Chapter 12

Providing a Strategic Impact Electronic Commerce Systems Inter-organizational Information Systems Global Information Systems Strategic Information Systems

Describe how information systems can have a strategic impact on a business and give examples of information systems that create a competitive advantage for a business. Describe the main types of electronic commerce. List the functions provided by electronic commerce systems. Explain why inter-organizational systems are used in business alliances.

Describe several ways that a business can participate in an inter-organizational system. Explain how an electronic data interchange system functions. Explain what global information systems are why international businesses need them. Describe different forms that global information systems can take and how each form relates to international business strategy. Explain what a strategic information system is an what types of information systems are strategic. Describe how strategic information system opportunities can be identified in business.

Information systems can have a strategic impact on a business when it creates competitive advantage.

Examples of Information Systems that provide a competitive advantage for a business are:  E-Commerce Systems  Inter-organizational Information Systems  Global Information Systems  Strategic Information Systems

Business-to-business (B2B) Consumer-to-consumer (C2C) Business-to-consumer (B2C) Intra-organizational

Types of B2B e-commerce: 1. Supplier-oriented marketplace – supplier companies offer e-commerce for other businesses to order its products. 2. Buyer-oriented marketplace – buyers electronically request quotations or bids from other companies. 3. Intermediary-oriented marketplace – act as intermediaries between buyer and seller.

Describes activities of businesses serving end consumers with products/services. Is growing as consumers experiment with making purchases online. Describes activities of businesses serving end consumers with products/services. Is growing as consumers experiment with making purchases online.

B2C companies run in these ways: – Selling their products electronically aka full cyber-marketers – E-tailing Selling goods or commodities to consumers electronically. aka direct marketers – selling their products through others aka indirect marketers

– Selling traditionally and electronically aka partial cyber-marketers – Filling orders from their own inventory aka electronic distributor – Sending orders they receive to manufacturers or wholesalers that fill the orders aka electronic brokers

It is e-commerce within a business; within the departments, subsidiaries, regions and other units of a business.

A.Presents products – Electronic catalogues, electronic advertising B.Does order entry A.order confirmation, shopping carts C.Allows electronic payment A.Credit cards, debit cards and e-checks D.Permits quicker order fulfilment A.Product distribution E.Provides customer service F.Provides product support G.Allows quick access of data

It computerizes the flow of information between organizations. Shared by one or more suppliers and customers It allows a desired supply-chain management system. It enables competitive organizations to develop. It computerizes the flow of information between organizations. Shared by one or more suppliers and customers It allows a desired supply-chain management system. It enables competitive organizations to develop.

EDI (Electronic Data Interchange) are the most commonly used systems. They transfer data between businesses. EFT (Electronic Funds Transfer) is also used. It transfers money between financial institutions.

Business alliances occur when different businesses decide to help each other grow. They coordinate operations and share resources. Inter-organizational systems allow businesses to share information and process data between each other. Businesses can order their products electronically using an EDI system which is less expensive.

Businesses can participate in an IOS by: – being a sponsor Setting up and maintaining an IOS – being a participator Using an IOS – entering input and receiving output using an IOS sponsored by another business. – accessing data storage or processing capabilities of another business in the IOS. – participating in an IOS by using the capabilities of the IOS received from the sponsor for managing internal operations.

EDI systems permit electronic communication of data between businesses. Data sent can include purchase order data, shipping data, invoice data, product description data, price list data, and insurance data.

It requires: a)Data communications links between businesses b)Special software to send encrypted standardized data c)Data to be inputted directly into the system upon receipt Benefits: – It is fast – Results in fewer data entry errors Complications: – Organizational participation – Technical problems must be solved – Expensive

It is responsible for: – communication between business locations worldwide – transfer of data between international locations – use of system functions at different locations internationally.

International Businesses need Global Information Systems to: – Offer sites in several languages, with a feature that allows the user to select the preferred language. – Allow payment in several different currencies. – Be delicate to cultural differences in the varying countries.

They take the following different forms: – International Sales – International Production – International Product Development

There are 4 business strategies:  Global strategy  Multinational strategy  International strategy  Transnational strategy

Global strategy – the chief headquarters closely directs the activities of its foreign operations. Businesses that follow a global strategy usually have highly centralized Global Information Systems determined by the central headquarters.

Multinational strategy – a business’ foreign operations function independently. Businesses that follow a multinational strategy tend to have decentralized, or independent, information systems for their central headquarters and different foreign operations.

International strategy – makes the central headquarters transfer knowledge and skills to the foreign operations. Businesses that follow an international strategy tend to have distributed GIS in which systems in the central headquarters are connected to those in the foreign operations.

Transnational strategy – uses knowledge and skills from both the central headquarters and the foreign operations. Business that follow the transnational strategy require complex, integrated GIS in which the central headquarters and all the foreign operations participate equally.

Types of information systems that are strategic:  Management Information Systems (MIS)  Transaction Processing Systems (TPS)  Decision Support Systems (DSS)

To identify strategic information system opportunities the user needs to look at the value chain. The Value Chain includes primary and support activities.

Primary Activities Inbound logistics Operations Outbound logistics Marketing and Sales Service Support Activities Procurement Human resource management Technology development Firm Infrastructure

1.List three (3) information systems that create a competitive advantage for a business. 2. List and give an example of three of the four (4) types of E-commerce. 3. List five (5) functions of E-commerce systems. 4. Define Inter-organizational information systems and give two (2) examples. 1.List three (3) information systems that create a competitive advantage for a business. 2. List and give an example of three of the four (4) types of E-commerce. 3. List five (5) functions of E-commerce systems. 4. Define Inter-organizational information systems and give two (2) examples.

5. What is EDI? State two (2) functions. 6. State two (2) reasons businesses need Global information systems. 7. List the four (4) business strategies and explain two (2). 8. List three (3) primary activities and three (3) support activities of a VALUE CHAIN. 5. What is EDI? State two (2) functions. 6. State two (2) reasons businesses need Global information systems. 7. List the four (4) business strategies and explain two (2). 8. List three (3) primary activities and three (3) support activities of a VALUE CHAIN.