In order to operate, businesses must deal with many different pieces of information about suppliers, customers, employees, invoices and payments, and of course their products and services.
Business processes are the collection of activities required to produce a product or service. These activities are flows of material, information, and knowledge among the participants in business processes. Business processes also refer to unique ways in which organizations coordinate work, information, and knowledge, and the ways in which management chooses t coordinate work. To a large extent, the performance of a business firm depends on how well its business processes are designed and coordinated.
How Information Technology Improves Business Processes
Today, information technology can do much more. New technology can actually change the flow of information, making it possible for many more people to access and share information, replacing sequential steps with tasks that can be performed simultaneously, and eliminating delays in decision making. New information technology frequently changes the way in business works and supports entirely new business models.
Types of Information Systems
A typical business organization has systems supporting processes for each of the major business functions – systems for sales and marketing, manufacturing and production, finance and accounting, and human resources. It also has different systems supporting the decision-making needs of each of the main management groups.
Systems for Different Management Groups
Transaction Processing Systems
Operational managers need systems that keep track of the elementary activites and transactions of the organization, such as sales, receipts, cash deposits, payroll, credit decisions, and the flow of materials in a factory. Transaction processing systems (TPS) provide this kind of information.
Business Intelligence Systems for Decision Support
Management information systems (MIS) summarizes and reports on the company’s basic operations using data supplied by transaction processing systems. The basic transaction data from TPS are compressed and usually presented in reports that are produced on a regular schedule. Today, many of these reports are delivered online. In contrast, decision-support systems (DSS) support more non-routine decision making. They focus on problems that are unique and rapidly changing, for which the procedure for arriving at a solution may not be fully predefined in advance. Business intelligence is a contemporary term for data and software tools for organizing, analyzing, and providing access to data to help managers and other enterprise users make more informed decisions.
Fig. How Management Information Systems Obtain Their Data From The Organization’s TPS
Executive support systems (ESS) help senior management make these decisions. A digital dashboard displays on a single screen graphs and charts of key performance indicators for managing a company. Digital dashboards are becoming an increasingly popular tool for management decision makers.
Systems for Linking the Enterprise
Enterprise applications which are systems that span functional areas, focus on executing business processes across the business firm, and include all levels of management. Enterprise applications help businesses become more flexible and productive by coordinating their business processes more closely and integrating groups of processes so they focus on efficient management of resources and customer service.
Enterprise Systems Firms use enterprise systems, also known as enterprise resource planning (ERP) systems, to integrate business processes in manufacturing and production, finance and accounting, sales and marketing, and human resources into a single software system. Supply Chain Management Systems Frims use supply chain management (SCM) systems to help manage relationships with their suppliers. Customer Relationship Management Systems Firms use customer relationship management (CRM) systems to help manage their relationships with their customers. Knowledge Management Systems (KMS) enable organizations to better manage processes for capturing and applying knowledge and expertise.
Fig. Enterprise Application Architecture
E-Business, E-Commerce, and E-Government
The systems and technologies we have just described are transforming firm’s relationships with customers, employees, suppliers, and logistic partners into digital relationships using networks and the Internet. Electronic business or e-business, refers to the use of digital technology and the Internet to execute the major business processes in the enterprise. It also includes electronic commerce or e-commerce. E-government refers to the application of the Internet and networking technologies to digitally enable government and public sector agencies’ relationships with citizens, businesses, and other arms of government.
Systems For Collaboration and Teamwork
Collaboration is working with others to achieve shared and explicit goals. It focuses on task or mission accomplishment and usually takes place in a business or other organization, and between businesses. Collaboration can be short-lived, lasting a few minutes, or longer term, depending on the nature of the task and the relationship among participants. It can be one-to-one or many-to-many. Teams have a specific mission that someone in the business assigned to them. They have a job to complete. Teams are often short-lived, depending on the problems they tackle and the length of time needed to find a solution and accomplish the mission.
Tools and Technologies for Collaboration and Teamwork
A collaborative, team-oriented culture won’t produce benefits if there are no information systems in place to enable collaboration.
Checklist for Managers: Evaluating and Selecting Collaboration Software Tools
With so many collaboration tools and services available, how do you choose the right collaboration technology for your firm? To answer this question, you need a framework for understanding just what problems these tools are designed to solve. One framework that has been helpful for us to talk about collaboration tools is the time/space collaboration matrix developed in the early 1990s by a number of collaborative work scholars.
|Table 2-3 Fifteen Categories of Collaborative Software Tools|
|E-mail and instant messaging||White boarding|
|Collaborative writing||Web presenting|
|Collaborative reviewing/editing||Work scheduling|
|Event scheduling||Document sharing (including wikis)|
|File sharing||Mind mapping|
|Screen sharing||Large audience Webinars|
Fig. The Time/Space Collaboration Tool Matrix
The time/space matrix focuses on two dimensions of the collaboration problem: time and space. Place (location) also inhibits collaboration in large global or even national and regional firms. Assembling people for a physical meeting is made difficult by the physical dispersion of distributed firms, the cost of travel, and the time limitations of managers. Using this time/space framework will help you to choose the most appropriate collaboration and teamwork tools for your firm.
The Information Systems Functions in Business
In all but the smallest of firms, the information systems department is the formal organizational unit responsible for information technology services. It is responsible for maintaining the hardware, software, data storage, and networks that comprise the firm’s IT infrastructure.
In many companies, the information systems department is headed by a chief information officer (CIO) who oversees the use of information technology in the firm. The chief security officer (CSO) is in charge of information systems security for the firm and is responsible for enforcing the firm’s information security policy. A chief privacy officer (CPO) is responsible for ensuring that the company complies with existing data privacy laws. The chief knowledge officer (CKO) is responsible for the firm’s knowledge management program who helps design programs and systems to find new sources of knowledge or to make better use of existing knowledge in organizational and management processes.
Programmers are highly trained technical specialists who write the software instructions for computers. Systems analysts constitute the principal liaisons between the information systems groups and the rest of the organization. Information systems managers are leaders of teams of programmers and analysts, project managers, physical facility managers, telecommunications managers, or database specialists.
Organizing The Information Systems Function
There are many types of business firms, and there are many ways in which the IT function is organized within the firm. The question of how the information systems department should be organized is part of the larger issue of IT governance. IT governance includes the strategy and policies for using information technology within an organization. It specifies the decision rights and framework for accountability to ensure that the use of information technology supports the organization’s strategies and objectives.