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Chapter 7

Chapter 7

3 Pages
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Department
Commerce
Course Code
COMM 190
Professor
Mosey Nicholas J

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Chapter 7: Competitive Advantage and Business Processes What are the Fundamental Ways of Achieving Competitive Advantage?  One way is to enhance the product or service through information systems  The second way is through business processes  look for technology to help retain customers, reduce costs, and create entry barriers  In effect, companies are making their primary and support activities more productive compared to those of competitors o Happens when business process become more effective, efficient, or both What are Business Functions and Functional Systems?  Business functions are the primary and support activities in an org’s value chain  A functional system is the second era of IS  the goal is to facilitate the work of a single department/function  add more features over time to provide more value & assistance Functional Silos and Cross-Functional Systems  The problem with functional applications is their isolation o Often called functional silos because they are designed to work independently  The separation makes it seems as if various departments in the same company should work separately and independently of each other  the truth is that they are interrelated  This realization lead to cross-functional systems which integrate data and business processes across different departments and systems  Interorganizational systems: info systems processing routine transactions between + orgs Why are Functional Systems Changing?  As mentioned, the benefits of functional systems are limited because the systems operate in isolation  leads to: o Data duplication and inconsistency; disjointed processes; limited info and lack of integrated info; isolated decisions lead to inefficient overall activities, ↑ expenses How Can Business Processes Be Improved?  Before talking about how technology can improve businesses processes, it’s important to note they can be improved other ways too by 1) adding resources, 2) adding increased specialization, and 3) changing/eliminating unproductive activities  First step in considering how IT can improve your business is understanding where improvements might take place o Change activities so you get more/same done w. same/less resources, respectively  Business process design involves the creation of new, usually cross-functional, business practices during IS development o Orgs do not create new IS to automate existing business processes but use technology to enable new, efficient business processes Integrating Functional Systems: AEI and ERP  Integrating these system can be very complex and requires careful thinking  Here are two approaches to integration  Enterprise application integration (EAI) is an approach to combining functional systems which uses layers of software as a bridge to connect different functional systems together o The data for each functional system, stays with the functional system o The EAI server pulls whatever data from each functional system which acts to integrate the necessary information from the functional systems  The second approach is enterprise resource planning o There is a single central database, people in the functional areas use
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