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Chapter 7

Chapter 7 Info Systems for Competitive Advantage.pdf

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Business Administration
BUS 237
Maryam Ali

Chapter 7 Info Systems for Competitive Advantage June-26-12 8:47 PM History of IS in Organizations Calculation Systems • Very first IS • Eliminate tedious calculations • Payroll paycheque, balance sheet, inventory records Functional Systems • Natural expansion of calculation systems • Improveoperation & managementof depts. • E.g. payroll → HR, inventory → operations/manufacturing • Con: isolated, functional silos, work independently Integrated, Cross-Functional Systems • AKA cross-departmentalsystems • Business process activities cross dept. boundaries InterorganizationalSystem • Systems used by 2 or morerelated companies Functional Systems Function Example Info Systems Marketing and sales Product management Lead tracking Sales forecasting Customer management Operations Order entry Order management Inventory management Customer service Manufacturing Inventory Planning Scheduling Manufacturing operations HR Payroll and compensation Recruiting Assessment Development and training HR planning Accounting and finance General ledger Financial reporting A/R A/P Cost accounting Budgeting Cash management Treasury management Marketing & Sales Productmanagement • Primary function • Assess how well marketing is working • Sales compared to forecast, history, etc. to adjust money to where it is needed Lead tracking • Record prospects, keep track of sales contracts with potential customers Sales forecasting • Vital for planning production, managing inventory,and financial reporting Customer management • Generate follow up business with existing customers Operations Used by non-manufacturers, e.g. distributors & retailers Order entry • Make orders, either by employeesor on e-commerce Order management • Track orders, handling orders and changes Inventorymanagement • Analyze sales activity, generate product orders as required • Balancing act between cost of carrying excessive inventoryand cost of lost orders from not enough inventory • Seek to minimize inventoryinvestment Customer service • Processcomplaints, respond to product issues, receive returned goods Manufacturing Support transformationof materials into products Inventory • Raw materials, WIP, finished goods inventory Planning • Push production ─ make products to sell • Pull production ─ respond to customer demand • "One-off" (custom) • Manufacturer chooses a planning system to match philosophy Scheduling • Help organizations determine optimal methods • Help organizations determine optimal methods Manufacturingoperations • Control plants & machines HR In large organizations, used to categorize employee skills and training req's HR Planning • Ensure enough workers with needed skills to fill job req's Accounting & Finance Systems reduce time needed to provide accounting info. Downsides ─ isolated systems • Data duplication → inconsistent data → loss of data integrity • Disjointed processes,bothersometo send data across depts. • Lack of integrated info • Isolated decisions → inefficient overall activities • Increased expense • All lead to need of change of functional systems Business Process (Re)Design • Organizations should not simply automateor improveexisting functional systems (paving the cowpath) • Should establish more efficient and integrated activities of departmentsinvolved in value chain Challenges • Expensive, difficult • Complex, require many people to agree on changes • Time consuming • Resistance to change • Uncertain outcomes Benefits • Pre-made applications save hours of design work • Industry standard processes • SAP R/3 ○ Advantage: save time from design, use tried an
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