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CONTENTS
Contents
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OVERVIEW - ENTERPRISE SOLUTION
Chapter 1
OVERVIEW - ENTERPRISE SOLUTION
Objectives
Structure:
1.1 Introduction
1.4 Summary
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OVERVIEW - ENTERPRISE SOLUTION
1.1 INTRODUCTION
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OVERVIEW - ENTERPRISE SOLUTION
Micro Entities
2Small Enterprises
Medium Enterprises
Large Enterprises
Fortune-500/Global-500 Organizations
Medium < 500 < $15-20million < 250 < Euro50.00 million
Large < 1000 > $100+ million < 1000 > Euro50.00 million
Micro Entities < Rs. 25.00 lakhs < Rs. 10.00 lakhs
< Rs. 25.00 lakhs to Rs. < Rs. 10.00 lakhs to Rs.
Small
5.00 crores 2.00 crores
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Right here, I would like to address a general colloquial error with respect to
Enterprise Solutions and ERP. Enterprise Solution comprises of all IT assets
(software, hardware, network, etc.) that go to meet the business
requirements of an enterprise. They comprise of many software products
or applications that support various business functions and also such IT
assets as Networks, Data Centers, Storage Devices, etc. which are
generally invisible to the users. ERP the most visible and most discussed
is just one element, but the centerpiece of the enterprise solution set.
ERPs typically support the core business function, but many current ERPs
also build-in all other functions such as document management, supply
chain to a minimal extent. Optionally, ERP vendors provide products for
each of the other critical business functions. Some functions like Corporate
Treasury are always separate products, though SAP also has its own
Treasury product. So, why do we mix up and tend to term the ERP to an
Enterprise Solution? In the 70s and 80s, the businesses requirements and
expectations of IT were much simpler and the MRP and MRP-II served the
complete business functions of an enterprise. The initial advent of the ERP
also promised an Enterprise Solution (though found inadequate) hence,
the tendency to identify an ERP with Enterprise Solution.
As no one size fits all, Enterprise Solutions are generally built and
packaged for the type of business (example, manufacturing, banking,
retail, etc.) and the scale, for example,
Enterprise Solutions and ERP rollouts involve not only huge capital outlays,
but also long implementation times, significant IT resources and intense
cultural change.
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Large enterprises with enormous financial clout handle these over time-
frames of 3+ years, with large budget outlays. However, even these large
enterprises are stretched to their limits and many company-wide roll-outs
are at times aborted before the entire objectives are fulfilled. General
Electric Corporations roll-out Oracle ERPs across their North America
divisions lasted over 5 years with major customization.
I would like to touch upon another point here the term enterprise refers
to a network of business functions. Therefore, the phrase enterprise
solutions refers to an integrated IT solution for various functions in a
corporation, be they large or SMB. They provide enhanced scalability and
efficiency of the systems. Therefore, the term Enterprise Solutions
encompass all aspects of computer technology and business solutions
including hardware, software and the employees required, to implement
and maintain these. This does not make it insignificant. However, in this
book, we will deal with only the software solutions.
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Where did the business solutions begin? The initial computers were built for
providing scientific solution during war and the technology was
subsequently adopted for business computing. IBM, Data General,
Burroughs, Sperry-Univac and several other computer manufacturers
created their own business computers with proprietary operating systems,
development tools, and applications built over these development tools.
They were in the initial days mid-range computers and then the
mainframes came. Businesses built custom developed applications tailored,
to suit their business requirements.
The first packaged softwares came in the latter half of the 1960s and
developed into MRPs and MRP-II and subsequently into ERPs. The primary
functions delivered by these software products were for the manufacturing
organizations and some Financial Accounting. There were also Core
Banking applications to meet the needs of Retail and Corporate Banking.
Airline Industry had its most popular product on Sperry-Univac systems.
These systems were entirely on green-screens prior to the advent of the
GUI.
The late 1980s saw the Enterprise Solutions moving to open architecture
as promoted by OSI (Open System Interface), to support desktops and
multi-servers across. The dependence on proprietary and stove pipe
systems got reduced. The use of homogeneous technology moved to
heterogeneous business computing systems. Establishing compatibility of
data between two systems was always a challenge. They were addressed
by the specifications created by independent bodies represented by
different manufacturers under the umbrella of International Organization
for Standards (ISO). The necessary internal modifications within the
development tools were made. The database structuring and interfaces
were defined. This helped the subsequent interfaces to work seamlessly,
and thus evolved the open system architecture. When the system performs
is slow due to larger volume or complex processing algorithms, an
enterprise could switch over from system with low availability to the one
with high availability. The business centric or organization centric
computing was working successfully.
This era brought the Management Information System (MIS) and Executive
Information System (EIS). Soon, the executive management and
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OVERVIEW - ENTERPRISE SOLUTION
The turn of the century, along with Y2K fix, brought in the ERPs such as
SAP, Oracle. What are ERPs? They are software systems for business
management, that comprise of integrated modules supporting functional
areas such as planning, manufacturing, sales, marketing, distribution,
accounting, financial accounting, human resource management, project
management, inventory management, service and maintenance,
transportation. The current ERPs incorporate SOA and middleware that
architectures which can integrate with the companys multitude legacy
applications, e-business and self-service delivery channels.
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Enterprise Solutions have progressed much since first ERP systems were
deployed and today they are a well architected and integrated systems of
various software, middleware, presentation layers that work over seamless
networks with Data Centers and Disaster Recovery and security systems.
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The MIT Center for Information Systems Research (MIT CISR) defined
enterprise architecture as the specific aspects of a business that are under
examination.
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OVERVIEW - ENTERPRISE SOLUTION
used to steer decision making toward the evolution of the future state
architecture.
Enterprise IT Architecting.
Enterprise Integration
Enterprise Ecological Adaptation
The core of any Enterprise Solution is an ERP or better stated as the Core
Business Function Software. The examples below adds clarity:
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OVERVIEW - ENTERPRISE SOLUTION
For Bank, it would be a Core Banking software package which would have
the basic functions of CIF, Loans and Deposits. This Core Banking
software provides for minimal functions of Credit/Debit Cards, Corporate
Lending, Multi-channel Banking, etc. However, due to the complexity of
the banking business, these functions are supported by specialized
softwares.
A Retailer chain such as Star Bazar, would have a Retail ERP that runs its
core business.
So, there is nothing like a single ERP that fits all businesses or even the
complete core functions of a one type of industry. Further, softwares that
support other business functions Document Management, Supply Chain,
CRM are independent software products built around these core business
function software and integrated.
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OVERVIEW - ENTERPRISE SOLUTION
There will also be multiple small applications that are custom-built and
cannot be replaced these enhance the functionalities of many of the
packaged products and cannot be discarded.
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OVERVIEW - ENTERPRISE SOLUTION
Major software vendors such as SAP, Oracle and IBM provide multiple
products for all the enterprise business functions. SAP provides integrated
suite of ERP modules for all functions its a one-stop shop including
Retail and Corporate Banking, Core Insurance and Treasury products. SAP
integrates the various modules through its own ESB and Workflow systems.
However, Oracle and IBM provide very unbundled solutions which can be
integrated with products from various other vendors. Most Fortune-500
organizations and large corporates tend to deploy a mix of products from
various vendors best of breed solutions as such implementations are
known.
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OVERVIEW - ENTERPRISE SOLUTION
And many others that are invisible to the user, but are vital cogs in the
Enterprise IT Solution framework.
You will notice most components of an Enterprise Solution that have been
discussed above. Note, there are two applications that support the core
business function of this company has been denoted as Core FS ERP
essentially an ERP. In this case, it would be a Financial Services product.
For example, if this company were to be a Bank, these ERPS would be Core
Banking Products one for Retail Banking and another for Corporate
Banking.
In the subsequent chapters of this book, we will cover all aspects of IT that
go to make an Enterprise Solutions. This book will deal with IT from a
managers point of view dealing with technology without immersing in it.
We will discuss software products from a functional point of view, selection
criteria for products, vendors and their relative strengths, analysts views
on products and the industry.
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OVERVIEW - ENTERPRISE SOLUTION
1.4 SUMMARY
You have been initiated into details of what comprise the components of an
Enterprise Solution, briefly ERP, HRMS, Financial Accounting, CRM, Data
and Analytics and the all important integrator the Middleware and some
of the popular products.
Introduction:
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OVERVIEW - ENTERPRISE SOLUTION
History:
The era of MIS and the lacunae is the systems of those days.
ERPs.
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
Video Lecture
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ENTERPRISE RESOURCE PLANNING (ERP)
Chapter 2
ENTERPRISE RESOURCE PLANNING (ERP)
Objectives
Classifications of ERP.
Evaluating ERPs.
Structure:
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ENTERPRISE RESOURCE PLANNING (ERP)
2.16 Summary
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ENTERPRISE RESOURCE PLANNING (ERP)
With the advent of E-Business and the need to leverage multiple sources of
information within the enterprise, ERP software has emerged as a major
area of interest for many businesses. Back-office enterprise software has
its roots in the 1960s and 1970s, as computing power became affordable
enough for companies to automate materials planning through MRP and
financial processing, through payroll and general ledger software. MRP,
short for Material Requirements Planning, was developed in the early 1960s
at IBM and had become the principal production control paradigm in the
US. MRP consists of a set of procedures that convert forecasted demand for
a manufactured product into a requirements schedule for the components,
subassemblies and raw materials comprising that product MRP is limited to
controlling the flow of components and materials, and does not lend itself
to more complete production control and coordination.
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!
The diagram above gives you the business architecture of an ERP.
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ENTERPRISE RESOURCE PLANNING (ERP)
Manufacturing:
Material Planning
Capacity Planning
Shop Floor Control
Quality Management
Financials:
Bills Receivables
Bill Payables
General Ledger
Asset Management
Invoicing
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ENTERPRISE RESOURCE PLANNING (ERP)
HR Management:
Employee Database
Payrolls
Automobile
Aerospace
Chemicals
Pharmaceuticals
Semiconductors
Todays, ERPs have evolved to cover most Industry verticals such as:
Retail
Financial Services Core Banking and Insurance
Utilities
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ENTERPRISE RESOURCE PLANNING (ERP)
Let us first state the need is definitive terms an organization had three
primary challenges:
3. IT Systems that support the business processes and provide the right
Information for decision making.
How can you have Business Processes that support the objectives of the
company?
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ENTERPRISE RESOURCE PLANNING (ERP)
How can you have IT Systems that support the business processes and
provide the right information for effective decision making? This is where
the ERPs come in, they are software products that have:
ERPs manage complex business process and data and provide quick
and reliable information for decision making
ERPs are modular, yet have been architected and designed as one
system, hence communicate and share data and produce reports that
have integrity.
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ENTERPRISE RESOURCE PLANNING (ERP)
Data redundancy, errors and out of sync Data synced one source for all
reports
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Componentized architecture
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ENTERPRISE RESOURCE PLANNING (ERP)
The boundary of an ERP system is usually smaller than the boundary of the
organization that implements the ERP system. In contrast, the boundary of
supply chain systems and e-commerce systems extends to the
organizations suppliers, distributors, partners and customers. In practice,
however, many ERP implementations involve the integration of ERP with
external information systems
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ENTERPRISE RESOURCE PLANNING (ERP)
Business Processes
Streamlined business processes and workflows the first step in ERP
Controls
Approval and authorization based on a whole system view
Greater accuracy of information
Thereby, controls are more effective
views
Data
Standardization of Masters ensure redundant entries are eliminated
Time
Faster search and retrieval of data
Alerts, better response and follow-up actions
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ENTERPRISE RESOURCE PLANNING (ERP)
Intangibles
Improved customer responses enabled by a common CIF and Vendor
Data
Response to changing business needs in faster
Reduced paperwork
Reduction of inventory
Productivity Improvements
Improved Order Management Cycle
Reduction of Financial Close/Cycle
IT Cost Reduction
Procurement Cost Reductions
Improvement in Cash Management
Transportation/Logistics Cost Reductions
Reduction in Cost of Hardware and Software and Maintenance
Improved On-time Delivery
Redeployment of personnel into more value-producing activities though
this is a touchy subject to discuss with the employees as, redeployment
is read as pink slips.
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ENTERPRISE RESOURCE PLANNING (ERP)
ERP systems have evolved over the past 15 years from those like SAP
and Oracle that were implementable only in large enterprises to ERPs for
all types of industry and for the small and medium sectors.
All ERP solutions are not created alike one might be too big, another too
small, but the third is just right. The just right for you, would not
necessarily be so for another company of even similar size. Though other
companies in your industry are adopting a particular solution, you need to
go with is right for your business process.
Many mid-size businesses think that Tiers equate with Good, Better,
Best. They believe that a Tier-1 brand name gives you the best of breed;
but at what cost? The more comprehensive the more expensive and it is
not necessarily the best. Total Cost of Ownership (TCO) is high for a Tier-1
ERPs. Its like owning house thats too big your utility bills are bigger,
when you have more rooms, Government taxes you pay would be higher,
and your maintenance bills would be higher. While you spend more, youre
not getting a lot more for the price. And do you require it? The same holds
true for ERP systems, in which TCO is dependent on complexity.
But choosing the least expensive system also might not be the most
economical particularly if you end up accessorizing the solution with a
multitude of spreadsheets. When you dont buy a powerful enough
solution, you may wind up unable to do what you need to run your
business, and inefficiency runs rampant. You may find yourself creating so
many spreadsheets outside the system, that you are essentially manually
tracking everything. We have heard of companies using 90 different
spreadsheets to run their business.
If Tier-1 ERP could equate to living in a 30 room palace, then Tier-3 is like,
squeezing your large 20-member family and furniture into a 1-BHK Mumbai
apartment. But, some families are small and need just a 1-Bedroom
apartment and there are other rich families that can afford to pay for the
30 room palaces and also utilize them. Therefore, selection of the ERP is
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ENTERPRISE RESOURCE PLANNING (ERP)
Tier-1 ERP solutions generally take a long time to implement and are
equipped with a wealth of features at a pretty high price. Clearly, there are
only two vendors or ERP suites in this category. They are:
SAP
Oracle (JD Edwards and PeopleSoft)
Tier-2 ERPs, a step down in complexity and cost from Tier I, there are
several products on offer from a myriad of vendors or ISVs, some of which
are highly vertically focused and niche.
These ERP systems fit well with mid-size companies with mostly single
location and multiple divisions or multiple locations in the same
region. Generally, the needs are less complex of the Fortune-500
companies; however, the level of complexity does vary within this
group. Generally, Tier-2 ERP vendors are those focused specialized industry
verticals and choosing a highly virtualized solution generally works well for
the user.
However, Tier-2 are by no means a market for the taking all Tier-1
players have consistently tried to tailor their offerings to gain foothold in
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ENTERPRISE RESOURCE PLANNING (ERP)
this market space and Tier-3 ISVs have tried to gain upward mobility. This
is a big market.
The risks the more virtualized an ERP system, the smaller would be the
ISV, the greater the chances of financial instability and hence vulnerability
to mergers-acquisition and product support failures. Its absolutely
essential to check the long-standing and financial stability of Tier-2 ERP
vendors before making a buy decision.
Microsoft Dynamics
Infor previously BaaN
QAD
Orion
Microsoft NAV
Epicor Vantage
Marshall
IFS
MfgPro
Tier-3 and Tier-4: Small companies with single site operations, even
start-ups. There are many ERPs and so-called ERPs available.
At the lowest cost level, youve got Quickbooks and Sage 50, formerly
known as Peachtree. These products do not offer the functionality of Tier-1
and Tier-2 solutions, and may not even qualify as ERP systems. Youre
getting basic accounting abilities with these small business tools.
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ENTERPRISE RESOURCE PLANNING (ERP)
Microsoft GP
AccPac
Sage formerly PeechTree
Syspro
Aptean formerly Consona
Acumatica
Exact Americas
Global Shop Solutions
HarrisData
OmegaCube Technologies
Smarter Manager
Solarsoft Business Systems
Visibility
xTuple
Discrete Manufacturing
Process Manufacturing
Chemical Products Industry
Electronics and High-tech Components such as Semi-conductors
Distribution Industry
Warehouses WMS
Manufacturing for SMBs
Pharmaceutical and Botanical Products
Oil and Gas Extraction
Food and Beverage Products
Computer, IT and Software Construction
Retail Wholesale and Retail Trade
Hospitality Sector Hotels and Restaurants
Transportation
Real Estate
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ENTERPRISE RESOURCE PLANNING (ERP)
Apart for the core business process, most functions of a company are also
addressed in the ERPs, in that ERPs particularly from the big players such
as SAP and Oracle have become complete Enterprise Solutions. However,
these solutions have been bundled, so as provide customers to take the
whole or selective modules. Below are some of the additional functions
covered in ERP bundling:
Maintenance Management,
Portfolio Management,
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ENTERPRISE RESOURCE PLANNING (ERP)
Project Management,
Two-tier Implementations
In typical two-tier architecture, the server handles both application and
database duties. The clients are responsible for presenting the data and
passing user input back to the server. While there may be multiple servers
and the clients may be distributed across several types of local and wide
area links, this distribution of processing responsibilities remains the same.
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ENTERPRISE RESOURCE PLANNING (ERP)
If youre looking for your first ERP system or looking to upgrade from an
existing system, the evaluation, selection and implementation process is a
long-term strategic decision for your organization.
To help you through this process, here are eight simple steps for a
successful ERP system selection.
Step 1: Evaluation
Form an evaluation committee that includes top management, functional
experts and end-users from the different departments within your
company. Consider hiring external consultants to assist. Throughout the
selection process, end each step with a consensus of all members to gain
enterprise-wide acceptance of the final ERP system.
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ENTERPRISE RESOURCE PLANNING (ERP)
Industry Expertise. How well does the ERP vendor understand your
industry? Does the vendor offer industry best practices or pre-defined
processes that are generalized or horizontally focused? ERP solutions
should at the very least address your mission-critical business
requirements specific to your industry.
Customer Support. Does the ERP vendor have its own in-house support
or does it outsource? Youll gain the most out of your investment if you
have access to a customer care center that can answer your key
application and technical questions, solve your complex technical or
software related issues, and advise on best industry practices.
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2.9.1 SAP
SAP is the world leader in ERPs, with more than 40 years of experience and
nearly 50,000 customers. SAPs market-leading ERP software is a proven,
trusted foundation that comes with implementations amongst worlds
largest organizations as well as small- and mid-sized companies in 25
different industries.
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Consolidates the foundation for the latest mobile, cloud, and in-memory
technologies
Over the years, SAP has grown above being just an ERP product company
to provide the entire range of Enterprise Solutions. Their current products
suits is as below:
Mobile Analytics
Mobile Apps Applied Analytics
Mobile Apps Platform Business Intelligence
Mobile Commerce Solutions Data Warehousing
Mobile Device Management Enterprise Performance
Managed Mobility Management
Mobile Services Governance, Risk, Compliance
Cloud
Analytics
Business Applications
Collaboration
Platforms
Virtualization
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SAP is a well-Integrated system. This means that all SAP modules are
designed to share information and automatically create transactions based
on various business processes.
Over the years, SAP has launched three major versions of its ERP:
SAP R/1 The first version of SAPs flagship enterprise software was a
Financial Accounting System named R/1.
SAP R/2 Replaced R/1 to the end of 1970s. R/2 was also a Mainframe
Based Software Package that was very successful in the 1980s and
1990s.
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mySAP ERP (or SAP All-in-One) The most current generation from
its stables is SAPs business software brand for small- and medium-sized
enterprises (SMEs). It includes a range of products like SAP CRM, SAP
ERP, SAP PLM (Product Life Cycle Management), SAP SCM, SAP SRM, SAP
HR and SAP Financial Management.
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Besides native language, ABAP languages such as C, C++, Java, HTML and
ActiveX-Controls can be used.
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! !
In a three-tier configuration, you use your own host for the three tiers.
Using data from the database server, several different application servers
can operate at the same time. To ensure that the load on individual
servers is as even as possible and to achieve optimal performance, you
can use special application servers for individual application areas such
as sales planning, distribution or financial accounting.
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2.9.1.2 mySAP.COM
This part covers the SAP business application components that are included
in the mySAP.com offering, including everything from the traditional SAP
R/3 to SAPs new Customer Relationship Management solutions. The
intention is to provide a brief overview of what these components are
meant for, their underlying technology, and their IT hardware infrastructure
requirements.
As with most ERPs, SAP too was always focused on modernizing the
customers their back-office operations by integrating business processes,
with its R/2 and R/3 versions of its software solutions.
In the traditional ERP world, companies first focused on getting their own
in-house business processes under control and integrated. Data exchange
or communication such as placing orders or transferring financial data
within a company, usually happened with SAPs Application Link Enabling
(ALE) protocol. Inter-company data exchange and communication was
usually through EDI. ALE or EDI required being set up for each channel.
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However, with the evolution of Internet, HTTP and XML, SAP opened up its
new version to meet the requirements of doing business 24 7 real-time
with the introduction of mySAP.com. Its main elements ar:
mySAP.com Marketplace
mySAP.com Workplace
mySAP.com Business Scenarios
mySAP.com Application Hosting
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To complete this section of SAP, I will discuss briefly, the reasons why SAP
has been so successful in the ERP market space and is today the clear
market leader:
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SAP was the first ERP to offer fully localized versions of its ERP that
incorporated country specific taxation and regulatory requirements. So
(for example) companies in India, did not have to spend huge amounts
of money and time to customize a European version it became the
pioneers of Custom off-the-shelf or COTS products.
SAP runs on virtually any kind of hardware, OS, Database and browser.
SAP has grown out of the ERP to become one-source Enterprise Solution.
Continuous evolution to meet not just its immediate pain-points, but the
futuristic market needs but so as to make ERP acceptable at all levels.
SAP largely grew organically thereby did not have to contend with
diverse architectures of acquired products and the challenges of
integrating these with its core product.
The largely organic product growth strategy ensured that there was
always only one SAP product stream in the market. Customer always saw
only one brand old and new that was SAP R/*.
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2.9.2 Oracle
For those new to Oracle or Oracle Suite of Enterprise Solutions, the array
of products and their evolution and the future roadmap will be very
confusing. Under the umbrella of Oracle Applications, there are a number
of other proprietary labelled products mostly legacy suites that offer very
similar or redundant functionality, and then there is this a new application
suite called Oracle Fusion Applications that also offers much the same
functionality.
This will not be a straightforward bulleted executive summary, but will give
you a high level perspective to start with.
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The first application was Oracle Financials and immediately following was
Oracle Manufacturing followed by Logistics, SCM, Product Life Cycle
Management and CRM. Oracle subsequently added or customized Industry
specific modules for Healthcare, Aerospace, Life Science and High-tech
industries.
In the 1990s, Oracle Apps as these were called, found a major buyer in
General Electric Corporation who implemented Oracle Apps Financials
and Manufacturing as their ERP of choice in all their US Divisions. In the
course of implementation, these products underwent considerable changes
and matured as strong ERP products.
This suite of ERP originally labelled as Oracle Applications, has since grown
and today contains the following business functionality focused modules:
Manufacturing
Order Management
Procurement Management
Marketing and Sales
SCM and Logistics
Service Management
Projects Portfolio Management
Product Life Cycle Management
Financial Management
Human Resource Management
Learning Management
Customer Data Management
Value Chain Planning and Execution
Product Information Management
Real Estate Management
Financial Services
Communication and Utilities
Public Sector and Universities
High-tech Industries
Aerospace and Defense
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Transportation.
Integration
E-commerce Gateway
Workflow
XML Gateway
Report Manager
Web Applications Desktop Integrator
Application Administration
iSetups
Alerts
Thus, the applications suite that was originally called Oracle Applications
came to be renamed as E-Business Suite Oracles foray into
Business Applications. Currently, the term Oracle Applications refers to
the loose combination of: E-Business Suite, PeopleSoft, Siebel CRM, and JD
Edwards.
Also coming up on the horizon are other operating models for application
software procurement and deployment, such as Open Source and SaaS.
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These modalities have made no inroads within the large corporate sector,
but SaaS has been doing well in the SME sector, rapidly displacing
Microsoft, who used to have a large share of this niche market.
However, over the past 5 years, with industry in recession, progress was
very slow, and Fusion Applications was first launched only in 2011
incorporating what Oracle calls, the best elements of its existing legacy
Oracle Applications products. Fusion Applications are, in keeping with the
times, available on the iPad and offer an extensibility layer to support
customizations using JDeveloper (2012).
To combat the rise of SaaS in the SME sector, Oracle also offers Fusion
Applications as a private/public/hybrid cloud deployment.
Oracle sees Fusion Applications are coexisting with its legacy Oracle
Applications suites, with customers slowly adopting SOA as a technology
and then mixing and matching individual Fusion Applications with legacy
Oracle Applications on an as needed basis. Realistically, it will probably be
several decades before the legacy applications disappear because of the
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Below, we will briefly discuss the contents of each of these Oracle Modules.
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Oracle makes available, a fairly wide set of Business Applications, within its
bundled Oracle E-Business Suite listed as below:
Oracle Assets
Oracle General Ledger
Oracle Payables
Oracle Receivables
Oracle Cash Management.
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Over and above, the following products are also included in the Oracle E-
Business Suite:
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Its good to mention here the Oracle User Productivity Kit (UKP)
application that provides a content development, deployment, and
maintenance platform.
Oracle Fusion Applications you can called as ERP module for Fusion.
Oracle Fusion Applications is Oracles next generation suite of
applications, that eventually replace E-Business Suite. It will assimilate
best of breed features from:
E-Business Suite
JD Edwards
PeopleSoft
Siebel
With these releases, Oracle is not only moving to the next generation
technology stack like SOA, BPEL, BAM, JSF, Ajax, ESB, etc., but will also
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Application Server
BPA Suite (Business Process Analysis)
Business Integration
Business Intelligence
Identity Management
SOA Suite (Service Oriented Architecture)
WebCenter Suite
Fusion apps are metadata driven which is managed by the MDS framework.
Let summarize these all in various components and products and tools.
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Manufacturing Execution System (MES) is the key shop floor control and
execution module with capabilities, to deploy directly on the shop floor.
MES helps shop floor operators and supervisors to perform, record, and
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Supply Management
One View Reporting (OVR)
In-memory
Localizations.
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With the release of Version 8.0, the entire suite was refactored into a thin-
client, web based and n-tier architecture termed as the PeopleSoft Internet
Architecture (PIA).
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R12 is the latest and most advanced version, of the E-Business Suite,
running on Fusion Middleware.
Many of the technology components and new features in R12 will carry
over to the Fusion Applications. For customers running earlier release of
11i, upgrading/Re-implementation to R12 will allow you to move to the
Fusion Architecture in an incremental manner.
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Release 12.1, which became available in May 2009, rounds out Release 12,
with significant enhancements to the other product areas, including
Procurement, Supply Chain Management, Human Capital Management,
Customer Relationship Management and Master Data Management. It also
contains usability improvements and centralized life cycle management.
With the initial release of Oracle Fusion Applications likely focused on point
solutions, most users will be concerned with how to integrate Oracle Fusion
Applications, into their core applications. This will be a substantially easier
effort than migrating the entire core functionality.
1. Continue on Your Current Path: That mean you need to evaluate, the
latest Applications Unlimited releases Oracle Applications releases such
as Oracle E-Business Suite 12.1.3, PeopleSoft Enterprise 9.1, Siebel
Customer Relationship Management 8.2, and JD Edwards EnterpriseOne
9.1 for the additional value they bring to the businesses. In addition to
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Having discussed the evolution and the various product versions and
bundling of Oracle Applications, the best summarization for Oracle
Applications would be the following two figures that sums up its product
strategy and roadmap:
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Microsoft ERPs though classified as Tier-1 are not yet known to be in the
same class as SAP and Oracle in the sense of having its footprint amongst
multi-regional, multi-division mega corporate implementations.
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Microsoft acquired Navision in 2002 for $1.45 billion and created a division,
Microsoft Business Solutions, while continuing to use the Navision brand
name on the products. In 2006, the Navision products were rebranded, as
Microsoft Dynamics ERP in order to establish a stronger brand, for its
many product brands under Microsoft Business Solutions.
Microsoft has the following products in its fold of ERP Dynamics Products:
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Financial Services
Manufacturing
Public Sector
Retail
Service Industry.
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The Client(s), the actual user interface, into Microsoft Dynamics AX.
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Apart from the common AX 2012 architecture, the following components of
Microsoft technology stack deployed are:
The Enterprise Portal and Role Pages are hosted in SharePoint. Window
SharePoint Foundation 2010, is a free download or Microsoft SharePoint
Server 2010, may be purchased to provide extended collaboration and
content management tools.
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Customers can combine these capabilities, to suit just about any unique
business structure. Microsoft Dynamics AX 2012 makes all of this
functionality available in a single solution.
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Microsoft Dynamics GP is a product, for the SMB sector, that has fairly
comprehensive out-of-the-box capabilities, provides rapid and flexible
deployment options and helps a SMB get up and running quickly and
affordably.
Financial Management
Manufacturing
Supply Chain Management
Reporting and BI
Service and Project Management
Risk Management
Human Resource Management.
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Microsoft Dynamics GP, in a hosted setup, makes great sense for a growing
or mid-market company, looking to acquire a top-notch business system. It
offers a low cost of entry, with predictable IT costs.
Until Version NAV 2013, Microsoft Dynamics NAV gave users the option of
using either a native database server or Microsoft SQL Server, the
database. SQL Server, is now the only database option.
1. Starter Pack:
Project Management.
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2. Extended Pack
Data Tier: The Database Server, a database that stores the Microsoft
Dynamics NAV data (as of NAV 2013 only Microsoft SQL Server).
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Middle or Server Tier: The Application Server (starting from NAV 2009
RTC), a service, that managing all business logic and communication of
Microsoft Dynamics NAV's operation a service that controls all aspects
of Microsoft Dynamics NAVs operation.
Client Tier: The client(s), the actual user interface into Microsoft
Dynamics NAV.
Microsoft Dynamics NAV 2009 has RTC (Role Tailored Client) and
Classic Client.
All three components on the same computer. This is the configuration for
a demo install, and is also typical for a development environment, so that
a developer can work on Microsoft Dynamics NAV applications, without
worrying about network connections and inter-component security.
The Windows or Role Tailored client and Microsoft Dynamics NAV Server
are on the same computer and data tier on a separate computer.
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Limited User has only read access to the system, except write access
key tables such as Time sheets, Warehouse Pick and Commenting plus
any three extra tables of choice. The Limited user is "concurrent" and
with 2013 is trust based, as of version 2013r2 the limited user licensing
is checked.
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Financial Management
Project Accounting
Manufacturing
Field Service
Supply Chain Management
Analytics and BI
E-Commerce.
Construction
Government
Professional Services
Distribution.
2.10.1.6 Summary
In summary, while Microsoft has brought a whole suite of ERPs for various
segments and also provide tremendous flexibility in its offering, Microsoft
Dynamics suite are traditionally seen as ERP systems, primarily suitable for
the mid-sized and smaller organizations or the subsidiaries of larger
organizations.
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Infor is the third largest ISV in the ERP space, with a range of Resource
Planning systems Manufacturing, Financial systems and to supply chain
and CRM. Infor is a privately held New York based company whose primary
shareholding is with a private equity firm, Golden Gate Capital Partners.
Infor has about 70,000+ customers and supports customers in 194
countries, with a wide network of sales and service partners, offering
support and training in over 20 languages. Infor offers a complete array of
products to manage every part of a companys front office, back office, and
supply chain operations. The company was originally founded under the
name Agilisys and changed its name after the acquisition of the German
company Infor Business Solutions.
Baan is one of its flagship products and hence market tends to label Infor
LN Manufacturing ERP as Baan. Similarly, most of the original product
brands continue to be sold and with some thread to their original branding.
In the paragraphs below, I will deal with an overview of the entire Infor
suite of products and focus a bit on Infor LN which is the original Baan
Manufacturing ERP, upgraded since acquisition.
While Infor has products to suit at least a dozen industry verticals, its
primary Industry focus are:
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Hospitality
Public Sector.
Below is a list of Infor Products categorized by solution. You will notice, all
their solutions are a combination of multiple products, though well
integrated. This also gives the customer the ability to pick and choose the
products that they specifically require.
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Like all well-established ERPs, Infor LN helps you drive efficiency and
innovation, while improving visibility and control across your global
operations; as such the following (though ERP standard) features are
available:
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Tier-3 ERPs are essentially, the smaller systems that are utilized by
medium and small businesses and start-ups. Typical features of such ERPs
are:
The products are designed for small companies, that range in annual
revenues from $10 million to $50 million. These SMBs have less complex
process needs and have limited locations.
Tier-3 ERP products have limited complexity and are often designed for a
specific vertical industry and have limited breadth in applications, though
with the necessary depth required of the niche vertical industry segment.
The risk is that a company may outgrow the product in a few years, and
the ERP Tier-3 vendor is a smaller company with limited size and
resources to keep up with technology.
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small businesses get the basic accounting abilities with these small
business systems.
Small businesses with weak accounting systems benefit hugely from using
a Tier-3 solution, in that they can quickly implement an IT solution that
brings structure to their business processes and at a low TCO. There is the
small risk that, a fast growing company may outgrow this solution, but
most Tier-2 ERPs provide data migration capabilities and interfaces to the
big ERPs.
In this section, we will discuss not so much the ERP products available for
the SMB segment, but of the needs, pressures and pitfalls the SMBs face in
selecting and implementing ERP solutions.
The consideration for such a discussion is, SMBs by their very nature have
limited spend and ability to absorb financial losses. At the same time, the
need is high and deferment of ERP decision or delays in implementation
can be disastrous to the fortunes of the company.
The Graphs below from a Aberdeen Study on SMBs and the business
pressures they face due to not having an ERP implemented are:
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!
Source: Aberdeen Group, December 2011.
Fig. 2.1: Pressures Facing SMBs without ERP
Aberdeen study reveals that over 75% of the SMBs have implemented
some form of ERP solutions.
What are ERP benefits to the SMB? Aberdeens assessment came out with
the following key benefits:
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While some of the above benefits may seem intangible to the operating
layers of a SMB organization, the absolutely Direct Benefits perceived at all
levels are:
It is from the above perspectives, that ERPs for this segment, have been
designed vastly different, from those for the large enterprises. These ERP
products, are typically easy to install and need very little BPR or change to
the enterprises current ways of working. The licensing, as with Microsoft
Dynamic NAV or GP is typically 3-users and made available through a wide
network of dealers it is very similar to buying and installing MS Office.
In summing up, what are typical selection criteria for SMB ERPs?
A brief discussion on SAPs ERP product configurations, for the SMBs will
conclude this section appropriately. While SAPs original products were
typically used by Fortune-500 companies, SAP now actively targets small-
and medium-sized enterprises (SME) with its SAP Business One and SAP
Business All-in-One products.
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Mobility: For iOS and Android, SAP has free-downloadable app per user
licence that interfaces with SAP Business One.
SAP Business One provides integration at multiple points and for multiple
purposes using built-in APIs available in the SDK component. Another
integration option is the use of SAP Business One integration framework,
that employs XML based simple definition of integration scenarios. SAP
Business One provides the following software components:
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ERP vendors, other than SAP, have grown entirely through inorganic
acquisition and consolidation PeopleSoft Inc., Oracle Corporation and
Infor Software Solutions are classic cases. AMR Research of Boston says,
consolidation among the major players will continue and intensify. ERP
vendors are expected to put more effort into e-commerce, CRM and SCM
initiatives, with leaders redirecting between 50% and 75% of their R&D
budget to these projects.
According to the Gartner Research Group, the rapid evolution of ERP has
already led to a new corporate must-have, ERP II, which is supposed to
help businesses gain more competitive edge in the future. The major
difference is that ERP II involves collaborative commerce, which enables
business partners from multiple companies, to exchange information
posted on E-Commerce exchanges.
It should help companies strike that balance, but the same tug of war
between standardization and customization often plagues IT leaders.
Organizations have lost hundreds of millions of dollars, for example, trying
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While ERP has been used successfully to run management tasks, such as
finance and accounting, on a functional or regional basis, cross-functional
integration on a global scale, has proved far more elusive. Data from
Financial Executive International, an association of corporate finance
executives, show that more than 50% of ERP implementations do not
provide the expected benefits and that more than 80%, end up over
budget struggling to support the expanding demands of corporate global
operating models. However, this is a Finance/Cost Accountants view and
accountants are paid to highlight the negative financial impacts, as a
caution to the business that makes the decisions.
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I have covered under the section on SAP ERP and Oracle Applications,
specifics of a SAP and Oracle Application implementation. Other major and
smaller ERP ISVs have their own implementation/roll-out plans. However, it
is essential for an enterprises IT department and key business managers,
to have an independent understanding of what an ERP Implementation
plan should include. Below are the key phases of a generic ERP
Implementation plan.
5. Transition cut-over to the new ERP product, data migration and sign-
off.
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ERP Program Planning: Covers a set of key program plans. These plans
are essential to firstly, ensure proper control and delivery of the ERP
implementation, on-time and within budget and secondly, to define the
program activities, deliverables, timelines, budget, roles, responsibilities.
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In closing, after all the language you have read, a diagram above would
best give you a clear perspective, of a generic ERP Implementation plan.
The subsections below, give you a view of Implementation Plans for the
ERP majors SAP, Oracle and Microsoft. These have developed their own
implementation frameworks and it would be useful for you to get a gist of
it.
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Clearly defining the mission and the scope of the project clearly Project
Scope is the key in scheduling and ensuring, that cost overruns are
minimal.
Realizing a detailed plan at the start of the project as close as possible.
Standardizing and establishing a single project or implementation
methodology, as defined by ASAP itself.
Creating a homogeneous project environment.
Phase 3, the realization phase, is the longest phase and includes many
technical activities. Most importantly for technology- and infrastructure-
related tasks, it contains the work package System Management, which
is made up of a set of activities such as:
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Develop System Test Plans
Define Service Level Commitment
Establish System Administration Functions
Set up Quality Assurance Environment
Define Production System Design
Define Production System Management
Set up Production Environment
Phase 4, the final preparation phase, contains work packages for system
management, that target specific activities for the productive
environment, especially for conducting system tests. It is also important,
to perform a quality check on technical issues, in this phase
Phase 5, the go live and support phase, is an important overall phase for
the full project team, providing extensive support and guarantees that
the systems work as expected. This includes all infrastructure
components and support of the basis system.
Despite the high potential business benefits of the software, the flexibility
and broad scope of the Oracles ERP, makes an Oracle implementation
challenging and complex. Moreover, unlike SAP, Oracle does not provide its
custom implementation project plan, with attendant documentation and
tools.
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The key elements of an Oracle Implementation are:
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6. Upfront Planning: Even before the ERP deal is signed off with the
potential vendor, its essential to have the vendor and the companys
team sit down and finalize and sign-off an initial Implementation Plan
complete with resource commitments, ROI and Performance
Measurement goals. While it is ERP vendors objective to close the deal
as soon as possible, the companys objective should be to make sure its
done right. Too often, companies jump right in to a project, without
validating the software vendors understanding of business
requirements, or its project plan. The more time you spend, ensuring
that these things are done right at the beginning of the project, the less
time youll spend fixing problems later on.
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The leadership of the CIO and the IT team cannot be over emphasized.
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For the SMB, ERP benefits and challenges are more or less complimentary:
Below is a discussion on some of the challenges that SMBs must factor for
and mitigate prior to ERP:
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Resources that are integrated when consumers use SSTs, their co-
production role and what might constitute value are:
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ATM
Pay at the pump
Internet banking
Automated airline check-in
Automated hotel check-in/out
Automated car rental
MVD auto registration online
Online auctions
Home and car buying online
Automated car rental
Automated filing of legal claims
Automated drivers license testing
Automated betting machines
Automated investment transactions
Insurance online
Package tracking
Electronic blood pressure machines
Various vending services (food, drink, cameras etc.)
Internet shopping (Amazon.com, Gap, E-Stamps, etc.)
Internet information search
Tax preparation software
Self-scanning at retail stores
Various IVR phone systems (phone banking, prescription ordering, etc.)
Distance learning/training.
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advantage of these. The flip side is that, customers can rarely get to a
representative to discuss a problem, that one finds difficult to sort out on
the IVR.
Quality of the products itself and cost bad products dont improve with
self-service however good they may be. In fact, if the products are not so
good, a personalized service would go much better with the customers.
The types of services that are put out for self-service can itself cause a
serious failure through lack of acceptance by the customer.
Design of the self-service channels with alternate choices for the same
service particularly when they take over from a long available human
voice or face. Ideally, it is essential to have multiple channels with some
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Managing and preventing failures and the SSTs ability for service
recovery (even if caused by the customer) are generally limited. CSRs
have to be continuously behind the Self-service channels and come in
expeditiously to engage with dissatisfied customers and make a recovery.
Therefore, self-service channels cannot stand alone by themselves.
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2.16 SUMMARY
While the term ERP has widened and is now an industry term for the broad
set of activities, supported by multi-module application software, that helps
a manufacturer or any other business, manage the core parts of its
business, including product planning, parts purchasing, maintaining
inventories, interacting with suppliers, providing customer service, and
tracking orders.
Though the ERP having its origins in MRP-II, was originally (and is
currently) a term denoting a packaged software for the manufacturing
industry, ERP vendors and many niche ISVs have ERPs for industries
other than manufacturing. So, today we have ERPs for Hospitality
Industry, Health Care, Utilities, Telecom, Construction, Projects
Organizations, Retail and Services Organization and many more and as
ludicrous as it may sound for Furniture Industry!
SAP the ERP major has developed Core Banking and Core Insurance
products these meet the core businesses of a bank and the insurance
companies. So, ERPs today, are all the more focussed on meeting the core
business functions. While other functions are services by software products
such as CRM, SCM, etc. all from the same stable. The ERP vendors have
also developed SOA Services and Middlewares and Workflow products so as
to provide customers the flexibility to pick and choose a range of products
(not necessary from the same vendor) and integrate all using a middleware
of choice. Data Warehousing, BI and Analytics are always sourced from
niche vendors, though all ERP boast of a BI module.
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What are the trends that you may expect in the ERP space?
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IT companies grew at over 100% p.a., and anything less was considered
as Hindu rate of growth. Today, Indian companies have stabilized to the
international norms, customers have become more demanding, annual
rate increases have become difficult to negotiate and competition is
fierce. Similar reasons have made ERP pricing more reasonable and ISVs
are willing to cut margins to get a deal.
All said, ERPs have come to stay and business cannot anymore do with a
multitude of badly written in-house application systems and third-party
softwares with disparate architectures and communication protocols.
Therefore, ERP vendors continue to have a healthy business growth.
However, the buy-side focus should be on not just right selection, rather
on setting the right goals for the ERP this ensures success and prevents
retributions and post-mortems.
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Some of the following questions would require you to use your industry
experience and some additional reading. The Exercises are meant to
enable you understand ERP as manager would need to:
1. Define ERP.
11. What are the two major acquired components of Oracle Applications?
14. You are the CEO of a Small-scale Manufacturing Company based out of
Chennai and your primary customer is Hyundai Motors. To mitigate the
risk of most of your business being with one customer, bring at least 6
more steady customers that involves creating additional capacity. Write
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a brief note on how you would select an ERP that suits your
organization.
15. With respect to Question 14 above, having selected an ERP for your
organization, describe with a detailed plan how you would go about
implementing the ERP. Please provide an initial write-up of your
company and its operations, the selection criteria and a justification of
the ERP selection and finally, how would you handle your CRM, SCM
and Reports requirements. What short-term changes, you would have
to make in your organizations workings and how would you handle the
BPR exercise within constraints of staffing?
EXERCISE 1: Read one book on ERP, for example, a detailed book on any
one of the Tier-1 ERPs.
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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SUPPLY CHAIN MANAGEMENT (SCM)
Chapter 3
SUPPLY CHAIN MANAGEMENT (SCM)
Objectives
Structure:
3.1 Introduction
3.9 Summary
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3.1 INTRODUCTION
The Supply Chain are those functions primarily concerned with the efficient
integration of suppliers, factories, warehouses and store so that
merchandise is produced and distributed in the right quantities, to the right
locations at the right time, so as to minimize the total system cost subject
to satisfying service requirements.
Like all complex systems, Supply Chain systems too comprise of several
elements closely linked and interlinked to the movement of products along
the chain.
As with all business systems, Supply Chain Management too, starts and
ends with the customer. SCM is different from Supply Management which
emphasizes only the buyer-supplier relationship, whereas SCM begins and
ends with the Customer the functions briefly dealt with below, gives you
a perspective as to how Supply Chain is quite different from Supply
Management.
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Inventory and Stores: Planning and stocking of raw materials, WIP and
finished goods and managing reorder levels and generating procurement
requests.
Warehousing: After the items have been completed and tested, they
are stored back in the warehouse prior to delivery to the customer. At the
other end of the cycle, the suppliers materials are stocked in various
warehouses for shipment and delivery.
Some supply chains are simple, while others are rather complicated. The
complexity of the supply chain will vary with the size of the business,
global or local, the intricacies and type of manufacture or services.
Supply Chain Management has three levels of activities that different parts
of the company will focus on:
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Supply Chain Management strategies have moved far from the traditional
and, some of the newer concepts are:
Push-pull Strategies
Direct-to-Customer
Strategic Alliances
Manufacturing Postponement
Mass Customization
Dynamic Pricing
E-Procurement.
All major ERP companies now offer Supply Chain solutions as an extension
of their ERP packages. SCM products and technologies have also
considerably grown with the growth of Internet Technologies and E-
Commerce.
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Order Fulfilment is the key process chain in the Sales Order to Delivery
cycle of any product, retail or services company and hence is the key
element in the SCM process.
The operational order fulfilment process deals with the activities that have
to be performed to fill the order.
Today, there are e-fulfilment processes that are different from the physical
order fulfilment process. Most E-Commerce organizations use one or more
of the following order fulfilment strategies:
The key factors that influence the responsiveness of the order fulfilment
process are the nature of the product, the nature of product demand,
production triggering, and meeting customer demand.
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The Order Fulfilment Systems also determine the decoupling point in the
process, where the Forecast Driven (also called the Push), and the
Demand Driven (also called the Pull), activities meet. The Inventory
Buffer manages this point that is the gap between Sales Forecasts and
actual demand and organizations strive to move this to the point of JIT a
concept first initiated in the Automobile Industry in the 1970s.
Lowering the Ordering Costs. The key to selling at the lowest price, is
lowering the ordering costs. Retailers in particular cannot have bulk
discounts as most retail customers dont want to buy in bulk. Wal-Marts
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backward integration into wholesale and its technology driven SCM made
the difference. The other factor was employee motivation.
Production Pick Rate: This is the ratio of the volume of picking over
the hours worked. The calculation is complicated by the fact that the
total hours paid are rarely the total hours worked, introducing the need
to assess productive time versus paid time.
Order Cycle Times: What we refer to when we look at the actual ship
date versus the customer order date.
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1. Improved visibility
2. Adaptive supply chain network reduces uncertainty along the chain
3. Quick response to changes and capitalize on opportunities
4. Proper Inventory levels in the chain
5. Minimize delays
6. Eliminate rush unplanned activities
7. Provide the best customer service
8. Major contributor to success of the business
9. Better compliance.
With SCM, you can lower operational expenses with timely planning for
procurement, manufacturing and transportation. You have a better order,
product and execution tracking systems that can lead to improvements in
performance and quality and lower costs. You can also improve margins
through better coordination with your business partners. Real-time
business intelligence can lead to shorter cash-to-cash cycle times.
While there are significant benefits from SCM, its not achieved without
overcoming significant challenges. Some of the issues that global
companies face with Supply Chain management and their approaches to
resolving them are:
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Managing Uncertainty
Matching supply and demand
Demand is not the only source of uncertainty
In this section, we will very briefly deal with software frameworks and
components of a generic SCM product. In subsequent sections on the
products itself, you will get a view of the architectures and designs of some
of the most popular software products for SCM realization.
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Each of the systems ERP, WMS, TMS have their own databases and
softwares that handle the transformation of the stored data during the
course of the business process. The ERP, WMS and TMS ensure uniform
processes and transaction interfaces within the organization.
However, Supply Chain Management and SCM Products have moved far
since the Dot Com and have become supplier-buyer integrated, inter-
organization, cross-boundary e-commerce products. As such,
organizational requirements to be able to even implement SCM softwares,
have to be looked into, prior to a decision making. The following
c h a ra c t e r i s t i c s t h a t e n h a n c e e f f e c t i v e n e s s o f S C M S o f t w a r e
implementation:
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Supply chain software refers to the range of tools, that are designed to
control business processes, execute value chain transactions and manage
supplier relationships. While functionality in these systems varies
tremendously, common features include purchase order fulfilment,
shipping, inventory and warehouse management, and supplier sourcing.
Per Gartner, the market for SCM software procurement, maintenance and
services (that included Supply Chain Planning (SCP), Supply Chain
Execution (SCE), WMS and TMS) had substantial growth in the year 2013
with revenues of approximately $8.944 billion in 2013 which was nearly
7.4% growth over 2012 revenues.
Gartner predicts a 9.9% CAGR for SCM software excluding procurement for
the next 5 years, reaching $9.8 billion in 2018. Gartner sees the biggest to
be the way processes that once operated in their own silos converging into
the broader supply chain management space.
The top five market leaders are SAP with $2.138 billion, Oracle $1.455
billion, JDA Software $445 million, Manhattan Associates 167 million and
Epicor $159 million. The ERP vendors take the top eight spots with an all-
from-the-same-stable perception advantage. The top three ISVs SAP,
Oracle and JDA accounted for 45% of the total SCM software market.
JDA grew with the acquisition of RedPrairie.
The Table below gives Gartners List of Top-20 SCM Vendors with their
rank, Revenue in Year 2013 and the functional areas where they have
product coverage. Starting No. 7, the products address the mid-market
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and the small enterprises requirements you will notice that the coverage
is confined to the essential functional areas.
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Source: Gartner
Source: Gartner
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Demand and Supply Planning: Balance supply and demand and run
your business based on actual-versus-forecasted demand with supply
planning software from SAP. Creates supply allocations for customers and
channels, plans and balances production runs with inventory costs,
replenish inventory with time-phased order logic, sourcing decisions in real
time, optimizes the supply path by using a multistage production
environment.
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Track and Trace: Improves the visibility and traceability of raw materials
and products across your supply network and meet regulatory and
compliance requirements. It is possible to detect counterfeits and
diversions by closely monitoring genuine product flow and expedite
execution of recalls and reverse logistics. It provides traceability to
material components, plants, and suppliers.
Below is SAPs Solution Map for its SCM Product Family, graphically
depicted
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!
Figure 3.1: SAP* Supply Chain Management Solution Map
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SAPs Roadmap for its Supply Chain products in 2011 were based on the
following global trends increased demand and supply volatility, global
pressure on margins, increased risk and compliance requirements and
the need of Supply Chain Management was to rectify issues with respect
to:
Unprofitable Demand-Supply Synchronization
Inefficient and inflexible execution
Increasing number of supply chain disruptions.
The SAP Roadmap below, is a bit dated, yet it will give you an good idea of
how the SCM vertical has progressed/progressing.
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On 1 April 2014, SAP announced its new supply chain solutions strategy at
a SAP event in Las Vegas. Though no official SAP press release has been
done yet, Gartner analysts at the meet, have already put out an analysis
for customers. Below paragraphs is a brief of Gartners analysis.
It is expected that, over the next couple of years, the majority of supply
chain planning capabilities will be built into the Hana native solutions,
though SAP APO will continue a few operational and optimization features
and others will be merged with the ERP.
Presently, most systems cannot offer or even visualize this kind of holistic
view. However, SAP needs to have a roadmap to address the limitations of
its existing applications.
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SAP released Business Suite i2013 Innovation 2013 which include new
enhancement packages for all SAP Business Suite core applications: SAP
ERP 6.0 EHP7, SAP CRM 7.0 EHP3, SAP SCM 7.0 EHP3 and SAP SRM 7.0
EHP3. All these innovations are available with the SAP HANA database and
the traditional certified databases, thus giving more choice to customers to
continue to innovate without disruption.
The technical components that make up HANA are The core of SAP HANA
Enterprise 1.0 is the SAP In-memory Database 1.0, a massively parallel-
processing data-store that blends row-based, column-based, and object-
based storage techniques. Other components of SAP HANA Enterprise 1.0
include:
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SAP HANA runs the SUSE Linux Enterprise Server 11 SP1 operating system
and generally delivered as an on-premise appliance and is available now.
SAP HANA has been designed to replicate and ingest structured data from
SAP and non-SAP relational databases, applications, and other systems
quickly. One of the three styles of data replication trigger-based, ETL-
based, or log-based is used depending on the source system and desired
use-case. The replicated data is then stored in RAM rather than loaded
onto disk, the traditional form of application data storage. Because the
data is stored in-memory, it can be accessed in near real-time by analytic
and transactional applications that sit on top of HANA.
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satisfaction are increased and fulfillment costs and order errors are
drastically reduced.
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Oracle solutions have their weakness, some of them typical to any Oracle
solution - Oracle applications portfolios is extremely large size and range
and the fluidity of new product acquisitions and resultant architectural
changes and retirement of old ones and the bundling/re-bundling makes
product selection and particularly upgrades a major challenge.
Understanding the many Oracle applications configurations of ERO and
supply chain software products to determine whether Fusion, EBS,
PeopleSoft or JD Edwards deliver the optimal enterprise software for
particular business requirements can be extremely confusing and many
times leads to wrong BOMs. Lastly, Oracle Fusion Applications future
direction for Supply Chain Management is still not quite clear.
3.9 SUMMARY
From a SCM Product angle both SAP and Oracle, as well as some of the
other major SCM software vendors offer a wide choice in customer delivery
be it in-premise, public cloud, ISV-cloud, private cloud, or a hybrid
combination of any of these. They also provide lean solutions for SMBs with
SaaS offerings. All major solutions are integrable with existing ERPs, with
options of selectively implementations of any specific modules.
Below are a few Supply Chain trends that would be good to gain and
understand of:
Online Purchases: Over the last decade, online retail sales have
exploded, and with them the need for effective warehousing, inventory
and transportation control. Suppliers, more often than not, are taking a
product from manufacturing not to a FG store, but to a warehouse for
direct dispatch to the consumer. Ensuring an effective inventory control
path is absolutely critical throughout this process.
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Gartners Supply Chain Top-25 for Year 2014 Report has the
following key observations:
Key Findings
The top five include Apple, McDonalds, Amazon, Unilever and P&G.
Recommendations
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2. How SCM can be divided into main flows? Which are they? Explain each
one of them.
3. Which are the main types of SCM software? Explain each one of them.
6. List down the supply chain management problems. Explain each one of
them.
7. Describe the SCM activities and the functions within. Explain each one of
them.
8. Explain the supply chain business process integration. Which are the key
critical supply business processes combining these processes? Explain
them.
EXERCISE 1: Read the book The Wal-Mart Way: The Inside Story of the
Success of the worlds largest company, by Don Soderquist. Write a 10-
page synopsis of what you have learnt of Wal-Marts Supply Chain
Management success.
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
Video Lecture
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Chapter 4
SUPPLIER RELATIONSHIP MANAGEMENT
(SRM)
Objectives
Structure:
4.1 Introduction
4.7 Summary
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4.1 INTRODUCTION
A contract between a supplier and its customer goes through many stages
through its life cycle. In order to remain competitive, organizations have to
take special care in maintaining efficient and cost-effective partnerships
with their partners. The only way to be certain, that suppliers are holding
up their end of the bargain is to consistently evaluate their performance, a
difficult task made easier by SRM software. SRM systems help users keep
suppliers on their toes by monitoring their operations and revealing poor
performance.
Supplier relationships also vary based on the organizations need and the
business scenarios. There are the following four types of supplier
relationships:
The relationship and needs vary from complexity of the procurement and
strategic value to level of specification.
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SRM includes both business practices and software and is part of the
information flow component of Supply Chain Management (SCM). SRM
practices create a common frame of reference, to enable effective
communication between an enterprise and suppliers, who may use quite
different business practices and terminology. As a result, SRM increases
the efficiency of processes, associated with acquiring goods and services,
managing inventory, and processing materials.
While there are different forms of formal and informal relationship links
between buyers and suppliers, the key or most rewarding areas that SRM
comes into play in vendor relationships are:
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Procurement Intelligence
Project Management
Sourcing
Electronic Tendering
Auctioning
Supplier Management
Contract Management
Catalogue Management
Operational Procurement
External Resources
BPO Procurement.
Performance assessments SRM programs will allow the user to utilize key
performance indicators (KPIs) to perform
quality assessments and a thorough
awareness of deviations.
Risk assessments Scorecards enable supplier segmentation by
user-defined risk variables, helping determine
which partners present the least risk, in the
most important areas.
Centralized sourcing and SRMs use a centralized information database,
collaboration to streamline bidding, consolidate and
distribute contracts, track compliance and
improve collaboration.
Regulation compliance High quality SRMs use rules engines and
compliance scorecards, to reduce the burden
and improve the success of compliance
management protocols.
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This section briefly discusses the Whys? of SRM Why is it required and
Is it useful?
The need and thrust of interaction with suppliers can and does change a
once strategic supplier may fall off the radar or moved on to others in
layered progression. Many times, the flux in markets and among suppliers
requires a shift in focus or emphases.
From a strategic point of view, SRMs primary role is in the initiatives for
projected requirements and leveraging market conditions so as to reap the
best benefits and avoid risks.
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Just as with all Enterprise Software Solutions, there are multiple software
vendors mega, large, medium and small ISVs. There are the SAPs and
the Oracle and then the Microsoft and a host of mid-sized companies that
have very good products and products that fit the budget of SMBs and
start-up.
The market leaders in SRM are clearly the big names, as listed below;
these products will be discussed in detailed in later sections:
SAP SRM.
Ariba.
PeopleSoft.
JD Edwards.
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12. AMT: AMT is a product, focused at the Apparel and Retail industry
segments to assist Supplier Relationship Management. Orion has
redesigned this offering and the current version works under
Microsofts .NET framework, SQL Server and Sharepoint.
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The diagram below shows how mySAP SRM fits in the SAP enterprise
Architecture.
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Catalogue Management
eProcurement
eSettlement.
eSupplier Connection
Financials
Procurement Spend Analysis
Purchasing
Services Procurement
Strategic Sourcing
Supplier Contract Management.
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Strategic Sourcing, enables customers to source for the lowest total cost
and create immediate and long-term savings. Improves sourcing results
with cross-functional collaboration, providing the ability to access a
contract clause library and includes clauses on sourcing events, and
carrying them forward onto the first draft of contracts once awarded.
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4.5.2 Ariba
Ariba was founded on the then new business concept of on the idea of
using the Internet to enable companies improve their procurement
process. Ariba is extremely strong in the B2B segment and in the early
2000s the dot-com era was considered a trend setter in Supply Chain
products. However, with the bursting of the dot-com bubble, Aribas stock
price and its brand took considerable hit and revived with the growth of
Internet technologies essentially Ariba was company with a concept and
product that was ahead of its times.
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Even today, its Ariba Network is a B2B solution that is highly popular and
no discussion on Supply Chain would be complete without a brief on Ariba.
Ariba analyses the companys procurement-spend trends and uses the data
to support stronger negotiation. Connection to a network of suppliers,
helps to quickly discover collaborative partners, who can lower your costs
for goods and services while minimizing your risks. As with all SRMs, Ariba
also ensures contracting and procuring compliance.
Supplier Discovery
Sourcing
Contract Management
Procurement
Supplier Management
Operational Procurement
Spend Analysis
Catalogue Management
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Global economic trends have had a direct affect on the SRM software
market. Over the past few years, more organizations not just the
Fortune-500s have leveraged SRM softwares to reduce spending and
manage supply risk. SRM systems have been effectively leveraged to
maximize supplier performance with informed decisions in contract
evaluation and renegotiation. The necessity of going global has introduced
cross-border supply chains and many SRM vendors upgraded their system
to the requirements. In such scenarios that an enterprise faces, it would be
prudent to ask the following questions while selecting a SRM product:
Does the system offer the necessary functionality to meet the unique
needs of your organization monitor supplier compliance for specific
industry regulations?
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the price. It is also a fact that unlike CRM or SCM, a whole lot of
information is not available on SRM products. So selection has challenged
and the objective is to select right definitely not buy a Mercedes when
your actual need is only a Maruti Alto. Below are some key points to
consider when choosing among options.
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4.7 SUMMARY
In the current business world, with pressures on top-line and margins and
a continued uncertainty remain competitive, the ever pressing
organizational need, is to reduce cost of procurement at the same time
ensure on-time, good quality in wards goods and services. Organizations
have found to their advantage that the strategy is to take special care in
maintaining efficient and cost-effective partnerships with their vendors/
suppliers and the only way to be certain, that suppliers are holding up their
end of the bargain, is to consistently evaluate their performance a
difficult task made easier by SRM software.
While Software systems for SRM have matured late, their importance has
been quickly realized and SRM softwares are now standard components, of
any enterprise solution for large and small companies. SRM softwares help
procurers keep suppliers on their toes by monitoring their operations and
revealing poor performance.
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2. What are the integration points of SRM with other the ERP?
4. Name 5 SRM vendors for SMB and write a few lines on their products.
5. What are the criteria on which you would evaluate a SRM product for
your organization?
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
Video Lecture
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Chapter 5
CUSTOMER RELATIONSHIP MANAGEMENT
(CRM)
Objectives
Structure:
5.1 Introduction
5.2 Need and Benefits of CRM
5.3 CRM Strategies
5.4 CRM Software Components
5.5 CRM Products Overview
5.5.1 CRM Product Criteria Large Companies
5.5.2 CRM Product Criteria SMBs
5.5.3 CRM Analytics Products
5.5.4 CRM Specialty Tools and Products
5.6 CRM Tier-1 Products
5.7 CRM Implementation Best Practices and Pitfalls
5.8 CRM Industry Trends
5.9 Summary
5.10 Self Assessment Questions
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5.1 INTRODUCTION
Today, both the business process and the software tools have varyingly
been called CRM. In this section, we will primarily deal with the software
technologies in CRM, though briefly dealing with processes as softwares by
themselves do not achieve a business purpose.
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Consider the following use case scenario to help you understand the need
for CRM software:
The contact center receives a customer call: The contact center rep
toggles between each of these tools to figure out whether the caller is a
prospect or an existing customer if the caller happens to be a high-
value customer, then she/he definitely gets annoyed by the delay and the
cold response. During the conversation, it may happen that the
representative miss out closing some pending order or fails to put across
a new sales opportunity.
With a CRM Software in place: The contact center rep could simply pull
up that account, wish the customer a Happy Wedding Anniversary, and
go on to refer to every meeting, phone call, e-mail exchange the
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customer had with any member of the organization and all pending
issues both ways.
In the past one year or so, most of you must have been informed by your
banks that you need to come and update your KYC records from a
CRM point of view this is the biggest joke. KYC is at the upper end of
customer management process, that involves deep knowledge of the
customer and his/her financial status and investment patterns, whereas
what RBI and the Indian banks call as KYC, is very basic data on its
customers, such as Name, Address, Date of Birth, Proof of Identity and
Address and nominee the first thing that any bank captures and expected
to keep updated in real-time. This is a great example of the misuse of
CRM.
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Below are some of the transactional benefits that arise out of the
implementation of CRM softwares:
Sales and Marketing and all relevant sections of the organization gets
immediate insight into customer and prospect leads originating from any
channel.
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All CRM softwares integrate with the company websites, to track and
provide truly multi-channel coverage.
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Buyers usually hesitate to switch the supplier because, it may cause costly
disruptions to their business and the risk of making another wrong choice
from the devil to the deep sea. The customers potential problem (with
existing supplier) must exceed the benefits they gain from the new supplier
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and this from the sales and marketing perspective, is the key aspect of a
CRM strategy.
!
The key strategy of CRM is to maximize customer loyalty through value and
relationship by integrating sales, marketing, delivery and service. To
achieve these objectives, the organization would need to:
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Good CRM softwares should measure well on the following five parameters:
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CRM software systems offer two value propositions. The first is cost
savings due to greater efficiency in business processes, known as
Operational CRM. The second, called Analytical CRM, is the gathering of
actionable customer data, that is analyzed for greater customization and
for predictive purposes. Hence, the discussion, Operational CRM versus
Analytical CRM.
Operational CRM
Operational CRM supports the front-end, customer-facing business
processes and includes all the products, services and operational
capabilities, that enable the company to service its customers. Examples
include contact centers, data aggregation tools, transactional/self-service
websites, customer-centric business processes and performance measures
(cost, cycle time, satisfaction). With operational CRM call center and self-
help, efficiency can be analyzed in great detail and improved upon
quantitatively and qualitatively.
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Analytical CRM
The value of CRM to the organization only begins with an improved and
more competitive customer experience. The real CRM payoff comes as
customer data is captured and analyzed to gain intelligence into both
individual customers and the marketplace. When analyzed intelligently, this
data becomes the basis of future product development, targeted marketing
campaigns and enhanced services. Ultimately, analytical CRM produces a
more competitive enterprise that is able to predict and act on market
trends rather than respond after the fact.
Analytical CRM describes the component of CRM that relates to data mining
and interpretation of data collected about customers. Companies that use
CRM are usually trying to garner as much customer data and transaction
history as possible to make effective business and customer-centered
marketing decisions.
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To keep this data meaningful, e-mail is linked into this centralized system,
data from websites can be linked automatically, and the whole accessed
and updated from mobiles So, every way of contacting the customer is
linked into CRM and we have Operational CRM.
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The third component of CRM is the Collaborative CRM that focuses on the
interaction with customers through personal interaction, letter, fax, phone,
Internet, e-mail etc. The final objective is to retain the customer
relationship. Collaborative CRM Includes:
All CRM software will at very least include the following four Core
Functions:
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1. Marketing Automation
2. Sales Force Automation
3. Customer Service.
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This section and the subsequent ones on Tier-1 products, SMB specific
products and the penultimate section on CRM Trends may help the readers
who would be potential purchasers, in deciding the right CRM softwares
packages required for their business.
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and prompts and other embedded guides that help users learn faster are
essential. These are very important in first time implementations of CRM
software.
Some key aspects that you should look for when buying a CRM product are
how it handles all aspects of the customer interaction experience, data
sharing ability across between multiple user groups, and the ease of
installation and use. It is essential to examine case studies of
implementation in similar organization and feedbacks from existing
customers of the product.
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Gartner Report of May 2014, in Table below gives you the top CRM
Software Spending by Vendors, Total Software Revenue Worldwide, 2013
(Millions of Dollars).
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In this section, we will discuss CRM products that are suitable for large
companies. The key criteria that large organizations apply in their selection
of CRM products typically include but not confined to the following:
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CRM solutions for the small enterprises primarily target organizations with
up to 250 employees. Functionality is limited compared with what full CRM
suite solutions offer and typically focuses on basic contact management
including social channel interactions and e-mail marketing capabilities for
individuals or small teams. They offer a variety of deployment options,
including on-premises licensed and SaaS.
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A few of the CRM products for mid-markets and small enterprises though
not with any consideration of their revenues or market rankings have
been discussed briefly below:
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CRM softwares are becoming increasingly popular with small and medium
enterprises, across industry segments and across the globe. Even the
smallest organizations recognize the value of a CRM solution, to manage
interfaces/interactions with customers and prospects.
Just as all small businesses are not similar, so too CRM solutions. CRM
solutions for the SMB can span from limited contact management features
to full-featured CRM, out-of-the-box implementations or customized to
meet specific business requirements. So also, CRMs provide deployment
options ranging from in-premise to SaaS-based though the SMB segment
generally opts for SaaS/Cloud solutions since they alleviate the issues
associated with installing and upgrading infrastructure.
As SMBs evaluate their options, they need to determine which solution best
meets their organizations marketing, sales and business needs best from
present and growth perspectives. Below are a few of the features and
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criteria that small and medium businesses should look at in deciding a CRM
technology for their needs.
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While most Tier-1 CRM products provide extremely mature Analytic CRM, I
have discussed a couple of products which are exclusively known for the
Analytics. They are SAS and Teradata both are traditional Data
warehouse, BI and Analytics specialists and hence their CRM integrates
well into the Analytics architectures of most organization.
1. SAS Analytics CRM has been a mega player in the field of BI and
Analytics and by natural progression, built several high-end CRM
Analytics Products. SAS Customer Intelligence provides the vital
knowledge needed, to help organizations build a market-ready
enterprise and create a sustainable competitive advantage. SAS
Customer Intelligence can run campaigns and programs implemented
across channels effectively, targeting the right customers, with the right
offers. SAS predictive analytics, assists in assessing new campaign
spend. SAS Customer Intelligence is built on the SAS Enterprise
Intelligence Platform, which provides foundational components, that can
be used within the marketing department and across the organization.
The SAS Enterprise Intelligence Platform includes enterprise-level
reporting to explore customer data through a variety of standard
reports, ad hoc reports, OLAP drill-down analysis and parameter-driven
reports. The platform also provides comprehensive data management
capabilities that allow you to create a single view of the customer.
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SAS Web Analytics helps customer learn how each customer navigates
the website and whether they are buying and whether or not they are
likely to come back.
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Campaign Management
Marketing Resource Management
Offer Management
Active Analytics
Integrated Web Intelligence
Interaction Management
Communication Management.
Teradata product family for CRM is an extension of its DWH and BI Solution
suite. The CRM Analytics are essentially built on the same architecture and
databases; therefore, extending from an existing Teradata DWH to CRM is
fairly simple. Teradata offers the following CRM Analytics products:
This category comprises vendors that offer solutions with narrow functional
breadth but deep specialty capabilities such as marketing automation
and customer service for both large and mid-market organizations. This
category also includes CRM vendors that specialize in specific industries
such as financial services, life sciences, telecommunications, and not-for-
profit. Some examples in this category are:
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Sales Quote Order Helps to prevent order errors by allowing sales data
to be transferred to the order handling engine as quotes.
Amdocs CRM software links together your company objectives and the
customer life cycle, in order to reduce the cost-to-serve process and
promote higher value customer interactions.
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Infor Social Commerce integrates Facebook with your site for maximum
conversions, Targeted campaign executing and preference analysis,
Consumer Interaction Hub helps optimize interactions for stronger lead
cultivation and better customer insights.
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As introduced in the previous section the list of CRM products for Tier-1
companies the Fortune-500 companies are:
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As you can see from the above figure, Oracle Siebel CRM offers very strong
capabilities in the entire range of CRM functionalities marketing sales,
partner channel management, field service, customer data management,
architecture and platform, business intelligence. Siebel also supports global
businesses with cross-border and multi-language capabilities. Siebel also
has strong capabilities in customer service and its current versions offer
good usability features. Siebel is also at par or ahead of other CRM vendors
in mobile CRM.
Oracle Siebel CRM has industry specific solutions for life sciences, utilities,
telecommunications, and financial services industries.
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!
From a planning perspective, the above figures give you a picture of
Siebels strategy and what you may expect Oracle to roll-out in the coming
years.
The company has grown quickly as the leading pioneer of CRM with a SaaS
deployment model, which mitigates customers IT risks and implementation
challenges, compared with traditional in-premise solutions.
Salesforce.com offers strong usability, sales and partner channel
management functionality. It also has a strong architecture and platform as
well as strong customer service capabilities. The solution also has sound
customer data management and BI capabilities.
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The SAP CRM solution has one of the largest user bases in the industry
SAP reports more than 7.5 million users.
SAP CRM also offers very strong functionality for sales, partner channel
management, platform and architecture, and the ability to support global
enterprises. Usability has been significantly improved in recent years and is
very strong. SAP CRM also has a good set of features in BI, marketing, and
field service and sound functionality, in customer data management and
customer service.
Compared with other CRM vendors, SAP CRM offers strong support for
mobile CRM. As with SAP ERP products, CRM too is strong in industry-
specific business processes utilities, financial services,
telecommunications, and manufacturing sectors.
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Microsoft Dynamics CRM offers very strong capabilities for sales, usability
(based on the familiar Outlook UI look and feel), and the ability to support
organizations that operate across international boundaries and languages.
Microsoft Dynamics offers strong marketing, business intelligence, and
customer data management capabilities, as well as a strong architecture
and platform. It provides sound functionality for customer service and
partner channel management capabilities, but falls short for field service
and e-Commerce. As with leading CRM vendors, it offers strong support for
mobile CRM.
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Amongst SaaS CRM solutions, this product has depth of functionality for
the following industry verticals life sciences, high-tech manufacturing,
and financial services.
Buyers turn to Pega CRM to address their needs for transforming customer-
facing problems, especially for untamed processes in large, complex
organizations.
With its recent unification of predictive and adaptive analytics and new
support for social and mobile, the company has invested heavily to help
organizations, deliver uniquely differentiating customer experiences. Pega
CRM offers a strong architecture and platform as well as very strong
customer service functionality. It also offers strong marketing, sales, and
business intelligence functionality as well as strong usability and mobile
CRM. The solution has very strong business process and workflow
functionality.
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Pega CRM is best suited for buyers that want to strengthen their ability to
support, rules-based customer service, marketing, and sales processes.
Rampant are the high failure rates of CRM implementations, but not any
greater than any enterprise software implementation. Organizations would
do well to study reports from analysts, such as Gartner, AMR and Forrester
Research on the failure rates and issues; a few data is reproduced below.
What is a success and what a failure, also lacks clarity as most software
projects are difficult to evaluate objectively the irony being that even Six
Sigma evaluations have proved ineffective. An implementation may be
shown as successful in terms of numbers such as ROI or defects per
million parts or growing top line sales or improving the customer
experience, but a failure when viewed from the eyes of the business. It is
generally known that C-level executives take a long-term perspective,
while operational managers are quick to label failure. How do large
organizations fare vis--vis the smaller enterprises? This difference is only
that, the large corporates have deeper pockets to absorb financial impacts.
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Analytical CRM: This does not roll-out at the same pace as Operational
CRM as it requires substantial data clean-up and fine-tuning with new
data as it comes in.
Failure to follow through on any of the above best practices, can be costly
and may doom your project. In addition, the following list of
implementation pitfalls should be proactively avoided.
Failure to Get Buy-in of the Executive and Key Users: A sure cause
for failure. Since CRM (as with any enterprise implementation) is
organization-wide, senior leadership vacuum will definitely result in
disappointing results, if not a total failure. At the same time, buy-in of
the key user groups is equally important, in ensuring success of the
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Key Users are Not Trained Properly: Firms mistakenly believe, that
the CRM initiative is complete once the CRM infrastructure is in place.
Training of all users and their buy-in and satisfactorily answering their
question whats in it for us cannot be more stressed.
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!
Source: Gartner (July 2013).
Gartner one of the most well-known analysts publishes Hype Cycle every
year for almost all areas of business and technology. Above is reproduced
Gartners Hype Cycle for CRM Sales 2013. The CRM trends given below are
based on the Gartner Hype Cycle for 2013. Understanding the Gartner
Hype Cycle for 2013 the Peak of Inflated Expectations, is the phase in
the life cycle of technologies, that sees huge overenthusiasm and
unrealistic projections with a overpublicity by technology leaders and sees
limited successes but more failures as the technology is not yet mature;
the Plateau of Productivity, is that phase when actual benefits of
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So, if you map the CRM technologies that are being talked about in the
market by corporate IT leaders, product companies and consultants and
relate with the Gartner Hype Cycle analysis, we understand:
1. Plateau of Productivity
Here below are two areas of CRM, that corporates will focus their
implementations on, in the coming 2+ years, closely followed by those in
the Slope of Enlightenment. The technologies have matured and tested
and business processes have aligned well, to quickly implement and realize
immediate business benefits.
Proposal Generation
Mobile Sales Force Automation for Orders and Inventory
2. Slope of Enlightenment
These areas of technology are nearing maturity and becoming good
enough for industries to take them in with quick business benefits.
Social CRM
Mobile CRM
Handheld devices
Sales Objective and Quota Management
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Social CRM (SCRM) for Sales is at the Peak of Inflated Expectations, with
90% of spending for these applications being generated from B2C
companies. Gartner expects B2B companies to lead the growth of these
applications through 2015.
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Predictive Analytics and Big Data analytics and the big data has
seen many ups and downs and is still an area where companies tread with
caution that is not so much due to lack of technology, but more due to
the increasing complexity of business and data being dealt with. Given the
increasing complexity of marketing automation systems and the strategies
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they support, predictive analytics and big data are expected to accelerate
quickly over the next two-three years. However, given the history of
analytics, one should approach this with realism but not avoid.
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5.9 SUMMARY
The past decade and specifically the recent recessionary years, have
changed the way business operates. As never before, it is the customers
choice today that determines the fate companys brand and destiny. In a
global world with increasing mobility, dynamism where borders are no
longer relevant to business, customers are calling the shots and redefining
markets.
While all large organizations have adopted CRM, it is the mid-sized and
small companies that find it difficult to catch up with the change. However,
despite these challenges of size and financial sustainability, the SMBs have
to embrace technology, that enables them to leverage our customer data,
into productive actions that result in increasing our customer value and
profitability.
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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Chapter 6
ENTERPRISE CONTENT MANAGEMENT
Objectives
Structure:
6.1 Introduction
6.2 Concepts and Benefits Of Content Management
6.3 Content Management Products An Overview
6.4 Tier-1 ECM Products
6.5 Tier-2 ECM Products
6.6 Summary
6.7 Self Assessment Questions
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6.1 INTRODUCTION
ECM is the strategies, methods and tools used to capture, manage, store,
preserve, and deliver structured and unstructured content and documents
related to organizational processes. The kind of content managed by ECM
today was traditionally managed by manual record management systems.
Needless to say, it includes the conversion of data, to and from digital and
traditional forms including paper and microfilm. ECM also manages Web
content and its key features are rapid search and retrieval and online
collaboration, digital asset management and workflow of document in an
organization. In doing so, ECM boosts effectiveness, encourages
collaboration and make information easier to share.
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Forms
Executables
XML Documents
COLD/ERM
Instant Messages
Cheques
Web Pages
X-Rays
Content files stored in repositories may be in any file format and created
by any application. The Document Management system must recognize all
file formats and store them appropriately and when the document is
accessed, the appropriate viewing or editing application is automatically
launched on the client computer.
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What are the benefits of ECM? Compare the way a traditional file system
handles content vis--vis ECM Product:
Cant be certain of the version of a Can always access the most current
document. document or any specific version.
Limited access rights settings. You can restrict who can read, edit or
Search for documents based on a delete a document.
limited set of properties. Search for documents based on
Different formats maintained as descriptive information.
separate files. Seamlessly maintains differently.
Workflow and routing not available at formats of the same document.
all. Routes documents for review and
app.
Content Distribution:
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Categorizing ECM Products, in the top tier, are the following seven
products:
1. IBM Filenet.
2. EMC Documentum.
3. Microsoft SharePoint.
4. Perceptive Software.
5. Hyland Software OnBase.
6. OpenText.
You will notice that ECM is one enterprise solution, where Oracle
Corporation does not figure in Tier-1 quite so due to the fact that their
solution, does not yet compare with other Tier-1 products in the industry.
However Oracle WebCenter Content is fast catching up with new
releases.
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IBM is the market leader in terms of ECM software revenue and its broad
portfolio of ECM tools under the brand Filenet supports, the upper end of
the value-chain, particularly for transactional content and social content
management. IBM Filenets product strategy is focused on embracing the
intersection of social, mobile and content management, as well as the role
of analytics and content management in industry solutions such as patient
care and fraud investigation.
IBM has reduced the complexity of Filenet and given it a more user-friendly
universal UI, Content Navigator, that gets the better of other ECM products
which have high complexity and long deployment cycles, with a Content
Foundation server, a streamlined FileNet P8 repository that combines three
engines process, content and app into one.
However, one key challenge, with Filenet is that it still has too many
content management and related repositories IBM Connections, Web
Content Manager, IBM Docs and the three ECM repositories. IBMs ECM
messaging concentrates too much on the core ECM tools as the system of
record.
Below are some details of the product, that helps you understand it better
from point of a buyer.
IBM ECM Filenet delivers high value solutions that can help companies
transform the way they do business, by providing the basic aspects of ECM
capturing, activating, socializing, analyzing and governing through the
business process life cycle. FileNet Content Manager is a document
management engine, that combines enterprise content, security and
storage features with ready-to-use workflow and process management
capabilities.
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A key aspect of IBM ECM, is that it provides a way to discover the content,
recognize its value and then act on it for better business insight and
outcomes:
Content Navigator
Content Federation Services
FileNet Image Services
FileNet Rendition Engine
FileNet services for IBM Quickr
SharePoint Web Parts
Workplace XT.
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Through SharePoint, users can author, browse and manage their FileNet
Content Manager content, access personal and public inboxes and initiate
FileNet Content Manager workflows.
Content Management Interoperability Services (CMIS), support for easier
integration with Microsoft SharePoint, SAP and other third-party
softwares.
EMC has revitalized its content management strategies and products with
Documentum Platform 7, and considerably improves usability, scalability
and a lower TCO. Documentum xCP provides the process management
capabilities to build transactional content management solutions and is
easier and less costly to deploy. EMC is also focusing on the mobile space
a frequent demand from customers.
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The high costs and complexities for Documentum software and services is
one of the biggest challenges that for customers face particularly the
mid-market.
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Webtop Gain quick access to information of all types and expose the
full range of Documentum services.
3. Capture
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While Microsoft is a great product for all size of users, some of the typical
challenges its users face are getting better usability/interfaces, more
flexible user experience capabilities and successful change management
are concerns of many SharePoint shops; lack of native functionality in
areas such as administration, backup and recovery, workflow, replication,
mobile support and broad usability.
1. Perceptive Software
Perceptive Software is a stand-alone software business unit of Lexmark
International, continues to show double-digit market growth organically
and via acquisitions.
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Unlike the other large Tier-1 products, On Base is very strong in the mid-
market customer segment. On Base has strong presence in large
healthcare enterprises and in higher education and Government. On Base
solutions capture medical records, transcript capture, and board and
committee agenda management as well as accounts payable. On Base
Cloud combines the full ECM functionality of On Base with flexible, scalable
and cost-effective aspects of Cloud deployment and there is functional
parity between Cloud/SaaS and in-premise implementations.
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3. Open Text
Open Text headquartered in Waterloo, Ontario, Canada, is an enterprise
information management company, extending beyond ECM. Acquisitions
by Open Text have included a variety of companies, most recently Cordys,
a Dutch BPM vendor, and Resonate Knowledge Technologies, a provider of
user experience software.
Open Text ECM solutions has one of the broadest Content Management
features and functionalities within the standard modules Records
Management, Archiving, Capture, E-mail Solutions, Data and Content
Integration, They also have a BPM solution (Metastorm and Global 360 BPM
products) and excellent Discovery Module with Search, Content Analytics,
Open Text Semantic Navigation, Auto-Classification, e-Discovery and Info
Fusion the Discovery Platform for Unified Information Access.
Open Text has cloud implementation in Open Text Cloud with managed
hosted services and collaboration services, Tempo, and messaging services
through Easy Link and Right Fax.
Open Text also has very broad content management product portfolios.
Open Text Cloud and Tempo, its social collaboration and enterprise file sync
and share tools, represent important areas on which ECM customers are
focused today.
Open Text has a reseller partner agreement with SAP providing a strong
sales channel for Open Text. The level of integration and interoperability
between SAP and Open Text products provides a competitive advantage for
Open Text.
The one challenge with Open Text is its proliferation of acquisitions that
have resulted in many overlapping and similar products in areas such as
document management, records management, WCM and BPM. There are
customer issues and concerns over migration path, support and limited
product enhancements for some non-strategic products.
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Oracle WebCenter Content users often complain that the software has an
older UI, a lack of fresh enhancements. The UI version released in the July
2013 11.1.1.8 still does not offer Electronic File Sync and Share capabilities
to complement their ECM environment.
The challenges that Laserfiche faces are it has found it difficult to shake
off its origins as a mid-markets product and limited relationship with large
Enterprise Solution providers and integrators.
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The HP ECM portfolio has large breadth with strong enterprise search and
classification tools in the Intelligent Data Operating Layer (IDOL), WCM,
document management, imaging and workflow. A related product from
then HP stable is the HP Exstream for customer communications
management.
Many of HPs ECM Suite are loosely integrated today TeamSite and
MediaBin lack deep integration with the core document and records
management offerings and so also the BPM and document management
products. Records management has multiple offerings.
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Gateway in partnership with Zumboxs Digital Postal Mail and Pitney Bowes
Volly has functionalities for the printed bills, statements and other
documents for distribution to digital mail providers.
Its ECM suite addresses the content life cycle from capture to archival. A
major focus for Unisys in recent years has been platform modernization
with the introduction of a mobile client, CMIS support, and most recently a
SaaS strategy and offering.
The global reach and scale of Unisys enable it to support customers around
the globe, including in emerging markets.
Mobile Work Manager provides a fully functional mobile client for Apple
iPads and iPhones, as well as for Android devices. There are native
applications for document capture, process automation and document
access.
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Niche ECM Products: Below are a few ECM companies and products
one of which is an Indian company that may be considered as niche
products due to their capabilities and options.
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In 2013, Newgen introduced its ECM and BPM suites as public cloud
offerings and through other business process outsourcing (BPO) data
center providers. Newgen has solution deployments on public cloud
Amazon Web Services (AWS) and private cloud and BPO deployments HP
Cloud Map. Newgen also offers a subset of its solution for the small
enterprises.
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6.6 SUMMARY
A Gartner finding brings out the need for automated ECM solutions in the
following analysis of delays faced by businesses:
About 25% of enterprise paper documents are misplaced and may never
be located.
However, as with all Enterprise solutions, right product choice is the key
and this Chapter has provided you with adequate information to get your
arms around selecting the right product for your companys needs.
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4. Summarize the best ECM Product that you think is best suited for your
company.
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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SOA, MIDDLEWARE AND WORKFLOW
Chapter 7
SOA, MIDDLEWARE AND WORKFLOW
Objectives
Structure:
7.1 Introduction
7.2 Concepts of Software Architecture
7.3 Service Oriented Architectures
7.3.1 Key Components of SOA
7.3.2 Enterprise Service Bus
7.3.3 SOA Reference Architecture
7.3.4 SOA Governance
7.4 Middleware
7.5 Workflow Systems
7.6 Products
7.6.1 SOA and Middleware Products
7.6.2 Workflow Products
7.7 Summary
7.8 Self Assessment Questions
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7.1 INTRODUCTION
However, before we get into the SOA and Workflow, I will briefly introduce
you to concepts of Software Architecture.
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The applications should be built for change rather than built to last.
Should build in adequate flexibility that enables the application to change
over time to address new requirements.
Formalize a model that has the capability to iterate and adapt the design
easily.
Identify key engineering decisions right and right in the beginning and
use the information to make the key engineering decisions so that the
design is more flexible and less likely to be broken by changes.
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Best-case requirements
Long-term organizational focus
Reuse considerations
Bring in as much of the business wish list as possible
Anticipate all scenarios and incorporate them.
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What are the drivers for SOA? In large organizations, the following types of
organizational, business, and technology changes drive a desire to reap the
benefits of SOA:
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Service Discovery
Service discovery is the mechanism by which service consumers become
aware of available services and their capabilities. Service discovery starts
with a one-time operation in which the service provider publishes its
service, in some form of service registry. The form of registry can range
from a simple web page, to a robust implementation with advanced query
capabilities. The service registry is then queried at design time by the
developers of service consumers, for services with desired capabilities.
Even though there is much discussion about runtime discovery of services,
the reality is that current technologies do not support runtime discovery.
The word dynamic is often used to describe the binding between service
consumers and services. There are various degrees of dynamism. At the
lower end of the spectrum, is late binding of a proxy service to a specific
service instance, that depends on user context or load balancing policies.
At the higher end of the spectrum is fully dynamic binding, in which service
consumers are capable of querying service registries at runtime, selecting
the best service from the list of returned services, and invoking the
selected serviceall at runtime, and without human intervention. Late
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Service Composition
Service composition is the mechanism, by which services are combined to
fulfill a business or operational process. Service composition can be done
fully within the service consumer, but there is also considerable support for
service composition within SOA infrastructures, specifically in Business
Process Modelling (BPM) infrastructure components. Typical BPM
components enable a service consumer developer, to graphically compose
services available in a registry and then generate the appropriate code for
the orchestration.
Service Endpoint
Service Endpoint is the URL where your service can be accessed by a client
application. The same web service can have multiple endpoints for
example, in order to make it available using different protocols. The
endpoint is a connection point where HTML files or active server pages are
exposed. Endpoints provide information needed to address a Web service
endpoint. The endpoint provides a reference or specification, that is used
to define a group or family of message, addressing properties and give
end-to-end message characteristics, such as references for the source and
destination of endpoints, and the identity of messages, to allow for uniform
addressing of independent messages. The endpoint can be a PC, PDA, or
point-of-sale terminal.
Service Invocation
Service invocation is the mechanism by which services are invoked by
service consumers at runtime. There are two basic invocation patterns:
point-to-point and mediated. In the point-to-point invocation pattern,
service consumers directly invoke services over a network. Point-to-point is
most acceptable in environments that are small in number of services and
consumers, homogeneous in implementation technologies, and have low
pace of change (business and technology). In the mediated pattern,
service consumers invoke services via a middleware component such as an
Enterprise Service Bus (ESB). The mediated pattern is most acceptable in
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Web Services
Web Services is any piece of software that uses standard Web interfaces to
communicate with other software containing Web service interfaces the
distinguishing feature is use of common interfaces. It is the standardization
of interfaces that enables Web services to talk to each other and provide a
framework for all people, anywhere to communicate with each other
through Web services.
Earlier, Web Services was implemented using the WS* stack. However, in
recent years, REST has emerged as an alternative and getting widely
adopted.
Following are the Web Services standards; this is purely to get you familiar
with the names and its purposes:
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In the SOA space, this brokering software is usually called the ESB. The
more classical term is enterprise application integration (EAI) software.
Each application is designed to interact with the ESB, allowing it to manage
the routing and transformation of messages between applications.
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The ESB can transform data, including conversion of data format from
legacy application to specific, fixed field record file format to a predefined
XML schema business content for example, a part number in an ERP,
to a different number format in Web-based order entry system and
message multiplicity.
Beyond the above, ESBs are vastly different and a diverse set of products.
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Enterprise architecture, in its widest sense, includes much more than IT. It
covers business operations, finance, people, and buildings in addition to
technology, and it covers technologies other than IT, such as for
manufacturing or transport. The enterprise architect must understand
these areas, at least well enough to supervise architects that specialize in
them. The IT architect must be able to work in teams with such specialists.
There are considerable benefits that SOA brings to business, such as cost
reduction, agility to change, increasing time-to-market and hence
competitive advantage, consolidation and alignment.
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At the same time, there are also considerable challenges and also
organizations cannot just strip off its existing IT systems and step into an
SOA overnight migration to SOA brings considerable risks too.
What are the considerations and criteria for producing an SOA solution?
How can an SOA solution be organized as an architectural framework
with interconnected architectures and transformation capabilities?
How can an SOA solution be designed in a manner that maximizes asset
reuse?
How can automated tools take the guesswork out of architecture
validation and capacity planning?
The usage of the SOA Reference Architecture (SOA RA) is a key enabler for
the achievement of the value propositions of an SOA. Additionally, it
provides insights, patterns, and the building blocks for integrating
fundamental elements of an SOA into a solution or enterprise architecture.
Informally, the aim of the SOA RA is to answer some of the key questions
and issues encountered by architects, including but not restricted to
common questions such as:
What are the aspects, building blocks, and layers of an SOA that I need
to consider in designing solutions, establishing enterprise architecture
guidelines, or assessing an architecture based on service oriented
principles?
What are some of the key architectural decisions I need to make when
designing a solution, or assessing an architecture that is based on service
oriented principles?
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Which roles in a project would benefit from using these principles and
guidelines?
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Like all governance models, Governance with SOA should also be about
delivering the objectives of your business and SOA. It must link SOA
investments to business goals and initiatives mitigate the risks associated
with SOA, and fit into the context of an organizations overall IT
Governance framework.
Governance and a roadmap for SOA allow companies to begin the SOA
journey and manage the transformation to SOA by building on step-by-step
and finally delivering the benefits expected from SOA service reuse,
improved integration, interoperability and business agility. Governance is a
significant part of that journey.
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SOA Governance simply implies that you need to have a SOA strategy,
ensure that its aligned with where your business is going and a concrete
objective of what you expect from your SOA investments. In order to
deliver on these expectations and as part of your SOA strategy, you need a
plan that is referred to as the SOA Roadmap, which outlines the projects to
be implemented with SOA and the capabilities that need to be put into
place over a period of time (for example, two to five years), to ensure that
you deliver on your business and SOA strategy.
To ensure SOA success, you should enact policies and supporting processes
that support the delivery of the SOA Roadmap. You should communicate
them widely, and then monitor their implementation and make
adjustments as you go. This is the essence of governance with SOA
enacting policies and procedures to ensure the timely and appropriate
execution of your SOA Roadmap.
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7.4 MIDDLEWARE
Middleware are systems that act as the software glue that helps
programs and databases running on different computers work together.
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Web Services are Web-based services that use any one or more of three
related XML-based standards including SOAP, Web Services Description
Language (WSDL) or Universal Description, Discovery and Integration
(UDDI). The initial intent of Web Services was for HTTP-based access to
applications. However, Web services can be run over other, non-HTTP
transports, such as those implemented in MOM or e-mail systems (SMTP).
However, not all Web services (software using one or more of the Web
services standards) will use Internet protocols. However, well-designed
Web services should use either of SOA or event-driven architecture (EDA)
rather than being monolithic in design.
Adapters are a combination of design tools and runtime software that act
as glue to link applications, which are considered sources or targets to
other applications or other integration middleware. When interfacing with a
source or target application, an adapter generally deals with a group of
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Business Rule Engines (BRE) in its simplest form, takes the essence
of business or technical rules and records them in an easy-to-understand
and easy-to-change format to allow for fast time to implement changes of
software behaviour that affect business and technical outcomes. The
complex forms can support goal-directed flows, point to probable outcomes
and suggest patterns in decision making.
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What is a Process?
A task is a logical unit of work that is carried out as a single whole by one
resource.
Its goal is to manage the flow of work such that the work is done at the
right time by the proper person. And, Workflow Management Systems are
software packages that can be used to support the definition, management
and execution of workflow processes.
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!
Listed below are some typical features associated with many Workflow
Management Systems.
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Around the BPEL standard, vendors have created BPEL tools that enable
non-technical business programmers to devise workflows visually. Once
interface descriptions for the participating services are in place, a BPEL tool
can create BPEL code that describes the workflow.
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proceeding in a flow
Issuing asynchronous service call and correlating a separate service
call-back
Wait for a period of time for a service call response.
automated reassignment
Dual control also known as double-check or four-eyes approval
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7.6 PRODUCTS
As you will now have understood that both SOA and Middlewares are
basically application integration strategies the ESB can very easily fit into
either a SOA or a Middleware discussion.
So, we will discuss software products and vendors in space together as
they go together.
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!
The leaders clearly are IBM, SAP, Oracle, Microsoft with TIBCO, Software
AG, Mulesoft, Axway. While IBM, SAP, Oracle, Microsoft are mega
Enterprise Solution OEMs, TIBCO has been one of oldest EAI specialist and
the others Software AG, Mulesoft and Axway are also in the integration
products space only.
Middleware products and vendors can also be broken down into major
typology categories for easier understanding and access, though some
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vendors have products in more than one technology and this is not a
complete list:
The BPM product market provides a range of options from products that
provide simple workflow engines (but dont address the full life cycle of
ongoing process improvement) and model driven tools that enable the
development of process applications as well as BPMS and iBPMS product
categories.
Vendors that grew in the flat market tended to be those that offered iBPMS
products as well as those that were addressing the drivers for quicker
project starts by delivering on cloud infrastructure.
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!
As Evident from Gartners Magic Quadrant, the leading products are
from IBM, Pegasystems, Apian, Oracle, TIBCO.
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All vendors today provide fairly comprehensive iBPMS products and most of
these products have at minimum the following capabilities:
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7.7 SUMMARY
Even with well integrated systems that are flexible to change, process
remains a major constraint for smooth business flow execution. If you look
at business processes from inquiry to final delivery, many intermediate
steps have to be coordinated by a company to get to the point of delivery.
The steps are different in each industry, depending on the processes.
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
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Chapter 8
DATA WAREHOUSE AND BUSINESS
INTELLIGENCE
Objectives
Structure:
8.1 Introduction
8.2 Concepts of Data Warehouse
8.2.1 Data Warehouse Architecture
8.2.2 Components of Data Warehouse
8.2.3 Data Cleansing
8.3 Business Intelligence
8.3.1 The Big Data
8.4 DWH and BI Products
8.4.1 Data Modelling Tools
8.4.2 Data Mining Tools
8.4.3 OLAP Tools
8.4.4 ETL Tools
8.4.5 Business Intelligence Tools
8.4.6 Reporting Tools
8.5 Data Warehouse Implementations
8.6 Risks and Pitfalls of DWH Projects
8.7 Summary
8.8 Self Assessment Questions
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8.1 INTRODUCTION
In the words of Bill Inmon widely considered the father of the concept of
Data Warehouse a Data Warehouse is a subject-oriented, integrated,
time-variant and non-volatile collection of data in support of managements
decision making process.
Historical data is kept in a data warehouse is time variant. The DWH can
retrieve for you data from 3 months, 6 months, 12 months, or older
periods. In a transaction database, only the most recent data is kept. For
example, a transaction system for Cell Phone Billing will hold only the
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current months data whereas a DWH will hold upto 2 years or more or a
the past 12 months data and a summary of your billing from inception.
Unlike many of the other Enterprise Solutions, it is not the easiest of tasks
to give the reader an idea of what is a generic DWH Architecture.
Architectures of DWH systems have differed widely with different structures
and Operational Data Stores (ODS); some have multiple Data Marts; while
some DWHs have fewer number of data sources and others may have
many dozens of data sources. Considering this, it may be prudent not to
spell out any generic architecture for DWH systems, but leave the reader
with an idea of the different layers of a DWH Architecture. The architecture
is always a function of the size of an organization, its various Lines-of-
Business, the IT architecture and complexity of its software systems. All
large organizations have multiple Data Warehouses there was an attempt
to have what was termed as Enterprise Data warehouse, but that also fell
by the wayside as it could not cater to the demands of various businesses
of the organizations. In general, all data warehouse systems have the
following layers:
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The picture below shows the relationships among the different components
of the data warehouse architecture:
Data Source Layer obviously, represents the different data sources that
feed data into the DWH. These data sources may be of any types and
format. Data may come in formats such as RDBMS or other Databases,
MS Excel files or a plain text file. The data may be of different types which
itself constitutes different sources such as below and all these data sources
together form the Data Source Layer. Some types/sources are:
Data Extraction Layer is the layer where data gets pulled from the
data source into the DWH system with some data cleansing though without
any major Data Transformation.
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Staging Area is where the data sits prior to being cleansed and
transformed into a DWH or Data Mart quality. This common staging area
makes it easier for subsequent data processing and integration.
Data Storage Layer is the final storage for the cleansed and
transformed data no data is erased or changed once it is moved into this
database. Typically, three types of entities may be found here Data
Warehouse, Data Mart and Operational Data Store (ODS). In EDWs, you
may have just of these or all three.
Data Logic Layer is where business rules are stored. The business rules
do not affect the underlying data transformation rules, but do affect what
the report looks like.
Data Presentation Layer and/or other Reporting Tools are used here
and this layer gives shape to the form in which information is presented to
the user such as a tabular or graphical report in a browser or e-mailed
report, alerts and their periodicity of generation.
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Logical Data Model A logical data model describes the data inasmuch
detail as possible, without regard to how they will be physically
implemented in the database. Features of a logical data model include all
entities and relationships among them; All attributes for each entity are
specified; The primary key for each entity is specified; Foreign keys (keys
identifying the relationship between different entities) are specified;
Normalization occurs at this level.
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Physical Data Model Physical data model represents how the model will
be built in the database. A physical database model shows all table
structures, including column name, column data type, column constraints,
primary key, foreign key, and relationships between tables. Features of a
physical data model include Specification all tables and columns, Foreign
keys are used to identify relationships between tables; Denormalization
may occur based on user requirements; Physical considerations may cause
the physical data model to be quite different from the logical data model,
physical data model will be different for different RDBMS. For example,
data type for a column may be different between MySQL and SQL Server.
Having defined the three data models, let us for a better understanding
compare how Conceptual, Logical and Physical Data Models differ from
each other. Conceptual by its very name is initial concept data model and
the complexity of the data model increases as it progresses to logical and
then to the physical data model. The conceptual data model is written just
so as to understand and conceptualize at high level the different entities in
the data and how they relate to one another. The logical data model has
the details of the data defined, independent of how they will be actually
implemented. The physical data model is where the exact details of the
data model to be implemented in a database of choice are defined.
Data Mart Data marts are small slices of the data warehouse. They have
a more limited audience and/or data content. Data Mart is the access layer
of the DWH environment that is used to get data out to the users. It is a
subset of the data warehouse that is usually oriented to a specific business
line or team. Data mart is a simple form of a data warehouse that is
focused on a single subject or functional area such as Sales, Finance, or
Marketing and hence it has to deal with fewer data sources than the
DWH handles. Data marts are often built and controlled by a single
department within an organization. Given their single-subject focus, data
marts usually draw data from only a few sources. The sources could be
internal operational systems, a central data warehouse, or external data.
The primary difference between DWH and Data Mart is that the DWH is a
Corporate entity, whereas a Data Mart pertains to a line of business.
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Data Marts are usually much smaller that a DWH combines data from
databases across the enterprise. The data in a Data Mart is accessed using
a Business Intelligence Application.
There are two basic types of data marts dependent and independent a
categorization based on the data source that feeds the data mart.
Dependent data marts draw data from a central data warehouse that has
already been created. Independent data marts, in contrast, are stand-alone
systems built by drawing data directly from operational or external sources
of data, or both and hence the ETL process that involves moving data from
operational systems, filtering it, and loading it into the data mart is far
more intensive.
Fact Table A table that stores quantitative information for analysis and
is often in denormalized form. It consists of the facts or metrics of a
business process. A fact table holds the data to be analyzed. For example,
a Table that stores Sales Metrics Customer Code, Product Code, Date and
Time Stamp, Quantity Sold. There can be Cumulative Fact Tables that
stores summary information like Total Sales by Customer or Day Totals and
a Snapshot Fact Table. It is the central table in a star schema of a data
warehouse. A fact table typically includes two types of columns: fact
columns and foreign keys to the dimensions. The key aspect that the
Business Analyst or the Business User must know and consider in the
design is the granularity of the Fact Table, i.e., the lowest level of
information to be stored, which Dimensions to be included and hierarchy of
each Dimension data. There are also what are known as Factless Fact
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Tables which are Fact Tables without any fact it may sound ridiculous yet
true this just means that the Table does not have any Metrics.
Below are two views of a Dimension Data Model. The first is a schematic of
a Dimension Data Model you can see how the Fact Table fits in with
different Dimension Tables.
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The two schematics above should give you a fairly simplistic understanding
of how data is organized in a Data Warehouse to produce the reports that
you require. This also should tell you the critical role that the business
analysts and business users play in making a Data warehouse design a
success.
Dimension Data Modelling typically involves one or more Fact Tables and
Dimension Tables. The Hierarchies are typically stored in the Dimension
Table itself for example, the Location Hierarchy will contain region,
country, state and city. Then there is the problem of Slowly Changing
Dimension a common issue facing data warehousing practitioners a
standard example is of customers who change their location frequently. In
designing DWH Data Models, there are two typical approaches Snowflake
Schema and Star Schema a couple of line on each is just so that you
catch the terminologies. Star Schemas are a common form of dimensional
data modelling in which each dimension is represented by a single
dimension table. In the Snowflake Schemas, a dimension can have more
than a single dimension table by extending different hierarchies in a
dimension into their own dimension tables.
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Drill Down is the process of dividing an information area up into finer and
finer layers in a hierarchy, with the objective of narrowing down to a
specific area of data that can be analyzed for a business decision. Drill
Across is data analysis across dimensions, Drill Through is data analysis
that goes from an OLAP cube into the relational database and Drill Up is a
data analysis to a parent attribute. Hierarchy defines the navigating path
for drilling up and drilling down. All attributes in a hierarchy belong to the
same dimension.
Finally, the much misused phrase Slice and Dice the simplest
meaning of this term is to present data/information in a variety of different
and useful ways. Essentially, it is the process of breaking down a mass of
data into smaller parts to enable analysis from different viewpoints for a
better understanding. You typically dice and then slice data views. Smaller
slices of data provided in different views can elicit better insight.
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What is dirty data? Are data anomalies that create wrong outputs. Dirty
data is created when reality is different from what is captured and stored.
Data quality problems are present in single data collections, such as files
and databases, e.g., due to misspellings during data entry, missing
information or other invalid data. When multiple data sources need to be
integrated, e.g., in data warehouses, federated database systems or global
web-based information systems, the need for data cleaning increases
significantly. This is because the sources often contain redundant data in
different representations. In order to provide access to accurate and
consistent data, consolidation of different data representations and
elimination of duplicate information become necessary.
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The other key element in Data Cleansing is Conflict Resolution and Tools
and there are many good ones in the market.
While business intelligence could to the layman mean all the large amounts
of data collected and stored by a company, in the context of BI we are
essentially dealing with the system of leveraging the large data to create
Business Intelligence for critical decision making. And that involves a large
number of software tools, methodologies, business systems and the
process of analyzing the data and generating the right reports for the right
people at the right time.
BI, therefore, is not one piece of software. The types of tools that make up
a business intelligence software application solution generally include tools
for spreadsheets, operational dashboards, data mining tools, reporting
tools, search and query tools, analytics processing softwares such as OLAP,
content viewer, and other components of ERP systems. Often, business
intelligence software may also integrate tools designed for specific
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The large ISVs in the BI space including SAP, Oracle, IBM, Microsoft,
Information Builders, MicroStrategy and SAS, have been around for years,
but there is also a number of BI start-ups that see their products get
absorbed as a feature in a larger players software. A few of the mid-size
BI vendors to consider include Actuate Corporation, Alteryx, Logi Analytics,
QlikTech and Tableau.
That brings us to the term Big Data that is so much talked about today
and what is Big Data? are data sets that are too large and complex to
manipulate or interrogate with standard methods or tools. There is much
IT investment going towards managing and maintaining big data.
Big Data is a popular term used to describe the exponential growth and
availability of data, both structured and unstructured. And big data may be
as important to business and society as the Internet has become. Why?
The assumption is, more data may lead to more accurate analysis. And, it
is assumed that more accurate analysis may lead to more confident
decision making. And, better decisions can mean greater operational
efficiencies, cost reductions, reduced risk and increased business for the
company.
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Why do organizations need to do anything at all with Big Data? The hopeful
vision is that organizations will be able to take data from any source,
harness relevant data and analyze it to find answers that resolve key
issues such as product development strategies and cost rationalization
without having to compromise customer service and presence. It is
intended that by combining big data and high-powered analytics, it may be
possible to recalculate entire risk portfolios in minutes, or identify root
causes of failures and defects in near-real time thereby saving potential
billions of dollars.
Even while the industry is gung-ho on big data, there is a lot of confusion
around the term leading upto its pros and cons. There are questions being
asked as to whether big data is really big after all? Hasnt DWH always held
very large amounts of data?
Big Data is a collection of data from traditional and digital sources inside
and outside your company that represents a source for ongoing discovery
and analysis. That means big data consists of all traditional data derived
from product transaction information, financial records and interaction
channels, such as the call center and point-of-sale plus volumes of digital
data thats now growing at an exponential rate.
Big Data can also consist of unstructured data that comes from
information that is not organized or easily interpreted by traditional
databases or data models, and typically, its text-heavy Twitter tweets
and other social media posts are examples of unstructured data.
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Multi-structured data that comes in a variety of data formats and types and
can be derived from interactions between people and machines, such as
web applications or social networks. An example is web log data, which
includes a combination of text and visual images along with structured data
like form or transactional information.
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In this section, we will cover a host of products and tools that are required
across the Data Warehouse and BI space. I have categorized these into
their respective areas of use so such as ETL, Data Mining, etc. I should be
noted that most of the vendors in the DWH and BI space have products
that cover all the requirements. However, each vendor with the exception
of the large companies have their relative strength areas.
Following are a list of tools for Data Mining these are the top order tools.
However, besides these there are many niche tools and also for the mid-
sized companies.
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7. TIBCO Spotfire
13. NetOwl Suite Multilingual Text and Entity Analytics Products that
enable Data Mining
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5. Hyperion
6. MicroStrategy
7. Palo OLAP Server
There are a host of ETL Tools, the most popular of which are the first two
Informatica and Cognos:
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There are a host of good Reporting Tools available in the market; primary
considerations are ease of use and the learning curve. One of the most
popular Tool is Crystal Reports that is usable by lay users.
10. Pentaho BI Suite Open Source; Pentaho Report Designer and Engine,
v5.1, Pentaho
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13. SAP Enterprise BI Server Query and Analysis, v9.4, SAS Institute
At outset, let me inform you that there are very few ground-up DWH
Project builds in the world. If at all, you will get such projects only in
Greenfield Enterprise Solutions in India and the developing world where
companies wake up and decide to move out of MS Excel workbooks or 30-
year old flat-file based software systems and go for the most current IT
implementations. Even in such greenfield implementations, the DWH
project will typically start only a year after the remaining enterprise
solutions have reached stable operations and adequate data has been built
up, cleansed and studied by business. Most time its an overhaul of the
existing Enterprise Data Warehouse as business feels that the DWH is not
meeting their requirements.
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8. Query Optimization
9. Performance Tuning
10. Reports Development
11. Production Roll-out
Business analysts, business users and SMEs are the most vital cog in any
Data Warehousing or Business Intelligence or Analytics project at all
stages. It is essential to identify the entire team of business specialists and
get senior management buy-in for the continuance of the named team,
throughout the project from Requirements Definition to implementation.
While this is true of any IT implementation, in the DWH Project, the impact
of the Business/SME team and their continuance through to the end is
always the difference between success and failure. This team should be
experienced and empowered and have a direct line to the senior
management.
Data Modelling is the most important step and the foundation stone in a
DWH project. A good data model permits the DWH system to grow easily
and allows for good performance. As discussed in earlier sections, the
Logical Data Model is built based on user requirements then translated into
the Physical Data Model. Prerequisite to the data modelling stage is the
identification of data sources. Though this is sometimes mixed up with the
ETL stage, it should be emphasized that it is always better to identify the
data sources right at start because if certain data is found to be not
available at the ETL stage, it upsets the project. The Data Modelling phase
delivers the Data Sources Document, Logical and Physical Data Models.
The ETL process is usually the longest phase of a DWH Project and may
take as long as 50%-60% of the total project schedule and efforts. This is
laborious work involving collection and analysis of sources data, design the
columns and finalize the business rules in sync with the logical and physical
data models. The deliverables from this phase are a Data Mapping
document and ETL Scripts.
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and identifying attributes for each dimension. The required stored and
calculated measures are identified as part of the business requirements
specifications phase. The resulting logical model becomes the design for
the OLAP data model. Critical points to note are the aggregations you
create and use to query the cube is the major factor that influences query
response time. The aggregations that are being stored with the cube, affect
cube build time, the absolute cube file size, OLAP Server CPU usage and
query response times. As a result, determining and building your cube
aggregations is a crucial component of good cube design. Deliverables from
this phase are OLAP Cube Reports and document specifying the OLAP
cube dimensions and measures.
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All large and complex projects have almost similar challenges and risks and
most large, complex IT Projects see failures of some sorts schedule
overruns, budget overruns, failure to deliver the agreed or sometimes even
a total failure of the project and its scrapping.
Most of the fatal risks for a data warehouse project are organizational
rather than technical, i.e., building a data warehouse that doesnt address
a relevant business need. Risks factors include, but not limited to:
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Not having people who really understand the source system provided on
a timely basis and for an adequate amount of time.
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8.7 SUMMARY
Given that many companies, are seeking a competitive edge with analytics,
the corporate leaders need to ask themselves the following questions:
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6. Explain ETL and OLAP and how they are central to the concept of DWH.
9. Which are the Reporting Tools that suit your organizational needs best?
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
Video Lecture
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CLOUD COMPUTING AND SAAS
Chapter 9
CLOUD COMPUTING AND SAAS
Objectives
Concepts of Cloud.
Concepts of SaaS, PaaS and IaaS.
Business Benefits, Risks and Challenges, Security Issues.
Vendors for Cloud, SaaS.
Structure:
9.1 Introduction
9.2 Evolution
9.3 Cloud Concepts
9.4 Components of Cloud Computing
9.5 Cloud Deployment Models
9.6 Cloud Service Models
9.6.1 Software as a Service (Saas) Model
9.6.2 Benefits of SaaS to the Customer
9.7 Managing Security Issues
9.7.1 Cloud Specific Security Issues
9.7.2 Cloud Security Plan
9.8 Risks and Pitfalls
9.8.1 Potential Risks
9.8.2 Security Provisions in Cloud Contracts
9.8.3 User Responsibilities
9.9 Cloud Vendors
9.10 Summary
9.11 Self Assessment Questions
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9.1 INTRODUCTION
9.2 EVOLUTION
Cloud Technologies is not an altogether new concept of the past 5-6 years.
In the late 90s long before the term Cloud and SaaS had come about,
there was a similar model the ASP (Application Service Provider) that
came with the first wave of Internet and strengthened in the early 2000
Dot Com era. The ASP Model enabled many small first-time Dot Com
ventures to take off with low investments. Many B2C dot coms using well-
known products such as InterShop launched their shopping sites using the
ASP Model. These dot coms did not even have a one-person IT
department; the outsourcers developed the site and the ASPs hosted their
site and maintained it for a small annual fee. So, the model of Cloud or
SaaS is not just a recent great idea.
However, the ASP Model did not survive and new business models came
about Cloud, SaaS, IaaS and PaaS.
How are the new models different from ASP? Let us spend a paragraph to
understand the reason why the old business model failed and what is
different in the current ones.
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Broad Network Access: Capabilities are available over the network and
accessed through standard mechanisms that promote use by
heterogeneous thin or thick client platforms (e.g., mobile phones,
tablets, laptops, and workstations).
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Clients: Clients are very much the same devices that you have in a
standard LAN/WAN environment desktops, laptops, Mobile devices
Mobile devices being the more important in a Cloud environment because
one of the key differences between Cloud and native environment being
mobility. The clients may also be Thin Client and Thick Client. Thin
Clients are obviously more popular because all the computing resources
required by the users including storage space is offered on the Cloud.
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systems, or storage, but has control over the deployed applications and
possibly application hosting environment configuration.
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whole application. The application is owned by the Cloud provider and the
program resides on and is executed on the providers servers. The
consumers browser provides the interface to the providers server. The
SaaS providers main responsibilities are to ensure that the software that it
supplies is solidly supported and tested. The SaaS applications be scalable
to increasingly larger consumer workloads, maintain the necessary
infrastructure. To carry this out in a secure environment with specified
uptime for the consumer is a critical aspect.
All customers have valuable organizational data stored in the cloud and
some of this information may be proprietary and business-sensitive;
therefore, a secure environment is paramount.
4. Scope of Control
SaaS Cloud Provider Admin Control over the applications and Total
control over Hardware, OS and Middleware.
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The first thing you must look into is the security measures that your cloud
provider already has in place. These vary from provider to provider and
among the various types of clouds. What encryption methods do the
providers have in place? What methods of protection do they have in place
for the actual hardware that your data will be stored on? Will they have
backups of my data? Do they have firewalls set up? If you have a
community cloud, what barriers are in place to keep your information
separate from other companies?
Most cloud providers have standard terms and conditions that may answer
these questions. Small businesses may have more leverage to discuss the
terms of their contract with the provider. However, the large and
Fortune-500 organizations that have very tight security requirements may
have to enforce their own standards on the Cloud provider.
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There are several research works happening in the area of cloud security.
The Cloud Security Alliance (CSA) is gathering solution providers, non-
profits and individuals to enter into discussion about the current and future
best practices for information assurance in the cloud. The Cloud Standards
website collects and coordinates information about cloud-related standards
under development by the groups. The Open Web Application Security
Project (OWASP) maintains list of top vulnerabilities to cloud-based or
SaaS models which is updated as the threat landscape changes. The best
security solution for SaaS applications is to develop a development
framework that has tough security architecture.
While public cloud offers many potential benefits for the enterprise, yet
there are still many public-cloud-migration holdouts among CIOs, and their
hesitation is still largely tied to perceived risks and the debate around
cloud computing risk continues. This isnt because the risks that large
enterprises care about have worsened or because there is a new set of
risks that presents concern. The clarity of clouds risk-adjusted value
proposition thus has yet to emerge, mostly because evaluations of risk and
value remain moving target.
Risk is not something intrinsic to the cloud, but rather the lack of a
consistent framework in large enterprises for engaging with and managing
cloud services.
The risk issues normally associated with cloud technologies, such as data
privacy and security, are evolving rapidly. Even the technologies
themselves vary by provider and service. The absence of a consistent
approach to these technologies and providers should be the risk that most
concerns CIOs, as it will exacerbate the risks of what could otherwise be a
perfectly acceptable sourcing arrangement.
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Given below are six potential risks and a discussion on their impact. As you
will notice, some of these are also security issues and have been dealt with
in the previous section.
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4. Data Segregation: An aspect which deals with the issue that ones
data should not mix with someone elses data. Yet again, the response
to this issue is automation. Todays cloud services use highly automated
services which literally decrease the chances of data loss and data
segregation to nearly zero.
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audits. But, a vendor simply reporting that it complies with these audits
in many cases does not provide end-users with the information they
need to evaluate the providers system for their specific security needs.
Within the user organizations, the organization must account for the
following three deficiencies:
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When we discuss Cloud and its vendors, its to be borne in mind that its
not one package; as we have discussed earlier, you have SaaS, PaaS and
IaaS, Cloud Storage, etc. Each of these is a specialized service PaaS you
could have vendors who deal only platform and others deal only with cloud
storage service. There are cloud services brokerages or any other type of
cloud service provider that does not cover the hardware and software
vendors that may be used to build cloud infrastructure.
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Cloud Platforms
Cloud Storage Cloud Security
Cloud Software and
Development
SalesForce.com Webnsense
Avalara Asigra
Marketo
NetSuite
Oracle
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Verizon Software AG
AT&T IBM
CenturyLink SAP
HP Red Hat
Navisite
Unlike other Cloud Services, SaaS vendors are specific to product, for
example Siebel CRM SaaS offering only the CRM on a SaaS platform or
Microsoft Dynamics ERP for SMBs as a SaaS offering.
SaaS Companies
Microsoft
Cisco Citrix Blackboard
Dynamics
Concur
ADP Google Athenahealth
Technologies
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The SaaS market will also see significant changes and new trends in 2014
as vendors jockey for competitive position and customers continue shifting
their IT strategies toward the deployment model. Below are some of the
choices that the users will be offered by SaaS vendors.
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same time, the model makes the vendor more responsive to customer
needs and customer retention strategies become very important.
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9.10 SUMMARY
If you are considering using the cloud, be certain that you identify what
information you will be putting out in the cloud, who will have access to
that information and what you will need to do to make sure it is protected.
Additionally, know your options in terms of what type of cloud will be best
for your needs, what type of provider will be most useful to you, and what
the reputation and responsibilities of the providers you are considering are
before you sign up.
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2. How are SaaS, IaaS and PaaS different from each other? Expand in a
few lines your understanding of each of these services.
5. For your organization, which cloud security issues do you see as key?
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
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Summary
PPT
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Chapter 10
ENTERPRISE IT INFRASTRUCTURE
Objectives
Unified Communication.
Structure:
10.1 Introduction
10.2 Enterprise Networks
10.2.1 Network Components
10.2.2 Area Networks
10.2.3 Network Designs
10.2.4 Internet and Office Services
10.3 Data Centers
10.4 Enterprise Data Storage
10.5 Unified Communications
10.6 Network Security
10.7 Information Security
10.8 Corporate Governance of Information Technology
10.9 Summary
10.10 Self Assessment Questions
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10.1 INTRODUCTION
These are networks that power your e-mail, Unified Communication and
Network and Information Security frameworks that are vital and regulatory
requirements to any organization however small.
We will discuss these briefly in this chapter giving you enough appreciation
of these areas.
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Early computer networks of the late 1950s included the US militarys Semi-
Automatic Ground Environment (SAGE) and the commercial airline
reservation system called the Semi-Automatic Business Research
Environment (SABRE). Based on designs developed in the 1960s, the
Advanced Research Projects Agency Network (ARPANET) was created in
1969 by the US Department of Defense and was based on circuit switching
the idea that a single communication line, such as a two-party telephone
connection, deserves a dedicated circuit for the duration of the
communication.
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A Large Enterprise with 1000s of users spread over multiple sites with
a few sites having a few 1000s of machines would have a complex
network with a few 100s of switches, 10s of routers, duplicate servers,
firewalls, DHCP, Proxy Servers and logging, DMZ, WAN and Internet
security management hardware and softwares.
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This simple network evolved into the present-day Internet. Some of the
basic hardware components that can be used in networks include:
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SWITCH
Switch in the context of networking is a high-speed device that receives
incoming data packets and redirects them to their destination on a local
area network (LAN). A LAN switch operates at the data link layer (Layer 2)
or the network layer of the OSI Model and, as such it can support all types
of packet protocols. Essentially, switches are traffic police of a network.
Switches are similar to hubs, only smarter. A hub simply connects all the
nodes on the network communication is essentially in a haphazard
manner with any device trying to communicate at any time, resulting in
many collisions. A switch, on the other hand, creates an electronic tunnel
between source and destination ports for a split second that no other traffic
can enter. This results in communication without collisions.
Switches are similar to routers as well, but a router has the additional
ability to forward packets between different networks, whereas a switch is
limited to node-to-node communication on the same network.
ROUTER
Router is a device that analyzes the contents of data packets transmitted
within a network or to another network. Routers determine whether the
source and destination are on the same network or whether data must be
transferred from one network type to another, which requires encapsulating
the data packet with routing protocol header information for the new
network type.
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The initial idea for a router, which was then called a gateway, came from a
group of computer networking researchers who formed an organization
called the International Network Working Group, which became a
subcommittee of the International Federation for Information Processing in
1972.
In 1974, the first true router was developed and by 1976, three PDP-11-
based routers were used to form a prototype experimental version of the
Internet. From the mid-1970s to the 1980s, mini-computers were used as
routers. Today, high-speed modern routers are actually very specialized
computers with extra hardware for rapid data packet forwarding and
specialized security functions such as encryption.
HUB
Hub in the context of networking, is a hardware device that relays
communication data. A hub sends data packets (frames) to all devices on a
network, regardless of any MAC addresses contained in the data packet. A
switch is different from a hub in that it keeps a record of all MAC addresses
of all connected devices. Thus, it knows which device or system is
connected to which port. When a data packet is received, the switch
immediately knows which port to send it to. Unlike a hub, a 10/100 Mbps
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switch will allocate the full 10/100 Mbps to each of its ports, and users
always have access to the maximum bandwidth a huge advantage of a
switch over a hub. Common types of hubs used in networking are network
hubs, passive hubs, intelligent and switching hubs.
Network Hubs: These are common connection points for network devices,
which connect segments of a LAN (local area network) and may contain
multiple ports an interface for connecting network devices such as
printers, storage devices, workstations, servers, etc. A data packet arriving
at one hubs port may be copied to other ports allowing all segments of the
network to have access to the data packet.
Passive Hubs: These only serve as paths or conduits for data passing
from one device, or network segment, to another.
Switching Hubs: These hubs actually read the attributes of each unit of
data. The data is then forwarded to the correct or intended port.
Network interface devices are the little grey telephone boxes outside of
homes that provide connection to a public switched telephone network.
One side of the network is locked with a small tie ring, while the other is
left open for the customer to access.
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Most network interface devices include circuit protectors, which protect the
customers wiring, equipment and personnel from transient energy on the
line such as from a lightning strike to a telephone pole. A simple network
interface device has no intelligence or logic, and lacks capabilities beyond
wiring termination, circuit protection and a place to connect test
equipment.
WAN (Wide Area Network): As the term implies, a WAN spans a large
physical distance. The Internet is the largest WAN, spanning the Earth. A
WAN is a geographically dispersed collection of LANs. A network device
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Other Area Networks: While LAN and WAN are by far the most popular
network types mentioned, you may also commonly see references to
these others are (i) Wireless Local Area Network a LAN based on WiFi
wireless network technology; (ii) Metropolitan Area Network a network
spanning a physical area larger than a LAN but smaller than a WAN, such
as a city; A MAN is typically owned and operated by a single entity such
as a government body or large corporation; (iii) Storage Area Network
connects servers to data storage devices through a technology like Fibre
Channel; (iv) System Area Network links high-performance computers
with high-speed connections in a cluster configuration also known as
Cluster Area Network.
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Computer networks also differ in their design. The two basic forms of
network design are called:
File Servers were the original reason for Server-based networks and enable
sharing of files by authorized users across the network. Their typical
characteristics are Access Control Lists (ACL), large memories and storage
space, Multiple CPUs, Fast I/O buses, hot-swappable disks and Application
Servers are those that run a specialized application typically Mail Servers.
Typical are Microsoft Exchange Server or a Lotus Domino Server. Web
Servers are those that run HTTP and publish information on the Internet
and corporate site they host the web applications of the enterprise.
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network administrators the ability to set the path traffic will take through
the network, and set performance characteristics for a class of traffic.
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File and print Servers allow sharing of files and printers across the
network.
DNS and WINS Services allow the admin to configure DNS and
NetBIOS name resolution.
Group Policies allow the admin to deploy the settings down to the
client operating systems from a central server. By this, admin can apply
organizations common settings on all client machines. Examples folder
redirection, file permissions, user rights and installation of software and
updates.
Directory Services holds a list of users that are allowed to log-in to the
network and user rights for each of these and information on the users.
When a user tries to log-in to the network from any client machines, the
log-in request is sent to the Directory Server database that verifies the
credentials and passes or rejects the attempt to log-in. Servers can
perform multiple roles it can function as a File Server as well as provide
Directory Services.
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The data center is the Achilles heel of IT operations and hence any
discussion on Enterprise Solutions is incomplete without stressing the
importance and critical aspects of a Data Center. Typically, large
corporations have multiple Data Centers Primary (DC), Disaster Recovery
(DR), Near-site Redundancy (NR) and some of the mega Fortune-500
corporations in the US even have remote underground Disaster Recovery
centers with hot replication so that not even the last transaction is lost.
A user sitting in Paris may be executing a software program that is run out
of a data center somewhere in the US. The data that this user processes by
executing computer programs update not only the primary data center, but
in real-time update two or more disaster recovery data center sites. So, in
such a scenario, if the primary data center goes down for whatever reason,
the user will be blissfully unaware of such an event as s/he is not affected
in the least.
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The amount of data loss a company can tolerate, also known as its
recovery point objective (RPO) is a very important parameter. Recovery
time can be between 2 hours to days or even weeks, based on the
companys applications. Highly critical applications require less downtime
and less data loss. For that reason, a disaster avoidance solution might be
a better option for businesses with many highly critical applications.
Three critical elements play a key role in disaster avoidance. First, you
need to know that a disaster is coming. Second, the two facilities should be
close enough to perform live migration or what VMware calls vMotion.
(Note that VMware is discussing long distance vMotion, however.) Third,
the data link carrying the application workload between data centers must
be big enough to carry all the memory pages involved in the live migration
of the virtual machines.
Although disaster avoidance includes the term disaster, this process can
also be used for maintenance purpose. There are times you may migrate a
workload to another data center for routine maintenance.
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RPO and RTO: We have already mentioned data loss and recovery time,
as well as RPO. The recovery time objective (RTO) is the time it takes
applications to come back up after the planned or unplanned failure.
Backup technologies can be used to avoid data loss, but replication
technologies at the host, application or storage level are also used to
decrease RPO. To support active-active data centers, avoid traffic hair-
pinning, and provide read/write capability to storage, you may need to
implement a solution specific to your storage environment. This can help to
reduce RTO, because storage at both data centers can be leveraged by
applications. To reduce RPO at the storage level, a synchronous replication
solution can be implemented. Latency should be within the limit of the
replication solution to avoid poor application performance.
When web servers talk with application servers or application servers talks
with database servers, these interactions are examples of an east-west
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For specific and critical workloads, leaf devices can be connected to each
other, providing even lower latency. On top of leaf and spine physical
architecture, its possible to deploy Layer 2 or Layer 3 protocols such as
TRILL, FabricPath, SPB, or VXLAN. Cisco recently announced that its ACI
fabric uses VXLAN tunnels on top of leaf and spine architecture with the
Nexus 9000 series switches
Storage often doesnt get the attention it deserves, which can turn out to
be a costly oversight. This section provides an overview to get you up to
speed on the various storage subsystems and the devices and technologies
that support them.
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Direct attached storage (DAS), storage area network (SAN), and network
attached storage (NAS) are the three basic types of storage. DAS is the
basic building block in a storage system, and it can be employed directly or
indirectly when used inside SAN and NAS systems. NAS is the highest layer
of storage and can be built on top of a SAN or DAS storage system. SAN is
somewhere between a DAS and a NAS.
Direct Access Storage (DAS) is the most basic storage subsystem that
provides block-level storage, and its the building block for SAN and NAS.
The performance of a SAN or NAS is ultimately dictated by the
performance of the underlying DAS, and DAS will always offer the highest
performance levels because its directly connected to the host computers
storage interface. DAS is limited to a particular host and cant be used by
any other computer unless its presented to other computers over a
specialized network called a SAN or a data network as a NAS server.
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What is network security? How does it protect you? How does network
security work? What are the business benefits of network security?
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Single Sign-On (SSO) allows a user to log onto every assigned system
that user has access to once, using a single user ID and password
combination.
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A Virtual Private Network (VPN) is a private data network that uses the
public telecommunication infrastructure (as opposed to a system of owned
or leased lines), maintaining privacy through the use of a tunnelling
protocols and security procedures.
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What are the Business Benefits of Network Security? With network security
in place, your company will experience many business benefits. Your
company is protected against business disruption, which helps keep
employees productive. Network security helps your company meet
mandatory regulatory compliance. Because network security helps protect
your customers data, it reduces the risk of legal action from data theft.
Ultimately, network security helps protect a businesss reputation, which is
one of its most important assets.
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!
The IS Steering Committee communicates the importance of meeting IS
objectives and conforming to IS policy, its responsibilities under the law
and the need for continual improvement. The committee also allocates
budget for Infosec activities including staffing. The IS Steering Committee
decides on the acceptable level of risks and conducts a management
review of ISMS. The regional Information Security Forums support and
ensure proper implementation of the ISMS uniformly across the region.
They meet at regular intervals to review the threats, status of security
implementation, security incidents and actions, specify methodologies and
responsibilities for implementing Information Security select control
objectives and controls to be implemented in order to ensure Information
Security, support the organization-wide Information Security initiatives as
per the security policy and procedures that are defined as part of the
Information Security Management System, review the Information Security
incidents and handle them as per the Incident Handling Procedure, support
system and network auditing through process such as vulnerability
assessment and institutionalize Disaster Recovery and Business Continuity.
A typical organization structure for Information Security Management is
given below; this varies from organization to organization based on it size,
the nature of its business.
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1 0 . 8 C O R P O R AT E G O V E R N A N C E O F I N F O R M AT I O N
TECHNOLOGY
With the maturation of Six Sigma Techniques and its successful adoption by
corporates such as Motorola and General Electric Corporation, it becomes
possible to measure IT Projects and correlate their performance and value
generation directly to corporate objectives.
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The GRC model was born out of series of business failures due to lack of
regulatory compliance and management of risks. GRC evolved from the
compulsion to help companies devise risk management measures that
identify, manage, monitor, and report on risks across the business before
they materialize into loss at optimized costs. Quality Assurance frameworks
such as ISO 9001 and CMM/CMMi also provided an assurance framework
for compliance and risk management and governance. The Governance
Risk Compliance (GRC) Governance Model focuses on:
Briefly dealt with below are the frameworks for Corporate IT Governance:
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Some of the main challenges with IT Governance have been that it has
often been confused with compliance and controls. Quality Frameworks
that seemingly propagate a theory (though ill founded) that best results
are obtained through compliance and controls to ensure compliance have
not helped.
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10.9 SUMMARY
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3. For your organization, detail the computer equipment that you have,
based on which try to formulate a basic network requirement.
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
! !404
ENCAPSULATING ENTERPRISE IT SOLUTIONS
Chapter 11
ENCAPSULATING ENTERPRISE IT
SOLUTIONS
Objective
After completing the chapter, you will understand:
Structure:
11.1 Introduction
11.1 INTRODUCTION
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Having covered all components of IS/IT that any enterprise small or large
would require, I am introducing here below the Enterprise Architecture
for a mid-sized Financial Services organization with the express intention
of a more educated discussion on the enterprise solution.
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Similarly, Insurance companies have more than one system they typically
have Policy Administration Systems (PAS) and Claims Systems. They also
have more than one PAS in most Life companies the older generation
systems retain the closed book policies while they move their newer Life
products and policies into newer generation PAS systems.
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The core ERP apart, you will notice all other business functions provisioned
HRMS, Financials, CRM, Data and Reports and also Treasury.
At the top end are the interfaces to the users internal and external and at
the bottom end is depicted the interfaces to the business partner
applications.
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Security Layer
Presentation Layer
Business Process Layer (that includes workflow and rules engine)
Integration Layer with the ESB
Data Layer
Security Layer: The key building blocks of security are security layer
building blocks consist of identity and provisioning management to
authenticate users based on a single sign-on and allow fine-grained role-
based access to the services or components of the various enterprise
applications underneath. The following are some of the functional features
that are seen by the users of security layer components.
The Identity Manager handles your user ID/password, the roles associated
to users at the application level and privileges at the individual application
level, User ID creation process and association of users to groups and the
workflows for password management. The key security tasks come in the
form of handling of Rogue/Orphan account managed through access
denials, workflows and reconciliation.
Role based grants are checked against each application based on user
type. Services/transactions will be constructed as links with provision for
two-way redirection to the application directly and to the business
process (if configured).
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The building blocks of any BPEL are typically two major categories
Process Modelling and Execution and Business Rules Integration.
The Process Modelling and Execution involves and provides a BPM design,
conceptual models, business processes at various granularity levels, a
detailed task level granularity to be matched to composite service or low
level system services, the Process Execution Layer and its Transformations.
They also include definition of notifications to users, user groups or a
destination address.
The Business Rules are categorized at two levels and involves building
Business Process Layer Rules and Application In-built Rules.
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Business rules at the business process layer level are captured and used to
the extent required by service orchestration. The rules specific to ERP,
CRM, HRMS or other applications and available as out-of-box solution are
generally maintained as-is.
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Data Layer
Data Centers primary and multiple redundant data centers that ensure
business continuity.
The security layers that ensure the organizations assets are protected
from malicious elements.
Lastly, the function that is seen as restrictive but most vital in todays
organizations Information Security.
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Mobility Is by the day getting well established, but the extent of its
possibilities and impact on business is still in a predictive state.
In this section, we will discuss those disruptive technologies that will have
direct bearing on business and the enabling enterprise IT solutions areas
that CEO-CIO combinations will have to give senior management attention.
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commands to ask for directions. The cloud can also improve the economics
of IT for companies and governments, as well as provide greater flexibility
and responsiveness. Finally, the cloud can enable entirely new business
models, including all kinds of pay-as-you-go service models.
2. Big data: Big data has quickly emerged as a significant challenge for IT
leaders. The term only became popular in 2009. By February 2011, a
Google search on big data yielded 2.9 million hits, and vendors now
advertise their products as solutions to the big data challenge. The key
thing enterprises have to realize is that they just cant store it all. There
are new techniques to handle extreme data, such as Apache Hadoop,
but companies will have to develop new skills to effectively use these
technologies, Cearley says.
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ENCAPSULATING ENTERPRISE IT SOLUTIONS
REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
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Video Lecture
! !418
EPILOGUE IT OUTSOURCING
Chapter 12
EPILOGUE IT OUTSOURCING
Objective
Structure:
12.1 Introduction
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EPILOGUE IT OUTSOURCING
12.1 INTRODUCTION
The car manufacturer does not need to make all the nuts and bolts in
manufacturing industry, these are called standard parts. However, there
may be some specialized nuts and bolts that the car manufacturer must
make in-house. Many times, companies make many things in-house just
because there arent any suitable subcontractor Indias defence
production industry is the best example either you import or make in-
house because there arent any domestic companies that have the
capability or willingness to invest in sophisticated manufacturing
techniques and machinery required to meet defence needs. There are also
companies such as Bugatti and Ferrari that makes cars but not ordinary
cars, so much so that every part is made in-house and assembled by hand
in such cases, its the product and pride in their product that prevents
outsourcing or sub-contracting or buy.
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Before we go further, I would like to put down a caveat that one chapter is
grossly inadequate to do justice to IT Outsourcing and Outsourcing
Management its very different from traditional sub-contracting functions.
This chapter only intended to introduce you to some concepts of
IT Outsourcing from the experiences of the author.
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Until the late 1990s, that is Thats when ASPs burst on to the scene,
claiming they could take a companys most strategic functions and run
them remotely on their own applications. A business wouldnt need to
maintain an expensive IT department to build its own applications; it could
just rent the functionality over the Internet or a private network. This
appealed to dot coms with huge venture capital, business plans and little
else, and also to some established, brick-and-mortar retailers that wanted
to start making money quickly on the Web. As it turned out, ASPs could not
deliver on all their promises. In order to be profitable, they had to limit the
number of applications they supported. ASP customers have learned this
the hard way and when several major ASPs went bust, their customers
suddenly found themselves without the applications they needed to run
their businesses.
Which brings us to the present; but before that lets us also briefly discuss
Indian IT Industry and its growth to being world leaders.
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India has been outsourcing software work from overseas mainly USA since
the late 70s and 80s. The outsourcing model was small projects or parts of
projects, done entirely offline in India and shipped to the customer in tapes
or CDs mainly the middle life cycle that is coding and unit testing. That
was the age prior to availability of Leased-line communication
infrastructures.
In the 1980s, Prime Minister Rajiv Gandhi tried to computerize the vast
and numerous departments of the Indian government, but senior
bureaucrats were initially reluctant to accept the technology. The personal
computer was largely used as a typewriter and assigned to the typists.
However, Sam Pitrodas (the Technology Adviser to Prime Minister Rajiv
Gandhi) intense push hugely assisted Indias IT companies and their story.
The next major event that boosted Indian IT Industrys growth was General
Electrics investment in IT Outsourcing to India and its Chairman Jack
Welchs commitment to the Government of India to use Indian IT
companies as outsourcers and offshorers in exchange for a substantial
purchase of GEs Aircraft Engines again facilitated by Sam Pitroda. This
resulted in GE Outsourcing substantial software work to thousands of
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While the above two triggers were external, the next two came from within
by the sheer capability and agility of the Indian IT Industry to improve,
change and innovate. The first of these was the Y2K a huge software
problem brought about due to dates being in 6-digit format that caused
arithmetic errors around the century. The root cause of this problem was
not so much an Analyst/Programmer error but the fact that in the 70s and
80s, hardware was very expensive and the focus of all software
development was efficient utilization of computer memory and disk space
hence, programs ensured least memory and sick space was taken up and
hence, the least amount of data was always stored. Even in the 80s and
90s, the developed world was so widely computerized that a food store in
the US would not be able to check out an item of purchase if the
computers were down. Hence, the impact of Y2K issue on the developed
world was so wide that it could bring all activities to standstill. Indian IT
engineers started as cheap labour to just change the date formats, but
ended up rewriting many billions of lines of code, testing them and
productionizing them in a manner previously unconceivable to the Western
world. By the turn of century, multinationals had realized the potential of
the Indian Programmer the Indian Programmer had arrived.
Immediately following the happy turn of the century, came the DOT COM.
Again, the agile Indian programmer overnight absorbed the intricacies of
Web technologies to fuel the dot com boom the Indian Programmer had
come to stay.
I would say, it was the Y2K and the DOT COM that made Multinationals sit
up and realize that they needed the Indian programmers and analysts and
designers and architects to maintain, manage and grow their Information
technology assets its not a favour to India any more.
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world. By the end of the 20th Century, Indian IT companies had become
ISO 9000 certified and SEI-CMM Level 5 compliant.
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In this section, we will deal with the Operational Models. There are
essentially two Operational Models:
Staff Augmentation
Projects Outsourcing
Managed Services
Staff Augmentation: This is the most basic of all outsourcing models. You
add contractors to increase your output as demanded by the organization.
You still control all resources but this setup allows add-on services which
are presently deficient in your company (i.e., support services for market
expansion). In addition to being the most basic setup, this has the least
risk among all the outsourcing models. You may use this to expand current
capacity to serve short-term immediate business needs.
The projects were full life cycle bespoke development that included the
outsourcer to manage independently Design, Coding, Unit testing,
Systems and Integration testing and support UAT and Production
Implementation with a limited post-implementation warranty.
The Requirements phase was quite uncertain in terms of its scope and
timelines and hence could not be estimated.
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Scope and budget linked issues and those internal to the organization.
To a great extent, even Design Phase and more specifically the HLD was
also never outsourced and the outsourcer always came in from LLD
onwards.
Essentially, the IT Outsourcer is engaged only for those phases where the
scope and hence the estimates of effort and schedule can be defined as
accurately as possible.
General Electric Co. and Hitachi Corporation are two companies that
perfected this model best and leveraged outsourcing most effectively in
the90s. Their model is bulleted below:
Engage one or a few resources from the ODC vendors in the detailed
Requirements Definition Phase the resources would be deputed at
customer site and be part of the customers requirements team. These
resources would subsequently return to Offshore and be part of the
project team thereby transferring full knowledge of the requirements to
the offshore team.
High Level Design also done in-house with the same ODC resources that
took part in Requirements participating.
The signed-off Requirements documents and HLD are sent to the ODC
and the ODC provided estimates of timelines and effort.
This is a model perfected over a few years and practiced even today across
the IT Outsourcing world.
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Managed Services is also known as the Fully Outsourced Model where the
vendor takes complete, end-to-end responsibility of a set of deliverables in
a project. This model is generally adopted when the work can be clearly
scoped out with clearly marked out deliverables even in Maintenance
scenarios. Complete decision making responsibilities for providing the
agreed services/deliverables is with the vendor.
Clearly SLAs for each deliverable and penalties applicable for non-
delivery should be agreed contractually.
For this model to work, the client should show confidence in the vendor
to hand over whole applications to the vendor and the vendor should
have an excellent understanding of the clients systems.
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Since delivery and stakeholder management are with the vendor, the
organization can focus on its core business.
Vendors can take decisions without have to get the nod of the customer
at every step.
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Strategies are not static and will change over time as the company grows
and the dynamics of choosing different models will continue.
Time and Material is the oldest and most common commercial model.
It is no-risk model to both customer and vendor, where the vendor assigns
resources to the project or customer site. The customer is free to utilize
the resources as they would their own staff. As and when the customers
demand ceases, the resources are released typically a notice of two
weeks is given to the vendor. The biggest advantage to the customer is
retain control of the project as always, have additional resources as and
when required and no commitment to retain the resources beyond their
need. The vendor is assured of annuity revenue and over a period of their
resources gain sufficient confidence of the customer to manage the project
or transfer it to a managed services model. However, its favoured mainly
for Onsite engagements; the customer is apprehensive of the offshore T&M
as they dont have visibility to the activities and hence suspect low
productivity. The main disadvantage of this model is that the vendor is
continuously trying to augment their staffing in an attempt to increase
revenues. This becomes particularly difficult to resist in the last quarter of
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the vendors financial year when the sales is pushed to meet higher
targets.
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REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
Video Lecture
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