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CHAPTER 11: Inter-Organizational, Large Scale and Global Information Systems

(Prepared by Research Scholar: Amrita Patwa)

On-demand enterprise is a concept based on the premise that manufacturing will start its
operation only after an order is received. On-demand and real time implies that no productive
step would be ahead or behind because the entire fulfillment cycle would be primed to respond to
real time conditions. These two concepts have revolutionized the supply chain. For achieving
them, companies must reengineer their supply chain.
Inter-organization activities include:

Joint venture
Buying and selling
Other activities (work jointly on standards, conduct research, etc.)

All of the above include communication, collaboration and search using the support of IT.
Order Fulfillment: Providing customers with what they have ordered and doing so on time and
also providing all related customer services. An important concept related to order fulfillment is
logistics. It can be defined as the process of planning, implementing and controlling the effective
and efficient flow and storage of goods, services and related information from point of origin to
point of consumption for the purpose of conforming to customer requirements. The order
fulfillment process:
1. Make sure the customer will pay- validity of each payment must be determined
2. Check for in-stock availability- inquiry needs to be made regarding stock availability
3. Arrange shipments- if the item is physical and it is readily available, packaging and
shipment arrangement needs to be made
4. Insurance- contents of a shipment needs to be insured
5. Replenishment- if standard items are out of stock, they need to be produced or procured.
6. In-house production
7. Use suppliers- opt to buy products or subassemblies from suppliers
8. Contacts with customers- sales representative need to keep contact with customers
9. Return- the movement of return from customers back to vendors (reverse logistics)
There are various problems and issues that are faced in the order fulfillment process such as,
delays in transportation/shipment, human errors in information sending, over or under stocked
inventories, slow or incorrect billing, etc.
Inter-Organizational Information System (IOS) involves information flow among two or
more organizations. Its major objectives are efficient processing of transactions and the support
of communication and collaboration.

Types of IOS:

B2B trading systems

B2B support systems
Global systems
Electronic funds transfer (EFT)
Shared databases

IOS Infrastructure Technologies are:

Electronic Data Interchange (EDI)- the electronic movement of business documents

between business partners
Extranet- internet based, secure systems that link business partners via intranet
XML- a companion or a replacement for EDI systems
Web Services- integrating B2B and intra business applications
Enterprise Application Integration- integrate systems internally, before they are
connected to business partners
Extended ERP- extended to suppliers, customers and other business partners

Global Information Systems (GIS) are inter-organizational systems that connect companies
located in two or more countries. Examples of global systems are multinational companies
(operate in several countries), international companies (do business with companies of other
countries) and virtual global companies (business partners are located in different countries)
Benefits of GIS:

Effective communication at reasonable cost

Standardize procedures and common languages
Effective collaboration to overcome differences in distance, time, language and culture
Access to databases of business partners and ability to work on the same projects while
their members are in different locations

Issues in global IS design and Implementation:

Cultural, economic and political differences and legal issues

Design websites for a global audience (legal, cultural, language and other factors)
Globalization and off shoring of software and other IT activities
Globalization and personnel issues

There are certain problems that come along global supply chains such as, they are relatively
longer and complex, interruption and uncertainties are likely to occur, legal issues, language and
cultural differences, fast changes in currency exchange rates, etc.

Demand Driven Supply Networks

In contrast to the traditional supply chain driven by suppliers and producers, DDSNs are driven
by customer demand. Instead of products being pushed to market, they are pulled to market by

More accurate and detailed demand forecasting

Lower supply chain costs
Improved perfect order performance
Reduced days of inventory
Improved cash-to-cash performance
Provides a customer centric approach
Use of probabilistic optimization
Provides for agility, adaptability and alignment

Use of RFID to improve Supply Chain

Automatic alerts can be sent within each company and between companies
Visibility of inventories is provided to all business partners
Rapid checkout at stores eliminates the need to scan each item
Transmit real-time information about the location of the merchandise

There are certain limitations of RFID such as for small companies the cost of an RFID system
may be too high, there could be atmospheric interference and the fear of violating customers
Partner Relationship Management (PRM)
It is a business strategy and practice that recognizes the need to develop long-term relationships
with business partners by providing each partner with the services that are most beneficial to that
Uses of PRM

Connect companies with their business partners using web technologies to securely
distribute and manage information
Facilitates partner relationships
Partner profiles and partner communications
Management of customer leads
Targeted information distribution
Centralized forecasting, etc.

Collaborative commerce refers to non-selling/buying electronic transactions within, between

and among organizations. It implies communication, information sharing and collaboration done
electronically by means of tools such as groupware, wikis and specially designed collaboration