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Chapter I Session I

Management and use of the information using computer-based tools. It can refer to both hardware and software. Mostly, it is the term used to refer to business applications of computer technology rather than scientific applications. India exports softwares and services to approximately 95 countries in the world.

Stands for "Information Technology," and is pronounced "I.T." It refers to anything related to computing technology, such as networking, hardware, software, the Internet, or the people that work with these technologies. Many companies now have IT departments for managing the computers, networks, and other technical areas of their businesses. IT jobs include computer programming, network administration, computer engineering, Web development, technical support, and many other related occupations. Since we live in the "information age," information technology has become a part of our everyday lives. That means the term "IT," already highly overused, is here to stay.


order to support IT and ITES, the Indian Government is also taking many steps. For example: 1. The Govt. has provided incentives including tax holiday up to 2010 and competitive duty structures. 2. The Govt. is trying to reduce the international communication cost 3. It is providing infrastructure support through organizations such as software technology parks.

IT will continue to gain momentum. The immense expansion in networking technologies is expected to continue into the next decade also. IT will bring about an improvement in the quality of life as it impacts on global competitiveness. Technologies that are emerging are Data Warehousing and Data Mining. They involve collecting data in normal research. Software services that are being used will go a long way. Future Estimates Annual revenue estimated for the industry is US$87 billion * Software and Services will contribute over 7.5% of the overall GDP growth of India. * IT exports will constitute 35% of the total exports of India * There will be 2.2 million jobs in IT sector * IT industry will attract FDI of US$ 4-5 billion * Market capitalization of IT shares will be approximately US $225 billion.

Function IT Systems Function IT systems enable individuals to carry out their tasks effectively in their place of work. Functional systems include spreadsheets, word processors, statistical analysis software and computer aided design (CAD). Employees can work and carry out their task independently or collectively using these software technologies. Network IT Systems Network IT systems enable effective communication within or outside an establishment. Examples of these systems are straightforward e-mail (electronic mail) systems, blogs, wiki, IM (instant messaging) and electronic conferencing. These technologies help interaction and collaboration between working groups and also make possible rapid information flow at all levels within an organisation. Management IT systems MITS can be defined as a planned application that is designed to process data and transform it into useful information for management decision making. MIS may be regarded as a division of Management IT systems. Nevertheless, because of the crucial role MIS plays in a business environment, it is considered as a key information technology system for businesses. Enterprise IT Systems Enterprise IT systems are applications designed to integrate and handle entire business processes for big organisations. In general, enterprise application software is hosted on large servers over a computer network. Transmission of information is possible internally or externally.

Business strategy - collapsing time and distance, enabling electronic commerce. It facilitates resequencing, simultaneity, time extension, portability, reusability Organization Culture - encouraging the free flow of information Organization Structures - making networking and virtual corporations a reality Management Processes - providing support for complex decision making processes Work - dramatically changing the nature of professional, and now managerial work The workplace - allowing work from home and on the move, as in telework

Understanding the Changing Context of IT - as well as the direct impact on their business managers need to be able to see these developments in the context of the wider environment in which their business operates. For a long term perspective see IT Futures Discussion Paper Keeping abreast of Developments - not about the details of the technologies, but about the business impacts; for example by meeting suppliers business consultant's, attending conferences, or receiving customized presentations from independent analysts. Integrating IT and Business Planning - the IT strategy should support the business strategy and vice versa. This may need new planning processes, hybrid teams, and a increased incorporation of the levers into business plans. Addressing Culture Issues - the dimensions of existing and desired culture need to be understood and how proposed systems will affect them. In particular attention needs to be paid to the organization's information culture Experimenting with new Structures - using IT to remove some of the limitations of hierarchy and to encourage the development of innovative teams, using experts located in different functions and places. Managing dispersed teams is challenging but rewarding.

Ensuring that new systems are customized change proof - our studies have shown many new systems to be developed around existing customized structures and responsibilities. Since these change very rapidly, new systems should be built with orgacustomizedxibility and change in mind.
Developing New Skills - more of tomorrow's managers will need to become hybrid managers, combining the knowledge and skills of general management, their own discipline and IT. Using IT as a management tool - initiating personal use of IT into every day work. This should include use of decision support tools, groupware, knowledge management solutions and exploiting the Internet. Exploiting Information as a Strategic Asset - using the techniques of Information Resources Management to develop it as a valuable resource for internal use, for adding value to customer activities or services, or for creating saleable products. Introducing Knowledge Management and Innovation - going beyond information to developing networks of knowledge experts who evolve the organization's knowledge assets to create extra capabilities and value. Reorganizing the Workplace - by introducing flexible working and telework. The business benefits of this in terms of productivity and cost savings are such that there are many personal benefits to be achieved by a successful implementation.


level of productivity Enhanced enterprise processes Enhanced management and administration Networking and communication E-commerce and globalization New technology innovations

The evolution of the web The growth of broadband The explosion of video on internet The growth of cell phones The explosion of virtual worlds One key technology trend Social media leverages technology to allow people to connect Turning television into an internet-connected device Technology is just important for large companies as small ones. A major focus area is integrating online and offline data Cloud computing Fact: One example from the banking industry is check processing. It's been said that without information technology systems, to process all the checks handled in the U.S. manually would take a human staff the size of the entire working population of California.

Chapter 2 Session II

A management information system (MIS) provides information which is needed to manage organizations efficiently and effectively.[1] Management information systems involve three primary resources: people, technology, and information.
The successful MIS supports a business's long range plans, providing reports based upon performance analysis in areas critical to those plans, with feedback loops that allow for titivation of every aspect of the enterprise, including recruitment and training regimens. MIS not only indicate how things are going, but why and where performance is failing to meet the plan. These reports include near-realtime performance of cost centers and projects with detail sufficient for individual accountability.


Early 20th century 1950

MIS not recognized, highly informal information was available MIS was organized under a separate deptt. Called as computer deptt

1970 1980 1990

Computer manager and MIS manager became synonymous

Computer Deptt. Was called as EDP The introduction of Systems concept, focus shifted to information DSS has emerged. Online access and resltime access to MIS database

21st century

Artificial intelligence is used for designing expert systems to cater managerial information needs AI is practically applied in the field of computer games, expert systems, neural networks, robotics etc

Management information systems (MIS), per se, produce fixed, regularly scheduled reports based on data extracted and summarized from the firms underlying transaction processing systems[4] to middle and operational level managers to identify and inform structured and semi-structured decision problems. Decision support systems (DSS) are computer program applications used by middle management to compile information from a wide range of sources to support problem solving and decision making. Executive information systems (EIS) is a reporting tool that provides quick access to summarized reports coming from all company levels and departments such as accounting, human resources and operations. Marketing information systems are MIS designed specifically for managing the marketing aspects of the business. Office automation systems (OAS) support communication and productivity in the enterprise by automating work flow and eliminating bottlenecks. OAS may be implemented at any and all levels of management.

TO utilize emerging importance of advanced information systems which can change mgt. in several ways The basic function of planning and control now depend to an increasingly greater extent on access to computer based IS as decision making becomes more structures and relies most on the flow of information to and between decision centres The organization is changing to accommodate IT. The structure and composition of resources have adapted to absorb information. The manner in which the technical functions of business are managed are largely controlled by the design of IS to make decisions, and operate.

Companies are able to highlight their strengths and weaknesses due to the presence of revenue reports, employees' performance record etc. The identification of these aspects can help the company improve their business processes and operations. Giving an overall picture of the company and acting as a communication and planning tool. The availability of the customer data and feedback can help the company to align their business processes according to the needs of the customers. The effective management of customer data can help the company to perform direct marketing and promotion activities. Information is considered to be an important asset for any company in the modern competitive world. The consumer buying trends and behaviours can be predicted by the analysis of sales and revenue reports from each operating region of the company.

An information system is an arrangement of a number of elements that provide effective information for decision making and or control of some operations of an organization. It reduces uncertainty. Some of the important implications or benefits of IS in business are Decision making to achieve goal Right decision at right time Knowledge used in unusual situations Solving critical problems Edge in competitive environment Formulate a strategy of action

Operational function the grouping of several functional units on the basis of related activities into a sub-system is termed as operational function. Eg. In business enterprise, marketing is an operational function. Grouping of functional units like market research, advertising, sales analysis etc. here information required at different ends are different. Types of Decision making Programmed/Nonprogrammed decisions. Eg1: ordering inventories when the level drops to 100 units or fewer in a retail shop. Eg2: determining the best training for a new employee joining in the company. Level of Mgt. activity different levels of Mgt. activities in Mgt. planning and control hierarchy are strategic level, tactical level, operational level.

Chapter III

The process of managing data as a resource that is valuable to an organization or business. One of the largest organizations that deal with data management, DAMA (Data Management Association), states that data management is the process of developing data architectures, practices, and procedures dealing with data and then executing these aspects on a regular basis. "Data management is the development, execution and supervision of plans, policies, programs and practices that control, protect, deliver and enhance the value of data and information assets. Data Mgt is composed of four building blocks: Data Profiling Data Quality Mgt. Data integration Data Augmentation/amplification


increases exponentially with time Relevancy check and quality check Scattered data Need of collecting much of the external data for decision making Data security, integrity, legality How to select appropriate tool Manage offline data Redundancy of data Maintenance problem


Management at the National Security Archive is extremely difficult since only 22 staff manage over 2 million documents from 80 government agencies, and that volume is growing by 50,000 documents annually. They have developed the methodology, models, software, and infrastructure available in order to manage large blocks of data.

1. 2. 3. 4. 5.


Data life cycle process refers to transformation of data into knowledge. The steps in this process are Collection of data from various resources and databases like internal data, external data, personal data Storing this data in databases and data warehouses Data are preprocessed to the format of a data warehouse Users then access the warehouse and take a copy of the needed data for analysis through various software The analysis is done with data analysis and mining tools which look for intelligent systems to support interpretation of results. Results could be creation of Knowledge and its Management methods. The data needs to be presented to the user internal/external using various visualization tools. The knowledge is stored in organizational knowledge base for any upcoming decision making need.

Data Model is a logical map that represents the inherent properties of the data independent of software hardware or machine performance considerations. The model shows data elements grouped into records as well as the association around those records. Representation of a real world situation about which data is to be collected and stored in a database. A data model depicts the dataflow and logical interrelationships among different data elements. Data modeling is the process of creating a data model for an information system by applying formal data modeling techniques. Data Modeling is a method used to define and analyze data requirements needed to support the business functions of an enterprise. These data requirements are recorded as a conceptual data model with associated data definitions. Data modeling defines the relationships between data elements and structures. Data modeling techniques and methodologies are used to model data in a standard, consistent, predictable manner in order to manage it as a resource. The use of data modeling standards is strongly recommended for all projects requiring a standard means of defining and analyzing data within an organization, e.g. -


manage data as a resource; for the integration of information systems; for designing databases/data warehouses For data value integrity Data structure integrity Data retention integrity Data derivation integrity

Data Warehousing :

In computing, a data warehouse (DW) is a database used for reporting and analysis. The data stored in the warehouse is uploaded from the operational systems.
A data warehouse is a subject-oriented, integrated, time-variant and non-volatile collection of data in support of management's decision making process. A data warehouse is a copy of transaction data specifically structured for query and analysis.


directly with operational system using software tools i.e. front end tools which is optimal in companies that do not have a large no of end users running queries and conducting analysis Use a data warehouse

Data Warehouse in a company

DATA MART A data mart is the access layer of the data warehouse environment that is used to get data out to the users. The data mart is a subset of the data warehouse which is usually oriented to a specific business line or team.

Reasons for creating a data mart

Easy access to frequently needed data Improves end-user response time Ease of creation Lower cost than implementing a full data warehouse Potential users are more clearly defined than in a full data warehouse METADATA

Data that serves to provide context or additional information about other data. For example, information about the title, subject, author, typeface, enhancements, and size of the data file of a document constitute metadata about that document. It may also describe the conditions under which the data stored in a database was acquired, its accuracy, date, time, method of compilation and processing, etc.

database administrator (short form DBA) is a person responsible for the installation, configuration, upgrade, administration, monitoring and maintenance of physical databases. The role of DBA includes the development and design of database strategies, monitoring and improving database performance and capacity, and planning for future expansion requirements. They may also plan, coordinate and implement security measures to safeguard the database.


organizational skills Strong logical and analytical thinker Ability to concentrate and pay close attention to detail Ability to think broadly and consider impacts across systems and within the organization Good team player

database administrator's responsibilities can include the following tasks:[7] Installing and upgrading the database server and application tools Allocating system storage and planning future storage requirements for the database system Creating primary database storage space Modifying the database structure, as necessary

Enrolling users and maintaining system security Ensuring compliance with database vendor license agreement Controlling and monitoring user access to the database Monitoring and optimizing the performance of the database Planning for backup and recovery of database information Backing up and restoring the database Contacting database vendor for technical support

Integrated collection of automated data files related to one another in the support of a common purpose.

Character: the most basic logical data element is character. Its a single numeric alphabetic or other symbol eg. 1 Field: grouping of characters. Its an attribute of some entity. Eg. 1000 (grouping of price of commodity) Record: group of related fields. Its group of collection of attributes that describe an entity. Eg. Serial no, item code, item name, price are record of a commodity File: group of related records. Eg. Product information can be a file which mentions commodities details. Elements: Each file is made up of data elements. Eg. 1000 (which is price of a commodity)

Data mining is the process of analyzing data from different perspectives and summarizing it into useful information - information that can be used to increase revenue, cuts costs, or both. Data mining software is one of a number of analytical tools for analyzing data. It allows users to analyze data from many different dimensions or angles, categorize it, and summarize the relationships identified. Technically, data mining is the process of finding correlations or patterns among dozens of fields in large relational databases.

One Midwest grocery chain used the data mining capacity of Oracle software to analyze local buying patterns. They discovered that when men bought tomato sauce on Thursdays and Saturdays, they also tended to buy snacks. On Thursdays, however, they only bought a few items. The retailer concluded that they purchased the snacks to have it available for the upcoming weekend. The grocery chain could use this newly discovered information in various ways to increase revenue. For example, they could move the snacks display closer to the tomato sauce display. And, they could make sure snacks and tomato sauce were sold at full price on Thursdays.

Data warehousing is defined as a process of centralized data management and retrieval. Data warehousing, like data mining, is a relatively new term although the concept itself has been around for years. Data warehousing represents an ideal vision of maintaining a central repository of all organizational data.




Blockbuster Entertainment mines its video rental history database to recommend rentals to individual customers. American Express can suggest products to its cardholders based on analysis of their monthly expenditures. The National Basketball Association (NBA) is exploring a data mining application that can be used in conjunction with image recordings of basketball games. The Advanced Scout software analyzes the movements of players to help coaches orchestrate plays and strategies


movement is the ability to move data from one place to another. For eg: from database to end user. It needs collecting hardware, applications, data, to shift to new place with the same form. It needs to be classified, stored, and accessed with ease within an organization.

Operational level - Tracks elementary activities and transactions eg. Sales, receipts, cash deposits, payroll etc - Answers routine questions like no of hrs worked by an employee Knowledge level - Supports organizations knowledge and data workers - Control the flow of paperwork eg. Workstation and office systems

Management level - monitoring, decision making, controlling and admin activities - It generates periodic reports eg. Relocation control systems for various departments who does reporting to marketing tasks Strategic level - Helps senior mgt. tackle and address long term trends in internal and external environment - To tap with the changes

Chapter 4 An introduction

Collection of components A system is a set of elements (often called 'components' instead) and relationships which are different from relationships of the set or its elements to other elements or sets. Most systems share common characteristics, including: Systems have structure, defined by components/elements and their composition; Systems have behavior, which involves inputs, processing and outputs of material, energy, information, or data; Systems have interconnectivity: the various parts of a system have functional as well as structural relationships to each other. Systems may have some functions or groups of functions

Business System A collection of policies, procedures, methods, people, machines, and other elements that interact and enable the organization to achieve its goals. Information System A collection of procedures, programs, equipment, and methods that process data and make it available to management for decision-making.


a new approach for problem solving It relates to development of new information system those activities which contribute into producing an information system which solves organization problems or to tap with the new opportunities is called as Systems Development

The analysis to solve problems in an organizations information system. The steps are 1. Defining the problem 2. Identifying causes 3. Specifying the solution 4. Identifying the information requirements 5. Collect the alternatives 6. Feasibility study: whether the solution found is feasible, achievable financially, technically from organization's point of view 7. Collect the alternatives 8. Make a Project Proposal Report

Creating a roadmap of the existing organization and systems Identifying the primary owners and users of data in organization Anticipate the need/impacts of evolution of new system Describing the existing h/w and s/w that serves the system Find out problems in existing information systems Examine documents of operations and interview key users of the system


design is the process of defining and developing systems to satisfy specified requirements of the user. One could see it as the application of systems theory to product development. If the broader topic of product development "blends the perspective of marketing, design, and manufacturing into a single approach to product development,"then design is the act of taking the marketing information and creating the design of the product to be manufactured.

Logical design The logical design of a system pertains to an abstract representation of the data flows, inputs and outputs of the system. Physical design The physical design relates to the actual input and output processes of the system. This is laid down in terms of how data is input into a system, how it is verified/authenticated, how it is processed, and how it is displayed as output. Example: a personal computer's physical design involves input via a keyboard, processing within the CPU, and output via a monitor, printer, etc.


details system specification It addresses all types of organizational functions managerial, technological, organizational Judges superiority of one design over other to fulfill end-users requirements

1. Output - Medium - Content - Timing 2. Input - Origins - Flow - Timing 3. User interface - Simplicity - Efficiency - Logic - Feedback - Errors

4. Database design Logical data model Volume and speed requirements File organization and design Records specifications 5. Manual procedures What activities Who performs them When How Where 6. Organizational design Task design Job design Process design Organizational structure design Reporting relationships


firm meaning System scalability to accommodate growing no of users and to deliver data over multiple platforms web browsers, cell phones, other mobile devices, platforms Updated to current technologies

Systems analysis, design, and programming

To perform as a programmer, where he actually writes the code to implement the design of the proposed application. Due to the various responsibilities that a system analyst requires to handle, he has to be multifaceted person with varied skills required at various stages of the life cycle. In addition to the technical know-how of the information system development a system analyst should also have the following knowledge. Business knowledge: As the analyst might have to develop any kind of a business system, he should be familiar with the general functioning of all kind of businesses. Interpersonal skills: Such skills are required at various stages of development process for interacting with the users and extracting the requirements out of them Problem solving skills: A system analyst should have enough problem solving skills for defining the alternate solutions to the system and also for the problems occurring at the various stages of the development process

is a process of creating or altering information systems, and the models and methodologies that people use to develop these systems. The SDLC is a process used by a systems analyst to develop an information system Any SDLC should result in a high quality system that meets or exceeds customer expectations, reaches completion within time and cost estimates, works effectively and efficiently in the current and planned Information Technology infrastructure, and is inexpensive to maintain and cost-effective to enhance.[

In project management a project can be defined both with a project life cycle (PLC) and an SDLC, during which slightly different activities occur. According to Taylor (2004) "the project life cycle encompasses all the activities of the project, while the systems development life cycle focuses on realizing the product requirements".[

A number of system development life cycle (SDLC) models have been created: waterfall, fountain, spiral, build and fix, rapid prototyping, incremental, and synchronize and stabilize. The oldest of these, and the best known, is the waterfall model: a sequence of stages in which the output of each stage becomes the input for the next. These stages can be characterized and divided up in different ways, including the following

System study: Problem identification Background analysis Inference or findings 2. Feasibility Study 3. System Analysis Keeping in view the problems and new requirements Work-out the pros and cons including new areas of the system

4. System Design: - Preliminary design - Structured or detailed design System Design Tools: - Flowchart - DFDs - Data Dictionary - Structured English - Decision Table - Decision Tree 5. Coding: converting the new system or program specifications into computer programming language does this. This task is done by programmer and involves data movement and control. 6. Testing: The code is tested at various levels in software testing. Unit, system and user acceptance testings are often performed. This is a grey area as many different opinions exist as to what the stages of testing are and how much if any iteration occurs. Iteration is not generally part of the waterfall model, but usually some occur at this stage. In the testing the whole system is test one by one

7. Implementation: - How to execute the package - How to enter the data - How to process the data - How to take the reports


To know the full capabilities of the system To know the required changes or the additional requirements Studying the performance


ISO defines e-commerce as: it is the general term for exchange of information among enterprise and between enterprise and customers; the Global Information Infrastructure Committee defines it as the economical activities using electrical communications, with which people can purchase products, advertise goods and settle. The following are definitions given by transnational corporations Intel, IBM and HP respectively.
Intel: E-commerce = electronic market + electronic trade + electronic service IBM: E-commerce = information technology + web + business HP: E-commerce is to accomplish commercial business by electronic means.


to business (B2B)

automating supply increasing business efficiency


to Consumer (B2C)

Retail Sales Customer Support


to Consumer (C2C)

Online Auctions


is more then just an online shop selling goods. Businesses make huge savings by more efficient interaction with their suppliers or buyers.

A local pharmacist orders 60% of his supplies from an overseas pharmaceutical suppliers website and saves 5% in his purchases A remote Fiji resort attracts guests from the USA after several exchanges of email


million users of Internet worldwide 1999 US online retail sales - US$20bn. Forrester


US online retail sales - US$30bn+ Forrester


Online buying will reach US$6.9 trillion 2004. Forrester Research electronic payment of bills and banking will cost US Postal Service $17bn over 10 years.


are willing to spend money on online transactions. Despite the recent drop in investment - consumers continue to use the Internet in growing numbers. The US figures are only part of the global picture.


Retail - items that dont need personal touch - objectivity in product quality and performance music, books, gifts, Computers, electronic items Auctions Real Estate - houses and investment properties. Customer support services

More efficient and effective processes between businesses (B 2 B)


which require touch and trial

Luxury goods Clothes - beyond T shirts


- it works for some people but market is restricted Note: Many OFF line factors determine success of Online service. Eg. Transport network,
customer profiles,

(1) Network: It includes Internet, Intranet, and Extranet. Internet is the foundation of e-commerce and the carrier of commercial business information. As to Intranet, it means for enterprises to carry out internal affairs. With regard to Extranet, it is the link between enterprises and users to carry out commercial activities. (2) E-commerce user. It includes personal consumers and business consumers. The business consumer scientifically manages staff, wealth, goods, production, supply and sales by Intranet, Extranet and MIS. Personal consumer has access to information and purchases goods by connecting Internet with browsers, set-top boxes, PDA (the personal digital assistance), Visual TV etc. (3) Authentication Authority: The authentication Authority (CA), the authority recognized by law, is responsible for issuing, managing digital certificates and facilitating parties involved in online sales to identify each other. (4) Distribution center. It is in charge of sending goods that cannot be delivered on line to consumers and keeping track of goods flow. (5) Online bank. It provides the sellers and buyers the traditional bank business, such as settlement, and round-the-clock service. (6) The administration of the commercial activity. It consists mainly of departments of industry, customs, tax and trade.


transactions Social services Entertainment National security

Electronic data interchange (EDI) is the structured transmission of data between organizations by electronic means. It is used to transfer electronic documents or business data from one computer system to another computer system, i.e. from one trading partner to another trading partner without human intervention. Organizations that send or receive documents between each other are referred to as "trading partners" in EDI terminology. The trading partners agree on the specific information to be transmitted and how it should be used. This is done in human readable specifications (also called Message Implementation Guidelines).


might replace bills of lading request for quotation (RFQ), bid in response to RFQ, purchase order, purchase order acknowledgment, shipping notice, receiving advice, invoice, and payment advice, patient records and laboratory results, transport (e.g., container and modal information), engineering and construction, etc. transport (e.g., container and modal information), engineering and construction, etc. with appropriate EDI messages.

B2b - Intel selling micro processors to Dell - Heinz selling ketchup to Mc Donalds

b2c - Dell selling me a laptop - Mc Donalds selling me a Big Mac c2c - Mary buying an iPod from Tom on eBay - Me selling a car to my neighbor - Elance c2b - Me selling my old school books to a second hand book shop - PayPal G2G (Government-to-Government), G2E (Government-toEmployee), G2B (Government-to-Business), B2G (Business-toGovernment), G2C (Government-to-Citizen), C2G (Citizen-toGovernment) are other forms of ecommerce that involve transactions with the government--from procurement to filing taxes to business registrations to renewing licenses.


resource planning (ERP) is an enterprise-wide information system designed to coordinate all the resources, information, and activities needed to complete business processes such as order fulfillment or billing. ERP software applications can be used to manage product planning, parts purchasing, inventories, interacting with suppliers, providing customer service, and tracking orders. ERP can also include application modules for the finance and human resources aspects of a business.

The information made available through an ERP system provides visibility for key performance indicators (KPIs) required for meeting corporate objectives. Typically, an ERP system uses or is integrated with a relational database system. Todays ERP systems can cover a wide range of functions and integrate them into one unified database. For instance, functions such as Human Resources, Supply Chain Management, Customer Relations Management, Financials, Manufacturing functions and Warehouse Management functions ERP package is tight integration between modules, so that all of the core business modules are related. For instance, manufacturing operations are integrated with customer service, logistics and delivery.

Manufacturing: engineering, BOM, Works order, scheduling, capacity, workflow management, quality control, cost management, manufacturing process, manufacturing projects. Manufacturing flows etc. Financials: Accounts payable, accounts receivable, fixed assets, general ledger and cash management, performance units etc. Human Resources: Benefits, training, payroll, time and attendance, etc Supply Chain Management: order to cash, Inventory, supply chain planning, product configuration, supplier scheduling, inspection of goods, claim processing, order entry, purchasing, commission calculation etc. Projects: Costing, billing, activity management, time and expense, etc. Customer relationship management (CRM): sales and marketing, commissions, service, customer contact, call-center support Data Warehouse: retrieve and analyze data, to extract, transform and load data, and to manage the data dictionary are also considered essential components of a data warehousing system. Access Control: system admin, management of super privileges, developers and other super users

2. 3. 4. 5. 6. 7.



to exploit new markets Lower manufacturing costs Flexibility to ship products Improve customer service Reduced time for order fulfillment

The right people get right information at right time and right place Single source of data DATA INTEGRITY Ease for system control Cost reduction and increased profit Better and faster inventory management Real time operations Integrated information of all parties vendors, clients, employees, agents, distributors Integrated business operation locally and internationally Process improvement with the use of workflows Paperless office environment


initial investments Integration complexity Long term implementation phase Mostly single vendor dependency


process reengineering (often referred to by the acronym BPR) is the main way in which organizations become more efficient and modernize. Business process reengineering transforms an organization in ways that directly affect performance. Business Process Reengineering is the key to transforming how people work. What appear to be minor changes in processes can have dramatic effects on cash flow, service delivery and customer satisfaction.

If you have ever waited in line at the grocery store, you can appreciate the need for process improvement. In this case, the "process" is called the check-out process, and the purpose of the process is to pay for and bag your groceries. The process begins with you stepping into line, and ends with you receiving your receipt and leaving the store. You are the customer (you have the money and you have come to buy food), and the store is the supplier.

Supply Chain encompasses all activities in fulfilling customer demands and requests as shown in Figure 1.1. These activities are associated with the flow and transformation of goods from the raw materials stage, through to the end user, as well as the associated information and funds flows.


supply network the internal supply chain (which are manufacturing plants) distribution systems the end users. Flows in SCM up/down material flow, service flow, information flow and funds flow


is a process or methodology used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. CRM is a process that will help bring together lots of pieces of information about customers, sales, marketing effectiveness, responsiveness and market trends. CRM helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers


and efficiency Decrease in overall costs Decision support Enterprise ability Customer Attention Stop the problem before they occur


CRM eg. Marketing, sales,

service Enterprise marketing automation eg. Business climate, new technology, competitor strategies Customer service and support automation eg. Item returns or customer complaints Sales force automation eg. Demographics, customer needs, accounting management, call centres


CRM product development, Risk management Collaborative CRM company+customers eg. Personal interaction, telephonic, internet

Relaxed Atmosphere E-business operations often have a more relaxed atmosphere and approach than traditional storefront businesses. With no customers and clients to see in person, creative e-business leaders can encourage individualization and customization of employee workspaces. Employees are often allowed to dress in a comfortable manner as well, creating a relaxed, low-stress organizational culture. This, in turn, promotes greater levels of productivity, giving e-businesses an advantage over more traditional operations. Management Style Unlike traditional workspace where business offices and cubicles exist for client meetings, e-business operations are often lowfrill, with open designs and meeting space. This organizational concept promotes a more open leadership style where managers are easily accessible to employees. Managers of e-businesses are typically tech-savvy as well, leading to a variety of electronic communication channels that streamline workplace productivity and enhance employee's time management skills.

Flexible Scheduling Online business venues present an opportunity for employees to work from a variety of locations, such as their own homes. Ebusiness leaders often have a more liberal and trusting relationship with employees and focus more on the end result of work efforts rather than a certain number of hours in any given workday. This promotes a corporate culture that values production over time spent in an office chair. It also creates a number of advantages for working parents and other professionals who wish to telecommute or job share, which expands the potential talent pool for e-business owners, providing an advantage in the hiring arena. Challenging Work Opportunities With technology and e-business opportunities continually expanding, employees of e-commerce operations have the chance to grow with their companies throughout their careers. Motivating leaders who encourage on-going professional development in the technology arena creates a motivated and loyal workforce with low employee turnover.

International Markets With 24-hour access to the Internet, e-businesses have the advantage of easily operating in international markets across the globe. This can create a diverse organizational culture comprised of employees from different nationalities and backgrounds. Marketing and Advertising Advantages Tech-savvy e-business leaders understand the nuances of online marketing and social media marketing strategies. This allows them the advantage of effectively advertising and promoting their businesses on a large scale, often for reduced rates.

Chapter 7


order processing JIT (Just in Time) inventory Timely order fulfillment Apply click and brick supply chain

Bergen Brunswig manage information and the ultimate cost-effectiveness of that supply chain. Dell is built on vision of customer-responsive order fulfillment so have flexible supply chains P&G saved retail customers millions of dollars through gains in supply chain efficiency Boeing aircraft failed in 1997 because of lack of materials , internal and supplier part shortages and productivity inefficiencies FedEx and Amazon to sell Harry potter and the Goblet of Fire


increase responsiveness to satisfy demands To increase flexibility to satisfy demands Deliver value to customers as per what they want, where they want, when they want Matching internal system planning and execution to satisfy suppliers, partners, customers Companies are now pressurized to Reduce costs, decrease order cycle times, manufacturing

a process umbrella under which products are created and delivered to customers A complex network of relationships that organizations maintain with trading partners to source, manufacture, and deliver products The facilities where raw materials, intermediate products and finished goods are acquired, transformed, stored, and sold. Supply chain consists of multiple companies with full information, visibility and accountability. SCM is the coordination of material, information, financial flows between and among all the participating enterprises in a business transaction


flows/reverse material flow: physical products, products, product returns, servicing, recycling, disposal Information flow: demand forecasts, order transmission, delivery status reports Financial flows: credit card information, credit terms, payment schedules, consignment, title ownership arrangements

Expansion of internet enabled supply chain collaboration with trading partners The trend towards worldwide dispersion of manufacturing and distribution facilities Channel unpredictability Responsiveness over efficiency Companies willingness to accept lower margins to maintain and increase market share Proliferation of websites, introduction of POS devices to acquire data, the growth of data manipulation tools for large scale data optimization, the growth of dissemination capabilities Replacement of inventories with information

Enterprise Focus: Retail stores and distributors maximize their profits by the no. of inventory turns They want frequent delivery of more products Manufacturers wants longer production lead times Solution: create stores of inventory in supply chain Eg. Nabisco

2. Partner focus/Collaborative: Retailers and distributors know more about consumption as they are close to consumers. So, they can determine levels of consumptions at various promotions. Manufacturers desperately need this data. So create a central repository of information.
Eg. P&G

3. Direct Focus: this represents zero inventory model so as to reduce unnecessary inventory and excess inventory. So they adopt build-to order strategy. They work only for longer order-to delivery cycles. Eg. DELL

SCP applications integrate planning functions such as demand forecasting, inventory simulation, distribution, transportation, manufacturing planning, scheduling. Quality planning forecast accuracy, optimizes production scheduling, reduces inventory and transportation costs, decreases order-cycle times, improves customer service. SCE applications integrate execution functions like procurement, manufacturing, distribution products throughout the value chain. Manage the flow of products through distribution centres, warehouses, delivery monitoring with best transportation alternatives.

2. 3. 4. 5.

Order planning Production Replenishment Distribution management Reverse distribution/reverse logistics


of moving goods throghout supply

chain Exposure to inventory carrying and depreciation costs Higher volatility in demand Transitions through product cycles.


your SC goals Conduct a supply chain readiness audit Develop a business case Establish a SC coordination unit Begin supplier integration Develop a performance scorecard Educate, educate, educate Learn to manage failure

Chapter 6

Knowledge is fluid mix of framed experience, values, contextual information, expert insight, and intuition that provides an environment and framework for evaluating and incorporating new experiences and information. It originates in individual minds but is often embedded in organizational routines, processes, practices, systems, software and norms. KM systems and tools are used to capture, re-use and re-purpose the relevant information to the person that needs it, preferably at the time they need it. Eg1. FAQ applications for online customer support. Eg2. Lotus uses people profiling Eg3. IBM uses knowledge utility

The globalization of the economy pushing firms to have increased adaptability, innovation and process speed The awareness of the value of specialized knowledge that has embedded in organizational processes and routines in coping with the competition The awareness that knowledge is a distinct factor of production and its role on the growing book to market ratios within the knowledgebased industries Low cost network computing which has become a powerful tool to work and learn together

KM is the practice that involves document management and content management techniques typically content search, categorization, and content retrieval for processing unstructured data (documents, internet files, news feeds, email and other text-based information).




Collect, summarize, match, and disseminate knowledge i.e creating and using knowledge repositories Includes process, business knowledge of specific operations, accumulated intellectual capital Collaborate computing and KM

Existing Infrastructure Departmental databases People Corporate knowledge Product information Best practices Business functions Client specific

A process of Identifying and creating and supporting creative individuals Amplification, crystallization of their knowledge as a part of knowledge network of the organization
A process mobilized in the conversion of tacit knowledge at different entity levels, i.e. at individual knowledge, group level, organizational level and inter-organizational levels and explicit knowledge is elevated dynamically from lower to higher levels.

SOURCE: Fuji Xerox

From Nonaka and Takeuchis point of view (1995), knowledge is not only regarded as data or information that can be stored in a computer, it also involves emotions, values, and intuition. To understand the true nature of knowledge, it is necessary to recognize that tacit and explicit knowledge are essential to knowledge creation (Nonaka, Toyama, & Konno, 2000)

Socialization (tacit to tacit) Eg. Interactions with customers before product development and after introduction

Externalization (tacit to explicit) Process of articulating the tacit knowledge into explicit with the help of metaphor concepts, analogies, hypothesis or models. It is most important step in knowledge creation as it created new explicit concepts from tacit knowledge.

Combination (explicit to explicit) Process of systemizing concepts into a knowledge system OR reconfiguration of existing knowledge, sorting, adding, combining and categorizing of explicit knowledge can lead to new knowledge. Eg. Individuals interchange knowledge through media such as documents conversions and networks.

Internalization (explicit to tacit): Learning by doing. When experiences through all the other modes are internalized into individuals tacit knowledge base in the form of mental modes or technical know-how, they become valuable assets. Eg. Case-studies, stories, symbols, documentation

TACIT: OJTs, Brainstorming, Information sharing meetings, discussions on specific trainings or on specific problems. Explicit: open and clear knowledge about product development, diminishing the scope of disliking of product by the customers

Honda, Canon, Matsushita, NEC, Nissan, 3M, GE, and even the U.S. Marines. For instance, using Matsushita's development of the Home Bakery (the world's first fully automated bread-baking machine for home use), they show how tacit knowledge can be converted to explicit knowledge: when the designers couldn't perfect the dough kneading mechanism, a software programmer apprenticed herself with the master baker at Osaka International Hotel, gained a tacit understanding of kneading, and then conveyed this information to the engineers. In addition, the authors show that, to create knowledge, the best management style is neither top-down nor bottom-up, but rather what they call "middle-up-down," in which the middle managers form a bridge between the ideals of top management and the chaotic realities of the frontline. As we make the turn into the 21st century, a new society is emerging. Peter Drucker calls it the "knowledge society," one that is drastically different from the "industrial society," and one in which acquiring and applying knowledge will become key competitive factors. Nonaka and Takeuchi go a step further, arguing that creating knowledge will become the key to sustaining a competitive advantage in the future. Because the competitive environment and customer preferences changes constantly, knowledge perishes quickly. With The Knowledge-Creating Company, managers have at their fingertips years of insight from Japanese firms that reveal how to create knowledge continuously, and how to exploit it to make successful new products, services, and systems.



3. 4. 5. 6. 7.

Lotus Notes and Lotus Domino group of application programs that allows an organization to share documents and exchange e-mail. PwC is the first major customer of Lotus Notes to create an architecture for DOCUMENT AMANGEMENT, WIDE AREA SHARING, ONGOING RESEARCH AT LOTUS INSTITUTE, THINK TANK AND SEARCH TOOLS (grapevine). Wincite 5.0 is goal oriented solution provider that organizes and distributes information related to specific problems. Owens Corning is an industry who used this to maintain the most current information about the customers, competitors, products and markets. Knowledge X of IBM IN Query from Sovereign Hill Dataware II Knowledge Management Suite Concept Explorer Professional Electronic Performance Support System provides integrated, onddemand access to information, advice, learning experiences and tools to enable a high level of job performance and empower employees to work on their own (JIT training)

8. Internet and intranet technologies applies pull approach where individuals can find each other and the knowledge required. Eg. Dow Chemicals has currently 50 websites to connect its Business Units.


Group, Infosys, Wipro, I-Flex Solutions are examples Mostly IT companies have all the resources and required expertise to apply KM Hurdle comes when employees dont take initiative in contributing their knowledge assets to companies But, companies are taking this up-stage by distinguishing it in annual appraisal cycles. Positions like Chief Knowledge Officer or Chief Learning Officer are being created.