Transcript Type of Information Systems

e-Everything Age
Learning Objectives
 Relate functional areas and business processes to
the value chain model.
 Describe the support provided by IT and the Web
to each of these functional areas:
production/operations, marketing and sales,
accounting and finance, and human resources
management.
 Describe the benefits & issues of integrating
functional information systems.
The Age of Networked Intelligence
 Not just networking of technology but it
is about the networking of humans
through technology
Digital Economy
 Individuals and enterprises create
wealth by applying knowledge,
networked human intelligence, and
effort to manufacturing, agriculture, and
services
Knowledge Economy
 Based on the application of human know
how
 Life long learner
 “SMART” products
 Economy added value will be created by
brain not brawn
 Mass Customized rather than massproduced (Boutique Bakers/Garden
scents)
Mass Customization
 One of the most
successful models of eCommerce is mass
customization.

the production of large
quantities of
customized items.
 It supplements or even
replaces one of the most
innovative concepts of
the Industrial Revolution,
mass production.
 Mass customization
can be facilitated by
the Web in four
different approaches;

Collaborative
customizers
 Adaptive
customizers
 Cosmetic
customizers
 Transparent
customizers
Pressures
 Market
 Global
Economy and Strong Competition
 Changing Nature of the Workforce
 Powerful Customers
 Technological
 Technological
innovation and
obsolescence
 Information Overload
Pressures (cont.)
 Societal
 Social
Responsibility
 Government Regulations
 Government Deregulations
 Shrinking budgets and subsidies
 Ethical Issues
Organization Structure
Need for new structures…..
Information Technology
 Information technologies are flexible tools,
constrained primarily by managers’ will to use
them, expectations about their roles, and
applications choices.
Cash p.267
Organization Structure
 Division of Labor
 Who
does what?
 Division of Decision Rights
 Who
should make which decision?
 Coordination Mechanisms
 Organizational Boundaries
 Informal Structures
Virtual Corporations

A Virtual Corporation (VC) is an organization
composed of several business partners sharing costs
and resources for the purpose of producing a product
or service.

According to Goldman et al. (1995), permanent virtual
corporations are designed to do the following:
1.
2.
3.
Create or assemble productive resources rapidly.
Create or assemble productive resources frequently
and concurrently.
Create or assemble a broad range of productive
resources.
Virtual Corporations (cont.)

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;
 Communication/ collaboration among dispersed
business partners





e.g., e-mail, desktop videoconferencing, screensharing, etc.
EDI and EFT
Intelligent agents
Modern database technologies and networking
Intranet/Internet applications
Types of Information Systems
Enabling Role of IT
Old Rule
Intervening
Technology
New Rule
Information
appears in only
one place at one
time.
Shared databases,
client/server
architecture,
Internet, intranets
Information
appears
simultaneously
wherever needed.
Only an expert
can perform
complex work.
Expert systems,
neural computing
Novices can
perform complex
work.
Business must
be either
centralized or
distributed.
Telecommunication
and networks:
client/server,
intranet
Business can be
both centralized
and distributed.
Only managers
make decisions.
Decision support
Decision making is
systems, enterprise part of everyone’s
support systems,
job.
expert systems
Empowerment Using IT
 Empowerment is the vesting of decision-making or
approval authority in employees where, traditionally,
such authority was a managerial prerogative.
 Empowerment can be enhanced through IT.

Empowered employees are expected to perform better.
 In addition to empowering employees, companies are
empowering their customers, suppliers, and other
business partners.

E.g. Federal Express uses the Internet to empower its
customers.
Strategic Information Planning
 To accomplish business/IT alignment, the
organization must execute the following
(same for e-business):

Set the IT mission.
 Assess the environment.
 Assess existing systems’ availabilities and
capabilities.
 Assess organizational objectives and strategies.
 Set IT objectives, strategies, and policies.
 Assess the potential impacts of IT.
Why Organizations need
Information Systems
 Meeting Global Challenges
 Capturing opportunities in the Market Place
 Supporting Corporate Strategy
 Linking Departments Whose Functions are
different
 Enhancing Worker Productivity
 Increasing Quality of Goods and Services
IT Era’s
 Data Processing (DP)
 Micro Era
 Network Era
 WAN Network Environment
 Client-Server
 Thin
Client
 WAP
Human
Resources
Systems
Manufacturing
Information
Systems
Quality Control
Information
Systems
Customer
Geographic
Information
Systems
Financial
and Accounting
Systems
Marketing
Information
Systems (CRM)
Customer Relationship Management
 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.
 Relationship marketing is
the “overt attempt of
exchange partners to build a
long-term association,
characterized by purposeful
cooperation and mutual
dependence on the
development of social, as
well as structural, bonds”
(Mowen & Minor, 1998).
 E-Service is customer
service that is performed on
the Web, sometimes
automatically.
Information Technology in CRM
Customer Service on the Web
 Providing Search and
Comparison
Capabilities.
 Allowing Customers to
Order Customized
Products and Services
Online.
 Providing Free Products
and Services.
 Providing Technical and
Other Information and
Service.
 Letting Customers
Track Accounts or
Order Status
Tools for Customer Service
 Personalized Web
Pages
 E-mail and
Automated
Response
 FAQs
 Tracking Tools
 Chat Rooms
 Help Desks and
Call Centers
 Troubleshooting
Tools
Other Information Systems
 Strategic
Semiconductor – “faster & better”
decisions
 National
 Global – Levi’s
Strategic Information Systems
 Cost leadership
 Differentiation
 Supports strategic changes – like
reengineering
 Growth
 Innovation
 Provide business intelligence by
collecting and analyzing information

Improve internal efficiency
 Customer-oriented approaches
IT Planning & BPR
Nuts and Bolts…….
Technology Issues
 Transition to network computing
 Move from Legacy systems to
client/server
 How much infrastructure?
 Centralization vs decentralization –
finding the balance
 Role of end user
Dell Case Study
How Dell Reengineered its Supply Chain
Lessons from the Case
 By introducing a new business model , one
can change the manner in which business is
done.
 To implement this model on a large scale, one
needs to build superb supply chain
management.
 Improved communications and customer
service, which are part of Dell’s CRM
program, are the cornerstones of its success.
 Dell was using e-Commerce with its business
partners.
Key Planning Issues
 Align IT plan with organizational business plan
 IT architecture that promotes and networks the
integration of users, applications, and
databases
 Allocation of IS and operational resources
among competing applications
 Completing projects on time and within budget
Infrastructure Considerations
 Broadbent et al. (1996) found the following four
infrastructure relationships;

Industry—manufacturing firms use less IT
infrastructure services than retail or financial firms.
 Market volatility—firms that need to change products
quickly use more IT infrastructure services.
 Business unit synergy—firms that emphasize
synergies (e.g., cross-selling) use more IT
infrastructure services.
 Strategy and planning—firms that integrate IT and
organizational planning, use more IT infrastructure
services.
CSF’s Prime Source
 Structure of Particular Industry
 Competitive Strategy, industry position,
and geographical location
 Environmental Factors
 Temporal Factors
The critical success factors (CSF) approach
was developed to help identify the information
needs of managers
Critical Success Factors
(CSF’s – Pg 346-347)
 What industry objectives are central to
your organization?
 What are the critical factors that are
essential to meeting these objectives?
 What decisions or actions are key to
these critical factors?
 What information systems can supply
these measures?
Reengineering….
BPR, Process Innovation, ERP,
Mass Customization, Networked
Organization, Empowerment, Teams,
Virtual Corporations, TQM, JIT, POM,
BPM, CRM
Reengineering the Corporation
 Written - 1993
 Michael Hammer
 One
of 1996 most influential people in the
U.S.
Time Magazine
July 17,1996
 James Champy
What is Reengineering?
 “the fundamental rethinking and radical
redesign of business
processes to achieve dramatic
improvements in critical,
contemporary measures or
performance, such as cost,
quality, service, and speed”
p. 32
Business Process Reengineering
 Initially,
attention was given to a complete
restructuring of organizations.
 Later, the concept was changed due to
failures of BPR projects and the emergence
of Web-based applications.
 Today, BPR can focus on anything from the
complete restructuring of an organization to
the redesigning of individual processes.
 Major objective of BPR = Information
Integration.
Impacts
Company
Customers
Employees
 Increase
Teams
 Benefit from
product by an better product Less Workers
order of
- More Work
 Needs are
magnitude
Empowered
met
 Examine
Layoffs
 Tendency to
process
return
 Vision
 Loyalty
 Increase
Profits
Why Reengineer
 The 3 C’s
 Customers
 Competition
 Change
 Nothing is Constant or Predictable
 Change is the only constant
 To reengineer a company is to take a
journey from the familiar into the
unknown. The journey has to begin
somewhere and with someone. Where
and with whom?
 P.
101
Keys
 Leaders
 Staff Empowerment
 Broader Scope
 Knowledge
/ Skills
 Tasks to Process
 Redesign
of Systems
 Information Technology
 Community
The 3 R’s
 Redesign
 Cross-function
approach
 Retool
 Information
Tools
 Reorchestrate
 Organization
changes
Problems
 Fix vs. Change
 Focus
 Ignore
 Quit
 Scope
 HR / Unions
 Success Rate
BPR Failures
 During the 1990s there were just as many cases
of BPR failures as there were success stories.
 A survey conducted by the PROSCI organization
(prosci.com) indicates a failure rate of 50 to 80%.
 Some of the reasons cited for failures are:
 high risk
 inappropriate change management
 failure to plan for internal politics
 high cost of retooling
 lack of participation and leadership
 inflexible software
 lack of motivation
Bell Atlantic’s Experience
 The difference is that in a compliance mode
I do what I must do because my boss tells
me I must do it. In a commitment mode, I
understand what the corporation is trying to
achieve and how we’re going to achieve it,
and I will do whatever it takes to make that
happen, including changing the way I do my
job if that is what is required

p. 196/197
BPR
 No longer a need to destroy
everything - start from scratch
 Instead - Flexible approach that can
be executed by proven
methodologies and principles.
Hammer and Stanton[1995]
& Champy [1995]
Process Innovation
Encompasses the envisioning of new
work strategies, the actual process
design activity, and the implementation of
the change in all its complex
technological, human, and organizational
dimensions – order-of-magnitude
improvements
Davenport (1993)
Networked Organization
Classical/Hierarchical







Formal
Highly Structured
Manage
Control
Direct
Employee a cost
Information management
owned
 Risk avoidance
 Individual contributions
Networked Organ.
Informal
Loosely Structured
Delegate/lead
Ownership/participation
Empower
Employees an asset
Information
shared-ownership
 Risk management
 Team
contributions







CHANGE
 “It is an educational and
communications campaign”
 p.148
4 C’s – from Last Week
 Convergence
 Core Competencies
 Content (distributed)
 Control (local / departmental)
QVC
Moving CRM from TV to the Web
Case: Integrated Solutions for Building Supply
Problem:
 Colonial is a small building supply company in Utah. To
remain competitive, they needed a technology to provide
information about inventory levels & customer buying
trends.
Solution:
 Colonial purchased an integrated system, point-of-sale
(POS) terminals, hand-held automatic product
identification & data collection.
 Sold items are deducted from the inventory instantly.
 Purchase orders are sent electronically via the Internet.
Results:
 Lower costs for data entry labor, reductions in inventory/
storage space, fast access to information, better customer
service, & higher employee satisfaction
Lessons from the Case
 IT supports the routine processes of a retailer, enabling it
to be efficient and effective and to satisfy its customers.
 The software helped to modernize & redesign the
company’s major business processes.
 The software supports several business processes, not
just one.
 The system’s major applications are in logistics. However,
the same software vendor provides ready-made
accounting, marketing, & operations modules.
 IT can be beneficial to a relatively small company.
 The integration includes connection to business partners
using the Internet.