Management Information Systems Managing Information Technology in the Business Enterprise

Introduction to e-Business Systems Chapter 5 Introduction to e-Business Systems

Learning Objectives Give examples of how Internet and other information technologies support business processes within the business functions of .. Accounting, Finance, Human resource management, Marketing, and Production and operations management.

Learning Objectives (continued) Identify the following cross-functional system concepts, and how they can provide significant business value to a company: Enterprise application integration Transaction processing systems Enterprise collaboration systems

Functional Business Systems Section I Functional Business Systems

IT in Business “Business managers are moving from a tradition where they could avoid, delegate, or ignore decisions about IT to one where they cannot create a marketing, product, international, organization, or financial plan that does not involve such decisions.”

Marketing Systems Marketing Information Systems provide information technologies that support major components of the marketing function. Interactive Marketing Customer focused marketing process Based on using Internet, intranets, & extranets to establish two-way communications between customers or potential customers and the business Customers become involved in product development, delivery, & service issues

Marketing Systems (continued) Targeted marketing Five targeting components Community Content Context Demographic/psychographic Online behavior

Marketing Systems (continued) Sales Force Automation The sales force is connected to marketing websites on the Internet, extranets, & the company intranet Increases productivity of sales force Speeds up the capture & analysis of sales data Allows management to provide improved delivery information & better support of the sales force.

Manufacturing Systems Support the production/operations function Assists firms in planning, monitoring, & controlling inventories, purchases, & the flow of goods and services

Manufacturing Systems (continued) Computer-Integrated Manufacturing (CIM) Simplify Automate Integrate Supports the concepts of flexible manufacturing systems, agile manufacturing, & total quality management Computer-Aided Engineering (CAE) Computer-Aided Design (CAD) Material Requirements Planning (MRP)

Manufacturing Systems (continued) Computer-Aided Manufacturing (CAM) Automate the production process Manufacturing Execution Systems (MES) Performance monitoring systems for factory floor operations

Manufacturing Systems (continued) Process Control The use of computers to control an ongoing physical process Machine Control The use of a computer to control the actions of a machine. Also called numerical control

Human Resource Systems Human Resource Information Systems support Planning to meet the personnel needs of the business Development of employees to their full potential Recruitment, selection, & hiring Job placement

Human Resource Systems (continued) Human Resource Information Systems (continued) Performance appraisals Employee benefits analysis Training and development Health, safety, & security

Human Resource Systems (continued) HRM and the Internet Allows companies to process most common HRM applications over their intranets. Allows companies to provide around-the-clock services to their employees. Allows companies to disseminate valuable information faster. Allows employees to perform HRM tasks online.

Human Resource Systems (continued) Staffing Supported by information systems that record and track human resources to maximize their use Training and Development Help human resource managers plan and monitor employee recruitment, training, and development programs

Accounting Systems Record and report business transactions and other economic events Online Accounting Systems

Accounting Systems (continued) Six widely used accounting systems Order processing Captures & processes customer orders and produces data needed for sales analysis and inventory control Inventory Control Processes data reflecting changes in items in inventory. Helps provide high-quality service while minimizing investment in inventory & inventory carrying costs

Accounting Systems (continued) Accounts Receivable Keeps records of amounts owed by customers from data generated by customer purchases and payments Accounts Payable Keeps track of data concerning purchases from, and payments to, suppliers

Accounting Systems (continued) Payroll Receives and maintains data from employee time cards and other work records General Ledger Consolidates data received from accounts receivable, accounts payable, payroll, & other accounting information systems

Financial Management Systems Supports financial managers in decisions concerning The financing of the business The allocation & control of financial resources within the business.

Financial Management Systems (continued) Major financial management system categories Cash Management Collects information on all cash receipts and disbursements on a real-time or periodic basis

Financial Management Systems (continued) Investment Management Helps the financial manager make buy, sell, or hold decisions for each type of security Helps the financial manager develop the optimum mix of securities in order to minimize risk and maximize return

Financial Management Systems (continued) Capital Budgeting Involves evaluating the profitability and financial impact of proposed capital expenditures Allows financial managers to analyze long-term expenditure proposals for plant and equipment

Financial Management System (continued) Financial Forecasting & Planning Evaluate the present and projected financial performance of the company Help determine financing needs and analyze alternative methods of financing Explore what-if and goal-seeking questions

Cross-Functional Enterprise Systems Section II Cross-Functional Enterprise Systems

Cross-Functional Enterprise Applications Integrated combinations of information subsystems that share information resources and support business processes across the functional units A strategic way to use IT to share information resources & improve efficiency & effectiveness

Cross-Functional Enterprise Applications (continued) Enterprise Application Architecture

Cross-Functional Enterprise Applications (continued) Focused on accomplishing fundamental business processes in concert with the company’s customer, supplier, partner, & employee stakeholders

Enterprise Application Integration (EAI) Software enables users to model the business processes involved in the interactions that should occur between business applications. Also provides middleware that Performs data conversion & coordination Provides application communication & messaging services Provides access to the application interfaces

Enterprise Application Integration (continued) Business value Integrates front-office and back-office applications to allow for quicker, more effective response to business events and customer demands Improves customer and suppler experience with the business because of its responsiveness.

Transaction Processing Systems Cross-functional information systems that process data resulting from the occurrence of business transactions Transactions – events that occur as part of doing business Sales Purchases Deposits Withdrawals Refunds Payments

Transaction Processing Systems (continued) Online transaction processing systems Real-time systems that capture and process transactions immediately Adds value to product or service through superior customer service

Transaction Processing Systems (continued) Transaction Processing Cycle Data entry The capture of business data Transaction processing Two basic ways Batch processing where transaction data are accumulated & processed periodically Real-time processing where data are processed immediately after a transaction occurs

Transaction Processing Systems (continued) Database maintenance Corporate databases are updated to reflect the day-to-day business transactions Document and report generation A variety of documents and reports are produced

Transaction Processing Systems (continued) Inquiry processing Inquiries and responses concerning the results of transaction processing activity

Transaction Processing Systems (continued)

Enterprise Collaboration Systems Cross-functional e-business systems that enhance communication, coordination, & collaboration Communicate – share information with each other Coordinate – coordinate individual work efforts & use of resources with each other. Collaborate – work together cooperatively on joint projects and assignments

Enterprise Collaboration Systems (continued) Tools for Enterprise Collaboration Electronic communication E-mail Voice mail Fax Web publishing Bulletin boards Paging Internet phone systems

Enterprise Collaboration Systems (continued) Electronic conferencing Data & voice conferencing Videoconferencing Chat systems Discussion forums Electronic meeting systems Synchronous. Team members can meet at the same time and place in a “decision room” setting

Enterprise Collaboration Systems (continued) Collaborative work management Calendaring & scheduling Task & project management Workflow systems Knowledge management

Summary Marketing information systems support traditional and e-commerce processes Manufacturing information systems support Computer Integrated Manufacturing (CIM) Human resources information systems support staffing, training, development, and compensation Accounting information systems record, report, and analyze transactions and events

Summary (continued) Financial information systems include forecasting and planning of cash, investments, and capital Cross-functional enterprise systems include Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Supply Chain Management (SCM), and Enterprise Collaboration Systems (ECS) Transaction processing systems record data about business transactions

Discussion Questions Why is there a trend toward cross-functional integrated enterprise systems in business? How do you think sales force automation affects salesperson productivity, marketing management, and competitive advantage?

Discussion Questions (continued) How can Internet technologies be involved in improving a process in one of the functions of business? What are several e-business applications that you might recommend to a small company to help it survive and succeed in challenging economic times?

Discussion Questions (continued) Which of the 14 tools for enterprise collaboration do you feel are essential for any business to have today? Which do you feel are optional?

Real World Case 1 – Canadian Depository for Securities What are the advantages and disadvantages of CDSX versus the legacy system it replaced? Identify the online services that you find to be useful. Who are the potential users of the CDSX system?

Real World Case 2 – Trimac Transportation What are the advantages of integrated systems? How would Trimac customers benefit from the BI system? What would you recommend as the next customer-based e-business initiative for Trimac?

Real World Case 3 – Union Pacific, Corporate Express, & Best Buy How could an enterprise application integration system help a firm to better serve its customers? How could enterprise application systems improve a company’s business interactions with its suppliers?

Real World Case 3 (continued) What major challenges are faced by businesses that implement EAI initiatives? How can companies meet those challenges?