Management Information Systems:

Managing the Digital Firm

Fifteenth edition

Chapter 2
Global E-business and Collaboration
 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?
 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
 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– Outdated static technology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
 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 2)
• 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
 Business Processes (2 of 2)
• 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
Figure 2.1: The Order Fulfillment Process

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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
 Systems for Different Management Groups (1 of 2)
• Transaction processing systems
– 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
Figure 2.2: A Payroll TPS

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 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
 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
Figure 2.3: How Management Information Systems Obtain Their Data from
the Organization’s TPS

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Figure 2.4: Sample MIS Report

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 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
– Voyage-estimating systems
• Data driven DSS
– Intrawest’s marketing analysis systems
Figure 2.5: Voyage-Estimating Decision-Support System

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 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
 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?
 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.
 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
Figure 2.6: Enterprise Application Architecture

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 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
 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
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
 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
 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
 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
 What Is Social Business?
• Social business
– Use of social networking platforms (internal and external) to engage
employees, customers, and suppliers
• Aims to deepen interactions and expedite information sharing
• “Conversations”
• Requires information transparency
– Driving the exchange of information without intervention from
executives or others
 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
Figure 2.7: Requirements for Collaboration

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 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
 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)
– Cloud collaboration services (Google Drive, Google Docs, etc.)
– Microsoft SharePoint and IBM Notes
– Enterprise social networking tools
 Interactive Session: Technology: Collaborating the
Glasscubes Way

• Class discussion
– Discuss the features of Glasscubes as a collaboration software.
– Why did the NSHCS require a tool for collaboration? Was Glasscubes a feasible option?
– Name some other areas where such software can be useful. Discuss at least one such area.
 Checklist for Managers: Evaluating and Selecting
Collaboration and Social Software Tools

• Time/space matrix
• Six steps in evaluating software tools
– Identify your firm’s collaboration challenges
– 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
Figure 2.8: The Time/Space Collaboration and Social Tool
Matrix

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 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
 Organizing the Information Systems Function
• IT governance
– Strategies and policies for using IT in the organization
– Decision rights
– Accountability
– Organization of information systems function
• Centralized, decentralized, and so on