Management Information Systems:
Managing the Digital Firm
Sixteenth Edition • Global Edition
Chapter 2
Global E-Business and
Collaboration
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Business Processes (1 of 2)
• Business processes
– Flows of material, information, knowledge
– Logically related set of tasks that define how specific
business tasks are performed
– May be tied to functional area or be cross-functional
• Businesses: Can be seen as collection of business
processes
• Business processes may be assets or liabilities
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Business Processes (2 of 2)
• Examples of functional business processes
– Manufacturing and production
Assembling the product
– Sales and marketing
Identifying customers
– Finance and accounting
Creating financial statements
– Human resources
Hiring employees
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Figure 2.1 The Order Fulfillment
Process
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How Information Technology
Improves Business Processes
• Increasing efficiency of existing processes
– Automating steps that were manual
• Enabling entirely new processes
– Changing flow of information
– Replacing sequential steps with parallel steps
– Eliminating delays in decision making
– Supporting new business models
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Systems for Different Management
Groups (1 of 2)
• Transaction processing systems
– Serve operational managers and staff
– Perform and record daily routine transactions
necessary to conduct business
Examples: sales order entry, payroll, shipping
– Allow managers to monitor status of operations and
relations with external environment
– Serve predefined, structured goals and decision
making
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Figure 2.2 A Payroll TP S
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Systems for Different Management
Groups (2 of 2)
• Systems for business intelligence
– Data and software tools for organizing and analyzing
data
– Used to help managers and users make improved
decisions
• Management information systems
• Decision support systems
• Executive support systems
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Management Information Systems
• Serve middle management
• Provide reports on firm’s current performance, based on
data from TP S
• Provide answers to routine questions with predefined
procedure for answering them
• Typically have little analytic capability
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Figure 2.3 How Management
Information Systems Obtain Their
Data from the Organization’s TP S
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Figure 2.4 Sample MI S Report
Consolidated Consumer Products Corporation Sales by
Product and Sales Region: 2019
Product Product Sales Actual Planned Actual
Code Description Region Sales Versus
Planned
4469 Carpet Cleaner Northeast 4,066,700 4,800,000 0.85
South 3,778,112 3,750,000 1.01
Midwest 4,867,001 4,600,000 1.06
West 4,003,440 4,400,000 0.91
Blank Total Blank 16,715,253 17,550,000 0.95
5674 Room Northeast 3,676,700 3,900,000 0.94
Freshener South 5,608,112 4,700,000 1.19
Midwest 4,711,001 4,200,000 1.12
West 4,563,440 4,900,000 0.93
Blank Total Blank 18,559,253 17,700,000 1.05
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Decision Support Systems
• Serve middle management
• Support nonroutine decision making
– Example: What is the impact on production schedule if
December sales doubled?
• May use external information as well TP S / M I S data
• Model driven DS S
– Voyage-estimating systems
• Data driven DS S
– Intrawest’s marketing analysis systems
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Figure 2.5 Voyage-Estimating
Decision-Support System
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Executive Support Systems
• Support senior management
• Address nonroutine decisions
– Requiring judgment, evaluation, and insight
• Incorporate data about external events (e.g., new tax laws
or competitors) as well as summarized information from
internal M I S and DS S
• Example: Digital dashboard with real-time view of firm’s
financial performance
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Enterprise Applications
• Systems for linking the enterprise
• Span functional areas
• Execute business processes across the firm
• Include all levels of management
• Four major applications
– Enterprise systems
– Supply chain management systems
– Customer relationship management systems
– Knowledge management systems
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Figure 2.6 Enterprise Application
Architecture
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Enterprise Systems
• Also called enterprise resource planning (ER P) systems
• Integrate data from key business processes into single
system.
• Speed communication of information throughout firm.
• Enable greater flexibility in responding to customer
requests, greater accuracy in order fulfillment.
• Enable managers to assemble overall view of operations.
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Supply Chain Management (SC M)
Systems
• Manage relationships with suppliers, purchasing firms,
distributors, and logistics companies.
• Manage shared information about orders, production,
inventory levels, and so on.
• Goal is to move correct amount of product from source to
point of consumption as quickly as possible and at lowest
cost
• Type of interorganizational system: Automating flow of
information across organizational boundaries
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Customer Relationship Management
(CR M) Systems
• Help manage relationship with customers.
• Coordinate business processes that deal with customers in
sales, marketing, and customer service
• Goals:
– Optimize revenue
– Improve customer satisfaction
– Increase customer retention
– Identify and retain most profitable customers
– Increase sales
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Knowledge Management Systems
(KMS)
• Manage processes for capturing and applying knowledge
and expertise
• Collect relevant knowledge and make it available wherever
needed in the enterprise to improve business processes
and management decisions.
• Link firm to external sources of knowledge
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Intranets and Extranets
• Technology platforms that increase integration and
expedite the flow of information
• Intranets:
– Internal networks based on Internet standards
– Often are private access area in company’s Web site
• Extranets:
– Company Web sites accessible only to authorized
vendors and suppliers
– Facilitate collaboration
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E-Business, E-Commerce, and
E-Government
• E-business
– Use of digital technology and Internet to drive major
business processes
• E-commerce
– Subset of e-business
– Buying and selling goods and services through Internet
• E-government
– Using Internet technology to deliver information and
services to citizens, employees, and businesses
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