Information Systems in the Enterp

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2.1 2006 by Prentice Hall

Information

Systems in the

Enterprise


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Management Information SystemsChapter 2 Information Systems in the Enterprise

Traditional View of Systems

Figure 2-14

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:

Introduction to Enterprise Applications


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Systems for Enterprise-Wide Process Integration

Enterprise applications:

Designed to support organization-wide processcoordination and integration




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Consist of :

Enterprise systems

Supply chain management systems

Customer relationship management systems

Knowledge management systems


Systems for Enterprise-Wide Process Integration

(Continued)




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Enterprise Systems

Enterprise systems, also known as enterprise

resource planning (ERP) systems, provide a

single information system for organization-widecoordination and integration of key business

processes.

Information that was previously fragmented indifferent systems can seamlessly flow throughout

the firm so that it can be shared by business

processes in manufacturing, accounting, human

resources, and other areas.




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Enterprise Systems

Figure 2-15




7/292.7 2006 by Prentice Hall


Benefits of Enterprise Systems

Help to unify the firms structure and

organization: One organization

Management: Firm wide knowledge-based

management processes

Technology: Unified platform

Business: More efficient operations & customer-

driven business processes






Challenges of Enterprise Systems

Difficult to build: Require fundamental changes in

the way the business operates

Technology: Require complex pieces of software

and large investments of time, money, and

expertise






Supply Chain Management (SCM)

Close linkage and coordination of activitiesinvolved in buying, making, and moving aproduct

Integrates supplier, manufacturer, distributor, andcustomer logistics

Reduces time, redundant effort, and inventorycosts

Network of organizations and business

processes






Helps in procurement of materials,

transformation of raw materials into intermediate

and finished products

Helps in distribution of the finished products to

customers

Supply Chain Management (SCM)






Information from Supply Chain Management

Systems helps firms:

Decide when and what to produce, store,

and move

Rapidly communicate orders

Track the status of orders

Check inventory availability and monitor

inventory levels






Information from Supply Chain Management

Systems helps firms: (Continued)

Reduce inventory, transportation, and

warehousing costs

Track shipments

Plan production based on actual customer

demand

Rapidly communicate changes in product design






Customer Relationship Management (CRM)

Manages all ways used by firms to deal with

existing and potential new customers

Business and technology discipline

Uses information system to coordinate entirebusiness processes of a firm







(Continued)

Provides end- to- end customer care

Provides a unified view of customer across the

company

Consolidates customer data from multiple

sources and provides analytical tools for

answering questions







Figure 2-17






Knowledge Management Systems

Collects relevant knowledge and make it available

wherever and whenever it is needed

Support business processes and management

decisions

Also link the firm to external sources of

knowledge

Support processes for acquiring, storing,

distributing, and applying knowledge






Enterprise Application Architecture

Figure 2-13






There are extraordinary opportunities to useinformation systems to achieve business value,

and increase profitability

MANAGEMENT OPPORTUNITIES, CHALLENGES, AND

SOLUTIONS

Management Opportunities:




Integration and the whole firm view: Given the

different interests and perspectives within a firm,

it is difficult to achieve consensus about the need

for the "whole firm" viewpoint.

Management and employee training: Training a

large number of employees on many systems in a

large organization involves commensurately large

investments.


SOLUTIONS

Management Challenges:


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Accounting for the cost of systems and managingdemands for systems: Given the large number of

different types of systems in a firm, and the large

number of people involved with using them, it is

a complex task to understand which systems are

truly necessary and productive with high returns

on investment


SOLUTIONS

Management Challenges: (Continued)


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SOLUTIONS

Solution Guidelines:

Inventory the firms information systems: Develop

a list of firm-wide information requirements to give

a 360-degree view of the most importantinformation needs of the firm.

Employee and management education: Ensure that

you understand how much training is required.

Account for the costs and benefits: Develop an

accounting system for information services firm-

wide.


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Business Environment Drives EB

M t I f ti S t


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ORGANIZATIONS AND INFORMATION SYSTEMS

Environments and Organizations Have a

Reciprocal Relationship

Figure 3-5

Management Information SystemsChapter 3

Information Systems, Organizations, Management, and Strategy

Management Information Systems


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INFORMATION SYSTEMS AND BUSINESS STRATEGY

In the larger environment, there are five main forces or

threats:

New market entrants

Substitute products and services

Suppliers bargaining power

Customers bargaining power

Other firms competing directly

Management Information SystemsChapter 3

Information Systems, Organizations, Management, and Strategy

Porters Five Forces Model


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Porters Competitive Forces


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Low cost leadership: Low operational cost and lowestprices. Walmart

Product differentiation: enable new products or services orgreatly change the customer

convenience. M-banking, atm, credit

card usage

Focus on Market niche: By finely tuned sales and marketingtechniques. The data may come from

various sources.

Strengthen the customer and supplier intimacy:Strong linkages with customers and

suppliers increase switching cost

Information System Strategies for dealing

with competitive forces:


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The major strategies used to compile user

profiles include the following:

Solicit information directly from the user

Observe what people are doing online

Build from previous purchase patterns

Make inferences


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Observing Customers transaction log

A record of user activities at a companys Web site

clickstream behavior

Customer movements on the Internet

cookie

A data file that is placed on a users hard drive by a remote Web

server, frequently without disclosure or the users consent, that

collects information about the users activities at a site

Web bugs

Tiny graphics files embedded in e-mail messages and in Web sites thattransmit information about users and their movements to a Web server

spyware

Software that gathers user information over an Internet connection withoutthe users knowledge

ISPs

H th I t t I fl I d t


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How the Internet Influences Industry

Structures

Increases as large no. of

customers at hand

Third party may be omitted

Again as many suppliers

may enter into bus.

Bargaining over suppliers

increases

Shifts bargaining power to

end customers

Reduces switching costThe proliferation of

Internet creates new

Substitution threats

Reduces need for sales force,physical assets, channels etc.

Difficult to keep proprietary

from new entrantsReduces differences among competitors

Migrates competition mainly on price

Widens geographic market, more

competitors

Information Systems in the Enterp

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