ch08 Organizational Information Systems.ppt

ch08 Organizational Information Systems.ppt

1. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 1
Introduction to Information
Systems, 1
st
Edition
Authors: Rainer, Turban and Potter
Publisher: John Wiley & Sons, Inc.
Slides by: Hellene Bankowski, Professor, Philadelphia University

2. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 2
Chapter 8
Organizational Information
Systems

3. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 3
Chapter Outline
8.1 Transaction Processing Systems
8.2 Functional Area Management Information
Systems
8.3 Enterprise Resource Planning Systems
8.4 Customer Relationship Management Systems
8.5 Supply Chain Management Systems
8.6 Electronic Data Interchange, Extranets, and
Web Services

4. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 4
Learning Objectives
Describe transaction processing system.
Describe management information
systems and the support they provide for
each functional area of the organization.
Describe enterprise resource planning
systems.

5. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 5
Learning Objectives (Continued)
Describe customer relationship
management systems.
Describe supply chain management
systems.
Discuss electronic data interchange,
extranets, and Web services.

6. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 6
8.1 Transaction Processing
Systems
Transaction Processing System (TPS)
monitors, collects, stores and processes data
generated from all business transations.
Source data automation is the process of
automating the TPS data entry as much as
possible because of the large volume
involved.

7. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 7
TPSs (Continued)
Batch Processing is when the firm collects
data from transactions as they occur, placing
them in group or batches, then prepares and
processes the batches periodically (say, every
night).
Online Transaction Processing (OLTP) is
when business transactions are processed
online as soon as they occur.

8. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 8
8.2 Functional Information
Systems
Functional Information Systems also
called Management Information Systems
(MISs) or Functional Area IS provide
information to managers (usually middle-
level managers) in the functional areas.
MISs support planning, organizing, and
controlling operations.

9. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 9
MIS Reports
Routine reports - scheduled
Ad-hoc reports – on demand

Drill-down reports

Key-indicator reports

Comparative reports
Exception reports – outside the norm

10. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 10
Information Systems for Specific
Functional Areas
Information Systems that are designed to
support a functional area by increasing its
internal effectiveness and efficiency in the
following areas: accounting, finance,
marketing, operations (POM), and human
resources management functional areas.

11. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 11
8.3 Enterprise Resource Planning
Systems
Enterprise Resource Planning (ERP)
systems integrate the planning, management
and use of all resources of the organization.
ERP’s major objective is to tightly integrate
the functional areas of the organization and
to enable seamless information flows across
the functional areas.

12. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 12
ERP Systems (Continued)
Business process is a set of related steps or
procedures designed to produce a specific
outcome.
Business processes supported by ERP
modules include Financial and Accounting
Processes, Sales and Marketing Processes,
Manufacturing and Production Processes and
Human Resources Processes.

13. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 13
ERP Systems (Continued)
Best practices are the most successful
solutions or problem-solving methods for
achieving a business objective.
Drawbacks to ERP systems are that they can
be extremely complex, expensive and time-
consuming to implement.
Leading ERP software vendors include SAP
(SAP R/3), Oracle and PeopleSoft.

14. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 14
8.4 Customer Relationship
Management
Customer Relationship Management (CRM) is
an enterprisewide effort to acquire and retain
customers.

Includes a one-to-one relationship between a customer
and a seller.

One simple idea “Treat different customers differently”.

Helps keep profitable customers and maximizes lifetime
revenue from them.

15. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 15
CRM Applications
Customer touch point is a method of interaction
with a customer, such as telephone, e-mail, a
customer service or help desk, conventional mail,
Web site and store.
CRM systems provide applications in 3 major
areas:

Sales - sales force automation (SFA).

Marketing – support marketing campaigns & provide
opportunities for cross-selling, up-selling and bundling.

Customer service – can take many Web-based forms.

16. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 16
SFA & Marketing
Sales force automation (SFA) functions provide such data
as sales prospect and contact information, product
information, product configurations and sales quotes.
Marketing

Cross-selling refers to the marketing of complementary products to
customers.

Up-selling is the marketing of higher-value products or services to
new or existing customers.

Bundling is a type of cross-selling in which a combination of
products is sold together at a lower price than the combined costs of
the individual products.

17. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 17
Customer Service
Customer service functions provide
information and tools to make call centers,
help desks and customer support staff more
efficient.
Customer service can take many forms and
includes:

Technical and other information and services
Customized products and services

18. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 18
Customer Service (Continued)

Tracking account or order status

Personalized Web pages

FAQs

E-mail and automated response

Call centers

19. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 19
8.5 Supply Chain Management
Systems
Supply chain refers to the flow of materials,
information, money and services from raw
material suppliers, through factories and
warehouses, to the end customers.
Supply chain management (SCM) is the
function of planning, organizing and
optimizing the supply chain’s activities.

20. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 20
SCM Systems (Continued)
Interorganizational information system
(IOS) involves information flows among two
or more organizations.
Global information systems are
interorganizational information systems that
connect companies located in two or more
countries.

21. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 21
Issues in Global IOS Design
Cultural differences
Localization
Economic and Political Differences
Legal issues
Cross-border data transfer which refers to
the flow of corporate data across nations’
borders.

22. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 22
The Structure & Components of
Supply Chains
A supply chain involves three segments:

Upstream, where sourcing or procurement from
external suppliers occurs;

Internal, where packaging, assembly or
manufacturing takes place;

Downstream, where distribution takes place,
frequently by external distributors.

23. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 23
The Structure & Components of
Supply Chains (Continued)
Tiers of suppliers, a supplier may have one
or more subsuppliers, and the subsupplier
may have its own subsupplier(s) and so on.
Material flows are the physical products, raw
materials, supplies and so forth that flow
along the chain.

Reverse flows – returned products, recycled
products and disposal of materials or products.

24. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 24
The Flows in the Supply Chain
(Continued)
Information flows are all data related to
demand, shipments, orders, returns and
schedules as well as changes in any of these
data.
Financial flows are all transfers of money,
payments and credit-related data.
A supply chain involves a product life cycle
approach, from “dirt to dust”.

25. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 25
Problems along the Supply Chain
Poor customer service – not delivering
products or services when and where the
customers need them.
Poor quality product
High inventory costs
Loss of revenues
New technologies

26. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 26
Problems along the Supply Chain
(Continued)
Problems stem mainly from two sources:

Uncertainties due to demand forecast, delivery
times, quality problems in materials and parts
that can create production delays;
The need to coordinate several activities, internal
units and business partners.
Bullwhip effect refers to erratic shifts in
orders up and down the supply chain.

27. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 27
8.6 Electronic Data Interchange
and Extranets
Electronic data interchange (EDI) is a
communication standard that enables
business partners to exchange routine
documents, such as purchase orders,
electronically.
EDI translator converts data into a standard
format before it is transmitted.

28. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 28
EDI (Continued)
Business transactions messages include
repetitive business transactions such as
purchase orders, invoices, credit approvals,
shipping notices and confirmations.
Data formatting standards are used.
EDI serves as a catalyst and a stimulus to
improve the standard of information that
flows between and among organizations.

29. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 29
EDI Benefits
Minimize data entry errors
Length of messages are shorter
Messages are secured
Reduces cycle time
Increases productivity
Enhances customer service
Minimizes paper usage and storage

30. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 30
EDI Limitations
Significant initial investment to implement
Ongoing operating costs are high due to the
use of expensive, private VANs
Traditional EDI system is inflexible
Long startup period
Multiple EDI standards exist

31. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 31
Extranets
Extranets link business partners to one another
over the Internet by providing access to certain
areas of each other’s corporate intranets.
The main goal of extranets is to foster
collaboration between business partners.
An extranet is open to selected B2B suppliers,
customers and other business partners.

32. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 32
Types of Extranets
A company and its dealers, customers or
suppliers – centers around one company.
An industry’s extranet – major players in
an industry team up to create an extranet.
Joint ventures and other business
partnerships – partners in a joint venture
use extranet as a vehicle for communications
and collaboration.

33. Copyright 2007 John
Wiley & Sons, Inc.
Chapter 8 33
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John Wiley & Sons, Inc.
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