1. Copyright 2007 John Wiley & Sons, Inc. Chapter 81 Organizational Information Systems

2. Copyright 2007 John Wiley & Sons, Inc. Chapter 82 Chapter Outline  8.1 Transaction Processing Systems  8.2 Functional Area Management Information Systems  8.3 Enterprise Resource Planning Systems  8.4 Customer Relationship Management Systems  8.5 Supply Chain Management Systems  8.6 Electronic Data Interchange, Extranets, and Web Services

3. Copyright 2007 John Wiley & Sons, Inc. Chapter 83 Learning Objectives  Describe transaction processing system.  Describe management information systems and the support they provide for each functional area of the organization.  Describe enterprise resource planning systems.

4. Copyright 2007 John Wiley & Sons, Inc. Chapter 84 Learning Objectives (Continued)  Describe customer relationship management systems.  Describe supply chain management systems.  Discuss electronic data interchange, extranets, and Web services.

5. Copyright 2007 John Wiley & Sons, Inc. Chapter 85 8.1 Transaction Processing Systems  Transaction Processing System (TPS) monitors, collects, stores and processes data generated from all business transations.  Source data automation is the process of automating the TPS data entry as much as possible because of the large volume involved.

6. Copyright 2007 John Wiley & Sons, Inc. Chapter 86 TPSs (Continued)  Batch Processing is when the firm collects data from transactions as they occur, placing them in group or batches, then prepares and processes the batches periodically (say, every night).  Online Transaction Processing (OLTP) is when business transactions are processed online as soon as they occur.

7. Copyright 2007 John Wiley & Sons, Inc. Chapter 87  Let see figure 8.1

8. Copyright 2007 John Wiley & Sons, Inc. Chapter 88 8.2 Functional Information Systems  Functional Information Systems also called Management Information Systems (MISs) or Functional Area IS provide information to managers (usually middle-level managers) in the functional areas.  MISs support planning, organizing, and controlling operations.

9. Copyright 2007 John Wiley & Sons, Inc. Chapter 89 MIS Reports  Routine reports - scheduled  Ad-hoc reports – on demand Drill-down reports Key-indicator reports Comparative reports  Exception reports – outside the norm

10. Copyright 2007 John Wiley & Sons, Inc. Chapter 810 Information Systems for Specific Functional Areas  Information Systems that are designed to support a functional area by increasing its internal effectiveness and efficiency in the following areas: accounting, finance, marketing, operations (POM), and human resources management functional areas.

11. Copyright 2007 John Wiley & Sons, Inc. Chapter 811  Let see table 8.1 and fig. 8.2

12. Copyright 2007 John Wiley & Sons, Inc. Chapter 812 8.3 Enterprise Resource Planning Systems  Enterprise Resource Planning (ERP) systems integrate the planning, management and use of all resources of the organization.  ERP’s major objective is to tightly integrate the functional areas of the organization and to enable seamless information flows across the functional areas.

13. Copyright 2007 John Wiley & Sons, Inc. Chapter 813 ERP Systems (Continued)  Business process is a set of related steps or procedures designed to produce a specific outcome.  Business processes supported by ERP modules include Financial and Accounting Processes, Sales and Marketing Processes, Manufacturing and Production Processes and Human Resources Processes.

14. Copyright 2007 John Wiley & Sons, Inc. Chapter 814 ERP Systems (Continued)  Best practices are the most successful solutions or problem-solving methods for achieving a business objective.  Drawbacks to ERP systems are that they can be extremely complex, expensive and time- consuming to implement.  Leading ERP software vendors include SAP (SAP R/3), Oracle and PeopleSoft.

15. Copyright 2007 John Wiley & Sons, Inc. Chapter 815  Let see table 8.2

16. Copyright 2007 John Wiley & Sons, Inc. Chapter 816 8.4 Customer Relationship Management  Customer Relationship Management (CRM) is an enterprisewide effort to acquire and retain customers. Includes a one-to-one relationship between a customer and a seller. One simple idea “Treat different customers differently”. Helps keep profitable customers and maximizes lifetime revenue from them.

17. Copyright 2007 John Wiley & Sons, Inc. Chapter 817 CRM Applications  Customer touch point is a method of interaction with a customer, such as telephone, e-mail, a customer service or help desk, conventional mail, Web site and store.  CRM systems provide applications in 3 major areas: Sales - sales force automation (SFA). Marketing – support marketing campaigns & provide opportunities for cross-selling, up-selling and bundling. Customer service – can take many Web-based forms.

18. Copyright 2007 John Wiley & Sons, Inc. Chapter 818 SFA & Marketing  Sales force automation (SFA) functions provide such data as sales prospect and contact information, product information, product configurations and sales quotes.  Marketing Cross-selling refers to the marketing of complementary products to customers. Up-selling is the marketing of higher-value products or services to new or existing customers. Bundling is a type of cross-selling in which a combination of products is sold together at a lower price than the combined costs of the individual products.

19. Copyright 2007 John Wiley & Sons, Inc. Chapter 819 Customer Service  Customer service functions provide information and tools to make call centers, help desks and customer support staff more efficient.  Customer service can take many forms and includes: Technical and other information and services Customized products and services

20. Copyright 2007 John Wiley & Sons, Inc. Chapter 820 Customer Service (Continued) Tracking account or order status Personalized Web pages FAQs E-mail and automated response Call centers

21. Copyright 2007 John Wiley & Sons, Inc. Chapter 821 8.5 Supply Chain Management Systems  Supply chain refers to the flow of materials, information, money and services from raw material suppliers, through factories and warehouses, to the end customers.  Supply chain management (SCM) is the function of planning, organizing and optimizing the supply chain’s activities.

22. Copyright 2007 John Wiley & Sons, Inc. Chapter 822 SCM Systems (Continued)  Interorganizational information system (IOS) involves information flows among two or more organizations.  Global information systems are interorganizational information systems that connect companies located in two or more countries.

23. Copyright 2007 John Wiley & Sons, Inc. Chapter 823  Let see fig. 8.3

24. Copyright 2007 John Wiley & Sons, Inc. Chapter 824 Issues in Global IOS Design  Cultural differences  Localization  Economic and Political Differences  Legal issues  Cross-border data transfer which refers to the flow of corporate data across nations’ borders.

25. Copyright 2007 John Wiley & Sons, Inc. Chapter 825 The Structure & Components of Supply Chains  A supply chain involves three segments: Upstream, where sourcing or procurement from external suppliers occurs; Internal, where packaging, assembly or manufacturing takes place; Downstream, where distribution takes place, frequently by external distributors.

26. Copyright 2007 John Wiley & Sons, Inc. Chapter 826 The Structure & Components of Supply Chains (Continued)  Tiers of suppliers, a supplier may have one or more subsuppliers, and the subsupplier may have its own subsupplier(s) and so on.  Material flows are the physical products, raw materials, supplies and so forth that flow along the chain. Reverse flows – returned products, recycled products and disposal of materials or products.

27. Copyright 2007 John Wiley & Sons, Inc. Chapter 827 The Flows in the Supply Chain (Continued)  Information flows are all data related to demand, shipments, orders, returns and schedules as well as changes in any of these data.  Financial flows are all transfers of money, payments and credit-related data.  A supply chain involves a product life cycle approach, from “dirt to dust”.

28. Copyright 2007 John Wiley & Sons, Inc. Chapter 828 Problems along the Supply Chain  Poor customer service – not delivering products or services when and where the customers need them.  Poor quality product  High inventory costs  Loss of revenues  New technologies

29. Copyright 2007 John Wiley & Sons, Inc. Chapter 829 Problems along the Supply Chain (Continued)  Problems stem mainly from two sources: Uncertainties due to demand forecast, delivery times, quality problems in materials and parts that can create production delays; The need to coordinate several activities, internal units and business partners.  Bullwhip effect refers to erratic shifts in orders up and down the supply chain.

30. Copyright 2007 John Wiley & Sons, Inc. Chapter 830 8.6 Electronic Data Interchange and Extranets  Electronic data interchange (EDI) is a communication standard that enables business partners to exchange routine documents, such as purchase orders, electronically.  EDI translator converts data into a standard format before it is transmitted.

31. Copyright 2007 John Wiley & Sons, Inc. Chapter 831 EDI (Continued)  Business transactions messages include repetitive business transactions such as purchase orders, invoices, credit approvals, shipping notices and confirmations.  Data formatting standards are used.  EDI serves as a catalyst and a stimulus to improve the standard of information that flows between and among organizations.

32. Copyright 2007 John Wiley & Sons, Inc. Chapter 832 EDI Benefits  Minimize data entry errors  Length of messages are shorter  Messages are secured  Reduces cycle time  Increases productivity  Enhances customer service  Minimizes paper usage and storage

33. Copyright 2007 John Wiley & Sons, Inc. Chapter 833 EDI Limitations  Significant initial investment to implement  Ongoing operating costs are high due to the use of expensive, private VANs  Traditional EDI system is inflexible  Long startup period  Multiple EDI standards exist

34. Copyright 2007 John Wiley & Sons, Inc. Chapter 834  Let see figure 8.4

35. Copyright 2007 John Wiley & Sons, Inc. Chapter 835 Extranets  Extranets link business partners to one another over the Internet by providing access to certain areas of each other’s corporate intranets.  The main goal of extranets is to foster collaboration between business partners.  An extranet is open to selected B2B suppliers, customers and other business partners.

36. Copyright 2007 John Wiley & Sons, Inc. Chapter 836  Let see fig. 8.5

37. Copyright 2007 John Wiley & Sons, Inc. Chapter 837 Types of Extranets  A company and its dealers, customers or suppliers – centers around one company.  An industry’s extranet – major players in an industry team up to create an extranet.  Joint ventures and other business partnerships – partners in a joint venture use extranet as a vehicle for communications and collaboration.

38. Copyright 2007 John Wiley & Sons, Inc. Chapter 838  THE END OF SESSION 6 AND 7