Order ID | 9784559049 | ||||||||||||||||||
Subject | IT Project Management | ||||||||||||||||||
Topic | Understanding Functional Systems | ||||||||||||||||||
Type | Essay | ||||||||||||||||||
Writer level | High School | ||||||||||||||||||
Style | APA | ||||||||||||||||||
Sources / references | 1 | ||||||||||||||||||
Language | English(U.S.) | ||||||||||||||||||
Description / paper instructions
IT Project Management One of the roles of a Director of MIS or CIO is to understand his or her portfolio of information systems. Some of these systems are common to all organizations, some are unique to the company’s industry, and some are unique to the core business of the company. In Chapter 10 of your textbook, you learned about the more common systems. Let’s take the opportunity to learn about some of the more unique systems.
Describe a unique information system or subsystem at your company by responding to the following questions. If you do not have knowledge of a unique business system, then respond with a description of a unique system that you use personally that your classmates may not know about or have knowledge of. What is the primary purpose of the system? Which stakeholders benefit from using the system? When and how did the company acquire and implement the system? How would you enhance the system if you had responsibility for it? IT Project Management
Chapter 10: Information Systems Within the Organization
What’s In IT For Me? This Chapter Will Help Prepare You To … [ IT Transformation at Ford Motor Company ] IT Project Management The Problem Ford Motor Company underwent a “near-death” experience in the mid-2000s when it nearly declared bankruptcy. The old business model at Ford allocated a great deal of autonomy to each geographic region. One consequence of this arrangement was that the company’s IT environment had become excessively complex and fragmented. The IT department had introduced initiatives that primarily addressed Ford’s IT infrastructure. However, it had not proposed any initiatives to deal with the giant company’s application portfolio. (An application portfolio is the term used for the entire group of applications used and maintained by an organization.) In fact, Ford often had at least three applications among its North American, South American, European, and Asia Pacific locations that fundamentally performed the same functions. Even worse, the IT department was not providing adequate support for the company’s business initiatives. IT Project Management The Solution When Alan Mulally became Ford’s CEO in 2006, he put several strategies in motion:
Mulally called the last item the “One Ford” initiative. In parallel with One Ford, the IT group developed its “One IT” initiative. Consequently, Ford’s entire IT group refocused on an initiative called One IT, which supported One Ford. The One IT initiative called for Ford to reorganize its IT group around four priorities:
To accomplish these priorities, the IT department first redirected funds from maintaining existing applications to investing in innovative new projects. Because those resources totaled 30 percent of IT’s total budget, the department was able to devote hundreds of millions of dollars to new IT projects and applications. The IT department then realized savings from reducing staff and consolidating its six enterprise data centers into two. IT also retired numerous legacy applications and standardized business processes and applications across the company. Another IT initiative involved transforming the company’s historical, decentralized model into a centralized federated model. The federated model combines the essential features of centralization and decentralization. The underlying philosophy is to obtain the best of both worlds by creating shared best-of-breed services (e.g., corporate databases) that standardize Ford’s IT architecture, while placing IT professionals in each of the business units (e.g., in research and development, product engineering, or manufacturing in any geographical region) so that they understand both the business details and the customers. Essentially, Ford simplified its IT environment. The company now has a single shared service for IT infrastructure and operations and one for application development. The company is leveraging the scale of its IT department globally while supporting the unique requirements of its consumers and its product development and manufacturing facilities. The federated model mirrors One Ford. One Ford provides “shared skill” teams for product engineering and manufacturing so that the company maintains consistent business processes around the world. In addition, One Ford has business units that support North America, South America, Europe, and Asia Pacific that ensure that the company tailors its product offerings to satisfy the unique requirements of each market. Ford is currently building eight manufacturing plants around the world. The IT teams are delivering the automation that each plant requires. At the same time, they are integrating the new plants with Ford’s global supply chain systems. Ford also realized that to implement a successful IT transformation the company had to empower its employees. To accomplish this task, the automaker introduced a program called “Digital Worker” that examines all of the collaboration tools it needs to enable increased global capabilities. This initiative is partitioned into four areas, which are integrated to help teams situated throughout the world to collaborate:
The first phase of Digital Worker involved bringing these tools together. Next, Ford explored strategies to maximize business capability by considering not just the tools but the actual process of collaboration and how collaborative tools enable workers to be more productive. Finally, the IT department is creating a tool called “How I Work,” which employs a scenario-based approach that helps employees to identify the most effective and efficient collaborative tools to use within each context. For example, one scenario considers how to run an effective meeting. IT Project Management The Results Since the mid-2000s, Ford has experienced a remarkable turnaround. Significantly, the automaker’s IT transformation played a key role in its comeback. The purpose of the IT transformation is to make Ford a faster, more agile, more innovative company. For example, IT support of Ford’s new capabilities manifested itself when IT assisted in developing and deploying the Ford SYNC and in helping the company automate its new manufacturing plants. Ford SYNC is a factory-installed, integrated in-vehicle communications and entertainment system that allows users to make hands-free telephone calls, control music, and perform other functions through voice commands. As of 2012, Ford offered SYNC in North America as a feature in fourteen Ford models and five Lincoln models. Ford can now install all SYNC software in real time in the plant. Basically, as the vehicle progresses down the assembly line, the SYNC software is loaded wirelessly via Wi-Fi. Significantly, the SYNC functions are customized to meet the specifications of each vehicle. The SYNC language pack is based on whatever language needs to be configured for each vehicle. This wireless software installation process is now being used with other software modules on each vehicle (e.g., antilock braking system, power steering system, navigation system, etc.). Increasingly, IT applications in manufacturing plants are enabling Ford to provide more product functions than the company could provide historically when it had to physically load the software early on in the manufacturing process. IT applications are also increasing the flexibility of Ford manufacturing plants. Because the tooling is more flexible, Ford can adjust its manufacturing capacity in real time to meet customer demand. (Tooling is the process of converting raw materials, such as steel and aluminum, into finished products, such as car bodies, doors, etc.) Historically, plants were configured to produce a certain number of one type of vehicle. Using IT and robots, Ford manufacturing plants are now able to adjust the mix of vehicles that are scheduled to be manufactured on a week-to-week basis. Ford badly needs this amount of flexibility, particularly in light of the automaker’s problems in the spring of 2012, when it could not manufacture enough vehicles to meet the increase in customer demand in North America. During this same period, Ford’s rivals Chrysler and General Motors did not experience similar problems in increasing their capacity. In sum, then, the IT function at Ford has evolved from being perceived internally as simply a tool provider to a true collaborator and innovator that actually helps the company solve its business problems. Sources: Compiled from “SYNC Comes Different Ways,” Ford Motor Company, 2013; J. Hiner, “How Ford Reimagined IT from the Inside-Out to Power Its Turnaround,” CNET News, July 9, 2012; www.ford.com, accessed May 5, 2013. What We Learned from This Case The chapter-opening case illustrates the variety of information systems (IS) in organizations, as well as the integral part that IS play in an organization’s success. IS are everywhere, and they affect organizations in countless ways. Although IS are frequently discussed within the context of large organizational settings, they also play a critical role in small organizations, as illustrated inIT’s About Business 10.1. Henthorn Mower & Engine Serviced needed a payroll solution, and ADP matched the company’s requirements. As Henthorn Mower demonstrates, “systems within organizations” do not have to be owned by the organization itself. Instead, organizations can deploy very productive IS that are owned by an external vendor. The important point here is that “systems within an organization” are intended to support internal processes, regardless of who actually owns the systems. It is important for you to have a working knowledge of IS within your organization, for a variety of reasons. First, your job will require you to access corporate data that are supplied primarily by your firm’s transaction processing systems and enterprise resource planning systems. Second, you will have a great deal of input into the format and content of the reports that you receive from these systems. Third, you will utilize the information contained in these reports to perform your job more productively. This chapter will teach you about the various information systems that modern organizations utilize. You begin by considering transaction processing systems, the most fundamental organizational information systems. You continue with the functional area management information systems, proceed to enterprise resource planning systems, and conclude with the reports that these information systems produce. IT’s about [small] business: 10.1 Henthorn Mower & Engine Service and ADP Information systems within an organization are not always computer based. Many small businesses still rely on systems where collection, storage, analysis, and distribution of information are all executed on paper. For example, paper payrolls include a time card that each employee “punches” every day when arriving at and leaving work (data collection). These “punches” are manually totaled at the end of each week (analysis) and then entered into a ledger for future reference (storage). At the appropriate time, this information will be sent to the accountant (distribution) to determine the amount of pay due to each employee (information). In most cases, this process works. However, there are many ways this information could be more useful, if it were stored in a computer system that would help manage the entire process. Paper systems require significant manual effort, and they are especially subject to human error. Computerized information systems are much more reliable, and they provide many other benefits as well. Consider the case of Rickie Star, who purchased his in-laws’ mower business in 1978. The business—Henthorn Mower & Engine Service—remains a small, family-run business with about 12 employees. As is frequently true of family-owned businesses, many of the current information systems are paper based. Within Henthorn, the division of responsibilities was initially determined by history, preference, and the “way it has always been.” In particular, the responsibility of managing time cards and payroll fell to Rickie’s mother-in-law. She spent every Thursday morning going through the manual process outlined above. This process worked fine—that is, until she passed away, and the responsibility fell on Rickie’s shoulders. It did not take long for Rickie to realize that he needed a better solution to the payroll process. Even for his small business, he needed a quicker and more reliable system that would free him to spend his time performing other duties. After researching the possible solutions, he decided that the EasyPayNet (https://easynet.adp.com) and ezLaborManager (https://ezlm.adp.com/) solutions from ADP (www.adp.com) best suited his needs. Rickie’s time system moved from paper to the computer in a seamless fashion. Employees now use an electronic clock that scans a time card rather than the old manual clock that “punched” the card. This information is available in real time (no waiting until Thursday), so Rickie can see who is on time, who is late, and how many hours each employee has worked for each pay period. The system also calculates sick days, vacation days, taxes … and even cuts the employees’ paychecks! For Henthorn Mower & Engine Service, moving its paper-based system to the ADP solutions provided benefits beyond simply the time saved by not having to manually calculate payroll. Rather, the new IS added a level of reliability and quick access to information that employees had not even realized they were missing. Sources: Compiled from “Henthorn Mower & Engine Service,” ADP Small Business Services Case Study, 2011;www.adp.com, https://easynet.adp.com, https://ezlm.adp.com, accessed March 21, 2013. Questions 1. Identify additional advantages (other than the ones described in this case) of computerizing Henthorn’s payroll process. 2. What are some potential disadvantages of computerizing Henthorn’s payroll process? 10.1: Transaction Processing Systems IT Project Management Millions (sometimes billions) of transactions occur in large organizations every day. A transaction is any business event that generates data worthy of being captured and stored in a database. Examples of transactions are a product manufactured, a service sold, a person hired, and a payroll check generated. In another example, when you are checking out of Walmart, each time the cashier swipes an item across the bar code reader is one transaction. A transaction processing system (TPS) supports the monitoring, collection, storage, and processing of data from the organization’s basic business transactions, each of which generates data. The TPS collects data continuously, typically in real time—that is, as soon as the data are generated—and it provides the input data for the corporate databases. The TPSs are critical to the success of any enterprise because they support core operations. In the modern business world, TPSs are inputs for the functional area information systems and business intelligence systems, as well as business operations such as customer relationship management, knowledge management, and e-commerce. TPSs have to efficiently handle both high volumes of data and large variations in those volumes (e.g., during periods of peak processing). In addition, they must avoid errors and downtime, record results accurately and securely, and maintain privacy and security. Figure 10.1 illustrates how TPSs manage data. Consider these examples of how TPSs manage the complexities of transactional data:
FIGURE 10.1: How transaction processing systems manage data. These and similar issues explain why organizations spend millions of dollars on expensive mainframe computers. In today’s business environment, firms must have the dependability, reliability, and processing capacity of these computers to handle their transaction processing loads. Regardless of the specific data processed by a TPS, the actual process tends to be standard, whether it occurs in a manufacturing firm, a service firm, or a government organization. As the first step in this procedure, people or sensors collect data, which are entered into the computer via any input device. Generally speaking, organizations try to automate the TPS data entry as much as possible because of the large volume involved, a process called source data automation (discussed inTechnology Guide 1). https://www.perfectacademic.com/ Next, the system processes data in one of two basic ways: batch processing and online processing. In batch processing, the firm collects data from transactions as they occur, placing them in groups or batches. The system then prepares and processes the batches periodically (say, every night). In online transaction processing (OLTP), business transactions are processed online as soon as they occur. For example, when you pay for an item at a store, the system records the sale by reducing the inventory on hand by one unit, increasing sales figures for the item by one unit, and increasing the store’s cash position by the amount you paid. The system performs these tasks in real time by means of online technologies. IT Project Management before you go on… 1. Define TPS. 2. List the key functions of a TPS. 10.2: Functional Area Information Systems Each department or functional area within an organization has its own collection of application programs, or information systems. Each of these functional area information systems (FAISs) supports a particular functional area in the organization by increasing each area’s internal efficiency and effectiveness. FAISs often convey information in a variety of reports, which you will see in Section 10.5. Examples of FAISs include accounting IS, finance IS, production/operations management (POM) IS, marketing IS, and human resources IS. As illustrated in Figure 10.1, the FAIS access data from the corporate databases. The following sections discuss the support that FAISs provide for these functional areas. Information Systems for Accounting and Finance A primary mission of the accounting and finance functional areas is to manage money flows into, within, and out of organizations. This mission is very broad because money is involved in all organizational functions. Therefore, accounting and finance information systems are very diverse and comprehensive. In this section, you focus on certain selected activities of the accounting/finance functional area. Financial Planning and Budgeting. Appropriate management of financial assets is a major task in financial planning and budgeting. Managers must plan for both acquiring and utilizing resources.
Managing Financial Transactions. Many accounting/finance software packages are integrated with other functional areas. For example, Peachtree by Sage (www.peachtree.com) offers a sales ledger, a purchase ledger, a cash book, sales order processing, invoicing, stock control, a fixed assets register, and more. Companies involved in electronic commerce need to access customers’ financial data (e.g., credit line), inventory levels, and manufacturing databases (to determine available capacity and place orders). For example, Microsoft Dynamics GP (formerly Great Plains Software) offers 50 modules that meet the most common financial, project, distribution, manufacturing, and e-business needs. Organizations, business processes, and business activities operate with, and manage, financial transactions. Consider these examples:
Investment Management. Organizations invest large amounts of money in stocks, bonds, real estate, and other assets. Managing these investments is a complex task, for several reasons. First, organizations have literally thousands of investment alternatives dispersed throughout the world to choose from. In addition, these investments are subject to complex regulations and tax laws, which vary from one location to another. Investment decisions require managers to evaluate financial and economic reports provided by diverse institutions, including federal and state agencies, universities, research institutions, and financial services firms. In addition, thousands of Web sites provide financial data, many of them for free. To monitor, interpret, and analyze the huge amounts of online financial data, financial analysts employ two major types of IT tools: (1) Internet search engines and (2) business intelligence and decision support software. Control and Auditing. One major reason why organizations go out of business is their inability to forecast and/or secure a sufficient cash flow. Underestimating expenses, overspending, engaging in fraud, and mismanaging financial statements can lead to disaster. Consequently, it is essential that organizations effectively control their finances and financial statements. Let us examine some of the most common forms of financial control.
Information Systems for Marketing It is impossible to overestimate the importance of customers to any organization. Therefore, any successful organization must understand its customers’ needs and wants and then develop its marketing and advertising strategies around them. Information systems provide numerous types of support to the marketing function. In fact, customer-centric organizations are so important that we devote one half of Chapter 11 to this topic. Information Systems for Production/Operations Management The POM function in an organization is responsible for the processes that transform inputs into useful outputs as well as for the overall operation of the business. Because of the breadth and variety of POM functions, you see only four here: in-house logistics and materials management, planning production and operation, computer-integrated manufacturing (CIM), and product life cycle management (PLM). The POM function is also responsible for managing the organization’s supply chain. Because supply chain management is vital to the success of modern organizations, the second half of Chapter 11addresses this topic in detail. In-House Logistics and Materials Management. Logistics management deals with ordering, purchasing, inbound logistics (receiving), and outbound logistics (shipping) activities. Related activities include inventory management and quality control. Inventory Management. As the name suggests, inventory management determines how much inventory an organization should maintain. Both excessive inventory and insufficient inventory create problems. Overstocking can be expensive, because of storage costs and the costs of spoilage and obsolescence. However, keeping insufficient inventory is also expensive, because of last-minute orders and lost sales. Operations personnel make two basic decisions: when to order and how much to order. Inventory models, such as the economic order quantity (EOQ) model, support these decisions. A large number of commercial inventory software packages that automate the application of these models are available. Many large companies allow their suppliers to monitor their inventory levels and ship products as they are needed. This strategy, called vendor-managed inventory (VMI), eliminates the need for the company to submit purchasing orders. We discuss VMI in Chapter 11. Quality Control. Quality-control systems used by manufacturing units provide information about the quality of incoming material and parts, as well as the quality of in-process semifinished and finished products. These systems record the results of all inspections and compare the actual results to established metrics. They also generate periodic reports containing information about quality—for example, the percentage of products that contain defects or that need to be reworked. Quality control data, collected by Web-based sensors, can be interpreted in real time. Alternatively, they can be stored in a database for future analysis. Planning Production and Operations. In many firms, POM planning is supported by IT. POM planning has evolved from material requirements planning (MRP), to manufacturing resource planning (MRP II), to enterprise resource planning (ERP). We briefly discuss MRP and MRP II here, and we examine ERP in detail later in this chapter. Inventory systems that use an EOQ approach are designed for items for which demand is completely independent—for example, the number of identical personal computers a computer manufacturer will sell. In manufacturing operations, however, the demand for some items is interdependent. Consider, for example, a company that makes three types of chairs, all of which use the same screws and bolts. In this case, the demand for screws and bolts depends on the total demand for all three types of chairs and their shipment schedules. The planning process that integrates production, purchasing, and inventory management of interdependent items is calledmaterial requirements planning (MRP). MRP deals only with production scheduling and inventories. More complex planning also involves allocating related resources, such as money and labor. For these cases, more complex, integrated software, called manufacturing resource planning (MRP II), is available. MRP II integrates a firm’s production, inventory management, purchasing, financing, and labor activities. Thus, MRP II adds functions to a regular MRP system. In fact, MRP II has evolved into enterprise resource planning. Computer-Integrated Manufacturing. Computer-integrated manufacturing (CIM; also called digital manufacturing) is an approach that integrates various automated factory systems. CIM has three basic goals: (1) to simplify all manufacturing technologies and techniques, (2) to automate as many of the manufacturing processes as possible, and (3) to integrate and coordinate all aspects of design, manufacturing, and related functions via computer systems. Product Life Cycle Management. Even within a single organization, designing and developing new products can be expensive and time consuming. When multiple organizations are involved, the process can become very complex.Product life cycle management is a business strategy that enables manufacturers to share product-related data that support product design and development and supply chain operations. PLM applies Web-based collaborative technologies to product development. By integrating formerly disparate functions, such as a manufacturing process and the logistics that support it, PLM enables these functions to collaborate, essentially forming a single team that manages the product from its inception through its completion. Information Systems for Human Resource Management Initial human resource information system (HRIS) applications dealt primarily with transaction processing systems, such as managing benefits and keeping records of vacation days. As organizational systems have moved to intranets and the Web, however, so have HRIS applications. Many HRIS applications are delivered via an HR portal. For example, numerous organizations use their Web portals to advertise job openings and to conduct online hiring and training. In this section, you consider how organizations are using IT to perform some key HR functions: recruitment, HR maintenance and development, and HR planning and management. Recruitment. Recruitment involves finding potential employees, evaluating them, and deciding which ones to hire. Some companies are flooded with viable applicants; others have difficulty finding the right people. IT can be helpful in both cases. In addition, IT can assist in related activities such as testing and screening job applicants. With millions of resumes available online (in particular, LinkedIn), it is not surprising that companies are trying to find appropriate candidates on the Web, usually with the help of specialized search engines. Companies also advertise hundreds of thousands of jobs on the Web. Online recruiting can reach more candidates, which may bring in better applicants. In addition, the costs of online recruitment are usually lower than traditional recruiting methods such as advertising in newspapers or in trade journals. Human Resources Development. After employees are recruited, they become part of the corporate human resources pool, which means they must be evaluated and developed. IT provides support for these activities. Most employees are periodically evaluated by their immediate supervisors. In addition, in some organizations, peers or subordinates also evaluate other employees. Evaluations are typically digitized, and they are used to support many decisions, ranging from rewards to transfers to layoffs. IT also plays an important role in training and retraining. Some of the most innovative developments are taking place in the areas of intelligent computer-aided instruction and the application of multimedia support for instructional activities. For example, companies conduct much of their corporate training over their intranet or via the Web. Human Resources Planning and Management. Managing human resources in large organizations requires extensive planning and detailed strategy. The following three areas are where IT can provide support:
Table 10.1 provides an overview of the activities that the FAIS support. Figure 10.2 diagrams many of the information systems that support these five functional areas. Table10.1: Activities Supported by Functional Area Information Systems
FIGURE 10.2: Examples of information systems supporting the functional areas. before you go on… 1. Define a functional area information system and list its major characteristics. 2. How do information systems benefit the finance and accounting functional area? 3. Explain how POM personnel use information systems to perform their jobs more effectively and efficiently. 4. What are the most important HRIS applications? 10.3: Enterprise Resource Planning Systems Historically, the functional area information systems were developed independently of one another, resulting in information silos. These silos did not communicate well with one another, and this lack of communication and integration made organizations less efficient. This inefficiency was particularly evident in business processes that involve more than one functional area, such as procurement and fulfillment. Enterprise resource planning systems are designed to correct a lack of communication among the functional area IS. ERP systems resolve this problem by tightly integrating the functional area IS via a common database. For this reason, experts credit ERP systems with greatly increasing organizational productivity. ERP systems adopt a business process view of the overall organization to integrate the planning, management, and use of all of an organization’s resources, employing a common software platform and database. The major objectives of ERP systems are to tightly integrate the functional areas of the organization and to enable information to flow seamlessly across them. Tight integration means that changes in one functional area are immediately reflected in all other pertinent functional areas. In essence, ERP systems provide the information necessary to control the business processes of the organization. It is important to understand here that ERP systems are an evolution of FAIS. That is, ERP systems have much the same functionality as FAIS, and they produce the same reports. ERP systems simply integrate the functions of the various FAIS. Although some companies have developed their own ERP systems, most organizations use commercially available ERP software. The leading ERP software vendor is SAP (www.sap.com), which features its SAP R/3 package. Other major vendors include Oracle (www.oracle.com) and PeopleSoft (www.peoplesoft.com), now an Oracle company. (With more than 700 customers, PeopleSoft is the market leader in higher education). For up-to-date information on ERP software, visit http://erp.ittoolbox.com. Although implementing ERP systems can be difficult because they are large and complicated, many companies have done so successfully. IT’S About Business 10.2 recounts a successful ERP deployment at a large European railway company. ERP II Systems ERP systems were originally deployed to facilitate business processes associated with manufacturing, such as raw materials management, inventory control, order entry, and distribution. However, these early ERP systems did not extend to other functional areas, such as sales and marketing. They also did not include any customer relationship management (CRM) capabilities that enable organizations to capture customer-specific information. Finally, they did not provide Web-enabled customer service or order fulfillment. Over time, ERP systems evolved to include administrative, sales, marketing, and human resources processes. Companies now employ an enterprise-wide approach to ERP that utilizes the Web and connects all facets of the value chain. (You might want to review our discussion of value chains inChapter 2.) These systems are called ERP II. IT’s [about business]: 10.2 European Railway Successfully Converts to SAP A large European railway company transports millions of passengers and thousands of tons of cargo every year. The company has ambitious plans for growth, particularly in its freight-transport operations. As a result, it has invested heavily in expanding its information technology infrastructure. At the same time, the company faces rising operational expenses and increasing competition from other transport operators due to decreasing regulation of the transportation sector in its European markets. To successfully expand its operations as well as its market share, the railway must maximize savings and efficiencies, without sacrificing the exceptional service levels its customers have come to expect. As the firm pursued its strategy of expansion, obtaining a unified view of its operations became increasingly difficult. The company’s application portfolio was highly customized and fragmented, comprising more than 1,000 different information systems. This lack of IS integration and transparency across the company made it challenging for the business to obtain an accurate view of enterprise-wide cost structures and difficult to streamline operations across all of its divisions. The company needed to standardize its applications on a common platform. The railway decided to replace its application portfolio with software solutions from SAP (www.sap.com). The company implemented SAP core modules, including financials, controlling, sales and delivery, materials management, plant maintenance, production planning and control, and project management. The firm also implemented the SAP real estate management module to support its complex property-management business. In addition, the railway relies on the SAP human capital management module for its staff and pension administration and billing. The SAP human resource solution is another critical application for the firm, which has thousands of current staff on its payroll and many former staff members who are receiving company pensions. The entire corporate planning process and the consolidation of the company’s divisions are based on SAP NetWeaver Business Warehouse. For analysis and business intelligence applications, the company implemented SAP BusinessObjects software. Approximately 25,000 users have access to the employee self-service portal, while a total of 2,500 users have access to the company’s main SAP systems. To ensure that all users across all different systems comply with the company’s access rights, the railway implemented SAP solutions for data governance, risk, and compliance. Following the initial implementation of the core SAP modules, the railway leveraged its investment by replacing approximately 250 legacy applications without having to invest additional monies in SAP software licenses. Consolidating company data in the integrated SAP modules also substantially reduced the complexity of the overall information technology architecture, thereby reducing licensing, operational, and maintenance costs. Overall, the SAP implementation lowered the total cost of ownership for corporate data management by 25 percent, and it reduced data backup times by 70 percent. Both enhancements enabled the company to reduce its operational costs. In addition, the new system reduced both application response times and batch processing times by 30 percent. Finally, the system reduced the time required to switch to backup systems in the event of a system failure by 97 percent, which dramatically improved both data security and business continuity. Sources: Compiled from S. Kramer, “Belgian Railways Gets on Track for the Future with SAP and OpenText,” SAP Business Trends, March 14, 2013; “A Large Railway Company Lays the Track for New Business Opportunities,” IBM Case Study, April 12, 2013; “Belarusian Railways Transforms Operations and Reporting with SAP and IBM, IBM Case Study, October 1, 2012; www.ibm.com, www.sap.com, www.rw.by/en, accessed May 5, 2013. Questions 1. Discuss why the railway decided to implement an ERP system. 2. Describe the benefits that the company realized after deploying its ERP system. ERP II systems are interorganizational ERP systems that provide Web-enabled links among a company’s key business systems—such as inventory and production—and its customers, suppliers, distributors, and other relevant parties. These links integrate internal-facing ERP applications with the external-focused applications of supply chain management and customer relationship management. Figure 10.3 illustrates the organization and functions of an ERP II system. The various functions of ERP II systems are now delivered as e-business suites. The major ERP vendors have developed modular, Web-enabled software suites that integrate ERP, customer relationship management, supply chain management, procurement, decision support, enterprise portals, and other business applications and functions. Examples are Oracle’s e-Business Suite and SAP’s mySAP. The goal of these systems is to enable companies to execute most of their business processes using a single Web-enabled system of integrated software rather than a variety of separate e-business applications. FIGURE 10.3: ERP II system. ERP II systems include a variety of modules that are divided into core ERP modules—financial management, operations management, and human resource management—and extended ERP modules—customer relationship management, supply chain management, business intelligence, and e-business. If a system does not have the core ERP modules, then it is not a legitimate ERP system. The extended ERP modules, in contrast, are optional. Table 10.2 describes each of these modules. Benefits and Limitation of ERP Systems ERP systems can generate significant business benefits for an organization. The major benefits fall into the following categories:
Table10.2: ERP Modules
Despite all of their benefits, however, ERP systems do have drawbacks. The major limitations of ERP implementations include:
IT Project Management In almost every ERP implementation failure, the company’s business managers and IT professionals underestimated the complexity of the planning, development, and training that were required to prepare for a new ERP system that would fundamentally change their business processes and information systems. The major causes of ERP implementation failure include:
Implementing ERP Systems Companies can implement ERP systems in two ways, using on-premise software or using software-as-a-service (SaaS). We differentiate between these two methods in detail in Technology Guide 3. On-Premise ERP Implementation. Depending on the types of value chain processes managed by the ERP system and a company’s specific value chain, there are three strategic approaches to implementing an on-premise ERP system. These approaches are:
IT Project Management Software-as-a-Service ERP Implementation. Companies can acquire ERP systems without having to buy a complete software solution (i.e., on-premise ERP implementation). Many organizations are utilizing software-as-a-service (SaaS; discussed in Chapter 13 and Technology Guide 3) to acquire cloud-based ERP systems. (We discuss cloud computing in Technology Guide 3.) In this business model, the company rents the software from an ERP vendor who offers its products over the Internet using the SaaS model. The ERP cloud vendor manages software updates and is responsible for the system’s security and availability. Cloud-based ERP systems can be a perfect fit for some companies. For instance, companies that cannot afford to make large investments in IT, yet which already have relatively structured business processes that need to be tightly integrated, might benefit from cloud computing. The relationship between the company and the cloud vendor is regulated by contracts and by service level agreements (SLAs). The SLAs define the characteristics and quality of service; for instance, a guaranteed uptime, or the percentage of time that the system is available. Cloud vendors that fail to meet these conditions can face penalties. The decision about whether to use on-premise ERP or SaaS ERP is specific to each organization, and it depends on how the organization evaluates a series of advantages and disadvantages. Three major advantages of using a cloud-based ERP system are:
There are also disadvantages to adopting cloud-based ERP systems that a company must carefully evaluate. Three main disadvantages of using a cloud-based ERP system are: IT Project Management
Enterprise Application Integration IT Project Management For some organizations, integrated ERP systems are not appropriate. This situation is particularly true for companies that find the process of converting from their existing system too difficult or time-consuming. Such companies, however, may still have isolated information systems that need to be connected with one another. To accomplish this task, these companies can use enterprise application integration. An enterprise application integration (EAI) system integrates existing systems by providing software, called middleware, that connects multiple applications. In essence, the EAI system allows existing applications to communicate and share data, thereby enabling organizations to utilize existing applications while eliminating many of the problems caused by isolated information systems. EAI systems also support implementation of “best of breed” ERP solutions by connecting software modules from different vendors. before you go on… 1. Define ERP and describe its functions. 2. What are ERP II systems? 3. Differentiate between core ERP modules and extended ERP modules. 4. List some drawbacks of ERP software. 5. Highlight the differences between ERP configuration, customization, and best of breed implementation strategies. 10.4: ERP Support for Business Processes IT Project Management ERP systems effectively support a number of standard business processes. In particular, ERP systems manage end-to-end, cross-departmental processes. A cross-departmental process is one that (1) originates in one department and ends in a different department or (2) originates and ends in the same department but involves other departments. Three prominent examples of cross-departmental processes are:
Below, we examine these three processes in more detail, focusing on the steps that are specific to each one. The Procurement, Fulfillment, and Production Processes IT Project Management Three common cross-functional business processes are procurement, fulfillment, and production. In this section, we examine these processes in more detail, focusing on the steps that are specific to each one. The Procurement Process. The procurement process originates when a company needs to acquire goods or services from external sources, and it concludes when the company receives and pays for them. Let’s consider a procurement process where the company needs to acquire physical goods. This process involves three main departments—Warehouse, Purchasing, and Accounting—and consists of the following steps:
Figure 10.4 illustrates the procurement process. The Order Fulfillment Process. IT Project Management In contrast to procurement, in which the company purchases goods from a vendor, in the order fulfillment process, also known as the order-to-cash process, the company sells goods to a customer. Fulfillment originates when the company receives a customer order, and it concludes when it receives a payment from the customer. The fulfillment process can follow two basic strategies: sell-from-stock and configure-to-order. Sell-from-stock involves fulfilling customers directly using goods that are in the warehouse (stock). These goods are standard, meaning that the company does not customize them for buyers. In contrast, in configure-to-order, the company customizes the product in response to a customer request. FIGURE 10.4: Departments and documents flow in the procurement process. IT Project Management A fulfillment process involves three main departments: Sales, Warehouse, and Accounting. The steps in a fulfillment process include the following:
Figure 10.5 diagrams the fulfillment process. Note that it applies to both sell-from-stock and configure-to-order, because the basic steps are the same for both strategies. The Production Process. IT Project Management The production process does not occur in all companies because not all companies produce physical goods. In fact, many businesses limit their activities to buying (procurement) and selling products (e.g., retailers). The production process can follow two different strategies: make-to-stock and make-to-order (see the discussion of the pull model and the push model in Chapter 11). Make-to-stock occurs when the company produces goods to create or increase an inventory; that is, finished products that are stored in the warehouse and are available for sales. In contrast, make-to-order occurs when the production is generated by a specific customer order. Manufacturing companies that produce their own goods manage their inter-departmental production process across the Production and Warehouse departments. The steps in the production process are as follows:
FIGURE 10.5: Departments and documents flow in the fulfillment process. FIGURE 10.6: Departments and documents flow in the production process.
This overview of the Production process is a highly simplified one. In reality, the process is very complex, and it frequently involves additional steps. In addition, ERP systems collect a number of other documents and pieces of information such as the bill of materials (a list of all materials needed to assemble a finished product), the list of work centers (locations where the production takes place), and the product routing (production steps). All of these topics require an in-depth analysis of the production process and are therefore beyond the scope of our discussion here.Figure 10.6 illustrates the production process. A number of events can occur that create exceptions or deviations in the procurement, fulfillment, and production processes. Deviations can include:
Companies use ERP systems to manage procurement, fulfillment, and production because these systems track all of the events that occur within each process. Further, the system stores all of the documents created in each step of each process in a centralized database, where they are available as needed in real time. Therefore, any exceptions or mistakes made during one or more inter-departmental processes are handled right away by simply querying the ERP system and retrieving a specific document or piece of information that needs to be revised or examined more carefully. Therefore, it is important to follow each step in each process and to register the corresponding document into the ERP system. Figure 10.7 portrays the three cross-functional business processes we just discussed. It specifically highlights the integration of the three processes, which is made possible by ERP systems. FIGURE 10.7: Integrated processes with ERP systems. IT Project Management Interorganizational Processes: ERP with SCM and CRM IT Project Management Although the procurement and the fulfillment processes involve suppliers and customers, they are considered (together with the production process) intraorganizational processes because they originate and conclude within the company. However, ERP systems can also manage processes that originate in one company and conclude in another company. These processes are calledinterorganizational processes, and they typically involve supply chain management (SCM) and customer relationship management (CRM) systems. You can find a more detailed description of CRM and SCM in Chapter 11. Here, we focus on the integration of these processes within a firm’s industry value chain. SCM and CRM processes help multiple firms in an industry coordinate activities such as the production-to-sale of goods and services. Let’s consider a chain of grocery stores whose supply chain must properly manage perishable goods. On the one hand, store managers need to stock only the amount of perishable products that they are reasonably sure to sell before the products’ expiration dates. On the other hand, they do not want to run out of stock of any products that customers need. ERP SCM systems have the capability to place automatic requests to buy fresh perishable products from suppliers in real time. That is, as each perishable product is purchased, the system captures data on that purchase, adjusts store inventory levels, and transmits these data to the grocery chain’s Warehouse as well as the products’ vendors. The system executes this process by connecting the point-of-sale barcode-scanning system with the Warehouse and Accounting departments, as well as with the vendors’ systems. In addition, SCM systems utilize historical data to predict when fresh products need to be ordered before the store’s supply becomes too low. ERP CRM systems also benefit businesses by generating forecasting analyses of product consumption based on critical variables such as geographical area, season, day of the week, and type of customer. These analyses help grocery stores coordinate their supply chains to meet customer needs for perishable products. Going further, CRM systems identify particular customer needs and then utilize this information to suggest specific product campaigns. These campaigns can transform a potential demand into sales opportunities, and convert sales opportunities into sales quotations and sales orders. This process is called the demand-to-order process. IT Project Management before you go on… 1. What are the three main intraorganizational processes that are typically supported by ERP systems? 2. Why is it important that all steps in each process generate a document that is stored in the ERP system? 3. What is the difference between inter- and intra-company processes? 4. What are the two main ES systems that support interorganizational processes? 10.5: Reports IT Project Management All information systems produce reports: transaction processing systems, functional area information systems, ERP systems, customer relationship management systems, business intelligence systems, and so on. We discuss reports here because they are so closely associated with FAIS and ERP systems. However, the important point is that all information systems produce reports. These reports generally fall into three categories: routine, ad-hoc (on-demand), and exception. Routine reports are produced at scheduled intervals. They range from hourly quality control reports to daily reports on absenteeism rates. Although routine reports are extremely valuable to an organization, managers frequently need special information that is not included in these reports. At other times, they need the information that is normally included in routine reports, but at different times (“I need the report today, for the last three days, not for one week”). Such out-of-the routine reports are called ad-hoc (on-demand) reports. Ad-hoc reports also can include requests for the following types of information:
Some managers prefer exception reports. Exception reports include only information that falls outside certain threshold standards. To implement management by exception, management first creates performance standards. The company then creates systems to monitor performance (via the incoming data about business transactions such as expenditures), compare actual performance to the standards, and identify exceptions to the standards. The system alerts managers to the exceptions via exception reports. Let us use sales as an example. First, management establishes sales quotas. The company then implements an FAIS that collects and analyzes all of the sales data. An exception report would identify only those cases where sales fell outside an established threshold—for example, more than 20 percent short of the quota. It would not report expenditures that fell within the accepted range of standards. By leaving out all “acceptable” performances, exception reports save managers time, thus helping them focus on problem areas. before you go on… 1. Compare and contrast the three major types of reports. 2. Compare and contrast the three types of on-demand reports. What’s In IT For Me? IT Project Management For the Accounting Major IT Project Management Understanding the functions and outputs of TPSs effectively is a major concern of any accountant. It is also necessary to understand the various activities of all functional areas and how they are interconnected. Accounting information systems are a central component in any ERP package. In fact, all large CPA firms actively consult with clients on ERP implementations, using thousands of specially trained accounting majors. For the Finance Major IT Project Management IT helps financial analysts and managers perform their tasks better. Of particular importance is analyzing cash flows and securing the financing required for smooth operations. In addition, financial applications can support such activities as risk analysis, investment management, and global transactions involving different currencies and fiscal regulations. Finance activities and modeling are key components of ERP systems. Flows of funds (payments), at the core of most supply chains, must be executed efficiently and effectively. Financial arrangements are especially important along global supply chains, where currency conventions and financial regulations must be considered. For the Marketing Major IT Project Management Marketing and sales expenses are usually targets in a cost-reduction program. Also, sales force automation not only improves salespeoples’ productivity (and thus reduces costs), but it also improves customer service. For the Production/Operations Management Major IT Project Management Managing production tasks, materials handling, and inventories in short time intervals, at a low cost, and with high quality is critical for competitiveness. These activities can be achieved only if they are properly supported by IT. In addition, IT can greatly enhance interaction with other functional areas, especially sales. Collaboration in design, manufacturing, and logistics requires knowledge of how modern information systems can be connected. For the Human Resources Management Major IT Project Management Human resources managers can increase their efficiency and effectiveness by using IT for some of their routine functions. Human resources personnel need to understand how information flows between the HR department and the other functional areas. Finally, the integration of functional areas via ERP systems has a major impact on skill requirements and scarcity of employees, which are related to the tasks performed by the HRM department. For the MIS Major IT Project Management The MIS function is responsible for the most fundamental information systems in organizations: the transaction processing systems. The TPSs provide the data for the databases. In turn, all other information systems use these data. MIS personnel develop applications that support all levels of the organization (from clerical to executive) and all functional areas. The applications also enable the firm to do business with its partners. [ Summary ] IT Project Management
The major drawbacks of ERP systems include the following: IT Project Management
[ Chapter Glossary ] IT Project Management ad-hoc (on-demand) reports Nonroutine reports that often contain special information that is not included in routine reports. batch processing Transaction processing system (TPS) that processes data in batches at fixed periodic intervals. comparative reports Reports that compare performances of different business units or times. computer-integrated manufacturing (CIM) An information system that integrates various automated factory systems; also called digital manufacturing. cross-departmental process A business process that originates in one department and ends in another department, and/or originates and ends in the same department while involving other departments. drill-down reports Reports that show a greater level of detail than is included in routine reports. enterprise application integration (EAI) system A system that integrates existing systems by providing layers of software that connect applications together. enterprise resource planning (ERP) systems Information systems that take a business process view of the overall organization to integrate the planning, management, and use of all of an organization’s resources, employing a common software platform and database. ERP II systems IT Project Management Interorganizational ERP systems that provide Web-enabled links among key business systems (such as inventory and production) of a company and its customers, suppliers, distributors, and others. exception reports Reports that include only information that exceeds certain threshold standards. functional area information systems (FAISs) Systems that provide information to managers (usually midlevel) in the functional areas, in order to support managerial tasks of planning, organizing, and controlling operations. key-indicator reports Reports that summarize the performance of critical activities. online transaction processing (OLTP) Transaction processing system (TPS) that processes data after transactions occur, frequently in real time. order fulfillment process A cross-functional business process that originates when the company receives a customer order, and it concludes when it receives a payment from the customer. procurement process A cross-functional business process that originates when a company needs to acquire goods or services from external sources, and it concludes when the company receives and pays for them. production process A cross-functional business process in which a company produces physical goods. routine reports Reports produced at scheduled intervals. transaction Any business event that generates data worth capturing and storing in a database. transaction processing system (TPS) Information system that supports the monitoring, collection, storage, and processing of data from the organization’s basic business transactions, each of which generates data. [ Discussion Questions ]
Why is it logical to organize IT applications by functional areas? 2. IT Project Management Describe the role of a TPS in a service organization. 3. IT Project Management Describe the relationship between TPS and FAIS. 4. IT Project Management Discuss how IT facilitates the budgeting process. 5. IT Project Management How can the Internet support investment decisions? 6. IT Project Management Describe the benefits of integrated accounting software packages. 7. IT Project Management Discuss the role that IT plays in support of auditing. 8. IT Project Management Investigate the role of the Web in human resources management. 9. IT Project Management What is the relationship between information silos and enterprise resource planning? [ Problem-Solving Activities ]
Finding a job on the Internet is challenging as there are almost too many places to look. Visit the following sites: www.careerbuilder.com, www.craigslist.org, www.linkedin.com,www.jobcentral.com, and www.monster.com. What does each of these sites provide you as a job seeker? 2. IT Project Management Enter www.sas.com and access revenue optimization there. Explain how the software helps in optimizing prices. 3. IT Project Management Enter www.eleapsoftware.com and review the product that helps with online training (training systems). What are the most attractive features of this product? 4. IT Project Management Check out Microsoft Dynamics demos at http://www.wiley.com/go/rainer/problemsolving. View three of the demos in different functional areas of your choice. Prepare a report on each product’s capabilities. 5. IT Project Management Examine the capabilities of the following (and similar) financial software packages: Financial Analyzer (from Oracle) and CFO Vision (from SAS Institute). Prepare a report comparing the capabilities of the software packages. 6. IT Project Management Surf the Net and find free accounting software. (Try CNet’s software athttp://www.wiley.com/go/rainer/problemsolving, www.rkom.com, www.tucows.com,www.passtheshareware.com, and www.freeware-guide.com.) Download the software and try it. Compare the ease of use and usefulness of each software package. 7. IT Project Management Examine the capabilities of the following financial software packages: TekPortal (fromwww.tekknowledge.com), Financial Analyzer (from www.oracle.com), and Financial Management (from www.sas.com). Prepare a report comparing the capabilities of the software packages. 8. IT Project Management Find Simply Accounting Basic from Sage Software (http://us.simplyaccounting.com). Why is this product recommended for small businesses? 9. IT Project Management Enter www.halogensoftware.com and www.successfactors.com. Examine their software products and compare them. 10. IT Project Management Enter www.iemployee.com and find the support it provides to human resources management activities. View the demos and prepare a report on the capabilities of the products. COLLABORATION EXERCISE: IT Project Management Background Transaction processing systems, functional area systems, and enterprise resource planning systems provide much of the basis for decision support within an organization. All of the data often resides in a few databases or data warehouses and is then accessed by the various systems that provide support for making decisions. Activity Divide your team into the following positions based on major as much as possible (if you do not have enough majors to divide, then choose by preference): inventory, sales, production, labor, and accounting. Imagine that you are a manufacturing company that sells widgets and that your top salesperson just closed a deal for 10,000 units. For each of the systems mentioned above (transaction, function, and enterprise), describe the information you think your area would need to capture, store, analyze, and distribute for this transaction. Once everyone has completed their list of data needs, meet as a team and have a conversation about how similar or different your needs are. Is there any overlap? How would you use the information to make decisions? Deliverable Write up a description of the data that is needed by different areas and how important data capture is for providing the correct data points to the enterprise system. Submit your description to your professor. [ Closing Case: Truck Manufacturer Incorporates Information Systems in Trucks ] The Problem: IT Project Management For more than a century, PACCAR (www.paccar.com) has been a manufacturer of Peterbilt, Kenworth, and DAF (in Europe) heavy trucks. For much of this period the company turned a handsome profit. During the U.S. recession of 2008, however, PACCAR’s sales declined by 50 percent (but the company did report a profit that year). This problem convinced the company to take a risk by initiating a major information technology project. IT leaders at PACCAR crafted a strategic vision for how electronic systems could change their trucking and freight-hauling business. This vision included identifying new features their trucks would need for PACCAR to remain competitive and profitable. IT envisioned two innovative systems: (1) a navigation system tailored to truckers’ needs and (2) an onboard diagnostic system comprised of a network of data-collecting sensors that would warn of performance problems. Both systems would use pervasive wireless links to send data back to dispatchers. This system would allow PACCAR’s customer companies to continuously monitor their trucks’ location and performance. The IT Solution: IT Project Management As a first step to implementing this vision, IT staffers communicated directly with employees from all of the firm’s functional areas to emphasize the growing importance of in-vehicle electronic systems. Based on these talks, the company’s business and IT leaders achieved a consensus that PACCAR should develop its electronic systems in house, even though the firm had no expertise in building either wireless consumer electronics or consumer-friendly computer interfaces. To kick off the project, PACCAR convened a workshop for company design engineers, IT systems developers, and truck parts specialists. The workshop attendees decided their highest priority was to build a smart navigation system. Then, financial problems hit the company. PACCAR reported revenue of $15 billion in 2008, but that revenue decreased by almost half to $8 billion in 2009. PACCAR eventually had to lay off roughly one-third of its workforce to keep its costs in line. The IT department had to reduce its staff as well, and it was prohibited from hiring new talent in wireless and mobile systems. Furthermore, because of the tough financial climate, the IT department had neither the research nor the development budget to create an innovative new system. Adding to these problems, PACCAR realized that in-vehicle electronic systems, a new territory for them, would evolve at a much faster pace than areas in which they possessed extensive expertise, such as engine technology. To overcome these barriers, PACCAR decided to partner with outside organizations. For instance, the company utilized an automotive system that Microsoft had developed to build an in-cab electronics system. The PACCAR system contained a software development application that third parties could use to develop additional applications for PACCAR. In addition, PACCAR’s system enabled high-resolution graphics on a touch screen in the cab of its trucks. PACCAR’s navigation system used Garmin geo-positioning integrated with the driver’s user interface and related routing and mapping applications. Truck navigation systems are different from car systems in that they need to track details such as heights of bridges and weight restrictions along a route. In addition to navigation, the touch screen presents the driver with six “virtual gauges” that display various metrics regarding engine performance. PACCAR plans to incorporate more than 20 additional gauges into the next generation of the system. Significantly, this change will require nothing more than a simple software update. After developing its navigation system, PACCAR shifted its attention to its diagnostic system. PACCAR’s system uses a modem from SignalSet (www.signalset.com) that automatically links to the strongest wireless signal that the truck can access. In August 2011, PACCAR announced that its diagnostic system was available as an add-on to its trucks. Less than a year later the system was available as a built-in option. To demonstrate the navigation and diagnostic systems for potential customers, PACCAR has built kiosks in 1,900 of its dealer showrooms. The Results PACCAR’s electronic systems projects did more than place vital, customer-facing new systems into its products in the middle of a terrible economy. The projects also allowed the 275 PACCAR employees working on the projects to gain valuable experience collaborating with external talent. Having made the leap into customer-facing systems and having made IT a critical part of its products, PACCAR understands that the pressure to continually update its IT systems to keep up with drivers’ demands and rival products will be unrelenting. Therefore, the company now maintains a skilled IT staff dedicated to developing products and, when necessary, to collaborating with outside companies. And the bottom line? PACCAR reported revenues of $17 billion in 2012, an increase of $700 million from 2011. Further, the company reported net income of $1.1 billion in 2012, an increase of $70 million over 2011. Interestingly, 2012 is the 73rd consecutive year that PACCAR has reported a profit. Sources: Compiled from S. Kilcarr, “I’ll Take Telematics With That Truck,” Fleet-Owner, May 15, 2012; G. Conti, “Telematics: The Next Frontier,” Truckinginfo.com, May 2012; P. Menig, “Top 12 Truck Electronics Issues – A Year’s Worth of Subjects,” tech-i-m.com, January 11, 2012; C. Babcock, “Heavy Truck Maker Revs Up IT Innovation Amid a Brutal Recession,” InformationWeek, September 19, 2011; “PACCAR Truckerlink Uses Proprietary Cellular Network Technology,” Truckinginfo, September 16, 2011; “PACCAR Parts Touts Cellular-Based Telematics Fleet Management Service,” Truck Parts and Service, September 15, 2011; “Kenworth Truck Company Has Introduced the Revolutionary Kenworth NavPlus™, A PACCAR Proprietary Navigation and Infotainment Technology System for Class 5–8 Trucks,” The Street, March 24, 2010; www.paccar.com, www.kenworth.com, www.peterbilt.com, www.truckerlink.com,www.signalset.com, accessed March 10, 2013. Questions: IT Project Management 1. Why did PACCAR turn to collaboration and commit resources to develop electronic systems during the recession? 2. What are the benefits of PACCAR’s new navigation system and diagnostic system to truck drivers? 3. What are the benefits to PACCAR of collaborating with outside companies in building new systems? [ Internship Activity ] IT Project Management Manufacturing Industry Implementation of an Enterprise Resource Planning system (ERP) is a very lofty goal for any organization. Especially if there are existing systems in place. Migrating to a new system takes more than just updating software. Sometimes it requires modifying processes, changing habits, providing training, and getting management and user buy-in. For this activity, you will work for Halle Smith CIO of a wire manufacturing company. Halle has been charged with finding and implementing an ERP to help clean up the flow of data and operations within the organization. However, she knows it will be an uphill battle. Your task will be to research unsuccessful ERP implementations to help Halle understand the reasons why ERP implementations often fail. Please visit the Book Companion Site to receive the full set of instructions. IT Project Management
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