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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  Business processes: - Workflows of material, information, knowledge - Sets of activities, steps - May be tied to functional area or be cross-functional  Businesses: Can be seen as a collection of business processes  Business processes may be assets or liabilities Examples of Functional Business Processes  Manufacturing and Production - Assembling the product  Sales and Marketing - Identifying customers  Finance and Accounting - Creating financial statements  Human Resources - Hiring employees Information Technology Enhances Business Processes in Two Ways: 1. Increasing efficiency of existing processes  Automating steps that were manual 2. Enabling entirely new processes that are capable of transforming the businesses  Change flow of information  Replace sequential steps with parallel steps  Eliminate delays in decision making 2.2 - Types of Information Systems 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) Business Intelligence Systems for Decision Support  Support middle management with monitoring, controlling, decision making, administrative activities  Management Information Systems (MIS)  Decision Support Systems (DSS)  Executive Support Systems (ESS) Management Information Systems (MIS)  Serve middle management  Provide reports on firm's current performance, based on data from TPS  Provide answers to routine questions with predefined procedure for answering them  Typically have little analytic capability Decision Support Systems (DSS)  Serve middle management  Support non-routine decision making  Often use external information as well as information from TPS and MIS  Model driven DSS - Example: Voyage-estimating systems  Data driven DSS - Example: Intrawest's marketing analysis systems Systems for Linking the Enterprise  Enterprise applications - Enterprise systems (ERP) - Supply Chain Management Systems (SCM) - Customer Relationship Management Systems (CRM) - Knowledge Management Systems (KMS) - Intranets and Extranets Enterprise Systems  Also known as enterprise resource planning (ERP) systems  Collect data from different function 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 Supply Chain Management (SCM) 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 Customer Relationship Management (CRM) 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 retention  Integrate firm's customer-related processes and consolidate customer information from multiple communication channels Knowledge Management Systems (KMS)  Su
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