Business Information System

CHAPTER 2
BUSINESS BASED INFORMATION SYSTEM
Prof. Hemant Thakar
Chapter 2
Business based Information System:

People Processes and Business Application
This covers the discussion on the importance of people, processes and

data in understanding computer bases.
Prof. Hemant Thakar
What Is Information Systems ?
Information systems are more than just computer programs. Though information and communications technologies are playing an increasing role in meeting organization's information needs, an information system is a much more general concept.
It refers to the wider systems of people, data and activities, both computer-based and manual, that effectively gather, process, store and circulate organization's information.
Prof. Hemant Thakar
Why information systems are Important? EG Chak De India and IPL
An understanding of the effective and responsible use and management of information systems is important for managers and other business knowledge workers in todays global information society. Information systems and technologies have become a vital component of successful businesses and organizations.
Information systems constitute an essential field of study in business administration and management, as they are considered a major functional area in business operations.
Prof. Hemant Thakar
What You Need To Know?
Managerial end users need to know how information systems can be employed successfully in a business environment. The important question for any business end user or manager is: What do you need to know in order to help manage the hardware, software, data, and network resources of your business, so they are used for the strategic success of your company?
Prof. Hemant Thakar
An IS Framework For Business Professionals.

People Resources (End Users And IS Specialists)
Software Resources (Program And Procedures)
Network resources (Communications media and Network Support)
Data Resources(data And Knowledge Bases)
Hardware Resources
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Computer-based Information System
An Information System is an organized combination of people, hardware, software, communication networks and the data resources that collects, transforms and disseminates information in a organization.
Prof. Hemant Thakar
Definitions
Data
$35,000 12 Units $12,000 J. Jones Western Region $100,000 100 Units 35 Units
Information
Salesperson: J. Jones Sales Territory: Western Region Current Sales: 147 Units = $147,000
Data Processing
Prof. Hemant Thakar
Definitions
Information Systems An information system(IS) is typically considered to be a set of interrelated elements or components that collect(input), manipulate(processes), and disseminate (output) data and information and provide a feedback mechanism to meet an objective.
Feedback
Input
Processing
Output
Prof. Hemant Thakar
IS Vs IT
Payroll System INFORMATION TECHNOLOGY Hardware Software Databases Networks Other related components
Inventory System
Are Used to Build
INFORMATION SYSTEMS Marketing System Customer Service System
Classification of IS
Information Systems
Operations Support System

Transaction Processing Systems Process Control Systems Office Automation Systems
Management Support System

Management Information Systems Decision Support Systems Executive Information Systems
Prof. Hemant Thakar
Types of Information Systems

KIND OF SYSTEM
STRATEGIC LEVEL
GROUPS SERVED
SENIOR MANAGERS
MANAGEMENT LEVEL
MIDDLE MANAGERS
KNOWLEDGE LEVEL
KNOWLEDGE & DATA WORKERS
OPERATIONAL LEVEL
OPERATIONAL MANAGERS
SALES & MARKETING
MANUFACTURING
FINANCE
ACCOUNTING
HUMAN RESOURCES
3 Vital Roles In Business
Support an Organization Business Process & operations
Business Decision Making
Strategic Competitive Advantage
Prof. Hemant Thakar
CHAPTER 3 FOUNDATIONS OF INFORMATION SYSTEMS IN BUSINESS - I
Prof. Hemant Thakar
Chapter 3
Foundations of Information Systems in Business - I: Major roles of Information systems

Information Technology Information system-Need, Purpose and objective Attributes of Information and its relevance to Decision making Types of Information
Prof. Hemant Thakar
Prof. Hemant Thakar
Information systems consist of three layers:

operational support, support of knowledge work, and management support.
Prof. Hemant Thakar
Operational support forms the base of an information system and contains various transaction processing systems for designing, marketing, producing, and delivering products and services. Support of knowledge work forms the middle layer; it contains subsystems for sharing information within an organization. Management support, forming the top layer, contains subsystems for managing and evaluating an organizations resources and goals.
Prof. Hemant Thakar
Some examples of such systems are:

Data warehouses Enterprise resource planning Enterprise systems Expert systems Geographic information system Global information system Office Automation
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Office Automation
Refers to varied computer machinery and software used to digitally create, collect, store, manipulate and relay the office information needed for accomplishing basic tasks. The back bone of office automation is a LAN which allows users to transmit data, mail and even voice across network. Office functions like dictations, typing, filing, copying, fax, Telex and record management fall in the category of Office automation.
Objective of Information Systems
Bring new options to the way companies interact, the way organizations are structured, and the way workplaces are designed Can significantly lower the costs of communication among workers and firms and enhance coordination on collaborative projects The capability to communicate information efficiently within a firm has also led to the deployment of flatter organizational structures with fewer hierarchical layers. An effective IS provides information on just about anything the company needs to track and analyze about employees, former employees, and Clients.
Prof. Hemant Thakar
Objective of Information Systems
Nevertheless, information systems do not uniformly lead to higher profits Success depends on both the skill with which information systems are deployed and the availability of other assets
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Information Systems Process
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The Characteristics of Valuable Information
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Attribute of Information Systems : Life Cycle
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Attribute of Information Systems : Life Cycle
Information systems life cycle
The development phase of the life cycle for an information system consists of a

feasibility study, system analysis, system design, programming and testing, installation.
Following a period of operation and maintenance, typically 5 to10 years, an evaluation is made of whether to terminate or upgrade the system.
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Information Systems : Security Measures
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Information Systems : Security Measures
Potential problems are known, The second step, establishing controls, can be taken. Finally, the third step consists of audits to discover any breach of security.
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Need of Information Systems
Operational Excellence Continuous Improvement
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Operational Excellence
It is a philosophy of leadership, teamwork and problem solving resulting in continuous improvement throughout the organization by focusing on the needs of the customer, empowering employees, and optimizing existing activities in the process
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Continuous Improvement
Is not only about improving HR quality, but also it is about the processes and standards improvement You can not improve if you do not measure
Metrics and KPI definition for any process is of pivotal importance.
Prof. Hemant Thakar
Example: Wal-Mart
The largest retailer will be a typical example of a powerful Information systems coupled with brilliant business practices and supportive management to achieve the world class operational efficiency.
Prof. Hemant Thakar
Prof. Hemant Thakar
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Coldwater Wal-Mart Grocery Directory Aisle 1 Frozen Foods: Ice Cream, biscuits, breads, whipped topping, pie shells, Breakfast Items, Juice, Aisle 2 Aisle 3 Aisle 4 Aisle 5 Aisle 6 Aisle 7 Aisle 8 Frozen Food: Entres, Dinners, Potatoes, Desserts, Vegetables, Fruits Frozen Foods: Pizza, Snacks Non Frozen: Bread, Bagels, Buns Asian Foods, Condiments, Salad Dressing, Peanut Butter, Jelly, Coffee, Tea, Creamer, Canned Beans, Vinegar, Pickles, Tomato Sauce, Canned Vegetables, Bulk Size Items, Latino Foods New "$1 or Less" Aisle (also: Seasonal, Snack Cakes) Soup, Stuffing, Spaghetti Sauce, Pastas, Canned Pasta, Boxed Potatoes Sauce and Gravy Mixes, Gelatin, Canned Meat, Dry Beans, Rice, Boxed Dinners, Ice Cream Toppings, Macaroni & Cheese, Pudding, Health Bars, Rice Cakes, Boxed Rice & Soy Milks
Aisle 9 Aisle 10 Aisle 11 Aisle 12 Aisle 13 Aisle 14 OutsideAisle Prof. Hemant Thakar
Canned Fruit, Juice, Juice Boxes, Drink Mixes Baking Supplies, Nuts, Spices, Pie Filling, Shortening, Vegetable Oil Cereal (hot and cold), Syrup, Pancake Mix, Pop Tarts, Fruit Snacks Popcorn, Peanuts, Crackers, Cookies, Snack Mixes Chips, Candy Butter, Sour Cream, Juice, Eggs, Cookie Dough, Tube Biscuits, Milk, Yogurt Butter, Cheese, Lunch Meats, Breakfast Meats

2010 EBITA Margin Target 8%
World Class Operating Systems And Procedures
The Right Customers And Suppliers To become the supplier of choice to our chosen customers and customer of choice for our chosen suppliers
Sustainable Profitable Growth
To create common world class operating systems and procedures, facilitating sustainable, profitable growth
The Best People To create a development programme that provides opportunity for our employees and attracts the people that we need for the future
Performance Based Culture To create a performance based culture managed by a measurement structure that will enable continuous improvement
Prof. Hemant Thakar
New products, services and business models
Information systems and technologies are a major enabling tool for firms to create a new products and services, as well as entirely new business models. A business models describes how a company produces, delivers and sells a product or service to create wealth. Example for Apple iPods.
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Customer and Supplier intimacy
When a business really knows the customers, and serves them well, the customers generally respond by returning and purchasing more. This raises revenues and profits Likewise with suppliers, the more a business engages its suppliers , the better the suppliers can provide vital inputs. This lowers costs. How to really know your customers and suppliers is a central problem for business with millions of business firms.
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Example of Customer Intimacy
High end hotels - use of information systems and technologies to achieve customer intimacy
The Mandarin Oriental Hotel
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Example Of Supplier Intimacy
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Improved Decision Making
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Improved Decision Making
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Case - 01
Liz Claiborne Upgrades Its Information System
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Case - 01
Liz Claiborne designs and markets an extensive range of women's fashion apparel and accessories, with versatile collections ranging from casual to dressy. The company also designs and markets men's apparel and furnishings, as well as fragrances for women and men. Net sales for a recent year were a record $2.4 billion. It should come as no surprise to anyone who has ever tried to keep up with fashion trends, that change is driving the apparel industry today. But change is occurring more than in the design of clothes. The structure and nature of retailing and manufacturing are also shifting. Geographical boundaries are disappearing. Limitations are dissolving. Above all, consumers today look for versatility and value, and they, not the retailers or manufacturers, define what constitutes those qualities. For example, the move toward casual dress is an attempt to simplify increasingly complex lives. These shifting priorities mean consumers are less loyal to brands or to stores, but more discerning and very time-constrained.
Prof. Hemant Thakar
Case - 01
To keep pace with the rate of change, Liz Claiborne has put all business processes under the microscope. As a result it is concentrating on streamlining the things it does best and teaming with others through licensing and outsourcing arrangements to perform activities in which it has less expertise, from marketing watches to producing footwear and home furnishings. Specific corporate goals include doubling revenue to more than $4 billion by the year 2000, cutting operations costs by $35 million per year, reducing time from product design to availability, and improving communications with customers. To achieve these goals, Liz Claiborne is making a major technology overhaul that will result in replacing over 80% of its business processes, business information systems, hardware, software, databases, and network capabilities.
Prof. Hemant Thakar
Case - 01
To keep pace with the rate of change, Liz Claiborne has put all business processes under the microscope. As a result it is concentrating on streamlining the things it does best and teaming with others through licensing and outsourcing arrangements to perform activities in which it has less expertise, from marketing watches to producing footwear and home furnishings. Specific corporate goals include doubling revenue to more than $4 billion by the year 2000, cutting operations costs by $35 million per year, reducing time from product design to availability, and improving communications with customers. To achieve these goals, Liz Claiborne is making a major technology overhaul that will result in replacing over 80% of its business processes, business information systems, hardware, software, databases, and network capabilities.
Prof. Hemant Thakar
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Case - 01
Even ITS people are affected as they get training in the new technology and new roles are identified for current IS staff. A key challenge to this transformation process is surprisingly not installing or maintaining the new technology itself but aligning technology, business needs, and teaching people how to cope with the change. What many organizations dont realize is that if you dont manage the business part of a technology change, you can fail even if the technology part succeeds states Naomi Karten, an adviser to the company. Liz Claiborne has developed Web-based tools to improve communications with suppliers and retailers. A Web-based application allows retailers to track purchase orders and to check the status of transactions instantly a process that used to be done over the phone. s
Prof. Hemant Thakar
Case - 01
Over 60% of customer orders are now placed electronically. The company also invested heavily in software to track materials around the world and to help communicate better with service providers, manufacturing partners, and freight consolidators. The technology changes have even affected the design process. In the past, Claiborne relied on pen-based sketches from external organizations for designs. Now the company uses sophisticated software tools to help in the design process. While the company used to fly in retailers to view its new designs, it now sends them electronically via the Web at a major cost and time savings. This networking technology permits the global transfer of textile and design information and is dubbed LizCADalyst.
Prof. Hemant Thakar
Case 01_Discussion Questions:
What do you think Ms. Karten means when she says: What many organizations dont realize is that if you dont manage the business part of a technology change, you can fail even if the technology part succeeds? How does this apply to Liz Claiborne? Liz Claiborne has made a substantial investment in upgrading its information systems. If you had to justify this investment to the board of directors, what would you say? Sources: adapted from Jaikumar Vijayan, IT Overhaul May Boost Fashion
Profit, Computerworld, April 13, 1998, p. 55-56; Tom Stein, Going Global InformationWeek, February 2, 1998, p. 84-85; and Liz Claiborne Web page at: *http://www.lizclaiborne.com accessed on April 15, 1998.
Prof. Hemant Thakar
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CHAPTER 4 FOUNDATIONS OF INFORMATION SYSTEMS IN BUSINESS - II
Prof. Hemant Thakar
Chapter 4
Foundations of Information Systems in Business - II:

Major roles of Information systems Information Technology Information system-Need, Purpose and objective Attributes of Information and its relevance to Decision making Types of Information
Prof. Hemant Thakar
Prof. Hemant Thakar
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Types of Information System In Business

Transaction Processing Systems (TPS) Management Information Systems (MIS) Decision Support Systems (DSS) Executive Support Systems (ESS)
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Executive Support Systems (ESS)
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Business Processes and Information Systems
Business Processes
Manner in which work is organized, coordinated, and focused to produce a valuable product or service Concrete work flows of material, information, and knowledge - sets of activities Unique ways to coordinate work, information, and knowledge Ways in which management chooses to coordinate work
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Traditional View of the Systems
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Key System Applications In The Organization
Transaction Processing Systems (TPS):

Basic business systems that serve the operational level A computerized system that performs and records the daily routine transactions necessary to the conduct of the business
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Types of TPS Systems
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System Architecture: Transaction
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Major Roles of Information Systems
The major business functions or specialized task performed by business organization, consist of

Sales and marketing Manufacturing production Finance and accounting Human resource
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Finance and Accounting Systems
Major functions of systems:
Budgeting, general ledger, billing, cost accounting
Major application systems:
General ledger, accounts receivable, accounts payable, budgeting, funds management systems
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Sales and Marketing Systems
Sales management, market research, promotion, pricing, new products
Sales order info system, market research system, pricing system
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Manufacturing and Production Systems
Scheduling, purchasing, shipping, receiving, engineering, operations
Materials resource planning systems, purchase order control systems, engineering systems, quality control systems
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Human Resource Systems
Personnel records, benefits, compensation, labor relations, training
Payroll, employee records, benefit systems, career path systems, personnel training systems
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Human Resource Systems
Systems From A Functional Perspective
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Key System Applications In The Organization
Payroll TPS
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System Example: Payroll System (TPS)
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Systems From A Functional Perspective
Overview of Inventory Systems
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Management Information System (MIS)
An MIS provides managers with information and support for effective decision making, and provides feedback on daily operations. MIS provides information to the users in the form of reports Output, or reports, are usually generated through accumulation of transaction processing data. MIS is an integrated collection of subsystems, which are typically organized along functional lines within an organization.
Prof. Hemant Thakar
Management level

Inputs: High volume data Processing: Simple models Outputs: Summary reports Users: Middle managers
Example: Annual budgeting
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Structured and semi-structured decisions Report control oriented Past and present data Internal orientation Lengthy design process
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Creates reports managers can use to make routine business decisions

Scheduled reports Key-indicator reports Exception reports Ad hoc (demand) reports Drill-down reports
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Output of Management Information System

(a) Scheduled Report
Scheduled Reports: Produced periodically, or on a schedule (daily, weekly, monthly).
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(b) Key-Indicator Report
Key-Indicator Report: Summarizes the previous days critical activities and typically available at the beginning of each day.
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(c) Demand Report
(d) Exception Report
Demand Report: Gives certain information at a managers request. Exception Report: Automatically produced when a situation is unusual or requires management action.
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Drill Down Reports Provide detailed data about a situation
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Decision Support System (DSS):
Management level

Inputs: Low volume data Processing: Interactive Outputs: Decision analysis Users: Professionals, staff
Example: Contract cost analysis
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Decision Support System (DSS)
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Four Types of Models
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Decision Support System (DSS)
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Executive Support System (DSS):
Top level management Designed to the individual Ties CEO to all levels Very expensive to keep up Extensive support staff
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Strategic level

Inputs: Aggregate data Processing: Interactive Outputs: Projections Users: Senior managers
Example: 5-year operating plan
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Business Processes and Information Systems
Cross-Functional Business Processes
Transcend boundary between sales, marketing, manufacturing, and research and development Group employees from different functional specialties to a complete piece of work Processing: Interactive
Example: Order Fulfillment Process
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The Order Fulfillment Process
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Inter-relationships Among Systems
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Information Flow
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Information System Decision Making
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Decision Making
Decisions! Decisions!
Transcend boundary between sales, marketing, manufacturing, and research and development Many decision making models that exist nowadays means that you even have to make a decision as to which one to use!
There are rational models, intuitive models, rational-iterative models as well as 5, 6, 7 and even 9 Step Decision Models
Some of these decision making models presuppose that decision making is the same as problem solving.I don't believe that every decision is solving a problem. For example, deciding whether you want dark chocolate or milk chocolate is not, in and of itself, a problem frame.
Prof. Hemant Thakar
Decision Making
So What Is It?
Decision making is about choosing from several options or ideas and taking action to generate a particular result. It is usually considered to be a rational and logical thinking process
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5 Stages Decision Making Model
The 5 Stages Decision Making Model

Define the situation Generate alternatives Information gathering Selection Action
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Stage 1 : Define the situation

This is probably the most significant step. It is vital to have a good understanding and be very clear about
a) the situation and
b) what you want to achieve.
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Stage 2 : Generate alternatives

Unless you are choosing from alternatives there is no decision to make! The number of alternatives you choose will depend on such factors as experience, knowledge, skills, number of people involved in generating alternatives and what's considered important
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Stage 3 : Information gathering

Of the stages in decision making, this one often takes the most time. An aspect of the rational decision making models is the weighing up of the pros and cons of the various alternatives so as to arrive at the best.
Prof. Hemant Thakar
Stage 4 : Selection

Selection is the choosing of one of the alternatives. The method of selection will very much depend on the decision making process. Rational decision models choose the option that has more pros than cons. Intuitive decision makers 'go with their gut', or their heart.
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Stage 5 : Action
A decision is not complete until you take action and then determine if the action got you your outcome. If not, you need to cycle back to an earlier stage in the process.
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Order of Stages
The order of the stages in decision making is important if you want to make quality decisions effortlessly and consistently
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Rational Decision Making Model
Involve a cognitive process where each step follows in a logical order from the one before The comparison is often performed by filling out forms or charts that have many names. Decision matrix, Pugh matrix, decision grid, selection matrix, criteria rating form, amongst others. A relative importance is given to each criterion and the options are scored against each of the criteria and the highest 'wins'.
Prof. Hemant Thakar
Rational Decision Making Model
Pros and Cons
A rational decision making model presupposes that there is one best outcome. Because of this it is sometimes called an optimizing decision making model. The search for perfection is frequently a factor in actually delaying making a decision. It is also limited by the cognitive abilities of the person making the decision; The criteria will be subjective and may be difficult to compare. Require a great deal of time and a great deal of information. A rational decision making model attempts to negate the role of emotions in decision making.
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Intuitive Decision Making Model
It's not simply the opposite of rational decision making. Carl Jung pointed out that it is outside the realm of reason. "A good plan, executed now, is better than a perfect plan next week." - General George S. Patton, Jr. The military are educating the soldiers of every rank in how to make intuitive decisions.
Information overload, lack of time and chaotic conditions are poor conditions for rational models.
Instead of improving their rational decision making, the army has turned to intuitive decision models. Why? Because they work!
Prof. Hemant Thakar
Recognition Primed Decision Making Model
How it works
In a given situation, the decision maker will pick up cues and indicators that let them recognize patterns. Based on these patterns and the decision they have to make, the person chooses a single course of action, an ' action script', that they consider will achieve the outcome
How people could assess this single option if they were not comparing it to something else.
The decision maker would run the action script through a mental simulation The mental simulation was based on mental models that the decision maker had developed through experience
Prof. Hemant Thakar
Recognition Primed Decision Making Model
How it works
There is no actual comparison of choices, but rather a cycling through choices until an appropriate one is found. Obviously people become better with this over time as they have more experiences and learn more patterns
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Case - 02
Farmers Insurance Finds Higher Revenue And Lower Claims In Information
Prof. Hemant Thakar
Case - 02
Large companies process millions of transactions every year and store huge amounts of data on these transactions. Often, the data is spread across a variety of different computer systems in different areas of the country or the world. This raw data, although needed for record keeping, has little value to managers and decision makers unless it can be filtered and processed into meaningful information. The results can be a staggering increase in revenues and profits. But doing this is the real challenge. Finding strategic information from a mountain of data can be like finding a needle in a haystack, but the effort is usually worth it. With todays fast computers and a knowledgeable IS staff, the possibility of turning raw data into useful and profitable information can become a reality. This was the case with Farmers Insurance Group. Like other companies, Farmers Insurance Group was sitting on a huge amount of raw data. The data, however, was spread across different computer systems in different locations.
Prof. Hemant Thakar
Case - 02
As in all insurance companies, underwriting determines what insurance policies a company can offer and at what premiums. Farmers underwriting business was responsible for assessing insurance risk, which can make the difference between profits and losses. The people who are responsible for determining insurance risk are called actuaries. According to Tom Boardman, an assistant actuary at Farmers, As competition has gotten more intense in the insurance industry, the traditional ways of segmenting risk arent good enough at providing you competitive advantage. Boardman was referring to how most insurance companies categorize risk. For example, high-powered sports cars are more likely to be involved in expensive accidents than ordinary sedans. Thus, insurance companies can put sports cars in a different risk category than sedans and charge customers who own them a higher premium.
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Case - 02
In assessing risk, an insurance actuary would traditionally have a hunch, such as sports cars are more prone to accidents than sedans. Then the actuary would test his or her hunch using the computer. According to Boardman, this was like using the computer to dig up data to prove or UN-prove those hunches. One disadvantage of this old approach is that small, but profitable, market niches may be ignored or not priced correctly. As a result, Farmers decided to look into a computer system to help it find profitable market niches. The company found the help it needed through IBM, which developed a customized software product for Farmers called Decision Edge. The computer system was an advanced decision support system that combined raw data from seven different databases on a staggering 35 million records.
Prof. Hemant Thakar
Case - 02
Consolidating the raw data into useful information took about twice as long as expected, but the additional wait was worth it. Farmers was able to locate market niches that it didnt see before the decision support system. For example, Decision Edge helped Farmers determine that not all sports car owners are alike - those who were older and had at least one other car were less likely to be in an expensive accident. Once this market niche was identified, Farmers could offer that segment of the sports car market lower premiums. Using Decision Edge to find the market niche resulted in millions of dollars of increased revenues for Farmers. The approach used by Farmers is sometimes called data scrubbing. It allows a company to consolidate important information and squeeze additional revenues and profits from it. After helping Farmers and seeing a market opportunity, IBM also decided to offer its Decision Edge software to other insurance companies.
Prof. Hemant Thakar
Case - 02_Discussion Questions:
How was Farmers able to transform its raw data into meaningful information and additional revenues? Describe how this approach could be used in other industries.
Sources: adapted from Hoffman, Thomas, Finding a Rich Niche, Computerworld, February 8, 1999, p. 44 and Farmers Trim Paper Trail, Future Banker, September 6, 1999, p. 24.
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CHAPTER 5
BUSINESS VALUE OF IT/IS
Prof. Hemant Thakar
Chapter 5
Business Value of IT/IS:
Information system & Business strategy Technological Diffusion and Infusion
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Principles and Learning Objectives
The value of information is directly linked to how it helps decision makers to achieve the organizations goals
For effective implementation of any information system we need to distinguish data from information and describe the characteristics used to evaluate the quality of data
Knowing the potential impact of information systems and having the ability to put this knowledge to work can result in a successful personal career, organizations that reach their goals, and a society with a higher quality of life
Identify the basic types of business information systems and discuss who uses them, how they are used, and what kinds of benefits they deliver
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System users, business managers and information systems professionals must work together to build a successful information system For effective functioning of IS we need to identify the major steps of the system development process and state the goal for each of the steps. The use of information systems to add value to the organization can also give an organization a competitive advantage Identify the value-added processes in the organization and describe the role of information systems within them Identify some of the strategies employed to lower costs or improve service
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Management Issues
Annual investment in BIS is significant for many companies. But what return do organizations receive for this investment? To achieve well planned BIS, strategy is required that supports the Corporate Goals. Despite the large scale investments in IS within an Organizations, it is still not clear the extent to which investment in information systems benefits organizations. This highlights the importance of effective development and implementation of an IS strategy which supports business goals. Research results indication a poor correlation between organization investment in IS and organizational performance measured by return on equity
The Strategic Context
In its original sense, strategy referred to the development of plans for deceiving or outwitting an enemy. Today, corporate strategy is developed not to conquer a single competitor, but rather to compete within a chosen market.
Effective use of BIS can also result in increased efficiency of internal processes and outward facing processes which are part of supply chain management. This can help reduce costs and lead to increased profitably.
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Organization Strategy
Vision an image of a future direction that everyone can remember and follow. Mission a statement of what a business intends to achieve and what differentiates it from other businesses Strategies a conditional sequence of consistent resource allocations that defines an organizations relationships with its environment over time. Policies guidelines and procedures used in carrying out a strategy.
Tools for strategic analysis and definition

Porter and Millars five forces model Porters competitive strategies Value chain analysis Critical success factor (CSF)
The purpose of Five-Forces Analysis
The five forces are environmental forces that impact on a companys ability to compete in a given market. The purpose of five-forces analysis is to diagnose the principal competitive pressures in a market and assess how strong and important each one is.
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Porters Five Forces Model of Competition

Threat of Threat of New New Entrants Entrants
Threat of New Entrants

Economies of Scale Product Differentiation
Capital Requirements
Switching Costs Access to Distribution Channels Cost Disadvantages Independent of Scale Government Policy
Barriers to Entry

Threat of New New Entrants Entrants
Threat of
Bargaining Power of Suppliers
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Suppliers are likely to be powerful if:
Supplier industry is dominated by a few firms Suppliers products have few substitutes Buyer is not an important customer to supplier Suppliers product is an important input to buyers product Suppliers products are differentiated Suppliers products have high switching costs Supplier poses credible threat of forward integration
Suppliers exert power in the industry by: * Threatening to raise prices or to reduce quality Powerful suppliers can squeeze industry profitability if firms are unable to recover cost increases

Threat of New New Entrants Entrants
Threat of
Bargaining Power of Buyers

Buyer groups are likely to be powerful if:
Buyers are concentrated or purchases are large relative to sellers sales

Purchase accounts for a significant fraction of suppliers sales Products are undifferentiated Buyers face few switching costs Buyers industry earns low profits Buyer presents a credible threat of backward integration Product unimportant to quality Buyer has full information Buyers compete with the supplying industry by: * Bargaining down prices * Forcing higher quality * Playing firms off of each other
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Threat of Substitute Products

Keys to evaluate substitute products: Products with similar function limit the prices firms can charge
Products with improving price/performance tradeoffs relative to present industry products

Example:
Electronic security systems in place of security guards Fax machines in place of overnight mail delivery

Rivalry Among Competing Firms in Industry
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Rivalry Among Existing Competitors
Intense rivalry often plays out in the following ways:

Jockeying for strategic position Using price competition Staging advertising battles Increasing consumer warranties or service Making new product introductions
Occurs when a firm is pressured or sees an opportunity

Price competition often leaves the entire industry worse off Advertising battles may increase total industry demand, but may be costly to smaller competitors
Rivalry Among Existing Competitors
Cutthroat competition is more likely to occur when:

Numerous or equally balanced competitors Slow growth industry High fixed costs High storage costs Lack of differentiation or switching costs Capacity added in large increments Diverse competitors High strategic stakes High exit barriers
Porters competitive strategies

Overall Cost leadership Differentiation Focus on niche
Firm aims to become the lowest cost producer in the industry. The strategy here is that is by reducing cost, one is more likely to retain customers and reduce the threat post by substitute products.
An example of how this might be achieved is to invest in systems that supports accurate sales forecasting and therefore projected requirement so that good long term deals can be struck with suppliers thus reducing material cost
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Creates a product perceived industry wise as being unique, by being able to tailor products by specific customers requirement or by offering exceptional quality / services, the risk of customers switching is reduced.

This involves indentifying and serving a target segment very well. Eg. Buyer group, product range, geographic market etc.
The firms seeks to achieve either or both of Cost Leadership and Differentiation.
Organizations and Information Systems
Value chain: a series (chain) of activities that includes inbound logistics, warehouse and storage, production, finished product storage, outbound logistics, marketing and sales, and customer service It contains all the activities, other than the production or manufacturing of the goods or services, which are supportive to improve the quality of the product for the end user
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Upstream management: management of raw materials, inbound logistics, and warehouse and storage facilities Downstream management: management of finished product storage, outbound logistics, marketing and sales, and customer service
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The Value Chain of a Manufacturing Company

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Organizational Culture and Change
Organizational Culture Acceptance level of employees Cultural and political influences Behavioral factors Organizational Change How organizations plan for, implement, and handle change Employees resistance to the change
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Technology Diffusion, Infusion, and Acceptance
Technology Diffusion: measure of widespread use of technology Technology Infusion: extent to which technology filtered through a department Technology Acceptance Model (TAM): specifies factors that can lead to higher acceptance and usage of technology
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Organizational in a Global Society
As companies rely on virtual structures and outsourcing to a greater extent, businesses can operate around the world Some of the challenges to operating in a global society Every country has a set of customs, cultures, standards, politics, and laws Language barriers Difficulty in managing and controlling operations in different countries
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Competitive Advantage
Significant, long-term benefit to a company over its competitor
Ability to establish and maintain a competitive advantage is vital to a companys success
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Factors That Lead Firms to Seek Competitive Advantage (Porters Model)

Rivalry among existing competition Threat of new entrants Threat of substitute products and services Bargaining power of customers and suppliers
Prof. Hemant Thakar
Strategic Planning for Competitive Advantage

Change the structure of the industry Create new products or services Improve existing products or services
Use information systems for strategic purposes
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Strategic Planning for Competitive Advantage
Competitive Advantage Factors and Strategies

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Strategic Planning For Competitive Advantage
Competitive Advantage Factors and Strategies

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Performance-Based Information Systems
Consider both strategic advantage and costs Use productivity, return on investment (ROI), net present value, and other measures of performance
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Performance-Based Information Systems
Three Stages in the Business Use of Information Systems
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Productivity
Output achieved divided by input required Higher level of output for a given level of input means greater productivity
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Return on Investment and the Value of Information Systems

Earnings growth Market share Customer awareness and satisfaction Total cost of ownership
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Summary

Data: raw facts Information: organized collection of facts System components: input, processing, output, and feedback Computer-based information system (CBIS)
Hardware, software, procedures
databases,
telecommunication,
people,
and
Collect, manipulate, store, and process data into information
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Summary
Transaction processing system (TPS):
a collection of people, procedures, software, databases, and devices used to record completed business transactions
Management information system (MIS):
a collection of people, procedures, software, databases, and devices used to provide routine information to managers and decision makers
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Summary
Decision support system (DSS):
a collection of people, procedures, software, databases, and devices used to support problem-specific decision making
Systems development: creating or modifying existing business systems
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Summary
Competitive advantage: significant, long-term benefit to a company over its competition Primary responsibilities in information systems: operations, systems development, and support
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Case - 03
Federal Express Redefines Its Services To Maintain Competitive Advantage
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Case - 03
Federal Express (FedEx) with headquarters in Memphis, has a fleet of 40,000 ground vehicles and 600 airplanes. It generates annual revenues in excess of $11 billion. The firm also has an impressive information system architecture that is driving FedExs transformation from a package delivery company to a strategic provider of E-commerce, logistics, and other supply-chain services. FedEx knows that building and leveraging its information systems and networks is key to its success in the 21st century. As a result, it spends about $1 billion a year on information technology. FedEx is not only reorganizing its internal operations around a more flexible technology infrastructure, but its also attracting new customers and in many cases locking in existing customers with an unprecedented level of technology integration.
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Case - 03
Although FedEx pioneered Web package-tracking capabilities, these have now become an industry norm rather than a competitive advantage. All major transportation and delivery companies, from United Parcel Service to Ryder System, are making major investments in information technology. Where FedEx is different is that it is using information technology to transform itself from a delivery service to a vital link in todays networked and increasingly electronic economy. FedEx seeks to become a fully integrated corporate partner that picks up, transports, warehouses, and delivers all of a companys finished goods from the factory floor to the customers receiving dock with status data available every step of the way. Large companies such as National Semiconductor Corp. have hired FedEx to handle most of their warehousing and distribution operations.
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Case - 03
Today, virtually all of National Semiconductors products, manufactured in Asia by three National Semiconductor factories and three subcontractors, are shipped directly to a FedEx distribution warehouse in Singapore. National Semiconductors order-processing application, running on an IBM mainframe in Santa Clara, California sends a daily batch of orders directly to FedExs inventory-management system running on a Tandem computer in Memphis. At this point, FedEx takes over the orders are forwarded to the FedEx warehouse management application in Singapore, where they are fulfilled in a FedEx warehouse and shipped directly to customers via FedEx. Except for receiving a confirmation that the order was filled, National Semiconductor is done with the order transactions. National Semiconductor has gained significant benefits: the average customer delivery time has been reduced from four weeks to seven days, distribution costs have been cut from 2.9% to 1.2% of sales.
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Case - 03
In addition, seven regional warehouses in the United States, Asia, and Europe were closed saving National Semiconductor costs for warehouse space and employees. The tight information technology links between FedEx and National Semiconductor exemplify FedExs strategy of technology integration with its corporate customers. FedEx stores the product, operates the warehouse, and processes the order and then hands it off to the carrier which, of course, is FedEx. FedEx is not alone in using information technology to move beyond package delivery. UPS, which has spent $9 billion on IT since 1986, has already formed five alliances to help disseminate its logistics software among E-commerce users with UPS providing order-entry, catalog, and inventory management. Ryder System has formed an alliance with IBM and Andersen Consulting to deliver logistics services to customers. IBM will lend technology expertise and Andersen its consulting personnel to Ryder projects worldwide.
Prof. Hemant Thakar
What is meant by strategic competitive advantage? How can information technology help a company to gain and maintain a strategic competitive advantage?
Sources: adapted from Monua Janah and Clinton Wilder, Special Delivery, Informationweek, October 27, 1997, p. 42-60; and FedEx Web site at:*http://www.fedex.com, accessed April 8, 1998.
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CHAPTER 6
SYSTEM ANALYSIS AND DESIGN - I
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Chapter 6
System Analysis and Design - I:

Overview of System Development Life Cycle Types of Models
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Introduction
The trends of increasing technical complexity of the systems, coupled with the need for repeatable and predictable process methodologies, have driven System Developers to establish system development models or software development life cycle models. Nearly three decades ago the operations in an organization used to be limited and so it was possible to maintain those using manual procedures. But with the growing operations of organizations, the need to automate the various activities increased, since for manual procedures it was becoming very difficult, slow and complicated. Like maintaining records for a thousand plus employees company on papers is definitely a bulky job. So, at that time more and more companies started going for automation.
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Introduction
Since there were a lot of organizations, which were opting for automation, it was felt that some standard and structural procedure or methodology be introduced in the industry so that the transition from manual to automated system became easy. The concept of system life cycle came into existence then. Life cycle model emphasized on the need to follow some structured approach towards building new or improved system. There were many models suggested. A waterfall model was among the very first models that came into existence. Later on many other models like prototype, rapid application development model, etc were also introduced.
Prof. Hemant Thakar
Introduction
System development begins with the recognition of user needs. Then there is a preliminary investigation stage. It includes evaluation of present system, information gathering, feasibility study, and request approval. Feasibility study includes technical, economic, legal and operational feasibility. In economic feasibility costbenefit analysis is done. After that, there are detailed design, implementation, testing and maintenance stages.
Why Do We Need An SDLC?
There is a great temptation to just resign to the fact of creating software based on the problem. For example, the business needs simple computing software embedded in their website. That is a simple problem that could be done by programmer, anytime. It is just a matter of using code to efficiently implement the software in a website. But if you take a look at it strongly, there are steps that should be done before you can actually create the software. First you have to know what type of computing software and the components that should be added. Then they have to plan the actual codes that will be used and test it extensively before implementation. With SDLC, software development companies or inhouse developers will ensure the software released SHOULD have the following behaviors:
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Software Behavior
Software Created Is Of High Standard Building software is different from building well built software. Anyone could create software as there are available tools that do not even require knowledge in extensive programming. But with SDLC, programmers have to look further than tapping in shortcuts to create a specific tool that the customer wants.
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Software Behavior
Project Implementation and Control will be easier The role of developers does not end when the program is implemented. Even though specific software is highly efficient when implemented, anything found wrong or a bug in the system should be worked on especially when the software did not go through beta testing. In this account, SDLC will ensure that controls of the software are stable. This is usually done be creating better documentation to guide the developers in controlling the specific function of a software.
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Software Behavior
Answer the need of the users or even exceeding their expectations Every software that is created should answer the specific needs of their customers. Having highly stable software will be nothing if the intended users cannot use the software. SDLC will make sure the needs are answered and could even provide more than they need. The steps they will be using are geared towards creating software that is highly efficient as well as problem solving for better time management.
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Activities Involved In Software/ System Development Life Cycle Model
Problem solving in software consists of these activities: For small problems these activities may not be done clearly. The start end boundaries of these activities may not be clearly defined and not written record of the activities may be kept. However, for large systems where the problem solving activity may last over a few years. And where many people are involved in development, performing these activities implicitly without proper documentation and representation will clearly not work.
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The basic activities or phases to be performed for developing a software system are:
Prof. Hemant Thakar
In addition to the activities performed during software development, some activities are performed after the main development is complete. There is often an installation (also called implementation) phase, which is concerned with actually installing the system on the clients computer systems and then testing it. Then, there is software maintenance. Maintenance is an activity that commences after the software is developed. Software needs to be maintained not because some of its components wear out and need to be replaced, but because there are often some residual errors remaining in the system which must be removed later as they are discovered. Furthermore, the software often must be upgraded and enhanced to include more features and provide more services. This also requires modification of the software, Therefore, maintenance is unavoidable for software systems.
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In most commercial software developments there are also some activities performed before the requirement analysis takes place. These can be combined into a feasibility analysis phase. In this phase the feasibility of the project is analyzed, and a business proposal is put forth with a very general plan for the project and some cost estimates. For feasibility analysis, some understanding of the major requirements of the system is essential. Once the business proposal is accepted or the contract is awarded, the development activities begin starting with the requirements analysis phase.
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Phases In System Development Life Cycle Model

Following topics describes the above mentioned phases:
I R D D T M E A
Preliminary Investigation Requirement Analysis / Determination of Systems Requirement
Design of System
Development (coding) of Software System Testing Maintenance and Error Distribution with Phases
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Preliminary Investigation
First stage is the preliminary analysis. The main aim of preliminary analysis is to identify the problem. First, need for the new or the enhanced system is established. Only after the recognition of need, for the proposed system is done then further analysis is possible. Suppose in an office all leaveapplications are processed manually. Now this company is recruiting many new people every year. So the number of employee in the company has increased. So manual processing of leave application is becoming very difficult. So the management is considering the option of automating the leave processing system. If this is the case, then the system analyst would need to investigate the existing system, find the limitations present, and finally evaluate whether automating the system would help the organization.
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Once the initial investigation is done and the need for new or improved system is established, all possible alternate solutions are chalked out. All these systems are known as candidate systems. All the candidate systems are then weighed and the best alternative of all these is selected as the solution system, which is termed as the proposed system. The proposed system is evaluated for its feasibility. Feasibility for a system means whether it is practical and beneficial to build that system. Feasibility is evaluated from developer and customers point of view. Developer sees whether they have the required technology or manpower to build the new system. Is building the new system really going to benefit the customer? Does the customer have the required money to build that type of a system?
Prof. Hemant Thakar
All these issues are covered in the feasibility study of the system. The feasibility of the system is evaluated on the three main issues: technical, economical, and operational. Another issue in this regard is the legal feasibility of the project.
Technical feasibility: Can the development of the proposed system be done with current equipment, existing software technology, and available personnel? Does it require new technology? Economic feasibility: Are there sufficient benefits in creating the system to make the costs acceptable? An important outcome of the economic feasibility study is the cost benefit analysis. Legal feasibility: It checks if there are any legal hassle in developing the system.
Prof. Hemant Thakar
Operational feasibility: Will the system be used if it is developed and implemented? Will there be resistance from users that will undermine the possible application benefits?
The result of the feasibility study is a formal document, a report detailing the nature and scope of the proposed solution. It consists of the following: Statement of the problem Details of findings Findings and recommendations in concise form Once the feasibility study is done then the project is approved or Disapproved according to the results of the study. If the project seems feasible and desirable then the project is finally approved otherwise no further work is done on it.
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Preliminary Analysis
Case Study: Library Management System
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Preliminary Analysis Case Study: Library Management System

Again referring back to our Library management system discussed in earlier chapters, we now apply to it the concepts that we have studied in this chapter.
Request Clarification First the management of the library approached this ABC Software Ltd. for their request for the new automated system. What they stated in their request was that they needed a system for their library that could automate its various functions. And provide faster response. From this request statement, it is very difficult for the analyst to know what exactly the customer wants. So in order to get information about the system, the analyst visits the library site and meets the staff of the library.
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Library staff is going to be the end user of the system. Analyst asks various questions from the staff so that the exact requirements for the system become clear. From this activity, the analyst is able to identify the following requirements for the new system:

Function for issue of books Function for return of books that can also calculate the fine if the book is returned after the due date Function for performing different queries Report generation functions Function for maintaining account s Maintaining the details for members, books, and suppliers in some structured way.
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Now that the requirements are known, the analyst proposes solution system. Solution: The desired system can be implemented with Oracle RDBMS in the back end with Visual Basic as the front end. It will have modules for handling issue and return functions, generating reports, performing checks, and maintaining accounts. It will also store the data relating to books, members, and suppliers in a structures way. In our case, the data will be maintained in a relational way. Feasibility Study Now the next stage in preliminary analysis is to determine whether the proposed solution is practical enough to be implemented. For this feasibility study is done. First technical feasibility is done.
Prof. Hemant Thakar

Major issues in technical feasibility are to see if the required resources trained manpower, software and hardware are available or not. ABC Software Ltd. is big IT Company. It has developed similar projects using Oracle and VB. It has a special team that is formed to work in this combination of projects, that is, Oracle and Visual Basic. So manpower is readily available. The software is available with the company since it has already worked with the same software earlier also. So our solution is technically feasible. Technical feasibility doesnt guarantee if the system will be beneficial to the system if developed. For this economic feasibility is done. First task that is done in economic analysis is to identify the cost and benefit factors in the system proposed. In our case, the analyst has identified the following costs and benefits.
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Costs
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Benefits: According to new policy: A member is required to pay Rs 500 for a half yearly membership and Rs 1000 for a year membership. Expected increase in number of members: 75 per month 40 new members for 1 year and 35 new members for half year
Free Collected From New Members In One Year = 12 (40 * 1000 + 35 * 500) = Rs 6,90,000 = 4 * 6,90,000 = 27,60,000
Prof. Hemant Thakar
For Four Years

Benefits:
Now using Net present value method for cost benefit analysis we have, Net Present Value(or Gain) = 27,60,000 5,55,000 = 22,10,000 Gain % = Benefits Costs = 22,10,000 / 5,55,000 = 4.018 Overall Gain
Prof. Hemant Thakar
= 401.8 % in four year
Determination of System Requirements: Analysis Phase In SDLC

Requirements Analysis is done in order to understand the problem for which the software system is to solve. For example, the problem could be automating an existing manual process, or developing a completely new automated system, or a combination of the two. For large systems which have a large number of features, and that need to perform many different tasks, understanding the requirements of the system is a major task. The emphasis in requirements Analysis is on identifying what is needed from the system and not how the system will achieve its goals. This task is complicated by the fact that there are often at least two parties involved in software development a client and a developer. The developer usually does not understand the clients problem domain, and the client often does not understand the issues involved in software systems. This causes a communication gap, which has to be adequately bridged during requirements Analysis. Prof. Hemant Thakar
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Once the problem is analyzed and the essentials understood, the requirements must be specified in the requirement specification document. For requirement specification in the form of document, some specification language has to be selected (example: English, regular expressions, tables, or a combination of these). The requirements documents must specify all functional and performance requirements, the formats of inputs, outputs and any required standards, and all design constraints that exits due to political, economic environmental, and security reasons. The phase ends with validation of requirements specified in the document. The basic purpose of validation is to make sure that the requirements specified in the document, actually reflect the actual requirements or needs, and that all requirements are specified.
Prof. Hemant Thakar

Validation is often done through requirement review, in which a group of people including representatives of the client critically review the requirements specification. Software Requirement or Role of Software Requirement Specification (SRS) IEEE (Institute of Electrical and Electronics Engineering) defines as,
A condition of capability needed by a user to solve a problem or achieve an objective; A condition or capability that must be met or possessed by a system to satisfy a contract, standard, specification, or other formally imposed document.
System/Software Design Phase In SDLC

The purpose of the design phase is to plan a solution of the problem specified by the requirement document. This phase is the first step in moving from problem domain to the solution domain. The design of a system is perhaps the most critical factor affecting the quality of the software, and has a major impact on the later phases, particularly testing and maintenance. The output of this phase is the design document. This document is similar to a blue print or plan for the solution, and is used later during implementation, testing and maintenance. The design activity is often divided into two separate phasesystem design and detailed design. System design, which is sometimes also called toplevel design, aims to identify the modules that should be in the system, the specifications of these modules, and how they interact with each other to produce the desired results. At the end of system design all the major data structures, file formats, output formats, as well as the major modules in the system and their specifications are decided.
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During detailed design the internal logic of each of the modules specified in system design is decided. During this phase further details of the data structures and algorithmic design of each of the modules is specified. The logic of a module is usually specified in a highlevel design description language, which is independent of the target language in which the software will eventually be implemented. In system design the focus is on identifying the modules, whereas during detailed design the focus is on designing the logic for each of the modules. In other words, in system design the attention is on what components are needed, while in detailed design how the components can be implemented in software is the issue. During the design phase, often two separate documents are produced. One for the system design and one for the detailed design. Together, these documents completely specify the design of the system. That is they specify the different modules in the system and internal logic of each of the modules.
Prof. Hemant Thakar

A design methodology is a systematic approach to creating a design by application of set of techniques and guidelines. Most methodologies focus on system design. The two basic principles used in any design methodology are problem partitioning and abstraction. A large system cannot be handled as a whole, and so for design it is partitioned into smaller systems. Abstraction is a concept related to problem partitioning. When partitioning is used during design, the design activity focuses on one part of the system at a time. Since the part being designed interacts with other parts of the system, a clear understanding of the interaction is essential for properly designing the part. For this, abstraction is used. An abstraction of a system or a part defines the overall behavior of the system at an abstract level without giving the internal details.
Prof. Hemant Thakar

While working with the part of a system, a designer needs to understand only the abstractions of the other parts with which the part being designed interacts. The use of abstraction allows the designer to practice the divide and conquer technique effectively by focusing one part at a time, without worrying about the details of other parts. Like every other phase, the design phase ends with verification of the design. If the design is not specified in some executable language, the verification has to be done by evaluating the design documents. One way of doing this is thorough reviews. Typically, at least two design reviews are heldone for the system design and one for the detailed and one for the detailed design.
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Development of Software Coding Stage/Phase In SDLC

Once the design is complete, most of the major decisions about the system have been made. The goal of the coding phase is to translate the design of the system into code in a given programming language. For a given design, the aim of this phase is to implement the design in the best possible manner. The coding phase affects both testing and maintenance profoundly. A well written code reduces the testing and maintenance effort. Since the testing and maintenance cost of software are much higher than the coding cost, the goal of coding should be to reduce the testing and maintenance effort. Hence, during coding the focus should be on developing programs that are easy to write. Simplicity and clarity should be strived for, during the coding phase.
Prof. Hemant Thakar

An important concept that helps the understandability of programs is structured programming. The goal of structured programming is to arrange the control flow in the program. That is, program text should be organized as a sequence of statements, and during execution, the statements are executed in the sequence in the program. For structured programming, a few singleentrysingleexit constructs should be used. These constructs includes selection (ifthenelse), and iteration (while do, repeat until etc). With these constructs it is possible to construct a program as sequence of single entry single exit constructs. There are many methods available for verifying the code. Some methods are static in nature that is, that is they do not involve execution of the code.
Prof. Hemant Thakar

Examples of such methods are data flow analysis, code reading, code reviews, testing (a method that involves executing the code, which is used very heavily). In the coding phase, the entire system is not tested together. Rather, the different modules are tested separately. This testing of modules is called unit testing. Consequently, this phase is often referred to as coding and unit testing. The output of this phase is the verified and unit tested code of the different modules.
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System Testing
Testing is the major quality control measure employed during software development. Its basic function is to detect errors in the software. During requirement analysis and design, the output is a document that is usually textual and nonexecutable. After the coding phase, computer programs are available that can be executed for testing phases. This implies that testing not only has to uncover errors introduced during coding, but also errors introduced during the previous phases. Thus, the goal of testing is to uncover requirement, design or coding errors in the programs. Consequently, different levels of testing are employed. The starting point of testing is unit testing. In this a module is tested separately and is often performed by the coder himself simultaneously with the coding of the module.
Prof. Hemant Thakar
System Testing
The purpose is to execute the different parts of the module code to detect coding errors. After this the modules are gradually integrated into subsystem, which are then integrated themselves eventually form the entire system. During integration of modules, integration testing is performed. The goal of this testing is to detect design errors, while focusing on testing the interconnection between modules. After the system is put together, system testing is performed. Here the system is tested against tech system requirements to see if all the requirements are met and the system performs as specified by the requirements. Finally, acceptance testing is performed to demonstrate to the client, on the real life data of the client, the separation of the system.
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System Testing
For testing to be successful, proper selection of test cases is essential. There are two different approaches to selecting test casesfunctional testing and structural testing. In functional testing the software for the module to be tested is treated as black box, and then test cases are decided based on the specifications of the system or module. For this reason, this form of testing is also called black box testing. The focus is on testing the external behavior of the system. In structural testing the test cases are decided based on the logic of the module to be tested. Structural testing is sometimes called glass box testing. Structural testing is used for lower levels of testing and functional testing is used for higher levels.
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System Testing
Testing is an extremely critical and timeconsuming activity. It requires proper planning of the overall testing process. Frequently the testing process starts with the test plan. This plan identifies all the testing related activities that must be performed and specifies the schedule, allocates the resources, and specify guidelines for testing. The test plan specifies manner in which the modules will integrate together. Then for different test units, a test case specification document is produced, which lists all the different test cases, together with the expected outputs, that will be used for testing. During the testing of the unit, the specified test cases are executed and actual result is compared with the expected output. The final output of the testing phases is to the text report and the error report, or set of such reports (one of each unit is tested). Each test report contains the set of such test cases and the result of executing the code with these test cases the error report describes the errors encountered and action taken to remove those errors.
Prof. Hemant Thakar
SDLC Implementation And Maintenance In Software Life Cycle

Maintenance includes all the activity after the installation of software that is performed to keep the system operational. As we have mentioned earlier, software often has design faults. The two major forms of maintenance activities are adaptive maintenance and corrective maintenance. It is generally agreed that for large systems, removing all the faults before delivery is extremely difficult and faults will be discovered long after the system is installed. As these faults are detected, they have to be removed. Maintenance activities related to fixing of errors fall under corrective maintenance. Removing errors is one of the activities of maintenance. Maintenance also needed due to a change in the environment or the requirements of the system. The introduction of a software system affects the work environment. This change in environment often changes what is desired from the system.
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Furthermore, often after the system is installed and the users have had a chance to work with it for sometime, requirements that are not identified during requirement analysis phase will be uncovered. This occurs, since the experience with the software helps the user to define the needs more precisely. There might also be changes in the input data, the system environment and output formats. All these require modification of the software. The maintenance activities related to such modification fall under adaptive maintenance. Maintenance work is based on existing software, as compared to development work, which creates new software. Consequently maintenance resolves around understanding the existing software and spares most of their time trying to understand the software that they have to modify. Understanding the software involves not only understanding the code, but also the related documents.
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During the modification of the software, the effects of the change have to be clearly understood by the maintainer since introducing undesired side effects in the system during modification is easier. To test whether those aspects in the system that are not supposed to be modified are operating as they were before modification, regression testing is done. Regression testing involves executing old test cases to test that no new errors have been introduced. Thus, maintenance involves understanding the existing software (code and related documents), understanding the effects of change, making the changes both to the code and documents, testing the new parts (changes), and resetting of the old parts that were not changed.
Prof. Hemant Thakar

Since often during development, needs of the maintainers are not kept in mind, little support documents are produced during development to aid the maintainer. The complexity of the maintenance task is coupled with the neglect of maintenance concerns during development which makes maintenance the most cost effective activity in the life of a software product.
Prof. Hemant Thakar
Error Distribution With Phase In Software Development Life Cycles

A typical software product may take months to a few years for development, and is in operation for five to twenty years before it is withdrawn. For software, the cost of development is the incurred during requirement analysis, design, coding and testing. Therefore, the development cost is the total cost incurred before the product delivery. The cost of maintenance is the cost of modifying the software due to residual faults in the software, for enhancing or for updating the software. This cost is spread over the operational years of the software. Software engineers generally agree that the total cost of maintenance is more than the cost of development of software. The ratio of development to maintenance cost has been variously suggested as 40/60, 30/70 or even lower. However, it is generally accepted that the cost of maintenance is likely to be higher than the development cost, and are often not at all concerned with the maintenance.
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Since maintenance depends critically on the software characteristics that are decided during development, maintenance cost can be reduced if maintenance concerns are kept in forefront during development. One of the reasons why this is often not done is that the development cost is done by the developers while maintenance is often done by the users. Hence, the developers do not have much incentive for increasing the development effort in order to reduce the maintenance cost. However, for reduction in overall cost of software, it is imperative that the software be developed so the maintenance is easy. The development cost, a typical distribution of effort with the different phases is Requirement 10% Design 20% Coding 20% Testing 50%
Prof. Hemant Thakar

The exact number will differ with organization and the type of the project. There are some observations we can make from the data given above. The first is that the goal of design and coding should reduce the cost of design and coding, but should be to reduce the cost of testing and maintenance, at the expense of increasing design and coding cost. Both testing and maintenance depend heavily in the design and coding of the software. And these costs can be considerably reduced if the software is designed and coded to make testing and maintenance easier. Therefore, during design and implementation, the issues in our minds should be can the design be easily tested, and can it be easily modified. These require alternate designs and may increase the cost of the design and coding. But this additional costs pay dividends in the later phases.
Prof. Hemant Thakar

Error Distribution The notion that programming is the central of activity during software development is largely because normally programming has been considered to be difficult task and sometimes an art. Another consequence of this kind of thinking is the belief that errors largely occur during programming, as it is the oldest activity in software development and offers many opportunities for committing errors. It is now realized that errors can occur at any stage during development. A typical distribution of error occurrences by is

Requirement Analysis 20% Design 30% Coding 50%
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As we can see, errors occur throughout the development process. However the cost of correcting different phases is not the same and depends on when the error is detected and corrected. As one old expect, the greater the delay in detecting an error after it occurs, the more expensive it is to correct it. Error that occur during the requirements phase, if corrected after coding is completed, can cost many times more than correcting the error during the requirements phase itself. The reason for this is fairly obvious. If there is an error in the requirements, then the design and the code will get affected.
Prof. Hemant Thakar

To correct the error, the coding that is done would require both the design and the code to be changed there by increasing the correction. So we should attempt to detect errors in the previous phase and should not wait until testing to detect errors. This is not often practiced. In reality, sometimes testing is the sole point where errors are detected. Besides the cost factor, reliance on testing as the primary source for error detection, due to the limitations of testing, will also result in unreliable software. Error detection and correction should be a continuous process that is done throughout software development. In terms of the development phases what this means is that we should try to validate each phase before starting with the next.
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What is Process?
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Waterfall Model Revisited
Disadvantages of Waterfall Model

Real projects are rarely so straightforward and sequential It is generally not possible to completely define (and freeze) all the requirements at the start of the project Problem is discovered in testing? Freight-Train Effect, or Late, or Over-Budget
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What is Wicked Problem
Problems we cant really understand until weve developed a solution. That is not what I want ... but now I know what I do want!
Prof. Hemant Thakar
The Mythical Man MonthDr. Frederick Brooks
In software projects, what will take one person ten months can not be solved by ten people in one month. Throwing people onto a late project will just make it later Because of Wicked Problems, Plan to the throw one away
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Rapid Prototyping
Put together a team of Smart Guys from multiple disciplines Develop the GUI on Paper Code the GUI in a fast language (Make it look like its working)
<=Requirements=>
Show it to the USERS (A Picture is worth a 1,000 words) Get Feedback
**<=Prototype=>** <=Design=> <=Code=> <=Test=> <=Deploy=>
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Typical Steps
Project Manager, Developer, Community Members write user requirements Coder writes sample HTML Shows the web page; heads bob, some changes to navigation DBA, Coder, Project Manager determine the architecture (Design) Coding & Review Shifting Requirements priced project out-of-budget
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Problems With Prototyping
No Current Documents Functional Spec is Prototype + Feedback Prototype is not baseline functionality Same problems with Functional Spec as waterfall!
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Prototyping Part II: The Rigged Demo
Re-Visit and improve the prototype to serve as a baseline

Listen To Customer Turns prototype into a rigged demo Show that to the customer
Build/Revise Mockup
Customer Test Drives Mockup
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At the Demo Dialogue
Customer: This looks great, and it looks like youre about done. When can we have it? Developer: Uh, its only a prototype we plan to throw it away and start over. Customer: No this is exactly what we need, and we need it now! Well take 50 prototypes!

The Sales Guy begins to see $$ signs. Under Rigged Demo scenarios, there is either a lot of wasted effort, or prototypes that were never intended to ship end up shoved into production.
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Iterative Models Whats an Iteration?
Iterative Design: Code as much as you can questions surface, then start over. Every model well talk about below is a variation on the Iterative Model.
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Spiral Model
Determine Objectives, Alternatives, Constraints Evaluate Alternatives, Identify And Resolve Risks
Risk Reduction Strategies Are Assessed And Plan Next Phases
Develop Verify Next Level Product

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Risk Assessment
Spiral Model risk driven rather than document driven The "risk" inherent in an activity is a measure of the uncertainty of the outcome of that activity High-risk activities cause schedule and cost overruns Risk is related to the amount and quality of available information. The less information, the higher the risk
Prof. Hemant Thakar
Spiral Model Strength and Weaknesses
Strengths

Introduces risk management Prototyping controls costs Evolutionary development Release builds for beta testing Marketing advantage
Weaknesses

Lack of risk management experience

Lack of milestones Management is dubious of spiral process Change in Management Prototype Vs Production
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Win Win Spiral Model
Win-Win Spiral Process Model is a model of a process based on Theory W, which is a management theory and approach "based on making winners of all of the system's key stakeholders as a necessary and sufficient condition for project success." Win-Win Spiral Model (eliciting software requirements defined through negotiation between customer and developer, where each party attempts to balance technical and business constraints)
Prof. Hemant Thakar
WinWin Spiral Model

Identify Next Level Stake holders Identify Stake level & process definitions Reconcileproduct ofProcess and win Evaluate commitment Review, Win conditions conditions Validate Product Define next holders product Alternatives process
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Win Win Spiral Cont
Identifying the system's stakeholders and their win conditions and reconciling win conditions through negotiation to arrive at a mutually satisfactory set of objectives, constraints, and alternatives for the next level. Evaluate Product and Process Alternatives. Resolve Risks
Define next level of product and process - including partitions

Validate Product and Process Definitions Review, commitment
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Agile
Agile software development, is a group of software development methodologies based on iterative and incremental development, where requirements and solutions evolve through collaboration between self-organizing, cross-functional teams.
Agile
Twelve principles underlie the Agile Manifesto, including: Customer satisfaction by rapid delivery of useful software Welcome changing requirements, even late in development Working software is delivered frequently (weeks rather than months) Working software is the principal measure of progress Sustainable development, able to maintain a constant pace Close, daily co-operation between business people and developers Face-to-face conversation is the best form of communication (co-location) Projects are built around motivated individuals, who should be trusted Continuous attention to technical excellence and good design Simplicity Self-organizing teams Regular adaptation to changing circumstances
Agile characteristics
Agile methods break tasks into small increments with minimal planning, and do not directly involve long-term planning. Iterations are short time frames that typically last from one to four weeks. Each iteration involves a team working through a full software development cycle including planning, requirements analysis, design, coding, unit testing, and acceptance testing when a working product is demonstrated to stakeholders. This minimizes overall risk and allows the project to adapt to changes quickly. Stakeholders produce documentation as required. An iteration may not add enough functionality to warrant a market release, but the goal is to have an available release (with minimal bugs) at the end of each iteration. Multiple iterations may be required to release a product or new features. Team composition in an agile project is usually cross-functional and self-organizing without consideration for any existing corporate hierarchy or the corporate roles of team members. Team members normally take responsibility for tasks that deliver the functionality an iteration requires. They decide individually how to meet an iteration's requirements. Agile methods emphasize face-to-face communication over written documents when the team is all in the same location. No matter what development disciplines are required, each agile team will contain a customer representative.
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CHAPTER 7
SYSTEM ANALYSIS AND DESIGN - II
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Chapter 7
System Analysis and Design - II:

Concept of database, data warehouse Content management and data mining (Strategic Informaation FB)
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What is a Warehouse?
Collection of diverse data subject oriented aimed at executive, decision maker often a copy of operational data with value-added data (e.g., summaries, history) Integrated data time-varying non-volatile
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What is a Warehouse?
Collection of tools gathering data cleansing, integrating, ... querying, reporting, analysis data mining monitoring, administering warehouse
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Components of A Data Warehouse
Operation Data Customer Data Manufacturing Data Historical Data
Extracting & Transform
Data ware house
Data Access & Analysis

Queries & reports OLTP / OLAP Data Mining
External Data
Info Directory
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Warehouse Architecture
Client Query & Analysis Client
Metadata
Warehouse
Integration
Source
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Source
Source
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Data Marts
A Data Mart is a subset of Data Warehouse. Highly focused portion of organizations data is placed in separate database for specific population of users.
E.g. Marketing data, Sales data etc
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OLTP vs. OLAP
OLTP: On Line Transaction Processing Describes processing at operational sites OLAP: On Line Analytical Processing Describes processing at warehouse
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OLTP vs. OLAP

OLTP

OLAP

Mostly updates Many small transactions Mb-Tb of data
Mostly reads Queries long, complex Gb-Tb of data
Raw data Clerical users Up-to-date data

Consistency, recoverability critical
Summarized, consolidated data Decision-makers, analysts as users
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Warehouse Models & Operators
Data Models stars & snowflakes Cubes Operators slice & dice roll-up, drill down pivoting other
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Data Mining
Decision Trees Clustering Association Rules
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Decision Trees
Example: Conducted survey to see what customers were interested in new model car Want to select customers for advertising campaign
sale
custId c1 c2 c3 c4 c5 c6
car taurus van van taurus merc taurus
age 27 35 40 22 50 25
city sf la sf sf la la
newCar yes yes yes yes no no
Training Set
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One Possibility
sale custId c1 c2 c3 c4 c5 c6 car taurus van van taurus merc taurus age 27 35 40 22 50 25 city sf la sf sf la la newCar yes yes yes yes no no
age<30
Y
city=sf
N
car=van
Y
likely
N
unlikely
Y
likely
N
unlikely
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Another Possibility
sale custId c1 c2 c3 c4 c5 c6 car taurus van van taurus merc taurus age 27 35 40 22 50 25 city newCar sf yes la yes sf yes sf yes la no la no
car=taurus
Y
city=sf
N
age<45
Y
likely
N
unlikely
Y
likely
N
unlikely
Notes11
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CS 245
Issues
Decision tree cannot be too deep would not have statistically significant amounts of data for lower decisions Need to select tree that most reliably predicts outcomes
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Case - 04
Gerber Development System to Manage Customers Inventory
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Case - 04
The Gerber story started in the kitchen of Daniel Gerber in the summer of 1927. Following the advice of a pediatrician, his wife had been handstraining solid food for their seven-month-old daughter. After many evenings of repeating this chore, Dorothy Gerber suggested that her husband try it. After watching him make several attempts, she pointed out that the work could be easily done at the Fremont Canning Company, where the Gerber family produced a line of canned fruits and vegetables.
Experiments with strained baby foods began shortly. Soon workers in the plant requested samples for their babies. By late 1928, strained peas, prunes, carrots and spinach, not to mention beef vegetable soup, were ready for the national market. Gerber has continued to grow throughout the years. Today nearly 190 food products are labeled in 16 languages and distributed to 80 countries.
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Case - 04
Tightening inventory management is a top priority for cost-conscious retailers and their suppliers. Retailers want their products to be available for customers to buy, but they dont want too much. Gerber has convinced 40 major grocery chains to allow the company to manage their inventory of Gerber products. During systems analysis, project participants defined the system objectives reduce both Gerbers and the customers inventory costs and provides a strong incentive for store managers to buy from Gerber. The company also decided not to charge for the inventory management service, treating it instead as a way to build customer loyalty and get sales data that can be used to fine-tune baby food production plans. Gerber believes it can gain a competitive advantage with superior forecasting and planning.
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Case - 04
An electronic data interchange (EDI) setup was designed and implemented to feed information on sales of Gerber products from the grocery stores to the Freemont, Michigan, company. The data is input to Manugistics software to schedule new deliveries. Manugistics, Inc. is a manufacturer of software for supply chain management. The company's solutions improve the flow of product within and among companies from raw materials or parts through manufacturing to delivery of product to the end customer. With Manugistics software, Gerber makes informed operational decisions, resulting in increased revenues, reduced inventories, improved customer service, better relationships among trading partners, greater speed to market and lower overall costs throughout the supply chain.
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Case - 04
An electronic data interchange (EDI) setup was designed and implemented to feed information on sales of Gerber products from the grocery stores to the Freemont, Michigan, company. The data is input to Manugistics software to schedule new deliveries. Manugistics, Inc. is a manufacturer of software for supply chain management. The company's solutions improve the flow of product within and among companies from raw materials or parts through manufacturing to delivery of product to the end customer. With Manugistics software, Gerber makes informed operational decisions, resulting in increased revenues, reduced inventories, improved customer service, better relationships among trading partners, greater speed to market and lower overall costs throughout the supply chain.
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Case - 04
Manugistics formed a partnership with Frontec AMT, a company that specializes in integrating applications. The alliance created the Intelligent Messenger for Vendor Managed Inventory, a software product to format and prepare customer product activity data for input into Manugistics. The software was designed to present data to Manugistics that is consistent and complete in terms of product identification, unit of measure conversion, data validation and sequence checking. Additional features were identified based on user requirements - intelligent routing of messages, event-driven notifications, and predefined trading partner business processes. Gerber plans to be the first company to implement the new data transformation and messaging software. It has established objectives for this system to dramatically increase the amount of inventory it manages for grocery stores. Gerber sells around $700 million worth of baby food in the U.S. each year; however, it only manages about 27% of base sales. Its goal is to manage inventory for 80% of sales within two years.
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What are the stages of an information systems project and what are the objectives of each stage?
Who are the various players that need to be involved in an information system development project and what are their roles?
Sources: adapted from Craig Stedman, Gerber Tightens Inventory Control, Computerworld, June 8, 1998, p. 57-58; Gerber Story and Products sections of the Gerber Web site at *http://www.gerber.com accessed on June 19, 1998; and Press release Frontec Announces Intelligent Messenger For Vendor Managed Inventory, June1, 1998 found at Manugistics Web site at *http://www.manugistics.com accessed on June 19, 1998.
Prof. Hemant Thakar
CHAPTER 8
TELECOMMUNICATIONS AND NETWORKS
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Chapter 8
Telecommunications and Networks: Network architecture

Network standards and open systems Virtual Private network Network management system
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The value of information is directly linked to how it helps decision makers to achieve the organizations goals
For effective implementation of any information system we need to distinguish data from information and describe the characteristics used to evaluate the quality of data
Knowing the potential impact of information systems and having the ability to put this knowledge to work can result in a successful personal career, organizations that reach their goals, and a society with a higher quality of life
Identify the basic types of business information systems and discuss who uses them, how they are used, and what kinds of benefits they deliver
Prof. Hemant Thakar
System users, business managers and information systems professionals must work together to build a successful information system For effective functioning of IS we need to identify the major steps of the system development process and state the goal for each of the steps. The use of information systems to add value to the organization can also give an organization a competitive advantage Identify the value-added processes in the organization and describe the role of information systems within them Identify some of the strategies employed to lower costs or improve service
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Trends In Telecommunications
Industry More competitive
More options for the firm
Technology Unrestricted connectivity
Easy access for end users

Open systems
Use common standards for hardware, software, applications, & networking.
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Technology (continued)

High degree of interoperability Digital networks

Higher transmission speeds Moves larger amounts of information Greater economy
Lower error rates

Multiple types of communications on the same circuits Faster transmission speeds
Fiber-optic lines & cellular, PCS, satellite & other wireless technologies
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Business applications
Dramatic increase in the number of applications.
feasible telecommunication
Cut costs, reduce lead times, shorten response times, support e-commerce, improve collaboration, share resources, lock in customers & suppliers, & develop new products & services
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The Internet

A network of networks Popular uses E-mail Instant messaging Browsing the World Wide Web Newsgroups and chat rooms
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The Internet
The business value of the Internet
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Intranets

Within an organization Uses Internet technologies Business value of Intranets
Used for information sharing, communication, collaboration, & support of business processes. Web publishing
Comparatively easy, attractive, & lower cost alternative for publishing & accessing multimedia business information
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Intranets (Portals)
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Extranets
Network links that use Internet technologies to interconnect the firms intranet with the intranets of customers, suppliers, or other business partners
Consultants, subcontractors, business prospects, & others Improve communication with customers and business partners
Business value

Gain competitive advantage in

Product development Cost savings Marketing Distribution Leveraging their partnerships
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Telecommunications Network Alternatives
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A Telecommunications Network Model
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Consists of five basic components
Terminals
Any input/output device that uses telecommunication networks to transmit or receive data
Telecommunication processors
Support data transmission and reception between terminals and computers
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Telecommunications channels
The medium over which data are transmitted and received Interconnected by telecommunications networks Control telecommunications activities & manage the functions of telecommunications networks
Computers
Telecommunications control software
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Types of Telecommunications Networks

Wide Area Networks (WAN) Metropolitan Area Networks (MAN) Local Area Networks (LAN) Campus Area Networks (CAN) Virtual Private Networks (VPN)
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Wide Area Networks (WAN)

Cover a large geographic area. Used to connect LANs and other types of networks together, so that users and computers in one location can communicate with users and computers in other locations Many WANs are built for one particular organization and are private
Several options which are available for WAN connectivity are mentioned in the next slide
Prof. Hemant Thakar

Option used Leased line Description Point-to-Point connection between two computers or Local Area Networks (LANs) A dedicated circuit path is created between end points. Best example is dialup connections Devices transport packets via a shared single point-to-point or point-to-multipoint link across a carrier internetwork. Variable length packets are transmitted over Permanent Virtual Circuits (PVC) or Switched Virtual Circuits (SVC) Best for simultaneous use of voice and data Advantages Most secure Disadvantages Expensive Bandwidth range Sample protocols PPP, HDLC, SDLC 28 - 144 kbit/s
Circuit switching
Less Expensive
Call Setup
PPP, ISDN
Packet switching
Shared media across link
X.25 FrameRelay
Similar to packet switching, but uses fixed length cells instead of variable length packets. Data is Cell relay divided into fixed-length cells and then transported across virtual circuits Prof. Hemant Thakar
Overhead can be considerable
ATM (Asynchronous Transfer Mode)
Metropolitan Area Networks (MAN)

A large computer network that usually spans a city or a large campus. A MAN usually interconnects a number of local area networks (LANs) using a high-capacity backbone technology, such as fiber-optical links, and provides up-link services to wide area networks (or WAN) and the Internet.
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Local Area Networks (LAN)
Connect computers & other information processing devices within a limited physical area. Connected via ordinary telephone wiring, coaxial cable, or wireless radio & infrared systems
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Campus Area Networks (CAN)
CAN is a computer network made up of an interconnection of local area networks (LANs) within a limited geographical area Connected via ordinary telephone wiring, coaxial cable, or wireless radio & infrared systems In the case of a university campus-based campus network, the network is likely to link a variety of campus buildings including; academic departments, the university library and student residence halls.
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Virtual Private Networks
A secure network that uses the Internet as its main backbone network, but relies on fire walls and other security features
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Client/Server Networks

Clients end user PCs or NCs Server helps with application processing and also manages the network
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Network computing
Network computing refers to computers working together over a network as opposed to stand alone computers like laptops and home computers
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Peer-to-Peer (P2P) Two major models

Central server architecture Pure peer-to-peer
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Telecommunications Media

Twisted-pair wire Coaxial cable

Minimizes interference and distortion Allows high-speed data transmission Glass fiber that conducts pulses of light generated by lasers
Fiber optics

Size and weight reduction

Increased speed and carrying capacity
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Wireless Technologies
Terrestrial Microwave
Line-of-sight path between relay stations spaced approximately 30 miles apart.
Communications Satellites

Geosynchronous orbits Serve as relay stations for communications signals transmitted from earth stations
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Wireless Technologies
Cellular Network and PCS (Personal Communications Service)

Each cell is typically from one to several square miles in area. Each cell has its own low-power transmitter or radio relay antenna. Computers & other communications processors coordinate & control the transmissions to/from mobile users as they move from one cell to another
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Cellular Networks

Overlapping towers Signal picked up by closest tower and transferred on AMPS standard (TACS in EUROPE) PCS and various alternative standards
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Wireless Application Protocol
WAP - An open international standard. A WAP browser is a commonly used web browser for small mobile devices such as cell phones Provides support to Internet and Web applications such as:

Email by mobile phone Tracking of stock-market prices Sports results News headlines new Music downloads
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I-mode
The Japanese i-mode system offers another major competing wireless data protocol. 60% of Japanese market Why so popular?

Lack of easy and based Internet access in Japan Lower PC penetration in Japan Extensive wireless coverage Returns money to website providers
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Personal Area Networks

Connection of computer to peripherals or other computers Connect PDA and desktop computer Several connection methods:

Bluetooth (radio frequency up to 300 feet) IrDA (Infrared) (cheap)
Wireless LAN 802.11b wireless Ethernet (more reliable)
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New Generations of Wireless Networks
3G network

Broadband up to 2 Mbps Packet switched Virtual home environment
The bandwidth and location information available to 3G devices gives rise to applications not previously available to mobile phone users. Some of the applications are given in the next slide
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New Generations of Wireless Networks
Mobile TV a provider redirects a TV channel directly to the subscriber's phone where it can be watched. Video on demand a provider sends a movie to the subscriber's phone. Video conferencing subscribers can see as well as talk to each other. Location-based services a provider sends localized weather or traffic conditions to the phone, or the phone allows the subscriber to find nearby businesses or friends.
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Telecommunications Processors
Modems (modulation/demodulation) Changes signals from analog to digital and back to analog The goal is to produce a signal that can be transmitted easily and decoded to reproduce the original digital data. Modems can be used over any means of transmitting analog signals Modems are generally classified by the amount of data they can send in a given time unit, normally measured in bits per second (bit/s, or bps)
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Multiplexers Allows a single communication channel to carry simultaneous data transmissions from many terminals A demultiplexer (or demux) is a device taking a single input signal and selecting one of many data-output-lines, which is connected to the single input. One use for multiplexers is cost savings by connecting a multiplexer and a demultiplexer (or demux) together over a single channel (by connecting the multiplexer's single output to the demultiplexer's single input).
Prof. Hemant Thakar
Multiplexers The image below demonstrates this. In this case, the cost of implementing separate channels for each data source is more expensive than the cost and inconvenience of providing the multiplexing/demultiplexing functions.
Prof. Hemant Thakar
Internetwork Processors
Switches
Makes connections between telecomm circuits so a message can reach its intended destination
Router
Interconnects networks based on different rules or protocols
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Hub

Port switching communications processor A device for connecting multiple twisted pair or fiber optic Ethernet devices together and making them act as a single network segment.
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Gateway
A processor that interconnects networks that use different communications architecture acts as an entrance to another network A gateway is an essential feature of most routers, although other devices (such as any PC or server) can function as a gateway.
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Telecommunications Software
Provides a variety of communications support services including connecting & disconnecting communications links & establishing communications parameters such as transmission speed, mode, and direction.
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Telecommunications Software
Network Management

Traffic management Security Network monitoring Capacity planning
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Network Topologies
Star

Ties end user computers to a central computer Considered the least reliable
Ring (sometimes called Token Ring)

Ties local computer processors together in a ring on a more equal basis.

Considered more reliable & less costly
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Network Topologies
Bus

Local processors share the same bus, or communications channel Tree is a variation which ties several bus networks together
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Network Topologies
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Network Architectures & Protocols
Protocols
A standard set of rules & procedures for the control of communications in a network Standards for the physical characteristics of cables and connectors
Network Architecture
Goal is to promote an open, simple, flexible, efficient telecommunications environment
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Network Architectures and Protocols
TCP/IP Transmission Control Protocol/Internet Protocol
Used by the Internet and all intranets and extranets
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Bandwidth Alternatives

Bandwidth is the frequency range of a telecommunications network Determines the channels maximum transmission rate Measured in bits per second (bps) or baud Narrow-band
Low-speed transmission
Broadband
High-speed transmission
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Switched Networks

Packet switched and circuit switched Integrated Services Digital Network (ISDN) Frame Relay Committed information rate Data bursts Asynchronous Transfer Mode (ATM) Various speeds and scalability The Internet
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CHAPTER 9 E-COMMERCE TRENDS, MODELS OF E-COMMERCE
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Chapter 9
E-commerce Trends, Models of e-commerce Overview of E-Business & E-Commerce

Types of E-Commerce & Models Business-to-Consumer (B2C) E- Commerce Business-to-Business (B2B) E-Commerce Electronic Payments Ethical and Legal Issues in E-Business
Prof. Hemant Thakar
Learning Objectives
Describe electronic commerce, including its scope, benefits, limitations, and types. Distinguish between pure and partial electronic commerce. Understand the basics of how online auctions work. Differentiate among business-to-consumer, business-to-business, consumerto-consumer, business-to-employee and government-to-citizen electronic commerce. Describe the major e-commerce support services, specifically payments and logistics. Discuss some ethical and legal issues relating to e-commerce.
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J&R .
Storefront in NYC
J&R Web site
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Overview
Electronic Commerce (E-Commerce, EC) Describes the buying, selling, transferring or exchanging of products, services or information via computer networks, including the Internet.
E-Business Is a broader definition of EC, including buying and selling of goods and services, and also servicing customers, collaborating with partners, conducting e-learning and conducting electronic transactions within an organization.
Pure versus Partial Electronic Commerce depends on the degree of digitization involved. Brick-and-mortar organizations Virtual organizations Click-and-mortar organizations
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FreshDirect
The following slides give you a look at FreshDirect, which is a partial EC, or clicks-and-mortar company.
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Types of E-Commerce

Business-to-Consumer (B2C) Business-to-Business (B2B) Consumer-to-Consumer (C2C) Business-to-Employee (B2E) E-Government Mobile Commerce (m-commerce)
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B2B and B2C Electronic Commerce
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E-Commerce Business Models

Online direct marketing
Electronic tendering system
Name-your-own-price
Find-the-best-price
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E-Commerce Business Models (continued)

Affiliate marketing
Note the Sony logo at the top of this Web page
www.howstuffworks.com
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Viral marketing
Group purchasing
Online auctions
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Product customization
Deep discounters
Membership
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Bartering Online
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Major E-Commerce Mechanisms

Auctions Forward Auctions Reverse Auctions
Slides of electronic storefronts, electronic malls, and electronic market places are in subsequent sections
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Forward and Reverse Auctions
Bid price
Bid price
Time Forward Auction
Time Reverse Auction
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Benefits of E-Commerce
Benefits to organizations Makes national and international markets more accessible Lowering costs of processing, distributing, and retrieving information Benefits to customers Access a vast number of products and services around the clock (24/7/365) Benefits to Society Ability to easily and conveniently deliver information, services and products to people in cities, rural areas and developing countries. Quick information flow
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Limitations of E-Commerce
Technological Limitations Lack of universally accepted security standards Insufficient telecommunications bandwidth Expensive accessibility Non-technological Limitations Perception that EC is unsecure Unresolved legal issues Lacks a critical mass of sellers and buyers
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Business-to-Consumer (B2C) Electronic Commerce

Electronic storefronts
Electronic malls
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Leading E-Tailing Websites

B2C electronic commerce is also known as e-tailing. Examples of e-tailing Websites include:
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Online Service Industries

A key issue is disintermediation
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Disintermediation Example
Online Diamond Broker

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110
Use Blue Niles decision support system to specify your own diamond
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Online Service Industries

Cyber banking
Online securities trading
Online job market
Travel services
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The Long Tail
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111
Issues in e-Tailing
Channel conflict Multi Channeling Order fulfillment
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Online Advertising
Advertising is an attempt to broadcast information in order to influence a buyer-seller transaction. Online Advertising methods Banners Pop-up ad Pop-under ad Permission marketing Viral marketing
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A Closer Look at Online Advertising
We must accept the fact that there is no mass in mass media anymore.
Jim Stengel, Global Marketing, Proctor & Gamble.
TV networks face disturbance because of ever-increasing attacks from digital media like Internet sites.
Jeff Zucker, chief executive of the NBC Universal Television Group.
We never know where the consumer is going to be at any point in time, so we have to find a way to be everywhere. Ubiquity is the new exclusivity.
Linda Kaplan Thuler, Chief Executive at the Kaplan Thaler Group, a New York ad agency.
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Drivers of Todays Online Advertising

The emergence of communitainment. The increasing popularity of Usites. Mainstreaming of the Internet. Declining usage of traditional media. Fragmentation of content consumption Consumers are multitasking and they do not like ads.
Source: PiperJaffrey
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Communitainment
PiperJaffray, an investment bank, defines communitainment as the blending of community, communication, and entertainment into a new form of online activity driven by consumers. The bank predicts that consumers will shift more than 50% of their content consumption over the next decade to communitainment formats (e.g., social networking, video, and photo sharing sites), displacing traditional forms of media content like TV, magazines, and large Internet sites. This trend presents a major challenge for advertisers.
Prof. Hemant Thakar
Usites
PiperJaffray defines Usites as Web sites with user generated content comprising all or most of their content.
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113
Mainstreaming of the Internet
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Declining Usage of Traditional Media
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Fragmentation of Content Consumption
Source: PiperJaffray
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114
Andconsumers are multitasking
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Andconsumers dont like ADS
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Eight Types of Web sites for Advertising
Portals: most popular; best for reach but not targeting
Search: second largest reach; high advertising value
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115
Eight types of sites (continued)
Commerce: high reach; not conducive to advertising
Mall of Hawaii
Entertainment: large reach; strong target ability
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Eight types of sites (continued)
Community: emphasize being a part of something; good for specific advertising
Communications: not good branding; low target ability
for
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Eight Types Of Sites (Continued)
News/weather/sports: poor targetability
Games: good for very specific types of advertising
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116
What The Eight Categories Mean For Advertisers
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A Graphical Look At The Eight Categories
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Business-to-Business (B2B) Electronic Commerce

In B2B e-commerce, the buyers and sellers are organizations, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer
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B2B Sell-Side Marketplace
Key mechanisms: electronic catalogs and forward auctions
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Ariba (sell-side marketplace)
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(Sell-side marketplace)
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118
(Sell-side marketplace)
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B2B Buy-Side Marketplace
Key mechanism: reverse auctions
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United Sourcing Alliance
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119
Electronic Exchanges
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Boeing PART
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PlasticsNet (Vertical Exchange)
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120
The Paper Site (Vertical Exchange)
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Horizontal Exchange
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Functional Exchange
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121
Electronic Payments
Electronic payment systems enable you to pay for goods and services electronically. Electronic checks (e-checks) Electronic credit cards Purchasing cards Electronic cash

Stored-value money cards Smart cards Person-to-person payments
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How E-Credit Cards Work
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Ethical and Legal Issues

Ethical Issues Privacy Disintermediation
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Legal Issues Specific to E-Commerce

Fraud on the Internet Domain Names Domain Tasting Cybersquatting Taxes and other Fees Copyright
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Chapter Closing Case
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CHAPTER 10
E-COMMERCE TECHNICAL INFRASTRUCTURE, EDI, MANAGING WEB STORES
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123
Chapter 10
E-commerce technical infrastructure
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E-business Infrastructure
E-Business has two different infrastructure
Technical Infrastructure Application Infrastructure
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Technical Infrastructure
This refers mainly to the hardware and networking infrastructure This includes the provision of servers, clients, networks and also systems software such as operating systems and browsers
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124
Application Infrastructure
This refers mainly to the software provision of the infrastructure This is used to deliver services to employees, customers and other partners
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A Five-layer Model of e-business Infrastructure
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Managing of E-business infrastructure requires decisions of Layers II, III, IV as mentioned in Figure above
Layer II System Software
Key management issue is standardization throughout the organization. This leads to reduced numbers of contacts for support and maintenance and can reduce purchase prices through multi-user licenses Decisions on the network will be based on the internal company network, which for the e-business will be an intranet, and the external network, either an extranet or linked to public Internet The main management decision is whether internal or external network management will be performed by the company or outsourced to third party
Layer III Transport and Network
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125
Layer IV Storage

The decision on Storage is similar to that for the transport layer Storage can be managed internally or externally E.g. Internet / Extranet are commonly managed internally while Internet storage such as corporate web site is commonly managed externally
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The relationship between intranets, extranets and the Internet

Prof. Hemant Thakar
Internet Service Providers (ISP)
ISP are telecommunication companies that provide access to the Internet for home and business users ISPs have two main functions Provide a link to a company or individual to access the World Wide Web Host web sites or provide a link from a companys web servers to enable other companies and consumers access to a corporate web site
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126
Internet Service Providers (ISP)
Issues in managing ISPs Speed of access Availability Service-level agreements Security
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Typical Problems

Web site communications too slow. Web site not available. Bugs on site through pages being unavailable or information typed in forms not being executed. Ordered products not delivered on time. E-mails not replied too. Customers privacy or trust is broken through security problems such as credit cards being stolen or addresses sold to other companies.
Prof. Hemant Thakar
Applications Infrastructure
Traditionally businesses have developed fragmented or separate applications for different functions. These may develop at three different levels

Different technology architectures used in different functional areas

Different applications and databases in different areas Different processes or activities in different areas
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(a) Fragmented applications infrastructure

Source: Adapted from Hasselbring (2000)
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To Avoid the problem of fragmented applications infrastructure, many companies turned to ERP (Enterprise Resource Planning) such as SAP, PeopleSoft, Oracle etc
ERP software provides integrated functions for major business functions such as production, distribution, sales, finance, HR etc
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(b) integrated applications infrastructure

Source: Adapted from Hasselbring (2000)
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Differing Use of Applications At Different Levels In A Company
Differing Use Of Applications At Levels Of Management Within Companies

Prof. Hemant Thakar
Elements of e-business Infrastructure Requiring Management
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Elements of e-business infrastructure that require management
New Access Devices

Mobile access devices Wi-Fi mobile access Bluetooth Next-generation mobile services Interactive digital television
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129
Components of an interactive digital TV system

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Chapter 10
EDI - Electronic Data Interchange
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EDI An Overview

What is EDI? Why use it? How does it work? What does it take to implement? How much ongoing support is required? Who in Oregon is using it?
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130
EDI An Overview
EDI Is the electronic transfer of information between two trading partners systems using a set of transactions that have been adopted as a national or international standard for the particular business function.
Prof. Hemant Thakar
The Transcript Trail
Print Transcript
Re-key Data U.S. Mail Receive Transcript
Student Information System
Request Transcript
Prof. Hemant Thakar
Recipients Student Information System
The Transcript Trail With EDI

Print Transcript
Re-key Data U.S. Mail Student Information System Receive Transcript
EDI
Request Transcript
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Recipients Student Information System
131
What It Takes To Use EDI

EDI server Internet access

Translation & mapping software Staffing Registration Encryption software
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Your EDI Server
Install translation & mapping software on stand-alone machine or on an existing server. Old, spare pc works great for EDI.Smart Trusted Link software requires Windows 95 or better
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Internet Access
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Software
Buy it off the shelf EDI.Smart

Partner Sungard SCT Freeware Receive & Print Partner Datatel
Quick n Easy

Inovis Trusted Link
Mercator Integration Broker AXIOM Write your own
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Registration
Internet EDI server Free 1 e-mail Receive reply with username & password
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Security
Encryption software Optional Whats available sftp to/from UT server PGP

Freeware
RSA security CryptoHeaven
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Staffing
Installation & Mapping Registrars office and Admissions office

Functional/Technical manager Systems Analyst/Programmer Analyst
IT
Daily Operation Office Specialist/Transcript Staff Maintenance Same as Installation & Mapping
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EDI or XML

What is XML? Characteristics of EDI Characteristics of XML Is EDI going away?
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Extensible Markup Language

XML Is a dynamic trading language that enables applications to flexibly, intelligently & cost efficiently exchange information. XML-based EDI is well suited to use over the Internet.
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Characteristics of EDI
Provides standardized rigid format Stability and uniformity High level of security Point-to-point integration Exchanges large amounts of data with no intervention Requires dedicated EDI server Minimizes file size in the exchange Machine decipherable (difficult for a person to read) Focus on data and structure Not web based Many trading partners available
Prof. Hemant Thakar
Characteristics of XML

Transacts over existing internet Focus on syntax and graphics Developed for graphic representations A way to format & manipulate text Very large file size Less efficient transmission
A cousin to HTML New, hot technology; easy to learn
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Characteristics of XML
Approved Version 1.0.0 by the Postsecondary Electronic Standards Committee in April 2004 UT Austin Server supports PESC XML standard XML users cannot trade with EDI users (crosswalk is being developed) Man and machine decipherable (easy to read by humans; not as secure)
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Is EDI going away?
NO
There are benefits of both EDI and XML. One significant factor in favor of EDI is that our current trading partners are using EDI.
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Benefits of EDI

More Secure than paper Cost savings Acknowledgements from receiving institution Speed Easy partner exchange each term Automated transfer articulation Small file size
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Perspectives

Server issues All technological systems need upgrades Staff training Interface with your student software system Move from SSN to generated ID Web transcript requests
Who owns EDI processing?
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Chapter 10
Managing web store
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Web Store Requirements
Developing a Web Store Build

Website design tools Site design templates Custom design services Website hosting Web page advertising E-mail promotions Web advertising exchanges with affiliated sites Search engine registrations
Market

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Serving Your Customers Serve

Personalized web pages Dynamic multimedia catalog Catalog search engine Integrated shopping cart Flexible order process Credit card processing Shipping and tax calculations E-mail order notifications
Transact

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Serving your customers (continued) Support

Website online help Customer service e-mail Discussion group and chat rooms Links to related sites
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Managing a web store Operate

24/7 website hosting Online tech support Scalable network capacity Redundant servers and power User password protection Encrypted order processing Encrypted website administration Network fire walls and security monitors
Protect

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Case - 05
NIT Scale Up
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Case - 05
Nippon Telegraph and Telephone was established over a hundred years ago. Today it is the principal telecommunications company in Japan, with 58 million subscribers and over 500 branches throughout the country. Globally, over 3,200 multinational companies look to NTT for solutions to their telecommunications requirements. NTT America was founded in 1987 as a wholly-owned subsidiary of Nippon Telegraph and Telephone. Today, NTT America is a leading provider of state-of-the-art products and services, as well as a major player in communications research. The current pace of technological innovation requires new information services that go far beyond conventional telephony. NTT has been transforming itself into a multimedia company to meet todays and tomorrows needs. NTT America plays a significant role in that transformation.
Prof. Hemant Thakar
Case - 05
NTT Mobile is by far the largest supplier of cellular services in the world. The Tokyo-based company had 10 million subscribers as of March 1997. That number is expected to grow to 17 million by March 1998, even with the economic slowdown in Japan. However, competition is increasing. For example, regional competitor TuKa Cellular is increasing the number of cellular subscribers by nearly 10 percent per month. Such competition is putting pressure on the one-time monopoly NTT Mobile to lower rates and improve customer service. NTT Mobiles core mainframe systems were preventing the company from coping with rapid growth. Developed in the late 1980s, these systems were terminal-to-host applications that supported customer service representatives in 2,000 retail locations. A number of disparate, nonintegrated systems were bundled together to support the reps in initiating new customer accounts, handling customer support calls, and performing administrative functions.
Prof. Hemant Thakar
Case - 05
The lack of integration across systems was a serious problem. One system handled new accounts processing, another tracked equipment inventory levels, and a third stored customer information. Not only were the systems not integrated, they relied on batch processing to update corporate data. Things were so bad that a new customer would buy an NTT service, begin to use it, then return to the store for repair before NTT could get the customers information from the accounts processing system into the customer information system. Then, when the customer showed up for service, the NTT systems had no data about him or her. Obviously, this made it difficult to provide good customer service. To improve customer service, NTT formed the ALADIN project team to provide an integrated, up-to-the-minute view of the companys distributed mobile telecommunications business.
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Case - 05
The company had to replace the stand-alone, mainframe based applications with new, fully integrated client/server applications running on a 40-processor, two-node cluster Configuration of Sun Microsystemss large Enterprise 6000 SPARC-based symmetric multiprocessing server. NTT Mobile completed a successful pilot of the ALADIN system using the new system in two branch offices serving 200,000 customers. However, performance slowed to a crawl when the company attempted to roll out the system to handle 1 million customers. The root cause of the performance problem was that the ALADIN applications on the two-node Enterprise 6000 cluster were bogging down as they contended for common blocks of data on disk (called data contention). This problem is not uncommon in large clustered environments, because nodes in systems such as an Enterprise 6000 cluster share disk storage and a database. The database system manages users access to the data, keeping one user away from data while it is being used and updated by another.
Prof. Hemant Thakar
Case - 05
The applications, operating systems, and the database had to be tuned to minimize contention. After struggling awhile, the team decided to move the ALADIN application logic to separate application serversrunning on Sun SC 2000E hardwarethereby creating a three-tier client/server architecture. Additional tuning was done to the database management software and operating system to reduce data contention and boost the performance of the operating system. The tuning efforts took several months but eventually system performance improved dramatically and NTT Mobile completed the ALADIN rollout. Today the new system supports 13,000 users, generating almost 25,000 database updates every minute and managing some 40 terabytes of historical data. When NTT began the conversion, the number of users, updates, and data placed a greater workload on the Sun hardware than any other Sun customer.
Prof. Hemant Thakar
Case - 05
Already the company has seen increased customer satisfaction and operational efficiency. Company agents are now able to process customer requests for service or support faster. The company has been able to substantially reduce the number of administrative workers needed to handle customer transactions, shifting them to other jobs. The system has been so successful, in fact, that NTT Mobile plans to extend ALADIN to its pager business, thus adding 5 million customers.
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Would you describe NTTs new system as a two-tier or three-tier client/server system? What type of computer is at each tier?
NTT experienced a performance problem when the pilot system expanded. Would you expect to see a similar performance problem when the system is expanded to serve the 5million pager customers? How might this be avoided? Sources: Adapted from NTT America Web site at http:www.nttamerica.com,
accessed May 26, 1998 and Jeff Moad, Sun Rises to the Occasion, PC Week, March 2, 1998, pp. 77, 83.
CHAPTER 11 INTRODUCTION TO E-BUSINESS SYSTEMS-I
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Chapter 11
Introduction to e-Business Systems - I: Batch Processing

On-line(real-time) systems Cross-functional enterprise applications Enterprise application integration
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E-Business System
Cross-functional e-business systems that enhance communication, coordination, & collaboration Communicate share information with each other Coordinate coordinate individual work efforts & use of resources with each other. Collaborate work together cooperatively on joint projects and assignments
Prof. Hemant Thakar
E-Business System
Tools for Enterprise Collaboration Electronic communication E-mail Voice mail Fax Web publishing Bulletin boards Paging Internet phone systems
Prof. Hemant Thakar
E-Business System
Electronic conferencing Data & voice conferencing Videoconferencing Chat systems Discussion forums Electronic meeting systems
Synchronous. Team members can meet at the same time and place in a decision room setting
Calendaring & scheduling Task & project management Workflow systems Knowledge management
Collaborative work management

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Batch Processing
Computers store data by organizing smaller units of data into large, more meaningful ones. Two basic types of files are used to store data. The master file, which is conceptually similar to a ledger in a manual system. The transaction file, which is conceptually similar to a journal in a manual system. Records are typically updated, stored, and retrieved using an identifier called a primary key. The primary key must be unique for each entity. A secondary key is another field used to identify a record. Secondary keys do not uniquely identify individual records, but identify a group of records.
Prof. Hemant Thakar
Batch Processing
Batch processing is updating master files periodically to reflect all transactions that occurred during a given time period. The master file is updated at set times or whenever a manageable number of transactions are gathered. Transaction data can either be entered as a batch or as each transaction occurs.
Prof. Hemant Thakar
Batch Processing
Group source documents into batches.
Master File
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On-line, Real-Time Processing
In on-line, real-time processing, the computer electronically,... edits it for accuracy and completeness, and... immediately processes it.
captures
data
The computer also processes information requests from users.
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On-line, Real-Time Processing
Enter transactions into system as they occur.
Master File
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Advantages

The main advantage of batch processing was efficiency in processing. On-line data entry is more accurate than periodic batch input because the system can refuse incomplete of erroneous entries. Real-time processing ensures that the information in master files is always current.
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Cross-functional Enterprise Applications
Integrated combinations of information subsystems that share information resources and support business processes across the functional units A strategic way to use IT to share information resources & improve efficiency & effectiveness Focused on accomplishing fundamental business processes in concert with the companys customer, supplier, partner, & employee stakeholders
Prof. Hemant Thakar
Cross-functional Enterprise Applications
Enterprise Application Architecture
Prof. Hemant Thakar
Enterprise Application Integration (EAI)
Software enables users to model the business processes involved in the interactions that should occur between business applications. Also provides middleware that Performs data conversion & coordination Provides application communication & messaging services Provides access to the application interfaces Business value Integrates front-office and back-office applications to allow for quicker, more effective response to business events and customer demands Improves customer and suppler experience with the business because of its responsiveness.
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CHAPTER 12
INTRODUCTION TO E-BUSINESS SYSTEMS-II
Prof. Hemant Thakar
Chapter 12
Introduction to e-Business Systems - II:

Collaboration systems Overview-Computer aided design (CAD) Overview-Computer aided manufacturing (CAM)
Prof. Hemant Thakar
Computer Aided Design
CAD (Computer Aided Design) is used all over the world by many different types of engineering manufacturers. You are probably familiar with some forms of CAD software which you may have used in school, e.g. 2D design, Corel Draw, Solid Edge, Prodesktop.
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Computer Aided Design
In industry, CAD refers to any computer software that is used to produce high quality drawings and models which meet exact specifications. CAD software is often then linked to machinery to perform a task to manufacture part of or a whole product; this is known as CAM (Computer Aided Manufacture).
Prof. Hemant Thakar
Computer Aided Manufacturing
What is Computer Aided Manufacturing? It is control of the manufacturing process by computers involving the integration of CAD engineering data and the computerized equipment which manufactures the product.
- (Russell, Taylor 213)
Other definitions: Computer aided manufacturing concerns the use of algorithms for planning and controlling fabrication processes.
- (utwente.nl)
Computer aided manufacturing is the use of computers for managing manufacturing processes.
-(techtarget.com)
Prof. Hemant Thakar
Computer Aided Manufacturing

Using technology to produce Leveraging capital investments Increasing productivity through automation Decreasing lead time through programmatically controlled machinery
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Computer Aided Manufacture
CAM (Computer Aided Manufacture), like CAD, is used all over the world by many different types of engineering manufacturers. CAM allows products to be manufactured with very little effort compared to more hands on techniques where humans are controlling the machines. CAM involves using CNC (Computer Numerical Control), whereby a machines movement is described in exact detail by the computer program.
Prof. Hemant Thakar
Computer Aided Manufacture
Some examples of products produced using CAM are:

Mobile phones Trains Mountain bikes Games consoles Many, many more
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Case - 06
Get Ready for Global E-Commerce
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Case - 06
E-commerce sites need to shift their focus from North American consumers as the use of the Internet grows rapidly in markets throughout Europe, Asia, and Latin America. The majority of Internet users will live outside the United States by 2003, and the U.S. share of all E-commerce revenues are projected to shrink from 69 percent in 2000 to 59 percent by 2003. Online retail sales in Europe will grow at a rate of 98% annually over the next five years, soaring from 2.9 billion euros in 1999 to 175 billion euros in 2005. Companies that want to succeed on the Web cannot ignore the global shift. Developing a sound strategy is critical for ensuring that a global E-commerce effort leads to Web sites that are relevant to the consumers and businesses the company wants to reach, whether those customers are in Cleveland, Singapore, or Frankfurt.
Prof. Hemant Thakar
Case - 06
The first step in developing a global E-commerce strategy is to determine which global markets make the most sense for selling products or services online. One approach is to target regions and countries in which a company already has online customers. Companies can track the country domains from which current users of a U.S.-centric site are visiting, and established global companies can look to their overseas offices to help determine the languages and countries to target for their Web sites.
Once the company decides which global markets it wants to reach with its Web site, it must adapt the existing U.S.-centric site to another language and culturea process called localization. Localization requires companies to have a deep understanding of the country, its people, and the market, which means either building a physical presence in the country or forming partnerships so that detailed knowledge can be gathered.
Prof. Hemant Thakar
Case - 06
Companies must be prepared to take painstaking steps to ensure that Ecommerce customers have a local experience even though theyre shopping at the Web site of an American company. Some of the steps involved in localization require recognizing and conforming to the nuances, subtleties, and tastes of local cultures, as well as supporting basic trade laws and technological capabilities such as each countrys currency, local connection speeds, payment preferences, laws, taxes, and tariffs. For example, when Dell Computer launched an ecommerce site to sell PCs to consumers in Japan, it made the mistake of surrounding most of the sites content with black borders, a negative sign in Japanese culture. Japanese Web shoppers took one look at the site and fled. Support for Asian languages is difficult because Asian alphabets are more complex and not all Web development tools are capable of handling them.
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Case - 06
As a result, many companies choose to tackle Asian markets last. In addition, great care must be taken to choose icons that are relevant to a country. For example, the use of mailboxes and shopping carts may not be familiar to global consumers. Users in European countries dont take their mail from large, tubular receptacles, nor do many of them shop in stores large enough for wheeled carts. One of the most important and most difficult decisions in a companys global Web strategy is whether Web content should be generated and updated centrally or locally. Companies that expand through international partnerships may be tempted to hand control to the new international entities to take the greatest advantage of the expertise of employees in the new markets. But turning over too much control can lead to a muddle of country-specific sites with no consistency and a scattered corporate message. A mixed model of control may be best.
Prof. Hemant Thakar
Case - 06
Decisions about corporate identity, brand representation, and the technology used for the Web sites are made centrally to minimize Web development and support effort as well as to present a consistent corporate and brand message. But a local authority decides on content and services best tailored for given markets. Companies must also be aware that consumers outside the United States will access sites with different devices and modify their site design accordingly. In Europe, for example, closed-system iDTVs (interactive digital televisions) are becoming a popular way to access online content, with iDTVs projected to reach 80 million European households by 2005. Such devices have better resolution and more screen space than PC monitors U.S. consumers use to access the Internet. So users of iDTVs expect more ambitious graphics.
Prof. Hemant Thakar
Case - 06
A new group of software and service vendors has emerged to address Web globalization issues. The group includes companies such as Idiom, GlobalSight, and Uniscape.com. Their software can integrate with popular E-commerce and Web content management software from vendors such as Vignette, BroadVision, and Interwoven. The multilingual Web site management software can work especially well for global sites with central management.
On the Web, ultimately the only way to fight global companies is to be a global company. Successful firms operate with a portfolio of storefronts designed for each target market, with shared sourcing and infrastructure to support the network of stores, and with local marketing and business development teams to take advantage of local opportunities. Service providers continue to emerge to solve the cross-border logistics, payments, and customer service needs of these pan-European retailers.
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Outline the major steps in taking a U.S. Web site global. What is meant by central control versus local control of the Web site content? Which approach is better? Why? Critical Thinking Questions Which approach is better to gain a deep understanding of a country, its people, and the marketform a partnership with a company in the country or hire a software vendor familiar with Web globalization issues. Why? Your company has just completed globalization of its Web site to address the needs of customers in seven countries in Latin America. How would you go about evaluating the success of this effort?
Prof. Hemant Thakar

Sources: Adapted from Matt Hicks and Anne Chen, Dress for Global Success,
PC Week, April 3, 2000, pp. 6573; Anne Chen and Matt Hicks, Going Global? Avoid Cultural Clashes, PC Week, April 3, 2000, p. 6; Idiom Web, E-business Globalization page for global consulting at *http://www.idiominc.com accessed on May 20, 2000; European Online Retail Will Soar to 175 Billion Euros by 2005, press release, March 28, 2000, accessed at *http://www.forrester.com/ER/Press/Release/0,1769,266,FF.html; Clay Shirky, Go Global or Bust, Business 2.0, March 2000, accessed at *http://www.business2.com/articles/2000/03/content/break_3.html on May 20, 2000.
Prof. Hemant Thakar
Case - 07
Reapplication of General Electric Web Site
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Case - 07
General Electric (GE) is a diversified services, technology, and manufacturing company that operates in more than 100 countries and employs nearly 340,000 people worldwide, including 197,000 in the United States. GE Aircraft Engines (GEAE) is a division of GE, with annual sales in excess of $10 billion and 33,000 employees worldwide. It is the world's largest producer of large and small jet engines for commercial and military aircraft. GEAE also supplies engines for boats and provides aviation services. Throughout the 1990s, more than 50% of the world's large commercial jet engine orders were awarded to GE or CFM International, a joint company of GE and Snecma of France. W. James McNerney is the president and chief executive officer (CEO) of GEAE, which is headquartered in Cincinnati.
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Case - 07
Under the leadership of its highly respected chairman and CEO, John F. Welch, GE has earned a number of awards as the Worlds Most Admired Company (by Fortune magazine in 1998 and 1999) and the Worlds Most Respected Company (by the Financial Times in 1998 and 1999). However, in May 1999, it became clear that a key E-commerce project was floundering. To fix the situation, GEAE CEO Jim McNerney recruited a former Green Beret, John Rosenfeld, to take on part of the failed project, a customer Web center for the complex spare-parts business, and build it at lightning speed. The mandate was to be operational within seven months.
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Case - 07
This challenging goal was met, and today GEAEs Customer Web Center has the following functions: Spare-parts order management, Checks parts availability, finds alternative parts, places orders, builds automated parts lists (for parts usually ordered together), checks status of orders, and tracks orders via UPS and FedEx. Component repair and engine overhaul. Checks status of repair and overhaul work in shops around the world and accesses initial findings reports and cost estimates, including corresponding high-resolution digital photos of damaged parts. Spare-parts warranty. Submits warranty claims, reviews status of claims, and generates reports.
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Case - 07
Technical publications. Finds information from illustrated parts catalogs, engine service manuals, standard practice manuals, fleet highlights, and service bulletins. Online wizards. Will determine return on investment for engine upgrades (e.g., part X will save Y dollars in maintenance over time frame Z). Online video training. Will help users brush up on how to remove, install, or service a part. Assume you are the manager of a critical E-commerce project in the Consumer Appliances division of GE that must be completed as soon as possible. You have made a visit to Cincinnati to meet with Jim McNerney and John Rosenfeld to see if you can reapply the GEAE Web site for Consumer Appliances.
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What questions will you ask about the technical infrastructure and capabilities of the Web site to assess whether it will meet the needs of the Consumer Appliances division? To what degree will you involve the customers of the Consumer Appliances division in the assessment of the ability of the GEAE Web site to meet their needs? Critical Thinking Questions
What similarities are there between the spare-parts business for aircraft engines and consumer appliances? What are some of the differences?
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How might you assess whether the GEAE Web site has the functionality needed to support the Consumer Appliances division? Sources: adapted from Marcia Stepanek, How to Jump-Start Your E-Strategy,
Business Week, June 5, 2000, pp. 96100; The $11 Billion Web Start-up, Computer World, May 1, 2000, pp. 5660; GE Fact Sheet, General Electric Web site, *http://www.ge.com/factsheet.html, accessed May 26, 2000.
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CHAPTER 13 ENTERPRISE E-BUSINESS AND E-COMMERCE SYSTEMS-I
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Chapter 13
Enterprise e-Business and E-commerce Systems- I:

Direct business model Supply chain management (SCM)
Challenges of SCM
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Supply Chain Management
A cross-functional inter-enterprise system that uses IT to help, support & manage the links between some of a companys key business processes and its suppliers, customers, & business partners. Goal is to create a fast, efficient, & low-cost network of business relationships. Electronic data interchange Exchanging business transaction documents over the Internet & other networks between supply chain trading partners
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The Role of SCM
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Benefits and Challenges Provide faster, more accurate order processing, Reductions in inventory levels, Quicker time to reach market place, Lower transaction and materials costs, & Strategic relationships with suppliers
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Problem causes Lack of proper demand planning knowledge, tools, and guidelines Inaccurate or overoptimistic demand forecasts Inaccurate production, inventory, and other business data Lack of adequate collaboration
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Trends
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CHAPTER 14 ENTERPRISE E-BUSINESS AND E-COMMERCE SYSTEMS-II
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Chapter 14
Enterprise e-Business and E-commerce Systems- II:

Enterprise Resource Planning (ERP) & its Architecture Challenges of ERP
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Enterprise Resource Planning
Serves as a cross-functional enterprise backbone that integrates & automates many internal business processes and information systems Helps companies gain the efficiency, agility, & responsiveness needed to succeed today
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Gives a company an integrated real-time view of its core business processes ERP software suites typically consist of integrated modules of Manufacturing Supply chain & Distribution Customer relationship management Finance / Accounting Human Resource Management
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Benefits and Challenges Quality and efficiency
Helps improve the quality and efficiency of customer service, production, & distribution by creating a framework for integrating and improving internal business processes
Decreased Costs
Reductions in transaction processing costs and hardware, software, and IT support staff
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Decision support Provides cross-functional information on business performance to assist managers in making better decisions Enterprise agility Results in more flexible organizational responsibilities, and work roles
structures,
managerial
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Causes of ERP failures Under-estimating the complexity of the planning, development, and training required
Failure to involve affected employees in the planning & development phases and change management programs
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The costs and risks of failure in implementing a new ERP system are substantial. Customization is problematic. Overcoming resistance to sharing sensitive departments can divert management attention. information between
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Trying to do too much, too fast Insufficient training Believing everything the software vendors and/or consultants say
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CHAPTER 15 ENTERPRISE E-BUSINESS AND E-COMMERCE SYSTEMS-III
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Chapter 15
Enterprise e-Business and E-commerce Systems- III:

Customer Relationship Management (CRM) Challenges of CRM
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Customer Relationship Management
Provides customer-facing employees with a single, complete view of every customer at every touch point and across all channels Provides the customer with a single, complete view of the company and its extended channels Integrates and automates many of the customer serving processes Creates an IT framework of Web-enabled software & databases that integrates these processes with the rest of the companys business operations Includes software modules that provide tools that enable a business & its employees to provide fast, convenient, dependable, consistent service.
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Major Application Components
Contact & Account Management
Helps capture and track relevant data about past and planned contacts with prospects & customers.
Sales Provides sales reps with software tools & company data needed to support & manage their sales activities. Helps optimize cross-selling & up-selling
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Marketing & Fulfillment

Helps accomplish direct marketing campaigns by automating tasks Helps capture & manage prospect & customer response data Helps in fulfillment by quickly scheduling sales contacts & providing appropriate information on products & services to them
Customer Service and Support

Provides software tools & real-time access to the common customer database Helps create, assign, & manage requests for service from customers Call center software Help desk software
Retention and Loyalty Programs Helps the company identify, reward, and market to their most loyal and profitable customers
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Marketing & Fulfillment

Helps accomplish direct marketing campaigns by automating tasks Helps capture & manage prospect & customer response data Helps in fulfillment by quickly scheduling sales contacts & providing appropriate information on products & services to them
Customer Service and Support

Provides software tools & real-time access to the common customer database Helps create, assign, & manage requests for service from customers Call center software Help desk software
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Three Phases of CRM
Acquire (new customers)
By doing a superior job of contact management, sales prospecting, selling, direct marketing, & fulfillment.
Enhance (customer satisfaction)
By supporting superior service from a responsive networked team of sales and service specialists.
Retain (your customers)
Help identify and reward your most loyal, profitable customers.
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Benefits and Challenges Quality and efficiency Decreased costs Decision support Enterprise agility Allows a business to identify its best customers Makes possible real-time customization & personalization of products & services based on customer wants, needs, buying habits, & life cycles Enables a company to provide a consistent customer service experience
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Failures Tools and workflows can be complex, especially for large businesses due to lack of understanding & preparation. Implementations are fragmentedisolated initiatives by individual departments to address their own needs Human response at all levels of the organization can affect the customer experience for good or ill. Even one unhappy customer can deliver a body blow to a business
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CHAPTER 16
OUTSOURCING
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Chapter 16
Outsourcing: Total cost of Ownership

Re-engineering Return on Investment
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Contents

What is Outsourcing Types of Outsourcing Shared Services
When to Outsource Lose of Control Business Requirements

Investment Appraisal How to Outsource (Best Practice) Tendering Managing Relationships
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What Is Outsourcing?
Outsourcing can be defined as the strategic use of outside resources to perform activities traditionally handled by internal staff and resources. Sometimes known also as facilities management, outsourcing is a strategy by which an organization contracts out major functions to specialized and efficient service providers, who become valued business partners.
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Types of Outsourcing
Tactical Outsourcing: Usually tied to a specific problem being experienced by an organisation and is often seen as a way of addressing this problem. Often these relationships are forged to: Generate immediate cost savings Eliminate the need for future investment Relieve the burden to staff Normally after tactically outsourcing there is a corporate restructuring
Strategic Outsourcing: Usually follow on from tactical whereby you are trying to get more out of the relationship from outsourcing through intangible benefits. Contract values are higher and the relationship is closer than in tactical. The thought process is one of long term.
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Reasons To Outsource - Strategic

Cost Saving Focus on Core Business Reduce and control operating costs Make capital funds available Operational Expertise Tax Benefits Shared risks Access to world class capabilities
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Reasons To Outsource - Tactical

Resources not available internally Improve company focus Function difficult to manage or out of control
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What Is Shared Services

This is a completely different proposition from outsourcing. Though it is often confused with outsourcing in the decision making process. Shared Services is about:

Client focused approach Clear value proposition/competitive advantage Defined products Internal marketing/product managers Internal account managers Service-minded people
No one organisation controls the actions of the Shared Services Centre
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Loss of control
Is it perception or reality? Both! It is in part fear of not understanding what will happen Wanting to know exactly how it will be done Wanting to ensure that the process does not change Not understanding the outsourcing proposition
Why does it happen? Business requirements ill defined Objective of outsourcing not documented or understood Haste in the decision making process Cultural clash Not handing over the process
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Outsourcing Your Finance Function
What constitutes your finance function? Accounts Payroll VAT Preparation of management, P&L accounts and reports Financial direction Invoice processing Debt management Treasury Preparation of end of year accounts End of year audit Budgeting
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How Much Does Your Finance Function Cost?
The costs of your finance function are driven by: Preparation of management, P&L accounts and reports, Salaries Training IT support Stationery Communications (postage, phones) External services (audit, consultants) Fees (annual filing)
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What Is Required?
Need to define the primary objective of the exercise. For example is it:

Cost savings? Expertise? Quality? Other?
Need to articulate the problem with the current service whether internal or external? What is the current cost?
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Investment Appraisal
Why is this important?
Baseline Cost
Current costs
Return on Investment Net Present Value Internal Rate of Return Payback Period Without considering these you are not going to make an informed decision to do this you need to know your baseline cost
Theoretical reduction
Practical reduction Practical baseline
Theoretical baseline Constraints In-house Improvement
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Current Costs
Cost Of Outsourcing
Direct Costs

Staff costs and benefits Direct costs associated with the process Ongoing investment costs
One off costs Outsourcers fees for transition Redundancy costs, both staff and infrastructure Contract termination costs Time Investment in researching options Management of transition Ongoing relationship management Annual costs Inflationary costs Increase in volume Outside of contract items
Indirect Costs

Staff costs and benefits System costs and maintenance Overheads The question on indirect cost is how much can it be reduced by outsourcing or will it just be reallocated?
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How To Outsource
Holistic approach - ensure that you have a multi disciplinary approach to the feasibility review Base line costing - define the base line costs accurately so you are able to measure the success of your implementation Management commitment - obtain senior line management commitment before we even think about starting implementation
Implementation - standardise with pragmatic reengineering and consolidate first - it is then easier to radically reengineer
Best practices - adopt best internal practice for consolidation, and then global best practices for reengineering Customer focus - implement a customer focused culture - using teams, performance measurement and service level agreements Leadership - appoint leaders with entrepreneurial flair who will run sections like a business, not a staff function
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Managing risk
The Process During Outsourcing
Phase I - feasibility
define the areas develop the business case high level implementation plan
Phase II - design
revise organisation define processes define performance measurements systems/information requirements operating procedures location analysis pilots and migration schedule
Phase III implement

work with staff build additional IT infrastructure train staff service level agreements staged review points for assessment
Phase IV optimise
performance evaluation continuous improvement update processes and systems
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Outsourcing Vendor Selection

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Commitment to quality Price References/reputation Flexible contract terms Scope of resources
Additional value-added capability Cultural match Existing relationship Location Other
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Location of Vendor
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Managing Relationships

So you just outsourced your... what now? There needs to be a channel for communication Needs to be regular meetings to discuss: issues, performance, changes to processes and additional items to be included Monitoring and reporting on Service Level Agreements Need to approach the relationship as allies, define the mechanism for escalating a problem and for conflict resolution
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Why Does Outsourcing Appear To Fail
Change of management that have no experience or understanding of outsourcing Management not being honest to the outsourcer about internal issues Responsibilities of management in relation to the outsourcing not understood Selection of wrong offshore outsourcing vendor Expectations that all other issues related to the department, process or function that has been outsourced will disappear Working with the outsourcer as a supplier Not taking the time to understand each others culture Relationship is not managed Political or other instability in outsourced country
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Summary

Understand why you want to outsource Be prepared for some loss of control Make sure that you know your baseline cost Understand how to the outsourcing transition process works and manage the risk of transition! Outline your primary objective and articulate current problems Pick your vendor carefully! Once up and running: communicate and manage conflict Build an in-house management team to monitor the project to completion Be alert things can go wrong Be ready for the point of no-return Make sure your enjoy the benefits!
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Case - 08
Starting a Procurement Business
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Case - 08
As discussed in the E-Commerce box, companies are starting partnerships to form Internet exchanges. Although some exchanges are general purpose, most are oriented towards the procurement function of transaction processing. In supporting these exchanges, businesses hope to save significant amounts of time and money in purchasing the parts, supplies, and services needed for these companies to manufacture their products ranging from cars to agricultural products. In addition to companies forming these strategic alliances, others are developing procurement businesses and Internet exchanges for the general market. One example of this move is the alliance of Chase Manhattan Bank and Deloitte Consulting.
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Case - 08
In early 2000, Chase Manhattan Bank and Deloitte Consulting decided to form a new company. The overall objective of the new firm is to offer Internet-based procurement services to larger, Fortune 1,000 companies. Chase and Deloitte hope to make a profit from the new company and also save the companies that participate money. On average, Chase and Deloitte forecast that each company participating in the new Internet procurement system should save from $200 million to $350 million annually. The cost savings are expected to come from combining the purchasing needs of all participating companies to obtain better volume discounts. The new Internet procurement firm, however, is still in the planning stage. The name of the new firm, the technology to be used, and who will head the new company has not been determined.
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Will this new Internet procurement firm be attractive to the average Fortune 1,000 company? Do you think that other companies will also try to start Internet procurement companies? Critical Thinking Questions
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Assume that you are the manager of a Fortune 1,000 manufacturing company. Discuss the advantages and disadvantages of this approach to procurement. Would you be willing to sign a long-term contract to be a part of this firm? Assume that several Fortune 1,000 manufacturing companies are considering forming a strategic partnership to form an Internet exchange. Compare and contrast this approach with the type of Internet procurement firm discussed in this case.
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Sources: Adapted from Craig Stedman, Chase, Deloitte Start Procurement
Firm, Computerworld, February 14, 2000, p. 20; Local Government Equals Big Business, Computing, March 2, 2000, p. 4; and Clinton Wilder et al., Sabre to Open Internet Marketplace, InformationWeek, March 6, 2000.
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Case - 09
Fedex And SAP Team Up To Provide Integrated Logistics Solution
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Case - 09
Federal Express and SAP are working together to provide software that integrates FedExs shipment tracking capability and logistics with SAPs R/3 ERP software. A module of the software runs on R/3 and automatically generates FedEx shipping documents and tracking numbers for products ordered using SAPs R/3 software. When the products are delivered by FedEx, transactions are sent from FedEx to update data in R/3. The goal is to make R/3 work like a standard business process and automatically trigger other processes, such as proof of delivery and payment. The applications are designed to give the 13,000 enterprises deployed on SAP R/3 real-time package life-cycle information. The SAP/FedEx applications, dubbed The Product, dovetail with SAPs development of a suite of supply-chain products. We think this is a turning point in the industry, said Paul Wahl, chief executive officer of SAP AG.
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Case - 09
Wahl says that applications for spotting bottlenecks, reacting to customer orders, and linking transportation with production schedules are among the five top priorities for SAP. Others include electronic commerce buying tools and systems for meshing Internet transactions with financial systems. Most of our customers are in the process of integrating an enterprise system, says Laurie Tucker, senior vice president of logistics, electronic commerce, and catalog, a $500 million FedEx unit. They are looking for ways to improve return on investment and are interested in any business process that can be integrated, as opposed to being separately invoked. Our most innovative customers are pushing us and their other suppliers for that integration. The functionality provided by the FedEx/SAP alliance is no small matter. The two companies are talking about systems that enable businesses to track components used in manufacturing processes from raw material to market. However, it is also in line with the rest of the industry.
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Case - 09
United Parcel Service of America says it is in pilot tests with a half-dozen corporate customers for similar functionality, and IBM Software recently rolled out a suite of Java applications for freight carrier J.B. Hunt. Fundamentally, SAP plans to extend its architecture to support multiplecarrier systems, Wahl said. He added that supply-chain planning is the largest single development effort at the billion-dollar software powerhouse, commanding the time of more than 250 engineers.
This type of software is an important addition to enterprise resource planning software. There is a real need to automate the logistics of delivering goods. Despite the advances in Internet connections, those companies dealing in tangible products still must rely on the same old business processes to physically deliver the products.
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What sort of companies would be most interested in this integrated solution? Why? Can you identify other important additions to enterprise resource planning software that would require similar partnering?
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Case - 10
Core Business Activities For Enterprise Resource Planning
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Case - 10
When powerful IBM and software giant Microsoft both use another companys software to run their basic transaction processing system, the software must be good. In both cases, the companies are using a new type of software called Enterprise Resource Planning (ERP) software. ERP software runs all the major transaction processing activities for a business. The integrated nature of ERP allows a company to coordinate all core business activities using one powerful software package. From an order taken through the final delivery of the product or service, ERP software supports all critical activities among them: order processing, inventory control, production scheduling, supplier coordination, material flow during manufacturing, product delivery, and managerial decision making. Orders are recorded and processed using ERP. Inventory control is performed using ERP. Scheduling production is another function of ERP software.
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Case - 10
Coordinating suppliers can also be achieved. ERP excels at following the flow of items as they are manufactured and sent to customers. As a result, companies can give customers firm commitments for product delivery and service, while reducing costs. ERP also provides managers with a wealth of information about how transactions are being processed and basic business operations. The growth in ERP systems has been phenomenal. In addition to IBM and Microsoft, many other large companies are installing ERP systems. Monsanto spent more than two years implementing an ERP system. Kodak is relying on ERP to help it compete in the tough photo and camera market. Procter & Gamble is also installing ERP worldwide. Chevron estimates that ERP could save it 25 percent annually.
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Case - 10
SAP was one of the first companies to produce and market ERP software. Founded in 1972, by five former employees of IBM, SAP America is the market leader with its R/3 software. When R/3 was first released in 1993, 1,000 R/3 packages were sold. In a few short years, sales jumped to about 9,000 packages. Sales growth has averaged over 35 percent annually. SAP, however, is not alone in the ERP market. Other companies are starting to market and sell their own versions of this popular software. Oracle, for example, has started selling ERP software to work with its large and popular database applications. PeopleSoft is another ERP software vendor. Starting with a human resource planning package, PeopleSoft now sells ERP packages to large companies. Baan is yet another ERP provider.
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How does using an ERP system differ from using a conglomeration of transaction processing systems from a variety of vendors? Pick a company and discuss how an ERP could process its transactions. What are the benefits and disadvantages of ERP? Sources: Adapted from Michael Martin, An Electronics Firm Will Save Big
Money Using Enterprise Resource Planning, Fortune, February 2, 1998, p. 149; Randy Weston, ERP Vendors Going with the Flow, Computerworld, January 26, 1998, p. 53; Michael Mecham, SAP Targets Aerospace for R/3 Applications, Aviation Week and Space Technology, January 10, 1998, p. 61.
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CHAPTER 17 DECISION SUPPORT SYSTEM - I
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Chapter 17
Decision Support System - I:

Group Decision Support System Decision Structure Decision Support system versus management reporting
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Concepts of Data Warehousing
What is a data warehouse? How did data warehousing came in to existence? What purpose does it solve?
DW
DW
Data ware housing
DW
DW
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What Is A Data Warehouse?

Consider the multi location banking system In order to manage millions of accounts, the bank has to maintain loads of data. For implementing any new business idea the bank has to analyze the data at different locations and base its decision on its data and hence the data should be in a format that allows the business analysts to have a clarity of the account holders and their transactions.
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Data warehouse : Storage area for processed and integrated data across different sources. (i.e. operational data and external data) A data warehouse allows its users to extract required data, for business analysis and strategic decision making.
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Conceptually A Data warehouse is a home for second hand data that originates in either other corporate application or some data source external to your company.
Formally A data warehouse is a stand alone repository of information, integrated from several, possibly heterogeneous operational databases
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Evolution of Data Warehouse
Before1970s
1970s
1980s
1990s
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Data Warehousing Features
A process, not a product The process of creating a well designed information management solution which enables information and analytical processing without the barrier of geography and organization
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Systems Maturity
Decision Support Systems (BI, BA, PM)
Enterprise Resource Planning Customer Support, Call center Inventory Operations Order Processing
Cross Office
Sales Support Financial Systems

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Front Office
Back Office
What Is A DSS?
Decision Support System (DSS) are interactive computer based systems intended to help decision makers utilize data and models to identify and solve problems and make decisions. Data warehouse is the foundation of DSS process. It is a strategy and a process for staging corporate data.
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Managers and Decision Making
Management is a process by which organizational goals are achieved through the use of resources (people, money, energy, materials, space, time). Decision refers to a choice that individuals and group make among two or more alternatives.
Decision making is a systematic process composed of three major phases: intelligence, design and choice (Simon 1977) Implementation phase was added later.
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Administrative Model (Herbert Simon Model)
Descriptive in that it describes how decisions are actually made. means that people have limits, or boundaries, on how rational they can be. Assumes that decision makers operate with limited (or "bounded") rationality - : a manager must settle for limited or bounded rationality. In other words, limitations of information, time and certainty limit rationality, even if a manager tries earnestly to be completely rational. Since managers can not be completely rational in practice. They sometimes allow their dislike of risk to interfere with the desire to reach the best solution under circumstances. Assumes that decision makers identify a limited number of decision making criteria, that they examine a limited range of alternatives and that they do not possess all the information needed to make a decision. Herbert Simon called this satisfying that is, picking a course of action that is satisfactory or good enough under circumstances.
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Administrative Model (Herbert Simon Model)
Decision making proceeds sequentially: alternatives are examined one at a time and the first satisfactory alternative that is found is selected. Decision maker uses satisfying, selecting the first alternative that meet the minimal criteria. Satisfying: means that decision makers choose the first solution alternative that satisfies minimal decision criteria. Rather that pursuing all alternative to identify the single solution that will maximize economic returns, managers will opt for the first solution that appears to solve the problem, even if better solutions are presumed to exist.
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Administrative Model: Phases

Intelligence Phase
Identify the problem Thoroughly understand the problem collect information Understand the circumstances in which it arose
Design Phase
Identify and evaluate as many as possible potential solutions Discard unsatisfactory solutions to reduce the no. of alternatives
Choice Phase
The actual work of finding the best algorithm, from the given set of algorithm and decreasing it over time along a given schedule. After deciding the algorithm that is the most suitable for the programming we move to the next step which is the implementation phase
Implementation Phase Evaluation Phase

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The real implementation of the solution is done Implement the solution to the given problem by using the algorithm according to the given problem.
Evaluate effectiveness or success of decision 538
Decision Making Process
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Why Managers Need IT Support

The number of alternatives to be considered constantly increases. Decisions must be made under time pressure. Decisions are more complex Decision makers can be in different locations and so is the information.
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A Framework For Computerized Decision Analysis
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Problem Structure
The first dimension deals with the problem structure, where does the decision making processes fall along the continuum ranging from highly structured to highly unstructured decisions. Structured Unstructured Semistructured
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The Nature of Decisions

The second dimension of decision support deals with the nature of decisions Operational control Management control Strategic planning
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BI, Multidimensional Data Analysis, Data Mining, and DSSs

Business Intelligence (BI) Two types of BI Systems: Those that provide data analysis tools

Multidimensional data analysis (or online analytical processing) Data mining Decision support systems Dashboards
Those that provide information in structured format
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How Business Intelligence Works
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Multidimensional Data Analysis

Provides users with a look at what is happening or what has happened. Allows users to analyze data in such a way that they can quickly answer business questions.
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Data Mining
Searching for valuable business information in a large database or data warehouse. Data mining performs two basic operations: Predicting trends and behaviors Identifying previously unknown patterns and relationships
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Decision Support Systems (DSS)

Decision support systems DSS capabilities Sensitivity analysis What-if analysis Goal-seeking analysis
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Group Decision Support Systems (GDSS)
Group decision support system (GDSS) is an interactive computer-based system that supports the process of finding solutions by a group of decision makers. Decision Room is a face-to-face setting for a group DSS, in which terminals are available to the participants.
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Organizational Decision Support System (ODSS)
Organizational Decision Support System (ODSS) is a DSS that focuses on an organizational task or activity involving a sequence of operations and decision makers.
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CHAPTER 18
DECISION SUPPORT SYSTEM - II
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Chapter 18
Decision Support System II Executive information Systems

Executive Support Systems Expert system Knowledge based Expert Systems
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Expert Systems

Expertise Expert systems (ESs)
Star Trek Voyagers Doctor: A 24th Century Expert System

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Expert Systems (continued)
The transfer of expertise from an expert to a computer and then to a user involves four activities: Knowledge acquisition Knowledge representation Knowledge inferencing Knowledge transfer
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The Components of Expert Systems

Knowledge base Inference engine User interface Blackboard Explanation subsystem
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Enterprise Systems: Concepts and Definitions
Executive information systems (EIS) Executive support systems (ESS) Enterprise information systems (EIS)
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Executive Information System (EIS)
A computer-based system that serves the information needs of top executives Provides rapid access to timely information and direct access to management reports Very user-friendly, supported by graphics Provides exceptions reporting and "drill-down" capabilities Easily connected to the Internet Drill down
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Executive Support System (ESS)

Comprehensive support system that goes beyond EIS to include Communications Office automation Analysis support Intelligence
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Enterprise Information System

Corporate-wide system Provides holistic information From a corporate view
Part of enterprise resource planning (ERP) systems For business intelligence Leading up to enterprise information portals management systems
and
knowledge
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Characteristics of EIS

Drill down Critical success Factors (CSF) Status access Analysis Exception reporting Colors and audio
Navigation of information Communication
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Knowledge Based Expert Systems
A knowledge based expert system that uses its knowledge about a specific, complex application area to act as an expert consultant. Provides answers to question in a very specific problem area. Must be able to explain reasoning process and conclusion to the user
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Components Knowledge base Software resources
Knowledge base Contains

Facts about a specific subject area Heuristics that express the reasoning procedures of an expert on the subject.
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Software Resources Contains an inference engine and other programs for refining knowledge and communicating
Inference engine processes the knowledge, and makes associations and inferences User interface programs, including an explanation program, allows communication with user
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KBES Model
User Control Mechanism
Knowledge Base
Inference Mechanism
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CHAPTER 19
DECISION SUPPORT SYSTEM - III
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Chapter 19
Decision Support System III

Artificial Intelligence Business Intelligence system-Introduction, Stages, Applications and Dash Boards
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Digital Dashboards
Dashboards: Provide rapid access to timely information. Provide direct access to management reports. Are very user friendly and supported by graphics.
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Sample Performance Dashboard
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Another Example of Dashboard
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A Bloomberg Terminal
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Management Cockpit
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Management Cockpit
A strategic management room that enables top-level decision makers to pilot their businesses better. The environment encourages more efficient management meetings and boosts team performance via effective communication. Key performance indicators and information relating to critical success factors are displayed graphically on the walls of the meeting room. External information can be easily imported to the room to allow competitive analysis.
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Virtual Reality
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Technology of Data Glove
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Virtual Reality Manipulation With Data Glove
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Driving Simulator
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Flight Simulator
External View
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Internal View
Virtual Reality (continued)
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Intelligent Systems

Intelligent systems Artificial intelligence (AI)
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Case - 11
Miller SQA Factory-Floor DSS Helps Manufacturer Deliver the Goods
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Case - 11
Miller SQA, a subsidiary of Herman Miller, Inc., is implementing a decision support system (DSS) at plants in Holland, Mich. and Rocklin, Calif. With DSS as part of its Quick Response Methods (QRM) program, Miller SQA looks to achieve quicker and more reliable customer response and to reduce the lead time from receipt of a customer order to production of the finished product to just two-days for a minimum of 25 percent of customer orders compared to five percent today. The company also expects to maintain its 100 percent on-time delivery performance, while achieving an expected 30 percent sales growth rate each year. Additionally, Miller SQA is looking to cut costs by significantly reducing its inventory levels and also making more effective use of floor space. Our customers want convenient buying, fast delivery, durability, just the right amount of options and no hassles selecting office furniture, said Doug Bonzelaar, Application Development Manager at Miller SQA.
Prof. Hemant Thakar
Case - 11
The Quick Response Method initiative is designed to support these customer goals. Miller SQA is implementing a DSS to provide decision making support for production planners who work in a fast-paced environment and must react quickly to customer changes, schedule changes, and process variation. The system also will improve allocation of raw materials by providing an accurate schedule and ensuring that the delivery of parts is coordinated with production schedules.
The DSS will help us improve cycle times and reduce finished goods inventory through its detailed scheduling of sales order line items. We expect to eliminate our daily fire drills of resolving issues where we find a high-priority component is on schedule, only to learn a companion piece at another work center has a completely different schedule, said Bonzelaar.
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Case - 11
With Microsoft Windows clients, the DSS software graphically displays the status of each job to Miller SQA personnel, supporting workers on the shop floor, as well as management, purchasing and other departments. Shop floor workers also will use the DSS to determine what jobs to assemble, to input quantities produced, to view special instructions, to report status exceptions, and to post completed jobs. The software displays problem areas as they occur and notifies the responsible department. At the heart of the DSS is Graphical Process Modeling. This component fuels Miller SQAs Bill of Process (BOP), a database that defines all the resources and activities necessary to produce goods and services. The BOP defines manufacturing operations, such as routings and resource needs, material requirements, and other support items such as specifications, approvals, tools and programs. It also communicates to support centers regarding raw material procurement, engineering, and transportation activities..
Prof. Hemant Thakar
Case - 11
The software translates plans or schedules into the details necessary for execution, including on-line dispatch lists with up-to-the-minute requirements for parts, people, machines, product specifications, and support activities. Because the system constantly runs and reevaluates actual status versus projected status, the software identifies variances and their impact as they occur. The software answers the questions, Can I fulfill the customer's demand when he wants it? and later, as the order is in process, Do I need to make any schedule adjustments to meet the customer's need date? Importantly, the system tells the end user what to do next, not what has already happened. It allows schedulers to perform their real jobs plan for future activities and not have to expedite.
Prof. Hemant Thakar
How do managers use a decision support system? How is it different from an MIS? How must the knowledge, experience, and insights of a manager be coupled with the outputs from a DSS to yield good decision making?
Sources: adapted from About Synquest found at the SynQuest Web site at:
*http://www.synquest.com accessed May 27, 1998 and Craig Stedman, Planning Systems Hit Shop Flo
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CHAPTER 20 & 21
SECURITY AND ETHICAL CHALLENGES
Prof. Hemant Thakar
Chapter 20 & 21
Security and Ethical Challenges - I:
Disaster Recovery
Security and Ethical Challenges - II: Computer Crime Encryption

Software privacy
Prof. Hemant Thakar
Ethical Responsibility
The use of IT presents major security challenges, creates serious ethical questions, and affects society in significant ways. IT raises ethical issues in the areas of.. Crime Privacy Individuality Employment Health Working conditions But, IT has had beneficial results as well. So as managers, it is our responsibility to minimize the detrimental effects and optimize the beneficial effects.
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Ethical Responsibility (continued)
Business Ethics Basic categories of ethical issues

Employee privacy Security of company records Workplace safety
Prof. Hemant Thakar
Theories of corporate social responsibility Stockholder theory
Managers are agents of the stockholders. Their only ethical responsibility is to increase profit without violating the law or engaging in fraud
Social Contract Theory

Companies have ethical responsibilities to all members of society, which allow corporations to exist based on a social contract First condition companies must enhance economic satisfaction of consumers and employees Second condition avoid fraudulent practices, show respect for employees as human beings, and avoid practices that systematically worsen the position of any group in society
Prof. Hemant Thakar
Theories of corporate social responsibility (continued) Stakeholder theory
Managers have an ethical responsibility to manage a firm for the benefit of all its stakeholders. Stockholders Employees Customers Suppliers Local community Sometimes stakeholders are considered to include Competitors Government agencies and special interest groups Future generations
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Technology Ethics Four Principles
Proportionality Good must outweigh any harm or risk Must be no alternative that achieves the same or comparable benefits with less harm or risk Informed consent Those affected should understand and accept the risks Justice Benefits and burdens should be distributed fairly Minimized Risk Even if judged acceptable by the other three guidelines, the technology must be implemented so as to avoid all unnecessary risk
Prof. Hemant Thakar

Ethical Guidelines
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Ethical guidelines (continued) Responsible end users

Act with integrity Increase their professional competence Set high standards of personal performance Accept responsibility for their work Advance the health, privacy, and general welfare of the public
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Computer Crime
Association of Information Technology Professionals (AITP) definition includes The unauthorized use, access, modification, and destruction of hardware, software, data, or network resources Unauthorized release of information Unauthorized copying of software Denying an end user his/her own hardware, software, data, or network resources Using or conspiring to use computer or network resources to illegally obtain info or tangible property
Prof. Hemant Thakar
Computer Crime (continued)
Hacking The obsessive use of computers, or the unauthorized access and use of networked computer systems Cyber Theft Involves unauthorized network entry and the fraudulent alteration of computer databases Unauthorized use at work Also called time and resource theft May range from doing private consulting or personal finances, to playing video games, to unauthorized use of the Internet on company networks
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Software Piracy Unauthorized copying of software
Software is intellectual property protected by copyright law and user licensing agreements
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Piracy of intellectual property Other forms of intellectual property covered by copyright laws

Music Videos Images Articles Books Other written works
Computer viruses and worms Virus

A program that cannot work without being inserted into another program A distinct program that can run unaided
Worm
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Privacy Issues
IT makes it technically and economically feasible to collect, store, integrate, interchange, and retrieve data and information quickly and easily. Benefit increases efficiency and effectiveness But, may also have a negative effect on individuals right to privacy Examples of important privacy issues Accessing private e-mail and computer records & sharing information about individuals gained from their visits to websites and newsgroups Always knowing where a person is via mobile and paging services Using customer information obtained from many sources to market additional business services Collecting personal information to build individual customer profiles
Prof. Hemant Thakar
Privacy Issues (continued)
Privacy on the Internet Users of the Internet are highly visible and open to violations of privacy Unsecured with no real rules Cookies capture information about you every time you visit a site That information may be sold to third parties Protect your privacy by

Encrypting your messages Post to newsgroups through anonymous remailers Ask your ISP not to sell your information to mailing list providers and other marketers Decline to reveal personal data and interests online
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Computer matching Computer profiling and matching personal data to that profile
Mistakes can be a major problem
Privacy laws Attempt to enforce the privacy of computer-based files and communications Electronic Communications Privacy Act Computer Fraud and Abuse Act
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Computer Libel and Censorship The opposite side of the privacy debate

Right to know (freedom of information) Right to express opinions (freedom of speech) Right to publish those opinions (freedom of the press) Spamming Flaming
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Other Challenges
Employment New jobs have been created and productivity has increased, yet there has been a significant reduction in some types of jobs as a result of IT. Computer Monitoring Concerns workplace privacy

Monitors individuals, not just work

Is done continually. May be seen as violating workers privacy & personal freedom Workers may not know that they are being monitored or how the information is being used May increase workers stress level May rob workers of the dignity of their work
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Other Challenges (continued)
Working Conditions IT has eliminated many monotonous, obnoxious tasks, but has created others Individuality Computer-based systems criticized as impersonal systems that dehumanize and depersonalize activities Regimentation
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Health Issues

Job stress Muscle damage Eye strain
Radiation exposure Accidents Some solutions Ergonomics (human factors engineering)
Goal is to design healthy work environments
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Health Issues (continued)
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Societal Solutions
Beneficial effects on society Solve human and social problems

Medical diagnosis Computer-assisted instruction Governmental program planning Environmental quality control Law enforcement Crime control Job placement
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Tools of Security Management
Goal Minimize errors, fraud, and losses in the e-business systems that interconnect businesses with their customers, suppliers, and other stakeholders
Prof. Hemant Thakar
Internetworked Security Defenses
Encryption Passwords, messages, files, and other data is transmitted in scrambled form and unscrambled for authorized users Involves using special mathematical algorithms to transform digital data in scrambled code Most widely used method uses a pair of public and private keys unique to each individual
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Internetworked Security Defenses (continued)
Firewalls Serves as a gatekeeper system that protects a companys intranets and other computer networks from intrusion

Provides a filter and safe transfer point Screens all network traffic for proper passwords or other security codes
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Denial of Service Defenses These assaults depend on three layers of networked computer systems

Victims website Victims ISP Sites of zombie or slave computers
Defensive measures and security precautions must be taken at all three levels
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E-mail Monitoring Spot checks just arent good enough anymore. The tide is turning toward systematic monitoring of corporate e-mail traffic using content-monitoring software that scans for troublesome words that might compromise corporate security.
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Virus Defenses Protection may accomplished through

Centralized distribution and updating of antivirus software Outsourcing the virus protection responsibility to telecommunications or security management companies
ISPs
or
to
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Other Security Measures
Security codes Multilevel password system

Log onto the computer system Gain access into the system Access individual files
Backup Files Duplicate files of data or programs File retention measures Sometimes several generations of files are kept for control purposes
Prof. Hemant Thakar
Other Security Measures (continued)
Security Monitors Programs that monitor the use of computer systems and networks and protect them from unauthorized use, fraud, and destruction Biometric Security Measure physical traits that make each individual unique

Voice Fingerprints Hand geometry Signature dynamics Keystroke analysis Retina scanning Face recognition and Genetic pattern analysis
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Computer Failure Controls Preventive maintenance of hardware and management of software updates Backup computer system Carefully scheduled hardware or software changes Highly trained data center personnel
Fault Tolerant Systems Computer systems that have redundant processors, peripherals, and software

Fail-over Fail-safe Fail-soft
Prof. Hemant Thakar
Disaster Recovery Disaster recovery plan

Which employees will participate and their duties What hardware, software, and facilities will be used Priority of applications that will be processed
Prof. Hemant Thakar
System Controls and Audits
Information System Controls Methods and devices that attempt to ensure the accuracy, validity, and propriety of information system activities Designed to monitor and maintain the quality and security of input, processing, and storage activities Auditing Business Systems Review and evaluate whether proper and adequate security measures and management policies have been developed and implemented Testing the integrity of an applications audit trail
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Case - 12
Human Resources at the Bank of Montreal
Prof. Hemant Thakar
Case - 12
The human resources function for most firms involves the complete employment life cycle from hiring employees to their retirement or dismissal. Interviewing potential employees, making employment decisions, scheduling jobs, managing employee benefits, overseeing compensation plans, and installing employee certification programs are just a few functions that the human resources MIS must perform. Information systems are often used to increase efficiencies and realize new opportunities. Like other firms, the Bank of Montreal had the option to develop the human resource information system internally or hire an outside company to develop the necessary software and systems. Internal development offers the option of more control and getting exactly what is needed, although this approach can be more expensive. In addition, there are a number of excellent software packages that can be purchased or leased. UltilPro, for example, is a human resources MIS that can run in a Windows environment. This type of software can cost from $50,000 to $1 million.
Prof. Hemant Thakar
Case - 12
Another alternative for companies such as the Bank of Montreal is to outsource all or part of the human resources MIS. In addition to having human resources software developed by an outside company, it is possible to have the complete human resources function performed externally by an outsourcing company. With new technology and increasingly complex regulations, many companies are now starting to outsource most or all of their human resources activities.
In addition to the increasing complexity and the many options of acquiring an effective human resources MIS, the Bank of Montreal was also considering a major merger with the Royal Bank of Canada. The merger, if successful, would result in a company with more than $300 billion in managed assets. The merger would not only have a dramatic impact on the economy of Canada but would also result in changes in all functional areas, including human resources.
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Case - 12
One of the biggest needs of the human resources MIS was to develop a compensation and certification system for information systems personnel. The special needs of the information systems department and a tight job market can often lead to conflicts between the human resources department and the information systems department that is often given the responsibility of developing the human resources MIS. The typical IS department is changing rapidly. It has been estimated that 45% of all IS departments will restructure the human resources function and 40% will redefine salary and compensation plans in the near future. As a result, the Bank of Montreal decided to scrap its old human resources MIS and to develop a new one. Mary Lou Hukezalie, director of Human Resources at the Bank of Montreal, realized the need for a system that could change with the changing needs of the IS department.
Prof. Hemant Thakar
Case - 12
The results are promising for the new compensation and certification system. In addition to improving efficiency and flexibility, the approach used by Hukezalie also improved the relationship between the human resources and information systems department.
Prof. Hemant Thakar
What are the options in acquiring a human resources MIS. Describe the problems and complexities faced by the Bank of Montreal. If you were the director of human resources at the Bank of Montreal, what would be your highest priorities in developing a new system?
Sources: Tim Ouellette, Human Resources, IT Develop Stronger Link,

Computerworld, February 9, 1998, p. 20; Purvis, Andrew, The Royal and the Bank of Montreal Announce Megamerger, Time, February 2, 1998, p. 83; Waal, Peter, Size Over Substance, Canadian Business, February 13, 1998, p. 17.
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CHAPTER 22 SOFTWARE TESTING AND QUALITY ASSURANCE
Prof. Hemant Thakar
Chapter 22
Software Testing and Quality Assurance:

Transaction Quality Management Software Quality Assurance
Standards of SQA
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Objectives

Learn what is software quality assurance (SQA). Learn the major quality factors. Understand how reviews are conducted.
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Topics Covered

Quality concepts Software quality factors Software reviews The ISO 9001
Prof. Hemant Thakar
Software Quality Assurance (SQA)
SQA encompasses a quality management approach, effective software engineering technology (methods and tools), formal technical reviews that are applied throughout the software process, a multi-tiered testing strategy, control of software documentation and the changes made to it, a procedure to ensure compliance with software development standards (when applicable), and measurement and reporting mechanisms.
Prof. Hemant Thakar
Software Quality
Software quality: Conformance to explicitly stated requirements and standards Quality assurance: is the activity that leads to fitness of purpose. Quality product: is the one that does what the customer expects it to do. User satisfaction = compliant product + good quality +delivery within budget and schedule
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Quality Concepts
Quality control: a series of inspections, reviews, and tests to ensure a product meets the requirements placed upon it. Includes a feedback loop to the process that created the work product. Quality control activities may be fully automated, entirely manual, or a combination of automated tools and human interaction. Quality assurance: analysis, auditing and reporting activities. provide management with the data necessary to be informed about product quality,
Prof. Hemant Thakar
Software Quality Factors
Functionality, Usability, Reliability, Performance, and Supportability (FURPS) quality factors

Functionality: feature set, capabilities, generality of functions, and security Usability: human factors like consistency, and documentation Reliability: frequency and severity of failures, accuracy of outputs, mean time between failures, ability to recover, predictability Performance: processing speed, response time, resource consumption, throughput, and efficiency Supportability: extensibility, adaptability, maintainability, testability, compatibility, configurability
Prof. Hemant Thakar
Why SQA Activities Pay Off?

Cost To Find & Fix a Defect 100
60.00-100.00
Log Scale 10 1.50 3.00
10.00
0.75
1.00
Req. Design
Test Code
System Test
Field Use
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The Quality Movement
Total Quality Management (TQM) is a popular approach for management practice. TQM stresses continuous process improvement and can be applied to software development. Not much can be done to improve quality until a visible, repeatable, and measurable process is created.
Prof. Hemant Thakar
TQM
Refers to a system of continuous process improvement. - develop a process that is visible, repeatable, and measurable. This step examines intangibles that affect the process and works to optimize their impact on the process. This step concentrates on the user of the product. Examining the way the user applies the product. This step leads to improvement in the product itself and, potentially, to the process that created it. This is a business oriented step that looks for opportunity in related areas identified by observing the use of the product in the marketplace.
Prof. Hemant Thakar
Software Quality Assurance
The SQA group must look at software from the customer's perspective, as well as assessing its technical merits. The activities performed by the SQA group involve quality planning, oversight, record keeping, analysis and reporting.
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Software Quality Assurance (Cont.) SQA
Process Definition & Standards
Formal Technical Reviews
Analysis & Reporting Measurement
Test Planning & Review
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Software Quality Assurance (Cont.)
Beginning of the project Project manager will consider quality factors and decide which ones are important for the system Decide on what validation and verification activities will be carried out to check that the required quality factors are present in the product During the project Validation and verification of quality standards and procedures End of the project Expected quality achieved to what extent
Prof. Hemant Thakar
Software Reviews

Any work product (including documents) should be reviewed. Conducting timely reviews of all work products can often eliminate 80% of the defects before any testing is conducted. This message often needs to be carried to managers in the field, whose impatience to generate code sometimes makes them reluctant to spend time on reviews.
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What are Reviews and What Reviews are not?
Reviews are: A meeting conducted by technical people for technical people A technical assessment of a work product created during the software engineering process A software quality assurance mechanism Reviews are not: A project budget summary A scheduling assessment An overall progress report
Prof. Hemant Thakar
Formal Technical Reviews (FTR)
The objectives of FTR are: To uncover errors in functions, logic, or implementation for any representation of the software. To verify that the software under review meets its requirements. To ensure that the software has been represented according to predefined standards. To achieve software that is developed in a uniform manner. To make projects more manageable.
Prof. Hemant Thakar
Notes on Formal Technical Reviews

Review the product, not the producer Set an agenda and maintain it Take written notes Limit the number of participants and insist upon advance preparation The duration of the review meeting should be less than two hours. Develop a checklist for each product that is likely to be reviewed
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The Players
Review Leader Standards Bearer (SQA)
Producer
Maintenance Oracle Recorder User Rep Reviewer
Prof. Hemant Thakar
How an FTR is Performed
Producer informs the project leader that the product is complete and that a review is required The project leader forms a review team and appoints a review leader The review leader evaluate the product for readiness, generates copies of the product material, distributes to the reviewers, and schedules a review meeting Each reviewer reviews the product. He becomes familiar with the product and makes notes of concerns
Prof. Hemant Thakar
How an FTR is Performed (Cont.)

Review leader, all reviewers, and producer attend the meeting One of the reviewers take the role of recorder During the meeting, the producer walks through the product, explaining the material, while the reviewers raise issue based on their preparation. If an error is discovered, then it is recorded by the recorder.
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Conducting the Review

Be prepared evaluate product before the review Review the product, not the producer Keep your tone mild, ask questions instead of making accusations Stick to the review agenda Raise issues, dont resolve them Avoid discussions of style stick to technical correctness Schedule reviews as project tasks Record and report all review results
Prof. Hemant Thakar
Outcome of An FTR
The attendees of the meeting decide whether to: Accept the product without further modification Accept the product provisionally. Minor errors have been encountered. These must be fixed but no additional review will be needed Reject the product due to sever errors. Once the errors are fixed, another review should be conducted At the end of an FTR, a review summary report should be produced. It should answer the following What was reviewed? Who was involved in the review? What were the findings and conclusions?
Prof. Hemant Thakar
Outcome of An FTR (Cont.)
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Review Checklists
FTR can be conducted during each step in the software engineering process. Checklists can be used to assess products that are derived as part of software development. The checklists are not intended to be comprehensive, but rather to provide a point of departure for each review.
Prof. Hemant Thakar
Software Project Planning
Software project planning develops estimates for resources, cost and schedule based on the software allocation established as part of the system engineering activity. Like any estimation process, software project planning is inherently risky. The review of the Software Project Plan establishes the degree of risk.
Prof. Hemant Thakar
Software Project Planning (Cont.)
The following checklist is applicable: Is software scope unambiguously defined and bounded? Is terminology clear? Are resources adequate for scope? Are resources readily available? Have risks in all important categories been defined. Is a risk management plan in place? Are tasks properly defined and sequenced?
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Software Project Planning (Cont.)

Is parallelism reasonable given available resources? Is the basis for cost estimation reasonable? Has the cost estimate been developed using two independent methods? Have historical productivity and quality data been used? Have differences in estimates been reconciled? Are pre-established budgets and deadlines realistic? Is the schedule consistent?
Prof. Hemant Thakar
Software Requirements Analysis
Reviews for software requirements analysis focus on traceability to system requirements and consistency and correctness of the analysis model. A number of FTRs are conducted for the requirements of a large system and may be also followed by reviews and evaluation of prototypes as well as customer meetings.
Prof. Hemant Thakar
Software Requirements Analysis (Cont.)
The following topics are considered during FTRs for analysis: Is information domain analysis complete, consistent and accurate? Is problem partitioning complete? Are external and internal interfaces properly defined? Does the data model properly reflect data objects, their attributes and relationships. Are all requirements traceable to system level?
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Software Requirements Analysis (Cont.)

Has prototyping been conducted for the user/customer? Is performance achievable within the constraints imposed by other system elements? Are requirements consistent with schedule, resources and budget? Are validation criteria complete?
Prof. Hemant Thakar
Software Design
Reviews for software design focus on data design, architectural design and procedural design. In general, two types of design reviews are conducted: The preliminary design review assesses the translation of requirements to the design of data and architecture. The second review, often called a design walkthrough, concentrates on the procedural correctness of algorithms as they are implemented within program modules.
Prof. Hemant Thakar
Software Design (Cont.)
The following checklists are useful for preliminary design review:

Are software requirements reflected in the software architecture? Is effective modularity achieved? Are modules functionally independent? Are interfaces defined for modules and external system elements? Is the data structure consistent with information domain? Is data structure consistent with software requirements? Has maintainability been considered? Have quality factors been explicitly assessed?
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Software Design (Cont.)
The following checklists are useful for Design walkthrough:

Does the algorithm accomplishes desired function? Is the algorithm logically correct? Is the interface consistent with architectural design? Is the logical complexity reasonable? Has error handling been specified? Are local data structures properly defined? Are structured programming constructs used throughout? Is design detail amenable to implementation language? Which are used: operating system or language dependent features? Has maintainability been considered?
Prof. Hemant Thakar
Coding
Errors can be introduced as the design is translated into a programming language. A code walkthrough can be an effective means for uncovering these translation errors.
Prof. Hemant Thakar
Coding (Cont.)
The following checklist assumes that a design walkthrough has been conducted and that algorithm correctness has been established as part of the design FTR. Has the design properly been translated into code? [The results of the procedural design should be available during this review.] Are there misspellings and typos? Has proper use of language conventions been made? Is there compliance with coding standards for language style, comments, module prologue?
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Coding (Cont.)

Are there incorrect or ambiguous comments? Are data types and data declaration proper? Are physical constants correct? Have all items on the design walkthrough checklist been re-applied (as required)?
Prof. Hemant Thakar
Software Testing

Software testing is a quality assurance activity in its own right. The completeness and effectiveness of testing can be dramatically improved by critically assessing any test plans and procedures that have been created.
Prof. Hemant Thakar
Test Plan
The following checklists are useful for test plan walkthrough:

Have major test phases properly been identified and sequenced? Has traceability to validation criteria/requirements been established as part of software requirements analysis? Are major functions demonstrated early?
Is the test plan consistent with overall project plan?

Has a test schedule been explicitly defined? Are test resources and tools identified and available? Has a test record keeping mechanism been established?
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Test Procedure
The following checklists are useful for test procedure walkthrough: Have both white and black box tests been specified? Have all independent logic paths been tested? Have test cases been identified and listed with expected results? Is error-handling to be tested? Have all boundary values been tested? Are timing and performance to be tested? Has acceptable variation from expected results been specified?
Prof. Hemant Thakar
Maintenance
The review checklists for software development are equally valid for the software maintenance phase. In addition to all of the questions posed in the checklists, the following special considerations should be kept in mind: Have side effects associated with change been considered? Has the request for change been documented, evaluated and approved? Has the change, once made, been documented and reported to interested parties? Have appropriate FTRs been conducted? Has a final acceptance review been conducted to ensure that all software has been properly updated, tested and replaced?
Prof. Hemant Thakar
Statistical Quality Assurance

Each defect needs to be traced to its cause. Defect causes having the greatest impact on the success of the project must be addressed first.
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Statistical SQA
Collect information on all defects Find the causes of the defects
Product & Process
Move to provide fixes for the process
measurement
... an understanding of how to improve quality ...
Prof. Hemant Thakar
Metrics Derived from Reviews

Inspection time per page of documentation Inspection time per KLOC or FP Inspection effort per KLOC or FP Errors uncovered per reviewer hour Errors uncovered per preparation hour
Errors uncovered per SE task (e.g., design)

Number of minor errors (e.g., typos) Number of major errors (e.g., nonconformance to requirements) Number of errors found during preparation
Prof. Hemant Thakar
Software Reliability
Software consistency: repeatability of results.

Reliability: probability of failure free operation for a specified time period. Dont apply hardware reliability theory to software (e.g. a key point is that, unlike hardware, software does not wear out so that failures are likely to be caused by design defects).
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IEEE Standard: Software Quality Assurance Plan
Prof. Hemant Thakar
The ISO 9001 Quality Standards

One of the most important worldwide standards for quality assurance Adopted for use by over 130 countries Not industry specific but expressed in general terms ISO 9001 is the quality assurance standard that contains 20 requirements that must be present in any software quality assurance system.
Prof. Hemant Thakar
The ISO 9001: How It Works?
A software developer implements a quality system according to ISO 9001 specifications The quality system is used for some time to detect any problems in the system Third party audit Accreditation request to the responsible body Accreditation body inspect the quality system documentation and visits the organization
On successful inspection, a certificate is issued

Unannounced visits to check whether the quality system is adhered to or not
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Key Points

Quality assurance: is the activity that leads to fitness of purpose Major software quality factors: functionality, usability, reliability, performance, and supportability. Any work product (including documents) should be reviewed. FTR are to find errors during the process so that they dont become defects after the release of the software. Checklists can be used to assess products that are derived as part of software development. ISO 9001 is the quality assurance standard that contains 20 requirements that must be present in any software quality assurance system.
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Business Information System

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CHAPTER 2

BUSINESS BASED INFORMATION SYSTEM

Prof. Hemant Thakar

Business based Information System:

People Processes and Business Application

This covers the discussion on the importance of people, processes and

Prof. Hemant Thakar

What Is Information Systems ?

Prof. Hemant Thakar

Why information systems are Important? EG Chak De India and IPL

Prof. Hemant Thakar

What You Need To Know?

Prof. Hemant Thakar

An IS Framework For Business Professionals.

Software Resources (Program And Procedures)

Network resources (Communications media and Network Support)

Data Resources(data And Knowledge Bases)

Computer-based Information System

Prof. Hemant Thakar

Prof. Hemant Thakar

Prof. Hemant Thakar

INFORMATION SYSTEMS Marketing System Customer Service System

Operations Support System

Management Support System

Prof. Hemant Thakar

Types of Information Systems

KNOWLEDGE & DATA WORKERS

SALES & MARKETING

3 Vital Roles In Business

Support an Organization Business Process & operations

Business Decision Making

Strategic Competitive Advantage

Prof. Hemant Thakar

CHAPTER 3 FOUNDATIONS OF INFORMATION SYSTEMS IN BUSINESS - I

Prof. Hemant Thakar

Foundations of Information Systems in Business - I: Major roles of Information systems

Prof. Hemant Thakar

Types of Information Systems

Prof. Hemant Thakar

Types of Information Systems

Information systems consist of three layers:

operational support, support of knowledge work, and management support.

Prof. Hemant Thakar

Types of Information Systems

Prof. Hemant Thakar

Types of Information Systems

Some examples of such systems are:

Prof. Hemant Thakar

Objective of Information Systems

Prof. Hemant Thakar

Objective of Information Systems

Prof. Hemant Thakar

Information Systems Process

Prof. Hemant Thakar

The Characteristics of Valuable Information

Prof. Hemant Thakar

Attribute of Information Systems : Life Cycle

Prof. Hemant Thakar

Attribute of Information Systems : Life Cycle

Information systems life cycle

Prof. Hemant Thakar

Information Systems : Security Measures

Prof. Hemant Thakar