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Chap07.ppt

  1. 1. • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •
  2. 2. ENTERPRISE INFRASTRUCTURE AND INTEGRATION Building the Dynamic Enterprise Chapter 7
  3. 3. STUDENT LEARNING OUTCOMES <ul><li>Define an enterprise system. </li></ul><ul><li>Describe an enterprise resource planning (ERP) system. </li></ul><ul><li>List and describe the seven “ilities.” </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  4. 4. STUDENT LEARNING OUTCOMES <ul><li>List the key traits that an IT infrastructure should exhibit. </li></ul><ul><li>Describe the differences among the four types of IT infrastructures. </li></ul><ul><li>Explain the difference between backup and recovery. </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  5. 5. STUDENT LEARNING OUTCOMES <ul><li>State the purpose of a disaster recovery plan. </li></ul><ul><li>Explain the need for system integration. </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  6. 6. One View for Del Monte Foods <ul><li>Del Monte needed to overhaul its IT infrastructure </li></ul><ul><ul><li>Migrate from multiple platforms </li></ul></ul><ul><ul><li>Consolidate applications to a central single system </li></ul></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  7. 7. One View for Del Monte Foods <ul><li>Develop an ERP system </li></ul><ul><ul><li>Merge multiple systems </li></ul></ul><ul><ul><li>Quick and cost effective </li></ul></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  8. 8. One View for Del Monte Foods <ul><li>Class poll… </li></ul><ul><ul><li>Why did Del Monte need to integrate its systems? </li></ul></ul><ul><ul><li>Why does knowing the sales of Kibbles ‘n Bits and the sales of vegetables help the overall organization? </li></ul></ul><ul><ul><li>Do you think Del Monte would like to know who is buying combinations of its products? Why? </li></ul></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  9. 9. INTRODUCTION <ul><li>Successful IT systems provide an integrated view of: </li></ul><ul><ul><li>Business </li></ul></ul><ul><ul><li>Extend analytical capabilities to users </li></ul></ul><ul><ul><li>Leverage a corporation's information and expertise </li></ul></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  10. 10. INTRODUCTION <ul><li>Enterprises need to encompass a range of intelligence systems and analytical applications that include: </li></ul><ul><ul><li>Data warehouses and data marts </li></ul></ul><ul><ul><li>Online analytical processing (OLAP) </li></ul></ul><ul><ul><li>Decision support systems (DSSs) </li></ul></ul><ul><ul><li>Executive information systems (EISs) </li></ul></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  11. 11. ENTERPRISE SYSTEMS <ul><li>An enterprise system (ES) - large software application that companies use to manage their operations </li></ul><ul><li>Key way by which large organizations distribute content of all kinds to their: </li></ul><ul><ul><li>Workforce </li></ul></ul><ul><ul><li>Suppliers </li></ul></ul><ul><ul><li>Customers </li></ul></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  12. 12. ENTERPRISE SYSTEMS McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  13. 13. ENTERPRISE SYSTEMS <ul><li>Enterprise systems are suited for information transactions </li></ul><ul><ul><li>They are the underlying information “factory” </li></ul></ul><ul><li>Enterprise systems offer the first great opportunity to achieve true connectivity </li></ul><ul><ul><li>A state in which everyone knows what everyone else is doing in the business all over the world at the same time </li></ul></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  14. 14. ERP Systems <ul><li>Enterprise resource planning (ERP) systems are software systems for business management, supporting areas such as planning, manufacturing, sales, marketing, distribution, accounting, financial, human resource management, project management, inventory management, service and maintenance, transportation, and e-business </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  15. 15. ERP Systems <ul><li>ERP systems allow companies to implement a single integrated system by replacing legacy information systems. </li></ul><ul><li>Legacy information system (LIS) - represents a massive, long-term business investment; such systems are often brittle, slow, and nonextensible </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  16. 16. ERP Systems McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  17. 17. ERP Systems <ul><li>An ERP system is required to have the following characteristics: </li></ul><ul><ul><li>Modular design comprising many distinct business functions such as financial, manufacturing, distribution, and the like </li></ul></ul><ul><ul><li>Centralized DBMS </li></ul></ul><ul><ul><li>Integrated functions that provide seamless information flow among the functions </li></ul></ul><ul><ul><li>Flexible, best business practices </li></ul></ul><ul><ul><li>Functions that work in real-time </li></ul></ul><ul><ul><li>Internet-enabled </li></ul></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  18. 18. Core ERP Functions <ul><li>Accounting </li></ul><ul><li>Financial </li></ul><ul><li>Manufacturing </li></ul><ul><li>Production </li></ul><ul><li>Transportation </li></ul><ul><li>Sales and distribution </li></ul><ul><li>Human resource </li></ul><ul><li>Supply chain </li></ul><ul><li>Customer relationship </li></ul><ul><li>E-business </li></ul>
  19. 19. ERP Systems McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Small-to-medium businesses Microsoft (Great Plains) ( www.microsoft.com ) Large businesses SSA Global (Baan) ( www.ssaglobal.com ) Large businesses Oracle/PeopleSoft ( www.oracle.com ) Large businesses SAP ( www.sap.com ) TARGET MARKET VENDOR/WEB ADDRESS
  20. 20. ERP Systems <ul><li>ERP systems are big business </li></ul><ul><li>At the top of the IT spending list is the ERP market </li></ul><ul><li>The United States federal government will spend $7.7 billion on ERP products and services in fiscal year 2009 </li></ul><ul><ul><li>Up 37 percent from 2004 spending of $5.6 billion </li></ul></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  21. 21. ERP Systems <ul><li>Advantages… </li></ul><ul><ul><li>Reliable information access </li></ul></ul><ul><ul><li>Avoid redundant data and operations </li></ul></ul><ul><ul><li>Cost reduction </li></ul></ul><ul><ul><li>See more on page 322 </li></ul></ul><ul><li>Disadvantages </li></ul><ul><ul><li>Time-consuming </li></ul></ul><ul><ul><li>Expensive </li></ul></ul><ul><ul><li>Vendor dependence </li></ul></ul><ul><ul><li>See more on page 322 </li></ul></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  22. 22. Evolution of ERP Systems <ul><li>The early stage of ERP was carried out in the 1970’s through a system called Materials Requirement Planning (MRP) </li></ul><ul><li>Early 1980s MRP was reengineered under the name of Manufacturing Resources Planning or MRPII </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  23. 23. Evolution of ERP Systems <ul><li>The beginning of the 1990’s came enterprise resource planning (ERP) </li></ul><ul><li>ERP systems have evolved into what is now commonly referred to as ERPII </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  24. 24. Evolution of ERP Systems McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  25. 25. ERP Vendors & Market Trends <ul><li>The top dominating ERP software suppliers are: </li></ul><ul><ul><li>SAP </li></ul></ul><ul><ul><li>Oracle/PeopleSoft </li></ul></ul><ul><ul><li>SSA Global </li></ul></ul><ul><ul><li>Microsoft </li></ul></ul><ul><li>Together they control more than 70 % of the multi­billion dollar global market </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  26. 26. ERP Vendors & Market Trends <ul><li>Complete list is very long </li></ul><ul><li>Invensys ( www.invensys.com ) </li></ul><ul><li>Epicor ( www.epicor.com ) </li></ul><ul><li>Mapics ( www.mapics.com ) </li></ul><ul><li>Navison ( www.navison.com ) </li></ul><ul><li>Deltek ( www.deltek.com ) </li></ul><ul><li>Many more on page 325 </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  27. 27. ERP Vendors & Market Trends <ul><li>The ERP market has been growing at a rate more than 30 % </li></ul><ul><li>The growth of the ERP market has been boosted both by business reasons as well as by technical reasons </li></ul><ul><ul><li>The main cited reason is globalization </li></ul></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  28. 28. DEVELOPING AGILE IT SYSTEMS <ul><li>Business agility means being prepared for change at a moment’s notice </li></ul><ul><li>Factors to consider whenever you are developing an IT system - these are commonly referred to as the “ilities”: </li></ul><ul><ul><li>Availability </li></ul></ul><ul><ul><li>Accessibility </li></ul></ul><ul><ul><li>Reliability </li></ul></ul><ul><ul><li>Scalability </li></ul></ul><ul><ul><li>Flexibility </li></ul></ul><ul><ul><li>Performance </li></ul></ul><ul><ul><li>Capacity planning </li></ul></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  29. 29. Availability <ul><li>Availability is determining when an IT system will be available for employees to access </li></ul><ul><li>Most companies have IT systems available 24 x 7 x 365 </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  30. 30. Accessibility <ul><li>Accessibility is determining who has the right to access different types of IT systems and information </li></ul><ul><li>Accessibility also means who can access or manipulate the information, whether they can create, read, update, and/or delete information </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  31. 31. Reliability <ul><li>Reliability ensures your IT systems are functioning correctly and providing accurate information </li></ul><ul><li>Inaccurate information exists for many reasons: </li></ul><ul><ul><li>The information being entered incorrectly </li></ul></ul><ul><ul><li>The information becoming corrupt </li></ul></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  32. 32. Scalability <ul><li>Scalability refers to how well a system can adapt to increased demands </li></ul><ul><li>A number of factors can affect organizational growth including: </li></ul><ul><ul><li>The market </li></ul></ul><ul><ul><li>The industry </li></ul></ul><ul><ul><li>The economy </li></ul></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  33. 33. Flexibility <ul><li>A single system can be designed in a number of different ways to perform exactly the same function </li></ul><ul><li>When choosing which design to implement, think about the system’s “flexibility,” or the system’s ability to change quickly </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  34. 34. Performance <ul><li>Performance measures how quickly an IT system performs a certain process </li></ul><ul><li>Benchmarks are baseline values a system seeks to attain </li></ul><ul><li>Benchmarking is a process of continuously measuring system results, comparing those results to optimal system performance (benchmark values), and identifying steps and procedures to improve system performance </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  35. 35. Capacity Planning <ul><li>Capacity planning determines the future IT infrastructure requirements for new equipment and additional network capacity </li></ul><ul><li>It’s cheaper for an organization to implement an IT infrastructure that considers capacity growth at the beginning of a system deployment </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  36. 36. INFORMATION SYSTEMS INFRASTRUCTURE <ul><li>An IT architecture is the blueprint for translating a business strategy into a plan </li></ul><ul><li>An infrastructure is a relative term meaning “the structure beneath a structure” </li></ul><ul><ul><li>This definition implies different layers of structure, which provide support or services </li></ul></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  37. 37. INFORMATION SYSTEMS INFRASTRUCTURE McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  38. 38. Why Architecture Matters <ul><li>The IT architecture identifies what information must be standardized corporate-wide and what will be standardized at a regional level </li></ul><ul><li>An IT architecture specifies where and how information will be located and accessed </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  39. 39. Why Infrastructure Matters <ul><li>Global markets are creating enormous demands for increased information sharing </li></ul><ul><li>A powerful, flexible IT infrastructure has become a prerequisite for doing business </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  40. 40. Why Infrastructure Matters <ul><li>IT infrastructure should exhibit several key traits, such as: </li></ul><ul><ul><li>Efficiency </li></ul></ul><ul><ul><li>Effectiveness </li></ul></ul><ul><ul><li>Agility </li></ul></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  41. 41. Why Infrastructure Matters <ul><li>Translating the architecture into an infrastructure entails creating details about certain technologies: </li></ul><ul><ul><li>Hardware </li></ul></ul><ul><ul><li>Software </li></ul></ul><ul><ul><li>Network </li></ul></ul><ul><ul><li>Information </li></ul></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  42. 42. INFORMATION TECHNOLOGY INFRASTRUCTURE <ul><li>There are four types of information technology infrastructures: </li></ul><ul><ul><li>Decentralized infrastructure </li></ul></ul><ul><ul><li>Centralized infrastructure </li></ul></ul><ul><ul><li>Distributed infrastructure </li></ul></ul><ul><ul><li>Client/server infrastructure </li></ul></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  43. 43. INFORMATION TECHNOLOGY INFRASTRUCTURE McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Varies Varies Very limited Full User control Shared Distributed Centralized Distributed Processing location Constrained Varies Constrained Excellent Network performance Moderate Difficult Easy Simple Management Ease Distributed Distributed Centralized Distributed Data location Very reasonable Moderate Excellent Moderate Cost efficiency Client/Server Distributed Centralized Decentralized Characteristics
  44. 44. Decentralized Infrastructure <ul><li>A decentralized infrastructure involves little or no sharing of information systems </li></ul><ul><li>Gives users the liberty to develop applications that meet their needs and maintain control over the applications they develop </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  45. 45. Decentralized Infrastructure McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  46. 46. Centralized Infrastructure <ul><li>A centralized infrastructure involves sharing of information systems in one central area or one central mainframe </li></ul><ul><li>Mainframes were originally the only computers available for business </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  47. 47. Centralized Infrastructure McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  48. 48. Distributed Infrastructure <ul><li>A distributed infrastructure involves distributing the information and processing power of IT systems via a network </li></ul><ul><li>By connecting all the information systems via a distributed infrastructure, all locations can share information and applications </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  49. 49. Distributed Infrastructure McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  50. 50. Client/Server Infrastructure <ul><li>A client/server infrastructure (or client/server network ) has one or more computers that are servers which provide services to other computers, called clients </li></ul><ul><li>The client/server infrastructure is a form of distributed infrastructure </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  51. 51. Client/Server Infrastructure McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  52. 52. Other Types of Infrastructure <ul><li>In a tiered infrastructure (sometimes referred to as a layer infrastructure ), the IT system is partitioned into tiers (or layers) where each tier (or layer) performs a specific type of functionality </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  53. 53. Other Types of Infrastructure <ul><li>A 1-tier infrastructure is the most basic setup because it involves a single tier on a single machine </li></ul><ul><li>A 2-tier infrastructure is the basic client/server relationship </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  54. 54. Other Types of Infrastructure <ul><li>A 3-tier infrastructure is the most common approach used for Web applications today </li></ul><ul><li>An n-tier infrastructure balances the work of the network over several different servers </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  55. 55. Other Types of Infrastructure McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  56. 56. The Infrastructure Investment <ul><li>IT investments are one of the most important decisions made within an organization </li></ul><ul><li>IT infrastructure investments are large, long term, and have no (real) value on their own </li></ul><ul><li>An infrastructure's value lies in its ability to quickly and economically enable the implementation of new applications </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  57. 57. Supporting an IT Infrastructure <ul><li>Backup is the process of making a copy of the information stored on a computer </li></ul><ul><li>Recovery is the process of reinstalling the backup information in the event the information was lost </li></ul><ul><li>Storage area networks (SAN) is an infrastructure for building special, dedicated networks that allow rapid and reliable access to storage devices by multiple servers </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  58. 58. Disaster Recovery Plan <ul><li>A disaster recovery plan is a detailed process for recovering information or an IT system in the event of a catastrophic disaster such as a fire or flood </li></ul><ul><li>A collocation facility is a company that rents space and telecommunications equipment from another company </li></ul><ul><li>A disaster recovery cost curve charts (1) the cost of the unavailability of information and technology and (2) the cost of recovering from a disaster over time </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  59. 59. Disaster Recovery Plan McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  60. 60. INTEGRATING THE ENTERPRISE <ul><li>Integration allows separate applications to communicate directly with each other by automatically exporting data files from one application and importing them into another </li></ul><ul><li>Building integrations between applications helps an organization maintain better control of its information </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  61. 61. Why Integration Is Necessary <ul><li>Business process reengineering (BPR) is the analysis and redesign of workflow within and between enterprises </li></ul><ul><li>Workflow defines all the steps or business rules, from beginning to end, required for a business process </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  62. 62. Motives for Integration <ul><li>An organization may choose to integrate because of its concerns about its operations, both with internal processes and external relationships </li></ul><ul><li>Enterprise integration is viewed as a possible solution to a number of problems with internal organizational processes </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  63. 63. Motives for Integration McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Limited growth potential Globalization Obsolete systems Complex processes Systems not integrated Responsiveness to customers Poor quality of information High cost structure Disparate systems Poor performance TECHNICAL MOTIVES OPERATIONAL MOTIVES
  64. 64. Benefits of Integration <ul><li>Many of the benefits can be easily measured in financial terms </li></ul><ul><ul><li>Cost reduction </li></ul></ul><ul><ul><li>Reduction of inventory costs </li></ul></ul><ul><ul><li>Reduction of personnel costs </li></ul></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  65. 65. Benefits of Integration McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Business performance Transportation logistics 8 Globalization Revenue/profit increase 7 Flexibility Procurement reduction 6 Standardization IT cost reduction 5 Integration Order processing improvements 4 Customer responsiveness Productivity improvements 3 New/improved process Personnel reduction 2 Information visibility Inventory reduction 1 INTANGIBLE TANGIBLE RANK
  66. 66. Integration Obstacles <ul><li>People </li></ul><ul><li>Process </li></ul><ul><li>Technology </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  67. 67. CAN YOU… <ul><li>Define an enterprise system. </li></ul><ul><li>Describe an enterprise resource planning (ERP) system. </li></ul><ul><li>List and describe the seven “ilities.” </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  68. 68. CAN YOU… <ul><li>List the key traits that an IT infrastructure should exhibit. </li></ul><ul><li>Describe the differences among the four types of IT infrastructures. </li></ul><ul><li>Explain the difference between backup and recovery. </li></ul>McGraw-Hill © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
  69. 69. CAN YOU… <ul><li>State the purpose of a disaster recovery plan. </li></ul><ul><li>Explain the need for system integration. </li></ul>

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