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Foundations of Information Systems Prof. Dr. Yang Dehua School of Economics and Management Tongji University Outlines Foundations of Information Systems Information Technologies and Systems Business Processes Business Process Reengineering Business Continuity Management Information Systems for Management Information Systems for Strategic Advantages New Economy Information Technologies and Systems Information Technology Hardware Software Networks Data Processing Information System Any organized combination of people, hardware, software, communications networks, and data resources that stores, retrieves, transforms, and disseminates information in an organization. Information Technologies and Systems Essential Issues of Using IT for Organizations’ Success: People Information Technology Information Information Technologies and Systems Business Success Factors: Information Technology Information Business Success People Information Technologies and Systems The Enterprise as A System Feedback Feedback Control Control Raw Material Control Manufacturing Process System Boundary Environment/Other Systems Products Information Technologies and Systems The Enterprise as A System Value added processes Costs and values Impact factors Environment Information Technologies and Systems Corporate environment Corporate/ business strategy Cultural and contextual issues Processes Outputs (value) Inputs (costs) Information strategy Information Technologies and Systems IS Components People Resources Input of Data Control of System Performance Processing Data into Information Data Resources Output of Data Hardware Resources Software Resources Storage of Data Network Resources Information Technologies and Systems Information System Activities Input of data resources Processing of data into information Output of information products Storage of data resources Control of system performance Information Technologies and Systems Information Systems Development Data warehousing Data mining High Integration Decision support Information Management Data extraction Data filtering Data Management Low Knowledge Management Transaction Processing Information Value High Business Processes Porter Value Chain Primary Processes Support Processes Inter-Organizational Business Processes Business Process Model Value Chains New Entrants Firm Infrastructure(3.1%) Support Processes Human Resource Management(7.1%) Technology Development(4.2%) Primary Processes Procurement of Resources(27%) Inbound Logistics (5.2%) Productions and Services Outbound Logistics Marketing and Sales Customer Service (6.6%) (4.3%) (2.2%) (40.3%) Supplier Power Threats of Substitutes Buyer Power Business Process Support IS Support of Primary Business Processes ERP SCM Inbound Logistics Production/ Operation ERP Outbound Logistics CRM ERP Marketing & Sales Cusomer Service Business Supply Chain Up-stream and Down-stream of Supply Chain Supply Chain Flows Material flows Financial flows Information flows Service flows Inter-organizational Processes Inter-organizational Business Processes Inter-organizational Processes Processes Processes Supplier Corporation Customer Enterprise Best Practices Norms or Best Practices of Industry Large and Comprehensive Information Systems Adopt Industrial Best Practices Business Process Reengineering(BPR) is Usually Needed When ERP, for Example, Is Implemented Business Processes Reengineering The Fundamental Rethinking and Radical Redesign of Business Processes to Achieve Dramatic Improvements in Critical, Contemporary Measures of Performance, Such as Cost, Quality, Services and Speed. Business Process Reengineering Business Process Changes Transformational High Business Reengineering Process Reengineering Process Simplification Nature Risk Automation Process Improvement Low Incremental Low Benefits Functional/Internal Scope High Cross-Functional/External Business Process Reengineering Principles Organize around outcomes,not around tasks Have those who use the output of a process actually perform the process Treat geographically dispersed units as if they were centralized Link parallel activities during the process,rather than at the end of the process Capture information once at the source Business Process Reengineering Procedures Develop business vision and process objectives Identify processes to be engineered Understand and measure existing processes Identify IT levers Design and build a prototype of the process BPR Examples IBM Customer Credit Company HP Procurement Kodak Camera Production Information Systems for Management Anthony Model Strategic Planning Tactics Management Operations Management Top Layer Middle Layer Low Layer Information Systems for Management Major Roles of IS Support of strategies for competitive advantage Support of business decision making Support of business processes and operations Information Systems for Management Types of Information Systems Inform ationSystem s Operations Support System s Transaction Processing ProcessControl M anagem ent Support System s Enterprise Collaboration M IS DSS EIS Information Systems for Management Managerial Challenges Business strategies Business processes Structure and culture Internetworked information systems IT infrastructure Customer values Business value Information Systems for Management Managerial Challenges Success and failure with IT Developing IS solutions Challenges of ethics and IT Challenges of IT Careers The IS functions integration Information Systems for Strategic Advantages Five Competitive Model Bargaining power of customers Bargaining power of suppliers Rivalry of competitors Threat of new entrants Threat of substitutes Information Systems for Strategic Advantages 5 Competitive Forces Threats of Substitute Products and Services Supplier Power: Bargaining Power of Suppliers Rivalry among Existing Companies Threats of New Entrants Buyer Power: Bargaining of Channels and End Users Information Systems for Strategic Advantages The Business Strategies Cost leadership Differentiation Innovation Growth Alliance Consolidation Barrier The New Economy The Industrial Economy Is Based on: Mass Production Mass Transportation Division of Labour Financial Capital The New Economy The New Economy Is Based on: Mass Customisation Data Communication and Computer Networks Aggregation of Labour Intellectual Capital The New Economy Features of the New Economy Knowledge Microsoft’s market value versus book value Intellectual property and capital Business intelligence Digitisation >50% of Intel’s business is online Online businesses The New Economy Virtualisation Virtual companies Virtual processes/Outsourcing/Offshoring Virtual communities Molecularization Market segmentation Personalization Object-oriented programming paradigm The New Economy Integration/Internetworking CRM, ERP and SCM to link demand chain Interorganizational processes integration Disintermediation Direct marketing E-tailing/Purchasing Digital products The New Economy Convergence Vertical/Horizontal integration Mobile phones/Pervasive computing and micropayments Innovation Make new products Re-engineer processes Online auctions The New Economy Prosumption Allow customers to join production processes Build to order Online banking Immediacy Networked collaboration Synergy Online immediacy The New Economy Globalisation Real-time collaboration on software development 24 hour shopping Pervasive presence Discordance Privacy and civil liberty issues Social exclusion Hegemony of Western brands and English language Security issues