ADMS 2511 Chapter Notes - Chapter 1-10: Business Process Management, Enterprise Application Integration, Information System

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Chapter 1
Information Technology: Any computer based tool that people use to work with information and to
support the information an information processing needs of an organization
Information System: Collects, processes, stores, analyzes and disseminates information for a
specific purpose
Important to study IT because:
1) Informed user a person knowledgeable about IS & IT
2) Allows you to benefit more from IT
3) In a position to enhance the quality your organizations IT applications
4) Keeps a person abreast with new IT and rapid developments to existing
5) Help improve organizations performance and teamwork as well as your own productivity
Data Items: Elementary Descriptions of things, events, activities, and transactions that are recorded,
classified, and stored but not organized to convey any specific meaning
Information: data that have been organized so that they have a specific meaning to the participant
Knowledge: consists of data/information that have been organized and processed to convey
understanding, experience, accumulated learning, and expertise as they apply to a specific problem
Computer based information system: information system that uses computer technology to
perform some or all of its intended tasks. Basic components include:
1) Hardware: consists of processor, monitor, keyboard, and printer
2) Software: program or collection of programs that enable the hardware to process data
3) Database: collection of related files or tables containing data
4) Network: connecting system that permits different computers to share resources
5) Procedures: instructions for combining the above components in order to process
information and generate desired output
6) People: Those individuals who use the hardware and software, interface with it, or use its
Types of Information systems:
1) Functional Area information System: supports a particular area within the organization
2) Enterprise resource planning: designed to correct a lack of communication among functional
areas by integrating the functional area ISs via a common database
3) Transaction Processing system: supports the monitoring, collection, storage and processing of
data for a particular functional area
a. Collects data continuously in real-time
b. Considered critical because they support core operations
- ERP and TPS function primarily within a single organization
Inter-organizational systems: connect two or more organization systems
- Support supply chains (flow of materials, info and money from suppliers all the way to
Office automation systems: support clerical staff, lower and middle managers and knowledge
workers. Use OASs to develop documents, schedule resources and communicate
Business Intelligence systems: computer-based support for complex, non-routine decisions,
primarily for middle managers and knowledge workers. Enable users to perform their own data
Expert systems: duplicate work of human experts by applying reasoning capabilities, knowledge,
and expertise within a specific domain
Dashboards: special form of IS that support all managers of the organization by providing rapid
access to timely information and direct access to structured information in the form of reports
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Chapter 2
Business process: an ongoing collection of related activities that create a product or a service of
value to the organization, its partners and/or its customers
- Process has inputs, outputs, and its activities can be measured
- Can be cross-functional or just a single department
- Cross-functional Business process: multiple areas are responsible for collaborating and
performing the process. Each functional area must execute its specific process steps in a
coordinated, collaborated way
o Can create a competitive advantage if they enable the company to innovate or to
execute better than its competitors.
Business Process Reengineering: a strategy for improving the efficiency and effectiveness of an
organization’s business process.
- Key is to examine BP from a clean sheet perspective and then determine how to best
reconstruct those processes to improve their business functions
- Success BRP will lead to BPM
Business process management (BPM): a management technique that includes methods and tools
to support the design, analysis, implementation, management and optimization of business processes
- Helps improve profitability by decreasing costs and increasing revenues
- Can create a competitive advantage by decreasing cost and increasing flexibility
- Can provide increased customer satisfaction and cost benefits
Business Environment: combination of social, legal, economic, physical, and political factors in
which business conducts their operation
1) Market Pressures: generated by global economy, intense competition, the changing nature or
the workforce and powerful customers
a. Globalization: interdependence and integration of economic, social, cultural, and
ecological facets of life made possible by rapid advances in information technology.
i. Globalization 1.0- 1492 to 1800. How much muscle, steam power, horse
power a country could deploy
ii. Globalization 2.0 1800-2000. Force behind globalization was emergence of
multinational companies
iii. Globalization 3.0. Focus on individuals. Focus on Friedman’s 10 forces: fall
of berlin wall, Netscape going public, development of workflow software,
uploading, outsourcing, offshoring, supply chaining, insourcing, informing,
the steroids
b. Changing nature of the workforce: workforce is becoming more diversified. IT is
easing integration of designated groups into workforce
c. Powerful customers: customers are now more knowledgeable than before.
Organizations understand their importance and have increased efforts to retain
them. Trying to practice CRM
2) Technology pressures:
a. Information overload: amount of information doubles every year on the Internet. To
make decisions effectively and efficiently, managers must be able to access,
navigate, and use these vast stores of data, information and knowledge
b. Technological innovation and obsolescence: state of the art technology today may
be obsolete tomorrow
3) Societal/political/legal pressures: Issues ranging from environment to company to people.
a. Can have organizational or individual social responsibility
4) Compliance with Government Regulations: business pressures from government regulations
are viewed by organizations as constraints
5) Protection against fraud terrorist attacks
6) Ethical Issues: standards of right and wrong in information-processing practices. If handled
poorly, they can damage an organizations image and destroy employees’ morale
Organizational Responses to business pressures:
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1) Strategic systems: provide organizations with advantages that enable them to increase their
market share or profits, to better negotiate with suppliers, and to prevent competitors from
entering their markets
2) Customer Focus: attempts to provide superb customer service can make the difference
between attracting and keeping customers and losing them to competitors.
a. Make to order: strategy of producing customized products and services
b. Mass customization: produces a large quantity of items, but customizes them to fit
the needs and preferences of individual customers
Competitive advantages: statement that identifies a business approach to compete, its goals and the
plans and policies that will be required to carry out those goals
- Core business remains the same for organizations, but IT provides tools that can enhance an
organizations success through traditional sources of competitive advantage
- Strategic IS provide a competitive advantage by helping an organization implement its
strategic goals and improve its performance and productivity
Competitive forces model: develop strategies to increase their competitive edge
1) Threat of new entrants
2) Bargaining power of suppliers
3) Bargaining power of buyers
4) Threat of substitute products or services
5) Rivalry among existing firms in the industry
Porter’s value chain model: identifies where an organization can use information technology to
achieve a competitive advantage
1) Primary activities: relate to the production and distribution of the firms product and services
2) Support activities: do not add value directly to the firm’s product or service
Primary activities include: inbound logistics, operations, outbound logistics, marketing and sales,
Secondary activities: Infrastructure (accounting, finance, management), human resources
management, product and technology development (R&D), procurement
1) Incoming materials are processed (inbound logistics)
2) Materials are used in operations, where value is added by turning RM into products
3) Products are prepared for delivery (packaging, shipping. Storing) outbound logistics
4) Marketing and sales sell the products to the customers, increasing product value by creating
5) Company performs after sales warranty service
A firms value chain is part of a larger stream of activities (value system) which in includes suppliers
that provide inputs necessary to the firm along with their value chains
- Can achieve and sustain a competitive advantage bur firms must understand every part of
the value system
Strategies for competitive advantage:
1) Cost leadership: products/services at lowest cost in the industry
2) Differentiation: offer different products, services, or product features that your competitors
3) Innovation strategy: introduce new products and services, add new features or existing or
develop new ways to produce them
4) Operational effectiveness: improve manner in which product and services in which internal
business processes are executed
5) Customer-orientation: focus on making customers happy
Business-information technology alignment: tight integration of the IT function with the strategy,
mission, and goals. 6 characteristics:
1) Organizations view IT as an engine of innovation that always transforms business
2) View their internal and external customers and customer service extremely important
3) Rotate business and IT professionals across departments and job functions
4) Provide overarching goals that are completely clear to each IT and business employee
5) Ensure that IT employees understand how company tasks make money
6) Create a vibrant and inclusive culture in the organization
Alignment might fail because:
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