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ITM 100 (123)
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Chapter 4

Chapter 4

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Information Technology Management
ITM 100
Ron Babin

Chapter 4 Enterprise Systems The value chain Value chain is a connected series of activities, each of which adds value or supports the addition of value to the firms goods or services 5 main parts of value chain are o Inbound logistics Receiving and warehousing raw materials needed to create a product or service o Operations Transform the raw materials into the final product o Outbound logistics Activities needed to get the finished product to the customer like packaging o Marketing and sales Activities that are convincing a buyer to purchase a product o Service activities Maintain and improve the products value such as customer support, warranty etc Value chain can be organized in to primary and secondary activities Primary activities creates business value for the company and its customers Companies also require support activities, these are activities a company does to support the creation of business value by the primary activities 4 critical support activities o Firm infrastructure (administration) o Technology development o HR management www.notesolution.com o Procurement Value chain is also useful for finding companies main processes and the activities and capabilities that it can use to have a competitive advantage over its competitors Information systems that support business activities Common IS are o Functional information systems (FIS) o Workflow management systems (WMS) o Transaction processing systems (TPS) o Management information and document management systems (MIS) (DMS) o Knowledgeable management systems (KMS) o Decision support systems (DSS) o Supply chain management (SCM) o Enterprise resource planning (ERP) FIS focuses on activities of the functional dept to improve its efficiency and effectiveness, for example accounting information system focuses on automating and informating accounting activities (pg 123 more FIS) WMS supports activities that several dept of a company may carry out, for example workflow in a typical online product order (pg 124) o Has benefits such as less delayed work which improves efficiency o Managers can focus more time on business decisions rather than on tracking work TPS allows transaction and activities and capture the key data created by the transaction o Transaction is an exchange of goods or services between 2 or more parties like businesses that creates a relationship between the parties, for example customer using a banks ATM to withdraw money o Transaction has 4 characteristics known as ACID (atomicity, consistency, isolation, durability) (pg 125) www.notesolution.com MIS stores processed transaction data as reports for managers o MIS shows 3 types of reports Periodic reports companys annual financial statements updated or created after a specific time period Exception reports monitors when and why exceptions occur of key values Demand reports created based on user requests o Executive information systems (EIS) designed to provide summary information about business performance to managers DMS enters, tracks, routes and processes many documents used in a company even the reports under MIS o Can create the documents electronically o Can convert documents to electronic form using imaging technology (scanners) o Used to maintain records and documents efficiently so that no paper documents required KMS is how the company recognizes, creates, manages and shares knowledge o To support tacit knowledge (peoples own knowledge from learning) KMS relies on collaborative software such as groupware o Groupware is a simple communication tool like email allows communication between team members to share data and information o Effective KM program can help business professionals make the value chain more efficient which might improve customer service and increase revenues as the company gets the products out to the market faster DSS help businesses use communications technologies, knowledge and models to organize and access data to perform decision-making activities o 5 types of DSS but model-driven DSS make the most significant contribution to decision making www.notesolution.com
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