02 IITF Lect Information Systems and Business Processes

8/10/2019 02 IITF Lect Information Systems and Business Processes

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INFO 1500 Introduction to IT Fundamentals

Alexander Nikov

2. Information systems andbusiness processes

Learning objectivesDefine and describe business processes and their relationship toinformation systems.

Evaluate the role played by systems serving the various levels ofmanagement in a business and their relationship to each other.

Explain how enterprise applications improve organizational performance .

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Americas Cup 2013: VideoORACLE TEAM USA racing in th e 34th America's Cup on San Francisc o Bay

http://www.youtube.com/watch?v=Sr055W97l4o

Prentic e Hall 2011

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Problem: Using IT to win the AmericasCup race

Solutions: New technology for physicalengineering of boat; sensor network tomonitor conditions and data analysis toimprove the performance of sails andmore.

IBM Oracle Database 11g datamanagement software provided real timeanalysis of boats sensor data.

Demonstrates ITs role in fostering

innovation and improving performance. Illustrates the benefits of using data

analysis and IT to improve productshttp://www.youtube.com/watch?v=HiBHCAnKa5U

Americas Cup 2013:USA Wins wi th Information Technology

Prentice Hall 2011

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Prentic e Hall 20115

Americas Cup 2010:USA Wins wi th Information Technology

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Outline

1. Business Processes and Information Systems

2. Types of Information Systems

3. The Information Systems Function in Business

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Business processes: Workflows of material, information, knowledge Sets of activities, steps May be tied to functional area or be cross functional

Businesses: Can be seen as collection of business processes

Business processes may be assets or liabilities

Business Processes and Information Systems


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Every business, regardless of itssize, must perform four functionsto succeed. It must produce theproduct or service; market andsell the product; keep track ofaccounting and financialtransactions; and perform basichuman resources tasks, such ashiring and retaining employees .

Business ProcessesThe Four Major Functions of a Business

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Examples of functional business processes

Table 2.1

Five basic business entities:

Suppliers Customers

Employees

Invoices/payments

Products and services

Organizing a Business:Basic Business Functions

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Logically related set of tasks that define how specificbusiness tasks are performed

The tasks each employee performs, in what order, andon what schedule

E.g., Steps in hiring an employee

Some processes tied to functional area

Sales and marketing: identifying customers

Some processes are cross-functional

Fulfilling customer order

Business Processes

2-11Figure 2-1

Fulfilling a customer

order involves acomplex set of stepsthat requires the closecoordination of thesales, accounting, andmanufacturingfunctions.

The Order Fulf illment Process

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1. Increasing efficiency of existing processes Automating steps that were manual

2. Enabling entirely new processes Change flow of information Replace sequential steps with parallel steps Eliminate delays in decision making

Support new

business

models


Information technology enhances business processes in two main ways:

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Outline




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Transaction processing systems: Keep track of basic activities and transactions of organization (e.g.,

sales, receipts, cash deposits, payroll, credit decisions, flow ofmaterials in a factory).

Management inform ation systems and d ecision-support systems: Help with monitoring, controlling, decision making, and

administrative activities. Executive support systems:

Help address strategic issues and long-term trends, both in firm andin external environment.

Systems for Different Levels of Management

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Perform and record daily routine transactions necessary to conduct business

Examples: sales order entry, payroll, shipping Allow managers to monitor status of operations

and relations with external environment Serve operational levels Serve predefined, structured goals and decision

making

Transaction processing systems (TPS)

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Sample MIS Report

Figure 2-4

This report,showingsummarizedannual salesdata, wasproduced bythe MIS inFigure 2-3.

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Serve middle management Support non routine decision making

Example: What is impact on production schedule if December sales doubled?

Often use external information as well from TPS and MIS Model driven DSS

Voyage estimating systems Data driven DSS

Intrawests marketing analysis systems

Decision support systems (DSS)

Prentice Hall 2011222-22

Figure 2-5

This DSSoperates on apowerful PC. It isused daily bymanagers whomust develop bidson shippingcontracts.

Voyage-Estimating Decision Support System

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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 with real time view of firms financial performance: working capital, accounts receivable, accounts payable, cash flow, and inventory

Executive support systems (ESS)



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Digital dashboard

Prentic e Hall 2011252-25

This system poolsdata from diverseinternal andexternal sourcesand makes themavailable toexecutives in aneasy-to-use form.

Model of an Executive Support System

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Transaction processing systems: supporting operational level employees

Management information systems and decision support systems: supporting managers

Executive support systems: supporting executives

Systems from a constituency perspective

Prentic e Hall 2011272-27

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 are only loosely integrated (but they are getting better!)

Relationship of systems to one another



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Manage firms relationships with suppliers

Share information aboutOrders, production, inventory levels,delivery of products and services

Goal:Right amount of products to destination withleast amount of time and lowest cost

Supply Chain Management Systems

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Provide information to coordinate all of the business

processes that deal with customers Sales Marketing Customer service

Helps firms identify, attract, and retain most profitablecustomers

E.g., Saab CRM applications to achieve 360 degree view ofcustomers resulted in greater follow-up rate on sales leadsand increased customer satisfaction.

Customer Relationship Management Systems

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Support processes for acquiring, creating, storing,distributing, applying, integrating knowledge

How to create, produce, distribute products andservices

Collect internal knowledge and experience withinfirm and make it available to employees

Link to external sources of knowledge

Knowledge Management Systems (KMS)

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Also used to increase integration and expedite the flow ofinformation

Intranets:

Internal company Web sites accessible only byemployees

Extranets:

Company Web sites accessible externally only tovendors and suppliers

Often used to coordinate supply chain

Intranets and Extranets

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E-business:

Use of digital technology and Internet to drive major businessprocesses

E-commerce:

Subset of e-business

Buying and selling goods and services through Internet

E-government:

Using Internet technology to deliver information and services tocitizens, employees, and businesses

E-Business, E-Commerce, and E-Government

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Outline




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Information systems department

Formal organizational unit responsible for informationtechnology services

Often headed by chief information officer (CIO)

Other senior positions include chief security officer(CSO), chief knowledge officer (CKO), chief privacyofficer (CPO)

Programmers

Systems analysts

Information systems managers

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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

End users and IT Governance


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Video caseHow FedEx Works: Enterpr ise Systems

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1.List the business processes displayed in the video.

2.List the types of information systems shown in the video. Can youdescribe how systems that were not shown might be used at FedEx?

3.The system displayed in the video is an enterprise system. Why is thistrue? Explain your answer.

4.How important is technology to FedEx's business processes?

5.How could FedEx's shipping process be made even more efficient?

Video case questionsHow FedEx Works: Enterpr ise Systems

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Business processes displayed in the video include: picking up a package, transporting a package to a hub, processing and sorting a package in a warehouse, shipping packages to airports, processing the package locally, and delivering the package.

1. List the business processes displayed in the video.

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Types of systems included in the video are: transaction processing systems, management information systems (at the FedEx air control center, MIS monitor the trucks and planes coming and going and the number

of packages being handled). An executive might receive a report of the days activities via an

executive support system. Customer complaints or questions might be resolved via a customer

relationship management system.

2. List the types of information systems shown inthe video. Can you describe how systems that were

not shown might be used at FedEx?


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The system in the video is an enterprise system because key businessprocesses of FedEx are integrated into a single software system.

3. The system displayed in the video is an enterprisesystem. Why is thi s true? Explain your answer.

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Having top-end technology is critical to the completion of critical businessprocesses for FedEx. Whether at the sorting centers or on the road in thehands of FedEx delivery workers, technology that never fails and gets the

job done quickly is necessary to maintain the level of customersatisfaction FedEx is accustomed to.

4. How important is technology toFedEx's bus iness processes?

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The sorting process could potentially become completely automated,FedEx could use more energy efficient vehicles, or they could continue toinnovate and develop even more efficient technologies across theenterprise.

5. How could FedEx's shipping process be madeeven more efficient?

02 IITF Lect Information Systems and Business Processes

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