1 ADM1370 Info Systems in Business Prof Craig Kuziemsky Sections M,N and P January 10/11, 2011.
Post on 27-Dec-2015
217 Views
Preview:
Transcript
Course TA’s
Section M Shalik Nath : shalik17@gmail.com Vijay Te : tevijay@gmail.com
Section N Ryan Briggs : ryan@iion.ca David Ilonze: chibiks@gmail.com
Section P manmohan parmar: parmar.manmohan@gmail.com
Balaharish Chandrasekaran: balaharish@gmail.com
Last Class
Introduced digitization and the role ICTs will play in the changing business environment
Five factors related to the impact of IT on business
Globalization and flattening
Today’s Class
Role of business processes and types of IT found in business
More on flattening – Start the chapter on Friedman
Next class and next week – specific examples of IT supported business
Examples of the Power of the Internet
http://www.ctv.ca/CTVNews//20100805/air-canada-twitter-100805/
Employee loses job http://www.thestar.com/News/Ontario/article/422864
Period of public backlash occurs facilitated by the Internet
Employee gets job back http://www.theglobeandmail.com/news/national/article684498.ece
Information Systems Components
Iivari, Hirschheim and Klein (2004) classify IS body of knowledge as needing:
1. technology knowledge
2. application domain knowledge
3. systems development knowledge
4. organizational knowledge
5. IS application knowledge
Three Key Concepts
1. Business Processes and how IT supports these processes
2. Changing paradigm of information and communication technologies
3. How to leverage #2 to better do #1
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 knowledge – sets of activities
• Unique ways to coordinate work, information, and knowledge
• Ways in which management coordinates work
Business Processes and Information Systems
• 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
Examples of Business Processes
Manufacturing and production: • Assembling product, checking quality, producing
bills of materials
Sales and marketing: • Identifying customers, creating customer
awareness, selling
Examples of Business Processes (continued)
Finance & accounting:Paying creditors, creating financial statements, managing cash accountsHuman resources: Hiring employees, evaluating performance, enrolling employees in benefits plans
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
15
IDENTIFYING COMPETITIVE ADVANTAGES
To survive and thrive an organization must create a competitive advantage Competitive advantage – a product or
service that an organization’s customers place a greater value on than similar offerings from a competitor
First-mover advantage – occurs when an organization can significantly impact its market share by being first to market with a competitive advantage
16
THE FIVE FORCES MODEL – Evaluating Business Processes and Strategy
Porter’s Five Forces Model determines the relative attractiveness of an industry
Porter’s 5 Forces Model
Buyer power - high when buyers have many choices of whom to buy from and low when their choices are few
Use IT to reduce buyer power (thus creating a competitive advantage) through loyalty programs Loyalty program rewards customers based on the
amount of business they do with a particular organization (frequent flyer programs, Shopper’s optimum, coffee shops where you get your 10th cup of coffee free, etc.)
ENTERPRISE IT SYSTEMS
Organizations use specific IT to support strategic initiatives including: Supply chain management (SCM) systems Customer relationship management (CRM)
systems Enterprise resource planning (ERP) systems
Each of those systems are complex and will be discussed in detail in ADM2372
Overview of Supply Chain Management (SCM) Systems
• 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
Overview of Supply Chain Management (SCM) Systems (continued)
Helps in procurement of materials, transformation of raw materials into intermediate and finished productsHelps in distribution of the finished products to customersIncludes reverse logistics - returned items flow in the reverse direction from the buyer back to the seller
Overview of Customer Relationship Management (CRM) Systems
Manages all methods a firm uses to deal with existing and potential customersUses information system to coordinate entire business processes of a firm to better understand and deliver customer’s needs
Overview of Customer Relationship Management (CRM) Systems (continued)
Provides end-to-end customer careProvides a unified view of customer across the companyConsolidates customer data from multiple sources and provides analytical tools for answering questions
Organizational/Behavioral Impacts
Note that: IT broadens the distribution of timely information Increases the speed of decision-making Empowers lower-level employees Increases management span of control
Flattening organizations, more virtual firms, increasing flexibility
Behavioral Impacts - Flattening organizations
IT facilitates flattening of hierarchies by: Distributing information to empower lower-level
employees and increase management efficiency less number of middle managers
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.
Flattener #1: The Fall of the Berlin Wall
November 9, 1989 Fall of communism People from the
former communist countries gained more freedom
Flattener #2: Netscape Browser
August 9, 1995
First mainstream browser
Gave individuals access to the Internet
THEN
NOW
Flattener #3: Work Flow Software
Applications that allow people worldwide to communicate
XML allows applications to “talk” to each other
New possibilities for information sharing
Flattener #4: Open Sourcing
Software and source code freely available to everyone
Blogs, Wikis, Wikipedia a
huge success
Flattener #5: Outsourcing
Outsourcing companies profited from the drop in telecommuni-cations costs
Companies can now use talented engineers from anywhere
Flattener #6: Offshoring
Companies set up entire factories in countries such as China Mass production Low Costs
Flattener #7: Supply Chaining
Integration of retailers, suppliers, and customers
RFID tags used
Wal-Mart became an early leader
Flattener #8: In-Sourcing
Delegation of company’s key operations to a subcontractor E.g.: UPS
provides complete supply chain solutions to companies
Flattener #9: In-Forming
In-Forming is to individuals what outsourcing, offshoring, and in-sourcing is to companies
Individuals have access to massive amounts of information
Flattener #10: The Steroids Personal digital devices like mobile phones,
iPods, personal digital assistants, instant messaging, and voice over Internet Protocol (VoIP).
Digital, Moble, Personal and Virtual – all analog content and processes (from
entertainment to photography to word processing) can be digitized and therefore shaped, manipulated and transmitted;
virtual - these processes can be done at high speed with total ease;
mobile - can be done anywhere, anytime by anyone;
personal - can be done by you.
37
Impact of the Internetpositive impact
Opportunities to alter how business processes are conducted (e.g. efficiency)
New opportunities for building brands and developing customer relationships (CRM)
Companies that are better at using IS in general and the Internet in particular do a better job of dealing with Porter’s 5 threats
Dell, Wal-Mart, eBay, etc.
38
Impact of the Internetnegative impact
Substitute products or services New substitutes emerge (e.g., online music lowers the value
of record stores) Customers’ bargaining power
Customers have access to info on products & pricing, thus can bargain
Suppliers’ bargaining power Suppliers have more options to sell their products
Threat of new entrants The Internet reduces barriers to entry, such as physical
location and changes the business environment (e.g. Blockbuster & www.netflix.ca )
Rivalry among existing competitors The Internet widens geographic market, increasing the
number of competitors, pressure to lower prices
Summary
Think of processes, IT and strategies as an integrated bundle
IT (especially the Internet) has changed how we access, share and use information
The forces of business have shifted and continue to shift at an incredible rate
top related