ITM 209 Business Analytics & Information

Systems

Final Review

Instructor: Inkyu Kim

Eli Broad College of Business
[email protected]

June 21, 2019

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Network Basics
Telecoms Networks can be linked by various media:

 Copper wire (e.g. telephone cables): cheaper, ubiquitous, secure, but

lower capacity

 Coaxial cables (e.g. cable TV): secure & more expensive but higher
capacity

 Wireless signals (e.g. cellphones, Wi-Fi): capacity increasing, but security

issues

 Fiber optics: fastest medium currently and highest capacity, but expensive
and not ubiquitous, so needs to be installed everywhere

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Network Categories

 Local area network (LAN) - Connects a group of computers in

close proximity, such as in an office building, school, or home
 Wide area network (WAN) - Spans a large geographic area
such as a state, province, or country
 Metropolitan area network (MAN) - A large computer
network usually spanning a city

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Virtual Private Network (VPN)

 A secure network that uses the Internet as its backbone

network, but relies on firewalls, encryption, and other
security features to prevent others from observing the
communication going on

 Metaphor: “a safe tunnel” between two computers that

allows secure access to resources (e.g. applications, data) on
the computer (usually a server) you connect to over the
Internet

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VPN

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Wireless Networks

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Radio Frequency Identification (RFID)

 RFID - use chips or smart labels that can store unique

identifiers and relay this information to electronic readers

 RFID tag - contains a microchip and an antenna, and typically

work by transmitting a serial number via radio waves to an
electronic reader, which confirms the identity of a person or
object bearing the tag
 Active vs passive tags
• Active tags have their own internal power supply
• so the signal they transmit is stronger than one passive tags do;
• Active tags are better for tough environments, e.g. farms, ports

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Business Mobility

 Benefits
 Enhance mobility
 Provides immediate data access
 Increases location and monitoring capability
 Improves work flow
 Provides mobile business opportunities
 Provides alternative to wiring

 Challenges
 Protect against theft
 Protect wireless connections
 Prevent viruses on a mobile device
 Address privacy concerns with RFID
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SCM Imperative
 What SCM is:
 the process of planning, implementing and controlling the operations
of the supply chain as efficiently as possible.

 SCM spans all movement and storage of raw materials, work-in-

process inventory, and finished goods from point-of-origin to point-of-
consumption

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The role of IT in SCM (SCM systems)
 Supply Chain Management systems consist of
 Supply Chain Planning Systems:
• improve the flow and efficiency of the supply chain while reducing
inventory (i.e. doing optimization activities).
• Example: Arena

 Supply Chain Execution Systems:

• ensure supply chain cohesion by automating the different activities of the
supply chain
• Example: Walmart’s weather forecast systems to help their trucks do
logistics automatically, RFID, electronic data interchange (EDI)

 SCM systems help to reduce:

 Inventories (better forecast the secure level of inventory)
 Time in Process (e.g. Walmart’s case, RFID)
 Cost
 Waste

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Basics of Supply Chain

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The role of IT in SCM
 IT’s primary role is to create integrations or tight process and
information linkages between functions within and across
firms.

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Factors Driving the Supply Chain

Goal: Supply chain integration (both internal and

external)
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Customer Relationship Management
 A means of managing all aspects of a customer’s relationship with an organization
to increase customer loyalty and retention and an organization’s profitability.

 Traditionally, how have Customer Relationships been managed?

 Sales/Account Representatives
 Personal Relationships
 Single Points of Contact

 This model breaks down when customers are global, separated by space and time,
and diversified.
 No single account rep or small group can manage the entire relationship with a
large, global company
 Information is all stored in the rep’s heads
 Costs are high with this model
 Risks are high with this model
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CRM systems overview:
The use of information technology
• to create a cross-functional enterprise system that integrates
and automates many of the customer-serving processes in sales,
marketing, and customer services that interact with a
company’s customers

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CRM
 Why is CRM important?
 Ensures that support personnel can have information
about previous interactions before answering the call
 Can provide a way to prioritize response to customers
 Enables the company to identify likely new customers and
cross sell

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The Evolution of CRM

 Three phases in the evolution of CRM include reporting,

analyzing, and predicting

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CRM

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Current Trends of CRM
 Supplier relationship management (SRM) – focuses on
keeping suppliers satisfied by evaluating and categorizing
suppliers for different projects, which optimizes supplier
selection

 Partner relationship management (PRM) – focuses on

keeping vendors satisfied by managing alliance partner
and reseller relationship that provide customers with the
optimal sales channel

 Employee relationship management (ERM) – provides

employees with a subset of CRM applications available
through a Web browser
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Enterprise Resource Planning (ERP)

 Enterprise resource planning

• integrates all departments and functions throughout an
organization into a single IT system (or integrated set of IT systems)
so that employees can make enterprise wide decisions by viewing
enterprise wide information on all business operation

 Centralized
 Integration
 Efficiency

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Features of ERP
 Serves as a cross-functional enterprise backbone that integrates and
automates many internal business processes and information systems

 Helps companies gain the efficiency, agility, and responsiveness needed to

succeed today

 Gives a company an integrated real-time view of its core business

processes

 ERP systems consist of many integrated modules and provide various

analysis tools

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Why is ERP important?

 Business operations before ERP:

 Legacy systems were often “islands of automation”
 The issue of “silo effect” (e.g. case from Sony)
 Fragmented data
 Businesses inefficiently organized by function, not process

 What ERP can ideally achieve:

 One integrated system

 Centralized data: standardized formats, consistent data

 Supports working in processes, not just functions

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Core and Extended ERP Components
 An ERP system consists of many integrated modules
 Note: These modules could be provided by multiple vendors!

 Three Core ERP components:

 traditional components included in most ERP systems
 primarily focus on internal operations
 Accounting and finance; production and materials management;
human resource

 Extended ERP components:

 components that meet organizational needs not covered by the core
components
 primarily focus on external operations
 more recent additions to ERP systems

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Measuring ERP Success
 Balanced scorecard – A strategic planning tool and is used to measure the
effectiveness of firms’ strategic planning.

 The idea: each firm has its clear vision and strategy (e.g. implementation
of ERP) and these vision and strategy are managed by four perspectives:
 Financial
 Customer
 Internal business process
 Learning and growth

 Goal: To ensure the effectiveness of the firm’s vision and strategy, firm
needs to balance its financial and non-financial measurements.

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ERP Benefits
 Quality and Efficiency – ERP creates a framework for integrating and improving a
company’s internal business processes that results in significant improvements in
the quality and efficiency of customer service, production, and distribution

 Decreased Costs – Significant reductions in transaction processing costs and

hardware, software, and IT support staff

 Decision Support – Provides vital cross-functional information on business

performance quickly to managers to significantly improve their ability to make
better decisions in a timely manner

 Enterprise Agility – ERP breaks down many former departmental and functional
walls of business processes, information systems, and information resources (i.e.
increase collaboration among functional areas within the firm)

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ERP Challenges
 Highly complex implementation
 10s to 100s of Millions of $
 Different departments need to agree on data specifications,
application ownership
 Old data needs to be converted and combined

 Need to train vast numbers of employees

 Changes in business processes required

 Need for firm to follow processes as recommended in the ERP system
 Usually, software has limited flexibility, so customizing it to fit a firm’s
requirements is not easy

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Collaboration Systems
 Collaboration system – supports the work of teams by facilitating the
sharing and flow of information

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System Development

 Why do I care? I’m not an IT major…

 Everyone participates in IT implementations
• Someone on project team
• Someone as end users
 You will manage departments in a few years
• You will need to acquire or develop systems
• You will need to understand the process (or at least enough to
know where to go look)
 You will need to know whether you are getting your money’s
worth for the project.

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System Development
 Why would a company build or implement a software package?
 Perceived need for feature set
 Automate previously manual work
 Need to do so to compete or participate in a marketplace (Wal-Mart
SCM example)

 Whether you are buying an ERP system, or developing a custom cutting

edge website, the software implementation process is wrought with
peril:
 31.1% of Software Projects are cancelled before rollout
 52.7% of Software Projects exceed their budget by 100% or more
 What do you think about these numbers and why?

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System Development Challenges

 Systems development is difficult and risky (e.g., difficult to identify

requirements)
Do you agree or disagree that it is difficult to identify requirements?
Why?

 Many projects are never finished because of the over budget issue.

 Some projects finish 200 or 300 percent over budget.

- How does this over budget issue influence firms? What do you think?

 Some projects finish on schedule and within budget but do not meet their
goals. One of major reasons for this issue is because users do not express
their requirements correctly!

Again, how does this issue affect firms?

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System Development Life Cycle (SDLC)
 SDLC: the overall process for developing information
systems from planning and analysis through
implementation and maintenance

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Requirement Gathering
 Consultant-led:
 Interviews
 Questionnaires
 Observations
 Reviewing documents

 User-led:
 Joint application development:
▪ users from different departments meet together to
discuss requirements from different departments, and
decide which to recommend

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Software Development Methodologies
 There are a number of different software development
methodologies including:
• Waterfall
• Agile
– Rapid application development (RAD)
– Extreme programming
– Scrum
– Rational unified process (RUP)

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Waterfall Methodology
 Traditional way of
development systems

 an activity-based
process in which each
phase in the SDLC is
performed sequentially
from planning through
implementation and
maintenance

 See why it’s called

“Waterfall”?
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Agile Methodology
 Agile methodology

 Aims for customer satisfaction through early and

continuous delivery of components developed by an
iterative process

 An agile project sets a minimum number of requirements

and turns them into a deliverable product

 Iterative development – consists of a series of tiny projects

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Agile Methodology
 Agility
 Agility is response to change
▪ Things change
▪ Requirements change
▪ Needs change
▪ Priorities change
▪ Technology changes
 The question really becomes how should we deal with change

 Uncertainty
 Organizations typically require more layers of plans as the degree of
uncertainty increases
 Planning attempts to substitute definition for value proposition

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Feature Delivery Difference
(Waterfall vs. Agile)

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Four primary forms of agile methodologies:
 Rapid prototyping or rapid application development
methodology
 Extreme programming methodology
 Scrum metrology
 Rational unified process (RUP) methodology

 All these four methods rely on iterative development and aim

for customer satisfaction through early and continuous
delivery of useful software components developed by an
iterative process using the bare minimum requirements.

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Project Management (PM) Fundamentals
 Project – temporary endeavor undertaken to create a unique
product, service, or result (e.g., your team project)

 Project management
 Using knowledge and skills to ensure that project tasks are
carried out so that the project’s outcome meets or exceeds
the expectations of stakeholders

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PM Fundamentals
 Project manager - an individual who is an expert in project planning and
management

 Project objective – quantifiable criteria that must be met for the project
to be considered a success and could include cost, schedule, and quality
metrics (the most important element for each project) (e.g. saving cost
by 20% in a month)

 Project Task - The steps to be taken to complete the project

 Project deliverable – any measurable, tangible, verifiable outcome, result,

or item that is produced to complete a project
 Any measurable, tangible, verifiable OUTCOMES of a project
• Final (at the end of project) or interim (during project)
• e.g., final - a working ERP system, a data warehouse, etc.
6/21/2019 • e.g., interim - a project charter, project module spec, etc. 40
PM Fundamentals
 Project milestone – represents key dates when a certain group of
activities must be performed
 Often indicate “review” or “delivery” times- e.g. user sign-off, user
acceptance test, etc.
 milestones missed  signal that project has problems
 E.g. final process model, data conversion, etc.

 Project management office (PMO) – an internal department that oversees

all organizational projects

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The Triple Constraint

Project management is the science of making intelligent

trade-offs between time, cost, and scope!

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Project Charter

 A document issued by the project initiator or sponsor

 Formally authorizes the existence of a project
 Provides the project manager with the authority to apply
organizational resources to project activities and includes:
 Project scope
 Project objectives
 Project constraints
 Projects assumptions

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Criteria for creating reasonable project criteria

 SMART criteria
 Useful reminders on how to ensure that the project has created
understandable and measurable objectives

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Critical Path Method

 Tasks not on the critical path can start earlier or later

without impacting the project’s completion
 However, starting or ending the tasks on the critical path
later will affect the completion time
 Useful method for identifying:
 Which tasks are necessary for completion

 How changes in their start/end times affects the

completion of the project

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Network Diagram

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Two options to develop information systems

 Insourcing (in-house-development) – a common approach

using the professional expertise within an organization to
develop and maintain the organization's information
technology systems

 Outsourcing – an arrangement by which one organization

provides a service or services for another organization that
chooses not to perform them in-house

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Outsourcing Projects
 Onshore outsourcing – engaging
another company within the same
country for services (e.g. Many
companies in US outsource their MIS
services to IBM)

 Nearshore outsourcing – contracting

an outsourcing arrangement with a
company in a nearby country (e.g. US
firms nearshore to Canada or Mexico)

 Offshore outsourcing – using

organizations from developing
countries to write code and develop
systems (e.g. US firms offshore to
India)

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5 Steps of IT Outsourcing
 Define the project requirements.
 Identify potential outsourcing candidates.
 Select an outsourcing firm
 Send out an RFP (Request for Proposal)
 Focus on these criteria:
• Application development experience
• Industry experience
• Similar customer experience
• Years of experience
 Establish a service level agreement (SLA)
 Manage the outsourcer

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Service Level Agreement (SLA)

1. List of Deliverables - linked to milestones

2. Performance Requirements - guarantees of the system’s
availability, responsiveness, capacity, etc.
3. Problem Management Protocol - How problems will be
reported and escalated
4. Change Management Protocol - How changes will be
evaluated and incorporated
5. "Malpractice" Provision - remedies for poor performance
by vendor, e.g. fees waived, client losses reimbursed, etc.

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