chapter 7.docx

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Computer Science
Computer Science 1032A/B
Diane Goldstein

CHAPTER 7 Q1. How Do Organizations Gain a CompetitiveAdvantage Using IS? - IS can impact competitive advantage by making the primary and support activities in an organization more productive than those of competitors. Q2. What are the Fundamental Types of IS within Organizations? Calculation Systems - Calculation System is the very first information system. The goal of this system was to relieve workers of tedious, repetitive calculations Functional System - Functional System is the second era of IS. The goal of this system was to facilitate the work of a single department or function. - The problem with functional applications is their isolation - Functional applications are sometimes called islands of automation because they work independently of one another. = cannot produce productivity and efficiency necessary for many businesses Integrated, Cross Functional Systems - In the third era, systems were designed to integrate activities in an entire business process. - Because those activities cross departmental boundaries, such systems are sometimes called cross-departmental or cross-functional systems - Because they support complete business processes, they are also called process- based systems - As cross functional systems have become more sophisticated, some IS have begun to cross not only functional boundaries but also organizational boundaries - Systems that are used by two or more related companies are referred to as interorganizational systems - Most organizations today have a mixture of functional and integrated systems Q3. WhatAre Functional Systems - Marketing and Sales Systems - Product management is the primary functional system for marketing - Lead tracking records prospects and keeps track of sales contacts with potential customers. Sales forecasting is vital not only for planning production or managing inventories, but also for financial reporting by publicly held companies - Customer Management systems’ major purpose is to generate follw up business from existing customers Operations Systems - Operations Systems are used by non manufacturers such as distributors and retailers. - Order Entry can take place in house, where company employees enter orders, etc - Order Management systems track orders through the fulfillment process, handling back orders and order changes as well as providing order status - Inventory Management systems analyze sales activity and generate product order - Modern inventory management seeks to minimize the investment in inventory - Customer service provides info about the status of orders, respond to customers Manufacturing Systems - Manufacturing Information Systems support the transformation of materials into products - Most manufacturers typically choose one of two manufacturing philosophies; 1. Push Production Planning - The organization creates a production plan or schedule and pushes goods through manufacturing and sales 2. Pull Production Planning responds to customer demand - Organizations that produce custom - Scheduling Systems help organizations determine the optimal methods - Manufacturing Operations Systems control manufacturing plants and machines Human Resources Systems - Functional systems for human resources (HR) include payroll and related compensation systems - Other HR functions systems include those used for recruiting and for assessing employee performance Accounting and Finance Systems - Accounting Functional Systems support all of the organization’s accounting activities. - In the history of computing, accounting systems have reduced the time required to produce results. >> Many modern systems provide near-real time accounting info - Legislations require management to create internal controls to provide more reliable financial statements and protect the organization’s assets Q4. WhatAre the Problems of Functional Systems? - Functional systems provide many benefits to those who use them, but their benefits are limited because they operate in isolation 1. First, with isolated systems, data are duplicated because each application has its own database - The principle problem of duplicated data is a potential lack of data integrity 2. When systems are isolated, business processes are disjointed 3. A consequence of disjointed systems is the lack of integrated enterprise information - Obtaining a consolidated statement about cusomer’s order will require processing many system, with possibly inconsistent data 4.Another consequence is inefficiency 5. Finally, isolated functional systems can result in increased cost for the organization - Duplicated data, disjointed systems, limited information, inefficiencies all mean higher cost Q5. What Is the Importance of Industry Standard Processes? - Business Process Design’s/Business Process Design’s central idea is that organizations should not automate or improve existing functional systems. Rather, they should create new, more efficient business processes that integrate the activities of all departments involved in a value chain Challenges of Business Process Design - Process design projects are expensive difficult - Employees resist change so it makes a challenge even new system is designed - The ultimate outcome is uncertain Benefits of Industry Standard Processes - Many early business process design projects failed because they were tailor-made. - They were custom fit to a organization so just one company bore the cost of the design effort - When an organization acquires a business application from companies, the processes for using the software are built in or industry standard processes - If software is designed well, the industry standard process will effectively integrate activities across departments - Licensing an integrated application not only saves the organization time, expense, and agony of process design; it also enables the organization to benefit immediately from tried and tested cross departmental processes - There is a disadvantage, the industry standard processes may be very different from existing processes and thus require the organization to change substantially Q6. WhatAre Cross Functional Systems? - Cross functional systems were developed to overcome the problems of functional systems - Two types of cross functional systems are important today; 1. Customer Relationshop Management (CRM) 2. Enterprise Resource Planning (ERP) Customer Relationship Management (CRM) - Customer Relationship Management Systems support the business processes of attracting, selling, managing, delivering and supporting customers - CRM addresses all activities and events that touch the customer and provides a single repository for data about all customer interactions - CRM systems store all customer data in one place and make it possible to access all data about the customer - Because all customer data reside in one location, CRM processes can be linked to one anohter - Customer Life Cycle consists of four phases; 1. Marketing, 2. Customer Acquisition, 3. Relationship Management, 4. Loss/Churn 1. Marketing sends messages to target market to attract customer prospects 2. When prospects order, they become customers who need to be supported 3. Resell processes increase the value of existing customers 4. Inevitably, over time the organization loses customers. When this occurs, win-back processes categorize customers according to value a
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