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STRATEGIC APPLICATION OFSTRATEGIC APPLICATION OF
INFORMATION TECHNOLOGYINFORMATION TECHNOLOGYUnit IUnit I
KNOWLEDGE MANAGEMENT :Building & knowledge Creating Company:- In an
economy where the only certainty is uncertainty, theone sure source of competitive advantage is
knowledgeWhen markets shift, competitors multiply, products
become obsolete almost over night successfulcompanies are those that consistently create new
knowledge, disseminating it widely throughout the
organization & quickly embody it in new
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technologies & products these activities define the
knowledge creating company, whose sloe business
is continuous innovation. Knowledge creating
companies.
Making personal knowledge available to others is the
central activity of the knowledge creating companies
it takes place continuously & at all levels of theorganization.
Knowledge management has Become one of the major
strategic uses of information technology.Many companies are building knowledge management
systems (KMS) to manage organizational learning &
business know how.
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The goal of such systems is to help knowledge
workers create, organize & make available important
business knowledge, wherever & whenever it is
needed in an organization.This includes processes, procedures, patents,
reference works, formulas, best practices, forecast
& problem fixes.Intranet / internet websites, data mining, knowledge
data bases, on-line discussion groups are some of the
key technologies that may be used by a KMS.Knowledge management systems facilitate
organizational learning & knowledge creation.They are designed to provide rapid feedback to
knowledge workers, encourage behaviour changes by
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employees & significantly improve business
performance.KMS helps to integrate the knowledge into
organizations business process products & services.
Knowledge management can be viewed as three
levels of techniques, technologies & systems that promote the collection, organization, access, sharing
& use of work place & enterprise knowledge.
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Leverage organization know how Performance support
Building expert networks
Enterprise
Intelligence
Information
creation,sharing & mgmt.
Document Mgmt.
Capturing & Distributing expert
stories Communication & collaboration New content creation
Access & Retrieval
Documents stored on-line
1
2
3
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Knowledge management systems use information
technology to help gather, organize, share business
knowledge within organization.
Corporate intranets have become the knowledgebases for storage & dissemination.
KNOWLEDGE MANAGEMENT DEFINITION:
(KM) KM is a business activity with two primary aspects:-
1. Treating the knowledge component of business
activity as an explicit concern of business reflected in
strategy, policy & practice at all levels of theorganization.
2. Making & direct connection between an
organizations intellectual assets both explicit
(recorded) & tacit (personal know how) and
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positive business results. In practice, KM often encompasses identifying &
mapping intellectual assets within the organization,
making vast amounts of corporate informationaccessible, sharing of best practices, & technology
that enables all of the above including information
communication technology (intra net etc.) & group
ware (collaborative work groups using it). A significant element of business community also
views knowledge management. As a natural
extension of business process re-engg.) Knowledge is a fluid mix of framed experience,
values, information, expert insight & intuition that
provides an environment & framework for evaluating
& incorporating new experience & information.
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Market valuation of a company largely depends on
intangible asset like its knowledge base. Knowledge unlike any physical asset, delivers
increasing returns. KM helps avoid unnecessary work duplication,
expensive reinvention & repeated mistakes.
KM can save your company from knowledgewalkouts. KM can compress delivery schedule & help you
deliver ahead of time.
KM mutually reinforces corporate agility. The abilityof companies to react comes from their knowledge &
this agility reinforces their ability to apply such
knowledge.
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Data Information Knowledge.
KNOWLEDGE GIVES TODAYS COMPANIES
THE EDGE TO COMPETE SUCCESSFULLY.
Basic principles of knowledge management.
1. Knowledge acquisition:- The process of
development & creation of insights, skills &
relationship
Ex:- stock Broker can predict.2. Knowledge Sharing:- Distributions & making
available what is already known.
Ex:- An expert system helps & technical call centre
help desk.
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3. Knowledge Utilization:- Learning is integrated into
the organization apply in new situations
- sharing & utilizations take place same time.
ata Baseapture Tools
Acquisition Sharing
Utilization
CommunicationNetwork
asicKnowledge
anagement
echnology
Collaborative
Tools
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Basic elements of KM & typical technology tools
that can be used.
Concept of knowledge management
Knowledge terms & definitions
Information:- Relates to description, definition, or
perspective (What, Who, When, Where) Knowledge:- Comprises strategy, Practice, Method,
or Approach (How) Wisdom:- Embodies Principle, Insight, moral
(Why).
Business Intelligence:- Is the process by which
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businesses gather information specific to their use. Logic:- Is the sequential decision making process in
an organizational context.
Technology:- Particularly the informationtechnology, aimed at information & knowledge.
Strategy:- Business strategy which incorporates,
information & knowledge.
Knowledge Management:- Is about connecting
people to people & people to information to create
competitive advantage.
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INFORMATION KNOWLEDGE
1) Processed Data Actionable Information
2) Gives facts only Allows Making
predictions
3) Clear, structured,
simple can beexpressed in writtenform
Intuitive, hard to
communicate, difficult toexpress in words
COMPARING INFORMATION & KNOWLEDGE
4) Obt i d b l l ti Li i ti
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4) Obtained by calculatingdata
Lies in conversation,intuition, peoples
5) Devoid of owner
dependency
Depends on the owner
6) Handled well byinformation systems
Also needs informalchannels
7) Key Resource inmaking sense of data
Key resource in intelligentdecision making /forecasting / intuitive
judgment
8) Formalized in database /
books / documents
Evolved with experience /
formed in & shared amongcollective minds.
9) Can be packaged in
reusable form
Often emerges in minds of
people thru their experience
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CLASSIFYING KNOWLEDGE Knowledge can be classified along four key dimensions:-
Type Focus Complexity
Perishability over time
1 2 3
4
Knowledge
Type
Focus
Complexity
Perishability
Technological
Business
Environmental
Operational
Strategic
Explicit
Tacit
Low
High
CLASSIFICATIONDIMENSIONS
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Knowledge can be broadly classified into two
categories:-
1. Explicit:- Can be document or codified / E-mailed / web
page etc.2. Tacit:- Personal, Context specific, stored in the head of
people. COMPARING TACIT & EXPLICIT KNOWLEDGE
Characteristic Tacit Explicit
1 Nature:- Personal Can be codified
2 DevelopmentProcess- Difficult torecord Can be systematicallyrecorded
3 Location:- Stored in thehead of
people
Stored in documents /databases
aracter st c ac t xp c t
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aracter st c ac t xp c t
4 IT Support:- Hard tomanage, share
or supportwith IT
Well supported byexisting IT
5 MediumNeeded:-
Needs & RichCommunication Medium
Can be transferredthru conventionalelectronic channel
COMPONENTS OF KNOWLEDGE A KM system & KM strategy must support:-
Intuition Beliefs
Ground Truth Intelligence
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BUSINESS & KNOWLEDGE
KMS for the Enterprise:-
The value of a firms products & services is basednot only on its physical resources but also on
intangible knowledge assets. Some firms can perform better than others because
Judgment
Experience
Value
Assumption
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they have better knowledge about how to create,
produce & deliver products & services
This firm knowledge is difficult to imitate & unique &can be leveraged into long term strategic benefit.KMS collect all relevant knowledge & experience in
the firm & make it available wherever & whenever it
is needed to support business process & decisions. The KMS also links the firm to external sources of
knowledge.KMS support processes for discovering & codifying
knowledge, sharing knowledge distributing
knowledge as well as the processes for creating new
knowledge & integrating it into the business
organization.
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KMS applications help companies map sources of
knowledge, create corporate knowledge directories of
employees with special expertise, identify & sharebest practices & codify knowledge of experts so that
it can be embedded in information systems &
available to others.KMS also includes tools for knowledge discovery that
enable the organization to recognize patterns &
important relationships in large pools of data.
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ROLE OF KNOWLEDGE MANAGEMENT
SYSTEMS IN BUSINESS ORGANIZATION
1. Creating Knowledge KMS Provides knowledge
workers with graphics, analytical, document mgmt.
tools & also access to internal/external data to generate
new ideas.
2. Discovering & codifying knowledge Artificialintelligence systems can elicit & incorporate expertise
from human experts or find patterns or relationship
from huge database.
3. Sharing knowledge Group collaboration systems
(Group ware), can help employees access & work
simultaneously on the same document from many
different locations & co-ordinate their activities.
Orga
nizati
onalProce
ss
ffi
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4. Distributing knowledge:- Office systems &
communication tools can distribute documents &
other forms of information among knowledge
workers.
Knowledge Management in the business
organization Emergence of information & knowledge economy,
core competencies (two or three things that an
organization does best) are key organizational
assets. Producing unique products or services or producing
at lower cost than competitors is based on superior
knowledge.
K l d O i i l k l d
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Knowledge assets:- Organizational knowledge
regarding how to efficiently & effectively perform
business processes & create new products & services
that enables the business to create value. Knowledge assets are as important for competitive
advantage & survival like financial & physical assets.
Organizational Learning:-
creation of new standard operating procedures
&business processes that reflect organizations
experience. KM increases the ability of the organization to learn
from its environment & to incorporate knowledge into
its business processes.
KM f h f d l d i
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KM refers to the set of processes developed in an
organization to create, gather, store, transfer & apply
knowledge.
Information technology plays an important role inKM by supporting these processes for creating,
identifying & leveraging knowledge across the
organization. Business organizations have created explicit
knowledge mgmt. programs for protecting &
distributing knowledge
they have identified & for discovering new sources ofknowledge.
- these programs are headed by a chief knowledge
officer (CKO)
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I- ALIGNING KNOWLEDGE MANAGEMENT
WITH BUSINESS STRATEGY
Knowledge Management A strategic perspective:-
In the emerging economy, a firms only advantage
is its ability to leverage & utilize its knowledge
Industry environment is influenced by unexpected,
multiple changes making competitive advantage not
sustainable.
Initiatives like TQM, BPR, SCM, CRM etc resultedin firms attaining some competitive advantage but are
replicable & not sustainable over longer period of
time.
Hence organizations are now focusing on methods of
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Hence organizations are now focusing on methods of
creating new knowledge & harnessing existing
knowledge to gain competitive advantage.
Sustainable competitive advantage thru knowledgemgmt. - major focus for modern organizations.
Strategy Concept & Framework Strategy is a
method / plan by a firm to balance its external (OT)
environment & the internal (SW) capabilities. Porters notion of competitive advantage says
resources & capabilities of an organization can be asource of competitive advantage if they process
certain characteristics of being rare, durable and
difficult to imitate.
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If a firm have resources with these characteristics,
they can position themselves strategically on the
basis of these resources & capabilities.
Tangible resources mostly will not have these
characteristics & hence organizations focus should be
on intangible knowledge assets.
Resources & capabilities are easily replicable. Tacit knowledge gained thru years of experience are
not easily replicable.
Market is dynamic & going thru a string ofrealignment hence any strategy based on market &
product mix or resources or capabilities may not
provide a firm with sustainable competitive advantage
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Integration of knowledge or collective knowledge to be
stressed.
Creativity, Innovation & Knowledge Strategy
Creativity & Innovation play a very important role in
designing & driving the business strategy of any modernorganization.
Present industry scenario, an organization does not
enjoy sustainable competitive advantage merely by
possessing resources & capabilities. These resources should be used & combined in new &
different ways or develop new capabilities to gain
sustainable competitive advantage .
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Experience&
Knowledge
Creativity &
Innovation
New ways of
Combining
Existing Resources
Develop New
Capabilities
Competitive
Advantage
Some of the innovations brought out by organizations are
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Some of the innovations brought out by organizations are
result of application of new knowledge & others are
result of working with & recasting existing knowledge.
Approach to competitive advantageCompetitive
Advantage
Align KnowledgeStrategy with
Business Strategy
FormulateKnowledge Strategy FormulateBusiness Strategy
Identify
Knowledge Gap
In current dynamic industry scenario organizations
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In current dynamic industry scenario, organizations
cannot achieve sustainable competitive advantage, by
pursuing just a product market based strategy.
They need to appreciate the importance of theknowledge existing in the organization & harness the
knowledge thru appropriate KM strategy & align this
strategy with the business strategy.
II KNOWLEDGE MANAGEMENT TECHNOLOGY& THE LEARNING ORGANIZATION
The technology perspective:- Some of the
technologies associated with KM:-o Internet / Intranet
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o Data Warehousingo Data Mining
o AI / Expert Systemso Information Retrievalo Electronic Publishing Technologyo Push Technology
o Simulationo Document Managemento Collaboration
o Groupwareo DBMSo Web Mapping Toolso Help Desk Technology
KM like any other top management initiative may
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KM like any other top management initiative may
use technology as an important enabler.
Systems Perspective Systems & Infrastructurefor Knowledge Management
Information systems can promote organizational
learning by identifying, capturing, codifying &
distributing both explicit & tacit knowledge.
Once Information has been collected & organized in a
system, it can be leveraged & reused many times. Companies can use information systems to codify
their best practices & make knowledge of these
practices more widely available to employees.
Best Practices:- Are the most successful solutions or
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Best Practices:- Are the most successful solutions or
problem solving methods that have been developed
by a specific organization or industry.
In addition to improving existing work practices, theknowledge can be preserved as organizational
memory to train future employees or to help them
with decision making.
Organizational memory Is the stored learning
from an organizations history that can be used for
decision making & other purpose.
Information systems can also provide knowledgenetworks for linking people so that individuals with
special areas of expertise can be easily identified &
tacit knowledge can be shared.
KM R i A i f ti t h l
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KM Requires:- An information technology
infrastructure that facilitates the:-
- Collection of knowledge- Sharing of knowledge.- Also requires software for distribution of information
(knowledge) & make it more meaningful.
It systems that are used:-
1 Group Collaboration systems2 Office Systems
3 Artificial Intelligence Systems
4 Knowledge work systems
IT INFRASTRUCTURE FOR KNOWLEDGE
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IT INFRASTRUCTURE FOR KNOWLEDGE
MANAGEMENT
1. Share knowledge
Group Collaboration System
Group Ware
Intranets
2. Distribute Knowledge
Office Systems
Word Processing
Desk top data base
DTP
Imaging & Web Publishing
3. Capture & CodifyKnowledge
Artificial intelligenceSystems
Expert Systems
Nevral Nets
Fuzzy Logic
4. Create Knowledge
Knowledge Work Systems
CAD Investment Work Stations
IT i f t t f KM
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IT infrastructure for KM:-Networks/Databases/Processors/Software/Internet/To
ols etc. are used heavily for above systems
Distributing Knowledge:- Office & DocumentManagement Systems
Office Systems:- Are any application of information
technology that increases productivity of informationworkers.OFFICE ACTIVITY TECHNOLOGY
Managing Documents Word Processing / DTP /
Web Publishing / Work flowManagers.
Scheduling Electronic Calendars /
Groupware / Intranets
ommun cat ng - a o ce a
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ommun cat ng a o ce aGroupware / Intranets /Digital Answering System
Managing Data
Desktop Data Bases /Spread Sheets / UserFriendly Interfaces to Mainframe data bases
Knowledge Repository:- Collection of documentedinternal & external knowledge in a single location for
more efficient management & utilization by the
organization. In addition to streamlining workflow, web based &
traditional document management systems provide
tools for creating knowledge repositories to help
organizations consolidate & leverage their knowledge.
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Creating Knowledge:- Knowledge work systems
(KWS)
KWS are information systems that aid knowledge
workers in the creation & integration of new
knowledge in the organization.
Knowledge work is that portion of information workthat creates new knowledge & information
Knowledge workers perform three key roles that are
critical to the organization:-
1) Keep the organization up to date in knowledge as it
develops in the external world.
2) Serving as internal consultants regarding the areas of
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2) Serving as internal consultants regarding the areas of
their knowledge, the changes taking place & the
opportunities.
3) Acting as change agents evaluating, initiating &promoting change projects.
Most knowledge workers rely on office systems such
as word processors, voice mail & calendars but they
also Require more specialized work systems
Knowledge work systems are specifically designed to
promote the creation of knowledge & to ensure that
new knowledge & technical expertise are properly
integrated into the business.
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Requirements of Knowledge Work Systems:
1) Must give knowledge workers the specialized toolsthey need such as powerful graphics, analytical tools,
communication & document management systems.
2) These systems require great computing power to
rapidly handle the sophisticated graphics or complexcalculations required by knowledge workers as
scientific researchers, product designers & financial
analysts.3) Knowledge workers are focused on knowledge in the
external world, so system should give easy & fast
access to external data base.
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External
knowledge
Base
Software Graphics Visualization
Modeling Simulation Document Management Communication
UserInterface
Hardware Platform:- Knowledge Work Stations
REQUIREMENTS OF KNOWLEDGE WORK
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REQUIREMENTS OF KNOWLEDGE WORK
SYSTEMS
Examples of Knowledge Work Systems
1) Computer aided design (CAD):-
- Information systems that automates the creation &
revision of design using sophisticated graphics
software.
2) Virtual Reality Systems:-
- Interactive Graphics software & hardware that createcomputer generated simulations that emulate real life
situation
Ex:- Aircraft design stress patterns.
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Virtual reality applications are being developed for
the web using & standard called (VRML) or Virtual
reality Modeling Language.
3) Investment Work Station:- Powerful desktop computer for financial specialists,
which is optimized to access & manipulate massiveamounts of financial data.
High end PCs used in financial sectors to analyze
trading situations instantaneously & facilitate
portfolio management. The financial industry is using specialized investment
workstations to leverage the knowledge & time of
brokers, trades, portfolio managers.
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Firms like DSP Merrill Lynch have installed
investment workstations that integrate a wide range
of data from both internal & external sources. Sharing knowledge:- Group Collaboration Systems
& Enterprise knowledge environment (Intranets) Community of Practice:- Informal group of people
that may live or work in many different locations butwho share a common professional interest. An
important source of expertise for organizations.
Ex:- Linux users group in a corporation that primarily
uses windows operating system.- Group in an international bank with special interest
in leading activities in south east Asia.
Groupware & Web Collaboration Tools:-
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Groupware & Web Collaboration Tools:
- Groupware is built around three key principles:-
Communication Collaboration Co-ordination
- It allows groups to work meetings, route electronic
forms, access shared folders, participate in electronic
discussions/conferencing, develop shared data base,
e-mail.
Information intensive companies such as consultingfirms, law firms & financial management companies
found group ware an especially powerful tool for
KM.
Internet tools for e-mail news group discussion
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Internet tools for e mail, news group discussion,
conferencing offer collaborative work. Proprietary groupware remains a key tool for
application requiring extensive collaboration,document tracking & frequent updating.
Lotus notes, open text live link & other groupware
products are used for sharing knowledge. Knowledge Map:- Tool for identifying & locating
the organizations knowledge resource.
Enterprise Information Portal:-
- Software application that enables companies to
provide users with a single gateway to internal &
external sources of information.
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- Portals help individuals navigate through various
knowledge resources also called knowledge
portals.
- Portals provide single point access to the firms
knowledge resources & helps the firm coordinateinformation / decision.
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- ENTERPRISE KNOWLEDGE PORTAL
E-Mail Web Pages Best Practices
Chat &
Conferencing
Document
ManagementProjects
GroupwareData Base &
Ware House
Research &
Reference
Search Tools
& Directories
Enterprise
ApplicationsNews Feed
Group sharing of knowledge requires team members
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Group sharing of knowledge requires team members
to believe it is in their interest to share, especially in
organizations that encourage competition among
employees. Successful knowledge sharing requires an
appropriate knowledge sharing environment.
CAPTURE & CODIFY KNOWLEDGE
Artificial Intelligence:-
Organizations are using artificial intelligencetechnology to capture individual & collective
knowledge & to codify & extend their knowledge
base (AI).
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AI is the effort to develop computer based systems
(both hardware & software) that behave as humans.
Such systems would exibit logic, reasoning, intuition
& commonsense qualities that we associate with
human beings.
The field of AI includes:-
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The field of AI includes:
Artificial
Intelligence
Natural
LanguageRobotics
Expert
Systems
Intelligent
Machines
Why business is interested in AI?
To store information & preserve expertise. Create & mechanism that is not subject to human
feeling fatigue etc. To eliminate routine jobs & unsatisfying jobs held by
people.
Handle massive & complex problems.
Capturing Knowledge Expert Systems:
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Capturing KnowledgeExpert Systems:-
Expert systems are knowledge intensive computer
program that captures the expertise of a human inlimited domain of knowledge.
Ex: Diagnosing a cars ignition system, rules of thumbused by real world experts can be understood,
codified & kept in a machine.
Expert systems lack the breadth of knowledge & theunderstanding of fundamental principles of an human
expert. They are quite narrow.
The model of human knowledge used by expert system is
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g y p y
called the knowledge base. An expert. System contains a number of rules to be followed, when
used. Organizational Intelligence Case-Based Reasoning
(CBR)
CBRs are AI technology that represents knowledge as a
database of cases & solutions done in past. The system generates a six step process to find
solutions to new problems encountered by user.
How Case Based Reasoning Works
o CBR represents knowledge as a database of past
cases & their solutions.
User Describes The Problem1
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User Describes The Problem
System Searches Data Base
System Asks User
Additional Qs
System Finds Closest Fit &Retrieves Solution
System Modifies The Solution
To Better Fit The Problem
Case Database
System Stores Problem
& Successful Solutionto Database
Successful
?
1
2
3
4
5
6
YesNo
In CBR, Descriptions of past cases of human
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, p p
specialists experience, represented as a case are stored
in a database for later retrieval when user encounter a
new case with similar parameter. OTHER INTELLIGENT TECHNIQUES FOR
KNOWLEDGE CAPTURE & CODIFY Neural Networks:-
o Neural Networks are designed to imitate the physicalthought process of the biological brain.
o These are hardware or software that attempts to
emulate the processing patterns of the biological brain.o A neural network uses rules it Learns from patterns
in data to construct a hidden layer of logic.o The hidden layer then processes inputs, classifying
them based on experience of the model.
NEURAL NETWORK
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Input Layer Hidden Layer Output Layer
Income Good Credit
Risks
Debt
Age
Payment
Record
Bad Credit
Risks
N l t k li ti i f
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Neural network applications are emerging for
business, science, medicine to address problems in
financial analysis & control & optimization. Neural nets are used by finance industry to identify
patterns in vast pools of data that help investment
firms predict the performance of quity, corporate
bond rating or corporate bankruptcies. Visa international is using a neural network to help
direct credit card fraud by monitoring all visa
transactions for sudden changes in the buying
patterns of card holders. Unlike Expert System, which Provide Explanation
for their solutions, neural networks cannot always
explain why they arrived at a particular solution.
Expert systems seek to emulate or model a human
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Expert systems seek to emulate or model a human
experts way of solving problems & highly specific to
a given problem & cannot be easily retrained.
KNOWLEDGE CREATION FRAME WORK
NONAKAS MODEL (SECI MOD)
o According to Prof. Ikujiro Nonaka, knowledge
creation is a spiral process of interaction between
explicit & tacit knowledge.
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Socialization
Empathizing
Embodying
Internalization
Externalization
Articulate
Connecting
Combination
Tacit
T
acit
Tacit Tacit
Explicit Explicit
Nonacas Model (Seci Model)
E
xpli
cit
Ex
pli
cit
Interactions between the explicit & tacit knowledge
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lead to the create of new knowledge. The four modes of knowledge conversion interact in
the spiral of knowledge creation & the spiral becomes large in scale as it moves up through
organization levels & trigger new creation. Socialization (Tacit to Tacit):-
- Includes the shared formation & communication oftacit knowledge between people ie in meetings.
- Knowledge sharing is often done without ever
producing explicit knowledge & to be most effective,should take place between people having common
culture.- So, tacit knowledge sharing is connected to ideas of
communities & collaboration.
Externalization (Tacit to Explicit):-
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- By its nature tacit knowledge is difficult to convert
into explicit knowledge.- Thru conceptualization, elicitation & ultimately
articulation, some proportion of a persons tacit
knowledge may be captured in explicit form.
- Typical activities when conversion takes place are indialog among team members, in response to Qs or
thru the elicitation of stories.
Combination (Explicit to explicit):-- Explicit knowledge can be shared in meetings via
documents, e-mails etc. or thrus education &
training.
Use of technology to manage & search collections of
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explicit knowledge is well established.- An ex: use text classification to assign documents
automatically.- Put a document in a shared data base. Internalization (Explicit to Tacit):-
- In order to act on information, individuals need tounderstand & internalize it, which involves creating
their own tacit knowledge.- By reading document they can to some extent, they
can re experience what others previously learned.- Also, reading doc., they have opportunity to create
knowledge by combining their existing tacit
knowledge with knowledge of others.
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- A typical activity would be to read & study doc.
From a number of data bases.
- Knowledge creation results from interaction ofpersons & tacit & explicit knowledge.
- Through interaction with others, tacit knowledge is
externalized & shared with others.- Technologies that may be applied to facilitate
knowledge conversation process:-
Tacit to Tacit Tacit To Explicit
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p
E-meetings Answering to Qs
Chat (Synchronous
Collaboration
Annotations
Explicit To Tacit Explicit To Explicit
Visualization Text Search
Browsable Video / AudioPresentation
Document & Acquisition
Basic knowledge Processes Acquisition,
Production & Integration of knowledge occur
throughout the organization to foster organizational
learning.
KNOWLEDGE LIFECYCLE MODEL1 O t id W ld
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1. Outside World
Step 1:-
Acquire Information or knowledge
Training Researching
Browsing
ReadingPublished or Printed Work
2. Individual Team or Community
Step 2:-Produce Knowledge
3. Transfer Knowledge
Step 3:-
Integrate Kno ledge
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Integrate Knowledge Expose Best Practices. (Redesign processes with
embedded knowledge) Structure & store knowledge for instant access. Share knowledge. Instruct / Present knowledge.
Knowledge Management Technologies:- Some
Soft Ware Tools
- Following s/w tools were evaluated for performance
by a Chicago based product assessment firm &
widely used in the industry:
1. WINCITE 5.0:-
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Most mature KM product in use for more than 10
yrs.
Used for competitive intelligence & few more areas. Designed to manage a shared data base & helps
analysis. The program is designed with presumption that
people will analyze & contribute value to what is
stored. Uses a group model, where putting content into
knowledge base is done by KM group but users can
suggest additions. Users can add notes with proposed, suggestions,
updates or new information. The KM group can see these notes & incorporate part
or all of them.
KM group & users can add information to the
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knowledge base by using forms. Each form contains a defined field / or fields & one
can add information manually, add as an attachment,or dynamically link to documents outside wincite, in
dedicated databases or internet. Wincite uses multidimensional data base model
organized into a relational database (RDBMS).
2. INTRASPECT 1.5:-
It creates a group memory by storing information
in maps customized to each end user &
communicated thru intranet, e-mail networked file
etc.
The programme design assumes users will both
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p g g
contribute to group memory & consume
information.
The systems peer-to-peer model grants wideauthority to contribute & inform.
Every piece of knowledge information has an e-mail
address. Information sent to the knowledge base can be
supplemented by user.
KM s/w tools.. (Contd.).
3. CHANNEL MANAGER 2.0 :-
It is a set of tools designed to gather information &
content from internal & external sources.
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applications with its main area of strength being the
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ability to push channels of information to a wide
range of desk top users.
The s/w tool is designed to gather information fromany. source (internet news feed, internal users etc.) &
broadcast it to the users who need it.The s/w user push technology as the mechanism to
deliver information in any file format. The goal of the product is not to store information in
a central repository for archival recall, but to turn
available sources into channels & disseminateinformation on a timely basis to users who need it.
The end user interface includes embedded browser &
windows explorer like navigation system.
Back web has user s/w for most desk top users
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including Windows & Macintosh.
5. KNOWLEDGE X 1.0 :- This KM s/w tool is designed to serve as a
centralized repository of categorized information &
then deliver it in forms that ease the work of analysis.
The KM s/w is most effective when its use is
centralized to a few experts who can master its
concepts, then use its dissemination features to
provide targeted, automated reports to a broader set
of consumers. The application of this tool is mainly for
competitive intelligence knowledge.
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STRATEGIC APPLICATION OF IT ISTRATEGIC APPLICATION OF IT I
E. R. PE. R. P
BUSINESS MODULES IN ERP PACKAGEBUSINESS MODULES IN ERP PACKAGE
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Business Environment & Business
Process
Financial
Management
HR
Management
Manufacturing
Quality
Management
Materials
Management
Production
Planning
Plant
Maintenance
Sales &
Distribution
ERP
SYSTEM
ERP SYSTEM
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o Business can be defined as the activities of
individuals or groups, involved in developing, producing & distributing the goods & services
needed to satisfy other peoples needs.o Business used resources to produce & services.
These resources are:-
1) Infrastructure (Land/Plant etc.)
2) Labour (Human Resource)3) Capital (Financial Resource)
o Resources become productive when combined in a
rational way for some creative or gainful purpose (.)
this is the function of the (4) th resource:
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this is the function of the (4) th resource:
Managemento Management combines the resources in different
ways to produce goods & services.
o It is the function of management to plan the effective
& efficient use of the resources available to the
enterprise.o The ERP systems help the management in making
the planning process more productive & efficient
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Resources
- Infrastructure
Produced Goods
Human Resource
inancial Resource
Management
Production
Process
ERP
Products &
Services
o ERP enables integration & automation of variousb siness f nctions (Rather than f nctioning in
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business functions (Rather than functioning in
isolation).
o Different modules in ERP are integrated they send& receive data across departmental barriers.
o Automation improves productivity & reduces
response & reaction time.
o A task which involved the co-ordination of two orthree departments, would take days in a non-erp
environment (.) with procedure integration &
automation, the same task will be completed inminutes (.)o Single action may trigger _______ lot of other
processes in different modules.
Ex:- Order Processing
BUSINESS MODULES IN ERP PACKAGE
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A) FINANCE:- Finance module of most ERP systems
will have the following sub systems:-1) Financial Accounting
- General ledger
- Accounts receivable/Payable- Special Ledger- Fixed Asset Accounting- Legal Consolidation
2) Investment Management
- Investment Planning / Budgeting / Controlling /
Depreciation Forecast / Simulation / Consolidation.
3) Controlling
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3) Controlling
- Overhead Based Costing
- Activity Based Costing- Product Cost Accounting- Profitability Analysis
4) Treasury
- Cash Management- Treasury Management
- Market RiskManagement
- Funds Management
5) Enterprise ControllingExecutive Information System
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- Executive Information System- Business Planning & Budgeting
- Profit Centre Accounting
B) MANUFACTURING (PRODUCTION)
o The major subsystems of manufacturing ERP moduleare:-
1. Material & capacity planning
2. Shop floor control3. Quality management
4. Jit/Repetitive Manufacturing
5. Cost Management
6. Engineering data mgmt.7 Engineering change control
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7. Engineering change control
8. Configuration mgmt.
9. Serialization / Lot control10.Tooling
C) HUMAN RESOURCE
o The major subsystems of HR module of ERP are:-
1. Personnel Management
- HR master data- Personnel Administration
- Information systems
- RecruitmentBenefits administration
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- Benefits administration- Salary administration
2. Organizational Management- Organizational structure- Staffing / job description
3. Payrole Accounting
4. Time Management
- Shift Planning- Work schedule- Absence Record
5. Personnel Development- Career / Succession Planning
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- Career / Succession Planning- Training Requirement
- Skills / Qualification Assessment.
D) PLANT MAINTENANCE
o Major subsystems of plant maintenance ERP moduleare:-
1. Preventive Maintenance control
2. Equipment tracking3. Component tracking
4. Plant maintenance / warranty claim tracking
5. Equipment calibration tracking ISO 9000
requirement.
E) MATERIALS MANAGEMENTo The major sub modules are:
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o The major sub-modules are:-
1. Purchasing
2. Pre-purchase activities3. Vendor evaluation
4. Inventory Management
5. Invoice verification &
6. Material inspection
F) SALES & DISTRIBUTION
o The major sub-modules are:-
1. Master data management
2. Order management
3. Ware house management
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4. Shipping
5. Billing
6. Pricing7. Sales support
8. Transportation
9. Foreign trade
ERP MARKET
o ERP software market is very competitive & fast
growingo Annual growth rate nearly 40%o ERP vendors are expanding market presence by
offering new applications such as SCM, CRM, sales
force automation etc.
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o Which ERP originated in the manufacturing market,
usage now has spread to every type of enterprise
including retail, utilities, public sector, healthcare etc.
The top five ERP vendors:-
SAP AG. 36% Oracle applications 10% People soft 7%
Baan 6% J.D. Edwards 7% Others (SSA, JBA, QAD etc.) 34%
Indian Scenario:-
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RAMCOs marshall is having 10% market share.
Others are SAP R/3, QADs MFG / PRO, OracleFinancial, Baan etc.
o Each vendor, due to historic reasons, has specialty in
particular module area, Ex:- SAP Logistics,Baan Manufacturing, People Soft HR,
Oracle Financialso Also about 50 established vendor for SME sector.
A)SAP AG Flagship product is SAP R/3 & mySAP.com.
o Systems applications & productso
Started by five Ex. IBM engineers for developing
business application softwares that were integrated.o First ERP product R/2 was launched in 1979 using
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o First ERP product R/2 was launched in 1979 using
centralized main frame system.o Redesigned as R/3 in 1992 on client-server architecture.o SAP AG is the largest ERP vendor cover 17000
customers in over 100 countries.o My SAP.com is the internet enabled ERP product.
o SAP AG has strong industry focused solution & longterm vision.
B. Oracle Corporation:- Flagship Product Oracle
Applicationso Best known for its data base s/w & related
applications (RDBMS).o 2nd largest s/w company after Microsoft.
o Oracles ERP system known as oracle applicationshaving more than 50 different modules in six major
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having more than 50 different modules in six major
categories:- Finance, Accounts Payable, HR,
Manufacturing, Supply Chain, Projects & Front Office.o Oracle has integrated its ERP solutions with the
internet & has introduced several applications in the e-
commerce.
o Tow powerful products with internet infrastructure1. Oracle 9 2 database
2. Oracle 9 2 application server
o Another significant feature of oracle is its OSBS
(oracle small business suite) provided consistent
financials, payroll, inventory control, order entry
purchase order & CRM functionality delivered as
web service.
c) People Soft inc Flagship Product People Soft 8
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o ERP s/w firm started in 1987 specialization in HR
mgmt. & financial services modules.o Enterprise solutions from people soft include
modules for manufacturing, materials mgmt.,
distributions, finance, HR, SCM.
o Main competitors:- SAP AG & oracle with longerexperience with customers & flexible attitude.
o Flagship application people soft 8 is a pure internet
based collaborative enterprise system.o People Soft 8 requires no client soft ware other than
a standard web browser giving ability to run
business any where, any time.
D. The Baan Company Flagship Product Baan ERPo Founded in 1978 in the Netherlands, Baan Started with
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o Founded in 1978 in the Netherlands, Baan Started with
s/w expertise in manufacturing industry.o
Baan ERP covers finance, procurement, manufacturing,integration & implementation, planning, sales, service
& maintenance, collaborative commerce & business
intelligence.
E. J.D. Edwards & Co. Flagship Product One Worldo J.D. Edwards was founded in 1977 in Denver (USA)
with long experience of supplying s/w for IBM as / 400
market.o One World is the ERP solution capable of running on
multiple platforms & with multiple data base.o The product includes modules for finance,
manufacturing, distribution, logistics, HR, quality
management, maintenance mgmt., data warehousing,customer support, & after sales service.
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customer support, & after sales service.o One World ERP package is more flexible & within
reach of smaller enterprises.o J.D. Edwards internet enabled version launched is
known as One World xe (xe stands for extended
enterprise).
o J.D. Edwards World Software Provides necessaryfunctionality & buift in longevity reduces problem of
obsolescence.o
Different modules available in J.D. Edwards are:- Financial suite Logistics / Distribution Manufacturing Suite
Engineering / Architecture / Construction / Real Estate
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g g Energy & chemical suite
Payroll Human Resource
Utility / Energy solutions
F. SSA System Software Associates
o SSA was founded in 1981 in Chicagoo Companys flagship product is BPCS client server V
6, which has successfully addressed the most critical
issues facing the ERP market the implementation
& integration of package applications.
ERP Present & Future
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ERP will continue to dominate the business practice
areas of financial mgmt., HR & manufacturing. Major developments will be in supply chain
management, CRM, retail, utilities etc. Major vendors will supplement direct sales thru
resellers. Will improve the implementation methodology for
faster deployment
Lower entry price point of ERP s/w to make itfinancially viable. Convergence on windows NT growing popularity of
windows NT forced ERP vendors to offer products on
this platform.
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Business Process Reengineering.
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Installation & Configuration. Project Team Training.
Business Requirement Mapping. Module Configurations. System Interface.
Data Conversion. Custom Documentation. End User Training. Acceptance Testing.
Post Implementation audit. Above steps are grouped & subdivided into four major
phases - namely
1) Detailed Discussions.
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2) Design & Customization
3) Implementation
4) Production
ERP Case Studies
The purpose of the case studies is to provide an idea of
the situations where ERP projects are implemented &
the benefits of these implementation with analysis of
ERP success & failure in implementation.
CASE:- ERP Implementation EDMAC
C C I
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Compressor Company, Inc
The case study (Distributed in the class)Highlights a success story of ERP implementation.
Major factors for success:-
1) Involvement of Mgmt. 2) Training. 3) Change Mgmt.4) Plan Ahead. 5) Allow for Fail-Safe. 6) Reward
Employees.