Computer Science 1B

Slide1 : 1b Chapter E-Business: How Businesses Use Information Systems


Slide2 : STUDENT OBJECTIVES Information Systems How Businesses Use Information Systems Identify and describe the major features of a business that are important for understanding the role of information systems. Describe the information systems supporting the major business functions: sales and marketing, manufacturing and production, finance and accounting, and human resources. Evaluate the role played by systems serving the various levels of management in a business and their relationship to each other.


Slide3 : Explain how enterprise applications and intranets promote business process integration and improve organizational performance. Assess the role of the information systems function in a business. STUDENT OBJECTIVES (Continued) Information Systems How Businesses Use Information Systems


Slide4 : Information Systems Help Kia Solve Its Quality Problems Problem: High level of defects in product, new government requirements for reporting defects. Solutions: Improve quality and monitor defects so that defects and quality problems are easily identified. Infogain data repository and Clarify CRM system link results in reduced costs and increased sales . Demonstrates IT’s role in centralizing data, interfacing with customers, and improving production processes. Illustrates digital technology’s role in improved quality and lower rate of defects leading to customer satisfaction and repeat business. Information Systems How Businesses Use Information Systems


Slide5 : Use the Internet to find the latest data on defects per vehicle in the automobile industry. Look for new articles on Kia’s use of information systems. What new data are available? Has Kia’s ranking changed? If so, what factors may have contributed to the change? What kinds of warranties is Kia offering on its vehicles these days? How do these warranties affect Kia’s ability to be profitable? Interactive Session: Kia Motors Information Systems Help Kia Solve Its Quality Problems Information Systems How Businesses Use Information Systems


Slide6 : Components of a Business Four basic business functions: manufacturing and production, sales and marketing, finance and accounting, and human resources Five basic business entities: suppliers, customers, employees, invoices/payments, and products and services Organizing a Business: Basic Business Functions Information Systems How Businesses Use Information Systems A business is a formal organization that makes products or provides a service in order to make a profit.


Slide7 : What tasks does each employee perform, in what order, and on what schedule? How are raw materials transformed into products? How are orders fulfilled? How are bills paid? How are products marketed? How are employees hired? Business Processes Components of a Business Information Systems How Businesses Use Information Systems


Slide8 : Figure 2-2 Fulfilling a customer order involves a complex set of steps that requires the close coordination of the sales, accounting, and manufacturing functions. The Order Fulfillment Process Components of a Business Information Systems How Businesses Use Information Systems


Slide9 : Managing a Business and Firm Hierarchies Senior management Middle management Operational management Knowledge workers Data workers Production or service workers Components of a Business Information Systems How Businesses Use Information Systems


Slide10 : SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN STRATEGIC LEVEL SENIOR MANAGERS MANAGEMENT LEVEL MIDDLE MANAGERS OPERATIONAL OPERATIONAL LEVEL MANAGERS KNOWLEDGE LEVEL KNOWLEDGE & DATA WORKERS RESOURCES MARKETING & ENGINEERING Information Systems How Businesses Use Information Systems Components of a Business Kind of System Group Served


Slide11 : Components of a Business Information Systems How Businesses Use Information Systems Operational-level systems support operational managers by monitoring the day-to-day’s elementary activities and transactions of the organization. e.g. TPS. Knowledge-level systems support knowledge and data workers in designing products, distributing information, and coping with paperwork in an organization. e.g. KWS, OAS Management-level systems support the monitoring, controlling, decision-making, and administrative activities of middle managers. e.g. MIS, DSS Strategic-level systems support long-range planning activities of senior management. e.g. ESS


Slide12 : The Business Environment Components of a Business Information Systems How Businesses Use Information Systems Global environment factors Technology and science Economy Politics International change Immediate environment factors Customers Suppliers Competitors Regulations Stockholders


Slide13 : Information systems relate to the following business objectives: Achieving operational excellence Developing new products and services Attaining customer intimacy and service Improving decision making Promoting competitive advantage Ensuring survival The Role of Information Systems in a Business Components of a Business Information Systems How Businesses Use Information Systems


Slide14 : Sales and marketing systems Manufacturing and production systems Finance and accounting systems Human resources systems Systems from a Functional Perspective Types of Business Information Systems Information Systems How Businesses Use Information Systems


Slide15 : Sales & Marketing Systems Information Systems How Businesses Use Information Systems Systems that help the firm identify customers for the firm’s products or services, develop products and services to meet customer’s needs, promote products and services, sell the products and services, and provide ongoing customer support.


Slide16 : Manufacturing and Production Systems Information Systems How Businesses Use Information Systems Systems that deal with the planning, development, and production of products and services and with controlling the flow of production.


Slide17 : Finance and Accounting Systems Information Systems How Businesses Use Information Systems Systems that keep track of the firm’s financial assets and fund flows.


Slide18 : Human Resources Systems Information Systems How Businesses Use Information Systems Systems that maintain employee records; Track employee skills, job performance, and training; And support planning for employee compensation and career development.


Slide19 : Information Systems How Businesses Use Information Systems Examples of Business Processes


Slide20 : Transaction processing systems Management information systems and decision-support systems Executive support systems Knowledge Work Systems (KWS) Office Automation Systems (OAS) Systems from a Constituency Perspective Types of Business Information Systems Information Systems How Businesses Use Information Systems


Slide21 : Transaction processing systems Transaction processing systems Information Systems How Businesses Use Information Systems Computerized system that performs and records the daily routine transactions necessary to conduct the business; these systems serve the operational level of the organization TYPE: Operational-level INPUTS: transactions, events PROCESSING: updating OUTPUTS: detailed reports USERS: operations personnel, supervisors DECISION-MAKING: highly structured EXAMPLE: payroll, accounts payable


Slide22 : A Symbolic Representation for a payroll TPS Information Systems How Businesses Use Information Systems Transaction processing systems


Slide23 : Typical Applications of TPS Information Systems How Businesses Use Information Systems Transaction processing systems


Slide24 : Office Automation Systems (OAS) Information Systems How Businesses Use Information Systems Office Automation Systems (OAS) Computer system, such as word processing, electronic mail system, and scheduling system, that is designed to increase the productivity of data workers in the office. TYPE: Knowledge-level INPUTS: documents, schedules PROCESSING: document management, scheduling, communication OUTPUTS: documents; schedules USERS: clerical workers EXAMPLE: document imaging system


Slide25 : Knowledge Work Systems (KWS) Information Systems How Businesses Use Information Systems Knowledge Work Systems (KWS) Information system that aids knowledge workers in the creation and integration of new knowledge in the organization. TYPE: Knowledge-level INPUTS: design specifications PROCESSING: modelling OUTPUTS: designs, graphics USERS: technical staff; professionals EXAMPLE: Engineering workstations


Slide26 : Decision Support Systems (DSS) Information Systems How Businesses Use Information Systems Information system at the management level of an organization that combines data and sophisticated analytical models or data analysis tools to support semi-structured and unstructured decision making. TYPE: Management-level INPUTS: low volume data PROCESSING: simulations, analysis OUTPUTS: decision analysis USERS: professionals, staff managers DECISION-MAKING: semi-structured EXAMPLE: sales region analysis Decision Support Systems (DSS)


Slide27 : Decision Support Systems (DSS) Information Systems How Businesses Use Information Systems Characteristics of Decision-Support Systems DSS offer users flexibility, adaptability, and a quick response. DSS operate with little or no assistance from professional programmers. DSS provide support for decisions and problems whose solutions cannot be specified in advance. DSS use sophisticated data analysis and modelling tools.


Slide28 : Management Information Systems (MIS) Information Systems How Businesses Use Information Systems Management Information Systems (MIS) Information system at the management level of an organization that serves the functions of planning, controlling, and decision making by providing routine summary and exception reports. TYPE: Management-level INPUTS: high volume data PROCESSING: simple models OUTPUTS: summary reports USERS: middle managers DECISION-MAKING: structured to semi-structured EXAMPLE: annual budgeting


Slide29 : Management Information Systems (MIS) Information Systems How Businesses Use Information Systems Characteristics of Management information Systems 1. MIS support structured decisions at the operational and management control levels. However, they are also useful for planning purposes of senior management staff. 2. MIS are generally reporting and control oriented. They are designed to report on existing operations and therefore to help provide day-to-day control of operations. 3. MIS rely an existing corporate data-and data flows. 4. MIS have little analytical capability. 5. MIS generally aid in decision making using past and present data. 6. MIS are relatively inflexible. 7. MIS have an internal rather than an external orientation.


Slide30 : Executive Support Systems (ESS) Information Systems How Businesses Use Information Systems Executive Support Systems (ESS) Information system at the strategic level of an organization that address unstructured decision making through advanced graphics and communications. TYPE: Strategic level INPUTS: aggregate data; internal and external PROCESSING: interactive OUTPUTS: projections USERS: senior managers DECISION-MAKING: highly unstructured EXAMPLE: 5 year operating plan


Slide31 : Executive Support Systems (ESS) Information Systems How Businesses Use Information Systems Model of a Typical Executive Support System


Slide32 : Major Types of Information Systems Information Systems How Businesses Use Information Systems


Slide33 : Read the Focus on Organizations and then discuss the following questions: What problems did First Union and Wachovia face when they merged? What solutions were available to Wachovia to solve its problems and meet its goals? What did the TrueComp EIM system do for Wachovia? How did the system benefit the business? Managing Employee Incentives: Wachovia’s Strategic Weapon Types of Business Information Systems Information Systems How Businesses Use Information Systems


Slide34 : Visit Wachovia’s Web site at www.wachovia.com What is your impression of the site? Does it make you think “customer service” or “lean selling machine?” Is there a good balance? Why or why not? What features of the site seem geared toward first-rate customer service? Discuss whether Wachovia’s site would be appealing to you if you were looking to open an account, invest, or apply for a loan. Interactive Session: Wachovia Types of Business Information Systems Information Systems How Businesses Use Information Systems


Slide35 : Interrelationships Among Systems Types of Business Information Systems Information Systems How Businesses Use Information Systems Figure 2-13 The various types of systems in the organization have interdependencies. TPS are major producers of information that is required by many other systems in the firm, which, in turn, produce information for other systems. These different types of systems have been loosely coupled in most organizations.


Slide36 : Enterprise Applications Information Systems How Businesses Use Information Systems Systems That Span the Enterprise Enterprise applications are systems that span functional areas and automate processes for multiple business functions and organizational areas; they include: Enterprise systems Supply chain management systems Customer relationship management systems Knowledge management systems


Slide37 : Firm wide information systems that integrate key business processes so that information can flow freely between different parts of the firm. Also known as enterprise resource planning (ERP) systems Integrate key business processes of an entire firm into a single system enabling managers of large firms to assemble an overall view of operations Alcoa used ERP to eliminate redundancies and inefficiencies in its disparate systems Enterprise Systems Information Systems How Businesses Use Information Systems Systems That Span the Enterprise


Slide38 : Enterprise Systems: traditional view of systems Information Systems How Businesses Use Information Systems Systems That Span the Enterprise


Slide39 : Enterprise Systems Information Systems How Businesses Use Information Systems Systems That Span the Enterprise


Slide40 : Benefits and Challenges of Enterprise Systems Information Systems How Businesses Use Information Systems Systems That Span the Enterprise Benefits Firm structure and organization: One Organization Management: Firm wide Knowledge-based Management Processes Technology: Unified Platform Business: More Efficient Operations and Customer-driven Business Processes Challenges Daunting Implementation High Up-front Costs and Future Benefits Inflexibility


Slide41 : Supply chain: network of facilities for procuring materials, transforming raw materials into finished products,' and distributing finished produce to customers Aim to move the correct amount of product from source to point of consumption as quickly as possible and at the lowest cost Used by firms to manage relationships with suppliers, purchasing firms, distributors, and logistics companies through shared information about orders, production, inventory levels, and more Automate the flow of information across organizational boundaries Supply Chain Management Systems Information Systems How Businesses Use Information Systems Systems That Span the Enterprise


Slide42 : How IS can facilitate supply chain management? Information Systems How Businesses Use Information Systems Systems That Span the Enterprise Information systems can help participants in the supply chain: Decide when and what to produce, store, and move Rapidly communicate orders Track the status of orders Check inventory availability and monitor inventory levels Track shipments Plan production based on actual customer demand Rapidly communicate changes in product design Provide product specifications Share information about defect rates and returns


Slide43 : Coordinate all of the business processes that deal with customers to optimize revenue and customer satisfaction, and increase sales Sales, marketing, and service record data from multiple communication channels can be combined Saab implemented CRM applications from Siebel Systems to achieve a 360º view of customers, resulting in a greater follow-up rate on sales leads and increased customer satisfaction Customer Relationship Management Systems Information Systems How Businesses Use Information Systems Systems That Span the Enterprise


Slide44 : Information Systems How Businesses Use Information Systems Systems That Span the Enterprise Intangible knowledge assets provide value to firms Knowledge management systems manage the capture, storage, distribution, and application of knowledge so that it can be leveraged for strategic benefit Knowledge Management Systems


Slide45 : Intranets and Extranets Information Systems How Businesses Use Information Systems Systems That Span the Enterprise Technology platforms that increase integration and expedite the flow of information Intranets: An in-house Web site that serves the employees of the enterprise. Although intranet pages may link to the Internet, an intranet is not a site accessed by the general Extranets: A Web site for existing customers rather than the general public. It can provide access to paid research, current inventories and internal databases, virtually any information that is private and not published for everyone. An extranet uses the public Internet as its transmission system, but requires passwords to gain access. Intranets that are extended for authorized use outside the company. Intranets often utilize a portal Extranets facilitate collaboration


Slide46 : E-Business, E-Commerce, and E-Government Information Systems How Businesses Use Information Systems Systems That Span the Enterprise E-business refers to the use of digital technology and the Internet to drive major business processes E-commerce is a subset of E-Business that involves buying and selling goods and services through the Internet E-government refers to using Internet technology to deliver information and services to citizens, employees, and businesses


Slide47 : The Information Systems Department Information Systems How Businesses Use Information Systems The Information System’s Function in Business Programmers Systems analysts Information systems managers Chief information officer (CIO) End users


Slide48 : Organizing the Information Systems Function Information Systems How Businesses Use Information Systems The Information System’s Function in Business Small companies often rely on a single person for information technology services rather than an information systems department Some large firms with IS departments decentralize them so that each functional area of the business has its own information systems Other large firms may depend on a central department that makes technology decisions for the entire company