IT for Managers

S. Ramanathan
A Framework for Information
Systems

Mgmt

Development
Process

Applications

Technology

Foundation Concepts
Information System Resources
People
Data
Software
Hardware
Networks
Technologies to
 Collect data / information
 Transform data into information
 Disseminate information
 Information system
A system to effectively and efficiently
handle all information related tasks
Capture, verify, validate
 Truthful, timely reflection of facts
Store, retrieve
 Permit quick access to desired information
Analyze, classify, summarize, consolidate
 Make information useful in a given context
Format, transmit, disseminate
 Make information available and usable
Archive, delete
 Information system
Procedures
 Define work flow and steps in an activity
 Define processing logic, role of people
Technology, products
 E.G., Book, pencil, typewriter, telephone
 Computer system, word processor, modem
People
 Operational staff, supervisors, managers
 External users (customers)
 What is a System?

Set of interrelated elements with a

common goal

(e.g) business system, political system

 The System Concept
Systems may be abstract (conceptual) or physical
 Social system is an example of abstract system
 Data processing system is a physical system
A system is defined by
 Goals
 Inputs and outputs
 Conversion process
 Feedback and control
 Communication with other subsystems
 Environment
 Boundaries
 ENVIRONMENT

BOUNDARY

INPUT PROCESS OUTPUT

Control /
Feedback
 Classification of Systems
Natural (rivers, lakes…) or manmade
(Computer)

Closed (does not interact with outside

world) or Open (interacts with external
environment)
 Expanding Role of IS

1990s-
Electronic Business
2000s

1980s – 90s Strategic and End user support

Decision Support
1970s -80s

1960s – 70s Management Reporting

1950s – 60s Data Processing

Leveraging IT at Different Levels

Strategic
support at
top

Decision
support for
Managers

Operational support for

business procedures
Beware: Inasmuch as IT can make,
IT can mar business too
Case: Hershey Foods
IS for Strategic Advantage
 Strategies for Competitive
C
Advantage
Competitive Forces
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t Suppliers Customer Entrants
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Strategic Role of Information
Systems
Lower Costs
 Use IT to reduce the cost of business process
 Use IT to reduce the cost of customers and
suppliers
Differentiate
 Develop IT features to differentiate products and
services
 Use IT features to reduce the differentiation
advantage of the competitor
 Use IT features to focus on specific markets and
products
Innovate
 Create new products and services that include IT
components
Strategic Role of Information
Systems – Contd.
Promote growth
 Use IT to manage expansion
 Use IT to diversify and integrate into other products
and services
Develop alliances
 Use IT to create virtual organization of business
partners
 Develop interorganizational information systems
linked by the Internet and extranets to support
strategic relationships with customers and suppliers
 Strategic Role of Information
Systems – Contd.
Improve quality and efficiency
 Use IT to improve quality of product and service
 Use IT to improve efficiency
 Use IT to shorten the time needed to develop, produce
and deliver products and services
Other strategies
 Use interorganizational systems to create switching
costs that lock in customers and suppliers
 Use investment in IT to create barriers for new entrants
 Use IT to make substitution of products unattractive
 Use IT to create, share and manage business knowledge
 How can IT improve business
processes?
Transactional Transform unstructured processes into routine
transactions
Geographical Transfer information quickly across large distances
Automational Replace labour
Analytical Handle complex algorithms
Informational Handle large amount of information
Sequential Change the sequence of tasks; enable multiple
tasks to be performed simultaneously
Knowledge Creation of knowledge to improve the processes
Tracking Ability to track any entity
Disintermediatio Direct connect to end users
n
Using Information Technology for
Strategic Advantage
Reengineering business processes
Becoming an agile company
Creating a virtual company
Building a knowledge-creating company
Breaking Business Barriers with
IT
Information Technologies
Hardware
Mainframes

Large and Powerful Computers

Main memory: Hundreds of Megabytes to Gigabytes
Slimmed over a period, but still large
Reduced air-conditioning over a period of time, but still high
Proprietary software environment
Still used in large corporations, Government, Utility companies
Useful for compute-intensive applications
Platform for Data Warehousing and data Mining apps
 Mini (Midrange) computers
Less costly, less powerful and easier to
maintain than mainframes
Can support terminals
Special purpose applications – scientific
analysis, engineering workstations
Servers
Microcomputers (PCs)
Small in size
Originally developed for individual use; but
has since become powerful
Economical
Easy networking
Further miniaturization – notebooks
Handheld computers – Palmtops - PDAs
Power of the processor doubles every 18 months – Moore’s Law
 Hardware

 Size Density of circuitry

 Speed Reliability

 Cost Connectivity
 Supercomputers
Very large computers with high processing
speed
Designed for specialized applications
requiring extensive processing power
(such as complex mathematical
calculations)
(E.g) Weather forecasting
Organization of a Computer

Input Outpu
t
Process

Storage
 Central Processing Unit
The Brain
Most important hardware component
CPU

Arithmetic –Logic Control

Unit (ALU) Unit
 Primary Storage
Main memory
Also known as Random Access Memory
(RAM)
Holds data and programs between
processing steps
Volatile
 Secondary Storage
For storage of data and programs
 Magnetic disks
 Optical disks
More permanent type of storage
 Input Devices
Keyboard
Point and Click
 Electronic Mouse

 Trackball

 Pointing stick

 Touch pad

 Touch screen

Pen-based
Voice recognition
Optical scanning, Optical Character Recognition
Barcode Reader
Smart cards
Digitizer
Web camera
 Output Devices
Printers
 Impact Printers
Dot Matrix
Line
 Non impact Printers
Inkjet
Laser
Plotters
Sound Card and Speakers
Video
 Liquid crystal displays
 Storage Devices
Capacity measured in terms of bytes
Binary representation of data
Magnetic Disk
 Floppy Disk
 Hard Disk
Magnetic Tape
 RAID Storage
Optical Disk
 CD (RW and R)
 DVD
Sequential and Direct Access
Software
 Overview of Software
Software

Application Software Systems Software

For end For computer
users system
operation

Application System Systems

General Purpose
- specific Management Development
Office automation Operating System Programming
software ERP
languages
Network Management
Email CRM
Editors
Utilities
Presentation Tools
graphics Performance monitors
CASE
Groupware Security software
Application Software for End Users
Integrated packages (eg) Oracle business suite
Web browsers
Electronic mail and instant messaging
Word processing  Desktop publishing
Electronic spreadsheets
Presentation graphics
Personal information managers
Groupware
Alternatives: Buy / Contract / Develop
Application Service Providers
Software licensing
 Operating Systems
Functions:
 Providing user interface
 Permits users to share hardware

 Resource management

 Task scheduling

 File management

 Utilities (e.g. Error logs, system accounting)

 Recovery from system errors

 Support services

Popular Operating Systems: Windows, Unix, Linux,

Mac OS X
 Programming Languages
Facilitate a programmer to develop a set
of instructions (programs) to be executed
on a computer
Different Programming Languages
1. Machine Languages
2. Assembly Languages
3. High-level Languages
4. Fourth Generation Languages
5. Object-Oriented Languages
 Web Languages
HTML
XML
Java
Web Services
Data Base Management Systems
Data – Basic Concepts

Field: Data item

Record: Group of related fields

File (table): Group of related records

Data Base: Collection of

logically related files
 Advantages of a Data Base
Data stored in a data base are independent of
the application programs using them
Advantages
 Controlled redundancy
 Inconsistency avoided
 Data integrity
 Integrated view of data
 Addresses unstructured information needs
 Enforcement of standards
 Security
 Data Base Management
System
Software interface between data base and
user
Facilitates
 Creation
 Interrogation and

 Maintenance

of data bases
And application development
 Interacting with Data Base
Application Programmer: thro’ DML,
embedded in a host language (e.g. Cobol)
Administrator; thro’ DB utilities
Sophisticated User: thro’ query language
Naïve User: thro’ menu driven application
programs
 Data Base Creation
By Data Base Administrator (DBA)
Using Data Definition Language (DDL)
Information about cataloged and stored in
data dictionary – contains the names and
descriptions about all types of data
records and their interrelationships,
access privileges, application programs
using each data
 Data Base Interrogation
User-friendly query language
Report Generator
SQL and QBE
 SQL
SQL is based on set and relational
operations with certain modifications and
enhancements
A typical SQL query has the form:
select A1, A2, ..., An
from r1, r2, ..., rm
where P
 Data Base Structures
Hierarchical
Network
Relational
 Hierarchical Structure
Relationship between records form a
hierarchy or tree like structure
All relationships are one-to-many
 Network Structure
Allows many-to-many relationships
Relationship between data items is called
sets
Pointer to locate record
Complex – difficult to comprehend, modify,
reconstruct
 Relational Structure
Data elements are viewed as being stored
in tables (relations)
Easy to understand and implement
Easy to modify
Access control is easier to implement
 Multidimensional Structure
Variation of relational model
Can be visualized as cubes of data
Useful for manipulating data with many
interrelationships
Support online analytical processing
(OLAP) applications
 Object-Oriented Structure
Used in multimedia web based
applications and computer aided design
(CAD)
Claimed to be superior in handling
complex data types such as documents,
graphic images, video clips, audio
segments than relational database
management system
 Architecture of Data Base
Schema – logical view of the data base
Conceptual schema – created by DA for
DBA
Internal schema – physical representation
External schema – users’ view
 Database Development
Data planning
Database design: Data modeling using
Entity-Relationship diagram – Conceptual
model
Logical design: in conformance with the
requirements of database model chosen
such as relational
Physical design: data storage in the
database and access methods
 Data Warehouse
A planned, integrated, managed store of
relevant corporate data optimized for
analysis, query and reporting purposes

Data extracted from operational data

bases over a period of time, screened,
edited, standardized and integrated
 Characteristics of Data
Warehouse
Separate location for data that is used for
decision support and analysis, apart from
operational data
Additional views of data that are relevant to
users in decision support and analysis
environment
 Integrated
 Non-volatile
 Subject-oriented
 Time invariant
Capabilities of Data Warehouse
Data storage
Data reconciliation
Data consolidation
Trend analysis
Drill-down
Slicing and Dicing
Graphical output
 Types of Data warehouse
Applications
Market Analysis
Financial Analysis
Sales Support
Customer Service
 Data Mining
Data Mining: Process in a data
warehouse to identify patterns –
knowledge discovery
Data Mart: subset of Data warehouse
Telecommunications and
Networking
 Advantages of Networks
Common storage
Sharing of resources
Sharing of applications
Centralized administration
Imagine breaking these barriers
without Networking
 The Internet Revolution
Internet is a computer network made up of
thousands of networks worldwide.
There are millions of computers connected
to the Internet and the number is growing
at a rapid rate
No one is in control of the Internet.
 Internet - Contd.
There are organizations which develop technical
aspects of this network and set standards for
creating applications on it.
The Internet backbone, through which Internet
traffic flows, is owned by private companies.
All computers on the Internet communicate with
one another using the Transmission Control
Protocol/Internet Protocol suite, abbreviated to
TCP/IP.
 Business Use of Internet
Information
Email
Discussion forums
Publishing thoughts, opinions, news
Buy and sell
Chat – data and voice
Business Value of the Internet
Cost reduction
More opportunities for marketing
Informed decision-making
Effective and efficient communication
Breaking geographical and time barriers
 Types of Networks
Classified on the basis of size, complexity
and geographical spread
Local Area Network (LAN): Collection of
networked computers within a premises
Wide Area Network (WAN): Connecting
computers, in which a public network
service is also used
 Local Area Network
Usually private owned
Topologies: Bus, Ring and Star
Media: Copper cables, Fibre optics
Transmission speed: 10 Mbps to 1 Gbps
Benefit: Resource sharing
 Wide Area Network
WAN can transmit information across a
wide geographic area
Can use both public and private networks
Error control more difficult than LANs
 Intranets and Extranets

• Intranets use Web-based and Internet

technology to inexpensively and easily share
[organizational] data across a private network
within an organization

• Extranets connect companies with their

suppliers and customers via Web links.
Extranets facilitate supply chain information
sharing
 Modems
Modulator / Demodulator
Necessary because data communication
takes place on a telephone line
Converts digital signal to analog and back
Speed measured in baud rate
Support for transmission error control,
auto dial and answer
 Multiplexors
Facilitate simultaneous data transmission
from many terminals over a single
channel.
Used to link several low speed lines to a
high speed line
 Client / Server Network
Network management from a central
computer called server
Client makes requests to the server and the
server responds with the required information
User-friendly interface and part of application
logic in client
Data storage at the server end: Robustness,
Security
Flexibility
Scalability
Reduced cost
 A Typical Client
Usually manages the GUI
 E.g. Windows, Mac OS, workstation Unix
Manages the display of data
Performs data input and validation
Dispatches requests to server(s)
Manages local environment
 Display
 Keyboard
 A Typical Server
A program that carries out client requests
o E.g. Unix, Windows N/T, MVS
Usually manages some unique resource
o RDBMS
o Printer
o Business Logic
o Files
Client / Server Architectures –
Two-tier
Architecture
 client with a front end program
 server with data base
Limitations:
 With increasing complexity of application,
client program will grow bigger (fat client)
 Only limited scalability
Client / Server Architectures –
Three-tier
Architecture
 Client focussed on GUI tasks
Application servers focussed on
application logic
Data base servers
 Network Topologies
Bus
Ring
Star
Mesh
Bus Topology
 Bus Topology – Contd.
All stations connected along a single transmission medium
Only one computer can communicate at a time
Extension by repeaters
Advantages
 Network will not fail, if a node fails
 Easy to use and understand
 Least amount of cable and less expensive
 Easy to expand
Disadvantages
 Degradation high because of attenuation caused by taps to
medium
 Heavy traffic affects the speed
 Vulnerability to break-down in channel
 All nodes have access to data on the channel: protection of
data
Star Topology
 Star Topology – Contd.
All computers connected to a single hub, which
establishes connections between stations
Resources and management centralized
Throughput depends on hub
Advantages
 Easy to add / remove nodes
 Node failure does not affect the network
 Easier to diagnose network problems through hub
Disadvantages
 Vulnerable to failure of central hub
 Cable cost is higher
 Ring Topology

Work Station/Node

Work Station/Node
Work Station/Node

Work Station/Node
 Ring Topology – Contd.
All the nodes are connected in the form
of a ring through repeaters
Unidirectional flow
Every repeater checks the packet for
destination and passes it on
Since signals are regenerated at each
repeater, longer distances can be
covered
Ring Topology – Advantages
and Disadvantages
Advantages
 Easily extendable
 Predictable delay (Token passing access)
 Better throughput
Disadvantages
 Vulnerable
 Difficult to troubleshoot
 Message delay proportional to the number of nodes
 Adding / removing computers can disrupt network
 Maintenance problems restrict number of
workstations
Mesh Topology
 Mesh Topology – Contd.
Every node is connected to every other node
Full and Partial mesh topologies
Advantages
 Minor faults will not disrupt the network
 Highly reliable
Disadvantages
 Adding / replacing a machine will disrupt the network
 Installation and maintenance costs are high
 Network Standards
International Standards Organization (ISO): Open
Systems Interconnect (OSI) model
American National Standards Institute (ANSI): Fibre
Distributed Data Interface (FDDI) and other
communication standards
Electronic Industries Association (EIA) – electrical
transmission standards EIA/TIA 232 (formerly RS 232)
Institute of Electrical and Electronic Engineers (IEEE):
networking standards 802.3, 802.5
International Telecommunications Union (ITU):
standards for telecommunications X.25
Internet Activities Board (IAB) improvements in Internet
standards – TCP/IP, SNMP
 OSI Model
Seven layers – logical partitions for system
– system communication
Each layer performs a specific function
OSI Layers
Application
Presentation
Session
Transport
Network
Data Link
Physical
 The OSI Model
Application Application
Presentation Presentation 1

Session Session 2
Peer Communication 3
Transport Transport
Network Network 4
Data link Data link 5
Physical Physical 6
7

Information Flow

Network Medium
 Physical Layer
Defines mechanical and electrical
characteristics to establish and maintain the
physical connection
Digital ones and zeroes are converted to
electrical signals
Issues addressed
 Physical topology
 Synchronization of bits
 Transfer rate
 Transmission mode
 Network Interface Card
 Provides connection between a computer’s
internal bus and network media
 Comes in many shapes and sizes
 Vary by the type of bus connection they
employ
 Have a unique identification number
 Transceiver
Part of any network interface (transmitter /
receiver)
Appearance and function vary with the
type of network cable and topology in use
 Repeater
Amplifies the signal it receives on one port
and resends them on another
Extends maximum length of a network
segment
Disadv: Amplifies everything it receives
 Hub
Also called a concentrator
central connection point for several
network devices
a multiport repeater
Classified as
 Active hub
 Passive hub
 Data Link Layer
Responsible for
 Creating packets (Logical chunks)
 Transmitting packets
 Receiving packets
 Logical addressing
 Detection of and recovery from errors
 Controlling media access
Contention
Polling
Token passing
 Flow regulation: synchronization of fast
transmitters and slow receivers
 Network Layer
Controls the operation of the network
Determines route from source to
destination
Handles congestion problems
 Routers
Operate at Physical, Data Link and
Network layers
Connect heterogeneous LANs
 Transport Layer
Ensures data transfer between end points
with error recovery and flow control
Breaks down messages into packets,
addresses the packets, forwards them,
reassembles them at destination node
 Session Layer
Provides control structure for
communication between applications
Establishes, manages and terminates
connections (sessions) between
cooperating applications
Functions
 Managing dialog control
 Synchronization
 Presentation Layer
Concerns itself with information
representation
Transforms information from machine
format to user understandable format
Services: data translation
conversion of file formats
encryption
 Application Layer
All exchange of information between the user and the network
occurs through this layer
Responsible for user and application program support such as
passwords
resource sharing
file transfer
network file system
electronic mail
remote login
directory services
inter-process communications
remote procedure call
 Gateways
Operate at all layers
Enable different communication
architecture to communicate
Maps functions performed by one
application in one computer to another on
a different computer
 Networking Protocols
Set of rules for sending information over a
network
Functions
 Data transmission mechanism
 Communication session initiation and termination
 Addressing and routing
 Authentication and verification
 Encryption and compression
 Error correction
WAN Message Transmission
Techniques
Message Switching: sending a complete message to a
concentration point for storage and routing to the
destination as soon as the communication path is
available. Transmission cost based on message length
Packet Switching: breaking message into packets, route
them individually. Transmission cost based on packet and
distance. Error and flow control procedures
Circuit Switching: physical channel established between
communicating equipment; connection, once established,
used exclusively by two users. No error or flow control.
Virtual circuits: logical circuit
 Switched Virtual Circuit (SVC): Dynamic on-demand connectivity
 Permanent Virtual Circuit (PVC): always on-line connection
 Base Band Network
Single channel frequency
Transmit signals without modulation
Half duplex transmission
Operates at a shorter distances (< 2 miles)
Speed: upto 100 Mbps
 Broadband Network
Multiple channels and multiple signals at
different frequencies
Capable of supporting wide range of data,
incl. audio and video
Full duplex transmission
Speed: upto 10Gbps
Virtual Private Network (VPN)
Use of public network to create a secure
network among preselected users
Less expensive than dedicated lines
(eg) Auto manufacturer and its dealers
network
 Twisted-Pair Cable
Consists of two strands of copper wire
twisted together.
Twisting reduces the sensitivity of the
cable to EMI and also reduces the
tendency of the cable to radiate RF noise
Low cost, inexpensive to install lowest cost
per foot of any cable
Disadv: Cross talk, Noise
 Twisted Pair Cable
Shielded Twisted Pair (STP)

Unshielded Twisted Pair

 Categories of Twisted Pair
Cables
Unshielded Twisted Pair Cable
Categories 1 and 2
Voice cables & low data rates < 4Mbps
Category 3
Data rates upto 10Mbps. New standards however support upto
100Mbps.
Category 4
Consists of 4 twisted pairs. Supports upto 16Mbps
Category 5
Data grade cable with 4 twisted pairs. Supports upto 100 Mbps
 Coaxial Cables
Central copper conductor enclosed in an
insulating sheath outer metallic case for
transmission of high frequency signals
Coaxial Cable
 Types of Coaxial Cables
Thinnet
 Light & flexible cable
 Inexpensive
 easy to install.
 Approximately .25 inches(6mm) in thickness
Thicknet
 Appx. .5 inches (13mm) in diameter
 harder to work with but can carry more signals a longer
distance(500m) than Thinnet
 More expensive
 relatively safer to install outside, running from building to
building
 Optical Fibre
Transmission of signals in the form of light
Higher bandwidth
More reliable
Extremely secure: Difficult to tap
No cross talk
High cost
 Fiber Optics Cable
Data travels in the form of light
Light sources could be LEDs and lasers
The centre coductor is a fiber that consists of highly
refined glass or plastic designed to transmit light signals
with little loss.
Glass core supports longer distance but plastic core is
easier to support with. Fiber is coated with a cladding or
a gel that reflects signals back into the fiber to reduce
signal loss.
A plastic sheet protects the fiber
The end of the cable that receives the light signal must
convert it back to electrical form
Fiber Optics Cable
Rationale for Unbounded Media
Space constraint
Mobile people
Temporary Installation
Satellite office or branches
Ships in Ocean
Teams in remote field locations
 Radio Waves
Used where cabling is difficult
(eg) communication to ships from shore,
communication among mobile police force
Should get Govt. clearance for usage of
frequency
Cheap
Easy to tap
Interference and Noise
 Micro Wave
Useful, where cable communication is
difficult
Line of sight between sending and
receiving stations
High cost of installation
Easy to tap
Interference and Noise
 Satellite Communication
Transmission across globe
Uses artificial satellites
Satellite terminals at the sending and
receiving ends
Reliable
Expensive
 Wireless LANs
Avoids cabling issues
Uses radio technology
Short-range wireless technology:
Bluetooth in computers and other devices:
rate of 1 Mbps within 10 to 100 metres
 Wireless Web
For Smart telephones, pagers, PDAs
Standard wireless application protocol (WAP):
specifies conversion of web pages in HTML /
XML into a wireless markup language (WML) to
be accessible in a Web-enabled wireless device
Third generation (3G) wireless technologies to
raise transmission speeds to enable streaming
video and multimedia applications on mobile
devices
 Integrated Voice, Data and
Video
Formally known as Integrated Services
Digital Network (ISDN)
Integrates voice, data and video through
digital switching and transmission for
worldwide communication
Narrowband and Broadband
Uses CCITT’s X.25 standard
 Network Administration and
Control
Ensures proper functioning of network
Security
Monitoring usage and throughput
Load balancing
Response to security violations
Back-up and recovery
Planning for scalability
Requirements: Knowledge of network topology
and protocols, administration tools
 Network Operating System
Renders the network as an unified,
controlled and uniform computing
environment
Enabling terminal – local and remote –
access to server(s)
Sharing of network resources
Checking user authorization to specific
resources
Network Performance Metrics
Measures of Communication Network
performance
 Latency: delay of transmitting a message
from source to destination
 Throughput: quantity of work per unit time,
measured in terms of bytes per second
 IP Addressing
Unique IP address for each host and network
component
32 bit – segmented into four 8 bits (octets),
separated by dots
01010000.00011110.00000011.00011000
80.30.3.24
Two pieces of information
 Network id
 Host id
 Classes of IP Addresses
A: assigned to networks with a very large
number of hosts
 First bit zero
 Balance bits in the first octet – network id
 Remaining 24 bits – host id
B: medium to large sized networks
 First two bits 10
 Next 14 bits network id
 Balance 16 bits host id
C: Small networks
 First three bits 110
 Next 21 bits network id
 Last 8 bits host id
 Classes of IP Addresses –
Contd.
D: for multicast groups – hosts related in some
manner
 First four bits 1110
 Remaining bits uniquely identify the group of hosts
E: reserved for future
 First four bits 1111

TCP/IP supports only A,B and C

 IPv6
IP addresses are being extended beyond
computers
IPv6 increases the address size from 32
bits to 128 bits
Can support up to 340 trillion trillion trillion
addresses
Information Systems in Business
Types of Information Systems

Information
Systems

Operations Management
Support Support

Enterprise
TPS MIS EIS
Collaboration
Process
Control
DSS
 Information Requirements of
Decision Makers
Ad hoc
Unscheduled
Summarized
Infrequent

Unstructured Strategic
Forward looking
External
ns

Management
sio

Wide scope

Inf
ci

orm
De

Prespecified
Semistructured Tactical Management

ati
Scheduled

on
Detailed
Frequent
Structured Operational Management
Historical
Internal
Narrow focus
Information System and
Decision-Making

EIS

MIS

TPS
Transaction Processing System
(TPS)
Transactions – events that occur as part of doing
business
(eg) sales, purchase
Information systems that process data resulting
from the occurrence of business transactions
(eg) invoicing, goods receipt
Online Transaction Processing (OLTP): for better
customer service and hence a strategic need
Transaction Processing Cycle:
Data capture  Data process data base
update  Document and Report generation 
Query process
 Data Entry
Input activity in transaction processing system
Speed and accuracy problems
Automated methods of data entry (source data
automation):
 POS terminals, ATMs
 Bar codes
 Magnetic stripes
 Optical scanning
 OCR
 Pen-based tablet PCs
 Touch screens
 Voice recognition system
 Data Processing
Batch processing: transaction data
accumulated over a period of time and
processed periodically
(eg) day end process in a bank
Realtime processing (online processing):
Data processed immediately after a
transaction occurs
 Batch Processing
Advantages:
 Economical
 Some applications are necessarily batch
processes (eg) payroll
Disadvantages:
 Current status may not be available
 Realtime Processing
Particularly important for applications where a
high frequency of changes are made in a short
period and currency of data is critical
Data base protection is more critical than in
batch process
More controls to prevent unauthorized access
High cost
 Fault Tolerant Systems
Built-in back-up failover capability
Multiprocessor technology
Redundancy in memory, disk drives,
software etc.
 Document and Report
Generation
Transaction Documents
 Action Documents: initiates action or transaction
on the recipient (eg)purchase order
 Information Documents: confirmation to the
recipient that the transition has occurred (eg)
sales receipt
 Turnaround Document: Designed to be returned to
sender in whole or in part as acknowledgement
(eg) delivery challan
Reports
 Control listings: detailed listing of transactions (eg)
payroll report
 Edit reports: description of errors during
processing (eg) error reports
 Management Information
Systems
Produces information products that support
many of the day-to-day decision making needs
of the management
Types of reports
 Periodic (eg) weekly sales analysis
 Exception (eg) list of customers who have exceeded
credit limit
 On-demand
 Push (eg) selective broadcast of reports
(eg) sales analysis reports
Executive Information Systems
Focus on strategic needs of top
management
Graphical displays
Drill-down
Exception reporting
Trend analysis
Web access
 Groupware for Enterprise
Collaboration
Software that enables multiple users to share information with
one another and to work together on multiple projects
(eg) Lotus Notes, Novell Groupwise, , Microsoft Exchange,
Netscape Communicator
Collaboration through e-mail, data or audio conferencing,
discussion forums, scheduling and calendaring, joint document
creation etc.
Use over Internet or intranets and extranets
Designed to make communication and coordination of
workgroup activities easier irrespective of location of the team
Important applications:
 Document management
 Workflow systems
 Knowledge management
 Office Automation Systems
 Main purpose: improving office productivity
Word processing
Spreadsheet
Database management
Graphics
Information Systems in
Functional Areas
 Strategic
Sale Order Forecast Planning

Dispatch MPS
Invoicing/

RCCP Operations
A/c WO / Sch
Creation Planning
Receivable

MRP

Purchase

Stores Receipt
Execution

Production Bill Passing

A/C payable

GL
EIS

MIS / EIS
Business Modules in an
Enterprise System
Finance HR
Production
Manufacturing
Planning
Enterprise
System Maintenance
Quality
Sales &
Materials Distribution
 Finance
Financial Accounting (GL, A/R, A/P, Fixed Asset,
P&L, Balance Sheet)
Costing (Cost centre accounting, Product
Costing, Activity Based Costing)
Treasury (Cash, Funds, portfolio management,
Risk analysis)
Control (Budgeting, MIS, EIS)
Scenarios
 Manufacturing
Capacity Planning
Material Requirement Planning (MRP)
Shop Floor Control
Engineering Data Management
Configuration Management
Lot control/ traceability
Tooling
Lobour Productivity
Computer-Integrated Manufacturing (CIM)
 Computer-Aided Engineering (CAE)
 Computer-Aided Design (CAD)
 Computer-Aided Process Planning (CAPP)
Process Control
Materials Management
Pre-Purchasing Activities
Purchasing
Vendor evaluation
Material Inspection
Inventory Management
Supplier Bill Passing
Tracking of material on-order
Reservation
Consignment Stocks
Stock valuation
Perpetual audit
 Quality
Quality Planning (Material Specifications,
Inspection Planning)
Inspection and follow-up action
Quality Control (Dynamic sample
determination on the basis of history, QC
Charts
 Sales and Distribution
Customer Data Base
Sales Forecast
Order Processing
Finished Goods Stock (Reservation, Analysis,
Valuation, Lot Control)
Distribution Requirement Planning (DRP)
Despatch (Due Date Monitoring , Pick List)
Invoicing (Credit and Debit Notes, Proforma
Invoices, Cancellation of Invoices, Discounts)
Pricing (Costing, Quotations)
Sales Support (Customer Data, Prospect List)
Export
Sales Force Automation
 Human Resources
Personnel (Employee database, recruitment,
benefits administration)
Organization (Organization Structure, Job
Descriptions)
Payroll (Salary Preparation, Staff Cost)
Time & Attendance (Time Recording, Shift
Planning)
HRD (Career and Succession Planning, Profile
Maintenance, Training Needs assessment, Training
Management)
 Plant Maintenance
Preventive Maintenance Planning
Equipment Tracking
Component Tracking
Calibration Tracking
Warranty Claims Tracking
Enterprise Business Systems

Enterprise Resource Planning (ERP)

Supply Chain Management (SCM)
Customer Relationship Management
(CRM)
 WHAT IS ERP?
The techniques and concepts
employed for the integrated
management of business as a
whole from the viewpoint of the
effective use of management
resources
 Information Integration through
ERP
Business Planning Finance

Manufacturing Human Resources

ERP
Materials Logistics

Quality Maintenance

Sales & Distribution

 ERP

Traditional applications are functionally

oriented and lines of demarcation become
barriers to communication

Materials Production Marketing Finance

ERP is business process based and improves

communication and accountability
 Organization as a
stream of Business
Processes
AN EXAMPLE:
Order Fulfillment Process
Order receipt  Order Processing 
Production Planning  Material Planning
 Purchase Order Release  Work Order release
 Production Monitoring  Warehousing 
Despatch Instructions  Billing Accounts
Receivable
 WHY ERP?
All processes are customer focused
Everybody in the value chain is fully
informed about the process
Single repository or information and
hence non redundancy
Updates across functions maintaining
consistency
Information access across functions
Main Benefits of ERP: Accountability
Responsibility
Communication
 What can you expect from
ERP?
To enable improved business processes
 Cycle time reduction
 Increased business agility
 On-time delivery
 Inventory reduction
 Order fulfillment improvement
 Increased flexibility
 Improved supplier performance
 Reduction in quality costs
 Improved resource utility
 Better customer satisfaction
What more can you expect
from ERP?
To provide flexible, integrated, real-
time decision support

 Improved information accuracy

 Better decision making capability
 Still More
To support business growth requirements
 Multiple product lines
 Multiple languages
 Multiple currencies

To eliminate limitation of legacy systems

 Fragmentation of data and processing
 inflexibility to change
 obsolete technologies
ERP – Top Players
in India
SAP, Business One
Oracle
Navision, Axapta
J D Edwards
Peoplesoft
MfgPro
Marshall
BaaN
MakeESS
 For ERP to succeed
 clarity of expectations from ERP
 top management commitment
 reasonable scope
 adequate resources
 the right product
 the right people for implementation
 Participation of end users
 proper communication within the organization
 steering committee and strong leader
 balanced team
 good training
 sound and appropriate Implementation methodology
 good monitoring and review mechanism