Management Information Systems:

Managing the Digital Firm

Sixteenth Edition

Chapter 2
Global E-Business and
Collaboration

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Business Processes (1 of 2)
• Business processes
– Flows of material, information, knowledge
– Logically related set of tasks that define how specific
business tasks are performed
– 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

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Business Processes (2 of 2)

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Figure 2.1 The Order Fulfillment Process

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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

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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

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Figure 2.2 A Payroll TP S

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

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Figure 2.3 How Management Information
Systems Obtain Their Data from the
Organization’s TP S

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Figure 2.4 Sample MI S Report
Consolidated Consumer Products Corporation Sales by
Product and Sales Region: 2019
Product Product Sales Region Actual Sales Planned Actual Versus
Code Description Planned

4469 Carpet Cleaner Northeast 4,066,700 4,800,000 0.85

South 3,778,112 3,750,000 1.01
Midwest 4,867,001 4,600,000 1.06
West 4,003,440 4,400,000 0.91

Blank Total Blank 16,715,253 17,550,000 0.95

5674 Room Freshener Northeast 3,676,700 3,900,000 0.94

South 5,608,112 4,700,000 1.19
Midwest 4,711,001 4,200,000 1.12
West 4,563,440 4,900,000 0.93

Blank Total Blank 18,559,253 17,700,000 1.05

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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 TP S / MI S data
• Model driven DS S
– Voyage-estimating systems
• Data driven DS S
– Intrawest’s marketing analysis systems

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Figure 2.5 Voyage-Estimating Decision-
Support System

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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 MI S and DS S
• Example: Digital dashboard with real-time view of firm’s
financial performance

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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
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Figure 2.6 Enterprise Application Architecture

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Enterprise Systems
• Also called enterprise resource planning (ER P) systems
• Integrate data from key business processes into single
system.
• Speed communication of information throughout firm.
• Enable greater flexibility in responding to customer
requests, greater accuracy in order fulfillment.
• Enable managers to assemble overall view of operations.

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Supply Chain Management (SC M)
Systems
• Manage relationships with suppliers, purchasing firms,
distributors, and logistics companies.
• Manage shared information about orders, production, inventory
levels, and so on.
• Goal is to move correct amount of product from source to point
of consumption as quickly as possible and at lowest cost
• Type of interorganizational system: Automating flow of
information across organizational boundaries

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Customer Relationship Management
(CR M) Systems
• Help manage relationship with customers.
• Coordinate business processes that deal with customers in sales,
marketing, and customer service
• Goals:
– Optimize revenue
– Improve customer satisfaction
– Increase customer retention
– Identify and retain most profitable customers
– Increase sales
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Knowledge Management Systems
(KMS)
• Manage processes for capturing and applying knowledge
and expertise
• Collect relevant knowledge and make it available wherever
needed in the enterprise to improve business processes
and management decisions.
• Link firm to external sources of knowledge

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Intranets and Extranets
• Technology platforms that increase integration and
expedite the flow of information
• Intranets:
– Internal networks based on Internet standards
– Often are private access area in company’s Web site
• Extranets:
– Company Web sites accessible only to authorized
vendors and suppliers
– Facilitate collaboration
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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
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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
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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” to strengthen bonds with customers
• Requires information transparency
• Seen as way to drive operational efficiency, spur
innovation, accelerate decision making
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Business Benefits of Collaboration and
Teamwork

Investment in collaboration
technology can return Productivity: Sharing
Quality: Faster resolution
large rewards, especially knowledge and resolving
of quality issues
in sales and marketing, problems
research and development

Financial performance:
Customer service:
Innovation: More ideas for Generated by
Complaints handled more
products and services improvements in factors
rapidly
above

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Figure 2.7 Requirements for Collaboration

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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
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Tools and Technologies for
Collaboration and Social Business
• E-mail and instant messaging (I M)
• Wikis
• Virtual worlds
• Collaboration and social business platforms
– Virtual meeting systems (telepresence)
– Cloud collaboration services (Google Drive, Google Docs,
etc.)
– Microsoft SharePoint and IB M Notes
– Enterprise social networking tools
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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
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Figure 2.8 The Time/Space
Collaboration and Social Tool Matrix

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The Information Systems Department
• Often headed by chief information officer (CI O)
– Other senior positions include chief security officer
(CS O), chief knowledge officer (CK O), chief privacy
officer (CP O), chief data officer (CD O)
• Programmers
• Systems analysts
• Information systems managers
• End users
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Organizing the Information Systems
Function
• I T governance
– Strategies and policies for using I T in the organization
– Decision rights
– Accountability
– Organization of information systems function
 Centralized, decentralized, and so on

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