Course Name : Information Systems & Innovation

(ISYS6484)
Year : 2018

Information Systems for the

Enterprise

Session 10&11
 LEARNING OUTCOME

• LO 2 : Explain various strategy and

innovation to achieve competitive
advantage

• LO 4 : Categorize information system to

support internal organization as well as
collaboration between external partner.
 Acknowledgement

These slides have been

adapted from
Valacich & Schneider (2018),
Information System Today:
Managing in the Digital World,
8th edition. Pearson. Chapter 7&8
 Acknowledgement

These slides have been

adapted from
Rainer, Prince & Watson (2015),
Management Information Systems:
Moving Business Forward, 3rd
edition. Wiley. Chapter 11,12,13
 Sub Topics

2. Functional
1. Transaction 3. Managing
Area
Processing the Supply
Information
Systems Chain
Systems

5. Enterprise
4. Customer
Resource
Relationship
Planning
Management
overview
 Learning Objectives

1. Explain the purpose of transaction

processing systems.
2. Explain the types of support that information
systems can provide for each functional area
of the organization.
3. Explain about SCM and CRM
4. Explain the definition of ERP and Identify
advantages and drawbacks to businesses
implementing an ERP system.

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 1. Transaction
Processing System
Millions (sometimes billions) of transactions occur in large
organizations every day.
A transaction is any business event that generate data
worthy of being captured and stored in a database.

www.coindesk.com

www.resavenue.com
www.dhgate.com
 1. Transaction
Processing System

How Transaction Processing Systems Manage Data

 1. Transaction
Processing System
Transaction processing system (TPS) monitors, collects,
stores and processes data generated from all business
transactions.
• Batch Processing is when the firm collects data from
transactions as they occur, placing them in groups or
batches, then prepares and processes the batches
periodically (say, every night).
• Online Transaction Processing (OLTP) is when
business transactions are processed online as soon as
they occur.
 1. Transaction
Processing System
Source data automation involves collecting data from
sensors (e.g., barcode scanners) and entering the data
directly into a computer without human intervention.
Source data automation
involves collecting data
from sensors (e.g.,
barcode scanners) and
entering the data directly
into a computer without
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human intervention.
 2. Functional Area
Information System

Functional Area Information Systems are

designed to support a functional area by
increasing its internal effectiveness and efficiency
in the following areas:

• IS for Accounting and Finance

• IS for Marketing
• IS for Production/Operations Management
• IS for Human Resource Management
• Reports
 2. Functional Area
Information System
 2. Functional Area
Information System
Information Systems for Accounting and Finance
:

Financial Planning and

Budgeting
Managing Financial
Transactions
Investment Management
Control and Auditing
 2. Functional Area
Information System
Budgeting Application
 2. Functional Area
Information System

Information Systems for Production/Operations & Logistics:

• In-House Logistics and Materials

Management
• Inventory Management
• Quality Control
• Planning Production and Operations
Management
• Computer-Integrated Manufacturing
• Product Lifecycle Management
 2. Functional Area
Information System
Inventory Management Application
 2. Functional Area
Information System

Information Systems for Human Resource

Management:

Recruitment
Human Resources
Development
Human Resources Planning
and Management
 2. Functional Area
Information System
Employee Record System

www.actionhrm.com
 2. Functional Area
Information System

Report
Routine Reports
Ad-hoc (On-Demand) Reports
• Drill-down reports
• Key indicator reports
• Comparative reports
• Exception reports

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 2. Functional Area
Information System
Monthly Sales Report
3. Managing the Supply Chain
Managing Complex Supply Networks
 3. Managing the Supply Chain
Benefits of Effectively Managing
Supply Chains

• Just-in-Time Production
– Inventory delivered just as it is needed
– Minimizes stock and handling costs
– Reduces obsolescence charges
• Vendor-Managed Inventory
– Vendors track usage and replenish supplies
– Reduces procurement and inventory replenishment
costs
 3. Managing the Supply Chain
Benefits of Effectively Managing
Supply Chains

• Reducing the Bullwhip Effect

– Ripple effects due to forecast errors
– Coordinated supply chain helps mitigate this
• Corporate Social Responsibility
– Product recalls
– Sustainable business practices
 3. Managing the Supply Chain
Benefits of Effectively Managing
Supply Chains

• Supply Chain Management (SCM)

– Supply Chain Planning
– Supply Chain Execution
– Supply Chain Visibility and Analytics
 3. Managing the Supply Chain
Functions the Optimize the Supply
Network
SCM Module Key Uses
Demand planning and forecasting Forecast and plan anticipated demand
Safety stock planning Assign optimal safety and target stock levels
Distribution planning Optimize the allocation of available supply
Supply network collaboration Work with partners across the supply network
Materials management Ensure production materials are available
Manufacturing execution Support production processes
Order promising Provide answers to customer queries
Transportation execution Manage logistics
Warehouse management Support receiving, storing, and picking of goods
Supply chain analytics Monitor key performance indicators

Source: Based on http://www.sap.com.

 3. Managing the Supply Chain
Developing an SCM Strategy

• Trade-offs
– Supply Chain Efficiency
• Minimizes cost, but increased risk of stock-
outs
• May sacrifice customer service
– Supply Chain Effectiveness
• Maximizes likelihood of meeting objectives
• Increased costs associated with
– Redundancy
– Sticking levels
– Cross-functionality
3. Managing the Supply Chain
Developing an SCM Strategy
 3. Managing the Supply Chain
Supply Chain Planning (SCP)

• SCP involves multiple SCM tools and modules working together to meet
business needs and customer demand
 3. Managing the Supply Chain

SCP Processes

• Demand Planning and Forecasting

– Based on historical data, build a demand forecast
• Distribution Planning
– How to move products to distributors, transportation
planning
• Production Scheduling
– Coordinate product/service creation, production plan
• Inventory and Safety Stock Planning
– Developing inventory estimates, determine optimal inventory
levels, sourcing plan
 3. Managing the Supply Chain

Supply Chain Execution (SCE)

• SCE focuses on the efficient and effective flow of materials, information,

and financial transactions
 3. Managing the Supply Chain
SCE Flows
• Product Flow
– Movement of goods from supplier to production to
distribution to consumer
– RFID is an important enabling technology
• Information Flow
– Movement of information through supply chain (e.g.,
order processing and delivery status updates)
– XML is an important enabling technology
• Financial Flow
– Movement of financial assets through supply chain
– Payment schedules, consignment, ownership
– Linkages to electronic banking and financial institutions
 3. Managing the Supply Chain
Key Technologies for Enhancing SCM

• Radio Frequency Identification (RFID)

– Replaces bar codes
– As low as 10 cents
• Extensible Markup Language
– XML, much like HTML for Web sites, creates a
standard many businesses can use to help
facilitate data exchange
 3. Managing the Supply Chain
Key Technologies for Enhancing SCM:
Radio Frequency Identification
 3. Managing the Supply Chain
Key Technologies for Enhancing SCM:
Extensible Markup Language
 4. Customer Relationship
Management
Customer
Relationships
 4. Customer Relationship
Management
Customer Relationship Management (CRM)
Benefits
Benefit Examples
24/7/365 operation Web-based interfaces
Individualized service Learn how each customer defines product and
service quality
Improved information Integrate all information for all points of contact
Improved problem Improved record keeping and efficient methods
identification/resolution of capturing customer complaints
Optimized processes Integrated information removes information
handoffs
Improved integration Information from the CRM can be integrated
with other systems to streamline business
processes
Improved product Tracking customer behavior over time helps to
development identify future product and service offerings
Improved planning Provides mechanisms for managing and
4. Customer Relationship
Management
Developing a CRM
Strategy
 4. Customer Relationship
Management
Key Elements of a CRM Strategy

• Policies and Business Processes

– Reflect a customer-focused culture
• Customer Service
– Quality, satisfaction, enhanced customer experience
• Employee Training
– For employees from all areas
• Data Collection, Analysis, and Sharing
– Track all aspects of the customer experience
4. Customer Relationship
Management
Architecture of a CRM System
 4. Customer Relationship
Management
Operational CRM

• Sales Force Automation (SFA)

– Supports day-to-day sales force activities
• Customer Service and Support (CSS)
– Automates service requests, complaints, product
returns, and information requests
• Enterprise Marketing Management (EMM)
– Improves the management of promotional
campaigns
4. Customer Relationship
Management
Operational CRM:
Sales Force Automation

Source: Courtesy of Microsoft Corporation.

 4. Customer Relationship
Management
Operational CRM:
Customer Service and Support

• Customer interaction centers (CIC) support multiple

communication channels
– Evolved from help desks and call centers
– Phone—automatic call distribution systems, virtual
hold technologies
– Web—self-service technologies
– Facebook
– Industry blogs
– Face-to-face
 4. Customer Relationship
Management
Operational CRM:
Customer Service and Support

A CEC allows customers

to use a variety of self-
service and assisted
technologies to interact
with the organization
4. Customer Relationship
Management
Operational CRM:
Enterprise Marketing Management
 4. Customer Relationship
Management
Analytical CRM

“Analyzing customer behavior and perceptions in order

to provide the business intelligence necessary to
identify new opportunities and to provide superior
customer service”

• Key Analytical Technologies (Chapter 6)

– Data mining
– Decision support
– Other business intelligence technologies
 4. Customer Relationship
Management
Analytical CRM: Digital
Dashboards
4. Customer Relationship
Management
Analytical CRM: Online
Identities
 4. Customer Relationship
Management
Social CRM

• Customers use Facebook and Twitter to comment

on products and services
• Monitoring social media conversations helps to
understand public perceptions
• Analytical CRM applications
– Microsoft’s Social Networking Accelerator
– Google Alerts
– Dell’s Social Media Listening Command Center
 4. Customer Relationship
Management
Collaborative
CRM
“Systems for providing effective and efficient communication
with the customer from the entire organization”

• Greater Customer Focus

– Understanding customer history and current needs
• Lower Communication Barriers
– Personnel have complete customer information
– Personnel use customer-preferred communication
methods
• Increased Information Integration
– Personnel know prior and ongoing communication
 4. Customer Relationship
Management
Ethical Concerns with
CRM
• CRM systems may facilitate coercive sales practices
• Systems may categorize customers in a way customers
take offense to
• Personalized communication may become too personal
 5. ERP Overview
Core ERP Modules

Manufacturing
& Production
Accounting Module
Human
and
Resources
Financial
Module
Module
Suppliers Customers
Supply Chain ERP Customer
Managemen Platform & Relationship
t Module Database Managemen
t Module

Business E-Business
Intelligence Module
Module

Extended ERP Modules

 5. ERP Overview

ERP Systems: Benefits

• Organizational Flexibility and Agility

• Decision Support
• Quality and Efficiency

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 5. ERP Overview

ERP Systems: Limitations

• Business Processes Predefined by Best

Practices
• Difficult to Implement
• Potential for Failure

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 5. ERP Overview

Major Causes of ERP Implementation Failure

• Failure to involve affected employees in

planning and development
• Attempting too much too fast
• Insufficient training
• Failure to perform proper data conversion
and testing

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 5. ERP Overview

Implementing ERP Systems

• On-Premise ERP Implementation

– Vanilla Approach : a company implements a
standard ERP package, using the package’s built-
in configuration options
– Custom Approach : a company implements a
more customized ERP system by developing new
ERP functions designed specifically for that firm.
– Best of Breed Approach : combines the benefits
of the vanilla and customized systems while
avoiding the extensive costs and risks associated
with complete customization.
• Software-as-a-Service (SaaS) ERP Implementation
 5. ERP Overview
ERP Support for Business Processes

• Procurement Process
– originates when a company needs to acquire goods or
services from external sources, and it concludes when
the company receives and pays for them.
• Order Fulfillment Process
– (order-to-cash process) process in which the company
sells goods to a customer originating when the
company receives a customer order, and concluding
when the company receives a payment from the
customer.
• Production Process
– occurring only in companies that produce physical
goods, this process follows one of two strategies: make-
to-stock and make-to-order.
5. ERP Overview
Departments & Documents Flow in
Procurement
5. ERP Overview
Departments & Documents Flow in
Fulfillment
5. ERP Overview
Departments & Documents Flow in
Production
5. ERP Overview
Integrated Processes with ERP Systems
 5. ERP Overview
ERP Core and Extended Components
 5. ERP Overview

Core Business Process Support

 5. ERP Overview

Enabling Business Processes Using ERP

Core Components
• ERP systems support core business Often packaged industry-
processes specific ERP versions
• Assist with: Support industry-specific
– Order-to-cash core processes
• Health care
– Procure-to-pay
• Automotive
– Make-to-stock/make-to-order • Construction
– Other business processes • Retail
• Specialized
manufacturing
industries
 5. ERP Overview

ERP Limitations
• ERP systems often require organizations to change their
business processes
• Once implemented, a company is locked in
• Difficult and costly to make future changes
• Modifications require extra and costly programming
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