Lecture 2

Emerging and Future

Information Systems II

Objectives
 Describe enterprise resource planning
System
 Describe the Characteristics of:
 Artificial Intelligence
 Expert Systems
 Describe some business applications of:
 Enterprise resource planning systems
 Expert systems
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Enterprise Resource Planning

 ERP system is a set of integrated programs
capable of managing a companies vital business
operation for an entire multi-site, global
organization.
 Major business functions of such a system
includes production, distribution, sales, finance
and human resource management.
 It is normally purchased as an off-the-shelf
package.

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Enterprise Resource Planning (Cont…)
 The benefits of ERP system includes:
 Reduce cost of buying from a single
supplier.
 Better transfer of information within the
organization since all modules of the
system is compatible.
 Simplified support and maintenance
through a single supplier.
 Use of ‘best-of-breed’ solutions applied by
the companies.
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Enterprise Resource Planning (Cont…)

 The main disadvantage of ERP systems

includes:
 The high costs charged by suppliers.
 The system often has to change its
processes or way of working in order to fit
the way the software operates.
 Only large companies can afford the
software and the consultants, which will
often be a total cost of millions of pounds.
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Traditional View of Information Systems

 Large organization typically has many different kinds
of information systems that support different functions

 Most of these systems are built around different

functions, business units and business processes that
do not “talk” to each other, and managers might have
a hard time assembling the data they need for a
comprehensive, overall picture of the organization’s
operations.

 For Example, sales personnel might not be able to tell

at the time they place an order whether the items that
were ordered were in inventory
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 Traditional View of Information Systems

Business Functions
Marketing
and Human
Manufacturing Accounting Finance Resources
Sales
Organizational Boundaries

Organizational Boundaries
Ve nd ors Cu stomers

Ve nd ors Business Business Business Business Business Cu stomers

processes processes processes processes processes

Ve nd ors Cu stomers
Marketing Human
Manufacturing Accounting Finance and Resources
Systems Systems Systems Sales Systems
Systems

Information Systems

Enterprise Systems
 Traditional IS have negative impact on
organizational efficiency and business performance.

 Many organizations are now building ERP systems.

 ERP models and automates many business

processes, with the goal of integrating information
across the company and eliminating complex,
expensive links between computer systems in
different areas of the business.
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Enterprise Systems
 Information will flow throughout the firm and can
be shared in all business processes

 This have positive impact and overall efficiency

of the organization will increase

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 Enterprise Systems

Manufacturing Accounting

E nterprise S ystem

Organizational Boundaries
Organizational Boundaries
Business process
Business process
Ve ndors Business process Custome rs
Enterprise-wide business
processes

Human Finance
Resources
Sales and
Marketing

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Business Process Support by ERP

 Manufacturing process, including inventory
management, purchasing, shipping, production
planning, material requirements planning, and
plant and equipment maintenance.

 Financial and accounting processes, including

accounts payable, accounts receivable, cash
management, and forecasting, product-cost
accounting, cost-center accounting, asset
accounting, general ledger, and financial
reporting.

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Business Process Support by ERP

 Sales and marketing processes, including

order processing, pricing, shipping, billing,
sales management, and sales planning.

 Human resource processes, including

personnel administration, payroll, personnel
planning and development, applicant tracking,
and travel expense reporting.

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 Some Business Applications of ERP
 Sales and Marketing Systems
 The sales and marketing function is
responsible for selling the organization’s
products or service.

 Marketing is concerned with:

 Identifying the customers for the firm’s
products or services
 Determining what they need or want

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Some Business Applications of ERP

 Planning and developing products and
services to meet their needs
 Advertising and promoting these products
and services.

 Sales are concerned with contacting

customers, selling the products and services,
taking orders, and following up on sales.

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Exam ples of Sales and Marketing IS

System Description Organizational
Level
Order Enter, process, and track orders Operational
processing
Market Identify customers and markets Knowledge
analysis using data on demographics,
markets, consumer behavior,
and trends
Pricing Determine prices for Management
analysis production and services
Sales trend Prepare 5-year sales forecast Strategic
forecasting
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 Some Business Applications of ERP
 Manufacturing and production Information
Systems
 The manufacturing and production function
is responsible for actually producing the
firm’s goods and services.
 Manufacturing and production systems deal
with:
 Planning

 Development

 Maintenance of production facilities

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Some Business Applications of ERP

 Establishment of production goals
 The acquisition
 Storage
 Availability of production materials
 Scheduling of equipment, facilities,
material, and labor required to fashion
finished products.

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Exam ples of Manufacturing and

Production Inform ation System s
System Description Organizational
Level
Machine control Control the actions of Operational
machines and equipment
Computer-aided Design new products Knowledge
design (CAD) using the computer
Production Decide when and how Management
planning many products should
be produced
Facilities location Decide where to locate Strategic
new production facilities
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 Some Business Applications of ERP
 Finance and Accounting Systems
 The finance function is responsible for
managing the firm’s financial assets, such as
cash, stocks, bonds, and other investments in
order to maximize the return on these financial
assets.
 The finance function is also in charge of
managing the assets of the firm.
 In order to determine whether the firm is
getting the best return on its investments, the
finance function must obtain a considerable
amount of information from sources external to
the firm.
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E xam p les of Finance and Accounting

Inform ation System s
System Description Organizational
Level
Accounts Track money owed to the Operational
receivable firm
Portfolio Design the firms portfolio Knowledge
analysis of investments

Budget Prepare short-term budgets Management

Profit planning Plan long-term profits Strategic

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Some Business Applications of ERP

 Human Resources Systems
 The human resources function is responsible
for attracting, developing, and maintaining the
firm’s work force.

 HRM Systems support activities such as

identifying potential employees, maintaining
complete records on existing employees, and
creating programs to develop employees’ talent
and skills.

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 Exam p les of H um an Resources IS
System Description Organizational
Level
Training and Track employee training,
development skills, and performance Operational
appraisals
Career pathing Design career paths for Knowledge
employees
Compensation Monitoring the range and
analysis distribution of employee Management
wages, salaries, and benefits
Human Plan the long-term labor Strategic
resource force needs of the
planning organization
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Artificial Intelligence

Data

People
Software

AIS

Knowledge Hardware

Procedures 23

Artificial Intelligence
 Artificial Intelligence Systems Include:
 People

 Procedures

 Hardware

 Software

 Data

 Knowledge

 The Objective of AI is not to replace human

Decision making completely but to solve
certain types of problems.
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 The Characteristics of AI
 Learn from experience and apply knowledge
acquired from experience
 Natural for Human beings

 Must be programmed

 Handle Complex Situations

 Even Human beings make mistakes

 requires careful planning and elaborate computer

programming

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The Characteristics of AI (Cont…)

 Solve problems with important information is
missing.
 Decision must be made even when we lack

information or have inaccurate information

 Determine what is important.

 Everyday we are bombarded with facts and must

process large amounts of data, filtering out what

is unnecessary
 Computers do not have this natural ability

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The Characteristics of AI (Cont…)

 React quickly and correctly to a new situation
 Human beings react quickly and correctly in a
new situation
 Complex programming is required

 Understand visual images.

 Being able to understand and correctly interact

visual images is an extremely complex process

for computer systems.
 Process and manipulate symbols
 Computers have difficulty handling symbolic

processing and reasoning

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 The characteristics of AI (Cont…)
 Be creative and imaginative
 Developing new and exiting products and
services from an exiting situation is a human
characteristic
 Human beings are creating new technologies to
make computer as an imaginative and creative
thing
 Use heuristics
 Human beings can guess and take decision using
general rules of thumb, without completely
searching all alternatives and possibilities
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Expert Systems

Components of an Expert Systems

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Expert Systems
 An ES is a special type of IS that uses knowledge
within some topic area to solve problems or
provide advice.

 ES’s are used to mimic human expertise by

manipulating knowledge rather than simply
information.

 When you use an ES, the system asks you a series

of questions, much as a human expert would.
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 Expert Systems (Cont…)
 ES’s are used when expertise for a particular
problem is rare or expensive.
 Examples of ES are:-
 Medical diagnosis

 Machine configuration

 Financial planning

 Computerized expert systems have been

developed to diagnose problems, predict future
events, and improve healthcare etc…

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Characteristics of ES
 Can explain their reasoning or suggested decisions
 This is the most valuable feature of a computerized
expert system
 Can display “intelligent” behaviors
 Can process new ideas or approaches to problem
solving
 Can draw conclusions from complex relationships
 Can suggest ways to improve quality control procedure.

 Can provide portable knowledge.

 Can be used to capture human expertise that might
otherwise be lost
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Characteristics of ES (Cont…)
 Can deal with uncertainty
 Use of probability & statistics.

 Not widely used or tested

 Difficult to use
 Some ES are difficult to control and use

 Limited to relatively narrow problems

 Some ES can perform complex data analysis

 Others are limited to simple problems

 Cannot readily deal with “mixed” knowledge

 Knowledge can be represented through defined rules

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 Characteristics of ES (Cont…)

 Possibility of errors.
 The primary source of knowledge is a human expert.
If this knowledge is incorrect or incomplete, it will
affect the system negatively

 Cannot refine own knowledgebase

 programmer must provide instructions to the system
that determine how the system is to learn from
experience

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Characteristics of ES (Cont…)
 Difficult to maintain
 Some are not responsive or adaptive to changing
conditions
 May have high development cost
 It can be expensive to develop when using traditional
programming languages and approaches
 Raise legal and ethical concerns
 People who make decisions and take action are
legally and ethically responsible for their behavior

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Some Business Applications of ES

 Information Management and Retrieval
 The explosive growth of information available to
decision makers has created a demand for devices to
help manage the information.
 Expert systems can aid this process through the use of
bots.
 Business might use a bot to retrieve information from
a large distributed databases or a vast network like the
Internet.
 Expert system agents help managers find the right
data and information while filtering out irrelevant
facts that might impede timely decision-making.
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 Some Business Applications of ES
 SHYSTER
 A case-based legal expert system which
provides advice in areas of case law that
have been defined by a legal expert using a
unique specification language.

 CARGEX
 Cargo Export System is used by Lufthansa, a
German airline, to help determine the best
shipping routes.

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Some Business Applications of ES

 FLEXPERT
 Uses fuzzy logic to perform plant layout. The
software helps determine the best placement
for equipment and manufacturing facilities.

 MYCIN
 (used by Harvard Community Health Plan) A
software that helps patients by giving
uncomplicated treatments for minor problems,
& for serious problems it schedules
appointments.

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Some Business Applications of ES

 Employee Appraiser
 Helps managers in employee performance
reviews and career development discussions.

 ACE
 Used by AT&T to analyze the maintenance of
telephone networks.

 CoverStory
 Extracts marketing information from database
and automatically writes marketing reports.
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 Some Business Applications of ERP
24SevenOffice system for small and medium sized
businesses delivered on demand through a Ajax-
powered web-based interface

Includes modules for:

 CRM
 Accounting
 Invoicing/Ordering
 Procurement
 Email
 Calendar
 Project Management,
 Content management system
 E-commerce

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Some Business Applications of ERP

 Sage Accpac is an award-winning accounting
system
 that integrates with a complete set of end-to-
end business solutions, including CRM,
HRMS, warehouse management …and more.
Components available to create a complete business solution integrating
the front office with the back office applications:
 Sage Accpac CRM (Customer Relationship Management)
 Accpac HR Series (Human Resources)
 Sage Accpac WMS (Warehouse Management System)
 Sage Accpac Exchange (Electronic Data Interchange)
 Accpac eTransact (Online Webstore)
 Sage Accpac ePOS (Retail Point of Sale)
 Sage Accpac Insight (Business Intelligence & Analysis)
 Accpac CFO (Financial Analysis)
 Sage Accpac Hosted Services (Remote Hosting Facilities)
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Some Business Applications of ERP

Apache Open For Business (Apache
OFBiz) is Open Source automation
software
Apache OFBiz aggregates
functionalities like:
ERP - planning
CRM - customer management
eCommerce
SCM - supply chain management
MRP - manufacturing resource planning
CMMS/EAM - Computerized Maintenance
Management System also known as Enterprise Asset
Management.
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