ITM330 Midterm Notes.docx

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Information Technology Management
ITM 330
Selcuk Savas

Chapter 1 Business FunctionsBusiness ProcessesEnterprise Resource Planning ERP programs are core software used by companies to coordinate information in every area of the business ERP programs help to manage companywide business processes using a common database and shared management reporting tools A business process is a collection of activities that takes one or more kinds of inputs and creates and output such as a report or forecast that is of value to the customer ERP software supports the efficient operation of business processes by integrating throughout a business tasks related to sales marketing manufacturing logistics accounting and staffing Companies that make and sell products have business processes that involve these basic functional areas and perform these different functions Marketing and sales o Sets product prices promotes products through advertising and marketing takes customer orders supports customers and creates sales forecastsSupply chain management o Develop production plans orders raw materials from suppliers receives the raw materials into the facility manufactures products maintains facilities and ships products to customersAccounting and finance o Performs financial accounting to provide summaries of operational data in managerial reports and also is responsible for tasks such as controlling accounts planning and budgeting and cash flow managementHuman resourceso Recruits hires and trains and compensates employees ensures compliance with government regulations and oversees the evaluation of employees A functional area is served by an information system Information systems capture process and store data to provide information needed for decision making Employees working in one functional area need data from employees in other functional areas Ideally functional area information systems should be integrated so shared data are accurate and timely Today business managers try to think in terms of business processes that integrate the functional areas thus promoting efficiency and competitiveness An important aspect of this integration is the need to share information between functions and functional areas ERP software provides this capability by means of single common databaseChapter 2 The Development of Enterprise Resource Planning ERP SystemsIn todays competitive business environment companies try to provide customers with goods and services faster and less expensively than their competitors Often the key is to have efficient integrated information systems Increasing the efficiency of information systems results in more efficient management business processes When companies have efficient business processes they can be more competitive in the marketplace An ERP system can help integrate a companys operations by acting as a company wide computing environment that includes a database that is shared by all functional areas Such software can deliver consistent data across all business functions in real time Real time refers to data and processes that are always current Several factors led to the development of ERPThe speed and power of computing hardware increased exponentially while cost and size decreasedThe early client server architecture provided the conceptual framework for multiple users sharing common dataIncreasingly sophisticated software facilitated integration especially in two areas AF and manufacturing resource planning The growth of business size complexity and competition made business managers demand more efficient and competitive information systemsSAP AG produced a complex modular ERP program called R3 The software could integrate a companys entire business by using a common database that linked all operations allowing real time data sharing and streamlines operationsSAP R3 now called SAP ERP is modular software offering modules for sales and distribution materials management production planning quality management and other areasERP software is expensive to purchase and time consuming to implement and it requires significant employee training but the payoffs can be spectacular For some companies however the ROI may not be immediate or even calculable Experts anticipate that ERPs future focus will be on managing customer relationships improving planning and decision making and linking operations to the internet and other applications through service oriented architecture
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