In particular, IT deals with the use of electronic

computers and computer software to convert, store,

protect, process, transmit, and retrieve information.

-A system that collects and processes data (information) and provides it to managers at all levels who use it for decision making, planning, program implementation, and

control.

components that collect, manipulate, and disseminate data or information, usually including hardware, software, people, communications systems.

�� The functional support role

�� The decision support role

�� The strategic support role

    • Time shifting

    • Space shifting

• Seamless flow of information within the firm, and with strategic partners

There is a growing interdependence between a firm’s information systems and its business

capabilities. Changes in strategy, rules, and business processes increasingly require

changes in hardware, software, databases, and telecommunications. Often, what the

organization would like to do depends on what its systems will permit it to do.

Using information systems effectively requires an understanding of the organization,

management, and information technology shaping the systems. An information system

creates value for the firm as an organizational and management solution to challenges posed

by the environment.

• People

• Structure

• Business processes

• Culture

• Sense makers

• Decision makers

• Planners

• Innovators of new processes

• Social Assets: Society’s Investment, Laws and

• Hardware: Physical equipment

• Software: Detailed preprogrammed instructions

• Storage: Physical media for storing data and the software

• Networks: Links computers to share data or resources

�� Sales and marketing systems

�� Manufacturing and production systems

�� Finance and accounting systems

4 Systems from a constituency perspective

�� Transaction processing systems

�� Management information systems

1. Operational-level: support operational managers, keeping track of the elementary activities and transactions

decision-making, and administrative activities

3. Strategic-level: help senior management tackle and address strategic issues

• Transaction Processing Systems (TPS)

• Management Information Systems (MIS)

• Decision-Support Systems (DSS)

• Top Level Management

• Designed for Individual Senior Manager

• Ties CEO to All Levels

These systems tend to be isolated from one another, and information does not flow seamlessly from one end of the organization to the other.

• Efficiency and business value tend to suffer greatly in these traditional firms

�� Enterprise Resource Planning (ERP)

�� Supply Chain Management (SCM)

�� Customer Relationship Management (CRM)

for finance and accounting, human resources,

manufacturing and production, and sales and marketing

processes for precise organizational coordination / control

systems can seamlessly flow throughout the firm so that it

can be shared by business processes

coordination and integration of key business processes

QUALITY AND EFFICIENCY 

ERP creates a framework for integrating and improving a company’s internal business processes that results in significant improvements in the quality and efficiency of customer service, production, and distribution

DECREASED COSTS

�� Decision Support

performance quickly to managers to significantly

improve their ability to make better decisions in a timely manner

�� Enterprise Agility

functional walls of business processes, information

systems, and information resources

• Centralized organizational coordination and decision making: Not the best way for the firms to operate

procuring raw materials, transforming into products, and distributing them to customers

supply chain in different directions

product, and fund flows up and down a supply chain to reduce time, redundant effort, and inventory costs

• Decide when and what to produce, store, and move

• Rapidly communicate orders

• Track the status of orders

• Check inventory availability and monitor inventory levels

• Reduce inventory, transportation, and warehousing costs

• Track shipments

• Plan production based on actual customer demand

components arrive exactly at the moment they are needed and finished goods shipped as soon as they leave the assembly line

as it passes from one entity to the next across the supply chain

• Fill rate (the ability to fill orders by the due date)

• Average time from order to delivery

• The number of days of supply in inventory

• Forecast accuracy

• Close linkage and coordination of activities involved in buying, making, and moving a product

• Integrates supplier, manufacturer, distributor, and customer logistics time

• Reduces time, redundant effort, and inventory costs

• Network of organizations and business processes

• Helps in procurement of materials, transformation of raw materials into intermediate and finished products

• Helps in distribution of the finished products to customers

• Includes reverse logistics - returned items flow in the reverse direction from the buyer back to the seller

• Sales force automation (SFA)

• Customer service

A method of interaction with a customer, such as

telephone, e-mail, customer service desk,

conventional mail Web site or retail store

Good Touch Points

�� New products offering to customers in need

�� Customized website

�� Product promotions to right customers

�� Bad Touch Points

�� Junk mails

�� Phone calls at wrong time

�� SPAM

stop using or purchasing products or services from a company

• Cost per lead

• Cost per sale

• Number of repeat customers

• Churn rate

• Sales closing rate

personalized relationship with customers is possible

Compares information gathered about a specific

user’s behavior at a Web site to data about other

customers with similar interests to predict what the

user would like to see next. The software then makes recommendations to users based on their assumed interests.

• Replacing human call center operators and clerks

• UPS.com: Customer tracking of packages

• Finding a successful Internet business model

• Organizational change challenges

• Content and location-based services

• Banking and financial services

• Wireless advertising

Electronic storage of ID and digital cash, e.g. Google checkout

Used for micro payments, similar to monthly telephone bills

Stored Value

Pre-payment of funds, debited on use. E.g. Husky card, smart card

Digital Cash

Electronic currency transferrable over the Web. E.g. Linden $.

Digital Checking

Electronic checks with digital signatures, used most often in B2B commerce

Electronic billing presentment and payment

Used by consumers to pay bills online, provided by many banks

��Properties: Information-based

��Big fixed cost

��Small or negligible variable cost

�� James Bryant and ProCD: Phone book CD