IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/25/ Chapter 9 Building Organizational Partnerships Using Enterprise Information Systems We have this beautiful, elegant, high-I.Q. part of our business that we have been working hard on for many years.” Jeff Bezos, Founder and CEO of Amazon.com We have this beautiful, elegant, high-I.Q. part of our business that we have been working hard on for many years.” Jeff Bezos, Founder and CEO of Amazon.com

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/25/2015 External & Internal Focus Interorganizational systems – External focus  Streamlines data exchange between organizations  Information Flows  Upstream data flow—data received from another company  Downstream data flow—data produced by a company & sent to another organization Intraorganizational systems – Internally focused  Streamlines data exchange within an organization 9-2

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/25/2015 Legacy System Approach 9-3 Problem: Information systems growing over time  Lack of integration  Different computing platforms  Difficult to integrate  Data must be reentered from one system to another  Same pieces of data stored in several versions

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/25/2015 Enterprise System Approach 9-4

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/25/2015 Enterprise Systems 9-5 Enterprise Resource Planning Software Supply Chain Management Software Customer Relationship Management Software Advantages of packaged enterprise applications  Written by third-party vendors  Based upon best practices  Business Process Reengineering  Useful for standardized, repetitive tasks  Cost effective Disadvantages  Must adapt business processes to software  Use the plain vanilla package

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/25/2015 Enterprise Resource Planning (ERP) 9-6 Data warehouse  Large, centralized data repository  Single place for data storage and access

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/25/2015 Core and Extended ERP Components 9-7 Core components—support primary internal activities Extended components—support primary external activities

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/25/2015 Supply Chain Management 9-8 Upstream activities Improvement of business processes spanning organizational boundaries Adopted by large organizations Collaboration with suppliers (supply network)  Ability to compete more effectively in the market place  Cost reduction  Increased responsiveness to market demands Focus on upstream information flows  Acceleration of product development  Reduction of costs of raw materials procurement

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/25/2015 Customer Relationship Management  Concentrates on the downstream information flow  To attract potential customers  Creation of customer loyalty  Unified face to customers 9-9

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/25/2015 Emerging SCM Trends 9-10 Enterprise portals—B2B marketplace  Access point to proprietary information  Productivity gains and cost savings Distribution portals o Products from single supplier to many buyers Procurement portals o Procurement of products between single buyer and multiple suppliers

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/25/2015 Trading Exchanges 9-11 Small companies don’t have funds for SCM Trading exchanges provide a solution  Operated by third-party vendors  Revenue model  Commission for each transaction  Usage and association fees  Advertising  Many buyers and many sellers can come together  Popular trading exchanges:  (steel)  (paper)  (medical equipment)

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/25/2015 Key Technologies for Enhancing SCM 9-12 Extensible Markup Language (XML)  Specifies rules for tagging elements  Specifies how information should be interpreted and used  Customizable  XML variations  Extensible Business Reporting Language (XBRL) Publishing of financial information