CHAPTER 2 "Global E-business and Collaboration"
2.1 Business Processes and Information Systems
In order to operate, businesses must deal with many different pieces of information. Information systems make it possible for firms to manage all their information, make better decisions, and improve the execution of their business processes.Business Processes
Business processes refer to the manner in which work is organized, coordinated, and focused to produce a valuable product or service. To a large extend, the performance of a business firm depends on how well its business processes are designed and coordinated. A company's business processes can be a source of competitive strength if they enable the company to innovate or to execute better than its rivals.How Information Technology Improves 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.2.2 Types of Information Systems
Because there are different interests, specialities, and levels in an organization, there are different kinds of systems. No single system can provide all the information an organization needs.System For Different Management Groups
A business firm has systems to support different groups or levels of management. These systems include:- Transaction Processing Systems (TPS) is a computerized system that performs and records the daily routine transactions necessary to conduct business, such as sales order entry, hotel reservations, payroll, employee record keeping, and shipping.
- Management Information Systems (MIS) designates a specific category of information systems serving middle management. MIS provide middle managers with reports on the organization's current performance.
- 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.
- Systems for 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. Business intelligence applications are not limited to middle managers, and can be found at all levels of the organization, including systems for senior management.
Systems For Linking The Enterprise
Enterprise Applications
There are four major enterprise applications:
- Enterprise Systems. Firms use enterprise 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 (SCM System). Firms use SCM systems to help manage relationships with their suppliers. These systems help suppliers, purchasing firms, distributors, and logistics companies share information about orders, production, inventory levels, and delivery of products and services so that they can source, produce, and deliver goods and services efficiently.
- Customer Relationship Management System (CRM System). Firms use CRM systems to help manage their relationships with their customers. CRM systems provide information to coordinate all of the business processes that deal with customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention.
- Knowledge Management Systems (KMS) enable organizations to better manage processes for capturing and applying knowledge and expertise. These systems collect all relevant knowledge and experience in the firm, and make it available wherever and whenever it is needed to improve business processes and management decisions.
Intranets and Extranets
Intranets and extranets deserve mention here as alternative tools for increasing integration and expediting the flow of information within the firm, and with customers and suppliers. Intranets are simply internal company Web sites that are accessible only by employees. Extranets are company Web sites that are accessible to authorized vendors and suppliers, and often used to coordinate the movement of supplies to the firm's production apparatus.
E-Business, E-Commerce, and E-Government
Electronic business, or e-business, refers to the use of digital technology and the Internet to execute the major business processes in the enterprise.
Electronic commerce, or e-commerce, is the part of e-business that deals with the buying and selling of goods and services over the Internet.
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.
2.3 Systems For Collaboration and Teamwork
Information systems can't make decisions, hire or fire people, sign contracts, agree on deals, or adjust the price of goods to the marketplace. In addition to the types of systems we have just described, businesses need special systems to support collaboration and teamwork.
What is Collaboration
Collaboration is working with others to achieve shared and explicit goals. Collaboration focuses on task or mission accomplishment and usually takes place in a business, or other organization, and between businesses.
Teams are part of the organization's business structure for getting things done. Teams have a specific mission that someone in the business assigned to them. They have a job to complete. Collaboration and teamwork are more important today than ever for a variety of reasons, such as:
- changing nature of work,
- growth of professional work,
- changing organization of the firm,
- changing scope of the firm,
- emphasis on innovation, or
- changing culture of work and business.
Business Benefits of Collaboration and Teamwork
- 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, correct actions faster, when they work together than if they work in isolation.
- 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; As a result of all the above, collaborative firms have superior sales growth and financial performance.
Building A Collaborative Culture and Business Processes
Collaboration won't take place spontaneously in a business firm, especially if there is no supportive culture or business processes. A collaborative business culture and business processes are very different. Senior managers are responsible for achieving results but rely on teams of employees to achieve and implement the results. Teams are rewarded for their performance, and individuals are rewarded for their performance in a team. The function of middle managers is to build the teams, coordinate their work, and monitor their performance.
Tools and Technologies For Collaboration and Teamwork
Currently there are hundreds of tools designed to deal with the fact that, in order to succeed in our jobs, we are all dependent on one another, our fellow employees, customers, suppliers, and managers.
- E-mail and Instant Messaging (IM)
- Social Networking
- Wikis
- Virtual Worlds
- Internet-Based Collaboration Environments
Checklist for Managers: Evaluating and Selecting Collaboration Software Tools
You need to collaborate with people in different time zones and you cannot all meet at the same time. 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.
The collaboration technologies are ways of overcoming the limitations of time and space. Using this time/space framework will help you to choose the most appropriate collaboration and teamwork tools for your firm. Note that some tools are applicable in more than one time/place scenario.
2.4 The Information Systems Function in Business
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.
The Information Systems Department
The information systems department consists of specialists, such as programmers, systems analysts, project leaders, and information systems managers.
- 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.
In many companies, the information systems department is headed by a Chief Information Officer (CIO). 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. The 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. End Users are representatives of departments outside of the information systems group for whom applications are developed.
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.
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source: "Management Information System" e-book, 12th edition, written by Kenneth C. Laudon and Jane P. Laudon.