Chapter 2

Global E-business
and Collaboration

2.1 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

STUDENT LEARNING OBJECTIVES

• What major features of a business are

important for understanding the role of
information systems?

• How do systems serve different

management groups in a business and
how do systems that link the enterprise
improve organizational performance?

2.2 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

STUDENT LEARNING OBJECTIVES

• Why are systems for collaboration

and teamwork so important and what
technologies do they use?

• What is the role of the information

system’s function in a business?

2.3 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

VIDEO CASES AND LEARNING TRACKS

Learning Tracks
[Link] from a Functional Perspective
[Link] Enables Collaboration and Teamwork
[Link] of Using Business Information Systems
[Link] the Information Systems Function

Video Cases
Case 1: Walmart’s Retail Link Supply Chain
Case 2: CEMEX – Becoming a Social Business
Instructional Video 1: US Foodservice Grows Market with Oracle
CRM on Demand

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 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

Major Features of a Business

Business: formal organization that makes products or

provides a service in order to make a profit

Organizing a Business: Basic Business Functions

• Four basic business functions

• Manufacturing and production
• Sales and marketing
• Finance and accounting
• Human resources

2.5 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

What major features of a business are important for understanding the

role of information systems?

The Four Major Functions of a Business

Every business, regardless of its

size, must perform four functions
to succeed. It must produce the
product or service; market and sell
the product; keep track of
accounting and financial
transactions; and perform basic
human resources tasks, such as
hiring and retaining employees.

Figure 2.1

2.6 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration
What major features of a business are important for understanding the
role of information systems?

Five Basic Business Entities

• Suppliers
• Customers
• Employees
• Invoices/payments
• Products and services

2.7 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

What major features of a business are important for understanding the

role of information systems?

Business Processes
• Logically related set of tasks that define how
specific business tasks are performed
• The tasks each employee performs, in what order, and on what
schedule
• E.g., Steps in hiring an employee
• Some processes tied to functional area
• Sales and marketing: identifying customers
• Some processes are cross-functional
• Fulfilling customer order

2.8 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

What major features of a business are important for understanding the role
of information systems?

The Order Fulfillment Process

Fulfilling a customer order

involves a complex set of
steps that requires the
close coordination of the
sales, accounting, and
manufacturing functions.

Figure 2.2
2.9 Copyright © 2017 Pearson Education, Inc.
 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

What major features of a business are important for understanding the

role of information systems?

How IT Enhances Business Processes

• Automation of manual processes

• Change the flow of information
• Replace sequential processes with
simultaneous activity
• Transform how a business works
• Drive new business models

2.10 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

What major features of a business are important for understanding the

role of information systems?

Managing a Business and Firm Hierarchies

• Firms coordinate work of employees by developing
hierarchy in which authority is concentrated at top.
 Senior management
 Middle management
 Operational management
 Knowledge workers
 Data workers
 Production or service workers
• Each group has different needs for information.

2.11 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

What major features of a business are important for understanding the

role of information systems?

Levels in a Firm
Business organizations are
hierarchies consisting of
three principal levels: senior
management, middle
management, and operational
management. Information
systems serve each of these
levels. Scientists and
knowledge workers often
work with middle
management.

Figure 2.3

2.12 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

What major features of a business are important for understanding the

role of information systems?

The Business Environment

• Global environment • Immediate

factors environment factors
• Technology and • Customers
science
• Suppliers
• Economy
• Competitors
• Politics
• Regulations
• International
change • Stockholders

2.13 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

What major features of a business are important for understanding the

role of information systems?

The Business Environment

To be successful, an
organization must constantly
monitor and respond to—or even
anticipate—developments in its
environment. A firm’s
environment includes specific
groups with which the business
must deal directly, such as
customers, suppliers, and
competitors as well as the
broader general environment,
including socioeconomic trends,
political conditions,
technological innovations, and
global events.
Figure 2.4

2.14 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

What major features of a business are important for understanding the

role of information systems?

The Role of Information Systems in a Business

• Firms invest in information systems in order to:

• Achieve operational excellence.
• Develop new products and services.
• Attain customer intimacy and service.
• Improve decision making.
• Promote competitive advantage.
• Ensure survival.

2.15 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

How do systems serve managers and and improve organizational performance?

Systems for Different Management Groups

• Transaction processing systems (TPS)

• Keep track of basic activities and transactions of organization
• Systems for business intelligence
• Address decision-making needs of all levels of management
• Management information systems (MIS)
• Decision support systems (DSS)
• Executive support systems (ESS)

2.16 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

How do systems serve managers and and improve organizational performance?

• Transaction processing systems:

• Serve operational managers.
• Principal purpose is to answer routine questions and
to track the flow of transactions through the
organization.
• E.g., inventory questions, granting credit to customer
• Monitor status of internal operations and firm’s
relationship with external environment.
• Major producers of information for other systems.
• Highly central to business operations and
functioning.

2.17 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

How do systems serve managers and and improve organizational performance?

A Payroll TPS

A TPS for payroll

processing captures
employee payment
transaction data (such
as a timecard). System
outputs include online
and hard copy reports
for management and
employee paychecks.

Figure 2.5

2.18 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

How do systems serve managers and and improve organizational performance?

• Management information systems:

• Provide middle managers with reports on firm’s
performance, to help monitor firm and predict future
performance.
• Summarize and report on basic operations using
data from TPS.
• Provide weekly, monthly, annual results, but may
enable drilling down into daily or hourly data.
• Typically not very flexible systems with little analytic
capability.

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 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

How do systems serve managers and and improve organizational performance?

How MIS Obtain Their Data from TPS

Figure 2.6
2.20 Copyright © 2017 Pearson Education, Inc.
 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

How do systems serve managers and and improve organizational performance?

Sample MIS Report

This report,
showing
summarized
annual sales
data, was
produced by
the MIS in
Figure 2-6.

Figure 2.7

2.21 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

How do systems serve managers and and improve organizational performance?

• Decision support systems (DSS):

• Serve middle managers.
• Support nonroutine decision making
• Example: What is impact on production schedule if
December sales doubled?
• Often use external information as well from
TPS and MIS
• Model driven DSS
• Voyage-estimating systems
• Data driven DSS
• Intrawest’s marketing analysis systems

2.22 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

How do systems serve managers and and improve organizational performance?

Voyage-Estimating Decision Support System

This DSS operates on

a powerful PC. It is
used daily by
managers who must
develop bids on
shipping contracts.

Figure 2.8

2.23 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

How do systems serve managers and and improve organizational performance?

• Executive support systems (ESS):

• Serve senior managers.
• Address strategic issues and long-term trends.
• E.g., what products should we make in five years?
• Address nonroutine decision making.
• Provide generalized computing capacity that can be
applied to changing array of problems.
• Draw summarized information from MIS, DSS, and
data from external events.
• Typically use portal with Web interface, or digital
dashboard, to present content

2.24 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

How do systems serve managers and and improve organizational performance?

Digital Dashboard

A digital dashboard
delivers comprehensive
and accurate
information
for decision making
often using a single
screen. The graphical
overview of key
performance
indicators helps
managers quickly
spot areas that need
attention.

2.25 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

How do systems serve managers and and improve organizational performance?

Systems for Linking the Enterprise

• Enterprise applications
• Systems that span functional areas, focus on
executing business processes across the firm,
and include all levels of management
• Four major types
1. Enterprise systems
2. Supply chain management systems
3. Customer relationship management systems
4. Knowledge management systems

2.26 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

How do systems serve managers and and improve organizational performance?

Enterprise Application Architecture

Enterprise applications
automate processes that
span multiple business
functions and
organizational levels
and may extend outside
the organization.

Figure 2.9

2.27 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

How do systems serve managers and and improve organizational performance?

Enterprise Systems
• Also called enterprise resource planning (ERP)
systems
• Integrate data from key business processes into
single system.
• Speed communication of information throughout
firm.
• Enable greater flexibility in responding to customer
requests, greater accuracy in order fulfillment.
• Enable managers to assemble overall view of
operations.

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 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

How do systems serve managers and and improve organizational performance?

Supply Chain Management (SCM) Systems

• Manage relationships with suppliers, purchasing

firms, distributors, and logistics companies.
• Manage shared information about orders,
production, inventory levels, and so on.
• Goal is to move correct amount of product from source to
point of consumption as quickly as possible and at
lowest cost
• Type of interorganizational system:
• Automating flow of information across organizational
boundaries
2.29 Copyright © 2017 Pearson Education, Inc.
 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

How do systems serve managers and and improve organizational performance?

Supply Chain Management (SCM) Systems

Supply chain management is moving the right items to

the right customer at the right time by the most efficient
means,” Beatty said in an article about his experience.
“No one does that better than Walmart.”

Assignment: Investigate Walmart's SCM, summarize

your findings in one page and submit in our next
class

2.30 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

How do systems serve managers and and improve organizational performance?

Customer Relationship Management (CRM) Systems

• Help manage relationship with customers.
• Coordinate business processes that deal with
customers in sales, marketing, and customer
service
• Goals:
• Optimize revenue
• Improve customer satisfaction
• Increase customer retention
• Identify and retain most profitable customers
• Increase sales

2.31 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

How do systems serve managers and and improve organizational performance?

Knowledge Management Systems

• Manage processes for capturing and

applying knowledge and expertise
• Collect relevant knowledge and make it
available wherever needed in the enterprise
to improve business processes and
management decisions.
• Link firm to external sources of knowledge

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 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

How do systems serve managers and and improve organizational performance?

Intranets and Extranets

• Technology platforms that increase integration
and expedite the flow of information
• Intranets:
• Internal networks based on Internet standards
• Often are private access area in company’s Web
site
• Extranets:
• Company Web sites accessible only to authorized
vendors and suppliers
• Facilitate collaboration
2.33 Copyright © 2017 Pearson Education, Inc.
 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

How do systems serve managers and and improve organizational performance?

E-Business, E-Commerce, and E-Government

• E-business:
• Use of digital technology and Internet to drive major
business processes

• E-commerce:
• Subset of e-business
• Buying and selling goods and services through Internet

• E-government:
• Using Internet technology to deliver information and
services to citizens, employees, and businesses

2.34 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

Why are systems for collaboration and social business so important and what
technologies do they use?

What Is Collaboration?

• Growing importance of collaboration:

• Changing nature of work
• Growth of professional work
• Changing organization of the firm
• Changing scope of the firm
• Emphasis on innovation
• Changing culture of work and business

2.35 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

Why are systems for collaboration and social business so important and what
technologies do they use?

What is Social Business?

• Use of social networking platforms to

engage employees, customers, suppliers
• Conversations to strengthen bonds
• Requires information transparency
• Seen as way to drive operational
efficiency, spur innovation, accelerate
decision making

2.36 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

Why are systems for collaboration and social business so important and what
technologies do they use?

Business Benefits of Collaboration and Social

Business
• Investment in collaboration technology can return
large rewards, especially in sales and marketing,
research and development
• Productivity: Sharing knowledge and resolving problems
• Quality: Faster resolution of quality issues
• Innovation: More ideas for products and services
• Customer service: Complaints handled more rapidly
• Financial performance: Generated by improvements in
factors above
2.37 Copyright © 2017 Pearson Education, Inc.
 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

Why are systems for collaboration and social business so important and what
technologies do they use?

Figure 2.10
Requirements for Collaboration

Successful collaboration
requires an appropriate
organizational structure
and culture, along with
appropriate collaboration
technology.

2.38 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

Why are systems for collaboration and social business so important and what
technologies do they use?

Tools and Technologies for Collaboration and Teamwork

• E-mail and instant messaging (IM)

• Wikis
• Virtual worlds
• Collaboration and social business environments
• Virtual meeting systems (telepresence)
• Cloud collaboration services
• Google Drive, Dropbox
• Microsoft SharePoint and IBM Notes
• Enterprise social networking tools

2.39 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

Why are systems for collaboration and social business so important and what
technologies do they use?

Evaluating and Selecting Collaboration Software Tools

1. What are your firm’s collaboration challenges?

2. What kinds of solutions are available?
3. Analyze available products’ cost and benefits.
4. Evaluate security risks.
5. Consult users for implementation and training issues.
6. Select candidate tools and evaluate vendors.

2.40 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

Why are systems for collaboration and social business so important and what
technologies do they use?

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, and
whether these interactions
are remote or colocated.

Figure 2.11

2.41 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

Is Social Business Working Out?

Interactive Session: People
Is Social Business Working Out?
• Read the Interactive Session and then discuss the
following questions:
• Identify the people, organization, and technology factors responsible for
impeding adoption of internal corporate social networks.
• Compare the experiences implementing internal social networks of the
two organizations. Why was one more successful than the other? What
role did management play in this process?
• Should all companies implement internal enterprise social networks?
Why or why not?

2.42 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

What is the role of the information systems function in a business?

The Information Systems Department

• Programmers
• Systems analysts
• Principle liaisons to rest of firm
• Information systems managers
• Leaders of teams of programmers and analysts, project
managers, physical facility managers,
telecommunications managers, database specialists,
managers of computer operations, and data entry staff
• Senior managers: CIO, CPO, CSO, CKO
• End users

2.43 Copyright © 2017 Pearson Education, Inc.

 Essentials of Management Information Systems
Chapter 2 Global E-Business and Collaboration

What is the role of the information systems function in a business?

Information Systems Services

• Computing services
• Telecommunications services
• Data management services
• Application software services
• Physical facilities management services
• IT management services
• IT standards services
• IT educational services
• IT research and development services

2.44 Copyright © 2017 Pearson Education, Inc.

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2.45 Copyright © 2017 Pearson Education, Inc.