1. The Company Organization and Functions
All companies can be viewed as having four basic functions
Sales and Marketing
Manufacturing and Production
Finance and Accounting
Human Resources
Plus execs, senior & middle management, operatives
In a start up you have to do all these things yourself!

2. Business Processes and Information Systems
A Business processes:
Flows of material, information, knowledge
Sets of activities, steps. The sequence of activities and steps is called a business process
May be tied to functional area or be cross-functional
Each company will be unique
Businesses: Can be seen as collection of business processes
Business processes – in ‘the old days’ were done without computers being involved – e.g. general ledger in a bank
Even today sometimes best not to use technology – e.g. ? Lost on a mountain – GPS or map ?

3. Business Processes and Information Systems
Examples of business processes (any examples from EMU?)
Manufacturing and production
How to assembling the product
How to replace a part
Can we think of any more?
Sales and marketing
Identifying customers
Shipment of product
Any more?
Finance and accounting
Creating financial statements
Accounts payable run
Human resources
Hiring employees
Evaluation of performance / Promotion
education

4. e.g.The Order Fulfillment Process (cross-function)
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.

5. Business Processes and Information Systems
Information technology enhances business processes by:
Increasing efficiency of existing processes
Automating steps that were manual
Making things happen a lot quicker
Reducing inaccuracies
Enabling entirely new processes
Change flow of information e.g. individualize product
More people can access information
Eliminate delays in decision making
Support new business models e.g. buying over the internet!
Analytics to help get deeper understanding of customers 5

6. Levels in a Firm
Business Processes have to be coordinated and controlled by a hierarchy of managers
Business organizations are hierarchies consisting of three principal levels: senior management, middle management, and operational management. Information systems serve each of these levels. Scientists and knowledge workers often work with middle management.
Ask students to think about how information systems would factor into the day-to-day jobs of each of the three types of workers in the pyramid. 6

7. Business Processes and Information Systems
Types of Information Systems
Performing business processes requires different skills and actions from different levels within the organization
Each of the above reasons involves business processes
There are different types of systems which specialize in supporting different functions within the organization and the business processes associated with the functions
Senior managers need summary information which can quickly inform them about the overall performance of the company
Middle managers need more detailed information about specific functional areas such as sales contacts by the sales force or production statistics
Operational managers may need transaction level information such as number of parts in inventory each day
Production or maintenance workers may need very specific information about a customer or a particular machine
We will now take a quick look at some of these different types of systems which focus on helping these different types of people make decisions

8. Decision Making Systems: Type1: TPS
Transaction processing systems (simple decision making systems)
Serve operational managers and staff
TPS perform and record daily routine transactions necessary to conduct business
Examples: sales order entry, payroll, shipping
Ensures accurate and reliable information for operatives
Allow managers to monitor status of operations and relations with external environment
Track flow of information; Predefined reports, structured goals and simple decision making
E.g. how many parts in the store, how many tins of beans on the shelf
Simple transactional based queries
Summary reports – how many tins of beans sold today
How many bags gone through this check-in desk
Room reservations in a hotel

9. e.g. A Payroll TPS TPS systems have large numbers of records
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.
TPS systems have large numbers of records
Failure can be critical to operations e.g. Parcel Tracking or Bank

10. e.g. A Baggage Handling TPS
What might baggage handling reports look like ?
Throughput per hour
% near to capacity
Average time for a bag to reach gate
% of delayed bags
% of lost bags
Summary of bags by check-in
Summary of bags by gate
All provides accurate and reliable information for operative/supervisor
US Airways: 2.5m bags lost or delayed per year
Were losing 9 bags per 1000 passengers
Each delayed/lost bag cost airline on average $1000 i.e. $2.5B/year
Implemented new system with sensors, actuators, mechanical devices, RFID
New figure of 3 bags/1000 passengers

11. Decision Making Systems: BIS Systems
Three more types of DMS known collectively as :
Business intelligence systems (BIS)
Management Information Systems (MIS)
Decision support systems (DSS)
Executive support systems (ESS)

12. Decision Making Systems: Type2: Management Information Systems
Serve middle management
Typically provide reports on dept or firm’s current performance, based on data from TPS (often more than one TPS input)
Provide answers to routine questions with predefined procedure for answering them e.g. Burgers sold this quarter; number of rooms free tomorrow night
Typically have little analytic capability
Emphasize to students that Management Information Systems, Global Edition is a specific category of information systems for middle management. It has the same name, but a very different meaning from the term introduced in Chapter 1 (the study of information systems in business and management). In other words, the study of Management Information Systems, Global Edition involves looking at all the systems used in business. An MIS system is a specific type of an IS. It’s easy to get the two confused.

13. How MIS Obtain Their Data from the Organization’s TPS
FIGURE 2-3
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. In the above scenario we might ask if we need to apply for additional bank funding to buy more materials if orders are exceeding expectation and payment is on 3 month terms

14. Decision Making Systems: Type3: Decision Support Systems
Serve middle management
Support non-routine decision making
Example: What is the impact on production schedule if December sales doubled?
May use external information as well TPS / MIS data
E.g. model driven DSS (Optimization)
Voyage-estimating systems; many ships; many contracts to bid for – which ships to use? Must calculate financial and technical voyage details such as speed, capacity, fuel efficiency, labor, port expenses, loading pattern; optimization.
What other examples can we think of regarding the need for optimization? (Internet traffic, parcel delivery, furniture maker with 3 different types of wood – oak, pine and cherry – could make chest of drawers, dressers or table and chairs. Each has different profit – what is optimum combination?)

15. Decision Support Systems: E.g. Voyage Estimating
FIGURE 2-5
This DSS operates on a powerful PC. It is used daily by managers who must develop bids on shipping contracts.

16. DMS Type 3: Decision Support Systems: E.g.2 supermarket
Supermarket promotion or not ?
Marketing department want to increase sales over festive season by 20%
Price reductions, special offers, extra loyalty card points, advertising campaign for awareness of offers, introductory loyalty card points
Operations Manager must consider:
Can supply chain handle additional re-stock orders
Are there enough staff to handle check-out, customer service, shelf stocking
Will there be a need for overtime payments – how much
Additional cash collection to meet insurance requirements
DSS support these type of more complex decisions

17. DMS Type 4: Executive Support Systems (ESS)
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 (a portal!) with real-time view of firm’s financial performance: working capital, accounts receivable, accounts payable, cash flow, and inventory –
Often incorporate data about external events - investment decision for new manufacturing plant – interest rate now and long term, tax incentives, projected product demand, expected lifetime of machinery, political stability
This is an example of the term “Information Driven Management”

18. Enterprise Applications
Where we need different systems to talk and share data
Systems for linking the enterprise
Span functional areas
Execute business processes across firm
Include all levels of management
Four major types:
Enterprise systems – a.k.a. ERP systems (do what we have been looking at but single applications)
Supply chain management systems (go external to help manage/support supply chain)
Customer relationship management systems (extend externally to manage customer)
Knowledge management systems – focused on company collaboration

19. Enterprise Application Architecture
Enterprise applications automate processes that span multiple business functions and organizational levels and may extend outside the organization.
FIGURE 2-6

20. Types of Information Systems
Enterprise systems (ERP 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
Examples – Oracle e-Business Suite, SAP, Microsoft Dynamics. These can be expensive to implement (license costs, re-training, data conversion)
Useful way to bring together companies after acquisition (multiple business processes need consolidating to realize economies of scale)
Encapsulate business best practices (many years of investment in the product)
Order->warehouse->shipment->accounting->customer service

21. Types of Information Systems
Supply chain management (SCM) systems (inter- organizational system – automate flow of information between organizations)
Manage firm’s relationships with suppliers
Link suppliers, purchasing dept, distribution, logistics
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
Example – Nike: contract manufacturers, component suppliers, raw materials suppliers (more later in the course)

22. Types of Information Systems
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
Optimize customer revenue, service and retention
Identify most profitable customers
Supermarket loyalty card forms part of a CRM system – it helps to gather the data
Identify which customers you don’t want ! E.g. call centre !

23. Types of Information Systems
Knowledge management systems (KMS)
Support processes for capturing and applying knowledge and expertise about how the company operates
How to create, produce, deliver products and services (often this information is specific to the company)
Collect internal knowledge and experience within firm and make it available to employees
Link to external sources of knowledge
More in chapter 11

24. Types of Information Systems
Internet Standards based systems
Intranets:
A cheaper alternative for integration
Internal company Web sites accessible only by employees
Extranets:
Company Web sites accessible externally only to vendors and suppliers
Often used to coordinate supply chain
EMU Student Portal ?

25. Types of Information Systems
E-business
Use of digital technology and Internet to drive major business processes (more in chapter 10)
E-commerce
Subset of e-business
Buying and selling goods and services through Internet (more in chapter 10)
E-government:
Using Internet technology to deliver information and services to citizens, employees, and businesses

26. Systems for Collaboration and Teamwork
Short-lived or long-term
Informal or formal (teams)
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

27. Systems for Collaboration and Teamwork
Social business (company social sites e.g Facebook, LinkedIn)
Use of social networking platforms, internal and external
Engage employees, customers, and suppliers
Goal is to deepen interactions and expedite information sharing
Product development
Product feedback
Customer support
“Conversations”
Requires information transparency
Driving the exchange of information without intervention from executives or others

28. Systems for Collaboration and Teamwork
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
E.g. software development (IBM and others)
Development teams can be global
‘virtual teams’
Draw upon global expertise to have ideas and solve problems

29. Requirements for Collaboration
Successful collaboration requires an appropriate organizational structure and culture, along with appropriate collaboration technology.
FIGURE 2-7

30. Systems for Collaboration and Teamwork
Building a collaborative culture and business processes has challenges:
“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.
Manager’s purpose is to serve and assist employees rather than control
Need a reward system which encourages team rather than individualistic behavior

31. Systems for Collaboration and Teamwork
Tools for collaboration and teamwork
and instant messaging
Wikipeadia (c.f. old model of Encyclopedia Britannica – central point of control of information)
Virtual worlds
Collaboration and social business platforms
Virtual meeting systems (telepresence)
Google Apps/Google sites (introductory)
Cyberlockers
Microsoft SharePoint (mid market)
Lotus Notes (IBM) (Large companies)

32. The Information Systems Function in Business
Information systems department:
Formal organizational unit responsible for information technology services
Often headed by chief information officer (CIO) (none technical role – information focused)
Other senior positions include chief security officer (CSO), chief knowledge officer (CKO), chief privacy officer (CPO), chief technology officer (CTO)
Programmers
Systems analysts
Information systems managers
Project Managers
IS Dept provides (typically) Information Technology infrastructure (hardware and software); Telco comms; data management and backup and retention policies; application development and support; IT Planning and Education; IT security; support for mobile platforms; IT helpdesk
More and more IT is now outsourced to third party specialist companies (Cloud, Software as a Service)

33. The Information Systems Function in Business
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
Decision rights
Accountability
Organization of information systems function
Centralized, decentralized, and so on