IT Strategy to meet corporate

objectives

Sanjay Mohapatra
 SANJAY MOHAPATRA
From To Position Organization
July ‘07 Contd…. Associate Professor Xavier Institute of Management, Bhubaneswar

May ‘05 July ‘07 Vice President J & B Software (I) Pvt. Ltd.

Dec ‘03 Mar ‘05 Vice President Polaris Software Lab Ltd.

Nov ‘97 Dec ‘03 Manager Infosys Technologies Limited

Nov ‘96 Nov ‘97 Senior Consultant PriceWaterhouse Coopers Pvt. Ltd.

Aug ‘93 Nov ‘96 Senior Consultant Ernst & Young Pvt. Ltd.

Jul ‘86 May ‘91 Engineer Hindustan Aeronautics Limited

 Ground Rules
• Cross talking is disturbing – difficult to
tolerate
• One person talks one time – please raise
your hand before talking
• You are allowed to think freely as long as
you participate in the class
• Mobiles in silent mode

5
 Module – I
What is IT Strategy
 Does IT Matter?

What is IT?

• A bunch of networks and computers

OR

• Hardware plus the software that mediates and manages

human knowledge or information
 What is IT Strategy?

Charles Fitzgerald, Microsoft General

Manager

• The source of competitive advantage

in business is what you do with the
information that technology gives you
access to. How do you apply that to
some particular business problem?
 What is IT Strategy? Contd…
Paul Strassman, former CIO of General
Foods, Xerox, Pentagon, and NASA

• Information technology today is a

knowledge-capital issue.

• Look at the business powers – most of all

Wal-Mart, but also companies like Pfizer
or FedEx. They’re all waging information
warfare.
What is IT Strategy? Contd…
Definition:
• Any kind of information system that uses
information technology to help an
organization gain a competitive
advantage, reduce a competitive
disadvantage, or meet other strategic
enterprise objectives.
Conceptual Framework of IT Knowledge
 IT Strategy
• Corporate
Objectives
• Tactical Strategy
• Operational
Strategy

Corporate
Vision Mission Metrics
Strategy

• MIS

Customer Financial Internal Learning and

Process Growth
Threat of Brand equity Vendor Competitive Stakeholders
competitors (barrier to entry for management edge
competitors)

Market Capitalization
IT STRATEGY
Innovative differentiation

Marketing differentiation IT Support for strategy Revenue performance

Domain competency

Operational Competency

Low cost production IT support for core competency Profitability

Technological competencies
Roles of IT in Business
 IT Strategy and Management: Why
 Information Technology (IT) is a strong contributor to
globalization.
 IT helps modern corporations in continuous
transformation.
 IT is not only a supporter or enabler but is also a strategic
value creator and differentiator.
 The growth of IT has accelerated due to the Internet and
convergence.
 New challenges and opportunities have emerged in
managing IT as a strategic resource.
 IT is strategic in nature and needs a long-term
perspective.
 IT management can be a difficult area.
Wednesday, June 03, IT Strategy and Management 15
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 Learning Pause: What do you think?
• Name one example where IT has dramatically
changed the ways in which business is conducted.
• Can these businesses survive without IT? Consider
what will happen if IT stops functioning.
• Therefore you need a proper and methodical approach
for IT Strategy and Management.

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2009
 IT Strategy and Management: What to
do? information as a key
• Analyze and critically evaluate
resource.
• Analyze IT systems’ ability to meet strategic
information needs.
• Evaluate the use of Information Systems (IS) or IT to
gain competitive advantage.
• Prepare an effective plan for the implementation of
information strategy.
• Evaluate IT function service capabilities and enhance
it using ITSM processes.

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2009
 1
BUSINESS STRATEGY: CHALLENGES
AND OPPORTUNITIES FOR IT
What is Business Strategy?
– Set of objectives, plans and policies for the firm to
compete in the market.
– Plan, Pattern, Position, Perspective and Ploy
What is the role of IT in formulating business strategy?
What is the impact of IT on business strategy?

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 1.3.1 What are the Challenges and
Opportunities with IT?
 Efficiency improvement through the use of digital
nervous systems.
 Delivering different mixes of value.
 Innovation for IT.
Why it is so?
 Global competition, global marketplace and global
connectivity.

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 1.4 WHAT IS IT STRATEGY?
 It is both
– Competitive necessity: To do business in any

industry.
– Competitive advantage: Developing products,

services, processes, or capabilities, giving the

company a superior position vis-à-vis competitors.
 Comprises
– IT application strategy.
– Technology management strategy for IT.
– IT management strategy.

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 1.4.1 IT Application Strategy
 IT application strategy involves answering these
questions:
– Which applications are to be used?
– For which business areas, and for what benefits and at
what cost are they to be used?
 Application types belong to either:
– Support,
– Factory,
– Turnaround, or
– Strategic
categories.
– This is discussed in detail in Chapter 5 (Session 3).

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1.4.2 Technology Strategy for IT
Long-term approach for planning and selection of underlying
information technology components and tools (See Chapter 6
Session 3)
1.4.3 IT Management Strategy
See Chapters 7, 8 and 9.
 More complex and involved in current times
 Managing underlying risk in the event of system failure
 Ensuring that IT projects and programs meet business
expectations within the desired time, cost and budget limits
 Decision on outsourcing versus doing in-house
 Establishing IT systems management processes
 Change management strategies for people.
Wednesday, June 03, IT Strategy and Management 22
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 1.5 DEVELOPING IT STRATEGY FOR
COMPETITIVE ADVANTAGE
 Understanding the strategic dimension
 Exploring the points of opportunity as well as areas of
concern
 Deciding whether corporate strategy should drive IT or
vice versa
 Setting long-term direction for IT.

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 2
BUSINESS–IT ALIGNMENT
 What is Business – IT alignment?
– Alignment between IT and business means that IT delivers what

businesses need to their satisfaction.

– IT also plays a strategic role in shaping new business strategy.

 Refer to Fig. 2.1 to show the alignment framework

 Alignment must happen between four elements as shown, spanning
– Functional integration

– Strategic fit.

 Refer to Section 2.1.1 for the broader definition of alignment

relevant examples.
 Refer to Sections 2.5, 2.6 and 2.7 for research by
– Cathleen and MacFarlane

– David Nickels.

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 2.2 CHALLENGES OF BUSINESS AND IT
ALIGNMENT
 Absence of a well-articulated strategy
 Completeness, comprehensiveness and speed to
gather the end-users’ requirements
 Uniform and seamless communication of the strategy,
objectives and critical success factors to the entire
organization.
 Alignment Inhibitors
– Leadership level congruence

– IT’s ability to identify and partner with business

– IT’s ability to deliver.

 Three levels of alignment: Refer to Fig. 2.2.

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 2.3 3D FRAMEWORK FOR ALIGNMENT
 Discipline
 Design
 Drive for results.

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 2.4 HOW TO ACHIEVE BUSINESS–IT
ALIGNMENT
 This section discusses the three-perspective
framework.
2.4.1 Communication School
 See page 18 What happened to the task force
manager? Discuss the case
 Discuss Rockert, Earl and Ross Bidirectional approach
and Rich and Benbast extension.

Wednesday, June 03, IT Strategy and Management 27

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 2.4.2 Architecture School
 Integrated architecture framework
 Quality Function Deployment (QFD)

 Design and Engineering Methodology for

Organizations (DEMO) by Jan Dietz
 Information Engineering (IE) James Martin.

IT Strategy and Management 28

 2.4.3 Technology School
 ITIL (Information Technology Infrastructure Library)
frameworks
2.4.4 People School
 Approaches of Indira and Michelle on the role of IT
professionals, skills required, and aspiration
 Approach of Charles about alignment as a
collaborative process.
 Business–IT alignment framework summary (Table 2.1)
 Role of IT professional (Fig. 2.3 )

IT Strategy and Management 29

 2.5 BUSINESS AND IT ALIGNMENT
TOOLS, TIPS AND TRAPS
Relationship between all Schools (see Fig. 2.4 IT
Strategy and Management book)
 Role of IT strategy played out at different stages of
business maturity (see Fig. 2.5 IT Strategy and
Management book).

IT Strategy and Management 30

 Module – II
Evolution of IT Strategy
Trends in ITS
Agenda
 Business Focus

Operational

1980s
Re-engineering

1990s
Today’s IT Strategy

After 2000
IT Strategy – over the years
 Changing Role of Information Technology

Old Business Rule Technology intervention New Business Rule

Information can appear Shared databases Information appears

only at one place simultaneously

Only experts can perform Expert Systems Generalists can act as

complex jobs experts.

Businesses must choose Telecommunication Centralization and

between centralization and networks decentralization
decentralization possible

Managers make all the Software tools Decision making is

decisions part of everyone’s job
 Enabling Role of Information Technology

Old Business Rule Technology intervention New Business Rule

Field persons need offices Wireless/internet/laptops Field offices can be

virtual

Personal contacts Internet / email Effective contacts

Find out the information Enterprise software Information comes to

you

Plans get revised On line computing Plans get revised

periodically instantly
Evolutionary Business Question Enabling Product Characteristics
Step Technologies Providers
Data "What was my total Computers, IBM, CDC Retrospective,
Collection revenue in the last tapes, disks static data
(1960s) five years?" delivery
Data Access "What were unit sales Relational Oracle, Retrospective,
(1980s) in New England last databases Sybase, dynamic data
March?" (RDBMS), Informix, IBM, delivery at
Structured Query Microsoft record level
Language (SQL),
ODBC
Data "What were unit sales On-line analytic Pilot, Retrospective,
Warehousing in New England last processing Comshare, dynamic data
& March? Drill down to (OLAP), Arbor, delivery at
Decision Boston." multidimensional Cognos, multiple levels
Support databases, data Microstrategy
(1990s) warehouses
Data Mining "What’s likely to Advanced Pilot, Prospective,
(Emerging happen to Boston algorithms, Lockheed, proactive
Today) unit sales next multiprocessor IBM, SGI, information
month? Why?" computers, numerous delivery
massive start-ups
databases (nascent
industry)
Current Trend and in near future……

•Automation of business processes

• Simplification of business processes
• Elimination of non-value adding business processes
• Reengineering of business processes
 e-business Information Technology
Infrastructure

S S
L L
A A
 What is e-business?
• Definition:
The use of Internet technologies to work
and empower business processes,
electronic commerce, and enterprise
collaboration within a company and with
its customers, suppliers, and other
business stakeholders.

• An online exchange of value.

 What is e-business?
• E-business is a new way of conducting, managing, and executing
business transactions using IT and telecommunications networks
(Internet and Extranet)
• E-business is remaking the business world by:
- redefining virtually every business process and function
- changing conventional concepts and rules about strategic
alliances, outsourcing, competition, industry specialization, and
customer relationships
- creating a wealth of information about customers, enabling
businesses to anticipate and satisfy individual needs with
pinpoint precision
- blurring the lines between industries
- challenging every business to reinvent itself
 It provides companies with new, more cost and time-efficient means
for working with customers, suppliers, and development partners
 e-business

Information Technology

Business E-Business

Telecommunication
 Information System Classifications by Scope

• Functional Business Systems – support basic business functions

• Strategic Information Systems – support processes that provide a

firm with strategic products, services, and capabilities for
competitive advantage

• Cross-functional Information Systems – integrated combinations of

information systems
Management Challenges & Opportunities
 Measures of Success

• Efficiency
– Minimize costs
– Minimize time
– Minimize the use of information resources

• Effectiveness
– Support an organization’s business strategies
– Enable its business processes
– Enhance its organizational structure and culture
– Increase the customer business value of the
enterprise
 The IT Function represents…

• A major functional area of business equally as

important to business success as the functions
of accounting, finance, operations management,
marketing, and human resource management.

• An important contributor to operational

efficiency, employee productivity and morale,
and customer service and satisfaction.
 The IT Function represents…

• A major source of information and support needed to

promote effective decision making by managers and
business professionals.

• A vital ingredient in developing competitive products and

services that give an organization a strategic advantage
in global marketplace.
 The IT Function represents…

• A dynamic, rewarding, and challenging career

opportunity for millions of men and women.

• A key component of the resources, infrastructure, and

capabilities of today’s networked business enterprise.
A Business System
IT Resources & Activities
 Information Technology Resources

• People – end users and IT specialists

• Process – Quality personnel???

• Hardware – physical devices and materials

used in information processing including
computer systems, peripherals, and media

• Software – sets of information processing

instructions including system software,
application software and procedures
 Information Technology Resources (contd..)

• Data – facts or observations about physical phenomena

or business transactions

• Network – communications media and network

infrastructure
• There is no longer a distinction between
an IT project and a business initiative.

• IT is an important contributor to
operational efficiency, employee
productivity and morale, and customer
service and satisfaction.
• Information Technology is a major source
of information and support needed to
promote effective decision making by
managers and business professionals.

• Information Technology can be

categorized based on their intended
purpose.
• Managing and using Information
Technology can pose several challenges
including the development process and
ethical responsibilities.
 Business
Environment

Organization:
- business process
Information Business
Technology - people
Processes
- data
- strategy
IT vs. DSS
Role of IT in business
Roles:
- support of business operations
- support of managerial decision
making
- support of strategic competitive
advantage
‘In an organization, information is
the blood and MIS is the heart’.
Impact of IT on an Organization

•As transactional Information Systems:

enables enterprise-wide shared and integrated

databases through :
i. improved decision making
ii. improved MIS reporting
- enables enterprise-wide cross functional work flow
automation through :
i. improving Intra-organizational transactions
ii. reducing in business processes lead times
iii. improved inventory and working capital
management
iv. improved financial reconciliation
Impact of IT on an Organization contd…

• Improves business process performance through:

- automation of business processes

- simplification of business processes
- elimination of non value adding business
processes
- reengineering of business processes
 Impact of IT on an organization

• IT as a coordination and planning information

system results in:
- improved coordination among sales, production
stores, purchase, and accounts due to close loop
systems and online data
- dynamic scheduling of production and purchase-
based on feedback from sales and visa versa
Customer-Focused Business
A business that:

• can anticipate customers’ future needs.

• responds to customer concerns.

• provides top-quality customer service.

IT in a Customer-Focused Business
 Customer Relationship Management (CRM)

Definition:
• The use of information technology to
create a cross-functional enterprise
system that integrates and automates
many of the customer-serving processes
in sales, marketing, and customer
services that interact with a company’s
customers
CRM Application Clusters
 Agile Company

Definition:
• A company that can make a profit in
markets with broad product ranges and
short model lifetimes, and can produce
orders individually and in arbitrary lot
sizes.
 Mass Customization

Definition:
• Providing individualized products while
maintaining high volumes of production
Agile Competitor
To achieve effective results, IT strategist should…

List business drivers Prioritize them

Select the processes with most IT potential

Identify specific information opportunity

Translate into automation requirements and

IT strategy
 IS
Industry Solutions

CO FI AA
Costing & controlling Financial Accounting Asset Accounting

MM HR
Materials Human Resources
Management

PP Central RM
Production Planning Reports Management
Enterprise
Database
QM SM
Quality Management Service Management

PM SD PS
Plants Maintenance Sales & Distribution Project Systems

CS
Country Specific
Solutions
 Module III
Need for IT Strategy
 The competitive edge
• To be competitive today you need:
- the flexibility to take on new business opportunities as
they arise
- a business framework that lets you
i. optimize business processes
ii. cut costs
iii. Differentiate
iv. Innovate
v. Improve customer service
vi. Shorten your time to market
vii. Develop alliances
- comprehensive decision support tools to provide up-to-
date information on revenues, budget performance,
sales, and cash-flow
• E-business can help provide the competitive edge you
need
Role of IT in business
Roles:
- support of business operations
- support of managerial decision
making
- support of strategic competitive
advantage
‘In an organization, information is
the blood and MIS is the heart’.
Impact of IT on an Organization

•As transactional Information Systems:

enables enterprise-wide shared and integrated

databases through :
i. improved decision making
ii. improved MIS reporting
- enables enterprise-wide cross functional work flow
automation through :
i. improving Intra-organizational transactions
ii. reducing in business processes lead times
iii. improved inventory and working capital
management
iv. improved financial reconciliation
Impact of IT on an Organization contd…

• Improves business process performance through:

- automation of business processes

- simplification of business processes
- elimination of non value adding business
processes
- reengineering of business processes
 Impact of IT on an organization

• IT as a coordination and planning information

system results in:
- improved coordination among sales, production
stores, purchase, and accounts due to close loop
systems and online data
- dynamic scheduling of production and purchase-
based on feedback from sales and visa versa
Customer-Focused Business
A business that:

• can anticipate customers’ future needs.

• responds to customer concerns.

• provides top-quality customer service.

 Customer Relationship Management (CRM)

Definition:
• The use of information technology to
create a cross-functional enterprise
system that integrates and automates
many of the customer-serving processes
in sales, marketing, and customer
services that interact with a company’s
customers
CRM Application Clusters
IT in a Customer-Focused Business
 Agile Company

Definition:
• A company that can make a profit in
markets with broad product ranges and
short model lifetimes, and can produce
orders individually and in arbitrary lot
sizes.
 Mass Customization

Definition:
• Providing individualized products while
maintaining high volumes of production
Agile Competitor
 3
STRATEGIC IT PLANNING
• Strategic planning is the systematic examination of opportunities
and threats in the business environment so that you are in the
position to identify those opportunities that should be exploited and
the threats that should be avoided.
—George Steiner
• Strategic planning is to create opportunity that can be leveraged to
create differential advantage in the marketplace.
—N. Les Clark

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 Discussion points:


 Develop a conceptual framework about the process

of SITP (Strategic IT Planning)

 Identify which planning methodologies really work

and why
 Examine the content of SITP, its measurement and

appraisal
 Dwell on the roles and responsibilities of

 Executives in integrating and aligning IT with the

business strategy
 IT professionals in ideal conditions.

Wednesday, June 03, IT Strategy and Management 85

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 3.1 BUSINESS IMPLICATIONS OF IT
STRATEGY AND PLANNING
• Where are we now?

• Where do we want to go?

• How will we get there?

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 3.2 WHAT IS STRATEGIC IT PLAN?
Nothing seems more logical, more reasonable or more
appropriate than planning. Doing things today to make
us better tomorrow. Because the future belongs to
those who make the hard decisions today.
—Anonymous (Page 33)
 A strategic plan maps out where the firm is headed,
short and long-range performance targets and actions
of the management to achieve outcomes.

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 3.3 STRATEGIC IT PLAN MOTIVATIONS
Refer to page 33 of IT Strategy and Management book
 Reduce cost and increase competitiveness and

integration.

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 3.4 SITP PROCESS : PLANNING
APPROACHES
• Top-down analytical approach
• Bottom-up evaluative approach (Fig. 3.2)
• Creative Approach (Fig. 3.3)

3.5 DIFFICULTIES IN DEVELOPING

AND EXECUTING
SITP: 3 difficulties according to McNurlin

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 3.6 BEST PRACTICES FOR ACHIEVING
SITP
• Segars, Grover and Teng (1998) (refer to Section 3.6)
defines the following best practices:
• Comprehensiveness
• Formal
• Focused
• Smooth flow
• Wider participation
• Consistency

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 3.7 SITP APPROACHES AND
PREVALENT RESEARCH
• IBM business systems planning
• Rockart’s critical success factors (CSF)
• Stages of growth: Nolan’s stages theory
• Porter’s competitive forces model
• Porter’s value chain analysis
• E-business value matrix
• Linkage analysis planning
• Scenario planning.

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 SITP overall planning processes
• See Fig. 3.4
• Refer to Figures 3.5, 3.6 and 3.7 for SITP approaches.

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 3.8 CRITICAL COMPARISON OF ALL
APPROACHES
 Refer to Table 3.1, page 45.

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 3.9 INTEGRATED PLANNING
APPROACH
• Refer Fig. to 3.8.

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 3.10 CONTENT OF SITP
 Refer Fig. 3.9
 Earl, Mocker and Teubner defined the components of
SITP as
• IS–M component
• S–MI component
• M–IS component.

3.10.1 Typical content of SITP Refer to pages 47-48.

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 3.10.2 Six Planning Stages of SITP
 Refer to pages 49–52. These are:
1. Assemble a planning team
2. Assess information needs
3. Develop a vision and a mission
– Examples of mission/vision statements of Saturn
division of GM as well as Eastman Kodak.
4. Communicate the vision and seek buy-in
5. Arrive at the project’s portfolio and define the scope of
projects and their prioritization:
6. Evaluate of IT projects for inclusion in application
portfolio.
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 3.11 CONSIDERATIONS FOR SYSTEMS
OPERATIONS
• Systems operations considerations include running the
firm’s applications according to the defined processes.

3.11.1 Considerations for Committed Service

Levels
 Refer to Table 3.2 (Typical list of IT projects)
 Refer to Table 3.3 (Typical TPS applications).

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 3.12 IT PLANNING HORIZON
• Operational—3 months
• Tactical—3 months–2 years
• Strategic—3-5 years.

3.12.1 Rapid Response Planning for Internet

Application

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3.13 RESOURCE PLANNING
– People planning
– Financial planning
– Administrative actions
– Technology planning

3.14 MANAGING PROJECT SCOPE

TIGHTLY

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 3.15 IMPLEMENTATION
CONSIDERATIONS OF SITP
• Refer to Fig. 3.12.
• The following are Important for the success of SITP process as
planning as shown by Gottschalk’s studies:
1. Adequacy of resources the implementation
2. Level of user involvement during the implementation
3. Adequacy of analysis of the organization’s information needs
4. Anticipation of changes in the external environment
5. Solutions to potential resistance during the implementation
6. Information technology to be implemented
7. IT projects’ relevance to the business plan
8. Who owns the responsibility for the SITP implementation
9. Level of management support for the implementation
10. Communication issues
11. IT issues
12. General business-related issues.

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 Completing SITP
• SITP implementation best practices (page 60)
• Pitfalls to be avoided as per Luftman’s studies
• Refer to Fig. 3.13

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 3.16 Change management Issues of SITP
development and implementation
3.17 Monitoring and measuring the SITP success
3.18 IT Strategy Committee: 9 important
functions.

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To achieve effective results, IT strategist should…

List business drivers Prioritize them

Select the processes with most IT potential

Identify specific information opportunity

Translate into automation requirements and

IT strategy
 Module IV
Factors affecting IT Strategy
 Factors affecting IT strategy
• Corporate objectives
• External and Internal drivers (Ch.11, Brien and Marakas, Management
Information Systems –TMH)
• Real time project data availability
• Daily work done electronically with schedule of authorization
• Work Flow based approval system
• One point data entry
• Metrics availability
– Utilization and productivity
– Cost of Quality
– Cost of operation
– Stakeholders satisfaction indices
• Support functions performance
• Data integrity
• Transparency
• Extent of sharing of best practices across organization
• Degree of compliance to statutory and legal requirement
Factors affecting IT strategy - 2
• Level of integration between production and
finance
• Degree of process automation
• Level of Encryption needed
• The need for Business continuity and disaster
recovery features
• Reliability of the system
– Availability
– Down time
 Factors affecting IT strategy - 3
• Ease of use
• Architecture – Central or Distributed (cost of upgrade
and maintenance)
• Total cost of ownership – ROI?
• License cost
• AMC
• Special skill resource cost
• Energy and resource cost
• Hardware cost
• Cost of upgrade
 Module V
Implementation of IT Strategy
 Implementation of IT strategy
• Issues
– Allocation of budget
– Maintenance of existing technology and upgrading to new
technology
– Specialized skill requirements
• Risks
– Delay in implementation schedule
– Availability of skilled resources
– End user acceptance
– Parallel use of old and new system
• Risk Mitigation
– IT organization structure
– Implementation plan with milestone defined
– Involvement of end users during IT strategy formulation and
deployment
– Training for end users
• Rewards
– Recognition scheme for core team members
Role of CIO
 Role of CIO contd..
• Leader
- the senior most information systems manager
- the leader is responsible for supervising, hiring, training, and
motivating information systems personnel
- leads all usage of IT from a business perspective

• Spokesman
- the CIO’s role extends to organizational contacts outside the
department to other areas of the organization
- ensures networking to the top level of the organization and to the key
decision makers in other departments

• Monitor
- scans the external environment to track technical changes and competition
- a technical innovator, the CIO identifies new ideas from sources outside the
organization
- is proactive and knowledgeable about opportunities for the use of IT in the
industry
 Role of CIO contd..
• Liaison
- responsible for developing a working relationship between IT and the
business units that fits the organization’s objectives, management style,
and culture
- communicates with the external environment including exchanging
information with the departments of suppliers, customers, buyers, market
analysts, and the media

• Entrepreneur
- influences the overall strategy and planning in the organization and
translates strategies and plans into definitive information systems actions
- identifies business needs and develops solutions that change business
situations

• Resource Allocator
- allocates human, financial, and information resources
- makes allocation decisions critical to the success of organizations
- decisions impact on departmental data management, standards, and
control
 CIO’s role in IT and business alignment
1.Process
- understand the process for a comprehensive view of the
interoperation, interrelationships, and interdependencies of the
IT environment
- arrive at the most effective analysis of all potential IT impacts of
changes
- implement the modernization of the project through stages:
a)migration—databases, platforms, languages, and data
b)transformation—data-field adjustment, naming
standardization,and system consolidation
c)redevelopment — application mining, process mining, and Web
redeployment
2.Maintain the process of updating IT data repository
- facilitates more effective understanding management, and
maintenance of complex IT environments
- providing CIOs with the information they need in order to
effectively -manage system changes and enhancements
- adapts to new technologies and business needs
 CIO’s role in effective IS implementation

• Achieve two-way strategic alignment: management and

IT work together to ensure that their initiatives are aligned
• Develop effective relationships with line
management: ensure integration of business and technology
capabilities through communication between IT and line personnel
• Deliver and implement new systems: systems delivery to
include development and procurement and integration
• Build and manage infrastructure: IT units to develop an
architecture, establish standards, communicate the value of the
infrastructure, and operate the increasingly complex infrastructure
• Reskill the IT organization: new skills needed
• Manage vendor partnerships: IT managers must be
informed about buyers and negotiators
• Build high-performance IT applications: the IT unit must
meet increasingly demanding performance goals
Why is information systems expenditure
difficult to quantify?
• Shift of IT applications from automation to IT acting
as a business enabler:
- automation yields measurable benefits in terms of cost savings
- justification of ROI from IT expenditure as part of a strategic move
involves assessing and taking a business risk where the benefits are
intangible returns
• High cost of IT infrastructure:
- 60% of the total investment made on information systems is the cost of
systems hardware and software and development costs for IT
infrastructure
- these systems provide the infrastructure that enables subsequent
computer applications and as a result may or may not yield any specific
benefit in the foreseeable future
• Indirect and intangible benefits:
- information technology helps in improving performance, productivity,
customer satisfaction, and value to the customer
- such benefits are very difficult to quantify and thus are called intangible
benefits from information technology
 IT Metrics

Systematic IT implementation
 Cost effectiveness approach

• The net present value (NPV) approach is often

used by financial experts to justify the expenditure
made on information technology
• Steps:
1. calculate the present value of the expected stream
of cash that the investment will generate
2. calculate the present value of the stream of expenditures
required to undertake the project
3. arrive at the difference between the two (known as the net
present value of the investment)
4. the manager can go ahead and invest if NPV is greater than
zero
 Cost effectiveness approach contd…

• This approach is true for most of the capital

investments
• In information technology investments the results
are seen only after a period of 3-4 years provided
the information technology investment is
implemented properly
• NPV calls for estimates of costs and revenues
over the entire life of the project which is difficult
to assess
• Changes in costs and revenues also cannot be
predicted
• NPV takes into account the entire life of the project
• NPV is not able to take into account short-term
uncertainties
 The Business value approach

• Business value = productivity, profitability, and

consumer value
• Business Value approach takes root from three
theories: the theories of production, competitive
strategy , and consumer
- IT spending is directly related to substantial
increases in net output and consumer surplus, but
unrelated to supranormal business profitability
- IT spending indirectly affects productivity because IT
helps firms reduce consumption of other inputs such as
ordinary capital ,labor and establishment costs
- IT creates value, intensifies competition and reduces
profitability
- IT should be used to generate business value rather than
to generate business profits
 IT Chargeback approach
• Information Systems Infrastructure by itself
cannot generate returns
• It is the IT chargeback is an example of
transfer pricing – a familiar concept in most
decentralized organizations
• Information technology investment is made for
building an organization wide IT infrastructure
• IT chargeback method relies on usage- based
charges and helps managers make effective
decisions on IT investment and use
 The Balanced scorecard approach
• Balanced scorecard: a set of measures that give the top
managers a fast but comprehensive view of business
• The approach allows managers to look at the business
from four important perspectives:
- customer
- internal
- innovation and learning
- financial
• Provides a method to consider all the operational
measures together
• Indicates if the improvement in one area can be achieved
through focus and investment in some other area
• Ensures that performance measurement is consistent
with the initiatives in companies:
- cross-functional integration
- customer supplier partnerships
- global scale
- continuous improvement
- team accountability
The Balanced scorecard approach
 The Benchmarking Approach

• Benchmarking: process of improving

performance by continuously identifying,
understanding, and adapting outstanding
practices and processes found inside and
outside the organization
• A tool that aids organizations in searching
for best practices that lead to superior
performance and in achieving these best
practices
• Focuses on how to improve any given
organisation process, product or service
by exploiting “best practices”
The Benchmarking Approach
Maximizing Returns from IT Investments

• Step1:
- identify the need
- the type of IT investment and the IT metric will
depend
on strategic moves, improvements in
productivity and performance, value addition to the
product, and gaining leverage
• Step2:
- identify the type of application
- find out whether the application focuses on the
infrastructure, process, user (employee), or
customer
- metrics will change depending upon the type of
 Maximizing Returns from IT Investments contd…

• Step 3:
- identify the user
- find out if the application will be used by a single
function, multiple functions , or all over the
organization
• Step 4:
- identify the approach to measure returns
- if part of a strategic move then the options
approach is
the most suitable
- if IT investment is made to the improve
performance of
the organization then the scenario, business value,
Success factors for IT implementations

• Top management commitment

•IT teamwork and composition
•Change management programme
•Training
•Effective communication
•Reward schemes
•Project Management
 Change Management
•Change Management is an organized, systematic application
of the knowledge, tools, and resources of change that provides
organizations with a key process to achieve their business
strategy

•Change management plans, initiates, realizes, controls, and

finally stabilizes change processes on both, corporate and
personal levels

• Role mapping
• Overall & change specific communication
• Overall & change specific training
 Impact on an organization
• First effects of change on employees, leaders, and on
performance levels are negative

• These effects include fears, stress, frustration and

denial of change

• Most employees tend to react with resistance to

change rather than seeing change as a chance to
initiate improvements

• They are afraid of losing something, because they

have incomplete information on how the change
processes will effect their personal situation in terms
of tasks, workload, or responsibilities
Module VII
IT security
 Information Security
• The protection of information systems against
unauthorized access to or modification of
information, whether in storage, processing or
transit, and against the denial of service to
authorized users or the provision of service to
unauthorized users, including those
measures necessary to detect, document,
and counter such threats

• The result of any system of administrative

policies and procedures for identifying,
controlling, and protecting from unauthorized
disclosure, information the protection of which
is authorized by executive order
 Information Security Management

• Information Security Management

provides:
- a systematic approach to achieving effective
information security within an organization;
- a realistic understanding of information security
risks and issues facing organizations; and
- effective techniques for matching information
security requirements with business requirements.
- consists of various facets : security policy, risk
analysis, risk management, contingency planning,
and disaster recovery
 Information Security Threats

Virus :
A program which gets executed when ever a
program is run on computer
Trojan Horse :
A program which does its supposed job but also
includes unsuspected and undesirable
functions. e. g. deletion of desirable items
Worm :
A self replicating program, creates its own
copies and executes, works in networks.
Information Security Threats contd…

Hackers have potential access to large systems

with prospects of security holes

Hackers use popular UNIX programs to discover

account names and guess passwords

Hackers can use electronic eavesdropping to

trap user and un-encrypted passwords

Hackers can spoof or configure a system to

mimic some other system
Security Architecture
Business
Data and application security
Network Security

Authentication and Authorization

Physical Security

Procedural Security

External World
 Information Security Architecture
Information Security

Authentication Message received by B has

actually come from A

Confidentiality Message is secured and not seen

by any snooper

Integrity Message has not been distorted by

accident or design

Non repudiation B can make A legally responsible

for the message
 Digital Certificate

VERSION

Certificate Serial No.

C.A.PRIVATE Signature Algorithm ID.

KEY
ISSUER

VALIDITY Period

Subject

Subject Public KEY INFO.

GENERATE ISSUER Unique Identifier
DIGITAL
SIGNATURE Subject Unique Identifier

Extensions

C.A.DIGITAL Signature
Internet Security
 Internet Security contd…

Operational Technology
•One-Time passwords
•Network Monitoring Tools
•Network Security Analysis Tools
•Firewalls

Cryptography Policy based Technology

•Digital Signature
•PKI Policy
 Module VIII
Cross Functional Process Automation
Enterprise Application Integration
Enterprise Application Integration contd….
 Enterprise Application Integration contd….

Definition:
• Software that integrates a variety of
enterprise application clusters by letting
them exchange data according to rules
derived from the business process models
developed by users
An Example…
 Enterprise Collaboration Systems (ECS)

Definition:
• Cross-functional information systems that
enhance communication, coordination,
and collaboration among the members of
business teams and workgroups
 ECS Goals

• Communicate – share information

• Coordinate – coordinate individual work

efforts and share resources

• Collaborate – work together cooperatively

on joint projects and assignments
ECS Tools
 Functional Business Systems

Definition:
• Information systems that support the
business functions of accounting, finance,
marketing, operations management, and
human resource management
Functional Business IS
Marketing Systems
 Interactive Marketing

Definition:
• Customer-focused marketing process that is
based on using the Internet, intranets, and
extranets to establish two-way transactions
between a business and its customers or
potential customers

Goal:
• Use networks to attract and keep customers
who will become partners with the business in
creating, purchasing, and improving products
and services
 Sales Force Automation

Definition:
• Information systems that improve the
delivery of information and support to
salespeople with the goal of improving
sales productivity and marketing
responsiveness
 Manufacturing Systems

Definition:
• Information systems that support the
production/operations function that
includes all activities concerned with the
planning and control of the processes
producing goods and services
Manufacturing Systems
Human Resource Systems
 HRM and the Internet

• Recruiting employees through recruiting

services and databases on the World
Wide Web

• Posting messages in selected Internet

newsgroups

• Communicating with job applicants via e-

mail
Accounting Information Systems
Financial Management Systems
 Financial Management Systems

• Capital Budgeting – evaluating the

profitability and financial impact of
proposed capital expenditures

• Financial Planning – evaluating the

present and projected financial
performance of a business
Three Phases of CRM
 Three Phases of CRM

• Acquire new customers by doing a superior job

of contact management, sales prospecting,
selling, direct marketing, and fulfillment

• Enhance relationship with customer by

supporting superior service from a responsive
networked team of sales and service specialists
and business partners

• Retain and expand business with customers by

proactively identifying and rewarding the most
loyal and profitable customers
 CRM Application Components

• Contact and Account Management – helps

sales, marketing, and service professionals
capture and track relevant data about every
past and planned contact with prospects and
customers, as well as other business and life
cycle events of customers

• Sales – provides sales reps with tools and

company data sources needed to support and
manage sales activities, and optimize cross-
selling and up-selling
 CRM Application Components

• Marketing Fulfillment – help marketing

professionals accomplish direct marketing
campaigns by automating such tasks as
qualifying leads for targeted marketing, and
scheduling and tracking direct marketing
mailings

• Customer Service and Support – provides

service reps with software tools and real-time
access to the common customer database
shared by sales and marketing professionals
 CRM Application Components

• Retention and Loyalty Programs – help a

company identify, reward, and market to
their most loyal and profitable customers
 Benefits of CRM

• CRM allows a business to identify and target their best

customers so they can be retained as lifelong customers
for greater and more profitable services.

• CRM makes possible real-time customization and

personalization of products and services based on
customer wants, needs, buying habits, and life cycles.
 Benefits of CRM

• CRM can keep track of when a customer

contacts the company, regardless of the
contact point.

• CRM systems can enable a company to

provide a consistent customer experience
and superior service and support across
all the contact points a customer chooses.
Case Study no.1 – J & B
Software
 Vision

To be one of the top three image

processing organization by 2010
 Business background
• 30% of retail banking checks of US are
processed
• Passport office in US
• Niche area
• Premium pricing
• Client list includes 63 Fortune 500 organizations
– Mission critical application
– Supports more than Billion $ per day
• Expanding to other geographies
 Opportunities

• Image processing in Health Care

• Revenue from Product licensing
• Retail boom in developing countries
– High volumes
– Electronic clearing system in other
geographies
 Goals & Objectives
• Five-year goals
– To be Billion $ company
– To achieve 70% market share in US and 80%
in developing countries
– 40% net profit
Factors Considered for formulating IT Strategy
•Real time data availability
•Compliance to statutory requirements
•Profitability of each and every project
•Utilization of resources
•Single data entry
•Data integrity
•Support functions and Project Management to be integrated – process automation for integrated processes
•Milestone based automated billing system
•Transparency and metrics roll up at different levels

Senior Management Project Dashboard

Organization wide project reports

Account wise Reports

Project Status Report
Delivery Heads Project Summary
Project Tracking
Resource Availability/Utilization

Project Status Report

Tasks Schedule
Tasks Tracking
Project Managers Resources Utilization
Resource cost
Project profitability

Finance Customized Reports for Billing

Implementation
Issues
•Total Cost of ownership should not be more than Rs. 50 lacs
•Scarcity of ABAP specialists in market

Risks
•Resistance to use old and new system in parallel – means double data entry
•Sceptical about new system

Risk Mitigation

•Involving end users in the implementation phase

•Conducting workshops and providing training to end users well in advance
•Defining roles and responsibilities for all stake holders
•Communication strategy
•Reward scheme for first successful implementation
 Structure for implementation

Steering Committee

Program Manager

Functional Functional Functional QA Members

Consultants Consultants Consultants

End Users
Defined Roles and Responsibilities for implementation

Sets goals, milestones

Steering Committee Owns technology decision
Strategic direction to implementation
Track goals

Overall responsibility for implementation

Assigning proper resources at right time
Coordination with all stakeholders
Reporting progress at defined milestones
Program Management Escalating to steering committee in case of delay im
implementation
Supervising development of training materials and
imparting training to end users
Set quality standards
Define success criteria for completion

Analyze 'As Is' process

Functional Consultants
Defining 'To Be' process
Design data structure and process flow based on ETVXM
Compliance to set quality standards
 Enterprise Management

Performance goals and objectives

Customer and employee Satisfaction

Operations

Marketing Sales Finance Project Management

Operations Support

Recruitment Deployment Development Payroll

processing

Financial Control
Training and Reporting
 Case study no. 2 for Polaris Software Lab Ltd. –
Presented to Mr. Arun Jain
on 23/01/2004
Objectives:
1. To achieve stakeholders satisfaction
2. To improve productivity by 7% in 2 years
3. To stop revenue leakage
4. To expand client base
5. To increase repeat business to 90%

Factors
1. Project Level goal setting and tracking
2. Peoplesoft to track goals at project level (not at cost center level)
3. Exception report on billing, bench report, gross margin to be generated
4. Appraisal, SEC HR and Nalanda training to be integrated
5. Single point data entry, data integrity and transparency
 Peoplesoft

HR Finance
Exception Report

Entry in Empower

P
M Time sheet
Knowledge Billing
T
Management Project Level: Gross
O
margin, Net margin
O
L
Metrics
Project Library
CASE STUDY No. 3 – JPMorganChase
 JpMorganChase Book of Work Summary

Key Message: Significant progress made in 2006 yet remaining book of work is complex with numerous cross dependencies.
2006 Summary Remaining Book of Work

– Industry leader with Receivables Edge browser – Total client migrations: 2,519 clients, 5,109 boxes
– Significant new business wins due to – Bank of New York – Phase II: 223 clients, 335
Receivables Edge and competitive pricing boxes
– RemitOne – Current Statistics – 2 RemitOne Releases (ER107 & ER207); 3 Edge
• Retired OWL (hBankOne platform) Releases
• 2,414 clients, 8,181 boxes/conversions – NDS- Tri-State Conversion –
(all platforms)  Establish WDC file feeds for VICOR sites
• 805 new clients, 1,333 boxes/conversions • Support early MICR conversion – GLAS to
• 5 million checks/month (71% NWL SAP
volume) – Finance Target – GLAS to SAP
• 2,513 clients (75%) migrated to • Revise strategy to feed lockbox platforms
Receivables Edge to SAP
– Offshore site opened June 2006 (Mumbai) – Offshoring – 3 phase ramp up
– Implemented 3 Releases • 44.5MM keystrokes, 87 FTE in 3 phases
– Completed SI and BNY –Phase I conversion – Fax/E-mail to EDGE – Targeted 353 clients
– Truncation – Reduce paper and re-association
process by truncating targeted clients - Scope
TBD
 System Capacity & Demand Forecast

•Model forecasts daily ”peak” processing Key Initiative Summary

Project # Imp Date Description Capacity Lift Recognized
capacity based on the R1 highest volume
day to date (10/11/06) 1 1/23/2007 Performance Hot Fix (stored proc. optimize for database lock relief) 0%
2 2/10/2007 Infrastructure Enhancement - DOP Modification 5% February-07
•New Prod Server Implementation in May 3 2/23/2007 Release 8.0 - Edge/TFC/RemitAdmin for UPS 0%
and Citrix Farm upgrade in July are critical 4 3/6/2007 Performance Hot Fix (5 key table splits for lock relief) 0%
5 4/13/2007 Implement 2 Additional Citrix Servers 3% April-07
to support migration volumes 6 5/6/2007 New Production DB Server and SQL 2005 Upgrade 55% May-07
•April batch, keystroke and citrix user 7 6/22/2007 Release 9.0 and ER207 - RemitOne/Edge/TFC/RemitAdmin 0%
8 6/28/2007 Performance Hot Fix (T-SQL Conversion) 5% July-07
capacity is amber as cushion between 9 7/2/2007 Citrix Farm Re-Design and 4 Additional Server Adds 15% July-07
demand and capacity lessens 10 11/9/2007 Release 10.0 - RemitOne/Edge/TFC/RemitAdmin for PVB/RedLight 0%
Arch. Design Recommendation Implementation #1
•Peak Transmissions is amber Oct-Dec, 11
12
Q3
Q4 Arch. Design Recommendation Implementation #2
TBD
TBD
Q3
Q4
does not include current plan to move
** Projects 1 & 3 actual capacity impact will be captured if improvement noted and forecast adjusted as necessary.
fax/e-mail transmissions to Edge in Q1
2007
Jan Feb March April May June July Aug Sept Oct Nov Dec

Project # and Capacity Lift 2 (5%) 5 (3%) 6 (55%) 8 & 9 (20%)

Batches
Batches/ Month Demand 447,942 450,908 474,813 499,830 534,789 563,767 597,361 620,978 651,425 682,804 711,936 714,903
Max Batches/Day Target 39,900 40,164 42,294 44,522 47,636 50,217 53,209 55,313 58,025 60,820 63,415 63,679
Capacity RAG

Keystrokes
Keystrokes/Month Demand 119,467,398 120,845,111 124,722,824 139,615,948 150,796,123 161,783,526 175,629,026 178,347,763 183,762,266 192,576,985 201,800,550 203,178,263
Max Keystrokes/Day Target 10,428,000 10,548,257 10,886,733 12,186,715 13,162,603 14,121,665 15,330,203 15,567,515 16,040,133 16,809,547 17,614,648 17,734,905
Capacity RAG

Checks
Checks/Month Demand 5,177,072 5,211,357 5,487,643 5,776,768 6,180,809 6,515,728 6,903,983 7,176,932 7,528,830 7,891,493 8,228,181 8,262,466
Max Checks/Day Target 446,960 449,920 473,773 498,734 533,617 562,532 596,052 619,617 649,998 681,308 710,376 713,336
Capacity RAG

Images
Images/Month Demand 13,975,224 14,136,388 14,997,552 15,737,146 16,810,926 17,565,878 18,398,600 18,597,548 18,989,119 19,513,894 20,370,569 20,531,733
Max Images/Day Target 1,159,000 1,172,366 1,243,784 1,305,121 1,394,172 1,456,782 1,525,842 1,542,341 1,574,815 1,618,336 1,689,382 1,702,748
Capacity RAG

Transmissions
Max Transmissions/Day Demand 2300 2300 2300 2400 2500 2600 2700 2800 2900 3000 3100 3100
Current Capacity RAG

Peak Transmissions
Max. Trans at 1400 Cutoff Demand 523 523 523 576 629 682 735 788 841 894 947 1000
Current Capacity RAG

Citrix Users
Peak Citrix Users/Day Demand 263 263 283 313 343 370 400 440 460 480 500 510
Current Capacity RAG
 Recommendation

Key Message: Prioritize remaining migration activities by corporate requirements and financial opportunities. Establish
migration waves based on critical capacity measures to ensure quality and effective change management.
Guiding Principles:
• Establish migration schedule leveraging key lessons learned in 2006
• Create migration waves within parameters (volume, complexity) that promote quality, timeliness and limit client impacts
• Define migration waves that do not conflict with corporate initiatives, system freeze periods or month-end/quarter end
• Meet key milestones throughout migration life cycle (e.g. client notifications 75-90 days prior to migration; 120 days for
complex clients)

2007 Client Migration Recommendation

• BNY Phase II migration wave scheduled on March 23rd in conjunction with enterprise conversion event
• Auto Wholesale – TSLink backdoor related accounts will be completed in 3 waves (April & May)
• Remaining hJPMC book of work will commence migrating in June
– Migration waves will alternate – simple & full
» Simple waves: No transmissions or complex workflow
» Full waves: Combination of simple, standard and complex clients
• 11 client migration waves scheduled from June through November 2007 (6 Full & 5 Simple)
– Complete VICOR & Imagescan migrations by November 2007 (except PVB/Redlight & FMS-Dallas)
– Full relationship migration drives AW and Custom Core population to R1 during the year (40% boxes, 30%
clients)
– Complete majority of migration activities for remaining AW & CC clients by end of 2007
• New business migrations will continue weekly throughout the year

Remaining Book of Work

• Timeline does not accommodate the following work to be migrated to RemitOne in 2007
– Remaining Auto Wholesale & Custom Core
– Cicero – Regional Lockbox
– PVB & Redlight – due to development requirements in ER207
– NYC Retail - Regulus
• This effort would require 5-7 additional migration waves which can not be supported in June-November 2007 timeframe
(approx. 800 clients & 1,400 boxes)
 JPMorganChase Improvement Efforts

Key Message: Cross-functional teams are actively engaged in process improvement efforts based on lessons learned from
2006 migrations. The improvement efforts will not introduce radical changes, but instill the appropriate discipline and
inspection required for success.

Complex Client
Client Engagement
Management
• Project management
• Define and identify
discipline
complex clients
• Strengthen Market
• Strengthen client
Readiness approach
engagement
• Holistic client engagement
• Mitigate client impacts

Migration Approach / HPC / Engagement

Timeline • Improve and increase
• T-Minus planning Training/Education
• Acceleration process • Improve recognition
• Command Center • Review tools and leverage
• Issue management best practices
JB Software solutions
- Improvement
Workstreams
Testing
• Comprehensive end-to-end
testing
• Address gaps from 2006
process

Capacity / Demand Release Cross-Impact

Management • Identify optimization
• Identify 2007 demand opportunities
• Create a capacity plan • Create forum for
• Establish forum and steps information/best practice
for ongoing management sharing
 Calendar
Key Message: The availability of migration waves is limited due to the 1st quarter delay and on-going stabilization efforts.
 Prioritized Platform Recommendation

Key Message: Platform migrations prioritized by corporate requirements and financial impacts.

Prioritized List Assumptions

– Associated volumes are dependent on the

sequence of migrations
– Client migrations are designed to migrate
entire client relationships, not just single
platform
– Multiple platforms/sites are impacted by
each migration
• For example, if we migrate a client
from VICOR in Chicago, the may have
boxes on Auto Wholesale in Brooklyn
– The prioritization accomplishes obtaining the
closure of three sites in 2007 – Chicago
South, Dallas, and Los Angeles
– Wave guidelines
• 350 Boxes: 100 Complex, 125
Standard, 125 Simple
• 4mm keystrokes
• Notifications: 70
• Checks: 175k
• Images 600k
 Infosys IT strategy evolution
1997 2000 2003
PsWeb SAP R3 IPM

Single HR data entry,

milestone based billing and
Billing Oracle Financial invoice automated

Telephone Directory Outlook exchange

Cc Mail IPM ver1.0 + QSD

MSP Knowledge Shop Knowledge management

BoK PCB technology based PCB technology based

Project Level goal

(Business and quality
QSD Billing at Project Level productivity related)

PCB project type based Balance Score Card Bench Utilization

Billing at Cost Center Level

 IT Strategy for Motorola Tenjing
Changes in demographic profile

Ability to make changes in process, technology

Internal quality Product or

Inbound and operations Outbound services

Demand Time to
fulfilment Meeting quality standards
market

Speed, Improve Productivity Predictability

flexibility operational and and risk
efficiency profitability mitigation

IT STRATEGY
Enterprise Information Systems
Objective:
1. To introduce the evolution of ERP
2. The need for business process automation
3. Impact of ERP on an organization
4. Future trend in ERP
Enabling Innovation and Change

ERP II

ERP

MRP II

MRP
Inventory
Control

1960 1970 1980 1990 2000 2010

 Functional Information Systems
(Financial Accounting)

Database Systems

A/R

G/L

A/P
 ERP Systems
• An integrated systems that allow information to enter at
a single point in the process (e.g., at the materials
receiving stage of a manufacturing process) and update a
single, shared database for all functions that directly or
indirectly depend on this information
• This integration should take place in real-time, not
through interfaces or programs that transfer information
to one or more modules only after the information has
already been processed and updated in the module
through which it entered the system
•Once placed into the system, the information should be
available in all the necessary forms through which it may
be accessed, throughout the system
 IS
Industry Solutions

CO FI AA
Costing & controlling Financial Accounting Asset Accounting

MM HR
Materials Human Resources
Management

PP Central RM
Production Planning Reports Management
Enterprise
Database
QM SM
Quality Management Service Management

PM SD PS
Plants Maintenance Sales & Distribution Project Systems

CS
Country Specific
Solutions

ERP: Functional View

 What does ERP do for an Enterprise?

 Work as a transactional Information Systems to

- enable enterprise wide shared and integrated database for
i. improved decision making
ii. improved MIS reporting
- enable enterprise wide cross functional
work flow automation for:
i. improving intra-organizational transactions
ii. reducing in business processes lead times
iii. improved inventory and working capital management
iv. improved financial reconciliation
 ERP enables improving
Business Process Performance
•Automation of business processes
• Simplification of business processes
• Elimination of non-value adding
business processes
• Reengineering of business processes
 Getting to ERP II
Industry Industry
Class A Sector Q
ERP Declared
“Dead”
Industry X

ERP II
Industry
Segment
Extended
Z
ERP
ERP Functionality
Technology
Deepens
MRP II Infrastructure
Functionality
MRP Increasing External Connectivity
Broadens

Source : Gartner Group

 e-Business Scope
At Macro Level, Organizations can be viewed to
have following four environments

Buy side Inside Sale side Marketing side

(Supplier, (Employee) (Customers, Dealers, (Customers, R&D
Service Providers Distributors) Partners)
e.g. transporters)

As you move up beyond “Publish stage”- you need to

deepen
your Electronic interaction with customers, suppliers &
business partners on a 24x7 basis
 e-Business Scope with examples

e-Business Buy Side Inside Sale side Marketing

Models
BPCL, BHEL, HLL, M&M, ICICI, HLL
Enabler BPCL, HPCL
Samsung,
TELCO, SAIL,
Model IOC, TATA, LG, HLL,
TISCO, ICI,
BHEL, ONGC MUL, Hundai
MUL, Reliance, etc.
ICI, Sony

Creator Dell, Amazon, Fedex, eSteel, eBay, Expedia

Model
Destroyer
Model CISCO, Intel, British Petroleum, …
How does e-Procurement function?
 E-Procurement
• Reverse Auction
- companies are experimenting and tasted success with
Reverse Auction using B2B Portals: FreeMarkets,
Commerce One, Trade2Gain, 01 Markets, IndiaMarkets,
MatexNet etc
- reverse auction comes at the end of the procurement cycle
and easy to implement
- speeds up slow negotiation price process
- entry cost low, low risk of exposing internal supply
chain processes to the security concern of the Web.
- effective in markets which are buyer led and supplier base
is fragmented
- transparent price setting mechanism
- market making / new supplier validation process
 CRM
‘Customer Relationship Management is the practice
of identifying, attracting and retaining the best
customers to generate profitable revenue growth’
Why CRM ?
1. Customer loyalty is the key differentiating factor as
other factors like product quality, price, distribution,
features, technology etc. are no more unfathomable.
2. It costs 10 times as much to bring in a new customer
than it is retain one.
3. The need for accurate and timely information to the
sales team is really important. With sales representative’s
mobility increasing by the day, it is difficult to expect the
same person to come in contact with the customer all the
time.
 … IS infrastructure for e-CRM

Home/Office PC Host
Mainframe Extranet
Internet Network
Corporate
Channel Integration SystemsCustomers
ATMs &  CTI applications
Enterprise
Kiosks Intranet  Channel integration middleware
 Contact management software
 Messaging applications
 Security services PSTN
Remote Branch  Intelligent agents
Agents Offices
Contact Center
Thank You