Ch2.

E-Business

 Key points (3):

o Components of a Business
o Types of Business Information Systems
o The Information System’s function in Business
 Components of a Business: (Basic Function – Basic Entities – Processes – Hierarchy –
Environment)
o Definition of a Business: Formal organization that makes Products or provide Services in
order to make Profits
o Basic Business Functions (4):
 Manufacturing and Production
 Sales and Marketing
 Finance and Accounting
 Human Resources
o Basic Business Entities (5): foundations, key players, or components
 Suppliers
 Customers
 Employees
 Invoices/Payments
 Products and Services
o Business Processes:
 Definition: Logically related Tasks that Define How specific Business Tasks are
Performed. (Responsibility – Order – Schedule)
 Categories:
 Functional (Performed within One Business Function)
 Cross-functional (Performed in collaboration between Multiple Business
Functions)
o Managing a Business and Firm Hierarchy:
 Hierarchy in which Authority is concentrated on Top. Each group has different
information needs:
 Senior Management
 Middle Management
o Scientists, Knowledge Workers
 Operational Management
o Data Workers
o Production or Service Workers (Hand Workers)
o Business Environment:
 Global Environment Factors:
 Technology and Science
 Economy
 Politics
 International Change
 Immediate Environment Factors:
  Customers
 Suppliers
 Competitors
 Regulations
 Stockholders
o The Role of IS in a Business (6 Objectives)
 Information System is
Information System
(Conceptual System)

Transformation
Input Resources Process (Physical Output Resources
Systems)

 a Conceptual System
 Enables managers to control and monitor
 Firm’s Physical Systems
 Used to transform Input Resources
 Into Output Resources
o Managers as IS Users:
 Managers exist in various
 Managerial Levels (Strategic Planning – Management Control –
Operational Control)
 Business Areas “Functions” (Finance, HR, Marketing, Manufacturing,
etc.), each Business Area has all three Managerial Levels
 IS Needs for each level:

Influence on Information System s Needs

Managerial Level
Required Source of Information Required Level of Detail
Strategic Planning Level Mostly from Environment Low
Management Control Level Evenly from Environment and Internal Sources Medium
Operational Control Level Mostly from Internal Sources High
  Types of Business Information Systems
o Systems for Different Levels of Management:

Type of IS Needed
Managerial Level
Type Functions
Address Strategic Issues and Long-
Strategic Planning
Executive Support Systems term Trends both in Firm and External
Level
Environment
Help with:
- Management
- Monitoring
Management Information Systems
- Controlling
Control Level - Decision Support
- Decision Making
Systems"
- Administrative Activities
Operational Transaction Processing Keep track of Basic Activities and
Control Level Systems Transactions

 Transactional Processing System (TPS):

 Serves Operational Control Managers
 Answer Routine Questions
 Track the flow of Transactions (Inventory, Credit, etc.)
 Monitor Status of internal Operations
 Monitor relationships with External Environment
 Major producer of Information to other Systems
 Highly central to business operations and functions

Transactional Processing System

(Conceptual System)

Management

Information Flow

Data
Processing
Software
Data Flow Environment
Environment
Database
Data Flow
Data Flow

Transformation
Output
Input Resources Process (Physical
Resources
Systems)
  Management Information Systems (MIS):
 Provide Middle Managers (Management Control Level) with reports on
firm’s performance
 Help Predict future performance
 Summarize Basic Operations (Data provided from TPS)
 Provide Periodic Results
 Enable drilling down into more details
 Typically Not Flexible
 Typically low Analytical capability

Management Information System

(Conceptual System)

Organizational
Problem Solvers

Information Flow

Report Writing Mathematical

Software Model

Data Flow
Environment
Environment Data Flow
Database

 Executive Support Systems (ESS):

 Serve Senior Managers (Strategic Planning Level)
 Address Strategic Issues and Long-term Trends
 Address Non-routine Decision Making
 Provide Generalized Computing Capacity that can be applied to
Changing Array of Problems
 Draw summarized information from MIS, DSS, and Data from External
Events
 Typically use Web Interface to present Content

Executive Support System

(Conceptual System)
 Menus
ESS  Graphics
Workstation/Portal  Communications
 Local Processing
Information Flow

Internal Data External Data

MIS – TPS – Modelling – Analysis Stock – News – Research Firms
 Management Levels
o Systems that Span the Enterprise:
 Enterprise Applications: Functions
 Span Functional Areas
 Focus on Executing Business Processes across the firm
 Include all management levels
 4 Types:
o Enterprise Systems
 Integrate data from key Business Processes into a single
system
 Speed Communication of Information within firm
 Greater Flexibility in responding to customer requests
 Greater accuracy in Order Fulfillment
 Assemble Overall view of Operations in large firms
 Eliminate Redundancies and Inefficiencies
o Supply Chain Management Systems
 Manage Relationships with (Suppliers – Purchasing
firms – Distributors – Logistics Companies)
 Manage Shared information about (Orders – Production
– Inventory – etc.)
 Type of Interorganizational System (Automated flow of
information among separate organizations)
o CRM Systems
 Help Manage Relationships with Customers
 Increase Sales
 Increase Customer Satisfaction
 Combine Marketing and Sales Records from multiple
communication channels to provide a unified 360
degree view of customers
 Follow-up on Sales Leads
 Eliminate Duplicate Efforts
o Knowledge Management Systems
 Intangible Knowledge Assets are
 Knowledge of producing and delivering
products
 Source of Value and Advantage for Firms
 Help Capture, Store, Distribute, and Apply Knowledge to
Leverage Strategic Benefits
o Intranets and Extranets:
 They are:
 Technology Platforms that
 Increase Integration
 And expedite the Flow of Information
 Intranets:
 Internal Networks based on Internet Standards
  Typically use Portals
 Extranets:
 Intranets extended for authorized use outside the company for partners
and customers
 Facilitate Collaboration
o E-Business, E-Commerce, and E-Governments:
 E-Business:
 Use of digital technology and internet to drive major Business Processes
 E-Commerce:
 Buying and Selling Goods through Internet
 Subset of E-Business (One Business Function “Sales and Marketing”)
 E-Government: Using internet technology to deliver information and services to
citizens, employees, and businesses
o Systems for Collaboration and Teamwork:
 Growing Importance of Collaboration:
 Changing Nature of Work
 Growth of Professional Work
 Changing Organization of the Firm
 Changing Scope of the Firm
 Emphasis on Innovation
 Changing Culture of Work
 Business Benefits of Collaboration and Teamwork:
 Shift from “Command and Control” to “Collaboration” enhances
Performance
Command and Control Model

Upper •Create Collaboration Model

Management Strategy
Team of Employees

Middle •Carry out Create Build

Management Orders
  Tools and Technologies for Collaboration and Teamwork:
 E-mail, IM
 Social Networking
 Wikis
 Virtual Worlds
 Internet Based Collaboration Environment
o Virtual Meeting Systems
o Google Apps
o MS SharePoint
o Lotus Notes
 Evaluating and Selecting Collaboration Software Tools:
 Collaboration Challenges
 Available Solutions
 Cost and Benefits
 Security Risks
 Implementation and Training of Users
 Product Vendor

 The Information System’s function in Business

o Information Systems Department:
 Programmers
 System Analysts (Principle Liaison to the rest of the firm)
 Information Systems Manager
 Senior Managers (CIO, CSO, CKO)
 End Users
 Manage External Specialists
o Information Systems Services
 Computing and Telecommunications Services  IT Management Services
 Data Management Services  IT Standards Services
 Application Software Services  IT Educational Services
 Physical Facilities Management Services  IT R&D Services