1. Global E-Business: How Businesses Use Information Systems
Chapter 2
Global E-Business: How Businesses Use Information Systems
LEC 3

2. Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
LEARNING OBJECTIVES
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.

3. Assess the role of the information systems function in a business.
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
LEARNING OBJECTIVES (Continued)
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.

4. Business processes and information systems
Information systems are all about improving business processes.
At this point it is very important to understand what a business process is.

5. Logically related tasks to produce specific business results.
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Business Processes and Information Systems
Business processes:
Logically related tasks to produce specific business results.
Sets of activities, steps
Manner in which work is organized, coordinated, and focused to produce a valuable product or service May be tied to functional area or be cross-functional
Businesses: Can be seen as collection of business processes

6. Examples of functional business processes
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Business Processes and Information Systems
Examples of functional business processes
Manufacturing and production
Assembling the product
Checking for quality
Producing bills of material
Sales and marketing
Identifying customers
Selling the product
Finance and accounting
Creating financial statements
Human resources
Hiring employees

7. Cross functional business process The Order Fulfillment Process
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Business Processes and Information Systems
Close coordination of major functional groups in a firm.
Require great deal of information.
Information must rapidly flow within firm and business partners and delivery firm. Information system make this happen.
Cross functional business process
The Order Fulfillment Process
Fulfilling a customer order involves a complex set of steps that requires the close coordination of the sales, accounting, and manufacturing functions.
Figure 2-1

8. Information technology enhances business processes in two main ways:
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Business Processes and Information Systems
Information technology enhances business processes in two main ways:
Increasing efficiency of existing processes
Automating steps that were manual
Enabling entirely new processes that are capable of transforming the businesses
Change flow of information
Replace sequential steps with parallel steps
Eliminate delays in decision making
Example Ordering a book online from Amazon
Downloading music from ITunes are new business processes based on new models.

9. Throughout this course we view business process with a view of how they mite be changed or replaced by using IT to achieve greater efficiency, innovation and customer service.

10. TYPES OF BUSINESS INFORMATION SYSTEMS
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
TYPES OF BUSINESS INFORMATION SYSTEMS
Looking at all systems from two perspectives
Systems from a functional perspective
Sales and marketing systems
Manufacturing and production systems
Finance and accounting systems
Human resources systems

11. Sales and marketing systems
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Sales and marketing systems
Functional concerns include:
Sales management, customer identification market research, advertising and promotion, pricing, new products
Sales and marketing information systems support all these business processes.
Examples of systems:
Order processing, tracking sales,customer service support (operational level)
Pricing analysis, support marketing research (middle mgmt)
Sales trend forecasting, monitor trends affectinging new products and sales opportunities (senior mgmt)

12. Example of a Sales Information System Used by Gap
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Example of a Sales Information System
Used by Gap
This system captures sales data at the moment the sale takes place to help the business monitor sales transactions and to provide information to help management analyze sales trends and the effectiveness of marketing campaigns. Determine sales revenue, hot selling items.
Figure 2-2

13. Manufacturing and production systems
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Manufacturing and production systems
Functional concerns include:
Planning, development and maintenance of production facilities. Managing production facilities, production goals, production materials, and scheduling
Examples of systems:
Machine control (operational mgmt)
Production planning, manufacturing the production costs and revenues. How many products to produce. (middle mgmt)
Facilities location, where to locate new plant,invest in new machines (senior mgmt)

14. Overview of an Inventory System
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Overview of an Inventory System
This system provides information about the number of items available in inventory to support manufacturing and production activities.
Reorder point the #of units in inventory that triggers a decision a decision to reorder so to prevent a stock out)
Figure 2-3

15. Finance and accounting systems
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Finance and accounting systems
Functional concerns include:
Finance function: Managing financial assets (cash, stocks, bonds,etc.) and capitalization of firm, and accounting is managing firm’s financial records. Keep track of firms financial assets and funds flow.
Examples of systems:
Accounts receivable. Track flow of funds (operational mgmt)
Budgeting i.e short term budgeting (middle mgmt)
Profit planning,longterm investment goals, forecast of firms financial performance.(senior mgmt)

16. An Accounts Receivable System
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
An Accounts Receivable System
An accounts receivable system tracks and stores important customer data, such as payment history, credit rating, and billing history. system keep track of bills outstanding
Figure 2-4

17. Human resource systems
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Human resource systems
Functional concerns include:
Identifying potential employees, maintaining employee records, creating programs to develop employee talent and skills
Examples of systems:
Training and development (operational mgmt)
Compensation analysis, monitor recruitment (middle mgmt)
Long-term Human resources planning and requirments (senior mgmt)

18. An Employee Record Keeping System
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
An Employee Record Keeping System
This system maintains data on the firm’s employees to support the human resources function.Report show list of emplyees terminated.
Figure 2-5

19. Systems from a constituency perspective
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Systems from a constituency perspective
Transaction processing systems: supporting operational level employees
Management information systems and decision-support systems: supporting managers
Executive support systems: supporting executives

20. Chapter 1 Information Systems in Global Business Today
Lecture2
Chapter 1 Information Systems in Global Business Today
System supporting at different levels
Constituency perspective
Support of
Strategic
Advantage(ESS)
Business
Decision Making(MIS,DSS)
Business Processes and Operations(TPS) 20

21. Transaction processing systems
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Transaction processing systems
Perform and record daily routine transactions necessary to conduct business
E.g. sales order entry, payroll, hotel reservation system,airline reservation system,shipping.
Allow managers to monitor status of operations and relations with external environment
Serve operational levels
Serve predefined, structured goals and decision making(procedures are pre defined)
Very central to a firm, failure of TPs leads to a firms death. E.g. airlines reservation system

22. Data elements in payroll
Payroll TPS
PROCESS
OUTPUT
INPUT
Payroll master file
Calculating pay
Calculating cost of taxes
etc.
Payroll
system
Management
reports
Data elements in payroll
master file
Employee number
Employee name
Employee department
Employee occupation
Employee pay rate
Earnings
State tax
Government
documents
Employee
checks

23. Management information systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Management information systems
Serve middle management
Provide reports on firm’s current performance, based on data from TPS
Provide answers to routine questions with predefined procedure for answering them
Typically have little analytic capability

24. Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
How Management Information Systems Obtain their Data from the Organization’s TPS
Accounts receivable system supplies data to the company's general ledger system which will produce reports like income statement.
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. Managers gain access to the organizational data through the MIS, which provides them with the appropriate reports.
Figure 2-6

25. Sample MIS Report Management Information Systems Figure 2-7
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Sample MIS Report
This report, showing summarized annual sales data, was produced by the MIS in Figure 2-6.
Figure 2-7

26. Decision support systems
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Decision support systems
Serve middle management
Support nonroutine decision making
Procedures for arriving at a solution may not be predefined.
E.g. What is impact on production schedule if December sales doubled?
Often use external information (from competitors, stock prices) as well from TPS and MIS
Model driven DSS
Use a variety of models to analyze data.

27. Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Executive support systems
Support senior management to address strategic issues and long term trends. Eg. What products should we making in five years?
Address nonroutine decisions requiring judgment, evaluation, and insight because there is no agreed on procedure to arrive at the solution.
ESS Incorporates data about external events (e.g. new tax laws or competitors) as well as summarized information from internal MIS and DSS
Display data of critical importance, in the form of graphs and displays via portal.
E.g. ESS that provides minute-to-minute view of firm’s financial performance as measured by working capital, accounts receivable, accounts payable, cash flow, and inventory.

28. Model of an Executive Support System
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Model of an Executive Support System
Figure 2-9
Illustrates a model of ESS.It consists of workstations with menus, interactive graphics and communication capabilities that can be used to access historical and competitive data from internal corporate systems and external databases such as dow Jones.

29. Relationship of systems to one another
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Relationship of systems to one another
TPS: Major source of data for other systems
ESS: Recipient of data from lower-level systems
Data may be exchanged between systems
In reality, most businesses’ systems only loosely integrated

30. Interrelationships Among Systems
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Interrelationships Among Systems
Figure 2-10
The various types of systems in the organization have interdepenncies. 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.

31. Systems That Span the Enterprise
Getting all kinds of system to work together as one corporate system.
One solution is to implement enterprise applications.

32. Enterprise applications Systems that Span functional areas
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Systems That Span the Enterprise
Enterprise applications
Systems that Span functional areas
Execute business processes across firm
Include all levels of management
Coordinating business processes and groups of processes.
Four major applications:
Enterprise systems
Supply chain management systems
Customer relationship management systems
Knowledge management systems

33. Enterprise applications
Each of these application integrates a related set of functions and business process to enhance performance of the organization as a whole.

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

35. Enterprise systems (or enterprise resource planning(ERP)
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Systems That Span the Enterprise
Enterprise systems (or enterprise resource planning(ERP)
Large organization has different systems built around different functions and levels and business processes that cannot automatically exchange information ERP solves this problem.
Collects data from different firm functions and stores data in single central data repository
Resolves problem of fragmented, redundant data sets and systems
Enable:
Coordination of daily activities
Efficient response to customer orders (production, inventory)
Provide valuable information for improving management decision making
E.g when a customer places an order,data flows automatically to other parts affected by it.

36. Enterprise Systems Management Information Systems Figure 2-12
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Enterprise Systems
Figure 2-12
Enterprise systems integrate the key business processes of an entire firm into a single software system that enables information to flow seamlessly throughout the organization. These systems focus primarily on internal processes but may include transactions with customers and vendors.

37. Supply chain management systems
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Systems That Span the Enterprise
Supply chain management systems
Manage firm’s relationships with suppliers
Share information about
Orders, production, inventory levels, delivery of products and services
Automate the flow of information among members of the supply chain
Goal: Right amount of products to destination with least amount of time and lowest cost

38. Supply chain management systems
Information from supply chain management systems help firms to decide
When, what to produce, store and move
Ex supply chain management system by SAP.

39. Customer relationship management systems:
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Systems That Span the Enterprise
Customer relationship management systems:
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.
Integrate firm’s customer-related processes and consolidate customer information from multiple communication channels

40. Salesforce.com Executive Team Dashboard
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Types of Business Information Systems
Salesforce.com Executive Team Dashboard
Some of the capabilities of salesforce.com, a market-leading provider of on-demand customer relationship management (CRM) software. CRM systems integrate information from sales, marketing, and customer service.

41. Knowledge management systems
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Systems That Span the Enterprise
Knowledge management systems
Support processes for acquiring, creating, storing, distributing, applying, integrating knowledge
Systems collect internal knowledge and make it available wherever needed and link to external knowledge
Include enterprise-wide systems for:
Managing documents, graphics and other digital knowledge objects
Directories of employees with expertise
These systems Optimize the creation ,sharing of knowledge to improve business process.

42. Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Systems That Span the Enterprise
Enterprise applications are costly, companies that don’t have resources to invest in Enterprise application will achieve some measure of information integration by using intranets and extranets.
Intranets:
Internal networks built with same tools and standards as Internet
Used for internal distribution of information to employees. Flow information is internal
Typically utilize private portal providing single point of access to several systems
May connect to company’s transaction systems

43. Extranets: Intranets extended to authorized users outside the company
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Systems That Span the Enterprise
Extranets:
Intranets extended to authorized users outside the company
Expedite flow of information between firm and its suppliers and customers
Can be used to allow different firms to collaborate on product design, marketing, and production

44. E-business (Electronic business):
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
Systems That Span the Enterprise
Systems and technologies we have described are transforming firms relationships with suppliers, partners and employees into digital relationships using networks ands internet.
E-business (Electronic business):
Use of digital technology and Internet to execute major business processes in the enterprise
Includes e-commerce (electronic commerce):
Buying and selling of goods over Internet
E-government: The application of Internet and networking technologies to digitally enable government and public sector agencies’ relationships with citizens, businesses, and other arms of government

45. Information systems department:
Management Information Systems
Chapter 2 Global E-Business: How Businesses Use Information Systems
The Information Systems Function in Business
Information systems department:
Formal organizational unit responsible for information technology services
Includes programmers, systems analysts, project leaders, information systems managers
Often headed by chief information officer (CIO)
End-users:
Representatives of other departments, for whom applications are developed

46. Video Case Study Assignment 3
How FedEx Works: Enterprise Systems?
  What technologies and systems are used by Fed Ex?Explain what these systems are doing to improve efficiency of package delivery?