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TECHNOLOGY AND INFORMATION SYSTEMS DDC 1583 CHAPTER 1 THE MODERN ORGANIZATION FUNCTIONING IN A GLOBAL ENVIRONMENT THE MORDEN ORGANIZATION FUNCTIONING IN A GLOBAL ENVIRONMENT Business Processes and Business Process Management Information system : Concept and Definitions. The Global Web- Based Platform Business Pressures, Organizational Responses and IT Support. Why Are Information System Important to Me? The Plan of the Book

2 Business Processes & Business Process Management
A business process is an ongoing collection of related activities that create a product or a service of value to the organization, its business partners and / or its customer. A process has inputs and outputs and its activities can be measured Many processes cross functional areas in an organization Example Product development involves research, design, engineering, manufacturing, marketing and distribution

3 Business Processes & Business Process Management
Accounting Business Processes Managing accounts payable Managing accounts receivable Reconciling bank account Managing cash receipts Managing invoice billings Managing petty cash Producing month-end close Producing virtual close Financial Business Processes Managing account collection Managing bank loan applications Producing business forecasts Applying customer credit approval and credit terms Producing property tax assessments Managing stock transactions Generating financial cash flow reports Marketing Business Processes Managing post-sale customer follow up Collecting sales taxes Applying copyrights and treatmarks Using customer satisfaction surveys Managing customer service Handling customer complain Handling returned goods from customer

4 Business Processes & Business Process Management
Producing sales leads Entering sales orders Training sales personnel Production / Operations management Business Processes Processing bills of materials Processing manufacturing change orders Managing master parts list and files Managing packing, storage, and distribution Processing physical inventory Managing purchasing Managing quality control for finished goods Auditing for quality assurance Receiving, inspecting, and stocking parts and materials Handling shipping and freight claims Handling vendor selection, files and inspections Human Resources Business Processes Applying disability policies Managing employee hiring Handling employee orientation Managing files and records Applying healthcare benefits Managing pay and payroll Producing performance appraisals and salary adjustments Managing resignations and terminations

5 Business Processes & Business Process Management
Applying training / tuition reimbursement Managing travel and entertainment Managing workplace rules and guidelines Overseeing workplace safety Management Information System Business Processes Antivirus control Computer security issues incident reporting Training computer users Computer user / staff training Applying disaster recovery procedures Applying electronic mail policy Generating Internet use policy Managing service agreements and emergency service Applying user workstation standards Managing the use of personal software. EXAMPLES OF BUSINESS PROCESSES

6 Business Processes & Business Process Management
Cross- Functional Processes - Cross Functional Processes meaning that no single functional area is responsible for their execution. - Multiple functional area collaborate to perform the process. - Each functional are must execute its specific process steps in a coordinated, collaborative way.

7 Business Processes & Business Process Management
Cross- Functional Processes Procurement Process * includes all of the tasks involved in acquiring needed materials externally from vendor. * Comprises 5 steps that are completed in three different functional areas of the firm: warehouse, purchasing and accounting. 1 The warehouse documents this need with a purchase requisition, which it sends to the purchasing department 2 In turn, the purchasing department identifies a suitable vendor, creates a purchase order based on the purchase requisition, and sends the order to the vendor 3 When the vendor receives the purchase order, it ships the materials, which are received in the warehouse 4 The vendor then send an invoice which is received by the accounting department 5 Accounting sends payment to the vendor, thereby completing the procurement process

8 Business Processes & Business Process Management
Cross- Functional Processes Fulfillment Process * is concerned with efficiently processing Customer Order. * is triggered by a Customer Purchase Order that is received by the sales department. * Sales then validates the purchase order and creates a sales order. * The sales order communicate date related to the order functional areas within the organization, and it tracks the progress of the offer. * The warehouse prepares and sends the shipment to the customer. * The customer then makes a payment, which account records.

9 Business Processes & Business Process Management
An organization’s business process can create a competitive advantage if they Enable the company less responsive and efficient. Example Illustrates the e- ticket purchasing business process

Excellence in executing business processes is widely recognized as the underlying basic for all significant measures of competitive performance in an organization. Consider these measures, for example:- Customer satisfaction The result of optimizing and aligning business process to fulfill customers needs, wants, and desires Cost reduction The result of optimizing operations and supplier process Cycle and fulfillment time The result of optimizing the manufacturing and logistics processes Quality The result of optimizing the design, development and production process Differentiation The result of optimizing the marketing and innovation processes Productivity The result of optimizing each individual’s work processes

Business Process Management (BPM) is a management technique that includes:- Methods Tools Helps companies improve profitability by decreasing costs and increasing revenues. Over time BPM can create a competitive advantage by improving organizational flexibility. BPM can provide cost benefits and increase customer satifaction To support the design, analysis, implementation, management and optimization of business process

12 INFORMATION SYSTEM: Concepts & Definitions
DATA, INFORMATION AND KNOWLEADGE Data items refer to an elementary description of things, events, activities, and transactions that are recorded, classified, and stored but not organized to convey meaning Information refers to data that have been organized so that they have meaning and value to the recipient Knowledge consists of data and/or information that have been organized and processed to convey understanding, experience, accumulated learning, and expertise as they apply to a current business problem KNOWLEDGE DATA INFORMATION Binary code, the foundation of information and knowledge, is the key to making complex decision

13 INFORMATION SYSTEM: Concepts & Definitions
INFORMATION TECHNOLOGY ARCHITECTURE An organization’s information technology architecture is a high-level map or plan of the information assets in an organization

INFORMATION SYSTEM: Concepts & Definitions INFORMATION TECHNOLOGY INFRASTRUCTURE An organization’s information technology infrastructure consists of the physical facilities, IT components, IT services, and IT personnel that support the entire organization Modern organizations operate within a global, Web-based platform, which is discussed next. DATABASE HARDWARE procedures procedures SOFTWARE NETWORK procedures procedures It takes technology (hardware, software, databases and network) with appropriate procedures to make a CBOS useful for people

The global, Web-based platform that has recently emerged spans the world and is best represented by the Internet and the functionality of the World Wide Web The platform enables individuals to connect, compute, communicate, collaborate, and compete anywhere and at any time. One of the biggest impacts this platform has had is the creation of new globalization opportunities. The three stages of globalization: Globalization 1.0 (1492 to 1800) – countries Globalization 2.0 (1800 to 2000) – multinational companies Globalization 3.0 (2000 and beyond) – groups and individuals

What external business pressures create threats and opportunities for today’s businesses? How have organizations responded to these pressures? How does IT support these organizational responses?


18 Business Pressures: Market
BUSINESS PRESSURES, ORGANIZATIONAL RESPONSES AND IT SUPPORT BUSINESS PRESSURES Business Pressures: Market Global economy and strong competition NAFTA, EU, etc. Rise of India and China Global labor costs Need for real-time operations The online marketplace never closes and up-to-the-minute information is required for organizational decision making The changing nature of the workforce The workforce is becoming more diverse and includes increasing numbers of women, single parents, minorities, and persons with disabilities Powerful customers Customers have access to vast amounts of information and have access to a large number of retailers and service providers

19 Business Pressures: Technology
BUSINESS PRESSURES, ORGANIZATIONAL RESPONSES AND IT SUPPORT BUSINESS PRESSURES Business Pressures: Technology Technological innovation and obsolescence New technologies are constantly being developed These new technologies must be considered when creating new innovative products, services, and processes Old technology rapidly becomes obsolete Information overload The amount of information collected, stored, and made accessible to organizations and individuals continues to grow Without proper IT tools, the information flood can be overwhelming IT’s such as search engines and data mining tools provide support for incorporating this vast amount of information into real-time organizational decision making

20 Business Pressures: Societal/Political/Legal
BUSINESS PRESSURES, ORGANIZATIONAL RESPONSES AND IT SUPPORT BUSINESS PRESSURES Business Pressures: Societal/Political/Legal Social responsibility Responsibility not only to traditional organizational stakeholders, but also society as a whole Compliance with government regulations and deregulation Protection against terrorist attacks Ethical issues Ethics relates to general standards of right and wrong Information ethics relates specifically to standards of right and wrong in information-processing practices (or other online activities)

BUSINESS PRESSURES, ORGANIZATIONAL RESPONSES AND IT SUPPORT ORGANIZATIONAL RESPONSES Strategic systems Customer focus and service (CRM), self-service Continuous improvement and business process reengineering Make-to-order and mass customization Better data management Business alliances E-business and e-commerce

BUSINESS PRESSURES, ORGANIZATIONAL RESPONSES AND IT SUPPORT IT SUPPORT FOR ORGANIZATION RESPONSES IT support for business activities has evolved quite dramatically from the 1950s through today This topic is discussed in more detail in the following chapter

23 Example: Grocery Store Checkout
Old Process New Process In the “old-old” economy, when you visited retail stores you placed your items in a shopping cart and proceeded to checkout The clerk manually entered the price for each item and you paid for them in cash The store gathered no information about the transaction other than receiving payment In the new economy you take your items to a self-service kiosk where you swipe the barcode for each item over a reader and then pay by cash, credit card or debit card In the coming generation of checkout technology all items with have wireless RFID tags allowing you to simply walk your cart through a device to total up the price and make payment

24 Example: Photography Old Process New Process
You buy film at the store, insert it into your camera, and take pictures Once you complete the film, sometimes weeks or months after you began the roll, you take it to the store (or mail it) for processing Go back to the store and pay for enlargements and duplications Send photos by mail to family and friends Video requires a second, different, camera Use a digital camera that can also take videos No film is needed, and no processing is required You can see the results immediately and enlarge and print photos quickly In minutes you can electronically send the pictures to your family and friends You can view the pictures on personal computers, personal digital assistants (PDAs), and other digital devices

Information systems are important to you for a variety of reasons:- First, information systems and information technologies are integral to your life. Second, the IS field offers many career opportunities. Finally, all functional areas in an organization utilize information systems. INFORMATION SYSTEM AND INFORMATION TECHNOLOGY ARE INTEGRAL TO YOUR LIVES There are many examples of the ways in which information systems and technologies are embedded in your lives. For example, thinks of all you can do online: Register for classes • Take classes, and not just classes from your university  • Access class syllabi, information, PowerPoints, and lectures • Research class papers and presentations • Conduct banking • Pay your bills • Research, shop, and buy products from companies or other people • Sell your “stuff”

INFORMATION SYSTEM AND INFORMATION TECHNOLOGY ARE INTEGRAL TO YOUR LIVES • Search for, and apply for, jobs • Make your travel reservations (hotel, airline, rental car) In addition to all the activities you can perform online, there are other examples of how information systems and information technologies are essential to your daily living. For example: you may not use a regular wire line telephone. Rather, you use a smart phone that has a calendar, an address

WHY ARE INFORMATION SYSTEM IMPORTANT TO ME? IT OFFERS CAREER OPPORTUNITIES Because information technology is vital to the operation of modern businesses, it offers many employment opportunities. The demand for traditional IT staff- programmers, business analysts, system analyst and designers. The information system field includes the people in organizations who design and build information systems, the people who use those systems, and the people responsible for managing those systems.


WHY ARE INFORMATION SYSTEM IMPORTANT TO ME? MANAGING INFORMATION RESOUCES Managing Information System in modern organizations is difficult, complex task. Information Systems have enormous strategic value to organizations. Information Systems are very expensive to acquire, operate and maintain. Factor contributing to the difficulty in managing information systems is the evolution of the management systems (MIS) function within the organization.


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