Global E-Business: How Businesses Use Information Systems

2. Problem: Outdated manufacturing processes, time-consuming manual labor. Solutions: Digital manufacturing systems allowed Tata to create a $2,500 car without sacrificing safety or value. Dassault Systems� Digital Enterprise Lean Manufacturing Interactive Application drastically reduced development cycle. Demonstrates IT�s role in fostering innovation and improving efficiency. Illustrates the benefits of updating manufacturing-related business processes. Prior to introducing this case, you could ask students whether they think it might be possible to buy a car for only $2,500. Then, after reviewing the Tata Nano case, emphasize the role of information systems in making such a car possible. What kind of market do students think this type of car would have? Consider the �product development cycle� as a business process and ask the students how this cycle was improved using the Dassault system.Prior to introducing this case, you could ask students whether they think it might be possible to buy a car for only $2,500. Then, after reviewing the Tata Nano case, emphasize the role of information systems in making such a car possible. What kind of market do students think this type of car would have? Consider the �product development cycle� as a business process and ask the students how this cycle was improved using the Dassault system.

3. Review Question 1 What exactly is an IS? How does it work? What are its management, organization, and technology components?

4. An information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support: �a. decision making and control in an organization. b. communications and data flow. c. managers analyzing the organization�s raw data. d. the creation of new products and services. Answer: a Difficulty: Medium Reference: p. 16

5. Which of the following are key corporate assets? A) intellectual property, core competencies, and financial and human assets B) production technologies and business processes for sales, marketing, and finance C) knowledge and the firm's tangible assets, such as goods or services D) time and knowledge Answer: a Difficulty: Hard Reference: p. 11

6. Business processes are at the heart of every business. Ask students if they can give any examples of business processes that they come in contact with everyday. This could include anything from ordering a hamburger at McDonalds, to applying for a driver�s license at the DMV. Emphasize that studying a firm�s business processes is an excellent way to learn a great deal about how that business actually works. How could a business process be a liability? Think of some dysfunctional business processes or ask the students to come up with some really poor business process.Business processes are at the heart of every business. Ask students if they can give any examples of business processes that they come in contact with everyday. This could include anything from ordering a hamburger at McDonalds, to applying for a driver�s license at the DMV. Emphasize that studying a firm�s business processes is an excellent way to learn a great deal about how that business actually works. How could a business process be a liability? Think of some dysfunctional business processes or ask the students to come up with some really poor business process.

7. 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 Other examples include checking the product for quality (manufacturing and production), selling the product (sales and marketing), paying creditors (finance and accounting), and evaluating job performance (human resources). You could ask students to contribute other examples of business processes and describe which of the four types they are.Other examples include checking the product for quality (manufacturing and production), selling the product (sales and marketing), paying creditors (finance and accounting), and evaluating job performance (human resources). You could ask students to contribute other examples of business processes and describe which of the four types they are.

8. Emphasize that each rectangle represents one part of the larger business process of order fulfillment. Notice that this business process spans more than one type mentioned on the previous slide.Emphasize that each rectangle represents one part of the larger business process of order fulfillment. Notice that this business process spans more than one type mentioned on the previous slide.

9. Examples of entirely new business processes made possible by information technology are downloading a song from iTunes or buying a book from Amazon. You might also mention the Amazon book reader Kindle which is continuously connected to the Internet and allows customers to download books and pay for them using Amazon�s one click purchase method. Ask students if they can name any other similar processes.Examples of entirely new business processes made possible by information technology are downloading a song from iTunes or buying a book from Amazon. You might also mention the Amazon book reader Kindle which is continuously connected to the Internet and allows customers to download books and pay for them using Amazon�s one click purchase method. Ask students if they can name any other similar processes.

10. MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

11. Transaction processing systems 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 operational levels Serve predefined, structured goals and decision making The purpose of these systems is to answer routine questions about the flow of transactions through the organization. These systems are a necessity for any business. The purpose of these systems is to answer routine questions about the flow of transactions through the organization. These systems are a necessity for any business.

12. Note that the outputs of the payroll system are useful not only within the company to managers, but also to regulatory agencies and other entities relying on the accuracy of the reported data.Note that the outputs of the payroll system are useful not only within the company to managers, but also to regulatory agencies and other entities relying on the accuracy of the reported data.

13. 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 procedures for answering them Typically have little analytic capability Examples: Annual budgeting, inventory status reports Emphasize to students that management information systems is a specific category of information systems for middle management. It has the same name, but a very different meaning from the term introduced in Chapter 1 (the study of information systems in business and management). In other words, the study of management information systems involves looking at all the systems used in business. An MIS system is a specific type of an IS. It�s easy to get the two confused. Emphasize to students that management information systems is a specific category of information systems for middle management. It has the same name, but a very different meaning from the term introduced in Chapter 1 (the study of information systems in business and management). In other words, the study of management information systems involves looking at all the systems used in business. An MIS system is a specific type of an IS. It�s easy to get the two confused.

14. Emphasize the relationship between TPS and MIS here. MIS receive data from an organization�s TPS systems and create outputs that management can use to make strategic decisions.Emphasize the relationship between TPS and MIS here. MIS receive data from an organization�s TPS systems and create outputs that management can use to make strategic decisions.

15. This graphic represents the �reports� portion of the previous figure, 2-3. Emphasize this to students, perhaps referencing that slide again to drive home that point. Students may not understand the decimals in the �ACTUAL versus PLANNED� category, where anything above 1.00 represents more sales than planned and anything less represents a disappointing result of fewer sales than planned.This graphic represents the �reports� portion of the previous figure, 2-3. Emphasize this to students, perhaps referencing that slide again to drive home that point. Students may not understand the decimals in the �ACTUAL versus PLANNED� category, where anything above 1.00 represents more sales than planned and anything less represents a disappointing result of fewer sales than planned.

16. Decision support systems Serve middle management Support nonroutine decision making Example: What is impact on production schedule if December sales doubled? Often use external information as well from TPS and MIS Model driven DSS Voyage-estimating systems; cost analysis Data driven DSS Intrawest�s marketing analysis systems You could ask whether or not students understand what is meant by nonroutine decision making, as opposed to routine decision making, and why DSS are specifically designed to assist managers in making that type of decision. Ask students for examples of non-routine decisions they make.You could ask whether or not students understand what is meant by nonroutine decision making, as opposed to routine decision making, and why DSS are specifically designed to assist managers in making that type of decision. Ask students for examples of non-routine decisions they make.

17. DSS can rely on either analytical models or large databases to provide valuable information. You could ask which of these two types the above figure best resembles (analytical models). You could also ask them what types of decisions does this system help its users make? Examples include what vessels to send to particular destinations to maximize profit, the optimal rate at which vessels should travel to maximize efficiency while still meeting their schedules, and so forth.DSS can rely on either analytical models or large databases to provide valuable information. You could ask which of these two types the above figure best resembles (analytical models). You could also ask them what types of decisions does this system help its users make? Examples include what vessels to send to particular destinations to maximize profit, the optimal rate at which vessels should travel to maximize efficiency while still meeting their schedules, and so forth.

18. This case describes a piece of software that is critical to Air Canada�s business. You could ask students what types of systems best characterize each module. Most Maintenix modules provide decision support for Air Canada. Ask students to come up with examples based on their own air travel experiences, and suggest ways their experience might have been better with a system like Maintenix.This case describes a piece of software that is critical to Air Canada�s business. You could ask students what types of systems best characterize each module. Most Maintenix modules provide decision support for Air Canada. Ask students to come up with examples based on their own air travel experiences, and suggest ways their experience might have been better with a system like Maintenix.

19. Executive support systems Support senior management Address nonroutine decisions requiring judgment, evaluation, and insight (5 year operation plan, investment planning, employment projection, climate projection) Incorporate data about external events (e.g. new tax laws or competitors) as well as summarized information from internal MIS and DSS Example: ESS that provides minute-to-minute view of firm�s financial performance as measured by working capital, accounts receivable, accounts payable, cash flow, and inventory; Emphasize the connection between ESS, MIS, and DSS. ESS rely on accurate inputs from a firm�s MIS and DSS to provide useful information to executives. These systems should not exist in isolation from one another. If they are isolated from each other, it is a kind of organizational dysfunction, probably inherited from the past. Emphasize the connection between ESS, MIS, and DSS. ESS rely on accurate inputs from a firm�s MIS and DSS to provide useful information to executives. These systems should not exist in isolation from one another. If they are isolated from each other, it is a kind of organizational dysfunction, probably inherited from the past.

20. The digital dashboard is a common feature of modern-day ESS. Emphasize that a critical feature of ESS is ease of use and simplicity of display. Executives using an ESS want quick access to the most critical data affecting their firm.The digital dashboard is a common feature of modern-day ESS. Emphasize that a critical feature of ESS is ease of use and simplicity of display. Executives using an ESS want quick access to the most critical data affecting their firm.

21. Systems from a constituency perspective Transaction processing systems: supporting operational level employees Management information systems and decision-support systems: supporting managers Executive support systems: supporting executives This slide is a recap of the previous slides describing these types of systems. In a constituency perspective, systems are distinguished on the basis of who uses the system� operational managers, middle management, senior management. Systems are often designed to fit the specific needs of each of these groups in a firm. These groups form �constituencies� that CIOs must appeal to for support. This slide is a recap of the previous slides describing these types of systems. In a constituency perspective, systems are distinguished on the basis of who uses the system� operational managers, middle management, senior management. Systems are often designed to fit the specific needs of each of these groups in a firm. These groups form �constituencies� that CIOs must appeal to for support.

22. Relationship of systems to one another TPS: Major source of data for other systems ESS: Recipient of data from lower-level systems Data may be exchanged between systems In reality, most businesses� systems only loosely integrated This slide once again emphasizes the relationship between different types of systems, but explain that actually achieving such a high level of integration is rare. You could ask students to offer reasons why it might be difficult to do this.This slide once again emphasizes the relationship between different types of systems, but explain that actually achieving such a high level of integration is rare. You could ask students to offer reasons why it might be difficult to do this.

23. Other points of discussion could be the following: How would disorganized or insufficient information technology threaten Johnny�s Lunch�s prospects for growth? Have students heard of Johnny�s Lunch before? What suggestions do students have for the company as it tries to expand and market its brand?Other points of discussion could be the following: How would disorganized or insufficient information technology threaten Johnny�s Lunch�s prospects for growth? Have students heard of Johnny�s Lunch before? What suggestions do students have for the company as it tries to expand and market its brand?

24. Enterprise applications are used to manage the information used in the systems discussed previously. In other words, enterprise applications are used to ensure that TPS, MIS, DSS, and ESS work together smoothly.Enterprise applications are used to manage the information used in the systems discussed previously. In other words, enterprise applications are used to ensure that TPS, MIS, DSS, and ESS work together smoothly.

25. Representing an integrated enterprise system in a single graphic is very difficult. The basic point is that enterprise systems are very large and diverse databases that pull information from many parts of the firm, and many systems, and then dispense that information to a very wide variety of groups. This is precisely their advantage: one system, one company, one world. The multi-colored triangle represents an organization � the ovals represent the business functions and organizational levels affected by enterprise applications. The horizontal oval extends outside of the triangle because even business functions involving outside entities may be automated by enterprise applications.Representing an integrated enterprise system in a single graphic is very difficult. The basic point is that enterprise systems are very large and diverse databases that pull information from many parts of the firm, and many systems, and then dispense that information to a very wide variety of groups. This is precisely their advantage: one system, one company, one world. The multi-colored triangle represents an organization � the ovals represent the business functions and organizational levels affected by enterprise applications. The horizontal oval extends outside of the triangle because even business functions involving outside entities may be automated by enterprise applications.

26. This slide emphasizes the singularity of enterprise systems (one system) that does everything � or most everything� and serves a wide variety of groups and purposes in the firm.This slide emphasizes the singularity of enterprise systems (one system) that does everything � or most everything� and serves a wide variety of groups and purposes in the firm.

27. Emphasize the central repository used in enterprise systems for all types of information collected and used by the business. Ask students what the difficulties of creating such a system might be (standardization across many business units, size of the system).Emphasize the central repository used in enterprise systems for all types of information collected and used by the business. Ask students what the difficulties of creating such a system might be (standardization across many business units, size of the system).

28. Emphasize that SCM systems are interorganizational systems, automating the flow of information across organizational boundaries. This distinction is important because SCM systems must be designed with the business processes of potential partners and suppliers in mind. Emphasize that SCM systems are interorganizational systems, automating the flow of information across organizational boundaries. This distinction is important because SCM systems must be designed with the business processes of potential partners and suppliers in mind.

29. This example of Haworths supply chain management system features �middleware� that connects company warehouses to its distributors. That way, both groups are able to get up-to-the-minute information about the stock of particular goods in their own warehouses as well as their partner�s.This example of Haworths supply chain management system features �middleware� that connects company warehouses to its distributors. That way, both groups are able to get up-to-the-minute information about the stock of particular goods in their own warehouses as well as their partner�s.

30. CRM systems are extremely important for both marketing and customer service. You could ask students if they�ve ever filled out a survey for a company. Then connect that to information systems, perhaps explaining that the information they entered was provided as input to a CRM system for analysis.CRM systems are extremely important for both marketing and customer service. You could ask students if they�ve ever filled out a survey for a company. Then connect that to information systems, perhaps explaining that the information they entered was provided as input to a CRM system for analysis.

31. Salesforce is a pioneer of the software-as-a-service business model, under which they provide their CRM services online to companies without proprietary CRM systems or companies looking to acquire useful marketing information at a reduced cost. Ask students if they can think of other Saas applications. How about iTunes? Photobucket.com, or a social network like MySpace. What kinds of applications can they find at these consumer sites?Salesforce is a pioneer of the software-as-a-service business model, under which they provide their CRM services online to companies without proprietary CRM systems or companies looking to acquire useful marketing information at a reduced cost. Ask students if they can think of other Saas applications. How about iTunes? Photobucket.com, or a social network like MySpace. What kinds of applications can they find at these consumer sites?

32. The idea that business firms are repositories of knowledge may be new to many students. Ask students for examples of firm knowledge, for instance, the knowledge required to run a fast food restaurant, or the knowledge required to operate a Web site like Amazon. Explain that knowledge management systems are useful for helping a firm�s employees understand how to perform certain business processes or how to solve problems. What might the consequences be for a firm with poor knowledge management systems?The idea that business firms are repositories of knowledge may be new to many students. Ask students for examples of firm knowledge, for instance, the knowledge required to run a fast food restaurant, or the knowledge required to operate a Web site like Amazon. Explain that knowledge management systems are useful for helping a firm�s employees understand how to perform certain business processes or how to solve problems. What might the consequences be for a firm with poor knowledge management systems?

33. Intranets and extranets are technology platforms more so than applications, but they are critical to the function of all enterprise applications. Emphasize the ability of intranets to connect to a company�s TPS and related systems.Intranets and extranets are technology platforms more so than applications, but they are critical to the function of all enterprise applications. Emphasize the ability of intranets to connect to a company�s TPS and related systems.

34. What are some of the unique benefits of extranets compared to intranets?What are some of the unique benefits of extranets compared to intranets?

35. �Interaction� jobs refer to jobs in which talking, e-mailing, presenting, or persuading other people is the primary value-adding activity. Each of the listed systems make interaction with others easier in some way. Students are bound to be familiar with each of these methods, so ask them to give some examples of each. Do students see themselves as headed for an interaction job?�Interaction� jobs refer to jobs in which talking, e-mailing, presenting, or persuading other people is the primary value-adding activity. Each of the listed systems make interaction with others easier in some way. Students are bound to be familiar with each of these methods, so ask them to give some examples of each. Do students see themselves as headed for an interaction job?

36. You could ask students to describe some common business processes conducted or made possible using the Internet. Examples include advertising, customer support, and payment. E-government is the ability of government to provide information and services via the Internet to individuals and businesses. Ask students for examples or use your podium computer to illustrate a state or local government Web site.You could ask students to describe some common business processes conducted or made possible using the Internet. Examples include advertising, customer support, and payment. E-government is the ability of government to provide information and services via the Internet to individuals and businesses. Ask students for examples or use your podium computer to illustrate a state or local government Web site.

37. Defined simply, the information systems department of a firm is responsible for coordinating all of the systems previously mentioned in this chapter. You could also mention to users that end users play a prominent role in how information systems are designed as well as the role that the information systems department plays in a firm.Defined simply, the information systems department of a firm is responsible for coordinating all of the systems previously mentioned in this chapter. You could also mention to users that end users play a prominent role in how information systems are designed as well as the role that the information systems department plays in a firm.

38. You could ask students why small firms might be less likely to simply have smaller information systems groups as opposed to none at all. As a company gets larger and larger, the information systems get progressively more complicated and require more effort to maintain. Students may be interested to learn that this is why extremely large companies (�Fortune 1000�) might even have multiple information systems departments that deal with individual segments of the firm.You could ask students why small firms might be less likely to simply have smaller information systems groups as opposed to none at all. As a company gets larger and larger, the information systems get progressively more complicated and require more effort to maintain. Students may be interested to learn that this is why extremely large companies (�Fortune 1000�) might even have multiple information systems departments that deal with individual segments of the firm.

39. This slide and the next two slides depict different methods of organizing the information systems function. In this organization each functional area of the business is monitored by distinct information systems departments.This slide and the next two slides depict different methods of organizing the information systems function. In this organization each functional area of the business is monitored by distinct information systems departments.

40. Under this organization, the information systems department is a unified department (shown here furthest to the right as VP CIO Information Systems) under the control of the CEO and Board of Directors.Under this organization, the information systems department is a unified department (shown here furthest to the right as VP CIO Information Systems) under the control of the CEO and Board of Directors.

41. In this organization, usually found in very large companies, separate divisions each have their own information systems department dedicated to that division alone. These divisional groups are still centrally controlled. Ask students to explain what type of firm is best suited to each configuration.In this organization, usually found in very large companies, separate divisions each have their own information systems department dedicated to that division alone. These divisional groups are still centrally controlled. Ask students to explain what type of firm is best suited to each configuration.