MANAGEMENT INFORMATION

SYSTEM
 WHAT IS A SYSTEM?
A system is…
A set of interrelated components
With a clearly defined boundary
Working together
To achieve a common set of objectives
By accepting inputs and producing outputs
In an organized transformation process
 BASIC FUNCTIONS OF A SYSTEM
Input:
Capturing and assembling elements that enter the system to be processed
Processing:
Transformation process that converts input into output
Output:
Transferring transformed elements to their ultimate destination
 WHAT IS MANAGEMENT
Management:
The Process of coordinating work activities so
that they are completed efficiently and
effectively with and through other people
Process - represents ongoing functions or
primary activities engaged in by managers
 WHAT IS MANAGEMENT
Management (cont.)
Efficiency - getting the most output from the least amount of inputs
“doing things right” (not wasting resources) ( Time)
concerned with means
Examples: cutting inventory levels
Decreasing the amount of time to manufacture products
Effectiveness - completing activities so that organizational goals are attained
“doing the right things”
concerned with ends
EFFICIENCY AND EFFECTIVENESS IN
MANAGEMENT
Efficiency (Means) Effectiveness (Ends)

Resource Goal
Usage Attainment

Low Waste High Attainment

Management Strives For:

Low resource waste (high efficiency)
High goal attainment (high effectiveness)
 KEY RESOURCES OF MIS
INFORMATION
Data:
Are raw facts that describe a particular phenomenon
e.g Current Temperature, Price of property, Age of a person etc.

A message which source wants to communicate to the receiver

e.g Text, Voice, Image, movies, Music etc

Information: Data that is organized, meaningful, and useful

data with context
processed data
value-added to data
 summarized
 organized
 analyzed
Data and Information
 Changing Data into Information
• Data
– Raw facts stored in databases
– Need additional processing to become useful
• Information
– Required by decision maker
– Data processed and presented in a meaningful form
– Transformation (any process that changes data into information).

Program
instructions
Characteristics of Valuable
Information
1. Accuracy.
2. Verifiable.
3. Timeliness.
4. Organized.
5. Meaningful.
6. Cost effective.
 1.Accuracy
• The information a user receives
has been processed correctly
• Correct information
• Free from errors
• Inaccurate information can lead to
incorrect decisions
 2. Verifiable

User can confirm and verify the

information.
 Identify source of information
 3.Timely information:

Having information when users need it.

Right information must be produced to users at
right time.
 4. Organized

 Information is arranged to suit the

needs and requirements of the
users.
 5. Meaningful :

 Relevant to the user who receives or uses it.

 Unnecessary information must be eliminated.
 6.Cost-effective

 The cost to produce the

information should be less
than the actual cost of the
information.
Information systems have become as integrated into our daily business
activities as accounting, finance, operations management, marketing,
human resource management, or any other major business function.

Information systems and technologies are vital components of

successful businesses and organizations.
Since you probably intend to be a manager, entrepreneur, or business
professional, it is just as important to have a basic understanding of
information systems as it is to understand any other functional area in
business.
Information technologies, including Internet-based information
systems, are playing vital and expanding roles in business.

Information technology can help all kinds of businesses improve the

efficiency and effectiveness of their business processes, managerial
decision making, and workgroup collaboration, which strengthens
their competitive positions in rapidly changing marketplaces.
This benefit occurs irrespective of whether the information technology is
used to support product development teams, customer support processes,
e-commerce transactions, or any other business activity. Information
technologies and systems are, quite simply, an essential ingredient for
business success in today’s dynamic global environment.

If we are to understand information systems and their functions, we

first need to be clear on the concept of a system.
In its simplest form, a system is a set of interrelated components, with
a clearly defined boundary, working together to achieve a common set
of objectives. Using this definition, it becomes easy to see that virtually
everything you can think of is a system, and one system can be made
up of other systems or be part of a bigger system.
An information system (IS) can be any organized
combination of people, hardware, software, communications
networks, data resources, and policies and procedures that
stores, retrieves, transforms, and disseminates information in
an organization. People rely on modern information systems
to communicate with one another using a variety of physical
devices (hardware), information processing instructions and
procedures (software), communications channels (networks),
and stored data (data resources).
 Consider some of the following examples of information systems:

Smoke signals for communication were used as early as recorded history

and can account for the human discovery of fire. The pattern of smoke
transmitted valuable information to others who were too far to see or hear
the sender.

Card catalogs in a library are designed to store data about the books in an
organized manner that allows readers to locate a particular book by its
title, author name, subject, or a variety of other approaches.

Your book bag, day planner, notebooks, and file folders are all part of an
information system designed to help you organize the inputs provided to
you via handouts, lectures, presentations, and discussions. They also
help you process these inputs into useful outputs: homework and good
exam grades.
The cash register at your favorite fast-food restaurant is part of a large infor-
mation system that tracks the products sold, the time of a sale, inventory levels,
and the amount of money in the cash drawer; it also contributes to the analysis
of product sales in any combination of locations anywhere in the world.

A paper-based accounting ledger as used before the advent of computer-based

accounting systems is an iconic example of an information system. Businesses
used this type of system for centuries to record the daily transactions and to
keep a record of the balances in their various business and customer accounts
 IT and IS
• What is Information Technology?
Any form of technology used by people to handle
information.
• What are Information Systems?
“A collection of hardware, software, data, people, and
procedures that are designed to generate
information that support day-to-day activities of
users in an organization”
Definition of Information Systems

“A collection of hardware, software,

data, people, and procedures that are
designed to generate information that
support day-to-day activities of users in
an organization”
Components of Information Systems

• Data
• Software
• Hardware
• People
• Procedures
 OPERATIONS SUPPORT SYSTEMS:

Transaction processing systems. Process data resulting from business

transactions, update operational databases, and produce business documents.
Examples: sales and inventory processing and accounting systems.
Process control systems. Monitor and control industrial processes. Examples:
petroleum refining, power generation, and steel production systems.
Enterprise collaboration systems. Support team, workgroup, and enterprise
communications and collaborations. Examples: e-mail, chat, and
videoconferencing groupware systems.
 MANAGEMENT SUPPORT SYSTEMS:
Management information systems. Provide information in the form of prespecified
reports and displays to support business decision making. Examples: sales
analysis, production performance, and cost trend reporting systems.
Decision support systems. Provide interactive ad hoc support for the decision-
making processes of managers and other business professionals. Examples:
product pricing, profitability forecasting, and risk analysis systems.
Executive information systems. Provide critical information from MIS, DSS, and
other sources tailored to the information needs of executives. Examples:
systems for easy access to analyses of business performance, actions of
competitors, and economic developments to support strategic planning.
 TYPES OF INFORMATION SYSTEMS
Operations Support Systems:

 TPS( Sales, Inventory, and accounting systems)

 PCS( Monitor and control industrial processes
 ( Petroleum refining,
 Power generation and
 Steel production systems.
 (ECS)Enterprise collaboration systems, such as e-mail, chat and
videoconferencing systems.
 TYPES OF INFORMATION SYSTEMS
Management Support Systems:

 MIS is the Provide information as reports and displays.

 DSS
such as
Products pricing,
Profitability forecasting,
Risk analysis.
 EIS is Provides critical information from MIS, DSS such as
system for easy access to analysis of business performance,
action of competitors, and strategic planning
 TYPES OF OPERATIONS SUPPORT SYSTEMS

Transaction Processing Systems:

 is the Record and Process business transactions

 Examples:
 Sales processing,
 Inventory systems,
 Accounting systems
 PROCESS CONTROL SYSTEMS

 Monitor and control physical processes

 Example:
 Using sensors to monitor chemical processes in a
petroleum refinery
 ENTERPRISE COLLABORATION SYSTEMS

 Enhance team and workgroup communication

 Examples:
 Email,
 Video conferencing
 TRANSACTION PROCESSING SYSTEMS

TPS is the important examples of Operations support systems that record and
process data resulting from business transactions.

Computerized systems that perform and record the daily routine transactions
necessary to conduct the business; they serve the organization’s
operational level
Examples:

 Accounting information systems

 TCS, DHL, all have systems that are TPS
 TWO WAYS TO PROCESS TRANSACTIONS

Batch Processing:
 Accumulate transactions over time and process periodically
 Example:
 A bank processes all checks received in a batch at night
Online Processing:
 Process transactions immediately

 Example:
 A bank processes an ATM withdrawal immediately
Batch Processing
Sometimes we have a lot of data to process and it is all of a similar form (e.g. we
might have to calculate the pay for 10,000 employees - the calculations we have
to do for each employee are very similar)

In cases like this, we can prepare the data into a set or 'batch' and hand it over
to the computer to be processed in one go.
Once we have prepared the batch of data, no user input is required .

This type of data processing is known as batch processing.

An advantage of this type of system is that the processing can occur when the
computer is not being used for anything else (e.g. at night).
The job is setup, people go home, and when they return the next morning the
work has been done.

Typical application where batch-processing can be used:

Payroll processing
Processing bank cheques
Printing of bank statements
EXAMPLE OF TPS
1. An inventory control system keeps a file of records about the
stock of goods that a business has on hand (the inventory)
which is one aspect of the state of the business.

2. When items are shipped or received, the state of the

business is affected, and the inventory control system
makes changes about the inventory in the stored records.
 EXAMPLE OF TPS

4. It also prints a report giving the quantity on hand for each item in
inventory, which is a characteristic of the state of the business.

Finally, when inventory is low, the system produces output that

causes more inventory to be ordered, which is another type of
business transaction.
 TRANSACTION PROCESSING
SYSTEM FUNCTIONS

Input function Processing function: Output function:

• Capture input data • perform computation • produce screen output

• Enter input data • make decision • print output
• Validate input data

Storage function:

• stored data
• Access data
• Update data
 TRANSACTION PROCESSING SYSTEM
Transaction processing systems perform
 input, output, storage, and processing functions.

Input functions include capturing data on a source document,

entering the input data into the system, and checking input
data for errors, a process called data validation

Output functions include producing screen or paper reports,

such as detail reports, summary reports, and exception
reports.
 TRANSACTION PROCESSING SYSTEM

Storage functions include storing data in files and

databases ,accessing stored data, sorting stored
data, and updating stored data.

Processing functions involve the manipulation of data,

including computation and decision making
TRANSACTION PROCESSING SYSTEMS
 MANAGEMENT INFORMATION
SYSTEMS
MIS Provides information in the form of reports and displays to managers and
many business professionals. Such as sales analysis, production
performance.
Provides information to business professionals in a variety of easy-to-use
formats.
Examples
– Systems that provide managers with reports and online real-
time access to company performance and historical records.
Management Information System
(MIS)
 DECISION SUPPORT SYSTEMS
Decision Support Systems are concerned with providing useful
information to support the decision process.
 A Production Manager may use a DSS to decides how much product
to manufacture based on the expected sales associated with a
future promotion and the location and availability of the raw
materials necessary to manufacture the product.
• Examples
– May take data from both internal sources (TPS, MIS) but also
from external sources (Stock prices or product prices of
competitors)
– Shipping companies use voyage-estimating systems that take
various shipping information into account and give advice on
costs, freight rates for various types of cargo and port expenses
etc.
 VOYAGE-ESTIMATING DECISION SUPPORT SYSTEM

Needs voyage-estimating system to calculate

 Financial details
 Ship/time costs (fuel, labour, capital)
 Freight rates for various types of cargo
 Port expenses
 Technical details
 Ship cargo capacity
 Speed
 Port distances
 Fuel and water consumption
 Cargo loading patterns
DECISION SUPPORT SYSTEMS
Decision Support System
(DSS)
 EXECUTIVE INFORMATION SYSTEMS
Information Systems at the organizations strategic level designed to address unstructured decision
making through advanced graphics and communications.
Examples:
– Incorporate data about external events such as tax laws or competitors, but also draw
summarized information from internal MIS and DSS.
– Filter, compress and track critical data, emphasizing the reduction of time and effort
required to obtain information useful to executives.
 STRATEGIC IT
To view information systems as more than
A set of technologies that support efficient business
operations, work group and enterprise collaboration.
Or effective business decision making.
A Strategic information system is any information system
that uses IT to help an organization…
 Gain a competitive advantage
 Reduce a competitive disadvantage
(A factor which places a business at risk for losing customers to
a competitor)
 Or meet other strategic enterprise objectives
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 STRATEGIC IT
The major role of information systems applications in
business is to provided:
“Effective support a company’s strategies for gaining
competitive advantage”.
This strategic role of information systems involves
using information technology to develop
“Products,
Services,
and capabilities that give a company major
advantages over the competitive forces it faces in
the global marketplace.
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 STRATEGIC IT

Strategic information system can be any

kind of information system that uses
information technology to help an
organization gain a competitive
advantage, reduce a competitive
disadvantage.

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 IDENTIFYING COMPETITIVE
ADVANTAGES
Three common tools used in industry to
analyze and develop competitive
advantages include:
Porter’s Five Forces Model
Porter’s three generic strategies
Value Chains
Technology has the opportunity to play an important role in
environmental scanning
For example, Frito-Lay, a premier provider of snack foods such
as Cracker Jacks and Cheetos, does not just send its
representatives into grocery stores to stock shelves—they carry
handheld computers and record the product offerings,
inventory, and even product locations of competitors. Frito-Lay
uses this information to gain business intelligence on
everything from how well competing products are selling to the
strategic placement of its own products.
 THE FIVE FORCES MODEL
EVALUATING BUSINESS SEGMENTS

Porter’s Five Forces Model determines the relative attractiveness of an industry

Buyer power – assessed by analyzing the ability of buyers to
directly impact the price they are willing to pay for an item
Supplier power – assessed by the suppliers’ ability to directly
impact the price they are charging for supplies (including
materials, labor, and services).
Threat of substitute products or services – high when there
are many alternatives to a product or service and low when
there are few alternatives from which to choose
Threat of new entrants – high when it is easy for new
competitors to enter a market and low when there are
significant entry barriers to entering a market
Rivalry among existing competitors – high when competition
is fierce in a market and low when competition is more
complacent
 BUYER POWER
Buyer power – assessed by analyzing the ability of buyers to directly
impact the price they are willing to pay for an item

Ways to reduce buyer power include:

 Switching costs – costs that can make customers reluctant to switch to

another product or service

 Loyalty program – rewards customers based on the amount of business

they do with a particular organization
Buyer power can also be called “customer power"
Calling buyer power customer power sometimes helps students
understand the difference between buyer power and supplier power
To reduce buyer power (and create a competitive advantage), an
organization must make it more attractive for customers to buy
from them than from their competition
Which kinds of loyalty programs are you currently using?
 Grocery store discounts – “Imtiaz Store Or Naheed Super Store”
 Restaurant discounts such as Subway’s get your 12th sandwich free
 Coffee clubs where you get your 10th cup of coffee free.
 Text. Send to customer through Mobile Technology.
 E-Mail send to customer
 SUPPLIER POWER
Supplier power – Assessed by the suppliers’ ability to directly impact the price
they are charging for supplies (including materials, labor, and services)

 Supply chain – consists of all parties involved in the procurement of a product

or raw material
The supplier wants to be able to set any price it wants for its goods,
And
if buyers (customers) have low power, then they do not have any
choice but to pay the high price since there are only one or two
suppliers.
What is an example of an organization with “high” supplier
power?
How an organization can be both a supplier and a buyer in a
supply chain?
 Discuss how Dell computers is both a buyer and supplier in the
supply chain
 Dell is a buyer (customer) of parts, and a supplier to its customers
who buy computers
 THREAT OF SUBSTITUTE PRODUCTS OR
SERVICES

Threat of substitute products or services – high

When there are many alternatives to a product or
service
And
Low when there are few alternatives from which
to choose
Ideally, an organization wants to be in a market in which there are
few substitutes for its products or services
This is difficult to achieve, and most organizations create a
competitive advantage through switching costs - the more
painful it is for a customer to switch suppliers, the less likely
they are to switch
If a customer has to experience pain when switching to a different
service provider, then they are unlikely to switch
For example, switching doctors usually involves sending all
medical records and explaining all past medical history to the
new doctor. Insurance also has to be transferred, along with
detailed forms that the customer will be required to complete
(such as family history, personal history, etc.) For these
reasons customers have to be extremely dissatisfied with a
doctor before they will endure the pain of finding or switching
to a new doctor
 THREAT OF NEW ENTRANTS
Threat of new entrants – High when it is easy for new
competitors to enter a market and low when there are significant
entry barriers to entering a market
 Entry barrier – a product or service feature that customers have
come to expect from organizations in a particular industry and
must be offered by an entering organization to compete and
survive
 What is an industry that has a
high entry barrier?
 Energy – the organization has to have the infrastructure to support energy
 Telecommunications – the organization has to invest in a telecommunications
infrastructure prior to offering services
 Banking – the bank must offer its customers an array of IT-enabled services including
ATMs and online account services
 What is an industry that has a low entry barrier?

 Restaurants –
 Simply lease a space, obtain a license, and you can sell food
 Catering –
 Simply offer food and deliver
 Movie rental –
 Simply buy the movies, pay the licensing fee, and offer the movies
for rental.
RIVALRY AMONG EXISTING COMPETITORS
Rivalry among existing competitors –
High when competition is fierce in a market and low when competition is more
complacent
 Product differentiation – occurs when a company develops unique
differences in its products with the intent to influence demand.

What are a few industries where competition is high?

 Restaurants, products, telecommunications, banking
What are a few industries where competition is low?
 This is typically highly regulated industries such as energy
markets and stock exchanges
 ANALYZING THE AIRLINE INDUSTRY
Buyer power: high as customers have many choices

Supplier power: high as there are limited plane and engine manufacturers to
choose from and unionized workforces squeeze the airline’s profitability

Threat of substitute products or services: high as there are numerous

transportation alternatives
 ANALYZING THE AIRLINE INDUSTRY
Threat of New Entrants:
High as new airlines are continuously entering the market

Rivalry among existing competitors:

High –for this reason airlines are forced to compete on price
 THE THREE GENERIC STRATEGIES
CREATING A BUSINESS FOCUS
Organizations typically follow one of Porter’s three generic strategies
when entering a new market.
Broad cost leadership: Broad strategies reach a large market segment
Broad differentiation: Focused strategies target a niche market
Focused strategy: Focused strategies concentrate on either cost
leadership or differentiation
COMPETITIVE FORCES
To succeed, a business must develop strategies to counter these forces…
 Rivalry of competitors within its industry
 New entrants into an industry and its markets
 Substitute products that may capture market share
 Bargaining power of customers
 Bargaining power of suppliers

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COMPETITIVE FORCES AND STRATEGIES

2-75
COMPETITIVE FORCES AND STRATEGIES
Competition is a positive characteristic in business,
And competitors share a natural and often healthy, rivalry.

This rivalry encourage and sometimes require a constant

effort to gain competitive advantage in the marketplace.

Against the threat of new entrants also expands significant

organizational resources.

The threat of substitutes is another competitive force

confronting a business. The effect of this force is seen
almost daily in a wide variety of industries.
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 COMPETITIVE FORCES AND
STRATEGIES
It is often at its strongest during periods of rising costs or inflation. When
airline prices get too high, peoples substitute care travel on their vacations.

If the customers’ bargaining power gets to strong, they can drive prices to
unmanageably low level or simply refuse to buy the products or service.

If a key suppliers’ bargaining power gets to strong, it can force the price of
goods and services to unmanageably high levels.

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 FIVE COMPETITIVE STRATEGIES
Cost Leadership:

 Become low-cost producers of products and services in the industry.

 Finding ways to Help suppliers or customers reduce costs

 Increase cost of competitors

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 FIVE COMPETITIVE STRATEGIES
Differentiation Strategy:

 Developing ways to differentiate a firms’ products and services

from those of its competitors or reduce the differentiate
advantages of competitors.

 This strategy may allow a firm to focus its products or services to

give it an advantage in particular segments or niches of a market.

 NUST, focus on IT programs, and IU focus on Business studies

 COMPETITIVE STRATEGIES
(CONTINUED)
Innovation Strategy:
Finding new ways of doing business.
This strategy may involve developing unique products and
services or entering unique markets or market niches.
 Radical changes to business processes
 Example: Amazon’s online, full-service customer
systems

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Growth Strategy:

Significantly expanding a company’s capacity to produce goods and

services.
Expanding into global markets.
Diversifying into new products and services

 Example: Wal-Mart’s merchandise ordering via global satellite

tracking
 ALLIANCE STRATEGY

 Establish linkages and alliances with customers, suppliers,

competitors, consultants, and other companies
 Includes mergers, acquisitions, joint ventures, virtual companies

 Example: Wal-Mart uses automatic inventory replenishment by

supplier.

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WAYS TO IMPLEMENT BASIC STRATEGIES

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 OTHER COMPETITIVE STRATEGIES
Investments in IT can allow a business to “ lock in customers and suppliers by
building valuable new relationships with them.

Lock in Customers and Suppliers

 Deter them from switching to competitors

Build in Switching Costs

 Make customers and suppliers dependent on the use of innovative IS

Erect Barriers to Entry

 Discourage or delay other companies from entering the market
 Increase the technology or investment needed to enter

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 OTHER COMPETITIVE STRATEGIES
Build Strategic IT Capabilities:

 Take advantage of strategic opportunities when they arise

 Improve efficiency of business practices

Leverage Investment in IT:

 Develop products and service that would not be possible without a

strong IT capability

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 building a Customer-Focused
Business
The driving force behind world economic
growth has changed from
Manufacturing volume
“To improving customer value”.
As a result key success factor for many firms
is maximizing “customer value”.
 building a Customer-Focused
Business
The chief business value of becoming a customer –focused business lies
in its
Ability to help keep

“Customers loyal”.

Anticipate their future needs, respond to customer

concerns, and provide top-quality customer service.
 This strategic focus on
“ Customer value”
recognizes that
Quality,
rather than
“Price”,
has become the primary determinant in a
Customer’s perception of value.
 Companies that
consistently offer the best value
from the customer’s perspective

Are those that keep track of their

customers’ individual preferences;
Keep up with market trends;

Supply products, services, and information anytime

and anywhere; and provide customer services
tailored to individual needs.
  Thus, internet technologies have created a
strategic opportunity for companies, larger and
small, to offer fast, responsive, high-quality
products and services tailored to individual
customer preferences.

 Internet technologies can make customers the

focal point of customer relationship management
and other e-business applications.
With the help of internet technology creates new
channels for interactive communications within a
company, as well as communication with customers,
suppliers, business partners.

Encourage cross-functional collaboration with

customers in product development, marketing,
delivery, service, and technical support.
 Customers use the internet to ask
question, complaints, evaluate
products request support, and make
and track their purchases.

Increase an effective response.

This ability encourages the creation of

cross-functional discussion groups and
problem-solving teams dedicated to
customer involvement, service and
support.
 Way of doing business that ensures delivery of
quality components and services to meet a
company’s commitments to its customers.

 This process is how a business demonstrates its

focus on customer value.

 The platform enables the business focus on

targeting the kinds of customers it really wants.
Finally, a successful business an
online community of customers,
employees, and business partners
that builds great customers
loyalty as it fosters cooperation
to provide an outstanding
customers experience.
 CUSTOMER-FOCUSED BUSINESS

What is the business value in being customer-

focused?

Keep customers loyal

Anticipate their future needs
Respond to customer concerns
Provide top-quality customer service

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 Focus on customer value

 Quality, not price, has become the primary determinant of

“Value Consistently “
 PROVIDING CUSTOMER VALUE
Companies that consistently offer the best value from
the customer’s perspective…

 Track individual preferences

 Keep up with market trends

 Supply products, services, and information anytime, anywhere

 Tailor customer services to the individual

 Use Customer Relationship Management (CRM) systems to focus

on the customer

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BUILDING CUSTOMER VALUE VIA THE
INTERNET

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 THE VALUE CHAIN AND STRATEGIC IS
View the firm as a chain of basic activities that add value to its products
and services:

Primary processes “ Directly relate to manufacturing or

delivering products”.

Support processes: Help support the day-to-day running of the

firm and indirectly contribute to products or services
Use the value chain to highlight where competitive strategies will add the
most value

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USING IS IN THE VALUE CHAIN

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 STRATEGIC USES OF IT
A company that emphasizes strategic business
use of IT would use it to gain a competitive
differentiation
Products
Services
Capabilities

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 REENGINEERING BUSINESS PROCESSES
Called BRP or simply Reengineering:

 Fundamental rethinking and radical redesign of business processes

 Seeks to achieve improvements in
 cost,
 Quality,
 Speed,
 and Service
Potential payback is high, but so is risk of disruption and failure
Organizational redesign approaches are an important enabler of
reengineering
 Includes use of IT, Process teams, Case Management

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BPR VERSUS BUSINESS IMPROVEMENT

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 THE ROLE OF INFORMATION
TECHNOLOGY
IT plays a major role in reengineering most business
processes:

 Can substantially increase process efficiencies

 Improves communication
 Facilitates collaboration

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 A CROSS-FUNCTIONAL PROCESS
Many processes are reengineered with…
 Enterprise resource planning software
 Web-enabled electronic business and commerce systems

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REENGINEERING ORDER MANAGEMENT
IT that supports this process…
 CRM systems using intranets and the Internet
 Supplier-managed inventory systems using the Internet and
extranets
 Cross-functional ERP software to integrate manufacturing,
distribution, finance, and human resource processes
 Customer-accessible e-commerce websites for order entry, status
checking, payment, and service
 Customer, product, and order status databases accessed via
intranets and extranets

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 BECOMING AN AGILE COMPANY
Agility is the ability to prosper
 In rapidly changing, continually fragmenting global markets
 By selling high-quality,
 High-performance,
 Customer-configured products and services
 By using Internet technologies
An agile company profits in spite of:
 Broad product ranges
 Short model lifetimes
 Individualized products
 Arbitrary lot sizes

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 STRATEGIES FOR AGILITY

An agile company…
 Presents products as solutions to customers’ problems
 Cooperates with customers, suppliers and competitors
 Brings products to market as quickly and cost-effectively as
possible
 Organizes to thrive on change and uncertainty
 Leverages the impact of its people and the knowledge they
possess

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HOW IT HELPS A COMPANY BE AGILE

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CATEGORIES OF COMPUTER SYSTEMS
MICROCOMPUTER SYSTEMS
Usually called a personal computer or PC

Computing power now exceeds that of the mainframes of previous generations

Relatively inexpensive
Are the networked professional workstations used by business processions

Versions include hand-held, notebook, laptop, tablet, portable, desktop, and floor-
standing
RECOMMENDED PC FEATURES

Business Pro Multimedia Heavy Newcomer

2-3 GHz processor Mac G4 or 2-3 GHz Intel 1-2 GHz Celeron
processor processor
512MB RAM 512MB RAM 256MB RAM

80GB hard drive 120GB+ hard drive 40GB hard drive

18-inch flat-panel 18-inch or larger CRT, 17-inch CRT or 15-inch

display flat-panel LCD, or flat panel LCD
plasma display
CD-RW/DVD drive or CD-RW/DVD+RW drive CD-RW/DVD drive
portable hard drives for
backup
Network interface card High-end color printer Internal, 56K modem
(NIC)
Basic speaker system Deluxe speaker system Basic inkjet printer
MICROCOMPUTER USES
Workstations
 Supports have mathematical computer and graphics display demands
 CAD, investment and portfolio analysis
Network Servers
 More powerful than workstations
 Coordinates telecommunications and resource sharing
 Supports small networks and Internet or intranet websites
CORPORATE PC CRITERIA
Solid performance at a reasonable price
Operating system ready
Connectivity
 Network interface cards
or wireless capabilities
INFORMATION APPLIANCES
Hand-held microcomputer devices
Known as personal digital assistants (PDAs)
 Web-enabled PDAs use touch screens, handwriting recognition, or keypads
 Mobile workers use to access email or the Web, exchange data with desktop PCs or
servers
 Latest entrant is the BlackBerry
PDAs include
 Video-game consoles
 Cellular and PCS phones
 Telephone-based home email appliances
MIDRANGE SYSTEMS
High-end network servers that handle large-scale processing of business applications
Not as powerful as mainframes
 Less expensive to buy, operate, and maintain
Often used to manage
 Large Internet websites
 Corporate intranets and extranets
 Integrated, enterprise-wide applications
Used as front-end servers to assist mainframes with telecommunications and
networks
MAINFRAME COMPUTER SYSTEMS
Large, fast, powerful computer systems
 Large primary storage capacity
 High transaction processing
 Handles complex computations
Widely used as superservers for…
 Large client/server networks
 High-volume Internet websites
Becoming a popular computing platform for…
 Data mining and warehousing
 Electronic commerce applications
SUPERCOMPUTER SYSTEMS

Extremely powerful systems designed for…

 Scientific, engineering, and business applications
 Massive numeric computations
Markets include…
 Government research agencies
 Large universities
 Major corporations
Uses parallel processing
 Billions to trillions of operations per second (gigaflops and teraflops)
 Costs $5 to $50 million
COMPUTER SYSTEM CONCEPT
A system of hardware devices organized by function
 Input
 Keyboards, touch screens, pens, electronic mice, optical scanners
 Converts data into electronic form for entry into computer system
 Processing
 Central Processing Unit (CPU)
 CPU subunits: arithmetic-logic and control unit
COMPUTER SYSTEM CONCEPT
 Output
 Video display units, printers, audio response units,
and so on
 Converts electronic information into human-intelligible form
 Storage
 Primary storage (memory)
 Secondary storage (disk drives)
 Control
 CPU controls other components of the system
COMPUTER SYSTEM CONCEPT
COMPUTER PROCESSING SPEEDS
Early computers
 Milliseconds (thousandths of a second)
 Microseconds (millionths of a second)
Current computers
 Nanoseconds (billionth of a second)
 Picoseconds (trillionth of a second)
Program instruction processing speeds
 Megahertz (millions of cycles per second)
 Gigahertz (billions of cycles per second)
 Commonly called the “clock speed”
COMPUTER PROCESSING SPEEDS
Throughput
 The ability to perform useful computation or data processing assignments during a
given period
Speed is dependant on…
 Size of circuitry paths (buses) that interconnect microprocessor components
 Capacity of instruction processing registers
 Use of high-speed cache memory
 Use of specialized microprocessor, such as math coprocessor
PERIPHERALS

Peripheral is a generic name for all input, output, and secondary storage devices
 Parts of the computer system, but not the CPU
 Are all online devices
Online devices
 Separate from the CPU, but electronically connected to and controlled by it
Offline devices
 Separate from and not under the control of the CPU
PERIPHERALS ADVICE
INPUT TECHNOLOGIES
Keyboard
 Still most widely used input device
Graphical User Interface (GUI)
 Icons, menus, windows, buttons, bars
 Selected with pointing devices
Electronic Mouse
 Most popular pointing device
 Pressing mouse buttons initiates
activity represented by the icon
selected
INPUT TECHNOLOGIES
Trackball
 Stationary device, similar to mouse
 Roller ball moves cursor on screen

Pointing Stick
 Small eraser-head device
embedded in keyboard
 Cursor moves in the
direction of the pressure
placed on the stick
INPUT TECHNOLOGIES
Touchpad
 Small, rectangular, touch-sensitive surface
 Usually on keyboard
 Cursor moves in direction your finger moves
Touch Screen
 Use computer by touching
screen
 Screen emits a grid of
infrared beams, sound waves,
or electric current
 Grid is broken when screen is touched
 What is software?

Consists of a series
of instructions that
Also called a
tells the computer program
what to do and
how to do it
TYPES OF APPLICATION & SYSTEM
SOFTWARE
APPLICATION SOFTWARE SUB DIVIDED
General Purpose Application programs
 Programs that perform common information processing jobs for end users
 E.g., word processing, spreadsheet
 Also call productivity packages
Custom Software
 Software applications developed within an organization for use by that organization
APPLICATION SOFTWARE
Commercial Off-the-Shelf (COTS)
 Many copies sold
 Minimal changes beyond scheduled upgrades
 Purchasers have no control over specifications, schedule, or evolution, and no
access to source code or internal documentation
 Product vendor retains the intellectual property rights of the software
APPLICATION SOFTWARE
Open-source Software
 Developers collaborate on the development of an application using programming
standards which allow anyone to contribute to the software
 As each developer completes a project, the application code becomes available and
free to anyone who wants it
BUSINESS APPLICATION SOFTWARE
Function-Specific Application Software
 Thousands of these packages support specific applications of end users
 Examples: customer relationship management, enterprise resource planning,
supply chain management, Web-enabled electronic commerce , functional area of
business like human resource management, accounting and finance.
SOFTWARE SUITES, INTEGRATED PACKAGES
Most widely used productivity packages are bundled together as software suites

Advantages
 Cost less than buying individual packages
 All have similar GUI
 Work well together
Disadvantages
 All features not used
 Takes a lot of disk space (bloatware)
WORD PROCESSING/DESKTOP PUBLISHING
Word Processing
 Create, edit, revise, and print documents
 E.g., Microsoft Word, Lotus WordPro, Corel WordPerfect

Desktop Publishing
 Produce printed materials that look professionally published
 E.g., Adobe PageMaker, Microsoft Publisher, QuarkXPress
ELECTRONIC SPREADSHEETS
Used by virtually every business for…
 Analysis, planning, modeling
Electronic Spreadsheet
 Worksheet of rows and columns
 Can be stored on local computer or on network
 Requires designing format and developing the relationships (formulas)
 Most help you develop charts and graphic displays of spreadsheet results
 Supports what-if questions
PRESENTATION GRAPHICS
Common presentation graphics packages…
 Converts numeric data into graphics displays
 Used to create multimedia presentations of graphics, photos, animation, and video
clips
 E.g., Microsoft PowerPoint, Lotus Freelance, Corel Presentations
 Top packages can tailor files for transfer in HTML format to websites
PERSONAL INFORMATION MANAGERS
Software for end user productivity and collaboration
 Stores information about clients
 Manages schedules, appointments, tasks
 Most include ability to access the Web and provide e-mail capabilities
 Some support team collaboration by sharing information with other PIM users
 E.g., Lotus Organizer, Microsoft Outlook
GROUPWARE
Software that helps workgroups collaborate on group assignments
 E-mail, discussion groups, databases, video conferencing
 E.g., Lotus Notes, Novell GroupWise, Microsoft Exchange
 Windows SharePoint Services and WebSphere both allow teams to create websites
for information sharing and document collaboration
SOFTWARE ALTERNATIVES
Outsourcing development and maintenance of software

Application service providers (ASPs)

 Companies that own, operate, and maintain application software and computer
system resources
 Use the application for a fee over the Internet
 Pay-as-you-go
 Use expected to accelerate in the coming years
SOFTWARE LICENSING
All COTS and ASP software is licensed
 Involves the underlying..
 Intellectual property rights
 Copyright
 Trademark
 Trade secrets
 Also involves traditional contract law, including Uniform Commercial Code (UCC)
You don’t buy software
 You buy a license to use the software
 Licensed to protect the vendor’s property rights
OPERATING SYSTEMS
Integrated system of programs that…
 Manages the operations of the CPU
 Controls the input/output, storage resources,
and activities of the computer system
 Provides support services as the computer executes application programs
The operating system must be loaded and activated before other tasks can be
accomplished
OPERATING SYSTEM BASIC FUNCTIONS
USER INTERFACE
The part of the operating system that allows
you to communicate with it
Three main types…
 Command-driven
 Menu-driven
 Graphical user interfaces (GUI)
RESOURCE MANAGEMENT
Part of the operating system that manages the hardware and networking resources of
a computer system
 Includes CPU, memory, secondary storage devices, telecommunications, and
input/output peripherals
Common functions
 Keeping track of where data and programs are stored
 Subdividing memory; providing virtual memory capability
FILE MANAGEMENT
Part of the operating system that controls the creation, deletion, and access of files
and programs
 Keeps track of physical location on storage devices
 Maintains directories of information about the location and characteristics of stored
files
TASK MANAGEMENT
Part of the operating system that manages the accomplishment of end user
computing tasks
 Controls which task gets access to the CPU,
and for how long
 Can interrupt the CPU at any time to substitute
a higher priority task
 Supports preemptive and cooperative multi-tasking and multi-processing
DATA RESOURCE
MANAGEMENT

If data wore store in an unorganized

systems, to get information from an
information systems so difficult.
Therefore, in all information systems, data
resources must be organized and structured in some
logical manner so that they can be accessed easily,
processed efficiently, retrieved quickly, and managed
effectively.
 FOUNDATION DATA CONCEPTS
Data Organization Structure is logically organized into:-
Character consists of a single alphabetic, numeric, or other
symbol.
Field. A field consist of a grouping of related characters.

Record. All the field used to describe the attributes of an

entity are grouped to form a record. Thus a record represents
a collection of attributes that describe an entity.

File. A group of related record is a data file or table.

Database. A database is an integrated collection of logically

data elements.
 CHARACTER

Consists of a single alphabets, numeric or other symbol.

It is a byte used to represent a particular character.
 FIELD

Consists of a grouping of related characters.

 E.g., person names represent the name field. i.e., last name, first name, state, city,
telephone #
 RECORD

Fields when grouped together make a record.

An allocation of attributes to describe any entity.
 E.g.,
 Person payroll records
 Employee claims record
 Student academic records
 FILE

Group of related records is a data file or table.

A single table may be referred to as a flat file.
E.g.,
 Employee file
 Student file
 Inventory file
 Payroll file etc
 DATABASE

An integrated collection of logically related data elements.

It contains all the records
 FOUNDATION DATA CONCEPTS

Data Organization Structure

Human Resource
Database
Payroll File Benefit File

Employee Employee Employee Employee

Record 1 Record 2 Record 3 Record 4
Name SS No. Salary Name SS No. Salary Name SS No. Salary Name SS No. Salary
Field Field Field Field Field Field Field Field Field Field Field Field

Jones T.A. 275-32-3874 20,000 Klugman J.L. 349-88-7913 28,000 Alverez, J.S. 542-40-3718 100,000 Porter, M.L. 617-87-7915 50,000
 FOUNDATION DATA CONCEPTS

Example: An Electric Utility Database

Electric Utility Database

Billing Payment
Entities: Processing
Customers, Meters, Bills,
Payments, Meter Readings

Meter Service
Reading Relationships:
Start/Stop
Bills Sent to Customers
Customers Make Payments
Customers Use Meters
 DATABASE STRUCTURES

DBMS packages are designed to use specific data structures to provide end users with quick;
easy access to information stored in the databases.
 DATABASE STRUCTURES

Five Major Database Structures

•Hierarchical Structure
•Network Structure
•Relational Model
•Object-Oriented
•Multidimensional Structure
 HIERARCHICAL STRUCTURE

One-to-many relationship
Relationship b/w records from a hierarchy structure all of them are dependent.
Root element
 NETWORK STRUCTURE
Allow many-to-many relationships among records.
E.g., employee records can be related to more than one project record & vice versa.
 RELATIONAL STRUCTURE
It is used by most microcomputers DBMS packages as well as by both midrange &
mainframes systems.
In this, all data elements within the database are viewed as being stored in the
form of simple two dimensional tables sometimes referred to as relations .

Department Table Employee Table

Deptno Dname Dloc Dmgr Empno Ename Etitle Esalary Deptno

Dept A Emp 1 Dept A
Dept B Emp 2 Dept A
Dept C Emp 3 Dept B
Emp 4 Dept B
Emp 5 Dept C
Emp 6 Dept B
MULTIDIMENSIONAL STRUCTURE
OBJECT-ORIENTED STRUCTURE

Web based Bank Account Object Describing the

applications Attributes attributes of an
•Customer entity, plus the
Supports •Balance
•Interest operations that can
inheritance Operations be performs upon the
•Deposit (Amount)
•Withdraw (Amount) data
•Get Owner

Inheritance Inheritance

Checking Account Object Savings Account Object

Attributes Attributes
•Credit Line •Number of Withdrawals
•Monthly Statements •Quarterly Statement
Operations Operations
•Calculate Interest •Calculate Interest Paid
•Print Monthly Statement •Print Quarterly Statement
OBJECT-ORIENTED STRUCTURE
 TYPES OF DATABASES
Operational Databases
Distributed Databases
External Databases
Hypermedia Databases
Distributed Database Model
External
Databases
on the
Internet and
Online
Services
Client PC

Network
Distributed Server
Databases Operational
on Intranets Databases
and Other of the
Networks Organization

End User Data Data

Databases Warehouse Marts
TYPES OF DATABASES
Operational Databases
TYPES OF DATABASES
Web-Based Information System

The Internet
Intranets HTML
Extranets XML
Web Web Web Pages
Browser Server Image Files
Software Video Files
Audio Files

Client PCs
Hypermedia
Network
Database
Server
DATA WAREHOUSES
Applications Data Marts
ERP Finance

Inveentory
Control Marketing

Logistics

Sales

Shipping

Accounting
Purchasing

CRM Management
Reporting
DATA WAREHOUSE COMPONENTS

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APPLICATIONS AND DATA MARTS

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DBMS MAJOR FUNCTIONS

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THE ROLE OF INTRANETS AND EXTRANETS
What is the business value driving so many companies to rapidly install and extend
intranets throughout their organizations?
What strategic competitive benefits do you see in a company’s use of extranets?
 ENTERPRISE BUSINESS SYSTEMS
E-business means using the Internet, other networks, and IT to support
 Electronic commerce
 Enterprise communications and collaboration
 Web-enabled business processes
E-commerce is the buying, selling, and marketing of products, services, and information over the
Internet and other networks

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 CROSS-FUNCTIONAL SYSTEMS
Many companies today are using information technology to develop integrated cross-functional
enterprise systems that cross the boundaries of traditional business functions in order to
reengineer and improved vital business all across the enterprise.

These organizations view cross-functional enterprise systems as a strategic way to use IT to share
information resources and improve the efficiency and effectiveness of business processes, and
develop strategic relationships with customers, suppliers, and business partners,
 CROSS-FUNCTIONAL SYSTEMS
Companies first moved from functional mainframe-based legacy systems to integrate cross-
functional client/server applications.

Installing enterprise resource planning, supply chain management, or customer relationship

management software from SAP America, PeopleSoft, Oracle, and others.

Theses applications may interconnected by enterprise application integration (EAI) systems .

So that business professionals can more easily access the information resources they need to
support the needs of customers, suppliers, and business partners.
 CROSS-FUNCTIONAL SYSTEMS
Enterprise collaboration systems (ECS) are cross-functional systems that support and enhance
communication and collaboration among the teams and workgroups in an organization.

Enterprise applications are focused on accomplishing fundamental business processes in concert

with a company’s customer, suppliers, partner, and employee stakeholders.
Enterprise resource planning (ERP) concentrates on the efficiency of a firm’s internal production,
distribution, and financial processes
 CROSS-FUNCTIONAL SYSTEMS
Customer relationship management (CRM) focuses on acquiring and
retaining profitable customers via marketing , sales, and service
processes.
Partner relationship management (PRM) aims at acquiring and retaining
partners who can enhance the selling and distribution of a firm's products
and services.
Supply chain management (SCM) focuses on developing the most efficient
and effective souring and procurement processes with suppliers for the
products and services needed by a business.
Knowledge Management (KM)
 Focuses on facilitating internal group collaboration and decision support
 CROSS-FUNCTIONAL SYSTEMS
Cross the boundaries of traditional business functions
 Used to reengineer and improve vital business processes all across the enterprise

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ENTERPRISE APPLICATION ARCHITECTURE

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 ENTERPRISE APPLICATION
ARCHITECTURE
Provides a conceptual framework
 Helps visualize the basic components, processes, and interfaces of major e-
business applications
Focuses on accomplishing fundamental
business processes in concert with
 Customers
 Suppliers
 Partners
 Employees

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 ENTERPRISE APPLICATION
ARCHITECTURE
Enterprise Resource Planning (ERP)
 Concentrates on the efficiency of internal production, distribution, and financial processes
Customer Relationship Management (CRM)
 Focuses on acquiring and retaining profitable customers via marketing, sales, and
services
Partner Relationship Management (PRM)
 Aims at acquiring and retaining partners who
can enhance the selling and distribution of products and services

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 ENTERPRISE APPLICATION
ARCHITECTURE

Supply Chain Management (SCM)

 Focuses on developing the most efficient and effective sourcing and procurement
processes
Knowledge Management (KM)
 Focuses on facilitating internal group collaboration and decision support

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 ENTERPRISE APPLICATION INTEGRATION
EAI software connects cross-functional systems
Serves as middleware to provide
 Data conversion
 Communication between systems
 Access to system interfaces

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TRANSACTION PROCESSING CYCLE:

Cross-functional information systems that process data resulting from the occurrence
of business transactions
 Transactions :include
 Sales,
 Purchases,
 Deposits, withdrawals, refunds, and payments.
 That describing business transitions, database and produce a variety of information
products.
 Online transaction processing (OLTP) is a real-time system that captures
transactions immediately

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You should understand transaction processing cycle of several basic activities:
1. Data Entry:
The first step of the transaction processing cycle is the capture of business data.
For example, transaction data may be collected by point-of-sale terminals using
optical; scanning of bar codes and credit card readers at a retail store.
For example: Imtiaz Super Store using this technology, and Naheed, Chase up store
for data entry and processing.
Transaction data can also be captured at an e-commerce Web site on the internet.
The proper recording and editing of data so they are quickly and correctly captured for
processing is one of the major design challenge of information system.
2. Transaction Processing:
Transaction processing systems process data in two basic ways.
1. Batch processing: where data are accumulated over a period of time and
processed periodically, and
2. Rea;-time processing: also called online processing): where data are processed
immediately after a transaction occurs.
All online transection processing systems incorporate real-time processing
capabilities.
Many online systems also depend on the capabilities of fault tolerant computer
system that can continue to operate even if parts of the system fail.
3. Database Maintenance:
An organizations’ database must updated by its transaction processing systems so
that they are always correct and up-to-date.
Therefore, transaction processing systems serve to assist in maintaining the
corporate databases of an organization to reflect changes resulting from day-to-
day business transactions.
For example, credit sales made to customer will cause customer account balance to
be increased and the amount of inventory on hand to be decreased.
Database maintained ensures that these and other changes are reflected in the data
records stored in the company’s databases.
4. Document and Report Generation:
Transaction processing systems produces a variety of documents, and reports.
Examples of transaction documents includes:
Purchase orders.
Paychecks.
Sales receipts
Invoices
Customer statements.
Transaction reports might take the form of a transaction listing such as payroll
register, or edit reports that describe errors detected during processing
5. Inquiry Processing.
Many transaction processing systems allow you to use the Internet, Intranets,
extranets, and Web browsers or database management query languages to make
inquiries and receive responses concerning the results of transaction processing
activity.
Typically, responses are displayed in a variety of pre specified format or screens.
for example: you might check on the status of a sales order, the balance in an
account, or the amount of stock in inventory and receive immediate responses at
your PC
THE TRANSACTION PROCESSING
CYCLE

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 ENTERPRISE COLLABORATION SYSTEMS
(ECS)
EC systems are cross-functional information systems that enhance team and
workgroup
 Communication
 Coordination
 Collaboration
Systems may include
 Networked PC workstations
 Servers
 Databases
 Groupware and application packages

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ECS TOOLS

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 FUNCTIONAL BUSINESS SYSTEMS

A variety of types of information systems that support the business functions

of
 Accounting
 Finance
 Marketing
 Operations management
 Human resource management

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 ACCOUNTING SYSTEMS
Accounting information systems are the oldest and most widely used information
systems in business.
They record and report business transactions and other economic events.
Computer-based accounting systems record and report the flow of funds through an
organization on a historical basis and produce important financial statements
such as balance
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 MARKETING SYSTEMS
Marketing systems are concerned with:
 Planning, promotion, and sale of existing products in existing markets
 Development of new products and new markets
 To-----------------------------------------------Better attracting and serving present
and
potential customers.
 Thus, Marketing Performs an essential function in the operational of a
business enterprise.
 Because firms have increasingly turned to “Information Technology” to
help them perform vital marketing functions in the face of the rapid
changes of today’s environment.

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MARKETING INFORMATION SYSTEMS

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 INTERACTIVE MARKETING
Interactive Marketing:
A customer-focused marketing process
 Uses the Internet, intranets, and extranets
 Establishes two-way transactions between a business and its customers or
potential customers
Goal: The goal of Interactive Marketing is to enable a company to use those
networks.
 Profitably use networks to attract and keep customers.
 Get customers to help create, purchase, and improve products and services

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Interactive Marketing encrouges customers to become involved in “ Product Development”,
Delivery, and service issues.
This is enabled by various internet technologies, including:
Chat.
Discussion Group.
Web Forms
Questionnaires,
Instant Messaging
Email Correspondence.
Finally, the expected outcomes of interactive marketing are a rich mixture of vital Marketing
data,
New Product ideas,
Volume Sales
And Strong Customer relationships.
 TARGETED MARKETING
Targeted Marketing has becomes an important tool in developing advertising and
promotion strategies to strengthen a company’s e-commerce initiatives, as well
as its traditional business venues.

As illustrated in the figure. Targeted Marketing in an advertising and promotion

management concept that includes five targeting components:

An advertising and promotion management concept with five targeting components

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 TARGETED MARKETING COMPONENTS

Community: Companies can customize their web advertising

messages and promotion methods to appeal to people in specific
communities.
They can be communities of internet, such as
Virtual communities of online sporting enthusiast, or arts and crafts
hobbyists, or geographic communities formed by the web sites of
a city or other local organization.

customized ads to appeal to specific virtual communities

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 CONTENT
Advertising, such as electronics billboards or banners, can be placed on variety of
selected Web sites., in addition to a company's Web sits.
The content to these messages is aimed at the targeted audience.
An ad for a products campaign on the opening page of an Internet search engine is
typical example.
Content: ads placed on a variety of selected websites, aimed at a specific audience
 CONTEXT

Advertising appears only in Web pages that are relevant to the content of a product or
service.
So, advertising is targeted only at people who are already looking for information about a
subject matter.
Such as vacation. Travel that is related to a company's products
Such as car rental services.

Context: ads placed on web pages that are relevant to a product or service
 DEMOGRAPHIC/PSYCHOGRAPHIC

Web Marketing efforts can be aimed only at specific types or classes of people: for
example unmarried, twenty-something, middle income, male college graduates.
Demographic/Psychographic: web marketing aimed at specific types or classes of
people
 ONLINE BEHAVIOR

Online behavior: promotions tailored to each visit to a site by an individual

 SALES FORCE AUTOMATION
Outfit sales force with notebook computers,
web browsers, and sales contact software
 Connect them to marketing websites and the company intranet
Goals
 Increase personal productivity
 Speed up capture and analysis of sales data
 Gain strategic advantage

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 MANUFACTURING INFORMATION SYSTEMS

Supports the production/operations functions

 Includes all activities concerned with planning and control of the processes producing
goods
or services.
 Information Systems used for operations management and transaction processing
support all firms that must plan, monitor, and control inventories, purchases, and the flow
of goods and services.
 Firms such as transportation companies, wholesalers, retailers, financial institutions, and
service companies must use of production/ operations information systems to plan and
control their operations.

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 MANUFACTURING INFORMATION SYSTEMS

 We will Concentrate on computer-based manufacturing applications to illustrate

information systems that support the production/operations function.
COMPUTER-INTEGRATED MANUFACTURING

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 CIM OBJECTIVES

Simplify production processes, product designs, and factory organization as a vital

foundation to automation and integration.
Automate production processes and the
business functions that support them with computers, machine, and robots.
Integrate all production and support
processes using
 Networks
 Cross-functional business software
 Other information technologies

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 MANUFACTURING INFORMATION SYSTEMS

The overall goal of CIM and such manufacturing systems is to create flexible, agile,
manufacturing processes that efficiently produce products of the highest quality.
CIM supports the concepts of flexible manufacturing systems, agile manufacturing,
and total quality management.
Manufacturing information systems help companies simplify , automate, and
integrate many of the activities needed to produces products of all kinds.
 MANUFACTURING INFORMATION SYSTEMS
For example, computers are used to help engineers design better products using both computer-
aided engineering(CEA) and computer-aided design (CAD) systems, and better production
processes with computer-aided process planning.
Also used to help plan the types of material needed in the production process, which is called
material requirement planning (MRP), and to integrate MRP with production scheduling and
shop floor operations, which is known as manufacturing resource paining.
 CIM SYSTEMS
Computer-aided manufacturing (CAM)
 That automate the production process.
 For examples, this could be accomplished by mentoring and controlling the production
process in a factory or by directly controlling
 A physical process ( process control) ,
 A machine tool ( machine control),
 Or machines with some humanlike work capabilities ( robots)

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 CIM SYSTEMS
Manufacturing execution systems (MES).
Are performance monitoring information systems for factory floor operations.
They monitor , track, and control the five essential components involved in a production process,
materials, equipment, personnel instructions and specifications , and production facilities.
MES includes sop floor scheduling and control, machine control, robotics control, and process
control systems.
To help the company achieve a flexible, high quality manufacturing process.
 CIM SYSTEMS

Process control: is the use of computers to control an ongoing physical process.

Process control computers control physical processes in petroleum fineries, cement
plants, steel mills, chemical plants, food product manufacturing plants, pulp and
paper mills, electric power plants, and so on.
A process control computer system requires the use of special sensing devices that
measures physical phenomena such as temperature or pressure changes.
 CIM SYSTEMS
Machine Control:
Is the use of computers to control the actions of machines.
This is also popularly called numerical control.
The computer-based control of machine tools to manufacturing products of all kinds
is a typical numerical control application used by many factories throughout the
world.
ENTERPRISE BUSINESS
SYSTEMS
WHAT IS CRM?
Managing the full range of the customer relationship involves
 Providing customer-facing employees with a single, complete view of every
customer at
every touch point and across all channels
 Providing the customer with a single, complete view of the company and its
extended channels
CRM uses IT to create a cross-functional enterprise system that integrates and
automates many of the customer-serving processes

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APPLICATION CLUSTERS IN CRM

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CONTACT AND ACCOUNT MANAGEMENT
CRM helps sales, marketing, and service professionals capture and track relevant
data about
 Every past and planned contact with prospects and customers
 Other business and life cycle events of customers
Data are captured through customer touchpoints
 Telephone, fax, e-mail
 Websites, retail stores, kiosks
 Personal contact

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SALES
A CRM system provides sales reps with the
tools and data resources they need to
 Support and manage their sales activities
 Optimize cross- and up-selling
CRM also provides the means to check on a customer’s account status and history
before scheduling a sales call

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MARKETING AND FULFILLMENT
CRM systems help with direct marketing campaigns by automatic such tasks as
 Qualifying leads for targeted marketing
 Scheduling and tracking mailings
 Capturing and managing responses
 Analyzing the business value of the campaign
 Fulfilling responses and requests

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CUSTOMER SERVICE AND SUPPORT
A CRM system gives service reps real-time access to the same database used by
sales
and marketing
 Requests for service are created, assigned,
and managed
 Call center software routes calls to agents
 Help desk software provides service data
and suggestions for solving problems
Web-based self-service enables customers
to access personalized support information

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RETENTION AND LOYALTY PROGRAMS
It costs 6 times more to sell to a new customer
An unhappy customer will tell 8-10 others
Boosting customer retention by 5 percent can boost profits by 85 percent
The odds of selling to an existing customer are 50 percent; a new one 15 percent
About 70 percent of customers will do business with the company again if a problem
is quickly taken care of

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RETENTION AND LOYALTY PROGRAMS

Enhancing and optimizing customer retention and loyalty is a primary objective of CRM
 Identify, reward, and market to the most loyal
and profitable customers
 Evaluate targeted marketing and relationship programs

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THE THREE PHASES OF CRM

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BENEFITS OF CRM
Benefits of CRM
 Identify and target the best customers
 Real-time customization and personalization
of products and services
 Track when and how a customer contacts
the company
 Provide a consistent customer experience
 Provide superior service and support across
all customer contact points

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CRM FAILURES
Business benefits of CRM are not guaranteed
 50 percent of CRM projects did not produce promised results
 20 percent damaged customer relationships
Reasons for failure
 Lack of understanding and preparation
 Not solving business process problems first
 No participation on part of business stakeholders involved

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TRENDS IN CRM
Operational CRM
 Supports customer interaction with greater convenience through a variety of
channels
 Synchronizes customer interactions consistently across all channels
 Makes the company easier to do business with

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TRENDS IN CRM
Analytical CRM
 Extracts in-depth customer history, preferences, and profitability from databases
 Allows prediction of customer value
and behavior
 Allows forecast of demand
 Helps tailor information and offers to
customer needs

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TRENDS IN CRM
Collaborative CRM
 Easy collaboration with customers,
suppliers, and partners
 Improves efficiency and integration
throughout supply chain
 Greater responsiveness to customer needs through outside sourcing of products
and services

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TRENDS IN CRM
Portal-based CRM
 Provides users with tools and information
that fit their needs
 Empowers employees to respond to
customer demands more quickly
 Helps reps become truly customer-faced
 Provides instant access to all internal and
external customer information

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ERP: THE BUSINESS BACKBONE
ERP is a cross-functional enterprise backbone that integrates and automates
processes within
 Manufacturing
 Logistics
 Distribution
 Accounting
 Finance
 Human resources

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 WHAT IS ERP?

Enterprise resource planning is a cross-functional

enterprise system
 An integrated suite of software modules
 Supports basic internal business processes
 Facilitates business, supplier, and customer information
flows

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ERP APPLICATION COMPONENTS

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ERP PROCESS AND INFORMATION FLOWS

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 BENEFITS AND CHALLENGES OF ERP
ERP Business Benefits
 Quality and efficiency
 Decreased costs
 Decision support
 Enterprise agility

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 BENEFITS AND CHALLENGES OF ERP

ERP Costs
Risks and costs are considerable
Hardware and software are a small part
of total costs
Failure can cripple or kill a business
COSTS OF IMPLEMENTING A NEW ERP

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 CAUSES OF ERP FAILURES

Most common causes of ERP failure

 Under-estimating the complexity of planning, development, training
 Failure to involve affected employees in
planning and development
 Trying to do too much too fast
 Insufficient training
 Insufficient data conversion and testing
 Over-reliance on ERP vendor or consultants

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TRENDS IN ERP

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SUPPLY CHAIN MANAGEMENT (SCM)
Fundamentally, supply chain management
helps a company
 Get the right products
 To the right place
 At the right time
 In the proper quantity
 At an acceptable cost

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GOALS OF SCM
The goal of SCM is to efficiently
 Forecast demand
 Control inventory
 Enhance relationships with customers, suppliers, distributors, and others
 Receive feedback on the status of every link in the supply chain

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WHAT IS A SUPPLY CHAIN?
The interrelationships
 With suppliers, customers, distributors, and
other businesses
 Needed to design, build, and sell a product
Each supply chain process should add value to the products or services a company
produces
 Frequently called a value chain

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SUPPLY CHAIN LIFE CYCLE

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ELECTRONIC DATA INTERCHANGE
EDI
 One of the earliest uses of information technology for supply chain management
 The electronic exchange of business transaction documents between supply chain
trading partners
 The almost complete automation of an e-commerce supply chain process
 Many transactions occur over the Internet, using secure virtual private networks

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TYPICAL EDI ACTIVITIES

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ROLES AND ACTIVITIES OF SCM IN BUSINESS

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PLANNING & EXECUTION FUNCTIONS OF SCM
Planning
 Supply chain design
 Collaborative demand and supply planning
Execution
 Materials management
 Collaborative manufacturing
 Collaborative fulfillment
 Supply chain event management
 Supply chain performance management

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BENEFITS AND CHALLENGES OF SCM
Key Benefits
 Faster, more accurate order processing
 Reductions in inventory levels
 Quicker times to market
 Lower transaction and materials costs
 Strategic relationships with supplier

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GOALS AND OBJECTIVES OF SCM

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BENEFITS AND CHALLENGES OF SCM
Key Challenges
 Lack of demand planning knowledge, tools,
and guidelines
 Inaccurate data provided by other information systems
 Lack of collaboration among marketing, production, and inventory management
 SCM tools are immature, incomplete, and
hard to implement

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TRENDS IN SCM

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 INTRODUCTION TO E-COMMERCE
 E-commerce is changing the shape of competition, the speed of action, and the
streamlining of interactions, products, and payments from customers to
companies and from companies to suppliers.
 electronic commerce is more than just buying and selling products online.
 e-commerce can include interactive marketing, ordering, payment.
 THE SCOPE OF E-COMMERCE

 Business processes involved in the marketing, buying, selling, and servicing of

products and services.
 Companies involved in e-commerce as either buyers or sellers rely on
Internet-based technologies.
 e-commerce applications and services to accomplish marketing, discovery,
transaction processing, and product and customer service processes .
 For example, e-commerce can include interactive marketing, ordering,
payment, and customer support processes at e-commerce catalog and
auction sites on the World Wide Web.
 However, e-commerce also includes e-business processes such as extranet
access of inventory databases by customers and suppliers (transaction
processing),
 intranet access of customer relationship management systems by sales and customer
service reps (service and support), and customer collaboration in product
development via e-mail exchanges and Internet newsgroups (marketing/discovery).
 The advantages of e-commerce allow a business of virtually any size that is located
virtually anywhere on the planet to conduct business with just about anyone, any-
where.
 Imagine a small olive oil manufacturer in a remote village in Italy selling its wares to
major department stores and specialty food shops in New York, London, Tokyo, and
other large metropolitan markets.
 The power of e-commerce allows geophysical barriers to disappear, making all
consumers and businesses on earth potential customers and suppliers.
 CATEGORIES OF E-COMMERCE
Many companies today are participating in or sponsoring four basic categories of e-
commerce applications: business-to-consumer, business-to-business, consumer-to-
consumer and business-to-government e-commerce.

Business-to-Consumer (B2C) e-Commerce. In this form of e-commerce, businesses must

develop attractive electronic marketplaces to sell products and services to consumers.
For example, many companies offer e-commerce Web sites that provide virtual
storefronts and multimedia catalogs, interactive order processing, secure electronic
payment systems, and online customer support. The B2C marketplace is growing like
a wildfire but still remains the tip of the iceberg when compared with all online
commerce.
Consumer-to-Consumer (C2C) e-Commerce. The huge success of online auctions like
eBay, where consumers (as well as businesses) can buy from and sell to one another in
an auction process at an auction Web site, makes this e-commerce model an important
e-commerce business strategy. Thus, participating in or sponsoring consumer or
business auctions is an important e-commerce alternative for B2C, C2B (consumer-to-
business), or B2B e-commerce. Electronic personal advertising of products or services
to buy or sell by consumers at electronic newspaper sites, consumer e-commerce
portals, or personal Web sites is also an important form of C2C e-commerce.
Business-to-Business (B2B) e-Commerce. If B2C activities are the tip of the iceberg, B2B
represents the part of the iceberg that is under the water—the biggest part. This
category of e-commerce involves both e-business marketplaces and direct market links
between businesses. For example, many companies offer secure Internet or extranet e-
commerce catalog Web sites for their business customers and suppliers. Also very
important are B2B e-commerce portals that provide auction and exchange marketplaces
for businesses. Others may rely on electronic data interchange (EDI) via the Internet or
extranets for computer-to-computer exchange of e-commerce documents with their
larger business customers and suppliers.