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ITM 100 (123)
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Chapter 2


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Ryerson University
Information Technology Management
ITM 100
Deb Fels

Chapter 2: How Businesses Use Information Systems 2.1- Business Processes and Information Systems: Business Processes:  The manner in which work is organized, coordinated, and focused to produce a valuable product or service  Every business is a collection of business processes  Unique ways in which organizations coordinate and organize work activities, information, and knowledge to produce a product or services  Workflows of material, information, knowledge  Sets of activities, steps  May be tied to functional area or be cross-functional  Examples of Business Processes: Functional area Business Process Manufacturing/Production -assembling, checking, producing Sales/Marketing -Identifying customers, selling the product, and making customers aware of the product Finance/Accounting -creating financial statements Human Resources -hiring employees, evaluating employees job performances. How Information Technology Improves Business Processes: • increase efficiency of existing processes • enable new processes that can transform the business • Increasing efficiency of existing processes • Automating steps that were manual • Change flow of information • Replace sequential steps with parallel steps • Eliminate delays in decision making 2.2- Types of Information Systems: Systems for Different Management Groups: 1) Transaction Processing Systems: • Perform and record daily routine transactions necessary to conduct business Examples: sales order entry, payroll, shipping • Allow managers to monitor status of operations and relations with external environment • Serve operational levels • Serve predefined, structured goals and decision making • Must pass ACID test (Atomicity, Consistency, Isolation and Durability) 2) Business Intelligence Systems for Decision Support:  Support middle management with monitoring, controlling, decision making, and administrative activities  Management Information Systems (MIS): specific category of information system serving the middle management. Provides the middle managers with reports on the organizations current performance to monitor and control the business and predict future performance  Decision Support Systems (DSS): IS at the organizations management level that combine data and sophisticated analytical models or data analysis tools to support semi-structured and unstructured decision making  Executive Support Systems (ESS): IS at the organizations strategic level designed to address unstructured decision making through advanced graphics and communications. Systems for Linking the Enterprise: Enterprise Applications: help businesses become more flexible and productive by coordinating their business processes more closely. 4 Major Enterprise applications: 1) Enterprise Systems:  Also known as enterprise resource planning (ERP) systems  Collect data from different functions and store data in single central data repository  Resolve problem of fragmented, redundant data  Enable: - Coordination of daily activities - Efficient response to customer orders - Use of valuable information for improved management decision making 2) Supply Chain Management Systems:  Manage firm’s relationships with suppliers  Inter organizational systems  Share information about - Orders, production, inventory levels, delivery of products and services  Goal: Right amount of products to destination with least amount of time and lowest cost 3) Customer Relationship Management Systems:  Provide information to coordinate all of the business processes that deal with customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention  Integrat
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