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INFO 1500 Introduction to IT Fundamentals

Learning objectives
Define and describe business processes and their relationship to
information systems.

2. Information systems and Evaluate the role played by systems serving the various levels of
management in a business and their relationship to each other.

business processes Explain how enterprise applications improve organizational performance.

Alexander Nikov
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Americas Cup 2013: Video Americas Cup 2013:


ORACLE TEAM USA racing in the 34th America's Cup on San Francisco Bay
http://www.youtube.com/watch?v=Sr055W97l4o USA Wins with Information Technology
Problem: Using IT to win the Americas
Cup race
Solutions: New technology for physical
engineering of boat; sensor network to
monitor conditions and data analysis to
improve the performance of sails and
more.
IBM Oracle Database 11g data
management software provided real time
analysis of boats sensor data.
Demonstrates ITs role in fostering
innovation and improving performance.
Illustrates the benefits of using data
2-3 analysis and IT to improve products 2-4
Prentice Hall 2011 http://www.youtube.com/watch?v=HiBHCAnKa5U Prentice Hall 2011
Americas Cup 2010:
USA Wins with Information Technology Outline

1. Business Processes and Information Systems

2. Types of Information Systems

3. The Information Systems Function in Business

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Business Processes and Information Systems Business Processes


The Four Major Functions of a Business
Businessprocesses:
Workflowsofmaterial,information,knowledge
Setsofactivities,steps Every business, regardless of its
Maybetiedtofunctionalareaorbecrossfunctional size, must perform four functions
to succeed. It must produce the
Businesses:Canbeseenascollectionofbusiness product or service; market and
sell the product; keep track of
processes accounting and financial
transactions; and perform basic
Businessprocessesmaybeassetsorliabilities human resources tasks, such as
hiring and retaining employees.

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Examples of functional business processes Organizing a Business:
Basic Business Functions
Five basic business entities:
Suppliers
Customers
Employees
Invoices/payments
Products and services

Table 2.1
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Business Processes The Order Fulfillment Process


Logically related set of tasks that define how specific
business tasks are performed
The tasks each employee performs, in what order, and
Fulfilling a customer
on what schedule order involves a
E.g., Steps in hiring an employee complex set of steps
that requires the close
Some processes tied to functional area coordination of the
sales, accounting, and
Sales and marketing: identifying customers manufacturing
Some processes are cross-functional functions.

Fulfilling customer order

Figure 2-1
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Informationtechnologyenhancesbusiness
processesintwomainways: Outline

1. Increasingefficiencyofexistingprocesses
Automatingstepsthatweremanual 1. Business Processes and Information Systems
2. Enablingentirelynewprocesses
Changeflowofinformation 2. Types of Information Systems
Replacesequentialstepswithparallelsteps
Eliminatedelaysindecisionmaking 3. The Information Systems Function in Business
Supportnewbusinessmodels

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Systems for Different Levels of Management Transactionprocessingsystems(TPS)


Transaction processing systems:
Keep track of basic activities and transactions of organization (e.g.,
sales, receipts, cash deposits, payroll, credit decisions, flow of Performandrecorddailyroutinetransactions
materials in a factory). necessarytoconductbusiness
Management information systems and decision-support systems:
Help with monitoring, controlling, decision making, and
Examples:salesorderentry,payroll,shipping
administrative activities. Allowmanagerstomonitorstatusofoperations
Executive support systems: andrelationswithexternalenvironment
Help address strategic issues and long-term trends, both in firm and
in external environment.
Serveoperationallevels
Servepredefined,structuredgoalsanddecision
making

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A Payroll TPS Business intelligence and
Business intelligence systems

A TPS for payroll Business intelligence


processing Data and software tools for organizing and analyzing data
captures employee
payment
Used to help managers and users make improved
transaction data decisions
(such as a
timecard). System
outputs include Business intelligence systems
online and hard Management information systems
copy reports for
management and
Decision support systems
employee Executive support systems
paychecks.

Figure 2-2
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How MIS Obtain Their Data from


Management information systems (MIS)
Organizations TPS

Serve middle management


Provide reports on firms current performance, based on
data from TPS
Provide answers to routine questions with predefined
procedure for answering them
Typically have little analytic capability

In the system illustrated by this diagram, three TPS supply summarized transaction
data to the MIS reporting system at the end of the time period. Managers gain
access to the organizational data through the MIS, which provides them with the
appropriate reports. Figure 2-3
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Sample MIS Report Decisionsupportsystems(DSS)

Servemiddlemanagement
Supportnonroutinedecisionmaking
Example:Whatisimpactonproductionscheduleif
This report,
Decembersalesdoubled?
showing
summarized OftenuseexternalinformationaswellfromTPSandMIS
annual sales ModeldrivenDSS
data, was
produced by
Voyageestimatingsystems
the MIS in DatadrivenDSS
Figure 2-3. Intrawestsmarketinganalysissystems

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Voyage-Estimating Decision Support System Executive support systems (ESS)

Supportseniormanagement
This DSS Addressnonroutinedecisions
operates on a
powerful PC. It is Requiringjudgment,evaluation,andinsight
used daily by Incorporatedataaboutexternalevents(e.g.newtax
managers who lawsorcompetitors)aswellassummarizedinformation
must develop bids
frominternalMISandDSS
on shipping
contracts. Example:Digitaldashboardwithrealtimeviewoffirms
financialperformance:workingcapital,accounts
receivable,accountspayable,cashflow,andinventory

Figure 2-5 2-23 2-24


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Digital dashboard Model of an Executive Support System

This system pools


data from diverse
internal and
external sources
and makes them
available to
executives in an
easy-to-use form.

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Systemsfromaconstituencyperspective Relationshipofsystemstooneanother

TPS:Majorsourceofdataforothersystems
Transactionprocessingsystems:supporting
operationallevelemployees ESS:Recipientofdatafromlowerlevelsystems
Managementinformationsystemsanddecision Datamaybeexchangedbetweensystems
supportsystems:supportingmanagers Inreality,mostbusinessessystemsareonlyloosely
Executivesupportsystems:supportingexecutives integrated(buttheyaregettingbetter!)

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Types of Information Systems Enterprise applications

Type of System Information Inputs Information Outputs Users


Transaction Transactions; daily Detailed reports; lists; Operations personnel; Systems for linking the enterprise
Processing Systems events summaries first-line supervisors
(TPS) Span functional areas
Management Summary transaction Summary and Middle managers Execute business processes across firm
Information Systems data; high-volume exception reports
(MIS) data; simple models Include all levels of management
Decision Support Optimized for data Interactive; Professionals, staff Four major applications:
Systems (DSS) analysis, analytic simulations; analysis managers
models and data
Enterprise systems
analysis tools. Supply chain management systems
Executive Support Aggregate data; Projections; responses Senior managers Customer relationship management systems
Systems (ESS) external, internal to queries
Knowledge management systems

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Enterprise Application Architecture Enterprisesystems

Collectsdatafromdifferentfirmfunctionsandstores
Enterprise datainsinglecentraldatarepository
applications
automate processes
Resolvesproblemoffragmented,redundantdatasets
that span multiple andsystems
business functions Enable:
and organizational
levels and may Coordinationofdailyactivities
extend outside the Efficientresponsetocustomerorders(production,
organization. inventory)
Providevaluableinformationforimproving
managementdecisionmaking

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Figure 2-6 32 Prentice Hall 2011
Supply Chain Management Systems Customer Relationship Management Systems

Manage firms relationships with suppliers Provide information to coordinate all of the business
Share information about processes that deal with customers
Orders, production, inventory levels, Sales
Marketing
delivery of products and services
Customer service
Goal: Helps firms identify, attract, and retain most profitable
Right amount of products to destination with customers
least amount of time and lowest cost
E.g., Saab CRM applications to achieve 360 degree view of
customers resulted in greater follow-up rate on sales leads
and increased customer satisfaction.

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Knowledge Management Systems (KMS) Intranets and Extranets

Also used to increase integration and expedite the flow of


Support processes for acquiring, creating, storing, information
distributing, applying, integrating knowledge
Intranets:
How to create, produce, distribute products and Internal company Web sites accessible only by
services employees
Collect internal knowledge and experience within Extranets:
firm and make it available to employees Company Web sites accessible externally only to
Link to external sources of knowledge vendors and suppliers
Often used to coordinate supply chain

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E-Business, E-Commerce, and E-Government
Outline
E-business:
Use of digital technology and Internet to drive major business
processes
E-commerce:
1. Business Processes and Information Systems
Subset of e-business
2. Types of Information Systems
Buying and selling goods and services through Internet
E-government:
3. The Information Systems Function in Business
Using Internet technology to deliver information and services to
citizens, employees, and businesses

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Information systems department End users and IT Governance

Formal organizational unit responsible for information


technology services
End users
Often headed by chief information officer (CIO) Representatives of other departments for whom
Other senior positions include chief security officer applications are developed
(CSO), chief knowledge officer (CKO), chief privacy Increasing role in system design, development
officer (CPO) IT Governance
Programmers Strategies and policies for using IT in the organization
Decision rights
Systems analysts
Accountability
Information systems managers
Organization of information systems function
Centralized, decentralized, and so on
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Video case
Video case questions
How FedEx Works: Enterprise Systems
How FedEx Works: Enterprise Systems
1.List the business processes displayed in the video.

2.List the types of information systems shown in the video. Can you
describe how systems that were not shown might be used at FedEx?

3.The system displayed in the video is an enterprise system. Why is this


true? Explain your answer.

4.How important is technology to FedEx's business processes?

5.How could FedEx's shipping process be made even more efficient?

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1. List the business processes displayed in the video. 2. List the types of information systems shown in
the video. Can you describe how systems that were
not shown might be used at FedEx?
Types of systems included in the video are:
Business processes displayed in the video include: transaction processing systems,
picking up a package, management information systems (at the FedEx air control center,
transporting a package to a hub, MIS monitor the trucks and planes coming and going and the number
processing and sorting a package in a warehouse, of packages being handled).
shipping packages to airports, An executive might receive a report of the days activities via an
processing the package locally, and executive support system.
delivering the package. Customer complaints or questions might be resolved via a customer
relationship management system.

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3. The system displayed in the video is an enterprise 4. How important is technology to
system. Why is this true? Explain your answer. FedEx's business processes?

Having top-end technology is critical to the completion of critical business


processes for FedEx. Whether at the sorting centers or on the road in the
The system in the video is an enterprise system because key business
hands of FedEx delivery workers, technology that never fails and gets the
processes of FedEx are integrated into a single software system.
job done quickly is necessary to maintain the level of customer
satisfaction FedEx is accustomed to.

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5. How could FedEx's shipping process be made


even more efficient?

The sorting process could potentially become completely automated,


FedEx could use more energy efficient vehicles, or they could continue to
innovate and develop even more efficient technologies across the
enterprise.

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