Management Information System

Ch-2 – Global E-
business and
Collaboration

S.Mookherjee

1
 Learning Objectives
– What are business processes? How are they related to
information systems?
– How do systems serve the different management groups
in a business, and how do systems that link the enterprise
improve organizational performance?
– Why are systems for collaboration and social business so
important, and what technologies do they use?
– What is the role of the information systems function in a
business?

2
Ch-2 – Global E-business and Collaboration
 Business Processes (1 of 2)

• Business Processes :
– Flow of information, knowledge
– Sets of activities, steps
– 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 ( e.g

statutory / legal processes )

Ch-2 – Global E-business and Collaboration 3

 Business Processes (2 of 2)

• Examples of Functional business processes

– Manufacturing and production
• Assembling the product , Quality Checking
– Sales and marketing
• Identifying customers , Selling the product
– Finance and accounting
• Creating financial statements , paying creditors
– Human resources
• Hiring employees , Performance evaluation

Ch-2 – Global E-business and Collaboration 4

The Order Fulfillment Process

5
Ch-2 – Global E-business and Collaboration
Order Invoicing Process – An Example

Order entry
Material
requirements planning

Production
order

Invoice

Storage/ Accounts
Delivery receivable

Slide 6
 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

Ch-2 – Global E-business and Collaboration 7

 Systems for Different Management Groups
(1 of 2)
• Transaction processing systems (e.g. ERP )
– 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

Ch-2 – Global E-business and Collaboration 8

Figure 2.2: A Payroll TPS

9
Ch-2 – Global E-business and Collaboration
 Transaction processing systems

The Transaction Processing System ( ERP ) records the data

from everyday operations throughout every division or
department in the organization. Each division/department is
tied together through the TPS to provide useful information
to management levels throughout the company.

10
Ch-2 – Global E-business and Collaboration
 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

Ch-2 – Global E-business and Collaboration 11

How Management Information Systems Obtain
Their Data from the Organization’s TPS

12
Ch-2 – Global E-business and Collaboration
 Management Information System

A Management Information System is used by managers

throughout the organization to help them in Directing, Planning,
Coordinating, Communicating, and Decision Making.

The MIS will help answer structured questions on a periodic

basis. ( Weekly , Monthly, Quarterly , Yearly )

13
Ch-2 – Global E-business and Collaboration
 Decision support systems

• Serve middle management ( to answer “What-If” questions )

• Support non-routine decision making
– Example: What is the impact on production schedule if
December sales doubled?
• May use external information as well TPS / MIS data
• Model driven DSS
– Voyage-estimating systems
• Data driven DSS ( when Model has not been established )

Ch-2 – Global E-business and Collaboration 14

Voyage-Estimating Decision-Support System

15
Ch-2 – Global E-business and Collaboration
 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
MIS and DSS
• Example: Digital dashboard with real-time view of firm’s
financial performance

Ch-2 – Global E-business and Collaboration 16

 Enterprise Applications ( ERP )

• 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

Ch-2 – Global E-business and Collaboration 17

 Enterprise Resource Planning…. Till 1980’s.

Legacy Systems of Company functions...

Purchase

Manufacturing Finance

Sales
 Enterprise Resource Planning…..90’s - 2000

... synchronization of Company functions...

Purchase

Manufacturing Finance

Sales
Enterprise Resource Planning … 2000-2010

… and extended to the complete value chain...

Vehicle OEM

Finance

Customer

Component
Supplier
 The beauty & power of ERP…
SD
Request from a PP
Customer FI MM FI

Credit Management
Dynamic Availability Check
Cash Forecast

?
OK

Slide 21
Enterprise Application Architecture

22
Ch-2 – Global E-business and Collaboration
23
Supply Chain Management (SCM) Systems

• Manage firm’s relationships with suppliers

• Share information about:
– Orders, production, inventory levels, delivery of products
and services
• Goal:
– Right amount of products to destination with least amount
of time and lowest cost

Ch-2 – Global E-business and Collaboration 24

Customer Relationship Management (CRM)
Systems

• Provide information to coordinate all of the business

processes that deal with customers
– Sales
– Marketing
– Customer service
• Helps firms identify, attract, and retain most profitable
customers

Ch-2 – Global E-business and Collaboration 25

 Knowledge Management Systems (KMS)

• Support processes for capturing and applying knowledge and

expertise
– How to create, produce, and deliver products and services
• Collect internal knowledge and experience within firm and
make it available to employees
• Link to external sources of knowledge

Ch-2 – Global E-business and Collaboration 26

 Intranets and Extranets

• Also used to increase integration and expedite the flow of

information
• Intranets
– Internal company websites accessible only by employees
• Extranets
– Company websites accessible externally only to vendors
and suppliers
– Often used to coordinate supply chain

Ch-2 – Global E-business and Collaboration 27

 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

Ch-2 – Global E-business and Collaboration 28

 What Is Social Business?
( Ref. Wikipedia )
Social business was defined by Nobel Peace Prize laureate
Professor Muhammad Yunus and is described in his books.
In these books, Yunus defined a social business as a business:

• Created and designed to address a social problem

• A non-loss, non-dividend company, i.e.

1. It is financially self-sustainable and

2. Profits realized by the business are reinvested in the business itself (or
used to start other social businesses), with the aim of increasing social
impact, for example expanding the company’s reach, improving the
products or services or in other ways subsidizing the social mission.

Unlike a profit-maximizing business, the prime aim of a social

business is not to maximize profits (although generating profits is
desired).
29
 What Is Social Business?
( Ref. Wikipedia )

Seven principles of social business ( Yunus and Reitz ):

1. Business objective will be to overcome poverty, or one or more

problems (such as education, health, technology access, and
environment) which threaten people and society; not profit
maximization.
2. Financial and economic sustainability
3. Investors get back their investment amount only. No dividend is
given beyond investment money
4. When investment amount is paid back, company profit stays with
the company for expansion and improvement
5. Gender sensitive and environmentally conscious
6. Workforce gets market wage with better working conditions
7. ...Do it with joy

30
e.g Aravind Eye Hospital , Change.org , Barefoot college
 What Is Social Business?
Organizations that address a basic unmet need or solve a
social or environmental problem through a market-driven
approach.

https://socialenterprise.us/about/social-enterprise/ 31
 What Is Social Business?
Three general social enterprise models:
•Opportunity Employment: organizations that employ people who
have significant barriers to mainstream employment.
• Examples include Goodwill Industries, Greyston
Bakery & Nisolo.

•Transformative Products or Services: organizations that create

social or environmental impact through innovative products and
services. ( e.g. Organic vegetables )
• Examples include Benetech, Growing Sound & Soles4Souls.

•Donate Back: organizations that contribute a portion of their profits to

nonprofits that address basic unmet needs.
• Examples include Everly, The Thx Co. & Songs Against
Slavery. KIIT Bhubaneswar.

32
https://socialenterprise.us/about/social-enterprise/
 Some examples of Social Business

1. Used Text Books for Social Change

2. Sustainable Water
3. Micro Lending
4. Social Crowdfunding ( Keto.org )
5. Micro Renewable Power Generation
6. Recycling and Upgrading second hand goods
7. Social products for rural / women / tribal employment

33
Ch-2 – Global E-business and Collaboration
 What Is Collaboration?

• Collaboration
– Short lived or long term
– Informal or formal (teams)
• Growing importance of collaboration
– Changing nature of work
– Growth of professional work—“interaction jobs”
– Changing organization of the firm
– Changing scope of the firm
– Emphasis on innovation
– Changing culture of work

Ch-2 – Global E-business and Collaboration 34

 What Is Social Business?

• Social business
– Use of social networking platforms (internal and external)
to engage employees, customers, and suppliers
• Aims to deepen interactions and expedite information sharing
“Conversations”
• Requires information transparency
– Driving the exchange of information without intervention
from executives or others

Ch-2 – Global E-business and Collaboration 35

 What Is Social Business?
Characteristics of organizations adopting the social business model

•Connected – employees will be able to seamlessly engage one-on-one in

real-time with other employees and individuals outside the organization
(customers, prospects, partners, media, etc.)

•Social – employees will follow social networking etiquette (being authentic,

helpful and transparent) in external interactions. The focus will be on
answering questions and providing information rather than overt sales or
promotion.

•Presence – these conversations may originate on the

company's website or elsewhere online (e.g., LinkedIn or Facebook).

•Intelligent – organizations will use in-depth analytics to monitor

connections, social interactions and presence; measure corresponding
business results; and continually adjust and improve practices for increased
effectiveness. 36
 Business Benefits of Collaboration and
Teamwork
• Investments in collaboration technology can bring
organization improvements, returning high ROI
• Benefits
– Productivity
– Quality
– Innovation
– Customer service
– Financial performance
• Profitability, sales, sales growth

37
Requirements for Collaboration

38
 Building a Collaborative Culture and
Business Processes….
• “Command and control” organizations
– No value placed on teamwork or lower-level participation
in decisions

• Collaborative business culture √

– Senior managers rely on teams of employees
– Policies, products, designs, processes, and systems rely
on teams
– The managers purpose is to build teams
AGILE - Technique

Ch-2 – Global E-business and Collaboration 39

Building a Collaborative Culture and Business
Processes

Ch-2 – Global E-business and Collaboration 40

 Tools and Technologies for Collaboration
and Social Business
• E-mail and instant messaging (IM)
• Wikis
• Virtual worlds
• Collaboration and social business platforms
– Virtual meeting systems (telepresence)
– Cloud collaboration services (Google Drive, Google Docs,
etc.)
– Microsoft SharePoint and IBM Notes
– Enterprise social networking tools

Ch-2 – Global E-business and Collaboration 41

 Checklist for Managers: Evaluating and
Selecting Collaboration and Social Software
Tools
• Time/space matrix
• Six steps in evaluating software tools
– Identify your firm’s collaboration challenges
– Identify what kinds of solutions are available
– Analyze available products’ cost and benefits
– Evaluate security risks
– Consult users for implementation and training issues
– Evaluate product vendors

Ch-2 – Global E-business and Collaboration 42

The Time/Space Collaboration & Social Tool Matrix

43
Ch-2 – Global E-business and Collaboration
44