Chapter 2 - Summary Management Information Systems PDF

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BUS375 Chapter 2 How Businesses Use Information -

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Business Processes and Info Systems  Business Processes o Every business can be seen as a collection of business processes o Workflows of material, info, knowledge o Sets of activities, steps o May be tied to functional area/be cross-functional o May be assets or liabilities  How Info Tech Improves Business Processes o Increases efficiency of existing processes o New info tech frequently changes the way a business works and supports entirely new business models o Analyze business processes = achieve a clear understanding of how a business works o Eliminate delays in decision making Types of Info Systems  Functional systems operating independently from each other are becoming outdated because they cannot easily share info to support cross-functional business processes  Systems for Different Management Groups o Transaction Processing Systems: a computerized system that performs and records the daily routine transactions necessary to conduct business, such as sales order entry, hotel reservations, payroll, employee record keeping, and shipping  Principle purpose = answer routine questions and track the flow of transactions through the organization  Managers need this to monitor the status of internal operations and the firm’s relations with the external environments  Major producers of info for the other systems and business functions  Failure for a few hours = firms demise and perhaps that of other firms linked to it o Systems for Business Intelligence: data and software tools for organizing, analyzing, and providing access to data to help managers and other enterprise users make more informed decisions  Focus on delivering info to support management decision making  Middle management – help with monitoring, controlling, decision making and admin activities  MIS – provides middle managers with routine reports on the organization’s current performance o Used to monitor and control the business and predict future performance

BUS375 Chapter 2 How Businesses Use Information

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o Summarize and report on the company’s basic operations using data supplied by TPS o Provide answers to routine questions (specified in advance with predefined procedure for answering them) o Most use simple routines (ex: summaries/comparisons)  Decision-support Systems (DSS): focus on problems that are unique and rapidly changing, and for which the procedure for arriving at a solution may not be fully predefined in advance o “What would be the impact on production schedules if we were to double sales in December?” o Uses internal info from TPS and MIS as well as bringing in info from external sources (ex: stock prices, prices of competitors) o Employed by “super-user” managers and business analysts  Address decision-making needs of sr management o “What will employment levels be in five years?”  Executive Support System (ESS): helps senior management make decisions o Address non-routine decisions requiring judgment, evaluation and insight o Info delivered to senior execs through a portal o Designed to incorporate data about external events and draw summarized info from internal MIS and DSS o Filter, compress and track critical data to display data of greatest importance to sr managers  Digital dashboard: displays (on a single screen) graphs and charts of key performance indicators for managing a company Systems for Linking the Enterprise o Enterprise Applications: systems that span functional areas, focus on executing business processes across the business firm, and include all levels of management  Help businesses become more flexible and productive by coordinating their business processes more closely and integrating groups of processes to focus on efficient management of resources and customer service  Costly and difficult to implement  Four major ones: o Enterprise Systems: integrates business processes in manufacturing and production, finance and accounting, sales and marketing, and HR into a single software system  AKA Enterprise Resource Planning (ERP) Systems

BUS375 Chapter 2 How Businesses Use Information

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o Supply Chain Management (SCM) Systems: helps manage relationships with their suppliers  Helps suppliers, purchasing firms, distributors, and logistics companies share info about orders, production, inventory, and delivery of products/services  Ultimate objecting = get the right amount of their products from their source to their point of consumption in the least amount of time and lowest cost  Type of interorganizational system because automates the flow of info across organizations o Customer Relationship Management (CRM) Systems: helps manage relationships with customers  Provides info to coordinate all business processes that deal with customers in sales, marketing, and service to optimize revenue and customer satisfaction/retention  Helps identify/attract/retain profitable customers, provides better service, and increases sales o Knowledge Management Systems (KMS): enable organizations to better manage processes for capturing and applying knowledge and expertise  Collect all relevant knowledge and experience in the firm and make it available to wherever/whenever needed to improve business processes and management decisions  Links the firm to external sources of knowledge o Intranets and Extranets  Alternative tools for increasing integration and expediting flow of info within firm and with customers and suppliers  Intranets: internal company websites accessible only by employees  Extranet: accessible to authorized vendors and suppliers, often used to coordinate movement of supplies to the firm’s production facility E-business, E-commerce and E-government o E-business: the use of digital technology and the Internet to execute the major business processes of an enterprise  Includes activities for the internal management of the firm and for coordination with suppliers/business partners

BUS375 Chapter 2 How Businesses Use Information

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 Includes e-commerce o E-commerce: part of e-business that deals with the buying/selling of goods and services over the internet  Includes advertising, marketing, customer support, security, delivery and payment o E-government: refers to the application of the Internet and networking technologies to digitally enable gov’t and public-sector agencies’ relationships with citizens, businesses and other arms of gov’t  Makes gov’t operations more efficient and provides citizens with info and the ability to network electronically with other citizens Systems for Collaboration and Social Business  Collaboration: working with others to achieve shared and explicit goals o Focuses on task/mission accomplishment o Usually takes places in a business/other organization and between businesses o Short-lived or long-term o Teams: have a specific mission that someone in the business assigned to them  Often short-lived o Reasons why important:  Changing nature of worm  Growth of professional work  Changing organization of the firm  Changing scope of the firm  Emphasis on innovation  Changing culture of work and business  Social Business: the use of social networking platforms to engage employees, customers and suppliers o Key word = conversations o Supporters say firms can use this to strengthen their bonds with customers/suppliers/employees to increase their emotional involvement in the firm  Business Benefits of Collaboration and Social Business o Investments in collaboration tech = organizational improvements returning over 4x the amount of investment o Increase productivity – solving problems rapidly with fewer errors o Increase quality – communicate errors and take corrective action faster o Increase innovation – more ideas for products, services and admin o Increase customer service – solve customer complaints/issues faster and more effectively o Increase financial performance

BUS375 Chapter 2 How Businesses Use Information 

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Building a Collaborative Culture and Business Processes o Sr managers responsible for achieving results but rely on teams of employees to achieve and implement them o Policies/products/designs/processes/systems dependent on teams at all levels to devise/create/build o Teams rewarded for performance/individuals of the team rewarded o Middle managers – build the teams, coordinate their work and monitor their performance o Culture and processes more “social” o Collaboration and teamwork vital to the organization  Tools and Technologies for Collaboration and Social Business o Need info systems in place for collaborative teams to produce benefits, including:  E-mail and IM  Wikis  Virtual Worlds  Collaboration and Social Business Platforms o Virtual meeting systems  Telepresence: an integrated audio and visual environment that allows a person to give the appearance of being present at a location other than their true physical location o Google apps/Google sites and Cloud Collab Services  Cyberlocker: online file-sharing service that allows users to upload files to secure online storage sites from which the files can be shared with others  Ex: Dropbox o Microsoft SharePoint o Lotus Notes o Enterprise social networking tools The Info Systems Function in Business  Information Systems Department: the formal organizational unit responsible for info tech services o Programmers: highly trained technical specialists who write the software instructions for computers o Systems Analysts: constitute the principal liaisons between the info systems groups and the rest of the organization  Translates business problems and requirement into info requirements and systems o Information Systems Managers: leaders of teams of programmers and analysts, project managers, physical facility managers, telecommunications managers, or database specialists

BUS375 Chapter 2 How Businesses Use Information

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 Managers of computer operations and data entry staff o Chief Information Officer (CIO): often the head of the info systems department. Senior manager who oversees the use of info tech in the firm  Should have a strong business background and info systems expertise  Plays a leadership role in integrating tech into the firm’s business strategy o Chief Security Officer (CSO): in charge of info systems security for the firm and for enforcing the firm’s info security policy  Responsible for educating and training users and info systems specialists about security, keeping mgmt. aware of threats and breakdowns, and maintaining tools and policies chosen to implement security o Chief Privacy Officer (CPO): responsible for ensuring the company complies with existing data privacy laws o Chief Knowledge Officer (CKO): responsible for the firm’s knowledge management program  Helps design programs and systems to find new sources of knowledge/make better use of existing knowledge o End Users: representatives of departments outside of the info systems group for whom applications are developed Organizing the Info Systems Function  Very small companies = no formal info systems group  IT Governance: includes the strategy and policies for using info tech within an organization o Specifies the decision rights and framework for accountability to ensure the use of info tech supports their strategies and objectives...