Monday, October 25th, 2010
Chapter 4
Enterprise Systems
Value Chain:
-The value chain is a connected series of activities, each of which adds value or supports the addition of
value to the firm’s goods and services1
-Every action an organization takes, from securing the necessary raw materials (input) to making the
goods or service (process) to completing a transaction with a customer (output), is either a primary
activity or support activity
-A transaction is an exchange of goods or services (value) between two or more parties
Primary Activities:
-Primary activities are directly related to the production and distribution of the organization’s products
and services that create business value for the organization and its customers
-Example primary activities include inbound logistics (obtaining raw materials), operations (creating the
product), outbound logistics (shipping the product), and marketing, sales, and service (selling the
Supportive Activities:
-Support activities are value chain activities that an organization conducts to support the creation of
business value
-Support includes:
1. Firm infrastructure (which we will call administration)
2. Technology development
3. Human resource (HR) management
4. procurement
Information Systems that Supports Business Activities:
Functional Information Systems (FIS):
focus on departmental activities to improve efficiency and effectiveness
Workflow Management Systems (WMS)
A workflow represents the steps, resources, input and output data, and tools needed to
complete a business process
A workflow management system (WMS) or business process management (BPM)
focuses on a business process from beginning to end
WMS enables modelling the steps of the business process to show the flow of work
along with the state of the components
Transaction Processing Systems (TPS)
A TPS brings together the common components of IT
A TPS must control the flow of both the activities and data involved in the transaction
TPS must incorporate:
the logic for controlling and enabling transactions
the business rules of the organization
necessary error-handling logic
Management Information Systems (MIS)
Businesses use captured and stored data to create information, which is used for
decision making
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