ENTERPRISE INFORMATION SYSTEMS

A PATTERN BASED APPROACH

INS 3061 ENTERPRISE

INFORMATION SYSTEMS

McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
 Content
• Analysis and Framework to EIS
• Enterprise System Development and Deployment
• ERP’s components
• Implementation Life Cycle
• Enterprise System Selection and Project Planning
• Business Process Reengineering and Best Practices
• System Architecture
• Vendor Profiles: Market Share and Product Variation
 Evaluation
No Assessment items Value Due date Notes

1. Class participation, 20% Continuous – class attendance

and tutorial participation, complete
Assignments

2. Mid-term quiz 20% Two-hour written exam

3. Final exam 60% Group projects

Total 100%

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 Textbooks
• David L Olson, Subodh Kesharwani (2009), Enterprise
Information Systems: Contemporary Trends and
Issues, World Scientific, ISBN: 978-9814273152
• Cheryl L. Dunn, J. Owen Cherrington, Anita S.
Hollander (2005), Enterprise Information Systems: A
Pattern-Based Approach, 3rd Ed, McGraw-Hill, ISBN:
0072404299.
• Simha R. Magal, Jeffrey Word (2013), Intergrated
Business Processes with ERP Systems. Wiley
Publishing.
 ENTERPRISE INFORMATION SYSTEMS
A PATTERN BASED APPROACH

Topic 1

An Introduction to Integrated Enterprise

Information Systems
Analysis and Framework to EIS

McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
 1. What are Integrated Enterprise
Information Systems?
• Enterprise
– A business, an industrious effort, especially one directed
toward making money
• Information System
– A set of interconnected channels for communicating
knowledge of specific events or situations
• Integrated
– Joined together, united,
made into a whole
by having brought
all parts together

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 Functional organizational
structure
• Typical functions or departments found in a modern
organization include purchasing, operations,
warehouse, sales and marketing, research and
development, finance and accounting, human
resources, and information systems.
• Need cross-functional→ meaning no single group or
function is responsible for their execution.

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 Functional structure Problem
• Workers complete their tasks in their
functional “silos” (isolation) without regard to
the consequences for the other components
in the process.
• Business process involves workers located in
multiple functional areas.
• →A major challenge facing organizations,
then, is to coordinate activities among the
different functional areas

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 BUSINESS PROCESSES
• is a set of tasks or activities that produce
desired outcomes.
• Every process is triggered by some event,
such as receiving a customer order or
recognizing the need to increase inventory

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 Key business processes
• Three processes are directly related to creating and
delivering products and services (buy, make, and
sell).
– The procurement process (buy ) refers to all of the activities
involved in buying or acquiring the materials used by the
organization, such as raw materials needed to make
products.
– The production process (make) involves the actual creation
of the products within the organization. Whereas the
production process is concerned with acquiring needed
materials internally (by making them), the procurement
process is concerned with obtaining needed materials
externally (by buying them).
– Finally, the fulfillment process (sell ) consists of all the steps
involved in selling and delivering the products to the
organization’s customers
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 INFORMATION AND SYSTEMS

• IT refers to anything related to

computing technology, such as
networking, hardware, software,
the Internet, or the people that
work with these technologies.
• “Information Technology means
the use of hardware, software,
services, and supporting
infrastructure to manage and
deliver information using voice,
data, and video” as
demonstrated in Figure 1.2.

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• An IS system includes components that are
not focused on decision-making. People use
information for numerous reasons and in
wide-ranging ways.

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 Types of Information Systems
• transaction processing systems (TPS),
• management information systems (MIS),
• decision-support systems (DSS),
• office automation systems (OAS),
• and expert systems (ES).

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How EIS differs from conventional packages

EIS
system
Auto Transaction

Self help

Generalist

Legacy
System
Specialist
 How EIS differs from
conventional packages
• Legacy system • EIS system
– Significantly resists – Radically different
modification & – Auto-transactional
evolution and self helping
– Consolidates – Adapts itself as a
information about its generalist and a
business. specialist under
– Has much less different conditions.
features and less
flexible options.
 EIS is an integrated
application
• EIS consist of many
independent
applications.
• EIS generates a
robust foudation for
intergration of
heterogenous
applications,
protocols and
formats.
EIS relationship to functional
systems
 Knowledge needed for integrated ES
• Knowledge to create integrated ES
– Representation in general
– Enterprise operations, general and specific
– Conceptual modeling tools
• Knowledge to effectively use integrated ES (i.e., to
be a power user)
– All of the above PLUS
– Information retrieval (querying) tools
• Knowledge to effectively audit integrated ES
– All of the above PLUS
– Audit objectives, techniques, tools
• Creativity and critical thinking! (for all of the above)

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 2. Concept of EIS
• The term enterprise system for many people brings to
mind ERP software. Such software has the same
objective as the REA (Resources-Events-Agents)
ontology- to store enterprise information one time, in a
disaggregated format from which it can be retrieved by
many different users for use in making many different
types of decisions.
– The REA ontology is a combination of script patterns and object
patterns that together enable us to model enterprises and to
understand and work with existing enterprises models.
– ERP software packages are representations of business
processes. If the software is not an adequate representation of an
enterprise's existing business processes, either the business
process must be changed or the software must be changed

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 REA example
• Figure 1. The REA Accounting Model
(Adapted from McCarthy, 1982

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 Either type of change is problematic!

• Enterprise customizes ERP software fit its

business processes → ? Problem?
• On the other hand, when an enterprise
changes its business processes→ ? Problem?

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 CONCEPT OF EIS (cont.)
• Early ERP systems focused on manufacturing,
although they quickly expanded to support all sorts of
organizations
• EIS facilitates enterprise-wide integrated information
systems covering all functional areas and performs
core corporate activities and enlarges customer
service. EIS is a business management system that
seeks to combine all aspects of the organization. It is
capable of taking care of planning, manufacturing,
sales and marketing
• Typically, an EIS system uses database systems
which are integrated with each other
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• EIS includes the internal back office
operations and external front office such as
financial system, human resources, inventory
management, shipping, customer order
processing, warehouse etc.
• → Enterprise Information System (EIS)
provides resources for EIS-specific
functionality to its clients.
• The evolution from a simple information system to a demand-
supply chain service provider model is shown in Figure 1.7.

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Supply chain model

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 2.1 Common EIS features
• Best business practices
• Beyond the Enterprise

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• Best Business Practices: It seeks a compilation of the best
business processes applicable worldwide.
• Beyond The Enterprise: In supply chain applications, the EIS
should not be confined to the enterprise boundaries, but should
provide on-line connectivity to the other business entities working
with the enterprise.
• Comprehensive: It should be able to sustain a variety of
enterprise functions and must be suitable for a wide range of
business enterprises.
• Flexibility: An EIS system should be flexible to act in response
to the changing needs of an enterprise. The client server
technology enables EIS to scamper across various database
back ends through Open Data Base Connectivity (ODBC).

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• Modular & Open: The EIS system has to have open
system architecture. This means that any module can
be interfaced or detached whenever required without
affecting the other modules. It should hold up multiple
hardware platforms for companies with heterogeneous
collection of systems. It must also support some third
party add-ons.

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 2.2 Customer Expectation of EIS
packages

• Number of implementations in the country?

• Integration?
• Is the package to old or too new?
• Is the package localized?
• Is implementation of the package easy?
• How fast is it to get skills on the package?
• Quality of the consultants hired.
• Financial health of the company.
• How big is the company? Is its main focus
implementation alone?
 3. EIS characteristics
• An integrated system
– Before to maintain and keep track of all of a business’s
operations, a business may be using multiple systems like
CRM (customer relationship management) software, an HR
software, payroll software and so on. An ERP system can be
customized to fit in all the software in one place that will help
run your business in one uniformed program.
• The system Operates in (or near) real-time
– Depending on the job it is tasked with, most ERP systems run
on real time or close to real time. That means when inputting
data, or maybe even doing something as simple as an
inventory check, the system will be up to date. [2]

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• A consistent look and feel across modules
– Having an all-in-one system helps so that you’re not having
to learn and remember where all the tools you need to get the
job done are located on what program. With ERP, a business
only has to worry about the one interface and the modules
within.
• Multiple Deployment options
– On-Premises – servers would be located within the offices.
– Hybrid – This means that there may be servers on site but
the system may also be hosted through a service online.
– SaaS – SaaS (Software as a service) would have the ERP as
stored and accessible on a subscription-based service much
like the Cloud.

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 The key rationales
• The key rationales for implementing ERP
systems are:
– Technology — more powerful, integrated computer
systems. Greater flexibility. Lower IT cost.
– Business practices — implementation of better
ways of accomplishing tasks. Better operational
quality. Greater productivity
– Strategic — cost advantages can be gained
through more efficient systems. Improved decision-
making. Support business growth. Build external
linkages.

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– Competitive — if an organization’s competitors
adopt ERP and gain cost efficiencies as well as
serve customers better, organizations will be left
with declining clientele. Better customer service.

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– Modular Design - The modular design of an ERP system
incorporates distinct business modules such as
manufacturing, financial, accounting, and distribution. Each
module takes care of various functions of a particular section
or department within your organization. While these modules
can operate separately, they are integrated inside the ERP
system to provide a seamless flow of data and information
between all modules. This ultimately will enlarge the
operational transparency provided for by the standard
interface. These separate modules work in real-time with
online and batch-processing capabilities.

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– Central Common Database - Implementing a
common centralized database management
system, which is also called a DBMS, is an
important characteristic of an advantageous ERP
system. All data is entered and stored only once
and then utilized by all departments simultaneously
which helps eliminate data-entry errors and other
flaws associated with using a distributed database.

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– Flexible and Open Database - Organizations are almost
always dynamic in nature, which is where ERP systems offer
flexibility to respond to the changing needs of the enterprise.
These systems have an open system architecture, allowing
them to attach or detach any module as and when required
without affecting the other modules. An advantageous ERP
system should support connectivity to other business entities
within the organization and shouldn’t be confined within the
boundaries of a manufacturing facility.

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– Automatic Generation of Information An ERP
system provides business intelligence tools such
as executive information systems, decision support
systems, easy warning systems, and more. These
tools help manufacturing operations to make data-
based decisions that pertain to their overall
production process. All financial and business
information will be automatically generated from
the data that is found in the centralized database of
the ERP system.

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 EIS RESEARCH
• Table 1.2: Reasons for Implementing ERP

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