Chapter 2 & 14

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Information Technology Management
ITM 102
Vikraman Baskaran

ITM – Chapter 2 Notes Business Processes examples Functional Area Business Process Manufacturing and production - Assembling the product - Checking for quality - Producing bills of material Sales and marketing - Identifying customers - Making customers aware of the product - Selling the product Finance and accounting - Paying creditors - Creating financial statements - Managing cash accounting Human resources - Hiring employees - Evaluating employees’ job performance - Enrolling employees in benefits plans How Information Technology Enhances business Processes - Automate many steps in business processes (Example: check clients credit, or generating an invoice and shipping order) - New technology can change the flow of information, making it possible for more people to access and share information. - Change business to make it more efficient or effective - Collection of business activities - How work is organized, coordinated and focused to deliver a produce to service Transaction Processing Systems (TPS) - Operational manager need a system that keeps track of the elementary activities and transactions of the organization, such as sales, receipts, cash deposit, payroll, credit decisions and the flow of materials in a factory. - Computerized system that performs and records the daily routine transactions necessary to conduct business, such as sales order entry, hotel reservations, payroll, employee record keeping, and shipping - Managers need TPS to monitor the status of internal operational and the firm’s relations with the external environment - Major producers of information for other types of systems (Example: payroll system, accounting, general ledger system and etc) - TPS is often the central point of a business, since it failure it can lead to a firm’s demise and perhaps linked to other firms. - Management Information System and Decision-Support Systems (MIS) - Middle management needs systems to help with monitoring, controlling, decision-making and administrative activities. - Designates a specific category of information systems serving middle management - Provides middle managers with reports on the organization’s current performance - Summarize and report on the company’s basic operations using data supplied by transaction processing system Decision-Support system (DSS) - Supports non-routine decision making for middle management - Focus on problems that are unique and rapidly changing in which the procedure for arriving at the solution may not be fully predefined in advance - Use internal information from TPS and MIS - Bring in information from external sources (Example: current stock prices, product process of competitors) - Designed so that users can work with them directly; these systems include user friendly software - Model driven DSS - Data driven DSS Executive Support Systems (ESS) - Senior managers need systems that address strategic issues and long-term trends, in both the firm and external environment - Address non-routine decisions requiring judgement, evaluation and insight because there is no agreed-on procedure for arriving at the solution - Present graphs and data from many different sources through an interface or information delivered through a portal - Designed to incorporate data about external events (example: new tax or competitors) Enterprise Applications - Systems that span functional areas, focus on executing business processes across the business firm and all levels of management and may extend outside the organization - Help business become more flexible and productive by coordinating their business processes more closely and integrating groups of processes so they focus on efficient management of resources and customer service Enterprise System (Enterprise resource planning)(ERP) - Large organization typically has many different kinds of information systems built around different functions, organizational levels and business processes that can’t be automatically exchange information - Collect data from various key business processes in manufacturing and production, finance, account, sales, marketing and human resources and storing the data in a single central data repository - Supply Chain Management Systems (SCM) - Help business manage relationships with their suppliers - Help suppliers purchase firms, distributors and logistics companies share information about orders, production, inventory levels, and delivery of products and services so they can make better decisions about organize and schedule sourcing, production, and distribution - Ultimate objective is to get correct amount of products to the point of consumption with the least amount of time and lowest cost - One type of interorganizational system since they automate the flow of information across organizational boundaries Customer Relationship Management Systems (CRM) - Help firms manage relationships with customers - Provides information to coordinate all the business processes that deal with customers in sales, marketing, and service to optimize revenue, customer satisfaction and customer retention. - Help firms identify, attract and retain the most profitable customer; better service to existing customers; and increase sales - Consolidate and integrate customer information from multiple communication channels (example: telephone, email, retail outlets, wireless devices, and web) Knowledge Management Systems (KMS) - Enable organizations to better manage processes for capturing and applying knowledge and expertise - Collect all relevant knowledge and experience in the firm and make it available whenever and wherever needed to improve business processes and management decisions - Support processing for acquiring , storing, distributing and applying knowledge, and processes for creating new knowledge and integrating it into the organization - Include enterprise-wide systems for managing and distributing documents, graphics and other digital knowledge objects Intranets and Extranets - Technology platforms than specific applications - Tools firms use to increase integration and expedite the flow of information within the firm and with customers and suppliers Intranet - Internal networks built with the same tools and communication standards (internet) and are used for the internal distribution of information to employees and as repositories of corporate policies, programs and data - Centres on a portal that provides a single point of access to information from several different systems and to documents using Web interface. - Portal can be customized to suit information needs of specific business groups and individual users if required (feature email, collaboration tools and tools for searching internal corporate systems and documents) Extranets - Expedite the flow of information between the firm and its suppliers and customers - Intranets extended to authorized users outside the company - Can be used to allow different firms to collaborate on product design, marketing, and production E-Busines
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