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BUSI 2400 (25)
Chapter 4

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BUSI 2400
Robert Riordan

Information Systems Chapter 4 Enterprise Systems • Value Chain: serial map of each activity that must happen (from initial customer interest & eventual purchase through 2 ultimate delivery of the product/service 2 the customer/end-user)  connected series of activities, each adds value or supports the addition of value to the firm’s G/S Information Systems That Support Business Activities Building an Understanding of the Value Chain • 5 core components of a typical value chain: 1. Inbound Logistics: includes receiving, warehousing, and inventory control of raw materials required 2 create a product or service 2. Operations: value-creating and proprietary activities that transform raw inputs into final product; can include R&D, manufacturing, and product design elements 3. Outbound Logistics: activities required 2 get finished product 2 the customer; including packaging, warehousing, order fulfillment 4. Marketing & Sales: all activities associated w/ defining and securing target market interest, getting buyers 2 purchase the product; including working with distributors, retailers, or online channels, and activities like competitive analysis, advertising, and pricing decisions 5. Service Activities: maintain and enhance the product’s value; including customer support, repair services, warranty, and recall o Moving through these components  add value @ each step • Value chain components can be further classified to: 1. PrimaryActivities: directly related 2 the production and distribution of organization’s products & services; activities that create the most direct business value 2. Support Activities: surrounds the primary activities; activities and organization conducts in support of or expansion of the business value created by the primary activities • 4 critical support activities that almost always exist in some form for most firms: 1. Firm Infrastructure (aka Administration): most organizations need some kind of infrastructure 2 exist 2. Technology Development and R&D: whatever technology resources & systems the organization needs 2 support its value chain 3. Human Resource (HR) Management: directly affects the people who perform the work that creates business value; HR manages compensation & benefits that reward employees 4 their work 4. Procurement: obtaining • Organization’s value chain is the sum of its primary & secondary support activities Information Systems Chapter 4 Enterprise Systems • Abusiness can increase its competitive advantage by incrementally changing the value-adding activities themselves • Value chain is always changing, adapting & improving Functional Information Systems (FIS) • Functional Information Systems (FIS): focus on activities of the functional department 2 improve its efficiency and effectiveness o Ex.Accounting information system provides instant access to information • w/o these systems, work would be tedious, too manually intense, take too much time to remain up-2-date and be far less efficient 4 firms • examples: Accounting (AIS), Marketing IS (CRM), Human Resources IS (HRIS), Financial (FIS), Manufacturing IS and Enterprise Resource Planning (ERP) Workflow Management Systems • Workflow: represents the steps, organizational resources, input & output data, and tools needed 2 complete a business process • By focusing on a business process from beginning 2 end, a Workflow Management System (WMS) (aka Business Process Management (BPM)): supports activities that several departments of the organization may carry out o Improves the costs & efficiency of the business & contributes to competitiveness o Typically provides tools 4 modelling the steps of the process; the model shows the flow of work, with the state of components  Benefits of a WMS: 1. Misplace/stalled work is reduced  improves efficiency & quality 2. Managers can focus more time on business decisions 3. B/c developing a WMS requires formal documentation of all procedures  more analysis & tighter control of the processes  better work assignments – the best person 4 the job – produces more efficient scheduling 4. Includes tools & features that allow users 2 work w/ and manage the processes & system itself 5. Some WMS will not have all capabilities needed 2 support the business rules of the organization Transact
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