Tonight’s Agenda

Welcome
Please run your Audio Wizard
before the start of class
• Questions/review
• IT Systems in Organizations
• Structuring Data

Evolution of IT in Organizations Strategic IT

• IT replaced established manual and paper • Major business strategic areas that need IT
processes 1. Customer relationship management (CRM)
• Later processes were redesigned around 2. Supply chain management (SCM)
systems 3. Business intelligence (BI)
• IT has evolved to be integrated into business 4. Enterprise resource planning (ERP)
processes to collaboratively support strategic 5. Integrated collaboration environments (ICE)
needs 6. Social Media

CUSTOMER RELATIONSHIP The Focuses of Customer Relationship

MANAGEMENT Management
• Customer relationship management
(CRM) system – uses information about
customers to gain insight into their
Analytics is now a huge part
needs, wants, and behaviors in order to of CRM. Analytics use hard
serve them better data to support decision
making.
• Includes multi-channel service delivery,
multiple ways in which customers can
interact with a business

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Customer Relationship Management
• Sales force automation (SFA) systems –
automatically track all the steps in the
sales process
– Sales lead tracking
– Listing potential customers
– Market and customer analysis
– Product configuration
– Getting repeat customers
IT Support for CRM
• Front-office systems – primary interface
to customers and sales channels
• Back-office systems – fulfill and support
customer orders
• Both interface to CRM database and
analysis and reporting systems
IT Support for CRM
• Software-as-a-service (SaaS) – software
model in which you pay for software on a
pay-per-use basis instead of buying the
software
• Learn more
– Salesforce.com
– CIO Magazine
– CRM Today
– destinationCRM.com
Opportunities of CRM
• Business strategy
– Differentiation and focus
– Growing the organization
• Classic goals
– Treating customers better
– Understanding their needs and wants
– Tailoring offerings
– Providing “delightful” experiences
IT Support for CRM
SUPPLY CHAIN MANAGEMENT
• Supply chain management (SCM) – tracks
inventory and information among business
processes and across companies
• Supply chain management (SCM) system – IT
system that supports supply chain
management
• Just-in-time (JIT) – method for producing or
delivering a product or service just at the time
the customer wants it
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 Dell’s Effective SCM Through JIT SUPPLY CHAIN MANAGEMENT
• Distribution chain – path followed by product
or service
• Inter-modal transportation – uses multiple
channels (trucks, boats, etc) of transportation

Strategic & Competitive Opportunities with Strategic & Competitive Opportunities with
SCM SCM
• Fulfillment – right quantity of parts at right time • Revenue and profit – no sales are lost because
• Logistics – transportation costs low of stock-outs
• Production – production lines run smoothly • Spend – minimizing costs of purchases of
material

Opportunities of SCM IT Support for SCM

• Business strategy
• SCM systems pioneered by specialist
– Overall cost leadership companies
– Running the organization (RGT) framework • SCM is now part of ERP software (discussed
• Goal is to squeeze out every penny of later)
cost possible in the supply chain • Learn more
– Supply Chain Knowledge Base
• This will optimize fulfillment, logistics,
– Supply Chain Management Review
production, revenue and profit, and cost – i2 Technologies
and price – CIO Magazine

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 BUSINESS INTELLIGENCE
• Business intelligence – knowledge about
competitors, suppliers, your own internal
operations, etc
• Combined forms of information to create real
knowledge
• Encompasses everything that affects your
business
• Helps you make strategic business decisions
BUSINESS INTELLIGENCE
Strategic and Competitive Opportunities with
BI
• Corporate performance management
• Optimizing customer relations
• Traditional decision support
• Management reporting of BI
• Information right time, location, and form
(personal information dimensions)
BUSINESS INTELLIGENCE
• BI system – support business intelligence
function
– Capabilities in the firm
– State of the art, trends, and future directions
– External environment affecting competition
– Actions of competitors
BUSINESS INTELLIGENCE
• Data warehouses – collections of information
(BI) from multiple operational databases
• Data marts – focused portion of a data
warehouse
IT Support for Business Intelligence
• Web supports many BI systems
• Movement toward specialized BI packages
• Digital dashboard – displays key information
tailored to an individual
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 IT Support for Business Intelligence
ENTERPRISE RESOURCE PLANNING
• MRP – 1970s; focus on production planning,
• MRP II – 1980s; closed the loop to include financial
The Big 4 ERP Vendors
ERP Evolution
• ERP – late 1980s/early 1990s; focus on critical “time
to market”; shorter lead times; customers want it
now
• ERP II – today; focus on complete ERP integration
with CRM, business intelligence, and a host of other
applications across the organization
ENTERPRISE RESOURCE PLANNING
• How do you bring together SCM, CRM, and
other systems? With an ERP system.
• Enterprise resource planning (ERP) system
– collection of integrated software for
business management, accounting, finance,
supply chain management, inventory
management, customer relationship
management, e-collaboration, etc.
ERP Evolution
calculating time requirements, procurement; basic
automated manufacturing focus
and accounting systems and serve as a decision
support tool for managers
ERP Functionality
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 ERP
• Attempts to integrate everything
– CRM drives what SCM will produce
– Everyone works together in e-collaboration
– The entire organization knows the entire
organization
ERP and Market Size
• Many ERP vendors based on organization
size
• Small business – less than 100 seats
• Medium-size business – 100-500 seats
• Large business – more than 500 seats
INTEGRATED COLLABORATION
ENVIRONMENTS (ICEs)
• Start with e-mail and get more advanced
• Workflow system – facilitates automation of
business processes (value chain
implementation)
• Workflow – steps, from beginning to end,
required for a business process
ERP Integrates Everything
INTEGRATED COLLABORATION
ENVIRONMENTS (ICEs)
• ICE – environment in which virtual teams do
their work
• Virtual team – when team members are
located in varied geographical locations
INTEGRATED COLLABORATION
ENVIRONMENTS (ICEs)
• Knowledge management (KM) system –
supports capturing, organization, and
dissemination of knowledge (know-how)
– Avoids reinventing the wheel
• Social network system – links you to people
you know, and from there, people they know
– Referral service
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 Strategic & Competitive Opportunities with
ICEs
IT Support for ICEs
• Joint ventures on large projects within an • Presence awareness – determines if person is
industry immediately reachable
• Collaborative preferred provider relationships • Peer-to-peer collaboration software –
• Sharing knowledge communicate and share files in real time
• Making the most of contacts without central server
• Social network systems

IT Support for ICEs SOCIAL MEDIA

TYPE EXAMPLE • Social media – Web-based and mobile

technologies that create interactivity
Collaboration LiveMeeting (www.microsoft.com)
among users, mostly allowing users to be
Workflow Metastorm (www.metastorm.com) both creators and consumers of content
Document Management FileNet (www.filenet.com)

Peer to Peer Groove (www.groove.net)

Knowledge Management IBM Knowledge (www.ibm.com)

Social Network Linkedin (www.linkedin.com)

SOCIAL MEDIA The Evolution of the Web

• Fueled by Web 2.0

• Web 2.0 – second generation of the Web
focusing on online collaboration, users as
both creators and modifiers of content,
dynamic and customized information
feeds, and many more engaging
technologies

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 Some Aspects of Social Media Social Networking
• Social networking site – site on which you
• Social networking post information about yourself, create a
• Social shopping network of friends, read about other
people, share content, and communicate
• Social playing with people
• Social “saving the world” • The big ones
• Social locationing – Facebook & LinkedIn
• There are many more – Google+
– StumbleUpon, Twitter, YouTube

Social Networking Players Social Shopping

• See what other people are buying and
wearing, trying to find the same, and
informing others of where the best deals
are
• Pepsi – social vending machines
• Bartab
• Groupon

Social Playing Social Playing

• World of Warcraft • Zynga

– Largest, 11 million players – Over 270 million play Zynga games on
– Complete quests in a world of monsters, Facebook
uber-warriors, and mythical creatures – Cityville
• Second Life – Farmville
– Virtual world – Mafia Wars
– Avatar – Zynga Pokerr
– Linden dollars – Words with Friends

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 Social Locationing Popular Social Locationing
Systems
• Social locationing (location-based • Geoloqi
services) – use of a mobile device and its • Facebook Places
location to • SCVNGR
– Check into locations
• Google Latitude
– Find friends and their locations
• Foursquare
– Receive rewards
– Take advantage of specials based on location • Gowalla

Structuring Data
• Business intelligence (BI) – collective
information that gives you the ability to
Structuring Data make effective, important, and strategic
business decisions
• Analytics – the science of fact-based
decision making

INTRODUCTION INTRODUCTION
• Businesses use many IT tools to manage and
• OLTP
organize information
– Supports operational processing
• Online transaction processing (OLTP) –
– Sales orders, accounts receivable, etc
gathering and processing information and
– Supported by operational databases &
updating existing information to reflect the DBMSs
processed information
• OLAP
• Online analytical processing (OLAP) –
– Helps build business intelligence
manipulation of information to support
decision making – Supported by data warehouses and data-
mining tools

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OLTP, OLAP, and Business Intelligence Data Management Topics
1. Relational Database Model
2. Database Management System Tools
3. Data Warehouses and Data Mining
4. Information Ownership

RELATIONAL DATABASE MODEL Database Characteristics

• Database – collection of information that • Collections of information
you organize and access according to the • Created with logical structures
logical structure of the information • Include logical ties within the information
• Relational database – series of logically • Include built-in integrity constraints
related two-dimensional tables or files for
storing information
– Relation = table = file
– Most popular database model

Database – Collection of Database – Created with Logical

Information Structures
• Data dictionary – contains the logical structure
for the information in a database
Before you can enter information
into a database, you must define
the data dictionary for all the
tables and their fields. For
example, when you create the
Truck table, you must specify that
it will have three pieces of
information and that Date of
Purchase is a field in Date format.

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 Database – Logical Ties within the Database – Logical Ties within the
Information Information
• Primary key – field (or group of fields) that uniquely
describes each record
• Foreign key – primary key of one file that appears in
another file

Customer Number
is the primary key
for Customer and
appears in Order as
a foreign key

Databases – Built-In Integrity DATABASE MANAGEMENT SYSTEM

Constraints TOOLS
• Database management system (DBMS) –
• Integrity constraints – rules that help helps you specify the logical requirements
for a database and access and use the
ensure the quality of information information in a database

• Data dictionary, for example, defines type

of information – numeric, date, and so on
• Foreign keys – must be found as primary
keys in another file
– E.G., a Customer Number in the Order Table
must also be present in the Customer Table

5 Components of a DBMS DBMS Engine

• DBMS engine – accepts logical requests and
1. DBMS engine converts them into the physical equivalents, and
2. Data definition subsystem access the database and data dictionary on a
storage device
3. Data manipulation subsystem
• Physical view – how information is physically
4. Application generation subsystem arranged, stored, and accessed on a storage
5. Data administration subsystem device
• Logical view – how you need to arrange and
access information to meet your needs

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 Data Definition Subsystem
• Data definition subsystem – helps you
create and maintain the data dictionary
and structure of the files in a database
• The data dictionary helps you define…
– Field names
– Data types (numeric, etc)
– Form (do you need an area code)
– Default value
– Is an entry required, etc
View
• View – allows you to see the contents of a database
file, make changes, and query it to find information
Query-by-Example Tool
• QBE tool – helps you graphically design the
answer to a question
Data Manipulation Subsystem
• Data manipulation subsystem – helps you
add, change, and delete information in a
database and query it to find valuable
information
• Most often your primary interface
• Includes views, report generators, query-
by-example tools, and structured query
language
Report Generator
• Report generator – helps you
quickly define formats of
reports and what information
you want to see in a report
Structured Query Language
• SQL – standardized fourth-generation
query language found in most DBMSs
• Sentence-structure equivalent to QBE
• Mostly used by IT professionals
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Application Generation Subsystem
• Application generation subsystem –
contains facilities to help you develop
transaction-intensive applications
• Mainly used by IT professionals
Data Administration Subsystem
• Backup and recovery – for backing up
information and restarting (recovering)
from a failure
– Backup – copy of information on a computer
– Recovery – process of reinstalling the
backup information in the even the
information was lost
Data Administration Subsystem
• Concurrency control – what happens if
two people attempt to make changes to
the same record
• Change management – how will structural
changes impact the overall database
Data Administration Subsystem
• Data administration subsystem – helps
you manage the overall database
environment by providing facilities for…
– Backup and recovery
– Security management
– Query optimization
– Reorganization
– Concurrency control
– Change management
Data Administration Subsystem
• Security management – for CRUD access –
create, read, update, and delete
• Query optimization – to minimize
response times for large, complex queries
• Reorganization – for physically
rearranging the structure of the
information according to how you most
often access it
DATA WAREHOUSES AND DATA MINING
• Help you build and work with BI
and some forms of knowledge
• Data warehouse – collection of
information (from many places)
that supports business analysis
activities and decision making
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Data Warehouse Characteristics
• Multidimensional
– Rows, columns, and layers
• Support decision making, not transaction
processing
– Contain summaries of information
– Not every detail
The Tool Set of the Analytics
Professional
The Tool Set of the Analytics
Professional
• Digital dashboard – displays key information
on a computer screen tailored to the needs
and wants of an individual
• Key performance indicator (KPI) – most
essential information used in any analytics
initiative
• Statistical tools – for applying mathematical
models to data warehouse information
The Tool Set of the Analytics
Professional
• Data-mining tools – software tools you
use in a data warehouse environment
– Query-and-reporting tools
– Artificial intelligence
– Multidimensional analysis tools
– Digital dashboards
– Statistical tools
The Tool Set of the Analytics
Professional
• Query-and-reporting tools – similar to
QBE tools, SQL, and report generators
• Artificial intelligence – tools to help you
“discover” information and trends (more
in Chapter 4)
• Multidimensional analysis (MDA tools) –
slice-and-dice techniques for viewing
multidimensional information
Digital Dashboard
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 Extraction, Transformation, and Loading
The Analytics Life Cycle
Data Marts
• Data mart – subset of a data warehouse in
which only a focused portion of the data
warehouse information is kept
INFORMATION OWNERSHIP
• Information is a resource you must
manage and organize to help the
organization meet its goals and objectives
• You need to consider
– Strategic management support
– Sharing information with responsibility
– Information cleanliness
(ETL)
• ETL is a three-step process
1. Extract needed information from its source
2. Transform the data into a standardized
format
3. Load the transformed data into a data
warehouse
Data Warehouse Considerations
• Do you really need one, or does your
database environment support all your
functions?
• Do all employees need a big data
warehouse or a smaller data mart?
• How up-to-date must the information be?
• What data-mining tools do you need?
Strategic Management Support
• CIO – every aspect of an organization’s
information resource
• CTO – the underlying IT infrastructure
and user-facing technologies
• CSO – technical aspects for security of
information
• CPO – information is used in an ethical
way
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Strategic Management Support Sharing Information
• 2 others in information management • Everyone can share – while not
• Data administration – function that plans consuming – information
for, oversees the development of, and • But someone must “own” it by accepting
monitors the information resource responsibility for its quality and accuracy
• Database administration – function
responsible for the more technical and
operational aspects of managing
organizational information

Information Cleanliness
• Related to ownership and responsibility for
quality and accuracy
• No duplicate information
• No redundant records with slightly different
data, such as the spelling of a customer name
• GIGO – if you have garbage information you
get garbage information for decision making

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