MIS project

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Global E-business and Collaboration

Chapter 2

Management Information Systems

In order to operate, businesses must deal with many different pieces of information about suppliers, customers, employees, invoices, and payments, and of course their products and services.
They must organize work activities that use this information to operate efficiently and enhance the overall performance of the firm.
Information systems make it possible for firms to manage all their information, make better decisions, and improve the execution of their business processes.

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Define and describe business processes and their relationship to information systems.
Evaluate the role played by systems serving the various levels of management in a business and their relationship to each other.
Explain how enterprise applications improve organizational performance.

Learning Objectives

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Explain the importance of collaboration and teamwork in business and how they are supported by technology.
Assess the role of the information systems function in a business.

Learning Objectives (cont.)

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Business processes: the manner in which work is organized, coordinated, and focused to produce a valuable product or service.
Flows of material, information, knowledge
Sets of activities: These activities are supported by flows of material, information, and knowledge among the participants in business processes.
the performance of a business firm depends on how well its business processes are designed and coordinated
A company’s business processes can be a source of competitive strength if they enable the company to innovate or to execute better than its rivals.

Business Processes and Information Systems

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Many business processes are tied to a specific functional area. For example
Manufacturing and production
Assembling the product
Sales and marketing
Identifying customers
Finance and accounting
Creating financial statements
Human resources
Hiring employees

Business Processes and Information Systems

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Fulfilling a customer order involves a complex set of steps that requires the close coordination of the sales, accounting, and manufacturing functions.

FIGURE 2-1

The Order Fulfillment Process

Other business processes cross many different functional areas and require coordination across departments.

The order passes first to accounting to

ensure the customer can pay for the order either by a credit verification or

request for immediate payment prior to shipping. Once the customer credit is

established, the production department pulls the product from inventory or

produces the product. Then the product is shipped (and this may require working

with a logistics firm, such as UPS or FedEx). A bill or invoice is generated by

the accounting department, and a notice is sent to the customer indicating that

the product has shipped. The sales department is notified of the shipment and

prepares to support the customer by answering calls or fulfilling warranty

claims.

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Information technology enhances business processes by:
Increasing efficiency of existing processes
Automating steps that were manual such as checking a client’s credit, or generating an invoice and shipping order.
Enabling entirely new processes
Change flow of information
Replace sequential steps with parallel steps
Eliminate delays in decision making
Support new business models

Ex. Downloading a Kindle e-book from Amazon, buying a computer online at Best Buy, and downloading a music track from iTunes

Business Processes and Information Systems

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Because there are different interests, specialties, and levels in an organization, there are different kinds of systems.
No single system can provide all the information an organization needs. Therefore, A business firm has systems to support different groups or levels of management.
Transaction processing systems
Serve operational managers and staff
Perform and record daily routine transactions necessary to conduct business
sales order entry, hotel reservations, payroll, employee record keeping, and shipping.
Allow managers to monitor status of operations and relations with external environment
Serve predefined, structured goals and decision making

Types of Information Systems

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A TPS for payroll processing captures employee payment transaction data (such as a time card). System outputs include online and hard-copy reports for management and employee paychecks.

FIGURE 2-2

A Payroll TPS

A payroll system keeps track of money paid to employees.

Maintain records of the firm’s income and expenses and for producing

reports such as income statements and balance sheets.

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Business intelligence: focus on delivering information to support management decision making.
Data and software tools for organizing and analyzing data
Used to help managers and users make improved decisions
Business intelligence systems
Management information systems
Decision support systems
Executive support systems

Types of Information Systems

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Management information systems
Serve middle management
Provide reports on firm’s current performance, based on data from TPS
Provide answers to routine questions with predefined procedure for answering them
MIS typically provide answers to routine questions such as summaries and comparisons that have been specified in advance and have a predefined procedure for answering them.

Types of Information Systems

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In the system illustrated by this diagram, three TPS supply summarized transaction data to the MIS reporting system at the end of the time period. Managers gain access to the organizational data through the MIS, which provides them with the appropriate reports.

FIGURE 2-3

How MIS Obtain Their Data from the Organization’s TPS

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This report, showing summarized annual sales data, was produced by the MIS in Figure 2-3.

FIGURE 2-4

Sample MIS Report

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Decision support systems
Serve middle management
Support non-routine decision making: focus on problems that are unique and rapidly changing, for which the procedure for arriving at a solution may not be fully predefined in advance.
Example: What is the impact on production schedule if December sales doubled?
May use external information as well TPS / MIS data
Model driven DSS
Voyage-estimating systems
Data driven DSS: extract useful information from massive quantities of data. ex.: Intrawest’s marketing analysis systems

Types of Information Systems

: collects and stores

large amounts of customer data from its Web site, call center,

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This DSS operates on a powerful PC. It is used daily by managers who must develop bids on shipping contracts.

FIGURE 2-5

Voyage-Estimating Decision Support System

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Executive support systems
Support senior management:
Address non-routine decisions
Requiring judgment, evaluation, and insight
Incorporate data about external events (e.g. new tax laws or competitors) as well as summarized information from internal MIS and DSS
Example: Digital dashboard with real-time view of firm’s financial performance: working capital, accounts receivable, accounts payable, cash flow, and inventory

Types of Information Systems

Senior managers need systems that focus on strategic

issues and long-term trends, both in the firm and in the external environment.

They are concerned with questions such as: What will employment levels be in

five years? What are the long-term industry cost trends? What products should

we be making in five years?

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Executive support systems

Types of Information Systems

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Enterprise applications
Systems for linking the enterprise: Getting all the different kinds of systems in a company to work together.
Span functional areas
Focus on executing business processes across firm
Include all levels of management
help businesses become more flexible and productive by coordinating their business processes more closely and integrating groups of processes.
Four major applications:
Enterprise systems
Supply chain management systems
Customer relationship management systems
Knowledge management systems

Types of Information Systems

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Enterprise applications automate processes that span multiple business functions and organizational levels and may extend outside the organization.

FIGURE 2-6

Enterprise Application Architecture

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Enterprise systems
Collects data from different firm functions and stores data in single central data repository
Resolves problem of fragmented data
Enable:
Coordination of daily activities
Efficient response to customer orders (production, inventory)
Help managers make decisions about daily operations and longer-term planning

Types of Information Systems

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Enterprise systems Example:
A customer places an order,
the order data flow automatically to other parts of the company that are affected by them.

The order transaction triggers the warehouse to pick the ordered products and schedule shipment.

The warehouse informs the factory to replenish whatever has been depleted.

The accounting department is notified to send the customer an invoice.

Customer service representatives track the progress of the order through every step to inform customers about the status of their orders.

Types of Information Systems

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Supply chain management (SCM) systems
Manage firm’s relationships with suppliers
Share information about:
Orders, production, inventory levels, delivery of products and services
Goal:
Right amount of products to destination with least amount of time and lowest cost

Types of Information Systems

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Customer relationship management systems:
Provide information to coordinate all of the business processes that deal with customers
Sales
Marketing
Customer service
Helps firms identify, attract, and retain most profitable customers

Types of Information Systems

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Knowledge management systems (KMS)
Support processes for capturing and applying knowledge and expertise
How to create, produce, deliver products and services
Collect internal knowledge and experience within firm and make it available to employees
Link to external sources of knowledge

Types of Information Systems

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Additional tools for increasing integration and expediting the flow of information within the firm, and with customers and suppliers.

- Intranets:

Internal company Web sites accessible only by employees
in contrast to the Internet, which is a public network linking organizations and other external networks.
Intranets use the same technologies and techniques as the larger Internet

Extranets:
Company Web sites accessible externally only to vendors and suppliers
Often used to coordinate supply chain

Types of Information Systems

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E-business
Use of digital technology and Internet to drive major business processes
Activities for the internal management of the firm and for coordination with suppliers and other business partners.
E-commerce
Subset of e-business
Buying and selling goods and services through Internet
activities supporting those market transactions, such as advertising, marketing, customer support, security, delivery, and payment.
E-government:
Using Internet technology to deliver information and services to citizens, employees, and businesses
makes government operations more efficient and also empowers citizens by giving them easier access to information.

Types of Information Systems

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Collaboration: is working with others to achieve shared and explicit goals.
Short-lived or long-term
Informal (not a formal part of the business firm’s organizational structure) or formal (teams): The team mission might be to “win the game,” or “increase online sales by 10 percent.”
Growing importance of collaboration:
Changing nature of work
Growth of professional work—“interaction jobs”
Changing organization of the firm
Changing scope of the firm
Emphasis on innovation
Changing culture of work

Systems for Collaboration and Teamwork

A number of factors are leading to a growing emphasis on collaboration in the firm. Work is changing, requiring more cooperation and coordination. Professions play a larger role in firms than before, and this often requires more consultation among experts than before. Organizations are flatter, with many more decisions made far down in the hierarchy. Organizations are more far flung around the globe, in multiple locations. There’s an emphasis on finding and sharing ideas which requires collaboration. Finally, what it means to be a “good” employee these days is in part an ability to work with others, and collaborate effectively. The culture of work has changed.

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Business benefits of collaboration and teamwork
Investments in collaboration technology can bring organization improvements, returning high ROI
Benefits:
Productivity
Quality
Innovation
Customer service
Financial performance
Profitability, sales, sales growth

Systems for Collaboration and Teamwork

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Successful collaboration requires an appropriate organizational structure and culture, along with appropriate collaboration technology.

FIGURE 2-7

Requirements for Collaboration

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Building a collaborative culture and business processes
“Command and control” organizations
No value placed on teamwork or lower-level participation in decisions
Collaborative business culture
Senior managers rely on teams of employees.
Policies, products, designs, processes, and systems rely on teams.
The managers purpose is to build teams.

Systems for Collaboration and Teamwork

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Tools for collaboration and teamwork
E-mail and instant messaging
Wikis
Virtual worlds
Collaboration and social business platforms
Virtual meeting systems (telepresence)
Google Apps/Google sites
Cyberlockers
Microsoft SharePoint
Enterprise social networking tools

Systems for Collaboration and Teamwork

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Enterprise social networking software capabilities
Profiles
Content sharing
Feeds and notifications
Groups and team workspaces
Tagging and social bookmarking
Permissions and privacy

Systems for Collaboration and Teamwork

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Two dimensions of collaboration technologies
Space (or location)—remote or co-located
Time—synchronous or asynchronous
Six steps in evaluating software tools

What are your firm’s collaboration challenges?

What kinds of solutions are available?

Analyze available products’ cost and benefits.

Evaluate security risks.

Consult users for implementation and training issues.

Evaluate product vendors.

Systems for Collaboration and Teamwork

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Collaboration technologies can be classified in terms of whether they support interactions at the same or different time or place or whether these interactions are remote or co-located.

FIGURE 2-8

The Time/Space Collaboration Tool Matrix

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Information systems department:

Formal organizational unit responsible for information technology services

Often headed by chief information officer (CIO)

Other senior positions include chief security officer (CSO), chief knowledge officer (CKO), chief privacy officer (CPO)

Programmers

Systems analysts

Information systems managers

The Information Systems Function in Business

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End users
Representatives of other departments for whom applications are developed
Increasing role in system design, development
IT Governance:
Strategies and policies for using IT in the organization
It specifies the decision rights and framework for accountability to ensure that the use of information technology supports the organization’s strategies and objectives.
Organization of information systems function
the return on IT investments? Who should make these decisions? How will these decisions be made and monitored?

The Information Systems Function in Business

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