Chapter 6

Information Systems for Business Operations and Electronic Commerce

Information Systems in Business

There are as many uses of information systems in business as there are problems and tasks to be performed

Business end users need to have a basic understanding and appreciation of the uses of information systems

There are a variety of information system types

Cross Functional Information Systems

Information systems are usually grouped into functional areas

In the real world systems are usually integrated combinations that support business processes

Many traditional organizations are working hard to develop cross functional information system platforms

Cont.

The cross functional platform is viewed as a strategic way to share resources and improve efficiency

Remember that the purpose of information systems is to support the strategic objectives of a business and to enable a sustainable competitive advantage

Applications of Information Systems in Business

Information system uses in business Productions/Operations Marketing Financial Accounting Human Resources

Cont.

Today, businesses are turning to Internet technology for additional uses including communication via intranets, coop arrangements via extranets, e-commerce sites, etc.

Enterprise Resource Planning

Many companies moving from mainframe based systems to cross functional client/server system in an effort to focus on the movement of products or services through the supply chain or development cycle

Marketing Information Systems

Marketing information systems provide for Interactive marketing through web

sites, etc. Sales force automation Assistance in product planning, pricing,

advertising, sales promotion, etc.

Interactive Marketing

The use of intranets, extranets, and the Internet has changed the face of business

The goal of interactive marketing is to enable profitability through the use of technology

Several uses of interactive marketing

Interactive Marketing

Source for marketing dataGet ideas for new products

(feedback, etc)High sales volumeChance to build strong customer

relationships

Sales Force Automation

Within many companies the sales force is being equipped with a variety of high tech devices such as laptops, handhelds, smart phones

Productivity increases occurSpeeds up the capture of dataAllows for higher level of serviceStrategic advantage can develop

Sales and Product Management

Provide for systems that can analyze data by product, area, customer group, cost, etc.

Can eliminate guessing about core customer group

More accurate target marketingDirect capture of data

Cont.

Product managers can use systems to plan and control brands, product lines, sales areas

Offer modeling capabilities for what if analysis

Evaluate performance of products

Advertising and Promotion

Decision makers use information to plan advertising media, promotion methods, allocate financial resources, control and evaluate results (measure)

Target Marketing

Can develop web content to appeal to online communities

Can use links, banners, etc to get exposure on related web sites

Can use a “web cookie” to track site visitors habits, etc.

Marketing Research and Forecasting

Assist managers in developing forecasts, strategies

Can use data warehousing to develop trends and patterns previously unknown

Use statistical analysis software to find inferential relationships

Manufacturing Information Systems

Provide for the support and operations of a manufacturing site

Concerned with the support of planning and control of purchasing, inventories, flow of goods through the process

Computer-Integrated Manufacturing

CIM is an overall concept that stresses Simplification or reengineering of business

processes Automation of production processes and

the business functions that support them Integration of production and support

processes using computers and networks

CIM cont.

The overall goal of CIM is to create flexible, highly dynamic processes that can produce the highest quality possible while incurring the lowest possible cost

Basis for TQM (total quality management)

CAE, CAD, CAO, MRP, CAM

Collaborative Manufacturing Networks

Computer aided manufacturing processes are typically a collaborative effort

Enabled by networks such as intranets, extranets, Internet

Process Control

Defined as the use of cis to control ongoing processes Oil refineries Food mfg Pulp and paper mills Chemical plants Steel mills

Machine Control

The use of computer to control the actions of a machine Typesetting Knitting Welding Machine tools (boring bars, presses, etc)

Robotics

A machine that controls itself through a microcomputer

Used in manufacturing facilitiesGood for dangerous chemical plants,

nuclear plants, explosives

Computer Aided Engineering

Engineers use CAE to analyze situations, materials needs, design alternatives

Can be used to refine “hard” drawings and convert to virtual images

Allows for multiple views

Human Resource Management IS

HRM involves recruiting, placement, evaluation, compensation, and development of employees

HR IS allow for the planning of needs development plans policy control succession planning

HR IS

Typically use information systems to produce payroll maintain employee records analyze resource use and needs recruitment selection performance appraisal benefit analysis

Accounting Information Systems

Accounting systems were probably the first and most widely used systems

Used to report the flow of funds through an organization

Used to produce planning toolsEnable good record keepingAllow for the correct format of

governmental reporting

Acct IS

Accounting systems can include several types of transaction processing order processing A/P and A/R Payroll GL

Acct IS

Managerial accounting information systems emphasize cost accounting reports budgeting projections analytical reporting

Electronic Commerce

Electronic commerce is more than buying or selling on the Internet

It is a process of developing, marketing, selling, servicing, and paying for goods and services in a new form

Reliant on the Internet's acceptance for future use

E-commerce

Can include Marketing, selling, ordering, payment

processing over the Internet Access to databases by customers and

business partners Intranet access for field staff, customer

service persons

B2C

Businesses create attractive, useful sites where consumers can order products and services

Offer easy payment methodsMake sure it is secure

B2B

Commerce between businesses conducted on the Internet

EDI direct data transfers between companies eliminate many manual processes for billing

Online Transaction Processing

5 step process data entry transaction processing file and database activities document and reporting inquiry processing

Electronic Payments and Security

Vital step in the e processConcerned with securityVery complex because of payment

alternatives

Secure Payments

Information is vulnerable due to network sniffers

Data encryption is best way to up security

Secure socket Layer (SSL) encrypts data between browser and merchants server

Digital Wallet is encryption of credit card information that can only be decoded by issuing financial institution

Secure payments cont.

SET - secure electronic transaction that encrypts data and encloses it within another data stream

Offline transactions - Just make payments offline