Lecture 2-Global E-Business and Collaboration

Lecture 2
Global E-Business and Collaboration

How Business Use Information Systems
VIDEO CASEs
Video 1 : FedEx Improves Customer Experience with
Integrated Mapping and Location Data
Video 2 : Geo-Mapping Technologies Help Target Sales

Prospects
Lecture 2 - Global E-Business 1

GLOBAL E-BUSINESS:
HOW BUSINESS USE INFORMATION SYSYEMS
• Every organization deals with many different pieces of

Information about their Suppliers, Customers,
Invoices, Payments, their Products and Services In
order to operate.
• Firms must organize their work activities that use

information to operate efficiently and enhance overall
performance of the firm.
• Information Systems (IS) make it possible for firms to

manage their information, make better decisions, and
improve the execution of their Business Processes.

GLOBAL E-BUSINESS: HOW BUSINESS USE INFORMATION SYSYEMS
BUSINESS PROCESSES
• Business Processes are Workflows of material, Information, and

Knowledge – in other word:
Business Processes are sets of activities.
• Business Processes are also referred to as unique ways in which

organizations coordinate work, information and knowledge and
the ways in which Management chooses to coordinate work.
A BUSINESS CAN BE SEEN AS A COLLECTION OF BUSINESS PROCESSES.

(Some of these Processes are part of large encompassing Processes )
• Information Systems (IS) are all about improving the Business
Processes, which lie at the very heart of a Business.

BUSINESS PROCESSES EXAMPLES
• Almost every Business has a way to hire (recruit) Employees. The
Process of hiring employees is a Business Process in the sense that a
set Of activities a firm performs in order to hire new Employees.
- Hiring employee PROCESS can be broken down into a number of different

steps such as Place Advertisement, Contact Employment Agencies, Collect
Resumes, Review Resumes, Interview candidates, Rank candidates, Make
employment decision and Enroll Employee into Payroll, Health scheme and
Pension scheme. which are part of Employee System .
• In some business Hiring process can be slow and inefficient, whereas in

others, it can be swift and highly effective.
One of the major purpose of Information Systems is to enable highly

efficient Processes.
• The performance of a Business firm depends on how well its Business

Processes are designed and coordinated.
• Business Process can be a source of competitive strength. It can

enable a company to innovate or to execute better than its rivals.

• Many Business Processes are tied to a specific Functional Area.
e.g. - Sales and Marketing Function responsible for identifying potential Customers.
- Human Resources function would be responsible for Hiring Employee .
• Some Business Processes cross many Business Functional Areas and require
coordination across Departments.
Example - Consider a simple Business Process of ‘Fulfilling a Customer Order’.
You will notice that:
– Sales Department would Create a Sales Order.
– The Order will pass first to Accounting Dapartment for Credit verification or
immediate Payment prior to Shipping.
–Then Manufacturing Department will need to pull the product from
the Inventory.
–Then Transportation department will ship the goods .
– An Invoice will have to be produced by the Accounting Department and
a notice will be sent to the Customer indicating that the Product has
shipped.
– Sales Department will have to be notified of the Shipment and prepare to
support the Customer by answering calls or fulfilling warranty claims.

•As you can see ‘Fulfilling a Customer Order’ Process involves a complex set
of steps that requires the close Coordination of several Departments.
To efficiently perform all these steps a great deal of information is needed.

The Information Systems make this possible.

HOW INFORMATION SYSTEMS ENHANCE BUSINESS PROCESSES?
Information Systems enhance Business Processes in two ways:

1. Increasing the efficiency of Existing Processes (Enhancing Existing Processes)
2. Creating New Processes that are capable of transforming the Business.
• Information Systems automate many steps in Business Processes that were formerly
performed manually.
Information Systems can enable entirely new Business Process by:-
- Changing the flow of information ,

- Making it possible for many more people to access and share information ,
- Replacing sequential steps with tasks that can be performed simultaneously in
parallel
- Eliminating delays in Decision making.
• You can achieve a very clear understanding of how Business actually works, and also
Understand how to change the Business Processes to make it more efficient or effective
by conducting a Business Process Analysis.
TYPES OF BUSINESS INFORMATION SYSTEMS
- Although there are many different Business Systems, We can categorize

different Systems from two different perspectives:
1. Systems from a Functional Perspective

Functional Perspective identifies Systems by their major Business Functions
– Sales and Marketing Systems
– Manufacturing and Production Systems
– Finance and Accounting Systems
– Human Resources Systems
2. Systems from a Constituency Perspective
Constituent Perspective identifies Systems in terms of major Organizational Groups

that they serve.
- Transaction Processing Systems (TPS)
– Management Information Systems (MIS)
– Decision-Support Systems (DSS)
– Executive Information Systems (EIS) or Executive Support Systems (ESS)

SYSTEMS FROM A FUNCTIONAL PRESPECTIVE
• From a historical perspective, Functional Systems were

the first kind of Systems, developed by Business firms.
• These Systems were located in specific Business

Departments, such as Sales and Marketing Department,
Production Department etc..
• SALES AND MARKETING SYSTEMS
The Sales and Marketing Function is responsible for

selling the organization’s Product and Services.
Marketing Department is concerned with:-
- Identifying potential Customers needs and wants,

- Planning for developing product and services to meet
customer needs
- Advertising and promoting these product and
services.
Sales Department is concerned with:
- Contacting customers,
- Selling the products and services,
- Taking Orders, and following up on sales.
Sales And Marketing Information Systems support all

Sales and Marketing Business functions.
Example of Sales and Marketing Information Systems
SYSTEM DESCRIPTION GROUP SERVED
Order Processing Enter, Process & Track Orders Operational Mgmt, and staff
Pricing Analysis Determine Price for products Middle Management
Sales trend Forecasting Prepare 5 year Sales plan Senior Management

Example of a Sales Information System
• Sales Information System captures Sales data at the moment of Sales to help the
Business monitor Sales Transactions and provide information to help Management
analyze Sales Trends and the effectiveness of Marketing campaign.

MANUFACTURING AND PRODUCTION SYSTEMS
• Manufacturing and Production Function is responsible for actually producing the
firm’s goods and services.
• Manufacturing and Production Systems deal with the:

– Planning, Development, and Maintenance of Production facilities;
– Establishment of Production goals;
– Acquisition, Storage, and availability of materials;
– Scheduling of resources such as equipment, facilities , material , and
labour required to produce products.
Examples of Manufacturing and Production Information Systems
SYSTEM DESCRIPTION GROUPS SERVED

Machine Control Controls the actions of machines Operational Management
Production Planning Decides when and how many Middle Management
Products should be produced .
Facilities Location Decides where to locate new Senior Management
Production facilities
Quality Control Identify source of defects
Inventory System …………………………
OVERVIEW OF AN INVENTORY SYSTEM (STOCK CONTROL SYSTEM)
• Most Manufacturing and Production Systems use some sort of Inventory System.
• An Inventory System produces a Report that gives information about number of each
item available in inventory, the number to be reorder replenished in each item to
support Production activities.
• Companies can estimate the number of items to reorder, or use a formula to

calculate the least expensive quantity called ‘Economic Order Quantity’ to reorder.

FINANCE AND ACCOUNTING SYSTEMS
 The Finance Function is responsible for managing Firm's Financial Assets such as: Cash ,
equities (stocks), bonds, and other investments to maximize return on the Financial
assets.
To determine whether a firm is getting the best Return on its investment , the Financial
Function must obtain a considerable amount of Information from sources outside of the
firm (External sources).
 Accounting Function is responsible for maintaining and managing the Firm’s Financial
Records such as Receipts, Disbursements, Depreciation, and Payroll in order to account
for the flow of funds in a firm.
Finance And Accounting Information Systems support these activities
Example of Finance and Accounting Information Systems

Accounts Receivables Tracks money owed the firm Operational Management
Budgeting Prepares short term Budget Middle Management
Profit Planning Plans long term Profits Senior Management

ACCOUNT RECEIVABLES SYSTEM
This System tracks and stores important Customer data , such as Payment History,
Credit Rating and Billing History.

HUMAN RESOURCES SYSTEMS
The Human Resources Function is responsible for attracting,
developing, and maintaining the firm’s workforce.
Human Resources Information Systems support activities such as:
- Identifying potential employees,

- Maintaining complete record of existing Employees,
- Creating programs (TRAINING PROGRAMS ) to develop employees’
talents and skills.
Examples of Human Resources Information Systems

Training and Development Tracks employees’ Training skills Operational Mgmt
and Performance appraisals
Compensation Analysis Monitors the range of distribution Middle Management
Wages, Salaries and Benefits
Human Resource Planning Plans the long term labour force Senior Management
needs of the Organization

AN EMPLOYEE RECORD KEEPING SYSTEM
The System maintains basic employee data that can be used to produce a variety of
Reports, such as ‘’List of Newly hired employees’’, Employees Classified by Job Type
and Educational Level’’, ‘’Employee Job Performance Evaluation Report’’ etc…
- Employee Record keeping Systems are typically designed to provide data that can
satisfy Government (State) record keeping requirements.

SYSTEMS FROM CONSTITUENCY PRESPECTIVES
• Although Functional Perspective is very useful for

understanding how Business Systems serve specific
Business Functions, it does not tell us how Systems
help the Mangers of the Firm.
• The Constituency Perspective examines in terms of the

various Levels of Management and Types of Decisions
that they support each management level.
• Each Management Level has different information needs

given their different responsibilities, and each can be
seen as major Information Constituents.

– Senior Managers (Directors . CEO )need Summary Information that
can quickly inform them about the overall performance of the Firm, such as:
– Gross Sales Revenue,
– Sales By Product Group Range,
– Overall Profitability.
– Middle Managers (Departmental Managers) need more specific

information on the results of specific Functional areas and Departments of the
Firm, such as:
– Contacts by Sales Force,
– Production Statistics for specific Factories or Product Lines,
– Employment Levels and Costs,
– Sales Revenues for each Month or even each Day.
– Operational Managers (Supervisors) need Transaction Level

Information, such as:
– Number of remaining Parts in Inventory each day
– Number of hours logged on say. Monday by each Employee.
• Knowledge Workers may need access to external Scientific Database

or Internal Databases with Organizational Knowledge.
• Production and Service Workers need access to Customer Records in
order to take Order and Answer queries from Customers.
1. TRANSACTION PROCESSING SYSTEMS (TPS)

A Transaction Processing System (TPS) is a Computerized System that
Performs and records the daily routine transactions necessary to conduct
Business such as :
– Sales Order Entry,

– Hotel Reservation,
– Payroll,
– Student Registration etc….
• TPS are mainly service Operational level of the organization. Therefore,

they must make information easily available, current and accurate to
answer routine questions; like How many parts are in inventory, What
happened to XYZ companies payments? As well as Etc…track the flow
of transactions through the Organization.
• At the Operational level , tasks, resources, and goals are predefined and highly
Structured.
For example: Decision to grant credit to a customer is made by a Lower-level
supervisor according to predefined criteria.
1. TRANSACTION PROCESSING SYSTEMS (TPS)

• Operational Managers need TPS to monitor the status of Internal Operations and the firm’s
relationships with the external environment.
• TPS are also major producers (source) of information for the other types of Constituense
Systems such as MIS, DSS even EIS Systems.
• TPS are often so central to a business that failure for a few hours can lead to a firm’s demise
and perhaps that of other External firms linked to it.

2. MANAGEMENT INFORMATION SYSTEMS (MIS)

The term Management Information Systems (MIS) are a specific category of
information Systems serving the Middle Management (Department Managers).
Middle Management needs Systems to help them with their Monitoring ,

Controlling, Decision making, and Administrative activities.
• MIS provides Middle Managers with reports on the Organization’s current

performance. This information is used to monitor and control current
business and predict future performance.
• MIS Summarise and report on the company’s basic operations using data
supplied by Transaction Processing Systems (TPS).
• The data from TPS are compressed and usually presented in reports that are
produced on a regular schedule. i.e. Weekly, Monthly , Yearly Reports etc.

2. MANAGEMENT INFORMATION SYSTEMS (MIS)
• MIS generally provides answer to routine questions that have been specified
in advance and have a predefined procedures for answering them.
• Most M IS use simple routines such as Summarize and Comparison, as

opposed to sophisticated Mathematical Modules or Statistical techniques.
• Today, many MIS Reports are delivered Online.
• Some MIS Systems enable Managers to ‘’Drill Down’’ reports to see daily or
hourly data if required.
• MIS generally are not flexible enough and have little analytical capability.

MANAGINGEMENT INFORMATION SYSTEMS (MIS)

3. DECISION SUPPORT SYSTEMS (DSS)
• Decision Support Systems (DSS) support non-routine Decision making of

Middle Management.
• DSS focus on problems that are unique and rather changing, for which the
procedure for arriving at a solution may not be predefined in advance.
• DSS answers ‘’What-IF’’ type of Questions.

e.g. What would be the impact on Production Schedules if we were to
double sales next month?
• Although DSS use internal information from Transaction Processing Systems

and the Management Information Systems, they often take in information
from External Sources, such as Current Stock Prices from Stock Market
Databases .

• DSS use a variety of Mathematical and Statistical models to analyze data.
• DSS condense large amounts of data into a form in which Decision makers
analyze them.
• DSS are designed so that Users can work with them directly and thus, these
Systems explicitly include User-friendly Software.
e.g. Voyage-Estimating System is a small but powerful example of DSS.
• DSS is also known as ‘’ Business Intelligence Systems’ (BIS) ’ because they

focus on helping Users make better business decisions.


• The Voyage-Estimating System example below operates on a powerful Personal Computer. It is
used daily by Managers who must develop Bids on Shipping Contracts in the open market to
carry general cargo.
• The System calculates financial and technical voyage details including ship/time cost (fuel, labour
and capital) cargo rates, and port expenses, ship cargo capacity, speed, port distances, fuel and
water consumption and loading patterns.

4. EXECUTIVE INFORMATION SYSTEMS (ESS)
• The nature of Senior Managers (Executives) role involves with strategic

issues and long-term trends, both in the firm and in the external
environment.
• Senior Managers are concerned with questions such as :-
- What will employment levels be in the next five years?

- What are the long term industry cost trends, and where does our
firm fit in?
- How well our competitors performing
- What product should we be making in 5 years?
- What new acquisitions would protect us from cynical business
swings?

4. EXECUTIVE INFORMATION SYSTEMS (EIS)
• EIS help senior Managers make Strategic and Long term trend decisions.
• EIS address nonroutine (unstructured) decisions that require judgement,

evaluation, and insight because there is no agreed-on procedure for arriving
at a solution.
• EIS provide a generalized computing and communications capacity that can

be applied to a changing array of problems.
• EIS are designed to incorporate data from Eternal sources (i.e. From Market
places) but they also draw summarized information from internal TPS and
DSS.
• ESS filter, compress, and track critical data, displaying the data of greatest
importance to Senior managers.
4. EXECUTIVE INFORMATION SYSTEMS (EIS)

• EIS presents graphs and data from many sources through an interface
that is easy for Senior Managers to use. Often the information is
delivered to a PORTAL, which uses a Web interface to present integrated
personalized business content.
• The model below illustrates an EIS. The System pools data from diverse internal
corporate Systems (TPS) and external Databases such as Dow Jones news and
makes them available to Executive Managers in an easy-to-use form.

RELATIONSHIP OF SYSTEMS TO ONE ANOTHER
• The TPS, MIS, DSS and EIS Systems are interrelated. As illustrated below.
• TPS are typically a major source of data for other Systems.
• EIS are primarily a recipient of data from Lower level TPS Systems
• The other Systems may exchange data with each other as well.
• Data may also be exchanged among TPS System serving different functional areas.
(e.g. An Order captured by the Sales System may be transmitted to a Manufacturing
System as a transaction for producing or delivering the product specified in the
Order.)
• In reality, TPS, DSS, MIS and EIS Systems are loosely coupled in most business
firms. However this situation is changing and firm are using new Networking
technologies and Enterprise-wide Software Systems to integrate information that
resides in many different Systems.

TYPES OF SYSTEMS

SYSTEMS THAT SPAN THE ENTERPRISE
ENTERPRISE APPLICATIONS
As a result of internal growth and through acquisition of smaller
firms, many corporations ended up with a collection of
Information Systems (most of them are old), and face the challenge
of getting them to “talk with one another’ and work together as
one Corporate System.
• Getting all the different kinds of Systems in a company to work together is a

major challenge. One solution to this problem is to implement the
‘’Enterprise Applications’’.
• Enterprise Applications are Systems that span Functional areas,

focus on executing business processes across the business firm,
and include all levels of Management.

Enterprise Applications automates all Business Processes that span multiple business functions and
Organizational levels and may extend outside the organization.
There are four major Enterprise Applications. Each of them integrate a related set
of Functions and Business Processes to enhance the performance of an Organization as a whole.:
1. Enterprise
Systems (ERP)
2. Supply Chain Management Systems (SCM)
3. Customer Relationship Management Systems (CRM)
4. Knowledge Management Systems. (KMS)


1. ENTERPRISE APPLICATIONS
• A large organization typically has many different kinds of Information
Systems built around different Business Functions, Organizational
Levels, and Business Processes that can not automatically exchange
information.
• Business managers might have hard time assembling the data they need
for comprehensive, overall picture of the Organization’s operations.
• The fragmentation of data in hundreds of separate Information

Systems, degrades Organizational efficiency and Business performance.
• Enterprise Systems also known as ENTERPRISE RESOURCE

PLANNING (ERP) Systems makes it possible for information that was
previously fragmented in different Information Systems to be shared
across the firm and for different parts of the business to work more
closely.

• ERP Systems Integrate the Key Business Processes (KBP)

of an entire organization into a Single Software System
that enables information to flow seamlessly throughout the
organization.
• ERP Systems focus primarily on internal processes but may include

transactions with customers and vendors.
ERP Systems collect data from various key Business Processes in

Sales and Marketing, Manufacturing and Production, Finance and
Accounting and Human Resources functional areas and stores the data
into a single Central Database
• ERP Systems speed communication of Information throughout the

company and thus make it easier for Businesses to coordinate their
daily operations.
ERP Systems provide valuable information for improving Management
Decision Making.
• Corporate headquarters has access to up-to-the minute data on sales, inventory,

and production and uses this information to create more accurate Sales and
Production forecasts.
• ERP Systems also provide company wide information to help Managers analyze
overall Product profitability or Cost structures.
• The ability to increase accuracy and on-time completion of business transactions

, minimize costs, and increase customer satisfaction, and adds to firm
profitability.
Implementation of ERP Systems eliminates many redundant processes

and Information Systems.


2. SUPPLY CHAIN MANAGEMENTG SYSTEMS (SCM)
• SCM Helps Businesses in managing relationships with their Suppliers.
• SCM Systems provide information to help Suppliers, Purchasers (Buyers),

Distributors, and Logistic companies share products and services so that
they can source , produce, and delivery goods and services efficiently.
• SCM Systems ultimate objective is to get the right amount of products

from source to the point of consumption (Destination) with the least
amount of time (in the shortest possible of time) and with the lowest cost.
• If a Company and its Supply Network (i.e. Suppliers) do not have accurate
information, they will most likely be saddled by excessive Inventories,
inaccurate Manufacturing Plans, and missed Production Schedules.
Inability of moving products efficiently through the supply chain raises

costs while degrading Customer services.
SCM System are one type of INTERORGANIZATIONAL SYSTEMS because

they automate the flow of information across organizational boundaries.
• Inter-organizational Systems are increasingly common as firms combine

their capabilities to offer Customers an integrated online shopping
experience.
For example: When you book a flight at www.hotels.com , you are in fact dealing
with several inter-organizational Systems that link Reservation
Systems on the Web with Flight and Room Inventory Systems
maintained by Airlines and Hotels.
-

HOW DO INFORMATION SYSTEMS FACILITATE SCM SYTEMS
Decide when and what to Produce, Where to store, and Move
• Rapidly communicate Orders

• Track the status of Orders
• Check Inventory availability and monitor Inventory levels
• Reduce Inventory, Transportation, and Warehouse costs
• Track Shipments
• Plan Production based on Actual Customer Demands
• Rapidly communicate changes in Product design

EXAMPLE
Howarth's Transportation Management System (TMS) examines Customer Orders,
Production Schedule, Carrier Rates and availability, and Shipping Costs to
produce optimal Lowest-cost.
• (TMS) works with the Warehouse Management System (WMS), which

tracks and controls the flow of finished goods from the Distribution Centre
to its Customers.
• (TMS) produces Delivery plans daily updated every 15 minutes.
 Howarth's Warehouse Management System (WMS) acts on the Shipping Plans
from (TMS) , to directs the movement of goods based on immediate conditions

for space, equipment , inventory and personnel.
 Haworth uses special ‘’MIDDLEWARE’’ Software to link its (TMS) and (WMS)
Systems to Order Entry System, Manufacturing Planning System, and the
Shipping System.
• The Middleware passes Customer Orders, Shipping Plans and Shipping
notifications among theLecture
applications.
2 - Global E-Business 44
The figure below demonstrates Howorth Incorporated SCM System,

(An office furniture designer and manufacturer)
The firm has several Manufacturing plants across America and it has4 Distribution
Centres.

3. CUSTOMER RELATIONSHIP MANAGEMENTG SYSTEMS (CRM)
Customer Relationship Management (CRM) Systems help firms manage their

relationships with their Customers.
• CRM Systems provide information to coordinate all of the business

processes that deal with Customers Sales, Marketing Services to
optimize revenue, Customer satisfaction, and Customer retention.
• Information about Customer:
 Helps firms identify, attract, and retain the most profitable Customers;
 Provide better services to existing Customers;
 Increases Sales.

In the past, a firm’s Sales, Services, and Marketing processes were highly
departmentalized, and these departments did not share essential customer
information.
- Some information on a specific Customer might be stored and organized in

terms of that person's Account with company.
- Other pieces of information about the same Customer might be organized by

Products that were purchased. There was no way to consolidate all of this
information to provide a unified view of a Customer across Company.
CRM Systems try to solve the fragmentation problem by integrating the firm’s
Customer related Processes and consolidating Customer information from multiple
communication channels such as Telephone, e-mail, wireless devices, retail outlets,
and Web.

Detailed and accurate knowledge of Customers and their preferences helps firms
increase the effectiveness of their Marketing campaigns and provide higher-quality
Customer Service and Support.
Example: SAAB Automobile Company in USA implemented three CRM

Applications for Automotive Dealers from its Siebel Systems. These
CRM Systems provided the Dealers with 360 degree view of each Customer,
including prior service-related questions and all the Marketing
communication the Customer had ever received.
– SAAB can track the status of referred leads by monitoring events, such as
Salesman's initial call to the Customer and the scheduling and completion of a test
drive.
– The System provides information to measure Sales results of specific leads and
target leads are directed more preciously to the right Salesman at the right
dealership.
SAAB’s follow-up rate on Sales has also increased from 38 to 50% and the
Customer satisfaction rose from 69 to 75 %.

4. KNOWLEDGE MANAGEMENTG SYSTEMS (KMS)
The value of a firm’s products and services is based not only on its physical
resources but also on intangible Knowledge Assets.
Intangible assets forms over half of the Stock market (Shares) value of a firm
and a large part of this value is Knowledge.
Some firms perform better than the others because they have better
knowledge about how to create, produce, and deliver products and services
A Firm’s knowledge is unique, thus it is difficult to imitate, and can be

leveraged into long term Strategic benefits.

Knowledge Management Systems (KMS) enable organizations to better

manage Business Processes for capturing and applying Knowledge and
experience in the firm, and make it available wherever and whenever it is
needed to improve Business Processeses and Management decisions.
• KMS also link the firm to External sources of knowledge.
• KMS support Processes for acquiring, storing, distributing, and

applying knowledge, as well as processes for creating new Knowledge
and integrating it into the firm.

Knowledge Management Systems include:-

• Enterprise-wide Systems that manages and distributes documents,
graphics, and other Digital Knowledge objects
• Systems for creating Corporate Knowledge Directories of Employees

with special areas of expertise
• Office Systems for distributing knowledge and information
• Knowledge work Systems to facilitate Knowledge creation.
Other Knowledge Management Applications use intelligent techniques that codify:

• Knowledge for use by other members of the organization
• Tools for knowledge discovery that recognize patterns and important

relationships in large pool of data.
INTRANETS AND EXTRANETS
 Enterprise Applications create deep-seated changes in the way a firm

conducts its business, and they are often costly to implement.
 Companies that do not have resources to invest in Enterprise Applications

can still achieve some measure of integration by using Intranets and
Extranets.
 Intranets and Extranets are more Technology Platforms than specific

Applications, but they deserve mentioned here as one of the tools firms use
to increase Integration and expedite the flow of information within the firm,
and with Customers and Suppliers.
 Intranets and Extranets are therefore an alternative to Enterprise

Applications for those organizations that need Information integrations but
can not afford to develop Enterprise Applications.

INTRANET
• Intranets are internal networks built with the same tools and
communication standards as Internet (i.e. TCP/IP) and are used for the
internal distribution of information to employees, and as repository of
corporate policies, programs, and data.
 An Intranet presents information through a Private Portal that provides a

single point of access to information from several different Systems and
to Documents using Web Interface.
EXTRANET
• Extranets are Intranets extended to authorized users outside the

company.

Corporate Portals can be customized to suit the information needs of specific
Business Groups and Individual Users. They also feature e-mail, Collaboration
tools, and tools for Searching internal Corporate Systems and Documents.
Example: SwissAir’s Corporate Intranet for Sales provides its Salespeople with
Sales leads, fares, statistics, libraries of best practices, space to
incentive programs, discussion groups, and collaborative workspace.
The Intranet includes a Ticket Sales capability that displays bulletins

about unfilled Airplane seats around the world to help the sales staff
work with colleagues and with Travel agents who can help them fill
those empty seats.
 Companies can also connect their Intranets to internal Company

Transaction Processing Systems (TPS) enabling employees to take action
central to a Company’s operations, such as checking the status of an Order
or granting a Customer credit.
connected to its Internal Reservation System..54

Lecture 2 - Global E-Business
e.g. Swissair’s Intranet is
E-BUSINESS, E-COMMERCE AND E-GOVERNMENT
Many businesses are now enabled by or based on Digital Networks that we
frequently use the terms Electronic Business (e-business) and
Electronic Commerce (e-commerce).
 e-business refers to the use of Digital Technology and the Internet to

execute the major Business processes within the enterprise.
• e- business include the activities for the internal Management of the Firm
and for coordinating with Suppliers and other Business partners.
e-business also includes Electronic Commerce or e-commerce.
 e-commerce is part of the e-business that deals with the Buying and Selling
of goods and services over the Internet.
• e-commerce also includes activities supporting those Marketing

transactions such as Advertising, Marketing, Customer support,
Security, Delivery and Payment and so on….

E-GOVERNMENT
The Technology associated with e-business have also bought about similar
changes in the Public sector.
Governments are using Internet technology to deliver information and

services to their citizens, employees, and businesses,
 e-government refers to the applications of the Internet and Networking

Technologies to digitally enable Government and Public Sector
relationships with citizens, businesses and other arms of government.
• e-government can make Government operations more efficient and

also empower citizens by providing them with easier access to
information and the ability to network electronically with other
citizens.
e.g. Renewal of Driver’s Licenses or apply for unemployment

benefits online etc.

THE INFORMATION SYSTEMS FUNCTION IN BUSINESS
• The Information Systems Department (IS Department also known as IT

Department) is the formal organizational unit responsible for providing
Information Technology Services in all but the smallest firms.
 The IS Department consists of IT specialists, such as Information Systems Managers,

Project Managers, Project Leaders, Telecommunication Managers,, Systems
Analysts, Programmers, Software Engineers, Database Administrator, Network
Administrator, Network Engineers, Computer Operators, Web Designers, Web
Administrator etc…
• In many companies the IS Department is headed by a Chief Information Officer (CIO),

who oversees the use of Information Technology in the firm. Information Systems
Managers are the leaders of teams Analyst, Programmers, Database specialists etc at the IT
Canter.
• The IS Department is responsible for maintaining the company’s IT Infrastructure,

which includes Hardware, Software, Data Storage, and Networks.
• The IS department also suggests new Business strategy and new Information-based
products and services, and coordinates both the development of the technology and
the planned changes in the organization.
ORGANIZING THE INFORMATION SYTEMS FUNCTION
• There are many types of business firms and there are many ways in which
the IT Function is organized within the Organization.
• A very small company with less than 100 employees will not have a formal
Information Systems Department. Rather, it will have one or two internal
IT specialists or Consultants from outside to keep its Network and Package
Applications programs running.
• Larger Companies will have separate Information Services Department,

which may be organized along several different lines, depending on the
nature and interests of the organization.
• Some Large organizations have separate Information Services Department

for each business functional areas (Decentralized IS Function) managed by
a Functional IS manager that typically reports to a Senior Manager or Chief
Information Officer (CIO).
e,g. Marketking IS Manager etc.

The Advantage of Decentralized IS organization approach is that Systems that are built
directly address the business needs of the Functional area.
• However central guidance is weak and there is a high danger that many incompatible
Systems will be built, increasing costs as each group makes its own Technology
purchases.

• In other arrangement (mainly in large firms) the Information System Function
operates as a separate Department with a large staff, a group of Middle Managers ,
and a Senior Management group that fights for its share of the company’s resources.
• This central IS Department makes technology decisions for the entire company,
which is more likely to produce more compatible Systems and more coherent long-
term Systems Development plans.
• Very Large size firms with multiple divisions and diverse product lines might allow
each division to have its own IS Group. This model combines some Divisional
independence with some centralization
Systems for Collaboration and Teamwork
• 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
Video - Meircats Work Together

• Business benefits of collaboration and teamwork

Investments in collaboration technology can produce
organizational improvements returning high ROI
Benefits:
 Productivity
 Quality
 Innovation
 Customer service
 Financial performance
 Profitability, sales, sales growth

Requirements for Collaboration
Successful collaboration requires an appropriate organizational structure

and culture, along with appropriate collaboration technology.
Video-Another Day in a Virtual Team

• 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, systems rely on
teams
 Managers purpose is to build teams

• Technology for collaboration and teamwork
15 categories of collaborative software tools

 Email and instant messaging, White boarding,
Collaborative writing, Web presenting, Collaborative
reviewing, Work scheduling, Event scheduling, Document
sharing /wikis, File sharing, Mind mapping, Screen
sharing, Large audience, Webinars, Audio conferencing,
Co-browsing, Video conferencing
Contd…

Social Networking
Wikis
Virtual Worlds
Internet-based Collaboration Environments
 Virtual meeting systems (telepresence)
 Google Apps/Google sites
 Microsoft SharePoint
 Lotus Notes
Video - Telepresence

VIRTUAL MEETINGS: SMART MANAGEMENT
Read the Interactive Session and discuss the following questions

• What are the advantages of using videoconferencing
technologies? What are the disadvantages?
• What is telepresence and what sorts of companies are best

suited to use it as a communications tool?
• What kinds of companies could benefit from using

videoconferencing? Are there any companies that might not
derive any benefits from this technology?
• Two dimensions of collaboration technologies

Space (or location) – remote or colocated
Time – synchronous or asynchronous
• Six steps in evaluating software tools

What are your firm’s collaboration challenges?
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

The Time/Space Collaboration Tool Matrix
Collaboration technologies can be classified in terms of whether they

support interactions at the same or different time or place whether these
interactions are remote or co-located.
The Information Systems Function in
Business
• Information systems department:
Formal organizational unit responsible for information

technology services
Often headed by chief information officer (CIO)
 Other senior positions include chief security officer (CSO),
chief knowledge officer (CKO), chief privacy officer (CPO)
Programmers
Systems analysts
Information systems managers

The Information Systems Function in
Business
• End users
Representatives of other departments for whom
applications are developed
Increasing role in system design, development
• IT Governance:
Strategies and policies for using IT in the organization
Decision rights
Accountability
Organization of information systems function
 Centralized, decentralized, etc.

TOWARD THE DIGITAL FIRM
Blue Nile
(http://www.bluenile.com)
for video: http://tinyurl.com/bluenile222
Blue Nile
60,000 jewelry
3-4 days delivery times
Unique products need unique technology
User Experience
-Understand Gender Preferences
-Women do the selection Men do the buying
-Competitive Price – no middlemen/commissions
-Availability: 24/7

Role of Information Systems

Questions ?

Lecture 2-Global E-Business and Collaboration

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Lecture 2

Global E-Business and Collaboration

Video 2 : Geo-Mapping Technologies Help Target Sales

Lecture 2 - Global E-Business 1

• Every organization deals with many different pieces of

• Firms must organize their work activities that use

• Information Systems (IS) make it possible for firms to

Lecture 2 - Global E-Business 2

• Business Processes are Workflows of material, Information, and

• Business Processes are also referred to as unique ways in which

A BUSINESS CAN BE SEEN AS A COLLECTION OF BUSINESS PROCESSES.

• Information Systems (IS) are all about improving the Business

Processes, which lie at the very heart of a Business.

Lecture 2 - Global E-Business 3

- Hiring employee PROCESS can be broken down into a number of different

• In some business Hiring process can be slow and inefficient, whereas in

One of the major purpose of Information Systems is to enable highly

• The performance of a Business firm depends on how well its Business

• Business Process can be a source of competitive strength. It can

Lecture 2 - Global E-Business 4

Lecture 2 - Global E-Business 5

To efficiently perform all these steps a great deal of information is needed.

Lecture 2 - Global E-Business 6

Information Systems enhance Business Processes in two ways:

Information Systems can enable entirely new Business Process by:-

- Changing the flow of information ,

- Although there are many different Business Systems, We can categorize

1. Systems from a Functional Perspective

2. Systems from a Constituency Perspective

Constituent Perspective identifies Systems in terms of major Organizational Groups

Lecture 2 - Global E-Business 9

SYSTEMS FROM A FUNCTIONAL PRESPECTIVE

• From a historical perspective, Functional Systems were

• These Systems were located in specific Business

• SALES AND MARKETING SYSTEMS

The Sales and Marketing Function is responsible for

- Identifying potential Customers needs and wants,

SYSTEMS FROM A FUNCTIONAL PRESPECTIVE

Sales Department is concerned with:

Sales And Marketing Information Systems support all

Example of Sales and Marketing Information Systems

SYSTEM DESCRIPTION GROUP SERVED

Lecture 2 - Global E-Business 11

Lecture 2 - Global E-Business 12

• Manufacturing and Production Systems deal with the:

Examples of Manufacturing and Production Information Systems

SYSTEM DESCRIPTION GROUPS SERVED

• Companies can estimate the number of items to reorder, or use a formula to

Lecture 2 - Global E-Business 14

Finance And Accounting Information Systems support these activities

Example of Finance and Accounting Information Systems

SYSTEM DESCRIPTION GROUPS SERVED

Lecture 2 - Global E-Business 15

Lecture 2 - Global E-Business 16

Human Resources Information Systems support activities such as:

- Identifying potential employees,

Examples of Human Resources Information Systems

SYSTEM DESCRIPTION GROUPS SERVED

Lecture 2 - Global E-Business 17

Lecture 2 - Global E-Business 18

SYSTEMS FROM CONSTITUENCY PRESPECTIVES

• Although Functional Perspective is very useful for

• The Constituency Perspective examines in terms of the

• Each Management Level has different information needs