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Lecture on Global E-Business How Business use Information systems
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What is E-Business?
E- (Electronic ): means the computer uses electronic components to process information
Businesses:
Can be seen as collection of business processes
Business processes may be assets or liabilities
E-business refers to a broader definition of e-commerce, not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners, conducting e-learning, and processing electronic transactions.
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Information Technology
Computer technology is encountered in many places today and in many different forms.
Information is the act of informing or the condition of being informed, the communication of knowledge derived from study, experience, or instruction
Technology is the application of science, especially to industrial or commercial objectives
Information Technology (IT) refers to the creation, gathering, processing, storage, and delivery of information and the processes and devices that make this possible.
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Business processes:
Environmental factors and enterprise applications have forced businesses to examine their 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
Information systems help organizations
Achieve great efficiencies by automating parts of processes
Rethink and streamline processes
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What is a business process?
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Manufacturing and production:
Assembling product, checking quality, producing bills of materials
Sales and marketing:
Identifying customers, creating customer awareness, selling
Finance and accounting:
Paying creditors, creating financial statements, managing cash accounts
Human Resources:
Hiring employees, evaluating performance, enrolling employees in benefits plans
Examples of Business Processes
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Ordering a book
Tracking a package
Trading stocks
Paying bills
Developing a photograph
Designing an airplane/car
Registering for a class
Capturing and sharing employee knowledge
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Examples: How IT Changes Business Process
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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
Integrating Functions & Business Processes:
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Figure 2-1
The Order Fulfillment Process
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An information system (IS) is a set of interrelated components working together to (1) facilitate operational functions and (2) support management decision making by producing information that enables managers to plan and control.
Components include hardware, software, data, people, and procedures
An (IS) is an organizational and management solution based on information technology to a challenge posed by the environment
Information technology (IT) includes computer hardware, software, storage technologies, and telecommunications/networks
What Are Information Systems?
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Information systems are models of physical systems
Information systems engage in four basic activities in order to support operations and management decision making
Input
Processing
Output
Feedback for operations and decision making
Feedback on the performance of IS
Storage
Basic Functions of Information Systems
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Transaction Processing Systems (TPS)
Management Information Systems (MIS)
Decision Support Systems (DSS)
Executive Support Systems (ESS)
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
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By the groups they serve
Operational level
Management level
Strategic level
By functional area
Sales and marketing
Manufacturing and production
Finance and accounting
Human resources
Ways to Categorize Information Systems
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The Four Major Types of Information Systems by the Groups They Serve & Functional Area
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Transaction Processing Systems (TPS)
Basic business systems that serve the operational level
A computerized system that facilitates daily routine transactions necessary to the conduct of the business and captures and stores data associated with the transaction
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A Symbolic Representation for a Payroll TPS
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Management Information System (MIS)
MIS serve the management level of the organization, providing managers with reports and online access to the organization’s current performance and historical records.
Inputs: High-volume data
Processing: Simple models
Outputs: Summary reports
Users: Middle managers
Example: Annual budgeting
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Management Information Systems (MIS) (continued)
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Decision Support System (DSS)
DSS serve the management level and help managers make decision that are unique, rapidly changing, and not easily specified in advance (use of mathematical models)
Inputs: Low-volume data
Processing: Interactive (e.g., what-if analysis), data-mining, OLAP
Outputs: Decision analysis
Users: Professionals, staff
Example: Contract cost analysis
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Decision-Support Systems (DSS) (Continued)
Voyage-estimating decision-support system
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Executive Support System (ESS)
ESS support strategic level managers to help make decisions that are non-routine requiring judgment, evaluation, and insight.
Inputs: Aggregate data
Processing: Interactive
Outputs: Projections
Users: Senior managers
Example: 5-year operating plan
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Top level management
Designed to the individual
Ties CEO to all levels
Very expensive to keep up
Extensive support staff
Executive Support System (ESS)
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Model of a Typical Executive Support System
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Overview of an Inventory System
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Financing & Accounting Systems (Continued)
SYSTEM
DESCRIPTION
ORGANIZATION- AL LEVEL
Accounts receivable
Tracks money owed the firm
Operational
Budgeting
Prepares short-term budgets
Management
Profit planning
Plans long-term profits
Strategic
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Human Resource Systems (Continued)
SYSTEM
DESCRIPTION
ORGANIZATIONAL LEVEL
Training and development
Tracks employee training, skills, and performance appraisals
Operational
Compensation analysis
Monitors the range and distribution of employee wages, salaries, and benefits
Management
Human resources planning
Plans the long-term labor force needs of the organization
Strategic
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Enterprise Systems
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Help to unify the firm’s structure and organization: One organization
Management: Firm wide knowledge-based management processes
Technology: Unified platform
Business: More efficient operations & customer-driven business processes
Benefits of Enterprise System
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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
2. Supply Chain Management (SCM)
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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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4. Knowledge Management Systems
Collects relevant knowledge and make it available wherever and whenever it is needed
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 OPPORTUNITIES & 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.
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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