Copyright 2010 John Wiley & Sons, Inc. Turban and Volonino Chapter 11 Interorganizational, Large-Scale and Global Information Systems Information Technology for Management Improving Performance in the Digital Economy 7th edition John Wiley & Sons, Inc. Slides contributed by Dr. Sandra Reid Chair, Graduate School of Business & Professor, Technology Dallas Baptist University Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. Chapter Outline 11.1 Interorganizational Activities and Order Fulfillment 11.2 Interorganizational Information Systems and Large-Scale Information Systems 11.3 Global Information Systems 11.4 Facilitating IOS and Global systems: From Demand-Driven Networks to RFID Copyright 2010 John Wiley & Sons, Inc.

Chapter Outline (cont’d) 11.5 Interorganizational Information Integration and Connectivity 11.6 Partner Relationship Management and Collaborative Commerce 11.7 Managerial Issues Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. Learning Objectives Describe interorganizational activities, particularly order fulfillment. Define and classify interorganizational information systems. Define and classify global information systems. Identify the major issues surrounding global information systems. Present demand-driven networks and RFID as supply chain facilitators. Copyright 2010 John Wiley & Sons, Inc.

Learning Objectives – cont’d Explain B2B exchanges, hubs, and directories. Describe interorganizational integration issues and solutions. Understand Partner Relationship management and its relationship to collaborative commerce. Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. Figure IT 7eU provides opportunity to discuss overview of IT’s role in corporate strategy setting and its intricate importance to performance as business solutions and the resulting profitability. Throughout the “semester” student learning will be evolving surrounding this chart making it good to begin by going back to it to integrate learning. Figure IT7eU Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. Boeing’s 787 Dreamliner Problems – Losing market share to major competitors. Economic recession world-wide. Solution – IT to expedite design, reduce problems, reduce costs, cycle time & assembly time. Implemented technologies to facilitate access, sharing, & storage of critical information. Results – May be most successful commercial airplane launch in history. Click image for homepage. Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. 11.1 Interorganizational Activities and Order Fulfillment On demand enterprise – order began when received. Build to order, mass customization. On demand & real time – entire fulfillment cycle would be primed to respond to real-time conditions. Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. Logistics Process of planning, implementing, & controlling the efficient & effective flow & storage of goods, services, & related information from point of origin to point of consumption. For much more & an overview on this topic – click the image: Includes inbound, outbound, internal & external movement; return of materials & goods. Includes order fulfillment. Key aspects are delivery of materials or products at the right time, to the right place, & at right cost. Article can aid to facilitate discussion of improved productivity & reduced costs thru automation of order fulfillment activities. Automated Order Fulfillment Increases Distribution Center Productivity by 80% Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. Figure 11.1 Informational slide. Typical order fulfillment process is illustrated in this figure. Order fulfillment and the logistics system. Copyright 2010 John Wiley & Sons, Inc.

Problems – Solutions Involve Automation Delays in transportation / shipments Human errors in information sending Over-or-under stocked inventories Shipments to wrong places or wrong quantities Late or wrong reporting on delivery Slow or incorrect billing Difficult product/part configuration Inability of IT systems of 2 organizations to “talk” to each other High cost of expedited shipments Automation will increase speed, reduce (or eliminate) errors, reduce cost, minimize delays, reduce inventories. Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. 11.2 Interorganizational Information Systems and Large-Scale Information Systems Copyright 2010 John Wiley & Sons, Inc.

IOSs Enable BOTH Partners to…. Reduce costs of routine transactions Improve quality of information flow by reducing/eliminating errors Compress cycle times Eliminate paper processing & associated inefficiencies/costs Transfer & processing of information made easier for users Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. Types of IOS B2B trading systems B2B support systems Global systems Electronic funds transfer (EFT) Groupware Shared databases Task students to come with examples. Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. 11.3 Global Information Systems Copyright 2010 John Wiley & Sons, Inc.

Multinational Companies Use Global Information Systems Companies that operate in several countries…. Headquarters in home country…… These are examples of multinational companies that use global information systems. Companies operate in several countries, have headquarters in home country, and manufacture/sales/research in other countries. And……manufacturing........sales……….& research in other countries…. Copyright 2010 John Wiley & Sons, Inc.

Benefits of Global Information Systems Partners make decisions, monitor transactions & provide controls at a reasonable cost utilizing email, EDI, web, & extranets. ERP can help standardize routine information world-wide. Collaboration enhanced with groupware software. Video teleconferencing & screen sharing are useful for successful project management. Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. 11.4 Facilitating IOS and Global Systems: From Demand-Driven Networks to RFID Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. Problem – increased internet sales made order fulfillment & after-sale customer service overwhelming for a small company. Solution – outsource delivery to FedEx & automation of order fulfillment process. Results – greater customer satisfaction & retention. Copyright 2010 John Wiley & Sons, Inc.

Benefits of Demand-Driven Supply Networks Lower supply chain costs Improved perfect-order performance Reduced days of inventory Improved cash-to-cash performance Customer-centric approach Bullwhip effect is minimized Probabilistic optimization is used Copyright 2010 John Wiley & Sons, Inc.

Real-Time Demand-Driven Manufacturing Quick & efficient response to demand. Provides customers with what they want, when & where they want it. Effective communication is essential. Partnerships share profit goals, design responsibility, on-time deliveries & continuous performance reviews. Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. Figure 11.2 All parts in the partnership must be focused on the goals, profit, strategy for the collaborative body; not just be internally focused. One must not benefit while another does not for total effectiveness & potential competitive advantage. Discuss the reality of it for most supply chain agreements. There is almost always one component that will benefit over another. Real-time demand-driven manufacturing. (Source: People Talk, “Real Time Demand Driven Manufacturing,” 15(3), July-Sept. 2004, pp. 14-15. XXPLANATIONS@ by XPLANE@, 2005, XXPLANE.com, courtesy of Oracle.) Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. Figure 11.3 How might RFID improve the supply chain? Because RFID are used by all companies, automatic alerts can be sent within each company & between companies. No longer need to count inventories. Benefits can go down several tiers within the supply chain. Rapid checkout in a retail store, eliminating need to scan each item will be future availability. How radio frequency ID tags smooth supply chains. Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. Figure 11.4 RFID transmits real time information about location of merchandise. RFID at retailers used to locate merchandise, control inventory, prevent theft, & expedite processing of relevant information. How RFID works in a manufacturer-retailer supply chain. (Source: Drawn by E. Turban.) Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. RFID Size of pinhead, or grain of sand. Includes an antenna & chip that contains an electronic product code (EPC). EPC stores more than a barcode. Passive tracking device. Cost may be too high. Atmospheric interference. Links are to YouTube videos that give visual examples of RFID applications & uses. These are helpful to stimulate discussion & critical thinking by students. How RFID works RFID Chips-how they work Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. Figure 11.5 Informational slide. A system of several interconnected public exchanges is shown in this figure. In this example, there are 3 interconnected exchanges. In other cases there may be only 1 exchange for an entire industry. Web-based supply chain involving public exchanges. Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. Figure 11.6 Refer to IT at Work, 11.3. Asite is organizational example of electronic hub. A structure of an electronic hub is shown in this figure. Electronic hub (bottom) compared to traditional intermediaries (top). (Source: Drawn by J. Lee & E. Turban.) Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. 11.5 Interorganizational Information Integration and Connectivity Copyright 2010 John Wiley & Sons, Inc.

Integrating IS of Merging Companies Establish IT leadership team Select option with lowest integration risks Customer-facing applications must have priority Offer generous incentives to retain top talent Maintain high morale Use rich communication media to read emotions & recognize successes Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. 11.6 Partner Relationship Management and Collaborative Commerce Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. Figure 11.7 E-supply chain is based on integration & collaboration. The core idea of this model is that an e-supply chain is based on integration & collaboration. The supply chain processes are connected, decisions are made collectively, performance metrics are based on common understanding, information flows in real time & the only thing a new partner needs in order to join the SRM system is a Web browser. Supplier relationship management (SRM). (Source: B. Schecterle, “Managing and Extending Supplier Relationships, “ People Talk, April-June 2003, courtesy of Oracle Corp.) Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. Problem – low sales & heavy debt Solution – CRM software tool customized for PRM that would track contacts & communications between Piper & its dealers & customers. Results – industry leader in quality, excellence, & customer care. Click image for hot link to home page. Refers to IT At Work, 11.4. Why does the company need such an elaborate program? How would you justify it? Describe the major features of the CRM/PRM program. Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. 11.7 Managerial Issues Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. Top Managerial Issues Web pages require language translation System selection Partners’ collaboration New infrastructures Globalization Partner & supplier relationship management Using ERP Copyright 2010 John Wiley & Sons, Inc.

Copyright 2010 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in section 117 of the 1976 United States Copyright Act without express permission of the copyright owner is unlawful. Request for further information should be addressed to the Permission Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the Information herein. Copyright 2010 John Wiley & Sons, Inc.