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Management Information Systems

Chapter 2 Global E-Business: How Businesses Use Information Systems

Global E Business

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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems

1. BUSINESS PROCESSES AND INFORMATION SYSTEMS Business Processes How Information Technology Enhances Business Processes: Efficiency and Transformation 2. TYPES OF BUSINESS INFORMATION SYSTEMS Systems from a Functional Perspective Systems from a Constituency Perspective Relationship of Systems to One Another 3. SYSTEMS THAT SPAN THE ENTERPRISE Enterprise Applications Intranets and Extranets E-Business, E-Commerce and E-Government

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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems

First, what do we know?


What is eBusiness? What is a business process? How does information technology enhance business processes?

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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems

eBusiness
Electronically linking all business activity within business functions, across business functions, at all levels within the business and to the extended business environment through the use of digital information systems.

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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems

What is a business process?


Business processes: Manner in which work is organized, coordinated, and focused to produce a valuable product or service

Concrete work flows of material, information, and knowledgesets of activities


Unique ways to coordinate work, information, and knowledge Ways in which management chooses to coordinate work

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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems

How does information technology enhance business processes?

Information systems help organizations achieve great efficiencies by automating parts of processes IS also contributes to completely rethinking processes.

Business processes typically span several different functional areas.


Change flow of information and work flow Allows shared information throughout the organization Lots more
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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems

MANAGEMENT CHALLENGES

1. Integration: Different systems serve variety of


functions, connecting organizational levels difficult, costly

2. Enlarging scope of management thinking:


Huge system investments, long development time must be guided by common objectives 3. Management and employee Training: dealing with employee turnover, new systems, new job tasks, new skills. 4. Accounting for Costs: effectively manage information costs to provide benefits within cost parameters.
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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Levels of Systems within an organization


Three main categories of information systems serve different organizational levels:
1. Operational-level systems: support operational managers, keeping track of the elementary activities and transactions Management-level systems: serve the monitoring, controlling, decision-making, and administrative activities

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3.

Strategic-level systems: help senior management tackle and address strategic issues

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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Types of Systems from a Constituency Perspective Transaction Processing Systems (TPS) Management Information Systems (MIS) Decision-Support Systems (DSS) Executive Support Systems (ESS)

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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Transaction Processing Systems (TPS) Basic business systems that serve the operational level A computerized system that performs and records the daily routine transactions necessary to the conduct of the business

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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Management Information Systems (MIS)

Management level
Inputs: High volume transaction level data

Processing: Simple models


Outputs: Summary reports

Users: Middle managers


Example: Annual budgeting
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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Decision-Support Systems (DSS)

Management level
Inputs: Transaction level data

Processing: Interactive
Outputs: Decision analysis Users: Professionals, staff Example: Contract cost analysis
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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

EXECUTIVE SUPPORT SYSTEMS (ESS): Inputs: Aggregate data Processing: Interactive Outputs: Projections

Users: Senior managers


Example: 5 year operating plan
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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

EXECUTIVE SUPPORT SYSTEMS (ESS) (Continued) Top Level Management Designed to the individual senior manager Ties CEO to all levels Very expensive to keep up Extensive support staff
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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Sales and Marketing Systems Major functions of systems: Sales management, market research, promotion, pricing, new products Major application systems: Sales order info system, market research system, pricing system

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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Manufacturing and Production Systems Major functions of systems: Scheduling, purchasing, shipping, receiving, engineering, operations Major application systems: Materials resource planning systems, purchase order control systems, engineering systems, quality control systems

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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Financing and Accounting Systems Major functions of systems: Budgeting, general ledger, billing, cost accounting Major application systems: General ledger, accounts receivable, accounts payable, budgeting, funds management systems

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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Human Resource Systems Major functions of systems: Personnel records, benefits, compensation, labor relations, training Major application systems: Payroll, employee records, benefit systems, career path systems, personnel training systems

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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications

Business Processes and Information Systems

Business processes: Manner in which work is organized, coordinated, and focused to produce a valuable product or service
Concrete work flows of material, information, and knowledgesets of activities Unique ways to coordinate work, information, and knowledge Ways in which management chooses to coordinate work
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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications

Business Processes and Information Systems (Continued) Information systems help organizations achieve great efficiencies by automating parts of processes IS also contributes to completely rethinking processes. Business processes typically span several different functional areas.
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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications

Examples of Business Processes


Manufacturing and production: Assembling product, checking quality, producing bills of materials Sales and marketing: Identifying customers, creating customer awareness, selling Finance & accounting: Paying creditors, creating financial statements, managing cash accounts Human resources: Hiring employees, evaluating performance, enrolling employees in benefits plans
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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications

Business Processes and Information Systems Cross-Functional Business Processes: Transcend boundary between sales, marketing, manufacturing, and research and development Group employees from different functional specialties to a complete piece of work Example: Order Fulfillment Process
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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications

Systems for Enterprise-Wide Process Integration

Enterprise applications: Designed to support organization-wide process coordination and integration Consist of : 1. Enterprise systems 2. Supply chain management systems 3. Customer relationship management systems 4. Knowledge management systems

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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications

1. Enterprise Systems Enterprise systems, also known as enterprise resource planning (ERP) systems, provide a single information system for organization-wide coordination and integration of key business processes. Information that was previously fragmented in different systems can seamlessly flow throughout the firm so that it can be shared by business processes in manufacturing, accounting, human resources, and other areas.
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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications

Traditional Silo View of Information Systems Within the business: There are functions, each having its uses of information systems Outside the organizations boundaries: There are customers and vendors Functions tend to work in isolation

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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications

Benefits of Enterprise Systems

Help to unify the firms structure and organization: One organization


Management: Firm wide knowledge-based management processes Technology: Unified platform Business: More efficient operations & customerdriven business processes
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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications

Challenges of Enterprise Systems

Difficult to build: Require fundamental changes in the way the business operates
Technology: Require complex pieces of software and large investments of time, money, and expertise

Centralized organizational coordination and decision making: Not the best way for the firms to operate
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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications

2. Supply Chain Management (SCM)

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
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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications

Supply Chain Management (SCM)

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
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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications

Information from Supply Chain Management Systems helps firms:


Decide when and what to produce, store, and move Rapidly communicate orders Track the status of orders Check inventory availability and monitor inventory levels Reduce inventory, transportation, and warehousing costs Track shipments Plan production based on actual customer demand Rapidly communicate changes in product design

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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications

3. Customer Relationship Management (CRM) Manages all ways used by firms to deal with existing and potential new customers Both a business and technology discipline Uses information system to coordinate entire business processes of a firm Provides end- to- end customer care Provides a unified view of customer across the company Consolidates customer data from multiple sources and provides analytical tools for answering questions

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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications

4. Knowledge Management Systems

Collects relevant knowledge and make it available wherever and whenever it is needed Accenture
Support business processes and management

decisions
Also link the firm to external sources of knowledge

Support processes for acquiring, storing, distributing, and applying knowledge


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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems MANAGEMENT OPPORTUNITIES and CHALLENGES

Management Challenges:

Integration and the whole firm view: Given the different interests and perspectives within a firm, it is difficult to achieve consensus about the need for the "whole firm" viewpoint.
Management and employee training: Training a large number of employees on many systems in a large organization involves commensurately large investments.
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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems MANAGEMENT OPPORTUNITIES and CHALLENGES

Management Challenges: (Continued)

Accounting for the cost of systems and managing demands for systems: Given the large number of different types of systems in a firm, and the large number of people involved with using them, it is a complex task to understand which systems are truly necessary and productive with high returns on investment
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Management Information Systems


Chapter 2 Global E-Business: How Businesses Use Information Systems

So What?
Know the types of information systemstheir functions, how different?

Know how can organizations be changed by information systems and visa versa?
Know the advantages of enterprise systems? Know the major Enterprise Applications and what they are used for
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