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Dr Sherif Kamel Department of Management School of Business, Economics and Communication IT Planning and Organizational Applications CRM and Integrated Solutions Outline Functional Information Systems The Value Chain Transaction Processing Systems (TPS) o Case Managing Human Resource Systems (HRMS) Customer Relationship Management (CRM) IT Planning Business Process Re-engineering (BPR) Virtual Corporations (VC) Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel Functional Information Systems Traditionally, information systems were designed within each functional area to increase their internal effectiveness and efficiency o Solution - Reengineer the organization o This may not suit some organizations, because certain processes may involve activities that are performed in several functional areas For example, the company can create cross-functional teams, each responsible for performing a complete business process Solution - Integrated approach Keeps the functional departments but creates a supportive information system to help communication, coordination, and control Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel Functional Department The Value Chain Administrative Coordination and Support Services SIS – Collaborative Work Systems Human Resources Management SIS – Employee Skills Database Systems Technology Development SIS – Computer-Aided Engineering and Design Procurement of Resources SIS – Electronic Data Interchange with Suppliers Inbound Logistics SIS Automated JIT Warehousing Operations SIS Computer Aided Flexible Manufacturing Outbound Logistics SIS Online Point Of Sale And order Processing Copyright © 2002 Turban, McLean and Wetherbe Marketing And Sales SIS Interactive Targeting Marketing Customer Service Competitive Advantage SIS Help Desk Expert Systems Copyright © 2005 Sherif Kamel Characteristics of Functional Information Systems A functional information system consists of several smaller information systems that support specific activities performed in the functional area The specific IS applications in any functional area can be integrated to form a coherent departmental functional system, or they can be completely independent Functional information systems interface with each other to form the organization-wide information system (Intranet) Some organizational information systems interface with the environment (Extranet-Internet) Information systems applications support the three levels of an organization’s activities: operational, managerial, and strategic Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel Transaction Processing Systems (TPS) Transaction Processing Systems (TPS) o Information systems that support business processes, mainly accounting and finance transactions, sales, personnel, and production activities TPS is the backbone of an organization’s information system o o It monitors, collects, stores, processes and disseminates information for all routine core business transactions Data represent input data to functional information systems applications, decision support systems (DSS), and customer relationships management (CRM) Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel Activities of TPS Data are collected and entered into the computer via any input device TPS then processes data through o Batch processing - o Online processing - o Firm collects data from transactions as they occur, placing them in groups or batches - system then processes the batches periodically Data are processed as soon as a transaction occurs Hybrid system - (a combination of batch and online processing) collects data as they occur but process them at specified intervals Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel Case: Taxis in Singapore Taxis in Singapore are tracked by a global positioning system (GPS) providing users with an instant fix on the geographical position of each taxi Customer orders are usually received via telephone, fax and eMail - frequent users enter orders from their offices or homes by keying in a PIN number The system completely reengineered the taxi order processing The transaction time for processing an order is much shorter Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel Managing Human Resource Systems Developments in Web-based systems increased the popularity of human resources information systems (HRISs) since the 1990s Initial HRIS applications were mainly related to transaction processing systems However, in the last decade we have seen considerable computerization activities in the managerial and even strategic areas Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel HRISs and Recruitment Using the web for recruitment o Position inventory o With millions of resumes available online, companies are trying to find appropriate candidates on the Web Large organizations need to fill vacant positions frequently - an advanced intranet-based position inventory system keeps the position inventory list current and matches openings Employee selection o To expedite the testing and evaluation process and ensure consistency in selection, companies use information technologies such as expert systems Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel Customer Relationship Management (CRM) Customer relationship management (CRM) is an approach that recognizes that customers are the core of the business and that the company’s success depends on effectively managing relationships with them Customer service is a series of activities designed to enhance the level of customer satisfaction eService is customer service that is performed on the Web, sometimes automatically Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel CRM in Action There are 5 steps in building IT-supported CRM… o o o o o Make it easy for customers to do business with you Focus on the end customer for your products and services Redesign your customer-facing business processes from the end customer’s point of view Wire your company for profit: design a comprehensive, evolving electronic business architecture Foster customer loyalty – especially in eCommerce Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel Information Technology in CRM Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel IT Planning A Strategic information systems plan identifies a set of computer-based applications that will help a company reach its business goals IT planning identifies the applications portfolio, a list of major, approved IS projects that are consistent with the long-range plan Planning and control systems for IT started in the late 1950s and early 1960s Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel IT Planning Issues Aligning the IT plan with the organizational business plan Designing an IT architecture for the organization in such a way that users, applications, and databases can be integrated and networked together Efficiently allocating information systems development and operational resources among competing applications Planning information systems projects so that they are completed on time and within budget and include the specified functionalities Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel 4 Stage Model of IT Planning Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel Stage 1 - Strategic Information Planning Strategic information planning (SIP) must be aligned with overall organizational planning and with eBusiness To accomplish this alignment, the organization must execute the following: o Set the IT mission o Assess the environment o Assess existing systems’ availabilities and capabilities o Assess organizational objectives and strategies o Set IT objectives, strategies, and policies o Assess the potential impacts of IT An organization would conduct the same six steps for eBusiness Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel Business Systems Planning The Business systems planning (BSP) model, developed by IBM, is a top-down approach that starts with business strategies It deals with two main building blocks as the basis of the information architecture… o o Business processes Data classes The recognition that processes could be a more fundamental aspect of business than departments or other organizational arrangements broke new grounds Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel Stage 2 - Information Requirements Analysis Step 1 - Define underlying organizational subsystems Step 2 - Develop subsystem matrix Step 3 - Define and evaluate information requirements for organizational subsystems Step 4 - Define major information categories and map interview results into them Step 5 - Develop information/subsystem matrix Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel Stage 3 - Resource Allocation Resource allocation consists of developing the hardware, software, data communications, facilities, personnel, and financial plans needed to execute the master development plan defined in Stage 2 This stage provides the framework for technology and labor procurement, and identifies the financial resources needed to provide appropriate service levels to users Funding requests from the ISD fall into two categories o Those necessary to stay in business o Those for improving the information architecture Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel Stage 4 - Project Planning Project Planning provides an overall framework within which specific applications can be planned, scheduled, and controlled Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel Infrastructure Considerations There are 4 infrastructure relationships o Industry - manufacturing firms use less IT infrastructure services than retail or financial firms o Market volatility - firms that need to change products quickly use more IT infrastructure services o Business unit synergy - firms that emphasize synergies (e.g., cross-selling) use more IT infrastructure services o Strategy and planning - firms that integrate IT and organizational planning, use more IT infrastructure services Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel IT Architecture Computing Centralized computing puts all processing and control authority within one computer and all other computing devices respond Distributed Computing handles the choices for computing at the point of the computing need; individual needs are met with individualized computing A Blended approach combines the two models above. The mainframe (centralized resource) can operate as a peripheral device for other (distributed) computing resources Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel Business Process Reengineering Business process reengineering (BPR) refers to a situation in which an organization fundamentally and radically redesigns its business process to achieve dramatic improvement o Initially, attention was given to a complete restructuring of organizations o Later, the concept was changed due to failures of BPR projects and the emergence of Web-based applications o Today, BPR can focus on anything from the complete restructuring of an organization to the redesigning of individual processes o Major objective of BPR = Information Integration Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel Mass Customization One of the most successful models of eCommerce is mass customization It supplements or replaces one of the most innovative concepts of the Industrial Revolution, mass production eCommerce transforms the supply chain from a traditional push model to a pull model o Push model - o Pull model - The business process starts with manufacturing and ends with consumers buying the products or services The process starts with the consumer ordering the product (or service) and ends with the manufacturer making it The pull model enables customization since orders are taken first Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel BPR Failures During the 1990s there were just as many cases of BPR failures as there were success stories Some of the reasons cited for failures are: o o o o o o o high risk inappropriate change management failure to plan for internal politics high cost lack of participation and leadership inflexible software lack of motivation Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel Virtual Corporations (Organization) Virtual Corporation (VC/VO) is an organization composed of several business partners sharing costs and resources for the purpose of producing a product or service VC is helping executives and staff globally to collaborate without face2face interaction A virtual corporation uses information technology to link people, assets and ideas According to Goldman et al. (1995), permanent virtual corporations are designed to do the following… o o o Create or assemble productive resources rapidly Create or assemble productive resources frequently and concurrently Create or assemble a broad range of productive resources Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel Model for a Virtual Corporation Alliance with subcontractors Boundary of firm Alliance with a major supplier Customer response and order-fulfillment teams Intranets Extranets Alliance with a major customer Manufacturing teams Alliance with a competitor who provides services that are complementary Alliance with small suppliers Cross-functional teams Copyright © 2002 Turban, McLean and Wetherbe Engineering teams Copyright © 2005 Sherif Kamel Characteristics of virtual corporations Adaptability Borderless Excellence Technology Opportunism Trust-based Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel Virtual Corporations In a VC, the resources of the business partners remain in their original locations but are integrated In order to function, VCs rely on the following forms of IT o Communication/ collaboration among dispersed business partners - eMail, desktop videoconferencing, screen-sharing, etc. o EDI and EFT o Intelligent agents o Modern database technologies and networking o Intranet/Internet applications Copyright © 2002 Turban, McLean and Wetherbe Copyright © 2005 Sherif Kamel