1. Alter – Information Systems 4th e d. © 2002 Prentice Hall 1 Moving Towards E-Business As Usual

2. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 2 Opening Case - Dell Computer Business insight: Sell directly to customers Decide how much to produce based on demand estimates & contracts produce on demand What makes this approach possible? Outsourcing Negative holding costs! Mass customization Powerful order fulfillment system

3. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 3 Work Systems, Information Systems, and E-Business E-business = the practice of performing & coordinating business processes through the extensive use of information technology (IT) IT = computer and communication technologies E-business does NOT equal the Internet, though the growth of the Internet acted as a very powerful catalyst

4. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 4 Work System = a system in which people and/or machines perform a business process using resources (e.g., information, technology) to create products/services for internal or external customers

5. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 5 Information System = a work system that processes information, thereby supporting other work systems Capture Transmit Store Retrieve Manipulate Display

6. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 6 Four Main Themes: Businesses operate through systems Business professionals are part of all phases of building & maintaining information systems Technological advances drive business innovation The success of IT-based systems is NOT guaranteed

7. Alter – Information Systems 4th e d. © 2002 Prentice Hall 7 1. Businesses Operate Through Systems

8. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 8 Systems & Subsystems System = a set of interacting components that operate together to accomplish a purpose Subsystem = a system component Has all the features of a system, but it is part of a larger system

9. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 9 Figure 1.2

10. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 10 System Terminology: Purpose The reason for the systems existence The reference for measuring the systems success Boundary Separates the system from its environment Environment Everything pertinent to the system that is outside the boundary

11. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 11 Inputs Objects & information that enter the system from the environment Outputs Objects & information that enter the environment from the system

12. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 12 Figure 1.1

13. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 13 Business Processes & the Value Chain Business process A related group of steps (subprocesses) and/or activities that use resources (including information) to create value for internal or external customers Subprocess = a well-defined part of a process Activity = less well-defined process component Often an important role of IT is to transform an activity into a better-defined subprocess

14. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 14 A process must add value for its customers Always analyze whether a process or subprocess adds value or not An obvious but surprisingly often overlooked point

15. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 15 Business Processes & Functional Areas Traditional organizational structure is centered around functional areas May reinforce an inward-looking orientation Functional silos Current trend: reorganize around customer-oriented processes

16. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 16 Three Types of Processes Processes that cross functional areas Processes related to a specific functional area Activities & subprocesses occurring in every functional area Possible problems when functional areas are overemphasized

17. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 17 The Value Chain The set of processes used by a firm to create value for its customers. Includes: Primary processes – directly create the value as perceived by the customers Support processes – indirectly create value by supporting the primary processes

18. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 18 Figure 1.4

19. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 19 The Supply Chain & the Customer Experience (Fig. 1.5)

20. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 20 Supply chain – the transactions, coordination, and movement of goods between the firm and its suppliers Each layer provides an opportunity to increase value to the customer and/or improve efficiency Basic approach: Standardized electronic links Long-term agreements

21. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 21 The Trend Toward E-Business Much more than a cool Web site! E-commerce – the part of e-business that the customer experiences directly B2B (business-to-business) vs. B2C (business-to-consumer)

22. Alter – Information Systems 4th e d. © 2002 Prentice Hall 22 2. Phases in Building & Maintaining Systems

23. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 23 Figure 1.7 – Business Professionals Play an Important Role in All 4 Phases

24. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 24 1. Initiation Defining the need for a new work system or for the change of an existing one May occur as result of a known problem, or as part of a planning process

25. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 25 2. Development Acquiring & configuring hardware, software, and other resources Decide how the different parts of the system will operate Acquire the resources Create the documentation Testing

26. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 26 3. Implementation Making the new process operational Planning User training Conversion to the new system Follow-up

27. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 27 4. Operation & Maintenance Supporting the ongoing operation of the system + efforts to enhance it and correct possible problems

28. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 28 Table 1.4

29. Alter – Information Systems 4th e d. © 2002 Prentice Hall 29 3. IT As a Driving Force for Innovation

30. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 30 Main Trends Greater miniaturization, speed, and portability Greater connectivity + continuing convergence of computing and communications Greater use of digitized information & multimedia Better software and user interfaces

31. Alter – Information Systems 4th e d. © 2002 Prentice Hall 31 4. Obstacles When Applying IT in the Real World

32. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 32 Unrealistic Expectations & Techno-hype Technology is almost never a solution by itself Often vendors claim to sell solutions Be skeptical about the Internet hype

33. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 33 Difficulty Building & Modifying IT Systems Factors most often associated with success: User involvement Executive support Clear statement of requirements Proper planning Realistic expectations

34. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 34 Difficulty Integrating IT Systems One of the most difficult issues – examples: Medicares insurance claims (aborted) system 72 A unified system would have had to integrate 72 existing systems, built & operated by different insurance companies Y2K problem Integrated supply chains

35. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 35 Organizational Inertia Often a change that has a positive impact in some areas, may also have a negative impact in other areas Natural tendency of both organizations & individuals to resist change Overcoming inertia may require a consistent effort across all phases of the system life cycle

36. Alter – Information Systems 4t h ed. © 2002 Prentice Hall 36 Genuine Difficulty Anticipating What Will Happen No one really knows how a particular innovation will develop in time Eye-opening examples in table 1.7