MANAJEMENT INFORMATION SYSTEM
Global E-business and Collaboration
Business processes, which we introduced in Chapter 1, refer to the manner in which work is organized, coordinated, and focused to produce a valuable product or service. Business processes are the collection of activities required to produce a product or service. These activities are supported by flows of material, information, and knowledge among the participants in business processes. Business processes also refer to the unique ways in which organizations coordinate work, information, and knowledge, and the ways in which management chooses to coordinate work.
What at first appears to be a simple process, fulfilling an order, turns out to be a very complicated series of business processes that require the close coordination of major functional groups in a firm. Moreover, to efficiently perform all
these steps in the order fulfillment process requires a great deal of information. The required information must flow rapidly both within the firm from one decision maker to another; with business partners, such as delivery firms; and with the customer. Computer-based information systems make this possible.
HOW INFORMATION TECHNOLOGY IMPROVES BUSINESS PROCESSES
Exactly how do information systems improve business processes? Information systems automate many steps in business processes that were formerly performed manually, such as checking a client’s credit, or generating an invoice and shipping order. But 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 a business works and supports entirely new business models. Downloading a Kindle e-book from Amazon, buying a computer online at Best Buy, and downloading a music track from iTunes are entirely new business processes based on new business models that would be inconceivable without today’s information technology.
That’s why it’s so important to pay close attention to business processes, both in your information systems course and in your future career. By analyzing business processes, you can achieve a very clear understanding of how a
business actually works. Moreover, by conducting a business process analysis, you will also begin to understand how to change the business by improving its processes to make it more efficient or effective. Throughout this book, we
examine business processes with a view to understanding how they might be improved by using information technology.
TYPES OF INFORMATION SYSTEMS
A typical firm also has different systems supporting the decision-making needs of each of the main management groups we described in Chapter 1. Operational management, middle management, and senior management each use systems to support the decisions they must make to run the company. Let’s look at these systems and the types of decisions they support.
E-BUSINESS, E-COMMERCE, AND E-GOVERNMENT
The systems and technologies we have just described are transforming firms’ relationships with customers, employees, suppliers, and logistic partners into digital relationships using networks and the Internet. So much business is now enabled by or based upon digital networks that we use the terms “electronic business” and “electronic commerce” frequently throughout this text. Electronic business, or e-business, refers to the use of digital technology and the Internet to execute the major business processes in the enterprise. E-business includes activities for the internal management of the firm and for coordination with suppliers and other business partners. It also includes electronic commerce, or e-commerce.
E-commerce is the part of e-business that deals with the buying and selling of goods and services over the Internet. It also encompasses activities supporting those market transactions, such as advertising, marketing, customer support,security, delivery, and payment. The technologies associated with e-business have also brought about similar changes in the public sector. Governments on all levels are using Internet technology to deliver information and services to citizens, employees, and businesses with which they work. 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.
In addition to improving delivery of government services, e-government makes government operations more efficient and also empowers citizens by giving them easier access to information and the ability to network electronically with other citizens. For example, citizens in some states can renew their driver’s licenses or apply for unemployment benefits online, and the Internet has become a powerful tool for instantly mobilizing interest groups for political action and fund-raising.
Collaboration and teamwork are more important today than ever for a variety of reasons.
- Changing nature of work
- Growth of professional work.
- Changing organization of the firm.
- Changing scope of the firm.
- Emphasis on innovation.
- Changing culture of work and business
BUSINESS BENEFITS OF COLLABORATION BENEFIT RATIONALE
Productivity: People working together can complete a complex task faster than the same number of people working in isolation from one another. There will be fewer errors.
Quality: People working collaboratively can communicate errors, and correct actions faster, when they work together than if they work in isolation. Can lead to a reduction in buffers and time delay among production units.
Innovation: People working collaboratively in groups can come up with more innovative ideas for products, services, and administration than the same number working in isolation from one another.
Customer service: People working together in teams can solve customer complaints and issues faster and more effectively than if they were working in isolation from one another.
Financial performance (profitability, As a result of all of the above, collaborative firms have sales, and sales growth) superior sales growth and financial performance.
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. A very small company will not have a formal information systems group. It might have one employee who is responsible for keeping its networks and applications running, or it might use consultants for these services. Larger companies will have a separate information systems department, which may be organized along several different lines, depending on the nature and interests of the firm. Our Learning Track describes alternative ways of organizing the information systems function within the business.
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. How much should the information systems function be centralized? What decisions must be made to ensure effective management and use of information technology, including the return on IT investments? Who should make these decisions? How will these decisions be made and monitored? Firms with superior IT governance will have clearly thought out the answers (Weill and