© 2001 Business & Information Systems 2/e1 Chapter 1 Information Systems in Business.
Chapter 3 Information Systems in Business
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Transcript of Chapter 3 Information Systems in Business
Management Information Systems, 4th Edition 1
Chapter 3Information Systems in Business
Management Information Systems, 4th Edition 2
Learning Objectives
• Identify various business functions and the role of ISs in these functions
• Explain how ISs in the basic business functions relate to each other
• Show how ISs of different business functions support each other
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Learning Objectives (Cont.)• Explain how information technology is used in the
most common business functions to make business processes more effective and more efficient
• Explain the notion of enterprise resource planning (ERP) systems
• Identify business areas where information technology facilitates the work of managers and knowledge workers
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Effectiveness and Efficiency• ISs can help companies attain more effective and efficient
business processes
– Effectiveness
• The degree to which a task is accomplished
• The degree to which the company achieves outcomes better than the competitors do
• “To get the right things done” by Peter F. Drucker
– Efficiency
• Determined by the relationship between resources expended and benefits gained in achieving a goal
• To do the things right
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Effectiveness and Efficiency (Cont.)
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Effectiveness and Efficiency (Cont.)
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Accounting• AISs automatically post transactions in the books
and automate generation of reports for management and legal requirements
• Three types of AISs
– Transaction processing systems (TPS)
– Cost accounting systems
– Managerial accounting systems
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Accounting (Cont.)
• Electronic Data Processing (EDP) Audits
– Ensure electronic systems comply with standard regulations and acceptable rules
– Ensure systems cannot be manipulated to circumvent acceptable principles
– To be an EDP auditor ($)
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Accounting (Cont.)
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Finance• The job of financial managers is to manage money
as efficiently as possible by: – Collecting payables as soon as possible
– Making payments by the latest time allowed by contract or law
– Ensuring sufficient funds are available for day-to-day operations
– Taking advantage of opportunities to accrue the highest yield on funds not used for current activities
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Finance (Cont.)
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Cash Management
• Financial ISs help balance the need to accrue interest against the need to have cash available
• Cash management systems (CMS):
– Handle cash transactions specifically
• Electronic fund transfer (EFT):
– Electronic transfer of cash from one bank account to another
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Investment Analysis and Service
• Analyze and project prices of a specific stock or bond in real time
• Transmit buy and sell orders electronically
• Provide clients with a detailed statement
• Monitor account information and news online
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Engineering• ISs reduce engineering lead time or time to market
– Key to maintaining a competitive edge
– Computer-Aided Design (CAD) Systems
• Help engineers and technicians design new products and quickly modify and store drawings electronically
– Rapid Prototyping:
• Creating one-of-a-kind products to test design in three dimensions
• Concurrent engineering and communication through Internet
• Product Data Management (PDM)
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Engineering (Cont.)
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• IT helps in these manufacturing activities:
– Plant activity scheduling
– Material Requirement Planning/assessment
– Material reallocation between orders
– Dynamic inventory management
– Grouping work orders by “characteristics”
– Resource qualification for task completion
Manufacturing & Inventory Control
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Manufacturing & Inventory Control (Cont.)
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• Take customer demand as initial input
– Deployment according to the bill of materials (BOM)
– Number of product units needed and when they are needed (Main Production Scheduling)
• Use long-range forecasts to put long-lead material on order
• Help reduce inventory cost while ensuring availability
– EOQ inventory under a specific lead time and a consumption rate
Materials Requirement Planning (MRP)
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Materials Requirement Planning (MRP) (Cont.)
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• Combines MRP with other manufacturing-related activities to plan the manufacturing process such as:
– Shop activity control and purchasing
– Source of demand
– Customer order entry and forecasting
• MPS (master production scheduling)
– Support functions such as financial management, sales analysis, and data collection
Manufacturing Resource Planning (MRP II)
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PastPart: A OH 20 AL 0 LT 1 ST 0 SS 25
Period Due 1 2 3 4 5 6 7 8 9 10 11 12
1.GR 0 80 50 100 60 100 70 100 60 100 50 100 50
2.SR 0 100 0 0 0 0 0 0 0 0 0 0 0
3.POH X 40 -10 -75 -35 -75 -45 -75 -35 -75 -25 -75 -25
4.PAB X 40 25 25 25 25 25 25 25 25 25 25 25
5.NR X 0 35 100 60 100 70 100 60 100 50 100 50
6.PORC 0 35 100 60 100 70 100 60 100 50 100 50
7.POR 0 35 100 60 100 70 100 60 100 50 100 50 0
7-row MRP table (example)
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The algorithm of MRP
• Procedure MRP;• 單階 BOM 展開 MPS 之 PORt, 加入其子件成為其
GRt
• LLC1;• While MPS 有未被處理項 Do
– While BOM 中 LLC 有任一項未被處理 Do• PAB0 OH-AL+max(SR0,0);• For t=1 to T Do
– IF t=1 then POH1PAB0+SR1-GR1-max(GR0,0)» Else POHtPABt-1+SRt-GRt;
– Endif – IF POHt<SS then NRtSS-POHt, PORCt=max(NRt,LS);
» Else NRt0, PORCt0;– Endif
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The algorithm of MRP (cont.)
– PABtPOHt+PORCt;– PORt-LTPORCt;– 單階 BOM 展開之 PORt, 加入其子件之 GRt;
• Endfor • Print the item MRP report
– Endwhile; – LLCLLC+1;
• Endwhile;• Endprocedure;
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• Track, schedule, and control manufacturing processes
• Collect data such as:
– Hours machine operates every day of the month
– Hours the machine is idle and why
– Optimization, rationalization
Manufacturing Execution Systems (MES)
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• Supply chain management (SCM)
– Managers know status of product during manufacturing
– Recent IS control/adjustment as well as monitor manufacturing process
– System at Ford Motor Company designed to ensure no assemble steps are missed
Monitoring and Control
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• Market Research
– Statistical (data mining) models help market researchers find the best populations for new and existing products
• Targeted Marketing
– Database management systems (DBMS) help define potential customers as narrowly as possible
Marketing, Sales, & Customer Service
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Marketing, Sales, & Customer Service (Cont.)
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• The Internet as a Marketing and Selling Medium
– Web lets companies reach more shoppers and serve them better
– Mobile Commerce (M-Commerce) is the newest form of marketing
• Location-based, timely, impulse-purchasing, killing-time info-tainment
– Commercial announcements/Internet advertisements pervade the Web
• Annoying but effective
Marketing, Sales, & Customer Service (Cont.)
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• Equipping salespeople with information technology to facilitate productivity
– IT allows salespeople to present different options for products and services on the spot
– Instantly mobile dispatching
Sales Force Automation
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• Customer Relationship Management (CRM) software for companies to better serve and know customer needs
– Track past purchase and payments
– Update online answers to frequently asked questions (FAQs)
– Analyze customer’s contact with company
• Web-based Customer Service available 24/7/365
Customer Relationship Management
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Human Resources
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Human Resources (Cont.)
• Employee Record Management
– Reduce space needed to store records, time to retrieve them, and costs of both
• Promotion and Recruitment
– Search databases for qualified personnel
– Use intranet to post job vacancies
– Use the Web to recruit
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Human Resources (Cont.)• Training
– Multimedia software training is replacing classrooms and teachers
– Training software simulates an actual task or situation and includes evaluation tools
• Evaluation
– Evaluation software helps standardize the evaluation process and adds a certain measure of objectivity and consistency (MBO)
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Human Resources (Cont.)• Compensation and Benefits Management
– ISs can help manage compensation efficiently and effectively
• Calculate salaries, hourly pay, commissions, and taxes
• Automatically generate paychecks or direct deposits
– Special software helps manage benefits, such as health insurance, life insurance, retirement plans, and sick and leave days
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Enterprise Resource Planning (ERP)
• All business functions served by one system that supports different activities for internal different departments
• Support the external-oriented material/information flow of supply chain management upward and downward, the series of main and supporting activities from order to delivery
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Enterprise Resource Planning (ERP) (Cont.)
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Groupware andCollaborative Work
• GroupWare lets workers in different locations communicate ideas, brainstorm, and work together as if they were in the same place, esp., the engineering task
• Document Control– Users can distribute and track electronic documents
without working with outdated information– PDM
• Collaborative Projects– Users can coordinate work on a single document from
many different terminals– Collaborative Production Commerce (CPC)
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Ethical and Societal IssuesPrivacy? What Privacy?
• What is Privacy?
– One’s right to control information about oneself
– Not a constitutional right per se; secured by laws or convention
– Increasing number of organizations may access information via better IT hardware and software
– Business and civil rights advocates dispute degree of privacy vs. utility of information access
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Ethical and Societal IssuesPrivacy? What Privacy?
• Business Arguments
– Necessary to collect basic financial and personal information as cheaply as possible
– Consumers benefit eventually from competitive environment augmented by readily available information
– Customization possibility
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Ethical and Societal IssuesPrivacy? What Privacy?
• Consumer Arguments
– Resent unsolicited mail and telephone calls
– Resent being refused credit because of credit bureau mistakes
– Frightened by “dossier phenomenon”
– Loss of control over information unfair—information gathered for a particular purpose with permission should remain restricted
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Ethical and Societal IssuesPrivacy? What Privacy?
• Seven Commandments of Personal Data Collection and Maintenance
– Purpose: Companies should inform people who provide information of specific, exclusive purpose
– Relevance: Companies should record and use only data necessary to fulfill their own purposes
– Accuracy: Companies should ensure that their data are accurate
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Ethical and Societal IssuesPrivacy? What Privacy?
– Currency: Companies should make sure that all data about an individual are current
– Security: Companies should limit data access to only those who need to know
– Time Limitation: Companies should retain data only for the time period necessary
– Scrutiny: Companies should establish procedures to let individuals review their records and correct inaccuracies
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Summary
• There are various business functions and ISs have a role in these functions
• ISs relate to each other in basic business functions
• IT is used in business functions to make business more effective and more efficient
• ERP systems help run different functions upon a common platform