Post on 18-Nov-2014
Chapter 01: An Introduction to Information
Systems
Stair, Reynolds and Chesney Fundamentals of Business Information Systems
(97818448008843) © Cengage Learning 2008
Permission received from
T Fuchs (Cengage Learning) –
14/01/2009
Organizations & Info Systems
• Organization: a collection of people and other
resources established to accomplish a set of goals
For-profit organization
Non-profit organization
• An organization is a system
– Input: resources (materials, people, money)
– Process: business processes
– Output: goods or services
• Business Organization (aka company / firm):
– A system designed for the purpose of creating products
and services for customers
Organization
NAME SCOPE PERSPECTIVE EXAMPLE
Calculation Single purpose Eliminate tedious
human calculations.
Payroll
General ledger
Stock control
Functional Business function To improve operation &
management of
individual departments.
Human resources
Order entry
Manufacturing
Financial reporting
Integrated Business process Develop IS to integrate
separate departments
into organization-wide
business processes.
Customer
Relationship
Management
(CRM)
Enterprise
Resource Planning
(ERP)
Categories of Information Systems
• Research & Development (R&D)
– Conducts basic research & relates new discoveries to
the firm’s current or new products.
• Production (operations)
– Takes in raw materials & people work to produce
finished goods (or services).
– May be a manufacturing activity or an operations
activity (retail).
• Marketing & Sales
– Handles planning, pricing, promoting, selling &
distributing goods & services to customers.
Departments (Functions)
• Accounting & Finance
– Tracks all financial activity.
– Handles cash management, pays accounts, & taxes,
issues salary cheques, records payments, makes
investments, compiles financial statements & reports.
• Human Resources (Personnel)
– Finds & hires people, administers sick leave & retirement
matters.
– Also concerned with compensation levels, professional
development, employee relations.
• Information Systems
– Manages the organization’s computer based systems &
plans for & purchases new systems.
Departments (Functions)
VALUE CHAIN
• Value chain:
– a series (chain) of activities that includes inbound logistics,
warehouse and storage, production, finished product storage,
outbound logistics, marketing and sales, & customer service
• Upstream management:
– management of raw materials, inbound logistics, and
warehouse & storage facilities
• Downstream management:
– management of finished product storage, outbound logistics,
marketing and sales, & customer service
Porter’s Value chain from the customer’s
perspective.
VALUE CHAIN cont.....
VALUE CHAIN
(Manufacturing Company)
DRAW VALUE CHAINS FOR THE FOLLOWING:
1. Wooden chair
2. Bicycle
3. Bottle of wine
4. You have decided to open an Internet site to buy and sell used
music CDs to other students. Describe the value chain
activities for your new business.
e.g. Sales & marketing, production, logistics, etc.
INTRODUCTION TO INFO SYSTEMS IN
ORGANIZATIONS
CLASS EXERCISE 2
• Supply Chain Management (SCM)
– Helps determine what supplies are required for value chain
– What quantities needed to meet customer demand
– How supplies should be processed into finished & services
– Shipment must be scheduled, monitored & controlled
• Customer Relationship Management (CRM)
– Marketing & sales
– Sales
– After-sales service
– Help to retain loyal customers
MANAGING THE VALUE CHAIN
ORGANIZATIONAL CHANGE
How organizations plan for, implement, and handle
change.
Causes:
• Internal New managers; staff leaving
• External Competitors; new laws; economic conditions
Types:
• Sustaining new or cheaper equipment
• Disruptive downsizing; mergers
USER SATISFACTION &
TECHNOLOGY ACCEPTANCE
To be effective, reengineering & continuous improvement efforts must result in satisfied users & be accepted and used throughout the organization.
• Technology diffusion: measure of widespread use of
technology
• Technology infusion: extent to which technology
permeates a department
• Technology acceptance model (TAM): specifies factors
that can lead to higher acceptance & usage of technology.
System must be easy to use & useful to user.
COMPETITIVE ADVANTAGE
• ..the ability of a firm to outperform its industry, that is,
to earn a high rate of profit than the industry norm.
• PORTER’S Five –forces model:
Factors that force an organization to seek competitive
advantage..........
The Competitive Environment
Threat of New
Entrants
Rivalry Among Existing
Competitors
Bargaining Power of Customers
Bargaining Power of Suppliers
Threat of Substitutes
Strategies to reach
Competitive Advantage
Improving existing products & service
Creating new products & services
Altering the industry structure
Differentiation Strategies
Cost Leadership Strategies
Niche Strategies
Strategic Planning for Competitive
Advantage (continued)
Competitive Advantage Factors and Strategies (Examples)
Strategic Planning for Competitive
Advantage (continued)
: Competitive Advantage Factors and Strategies (Examples)
Evaluating IS
Some approaches to evaluating IS include:
• Productivity
– Output achieved divided by input required
– Higher level of output for a given level of input means
greater productivity
• Return On Investment (ROI) & Value of info systems
– Earnings growth
– Market share
– Customer awareness and satisfaction
– Total cost of ownership
Careers in Information Systems
Systems Development
(SDLC steps)
• In-house?
• Outsource?