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CRICOS Provider Number 00103D 1 LN-2: Software for Information Management ITECH 1005/5005: Business Information Systems Dr Zhaohao Sun GSITMS, University.

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Presentation on theme: "CRICOS Provider Number 00103D 1 LN-2: Software for Information Management ITECH 1005/5005: Business Information Systems Dr Zhaohao Sun GSITMS, University."— Presentation transcript:


2 CRICOS Provider Number 00103D 1 LN-2: Software for Information Management ITECH 1005/5005: Business Information Systems Dr Zhaohao Sun GSITMS, University of Ballarat

3 CRICOS Provider Number 00103D 2 Objective –To define how the different forms of software contribute to an organization and review issues in software selection Learning outcomes: After reading this chapter, you will be able to: –Understand how different types of software support business information management –Distinguish between the concepts of e-business and e-commerce –Assess how the information management applications can support information flows within and between organizations Management Issues –How do we select the appropriate portfolio of information management applications? –Should we make, buy or rent software? –Should we adopt open source software? - - Objectives and Outcomes

4 CRICOS Provider Number 00103D 3 Information system –The combination of hardware and software technology used by an individual to perform tasks including information management (Chaffey & White 2011:39) Software – Intangible Hardware - Tangible Which is which? (a) Windows, (b) Sage Accounts, (c) A PC, (d) An iPod Information Systems, Software, Hardware

5 CRICOS Provider Number 00103D 4 Industry Total IT Spending 2010 2009-10 growth (%) Banking & security 390,4882.8 Communication media & services 392,5063.6 education 64,1462.5 Healthcare 88,9963.2 Insurance 159,9262.1 Local & regional gov 179,6641.7 Manufacturing & natural resources 426,0852.6 National & international gov 244,4104.0 Retail 146,2392.7 Transportation 105,7031.9 Others 209N/A Annual Growth (%) 2,407,0632.9 Source: Gartner (2010) IT Spend Trends (millions of US$)

6 CRICOS Provider Number 00103D 5 Software Categories Figure 2.1 Different categories of software (Chaffey 2011:41) Note: Renault has more than 1,400 applications in their portfolio

7 CRICOS Provider Number 00103D 6 Application and Systems Software Figure 2.2 The relationship between applications software and systems software (Chaffey 2011:42) Windows, Linux

8 CRICOS Provider Number 00103D 7 Categories of Application Software Figure 2.3 Main categories of applications software according to organizational scope (Chaffey 2011:42)

9 CRICOS Provider Number 00103D 8 How applications support decision making: The Anthony model (1965) Figure 2.4 Different forms of applications used to support management decision making within an organization (Chaffey 2011:43)

10 CRICOS Provider Number 00103D 9 Business applications developed by ERP – the SAP example Figure 2.5 Business applications delivered by an enterprise resource planning (ERP) system (Chaffey 2011:45)

11 CRICOS Provider Number 00103D 10 Growth in ERP – the SAP example Figure 2.6 The development of the SAP ERP system (Chaffey 2011:46)

12 CRICOS Provider Number 00103D 11 IT Systems = Grain Silos Figure 2.7 Grain silos – a great analogy for the problems of separate applications and databases (Chaffey 2011:47)

13 CRICOS Provider Number 00103D 12 Types of System Software Figure 2.8 Different categories of systems software (Chaffey 2005:72)

14 CRICOS Provider Number 00103D 13 The functions of operating systems software include: 1.Managing the user interface (GUI). 2.Managing data transfer with hardware. 3.Managing the file system. 4.Managing access to systems resources (access control). 5.Managing system resources for different applications. 6.Providing utilities for systems management. –(Chaffey, 2011:53-55) Popular OS: Windows XP, Vista and 7, Linux, and Mac see Chaffey 2011: 53, Figure 2.9 or see – Operating System functions

15 CRICOS Provider Number 00103D 14 Windows Task Manager Figure 2.11 Task Manager view of processes in Windows XP (Chaffey 2011:55)

16 CRICOS Provider Number 00103D 15 A typical approach for selecting for selecting the best type of software is 1.Identify criteria and functionality for new system. 2.Take the make, rent or buy decision. 3.Identify possible suppliers. 4.Produce a shortlist of preferred suppliers. 5.Select supplier from shortlist. Chaffey 2011:58 Issues in Software Selection

17 CRICOS Provider Number 00103D 16 1. Functionality. 2. Ease of use. 3. Performance. 4. Scalability. 5. Compatibility or interoperability. 6. Extensibility. 7. Stability or reliability. 8. Security. 9. Support. Chaffey 2011:59 Software Selection Criteria

18 CRICOS Provider Number 00103D 17 The options of acquiring a new information (management) system for an organisation 1. Bespoke: bespoke development 2. Off-the-shelf or packaged. A packaged implementation 3. Hosted solution (packaged): a hosted solution 4. Tailored development. Chaffey 2011:60-61 1 The Make, buy or rent decision

19 CRICOS Provider Number 00103D 18 Software acquisition methodAdvantagesDisadvantages 1. Bespoke Fits company needs well Costly and time consuming to develop and upgrade More errors 2. Packaged Relatively inexpensive Relatively error free Will not meet organizations needs exactly 3. Hosted Can pay for on a pay-per use model Relatively rapid to set up Majority of maintenance costs borne by supplier Longer term costs may be higher Dependent on supplier for data security and upgrades 4. Tailored Combines the benefits of the bespoke and packaged solutions Can use modules from different suppliers Inflexibility of packaged solutions may make it difficult to tailor software 2. Acquisitions alternatives

20 CRICOS Provider Number 00103D 19 Best of breed or single solution providers Chaffey 2011:62-3 3. Select Suppliers

21 CRICOS Provider Number 00103D 20 A software for which the underlying program code is freely available. The Open Source organization ( explain the benefits of open source software as The basic idea behind open source is very simple: When programmers can read, redistribute, and modify the source code for a piece of software, the software evolves. People improve it, people adapt it, people fix bugs. And this can happen at a speed that, if one is used to the slow pace of conventional software development, seems astonishing. We in the open source community have learned that this rapid evolutionary process produces better software than the traditional closed model, in which only a very few programmers can see the source and everybody else must blindly use an opaque block of bits. –Chaffey 2011:64-5 Please read Open-source Software

22 CRICOS Provider Number 00103D 21 Sterling Ball, chief executive of Californian guitar and guitar string manufacturer, Ernie Ball. He says that since the change-over productivity has improved. We don't have crashes and don't have viruses; and it is also cheaper: he believes he may save $80,000 to $100,000 a year. Two years previously, the company was fined $90,000 when, after an unannounced raid by armed US Marshals instigated by the Business Software Alliance, formed to protect companies investments in software, it was found to have eight unlicensed copies of Microsoft Office. The company paid the fine, but Ball was so furious that he decided to purge his company of all Microsoft products. It chose open source software for almost everything, in particular, Linux, the operating system, and OpenOffice, the open source productivity suite owned by Sun Microsystems that forms the basis of the StarOffice suite. A happy open-source adopter

23 CRICOS Provider Number 00103D 22 Wired (2003) explains: At 21, wearing a ratty robe in a darkened room in his mother's Helsinki apartment, Linus Torvalds wrote the kernel of an operating system that can now be found inside a boggling array of machines and devices. He posted it on the Internet and invited other programmers to improve it. Since then, tens of thousands of them have, making Linux perhaps the single largest collaborative project in the planet's history. WhosWho: How Linus developed Linux

24 CRICOS Provider Number 00103D 23 Advantages of open-source softwareCounter-argument 1. Effectively free to purchaseCost of migration from existing systems may be high and will include costs of disruption and staff training 2. Lower cost of maintenance since upgrades freeThere is not a specific counter-argument for this, but see the disadvantages below 3. Increased flexibilityOrganizations with the resources can tailor the code. Frequent patches occur through collaborative development Disadvantage of open-source softwareCounter-argument 1. Has less functionality than commercial softwareSimplicity leads to ease-of-use and fewer errors. Many functions not used by the majority of users 2. More likely to contain bugs compared to commercial software since not tested commercially Evidence does not seem to suggest this is the case. The modular design need by collaborative development enables problems to be isolated and resolved 3. Poor quality of supportOSrganizations with the resources can fix problems themselves since they have access to the code. Companies such as IBM, SuSe and RedHat do offer support for Linux for a fee To open-source or not

25 CRICOS Provider Number 00103D 24 You are asked to distinguish between E-commerce and E-business at a job interview. Write down your definitions. Use examples to illustrate your points. Definitions

26 CRICOS Provider Number 00103D 25 E-commerce: All financial and informational electronically mediated exchanges between an organization and its external stakeholders Examples: –Buying books online (transactional) –Selecting a car online (informational) –Interacting with brand online (relationship building / experiential, e.g. –Asking a customer service query, e.g. E-Business: All financial and informational electronically mediated exchanges between an organization and its external stakeholders supporting the range of business processes Examples: –Purchasing from suppliers (e-procurement) –A company intranet –Supplying partners with information through an extranet Chaffery 2011:69 E-commerce and E-business defined

27 CRICOS Provider Number 00103D B2B, B2C, and C2C B2B: Business to Business: commercial transactions are between an organisation and other organisations. B2C: Business to Customer: commercial transactions are between an organisation and customers. C2C? e-Business is the transformation of key business processes through the use of Internet technologies. –Chaffey 2011:72 26

28 CRICOS Provider Number 00103D 27 Relationship between E-business & E- commerce Figure 2.13 The relationship between e-commerce and e- business (Chaffey 2011:71)

29 CRICOS Provider Number 00103D 28 Products purchased online Search for it online directly Figure 2.14 Doing online activities in EU (Chaffey 2011:73)

30 CRICOS Provider Number 00103D Disintermediation and reintermediation Disintermediation –The removal of intermediaries such as distributors or brokers that formerly linked a company to its customers. Reintermediation –The creation of new intermediaries between customers and suppliers providing services such as search and product evaluation Countermediation: The creation of a new intermediary by an established company. Chaffey 2011:76 29

31 CRICOS Provider Number 00103D 30 Disintermediation and reintermediation Figure 2.16 From original marketplace structure (a) to disintermediation (b) and reintermediation (c) (Chaffey 2011:76)

32 CRICOS Provider Number 00103D 31 Intranets and Extranets Figure 2.17 The relationship between access to intranets, extranets and the Internet (Chaffey 2011:77)

33 CRICOS Provider Number 00103D 32 Intranet: A network within a single company which enables access to company information using the familiar tools of the Internet such as web browsers. Only staff within the company can access the Intranet. 1. Improved information sharing (customer service) 97% 2. Enhanced communications and information sharing (communications) 95% 3. Increased consistency of information (customer service) 94% 4. Increased accuracy of information (customer service) 93% 5. Reduced or eliminated processing 93% 6. Easier organizational publishing 92% (Chaffey 2011:79) Intranet Benefits

34 CRICOS Provider Number 00103D 33 Extranet is formed by extending the intranet beyond a company to customers, suppliers, collaborators or even competitors. 1. Information sharing in secure environment. 2. Cost reduction. 3. Order processing and distribution. 4. Customer service. (Chaffey 2011:82) Chaffey and Wood Business Information Management © Pearson Education Limited 2005 Extranet Benefits

35 CRICOS Provider Number 00103D 34 1. Are the levels of usage sufficient? 2. Is it effective and efficient? 3. Who has ownership for the extranet? 4. What are the levels of service quality? 5. Is the quality of the information adequate? (Chaffey 2011:82) Extranet Management Issues

36 CRICOS Provider Number 00103D 35 Web Logs Web logs = blogs –Blog: an online, publicly accessible, diary or news source prepared by an individual or a group of people. Blog is a very popular media for us to live in the Web world. How many blogs do you write regularly? How many years do you expect to write for your life? –(Chaffey 2011:83-84)

37 CRICOS Provider Number 00103D 36 CRM: Customer relationship management, is an approach to building and sustaining long-term business with customers. A CRM system supports the following marketing applications: 1.Sales force automation (SFA). 2.Customer service management. 3.Managing the sales process. 4.Campaign management. 5.Analysis. Chaffey 2010:84-5 CRM Applications

38 CRICOS Provider Number 00103D 37 Element of CRM DescriptionInformation-based marketing techniques Customer acquisition Forming relationships to gain new customers Tailored marketing communications such as direct mail, e-mail and visits by sales representatives are used to explain the features and benefits of services Customer retention Keeping existing customers buying existing products (repeat purchases) Personalised communications are used to keep the customer informed about the products offered Customer extension Part of customer retention that is specifically focused on selling additional similar products (cross- selling) or widening the range of products used to more expensive products (up-selling) Personalised communications are used to encourage repeat cross-selling and up- selling Customer selection Marketing communications for acquisition, retention and extension are targeted to customers likely to give the best response Database analysis and modelling is used to identify the groups of customers such as those that will be most responsive Four Elements of CRM (Chaffey 2010:84-85)

39 CRICOS Provider Number 00103D 38 Supply chain management (SCM) is the coordination of all supply activities of an organization from its suppliers and delivery of products to its customers. Value chain is a model for analysis of how supply chain activities can add value to products and services to the customer. Information Communications Technology (ICT) has a great impact on SCM since it enables information about demand and supply for products to be more easily exchanged. Chaffey 2010:86-88 Supply Chain Management (SCM) Applications

40 CRICOS Provider Number 00103D 39 Increased efficiency of individual processes. –Benefit: reduced cycle time and cost per order. Improved data integration between elements of the supply chain. Inventory management including VMI can be improved –Benefit: Reduced cost of paper processing and lower inventory holdings. Reduced cost through outsourcing. –Benefits: Lower costs through price competition and reduced spend on manufacturing capacity and holding capacity. Better service quality through contractual arrangements? Innovation. –Benefit: Better customer responsiveness Chaffey 2010:87 SCM based on ICT – Benefits

41 CRICOS Provider Number 00103D 40 Reduced complexity of the supply chain. This is the process of disintermediation. A company may be able to order direct from suppliers rather than through distributors and its own customers may also be able to order direct through the online environment. Benefit: reduced cost of channel distribution and sale. –Chaffey 2010:88 SCM based on ICT – Benefits

42 CRICOS Provider Number 00103D 41 Summary Software support business information management e-business and e-commerce and their applications Information management applications can support information flows within and between organizations Internet, Intranet and Extranet SCM, CRM and their applications Selection is a science –Selection is an engineering –Selection is a technology

43 CRICOS Provider Number 00103D 42 References Chaffey and Wood Business Information Management © Pearson Education Limited 2011 Chaffey and Wood Business Information Management © Pearson Education Limited 2005 Harvey, W. LN-2, 2008, UB Zhaohao Sun, LN-2, 2010, UB

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