Management Information Systems: Managing The Digital Firm: Fifteenth Edition

Management Information Systems:
Managing the Digital Firm

Fifteenth edition
Chapter 2
Global E-business and
Collaboration
Copyright © 2018 Pearson Education Ltd.

Learning Objectives
• 2-1 What are business processes? How are they related to information systems?
• 2-2 How do systems serve the different management groups in a business, and how do
systems that link the enterprise improve organizational performance?
• 2-3 Why are systems for collaboration and social business so important, and what
technologies do they use?
• 2-4 What is the role of the information systems function in a business?

Video Cases
• Case 1: Walmart’s Retail Link Supply Chain
• Case 2: CEMEX: Becoming a Social Business
• Instructional Video: US Foodservice Grows Market
with Oracle CRM on Demand

Enterprise Social Networking Helps ABB
Innovate and Grow (1 of 2)
• Problem
– Outdated static technology
– Geographically dispersed
• Solutions
– Develop knowledge sharing strategy and goals
– Change knowledge and collaboration processes
– Change organizational culture
– Deploy Inside+, with Yammer, Office 365, and Sharepoint

Enterprise Social Networking Helps ABB
Innovate and Grow (2 of 2)
• ABB uses Inside+ to provide new channels for
knowledge acquisition, innovation, and
collaboration
• Demonstrates IT’s role in helping organizations
improve performance and remain competitive
• Illustrates the ability of IT systems to support
collaboration and teamwork

Business Processes (1 of 2)
• Business processes
– Flows of material, information, knowledge
– Sets of activities, steps
– May be tied to functional area or be cross-
functional
• Businesses: Can be seen as collection of
business processes
• Business processes may be assets or liabilities

Business Processes (2 of 2)
• Examples of functional business processes
– Manufacturing and production
 Assembling the product
– Sales and marketing
 Identifying customers
– Finance and accounting
 Creating financial statements
– Human resources
 Hiring employees

Figure 2.1: The Order Fulfillment Process

How Information Technology Improves
Business Processes
• Increasing efficiency of existing processes
– Automating steps that were manual
• Enabling entirely new processes

– Changing flow of information
– Replacing sequential steps with parallel steps
– Eliminating delays in decision making
– Supporting new business models

Systems for Different Management Groups
(1 of 2)
• Transaction processing systems
– Serve operational managers and staff
– Perform and record daily routine transactions necessary to
conduct business
 Examples: sales order entry, payroll, shipping
– Allow managers to monitor status of operations and relations with
external environment
– Serve predefined, structured goals and decision making

Figure 2.2: A Payroll TPS

Systems for Different Management Groups
(2 of 2)
• Systems for business intelligence
– Data and software tools for organizing and analyzing data
– Used to help managers and users make improved decisions
• Management information systems

• Decision support systems
• Executive support systems

Management Information Systems
• Serve middle management
• Provide reports on firm’s current performance,
based on data from TPS
• Provide answers to routine questions with
predefined procedure for answering them
• Typically have little analytic capability

Figure 2.3: How Management Information
Systems Obtain Their Data from
the Organization’s TPS

Figure 2.4: Sample MIS Report

Decision support systems
• Serve middle management
• Support nonroutine decision making
– Example: What is the impact on production schedule if December
sales doubled?
• May use external information as well TPS / MIS
data
• Model driven DSS
– Voyage-estimating systems
• Data driven DSS
– Intrawest’s marketing analysis systems

Figure 2.5: Voyage-Estimating Decision-
Support System

Executive Support Systems
• Support senior management
• Address nonroutine decisions
– Requiring judgment, evaluation, and insight
• Incorporate data about external events (e.g., new

tax laws or competitors) as well as summarized
information from internal MIS and DSS
• Example: Digital dashboard with real-time view of
firm’s financial performance

Interactive Session: Organizations: New
Systems Help Plan International Manage Its
Human Resources (1 of 2)
• Class discussion
– Describe the problem faced by Plan International. What
management, organization, and technology factors contributed to
this problem?
– Describe the system solution to this problem. Describe the types
of systems used for the solution.
– Why is human resources so important at Plan International?

Interactive Session: Organizations: New
Systems Help Plan International Manage Its
Human Resources (2 of 2)
– How did these systems improve operational efficiency?
– How did these systems improve decision making? Give examples
of two decisions improved by Plan’s new systems.

Enterprise Applications
• Systems for linking the enterprise
• Span functional areas
• Execute business processes across the firm
• Include all levels of management
• Four major applications
– Enterprise systems
– Supply chain management systems
– Customer relationship management systems
– Knowledge management systems

Figure 2.6: Enterprise Application
Architecture

Enterprise Systems
• Collect data from different firm functions and store
data in single central data repository
• Resolve problems of fragmented data
• Enable:
– Coordination of daily activities
– Efficient response to customer orders (production, inventory)
– Decision making by managers about daily operations and longer-
term planning

Supply Chain Management (SCM) Systems
• Manage firm’s relationships with suppliers
• Share information about:
– Orders, production, inventory levels, delivery of products and
services
• Goal:
– Right amount of products to destination with least amount of time
and lowest cost

Customer Relationship Management (CRM)
Systems
• Provide information to coordinate all of the
business processes that deal with customers
– Sales
– Marketing
– Customer service
• Helps firms identify, attract, and retain most

profitable customers

Knowledge Management Systems (KMS)
• Support processes for capturing and applying
knowledge and expertise
– How to create, produce, and deliver products and services
• Collect internal knowledge and experience within

firm and make it available to employees
• Link to external sources of knowledge

Intranets and Extranets
• Also used to increase integration and expedite the
flow of information
• Intranets
– Internal company websites accessible only by employees
• Extranets
– Company websites accessible externally only to vendors and
suppliers
– Often used to coordinate supply chain

E-business, E-commerce, and E-government
• E-business
– Use of digital technology and Internet to drive major business
processes
• E-commerce
– Subset of e-business
– Buying and selling goods and services through Internet
• E-government
– Using Internet technology to deliver information and services to
citizens, employees, and businesses

What Is Collaboration?
• Collaboration
– Short lived or long term
– Informal or formal (teams)
• Growing importance of collaboration

– Changing nature of work
– Growth of professional work—“interaction jobs”
– Changing organization of the firm
– Changing scope of the firm
– Emphasis on innovation
– Changing culture of work

What Is Social Business?
• Social business
– Use of social networking platforms (internal and external) to
engage employees, customers, and suppliers
• Aims to deepen interactions and expedite

information sharing
• “Conversations”
• Requires information transparency
– Driving the exchange of information without intervention from
executives or others

Business Benefits of Collaboration and
Teamwork
• Investments in collaboration technology can bring
organization improvements, returning high ROI
• Benefits
– Productivity
– Quality
– Innovation
– Customer service
– Financial performance
 Profitability, sales, sales growth

Figure 2.7: Requirements for Collaboration

Building a Collaborative Culture and
Business Processes
• “Command and control” organizations
– No value placed on teamwork or lower-level participation in
decisions
• Collaborative business culture

– Senior managers rely on teams of employees
– Policies, products, designs, processes, and systems rely on teams
– The managers purpose is to build teams

Tools and Technologies for Collaboration
and Social Business
• E-mail and instant messaging (IM)
• Wikis
• Virtual worlds
• Collaboration and social business platforms
– Virtual meeting systems (telepresence)
– Cloud collaboration services (Google Drive, Google Docs, etc.)
– Microsoft SharePoint and IBM Notes
– Enterprise social networking tools

Interactive Session: Technology:
Collaborating the Glasscubes Way
– Discuss the features of Glasscubes as a collaboration software.
– Why did the NSHCS require a tool for collaboration? Was
Glasscubes a feasible option?
– Name some other areas where such software can be useful.
Discuss at least one such area.

Checklist for Managers: Evaluating and
Selecting Collaboration and Social Software
Tools
• Time/space matrix
• Six steps in evaluating software tools
– Identify your firm’s collaboration challenges
– Identify what kinds of solutions are available
– Analyze available products’ cost and benefits
– Evaluate security risks
– Consult users for implementation and training issues
– Evaluate product vendors

Figure 2.8: The Time/Space Collaboration
and Social Tool Matrix

The Information Systems Department
• Often headed by chief information officer (CIO)
– Other senior positions include chief security officer (CSO), chief
knowledge officer (CKO), chief privacy officer (CPO), chief data
officer (CDO)
• Programmers
• Systems analysts
• Information systems managers
• End users

Organizing the Information Systems
Function
• IT governance
– Strategies and policies for using IT in the organization
– Decision rights
– Accountability
– Organization of information systems function
 Centralized, decentralized, and so on

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Management Information Systems:

Managing the Digital Firm

Copyright © 2018 Pearson Education Ltd.

• 2-4 What is the role of the information systems function in a business?

Copyright © 2018 Pearson Education Ltd.

Copyright © 2018 Pearson Education Ltd.

Copyright © 2018 Pearson Education Ltd.

Copyright © 2018 Pearson Education Ltd.

Copyright © 2018 Pearson Education Ltd.

Copyright © 2018 Pearson Education Ltd.

Copyright © 2018 Pearson Education Ltd.

• Enabling entirely new processes

Copyright © 2018 Pearson Education Ltd.

Copyright © 2018 Pearson Education Ltd.

Copyright © 2018 Pearson Education Ltd.