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Lect-2-The Strategic Role of Information Systems
Lect-2-The Strategic Role of Information Systems
Information Systems
Thepul Ginige
1
LEARNING OBJECTIVES
• Analyze roles of 6 types of
information systems
• Describe types of information
systems
• Analyze relationships between
business processes
2
LEARNING OBJECTIVES
• Explain how systems & networks
create new efficiencies
• Evaluate benefits & limitations of
systems & networks
3
MANAGEMENT CHALLENGES
• Key system applications
• Functional perspective of systems
• Integrating functions & processes
4
MANAGEMENT CHALLENGES
1. INTEGRATION: Different systems serve
variety of functions, connecting
organizational levels difficult, costly
2. ENLARGING SCOPE OF MANAGEMENT
THINKING: Huge system investments,
long development time must be guided
by common objectives
5
TYPES OF INFORMATION SYSTEMS
KIND OF SYSTEM GROUPS SERVED
STRATEGIC LEVEL SENIOR
MANAGERS
OPERATIONAL
OPERATIONAL LEVEL
MANAGERS
SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN
MARKETING RESOURCES
6
MAJOR TYPES OF SYSTEMS
7
TYPICAL TPS APPLICATIONS
Sales & Marketing Systems
8
TYPICAL TPS APPLICATIONS
Manufacturing & Production Systems
KNOWLEDGE LEVEL
• INPUTS: DESIGN SPECS
• PROCESSING: MODELLING
• OUTPUTS: DESIGNS, GRAPHICS
• USERS: TECHNICAL STAFF
MANAGEMENT LEVEL
• INPUTS: HIGH VOLUME DATA
• PROCESSING: SIMPLE MODELS
• OUTPUTS: SUMMARY REPORTS
• USERS: MIDDLE MANAGERS
15
MANAGEMENT INFORMATION SYSTEMS (MIS)
TPS MIS
Order Processing SALES
DATA
System
17
DECISION SUPPORT SYSTEMS (DSS)
MANAGEMENT LEVEL
• Inputs: low volume data
• Processing: interactive
• Outputs: decision analysis
• Users: professionals, staff
EXAMPLE: CONTRACT COST ANALYSIS
18
DECISION SUPPORT SYSTEMS (DSS)
19
EXECUTIVE SUPPORT SYSTEMS (ESS)
STRATEGIC LEVEL
• Inputs: aggregate data
• Processing: interactive
• Outputs: projections
• Users: senior managers
EXAMPLE: 5 YEAR OPERATING PLAN
20
EXECUTIVE SUPPORT SYSTEMS (ESS)
21
INTERRELATIONSHIPS AMONG SYSTEMS
ESS
MIS DSS
KWS
TPS
OAS
22
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
23
SALES & MARKETING INFORMATION
SYSTEM
SALES
24
MANUFACTURING
INFORMATION SYSTEM
MFG
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL
25
FINANCE & ACCOUNTING INFORMATION
SYSTEM
FINANCE
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL
26
HUMAN RESOURCES INFORMATION SYSTEM
HUMAN RESOURCES
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL
27
EXAMPLES OF BUSINESS PROCESSES
28
EXAMPLES OF BUSINESS PROCESSES
PROCUREMENT
ACCOUNTING INTRANET
PRODUCTION
LOGISTICS
SHIPPING INVENTORY DISTRIBUTORS
SERVICES
30
Supply Chain Management
Supply chain management is the
streamlining of a business' supply-side
activities to maximize customer value and to
gain a competitive advantage in the
marketplace.
Supply chain management (SCM)
represents an effort by suppliers to develop
and implement supply chains that are as
efficient and economical as possible.
31
HOW INFORMATION SYSTEMS FACILITATES
SUPPLY CHAIN MANAGEMENT
32
TRADITIONAL VIEW OF SYSTEMS
33
BENEFITS OF ENTERPRISE SYSTEMS
• FIRM STRUCTURE & ORGANIZATION: One
organization
• MANAGEMENT: Firm wide knowledge-
based management processes
• TECHNOLOGY: Unified platform
• BUSINESS: More efficient operations &
customer-driven business processes
34
CHALLENGES OF ENTERPRISE SYSTEMS
• Daunting implementation
• High up front costs & future
benefits
• Inflexibility
• Hard to realize strategic value
35
INDUSTRIAL NETWORKS
LINK FIRMS INTO INDUSTRY-WIDE
SYSTEM
• HORIZONTAL: Link firms in same
industry, including competitors
• VERTICAL: Link firm with suppliers
in same industry
36
Emerging information system
trends in organisations
37
Enterprise Resource Planning systems
38
ENTERPRISE SYSTEM
Manufacturing Accounting
Business Processes
Vendors Enterprise-wide Customers
Business Processes
Human
Finance
Resources
Sales &
Marketing 39
ERP system contd..
• ERP is a commodity -- product in the form of
software
40
Features of an ERP system
44
Knowledge Management
• Knowledge management is the process of capturing,
distributing, and effectively using knowledge.
• So it’s a discipline that promotes an integrated
approach to identifying, capturing, evaluating,
retrieving, and sharing all of an enterprise's
information assets.
• These assets may include databases, documents,
policies, procedures, and previously un-captured
expertise and experience in individual workers.
45
Explicit, Implicit and Tacit Knowledge
• Explicit: information or knowledge that is set out in tangible form.
(this is the knowledge that is written down and is accessible in
one way or another.)
• Implicit: information or knowledge that is not set out in tangible
form but could be made explicit.(this is knowledge that isn’t
written down yet but is largely procedural and not dependent on
an individual’s context)
• Tacit: information or knowledge that one would have extreme
difficulty operationally setting out in tangible form.(this is the
knowledge in our heads that is made up from experience and
personal contexts. It’s not written down and is hard to articulate)
46
Customer Relationship Management (CRM)
47
The CRM Strategy
The CRM strategy allows you to following:
• Understand the customer
• Retain customers through better customer
experience
• Attract new customers
• Win new clients and contracts
• Increase profitably
• Decrease customer management costs
48
The Impact of Technology on CRM
• Technology and the Internet have changed the way
companies approach customer relationship strategies.
Advances in technology have changed consumer
buying behavior, and today there are many ways for
companies to communicate with customers and to
collect data about them. With each new advance in
technology — especially the proliferation of self-service
channels like the Web and smartphones — customer
relationships are being managed electronically.
49
The Benefits of CRM
• The biggest benefit most businesses realize
when moving to a CRM system comes directly
from having all your business data stored and
accessed from a single location. Before CRM
systems, customer data was spread out over
office productivity suite documents, email
systems, mobile phone data and even paper
note cards and Rolodex entries
50
• Storing all the data from all departments (e.g.,
sales, marketing, customer service and HR) in a
central location gives management and
employees immediate access to the most
recent data when they need it.
• Departments can collaborate with ease, and
CRM systems help organization to develop
efficient automated processes to improve
business processes.
51
• Other benefits include a 360-degree view of
all customer information, knowledge of what
customers and the general market want, and
integration with your existing applications to
consolidate all business information.
52
Electronic Commerce
• Electronic Commerce (EC) is where business transactions take
place via telecommunications networks, especially the Internet.
– Electronic commerce describes the buying and selling of
products, services, and information via computer networks
including the Internet.
– The infrastructure for EC is a networked computing
environment in business, home, and government.
– E-Business describes the broadest definition of EC. It includes
customer service and intrabusiness tasks. It is frequently used
interchangeably with EC.
53
The Driving Forces of
Electronic Commerce
• The New World of Business
– Business pressures
– Organizational responses
– The role of Information Technology (including
electronic commerce)
54
Electronic Commerce Terms
• Business-to-business (B2B)
– Businesses make online transactions purchases
with other business
• Business-to-consumer (B2C)
– Online transactions between businesses and
consumers
• Consumer-to-Consumer (C2C)
– Online auctions, posting to newspaper sites,
personal websites, e-commerce portals
55
Electronic Commerce Terms
(cont.)
• Pure vs. Partial EC: based on the degree of digitization of
– Product
– Process
– Delivery agent
• Traditional commerce: all dimensions are physical
• Pure EC: all dimensions are digital
• Partial EC: all other possibilities include a mix of digital
and physical dimensions
56
The Dimensions of E-Commerce
57
Benefits of ecommerce
• Discuss the benefits to
• Business
• Customer
58