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BUS 237 Chapter 7 Summary.docx

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Business Administration
BUS 237
Kamal Masri

CH 7 9 11 CHAPTER 7: IS FOR COMPETITIVE ADVANTAGE 3 types of Information Systems 1. CALCULATION SYSTEMS a. E.g. payroll, general ledger, inventory 2. FUNCTIONAL SYSTEMS a. Facilitated work of single department/business function b. “islands of automation” “functional silos” c. Inefficient working across corporations d. Payroll expanded to HR, inventory to operations/manufacturing 3. INTEGRATED, CROSS-FUNCTIONAL SYSTEMS a. Cross departmental, process-based b. Integrate activities across business processes c. E.g. inter-organizational systems (e.g. walmart), d. E.g. cross functional systems: CRM, ERP FUNCTIONAL SYSTEMS - MARKETING o Product management, lead tracking, sales forecasting, CRM - OPERATIONS o Order entry, order management, inventory management, customer service - MANUFACTURING o Push & pull production planning, scheduling systems, manufacturing operations systems - HR o Payroll/related compensation systems, recruiting, HR planning systems - ACCOUNTING & FINANCE o Accounting functional systems Problems with functional systems: - Data duplication + inconsistency from each application having own database o Lack of data integrity - Business processes disjointed - Limited info & lack of integrated info - Inefficient decisions based on limited knowledge (operational, tactical, strategic) - Increased overall costs and lost opportunities INDUSTRY STANDARD PROCESSES - Business process design/redesign o Organizations should create new, more efficient processes that integrate all processes in value chain - Cross-departmental business processes Challenges of business process design - Expensive, difficult, takes time and effort, employees resist change, ultimate outcome is uncertain Benefits of industry standard processes - Pre made integrated applications with built in industry standard processes saves hours of works (design) - Can integrate activities across departments - Saves the cost of tailor made process design (e.g. oracle, sap) Problems with industry standard processes - May be very different from current o Requires big change = disruptive - Hard for organizations to differentiate themselves from others CROSS FUNCTIONAL SYSTEMS CUSTOMER RELATIONSHIP MANAGEMENT (CRM) - Support business processes of attracting, selling, managing, delivering & supporting customers - Stores all customer data in single
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