Management Information System

What Is Management

Management the process of coordinating work activities

so that they are completed efficiently and effectively with and through other peopleProcess - represents ongoing functions or

primary activities engaged in by managersCoordinating - distinguishes a managerial

position from a non-managerial one

What is Management

Management (cont.) Efficiency - getting the most output from the least

amount of inputs “doing things right” (not wasting resources) concerned with means Examples: cutting inventory levels Decreasing the amount of time to manufacture

products Effectiveness - completing activities so that

organizational goals are attained “doing the right things” concerned with ends

Efficiency and Effectiveness in Management

Management Strives For:Low resource waste (high efficiency)

High goal attainment (high effectiveness)

ResourceUsage

Efficiency (Means)

GoalAttainment

Effectiveness (Ends)

Low Waste High Attainment

Key Resources of MIS Information

DataAre raw facts that describe a particular phenomenone.g Current Temperature, Price of property, Age of a person etc.

A message which source wants to communicate to the receivere.g Text, Voice, Image, movies, Music etc

Information: Data that is organized, meaningful, and useful

data with context processed data value-added to data

summarized organized analyzed

Data and InformationData and Information

Changing Data into Information

• Data – Raw facts stored in databases– Need additional processing to become useful

• Information– Required by decision maker – Data processed and presented in a meaningful form– Transformation (any process that changes data into information).

Program instructions

Data collected within an organisation

Data collected Where from? Used for?

Order details, customer details complaints

customers

Financial data bank

Cost of goods, new products

suppliers

Sales data Sales Dept

Data collected within an organisation

Data collected Where from? Used for?

Order details, customer details complaints

customers Supplying goods, creating invoices and statements

Improved performance

Financial data bank Planning strategic decisions

Cost of goods, new products

suppliers Selling to customers

Sales data Sales Dept Monitor sales against forecasts, re-order of stock

Characteristics of Valuable Information

1. Accuracy.

2. Verifiable.

3. Timeliness.

4. Organized.

5. Meaningful.

6. Cost effective.

1.Accuracy

• The information a user receives has been processed correctly

• Correct information

• Free from errors

• Inaccurate information can lead to incorrect decisions

2. Verifiable

User can confirm and verify the information.

Identify source of information

Having information when users need it.

Right information must be produced to users at right time.

3.Timely Information

4. Organized

Information is arranged to suit the needs and

requirements of the users.

5. Meaningful Relevant to the user who

receives or uses it.

Unnecessary information must be eliminated.

6.Cost-effective

The cost to produce the information should be less than the

actual cost of the information.

What is a System? A system is…

A set of interrelated components With a clearly defined boundary Working together To achieve a common set of objectives By accepting inputs and producing

outputs In an organized transformation process

Basic Functions of a System

Input: Capturing and assembling elements that enter the system to be

processed

Processing:

Transformation process that converts input into output

Output:

Transferring transformed elements to their ultimate destination

IT and IS• What is Information Technology?

Any form of technology used by people to handle information.

• What are Information Systems?“A collection of hardware, software, data, people, and procedures that are designed to generate information that support day-to-day

activities of users in an organization”

The branch of Engineering that deals with the use of Computers and Telecommunications to retrieve, store and transmit information

Any computer based tool that people use to work with information & support the information & information processing needs of an organization

Information Technology (IT)

Definition of Information Systems

“A collection of hardware, software, data, people, and procedures that

are designed to generate information that support day-to-

day activities of users in an organization”

Components of Information Systems

• Data

• Software

• Hardware

• People

• Procedures

Information System Activities

Input of data resources Data entry activities

Processing of data into information Calculations, comparisons, sorting, and so on

Output of information products Messages, reports, forms, graphic images

Storage of data resources Data elements and databases

Control of system performance Monitoring and evaluating feedback

Types of Information Systems

Operations Support Systems: TPS( Sales, Inventory, and accounting systems) PCS( Monitor and control industrial processes ( Petroleum refining,

power generation and steel production systems. Enterprise collaboration systems, such as e-mail, chat and

videoconferencing systems.

Management Support Systems: MIS( Provide information as reports and displays) DSS(such as products pricing, profitability forecasting, and risk

analysis. EIS( Provides critical information from MIS, DSS such as system for

easy access to analysis of business performance, action of competitors, and strategic planning

Types of Operations Support Systems

Transaction Processing Systems Record and process business transactions Examples: sales processing, inventory systems,

accounting systems Process Control Systems

Monitor and control physical processes Example: using sensors to monitor chemical processes

in a petroleum refinery Enterprise Collaboration Systems

Enhance team and workgroup communication Examples: email, video conferencing

Transaction Processing Systems

TPS is the important examples of Operations support systems that record and process data resulting from business transactions.

Computerized systems that perform and record the daily routine transactions necessary to conduct the business; they serve the organization’s operational level

Examples Accounting information systems TCS, DHL, all have systems that are TPS

Two Ways to Process Transactions

Batch Processing:

Accumulate transactions over time and process periodically

Example: a bank processes all checks received in a batch at night

Online Processing:

Process transactions immediately Example: a bank processes an ATM withdrawal

immediately

Example of TPS

1. An inventory control system keeps a file of records about the stock of goods that a business has on hand (the inventory) which is one aspect of the state of the business.

2. When items are shipped or received, the state of the business

is affected, and the inventory control system makes changes about the inventory in the stored records.

 

 

 

 

 

 

 

 

 

4. It also prints a report giving the quantity on hand for each item in inventory, which is a characteristic of the state of the business.

Finally, when inventory is low, the system produces output that causes more inventory to be ordered, which is another type of business transaction.

Example of TPS

Types of TPS Systems

Transaction Processing System Functions

Input function

• Capture input data• Enter input data• Validate input data

Processing function:

• perform computation• make decision

Output function:

• produce screen output• print output

Storage function:

• stored data• Access data• Update data

Transaction processing systems perform input, output, storage, and processing functions.

Input functions include capturing data on a source document, entering the input data into the system, and checking input data for errors, a process called data validation

Output functions include producing screen or paper reports, such as detail reports, summary reports, and exception reports.

Transaction Processing System

Storage functions include storing data in files and databases, accessing stored data, sorting stored data, and updating stored data.

Processing functions involve the manipulation of data, including computation and decision making

Transaction Processing System

Transaction Processing Systems

Management Information Systems

• MIS provides information in the form of reports and displays to managers and many business professionals. Such as sales analysis, production performance.

• Provides information to business professionals in a variety of easy-to-use formats.

• Examples– Systems that provide managers with reports and online real-

time access to company performance and historical records.

Management Information System (MIS)

Decision Support Systems

Decision Support Systems are concerned with providing useful information to support the decision process.

A Production Manager may use a DSS to decides how much product to manufacture based on the expected sales associated with a future promotion and the location and availability of the raw materials necessary to manufacture the product.

• Examples– May take data from both internal sources (TPS, MIS) but also from external

sources (Stock prices or product prices of competitors)

– Shipping companies use voyage-estimating systems that take various shipping information into account and give advice on costs, freight rates for various types of cargo and port expenses etc

Voyage-estimating Decision Support System

Needs voyage-estimating system to calculate financial details

Ship/time costs (fuel, labour, capital) Freight rates for various types of cargo Port expenses

technical details Ship cargo capacity Speed Port distances Fuel and water consumption Cargo loading patterns

Decision Support Systems

Decision Support System (DSS)

Executive Information Systems

• Information Systems at the organizations strategic level designed to address unstructured decision making through advanced graphics and communications.

• Examples:– Incorporate data about external events such as tax laws or competitors, but also

draw summarized information from internal MIS and DSS.

– Filter, compress and track critical data, emphasizing the reduction of time and effort required to obtain information useful to executives.

Executive Support System (ESS)

What is a human resources information system (HRIS)?

Manages human resources functions Employee relationship management (ERM) system

facilitates communication with employees

Human Resource Systems

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A strategic information system is any information system that uses IT to

help an organization…

Strategic IT

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Cost Leadership Become low-cost producers

Help suppliers or customers reduce costs

Differentiation Strategy Differentiate a firm’s products from its competitors’

Focus on a particular segment or niche of market

Five Competitive Strategies

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Innovation Strategy Unique products, services, or markets

Radical changes to business processes

Growth Strategy Expand company’s capacity to produce

Expand into global markets

Competitive Strategies

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Alliance Strategy

Establish linkages and alliances with customers, suppliers, competitors, consultants, and other companies

Competitive Strategies

How is a computer defined?

Produces and stores results

Electronic device operating under the control of instructions stored in its own memory

Processes data into informationinformation

Data that is organized, meaningful, and useful

Accepts datadata

Raw facts, figures, and symbols

What is Hardware

Hardware is the general term that is used to describe physical

artifacts of technology.

What is an input device?

Hardware used to enter dataand instructions

Input Devices

Input Devices

What is an output device?

Hardware that conveys information to one or morepeople

What is storage?

Storage mediaStorage media

Physical material on which data, instructions, and information are stored

Storage mediaStorage media

Physical material on which data, instructions, and information are stored

Storage deviceStorage device

Records and retrieves items to and from a storage medium

Storage deviceStorage device

Records and retrieves items to and from a storage medium

Holds data, instructions, and information for future use

Computer For Individual Users

Desktop computers The most common type of computer Sits on the desk or floor Performs a variety of tasks

Workstations Specialized computers Optimized for science or graphics More powerful than a desktop

Mainframe Very powerful, expensive computer that supports thousands of connected users[Also called an Enterprise Server]

Supercomputer The fastest, most powerful, most expensive computer. Used for applications requiring complex mathematical calculations

Server Controls access to network resources and provides centralized storage

What is a notebook computer?

Portable, small enough to fit on your lap

Also called a laptop computer

Generally more expensive than desktop computers with equal capabilities

What is a Tablet PC?

Especially useful for taking notes

Resembles a letter-sized slate Allows you to write on the

screen using a digital pen

Consists of a seriesof instructions thattells the computer

what to do andhow to do it

Consists of a seriesof instructions thattells the computer

what to do andhow to do it

What is software?

Also called aprogram

Also called aprogram

Computer Software

Definition: Key to productive use of computers. A computer program that tells the computer how to

perform particular tasks. Information that the computer uses to get the job done.

Types of Software Software can be categorized into two types:

System Software Application Software.

What is system software?

Operating System (OS)Operating System (OS)is a set of programs that coordinates all activities among computer hardware devices

Operating System (OS)Operating System (OS)is a set of programs that coordinates all activities among computer hardware devices

Utility ProgramsUtility Programs allow the user to perform maintenance-type tasks usually related to managing a computer, its devices or its programs

Utility ProgramsUtility Programs allow the user to perform maintenance-type tasks usually related to managing a computer, its devices or its programs

Programs that control or maintain the operations of the computer and its devices

What is application software?

Presentation Graphics

Spreadsheet

Database

Word Processing

Programs designed to make users more productive

Create/Produce useful data

Word Processing

Word Processing software is used to create and print documents. A key advantage of word processing software is that users easily can make changes in documents.

Electronic Spreadsheets

Electronic spreadsheet software allows the user to add, subtract, and perform user-defined calculations on rows and columns of numbers. These numbers can be changed and the spreadsheet quickly recalculates the new results.

Database SoftwareDatabase Software Allows the user to enter, retrieve, and update data in an organized and efficient

manner, with flexible inquiry and reporting capabilities.

Computer Software

What is a programmer? Someone who develops

application or system software Programmer writes

the instructions todirect the computer toprocess data intoinformation

What is a graphical user interface (GUI)?

Allows you to interact with the software using graphics and visual images such as icons

Controls how you enter data and instructions and how the screen displays information

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Bit and Byte

Bit Short for binary digit Smallest element of data Either zero or one

Byte Group of eight bits, which operate as a single

unit Represents one character or number

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Representing Characters in Bytes

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Using Binary Code to Calculate

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Storage Capacity Measurement

Kilobyte (KB): one thousand bytes Megabyte (MB): one million bytes Gigabyte (GB): one billions bytes Terabyte (TB): one trillion bytes

Petabyte (PB): one quadrillion bytes

Common Number Systems

System Base Symbols

Used by humans?

Used in computers?

Decimal 10 0, 1, … 9 Yes No

Binary 2 0, 1 No Yes

Octal 8 0, 1, … 7 No No

Hexa-decimal

16 0, 1, … 9,

A, B, … F

No No

75

Quantities/Counting (1 of 3)

Decimal Binary Octal

Hexa-decimal

0 0 0 0

1 1 1 1

2 10 2 2

3 11 3 3

4 100 4 4

5 101 5 5

6 110 6 6

7 111 7 776

Quantities/Counting (2 of 3)

Decimal Binary Octal

Hexa-decimal

8 1000 10 8

9 1001 11 9

10 1010 12 A

11 1011 13 B

12 1100 14 C

13 1101 15 D

14 1110 16 E

15 1111 17 F77

Quantities/Counting (3 of 3)

Decimal Binary Octal

Hexa-decimal

16 10000 20 10

17 10001 21 11

18 10010 22 12

19 10011 23 13

20 10100 24 14

21 10101 25 15

22 10110 26 16

23 10111 27 17 Etc.

78

Quick Example

2510 = 110012 = 318 = 1916

Base

79

Decimal to Decimal (just for fun)

Hexadecimal

Decimal Octal

Binary

80

12510 => 5 x 100 = 52 x 101 = 201 x 102 = 100

125

Base

Weight

81

Decimal to Decimal (just for fun)

Weight “0”

Binary to Decimal

Hexadecimal

Decimal Octal

Binary

82

Binary to Decimal

Technique Multiply each bit by 2n, where n is the “weight” of the bit

The weight is the position of the bit, starting from 0 on the right Add the results

83

Example

1010112 => 1 x 20 = 11 x 21 = 20 x 22 = 01 x 23 = 80 x 24 = 01 x 25 = 32

4310

Bit “0”

84

Octal to Decimal

Hexadecimal

Decimal Octal

Binary

85

Octal to Decimal

Technique Multiply each bit by 8n, where n is the “weight” of the bit

The weight is the position of the bit, starting from 0 on the right Add the results

86

Example

7248 => 4 x 80 = 42 x 81 = 167 x 82 = 448

46810

87

Hexadecimal to Decimal

Hexadecimal

Decimal Octal

Binary

88

Hexadecimal to Decimal

Technique Multiply each bit by 16n, where n is the “weight” of the bit

The weight is the position of the bit, starting from 0 on the right Add the results

89

Example

ABC16 => C x 160 = 12 x 1 = 12 B x 161 = 11 x 16 = 176 A x 162 = 10 x 256 = 2560

274810

90

Decimal to Binary

Hexadecimal

Decimal Octal

Binary

91

Decimal to Binary

Technique Divide by two, keep track of the remainder

First remainder is bit 0 (LSB, least-significant bit) Second remainder is bit 1

Etc.

92

Example

12510 = ?22 125 62 12 31 02 15 12 7 12 3 12 1 12 0 1

12510 = 11111012

93

Decimal to Octal

Hexadecimal

Decimal Octal

Binary

94

Decimal to Octal

Technique Divide by 8

Keep track of the remainder

95

Example

123410 = ?8

8 1234 154 28 19 28 2 38 0 2

123410 = 23228

96

Decimal to Hexadecimal

Hexadecimal

Decimal Octal

Binary

97

Decimal to Hexadecimal

Technique Divide by 16

Keep track of the remainder

98

Example

123410 = ?16

123410 = 4D216

16 1234 77 216 4 13 = D16 0 4

99

Octal to Binary

Hexadecimal

Decimal Octal

Binary

100

Octal to Binary

Technique Convert each octal digit to a 3-bit equivalent binary representation

101

Example

7058 = ?2

7 0 5

111 000 101

7058 = 1110001012

102

Hexadecimal to Binary

Hexadecimal

Decimal Octal

Binary

103

Hexadecimal to Binary

Technique Convert each hexadecimal digit to a 4-bit equivalent binary representation

104

Example

10AF16 = ?2

1 0 A F

0001 0000 1010 1111

10AF16 = 00010000101011112

105

Binary to Octal

Hexadecimal

Decimal Octal

Binary

106

Binary to Octal

Technique Group bits in threes, starting on right

Convert to octal digits

107

Example

10110101112 = ?8

1 011 010 111

1 3 2 7

10110101112 = 13278

108

Binary to Hexadecimal

Hexadecimal

Decimal Octal

Binary

109

Binary to Hexadecimal

Technique Group bits in fours, starting on right

Convert to hexadecimal digits

110

Example

10101110112 = ?16

10 1011 1011

2 B B

10101110112 = 2BB16

111

Octal to Hexadecimal

Hexadecimal

Decimal Octal

Binary

112

Octal to Hexadecimal

Technique Use binary as an intermediary

113

Example

10768 = ?16

1 0 7 6

001 000 111 110

2 3 E

10768 = 23E16

114

Hexadecimal to Octal

Hexadecimal

Decimal Octal

Binary

115

Hexadecimal to Octal

Technique Use binary as an intermediary

116

Example

1F0C16 = ?8

1 F 0 C

0001 1111 0000 1100

1 7 4 1 4

1F0C16 = 174148

117

Exercise – Convert ...

Don’t use a calculator!

Decimal Binary Octal

Hexa-decimal

33

1110101

703

1AF

118

Exercise – Convert …

Decimal Binary Octal

Hexa-decimal

33 100001 41 21

117 1110101 165 75

451 111000011 703 1C3

431 110101111 657 1AF

Answer

119

WEB BROWSERS

WORD PROCESSING & DESKTOP PUBLISHING

ELECTRONIC SPREADSHEETS & PRESENTATION GRAPHICS

Electronic Spreadsheets Worksheet of rows and columns Used for calculations and charts

E.g., Lotus 1-2-3, Microsoft Excel, Corel QuattroPro, BO XI

Presentation Graphics Convert numeric data into graphics displays

Prepare multimedia presentations including graphics, photos, animation, and video clips E.g., Microsoft PowerPoint, Lotus Freelance, Corel Presentations

ELECTRONIC SPREADSHEETS & PRESENTATION GRAPHICS

PERSONAL INFORMATION MANAGER & GROUPWARE

Personal Information Manager (PIM) Software for end user productivity and collaboration Store information about clients, schedules, manage appointments,

manage tasks E.g., Lotus Organizer, Microsoft Outlook

Groupware Software that helps workgroups collaborate on group assignments E-mail, discussion groups, databases, videoconferencing E.g., Lotus Notes, Novell GroupWise, Microsoft Exchange

PERSONAL INFORMATION MANAGER & GROUPWARE

SOFTWARE ALTERNATIVES

Outsourcing development and maintenance of software

Application service providers (ASPs) Companies that own, operate and maintain

application software and computer system resources

Use the application for a fee over the Internet Pay-as-you-go

SOFTWARE ALTERNATIVES

SOFTWARE LICENSING

All software (COTS, ASP) is licensed You don’t buy software: you buy a license to use

the software under the terms of the licensing agreement

Licensed to protect the vendor’s property rights

SYSTEM SOFWARE

Software that manages and supports a computer system

System management programs Programs that manage hardware, software, network, and data resources

E.g., operating systems, network management programs, database management systems, systems utilities

Systems development programs Programs that help users develop information system programs

SYSTEM MANAGEMENT PROGRAMS

OPERATING SYSTEM

Integrated system of programs that Manages the operations of the CPU

Controls the input/output and storage resources and activities of the computer system Provides support services as computer executes applications programs

OS BASIC FUNCTIONS

USER INTERFACE

Part of the operating system that allows you to communicate with it Three main types:

Command-driven Menu-driven

Graphical user interfaces (GUI)

USER INTERFACE

RESOURCE MANAGEMENT

Part of operating system that manages the hardware and networking resources of a computer system Includes CPU, memory, secondary storage device, telecommunications, and input/output

peripherals

FILE MANAAGEMENT

Part of the operating system that controls the creation, deletion, and access of files of data and

programs

FILE MANAGEMENT

TASK MANAGEMENT

Part of the operating system that manages the accomplishment of computing tasks of the end users

Multitasking Task management approach that allows for several tasks to be performed in a seemingly

simultaneous fashion Also called multiprogramming or time-sharing

TASK MANAGEMENT

POPULAR OS

Windows GUI, multitasking, networking, multimedia

Microsoft’s operating system Different versions manage servers

Unix Multitasking, multiuser, network-managing

Portable – can run on mainframes, midrange and PCs Linux

Low-cost, powerful reliable Unix-like operating system Open-source

MAC OS X Apple operating system for the iMac

GUI, multitasking, multimedia

OTHER SYSTEM SOFTWARE

Utilities Miscellaneous housekeeping functions

Example, Norton utilities includes data backup, virus protection, data compression, etc.

Performance monitors Programs that monitor and adjust computer system to keep them running efficiently

Security monitors Programs that monitor and control use of computer systems to prevent unauthorized use of

resources

WEB LANGUAGES

HTML A page description language that creates hypertext documents for the Web

XML Describes the contents of Web pages by applying identifying tags or contextual

labels to the data in Web documents

Java Object-oriented programming language that is simple, secure and platform

independent Java applets can be executed on any computer

WEB LANGUAGES

Data Resource Management

Foundation Data Concepts

Data Organization Structure is logically organized into:-Data Organization Structure is logically organized into:- Character Field Record File Database

Like writing can be organized into letters, word, paragraph & sentences

CHARACTER

Consists of a single alphabets, numeric or other symbol.

It is a byte used to represent a particular character.

field

Consists of a grouping of related characters. E.g., person names represent the name field. i.e., last name, first name, state, city, telephone

#

RECORD

Fields when grouped together make a record. An allocation of attributes to describe any entity.

E.g., Person payroll records Employee claims record Student academic records

FILE

Group of related records is a data file or table. A single table may be referred to as a flat file.

E.g., Employee file Student file

Inventory file Payroll file etc

DATABASE

An integrated collection of logically related data elements.

It contains all the records

Foundation Data Concepts

EmployeeRecord 1

EmployeeRecord 2

EmployeeRecord 3

EmployeeRecord 4

NameField

SS No.Field

SalaryField

NameField

SS No.Field

SalaryField

NameField

SS No.Field

SalaryField

NameField

SS No.Field

SalaryField

Jones T.A. 275-32-3874 20,000 Klugman J.L. 349-88-7913 28,000 Alverez, J.S. 542-40-3718 100,000 Porter, M.L. 617-87-7915 50,000

Human ResourceDatabase

Payroll File Benefit File

Data Organization StructureData Organization Structure

Foundation Data Concepts

Electric Utility Database

Entities: Customers, Meters, Bills, Payments, Meter Readings

Relationships: Bills Sent to Customers Customers Make Payments Customers Use Meters

Billing

MeterReading

PaymentProcessing

ServiceStart/Stop

Example: An Electric Utility DatabaseExample: An Electric Utility Database

DATABASE STRUCTURES

DBMS packages are designed to use specific data structures to provide end users with quick; easy access to information stored in the databases.

DATABASE STRUCTURES

Five Major Database StructuresFive Major Database Structures

•Hierarchical Structure•Network Structure•Relational Model•Object-Oriented•Multidimensional Structure

HIERARCHICAL STRUCTURE

One-to-many relationship Relationship b/w records from a hierarchy structure

all of them are dependent. Root element

NETWORK STRUCTURE

Allow many-to-many relationships among records. E.g., employee records can be related to more than

one project record & vice versa.

RELATIONAL STRUCTURE

It is used by most microcomputers DBMS packages as well as by both midrange & mainframes systems.

In this, all data elements within the database are viewed as being stored in

the form of simple two dimensional tables sometimes referred to as

relations .

Department Table Employee Table

Deptno Dname Dloc Dmgr Empno Ename Etitle Esalary DeptnoEmp 1Emp 2Emp 3Emp 4Emp 5Emp 6

Dept ADept BDept C

Dept ADept B

Dept A

Dept BDept CDept B

MULTIDIMENSIONAL STRUCTURE

Object-oriented structure

Attributes•Customer•Balance•Interest Operations•Deposit (Amount)•Withdraw (Amount)•Get Owner

Attributes•Credit Line•Monthly Statements Operations•Calculate Interest•Print Monthly Statement

Attributes•Number of Withdrawals•Quarterly Statement Operations•Calculate Interest Paid•Print Quarterly Statement

Bank Account Object

Checking Account Object Savings Account Object

Inheritance Inheritance

Web based Web based applicationsapplications

Describing the Describing the attributes of an attributes of an entity, plus the entity, plus the

operations that can operations that can be performs upon the be performs upon the

datadata

Supports Supports inheritanceinheritance

Object-oriented structure

Database Development

Database management packages like Microsoft Access or Lotus Approach allow end users to easily develop the database they need.

Database Development

•Database Administrators (DBAs)•Data Definition Language (DDL)

•Oracle 10g or IBM DB2 •Data Dictionary or Metadata Repository

•Database management catalog or directory that contain metadata.

•Relies on specialized database software component to manage a database.

•Metadata•Data on data

Data Mining

Identify New Product Bundles Find Root Causes to Quality or Manufacturing Problems

Prevent Customer Attrition Cross-Sell to Existing Customers

Profile Customers with More Accuracy

Types of Databases

Operational Databases Distributed Databases External Databases

Hypermedia Databases

Distributed Database ModelDistributed Database Model

Client PC

DistributedDatabases

on Intranetsand OtherNetworks

End UserDatabases

DataWarehouse

DataMarts

OperationalDatabases

of theOrganization

NetworkServer

ExternalDatabases

on theInternet and

OnlineServices

Operational DatabasesOperational Databases

Types of Databases

Web-Based Information SystemWeb-Based Information System

WebBrowser

The InternetIntranetsExtranets Web

ServerSoftware

HTMLXML

Web PagesImage FilesVideo FilesAudio Files

NetworkServer

Client PCsHypermedia

Database

Types of Databases

Data WarehousesApplications Data Marts

Finance

Marketing

Sales

Accounting

ManagementReporting

ERP

Purchasing

CRM

InveentoryControl

Shipping

Logistics

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Data Warehouse Components

5-171

Applications and Data Marts

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Database Management System

In mainframe and server computer systems, a software package that is used to…

Create new databases and database applications

Maintain the quality of the data in an organization’s databases

Use the databases of an organization to provide the information needed by end users

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Common DBMS Software Components

Database definition Language and graphical tools to define entities, relationships, integrity constraints, and

authorization rights

Nonprocedural access Language and graphical tools to access data without complicated coding

Application development Graphical tools to develop menus, data entry forms, and reports

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Common DBMS Software Components

Procedural language interface Language that combines nonprocedural access with full capabilities of a programming language

Transaction processing Control mechanism prevents interference from simultaneous users and recovers lost data after

a failure

Database tuning Tools to monitor, improve database performance

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Database Management System

Database Development Defining and organizing the content, relationships, and structure of the data needed

to build a database

Database Application Development Using DBMS to create prototypes of queries, forms, reports, Web pages

Database Maintenance Using transaction processing systems and other tools to add, delete, update, and correct data

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DBMS Major Functions

5-177

Database Interrogation

End users use a DBMS query feature or report generator Response is video display or printed report

No programming is required

Query language Immediate response to ad hoc data requests

Report generator Quickly specify a format for information you want to present as a report

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Database Interrogation

SQL Queries Structured, international standard query language found in many DBMS packages

Query form is SELECT…FROM…WHERE…

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Database Interrogation

Boolean Logic Developed by George Boole in the mid-1800s

Used to refine searches to specific information

Has three logical operators: AND, OR, NOT

Example Cats OR felines AND NOT dogs OR Broadway

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Database Interrogation

Graphical and Natural Queries It is difficult to correctly phrase SQL and other database language search queries

Most DBMS packages offer easier-to-use, point-and-click methods

Translates queries into SQL commands

Natural language query statements are similar to conversational English

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Graphical Query Wizard

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Database Maintenance

Accomplished by transaction processing systems and other applications, with the support of the

DBMS Done to reflect new business transactions and other events

Updating and correcting data, such as customer addresses

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Application Development

Use DBMS software development tools to develop custom application programs

Not necessary to develop detailed data-handling procedures using conventional programming languages

Can include data manipulation language (DML) statements that call on the DBMS to perform necessary data handling

Telecommunicationsand Networks

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Types of Communications Networks

Primary types of communications networks Wide Area

Local Area

Virtual Private

Client/Server

Peer-to-peer

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Wide Area Network (WAN)

Telecommunication network that covers a large geographic area

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Local Area Network (LAN)

Connects computers within a limited physical area, such as an office, classroom, or building

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Virtual Private Networks (VPN)

Used to establish secure intranets and extranets The Internet is the main backbone network

Relies on network firewalls, encryption, and other security features to build a “pipe” through the Internet

Creates a private network without the high cost of a separate proprietary connection

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Virtual Private Network

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Client/Server Networks

Clients End user personal computers or networked computers

Servers Used to manage the networks

Processing Shared between the clients and servers Sometimes called a two-tier architecture

Larger computer systems are being replaced with multiple client/server networks

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Client/Server Network

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Network Computing

Networks are the central computing resource of the organization

Thin clients provide a browser-based user interface for processing applets

Thin clients include Network computers

Net PCs

Other low-cost network devices or information appliances

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Network Computing

Application and database servers provide The operating system Application software

Applets Databases

Database management software

Sometimes called a three-tier client/server model because it consists of

Thin clients Application servers Database servers

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Network Computing

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Peer-to-Peer Networks

Central Server Architecture P2P file-sharing software connects all PCs

to a central server

When a PC requests a file, the server searches all active peers on the network

The server sends the requesting PC a list of links to all active peers who have the file

Clicking a link connects the two PCs and automatically transfers the file to the requesting PC

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Peer-to-Peer Networks

Pure Peer-to-Peer Architecture No central directory or server

File-sharing software connects one PC to another online user

When you request a file, the software searches every online user and sends you a list of active file names

Clicking a link automatically transfers the file from that user’s hard drive to yours

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Central Server Peer-to-Peer Networks

Advantages Can better protect the integrity and security

of the content and users of the network

Disadvantages Directory server can be slowed or overwhelmed by too many users or technical problems

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Peer-to-Peer Network Diagrams

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Digital and Analog Signals

Analog or digital refers to the method used to convert information into an electrical signal

Analog: an electrical current is generated that is proportional to the quantity being observed

Digital: the quantity being observed is expressed as a number

Analog: if the temperature is 83 degrees, a measuring device would generate 8.3 volts

Digital: a measurement of 83 degrees would be displayed as the number 83

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Telecommunications Media

Twisted-Pair Wire Ordinary telephone wire

Copper wire is twisted into pairs

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Telecommunications Media

Coaxial Cable Sturdy copper oraluminum wire wrappedwith spacers to insulate

and protect it

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Telecommunications Media

Fiber-Optic Cable One or more hair-thin

filaments of glass fiber wrapped in a protective jacket

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The Problem of “The Last Mile”

Network providers use fiber optic cable as a communications backbone Houses connected to the backbone are wired

with twisted pair

Users don’t benefit from the faster, better technology

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Wireless Technologies

Terrestrial Microwave Earthbound microwave systems transmit

high-speed radio signals

Follows a line-of-sight path between relay systems spaced about 30 miles apart

Communications Satellites Serve as relay stations

Use microwave radio signals

Earth stations beam signals to the satellites

Not suitable for interactive, real-time processing

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Wireless Technologies

Cellular and PCS Telephone and Pager Systems Geographic areas are divided into cells

Each cell has a low-power transmitter or radio relay antenna

Computers and other communications processors coordinate and control the transmissions to and from mobile users

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Wireless Technologies

Wireless LANS Uses wireless radio-wave technology to

connect PCs within an office or a building

Can be high-frequency, similar to digital cellular, or low frequency (spread spectrum)

Bluetooth Short-range wireless technology

Connects PCs to devices, such as a printer

Fairly low cost to implement

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Wireless Technologies

Other Wireless Systems Cellular phones Mobile radio

PDAs

Telecommunications networks now play vital and pervasive roles in

Web-enabled e-business processes Electronic commerce

Enterprise collaboration Other applications that support business operations, management, and strategic objectives

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The Wireless Web

Wireless Internet access is growing as Web-enabled information appliances proliferate

Smart telephones, pagers, PDAs All are very thin clients in wireless networks

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Telecommunications Processors

Modems The most common type of communications processor

Converts a digital signal to an analog frequency that can be transmitted over phone lines, then back into a digital signal

Modulation and demodulation

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Comparing Technologies

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Inter-Network Processors

Switch… makes connections between telecommunications circuits in a network

Router… intelligent communications processor that interconnects networks based on different protocols

Hub… a port-switching communications processor

Gateway… connects networks with different communications architectures

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Communications Processors

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Communications Processors

Multiplexer… allows a single communications channel to carry simultaneous data transmissions from many

terminals In time division multiplexing (TDM), the multiplexer divides the time each terminal can use the high-

speed into short time slots

Multiplexers increase the number of transmissions possible

Does not increase the number of physical data channels

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Telecommunications Software

May reside in PCs, servers, mainframes, and communications processors

Vital part of all telecommunications networks

Used to manage network performance

WANs often use telecommunications monitors or teleprocessing monitors

Other networks use operating system software

Middleware helps diverse networks communicate with each other

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Network Management Functions

Traffic Management Manage network resources and traffic to

avoid congestion and optimize service levels

Security Provide authentication, encryption, firewall, auditing, and enforcement

Network Monitoring Troubleshoot and watch over the network, alerting administrators of potential problems

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Network Management Functions

Capacity Planning Survey network resources, traffic patterns, and users’ needs

Determine the best way to accommodate the needs of the network as it grows and changes

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Network Topologies

Topology The structure of a network

Star Network Ties end user computers to a central computer

Ring Network Ties local computer processors together in a ring on a relatively equal basis

Bus Network Local processors share the same communications channel

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Network Topologies

Mesh Network Uses direct communications lines to connect some or all of the computers in the ring to

each other

Switch A message-switching computer that handles

data communication between autonomous local computers

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Network Topologies

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Network Architectures and Protocols

Protocol A standard set of rules and procedures for the control of communications in a network

Handshaking The process of exchanging predetermined

signals and characters

Establishes a telecommunications session between terminals and computers

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Network Architectures and Protocols

Network Architecture Master plan of standard protocols, hardware, software, and interfaces between end users

and computer systems

Goal is to promote an open, simple, flexible, and efficient telecommunications environment

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OSI and TCP/IP Models

Open Systems Interconnection (OSI) Model A seven-layer model that serves as a standard model for network architectures

Model for how messages should be transmitted between two points in a network

Each layer adds functions

Transmission Control Protocol/Internet Protocol (TCP/IP)

A five-layer telecommunications protocol used by the Internet

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OSI and TCP/IP Models

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Voice Over IP

Internet Telephony Using an Internet connection to pass voice

data using IP instead of a telephone network

Often referred to as voice over IP or VoIP

Works like a regular phone, but skips long-distance charges

Runs over standard network infrastructure

Requires a well-configured network to work smoothly

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Bandwidth

Bandwidth The frequency range of a telecommunications channel that determines the maximum

transmission rate

Speed and capacity typically measured in bits per second (bps)

Sometimes call baud rate

Transmission Rates Narrow-band = low speed

Broadband = high speed

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Transmission Speeds

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Switching Alternatives

Circuit Switching Switch opens a circuit to establish a link

between a sender and a receiver

It remains open until the communication session is completed

Packet Switching Breaks messages into groups called packets

Transmits packets separately

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Network Interoperability

Ensures that anyone anywhere on one network can communicate with anyone anywhere on another network

From a telecommunications perspective, no need to speak a common language

Telecommunications would be possible without Complete accessibility

Transparency

Seamless interoperability across all networks

Electronic Business Systems

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Enterprise Business Systems

E-business means using the Internet, other networks, and IT to support

Electronic commerce

Enterprise communications and collaboration

Web-enabled business processes

E-commerce is the buying, selling, and marketing of products, services, and information over the Internet and

other networks

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Cross-Functional Systems

Cross the boundaries of traditional business functions

Used to reengineer and improve vital business processes all across the enterprise

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Enterprise Application Architecture

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Enterprise Application Architecture

Provides a conceptual framework Helps visualize the basic components, processes, and interfaces of major e-business applications

Focuses on accomplishing fundamental business processes in concert with

Customers

Suppliers

Partners

Employees

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Enterprise Application Architecture

Enterprise Resource Planning (ERP) Concentrates on the efficiency of internal production, distribution, and financial processes

Customer Relationship Management (CRM) Focuses on acquiring and retaining profitable customers via marketing, sales, and services

Partner Relationship Management (PRM) Aims at acquiring and retaining partners who

can enhance the selling and distribution of products and services

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Enterprise Application Architecture

Supply Chain Management (SCM) Focuses on developing the most efficient and effective sourcing and procurement processes

Knowledge Management (KM) Focuses on facilitating internal group collaboration and decision support

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Enterprise Application Integration

EAI software connects cross-functional systems Serves as middleware to provide

Data conversion Communication between systems

Access to system interfaces

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Transaction Processing Systems

Cross-functional information systems that process data resulting from the occurrence of business

transactions Transactions include sales, purchases, deposits, withdrawals, refunds, and payments

Online transaction processing (OLTP) is a real-time system that captures transactions immediately

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Transaction Processing Systems

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The Transaction Processing Cycle

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Enterprise Collaboration Systems (ECS)

EC systems are cross-functional information systems that enhance team and workgroup

Communication

Coordination

Collaboration

Systems may include Networked PC workstations

Servers

Databases

Groupware and application packages

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ECS Tools

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Functional Business Systems

A variety of types of information systems that support the business functions of

Accounting

Finance

Marketing

Operations management

Human resource management

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IT in Business

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Marketing Systems

Marketing systems are concerned with Planning, promotion, and sale of existing products in existing markets

Development of new products and new markets

Better attracting and serving present and potential customers

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Marketing Information Systems

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Interactive Marketing

Interactive Marketing A customer-focused marketing process

Uses the Internet, intranets, and extranets

Establishes two-way transactions between a business and its customers or potential customers

Goal Profitably use networks to attract and keep customers

Get customers to help create, purchase, and improve products and services

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Targeted Marketing

An advertising and promotion management concept with five targeting components

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Targeted Marketing Components

Community: customized ads to appeal to specific virtual communities Content: ads placed on a variety of selected websites, aimed at a specific

audience Context: ads placed on web pages that are relevant to a product or service Demographic/Psychographic: web marketing aimed at specific types or

classes of people Online behavior: promotions tailored to each visit to a site by an individual

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Sales Force Automation

Outfit sales force with notebook computers, web browsers, and sales contact software

Connect them to marketing websites and the company intranet

Goals Increase personal productivity

Speed up capture and analysis of sales data

Gain strategic advantage

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Manufacturing Information Systems

Supports the production/operations functions Includes all activities concerned with planning and control of the processes producing goods

or services

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Computer-Integrated Manufacturing

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CIM Objectives

Simplify production processes, product designs, and factory organization

Automate production processes and the business functions that support them

Integrate all production and support processes using

Networks

Cross-functional business software

Other information technologies

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CIM Systems

Computer-aided manufacturing (CAM) Automate the production process

Manufacturing execution systems (MES) Performance monitoring information systems

for factory floor operations

Process control Control ongoing physical processes

Machine control Controls the actions of machines

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Human Resource Management (HRM)

Information systems designed to support Planning to meet personnel needs

Development of employees to their full potential

Control of all personnel policies and programs

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HRM Systems

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HRM and the Internet

Recruiting employees using the corporate website and commercial recruiting services

Posting messages in selected Internet newsgroups

Communicating with job applicants via e-mail

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HRM and Corporate Intranets

Corporate intranet uses Process common HRM transactions

Allow around-the-clock HRM services

Disseminate information faster than through previous company channels

Collect information from employees online

Allow HRM tasks to be performed with little HRM department intervention

Training

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Employee Self-Service

Intranet applications can allow employees to View benefits

Enter travel and expense reports

Verify employment and salary information

Access and update personal information

Enter time-sensitive data

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Accounting Information Systems

The oldest and most widely used information system in business

Records and reports business transactions and economic events

Produces financial statements

Forecasts future conditions

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Accounting Information Systems

Typically consists of Order processing

Inventory control

Accounts receivable

Accounts payable

Payroll

General ledger systems

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Accounting Information Systems

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Financial Management Systems

Supports business managers and professionals making decisions concerning

The financing of a business

The allocation and control of financial resources within a business

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Financial Management System Example

Enterprise Business Systems

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What is CRM?

Managing the full range of the customer relationship involves

Providing customer-facing employees with a single, complete view of every customer at every touch point and across all channels

Providing the customer with a single, complete view of the company and its extended channels

CRM uses IT to create a cross-functional enterprise system that integrates and automates many of the

customer-serving processes

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Application Clusters in CRM

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Contact and Account Management

CRM helps sales, marketing, and service professionals capture and track relevant

data about Every past and planned contact with prospects and customers

Other business and life cycle events of customers

Data are captured through customer touchpoints Telephone, fax, e-mail

Websites, retail stores, kiosks

Personal contact

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Sales

A CRM system provides sales reps with the tools and data resources they need to

Support and manage their sales activities

Optimize cross- and up-selling

CRM also provides the means to check on a customer’s account status and history before

scheduling a sales call

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Marketing and Fulfillment

CRM systems help with direct marketing campaigns by automatic such tasks as

Qualifying leads for targeted marketing

Scheduling and tracking mailings

Capturing and managing responses

Analyzing the business value of the campaign

Fulfilling responses and requests

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Customer Service and Support

A CRM system gives service reps real-time access to the same database used by sales

and marketing Requests for service are created, assigned,

and managed

Call center software routes calls to agents

Help desk software provides service data and suggestions for solving problems

Web-based self-service enables customers to access personalized support information

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Retention and Loyalty Programs

It costs 6 times more to sell to a new customer

An unhappy customer will tell 8-10 others

Boosting customer retention by 5 percent can boost profits by 85 percent

The odds of selling to an existing customer are 50 percent; a new one 15 percent

About 70 percent of customers will do business with the company again if a problem is quickly taken care of

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Retention and Loyalty Programs

Enhancing and optimizing customer retention and loyalty is a primary objective of CRM

Identify, reward, and market to the most loyal and profitable customers

Evaluate targeted marketing and relationship programs

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The Three Phases of CRM

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Benefits of CRM

Benefits of CRM Identify and target the best customers

Real-time customization and personalization of products and services

Track when and how a customer contacts the company

Provide a consistent customer experience

Provide superior service and support across all customer contact points

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CRM Failures

Business benefits of CRM are not guaranteed 50 percent of CRM projects did not produce promised results

20 percent damaged customer relationships

Reasons for failure Lack of understanding and preparation

Not solving business process problems first

No participation on part of business stakeholders involved

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Trends in CRM

Operational CRM Supports customer interaction with greater convenience through a variety of channels

Synchronizes customer interactions consistently across all channels

Makes the company easier to do business with

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Trends in CRM

Analytical CRM Extracts in-depth customer history, preferences, and profitability from databases

Allows prediction of customer value and behavior

Allows forecast of demand

Helps tailor information and offers to customer needs

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Trends in CRM

Collaborative CRM Easy collaboration with customers,

suppliers, and partners

Improves efficiency and integration throughout supply chain

Greater responsiveness to customer needs through outside sourcing of products and services

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Trends in CRM

Portal-based CRM Provides users with tools and information

that fit their needs

Empowers employees to respond to customer demands more quickly

Helps reps become truly customer-faced

Provides instant access to all internal and external customer information

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ERP: The Business Backbone

ERP is a cross-functional enterprise backbone that integrates and automates processes within

Manufacturing

Logistics

Distribution

Accounting

Finance

Human resources

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What is ERP?

Enterprise resource planning is a cross-functional enterprise system

An integrated suite of software modules

Supports basic internal business processes

Facilitates business, supplier, and customer information flows

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ERP Application Components

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ERP Process and Information Flows

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Benefits and Challenges of ERP

ERP Business Benefits Quality and efficiency

Decreased costs

Decision support

Enterprise agility

ERP Costs Risks and costs are considerable

Hardware and software are a small part of total costs

Failure can cripple or kill a business

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Costs of Implementing a New ERP

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Causes of ERP Failures

Most common causes of ERP failure Under-estimating the complexity of planning, development, training

Failure to involve affected employees in planning and development

Trying to do too much too fast

Insufficient training

Insufficient data conversion and testing

Over-reliance on ERP vendor or consultants

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Trends in ERP

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Supply Chain Management (SCM)

Fundamentally, supply chain management helps a company

Get the right products

To the right place

At the right time

In the proper quantity

At an acceptable cost

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Goals of SCM

The goal of SCM is to efficiently Forecast demand

Control inventory

Enhance relationships with customers, suppliers, distributors, and others

Receive feedback on the status of every link in the supply chain

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What is a Supply Chain?

The interrelationships With suppliers, customers, distributors, and

other businesses

Needed to design, build, and sell a product

Each supply chain process should add value to the products or services a company produces

Frequently called a value chain

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Supply Chain Life Cycle

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Electronic Data Interchange

EDI One of the earliest uses of information technology for supply chain management

The electronic exchange of business transaction documents between supply chain trading partners

The almost complete automation of an e-commerce supply chain process

Many transactions occur over the Internet, using secure virtual private networks

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Typical EDI Activities

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Roles and Activities of SCM in Business

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Planning & Execution Functions of SCM

Planning Supply chain design

Collaborative demand and supply planning

Execution Materials management

Collaborative manufacturing

Collaborative fulfillment

Supply chain event management

Supply chain performance management

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Benefits and Challenges of SCM

Key Benefits Faster, more accurate order processing

Reductions in inventory levels

Quicker times to market

Lower transaction and materials costs

Strategic relationships with supplier

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Goals and Objectives of SCM

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Benefits and Challenges of SCM

Key Challenges Lack of demand planning knowledge, tools,

and guidelines

Inaccurate data provided by other information systems

Lack of collaboration among marketing, production, and inventory management

SCM tools are immature, incomplete, and hard to implement

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Trends in SCM

Electronic Commerce Systems

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The Scope of e-Commerce

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E-Commerce Technologies

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Categories of e-Commerce

Business-to-Consumer Virtual storefronts, multimedia catalogs, interactive order processing, electronic payment,

online customer support

Business-to-Business Electronic business marketplaces, direct links between businesses, auctions and exchanges

Consumer-to-Consumer Online auctions, posting to newspaper sites, personal websites, e-commerce portals

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Essential e-Commerce Architecture

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Access Control and Security

E-commerce processes must establish mutual trust and secure access between parties

User names and passwords

Encryption key

Digital certificates and signatures

Restricted access areas Other people’s accounts

Restricted company data

Webmaster administration areas

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Profiling and Personalizing

Profiling gathers data on you and your website behavior and choices

User registration Cookie files and tracking software

User feedback

Profiling is used for Personalized (one-to-one) marketing

Authenticating identity Customer relationship management

Marketing planning Website management

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Search Management

Search processes help customers find the specific product or service they want

E-commerce software packages often include a website search engine

A customized search engine may be acquired from companies like Google or Requisite Technology

Searches are often on content or by parameters

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Content and Catalog Management

Content Management Software Helps develop, generate, deliver, update, and archive text and multimedia information at

e-commerce websites

Catalog Management Software Helps generate and manage catalog content

Catalog and content management software works with profiling tools to personalize content

Includes product configuration and mass customization

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Workflow Management

E-business and e-commerce workflow manage-ment depends on a workflow software engine

Contains software model of business processes

Workflow models express predefined Sets of business rules

Roles of stakeholders

Authorization requirements

Routing alternative

Databases used

Task sequences

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Example of Workflow Management

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Event Notification

Most e-commerce applications are event driven Responds to such things as customer’s first website visit and payments

Monitors all e-commerce processes

Records all relevant events, including problem situations

Notifies all involved stakeholders

Works in conjunction with user-profiling software

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Collaboration and Trading

Processes that support vital collaboration arrangements and trading services

Needed by customers, suppliers, and other stakeholders

Online communities of interest E-mail, chat, discussion groups

Enhances customer service Builds loyalty

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Electronic Payment Processes

Complex processes Near-anonymous and electronic nature

of transactions

Many security issues

Wide variety of debit and credit alternatives

Financial institutions may be part of the process

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Electronic Payment Processes

Web Payment Processes Shopping cart process

Credit card payment process

Debit and other more complex processes

Electronic Funds Transfer (EFT) Major payment system in banking, retail

Variety of information technologies capture and process money and credit card transfers

Most point-of-sale terminals in retail stores are networked to bank EFT systems

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Electronic Payment Example

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Securing Electronic Payments

Network sniffers easily recognize credit card formats

Encrypt data between customer and merchant Encrypt data between customer and financial institution

Take sensitive information off-line

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E-Commerce Application Trends

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E-Commerce Success Factors

Some of the success factors in e-commerce Selection and value

Performance and service

Look and feel

Advertising and incentives

Personal attention (one-to-one marketing)

Community relationships

Security and reliability

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Differences in Marketing

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Web Store Requirements

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Developing a Web Store

Build a website Choose or set up web hosting

Use simple design tools and templates

Include a shopping cart and payment support

Market the website Include Web page and e-mail advertising

and promotions

Exchange advertising with other Web stores

Register with search engines and directories

Sign up for affiliate programs

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Serving Your Customers

Convert visitors into loyal customers Develop one-to-one relationship with customers

Create incentives to encourage registration

Use Web cookies to identify visitors

Use tracking services to record and analyze website behavior and customer preferences

Create an attractive, friendly, efficient store

Offer fast order processing and payment

Notify when orders are processed and shipped

Provide links to related websites

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Managing a Web Store

Manage both the business and the website Record and analyze traffic, inventory, sales

Use CRM features to help retain customers

Link sales, inventory data to accounting systems

Operate 24 hours a day, seven day a week

Protect transactions and customer records Use security monitors and firewalls

Use redundant systems and power sources

Employ passwords and encryption

Offer 24-hour tech support

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B2B E-Commerce

B2B is the wholesale and supply side of the commercial process

Businesses buy, sell, or trade with other businesses

Relies on multiple electronic information technologies Catalog systems Trading systems Data interchange

Electronic funds transfers

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E-Commerce Marketplaces

One to Many Sell-side marketplaces

One supplier dictates product offerings and prices

Many to One Buy-side marketplaces

Many suppliers bid for the business of a buyer

Some to Many Distribution marketplaces

Unites suppliers who combine their product catalogs to attract a larger audience

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E-Commerce Marketplaces

Many to Some Procurement marketplaces

Unites major buyers who combine purchasing catalogs Attracts more competition and thus lower prices

Many to Many Auction marketplaces

Dynamically optimizes prices

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E-Commerce Portals

B2B e-commerce portals offer multiple marketplaces Catalogs

Exchanges Auctions

Often developed and hosted by third-party market-maker companies

Infomediaries serve as intermediaries in e-business and e-commerce transactions

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B2B E-Commerce Web Portal

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Clicks and Bricks

Success will go to those who can integrate Internet initiatives with traditional operations

Merging operations has trade-offs

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E-Commerce Integration

The business case for merging e-commerce with traditional business operations

Move strategic capabilities in traditional operations to the e-commerce business

Integrate e-commerce into the traditional business

Sharing of established brands

Sharing of key business information

Joint buying power and distribution efficiencies

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Other Clicks and Bricks Strategies

Partial e-commerce integration Joint ventures and strategic partnerships

Complete separation Spin-off of an independent e-commerce company

Barnes and Noble’s experience Spun off independent e-commerce company

Gained venture capital, entrepreneurial culture, and flexibility Attracted quality management Accelerated decision making Failed to gain market share

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E-Commerce Channel Choices

An e-commerce channel is the marketing or sales channel created by a company for its

e-commerce activities There is no universal strategy or e-commerce channel choice

Both e-commerce integration and separation have major business benefits and shortcoming Most businesses are implementing some

measure of clicks and bricks integration

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E-Commerce Strategy Checklist

Questions to ask and answer What audiences are we attempting to reach?

What action do we want those audiences to take?

Who owns the e-commerce channel within the organization?

Is the e-commerce channel planned alongside other channels?

Is there a process for generating, approving, releasing, and withdrawing content?

Will our brand translate to the new channel?

How will we market the channel itself?

Decision Support Systems

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Levels of Managerial Decision Making

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Decision Structure

Structured (operational) The procedures to follow when decision

is needed can be specified in advance

Unstructured (strategic) It is not possible to specify in advance

most of the decision procedures to follow

Semi-structured (tactical) Decision procedures can be pre-specified,

but not enough to lead to the correct decision

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Decision Support Systems

Management Information Systems

Decision Support Systems

Decision support provided

Provide information about the performance of the

organization

Provide information and techniques to analyze

specific problems

Information form and frequency

Periodic, exception, demand, and push reports

and responses

Interactive inquiries and responses

Information format

Prespecified, fixed format Ad hoc, flexible, and adaptable format

Information processing methodology

Information produced by extraction and manipulation

of business data

Information produced by analytical modeling of

business data

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Decision Support Trends

The emerging class of applications focuses on Personalized decision support

Modeling

Information retrieval

Data warehousing

What-if scenarios

Reporting

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Business Intelligence Applications

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Decision Support Systems

Decision support systems use the following to support the making of semi-structured business decisions Analytical models

Specialized databases

A decision-maker’s own insights and judgments

An interactive, computer-based modeling process

DSS systems are designed to be ad hoc, quick-response systems that are initiated and controlled by decision makers

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DSS Components

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DSS Model Base

Model Base A software component that consists of

models used in computational and analytical routines that mathematically express relations among variables

Spreadsheet Examples Linear programming

Multiple regression forecasting

Capital budgeting present value

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Applications of Statistics and Modeling

Supply Chain: simulate and optimize supply chain flows, reduce inventory, reduce stock-outs

Pricing: identify the price that maximizes yield or profit

Product and Service Quality: detect quality problems early in order to minimize them

Research and Development: improve quality, efficacy, and safety of products and services

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Management Information Systems

The original type of information system that supported managerial decision making

Produces information products that support many day-to-day decision-making needs

Produces reports, display, and responses

Satisfies needs of operational and tactical decision makers who face structured decisions

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Management Reporting Alternatives

Periodic Scheduled Reports Prespecified format on a regular basis

Exception Reports Reports about exceptional conditions

May be produced regularly or when an exception occurs

Demand Reports and Responses Information is available on demand

Push Reporting Information is pushed to a networked computer

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Example of Push Reporting

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Online Analytical Processing

OLAP Enables managers and analysts to examine

and manipulate large amounts of detailed and consolidated data from many perspectives

Done interactively, in real time, with rapid response to queries

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Online Analytical Operations

Consolidation Aggregation of data

Example: data about sales offices rolled up to the district level

Drill-Down Display underlying detail data

Example: sales figures by individual product

Slicing and Dicing Viewing database from different viewpoints

Often performed along a time axis

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OLAP Configuration

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Geographic Information Systems

GIS DSS uses geographic databases to construct

and display maps and other graphic displays

Supports decisions affecting the geographic distribution of people and other resources

Often used with Global Positioning Systems (GPS) devices

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Data Visualization Systems

DVS Represents complex data using interactive,

three-dimensional graphical forms (charts, graphs, maps)

Helps users interactively sort, subdivide, combine, and organize data while it is in its graphical form

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DVS Example

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Using Decision Support Systems

Using a decision support system involves an interactive analytical modeling process

Decision makers are not demanding pre-specified information

They are exploring possible alternatives

What-If Analysis Observing how changes to selected variables affect other variables

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Using Decision Support Systems

Sensitivity Analysis Observing how repeated changes to a single variable affect other variables

Goal-seeking Analysis Making repeated changes to selected variables until a chosen variable reaches a target value

Optimization Analysis Finding an optimum value for selected variables, given certain constraints

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Data Mining

Provides decision support through knowledge discovery Analyzes vast stores of historical business data Looks for patterns, trends, and correlations Goal is to improve business performance

Types of analysis Regression

Decision tree Neural network Cluster detection

Market basket analysis

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Analysis of Customer Demographics

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Market Basket Analysis

One of the most common uses for data mining Determines what products customers purchase together with other products

Results affect how companies Market products

Place merchandise in the store

Lay out catalogs and order forms

Determine what new products to offer

Customize solicitation phone calls

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Executive Information Systems

EIS Combines many features of MIS and DSS

Provide top executives with immediate and easy access to information

Identify factors that are critical to accomplishing strategic objectives (critical success factors)

So popular that it has been expanded to managers, analysis, and other knowledge workers

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Features of an EIS

Information presented in forms tailored to the preferences of the executives using the system

Customizable graphical user interfaces

Exception reports

Trend analysis

Drill down capability

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Enterprise Information Portals

An EIP is a Web-based interface and integration of MIS, DSS, EIS, and other technologies

Available to all intranet users and select extranet users

Provides access to a variety of internal and external business applications and services

Typically tailored or personalized to the user or groups of users

Often has a digital dashboard

Also called enterprise knowledge portals

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Dashboard Example

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Enterprise Information Portal Components

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Enterprise Knowledge Portal

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Artificial Intelligence (AI)

AI is a field of science and technology based on Computer science

Biology Psychology Linguistics Mathematics Engineering

The goal is to develop computers than can simulate the ability to think

And see, hear, walk, talk, and feel as well

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Attributes of Intelligent Behavior

Some of the attributes of intelligent behavior Think and reason

Use reason to solve problems

Learn or understand from experience

Acquire and apply knowledge

Exhibit creativity and imagination

Deal with complex or perplexing situations

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Attributes of Intelligent Behavior

Attributes of intelligent behavior (continued) Respond quickly and successfully to new situations

Recognize the relative importance of elements in a situation

Handle ambiguous, incomplete, or erroneous information

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Domains of Artificial Intelligence

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Cognitive Science

Applications in the cognitive science of AI Expert systems

Knowledge-based systems

Adaptive learning systems

Fuzzy logic systems

Neural networks

Genetic algorithm software

Intelligent agents

Focuses on how the human brain works and how humans think and learn

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Robotics

AI, engineering, and physiology are the basic disciplines of robotics

Produces robot machines with computer intelligence and humanlike physical capabilities

This area include applications designed to give robots the powers of Sight or visual perception

Touch Dexterity

Locomotion Navigation

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Natural Interfaces

Major thrusts in the area of AI and the development of natural interfaces

Natural languages Speech recognition

Virtual reality

Involves research and development in Linguistics Psychology

Computer science Other disciplines

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Latest Commercial Applications of AI

Decision Support Helps capture the why as well as the what of engineered design and decision making

Information Retrieval Distills tidal waves of information into simple presentations

Natural language technology

Database mining

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Latest Commercial Applications of AI

Virtual Reality X-ray-like vision enabled by enhanced-reality visualization helps surgeons

Automated animation and haptic interfaces allow users to interact with virtual objects

Robotics Machine-vision inspections systems

Cutting-edge robotics systems From micro robots and hands and legs, to cognitive and trainable modular vision systems

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Expert Systems

An Expert System (ES) A knowledge-based information system

Contain knowledge about a specific, complex application area

Acts as an expert consultant to end users

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Components of an Expert System

Knowledge Base Facts about a specific subject area

Heuristics that express the reasoning procedures of an expert (rules of thumb)

Software Resources An inference engine processes the knowledge

and recommends a course of action User interface programs communicate with

the end user Explanation programs explain the reasoning process to the end user

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Components of an Expert System

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Methods of Knowledge Representation

Case-Based Knowledge organized in the form of cases

Cases are examples of past performance, occurrences, and experiences

Frame-Based Knowledge organized in a hierarchy or

network of frames

A frame is a collection of knowledge about an entity, consisting of a complex package

of data values describing its attributes

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Methods of Knowledge Representation

Object-Based Knowledge represented as a network of objects

An object is a data element that includes both data and the methods or processes that act on those data

Rule-Based Knowledge represented in the form of rules

and statements of fact

Rules are statements that typically take the form of a premise and a conclusion (If, Then)

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Expert System Application Categories

Decision Management Loan portfolio analysis

Employee performance evaluation

Insurance underwriting

Diagnostic/Troubleshooting Equipment calibration

Help desk operations

Medical diagnosis

Software debugging

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Expert System Application Categories

Design/Configuration Computer option installation Manufacturability studies Communications networks

Selection/Classification Material selection

Delinquent account identification Information classification Suspect identification

Process Monitoring/Control

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Expert System Application Categories

Process Monitoring/Control Machine control (including robotics)

Inventory control Production monitoring

Chemical testing

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Benefits of Expert Systems

Captures the expertise of an expert or group of experts in a computer-based information system

Faster and more consistent than an expert

Can contain knowledge of multiple experts

Does not get tired or distracted

Cannot be overworked or stressed

Helps preserve and reproduce the knowledge of human experts

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Limitations of Expert Systems

The major limitations of expert systems Limited focus

Inability to learn

Maintenance problems

Development cost

Can only solve specific types of problems in a limited domain of knowledge

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Developing Expert Systems

Suitability Criteria for Expert Systems Domain: the domain or subject area of

the problem is small and well-defined

Expertise: a body of knowledge, techniques, and intuition is needed that only a few people possess

Complexity: solving the problem is a complex task that requires logical inference processing

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Developing Expert Systems

Suitability Criteria for Expert Systems Structure: the solution process must be able

to cope with ill-structured, uncertain, missing, and conflicting data and a changing problem situation

Availability: an expert exists who is articulate, cooperative, and supported by the management and end users involved in the development process

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Development Tool

Expert System Shell The easiest way to develop an expert system

A software package consisting of an expert system without its knowledge base

Has an inference engine and user interface programs

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Knowledge Engineering

A knowledge engineer Works with experts to capture the knowledge (facts and rules of thumb) they possess

Builds the knowledge base, and if necessary, the rest of the expert system

Performs a role similar to that of systems analysts in conventional information systems development

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Neural Networks

Computing systems modeled after the brain’s mesh-like network of interconnected processing

elements (neurons) Interconnected processors operate in parallel

and interact with each other

Allows the network to learn from the data it processes

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Fuzzy Logic

Fuzzy logic Resembles human reasoning

Allows for approximate values and inferences and incomplete or ambiguous data

Uses terms such as “very high” instead of precise measures

Used more often in Japan than in the U.S.

Used in fuzzy process controllers used in subway trains, elevators, and cars

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Example of Fuzzy Logic Rules and Query

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Genetic Algorithms

Genetic algorithm software Uses Darwinian, randomizing, and other mathematical functions

Simulates an evolutionary process, yielding increasingly better solutions to a problem

Being uses to model a variety of scientific, technical, and business processes

Especially useful for situations in which thousands of solutions are possible

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Virtual Reality (VR)

Virtual reality is a computer-simulated reality Fast-growing area of artificial intelligence

Originated from efforts to build natural, realistic, multi-sensory human-computer interfaces

Relies on multi-sensory input/output devices

Creates a three-dimensional world through sight, sound, and touch

Also called telepresence

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Typical VR Applications

Current applications of virtual reality Computer-aided design

Medical diagnostics and treatment

Scientific experimentation

Flight simulation

Product demonstrations

Employee training

Entertainment

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Intelligent Agents

A software surrogate for an end user or a process that fulfills a stated need or activity

Uses built-in and learned knowledge base to make decisions and accomplish tasks in a way that fulfills the intentions of a user

Also call software robots or bots

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User Interface Agents

Interface Tutors – observe user computer operations, correct user mistakes, provide hints/advice on efficient software use

Presentation Agents – show information in a variety of forms/media based on user preferences

Network Navigation Agents – discover paths to information, provide ways to view it based

on user preferences

Role-Playing – play what-if games and other roles to help users understand information and make better decisions

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Information Management Agents

Search Agents – help users find files and databases, search for information, and suggest and find new types of information products, media, resources

Information Brokers – provide commercial services to discover and develop information resources that fit business or personal needs

Information Filters – Receive, find, filter, discard, save, forward, and notify users about products received or desired, including e-mail, voice mail, and other information media