate with other software and hardware
the organization may already have, and if the infrastructure is not available, what is
needed and how costly is it.

• Support - How much support does the system require, and will it be vendor-supplied,
contracted to an external party, or hired in-house?

• Training - What training, essential for user adoption and realizing ROI, is available
with this system? Is one solution more user-friendly than another, and how does that
affect how quickly the business sees these benefits?

• Platform and customization - How easy is it to work with the platform the system was
developed on? Will it take specialized skills to customize the system to your unique
needs?

• Ecosystem - Does the vendor have a robust ecosystem of partners that provide both
implementation and consulting expertise as well as complementary solutions, either
by industry or department, such as electronic data interchange (EDI) or field service
automation?
ERP Requirements
2.1. Requirements Gathering Techniques

Many different techniques can be used for requirements gathering and elicitation. Some
standard techniques include interviews, focus groups, surveys, and. It is important to choose the
right technique based on the specific project and stakeholders involved. The requirement
gathering process can be time-consuming and challenging, but it is essential to the success of
any software project. Gathering and eliciting requirements ensures that your final product will be
exactly what the user wants and needs.

Requirements gathering is the process of extracting information from stakeholders about what
they want or need from a project. It can be done through interviews, surveys, focus groups, or
other methods. Many different techniques can be used when gathering requirements for a
project. The most important thing is to choose the correct technique for the specific project and
team you are working with. Here are some of the most common techniques:

• interviews
• focus groups
• Surveys
• Observations
• Document analysis
• Prototypes
• Task analysis
• Workshops

Agile requirements gathering is a process for gathering and documenting requirements for
software projects using an agile methodology. The agile requirements gathering process is
iterative and incremental, and typically involves close collaboration between business
stakeholders and the development team.

The goal of agile requirements gathering is to produce a set of high-level requirements that
accurately reflect the business need while also being sufficiently detailed to allow the
development team to estimate and deliver the software. Many techniques can be used during
agile requirements gathering, but some of the most common include user stories, use cases,
and storyboards.
 • User stories are brief, high-level descriptions of functionality that are typically written
from the perspective of the end user. User stories are an important tool for
understanding the needs of the end users, and they can be used to create a product
backlog – a prioritized list of all the features that need to be implemented.

• Use cases are another common technique for gathering requirements. A use case
describes a sequence of actions a user takes to achieve a specific goal. Use cases can
be used to identify both functional and non-functional requirements.

• Storyboards are another tool that can be used during agile requirements gathering.

2.2. Requirements Gathering Considerations

To help navigate the critical process of selecting the right ERP for your business, keep in mind
these three Ps: people, processes, and priorities.

2.2.1. People

First, you need to include the right people while gathering requirements. It’s important that this
team represents each of the departments that your ERP system will serve. Typically, this means
having staff from sales and marketing, finance, manufacturing, supply chain, IT, and customer
service.

Although it’s important to have an executive liaison for each department, including end users in
this group can be particularly valuable. End users have detailed, practical knowledge that helps
make for a smoother implementation, and involving them when defining requirements can help
meet business needs and gain widespread buy-in to the new system when it’s deployed. It’s
best to select staff who are innovative, have a positive attitude and can balance their individual
needs with the company’s goals. Some companies also include people from outside their
organization on this team, such as ERP consultants, contractors, compliance specialists or
investors.

2.2.2. Processes

One of the primary goals of every ERP implementation is to make business processes simpler
and more efficient. That’s why it’s a best practice to map existing processes and identify use
cases. By doing so, you’ll avoid recreating those same issues in the new system. This also helps
decision-makers understand whether certain solutions can meet all their needs. You may find
that an ERP vendor has built-in industry best practices based on working with other customers
that are more efficient than existing, internal processes.

2.2.3. Priorities

Once the team has developed a thorough understanding of its current state, the company can
build a clear picture of its desired future state based on business goals. The organization can
then use these business goals to set ERP priorities, as long as they are specific, measurable,
attainable, reasonable, and timely — often referred to as SMART. For example, SMART goals for
an ERP system may include decreasing the average time for item picking and packing in
warehouses.

It’s equally important to prioritize which modules and features of the ERP system you need right
away. Most businesses start with financials and accounting because the transactional record is
the core of the ERP system. Other areas like HR or inventory management may be implemented
alongside financials, or businesses may take a phased approach, adding features and
functionality as they are able, depending on business need and available resources. Prioritizing
specific features within those modules helps you stay focused on your business goals and avoid
getting distracted by flashy features that may be nice to have, but are not essential, often
referred to as “scope creep.”

2.3. ERP Functional Requirements

Using a requirements checklist can help you determine which ERP modules and features your
business needs. This checklist includes some of the most common business functions and
processes that ERP systems need to support:

• Accounting and Financials:

This module includes all core accounting and compliance systems, such as financial
reporting, the general ledger, accounts receivable (AR), accounts payable (AP), billing,
revenue recognition and budgeting.

• Human Resources/Human Capital Management:

The HCM module handles all employee data and other human resources information for
managers, HR staff and employees. It manages tasks such as onboarding, benefits,
payroll, productivity, taxes, timecard tracking and time off requests.
• Manufacturing and Distribution:

This application helps organizations run all facets of their manufacturing operations,
providing end-to-end visibility and analysis of all those steps and processes. Common
features include production control, distribution scheduling, quality analysis and
warehouse management.

• Materials Management:

A materials management module can help optimize the supply chain processes involved
in ensuring an organization has enough materials for planned production. Specific
features of materials resource planning (MRP) software may include automated
procurement, inventory management and logistics management.

• Inventory and Order Management:

An inventory management application offers the functionality needed to manage

inventory, ensuring there is sufficient inventory to meet demand, while reducing the risk
of stockouts and keeping stock up to date. It typically supports inventory tracking and
warehousing, pricing management, ecommerce, order entry and customer returns.

• Supply Chain Management (SCM):

An SCM module automates and organizes all the steps from placing an order with a
vendor to getting finished goods to a customer. Features include demand forecasting;
purchase order, work order and transfer order automation; shipping management; and
warranty management.

• Customer Relationship Management:

A CRM module tracks and manages all contacts and communication with customers. It
can capture customer order history, coordinate, and automate marketing campaigns,
manage leads, and generate sales quotes.

• Data Analysis:

Data analysis functionality helps businesses spot and execute on revenue-generating

opportunities by helping them identify solutions, mitigate problems, and report on results.
 The centralized nature of ERP datasets allows organizations to make decisions based on
the same data points in near real-time.

• Business Intelligence and Reporting:

This module adds a layer of cross-functional reporting tools that provide dashboards and
analytics. These provide valuable insights on the performance of the overall business
and specific departments, helping to shape priorities and inform key decisions.

• Marketing:

Marketing automation modules help businesses manage omnichannel campaigns across

all digital channels. These modules typically include email automation and customer
segmentation features and provide detailed reports on campaign performance, boost
customer loyalty, and sales.

• Automation:

The integrated nature of ERP modules — across HR, CRM, financials, inventory, etc. —
helps remove processes from silos and automate workflows. For example, inputting a
new order from sales may automatically prompt actions from inventory, finance, and
shipping teams. Beyond limiting the number of manual processes involved, this also
limits opportunities for manual errors and redundancies.

Below is Oracle’s ERP Requirements Checklist:

How Software Supports Accounting
3.1. What are Accounting Information Systems

An accounting information system (AIS) involves the collection, storage, and processing of
financial and accounting data used by internal users to report information to investors, creditors,
and tax authorities.

The software can create a variety of reports and financial statements, including profit and loss
statements and balance sheets, which are necessary for requesting funding from an investor.
You can also compare transaction activity or statements from prior months and years to your
current ones, which can help you analyze your business’s growth, sales trends, and other key
metrics that you need to make informed business decisions as you prepare for the future. You
can use the accounting software to categorize expenses and schedule and pay bills, whether
you pay online, by check, by credit card or with cash. This will help you keep track of those
transactions and manage your cash flow. You can also use the software to record the payments
you receive in cash or by check, and create and send invoices and past-due notifications.

3.2. AIS Features

it’s important to know which tools and features to look for when choosing a system. Nearly all
online accounting software uses double-entry accounting to ensure accuracy and have
accounts receivable, accounts payable, banking and reporting features.

3.2.1. Processing Features

• Accounts receivable

Accounting software systems should be able to handle billing, keeping track of what
customers owe (accounts receivable, or A/R) and their payments.

• Invoice processing and automation

At the very least, accounting software should be able to handle invoicing. When money
is owed to you, you need to know from whom, how much and when to expect payment.
All accounting systems allow you to print invoices, with most letting you email them. Your
system should remember basic customer data, such as names, addresses, account
 numbers and standard terms. Most of today’s software systems also remember your
standard pricing for a wide variety of products and services.

Automated invoicing ensures revenue is never delayed because you’ve forgotten to send
out an invoice. In addition, with automated statements and late reminders, the
accounting software acts as your collection department, reminding customers to pay
their bills.

• Payment Processing

Many accounting systems allow your customers to pay their invoices online by clicking a
button on the electronic invoice you send them. The advantages for the vendor are
many, including less staff time devoted to processing checks or making bank deposits,
greater security for payments, and faster processing times. However, there are costs
involved.

• Accounts Payable

Nobody likes paying bills, but keeping track of what you owe is essential for any
business. The way your accounting system handles the outflow side of your funds can
vary. Here are some of the most useful accounts payable (A/P) features.

o Purchase orders: Handling your purchases and what you owe is one of the main
tasks for accounting software, but how it functions can vary, from producing
simple purchase orders to following quotes all the way through to purchase and
payment.
o Vendor credit memos: It’s easy for a business to lose track of all those credits
vendors often hand out, either as rewards or returns. However, credit memos are
as valuable as cash, so a system that can track them helps keep costs down.
o Automatic payment: From scheduling bank payments and direct deposits to
printing checks, many A/P modules can completely automate your payment
processes, ensuring you don’t fall behind.
o Prepared tax forms: Having a database of the most common tax forms can save
you a lot of time. This is especially true if your accounting system can input all the
necessary data on the forms for you and file them electronically. Electronic
payment of taxes and filing of forms can keep you from being penalized for late
payments.
• Payroll

Payroll modules are extremely sophisticated in some accounting systems, offering full
payroll services that do everything from calculating hours and processing wages to
paying payroll taxes and making the necessary deductions (amounts not subject to tax
due to certain laws). Here are some of the best payroll features for accounting software:

o Variable wage schedules: Whether your employees are salaried or paid by the
hour, a system that can accurately calculate what you owe them is essential.
Problems arise when you have many intermittent workers or part-time staff.
Some employees may be paid monthly, others weekly or biweekly, or as needed.
Your software should be able to handle different pay schedules along with
different types of compensation (commissions, salaries, profit sharing, bonuses,
etc.) and benefits (health insurance, retirement plans and even perks like paid
parking).
o Direct deposit: This is essential for accounting software to support these days, as
most people expect their paychecks to be deposited directly into their bank
accounts. Decent accounting software should allow you to set up scheduled
direct deposit payments.
o Automatic tax calculations: This ranges from handling only the basic deductions
to providing sophisticated tax tables and printing relevant forms.
o Expense reimbursements and deductions: If your employees incur tax-deductible
expenses, such as travel and entertainment expenses, you’ll want a system that
can accommodate these reimbursements and ensure that payments comply with
tax deadlines.

• Banking

Accounting software should have some form of a link to your bank account, enabling you
to make direct payments and import real-time data from the bank into the accounting
system. Some software can go much further.

• Account Reconciliation

If you have more than one bank account, software that can keep track of them all and
reconcile them is essential. Make sure your program includes a general ledger function
and checkbook reconciliation.

o Bank deposit prep: These days, an accounting package should be able to handle
the setup of basic electronic deposits, but you should check on what type of
electronic payments it can handle.
 o Check handling: If you make a lot of payments by check, then a system that can
print and process your checks will save you a lot of time. Look out for other
features too, such as check voiding and notification of duplicate check payment.

3.2.2. Reporting Features

Besides the array of features available in accounting software, the quality and quantity of reports
the system can generate differ widely. Some systems offer a vast range of reporting options with
virtually unlimited categories. Others just offer the basic reports: money in and money out. Here
are some of the better options.

• Standard reports

The accounting system should be able to generate the customary reports used in
business, including income statements (profit and loss), balance sheets (assets and
liabilities), statements of cash flow, accounts receivable, accounts payable and
payroll summary.

• Customizable reports

A system that enables customizable reporting options allows you to create and
compile any report of your choosing. Look for a system that lets you easily add or
remove columns in standard reports, resize column widths, and remember custom
reports so that it can duplicate them in the future.

• Graph summaries

Long lists of numbers can be difficult to interpret, so software that can translate data
into pictorial forms such as pie and bar charts can help you make sense of where
your money is going. Look for color-coding capabilities and the ability to display
previous years on the same graph for easy comparison.

• Cost predictions

Reports are fine for helping you identify trends, but a system that can interpret data,
make statistical analyses, and produce forecasts can help you make financial
decisions based on facts, not guesswork. Look for systems that include budgeting,
estimating and other cost functions.
 • Subsidiary reporting

If you have multiple businesses, a system that can amalgamate certain financial
aspects can give you a better perspective of your entire portfolio, rather than making
you estimate from individual reports.

3.2.3. Advanced Features

• Shipping

For online retailers and businesses that frequently send goods by couriers or clients, an
accounting platform that can handle shipping processes will save you the investment of a
separate shipment software program. Here are some of the features you should look for:

o Shipping label printing: This can save you a lot of time and streamline the shipping
process by producing labels along with orders or invoices.
o Shipping cost estimation: Some systems can be set up to understand differences in
weight and distance to provide accurate shipping cost estimates. This ensures that you
include such costs in your billings and pricing.
o Shipment tracking: A link to a courier’s tracking system ensures that you can monitor
what has been shipped and estimate delivery times more accurately, providing better
service to your customers.
o Drop shipments: If you need to send a product to a customer directly from a supplier or
manufacturer, it can wreak havoc with your billing unless your accounting platform can
handle drop shipments.

• Inventory management

An accounting system with stock and inventory management controls can really streamline
your business, helping you identify what you have in stock, what you need to reorder and
where you’re spending your purchasing budget.

o Inventory tracking: Following the lifecycle of an item – from purchasing to stocking to

sales, all the way to shipping – is a great asset to help you track inventory levels.
o Set inventory levels: You can ensure you don’t over- or under-order certain products by
using automatic ordering to guarantee stock within a specified range. This saves you the
hassle of not having items in stock when you need them or a glut of products that just
won’t move.
 o Specified stock locations: For large distribution hubs, having stock locations included on
orders avoids the need for an additional warehouse management system, which helps
streamline business functions.
o Item images: The inclusion of item images is also advantageous for distributors, as it
allows all individuals involved in the process to identify products visually and ensure that
the correct items are being shipped.

• Time and Job Management

Most organizations need to monitor attendance and time spent on specific tasks. Time and
attendance modules can be very helpful additions to accounting systems.

o Time tracking: If you pay staff by the hour or require employees to punch in at a
certain time, keeping track of attendance and hours is essential for accurate payroll.
To ensure accurate timekeeping, this is usually done with a timeclock. These
timeclocks can be compatible with electronic swipe cards, barcodes, PINs or even
fingerprints, and some systems allow users to clock in from a web browser or an app.
o Job tracking: Businesses in service-based industries often need to track how long
jobs take to make sure they charge the right amount. This type of time tracking can
help you make adjustments in future prices and identify trends in the costs of
different jobs.
o Job status: If your software shows you which jobs are being worked on and which are
inactive, you can keep track of what needs doing and when.
o Estimates: For some service businesses, providing an estimate is essential to
procuring the job – and maybe to getting paid. A system that can store estimates and
turn them into orders and invoices in just a few clicks promotes efficiency.
Cost Accounting & Manufacturing
4.1. What is Cost Accounting

Cost accounting is a form of managerial accounting that aims to capture a company's total cost
of production by assessing the variable costs of each step of production as well as fixed costs.

Cost accounting is used internally by management in order to make fully informed business
decisions. Unlike financial accounting, which provides information to external financial statement
users, cost accounting is not required to adhere to set standards and can be flexible to meet the
particular needs of management. As such, cost accounting cannot be used on official financial
statements.

Scholars believe that cost accounting was first developed during the industrial revolution when
the emerging economics of industrial supply and demand forced manufacturers to start tracking
their fixed and variable expenses in order to optimize their production processes.

Cost accounting allowed railroad and steel companies to control costs and become more
efficient. By the beginning of the 20th century, cost accounting had become a widely covered
topic in the literature on business management.

4.2. Types of Costs

Before using cost accounting one must understand the different types of costs.

• Fixed costs are costs that don't vary depending on the level of production. These are
usually things like the mortgage or lease payment on a building or a piece of equipment
that is depreciated at a fixed monthly rate. An increase or decrease in production levels
would cause no change in these costs.

• Variable costs are costs tied to a company's level of production. For example, a floral
shop ramping up its floral arrangement inventory for Valentine's Day will incur higher
costs when it purchases an increased number of flowers from the local nursery or
garden center.
 • Operating costs are costs associated with the day-to-day operations of a business.
These costs can be either fixed or variable depending on the unique situation.

• Direct costs are costs specifically related to producing a product. If a coffee roaster
spends five hours roasting coffee, the direct costs of the finished product include the
labor hours of the roaster and the cost of the coffee beans.

• Indirect costs are costs that cannot be directly linked to a product. In the coffee roaster
example, the energy cost to heat the roaster would be indirect because it is inexact and
difficult to trace to individual products.

4.3. Types of Cost Accounting

Types of cost accounting include standard costing, activity-based costing, lean accounting, and
marginal costing.

4.3.1. Standard Costing

Standard costing assigns "standard" costs, rather than actual costs, to its cost of goods sold
(COGS) and inventory. The standard costs are based on the efficient use of labor and materials
to produce the good or service under standard operating conditions, and they are essentially the
budgeted amount. Even though standard costs are assigned to the goods, the company still has
to pay actual costs. Assessing the difference between the standard (efficient) cost and the actual
cost incurred is called variance analysis.

If the variance analysis determines that actual costs are higher than expected, the variance is
unfavorable. If it determines the actual costs are lower than expected, the variance is favorable.
Two factors can contribute to a favorable or unfavorable variance. There is the cost of the input,
such as the cost of labor and materials. This is considered to be a rate variance.

Additionally, there is the efficiency or quantity of the input used. This is considered to be a
volume variance. If, for example, XYZ company expected to produce 400 widgets in a period but
ended up producing 500 widgets, the cost of materials would be higher due to the total quantity
produced.
4.3.2. Activity-Based Costing

Activity-based costing (ABC) identifies overhead costs from each department and assigns them
to specific cost objects, such as goods or services. The ABC system of cost accounting is based
on activities, which refer to any event, unit of work, or task with a specific goal, such as setting
up machines for production, designing products, distributing finished goods, or operating
machines. These activities are also considered to be cost drivers (A cost driver affects the cost
of specific business activities, for example labour, maintenance, or other variable costs), and
they are the measures used as the basis for allocating overhead costs.

Traditionally, overhead costs are assigned based on one generic measure, such as machine
hours. Under ABC, an activity analysis is performed where appropriate measures are identified
as the cost drivers. As a result, ABC tends to be much more accurate and helpful when it comes
to managers reviewing the cost and profitability of their company's specific services or products.

For example, cost accountants using ABC might pass out a survey to production-line employees
who will then account for the amount of time they spend on different tasks. The costs of these
specific activities are only assigned to the goods or services that used the activity. This gives
management a better idea of where exactly the time and money are being spent.

To illustrate this, assume a company produces both trinkets and widgets. The trinkets are very
labor-intensive and require quite a bit of hands-on effort from the production staff. The
production of widgets is automated, and it mostly consists of putting the raw material in a
machine and waiting many hours for the finished good. It would not make sense to use machine
hours to allocate overhead to both items because the trinkets hardly used any machine hours.
Under ABC, the trinkets are assigned more overhead related to labor and the widgets are
assigned more overhead related to machine use.

4.3.3. Lean Accounting

The main goal of lean accounting is to improve financial management practices within an
organization. Lean accounting is an extension of the philosophy of lean manufacturing and
production, which has the stated intention of minimizing waste while optimizing productivity. For
example, if an accounting department is able to cut down on wasted time, employees can focus
that saved time more productively on value-added tasks.

When using lean accounting, traditional costing methods are replaced by value-based pricing
(Value-based pricing is a strategy of setting prices primarily based on a consumer's perceived
value of a product or service) and lean-focused performance measurements. Financial decision-
making is based on the impact on the company's total value stream profitability. Value streams
are the profit centers (A profit center is a branch or division of a company that directly adds or is
expected to add to the entire organization's bottom line) of a company, which is any branch or
division that directly adds to its bottom-line profitability.

4.3.4. Marginal Costing

Marginal costing (sometimes called cost-volume-profit analysis) is the impact on the cost of a
product by adding one additional unit into production. It is useful for short-term economic
decisions. Marginal costing can help management identify the impact of varying levels of costs
and volume on operating profit. This type of analysis can be used by management to gain insight
into potentially profitable new products, sales prices to establish for existing products, and the
impact of marketing campaigns.

The break-even point—which is the production level where total revenue for a product equals
total expense—is calculated as the total fixed costs of a company divided by its contribution
margin. The contribution margin, calculated as the sales revenue minus variable costs, can also
be calculated on a per-unit basis in order to determine the extent to which a specific product
contributes to the overall profit of the company.

4.4. Cost Accounting VS. Financial Accounting

While cost accounting is often used by management within a company to aid in decision-making,
financial accounting is what outside investors or creditors typically see. Financial accounting
presents a company's financial position and performance to external sources through financial
statements, which include information about its revenues, expenses, assets, and liabilities. Cost
accounting can be most beneficial as a tool for management in budgeting and in setting up cost-
control programs, which can improve net margins for the company in the future.

One key difference between cost accounting and financial accounting is that, while in financial
accounting the cost is classified depending on the type of transaction, cost accounting classifies
costs according to the information needs of the management. Cost accounting, because it is
used as an internal tool by management, does not have to meet any specific standard such as
generally accepted accounting principles (GAAP) and, as a result, varies in use from company
to company or department to department.
Human Resources & Information Technology
5.1. Human Resources Management

Human resources (HR) is the division of a business that is charged with finding, screening,
recruiting, and training job applicants. It also administers employee-benefit programs.

As a field, HRM has undergone many changes over the last twenty years, giving it an even more
important role in today’s organizations. In the past, HRM meant processing payroll, sending
birthday gifts to employees, arranging company outings, and making sure forms were filled out
correctly—in other words, more of an administrative role rather than a strategic role crucial to
the success of the organization.

Keep in mind that many functions of HRM are also tasks other department managers perform,
which is what makes this information important, despite the career path taken. Most experts
agree on seven main roles that HRM plays in organizations. These are described in the following
sections.

5.1.1. Staffing

You need people to perform tasks and get work done in the organization. Even with the most
sophisticated machines, humans are still needed. Because of this, one of the major tasks in HRM
is staffing. Staffing involves the entire hiring process from posting a job to negotiating a salary
package. Within the staffing function, there are four main steps:

• Development of a staffing plan. This plan allows HRM to see how many people they
should hire based on revenue expectations.

• Development of policies to encourage multiculturalism at work. Multiculturalism in the

workplace is becoming more and more important, as we have many more people from a
variety of backgrounds in the workforce.

• Recruitment. This involves finding people to fill the open positions.

 • Selection. In this stage, people will be interviewed and selected, and a proper
compensation package will be negotiated. This step is followed by training, retention,
and motivation.

5.1.2. Developing Workplace Policies

Every organization has policies to ensure fairness and continuity within the organization. One of
the jobs of HRM is to develop the verbiage surrounding these policies. In the development of
policies, HRM, management, and executives are involved in the process. For example, the HRM
professional will likely recognize the need for a policy or a change of policy, seek opinions on
the policy, write the policy, and then communicate that policy to employees. It is key to note
here that HR departments do not and cannot work alone. Everything they do needs to involve all
other departments in the organization. Some examples of workplace policies might be the
following:

• Discipline process policy

• Vacation time policy
• Dress code
• Ethics policy
• Internet usage policy

5.1.3. Compensation and Benefits Administration

HRM professionals need to determine that compensation is fair, meets industry standards, and is
high enough to entice people to work for the organization. Compensation includes anything the
employee receives for his or her work. In addition, HRM professionals need to make sure the
pay is comparable to what other people performing similar jobs are being paid. This involves
setting up pay systems that take into consideration the number of years with the organization,
years of experience, education, and similar aspects. Examples of employee compensation
include the following:

• Pay
• Health benefits
• Retirement plans
• Stock purchase plans
• Vacation time
• Sick leave
• Bonuses
• Tuition reimbursement
5.1.4. Retention

Retention involves keeping and motivating employees to stay with the organization.
Compensation is a major factor in employee retention, but there are other factors as well. Ninety
percent of employees leave a company for the following reasons:

• Issues around the job they are performing

• Challenges with their manager
• Poor fit with organizational culture
• Poor workplace environment

5.1.5. Training and Development

Once we have spent the time to hire new employees, we want to make sure they not only are
trained to do the job but also continue to grow and develop new skills in their job. This results in
higher productivity for the organization. Training is also a key component in employee
motivation. Employees who feel they are developing their skills tend to be happier in their jobs,
which results in increased employee retention. Examples of training programs might include the
following:

• Job skills training, such as how to run a particular computer program

• Training on communication
• Team-building activities
• Policy and legal training, such as sexual harassment training and ethics training

5.1.6. Dealing with Employment Laws

Human resource people must be aware of all the laws that affect the workplace. An HRM
professional might work with some of these laws:

• Discrimination laws
• Health-care requirements
• Compensation requirements such as the minimum wage
• Worker safety laws
• Labor laws

The legal environment of HRM is always changing, so HRM must always be aware of changes
taking place and then communicate those changes to the entire management organization.
5.1.7. Worker Protection

Safety is a major consideration in all organizations. Oftentimes new laws are created with the
goal of setting federal or state standards to ensure worker safety. Unions and union contracts
can also impact the requirements for worker safety in a workplace. It is up to the human
resource manager to be aware of worker protection requirements and ensure the workplace is
meeting both federal and union standards. Worker protection issues might include the following:

• Chemical hazards
• Heating and ventilation requirements
• Use of “no fragrance” zones
• Protection of private employee information

5.2. Topics in HRM

HR is a constantly evolving field, and many new topics rise every day.

• Human Resources Accounting

the activity of knowing the cost invested for employees towards their recruitment,
training them, payment of salaries & other benefits paid and in return knowing their
contribution to organization towards its profitability.

• Human Resources Planning

The process of analyzing the current workforce, determining future needs, identifying
gaps between the present and future, developing and implementing solutions, and
evaluating results.

• Human Resources Development

Human Resource Development is the framework for helping employees develop their
skills, knowledge, and abilities, which in turn improves an organization's effectiveness.

• Performance Management

Performance management is a goal-oriented process directed toward ensuring that

organizational processes are in place to maximize the productivity of employees, teams,
and ultimately, the organization.
5.3. A Short History of Human Resources Management Systems

In the 1970s, as companies looked to automate management of their people, payroll became the
first HRMS function to be computerized. But it took mainframe technology to calculate a
worker’s earnings, withhold deductions, print a paper check, and track payroll liabilities. It
wouldn’t be until the early 2000s, with widespread adoption of direct deposit and employee self-
service, that the payroll process became wholly electronic.

PeopleSoft was among the first to pioneer a more complete HRMS system in the late 1980s. In
addition to payroll, it offered employee record management, recruiting, time and attendance,
benefits administration, compensation, compliance reporting and other features to help HR
professionals automate more of the employee lifecycle and make better workforce decisions.

The rise of the internet in the late 1990s brought the benefits of automation to even more HR
processes. For example, paper-based help-wanted ads were replaced by electronic job boards,
giving recruiters and candidates new ways to connect. By the 2010s, cloud technology was
mainstream—now, HR teams at all-size companies could afford a suite of applications without
investing in expensive computer hardware or IT staff to operate and maintain the system.

Originally, key functions were being automated through separate individual systems isolated
from one another. So, the HR department had separate applications for payroll, employee
record management, recruiting, time and attendance, benefits administration, compensation,
compliance reporting and other features. However, as businesses came to rely on information
systems to automate their time-consuming processes, the need for a single system that
combines a suite of software applications. HR applications were eventually integrated into
Human Resources Management Systems (HRMS), also referred to as HRIS or HRAS.

5.4. HRMS Functions

As with broad functionality, HRMS feature sets can vary widely from provider to provider, and
cobbling together multiple products may limit the overall system. HR, IT, finance, and other
stakeholders should carefully assess which of these HRMS features are must-haves for the
company.
• Benefits administration:

Helps HR professionals develop plans, configure eligibility rules, and make payments or
deposits to benefits providers. Also offers self-service open enrollment and integrates
benefit costs with accounting.

• Centralized employee records:

Provides a single repository where all employee records are stored, updated, and
maintained. Allows for better reporting and lowers the costs of compliance and preparing
for audits.

• Learning management:

These features are designed to help employees acquire or develop skills through course
administration, course, and curriculum development, testing and certifications. Also
enables companies to roll out and track required compliance training.

• Reporting and analytics:

Delivers the ability to run operational reports to track HR information, complete

compliance reporting, develop key performance indicators (KPIs) to measure HR
process performance and embed HR metrics into financial dashboards for company-
wide analysis, planning and decision-making. Also look for the ability to create ad-hoc
reports.

• Rewards:

Calculate salaries, hourly wages, variable payments for bonuses, overtime, sales
commissions, shift differentials and merit increases while withholding regulatory and
elective deductions, resulting in accurate net payments to employees at regular intervals.
Benefits, like matching retirement fund contributions or mobile phone reimbursements,
are sometimes included in this feature set.

• Talent acquisition /ATS:

Recruiters are able to build career pages on the company website and intranet, create
job requisitions and descriptions, manage positions, integrate open positions with job
boards, manage resumes, track applicants through the recruiting process, extend job
offers, perform background checks, administer pre-employment screenings, and create
job application forms, before handing new hires off to a generalist or the hiring manager
to begin onboarding.
 • Talent management:

Enables HR professionals to develop and evaluate employees via performance reviews,

goal management, and competency and skills test administration.

• Time and attendance:

Delivers the ability to process time-off requests and manage time-off balances, employee
scheduling and absence management and enables timecards to be integrated with
payroll and projects.

• User interface:

Because an HRMS can be opened to the entire workforce, a user-friendly interface is

critical. Today’s systems feature employee and manager self-service, mobile apps,
localization, personalized dashboards, workflow automation, role-based access controls
and notifications to keep employees engaged and inquiries into the HR or IT
departments to a minimum.

• Workforce planning:

Provides the ability to plan and budget for workforce costs and measure against actual
outlays for both current and future scenarios. May also be used to identify skill gaps,
create succession plans, and prioritize recruitment efforts.

Additional features may be found in specialized HRMSs, and not every company needs a fully
loaded system. If you decide to use multiple providers to form the HRMS, ensure all the
products include an open architecture to allow for bi-directional data exchange, needed
integrations and file uploads across the system. Using a single provider for an HRMS reduces
the need for one-off integrations, which can be expensive, complex, and difficult to secure and
update.

5.5. Trends in HR

2020 and beyond promises even more HRMS innovation. Machine learning and predictive
analytics are built into many current systems, and the advent of true artificial intelligence will
help companies anticipate future skills requirements, detect workforce trends and match best-fit
candidates to open positions faster.
Here are some of the new features becoming more and more in widespread use:

• As of the 2010s, most HRMS have moved to become cloud-based services making them
more accessible for smaller businesses to use as initial investment is practically
eliminated.

• An emerging trend is employee self-service, as in employees being able to access and

even update their own data, when necessary, request days-off from the comfort of their
desktops.

• Better data gathering and analysis allowing for better more accurate HRA, HRP…
through the use of advanced solutions.

• Employee mood detection to help the HR department in improving the work environment
and therefore overall productivity.

• Since the pandemic, the importance of physical and mental health has been brought to
employers' attention. Now many are implementing wellness tracking features, which
keep track of employee activities such as gym memberships, volunteer work, trips…
Customer Relationship Management
6.1. Understanding Customer Relationship Management

Customer relationship management (CRM) refers to the principles, practices, and guidelines
that an organization follows when interacting with its customers. From the organization's point of
view, this entire relationship encompasses direct interactions with customers, such as sales and
service-related processes, forecasting, and the analysis of customer trends and behaviors.
Ultimately, CRM serves to enhance the customer's overall experience.

Elements of CRM range from a company's website and emails to mass mailings and telephone
calls. Social media is one-way companies adapt to trends that benefit their bottom line. The
entire point of CRM is to build positive experiences with customers to keep them coming back
so that a company can create a growing base of returning customers.

Increasingly, the term CRM is being used to refer to the technology systems companies can
engage to manage their external interactions with customers at all points during the customer
lifecycle, from discovery to education, purchase, and post-purchase.

With an estimated global market value of over $40 billion in 2018, CRM technology is widely
cited as the fastest-growing enterprise-software category, which largely encompasses the
broader software-as-a-service (SaaS) market. Five of the largest players in the CRM market
today include cloud computing giant Salesforce, Microsoft, SAP, Oracle, and Adobe Systems.

CRM includes all aspects in which a company interacts with customers, but more commonly
refers to the technology used to manage these relationships.

6.2. CRM Systems

A CRM system gathers, links, and analyzes all collected customer data, including contact
information, interactions with company representatives, purchases, service requests, assets, and
quotes/proposals. The system then lets users access that data and understand what happened
at each touchpoint. Through this understanding, a complete customer profile is developed, and
a solid customer relationship is built.
CRM tools have almost always been seen as sales tools. However, over time, these solutions
have extended their reach and become integral to marketing, ecommerce, and customer
service functions.

The power of customer relationship management is derived by constantly gathering customer

data, analysing that data, and then using those insights to deepen relationships and improve
business results. It allows any customer-facing employee to convey, "We know you, and we
value you."

A set of data-driven CRM tools supports you beyond the sales process, which is crucial to
business performance. With the in-depth knowledge of your customers, you can:

• Offer and sell new, add-on products—at the right time in the right way at the right price
• Help customer service teams resolve issues faster
• Help development teams create better products and services

6.2.1. Goal of CRM

CRM software supports strong, productive, loyal customer relationships through informed and
superior customer experiences. The goal? To improve customer acquisition and retention by
providing experiences that keep your customers coming back. Customer relationship
management is both a strategy and a tool that supports those experiences in five key ways.

• Answer the most basic customer questions

Customer relationship management helps you find new customers, sell to them, and
develop a loyal customer relationship with them. These systems collect many different
types of customer data and organize it so you understand your customers/prospects
better and can answer (or even anticipate) their questions.

• Manage Customer Data

Bad decisions come from a lack of access to and inability to interpret customer data.
Being able to store, track, and validate customer data within an automated system will
allow sales and marketing teams to optimize customer engagement strategies and build
better relationships.
 • Automate the Sales Process

Sales force automation makes selling more efficient, helping you sell more quickly. The
best CRM systems use artificial intelligence (AI) and unified customer data to automate
the sales process by prompting sellers with recommended next-best actions.

• Personalize Marketing Campaigns

Customers and potential customers arrive through various channels, including websites,
social media, email, online/offline events, etc. Unfortunately, many businesses struggle to
connect marketing efforts across all these channels. Marketing teams can improve
conversions, strengthen customer relationships, and align messaging across their digital
customer channels by leveraging CRM systems.

• Align Sales and Marketing

With customer relationship management, marketing and sales work better together to
drive sales and increase revenue. When sales and marketing are coordinated, sales
productivity goes up along with marketing ROI.

6.2.2. Benefits of CRM

A CRM system helps businesses organize and centralize their information on customers,
allowing for easier access and customer support. Businesses use CRM systems to optimize
sales and marketing and improve customer retention. Data analytics is also much easier, where
businesses can track the success of various projects or campaigns, identify trends, infer
associations, and create visually intuitive data dashboards.

Customer relationship management solutions are one of the largest and fastest-growing
enterprise application software categories. The CRM market size was valued at $41.93 billion in
2019 and is projected to reach $96.39 billion by 2027, growing at a CAGR of 11.1% from 2020
to 2027.

More and more companies are using CRM solutions to acquire more sales leads, improve the
sales pipeline, boost productivity, and improve customer satisfaction. However, many have
encountered problems ranging from cost overruns and CRM integration challenges to system
limitations. These are avoidable problems, and you can help ensure success by focusing on a
customer-first strategy.
It's critical for businesses to have integrated, customizable, and comprehensive views into their
customers’ and potential customers’ solution/product interests, customer service needs, and
purchase history. A good CRM system should provide that view. All data is in a single location,
viewable through optimized dashboards.

Additionally, your marketing team can leverage CRM solutions to orchestrate personalized
marketing and lead generation campaigns. These systems can help track all cross-channel
interactions—from engagement to purchase. Mature cloud CRM solutions do more. They are
fully integrated with back-office solutions to successfully support the entire customer journey.

Because it manages prospect and customer engagement points across all channels, your CRM
system can inform all your communications and marketing activities, delivering the 360-degree
customer view needed for a truly connected omnichannel experience.

Many different vendors have many different types of solutions. However, a few capabilities are
must-haves.

• Be easy to use, or people won't use it

• Fit within your budget and provide an acceptable ROI
• Integrate well with your other software systems
• Provide accurate, consistent data for that much-needed, complete customer 360-degree
view

6.2.3. Types of CRM

CRM software solutions, at their core, are used to manage customer relationships and sales
interactions. Still, many businesses leverage these systems simply as a sales force automation
tool. But these solutions, offer many more valuable capabilities that span a wide range of
marketing and sales functions, including marketing, customer service, sales, and partner
channel management.

Today’s CRM software can support the entire customer journey. But what one company may
need from a CRM system can be vastly different from what another company might require. To
help you select the right CRM for your organization, it’s helpful to know that there are three main
types of CRM solutions: collaborative, operational, and analytical.
• Operational CRM

An operational CRM streamlines and simplifies a company’s primary business processes.

In doing so, it spans marketing, sales, and customer service helping companies generate
leads and convert those leads into contacts. It also provides the customer service
infrastructure necessary to delight and retain customers. There are three basic
components of an operational CRM.

o Marketing automation, which streamlines the many marketing processes within

multichannel digital marketing campaigns. This can include email marketing, as well
as live chats, website monitoring, and lead management.

o Sales automation, which, at its most basic, streamlines the many time-consuming,
manual tasks that occur during the sales process.

o Customer service software, which automates, which speeds up multiple customer

service processes, such as call center routing and information management, and
provides various customer self-service options, including chatbots, policy/compliance
management and automation tools, and knowledgebases.

• Analytical CRM

An analytical CRM system (CRMS) focuses on connected data, analysis, and reporting to
help you better understand your customers.

When your CRM can connect customers’ behavioral and intent data, company data (in
the case of B2B sales), and known customer data points, you have access to accurate,
complete, and connected customer 360 profiles that can be used to provide
personalized, consistent customer experiences—at a moment’s notice. So, no matter
how or when your customers choose to interact or where they are in the buying cycle,
you’re ready to meet any and all of their expectations.

• Collaborative CRM

Selling is a collaborative process. This does not mean that your marketing team and
sales team go on sales calls together, or even sit in the same office. But the marketing
and sales data should work together. A collaborative CRM integrates marketing
automation, sales force automation, CPQ, and ERP data so that everything works
 together to close deals, and gives each team a clearer picture of customers’ needs and
expectations. There are two well-known types of collaborative CRM systems (CRMS).

o Contact management systems are used by sales teams to track contact and
account/company details and every customer/prospect interaction. Contact
management systems are the foundation of collaborative sales processes since
they house your first-party customer data.

o Channel management systems can encompass sales, customer service, and

marketing systems. For example, digital marketing and account-based marketing
(ABM) campaigns operate across different channels to reach as many people as
possible. Both can be integral parts of a cross-channel marketing strategy that
works to engage with people no matter where they are or how they want to
interact with you.

In addition, customer service organizations should leverage as many assisted and

self-service channels as possible. It can be virtually impossible to fully predict
which channels customers will use (chatbots, call centers, or knowledgebase
searches). To provide differentiated customer service experiences, you need to
be on all the channels your customers will want to use.

Channel management also focuses on distributors, wholesalers, and other

partner relationships who can expand your marketing, sales, and service reach.
Partner relationship management systems make it possible for all sellers to share
leads, register deals, create quotes, collaborate, and deliver results.

It is also important to note that while not considered a type of CRM, smaller businesses have
over the years implemented CRM solutions optimized for the smaller number of customers to
give those customers the best possible experience. These systems are often much simpler,
intuitive, and less expensive to implement than enterprise CRM.

6.2.4. B2C VS B2B CRM

Not every CRM tool is made equal. B2B sales are typically more complex, with more steps and
multiple buyers involved. A sale can take as long as 12 months to close—or even longer.
Business-to-business deals are usually larger and can be less frequent than typical B2C sales.
There are fewer leads because B2B products are not universally needed. Many people buy
Coca-Cola every week, but not everyone needs the tire assembly for an off-road earth mover.
A B2C sales environment is typically less complicated than B2B. Sales take hours or days—not
months or years—and require fewer touchpoints. Deal sizes are smaller, and there are more
products per purchase. Audience and customer segments are not as narrowly defined as they
are in B2B sales. The contacts and customer segments that are managed within the CRM are
much broader. Given the need to focus on this broad audience to make quick sales at scale, a
B2C CRM needs different capabilities than its B2B counterpart.

6.3. Trends in CRM Technology

Special CRM software aggregates customer information in one place to give businesses easy
access to data, such as contact data, purchase history, and any previous contact with customer
service representatives. This data helps employees interact with clients, anticipate customer
needs, recognize customer updates, and track performance goals when it comes to sales.

CRM software's main purpose is to make interactions more efficient and productive. Automated
procedures within a CRM module include sending sales team marketing materials based on a
customer's selection of a product or service. Programs also assess a customer's needs to
reduce the time it takes to fulfill a request.

CRM Software has recently been viewing many trends in its development, of which there is:

• CRM Cloud Solutions

Cloud-based systems provide real-time data to sales agents at the office and in the field
as long as a computer, smartphone, laptop or tablet connects to the internet. Such
systems boast heightened accessibility to customer information and eliminate the
sometimes-complicated installation process involved with other CRM products or
software.

The convenience of this type of system, however, has a trade-off. If a company goes out
of business or faces an acquisition, access to customer information may become
compromised. A business might have compatibility issues when and if it migrates to a
different vendor for this kind of software. Also, cloud-based CRM programs typically cost
more than in-house programs.
• Mobile CRM

A mobile CRM should boost a seller’s productivity. A mobile CRM solution with a built-in
digital assistant/chatbot allows your sales team members to handle various tasks while
on the go. The best systems enable users to do the following:

o Enter contact information easily

o Use conversational voice commands to find what’s needed, complete tasks, and
move deals to close faster
o Use conversational voice commands to find what’s needed, complete tasks, and
move deals to close faster
o Speak in a conversational, natural way
o Access customer information and sales records from anywhere, even offline
o Find needed sales and customer data anytime, anywhere, consistently across
devices

• AI and CRM

All of the computer software in the world to help with CRM means nothing without proper
management and decision-making from humans. Plus, the best programs organize data
in a way that humans can interpret readily and use to their advantage. For successful
CRM, companies must learn to discern useful information and superfluous data and must
weed out any duplicate and incomplete records that may give employees inaccurate
information about customers.

Despite this human need, industry analysts are increasingly discussing the impact that
artificial intelligence applications may have on CRM management and the CRM market in
the near future. AI is expected to strengthen CRM activities by speeding up sales cycles,
optimizing pricing and distribution logistics, lowering costs of support calls, increasing
resolution rates, and preventing loss through fraud detection.

The best CRM systems have AI and machine learning capabilities. AI is the future of
CRM, helping you see what's happened in the past and guiding you toward the next-best
actions and product configurations—specific to each customer opportunity. AI also
delivers timely customer intelligence so individual sellers can optimize the brand
experience across marketing, sales, and customer service. Finally, a good solution
should also offer usage analytics that provide a 360-degree view of customer
interactions.
 However, success is not dependent upon AI alone. Clean, complete, and accurate data
is needed to fuel AI, and tangible AI applications for CRM are in the early stages of
adoption, although Salesforce and Microsoft have already started to integrate AI
components into their existing CRM systems.

6.4. CRM VS. Marketing Automation

Marketing automation software streamlines the marketing processes used to support digital
marketing campaigns. This can include campaign management, audience segmentation,
behavioral analysis, website monitoring, and lead scoring.

Marketing automation saves time. It automates repetitive tasks, reduces human error, and helps
you achieve better results. Instead of doing things manually, you can focus on more strategic
tasks, such as campaign planning and design, goal development, research, brand consistency,
KPI measurement, and more.

Email marketing automation is what many people think of when they hear the term "marketing
automation." However, it does more than automate email campaigns. For example, marketing
automation software can streamline the following tasks:

• Lead generation, nurturing, and scoring

• Audience segmentation and targeting
• Upsell and cross-sell activities
• Customer loyalty and retention programs
• Analytics and reporting to optimize marketing and content strategies (that is, tweaking
the subject headings or send times)
• A/B testing to see which headlines, offers, copy, or images work best

Marketing automation software also works to enhance your customer data and build better
customer profiles. You can use this data to improve the customer experience (CX) by creating
tailored, personalized experiences across channels.

Fundamentally speaking, marketing automation primarily manages digital campaigns, email

marketing, lead tracking and scoring, and landing pages.
On the other hand, CRM manages the sales pipeline process: individual emails, lead status
tracking, task management, opportunity tracking and pipeline reporting. Basically, while CRM
generally drives and increases sales, marketing automation helps generate and nurture leads.

6.5. Features of CRM

The top CRM tools include these key features:

• Contact management - An element of CRM that sometimes goes by customer

management software, is a vital CRM capability. It allows users to segment your contacts
into groups to organize and better cater to them. With this CRM capability, you’ll be able
to gather crucial customer data and bolster your marketing strategies when introducing
new products. It also improves the personalization of all contacts with customers, making
them feel important and catered to.

• Sales Team and Customer Opportunity Management - Quantifying the opportunities that
your sales team has with customers is a relatively basic feature of CRM. Referred to as
lead scoring, it allows users to identify the customers that are most likely to convert. This
helps streamline sales/marketing teams, improve efficiency, and optimize your sales
process.

• Lead Management for Determining High-Quality Leads - This technology allows a

business to determine the best customers to follow up with based upon demographic
and psychographic factors. Like lead scoring, it improves the efficiency and productivity
of your sales team by helping them focus on the right leads at the right time.

• Reports and Dashboards - Once relegated to business intelligence tools, BI, reporting
and dashboards have become some of the top CRM features. Users can view statistics in
a highly visual, engaging perspective using customized reports and dashboards. They
offer real-time data updates and a platform that can be accessed from various portals,
improving ease of access for a variety of personnel.

• Sales Force Automation - The ability to automate certain aspects of your sales process.
This includes outgoing calls and follow-up campaigns, as well as the organization of data
for more effective future campaigns. Automating these repetitive tasks allows your
employees to devote their time and focus to more complex tasks.
• Sales Performance Management - sales performance management offers a range of
benefits to sales teams. Managers can easily see what aspects of the sales team are
performing well and which need improvement. Data can be organized by sales rep or by
other quantifiers. You can manage the performance of sales partners from the platform
to ensure your team is performing at its best. By identifying problem areas with concrete
data, they can be more efficiently addressed.

• Marketing Automation Integration - Marketing automation allows you to more efficiently

and strategically target audiences that are likely to be interested in what you’re selling. A
good CRM platform will allow you to control the terms of automating parts of your
marketing program selectively.

• Call Center and Support Automation and Integration - One of the key features of CRM is
the ability to control your call center from your CRM UI and integrate any third-party
program into a single platform. The fewer different systems you use, the less likely you’ll
be to get confused and lose information via translation or transfer. Customer support
features like FAQ pages, chatbots and email correspondence are becoming increasingly
automated as AI capabilities improve. Users can control the output of your customer
support features from your UI.

• Web Analytics Integration - Integrating web analytics doesn’t just allow you to collect
data on who is visiting your website. It analyzes raw data, identifies problem areas,
suggests ways to improve and provides insights into the way your user base interacts
with your website. CRM systems provide intuitive ways to collect and access these
statistics from your UI.

• Product Level Quotes - A CRM functions as an inventory database for your products.
Keep up with quotes for the products that you sell individually. Find out which products
are doing well with customers and where sales are lost. Access this information from
handheld devices, desktops and more.

• Testing Environment - This functionality of CRM refers to users’ ability to assess new
capabilities through tests like multivariate and A/B before rolling them out. Your
employees can get used to handling the changes, customers can explore and give
feedback and you collect data on every interaction. This helps prevent customer
frustration, improve conversion rates and help you make educated decisions and
actions.
• Campaign Management - Campaign management features allow you to manage your
entire sales campaign from a single UI. This includes campaign ROI, scheduling,
analytics and more. A CRM combines analytics tools with data collection software, then
gives you and your employees numerous access points.

• Territory Management - You can route leads and accounts according to the customer’s
location. CRMs let you segment accounts based on “territories” — geographical
location, product type or even industry. Create hierarchies based on countries, states,
cities and zip codes. Organizing accounts in territories lets you easily view which sales
reps are assigned to which region. It makes tracking easier and enables you to compare
performance based on different locations.

• Pipeline Management - CRMs provide complete visibility into your sales pipeline,
allowing you to instantly see what stage of the cycle a customer is currently at. You can
leverage this information to plan your next move, identify weak spots, forecast revenue
and analyze sales reps’ performance.
Supply Chain Management
7.1. What is Supply Chain Management

Supply chain management is the handling of the entire production flow of a good or service —
starting from the raw components all the way to delivering the final product to the consumer. A
company creates a network of suppliers (“links” in the chain) that move the product along from
the suppliers of raw materials to those organizations that deal directly with users.

7.1.1. Key Components of SCM

there are five components of traditional supply chain management systems:

• Planning

Plan and manage all resources required to meet customer demand for a company’s product
or service. When the supply chain is established, determine metrics to measure whether the
supply chain is efficient, effective, delivers value to customers and meets company goals.

• Sourcing

Choose suppliers to provide the goods and services needed to create the product. Then,
establish processes to monitor and manage supplier relationships. Key processes include
ordering, receiving, managing inventory, and authorizing supplier payments.

• Manufacturing

Organize the activities required to accept raw materials, manufacture the product, test for
quality, package for shipping and schedule for delivery.

• Delivery and Logistics

Coordinate customer orders, schedule deliveries, dispatch loads, invoice customers and
receive payments.

• Returning

Create a network or process to take back defective, excess, or unwanted products.

7.1.2. Evolution of SCM

While yesterday’s supply chains were focused on the availability, movement and cost of physical
assets, today’s supply chains are about the management of data, services and products bundled
into solutions. Modern supply chain management systems are about much more than just where
and when. Supply chain management affects product and service quality, delivery, costs,
customer experience and ultimately, profitability.

As recently as 2017, a typical supply chain accessed 50 times more data than just five years
earlier. However, less than a quarter of this data is being analyzed. That means the value of
critical, time-sensitive data — such as information about weather, sudden labor shortages,
political unrest and microbursts in demand — can be lost.

Modern supply chains take advantage of massive amounts of data generated by the chain
process and are curated by analytical experts and data scientists. Future supply chain leaders
and the Enterprise Resource Planning (ERP) systems they manage will likely focus on optimizing
the usefulness of this data — analyzing it in real time with minimal latency.

7.1.3. Importance of SCM

Effective supply chain management systems minimize cost, waste and time in the production
cycle. The industry standard has become a just-in-time supply chain where retail sales
automatically signal replenishment orders to manufacturers. Retail shelves can then be
restocked almost as quickly as product is sold. One way to further improve on this process is to
analyze the data from supply chain partners to see where further improvements can be made.

By analyzing partner data, the CIO.com post identifies three scenarios where effective supply
chain management increases value to the supply chain cycle:

• Identifying potential problems. When a customer orders more product than the manufacturer
can deliver, the buyer can complain of poor service. Through data analysis, manufacturers
may be able to anticipate the shortage before the buyer is disappointed.

• Optimizing price dynamically. Seasonal products have a limited shelf life. At the end of the
season, these products are typically scrapped or sold at deep discounts. Airlines, hotels and
others with perishable “products” typically adjust prices dynamically to meet demand. By
using analytic software, similar forecasting techniques can improve margins, even for hard
goods.
• Improving the allocation of “available to promise” inventory. Analytical software tools help to
dynamically allocate resources and schedule work based on the sales forecast, actual orders
and promised delivery of raw materials. Manufacturers can confirm a product delivery date
when the order is placed — significantly reducing incorrectly-filled orders.

7.1.4. Types of SC Models

Supply chain management does not look the same for all companies. Each business has its own
goals, constraints, and strengths that shape what its SCM process looks like. In general, there
are often six different primary models a company can adopt to guide its supply chain
management processes.

• Continuous Flow Model: One of the more traditional supply chain methods, this model is
often best for mature industries. The continuous flow model relies on a manufacturer
producing the same good over and over and expecting customer demand will little
variation.

• Agile Model: This model is best for companies with unpredictable demand or customer-
order products. This model prioritizes flexibility, as a company may have a specific need
at any given moment and must be prepared to pivot accordingly.

• Fast Model: This model emphasizes the quick turnover of a product with a short life
cycle. Using a fast chain model, a company strives to capitalize on a trend, quickly
produce goods, and ensure the product is fully sold before the trend ends.

• Flexible Model: The flexible model works best for companies impacted by seasonality.
Some companies may have much higher demand requirements during peak season and
low volume requirements in others. A flexible model of supply chain management makes
sure production can easily be ramped up or wound down.

• Efficient Model: For companies competing in industries with very tight profit margins, a
company may strive to get an advantage by making their supply chain management
process the most efficient. This includes utilizing equipment and machinery in the most
ideal ways in addition to managing inventory and processing orders most efficiently.
 • Custom Model: If any model above doesn't suit a company's needs, it can always turn
towards a custom model. This is often the case for highly specialized industries with high
technical requirements such as an automobile manufacturer.

7.2. Industry 4.0 and SCM

Today’s application of radical new technologies to manufacturing has been dubbed Industry 4.0,
or the “fourth industrial revolution.” In this latest iteration of industrialization, technologies such
as AI, machine learning, the Internet of Things, automation, and sensors are transforming the
way companies manufacture, maintain, and distribute new products and services. It can be said
that Industry 4.0 is built on the supply chain.

In Industry 4.0, the way enterprises apply technology to the supply chain is fundamentally
different from how they applied it in the past. For example, within the maintenance function,
enterprises would typically wait until a machine malfunctioned to fix it. Smart technology has
changed that. We can now predict failure before it happens, and then take steps to prevent it so
that the supply chain can continue uninterrupted. Today’s SCM is about using technology to
make the supply chain―and the enterprise―smarter.

Industry 4.0 SCM also provides a significant advantage over traditional SCM because it enables
aligned planning and execution while at the same time delivering substantial cost savings. For
instance, companies that operate under a “plan-to-produce” model—in which product
production is linked as closely as possible to customer demand—must create an accurate
forecast. That involves juggling numerous inputs to ensure that what is produced will meet
market demand without exceeding it, avoiding costly overstocks. Intelligent SCM solutions can
help you meet customer demand and financial objectives at the same time.

Intelligent SCM has other advantages, too. For instance, it can free up supply chain employees
to contribute to the business in ways that add more value. Better SCM systems that automate
mundane tasks can equip supply chain professionals with the tools they need to successfully
deliver the products and services the supply chain is designed around.

7.3. Effective SCM

The supply chain is the most obvious “face” of the business for customers and consumers. The
better and more effective a company’s supply chain management is, the better it protects its
business reputation and long-term sustainability.
IDC’s Simon Ellis in The Path to a Thinking Supply Chain¹ defines what is supply chain
management by identifying the five “Cs” of the effective supply chain management of the future:

• Connected: Being able to access unstructured data from social media, structured data
from the Internet of Things (IoT) and more traditional data sets available through
traditional ERP and B2B integration tools.

• Collaborative: Improving collaboration with suppliers increasingly means the use of

cloud-based commerce networks to enable multi-enterprise collaboration and
engagement.

• Cyber-aware: The supply chain must harden its systems and protect them from cyber-
intrusions and hacks, which should be an enterprise-wide concern.

• Cognitively enabled: The AI platform becomes the modern supply chain's control tower
by collating, coordinating and conducting decisions and actions across the chain. Most
of the supply chain is automated and self-learning.

• Comprehensive: Analytics capabilities must be scaled with data in real time. Insights will
be comprehensive and fast. Latency is unacceptable in the supply chain of the future.

Many supply chains have begun this process, with participation in cloud-based commerce
networks at an all-time high and major efforts underway to bolster analytics capabilities.

7.4. Key Features of SCM

Some of the essential SCM software features that can add value to an organization are:

• Monitoring and Planning

SCM systems provide information like shipment date, time, ID, order number, freight
data and much more. Businesses can analyze these insights to track KPIs and make
better strategic decisions. A centralized dashboard helps you monitor procurement,
manufacturing and logistics from one place and plan for disruptions before they occur.
 Later in the process, you can feed performance data back into your system to improve
forecasts and trends. Planning also helps manage inventory levels by automatically
allocating stock for high-priority orders. For further optimization, companies can utilize a
just-in-time system to reduce the costs associated with holding inventory.

o Advanced Shipment Notification Management

o Customizable Notifications
o Electronic Messaging API
o In-Transit Status Updates
o User Configurable Dashboard
o Visual Supply Chain Map
o Demand Forecasting
o Material Requirements Planning
o Supply Network Scheduling
o Supply Chain Simulation

• Order Processing and Inventory Management

Getting an order from sale to delivery quickly and accurately is one of the primary SCM
requirements. Getting a head start with strong order processing can make all the
difference for the right company. Order processing functionality streamlines your order-
related activities, increasing the number of perfect orders and improving customer
satisfaction. It primarily handles the creation and delivery of orders, including those from
multiple channels and drop shipments. You may choose a system that can handle your
invoices as well.

Inventory management assists in evaluating how companies bring materials into a

business and their movement thereafter. By using software to organize these activities,
companies gain more insight into how they work with suppliers and again, where
inventory will be at any given stage of a process chain. First, your solution needs to
support some method of inputting inventory data into the system. This is typically done
using RFID tags or barcodes.

These tools are the infrastructure that enable the rest of the system to carry out its
functions. Once you have a way of quickly identifying inventory, your visibility drastically
improves, and you can move onto optimization. Users can look into inventory levels and
determine what actions are necessary to meet demand. Many systems can automate
much of this process, using inbuilt intelligence features to decide optimal stock levels
and reorder items automatically.

o Sales Order Processing

o Order Management
 o Order Fulfillment
o Billing
o Order to Cash Management
o Inventory Optimization
o RFID integration
o Barcode Integration
o Shelf-Life Monitoring
o Vendor Accuracy Checks
o Automatic Reorder Triggers

• Warehouse Management

A warehouse management system (WMS) brings a more precise level of control to

physical warehouse operations. SCM feature helps users more capably direct what
happens inside the warehouse. These systems help deal with all parts of the equation,
including labor, materials, floor space and operational protocols, everything that makes a
warehouse work day-to-day.

These solutions come as come as part of a larger supply chain solution, part of an ERP
or as a standalone application. While standalone systems can be integrated with other
software, choosing a solution as part of an existing SCM suite minimizes the need to
manage discrepancies and overlaps.

o Inbound Processing
o Integrated Labeling
o Storage Optimization
o Labor Management
o Cross-Dock Planning
o Multiple Warehouse Support
o Virtual Yard for Off-Site Equipment
o Outbound Processing
o Warehouse KPI Reports

• Transportation Management

Transportation management tools direct the systems that handle supplies in transit. In
many cases, this is a mix of over-the-road fleet management tools and monitoring for
other types of shipping, such as rail, air or sea shipping. Being able to monitor shipments
allows you to see issues in their early stages, giving you the most time to get back on
track.
 In addition to monitoring your logistics, many supply chain management systems provide
the means to create plans and strategies. Avoid overspending by preplanning your
routes and allocating resources in the most optimal way. After a route has been
completed, see the impact of your decisions using performance reporting. Logistics
software should ultimately support the quick and secure handling of supplies and
inventory as it makes its way through the chain.

o Container Lot Tracking

o Fleet Management
o Document Management
o Freight Payment Automation
o Shipping Compliance Management
o Load Planning
o Dynamic Route Planning Engine
o Freight Matrix
o Claims Management
o Carrier Performance Reporting
o Third-Party Carrier Integration

• Sourcing and Supply Management

Sourcing procurement and supplier management tools bring other slightly different
angles to the task of evaluating your supply chain processes. Many of these tools look at
costs, contract management, supplier quality and other issues. They help drive the
sourcing and procurement of raw materials and supplies, as well as assess the technical
aspects of the relationships between companies and their vendors.

Sourcing and supply tools are vital in establishing key tracking methodologies for
supplies and materials. They also automate much of the relationship management,
increasing efficiency and reducing mix-ups and errors.

o Sourcing Strategy Development

o Bid and Negotiation Management
o Current Spend Assessment
o Supply Market Assessment
o Cost Analysis
o Expense Logging
o Contract Management
o Supplier Invoice Auditing
o Supplier Performance Reporting
• Supply Chain Analytics

Along with the SCM features that support the functions of a supply chain, you may want
to invest in software that can evaluate your process. These tools use business
intelligence and analytics to help you understand how your problems originate, what you
can do to manage risks and what events are likely to occur in the future.

Analytics tools give your business the means to capitalize on existing data. This allows
your company to move past ineffective strategies and bring in new innovation backed by
figures and facts.

o Demand Forecast Accuracy Analysis

o Information Management Integration
o Inventory Analysis
o Order Processing Analysis
o Transportation Analysis
o Warehouse Analysis
o Key Performance Indicators

• Collaboration Features

Collaborative features of supply chain management software help support business

partnerships that enhance a supply chain. Partners can get accessible data on the status
of items or shipments, look at transparent inventory models or manage identity access
for a system. The feature sets of these resources are made to allow multiple
stakeholders to work together on a project so that they’re on the same page, without the
need for labor-intensive communication and manual updates. Bringing automation to
collaboration can help companies tremendously in expanding their power, scaling up
operations and developing a more sophisticated approach to business.

o Self-Serve Internet Portal

o Role-Based Authorization
o Inventory Availability Reporting
o Status Reporting

• Technical Features

Companies also have to evaluate the deployment environment of a technology, the

operating systems that it runs on and the security features that it provides. For example,
security features may include things like an audit trail, encryption standards, access
control systems and perimeter or in-depth network monitoring. Companies should
assess systems for fault tolerance, availability/scalability, and how integration works with
application programming interfaces (APIs) and other tools.

o On-Premises Deployment
o Cloud Deployment
o Operating System
o Audit Trail
o Encryption Standards
o Access Control
o Network Monitoring
o APIs
o Scalability
Point of Sale Systems
8.1. What is POS Software

POS software is the operating system you use to manage physical stores and sell in person. It’s
what store staff use to find products, add them to a customer’s order, and accept payments.

POS software also has helpful tools like sales reporting, inventory management, and integrated
loyalty programs.

More modern software is built for merchants who sell online and in person. It connects to your
ecommerce platform and lets you run your entire business from one place rather than with two
separate systems.

8.2. Benefits of POS

POS software that connects with your online store helps you run your whole business from one
system. When ecommerce and retail stores talk to one another and are managed in the same
place, it makes managing and growing your business more straightforward.

Modern POS systems are ideal for restaurants, retail stores, salons, and other hospitality
businesses, offering a secure, streamlined checkout process. But today’s POS systems do much
more than process credit cards. They’re also used to evaluate sales, track inventory, create
customer reward programs, and more. These features give small-business owners in practically
any industry better control over inventory management, forecasting, customer relations, and
sales.

Here are just a few of the many benefits POS systems offer small-business owners:

• A streamlined checkout experience

• Increased efficiency
• Optimized inventory management
• Customer insights
• Increased accuracy (for payment processing, inventory tracking, etc.)
• Greater payment flexibility
8.3. Elements of POS Systems

POS systems run on an operating system software, which can be hosted in the cloud or installed
locally. There are a variety of POS system software options available to small-business owners
today, ranging from the free Square POS mobile app to the pricier Revel Systems, known for its
well-rounded customer relationship management (CRM) service.

Hardware is another essential component of every POS system. (Even a simple mobile POS
system requires at least a smartphone and a card reader). Most POS systems include a
touchscreen monitor, along with all of the devices required to scan products and complete
payment transactions.

These are some of the most common hardware elements of a POS system:

• Monitor, tablet, or smartphone

• Credit card processor
• Barcode scanner
• Cash register
• Receipt printer

8.4. Features of POS Systems

The features of a POS system vary depending on the company providing the service. Some
POS systems are more minimalistic, while others provide a host of features to optimize inventory
management, CRM, and more.

Here are some of the most helpful POS system features for small-business owners:

Payment processing

o Split payments
o Returns and refunds

Inventory management

o Product lookup
 o Quick keys
o Automatic inventory ordering
o Inventory counts

Customer relationship management (CRM)

o Customer purchase history

o Loyalty programs
o Promotions

Reporting and analytics

o Employee metrics
o Stock data
o Customer reports
IT Management Systems
9.1. Information Technology and Business

Most companies, especially those in the digital realm, rely on the IT department to ensure that
their network of computers functions properly and connects well. The IT department has three
major areas of concern, which include governance of the company's technological systems,
maintenance of the infrastructure and functionality of the systems overall. Beyond that,
professionals within the IT department work internally on computer software and hardware in
many ways that allow a business to be successful.

9.2. IT Department Responsibilities

Each member of the IT department fulfills an important role for the company. Some are
responsible for multiple areas of the IT department, especially in smaller companies. In other
circumstances, there may only be one IT professional within a company.

Whether the IT team includes two members or 20, there always seems to be a never-ending list
of tasks to be done. Most employees don't realize that the IT team is responsible for much more
than fixing computer problems and helping them log back into the computer when they forget a
password. Here are the main responsibilities within an IT department:

9.2.1. Administration

IT administrators play an integral role within a company and the IT department itself. They're
often the most knowledgeable person available when someone needs help with a technological
issue or has just joined the company and needs help navigating new equipment. The duties of
an administrator may overlap with other team members at times. For instance, the jobs of
system administrators and network administrators may have a similar structure but a different
focus. Some common administrative duties include the following:

• Maintain computer infrastructures of the company

• Assist new users with computer and software issues
• Train employees on new systems
• Perform software updates
• Renew licenses and other legal documents
• Monitor ongoing contracts with suppliers
 • Complete statutory forms
• Ensure compliance with quality standards
• Assess potential threats
• Oversee data storage

9.2.2. Technical Support

When people need access to computer systems or require troubleshooting assistance, they
typically get referred to the technical support team. Tech support professionals are especially
handy at fixing problems related to hardware and software issues, though their role within the
company does not end there. Another large part of their job involves educating people and
answering questions relating to the technologies they use. Here's a list of duties they may
perform:

• Install new software or hardware

• Research and procure IT hardware and supplies
• Participate in IT inventory asset management
• Assist in backup and recovery of digital assets
• Troubleshoot network issues
• Create work logs
• Process documentation
• Configure phone systems
• Serve as an escalation resource
• Install video and audio conferencing
• Install and configure new printers, copiers, and other equipment
• Provide and install cloud-based applications/services
• Repair hardware

9.2.3. Communication

In a business setting, there are several instances where the IT team helps facilitate successful
communication between all parties involved. Companies may communicate with potential or
existing clients through different methods of technology. Meetings and interviews via web
technology are becoming increasingly popular with advancements in digital technology. The IT
team receives training to assist if those important connections fail. Here's a more detailed list of
IT responsibilities tied to communication:

• Set up point-to-point phone calls and conference calls

• Prepare video and web conferences
• Maintain and troubleshoot email systems
 • Serve as a consultant to department heads and staff
• Coordinate security system by adding/deleting users
• Provide end-user support for computer applications
• Create backup copies of data sources
• Load new data into the system

9.2.4. Programming

The roles within a programming department of a company utilize the skills of a web developer,
programmer and possibly other IT professionals in creating new programs that ultimately help
companies achieve their goals. They often work with software developers and engineers to
translate their designs into workable code. Here's a list of duties specific to this area:

• Develop and enhance business applications

• Establish new databases using productivity software
• Establish new databases using productivity software
• Convert printed and electronic documents to ASCII, HTML, PDF and other file formats
• Use graphic editing applications to copy, edit and save graphics
• Implement knowledge of application development languages
• Code in programming languages

9.2.5. Company Website

There are many steps to creating a successful, user-friendly website. The IT team collaborates
with the various departments of a company to implement the overall vision of how the website
should look and function. Most commonly, the marketing team provides the copy and design
content for the site and then passes it along to the IT team for implementation. IT members work
behind the scenes to write the code, test the functionality of the webpages and assist with any
user experience issues. Here's a list of duties that IT members perform on a website:

• Configure site layout

• Write and implement website code
• Test the site for usability
• Maintain company internal network (intranet)

9.2.6. Application Development

Members of the IT team may work to create computer programs or applications that help
businesses function better. Business apps are especially useful for content management,
employee communication, customer relationship management and enterprise resource
planning. Developers put the apps through a series of tests that ultimately result in useful tools
employees and business owners can use. Here are some of the main duties associated with app
development:

• Turn software concepts into working programming code

• Meet with clients to discuss new program specifications and functions
• Create programming code that performs a task
• Write documentation to help users operate new programs

9.3. IT Management Software

IT management software is software that helps companies manage all aspects of an IT

infrastructure. This broad category includes all the software that controls and monitors the
performance of all of the applications, devices, servers and networks a company uses.

9.3.1. Introduction

The quality of an IT department’s software and the ability to quickly identify and fix issues that
impede business determines the quality of services a business can offer. Finding the IT
management software that fits the unique needs of the business and how the team works will
facilitate the flow of business and keep all departments running smoothly.

As IT departments handle a wide range of responsibilities with various types of technologies, the
number of different software they use is larger than that of most other departments. The below
table summarizes the types of software used, and they are described in more detail below.

Type
Asset Management Software
Business Continuity Software
Database Software
File Analysis Software
Incident Response Software
Description
For tracking and managing physical and digital IT
assets, including hardware and software.
For the development and implementation of business
continuity plans.
For the storage and analysis of business data.
For identifying and reporting on potential security
vulnerabilities within company files.
For mitigating security incidents through the use of
automated, pre-configured actions.
 IT Services Management Software
Mobile Device Management Software
Networking Management Software
Project Management Software
Remote Desktop Software
Service Desk Software
Task Management Software
Telecom Expense Management
Software
Ticketing Systems
For planning and managing IT service delivery.
For tracking, updating and managing mobile assets
used by the company.
For monitoring and maintaining business networks.
For organizing, tracking and analyzing the progress of
IT projects.
For accessing desktops in another location for
provisioning, updating or troubleshooting.
For providing support and troubleshooting to
business employees who use IT resources.
For planning, assigning and tracking tasks related to
IT projects.
For monitoring and analyzing telecom-related
expenses.
For storing, prioritizing and managing customer
service tickets or requests.

9.3.2. Asset Management Software

Asset management software is used by IT teams to track and manage a company’s physical and
digital IT assets, including hardware and software.

Through asset and inventory management, IT teams ensure each asset is properly maintained
and updated as well as decommissioned when required. For example, using asset management
software, IT teams can track laptops to ensure they’re being used properly and perform critical
security updates to other devices that may prevent a breach. Popular asset management
software vendors include AssetExplorer, Asset Panda, Ivanti, ServiceNow, MMSoft Pulseway
and GoCodes.

9.3.3. Business Continuity Software

Business continuity plans outline the process a company follows to recover from potential
threats, including data breaches and cybercrime. Business continuity software is a tool used to
develop and implement business continuity plans across an enterprise.

For IT teams, business continuity software provides a simple way to monitor the effectiveness of
continuity plans and uncover risks. This software also ensures business continuity programs
comply with various regulations, such as those required by HIPAA for healthcare companies and
FINRA for financial companies. Popular business continuity software vendors include Archer,
Arcserve, Fusion Framework System and Oracle Risk Management Cloud.
9.3.4. Database Software

Database software is used to develop databases as well as manage, analyze and search for the
data found within them.

Database software saves IT teams critical time when searching through large stores of data. For
example, users may simply use queries to find the data they’re looking for. Database software
also improves the security posture of a company by protecting its critical data. Users must be
authorized to modify data or view it.

A key use of database software is analytics. Companies can pull insights from the data found
within the database to solve business problems and look for security risks. Popular database
software vendors include MySQL, Microsoft SQL, PostgreSQL, Amazon RDS and Oracle
RDBMS.

9.3.5. File Analysis Software

File analysis software is an IT management software used to identify and report on potential
security risks within a company’s files. These tools work to analyze and track the file’s content as
well as its metadata.

File analysis tools help IT teams locate and manage redundant data. They also help pinpoint
which file data contains sensitive information to ensure it’s kept under lock and key. As a result,
companies protect their unstructured data and remain in compliance with privacy laws such as
the GDPR. Popular file analysis software vendors include Varonis Data Security Platform, IBM
StoredIQ Suite, Spirion and Micro Focus ControlPoint.

9.3.6. Incident Response Software

Incident response software, also known as security information and event management
software, is used for mitigating security incidents when they occur through the use of
automation and pre-configured actions. These tools help IT teams react to incidents quickly,
preventing serious data and resource loss.

Incident response software manages the entire process of response for IT teams. First, it will
detect security anomalies, including everything from failed login attempts to sudden increases in
network usage. Once detected, the software will automatically begin the response process,
which may include logging suspicious activity and alerting security teams. Popular incident
response software vendors include SolarWinds Security Event Manager, LogPoint SIEM and
Splunk Enterprise Security.

9.3.7. IT Services Management Software

IT services management software is used to plan, execute and manage IT service delivery. This
software encompasses every aspect of IT service delivery from troubleshooting to managing
security incidents.

ITSM software includes components such as a service desk, incident response tools, change
management tools and vendor management tools. ITSM software is used most often by IT teams
that follow ITSM frameworks such as COBIT and ITIL. Popular IT services management software
vendors include Freshservice, ServiceNow IT Service Management, SolarWinds Service Desk
and Jira Service Management.

9.3.8. Mobile Device Management Software

Mobile device management software supports IT teams with the management of mobile assets
used by internal employees. This includes tasks such as mobile device configuration,
deprovisioning and maintenance.

In today’s remote workforce, daily business tasks are often completed by mobile devices. And
with the rise of BYOD, IT teams need a simple way to secure devices and protect company data.
Mobile device management is the solution, enabling IT teams to manage mobile devices such as
phones and tablets from one centralized location. Popular mobile device management software
vendors including Citrix Endpoint Management, ManageEngine Mobile Device Manager Plus,
Jamf Now and SimplySecure.

9.3.9. Networking Management Software

Networking management software is an IT management software used to monitor and maintain

a company’s on-premises and cloud-based networks. This process includes monitoring
networks for security risks, provisioning networks and performing network maintenance.

Network management software enables IT teams to perform networking tasks on multiple

systems from a centralized location. This is a crucial capability for IT teams tasked with
managing large networks across multiple locations.
In addition, through network management tools, IT teams gain critical visibility into their
networks, allowing them to quickly mitigate security risks. Popular networking management
software vendors include Datadog, NinjaOne and SolarWinds.

9.3.10. Project Management Software

Project management software is used for organizing, tracking and analyzing the progress of IT
projects. For IT teams, project management software improves the management of projects
involving software development and deployment, website maintenance and hardware updates.

Project management software enables IT teams to collaborate on tasks and projects in a

centralized location. These tools also allow teams to customize their workflows through views.
For example, Agile and Scrum teams can use Gantt charts or Kanban boards to visualize
projects.

Project management tools provide additional benefits such as the ability to effectively manage IT
resources, easily report on project statuses and simplify the tracking of IT tickets. Popular
project management software vendors include Smartsheet, monday.com, ClickUp, Teamwork,
Wrike, Asana and Jira.

9.3.11. Remote Desktop Software

Remote desktop software is used by IT teams to access desktops in other locations locally to
make updates, provision new software and troubleshoot hardware.

Remote desktop software enables a user to connect to and control a remote device located
anywhere. As a result, IT teams can resolve technical issues, install apps and mitigate security
risks without traveling to another location. This process reduces business downtime and
improves IT productivity. Popular remote desktop software vendors include TeamViewer, Zoho
Assist, Splashtop, LogMeIn Pro, Chrome Remote Desktop and AnyDesk.

9.3.12. Service Desk Software

Service desk software is used by IT teams to provide support to internal employees who must
use IT resources such as networks and hardware to complete tasks.
Employees use service desk tools to submit questions or requests to the IT team. The service
desk software then organizes these requests, enabling teams to provide efficient support. Many
service desk tools also provide change management features, allowing IT teams to modify
systems to improve IT services on behalf of employees. Popular service desk software vendors
include Freshservice, ServiceNow IT, SolarWinds Service Desk and Jira Service Management.

9.3.13. Task Management Software

Task management software helps IT teams plan, assign and track tasks related to IT projects. By
effectively managing tasks, teams can move projects forward in a timely manner, improve
resource utilization and easily report on project progress.

IT teams also use task management software to collaborate from anywhere, a critical capability
in today’s distributed workforce. Many task management tools also offer automation to help
teams create tasks and move them through the pipeline without human intervention, saving time
and effort. Popular task management software vendors include Asana, ClickUp, monday.com,
ProofHub and Todoist.

9.3.14. Telecom Expense Management Software

Telecom expense management software is a tool used to track all of an IT team’s telecom
expenses in one place, resulting in simplified monitoring, analysis and decision-making.

IT teams can use telecom expense management software to track the cost and usage of
communication tools such as voice, IoT and the cloud.

Using telecom expense management software, teams gain a better understanding of where their
spending should be reduced or increased. Teams can also use these tools to prepare cost
audits and ensure vendors are charging appropriately. Popular telecom expense management
software vendors include Sakon, Tangoe, RadiusPoint, Network Control, One Source and
brightfin.

9.3.15. Ticketing Systems

Ticketing systems are a subset of IT management tools that support IT teams in prioritizing and
managing customer service tickets or requests. Using software and automation, tickets are
created, routed to the appropriate individual or team and then resolved.
The process of ticketing involves assigning a unique identifier to each event or request. As a
result, tickets are easily tracked to ensure they’re resolved, improving the customer experience.
Ticketing systems also improve a team’s productivity, as tickets are centralized and kept up to
date with each customer interaction. Popular ticketing system vendors include HubSpot Help
Desk and Ticketing, SolarWinds Ticketing System, Jira Service Desk and Zendesk.
Support Ticket Systems
10.1. What are Support Ticket Systems

A support ticket system is basically software that allows you to centrally manage multiple
customer service requests that come in from various channels. This neat little help desk
software generates a ticket for every customer service request you receive.

These can be email ticketing, call center ticketing, self-service portal ticketing, etc. However,
regardless of the source, support ticket systems centralize these incoming tickets and store
customer requests. Hence, it’s easier for ticket management staff to address complaints and
inquiries. If you receive customer complaints over multiple channels like email, phone, and your
website, then a ticket system software is an ideal solution for you.

Not only is a support ticket system almost a necessity for any business, but this neat little system
can make life much easier, saving you precious hours and winning you points with your
customers.

However, the difference between an excellent support ticket system and an average one can be
pretty drastic, so it’s in your best interest to ensure you have the best possible system while still
getting your money’s worth.

10.2. Support Ticketing System Key Features

There are several factors to consider, and while most help desk software will provide enough
features to keep customers happy, the most common question comes down to what the most
cost-effective solution is. Let’s look at some factors.

• Multichannel Support

Support tickets can be received from multiple channels via email, calls, and social media,
etc. therefore having a system that can handle receiving tickets from different channels is an
important factor to evaluate a system.
• Ticket Management

If you notice repetitive issues, features like macros or templated responses along with
predefined answers will help you save time. Automated ticket distribution and escalation
make the system easier to manage. Mass ticket actions will allow you to perform actions on
multiple tickets simultaneously, saving you time and allowing you to send, transfer, resolve,
or delete multiple tickets at once.

You also want in-depth reporting and analytics to make sure your decisions are informed.
Software that provides alerts and notifications is also great because they ensure you don’t
miss out on anything, and nothing slips by unnoticed.

Also, categorization of tickets according to priority is a very useful feature. The ability to
prioritize the problems that directly affect workflow and distinguish them from other not as
impactful problems is important.

• Support Portal

Think of an entire library with a list of articles or information about products or services,
articles, guides, screenshots, videos, etc. This is a one-stop shop for all information about a
product, commonly known as knowledge base software. It’s crucial to have a ready database
of customer information as well.

FAQ pages also function as a primary source for resolving customer issues or discrepancies.
Forums also function as discussion areas for specific topics. Some customer portals also
have feedback and suggestions pages.
Business Intelligence Software
11.1. What is Business Intelligence

Business intelligence (BI) is an umbrella term for the technology that enables data preparation,
data mining, data management, and data visualization. Business intelligence tools and processes
allow end users to identify actionable information from raw data, facilitating data-driven decision-
making within organizations across various industries. Also known as a decision support system
(DSS), a BI system analyzes current and historical data and presents findings in easy-to-digest
reports, dashboards, graphs, charts, and maps that can be shared across the company.

There are a number of BI tools in the marketplace, which aid business users in analyzing
performance metrics and extracting insights in real time. These tools focus on self-service
capabilities, reducing IT dependencies and enabling decision-makers to recognize performance
gaps, market trends, or new revenue opportunities more quickly. BI applications are commonly
used to make informed business decisions, advancing a company’s position within the
marketplace.

User adoption of BI software continues to increase at a rapid pace, especially as customers

migrate workloads to the cloud. Vendors are increasingly supportive of different cloud platform
providers, leading to more SaaS-based BI solutions and subscription-based pricing models.

11.2. Benefits of Business Intelligence

Business intelligence (BI) refers to capabilities that enable organizations to make better
decisions, take informed actions, and implement more-efficient business processes. BI
capabilities allow you to

• Collect up-to-date data from your organization

• Present the data in easy-to-understand formats (such as tables and graphs)
• Deliver data in a timely fashion to the employees in your organization

A successful BI program shines light on ways to increase profits and performance, discover
issues, optimize operations, and much more. Here are just a few of the many benefits of BI:
• Receive support for fact-based decision-making.

BI tools help executives, managers, and workers uncover insights that are relevant to their
roles and areas of responsibility – and use them to make decisions based on fact, not
guesswork.

• Gain and maintain competitive advantage.

With timely BI, organizations can quickly identify and act on new trends and opportunities.
They can also assess their own capabilities, strengths, and weaknesses compared to
competitors and use that information to their advantage.

• Measure and track performance.

BI dashboards make it easy to monitor key performance indicators (KPIs), track progress
against targets, and set alerts to know where and when to focus improvement initiatives.

• Identify and set benchmarks.

BI solutions let organizations compare their processes and performance metrics to industry
standards, determine where improvements are needed, set meaningful benchmarks, and
monitor progress toward goals.

• Spot issues so they can be resolved.

With BI, users can detect potential business problems before they cause financial harm –
such as manufacturing or distribution bottlenecks, upward trends in customer churn, rising
labor costs, and more.

• Operate more efficiently.

Business intelligence systems allow everyone to spend less time hunting down information,
analyzing data, and generating reports. They can also identify areas of overlap, duplication,
or inefficiencies across departments or subsidiaries in order to streamline operations.

• Make data and reporting accessible to everyone.

BI software offers intuitive interfaces, drag-and-drop reports, and role-based dashboards

that team members can use themselves – without the need for coding or other technical
skills.
• Improve customer and employee experiences.

BI users can mine data to spot patterns in customer and employee behavior, analyze
feedback, and use insights to tailor and improve experiences.

• Increase revenue and profitability.

Ultimately, business intelligence data leads to a better understanding of where risks and
opportunities exist, so that teams can make profitable adjustments.

11.3. Business Intelligence Versus

Search the internet, and you’ll find a variety of definitions for BI software. In general, a BI
solution is a combination of strategy and technology for gathering, analyzing, and interpreting
data from internal and external sources, with the end result of providing information and
analytics about the past, present, and future state of the subject being examined.

BI is constantly being confused with other data business processes, most notably business
analytics, big data, and data mining. These are the differences between them.

11.3.1. Business Analytics

The terms business intelligence and business analytics are often used interchangeably.
Business analytics, however, refers more specifically to the process of examining data to find
trends and insights. When used together, “BI and business analytics” has a broader meaning
and includes every aspect of gathering, analyzing, and interpreting data. A common distinction
is that business intelligence focuses on what happened in the past and what is happening now
(descriptive analytics). Whereas business analytics focuses on:

• Why something happened (diagnostic analytics)

• What is likely to happen next (predictive analytics), and
• What action should be taken to ensure the best possible outcome (prescriptive analytics)

But at the end of the day, both BI and business analytics are vital – working together to provide
companies with all four types of analytics (descriptive, diagnostic, predictive, and prescriptive)
and the big picture insights decision-makers need.
11.3.2. Big Data

The term big data can be defined simply as large data sets that outgrow simple databases and
data handling architectures. For example, data that cannot be easily handled in Excel
spreadsheets may be referred to as big data.

Big data involves the process of storing, processing, and visualizing data. It is essential to find
the right tools for creating the best environment to successfully obtain valuable insights from
your data.

Setting up an effective big data environment involves utilizing infrastructural technologies that
process, store, and facilitate data analysis. Data warehouses, modeling language programs and
OLAP cubes are just some examples. Today, businesses often use more than one infrastructural
deployment to manage various aspects of their data.

Big data often provides companies with answers to the questions they did not know they wanted
to ask. For example:

• How does the new HR software impact employee performance?

• How do recent customer reviews relate to sales?

Analyzing big data sources illuminates the relationships between all facets of your business.
Therefore, there is inherent usefulness to the information collected as big data. Businesses must
set relevant objectives and parameters in place to glean valuable insights from big data.

Big data can provide information outside of a company’s own data sources, serving as an
expansive resource. Therefore, it is a component of business intelligence, offering a
comprehensive view into your processes. Big data often constitutes the information which will
lead to business intelligence insights.

Again, big data exists within business intelligence. This means the two differ in the amount and
type of data they include. As business intelligence is an umbrella term, the data that is
considered a part of BI is much more all-inclusive than what falls under big data. Business
intelligence covers all data, from sales reports hosted in Excel spreadsheets to large online
databases. Big data, on the other hand, consists of only those large data sets.
The tools involved in the processes of big data and business intelligence differ as well. Base-
level business intelligence software has the ability to process standard data sources, but may
not be equipped to manage big data. Other more advanced systems are specifically designed
for big data mining.

Of course, there is some overlap involved in the use of comprehensive business intelligence
systems that handle large datasets. Most business intelligence software vendors offer tiered cost
models which increase functionality depending on the price. Big data capabilities may also be
offered as an add-on to a BI software system.

The objective of business intelligence is to help businesses make data-driven decisions. BI helps
deliver robust reports by extracting information from different data sources to gauge business
performance and processes. The purpose of big data is to ingest, process and analyze huge
datasets, both structured and unstructured, to boost business outcomes.

11.3.3. Data Mining

Data mining relates to the process of digging through large data sets to identify relevant or
pertinent information. However, decision-makers need access to smaller, more specific pieces
of data as well. Businesses use data mining to identify specific data that may help their
companies make better leadership and management decisions.

Data mining finds solutions to problems. For example, analyzing data sources can uncover
useful insights that help hiring teams conduct thorough background analysis while recruiting.
Digging deeper into data highlights information that may not be obvious from standard
observation.

Information overload can make data analysts believe they’re ignoring key points that could
enhance business performance. Data mining experts unearth huge information repositories to
identify points of interest.

Various software packages and analytical tools make data mining possible. The process is
manual or automated. Data mining allows individual workers to send specific queries for
information to archives and databases so that they can obtain targeted results.

Data mining falls under the umbrella term of “business intelligence,” and can be considered a
form of BI. Data mining can be considered a function of BI, used to collect relevant information
and gain insights. Moreover, business intelligence could also be thought of as the result of data
mining.

As stated, business intelligence involves using data to acquire insights. Data mining is the
collection of necessary data, which will eventually lead to answers through in-depth analysis.

The link between data mining and business intelligence can be thought of as a cause-and-effect
relationship. Data mining searches for the “what” (relevant data sets) and business intelligence
processes uncover the “how” and “why” (insights). Analysts utilize data mining to find the
information they need and use business intelligence to determine why it is important.

Business intelligence and data mining differ in core aspects, including purpose, volume and
results. The purpose of BI is to convert raw data into useful information for executives and
stakeholders. It tracks and presents key performance metrics on reports and dashboards to
facilitate robust, data-driven decisions.

On the other hand, the primary objective of data mining is to explore and analyze data to
uncover solutions to specific business problems. It leverages complex algorithms and
computational intelligence to detect trends and patterns.

Data mining algorithms process datasets from specific departments, customer segments or
competitors. Digging deeper into datasets lets them find answers to specific business problems.
On the contrary, business intelligence processes enterprise-wide data to deduce business
performance.

Since data mining focuses on resolving complex business problems, the end result is a
statistical data model that looks for patterns and relationships within similar datasets. However,
business intelligence produces charts, graphs, dashboards and reports.

11.4. Key Elements of Business Intelligence

BI platforms are expected to have dashboarding, ad hoc reporting and data visualization
capabilities. To stay competitive, business intelligence systems are integrating machine learning
and AI. At the core, they rely on data warehouses, ETL, and OLAP.
11.4.1. Data Warehouses and Data Marts

During business operations, the organization has a suite of applications supporting its functions
while simultaneously recording data of all the different activities throughout the different
departments. These applications become data sources for the organization to collect information
about all its operations.

After data is pre-processed and aggregated, it is fed into one central repository, such as a data
warehouse or data mart, which supports business analytics and reporting tools. For larger data
sets, businesses typically use an open-source data storage framework called Apache Hadoop.

11.4.2. ETL

BI solutions rely on a data integration process that combines data from multiple data sources
into a single, consistent data store that is loaded into a data warehouse or other target system.

ETL, which stands for extract, transform and load, is a data integration process that combines
data from multiple data sources into a single, consistent data store that is loaded into a data
warehouse or other target system.

As the databases grew in popularity in the 1970s, ETL was introduced as a process for
integrating and loading data for computation and analysis, eventually becoming the primary
method to process data for data warehousing projects. Through a series of business rules, ETL
cleanses and organizes data in a way which addresses specific business intelligence needs, like
monthly reporting, but it can also tackle more advanced analytics, which can improve back-end
processes or end user experiences.

11.4.3. OLAP

This technology extracts big data from relational tables and reorganizes it into a
multidimensional format, enabling fast processing and insightful data analysis. OLAP (for online
analytical processing) is software for performing multidimensional analysis at high speeds on
large volumes of data from a data warehouse, data mart, or some other unified, centralized data
store.

Most business data have multiple dimensions—multiple categories into which the data are
broken down for presentation, tracking, or analysis. For example, sales figures might have
several dimensions related to location (region, country, state/province, store), time (year, month,
week, day), product (clothing, men/women/children, brand, type), and more.

But in a data warehouse, data sets are stored in tables, each of which can organize data into just
two of these dimensions at a time. OLAP extracts data from multiple relational data sets and
reorganizes it into a multidimensional format that enables very fast processing and very
insightful analysis.

11.5. Emerging Business Intelligence Capabilities

Business intelligence has been around for over 30 years and traditionally, it was driven by IT.
Questions were submitted to the IT team and answers were provided back to the business in the
form of a static report. If there were follow-up questions, they were re-submitted to IT and
usually placed in the back of the queue. This time-consuming process has been replaced by
modern BI – which is far more interactive.

Modern, self-service BI tools let business users query data themselves, set up dashboards,
generate reports, and share their findings from any Web browser or mobile device – all with
minimal IT involvement. Recently, artificial intelligence (AI) and machine learning technologies
have made this process even simpler – and faster – by automating many BI processes, including
data discovery and the creation of reports and visualizations.

Increasingly, companies are choosing cloud-based BI tools that connect to more data sources
and are available 24×7 from anywhere. And they are choosing solutions that offer embedded BI
– BI that is embedded directly into workflows and processes so users can make better decisions
in the moment and in context.

The most modern BI platforms today combine business intelligence, advanced and predictive
analytics, and planning tools in a single analytics cloud solution. They are augmented by AI and
machine learning technologies, they can be embedded in any process, and they democratize BI
and analytics by making them easy to use for everyone – not just IT departments or professional
analysts.

Empowered by AI, business intelligence tools have recently gained the following features:
 • Natural language processing (NLP) refers to the branch of artificial intelligence that
enables computers to understand text and spoken words in a similar way to human
beings. BI vendors have started to incorporate this technology into their products,
allowing users to access business information in new ways. Imagine typing a question
into your self-service BI or asking it directly, “which product has created the most
revenue this month?” versus searching through the data for that answer yourself.

• AI – assisted data preparation. It is highly valuable for BI solutions to provide a one-stop-

shop across the entire analytics journey — and that starts with data. Automatically
identifying any problems in the data and suggesting ways to combine different data
sources allows users to adapt and customize datasets and dashboards as needed. The
process makes it faster and easier for a business user to cleanse, refine and combine
data modules so that they end up with exactly the data they need to drive powerful
visualizations and uncover new insights.

• Smart Reporting. Reporting and dashboarding are at the heart of a modern approach to
analytics. Organizations rely on regular, structured reporting to run their business. These
formal reports collect and disseminate the crucial details that support good decision-
making, and they provide jumping-off points for further exploration of trends, threats and
opportunities. AI features embedded in modern BI solutions learn from users to make it
easier to identify visualizations that have the highest impact for discovering and
communicating insights.

11.6. Features of Business Intelligence Software

Some crucial features of business intelligence (BI) include:

11.6.1. Reporting

BI reporting – presenting data and insights to end users in a way that is easy to understand and
act on – is fundamental to every business. Reports use summaries and visual elements like
charts and graphs to show users’ trends over time, relationships between variables, and much
more. They are also interactive, so users can slice and dice tables or drill deeper into data as
needed. Reports can be automated and sent out on a regular, predetermined schedule – or ad
hoc and generated on the fly.

11.6.2. Querying

Querying tools allow users to ask business questions and get answers through intuitive
interfaces. With modern querying tools, submitting a query can be as simple as asking Google
(or even Siri) a question – like “Where are shipping delays happening?”, “Did quarterly sales
meet their targets?”, or “How many widgets were sold yesterday?”

11.6.3. Dashboards

Dashboards are one of the most popular BI tools. They use continually updated charts, graphs,
tables, and other types of data visualization to track pre-defined KPIs and other business metrics
– and provide an at-a-glance overview of performance in near-real time. Managers and
employees can use interactive features to customize which information they want to view, drill
into data for further analysis, and share results with other stakeholders.

11.6.4. Data Visualization

The ability to visualize data and see it in context is one area where BI really shines. Charts,
graphs, maps, and other visual formats bring data to life in a way that can be quickly and easily
understood. Trends and outliers are more apparent. Colors and patterns paint a picture of the
story behind data in a way that columns and rows in a spreadsheet never could. Data
visualization is used throughout a BI system – in reports, as answers to queries, and in
dashboards.

11.6.5. OLAP

Online analytical processing (OLAP) is a technology that powers the data discovery capabilities
in many business intelligence systems. OLAP allows for fast, multidimensional analysis across
huge volumes of information stored in a data warehouse or other central data store.

11.6.6. Data Preparation

Data preparation involves compiling multiple data sources and generally preparing it for data
analysis. Using a process called extract, transform, and load (ETL), raw data is cleansed,
categorized, and then loaded into a data warehouse. Good BI systems automate many of these
processes and allow for setting dimensions and measures.

11.6.7. Data Warehousing

A data warehouse holds aggregated data from multiple sources that’s been cleansed and
formatted so that it can be accessed by BI and other analytics tools.
11.7. Dashboard Design

Dashboards are a unique and powerful way to present data-based intelligence using data
visualization techniques that display relevant, actionable data as well as track stats and key
performance indicators (KPIs).

11.7.1. Introduction

Dashboards should present this data in a quick, easy-to-scan format with the most relevant
information understandable at a glance. The term was born from the traditional automobile
dashboard, and they have evolved to serve the same function in the digital world.

Having the right approach to data visualization is a key feature in laying the foundation of a
successful dashboard. Data visualization is the presentation of data via graphics and pictures—
its primary objective is to help decision makers identify patterns or understand difficult concepts
that may go undetected in text-based applications.

11.7.2. Key Characteristics

An effective dashboard shows actionable and useful information at a glance. It simplifies the
visual representation of complex data and helps stakeholders understand, analyze, and present
key insights.

Great dashboards are clear, intuitive, and customizable.

• They communicate information quickly.

• They display information clearly and efficiently.
• They show trends and changes in data over time.
• They are easily customizable.
• The most important widgets and data components are effectively presented in a limited
space.

An initial customization of visual data and information to key user requirements will help improve
usability and eliminate the need for different user personas.

Great dashboards provide everything one click away.

 • All essential information is immediately accessible.
• Data is prioritized.
• Information is displayed clearly in a visual hierarchy on one screen.
• The design provides a coherent overview that includes sparse, clear initial data with
additional opportunities to drill down for more.
• Elements (chart, table, form) are displayed in a minimized view with the ability to bring up
more details in a modal window or go to a page with more detail.
• The design improves usability with filters allowing users to customize how data is
displayed and filters content using labels, categories, and KPIs.

11.7.3. Dashboard Design Decisions

Presenting only the most relevant data on dashboards is essential—the more information we
display, the harder it is for users to find what they need.

When faced with too much data to select from, designers should display only the most relevant
subset. We need to prioritize and carefully remove misleading and unclear metrics.

Effective dashboard design decisions should be guided by:

• the project goals

• the nature of the data
• the needs of users

The core objective of a dashboard is to make complex information accessible and easy to
digest. Therefore, the interface presenting the data should be clean and straightforward in order
to minimize users’ cognitive load and time spent searching.

The information architecture should present the essential data first while allowing access to
supporting or secondary metrics. A progressive drill-down system should be designed that
starts with a general overview and then goes into more detail—it facilitates data prioritization,
and creates clarity.

When designing dashboards, successful dashboard designers start with a well-defined set of
goals focusing on the problem to solve and the key, actionable insights people need to take
away from the data. Good design goals employing the S.M.A.R.T framework promote efficient
and precise execution.

A few key questions to ask when determining dashboard design goals:

• How many steps do users need to take to achieve a specific goal?

• Is the interface intuitive enough for the user to reach their goal on their own?
• What information does the user need to successfully achieve their goal?

To determine what the goal of a specific dashboard design may be, define it by asking, “What
specific problem is this design going to solve for the user?” The answer will provide insights on
what metrics, properties, values, visuals, and data are of consequence.

One of the biggest challenges of dashboard design is serving multiple personas. Once each
user role is defined, it becomes critical to understand where their needs overlap and where they
diverge. Always keep users context in mind when designing—identify their technical knowledge,
their familiarity with the system overall, their goals, and so on.

Be sure to ask the following questions when trying to determine user behavior and context:

• Does the design consider the direction the visitor is used to reading in?
• Does interaction with the dashboard require technical knowledge?
• Will users manage to accomplish most of the actions in just a few clicks?
• Does the design align with user context by creating drill-down menus; does it use
suggestive iconography and color palettes?

The color palette used in a dashboard’s design should also be considered as a context. Many
business-to-business SaaS product dashboards are designed in a dark-themed UI because they
are used for several hours straight.
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