MANAGEMENT INFORMATION SYSTEMS (MIS) Global E-Business How Business Use Information Systems LECTURE...

MANAGEMENT INFORMATION SYSTEMS (MIS)MANAGEMENT INFORMATION SYSTEMS (MIS)

Global E-Business Global E-Business How Business Use Information SystemsHow Business Use Information Systems

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SPRING 2010SPRING 2010

GLOBAL E-BUSINESS: GLOBAL E-BUSINESS: HOW BUSINESS USE INFORMATION SYSYEMSHOW BUSINESS USE INFORMATION SYSYEMS

• Every organization deals with many different pieces of Information about their Suppliers, Customers, Invoices, Payments, their Products and Services In order to operate.

• Firms must organize their work activities that use information to operate efficiently and enhance overall performance of the firm.

• Information Systems (IS) make it possible for firms to manage their information, make better decisions, and improve the execution of their Business Processes.

GLOBAL E-BUSINESS: HOW BUSINESS USE INFORMATION SYSYEMSGLOBAL E-BUSINESS: HOW BUSINESS USE INFORMATION SYSYEMS

BUSINESS PROCESSES

• Business Processes are Workflows of material, Information, and Knowledge – in other word:

Business Processes are sets of activities.

• Business Processes are also referred to as unique ways in which organizations coordinate work, information and knowledge and the ways in which Management chooses to coordinate work.

A BUSINESS CAN BE SEEN AS A COLLECTION OF BUSINESS PROCESSES.

(Some of these Processes are part of large encompassing Processes)

• Information Systems (IS) are all about improving the Business Processes, which lie at the very heart of a Business.


BUSINESS PROCESSES EXAMPLES

• Almost every Business has a way to hire (recruit) Employees. The Process of hiring employees is a Business Process in the sense that a set Of activities a firm performs in order to hire new Employees.

- Hiring employee PROCESS can be broken down into a number of different steps such as Place Advertisement, Contact Employment Agencies, Collect Resumes, Review Resumes, Interview candidates, Rank candidates, Make employment decision and Enroll Employee into Payroll, Health scheme and Pension scheme. which are part of Employee System .

• In some business Hiring process can be slow and inefficient, whereas in others, it can be swift and highly effective.

One of the major purpose of Information Systems is to enable highly efficient Processes.

• The performance of a Business firm depends on how well its Business Processes are designed and coordinated.

• Business Process can be a source of competitive strength. It can enable a company to innovate or to execute better than its rivals.


• Many Business Processes are tied to a specific Functional Area.

e.g. - Sales and Marketing Function responsible for identifying potential Customers. - Human Resources function would be responsible for Hiring Employee .

• Some Business Processes cross many Business Functional Areas and require coordination across Departments. Example - Consider a simple Business Process of ‘Fulfilling a Customer Order’. You will notice that:

– Sales Department would Create a Sales Order.

– The Order will pass first to Accounting Dapartment for Credit verification or immediate Payment prior to Shipping. –Then Manufacturing Department will need to pull the product from the Inventory. –Then Transportation department will ship the goods . – An Invoice will have to be produced by the Accounting Department and a notice will be sent to the Customer indicating that the Product has shipped.– Sales Department will have to be notified of the Shipment and prepare to support the Customer by answering calls or fulfilling warranty claims.


•As you can see ‘Fulfilling a Customer Order’ Process involves a complex set

of steps that requires the close Coordination of several Departments.

To efficiently perform all these steps a great deal of information is needed.

The Information Systems make this possible.

HOW INFORMATION SYSTEMS ENHANCE BUSINESS PROCESSES?

Information Systems enhance Business Processes in two ways:

1. Increasing the efficiency of Existing Processes (Enhancing Existing Processes) 2. Creating New Processes that are capable of transforming the Business.

• Information Systems automate many steps in Business Processes that were formerly performed manually.

Information Systems can enable entirely new Business Process by:-

- Changing the flow of information , - Making it possible for many more people to access and share information , - Replacing sequential steps with tasks that can be performed simultaneously in parallel

- Eliminating delays in Decision making.

• You can achieve a very clear understanding of how Business actually works, and also Understand how to change the Business Processes to make it more efficient or effective by conducting a Business Process Analysis.


TYPES OF BUSINESS INFORMATION SYSTEMS

- Although there are many different Business Systems, We can categorize different Systems from two different perspectives:

1. Systems from a Functional Perspective

Functional Perspective identifies Systems by their major Business Functions

– Sales and Marketing Systems

– Manufacturing and Production Systems

– Finance and Accounting Systems

– Human Resources Systems

2. Systems from a Constituency Perspective

Constituent Perspective identifies Systems in terms of major Organizational Groups that they serve. - Transaction Processing Systems (TPS)

– Management Information Systems (MIS)

– Decision-Support Systems (DSS)

– Executive Information Systems (EIS) or Executive Support Systems (ESS)

TYPES OF BUSINESS INFORMATION SYSTEMSTYPES OF BUSINESS INFORMATION SYSTEMS

SYSTEMS FROM A FUNCTIONAL PRESPECTIVE

• From a historical perspective, Functional Systems were the first kind of Systems, developed by Business firms.

• These Systems were located in specific Business Departments, such as Sales and Marketing Department, Production Department etc..

• SALES AND MARKETING SYSTEMS

The Sales and Marketing Function is responsible for selling the organization’s Product and Services.

Marketing Department is concerned with:-

- Identifying potential Customers needs and wants, - Planning for developing product and services to

meet customer needs

- Advertising and promoting these product and services.


SYSTEMS FROM A FUNCTIONAL PRESPECTIVE

Sales Department is concerned with:

- Contacting customers, - Selling the products and services,

- Taking Orders, and following up on sales.

Sales And Marketing Information Systems support all Sales and Marketing Business functions.

Example of Sales and Marketing Information Systems

SYSTEM DESCRIPTION GROUP SERVED

Order Processing Enter, Process & Track Orders Operational Mgmt, and staffPricing Analysis Determine Price for products Middle ManagementSales trend Forecasting Prepare 5 year Sales plan Senior Management

SYSTEMS FROM A FUNCTIONAL PRESPECTIVESYSTEMS FROM A FUNCTIONAL PRESPECTIVE

Example of a Sales Information System

• Sales Information System captures Sales data at the moment of Sales to help the Business monitor Sales Transactions and provide information to help Management analyze Sales Trends and the effectiveness of Marketing campaign.


MANUFACTURING AND PRODUCTION SYSTEMS

• Manufacturing and Production Function is responsible for actually producing the firm’s goods and services.

• Manufacturing and Production Systems deal with the:

– Planning, Development, and Maintenance of Production facilities; – Establishment of Production goals; – Acquisition, Storage, and availability of materials; – Scheduling of resources such as equipment, facilities , material , and

labour required to produce products.

Examples of Manufacturing and Production Information Systems

SYSTEM DESCRIPTION GROUPS SERVEDMachine Control Controls the actions of machines Operational ManagementProduction Planning Decides when and how many Middle Management Products should be produced .Facilities Location Decides where to locate new Senior Management Production facilitiesQuality Control Identify source of defects Inventory System …………………………


OVERVIEW OF AN INVENTORY SYSTEM (STOCK CONTROL SYSTEM)

• Most Manufacturing and Production Systems use some sort of Inventory System.

• An Inventory System produces a Report that gives information about number of each item available in inventory, the number to be reorder replenished in each item to support Production activities.

• Companies can estimate the number of items to reorder, or use a formula to calculate the least expensive quantity called ‘Economic Order Quantity’ to reorder.


FINANCE AND ACCOUNTING SYSTEMS

The Finance Function is responsible for managing Firm's Financial Assets such as: Cash , equities (stocks), bonds, and other investments to maximize return on the Financial assets.

To determine whether a firm is getting the best Return on its investment , the Financial Function must obtain a considerable amount of Information from sources outside of the firm (External sources).

Accounting Function is responsible for maintaining and managing the Firm’s Financial Records such as Receipts, Disbursements, Depreciation, and Payroll in order to account for the flow of funds in a firm.

Finance And Accounting Information Systems support these activities

Example of Finance and Accounting Information Systems

SYSTEM DESCRIPTION GROUPS SERVED

Accounts Receivables Tracks money owed the firm Operational Management

Budgeting Prepares short term Budget Middle Management

Profit Planning Plans long term Profits Senior Management


ACCOUNT RECEIVABLES SYSTEM

This System tracks and stores important Customer data , such as Payment History,Credit Rating and Billing History.


HUMAN RESOURCES SYSTEMS

The Human Resources Function is responsible for attracting,developing, and maintaining the firm’s workforce.

Human Resources Information Systems support activities such as:

- Identifying potential employees,

- Maintaining complete record of existing Employees, - Creating programs (TRAINING PROGRAMS ) to develop employees’

talents and skills.

Examples of Human Resources Information Systems

SYSTEM DESCRIPTION GROUPS SERVED

Training and Development Tracks employees’ Training skills Operational Mgmt

and Performance appraisals

Compensation Analysis Monitors the range of distribution Middle Management

Wages, Salaries and Benefits

Human Resource Planning Plans the long term labour force Senior Management

needs of the Organization


AN EMPLOYEE RECORD KEEPING SYSTEM

The System maintains basic employee data that can be used to produce a variety ofReports, such as ‘’List of Newly hired employees’’, Employees Classified by Job Typeand Educational Level’’, ‘’Employee Job Performance Evaluation Report’’ etc…

- Employee Record keeping Systems are typically designed to provide data that can satisfy Government (State) record keeping requirements.


SYSTEMS FROM CONSTITUENCY PRESPECTIVES

• Although Functional Perspective is very useful for understanding how Business Systems serve specific Business Functions, it does not tell us how Systems

help the Mangers of the Firm.

• The Constituency Perspective examines in terms of the various Levels of Management and Types of Decisions that they support each management level.

• Each Management Level has different information needs given their different responsibilities, and each can be seen as major Information Constituents.


SYSTEMS FROM CONSTITUENCY PRESPECTIVES

– Senior Managers (Directors . CEO )need Summary Information that can quickly inform them about the overall performance of the Firm, such as:

– Gross Sales Revenue, – Sales By Product Group Range, – Overall Profitability.

– Middle Managers (Departmental Managers) need more specific information on the results of specific Functional areas and Departments of the Firm, such as:

– Contacts by Sales Force, – Production Statistics for specific Factories or Product Lines,– Employment Levels and Costs, – Sales Revenues for each Month or even each Day.

– Operational Managers (Supervisors) need Transaction Level Information, such as:

– Number of remaining Parts in Inventory each day– Number of hours logged on say. Monday by each Employee.

• Knowledge Workers may need access to external Scientific Database or Internal Databases with Organizational Knowledge.

• Production and Service Workers need access to Customer Records in order to take Order and Answer queries from Customers.

SYSTEMS FROM CONSTITUENCY PRESPECTIVESSYSTEMS FROM CONSTITUENCY PRESPECTIVES

1. TRANSACTION PROCESSING SYSTEMS (TPS)

A Transaction Processing System (TPS) is a Computerized System thatPerforms and records the daily routine transactions necessary to conductBusiness such as :

– Sales Order Entry, – Hotel Reservation, – Payroll, – Student Registration etc….

• TPS are mainly service Operational level of the organization. Therefore, they must make information easily available, current and accurate to answer routine questions; like How many parts are in inventory, What happened to XYZ companies payments? As well as Etc…track the flow of transactions through the Organization.

• At the Operational level , tasks, resources, and goals are predefined and highly Structured.

For example: Decision to grant credit to a customer is made by a Lower-level supervisor according to predefined criteria.


1. TRANSACTION PROCESSING SYSTEMS (TPS)• Operational Managers need TPS to monitor the status of Internal Operations and the firm’s

relationships with the external environment.

• TPS are also major producers (source) of information for the other types of Constituense Systems such as MIS, DSS even EIS Systems.

• TPS are often so central to a business that failure for a few hours can lead to a firm’s demise and perhaps that of other External firms linked to it.


2. MANAGEMENT INFORMATION SYSTEMS (MIS)

The term Management Information Systems (MIS) are a specific category of information Systems serving the Middle Management (Department Managers).

Middle Management needs Systems to help them with their Monitoring , Controlling, Decision making, and Administrative activities.

• MIS provides Middle Managers with reports on the Organization’s current performance. This information is used to monitor and control current business and predict future performance.

• MIS Summarise and report on the company’s basic operations using data supplied by Transaction Processing Systems (TPS).

• The data from TPS are compressed and usually presented in reports that are produced on a regular schedule. i.e. Weekly, Monthly , Yearly Reports etc.


2. MANAGEMENT INFORMATION SYSTEMS (MIS)

• MIS generally provides answer to routine questions that have been specified in advance and have a predefined procedures for answering them.

• Most M IS use simple routines such as Summarize and Comparison, as opposed to sophisticated Mathematical Modules or Statistical techniques.

• Today, many MIS Reports are delivered Online.

• Some MIS Systems enable Managers to ‘’Drill Down’’ reports to see daily or hourly data if required.

• MIS generally are not flexible enough and have little analytical capability.

SYSTEMS FROM CONSTITUENCY PRESPECTIVESSYSTEMS FROM CONSTITUENCY PRESPECTIVES MANAGINGEMENT INFORMATION SYSTEMS (MIS)


3. DECISION SUPPORT SYSTEMS (DSS)

• Decision Support Systems (DSS) support non-routine Decision making of Middle Management.

• DSS focus on problems that are unique and rather changing, for which the procedure for arriving at a solution may not be predefined in advance.

• DSS answers ‘’What-IF’’ type of Questions. e.g. What would be the impact on Production Schedules if we were to

double sales next month?

• Although DSS use internal information from Transaction Processing Systems and the Management Information Systems, they often take in information from External Sources, such as Current Stock Prices from Stock Market Databases .



• DSS use a variety of Mathematical and Statistical models to analyze data.

• DSS condense large amounts of data into a form in which Decision makers analyze them.

• DSS are designed so that Users can work with them directly and thus, these Systems explicitly include User-friendly Software.

e.g. Voyage-Estimating System is a small but powerful example of DSS.

• DSS is also known as ‘’ Business Intelligence Systems’ (BIS) ’ because they focus on helping Users make better business decisions.



• The Voyage-Estimating System example below operates on a powerful Personal Computer. It is used daily by Managers who must develop Bids on Shipping Contracts in the open market to carry general cargo.

• The System calculates financial and technical voyage details including ship/time cost (fuel, labour and capital) cargo rates, and port expenses, ship cargo capacity, speed, port distances, fuel and water consumption and loading patterns.


4. EXECUTIVE INFORMATION SYSTEMS (ESS)

• The nature of Senior Managers (Executives) role involves with strategic issues and long-term trends, both in the firm and in the external environment.

• Senior Managers are concerned with questions such as :-

- What will employment levels be in the next five years?

- What are the long term industry cost trends, and where does our firm fit in?

- How well our competitors performing

- What product should we be making in 5 years?

- What new acquisitions would protect us from cynical business swings?


4. EXECUTIVE INFORMATION SYSTEMS (EIS)

• EIS help senior Managers make Strategic and Long term trend decisions.

• EIS address nonroutine (unstructured) decisions that require judgement, evaluation, and insight because there is no agreed-on procedure for arriving at a solution.

• EIS provide a generalized computing and communications capacity that can be applied to a changing array of problems.

• EIS are designed to incorporate data from Eternal sources (i.e. From Market places) but they also draw summarized information from internal TPS and DSS.

• ESS filter, compress, and track critical data, displaying the data of greatest importance to Senior managers.


4. EXECUTIVE INFORMATION SYSTEMS (EIS)

• EIS presents graphs and data from many sources through an interface that is easy for Senior Managers to use. Often the information is delivered to a PORTAL, which uses a Web interface to present integrated personalized business content.

• The model below illustrates an EIS. The System pools data from diverse internal corporate Systems (TPS) and external Databases such as Dow Jones news and makes them available to Executive Managers in an easy-to-use form.

RELATIONSHIP OF SYSTEMS TO ONE ANOTHERRELATIONSHIP OF SYSTEMS TO ONE ANOTHER

• The TPS, MIS, DSS and EIS Systems are interrelated. As illustrated below.• TPS are typically a major source of data for other Systems.

• EIS are primarily a recipient of data from Lower level TPS Systems• The other Systems may exchange data with each other as well.

• Data may also be exchanged among TPS System serving different functional areas.(e.g. An Order captured by the Sales System may be transmitted to a Manufacturing System as a transaction for producing or delivering the product specified in the Order.)

• In reality, TPS, DSS, MIS and EIS Systems are loosely coupled in most business firms. However this situation is changing and firm are using new Networking technologies and Enterprise-wide Software Systems to integrate information that resides in many different Systems.

SYSTEMS THAT SPAN THE ENTERPRISESYSTEMS THAT SPAN THE ENTERPRISE

ENTERPRISE APPLICATIONS

As a result of internal growth and through acquisition of smaller firms, many corporations ended up with a collection of Information Systems (most of them are old), and face the challenge of getting them to “talk with one another’ and work together as one Corporate System.

• Getting all the different kinds of Systems in a company to work together is a major challenge. One solution to this problem is to implement the ‘’Enterprise Applications’’.

• Enterprise Applications are Systems that span Functional areas, focus on executing business processes across the business firm, and include all levels of Management.

SYSTEMS THAT SPAN THE ENTERPRISESYSTEMS THAT SPAN THE ENTERPRISEENTERPRISE APPLICATIONS

Enterprise Applications automates all Business Processes that span multiple business functions and Organizational levels and may extend outside the organization.

There are four major Enterprise Applications. Each of them integrate a related set of Functions and Business Processes to enhance the performance of an Organization as a whole.:

1. Enterprise Systems (ERP) 2. Supply Chain Management Systems (SCM)

3. Customer Relationship Management Systems (CRM) 4. Knowledge Management Systems. (KMS)

•


ENTERPRISE APPLICATIONS


1. ENTERPRISE APPLICATIONS

• A large organization typically has many different kinds of Information Systems built around different Business Functions, Organizational Levels, and Business Processes that can not automatically exchange information.

• Business managers might have hard time assembling the data they need for comprehensive, overall picture of the Organization’s operations.

• The fragmentation of data in hundreds of separate Information Systems, degrades Organizational efficiency and Business performance.

• Enterprise Systems also known as ENTERPRISE RESOURCE

PLANNING (ERP) Systems makes it possible for information that was previously fragmented in different Information Systems to be shared across the firm and for different parts of the business to work more closely.



• ERP Systems Integrate the Key Business Processes (KBP) of an entire organization into a Single Software System that enables information to flow seamlessly throughout the organization.

• ERP Systems focus primarily on internal processes but may include transactions with customers and vendors.

ERP Systems collect data from various key Business Processes in Sales and Marketing, Manufacturing and Production, Finance and

Accounting and Human Resources functional areas and stores the data into a single Central Database

• ERP Systems speed communication of Information throughout the company and thus make it easier for Businesses to coordinate their daily operations.



ERP Systems provide valuable information for improving Management Decision Making.

• Corporate headquarters has access to up-to-the minute data on sales, inventory, and production and uses this information to create more accurate Sales and Production forecasts.

• ERP Systems also provide company wide information to help Managers analyze overall Product profitability or Cost structures.

• The ability to increase accuracy and on-time completion of business transactions , minimize costs, and increase customer satisfaction, and adds to firm profitability.

Implementation of ERP Systems eliminates many redundant processes and Information Systems.

2. SUPPLY CHAIN MANAGEMENTG SYSTEMS (SCM)

• SCM Helps Businesses in managing relationships with their Suppliers.

• SCM Systems provide information to help Suppliers, Purchasers (Buyers), Distributors, and Logistic companies share products and services so that they can source , produce, and delivery goods and services efficiently.

• SCM Systems ultimate objective is to get the right amount of products

from source to the point of consumption (Destination) with the least

amount of time (in the shortest possible of time) and with the lowest cost.

• If a Company and its Supply Network (i.e. Suppliers) do not have accurate information, they will most likely be saddled by excessive Inventories, inaccurate Manufacturing Plans, and missed Production Schedules.

Inability of moving products efficiently through the supply chain raises costs while degrading Customer services.


SCM System are one type of INTERORGANIZATIONAL SYSTEMS because

they automate the flow of information across organizational boundaries.

• Inter-organizational Systems are increasingly common as firms combine their capabilities to offer Customers an integrated online shopping experience.

For example: When you book a flight at www.hotels.com , you are in fact dealing with several inter-organizational Systems that link Reservation Systems on the Web with Flight and Room Inventory Systems maintained by Airlines and Hotels.

-


HOW DO INFORMATION SYSTEMS FACILITATE SCM SYTEMS

Decide when and what to Produce, Where to store, and Move

• Rapidly communicate Orders

• Track the status of Orders

• Check Inventory availability and monitor Inventory levels

• Reduce Inventory, Transportation, and Warehouse costs

• Track Shipments

• Plan Production based on Actual Customer Demands

• Rapidly communicate changes in Product design


EXAMPLEHowarth's Transportation Management System (TMS) examines Customer Orders,

Production Schedule, Carrier Rates and availability, and Shipping Costs to

produce optimal Lowest-cost.

• (TMS) works with the Warehouse Management System (WMS), which tracks and controls the flow of finished goods from the Distribution Centre to its Customers.

• (TMS) produces Delivery plans daily updated every 15 minutes.

Howarth's Warehouse Management System (WMS) acts on the Shipping Plans

from (TMS) , to directs the movement of goods based on immediate conditions for space, equipment , inventory and personnel.

Haworth uses special ‘’MIDDLEWARE’’ Software to link its (TMS) and (WMS)

Systems to Order Entry System, Manufacturing Planning System, and the Shipping System.

• The Middleware passes Customer Orders, Shipping Plans and Shipping notifications among the applications.



The figure below demonstrates Howorth Incorporated SCM System,

(An office furniture designer and manufacturer)

The firm has several Manufacturing plants across America and it has4 Distribution

Centres.

3. CUSTOMER RELATIONSHIP MANAGEMENTG SYSTEMS (CRM)

Customer Relationship Management (CRM) Systems help firms manage their

relationships with their Customers.

• CRM Systems provide information to coordinate all of the business processes that deal with Customers Sales, Marketing Services to optimize revenue, Customer satisfaction, and Customer retention.

• Information about Customer:

Helps firms identify, attract, and retain the most profitable Customers;

Provide better services to existing Customers;

Increases Sales.


In the past, a firm’s Sales, Services, and Marketing processes were highly

departmentalized, and these departments did not share essential customer

information. - Some information on a specific Customer might be stored and organized in terms of that person's Account with company.

- Other pieces of information about the same Customer might be organized by Products that were purchased. There was no way to consolidate all of this information to provide a unified view of a Customer across Company.

CRM Systems try to solve the fragmentation problem by integrating the firm’s

Customer related Processes and consolidating Customer information from multiple

communication channels such as Telephone, e-mail, wireless devices, retail outlets,

and Web.


Detailed and accurate knowledge of Customers and their preferences helps firms

increase the effectiveness of their Marketing campaigns and provide higher-quality

Customer Service and Support.

Example: SAAB Automobile Company in USA implemented three CRM Applications for Automotive Dealers from its Siebel Systems. These

CRM Systems provided the Dealers with 360 degree view of each Customer, including prior service-related questions and all the Marketing communication the Customer had ever received.

– SAAB can track the status of referred leads by monitoring events, such as Salesman's initial call to the Customer and the scheduling and completion of a test drive.

– The System provides information to measure Sales results of specific leads and target leads are directed more preciously to the right Salesman at the right dealership.

SAAB’s follow-up rate on Sales has also increased from 38 to 50% and the

Customer satisfaction rose from 69 to 75 %.

4. KNOWLEDGE MANAGEMENTG SYSTEMS (KMS)

The value of a firm’s products and services is based not only on its physical resources but also on intangible Knowledge Assets.

Intangible assets forms over half of the Stock market (Shares) value of a firm and a large part of this value is Knowledge.

Some firms perform better than the others because they have better

knowledge about how to create, produce, and deliver products and services

A Firm’s knowledge is unique, thus it is difficult to imitate, and can be leveraged into long term Strategic benefits.


Knowledge Management Systems (KMS) enable organizations to better manage Business Processes for capturing and applying Knowledge and experience in the firm, and make it available wherever and whenever it is needed to improve Business Processeses and Management decisions.

• KMS also link the firm to External sources of knowledge.

• KMS support Processes for acquiring, storing, distributing, and applying knowledge, as well as processes for creating new Knowledge and integrating it into the firm.


Knowledge Management Systems include:-

• Enterprise-wide Systems that manages and distributes documents, graphics, and other Digital Knowledge objects

• Systems for creating Corporate Knowledge Directories of Employees with special areas of expertise

• Office Systems for distributing knowledge and information

• Knowledge work Systems to facilitate Knowledge creation.

Other Knowledge Management Applications use intelligent techniques that codify:

• Knowledge for use by other members of the organization

• Tools for knowledge discovery that recognize patterns and important relationships in large pool of data.

INTRANETS AND EXTRANETSINTRANETS AND EXTRANETS

Enterprise Applications create deep-seated changes in the way a firm conducts its business, and they are often costly to implement.

Companies that do not have resources to invest in Enterprise Applications can still achieve some measure of integration by using Intranets and Extranets.

Intranets and Extranets are more Technology Platforms than specificApplications, but they deserve mentioned here as one of the tools firms use to increase Integration and expedite the flow of information within the firm, and with Customers and Suppliers.

Intranets and Extranets are therefore an alternative to Enterprise Applications for those organizations that need Information integrations but can not afford to develop Enterprise Applications.


INTRANET

• Intranets are internal networks built with the same tools and communication standards as Internet (i.e. TCP/IP) and are used for the internal distribution of information to employees, and as repository of corporate policies, programs, and data.

An Intranet presents information through a Private Portal that provides a single point of access to information from several different Systems and to Documents using Web Interface.

EXTRANET

• Extranets are Intranets extended to authorized users outside the company.


Corporate Portals can be customized to suit the information needs of specificBusiness Groups and Individual Users. They also feature e-mail, Collaboration tools, and tools for Searching internal Corporate Systems and Documents.

Example: SwissAir’s Corporate Intranet for Sales provides its Salespeople with Sales leads, fares, statistics, libraries of best practices, space to incentive programs, discussion groups, and collaborative workspace.

The Intranet includes a Ticket Sales capability that displays bulletins about unfilled Airplane seats around the world to help the sales staff work with colleagues and with Travel agents who can help them fill those empty seats.

Companies can also connect their Intranets to internal Company Transaction Processing Systems (TPS) enabling employees to take action central to a Company’s operations, such as checking the status of an Order or granting a Customer credit.

e.g. Swissair’s Intranet is connected to its Internal Reservation System..

E-BUSINESS, E-COMMERCE AND E-GOVERNMENTE-BUSINESS, E-COMMERCE AND E-GOVERNMENT

Many businesses are now enabled by or based on Digital Networks that wefrequently use the terms Electronic Business (e-business) and Electronic Commerce (e-commerce).

e-business refers to the use of Digital Technology and the Internet to execute the major Business processes within the enterprise.

• e- business include the activities for the internal Management of the Firm and for coordinating with Suppliers and other Business partners.

e-business also includes Electronic Commerce or e-commerce.

e-commerce is part of the e-business that deals with the Buying and Selling of goods and services over the Internet.

• e-commerce also includes activities supporting those Marketing transactions such as Advertising, Marketing, Customer support, Security, Delivery and Payment and so on….

E-GOVERNMENTE-GOVERNMENT

The Technology associated with e-business have also bought about similarchanges in the Public sector.

Governments are using Internet technology to deliver information and services to their citizens, employees, and businesses,

e-government refers to the applications of the Internet and Networking Technologies to digitally enable Government and Public Sector relationships with citizens, businesses and other arms of government.

• e-government can make Government operations more efficient and also empower citizens by providing them with easier access to information and the ability to network electronically with other citizens.

e.g. Renewal of Driver’s Licenses or apply for unemployment benefits online etc.

THE INFORMATION SYSTEMS FUNCTION IN BUSINESSTHE INFORMATION SYSTEMS FUNCTION IN BUSINESS

• The Information Systems Department (IS Department also known as IT Department) is the formal organizational unit responsible for providing Information Technology Services in all but the smallest firms.

The IS Department consists of IT specialists, such as Information Systems Managers, Project Managers, Project Leaders, Telecommunication Managers,, Systems Analysts, Programmers, Software Engineers, Database Administrator, Network Administrator, Network Engineers, Computer Operators, Web Designers, Web Administrator etc…

• In many companies the IS Department is headed by a Chief Information Officer (CIO), who oversees the use of Information Technology in the firm. Information Systems Managers are the leaders of teams Analyst, Programmers, Database specialists etc at the IT Canter.

• The IS Department is responsible for maintaining the company’s IT Infrastructure, which includes Hardware, Software, Data Storage, and Networks.

• The IS department also suggests new Business strategy and new Information-based products and services, and coordinates both the development of the technology and the planned changes in the organization.

ORGANIZING THE INFORMATION SYTEMS FUNCTIONORGANIZING THE INFORMATION SYTEMS FUNCTION

• There are many types of business firms and there are many ways in which the IT Function is organized within the Organization.

• A very small company with less than 100 employees will not have a formal Information Systems Department. Rather, it will have one or two internal IT specialists or Consultants from outside to keep its Network and Package Applications programs running.

• Larger Companies will have separate Information Services Department, which may be organized along several different lines, depending on the nature and interests of the organization.

• Some Large organizations have separate Information Services Department for each business functional areas (Decentralized IS Function) managed by

a Functional IS manager that typically reports to a Senior Manager or Chief Information Officer (CIO).

e,g. Marketking IS Manager etc.


The Advantage of Decentralized IS organization approach is that Systems that are built

directly address the business needs of the Functional area.

• However central guidance is weak and there is a high danger that many incompatible Systems will be built, increasing costs as each group makes its own Technology purchases.


• In other arrangement (mainly in large firms) the Information System Function operates as a separate Department with a large staff, a group of Middle Managers , and a Senior Management group that fights for its share of the company’s resources.

• This central IS Department makes technology decisions for the entire company, which is more likely to produce more compatible Systems and more coherent long-term Systems Development plans.

• Very Large size firms with multiple divisions and diverse product lines might allow each division to have its own IS Group. This model combines some Divisional independence with some centralization

MANAGEMENT INFORMATION SYSTEMS (MIS) Global E-Business How Business Use Information Systems LECTURE...

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