CSIT 306

IT RESOURCE PLANNING

SESSION1:
Introduction to IT Planning Systems

College of Education
School of Continuing and Distance Education
2014/2015 – 2016/2017
1-1
 Objectives
• Develop an understanding of how ITRP systems
improve the effectiveness of information systems in
organizations
• Recognize the business benefits of ITRP systems
• Understand the history and evolution of ITRP

1-2
 ITRP Market
• One of the fastest growing markets in software
industry
• 34.5% of companies with revenues over $1 billion
plan to purchase or upgrade
• $180 billion in sales in 2002
• Maybe as much as $1 trillion by 2010

1-3
 ITRP Systems
• Major investment
– Cost between $50,000 and $100,000,000+
• Variety of business justifications
– Replace legacy systems
– Reduce cycle times
– Lower operating costs
– Enables better management decisions
• Real-time
• On-line

1-4
 What is ITRP?
• Software tools
• Manages business systems
– Supply chain, receiving, inventory, customer orders,
production planning, shipping, accounting, HR
• Allows automation and integration of business
processes
• Enables data and information sharing
• Enterprise-wide system
• Introduces “best practices”

1-5
 Evolution of ITRP
• 1960s: software packages with inventory control
• 1970s: MRP systems
– Production schedule with materials management
• 1980s: MRPII systems
– Adds financial accounting system
• 1990s: MRPII
– Integrated systems for manufacturing execution
• Late 1990s: ITRP
– Integrated manufacturing with supply chain

1-6
 Integrated Systems Approach
• Common set of applications
• Usually requires re-engineering business processes
– Better alignment
• Limited customization
– Easier upgrades
• Overcomes inefficiencies of independent systems
• Integrated data supports multiple business functions

1-7
1-8
 Overall Business Benefits
• Information
– Maximizes information throughput
– Provides timely information
– Integrates information throughout supply chain
• Minimizes response time
• Pushes decision making down to lowest levels
• Reduces costs
• Cuts inventory
• Improves operating performance

1-9
 Department Benefits
• Sales
– Increased efficiency
• Lower quotes, reduced lead time, improved responsiveness
• Manufacturing
– Concurrent engineering
– Faster design and production
• Data Service
– Accurate customer service history and warranty information
• Accounts Payable
– Suppliers paid accurately

1-10
1-11
 Systems Benefits
• Eliminating legacy systems
– Reduces incompatible data
– Can cause fragmentation
• Allows sharing and monitoring of information across
organization
• Foundation of eBusiness
– Back-office functions
• Standardization
• Helps obtain and maintain competitive advantage
• Improved interactions with customers and suppliers

1-12
1-13
 Design Alternatives
• “Vanilla” implementation
– Complete vendor package
– Benefits
• Total integration across all functional areas
• Re-engineering of all business processes
– Deficits
• Expensive
• Time-consuming
• Selected ITRP modules
– Benefits
• Less costly and time-consuming
– Deficits
• Lacks total integration of data
• Limited applicability and use

1-14
 Design Alternatives, continued
• Build in-house
– Benefits
• Can create system based on its needs
• Competitors will not have access to similar system
– Deficits
• Time- and resource-consuming
• Expensive
• Risky
• May not provide competitive advantage
• Maintain concurrent legacy systems
– Benefits
• Familiarity
– Deficits
• May be a competitive disadvantage

1-15
 Cost-Benefit Analysis
• Net Present Value
– Time value of money
– 5-year timeframe for ITRP
– Non-recurring costs:
• Hardware, software,
consulting, training,
implementation
– Recurring expenses:
• Licenses, maintenance,
consulting, teams

1-16
 Maintaining Competitive Advantages
• Implement ITRP system better than competitors
• Migrate to new versions faster
• Use “vanilla” ITRP for core systems and build
customized modules for others
• Increase availability of operational data
• Better use of data for analysis

1-17
 Challenges
• Realization of benefits
• On-time, on-budget implementations
• Applying multi-stage approach
– Markus
• Three phases: project, shakedown, and onward and upward phases
• Business results not achieved until last phase
– Parr and Shanks
• Four phases: planning, re-engineering, design, and configuration
and testing phases
• Benefits not achieved until last two phases
– Holland and Light
• Benefits occur after implementation of advanced modules

1-18
 Case: Business Research
• Expected future growth in ITRP Marketplace
– U.S.
• Fortune 500 and mid-cap
– International
• Fortune 500 and mid-cap
• Market share of major vendors
– U.S.
• Fortune 500 and mid-cap
– International
• Fortune 500 and mid-cap

1-19
 Summary
• ITRP systems can improve the effectiveness of
organizations through automation and integration of
business processes
• ITRP systems allow data and information sharing
across the organization
• Departmental benefits include increased efficiency,
faster design and production, and accuracy
• Implementing an ITRP system helps the organization
obtain and maintain a competitive advantage

1-20
 CSIT 306
IT Resource Planning

Session 2:
IT Resource Planning Systems

College of Education
School of Continuing and Distance Education
2014/2015 – 2016/2017
2-1
 Objectives
• Recognize factors associated with the evolution of
ITRP systems
– BPR
– Client-server networking
– Integrated databases
• Examine role of process modeling in redesigning
business models

2-2
 Re-engineering
• Fundamental rethinking and radical redesign of business
processes
• Goal is to achieve major improvements in performance
• Efficient redesign of value chain
– Primary activities
• Inbound logistics, operations, outbound logistics, marketing and sales,
service
– Secondary activities
• Organizational activities, human resources, technology, purchasing
• Motivations
– Deregulation, consolidation, customer sophistication, increased
competition

2-3
2-4
Business Process Re-engineering (BPR)

• Technology used to mechanize work

• Create new business rules
• Remove outdated rules
• Improve responsiveness
• Reduce costs

2-5
 Business Process Re-engineering (BPR),
continued
• Decentralize decision making
– Become responsive to customer’s needs
– Flatten organization
• Facilitated by information technology
• Redesign of jobs
– New levels of judgment
– New types of leaders
• Adaptable

2-6
2-7
 Process Modeling
• Business process
– Business activities
• Data store
– Data needed by business process
• Data flow
– Data transferred between processes or from a process to
data store
• Organizational unit
– Units where processes take place
• Event
– Includes triggers and outcomes

2-8
 Neighborhood Food Cooperative

• Weekly cycle
• Members submit list
• Lists merged
• Orders placed for product
by phone
• Suppliers confirm in writing
with invoice
• Shipments made to
cooperative
• Members collect product
• Cooperative pays net 10
days

2-9
 Basis for Best Practices Supported by ITRP
Modules
• Re-engineered process models
– Improved process change depictions
• Data integration
– Among multiple processes
• Structural changes
– Streamline business functions
– Maximized productivity

2-10
 Reliable Finance Company
• Expansion required redesign of existing system
• Needs enhanced information system
• Increase number of branches exponentially
• Achieve a competitive advantage
• Analysis of loan application system
– Reduce approval from 10-13 days to 2-3 days
– Improve access to databases for approval decisions

2-11
 Failure in Re-engineering
Rosenthal:
– Apply “clean slate” approach
• Continuous training for new roles
• Measure performance
• Jobs must be redesigned
• Use rewards as incentives to change
– Move away from status quo
– Too narrowly focused
– Project too general

2-12
Information Technology Facilitates ITRP
• Client-server computing allows for increase power and
control
• Integrated databases
– Reduces redundancy
• Increases data consistency
– Supports multiple functional units
– Data maintained separately from application modules
– Database management systems
• Central data administration
• Improved data integrity
• Improved control

2-13
 Process Enterprises
Changed management structures
– Process responsibility given to “process owners”
• Has process design authority
– Stresses teamwork
– Leans toward standardization of processes
– Focuses on achieving goals

2-14
 Case: Re-engineering the Payment Process
System at RFC
Current payment processing system
– Customers:
• Make payments at branch
– Cash, check, money order
• Mail payments to branch
– Manually processed
– Batched for deposit in afternoon
– Home Office mailed an Advice of Payment Received
• Payment made to Home Office
– Manually processed
– Batched for deposit in afternoon
– Branch mailed an Advice of Payment Received
– Each night, batch payment processing runs to update
accounts

2-15
Case: Re-engineering the Payment Process System
at RFC, continued
• Weekly delinquency analysis run
• Payment reminders sent out at 15, 30, 45, and 60
days
– Computer generated
• Settlement figures processed upon request
– Urgent requests take overnight
• Major expansion planned

2-16
 Summary
• BPR allows the organization to rethink and radically
redesign their business processes
• Process modeling of business activities change
organizational management structures
• ITRP systems are facilitated by IT
• Processes are standardized and teamwork enhanced

2-17
 CSIT 306
IT Resource Planning

Session 3:
Planning, Design, and Implementation of
IT Resource Planning Systems

College of Education
School of Continuing and Distance Education
2014/2015 – 2016/2017
3-1
 Objective
• Understand the information systems development
process for enterprise systems, including planning,
design, and implementation

3-2
Traditional Systems Development Life Cycle
• Detailed analysis of system using tools and techniques
to determine problem areas
– Process models
– Data models
• Phases
– Problem definition
– Feasibility study
– Systems analysis
– Systems design
– Detailed design
– Implementation
– Maintenance
3-3
3-4
 Traditional Systems Development Life Cycle,
continued
• Automating current system is counter-productive
– Inherit old problems and flaws
• Provides opportunity to re-engineer current system
• Create logical database design before details are
refined
• Takes too much time
• Uses a great deal of resources
• Expensive

3-5
 New Approaches
• Prototyping
– Models shown to end-users for feedback, guidance
– Not necessarily faster
• End-user development
– End-users create information systems using spreadsheets
and databases
– Not effective for large-scale development
• Software packages
– Economies of scale in development, enhancement,
maintenance

3-6
 ITRP Systems Design Process
• Phases
– Planning
– Requirements analysis
– Design
– Detailed design
– Implementation
– Maintenance

3-7
Planning and Requirements Phases
– Planning
• Needs assessment
• Business justification
– Tangible and intangible benefits
– Requirements analysis
• Identify business processes to be supported
• “Best practices” offered by vendors
– Models of supported functions
• Checklist of activities and factors

3-8
 Design Phase
• Re-engineering business processes to fit software
– Traditional SDLC defines new business requirements and
implements conforming software
• Re-engineering versus customization
– Re-engineering can disrupt organization
• Changes in workflow, procedures
– Customizing
• Upgrading can be difficult

3-9
 Alternative Designs
• “Vanilla”
– Easy to implement
• Follow vendor prescribed methodology
• Employ consultants with specialized vendor expertise
– Usually on time and on budget implementations
• Customized
– Time and costs increase
– Not easily integrated into new version

3-10
3-11
 Alternative Designs, continued
• Maintain legacy systems and add ITRP modules
– Support specific functions
– Cost-effective
– Organization doesn’t get full benefit of ITRP
– Less disruptive
– Lacks integration
• Outsourcing
– External vendor operates
• ASPs provide on time-sharing basis
• Depends on reliability and stability of vendor

3-12
3-13
 Detailed Design Phase
• Team selects the models, processes, and information to
be supported
– “Best practices” methodology provides models
• Select applicable business processes
• Discard inapplicable processes
• Those processes that do not match the system will serve as
foundation for re-engineering
• Identify any areas not covered as candidates for customization
• Interactive prototyping
• Extensive user involvement

3-14
3-15
 Implementation Phase
• Implementation
– Address configuration issues
• Data ownership and management
• Security issues
– Migrate data
• Ensure accuracy
– Build interfaces
– Documentation review
– User training
– Reporting
– Testing

3-16
 Implementation Strategies
• Big bang
– Cutover approach
• Rapid
• Requires many resources
• Small firms can employ
• Mini big bang
– Partial vendor implementation
• Phased by module
– Module-by-module
– Good for large projects
• Phased by site
– Location-based implementation
3-17
Case: Response to Request for Proposal for
an ITRP System
• Wingate Electric
– Mid-sized manufacturer of electric motors
– Owned by Dick, CEO, and Steve, COO
• MIS system
– Supports major accounting and financial functions
• Sales order processing, inventory control, accounts payable, accounts
receivable, general ledger
– Multiple legacy systems
• Redundant data
• Inconsistent data
• Queries difficult

3-18
 Case: Response to Request for Proposal for an
ITRP System, continued
• Competitors adopting ITRP systems
– Integrating financial and manufacturing
– Web-based front ends
• Order processing, tracking, follow-up
• RFP for ITRP system
– Initially to support accounting, financials
– Additional support for production, manufacturing
– Eventual support for sales and marketing, HR, CRM, eBusiness
– $1,000,000 budget for system
– Determination made by five executives, representing different user
groups
• 10 scored criteria
• Vendor presentations, supplemental materials

3-19
 Summary
• Traditional SDLC has been modified by the use of
prototyping, end-user developments, and software
packages
• ITRP systems design process consists of six phases:
planning, requirements analysis, design, detailed
design, implementation, and maintenance
– The design phase considers the use of traditional methods,
re-engineering, and customization, as well as outsourcing

3-20
 CSIT 306
IT Resource Planning

Session 4:
ITRP Systems: Sales and Marketing

College of Education
School of Continuing and Distance Education
2014/2015 – 2016/2017
4-1
 Objectives
• Examine the sales and marketing modules
• Understand the interrelationships among business
processes

4-2
 Case: Atlantic Manufacturing
• Manufacturer of small motors
• Problems with current order acquisition, operations,
distribution, and accounting systems
– Information supplied to sales force inaccurate
– Customers requesting reduced lead times
– Credit system inconsistent, producing collection problems
– Service calls lack warranty information
– Quality control system not integrated
• Competition has eliminated these problems

4-3
 Sales and Marketing Processes
• Operational-level processes
– Daily activities
• Prospecting, telemarketing, direct mail
– Contact management
• Databases, lists
• Support
– Sales order processing system
– POS systems

4-4
 Sales Management Control Processes
• Designed to allocate resources to achieve maximum revenues
• Decisions made on analysis of sales
– Comparison of sales
– Analysis of revenues against benchmarks
– Listing of most profitable products, sorted by territory and salesperson
– Software often used
• Allows for quicker analysis
• Able to identify trends
• Analyze salesperson performance
• Identifies both strong and weak products
• Can signal potential shortfalls or excesses in stock levels

4-5
Additional Sales Management Applications
• Sales forecasting
– Predicts trends
– Determine customers’ needs in different market segments
– Based on sales history, customer demands, demographic
trend, competitor information
• Advertising
– Identifies channels that will be most effective
• Product pricing
– Decision supported by pricing models
– Examines CPI, expected consumer disposable income,
production volumes, labor costs, costs of raw materials

4-6
 Sales and Marketing Modules
• ITRP systems differ from traditional systems
– Allow for integrated marketing support systems
– Provide integrated CRM software
• Purpose
– Identify sales prospects
– Process orders
– Manage inventory
– Arrange deliveries
– Handle billing
– Process payments
• Benefits
– Standard codes and documents
– Common database
– Provides audit trail
– Allows for data Integration

4-7
4-8
 CRM
• Front-end interface with customer to sales and marketing
• Comprehensive approach
• Developed from sales force automation software
• Provides sales force with management tools
– Sales activity
– Sales and territory management
– Contact databases
– Leads generation and monitoring
– Product-specific configuration support
– Knowledge and information resource management
• Needs an underlying Sales and Marketing ITRP module for
operational-level data
• CRM data accessible through data warehouse

4-9
 Integration with Modules

• Sales model may be integrated with:

– CRM – Human Resources

– Financial Accounting – Quality Management
– Materials Management – Controlling

4-10
 Featured Article: Staples and Integrated
ITRP
• How is technology helping Staples achieve a competitive
advantage?
– Customers want full range of services
• Consistent
• Seamless
– Online kiosk
• Connected to e-commerce web site
– POS system, order management system, supply chain
• Access information about products and services
• View inventory
• Build PCs to order
– Multiple channel shoppers have greatly increased lifetime value
– Acquired Quill
• Implemented an integration level to connect two disparate systems

4-11
Featured Article: Staples and Integrated
ITRP, continued
• Reduced number of direct linkages
– Standardized systems
• Web services
– Team review of systems, users, needs

4-12
 Summary
• The sales and marketing modules for ITRP systems are
designed to support the sales order processing
systems, control daily activities like prospecting, and
manage contacts.
• This system produces sales forecasting, identifies
advertising channels, and helps to maintain
competitive pricing scales.
• The CRM module serves as a front-end interface
between the customer and the sales and marketing
departments.

4-13
 CSIT 306
IT Resource Planning

Session 5:
ITRP Systems: Accounting and Finance

College of Education
School of Continuing and Distance Education
2014/2015 – 2016/2017
5-1
 Objectives
• Examine accounting systems within ITRP
• Understand ITRP financial systems
• Review the interrelationships among business
processes supporting finance and accounting

5-2
 Case: Atlantic Manufacturing
• Inaccurate and/or incomplete paperwork produces
problems
• Exchange of information between departments made
manually
• Unable to supply quantity discount information to
sales force
• Lack of coordination between departments

5-3
 Accounting Processes

• Operational
management
level
– Production of
transactions
• Paychecks,
invoices, checks,
purchase orders

5-4
 Management Control Processes
• Budgeting
– Analysis of allocations, expenditures, revenues
• Cash management
– Cash flow analysis
– What-if analysis
• Capital budgeting
– Evaluation tools: NPV, IRR, pay-back period
• Investment management

5-5
 Accounting Systems
• Traditional
– Provide operational-level software
• Produce invoices, checks, statements
• Financial accounting
– Financial statements for external reporting purposes
• Management accounting
– Information on profitability

5-6
 Accounting Systems v. ITRP Modules
• ITRP
– Information shares integrated database
– Provides up-to-date information
– Seamless
– Creates document flow of transactions
• Accounting systems
– Manual or separate transfer of information
– Multiple platforms

5-7
5-8
 ITRP Financial Accounting Module
• External reporting
– Set by general accounting standards
– Legal requirements
• Includes accounts receivable subsystem
– Interfaces with cash management
– Monitors accounts and updates, handles payments, creates
due date lists, produces statements
• Accounts payable
– Handles payments, applies available discounts to maximize
profits

5-9
 Management Accounting Modules
• Internal accounting perspectives for directing and controlling operations
• Information on variances between planned and actual data
• Key activities
– Cost center accounting
– Internal orders as a basis for collecting and controlling costs
– Activity-based costing of business processes
– Product cost controlling for profitability analysis
– Profitability analysis by market segment
– Profit center accounting of individual areas of organization
– Consolidation of financial data for accounting perspectives
• Enable management to better allocate resources, maximizing profitability
and performance
• Central clearinghouse for accounting information

5-10
 ITRP Systems
• Provide on-line, real-time data
– Operational data
• Feedback on quality and efficiency of processes
• Information must be timely and specific
• Used for real-time operational control
– ABC data
• Information on profitability and products
• Real-time data
• Estimates are sufficient
• Strategic information
• Basis for continuing improvement to operations

5-11
5-12
 Featured Article: The Changing Landscape of
Computerized Accounting Systems
• Define each of the “in-technologies and systems”.
• What is their relationship to the success of ITRP?

5-13
 Featured Article: The Changing Landscape of
Computerized Accounting Systems, continued

• New types of accounting software

– Fair pricing
– Database management standardized
• Ease of mobility
– PC-based
• New markets
– ERPs dominate highest end
– Mid-levels are SQL-based and non-SQL-based
– Low-end systems range from very low end to more robust
– E-commerce and e-business drive most mid- and high-level
systems, as well as a few low-level

5-14
 Featured Article: The Changing Landscape of
Computerized Accounting Systems, continued

• Internet-based commerce
– Hottest technology
– E-business
• Quicken allows remote entries through Web
• EDI and EFT
– E-commerce
• Amazon.com and on-line securities trading
• Dell Computer
• ITRP
– Internet additions
– Prices decreasing

5-15
 Featured Article: The Changing Landscape of
Computerized Accounting Systems, continued

• Best practices
– Improve bottom line
– Create air of control
• Structured Query Language
– Database of choice

5-16
 Summary
• Most accounting processes operate at the operational
management level
– Additional software enables financial and management
accounting
– Each department or division may operate different
software and databases
• ITRP systems’ integrated database allow for seamless
information sharing
– Easier reporting
– Includes all operational data and ABC data
– Coordinates with management accounting modules

5-17
 CSIT 306
IT Resource Planning

Session 6:
ITRP Systems: Production and Materials
Management

College of Education
School of Continuing and Distance Education
2014/2015 – 2016/2017
6-1
 Objectives
• Examine the production management system in ITRP
• Understand the materials management system
• Acknowledge the interrelationships among business
processes supporting production and materials
management

6-2
 Case: Atlantic Manufacturing
• Materials and manufacturing are dealing with
inconsistent levels of raw materials and finished
products
• Change specifications are not made timely
• Sequential design produces long lead times
• Inadequate information from other divisions
• Lost purchasing requisitions

6-3
 Manufacturing Systems Background
• Designed to re-order inventory using re-order point
– Adapts production to customer orders
– Increased flexibility, responsiveness, integration
• 60s, 70s, 80s: High-volume production of few products
– Mainframe-based databases
• Late 80s: Production of new products to meet customers’ needs
– Changeable and flexible
– Manufacturing Execution Systems provided continuous feedback and
control
• 90s: Integration of processes and data produce operational
efficiency
– ITRP systems gave total integration, including supply chain

6-4
 Problems with Traditional Production
Systems
• Lack of integration between divisions in organization
– Production must be linked to sales to maintain proper
inventory levels
• Inaccurate production forecast will create incorrect
purchasing decisions
– Producing either a shortage of or extra raw materials
– Creating an excess of finished products or shortage
• Excess inventories
– Impact cash flow and profitability in accounting

6-5
 Production Systems
• Objectives
– Create production plan
– Acquire raw materials
– Schedule equipment, facilities, human resources
– Design products
– Produce appropriate quantities and expected quality level

6-6
 Production Planning and Manufacturing
Processes
• Operational-level processes
– Daily activities
• Purchasing
– Acquire correct quantity of raw materials and supplies
• Receiving
– Inspection of delivered products and processing
• Quality control
– Monitoring of receivables and identification of unacceptable
deliveries
– Monitoring quality of production goods
• Inventory management
– Maintains appropriate levels

6-7
 Information Systems Support
• Production planning and manufacturing processes
– Supported by information systems
• Data collection systems
• Material management systems
• BOM systems
• Inventory management systems
• Cost accounting systems

6-8
 Material Resource Planning
• Processes:
– Identify stock needed
– Calculate lead time for stock
– Determine safety stock levels
– Assign most cost-effective order quantities
– Produce accurate purchase orders
• MRP takes inputs from the MPS
• MPS employs sales forecasts to identify products
needed

6-9
6-10
 Just-in-Time Systems
• Ideal production and manufacturing situation
– Only maintain necessary inventory levels; no excess
– Requires supplies to be delivered only as needed to meet
production schedule
• EDI or Internet used to place orders
• Continuous replenishments of raw materials
– Reduces storage cost and space both pre- and post-
production
– Improved supply chain and value chain management

6-11
 Capacity Planning
• Evaluation of production capacity against production
goals
– Requires specific information
– Creates time-phased plans for product and production area
• Production scheduling
– Allocation of specific facilities
– Estimates human resource needed
• Product design and development is integrated with
cost information
– Allows comparison of alternatives to decrease expenses

6-12
 Production Planning and Materials
Management Modules
• ITRP extends information distribution
– Supports materials requirement planning, inventory management, capacity
planning
• Allows for merging of multiple databases
– Eliminates paperwork and bottlenecks
– Decreases design costs, lead time, personnel costs
– Increases productivity
• Sales forecasts employed to develop production plans
• MPS created through demand management
– Determines quantities and dates for finished products
• MRP creates efficient, detailed material plan
– Determines what needs to be ordered and when
– Creates work orders sent to production
• ITRP systems provides integration

6-13
 Materials Management Modules
• MES
– Factory floor information and communication systems
– Provide feedback on real-time basis
– Can be front-end combined with back-end applications
• APS systems
– Business analysis and support
– Leverage data for decision support
• Data collection
– Real-time data gathered with mobile phone or Internet-enabled devices
– Automated data collection

6-14
 eBusiness Strategies
• Facilitates communication along supply chain
• B2B
– Many suppliers available
– Internet enables quick and easy exchange of information
• Planning forecasts
– eMarketplaces allow for aggregation of buyers to improve
purchasing power
• Reduces costs
• Communities
– Eliminate traditional supply chains and problems
– RFPs handled more efficiently

6-15
Featured Article: What ITRP Can Offer ABC

• What manufacturing data is used by the managerial

accounting module within ITRP?
• How is this information used to control costs, to
maximize productivity, and to streamline operations?
• How does this data integration support managerial
decision making?

6-16
 Featured Article: What ITRP Can Offer
ABC, continued
• Activity-based costing systems
– Need correct activity cost driver
• Nonfinancial measures difficult to find in accounting systems
• Usually not controlled by accounting system
– Lack process controls
• Often derived from “back-of-an-envelope” information systems
– ITRP systems and activity cost-driver information
• Increase availability
• Increased reliability
• Allows for integration of multiple systems

6-17
 Featured Article: What ITRP Can Offer
ABC, continued
• SAP’s R/3 system
– Links production planning with materials management
• Allows establishment of standards
• Materials handling as process
– Activity cost driver – “number of pallet moves”
– Materials handling process attributed to specific product
– Direct costs can be calculated instead of being considered
overhead
– Bill of services created

6-18
Featured Article: What ITRP Can Offer
ABC, continued
– Activity-based budgeting
• Anticipates demand on process
• Estimates practical capacity
• Estimates quantity of direct materials and direct costs
• Can be used to improve processes, determine adjustments
– Collects nonfinancial measures for use as drivers
• Formal process
• Built-in controls for reliability
• High degree of integrity

6-19
 Summary
• Traditional production systems offered no integration within the
organization
• Most production planning lacks coordination with the
organization’s manufacturing , particularly at the operational
level
• Organizations want material resource planning, JIT systems,
and capacity planning
• ITRP systems offer both production planning and materials
management
– Facilitating communications along the supply chain
– Improving e-Business opportunities

6-20
 CSIT 306
IT Resource Planning

Session7:
ITRP Systems: Human Resources

College of Education
School of Continuing and Distance Education
2014/2015 – 2016/2017
7-1
 Objectives
• Examine the HR processes supported by ITRP
• Understand the interrelationships among business
processes supporting human resource management

7-2
 Case: Atlantic Manufacturing
• Recruitment, training, and retention of sales force is
difficult
• HR records inadequate
• HR paperwork and compliance requirements increase
steadily
• Management of compensation packages difficult
• Needs to create a strategy for controlling the cost of
various employee benefits

7-3
 Human Resources Problems
• Maintaining accurate employee information
• Job analysis and design
• Applicant selection
• Compensation
• Benefit administration
• Training
• Governmental reporting

7-4
 Evolution of HR Systems
• Traditionally relied upon stand-alone systems
– Specialized applications for applicant tracking,
compensation, benefits, attendance
• Redundant data
– No link to financial systems
• ITRP
– Linked to financial systems
– “Best practices”

7-5
 ITRP HR Modules
• Components
– HR Management
• Personnel records
• Resumes
– Benefits administration
• Links employee data to actual benefits
• Allows selection from group of benefits
– Payroll
• Paychecks, tax reports, accounting data
– Time and labor management
– Employee/Manager self service
• Travel reimbursement
• Personnel data and benefits changes
• Training class

7-6
 HR Modules
• Attributes
– Integration
– Common database
• Provide audit trails
– Scalable and flexible
– Drill-down capability
– Workflow management for electronic routing of documents
and other document management
– Process standardization
– Security
– User friendly and web-accessible

7-7
7-8
 Management Control Modules
• HR information enables management of diverse workforce
• Supports managerial decision making through query and reporting tools
• Operational level controls
– Maintain and update employee files
– Job analysis files
– Design files
– Regulatory files
– Skills inventory files
• Strategic level controls
– Human capital inventory for tracking employees
– Position control linked to budgeting
– Labor/management relationships
– Business intelligence tools for predicting trends
• Module integration is significant benefit

7-9
 Featured Article: Keep Track of Your
Employees
• What are the benefits of automated time and
attendance records?
• What advantages might accrue to employees using
these systems?

7-10
 Featured Article: Keep Track of Your
Employees, continued
• Employees’ attendance, time at work, and skill levels
– Most companies uncertain
– If tracked, usually manual
– Records usually neglected
– Often piece-meal, no end-to-end solution
• Benefits of automating
– Eliminates manual process
• Time-consuming
• Error-prone
• Better analysis
• More control

7-11
 Featured Article: Keep Track of Your
Employees, continued
• Banner Health
– Selected Kronos Inc. software
• Time- and labor-management
• Accessible from web, phone, badge terminals
• Information available in real-time
– Allows for quick staffing adjustments
• Financial benefits to employees, company
• Smurfit-Stone Container Corp
– Uses Workbrain Inc.’s ERM3, SAP financial applications, and
PeopleSoft payroll processing
• Web-based employee-relationship management software
– Optimized scheduling and tracking of employees
– Interfaces with PeopleSoft applications

7-12
 Summary
• ITRP systems include HR modules that offer records
management, benefits administration, and payroll
– Offer integrated operational and strategic level controls
– Scalable and very flexible

7-13
 CSIT 306
IT Resource Planning

Session 8:
Managing an ITRP Project

College of Education
School of Continuing and Distance Education
2014/2015 – 2016/2017
8-1
 Objectives
• Acknowledge the importance of project management
and control
• Examine the process of organizational change

8-2
 Factors Influencing Information Systems
Project Success
• Number of modifications
• Effective communications
• Authority for project implementation
• Business management
• Ability to generate additional funds to cover
implementation

8-3
Factors Causing Information Systems Project
Failures
• Poor technical methods
• Communication failures
• Poor leadership
• Initial evaluation of project

8-4
8-5
 Risk Factors
• Organizational factors
– Changes in scope
– Sufficiency of resources
– Magnitude of potential loss
– Departmental conflicts
– User experience
• Management support
– Changing requirements and scope
– Lack of commitment
• Software design
– Developing wrong functions, wrong user interface
– Problems with outsourced components

8-6
 Risk Factors, continued
• User involvement
– Lack of commitment
– Ineffective communication
– Conflicts
– Inadequate familiarity with technologies
• Project management
– Size and structure
– Control functions
• Project escalation
– Societal norms
– Continue pouring resources into sinking ships

8-7
 Implementation Risks
• Technology
– Consistencies with current infrastructure
• Organizational
– Customization increases risks
– Redesign of business processes to fit package decreases
risk
• Human resource factors
– IT staff skills and expertise
• Project size

8-8
 Managing Large-Scale Projects
• MRP or ITRP
– Package implementation differs from custom implementation
• Vendor participation
• User skills and capabilities
– Management commitment
• Project champion
• Communication with stakeholders
– Training in MRP
– Good project management

8-9
 Managing ITRP Projects
• Implementation factors
– Re-engineering business processes
– Changing corporate culture
– Project team
• Include business analysts on project team
– Management support
– Commitment to change
• Risk management

8-10
8-11
 Factors in Successful ITRP Projects
• Customization
– Increases time and cost
– BPR advantage from “best practices” adoptions lost
• Use of external consultants
– Offer expertise in cross-functional business processes
– Problems arise when internal IT department not involved
• Supplier relationship management
– Need effective relationships to facilitate and monitor contracts
• Change management
– People are resistant to change
– Organizational culture fostering open communications
• Business measures
– Create specific metrics at start of project

8-12
 Project-Related Factors
• Project division into subprojects
• Project leader with proven track record
• Project focus on user needs instead of technology
• Project champion
• Slack time in project schedule

8-13
 Additional Factors in the Success of a
Project
• User training
– Focus on business, not just technical
– Critical
• Management reporting requirements
– May need to add query and reporting tools
• Technological challenges
– Data conversion
– Interface development

8-14
8-15
 FoxMeyer versus Dow Chemical
• FoxMeyer
– Project went over budget because of new client
– Implemented two new systems at same time
– Technical issues with the ITRP software
– No open communications
– Unrealistic expectations on ROI
• Dow
– Had project implementation problems
– Dow had strong leadership and project champion
– Was able to adjust scope and maintain control
– Fostered open communications

8-16
 Summary
• A number of factors will effect the success or failure
of a systems project
– Operational methods and techniques
– Business management and style
– Leadership and communications
• Risk factors effecting projects must be considered
– Organizational factors, management support, software
design, the levels of user involvement, and the scope and
size of the project itself
– Implementation risks for technologies, the organization, and
human resource

8-17
 Summary, continued
• Success in ITRP projects includes factoring in
– Consideration of customizations, use of external consultants,
management of supplier relationships, establishing metrics,
and change management
– Project-related concerns
– Technological changes, user training, and management
requirements

8-18