2.1 © 2007 by Prentice Hall 2 Chapter Global E-Business: How Businesses Use Information Systems

2.2 © 2007 by Prentice Hall LEARNING OBJECTIVES Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems Define and describe business processes and their relationship to information systems. Describe the information systems supporting the major business functions: sales and marketing, manufacturing and production, finance and accounting, and human resources. Evaluate the role played by systems serving the various levels of management in a business and their relationship to each other.

2.3 © 2007 by Prentice Hall Explain how enterprise applications and intranets promote business process integration and improve organizational performance. Assess the role of the information systems function in a business. LEARNING OBJECTIVES (Continued) Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.4 © 2007 by Prentice Hall Information Systems Join the Tupperware Party Problem: Continuing expansion and transition to multilevel compensation structure. Solutions: Revised ordering processes and monitoring service levels and sales increase sales. Oracle Collaboration Suite and Portal enable order entry via Web interface, access to integrated corporate systems, and personal e-commerce sites. Demonstrates IT’s role in designing compensation structure and system integration. Illustrates the benefits of revising internal and customer- related business processes. Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.5 © 2007 by Prentice Hall Business Processes and Information Systems Business processes The unique ways in which organizations coordinate and organize work activities, information, and knowledge to produce a product or service. How information technology enhances business processes: efficiency and transformation Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.6 © 2007 by Prentice Hall Types of Business Information Systems Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems Functional AreaBusiness Process Manufacturing & productionAssembling the product Checking for quality Producing bills of materials Sales & marketingIdentifying customers Making customers aware of the product Selling the product Finance & accountingPaying creditors Creating financial statements Managing cash accounts Human resourcesHiring employees Evaluating employee’s job performance Enrolling employees in benefits plans

2.7 © 2007 by Prentice Hall The Order Fulfillment Process Figure 2-1 Fulfilling a customer order involves a complex set of steps that requires the close coordination of the sales, accounting, and manufacturing functions. Business Processes and Information Systems Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.8 © 2007 by Prentice Hall Systems from a functional perspective –Sales and marketing systems –Manufacturing and production systems –Finance and accounting systems –Human resources systems Systems from a constituency perspective –Transaction processing systems –Management information systems and decision-support systems –Executive support systems Relationship of systems to one another Types of Business Information Systems Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.9 © 2007 by Prentice Hall Transaction Processing Systems (TPS) Management Information Systems Decision-Support Systems Executive-Support Systems Types of Information Systems Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.10 © 2007 by Prentice Hall For operational managers Systems keep track of the elementary activities and transactions of the organization, such as sales, receipt, cash deposits, payroll, credit decisions, and the flow of materials in a factory TPS : a system that performs and records the daily routine transactions necessary to conduct business, such as sales order entry, hotel reservations, payroll, employee record keeping, and shipping. Transaction Processing Systems (TPS) Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.11 © 2007 by Prentice Hall For middle managers Designates a specific category of information systems serving middle management Provide reports on the organization’s current performance Used to monitor and control the business and predict future performance Management Information Systems (MIS) Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.12 © 2007 by Prentice Hall For middle managers Supports non-routine decision making Users can work with them directly, so these systems explicitly include user-friendly software DSS referred to as business intelligence systems because they focus on helping users make better business decisions. Decision Support Systems (DSS) Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.13 © 2007 by Prentice Hall For senior managers Help them make decisions Address nonroutine decision requiring judgment, evaluation, and insight because there is no agreed-on procedure for arriving at a solution ESS are designed to incorporate data about external events, such as new tax laws or competitors, but they also draw summarized information from internal MIS and DSS Filter, compress and track critical data, displaying data of greatest importance to senior managers Executive Support Systems (DSS) Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.14 © 2007 by Prentice Hall Popular ESS: Digital dashboard The information is presented in the form of a digital dashboard, which displays on a single screen graphs and charts of key performance indicators. Executive Support Systems (DSS) Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.15 © 2007 by Prentice Hall Figure 2-2 Types of Business Information Systems Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.16 © 2007 by Prentice Hall Overview of an Inventory System Figure 2-3 This system provides information about the number of items available in inventory to support manufacturing and production activities. Types of Business Information Systems Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.17 © 2007 by Prentice Hall Read the Interactive Session: Organizations, and then discuss the following questions: Why was it so difficult for Kia to identify sources of defects in the cars it produced? What was the business impact of Kia not having an information system to track defects? What other business processes besides manufacturing and production were affected? How did Kia’s new defect-reporting system improve the way it ran its business? What management, organization, and technology issues did Kia have to address when it adopted its new quality control system? What new business processes were enabled by Kia’s new quality control system? Information Systems Help Kia Solve Its Quality Problems Types of Business Information Systems Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.18 © 2007 by Prentice Hall Read the Interactive Session: Management, and then discuss the following questions: What kinds of systems are described here? What valuable information do they provide for employees and managers? What decisions do they support? What problems do automated expense reporting systems solve for companies? How do they provide value for companies that use them? Compare MarketStar’s manual process for travel and entertainment expense reporting with its new process based on Concur Expense Service. Diagram the two processes. What management, organization, and technology issues did MarketStar have to address when adopting Concur Expense Service? Are there any disadvantages to using computerized expense processing systems? Explain your answer. Managing Travel Expenses: New Tools, New Savings Types of Business Information Systems Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.19 © 2007 by Prentice Hall Interrelationships Among Systems Figure 2-10 The various types of systems in the organization have interdependencies. TPS are major producers of information that is required by many other systems in the firm, which, in turn, produce information for other systems. These different types of systems are loosely coupled in most business firms, but increasingly firms are using new technologies to integrate information that resides in many different systems. Types of Business Information Systems Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.20 © 2007 by Prentice Hall Enterprise applications Enterprise systems / ERP Supply chain management systems Customer relationship management systems Knowledge management systems Intranets and extranets E-business, e-commerce, and e-government Systems That Span the Enterprise Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.21 © 2007 by Prentice Hall Enterprise applications Solve problem by collecting data from various key business processes in manufacturing & production, finance & accounting, sales & marketing, and human resources. Information that was previously fragmented in different systems can be easily shared across the firm to help different parts of the business work more closely together. Systems That Span the Enterprise Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.22 © 2007 by Prentice Hall Enterprise Application Architecture Figure 2-11 Enterprise applications automate processes that span multiple business functions and organizational levels and may extend outside the organization. Systems That Span the Enterprise Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.23 © 2007 by Prentice Hall Supply Chain Management Help businesses manage relationships with their suppliers Help suppliers, purchasing firms, distributors & logistics companies share information about orders, production, inventory levels, and delivery of products and services Can make better decisions about how to organize and schedule sourcing, production and distribution. Systems That Span the Enterprise Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.24 © 2007 by Prentice Hall Example of Supply Chain Management System Figure 2-13 Systems That Span the Enterprise Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems Customer orders, shipping notifications, optimized shipping plans, and other supply chain information flow among Haworth’s Warehouse Management System (WMS), Transportation Management System (TMS), and its back-end corporate systems.

2.25 © 2007 by Prentice Hall Customer Relationship Management Help firms manage their relationship with their customers Provide information to coordinate all of the business processes that deal with customers in sales, marketing and service to optimize revenue, customer satisfaction, and customer retention Helps firm identify, attract, and retain the most profitable customers; provide better service to existing customers; and increase sales Systems That Span the Enterprise Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.26 © 2007 by Prentice Hall Customer Relationship Management Consolidate & integrate customer information from multiple communication channel: telephone, , wireless devices, retail outlets, or the Web. Detailed and accurate knowledge of customers and their preferences helps firms increase the effectiveness of their marketing campaigns and provide higher-quality customer service and support. Systems That Span the Enterprise Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.27 © 2007 by Prentice Hall Knowledge Management Systems Enable organizations to better manage processes for capturing and applying knowledge and expertise. Systems That Span the Enterprise Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems

2.28 © 2007 by Prentice Hall The information systems department Responsible for maintaining the hardware, software, data storage, and networks that comprise the firm’s IT infrastructure. Organizing the information systems function IS manager; CIO; CSO; CKO; end usersIS manager; CIO; CSO; CKO; end users The Information Systems Function in Business Management Information Systems Chapter 2 Global E-Business: How Businesses Use Information Systems