Applying Information Systems to Business

8/8/2019 Applying Information Systems to Business

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Submitted By:

Priyanka Pandey

Richa Sharma

Abhay Singh



Organization as a system Concept of the value network

understanding the worth of ICT and informationsystems

09/28/10 2Applying information system to business



BusinessOrganization

Physical

Environment

PoliticalEnvironment

SocialEnvironment

EconomicEnvironment09/28/10 3Applying information system to business



Production

Distribution

Consumption

Economic actors interrelate and interact in complexnetworks of value production, distribution and

consumption09/28/10 4Applying information system to business






Supplier

Customer

Regulator

Partner

Competitor

Supplier: Organizations

providing resources

Regulators are groups or

organizations that set policy for

appropriate economic activity

Competitors: Organizations in

the same industrial sector

Partner: Organizations in the same

industrial sector or market that

participate in a partnership arrangementwith an organization

Customer: Consumers of anorganization's products or

services




Michael Porter defines an economic environment

using a number of dimensions which involverelationships between four of the main types of

economic actors Competitive structure of the industry.

Relative power of buyers and sellers.

Basis of competition.

State of regulation in the economic environment.

State of technological deployment in the environment

Industry growth



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Value is the amount buyers are willing to pay for

what a firm provides them




Value chain is a series of interdependentactivities that deliver a product or service.

Primary activities

Secondary activities

Primary activities are the core competencies of the organization

Secondary activities are important to the

successful operation of primary activities.




Inbound logistics which involves receiving andstoring raw material, and distributing it tomanufacturing premises.

Operations which used to be called productionor manufacturing, and involves transforminginputs (raw materials) into finished products.

Outbound logistics: storing finished products inwarehouses and distributing them to customers.




Marketing and sales. Marketing is the process of planning and executing the conception, pricing,promotion and distribution of ideas, goods and servicesto create exchanges that satisfy individual andorganizational goals. Sales is the associated activity of managing customers’ purchasing activities.

After-sales service: services that maintain orenhance product value and also work to establish acontinuing relationship with customers. This includesinstallation, testing, maintenance and repair.

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Infrastructure activities: support activities for the entirevalue chain, such as general management, finance,accounting, legal services and quality management

Human resource management, concerned withrecruiting, hiring, training and developing employees.

Technology development: designing and improvingproducts and manufacturing processes. (This is also known

as research and development.)

Procurement: purchasing goods and services fromsuppliers at an acceptable quality and price, and withreliable delivery




• Exchange of goods and services has createdhuge scope for e-Business

• Flow of transaction• Recording of organizational activity / information

• Data management• Sales performance can be measured• Supply chain management

Usage of software is not a business expense but aninvestment




Value chain: A series of interdependent activities thatdeliver a product or service to a customer. The internal value chain is made up of a series of interdependent

activity systems.

Organizations are seen as social institutions that produceand deliver value to customers through defined activities

Manufacturing organization: value added is focused onthe products manufactured (price, reliability and safety)

Public sector: the services an organization deliversrepresent its value




Porter categorizes value chain focuses on internalprocesses as

Primary activities-the core competencies of the organization.

Secondary activities- the important to thesuccessful operation of primary activity.





MICHAEL PORTER’S VALUE CHAIN

PRIMARY ACTIVITY Inbound logistics Operations Outbound logistics Marketing and sales After-sales service

SECONDARY ACTIVITY Infrastructure activities Human resource

management

Technology development Procurement



SUPPLY CHAIN

Flow of goods andservices betweenorganizations

CUSTOMER CHAIN

Demand chain of thebusiness.




COMMERCE is the economic process whichdeals with the exchanges of goods & servicesfrom producer to final consumer. It can be

considered as a system or process involving aseries of phases of activity:

▪ Pre-sale activitiesSale executionSale settlement

After-sale

▪ Each of these activities generates a range of transactions, one of the most prominent types of whichis payments.





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A network of people and social relations.

Social capital: The productive value of people engaged ina dense network of social relations.

Social capital consists of those features of socialorganization – networks of secondary associations, high

levels of interpersonal trust, reciprocity – that act asresources for individuals and facilitate collective action.








Logical extension of a firm

Coordinate flow of value by controlling

and directing

Consciously designed to achieve

outcomes

Forms the cooperative environment

in the organization




Coordinates the flow of forces throughforces of supply and demand andexternal transactions





Organized NetworksInvolves directiveactions to sustain

Overlap with hierarchy

Self organizingNetworks

Arises from non-directiveinteraction between

membersOverlap with market



Popular way of thinking aboutbusiness change

Involves technological innovation Specifies the structure and dynamics

of an organization in terms of: Its products & services Key Stakeholders Cost & benefits of operation Key revenue flows





Valuenetwork

interrelate& interact



To work more efficiently organization requires:

To analyze existing the value chain

Re-design if, necessary

Value chain analysis involves analysis each and every activity

involves:

Procurement

Manufacture

Sales & Distribution Value chain analysis identifies the ways in which redesign will

lead to performance improvement




Value network analysis: Extension of value chain analysis Focuses on activities & relationship of business

with external shareholders


Value network analysis

DisaggregationSegmenting outthe elements of

value chainOutsource them to

partners

AggregationIntegrating

elements of valuechain to

streamlineprocess



A combination of process modelling approachesand information systems modelling constructs

It can be used to conduct both value-chain and

value network analyses. Collectively this is calledvalue-stream analysis Objective is to improve the efficiency of both

internal and external processes, frequentlythrough the application of ICT.




Stages of value stream analysis




Applying Information Systems to Business

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