Chapter 2 Global E-business and Collaboration @ Pearson pr treme in. he nenLearning Objectives 2-1 What are business processes? How are they related to information systems? 2-2 How do systems serve the different management groups in a business, and how do systems that link the enterprise improve organizational performance? 2-3 Why are systems for collaboration and social business so important, and what technologies do they use? 2-4 What is the role of the information systems function in a business? @ Pearson anit ©2046, 207, 216 Peron Eton AiharaVideo Cases ¢ Case 1: Walmart’s Retail Link Supply Chain * Case 2: CEMEX: Becoming a Social Business « Instructional Video: US Foodservice Grows Market with Oracle CRM on Demand @ PearsonEnterprise Social Networking Helps ABB Innovate and Grow (1 of 2) * Problem — Outdated static technology — Geographically dispersed * Solutions — Develop knowledge sharing strategy and goals Change knowledge and collaboration processes Change organizational culture — Deploy Inside+, with Yammer, Office 365, and Sharepoint I @ Pearson opi ©2048, 207, 2018 Pearson Eon A igh ReseedEnterprise Social Networking Helps ABB Innovate and Grow (2 of 2) ¢ ABB uses Inside+ to provide new channels for knowledge acquisition, innovation, and collaboration * Demonstrates IT’s role in helping organizations improve performance and remain competitive * Illustrates the ability of IT systems to support collaboration and teamworkBusiness Processes (1 of 3) ° In order to operate, businesses must deal with many different pieces of information about suppliers, customers, employees, invoices, and payments, and of course their products and services. * They must organize work activities that use this information to operate efficiently and enhance the overall performance of the firm. Information systems make it possible for firms to manage all their information, make better decisions, and improve the execution of their business processes @ Pearson apah © 208, 207, 28 Parson Een, AR ReadBusiness Processes (2 of 3) ¢ Business processes — Flows 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 @ Pearson cops ont, s,m Raves Ehsin nc ier soeBusiness Processes (3 of 3) ¢ Examples of functional business processes — Manufacturing and production + Assembling the product — Sales and marketing + Identifying customers — Finance and accounting + Creating financial statements — Human resources + Hiring employees @ Pearson apa © 208, 207, 28 Parson Een, ARM ReadFigure 2.1: The Order Fulfillment Process @ Pearson apa © 208, 207, 28 Parson Een, ARM ReadHow Information Technology Improves Business Processes * Increasing efficiency of existing processes — Automating steps that were manual « Enabling entirely new processes — Changing flow of information — Replacing sequential steps with parallel steps — Eliminating delays in decision making — Supporting new business models @ Pearson anh ©2046, 207, 216 Peon Eton A ih RareSystems for Different Management Groups (1 of 2) ¢ Transaction processing systems (TPS) — Serve operational managers and staff — 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 predefined, structured goals and decision making @ Pearson copy ©2048, 207, 2018 Pearson Eaton A ight ReseedFigure 2.2: A Payroll TPS Net pay Online Eamings (YTD) ueries Payroll data on master fle @ Pearson ony 6203, 208 enon eA Rt RoadSystems for Different Management Groups (2 of 2) ¢ Systems for business intelligence — Data and software tools for organizing and analyzing data — Used to help managers and users make improved decisions * Management information systems * Decision support systems * Executive support systems @ PearsonManagement Information Systems * Serve middle management « Provide reports on firm’s current performance, based on data from TPS ¢ Provide answers to routine questions with predefined procedure for answering them ¢ Typically have little analytic capability @ PearsonFigure 2.3: How Management Information Systems Obtain Their Data from the Organization’s TPS Transaction Processing Systems — Management Information Systems Order MIS FILES file Sales data Production ua master eit file product - Pal Product change data ‘Accounting files. Expense data @ Pearson =| Reports Online Displays and Dashboards opah © 201, 017, 2018 Pearson Evan, nl igh ReservedFigure 2.4: Sample MIS Report Consolidated Consumer Products Corporation Sales by Product and Sales Region: 2017 PRODUCT PRODUCT SALES ACTUAL PLANNED = ACTUAL CODE DESCRIPTION REGION SALES versus PLANNED 4469 Carpet Cleaner Northeast 4,066,700 4,800,000 0.85 South 3,778,112 3,750,000 1.01 Midwest 4,867,001 4,600,000 1.06 West 4,003,440 4,400,000 0.91 TOTAL 16,715,253 17,550,000 0.95 5674 Room Freshener Northeast 3,676,700 3,900,000 0.94 South 5,608,112 4,700,000 1.19 Midwest 4,711,001 4,200,000 1.12, West 4,563,440 4,900,000 0.93 TOTAL 18,559,253 17,700,000 1.05 opytah © 2016, 2017, 201 Pearson Easton. lights ResseDecision support systems ¢ Serve middle management * Support nonroutine decision making — Example: What is the impact on production schedule if December sales doubled? * May use external information as well TPS / MIS data * Model driven DSS — Example: Voyage-estimating systems * Data driven DSS — Intrawest’s marketing analysis systems @ Pearson apa © 208, 207, 88 Parson Een: ARM ReadFigure 2.5: Voyage-Estimating Decision- Ship file (e.9., speed, capacity) Port distance restrictions file Fuel consumption Analytical cost file Ship charter hire history cost file Port expense file opyah © 201, 017, 2018 Pearson Eaton nl igs ReservedExecutive Support Systems * Support senior management « Address nonroutine 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 firm’s financial performance @ Pearson comet nr, om aes Ehsin nc ir soeInteractive Session: Organizations: New Systems Help Plan International Manage Its Human Resources (1 of 2) * Class discussion — Describe the problem faced by Plan International. What management, organization, and technology factors contributed to this problem? — Describe the system solution to this problem. Describe the types of systems used for the solution. — Why is human resources so important at Plan International? @ Pearson apa © 208, 207, 8 Parson Een, ARM ReadInteractive Session: Organizations: New Systems Help Plan International Manage Its Human Resources (2 of 2) * Class discussion — How did these systems improve operational efficiency? — How did these systems improve decision making? Give examples of two decisions improved by Plan’s new systems. @ Pearson apa © 208, 207, 8 Parson Een: ARM ReadEnterprise Applications ¢ Systems for linking the enterprise ¢ Span functional areas « Execute business processes across the firm * Include all levels of management ¢ Four major applications — Enterprise systems — Supply chain management systems — Customer relationship management systems — Knowledge management systems @ Pearson compat ont, om aes Easing soFigure 2.6: Enterprise Application Architecture Slesand Manufacturing ‘Finance and Human Marketing and Production Accounting Resources FUNCTIONAL AREAS. @ PearsonEnterprise Systems * Collect data from different firm functions and store data in single central data repository * Resolve problems of fragmented data ° Enable: = Coordination of daily activities — Efficient response to customer orders (production, inventory) — Decision making by managers about daily operations and longer- term planning @ Pearson apa © 208, 207, 88 Parson Een: ARM ReadSupply Chain Management (SCM) Systems « Manage firm’s relationships with suppliers ¢ Share information about: — Orders, production, inventory levels, delivery of products and services * Goal: — Right amount of products to destination with least amount of time and lowest cost @ Pearson apa © 208, 207, 88 Parson Een, ARM ReadCustomer Relationship Management (CRM) Systems ¢ Provide information to coordinate all of the business processes that deal with customers — Sales — Marketing — Customer service ¢ Helps firms identify, attract, and retain most profitable customers — Pareto’s 80-20 Rule @ PearsonCRM and application of Pareto Principle ¢ The Pareto Principle, (named after esteemed economist Vilfredo Pareto), ° Specifies that 80% of consequences come from 20% of the causes, asserting an unequal relationship between inputs and outputs. * This principle serves as a general reminder that the relationship between inputs and outputs is not balanced. @ PearsonKnowledge Management Systems (KMS) * Support processes for capturing and applying knowledge and expertise — How to create, produce, and deliver products and services * Collect internal knowledge and experience within firm and make it available to employees ¢ Link to external sources of knowledgeIntranets and Extranets ¢ Also used to increase integration and expedite the flow of information * Intranets — Internal company websites accessible only by employees « Extranets — Company websites accessible externally only to vendors and suppliers — Often used to coordinate supply chain @ Pearson anh ©2046, 207, 216 Peon Een A ih RaedE-business, E-commerce, and E-government ¢ E-business — Use of digital technology and Internet to drive major business processes ° E-commerce — Subset of e-business — Buying and selling goods and services through Internet « E-government — Using Internet technology to deliver information and services to citizens, employees, and businesses @ Pearson anh ©2046, 207, 218 Peron Eton A ihe RareWhat Is Collaboration? * Collaboration — Short lived or long term — Informal or formal (teams) * Growing importance of collaboration — Changing nature of work Growth of professional work—“interaction jobs” Changing organization of the firm Changing scope of the firm — Emphasis on innovation — Changing culture of work @ Pearson copy ©2048, 207, 2018 Pearson Eocaton A igh ReseedWhat Is Social Business? * Social business — Use of social networking platforms (internal and external) to engage employees, customers, and suppliers (Examples....._) « Aims to deepen interactions and expedite information sharing * “Conversations” ¢ Requires information transparency — Driving the exchange of information without intervention from executives or others @ Pearson apa © 208, 207, 18 Parson Eon, ARM ReadBusiness Benefits of Collaboration and Teamwork ¢ Investments in collaboration technology can bring organization improvements, returning high ROI * Benefits — Productivity Quality Innovation — Customer service Financial performance * Profitability, sales, sales growth @ Pearson ont ©2046, 207, 21 Penn Eton WA ih RareFigure 2.7: Requirements for Collaboration @ Pearson Pearson Eason. Al igs ReservedBuilding a Collaborative Culture and Business Processes * “Command and control” organizations — No value placed on teamwork or lower-level participation in decisions * Collaborative business culture — Senior managers rely on teams of employees — Policies, products, designs, processes, and systems rely on teams — The managers purpose is to build teams @ Pearson copy ©2048, 207, 218 Pearson Eaton A igh ReseneTools and Technologies for Collaboration and Social Business « E-mail and instant messaging (IM) ° Wikis ¢ Virtual worlds * Collaboration and social business platforms — Virtual meeting systems (telepresence, Examples...) — Cloud collaboration services (Google Drive, Google Docs, etc.) — Microsoft SharePoint and IBM Notes — Enterprise social networking tools @ Pearson apa © 208, 207, 28 Parson Een, ARM ReadInteractive Session: Technology: Cisco 1X5000: What State-of-the-Art Telepresence Can Do for Collaboration * Class discussion — Describe the capabilities of Cisco’s 1X5000 telepresence system. How do they promote collaboration and innovation? — Why would a company like Produban want to invest in a telepresence system such as Cisco's 1X5000? How are videoconferencing technology and telepresence related to Produban’s business model and business strategy? — What kinds of other companies might benefit from a telepresence service such as 1X5000? Why? @ Pearson anh ©2046, 07, 216 Penn Eton AiharaChecklist for Managers: Evaluating and Selecting Collaboration and Social Software Tools ¢ Time/space matrix Six steps in evaluating software tools 1. Identify your firm's collaboration challenges: time and location Identify what kinds of solutions are available Analyze available products’ cost and benefits Evaluate security risks Consult users for implementation and training issues Evaluate product vendors 2ARwWN @ Pearson apa © 208, 207, 88 Paton Een, ARM ReadFigure 2.8: The Time/Space Collaboration and Social Tool Matrix ‘Same time Different time synchronous asynchronous Same place colocated remote Different place @ Pearson ony £2027, 206 eno Eten eA Rt RoadThe Information Systems Department ¢ Often headed by chief information officer (CIO) — Other senior positions include: + chief security officer (CSO), chief knowledge officer (CKO), chief privacy officer (CPO), chief data officer (CDO) « Programmers * Systems analysts + Information systems managers ¢ End users @ Pearson up Ss Pee ton. is nenOrganizing the Information Systems Function ¢ IT governance A. 2: 8. 4 @ Pearson Strategies and policies for using IT in the organization Decision rights Accountability Organization of information systems function i. Centralized, decentralized, and so on opytah © 2016, 2017, 2018 Pearson Easton. Al igs RenaeSource * Management Information Systems by Kenneth Laudon, Pearson, 15‘ edition « Management Information Systems by Effy OZ. Cengage Learning, 7' edition Mis Fall-2020 @ Pearson