Chapter Seven- Textbook Notes.docx

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Computer Science
Computer Science 1032A/B
Diane Goldstein

CompSci 1032a Taylor Ward November 15, 2011 Chapter Seven: Information Systems for Competitive Advantage Achieving Competitive Advantage - From chapter three o Determine competitive strategies  Changing the product: by introducing/enhancing new or current products or services  Business processes: organizations use technology to help lock in customers, reduce costs, create entry barriers for competition in market Information systems effect on Competitive Advantage - Making the primary and support activities more productive than those of competitors - Increased productivity realized when business processes become more effective and more efficient - True for commercial companies, non-profit organizations and government Calculation Systems - Antiquated systems - Relieved workers of repetitive calculations; labour-saving devices - Produced little information - Examples: computing payroll and writing checks, inventory tracking Functional Systems - Facilitated work of single department or function - Next step o Functions added to calculation system programs providing more value (payroll expanded to become human resources) o Problem is their isolation (functional silos): systems designed to work independently of one another - in reality, function systems are inter-related o purchasing influences inventory, influences production, then customer satisfaction and sales - decisions appropriate for only single business function may be inefficient for entire business process Reorganized Porter’s Value Chain: Relationship to Functional Systems - Basic Types of Functional Systems - Marketing and sales systems, operations systems, manufacturing systems, HR systems and accounting CompSci 1032a Taylor Ward November 15, 2011 - Accounting systems Marketing Information Systems - Product management o Product and brand management o Assess effectiveness of marketing messages, advertising, and promotions Sales Information Systems - Sales forecasting: planning production, managing inventory, financial reporting - Customer management: generate follow-up business, turn prospects into and manage customers Functions of Sales and Marketing Systems - Prospect (or lead) generation: Mailings, emailings website - Lead tracking: Record leads, track product interests, maintain history of contacts - Customer management: Maintain customer contact and order history, report credit status, track product interests - Sales forecasting o Record individual sales projections, roll up sales projections into district, region, national, and international, track variance over time - Product and brand management o Obtain sales results from order processing or receivables systems, compare results to projections, assess promotions, advertising, and sales channels, assess product success in market segments, manage product life cycle Operations Information Systems Manufacturing Information Systems - Process data about inventories, manufacturing scheduling and operations, support production and planning, - Manufacturing philosophies o Push production planning  Organization creates schedule and pushes good through manufacturing and sales o Pull production planning  Responds to customer demand, reduction in inventory triggers production o “One-off” producers fall into neither category CompSci 1032a Taylor Ward November 15, 2011 Human Resources Information Systems Accounting Information Systems CompSci 1032a Taylor Ward November 15, 2011 Functional Systems - Many benefits - Limited since they operate in isolation o Data duplication (each application has own database, potential lack of data integrity) o Business processes disjointed across functions (produces lack of integrated enterprise info) o Limited information available at any one source o Inefficient decisions based on limited knowledge o Increased costs to organization Business Process Design/Redesign - Do not simply automate or improve existing functional systems - “paving cowpath” process of making efficient what already exists, making things easier, not necessarily changing how it is done - Consider creationg of new, more efficient business processes: integrate activities of all depts. involved in value chain, cross-departmental business processes take advantage of as many linkages as possible Challenges of Business Process Design/Redesign - Process design projects are expensive and difficult, may take a long time - Employees resist change, ultimate outcome is uncertain Industry Standard Processes - Many early business process design projects tailor-made, by mid-1990, software vendors designed integrated applications with built in industry-standard processes (integrate activities across departments, save costs and time of tailor-made process design) - Advantages: inherent business processes, use of tried and tested processes - Disadvantages: may be different from existing processes in organization, may require organization to change substantially CompSci 1032a Taylor Ward November 15, 2011 Integrated, Cross-Functional Systems - Operate across departmental boundaries: increased functionality, efficiency - Transition from functional systems is difficult - Integrated processings: requires coordination of departmental activities, need for clear line of authority - Interorganizational systems: systems used by two or more related companies - Most organizations have mixture of functional and integrated systems Cross-Functional Systems - Designed to overcome problems in functional systems, two cross-functional systems: customer relationship management, enterprise resource management systems Customer Relationship Management Systems - Organization customer centered support process: attracting, selling, managing, delivering, supporting customers, direct value chain activities involving customers, integrates 4 Customer Life Cycle phases, single repository for customer data: eliminates inconsistent data, all departments access customer info - Customer life cycles: marketing sends messages to target market, prospects order and need to be supported, support and resale increases value to existing customers, win-back processes categorize cutomers according to value Customer Life Cycle - Marekting, customer acquisition, relationship management, and loss/churn - Marketing sends messages to target market to attract customer
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