INFORMATION SYSTEMS IN THE ORGANIZATION. OBJECTIVES. What are the major types of systems in a business? What roles do they play? Why should managers pay attention to business processes? Why do firms need to integrate their business processes? - PowerPoint PPT Presentation
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Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization
• What are the major types of systems in a What are the major types of systems in a business? What roles do they play?business? What roles do they play?
• Why should managers pay attention to Why should managers pay attention to business processes? Why do firms need business processes? Why do firms need to integrate their business processes? to integrate their business processes?
• What are the benefits and challenges of What are the benefits and challenges of using enterprise systems?using enterprise systems?
Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization
• What are the benefits of using systems to What are the benefits of using systems to support supply chain management and support supply chain management and collaborative commerce?collaborative commerce?
• What are the benefits of using What are the benefits of using information systems for customer information systems for customer relationship management and knowledge relationship management and knowledge management?management?
Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization
1.1. Integration:Integration: Different systems serve variety Different systems serve variety of functions, connecting organizational of functions, connecting organizational levels difficult, costlylevels difficult, costly
2.2. Enlarging Scope of Management Enlarging Scope of Management Thinking:Thinking: Huge system investments, long Huge system investments, long development time must be guided by development time must be guided by common objectivescommon objectives
Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization
Transaction Processing Systems (TPS):Transaction Processing Systems (TPS):
• Computerized systems that perform and Computerized systems that perform and record the daily routine transactions record the daily routine transactions necessary to conduct businessnecessary to conduct business
• Serve the operational levelServe the operational level
Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization
Knowledge Work Systems (KWS):Knowledge Work Systems (KWS):• Information systems that aid knowledge Information systems that aid knowledge
workers in the creation and integration of workers in the creation and integration of new knowledge in the organizationnew knowledge in the organization
Office Systems:Office Systems:• Computer systems, such as word Computer systems, such as word
processing, e-mail, and scheduling systems processing, e-mail, and scheduling systems that are designed to increase the that are designed to increase the productivity of data workers in the officeproductivity of data workers in the office
Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization
Decision Support System (DSS):Decision Support System (DSS): combines data and analytical models or data analysis tools to support semi-structured and unstructured decision-making
Management levelManagement level• Inputs:Inputs: Low-volume data Low-volume data
Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization2.2 ENTERPRISE APPLICATIONS
Enterprise ApplicationsEnterprise Applications• Systems that can coordinate activities, Systems that can coordinate activities,
decisions, and knowledge across many decisions, and knowledge across many different functions, levels and business different functions, levels and business unitsunits
• Includes enterprise systems, supply chain Includes enterprise systems, supply chain management systems, customer management systems, customer relationship management systems and relationship management systems and knowledge management systemsknowledge management systems
Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization
Business Processes Business Processes
• Manner in which work is organized, Manner in which work is organized, coordinated, and focused to produce a coordinated, and focused to produce a valuable product or servicevaluable product or service
• Concrete work flows of material, Concrete work flows of material, information, and knowledge—sets of information, and knowledge—sets of activitiesactivities
Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization
Cross-Functional Business ProcessesCross-Functional Business Processes
• Transcend boundary between sales, Transcend boundary between sales, marketing, manufacturing, and research and marketing, manufacturing, and research and developmentdevelopment
• Group employees from different functional Group employees from different functional specialties to complete a piece of workspecialties to complete a piece of work
Example: Order Fulfillment ProcessExample: Order Fulfillment Process
Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization
Enterprise Systems Enterprise Systems
• Provide a technology platform where Provide a technology platform where organizations can integrate and coordinate organizations can integrate and coordinate major business processesmajor business processes
• Also known as Enterprise Resource Also known as Enterprise Resource Planning Systems (ERP)Planning Systems (ERP)
Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization
Traditional View of SystemsTraditional View of Systems
• Within the business: Within the business: There are functions, There are functions, each having its uses of information systemseach having its uses of information systems
• Outside the organization’s boundaries:Outside the organization’s boundaries: There There are customers and vendorsare customers and vendors
Functions tend to work in isolationFunctions tend to work in isolation
Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization
Benefits and Challenges of Enterprise Systems
2.2 ENTERPRISE APPLICATIONS
ChallengesChallenges1.1. Difficult & costly to buildDifficult & costly to build2.2. Complex technologyComplex technology3.3. Need to rework business processesNeed to rework business processes4.4. Centralized organizational coordination Centralized organizational coordination
and decision making may not be and decision making may not be suitable for all organizationssuitable for all organizations
5.5. Difficult to attain strategic Difficult to attain strategic differentiationdifferentiation
Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization
Supply Chain Management (SCM)Supply Chain Management (SCM)• Close linkage and coordination of Close linkage and coordination of
activities involved in buying, making, and activities involved in buying, making, and moving a productmoving a product
• Integrates supplier, manufacturer, Integrates supplier, manufacturer, distributor, and customer logistics time distributor, and customer logistics time
• Reduces time, redundant effort, and Reduces time, redundant effort, and inventory costsinventory costs
Supply Chain Management and Collaborative Commerce
Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization
Supply ChainSupply Chain• Network of organizations and business Network of organizations and business
processes processes • Helps in procurement of materials, Helps in procurement of materials,
transformation of raw materials into transformation of raw materials into intermediate and finished products, and intermediate and finished products, and distributing final products to customersdistributing final products to customers
Reverse LogisticsReverse Logistics• The return of items from buyers to sellers in The return of items from buyers to sellers in
a supply chaina supply chain
2.2 ENTERPRISE APPLICATIONS
Supply Chain Management and Collaborative Commerce
Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization
Limitations:Limitations:
• Inefficiencies can waste as much as 25% Inefficiencies can waste as much as 25% of a company’s operating costsof a company’s operating costs
• Bullwhip Effect: Information about the Bullwhip Effect: Information about the demand for the product gets distorted as demand for the product gets distorted as it passes from one entity to nextit passes from one entity to next
2.2 ENTERPRISE APPLICATIONS
Supply Chain Management and Collaborative Commerce
Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization2.2 ENTERPRISE APPLICATIONS
Supply Chain Management and Collaborative Commerce
• Supply Chain Planning System:Supply Chain Planning System: Enables Enables firm to generate forecasts for a product and firm to generate forecasts for a product and to develop sourcing and a manufacturing to develop sourcing and a manufacturing plan for the productplan for the product
• Supply Chain Execution System:Supply Chain Execution System: Manages flow of products through Manages flow of products through distribution centers and warehousesdistribution centers and warehouses
Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization
• Uses digital technologies to enable Uses digital technologies to enable multiple organizations to collaboratively multiple organizations to collaboratively design, develop, build, move, and manage design, develop, build, move, and manage products products
• Increases efficiencies in reducing product Increases efficiencies in reducing product design life cycles, minimizing excess design life cycles, minimizing excess inventory, forecasting demand, and inventory, forecasting demand, and keeping partners and customers informedkeeping partners and customers informed
Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization
• Collaborative Planning, Forecasting, Collaborative Planning, Forecasting, and Replenishment (CPFR)and Replenishment (CPFR)– Collaboration of firms with their Collaboration of firms with their
suppliers and buyers to: suppliers and buyers to: • Formulate demand forecasts• Develop production plans • Coordinate shipping, warehousing and
Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization
Customer Relationship Management (CRM)
2.2 ENTERPRISE APPLICATIONS
• Manages all ways used by firms to deal with Manages all ways used by firms to deal with existing and potential new customersexisting and potential new customers
• Uses information system to integrate all Uses information system to integrate all business processes surrounding a firm’s business processes surrounding a firm’s interactions with its customers in sales, interactions with its customers in sales, marketing, and servicemarketing, and service
Management Information Systems,Management Information Systems, Second Canadian Edition Second Canadian Edition
Chapter 2: Information Systems in the OrganizationChapter 2: Information Systems in the Organization
Customer Relationship Management (CRM)
2.2 ENTERPRISE APPLICATIONS
• Provides end-to-end customer careProvides end-to-end customer care
• Provides a unified view of customer Provides a unified view of customer across the companyacross the company
• Consolidates customer data from multiple Consolidates customer data from multiple sources and provides analytical tools for sources and provides analytical tools for answering questionsanswering questions