enterprise information systems- david l. olson &...

Enterprise Information Systems-Contemporary Trends and Issues

Chapter 1: Enterprise Information Systems

1.1 Information and Systems

1.1.1 Purpose of Information Systems

1.1.2 Types of Information Systems

1.2 How EIS Differs From Conventional Packages

1.3 EIS Is An Integrated Application

1.4 Concept Of EIS

1.4.1 EIS Features

1.4.2 Customers Expectation In EIS Packages

1.5 EIS Characteristics

1.6 EIS Research

What we are going to discuss

Wikipedia definition

Enterprise Information Systems Enterprise Information Systems provide a technology platform that provide a technology platform that enables organizations to integrate enables organizations to integrate and coordinate their business and coordinate their business processes. processes. They provide a single system that is They provide a single system that is central to the organization and central to the organization and ensure that information can be ensure that information can be shared across all functional levels shared across all functional levels and management hierarchies. and management hierarchies.

Types of Information Systems

Transaction processing systemsTransaction processing systemsManagement Information systems (MIS)Management Information systems (MIS)DecisionDecision--support systems (DSS)support systems (DSS)Knowledge work systems (KWS)Knowledge work systems (KWS)Executive support systems (ESS)Executive support systems (ESS)

Integrated EIS

Create value through integrating Create value through integrating activities across organizationactivities across organizationImplementation of best practicesImplementation of best practicesStandardization of processesStandardization of processesOneOne--source datasource dataOnOn--line access to informationline access to information

EIS Features

Best Business Practices: Best Business Practices: Compilation of the worldwide best practicesCompilation of the worldwide best practices

Beyond The Enterprise: Beyond The Enterprise: Capable of application across supply chain Capable of application across supply chain applicationsapplications

Comprehensive: Comprehensive: Able to sustain a variety of enterprise functions Able to sustain a variety of enterprise functions Suitable for a wide range of business enterprises.Suitable for a wide range of business enterprises.

Flexibility: Flexibility: Modular & Open:Modular & Open:

Role in Business

ERP began with SAP in early 1970sERP began with SAP in early 1970sAccounting basisAccounting basisUS products US products –– some extension of MRPsome extension of MRPCombine business computingCombine business computing→→Unified system sharing one set of dataUnified system sharing one set of data→→Advantages in efficiency, accuracyAdvantages in efficiency, accuracy

Best PracticesBest Practices→→Apply the best process for each functionApply the best process for each function

Historical Growth

1970s & 1980s 1970s & 1980s –– more development than growthmore development than growth1990s 1990s –– became widely adopted by large firmsbecame widely adopted by large firmsLate 1990s Late 1990s –– growth exploded with fears of Y2K growth exploded with fears of Y2K problemsproblemsPostPost--2000 2000 –– growth slowedgrowth slowed

Saturated market, economy dippedSaturated market, economy dippedSeeking to Seeking to →→Fill in gaps with larger firmsFill in gaps with larger firms→→Make products useful for smaller firmsMake products useful for smaller firms→→Emphasize InternetEmphasize Internet

Why Study EIS?

TechnicalTechnical::Integration of computer systems Integration of computer systems foster consistency, efficiencyfoster consistency, efficiency

FinancialFinancial::Integrating applications saves moneyIntegrating applications saves money

OrganizationalOrganizational::All members of organization use same All members of organization use same systemsystem

Conception vs. Reality

Integrated SystemIntegrated SystemIn fact, vendors usually sell modulesIn fact, vendors usually sell modules

Would like to sell full systemWould like to sell full systemBuyers reduce cost, risk, by starting smaller Buyers reduce cost, risk, by starting smaller scalescale→→Risk of converting entire systemRisk of converting entire system→→Complex cost impactComplex cost impact

SAP: Best Practices

A key to original productA key to original productDavenport [1998]: Davenport [1998]:

FirmFirm’’s vary in what is best for thems vary in what is best for themBusiness world dynamicBusiness world dynamicRigid approach has dangersRigid approach has dangersIf a firm develops a competitive advantage, they If a firm develops a competitive advantage, they give it up by adopting give it up by adopting ““best practicesbest practices””

Table 2: ERP Supported Functions

Financial Hum Res Ops & Log Sales & MAccts receivable Time accounting Inventory OrdersAsset account Payroll MRP PricingCash forecast Personnel plan Plant Mtce Sales MgtCost accounting Travel expense Prod planning Sales planExec Info Sys Project MgmtFinancial consol PurchasingGeneral ledger Quality MgmtProfit analysis ShippingStandard costing Vendor eval

CPU Support

Originally mainframeOriginally mainframeSAP R/2 SAP R/2 –– 19741974

Client/Server architecture early 1990sClient/Server architecture early 1990sMore flexibleMore flexibleSAP R/3SAP R/3

Web PortalsWeb Portals

Advantages & Disadvantages

System IntegrationSystem IntegrationImproved understanding across usersImproved understanding across usersLess flexibilityLess flexibility

Data IntegrationData IntegrationGreater accuracyGreater accuracyHarder to correctHarder to correct

Better methodsBetter methodsMore efficiencyMore efficiencyLess freedom & creativityLess freedom & creativity

Expected lower costsExpected lower costsMore efficient system plannedMore efficient system plannedDynamic needs, training typically under budgeted, hidden Dynamic needs, training typically under budgeted, hidden implementation costsimplementation costs

SummaryEIS software has had a major impact on EIS software has had a major impact on organizational computingorganizational computingTechnological, financial, organizational Technological, financial, organizational benefitsbenefitsAlso expensive, massive, inflexibleAlso expensive, massive, inflexibleMany hidden costsMany hidden costsComplex system meriting studyComplex system meriting study

Prof. David L. Olson James & H.K. Stuart Professor in MIS, Department of Management, Office (402) 472-4521dolson3@unl.edu

Dr. Subodh KesharwaniSchool of Management StudiesIndira Gandhi National Open UniversityNew Delhi-110068,Mobile: 00-91-9350026685subodhkesharwani@gmail.com

enterprise information systems- david l. olson &...

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