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TRIBHUVAN UNIVERSITY
Thakur Ram Multiple Campus

Final
Report of
Management Information System
(BIT 353)

Submitted By: Bicky Patel

BIT 6th Sem.
Reg. no.:5-2-15-11-2021
Symbol no.: 767/078

Submitted to : Mr. Basant Ojha Sir

Tribhuvan University
Institute of Science and Technology (Bachelor in Information Technology (BIT) Program)

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Supervisor's Recommendation

It is with great satisfaction that I recommend the final report titled "Management Information
System" prepared by Bicky Patel as part of his academic requirement for BIT Program at Thakur
Ram Multiple Campus, Tribhuvan University, IOST.
The students have demonstrated commendable effort in researching and presenting the role and
application of Management Information Systems in modern organizations. His work reflects a
strong understanding of theoretical concepts, coupled with relevant practical insights. The report
is well-organized, methodically structured, and meets the academic standards expected at this
level.
I believe that this report not only fulfills the academic criteria but also serves as a valuable
reference for understanding how businesses leverage information systems for strategic and
operational advantage.

I hereby recommend this report for submission and evaluation.

______________________________
Basant Ojha
Supervisor
TRMC

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Table of Contents Page

1. Title Page 1
2. Introduction to Digital Firm 4-6
2.1 What is a Digital Firm?
2.2 Managing the Digital Firm
2.3 The Competitive Business Environment and the
Emerging Digital Firm

3. Supply Chain Management 7-9

3.1 Global Supply Chain Forum
4. Customer Relationship Management 10-17
4.1 Why do organizations undertake CRM?
4.2 Why does the organization need CRM?
4.3 Why does the organization need CRM?
5. ERP 18-23
5.1 Why use or think about implementing ERP?
5.2 ERP and E-commerce
5.3 Why organization buy ERP system?
5.4 What is ERP life cycle?
6. Knowledge Management System 24-29
6.1 How can info Router help you with Knowledge
Management
6.2 Knowledge and the Firm:
6.3 Knowledge Management in Organizations
7. Bibliography 30

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What Is Digital Firm?

A digital firm is one in which nearly all of the organization's significant business relationships
with customers, suppliers, and employees are digitally enabled and mediate. Core business
processes are accomplished through digital networks spanning the entire organization or linking
multiple organizations. Business processes refer to the set of logically related tasks and behaviors
that organizations develop over time to produce specific business results and the unique manner
in which these activities are organized and coordinated. Digital firms involve both time shifting
and space shifting. Time shifting refers to business being conducted continuously, 24x7, rather
than in narrow "work day" time bands of 9 a.m. To 5 p.m. Space shifting means that work takes
place in a global workshop, as well as within national boundaries.

Managing the Digital Firm

Toward the Digital Firm: the New Role of Information Systems in
Organizations
Manager cannot ignore information systems because they play such a critical role in contemporary
organizations. Responsibility for systems cannot be delegated to technical decision makers.
The Widening Scope of Information Systems
The interdependence between organizations and information systems, in contemporary systems
there is a growing interdependence between organizational business strategy, rule, and procedures
and the organization‟s information systems.

Fig: The interdependence between organizations and information systems.

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New Options for Organizational Design: the digital firm and the
networked enterprise Flattening Organization

In digital firms, hierarchy and organizational levels do not disappear. But digital firms develop
“optimal hierarchies” that balance the decision-making load across an organization, resulting in
flatter organizations.

Figure Flattening organizations. Information systems can reduce the number of

levels in an organization by providing managers with information to supervise
larger numbers of workers and by giving lower-level employees more decision-
making Authority.

Separating Work from Location

Communications technology has eliminated distance as a factor for many types of work in
many situations. Collaborative teamwork across thousands of miles has become a reality as
designers work on a new product together even if they are located on different continents.

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Reorganizing Workflows
Redesigned workflows can have a profound impact on organizational efficiency and can even lead to
new organizational structures, products, and services.

Increasing Flexibility of Organizations

Large organizations can use information technology to achieve some of the agility and
responsiveness of small organizations. Mass customization is use of software and
computer networks to finely control production so that products can be easily customized
with no added cost for small production runs.

The Changing Management process

Information technology is recasting the management process, providing powerful new
capabilities to help managers plan, organize, lead, and control.

Redefining Organizational Boundaries

A key feature of the emerging digital firm is the ability to conduct business across firm
boundaries almost as efficiently as it can conduct business within the firm. An
interorganizational system is information system that automates the flow of information
across organizational boundaries and links a company to its customers, distributors, or
suppliers.

The Digital Firm: electronic commerce and electronic business

Electronic market is a marketplace that created by computer and communication
technologies that link many buyers and sellers. Companies are also taking advantage of the
connectivity and ease of use of Internet technology to create internal corporate networks
called intranets that are base on Internet technology. Private intranet extended to
authorized users outside the organization are called extranets and firm use such networks
to coordinate their activities with other firm for electronic commerce and electronic
business.

The Competitive Business Environment and the Emerging Digital Firm

4 Major Systems Defining the Digital Firm
◻ Supply chain management systems
◻ Customer relationships management systems
◻ Enterprise systems
◻ Knowledge management systems

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Supply Chain Management

Supply Chain Management is the systematic, strategic coordination of the traditional

business functions and the tactics across these business functions within a particular
company and across businesses within the supply chain, for the purposes of improving
the long-term performance of the individual companies and the supply chain as a whole.
• Close linkage and coordination of activities involved in buying, making, and moving a
product.
• Integrates supplier, manufacturer, distributor, and customer logistics time
• Reduces time, redundant effort, and inventory costs
• Network of organizations and business processes
• Helps in procurement of materials, transformation of raw materials into
intermediate and finished products
• Helps in distribution of the finished products to customers
• Includes reverse logistics - returned items flow in the reverse direction from the
buyer back to the seller

"Supply chain strategies require a total systems view of the linkages in the chain that
work together efficiently to create customer satisfaction at the end point of delivery to the
consumer. As a consequence costs must be lowered throughout the chain by driving out
unnecessary costs and focusing attention on adding value. Throughout efficiency must be
increased, bottlenecks removed and performance measurement must focus on total systems
efficiency and equitable reward distribution to those in the supply chain adding value. The
supply chain system must be responsive to customer requirements

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Global Supply Chain Forum

Supply chain management is the integration of key business processes across the supply
chain for the purpose of creating value for customers and stakeholders.
According to the Council of Supply Chain Management Professionals, supply chain
management encompasses the planning and management of all activities involved in
sourcing, procurement, conversion, and logistics management. It also includes the crucial
components of coordination and collaboration
with channel partners, which can be suppliers, intermediaries, third-party service providers,
and customers. In essence, supply chain management integrates supply and demand
management within and across companies. More recently, the loosely coupled, self-
organizing network of businesses that cooperate to provide product and service offerings
has been called the Extended Enterprise.

A supply chain, as opposed to supply chain management, is a set of organizations directly

linked by one or more of the upstream and downstream flows of products, services, finances,
and information from a source to a customer. Managing a supply chain is 'supply chain
management'.
Supply chain management software includes tools or modules used to execute supply chain
transactions, manage supplier relationships and control associated business processes.
Supply chain event management (abbreviated as SCEM) is a consideration of all possible
events and factors that can disrupt a supply chain. With SCEM possible scenarios can be
created and solutions devised.
Organizations increasingly find that they must rely on effective supply chains, or networks,
to compete in the global market and networked economy. In Peter Ducker‟s (1998) new
management paradigms, this concept of business relationships extends beyond traditional
enterprise boundaries and seeks to organize entire business processes throughout a value
chain of multiple companies

Supply chain management flows can be divided into three main flows:
• The product flow
• The information flow
• The finances flow
There are two main types of SCM software: planning applications and execution
applications. Planning applications use advanced algorithms to determine the best way
to fill an order. Execution applications track the physical status of goods, the
management of materials, and financial information involving all parties.
Some SCM applications are based on open data models that support the sharing of data both
inside and outside the enterprise (this is called the extended enterprise, and includes key
suppliers, manufacturers, and end customers of a specific company). This shared data may
reside in diverse database systems, or data warehouses, at several different sites and

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companies.

By sharing this data "upstream" (with a

company's suppliers) and "downstream"
(with a company's clients), SCM
applications have the potential to
improve the time-to-market of products,
reduce costs, and allow all parties in the
supply chain to better manage current
resources and plan for future needs.

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Customer Relationship Management

CRM - principles, strategy, solutions, applications, systems, software, and ideas for
effective customer relationship management

Customer Relationship Management, or CRM, is an essential part of modern business

management. This CRM article is provided by Ellen Gifford, who specializes in helping
organizations develop excellence in CRM, and this contribution is gratefully
acknowledged.

What is Customer Relationship Management, or CRM? Customer Relationship

Management concerns the relationship between the organization and its customers.
Customers are the lifeblood of any organization be it a global corporation with thousands
of employees and a multi-billion turnover, or a sole trader with a handful of regular
customers. Customer Relationship Management is the same in principle for these two
examples - it is the scope of CRM which can vary drastically.

CRM focuses on the relationship

Successful organizations use three steps to build customer relationships:

• Determine mutually satisfying goals between organization and customers

• Establish and maintain customer rapport

• Produce positive feelings in the organization and the customers

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CRM Conditions
The organization and the customers both have sets of conditions to consider when
building the relationship, such as wants and needs of both parties;

• Organizations need to make a profit to survive and grow

• Customers want good service, a quality product and an
acceptable price Good CRM can influence both sets of
conditions.
Why do organizations undertake CRM?
CRM is a new concept to many organizations. If it's new to you, here's why most forward-
thinking organizations devote lot of energy and resources to the set up and management of a
CRM capability.

How CRM impacts on the organization

CRM can have a major impact on an organization through:
• Shifting the focus from product to customer
• Streamlining the offer to what the customer requires, not want the organization can make
• Highlighting competencies required for an effective CRM process

Why does the organization need CRM?

The ultimate purpose of CRM, like any organizational initiative, is to increase profit. In the
case of CRM this is achieved mainly by providing a better service to your customers than
your competitors. CRM not only improves the service to customers though; a good CRM
capability will also reduce costs, wastage, and complaints (although you may see some
increase initially, simply because you hear about things that without CRM would have
stayed hidden). Effective CRM also reduces staff stress, because attrition - a major cause of
stress - reduces as services and relationships improve. CRM enables instant market research
as well: opening the lines of communications with your customers gives you direct constant
market reaction to your products, services and performance, far better than any market
survey. Good CRM also helps you grow your business: customers stay with you longer;
customer churn rates reduce; referrals to new customers increase from increasing numbers
of satisfied customers; demand reduces on fire-fighting and trouble-shooting staff, and
overall the organization's service flows and teams work more efficiently and more happily.

Features of good CRM

The old viewpoint in industry was: 'Here's what we can make - who wants to buy
our product?' The new viewpoint in industry is:
• 'what exactly do our customers want and need?' and
• 'What do we need to do to be able to produce and deliver it to our customers?'

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What do customers want?

Most obviously, and this is the extent of many suppliers' perceptions, customers want cost-
effective products or services that deliver required benefits to them. (Benefits are what the
products or services do for the customers.) Note that any single product or service can
deliver different benefits to different customers. It's important to look at things from the
customer's perspective even at this level.

More significantly however, customers want to have their needs satisfied. Customers'
needs are distinctly different to and far broader than a product or service, and the features
and benefits encompassed.
Customers' needs generally extend to issues far beyond the suppliers' proposition, and
will often include the buying-selling process (prior to providing anything), the way that
communications are handled, and the nature of the customer-supplier relationship.

Modern CRM theory refers to the idea of 'integrating the customer'. This new way of
looking at the business involves integrating the customer (more precisely the customer's
relevant people and processes) into all aspects of the supplier's business, and vice versa.
This implies a relationship that is deeper and wider than the traditional 'arms-length'
supplier-customer relationship.

The traditional approach to customer relationships was based on a simple transaction or

trade, and little more. Perhaps there would be only a single point of contact between one
person on each side. All communication and dealings would be between these two people,
even if the customers' organization contained many staff, departments, and functional
requirements (distribution, sales, quality, finance, etc).

The modern approach to customer relationship management is based on satisfying all of

the needs - people, systems, processes, etc - across the customer's organization, such as
might be affected and benefited by the particular supply.

Generating a customer focused CRM solution

So what do we need to make this quantum leap of customer
integration? A new way of thinking:
• Change in paradigm
• Change in the messages sent and received
• Change in the overall culture And a new way of doing things:
• Processes that are capable and effective
• Structures and systems that support a business centered on its customers
• Connectivity (end-to-end processes) both internally and externally (e.g., with suppliers)

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Customers' expectations

If an organization cannot at least meet its customers' expectations it will struggle

Ideally a business organization should exceed its customers' expectations, thereby
maximizing the satisfaction of its customers, and also the credibility of its goods and
services in the eyes of its customers.
Customers normally become delighted when a supplier under-promises and over-delivers.
To over-promise and under-deliver is a recipe for customers to become very dissatisfied.
Rule No 1 - You cannot assume that you know what a customer's expectations are ... You must
ask.
Rule No 2 - Customer expectations will constantly change so they must be determined on
an on-going basis.

The expectations of different customers for the same product or service will vary according to:

• Social and demographic factors

• Economic situation
• Educational standards
• Competitor products
• Experience

Therefore, given all these variable factors, it is no surprise that one size certainly does not fit all.

Ask your customers what is important to them. Find out why your customers do business
with you. There are a wide variety of relationship drivers. For example:

• Quality
• Price
• Product
• Location
• Customer Service
When you ask you might discover some factors that you'd perhaps never even considered, for
example:
• Health and safety support
• Systems compatibility
• Contract structure
• Distribution flexibility
• Technical support
• Troubleshooting and problem-solving, to name just a few What service features will
keep your customers loyal to you? Find out

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CRM as a process
CRM can be regarded as a process, which has:

• Identifiable inputs
• Identifiable components
• Identifiable characteristics, which define CRM for your organization and customer
base capacity for improvement and evolution over time

Managing Customers
Why manage customers? Customers are the usual source of income for an organization. (If
not then they will certainly leverage your income, as in the case of readers of a free
publication which is funded by advertising. As such there are two types of customers: the
readers and the advertisers).

Customers are also an exceptional source of information - information which is vital to

enable a business to succeed; i.e., giving customers what they want.

Managing customers entails:

• Knowing what customers want and need - which enables you to focus your
production and service efforts
• Knowing which products or customers have most growth potential - which enables
you to focus on developing highest potential
• Knowing which products or customers are most or least profitable - which enables
you to focus on maximizing profit
• Knowing which customers will be advocates and supporters - which enables
you to provide references, case studies, and to safely test new products and
services

Achieving Good CRM

Achieving effective Customer Relationship Management requires many organizations to
adopt a new perspective. Consider the following:

• Traditional customer service is something you 'do to' the customer

• Modern Customer Relationship Management is 'done with' the customer

The second statement is emphasizes the big differences between conventional traditional
customer service, and the modern progressive CRM approach.

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• Your relationships with customers should be ongoing, cooperative, and built for the long
term.
• Organizations that have many transitory relationships with customers consequently
have to spend a lot of money on finding new customers.
• The cost of keeping existing customers is a tiny fraction of the cost of acquiring new
customers.
Focus on Building Relationships

The essential CRM focus of any organization should be on developing core competencies,
and an overall strategy of building customer relationships. In this way, all efforts in the
organization can be aligned to:

• Customers and the culture of exceeding of customer expectation

• Understanding and managing the people impact on the culture of the organization
• Customers being recognized and treated as partners
• The value of relationship-building being valued
• Service being seen as a value-adding activity
• Reward and recognition being based on customer focus i.e., 'going the extra mile'
• Evidence of corporate support for service activity

Characteristics of Excellent CRM

The following characteristics are associated with delivery of excellent CRM:

• Reliability
• Responsiveness
• Accessibility
• Safety
• Courtesy
• Consideration
• Communication
• Recognizing the customer
• Competence

CRM and communications

Communication is central to any successful relationship. In terms of Customer
Relationship Management, communication needs to be consistent and high
quality; as determined by:

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• On time
• Focused
• Relevant
• Reliable
• Coherent

Importantly also, for effective communications it's the message and meaning that is
received that counts, irrespective of what the communicator thinks they've said, or written.
Communications must be judged most vitally by the reaction of the receiver. If the reaction
is not good then the communication is poor.

The information contained in a CRM system allows communication to be directed at the

correct audience, in the correct way. The communication system must also encourage and
facilitate honest and actionable
feedback.
Feedbacks from customers - especially complaints - are essential for good organizational
performance and ongoing development. Most organizations avoid, discourage and hide
from complaints. Don't. Complaints are free guidance for improving your quality, and free
opportunities to increase customer loyalty.

People and CRM

As with any other business process your people have a huge impact on the success of the CRM
process.
Successful and effective Customer Relationship Management people tend to display the
following key characteristics:

• Positive attitude
• People orientation
• Organizational skills
• Analytical skills
• Customer focus (natural empathy)
• Understanding of the link between CRM and profitability

On the subject of empathy: Empathy is about understanding, not necessarily agreeing.

Effective customer focus enables the organization and its staff to see both sides, and to
work with the customer to arrive at a mutually satisfactory and sustainable solution.
Agreement alone amounts to capitulation, which is neither practicable nor sustainable.

Benefits of Effective CRM

There are significant business benefits which accrue from an effective, integrated Customer

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Relationship Management approach. These include:

• Reduced costs, because the right things are being done (i.e., effective and efficient
operation)
• Increased customer satisfaction, because they are getting exactly what they want
(i.e., exceeding expectations)
• Ensuring that the focus of the organization is external
• Growth in numbers of customers
• Maximization of opportunities (e.g., increased services, referrals, etc.)
• Increased access to a source of market and competitor information
• Highlighting poor operational processes
• Long term profitability and sustainability

Forward thinking organizations understand the vital need to maintain a strategic focus on
CRM and to resource and manage it appropriately.

CRM software solutions and ICT (information and communications

technology)
Software and ICT play a significant part in enabling an effective CRM capability, especially in
large organizations.

There are many and various systems available, and it is important to have a clear idea of
your requirements during the software solution selection process, which for most
organizations will also involve the selection of ICT service provider too, since any software
solution, for all but very small companies, generally requires support for specifying,
implementation, training and maintenance.

Siebel, Sage (who now provide the well-known Accpac and ACT! CRM solutions), and
Front Range (whose product is Goldmine) are all significant and proven CRM software
products companies. There are many others, and very many more ICT service providers
through whom distribution and support is normally arranged.

As with any ICT project, ensure you work with reliable and knowledgeable advisors, with
access to cost- effective proven solutions, which can help you to build and implement an
effective CRM software and ICT capability.

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ERP

What is ERP?
ERP is the acronym for Enterprise Resource Planning, an ambitious term that in reality
attempts to integrate all departments and functions across a company onto a single computer
system.

Why use or think about implementing ERP?

Implementing a solution at the enterprise level allows organizations to get rid of
standalone computer systems in finance, HR, manufacturing and the warehouse and
replaces them with a software solution with individual sub modules for each department.
The key difference is that now finance can look into the warehouse module and check if
the pending orders from a day before have been processed or not. This allows inter-
departmental monitoring of business processes while allowing the management to
correlate reports that provide a clearer picture of the enterprise as information is being
used from across all levels and departments of the organization.

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Our ERP Solutions

Our ERP solutions can be purchased by as a complete package or by module. We offer
complete services from consulting, requirement analysis to development, implementation
and user training for ERP systems.

Scope of ERP
◻ Integrate Financial Information
◻ Integrate Customer Order Information and Store Customer History
◻ Streamline the manufacturing process
◻ Standardizing HR Information
◻ Store and Analyze productivity information for employees and facilities
◻ Allow inter-departmental process monitoring and reporting
◻ Reports with data from across the organization
◻ Allow Marketing and Management to monitor and analyze all stages required to provide
the clients with products and services
◻ Allow users limited and monitored access to data across the organization according to needs.

ERP and E-commerce

E-Commerce has long moved from marketing trend to a proven method of increasing
commerce and sales by allowing direct marketing and giving consumers the freedom of
choice.

This is a twofold phenomenon which helps our clients integrate into their existing ERP
system with a complete E-Commerce facility. The first channel built allows the business to
communicate with the customers (B2C1) and the second channel allows suppliers and
partners to communicate with the organization (B2B2). This allows clients to streamline
Customer interaction while maintaining accurate records of their interaction for analyses
and use in marketing strategies.

ERP: Beneficial for the Management, Marketing and Employees

ERP has many benefits for the Management and Marketing, but a properly designed and
implemented system will be appreciated by Employees as well for all the benefits it offers
to everyone in the organization.

The Employees are now able to store their data and productivity reports at central locations.
This allows data security and allows for document sharing. This allows productivity to
increase while reducing the actual work for Employees. As data access in now limited and
secure, there are less chances for data theft, which removes the need for direct monitoring
of employees which often makes them uncomfortable. As sub modules are developed with

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the help of users they are able to use systems that they are comfortable with and have
received training for. This increases productivity as now the need to learn irrelevant features
using third party solutions is not necessary.

The Marketing and Sales of an organization also has a lot of benefits if a robust ERP is
being used. They are able to store and analyze information pertaining to Customers‟. This
could be about the status of
orders‟ or the history of each customer. By employing Data Mining and Business
Intelligence Tools this data can be used to profile customers and come up with future
marketing and sales strategies that maximize customer value.

The Management is the biggest beneficiary of a successful ERP system. They are able to
monitor and get reports and all aspects of the organizations operations. This allows them to
see a clearer picture of the
status and direction of the organizations‟ processes.

1. B2C means Business to Client

2. B2B means Business to Business

Why organization buy ERP system
The main reason that drives an organization decides to impalement ERP solution is usually
inefficiencies of business process. Together with delivering the obvious advantages of
business process automation, enhanced operational efficiencies and easier accessibility of
information, ERP system implementation surely can fix the system a company executes its
day by day processes.

Organizations think about purchasing ERP system when they deal with a number of
complex and interrelated business troubles. Most of them expect to get business advantages
through ERP implementation, such as :

❖ Achieving company‟s financial goals as a result of productivity gains as well

as efficiency resulting from business process automation.

❖ Managing and streamlining the large-scale the company‟s operational processes,

that may have raised in complexity due to acquisitions in the recent past or current
significant organic growth, and also acquiring multi-currency, multi-office,
multi-geography support

❖ Replacing or upgrading the existing ERP system that is out of date or not capable
of helping the company‟s day to day processes

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❖ Obtaining the benefits of improved information management through the

enhanced information accessibility, reduced data duplication and also better
forecasting features.
Ten Things You Should Know about ERP System

1. No exact fit: Know that no ERP package provides features that can precisely fulfill all of
the company‟s business requirements. A few level of customization and configuration of
the ERP package along with the business process of a company are definitely needed in the
course of ERP system implementation.

2. Modules vs. suite: An organization can implement only few modules as they required or
the entire ERP system suite. Each one can be applied alone or perhaps in conjunction with
other modules

3. You have to mix and match modules: Lots of ERP system modules and functionalities
are contained in different ERP packages. ERP modules are often broadly classified into 3
categories: sector-specific, cross-industry and extended ERP system modules.

4. Add-on features / functionalities drive ERP: Because of the commoditization of

core ERP features (for instance financial accounting), add-on features, applications of
industry-specific, as well as improvements are getting to be more important and are the
actual drivers of the ERP system market nowadays.

5. Options to On-Premise can be found: The traditional on-premise ERP implementation

has been joined by open source ERP and also on-demand / SaaS ERP as feasible ERP
alternatives. Open source ERP systems have yet to really carve out a place on the market
while SaaS ERP systems, particularly pertaining
to HCM and CRM, have started getting traction.

6. Pricing models: The most common pricing model for ERP system is Licensed-based
pricing whereas software expenses paid in advance. A variety of options available in this
model consist of user-based (concurrent user and named user) pricing, package-based
pricing, location-based and / or location based. One more pricing model-subscription-based
pricing is typically used for on-demand ERP systems. In such model, service fees are paid
on a periodic or monthly basis.

7. Return On Investment (ROI) expectations: it‟s uncommon when ROI coming from
ERP implementation is seen right away. In ERP case, ROI is recognized from process
enhancements and not only from ERP software. Realignment of business process in any

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company is determined by factors, like the process complexity, number of stakeholder

involved and the proposed change user acceptance, and these normally take time for being
effective.

8. Customization or configuration: An ERP system usually needs to be configured / set

up in order to make it perform the way you would like to the extent the system allows.
Additionally, the company has to modify or customize the source code or creating software
to fulfill its requirements. ERP system configuration must always be pursued prior to
customization. Modifications or customization must always be the last effort, since it could
potentially cause the system being complex, hard to maintain, complicated to integrate with
different system and also nonviable for support of ERP vendor.

9. Implementation: An ERP system implementation is the most important and difficult

phase in the entire process. Inadequate implementation, flawed data migration or
conversion and insufficient support of post implementation can cause even feature-rich
software perform poorly. On the other hand, the comprehensive implementation along with
good support of post implementation obviously can make ERP software an excellent fit.

10. Cost components: Along with fees for standard license and implementation services,
there other small unpredicted cost components which can get out of hand as well as can
take customers by surprise. These kinds of expenses comprise big unforeseen modification
cost, high and recurring cost of training, data migration / conversion costs, key ERP team
member‟s replacement cost and maintaining parallel systems cost.

What is ERP life cycle?

ERP lifecycle is in which highlights the different stages in implementation of
An ERP. There are different stages of the ERP implementation that are as
give below:
1. Pre evaluation Screening
Once the company has decided to go for the ERP system, the search for the package
must start as there are hundreds of packages it is always better to do a thorough and
detailed evaluation of a small number of packages, than doing analysis of dozens of
packages. This stage will be useful in eliminating those packages that are not suitable
for the business process.
2. Evaluation Package
This stage is considered an important phases of the ERP implementation, as the
package that one selects will decide the success or failure of the project.
Implementation of an ERP involves huge investments and it is not easy to switch
between different packages, so the right thing is „do it right the first time‟. Once the
packages to be evaluated are identified, the company needs to develop selection criteria

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that permit the evaluation of all the available packages on the same scale.
3. Project Planning
This is the phase that designs the implementation process. It is in this phase that the details
of how to go about the implementation are decided. Time schedules deadlines, etc for the
project are arrived at. The plan is developed, roles are identified and responsibilities are
assigned. It will also decide when to begin the project, how to do it and it completion. A
committee by the team leaders of each implementation group usually does such a planning.
4. GAP analysis
This is considered the most crucial phase for the success of ERP implementation. This is
the process through which the companies create a complete model of where they are now,
and in which direction will they opt in the future. It has been estimated that even the best
packages will only meet 80% of the
company‟s requirements. The remaining 20% presents problematic issues for
the company‟s reengineering.
5. Reengineering
It is in this phase that human factors are taken into consideration. While every
implementation is going to involve a significant change in number of employees and their
job responsibilities, as the process becomes more automated and efficient, it is best to
treat ERP as an investment as well as cost cutting measure.
6. Team training
is also an important phase in the implementation, which takes place along with the
process of implementation. This is the phase where the company trains its employees to
implement and later, run the system. Thus, it is vital for the company to choose the right
employee who has the right attitude- people who are willing to change, learn new things
and are not afraid of technology and a good functional knowledge.
7. Testing
This is the phase where one tries to break the system. One has reached a point where the
company is testing the real case scenarios. The system is configured and now you must
come up with extreme cases like system overloads, multiple users logging on at the same
time, users entering invalid data, hackers trying to access restricted areas and so on. This
phase is performed to find the weak link so that it can be rectified before its
implementation.
8. Post implementation
One the implementation is over, the vendor and the hired consultants will go. To reap the
fruit of the implementation it is very important that the system has wide acceptance. There
should be enough employees who are trained to handle problems those crops up time to
time. The system must be updated with the change in technology. The post
implementation will need a different set of roles and skills than those with less integrated
kind of systems. However, an organization can get the maximum value of these inputs if
it successfully adopts and effectively uses the system.

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Knowledge Management System

Knowledge Management System (KM System) refers to a (generally generated via or
through to an IT based program/department or section) system for managing knowledge in
organizations for supporting creation, capture, storage and dissemination of information. It
can comprise a part (neither necessary nor sufficient) of a Knowledge Management
initiative.

The idea of a KM system is to enable employees to have ready access to the organization's
documented base of facts, sources of information, and solutions. For example a typical
claim justifying the creation of a KM system might run something like this: an engineer
could know the metallurgical composition of an alloy that reduces sound in gear systems.
Sharing this information organization wide can lead to more effective engine design and it
could also lead to ideas for new or improved equipment.

A KM system could be any of the following:

➢ Document based i.e. any technology that permits

creation/management/sharing of formatted documents such as Lotus Notes,
SharePoint, web, distributed databases etc.
➢ Ontology/Taxonomy based: these are similar to document technologies in the
sense that a system of terminologies (i.e. ontology) are used to summarize the
document e.g. Author, Subj, Organization etc. as in DAML & other XML based
ontologies
➢ Based on AI technologies which use a customized representation scheme to
represent the problem domain.
➢ Provide network maps of the organization showing the flow of communication
between entities and individuals
➢ Increasingly social computing tools are being deployed to provide a more
organic approach to creation of a KM system.

KMS systems deal with information (although Knowledge Management as a discipline may
extend beyond the information centric aspect of any system) so they are a class of
information system and may build on, or utilize other information sources. Distinguishing
features of a KMS can include:

➢ Purpose: a KMS will have an explicit Knowledge Management objective of

some type such as collaboration, sharing good practice or the like.
➢ Context: One perspective on KMS would see knowledge is information that
is meaningfully organized, accumulated and embedded in a context of creation
and application.

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➢ Processes: KMS are developed to support and enhance knowledge-intensive

processes, tasks or projects of e.g., creation, construction, identification,
capturing, acquisition, selection, valuation, organization, linking, structuring,
formalization, visualization, transfer, distribution, retention, maintenance,
refinement, revision, evolution, accessing, retrieval and last but not least the
application of knowledge, also called the knowledge life cycle.
➢ Participants: Users can play the roles of active, involved participants in
knowledge networks and communities fostered by KMS, although this is
not necessarily the case. KMS designs are held to reflect that knowledge is
developed collectively and that the “distribution” of knowledge leads to its
continuous change, reconstruction and application in different contexts, by
different participants with differing backgrounds and experiences.

➢ Instruments: KMS support KM instruments, e.g., the capture, creation and

sharing of the modifiable aspects of experience, the creation of corporate
knowledge directories, taxonomies or ontologies, expertise locators, skill
management systems, collaborative filtering and handling of interests used to
connect people, the creation and fostering of communities or knowledge networks.

A KMS offers integrated services to deploy KM instruments for networks of participants,

i.e. active knowledge workers, in knowledge-intensive business processes along the entire
knowledge life cycle. KMS can be used for a wide range of cooperative, collaborative,
adhocracy and hierarchy communities, virtual organizations, societies and other virtual
networks, to manage media contents; activities, interactions and work-flows purposes;
projects; works, networks, departments, privileges, roles, participants and other active users
in order to extract and generate new knowledge and to enhance, leverage and transfer in
new outcomes of knowledge providing new services using new formats and interfaces and
different communication channels.

The term KMS can be associated to Open Source Software, and Open Standards, Open Protocols
and Open Knowledge licenses, initiatives and policies.

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Benefits of KM Systems
Some of the advantages claimed for KM systems are:

1. Sharing of valuable organizational information throughout organizational hierarchy.

2. Can avoid re-inventing the wheel, reducing redundant work.
3. May reduce training time for new employees
4. Retention of Intellectual Property after the employee leaves if such knowledge can be
codified.

How can info Router help you with Knowledge Management

➢ Promotes sharing and collaboration of corporate knowledge and intellectual assets.

➢ Easy access to fresh and timely content
➢ Notification mechanism that alerts knowledge workers to new and edited documents
➢ Robust tools to search and retrieve existing information and knowledge so that
this information can be reused and not regenerated.

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➢ Classification and Categorization of information for easy access and retrieval.

➢ Meta Data Definitions so that documents and information can be accessed
quickly based on consistent corporate criteria.
➢ Templates to create information so that all information reflects the familiar corporate
standards.
➢ Knowledge Management Portals to distribute timely content
➢ An effective Notification system that creates an informed community of users.
➢ An environment that supports and allows a community of users to contribute
information and knowledge.

Knowledge and the Firm:

An Overview and basic concepts the question of defining knowledge has occupied the
minds of philosophers since the classical Greek era and has led to many epistemological
debates. It is unnecessary for the purposes of this paper to engage in a debate to probe,
question, or reframe the term knowledge, or discover the .universal truth, From the
perspective of ancient or modern philosophy. This is because such an understanding of
knowledge was neither a determinant factor in building the knowledge-based theory of the
firm nor in triggering researcher and practitioner interest in managing organizational
knowledge. It is, however, useful to consider the manifold views of knowledge as discussed
in the information technology (IT), strategic management, and organizational theory
literature. This will enable us to uncover some assumptions about knowledge that underlie
organizational knowledge management processes and KMS. We will begin by considering
definitions of knowledge.

Knowledge Management in Organizations

The recent interest in organizational knowledge has prompted the issue of managing the
knowledge to the organization‟s benefit. Knowledge management refers to identifying and
leveraging the collective knowledge in an organization to help the organization compete.
Knowledge management is purported to increase innovativeness and responsiveness
(Hackbarth 1998). A recent survey of European firms by KPMG Peat Marwick (1998b)
found that almost half of the companies reported having suffered a significant setback from
losing key staff with 43% experiencing impaired client or supplier relations and 13% facing
a loss of income because of the departure of a single employee. In another survey, the
majority of organizations believed that much of the knowledge they needed existed inside
the organization, but that identifying that it existed, finding it, and leveraging it remained
problematic (Cranfield University 1998). Such problems maintaining, locating, and
applying knowledge have led to systematic attempts to manage knowledge.

According to Davenport and Prusak (1998), most knowledge management projects have one of
three aims:

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(1) to make knowledge visible and show the role of knowledge in an organization, mainly
through maps, yellow pages, and hypertext tools;

(2) to develop a knowledge-intensive culture by encouraging and aggregating behaviors such

as knowledge sharing (as opposed to hoarding) and proactively seeking and offering knowledge;

(3) To build a knowledge infrastructure. Not only a technical system, but a web of
connections among people given space, time, tools, and encouragement to interact and
collaborate.
Knowledge management is largely regarded as a process involving various activities. Slight
discrepancies in the delineation of the processes appear in the literature, namely in terms
of the number and labeling of processes rather than the underlying concepts. At a minimum,
one considers the four basic processes of creating, storing/retrieving, transferring, and
applying knowledge. These major processes can be subdivided, for example, into creating
internal knowledge, acquiring external knowledge, storing knowledge in documents versus
storing in routines (Teece 1998) as well as updating the knowledge and sharing knowledge
internally and externally. We will return to the knowledge management processes in the
framework section and consider the role of IT within each process.

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Role of Knowledge Management Systems

◻ Acquire Knowledge
◻ Store Knowledge
◻ Distribute Knowledge
◻ Apply Knowledge

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BIT 6th sem. Lab Roport 2081/MIS (BIT 353)