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Chapter 4

ITM 102 Chapter Notes - Chapter 4: Business Process Management, Management Information System, Enterprise System

Information Technology Management
Course Code
ITM 102
David Atkinson

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Value chain: connected series of activities, each of which adds value or supports the addition of
value to firms goods or services
Five core components:
1. INBOUND LOGISTICS receiving, warehousing, and inventory control of raw
materials required to create product or service
2. OPERATIONS value-creating and often proprietary activity that transforms raw
inputs into final product
3. OUTBOUND LOGISTICS activities required to get finished product to customer,
including packaging, warehousing, and order fulfillment
4. MARKETING AND SALES activities associated with getting buyers to purchase
product, including working with distributors, retailers or online channels, marketing,
advertising, and pricing
5. SERVICE ACTIVITIES maintain and enhance products value, including customer
support, repair services, and warranty and recall
Classified into two activities:
1. PRIMARY ACTIVITIES directly related to production and distribution of
organizations products and services
Creates business value for organization and customers
2. SUPPORT ACTIVITIES activities conducted to support creation of business value
by primary activities
Four critical support activities:
i.Firm infrastructure (administration)
ii.Technology development
iii.Human resource (HR) management
iv. Procurement
Useful tool for defining organizations processes, activities, and competencies that it can
use to gain competitive advantage
FUNCTIONAL INFORMATION SYSTEMS (FIS) focus on activities of functional
department to improve efficiency and effectiveness
Includes accounting, marketing, human resources, financial, and manufacturing
information system
WORKFLOW MANAGEMENT SYSTEMS (WMS) supports activities that several
departments of organization may carry out; also referred to as business process management
Workflow: represents steps, organizational resources, input and output data, and
tools needed to complete business process
Includes tools and features that allow users to work with and manage
processes and the system itself

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Will not have all the capabilities needed to support business rules of organization
Business rule is a statement that defines or constrains some aspect of
businessintended to assert business structure or to control or influence
behaviour of business
Benefits of WMS:
i.Less misplaced or stalled work, which improves efficiency and quality
ii.Managers can focus more time on business decisions rather than on tracking work
iii.Requires formal documents of all procedures, more analysis and tighter control of
processes, which leads to better work assignments and produces more efficient
TRANSACTION PROCESSING SYSTEMS (TPS) enable transaction activities and capture
key data created by transaction
Transaction: exchange of goods or services (value) between two or more parties that
creates relationship
Has four characteristics (ACID) allow organizations to create systems that can handle
large numbers of simultaneous transactions:
i.Atomicitytransaction must be unequivocally completed; if error occurs,
transaction should be reset to previous state
ii.Consistencyunchanging properties of data must be preserved; data captured by
transaction must fit within rules of data storage
iii.Isolation – transactions occurring at the same time should be executed
iv. Durability – completed transactions should be permanent
MANAGEMENT INFORMATION SYSTEM (MIS) storing processed transaction data as
reports for managers; produced large volumes of information because of limited ability to sort
and process data to specific user needs
Three types of reports:
i.Periodic reportsupdated and generated after specific time period has passed
ii.Exception reportsmonitor when exceptions occur of key values, defined as
critical to operation
iii.Demand reports – generated based on user request
Executive information systems (EIS): designed to provide summary information about
business performance to those making higher-level strategic decisions
DOCUMENT MANAGEMENT SYSTEM (DMS) enters, tracks, routes, and processes many
documents used in organization; can create documents electronically or convert them to electrons
form using imaging technology
KNOWLEDGE MANAGEMENT SYSTEMS (KM) how entity recognizes, generates,
manages, and shares knowledge
Two types of knowledge:
i.Explicit knowledgeanything that can be written down, stored, and codified
ii.Tactic knowledgethe know-how that people have to learn through experience,
which is difficult to write down and share
Groupware: providing shared workspaces to store common files and
tools for conferencing and meeting support; can be divided into three
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