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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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