Information

Technology
Management
(ERP and Related Technologies )

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IT management

IT management is the discipline whereby all of the

information technology resources of a firm are managed
in accordance with its needs and priorities. These
resources may include tangible investments like
computer hardware, software, data, networks and data
centre facilities, as well as the staff who are hired to
maintain them.

Managing this responsibility within a company entails

many of the basic management functions, like budgeting,
staffing, change management, and organizing and
controlling, along with other aspects that are unique to
technology, like software design, network planning, tech
support etc.
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IT management

The central aim of IT management is to generate
value through the use of technology. To achieve
this, business strategies and technology must be
aligned.

IT Management is different from management
information systems. The latter refers to
management methods tied to the automation or
support of human decision making. IT
Management refers to IT related management
activities in organizations. MIS is focused mainly
on the business aspect, with strong input into the
technology phase of the business/organization.
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IT management

A primary focus of IT management is the value creation made
possible by technology. This requires the alignment of technology
and business strategies. While the value creation for an organization
involves a network of relationships between internal and external
environments, technology plays an important role in improving the
overall value chain of an organization. However, this increase
requires business and technology management to work as a
creative, synergistic, and collaborative team instead of a purely
mechanistic span of control.

 Previously, one set of resources was dedicated to one particular

computing technology, business application or line of business,
and managed in a silo-like fashion.
 These resources supported a single set of requirements and
processes, and couldnt easily be optimized or reconfigured to
support actual demand.

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IT management
 This led technology providers to build out and complement their
product-centric infrastructure and management offerings with
Converged Infrastructure environments that converge servers,
storage, networking, security, management and facilities.

The efficiencies of having this type of integrated and automated

management environment allows enterprises to get their
applications up and running faster, with simpler manageability and
maintenance, and enables IT to adjust IT resources (such as
servers, storage and networking) quicker to meet unpredictable
business demand.

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IT management disciplines

Concepts commonly listed under IT
Management:
 Business/IT alignment
 IT governance
 IT financial management
 IT service management
 Sourcing
 IT configuration management

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IT management disciplines

Business/IT alignment
 Business-IT alignment is a dynamic state in which a business
organization is able to use information technology (IT) effectively
to achieve business objectives - typically improved financial
performance or marketplace competitiveness.

IT governance
 Information and technology (IT) governance is a subset
discipline of corporate governance, focused on information and
technology (IT) and its performance and risk management. The
interest in IT governance is due to the on-going need within
organisations to focus value creation efforts on an organisation's
strategic objectives and to better manage the performance of
those responsible for creating this value in the best interest of all
stakeholders.

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IT management disciplines

IT financial management
 Financial Management for IT Services is an element of the ITIL
best practice framework. It is used to plan, control and recover
costs expended in providing the IT Service negotiated and
agreed to in the service-level agreement(SLA).

IT service management
 IT service management (ITSM) refers to the implementation and
management of quality information technology services. IT
service management is performed by IT service providers
through people, process and IT. ITSM is process-focused and
has ties and common interests with process improvement
frameworks and methodologies (e.g., TQM, Six Sigma, CMMI).

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IT management disciplines

Sourcing
 Corporate sourcing refers to a system where divisions
of companies coordinate the procurement and
distribution of materials, parts, equipment, and
supplies for the organization. This is a supply chain,
purchasing/procurement, and inventory function.

IT configuration management
 Configuration management (CM) is a systems
engineering process for establishing and maintaining
consistency of a product's performance, functional
and physical attributes with its requirements, design
and operational information throughout its life.

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IT management in ES

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 LIMITATIONS OF THE ERP SYSTEM
The ERP system has 3 significant limitations:

1.Managers cannot generate custom reports or queries

without the help from a programmer and this inhibits them from
obtaining information quickly, which is essential for making a
competitive advantage.

2.ERP systems provide current status only, such as open

orders. Managers often need to look past status to find trends
and patterns that aid better decision-making.

3.The data in the ERP application is not integrated with other

enterprise or division systems and does not include external
intelligence.

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There are many technologies that help to overcome these limitations.
These technologies when used in conjunction with the ERP package, help
in overcoming the limitations of a stand-alone ERP system and thus help
the employees to make better decisions.
Some of these technologies are:

1. BUSINESS PROCESS RE-ENGINEERING (BPR)

2. MANAGEMENT INFORMATION SYSTEMS (MIS):

3. DECISION SUPPORT SYSTEMS (DSS)

4. EXECUTIVE INFORMATION SYSTEMS (EIS)

5. DATA WAREHOUSING

6. DATA MINING

7. ON-LINE ANALYTICAL PROCESSING (OLAP)

8. SUPPLY CHAIN MANAGEMENT(SCM) 12

 BUSINESS PROCESS RE-ENGINEERING (BPR)

DEFINITION :

Dr. Michael Hammer defines BPR as the fundamental
rethinking and radical redesign of business processes to
achieve dramatic improvements in critical, contemporary
measures of performance such as cost, quality, services
and speed.

One of the main tools for making this change is the

Information Technology (IT).

Any BPR effort that fails to understand the importance of IT,

and goes through the pre-BPR analysis and planning
phases without considering the various IT options available,
and the effort of the proposed IT solutions on the employees
and the organization is bound to crash during take off.
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 ADVANTAGES OF BPR

1. It helps in integrating the various business processes

of the organization.

2. With good ERP package, the organization will be able to

achieve dramatic improvements in areas such as cost,
quality, speed, etc.
Hence, many BPR initiatives are used in ERP
implementation.

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 MANAGEMENT INFORMATION SYSTEMS (MIS)
DEFINITION :
MIS is a computer based system that optimizes the collection, collation,
transfer and presentation of information throughout an organization, through an
integrated structure of databases and information flow.
The main characteristics of MIS are:

1. MIS supports data processing functions of transaction

handling and record keeping.

2. MIS uses an integrated database and supports a variety of

functional areas.

3. MIS provides operational, tactical and strategic levels of

organization with timely, structured information.

4. MIS is flexible and can adapt to the changing needs of the

organization. 15
 Comparison of MIS vs DPS

MIS DPS(DATA PROCESSING SYSTEM)

1 It uses an integrated 1 It does not use an integrated

database. database.

2 It provides greater flexibility 2 It provides no such flexibility

to the management

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Comparison of MIS vs DPS

MIS DPS(DATA PROCESSING SYSTEM)

3 Integrates the information 3 DPS tends to support a single

flow between functional functional area.
areas.

4 Focus on information 4 DPS focus on departmental-level

needs of all levels of support
management

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 DECISION SUPPORT SYSTEMS (DSS)
DEFINITION:
Decision support systems are interactive information systems that
rely on an integrated set of user-friendly software and hardware tools, to
produce and present information targeted to support management in the
decision making process.

Managers spend a lot of time and effort in gathering and

analyzing information before making decisions. Decision
support systems were created to assist managers in this task.

A DSS can help close this gap and allow managers to

improve the quality of their decisions.

To do this, the DSS hardware and software employ the latest

technological innovations, planning and forecasting models,
4th generation languages and even artificial intelligence.
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The main characteristics of a DSS are:

1.A DSS is designed to address semi-structured and

unstructured problems.

2.The DSS mainly supports decision-making at the top

management level.

3.DSS is interactive, user-friendly and can be used by the

decision maker with little or no assistance from a computer
professional.

4.DSS makes general purpose models, simulation

capabilities and other analytical tools available to the
decision maker.
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 Comparison of DSS vs MIS
DSS MIS

1
It focuses on decision 1 It emphasizes on planning
making. reports on a variety of
subjects.

2
Quite unstructured and is 2 It is standard, scheduled,
available on request. structured and routine.
3
It is immediate and user- 3 It is constrained by the
friendly. organizational system.

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 EXECUTIVE INFORMATION SYSTEMS (EIS)
DEFINITION:
EIS is a decision support system especially made for
senior level executives.

Top level executives and decision makers face

many problems and pressures. They have to
make the right decisions at the right time to take
the company forward.

An EIS is concerned with how the decisions
affect an entire organization.

An EIS takes the following into considerations:
 The overall vision and mission of the company
and the company goals.
 Strategic planning and objectives.
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EXECUTIVE INFORMATION
SYSTEMS (EIS)
 Organizational structure.
 Crisis management/ contingency planning.
 Strategic control and monitoring of overall
operations.

Successful EIS are easy to use, flexible and
customizable and use the latest technological
innovations.

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 DATA WAREHOUSING

1. If operational data is kept in the database of the ERP

system, it can create a lot of problems.

2. As time passes, the amount of data will increase and this

will affect the performance of the ERP system.

3. However once the operational use of the data is over, it

should be removed from the operational databases.

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IMPORTANCE OF DATA WAREHOUSING

The primary concept of the data warehousing is

that the data stored for the business analysis
can be accessed most effectively by
separating it from the data in operational
systems.

The most important reason for separating data for
business analysis, from the operational data, has
always been the potential performance
degradation on the operational system that can
result from the analysis processes.

High performance and quick response time is
almost universally critical for operational system.
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 DATA MINING
DEFINITION
Data mining is the process of identifying valid, novel,
potentially useful and ultimately comprehensible
information from databases that is used to make
crucial business decisions.

The main reason for needing automated

computer systems for intelligent data analysis is
the enormous volume of existing and newly
appearing data that require processing.

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The amount of data accumulated each day by various
businesses, scientific and governmental organizations around
the world is daunting.

Research organizations, academic institutions and

commercial organizations create and store huge amounts of
data each day.

It becomes impossible for human analysts to cope with such

overwhelming amounts of data.

Two other problems that surface when human analysts

process data are:

i. The inadequacy of the human brain when searching for

complex multi-factorial dependencies in the data.

ii. The lack of objectiveness in analyzing the data

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 ADVANTAGES

A human expert is always a hostage of the
previous experience of the investigating other
system.

Sometimes this helps, sometimes this hurts, but
it is almost impossible to get rid of this fact.

While data mining does not eliminate human
participation in solving the task completely, it
significantly simplifies the job and allows an
analyst, who is not a professional in statistics and
programming to manage the process of
extracting knowledge from data.

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ON-LINE ANALYTICAL PROCESSING (OLAP)
DEFINITION
OLAP can be defined in five words Fast Analysis of Shared
Multi-dimensional Information.

Fast : means that the system is targeted to deliver

most responses to users within about 5 seconds, with
the simplest analysis not taking more than one second
and very few taking more than 20 seconds.

Analysis: means that the system can cope with any
business logic and statistical analysis that is relevant
for the application and the user, and keep it easy
enough for the target user.

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ON-LINE ANALYTICAL PROCESSING (OLAP)

Shared: means that the system implements all

the security requirements for confidentiality and
if multiple write access is needed, concurrent
update locking at an appropriate level.

Multi-dimensional: means that the system must
provide a multi-dimensional conceptual view of
the data, including full support for hierarchies
and multiple hierarchies.

Information: is refined data that is accurate,
timely and relevant to the user.

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 Importance

OLAP technology is being used in an increasingly wide

range of applications.

The most common are sales and marketing analysis,
financial reporting and consolidation and budgeting and
planning.

OLAP is being used for applications such as product
profitability and pricing analysis; activity based coating;
manpower planning and quality analysis or for that
matter any management system that requires a flexible,
top down view of an organization.

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SUPPLY CHAIN MANAGEMENT(SCM)
DEFINITION:
A supply chain is a network of facilities and distribution
options that performs the function of procurement of materials,
transformation of these materials into intermediate and
finished products and the distribution of these finished
products to the customers.
1. Supply chains exist in both service and manufacturing
organizations, although the complexity of the chain may
vary greatly from industry to industry and firm to firm.
2. Traditionally, marketing, distribution, planning,
manufacturing and the purchasing organizations along the
supply chain operated independently.

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SUPPLY CHAIN MANAGEMENT(SCM)

3. These organizations have their own objectives

which are often conflicting.

4. There is a need for a mechanism through which

these different functions can be integrated
together.

5. Supply chain management is a strategy through

which such integration can be achieved.

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