CM

MIS Business Management Systems - Vocabulary Flashcards

Moore’s Law

  • Moore’s Law states that the number of transistors on a computer chip doubles approximately every 18 months, and the price of transistors decreases correspondingly.
  • Originally, the estimate suggested doubling every 2 years, but this was revised over time. Although Moore did not coin the term, the law is named after him and has held true for about 60 years.
  • Mathematical representation:
    • Doubling period: \Delta t = 18\text{ months} = 1.5\text{ years}
    • General form (current doubling period): N(t) = N0 \cdot 2^{\frac{t}{\Delta t}} = N0 \cdot 2^{\frac{t}{1.5}}
    • Original estimate: N(t) = N_0 \cdot 2^{\frac{t}{2}}
  • Practical implication: devices are replaced roughly every 4 years because software increasingly exploits new hardware capabilities, causing older devices to slow as software demands grow.
  • Significance: drives expectations for business management systems to leverage increasing computing power and to anticipate faster software evolution and more demanding applications.

Advancements in Business Management Systems

  • Purpose: to increase management efficiency by leveraging advances in technology; as capabilities improve, managerial expectations rise.
  • Example of change over time: from limited access to course syllabi in the 1980s (paper copies in first week) to today’s ability to view syllabi and benefits/records anytime on a phone.
  • Real-world relevance: enables access to schedules, retirement plans, compensation records, and benefits from anywhere.

Components of Business Management Systems

  • Three major components required:
    • A database management system (DBMS)
    • A predictive information system
    • A decision-making information system
  • The DBMS (Database Management System):
    • Stores and classifies information useful to managers
    • Accepts inputs and input verification
    • Stores data, supports queries, and enables report creation
  • The Decision-Making Information System:
    • Integrates the DBMS with predictive information systems to aid decisions
    • Designed for a limited number of inputs and unknowns
    • Provides statistical analysis of likely outcomes and often a recommended course of action; final decision rests with the manager

Implementing Business Management Systems

  • Managers must decide:
    • How the new system will interact with existing systems
    • Whether the change is worth the expense and impact on employee morale
    • Where the new system will be housed

Interaction with Existing Systems

  • Upgrading can reduce stress and increase productivity, but changes introduce short-term stress.
  • Training needs: moving to updated systems may cause anxiety, especially in HR, and requires significant training.
  • Implication: cost-benefit and morale considerations are central to go/no-go decisions.

Housing a New System: On-Premises vs Cloud-based Options

  • On-Premises (On-Prem):
    • Advantages:
    • Complete control over the management system
    • Can be configured to meet unique organizational needs
    • Changes can be implemented quickly
    • Disadvantages:
    • Large upfront hardware and software costs
    • High demand for IT staff to hire and retain
    • Maintenance and updates are challenging
    • Security concerns require constant vigilance against risks
  • Cloud-Based Custom Option (PaaS/IaaS):
    • Advantages:
    • Cloud-hosted security and scalability; easier to scale server size as needs grow
    • Cloud provider handles infrastructure maintenance
    • Disadvantages:
    • Loss of control over costs and speed of implementing changes
    • Managers must manage vendor relationships and service-level expectations
    • PaaS/IaaS allows running custom programs while hardware/software infrastructure is maintained by the cloud hosting firm
  • Software-as-a-Service (SaaS):
    • Advantages:
    • Providers handle updates and regulatory compliance
    • Enhanced security resources and expertise
    • Reduces initial implementation costs compared to on-premises
    • Disadvantages:
    • Limited customization; you generally accept the provided configuration

Human Resources Management (HRM) Systems

  • HRM definition: strategic use of employees to enable efficient operation and competitive advantage; focuses on forecasting HR needs, assessing current capabilities, and managing HR processes (recruiting, hiring, training, retaining, compensating, appraising, promoting, reassigning, firing; managing grievances, absences, sick days, PTO).
  • Legal framework: heavy government oversight necessitates significant legal expertise; many HRM activities are outsourced or supported by HRM systems due to the need for up-to-date regulatory compliance and data integrity.
  • SaaS in HRM: increasing use of online services to maintain HR processes and records due to the need for constant updates and unimpeachable data integrity.

History of HRM Systems

  • HRM systems have roots back to ancient times (e.g., Egyptian hieroglyphics showing workforce organization) and military logistics; computer systems later enabled more sophisticated management support.
  • 1970s: Xerox and IBM developed payroll/compensation tracking software for mainframes; engineers in Baden, Germany formed SAP after IBM halted the project; SAP and Oracle later embedded CRM within ERP systems; CRM moved to cloud by the mid-2000s.
  • Modern context: SAP, Oracle, Microsoft, and PeopleSoft offer integrated CRM within ERP solutions; cloud adoption became widespread.

The Roles of an HR Manager

  • Key responsibilities include:
    • Recruiting, selection, hiring
    • Employment agreements
    • Evaluation policies
    • Absenteeism, tardiness, sick leave, PTO policies and adherence
    • Dress policies, gifts, meals, break policies
    • Severance, bereavement, dismissal policies
    • Discrimination, harassment, and fraternization policies

Recruiting and Hiring Software

  • Recruiting and hiring planning is complex due to many variables in forecasting future workforce needs; sophisticated software is used to estimate requirements for recruiting, hiring, and training.

Recruiting and Hiring Management Systems (Example)

  • Scenario: HR director for a regional airline faces multiple factors:
    • Decreasing pool of former military pilots due to downsizing
    • Rising customer demand requiring more aircraft
    • FAA retirement age increasing from 60 to 65
    • Manufacturing delays slowing aircraft deliveries, reducing hiring now
  • This scenario illustrates the need for HR systems to handle dynamic supply/demand, policy changes, and external constraints.

Compensation Management Software

  • Compensation strategy affects overall firm performance; essential to pay correctly whether employees are hourly, salaried, or contractors.
  • Larger firms often include compensation management within an ERP; smaller firms may use services like Payscale, PayFactors, or Salary.com.

Employee Benefits Administration

  • Benefits administration includes enrolling, maintaining, managing, and ending benefits for employees and dependents; requires tracking hiring dates, marital status, benefit choices, and usage.
  • SaaS options (e.g., Zenefits, BenefitFocus) are commonly used to manage benefits systems.

Inventory System Management

  • Modern inventory management focuses on optimization: determining reorder points and order quantities, taking into account lead time (the time from ordering to receipt).
  • Reordering point identifies when stock should be replenished based on sales/usage rate and lead time; this triggers automatic re-orders or informs inventory managers for precise ordering.

Use of Inventory Management Systems

  • Inventory management is critical for profitability and customer satisfaction:
    • Overstocking increases holding costs and ties up assets; example: grocery stores must discount and discard overripe fruit
    • Understocking can halt production or cause lost sales and unhappy customers; example: missing key components delays fulfillment

UPC and RFID

  • Early inventory management relied on UPC (Universal Product Codes) as the standard barcode in grocery stores in the early 1970s; led to widespread computerization in the 1980s.
  • RFID (Radio-Frequency Identification) enables faster, real-time tracking and management of inventory.

Customer Relationship Management (CRM)

  • CRM systems manage interactions with customers using analytics to identify valuable customers and target future customers; focus on customer experience to attract/retain customers and increase sales, market share, and profit; CRM also helps maintain relationships with suppliers and colleagues.
  • Retail focus: CRM can be complex and expensive due to integration with social, call centers, and supply chain management; data collected includes emails, phone numbers, social data, and buying habits to anticipate customer desires.
  • CRM in business aims to maximize sales force efficiency by:
    • Targeting profitable customers
    • Improving pricing decisions
    • Enhancing customer service
    • Creating individualized products
    • Personalizing marketing messages
  • Background: Modern CRM began with mainframe technology in the 1970s, expanded to PCs in the 1980s, and later integrated into ERP suites; cloud CRM became common after consolidation by major vendors (SAP, Oracle, Microsoft, PeopleSoft).
  • CRM options:
    • Salesforce (integrates with Oracle, QuickBooks, SAP, etc.)
    • SAP/Oracle/Adobe/Microsoft embedded CRM within ERP
    • SMB-focused: HubSpot CRM, Zoho CRM, Freshsales

Decision-Making Management Information Systems (D-MIS)

  • Increased information should lead to better decisions when DBMS is integrated with predictive analytics.
  • D-MIS provide managers with recommended actions and analytical tools to improve decision making.

Business Process Management (BPM)

  • BPM aims to streamline organizational activities, preventing backlogs and inefficiencies.
  • Modern BPM supports both structured/repetitive processes and unstructured/variable processes; includes program management and flexible processes.
  • Five steps of BPM:
    • Examining the design of the process
    • Modeling the process
    • Running the process
    • Monitoring the process
    • Initiating process improvements

BPM: Step 1 – Process Design

  • Process design examines processes, breaking them into components; can analyze existing or desired future processes.
  • Analysts may storyboard to view the entire system before investigating components.

BPM: Step 2 – Process Modeling

  • Provides decisions with recommendations when shortages or excesses occur.
  • Use flowcharts and other tools to depict workflow, sequence, and decision points.
  • Model how decisions change with input variation; final process described in Business Process Execution Language (BPEL) for execution in a BPEL engine.

BPM: Step 3 – Process Execution

  • A process engine runs once designed/modelled/written in BPEL.
  • Provides real-time executable decision making and enables what-if analysis by varying inputs.

BPM: Step 4 – Process Monitoring

  • Track individual components and the overall process to measure performance (Business Activity Monitoring, BAM).
  • Predictive monitoring involves inputting variables to forecast outputs.

BPM: Step 5 – Process Optimization

  • When bottlenecks or excesses are found during monitoring, adapt the process to improve performance.
  • Implement improvements, re-execute the process, and analyze results for continual improvement.

Project Management (PM) Systems

  • PM software aids in executing projects with a defined start, end, and deliverables; examples include building a house vs. maintaining a house.
  • PM software supports Gantt charts and the four major PM phases.

PM Software Features

  • PM tools provide: task rescheduling, stakeholder reports, cloud-based collaboration, and security controls through permissions.
  • ERP-integrated PM options include SAP Projects Portfolio (SAP) and Oracle Project Management; smaller firms may use Jira, GanttPro, etc.

Gantt Charts and the Four Phases of PM

  • Gantt charts visualize a project as components with time estimates and dependencies; highlight concurrent vs dependent tasks.
  • Four PM phases:
    • Initiation
    • Planning
    • Execution
    • Closure

PMP Phase 1: Initiation

  • Identify project goals and opportunities; conduct feasibility studies to determine if goals are realistic.
  • Define project scope and timeline for deliverables.
  • Identify stakeholders; create a statement of work or working agreement.

PMP Phase 2: Planning

  • Create or refine Gantt chart; plan resources (supplies, labor, permits).
  • Schedule a coordination meeting with stakeholders to review the plan and timeline; ensure everyone understands their role.

PMP Phase 3: Execution

  • Manage ongoing progress and resources; monitor tasks and budgets.
  • Example: PM software may recommend delaying an inventory purchase if a dependent task is delayed.

PMP Phase 4: Closure

  • Document lessons learned to inform future projects.
  • Evaluate whether goals were met; close contracts; account for used and unused resources.

Business Intelligence (BI)

  • BI uses data mining and data visualization to help managers make faster, more informed decisions.
  • Data mining combines internal data with external data; predictive analytics use algorithms to forecast likely outcomes using input data.
  • Visualization tools present data in accessible ways to reveal patterns and insights.

Working with Nuances in BI

  • Modern BI offers not only predicted outcomes but also confidence levels or error rates, aiding contingency planning.
  • Combining internal and external data helps identify opportunities and threats.

BI Implementation and Stakeholder Buy-In

  • Successful BI requires selecting a system compatible with stakeholders’ needs; poor usability wastes resources.
  • Getting buy-in involves selecting BI tools familiar to users (e.g., if the business uses QuickBooks, choose BI that integrates well with QuickBooks).

Data Science, Big Data, and Data Visualization Tools

  • Data science: gathering, storing, and searching relevant data.
  • Big data analytics: the technology and processes to extract intelligent, usable information.
  • Data visualization: dashboards and visualization to convey meaning and patterns to decision-makers.

Data Visualization Tools

  • Dashboards provide an overview with features like scroll-over to drill down into analytics details.

Data Analytics Software Platforms

  • Platform options:
    • SAP Analytics Cloud: very powerful analytics but steep learning curve
    • Tableau (owned by Salesforce): powerful and popular; challenging for beginners
    • Microsoft Power BI: powerful and relatively easier to use
    • Oracle Analytics Cloud: strong for organizations using Oracle tools
    • Looker (owned by Google): integrates with Google Docs; uses natural language queries

Implementing Business Management Systems: Housing a New System (On-Premises) – Revisited

  • On-prem again summarized with advantages/disadvantages:
    • Advantages: customization, quick changes, full control
    • Disadvantages: high upfront costs, need skilled IT professionals, ongoing updates, security responsibilities

Closing Note

  • The content emphasizes how technology and data-driven systems transform management practices, with careful attention to cost, change management, security, and alignment with organizational goals.