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  Ch 2 - Global E-Business: How Businesses Use Information Systems

1. Opening Case - India's Tata Nano car       (p41)
   1. Problem: Outdated design and manufacturing processes.
   2. Solution: Dassault Systems' Digital Enterprise Lean Manufacturing Interactive Application (DELMIA).
   3. Illustrates the benefit of acquiring IT technology to revise a business process - much of product design, and manufacturing is now automated.  See http://tatanano.inservices.tatamotors.com/.
2. Business Processes and Information Systems     (p43)
   1. Def - Business process - the way in which an organization organizes and coordinates work activities, information, and knowledge to produce a good or service.
   2. Examples of functional business processes:
      1. Sales and marketing - identifying customers, making customers aware of products, selling products
      2. Finance and accounting - paying creditors, creating financial statements, managing cash accounts
      3. Human resources - hiring employees, evaluating employees' job performance, enrolling employees in benefits plans
   3. How Information Technology (IT) enhances business processes
      1. Efficiency - IT can automate steps in a business process that were formerly performed manually - example, generating an invoice.
      2. Transformation - IT can transform a business process - example, ordering a book online from Barnes & Noble.
          
3. Types of Information Systems      (p45)
   1. Def - Transaction Processing System (TPS) - an information system that performs and records the daily routine transactions necessary to conduct business.  A TPS can answer routine questions about transactions (How many TVs are in stock?) and track the flow of transactions thru the organization (What happened to Mr. William's payment?)
      1. Example - payroll system - Fig 2-2
   2. Def - Management Information System (MIS) - an information system that helps middle management answer routine questions about past business performance.  These questions usually have predefined procedures to determine the answers.
      1. A typical MIS summarizes TPS data and produces reports on a regular schedule.
      2. Flowchart of MIS - Fig 2-3.
      3. Sample MIS report - compares annual sales by product with planned targets - Fig 2-4.
   3. Def - Decision-Support System (DSS) - an information system that helps (supports) middle management answer nonroutine tactical questions about present or future business performance.  These questions usually do not have predefined procedures to determine the answers.  More in Ch 6, 12.
      1. A typical DSS uses internal info from the TPS and MIS and some external info, such as interest rates, competitors product prices.
      2. A DSS may use complex mathematical models to analyze data.
         Example - Voyage-Estimating DSS
         Given a customer delivery schedule, which vessel should be assigned to maximize profits? - Fig 2-5, p49.
      3. A DSS may condense large amounts of data.
         Example - Intrawest (largest ski operator in N. America)
         Collects data from its website, call center, lodging reservations, ski schools, and ski equipment rental stores to determine value, revenue potential, and loyalty of each customer.
         Segments customers into 7 categories based on needs, attitudes, and behaviors, ranging from "passionate expert" to "value-minded family vacationers"
         Emails appropriate video clips to each segment.
   4. Def - Executive Support System (ESS) - an information system that helps (supports) upper management answer unstructured strategic questions about future business performance.  These questions may not have an agreed-on procedure to determine the answers.  More in Ch 12.
      1. A typical ESS uses internal info from the TPS and MIS and more extensive external info than the DSS, such as Dow Jones, Internet news feeds - Fig 2-6, p52.
      2. Typical questions:
         What are the long-term industry cost trends?
         What acquisitions would protect us from cyclical business swings?
          
4. Systems that Span the Enterprise     (p52)
   1. Def - Enterprise Applications - information systems that span functional areas, focus on executing business processes across the business firm, and include all levels of management.  (more in Ch 9)
   2. The four major enterprise applications are:
      1. Def - Enterprise Systems (also known as Enterprise Resource Planning (ERP)) - integrated enterprise-wide info systems that coordinate key internal processes of the firm by storing the data in a single central database.
         Note by PJL from Mgt 3325 (for your info only): for an operations management explanation of ERP see http://www.patlyons.com/m3325/chapters/h914.htm.
      2. Def - Supply Chain Management (SCM) Systems - information systems that share info about orders, production, inventory, and delivery dates between a firm and its suppliers in order to improve efficiency.
      3. Def - Customer Relationship Management (CRM) Systems - information systems that track a company's interactions with its customers and analyze these interactions to improve profit, customer satisfaction, and customer retention.
         1. Example - Saab USA - has 3 customer channels - dealer network, customer service assistance center, lead management center.  Before CRM, each channel had its own independent info system.  After CRM, all channels centralized, customer satisfaction rose from 69% to 75%.
      4. Def - Knowledge Management Systems (KMS) - information systems that support creation, capture, storage, and dissemination of a business firm's expertise and knowledge.  (More in Ch 11)
          
5. Definitions     (p59)
   1. Def - Intranet - an internal corporate computer network based on Internet technology.
   2. Def - Extranet - an intranet that is accessible by authorized outsiders.
      1. Extranets allow different firms to work collaboratively on product design, marketing, and production.
   3. Def - Electronic Business (or e-business) - the process of conducting business using information technology and the Internet.
   4. Def - Electronic Commerce (or e-commerce) - the process of conducting buying and selling goods and services using information technology and the Internet.
                                     (This page was last edited on January 09, 2010 .)