Type:
Solution Manual
Resource:
Essentials of MIS
Edition:
14th Edition
Author(s):
Kenneth C. Laudon Jane P. Laudon
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Chapter 1 Business Information Systems in Your Career Learning Objectives 1-1 Why are information systems so essential for running and managing a business today? 1-2 What exactly is an information system? How does it work? What are its people, organizational, and technology components? 1-3 How will a four-step method for business problem solving help you solve information systemrelated problems? 1-4 What information systems skills and knowledge are essential for business careers? 1-5 How will MIS help my career? Learning Catalytics is a “bring your own device” student engagement, assessment, and classroom intelligence system. It allows instructors to engage students in class with real-time diagnostics. Students can use any modern, web-enabled device (smartphone, tablet, or laptop) to access it. For more information on using Learning Catalytics in your course, contact your Pearson Representative. The lecture notes for this text includes a Learning Catalytics activity for each introductory case.
Chapter Outline 1-1
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Why are information systems so essential for running and managing a business today? How Information Systems Are Transforming Business Key Challenges in Management Information Systems Globalization Challenges and Opportunities: A Flattened World Business Drivers of Information Systems What exactly is an information system? How does it work? What are its people, organizational, and technology components? What Is an Information System? It Isn’t Simply Technology: The Role of People and Organizations Dimensions of Information Systems How will a four-step method for business problem solving help you solve information systemrelated problems? The Problem-Solving Approach A Model of the Problem-Solving Process The Role of Critical Thinking in Problem Solving The Connections Between Business Objectives, Problems, and Solutions What information systems skills and knowledge are essential for business careers? How Information Systems Will Affect Business Careers Information Systems and Business Careers: Wrap-Up How This Book Prepares You for the Future How will MIS help my career?
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Key Terms The following alphabetical list identifies the key terms discussed in this chapter. The page number for each key term is provided. Business model, 35 Business processes, 40 Change management, 46 Computer hardware, 41 Computer literacy, 39 Computer software, 41 Critical thinking, 47 Culture, 40 Data, 37 Data management technology, 41 Extranets, 41 Feedback, 38 Information, 38
Information system (IS), 37 Information systems literacy, 39 Information technology (IT), 37 Information technology (IT) infrastructure, 41 Input, 38 Internet, 41 Intranets, 41 Management information systems (MIS), 39 Network, 41 Networking and telecommunications technology, 41 Output, 38 Processing, 38 World Wide Web, 41
Teaching Suggestions You are probably meeting in the first class session to introduce yourself, the course, and to meet the students. It is good to get to the classroom early and meet the students as they come in. Learn a few names as the students enter. After going over any requirements you may have for the course, try to give an overview of the course, stressing that this is not a technical course. Usually, you can’t do enough to put non-technical types at ease. The opening case, “PCL Construction: The New Digital Firm,” shows students that even some traditional industries such as construction are now embracing technology as a way to reduce costly delays and improve business processes. Students will become familiar with the idea that many kinds of businesses have had to change the way they operate. PCL employees are now using mobile devices and digital touch-screen kiosks to access digitized, updated blueprints instead of tracking down paper design documents. These digitized plans allow for much faster revisions, allowing employees to identify and resolve problems quicker in order to keep projects on-time and on-budget. PCL has also implemented its own proprietary project management system for budgeting, costing, forecasting, subcontractor tracking, production, and reporting. Further, PCL has started moving much of its computing work to the cloud using Microsoft Azure. This allows PCL employees to access information from the cloud at any time while saving money by not having to devote as many on-site resources to hosting the hardware and software.
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Section 1-1: Why are information systems so essential for running and managing a business today? This section gives students a feel for the importance of information systems in business today and how they have transformed businesses on the world stage. A good discussion of the six important business objectives outlined in this section allows the instructor and students to discuss why businesses have become so dependent on information systems today and the importance of these systems for the survival of a firm. Stress to students that information systems are not a luxury. In most businesses they are the core to survival. This would be a good time to ask students to discuss how their own schools are using information systems to enhance their product offering. Table 1-1 (Page 7) is a great way to introduce students to much of the new IT jargon that has developed over the last several years. Most of the technologies will be discussed in future chapters. Ask students how much hands-on experience they’ve had with some of the new business tools as either an employee or a customer. Globalization is affecting virtually every country in the world. The most striking evidence of this trend is the increasing presence of cell phones in very small villages of Africa. As technology becomes more pervasive and, in some cases easier to use, globalization will continue its steady march. China, Singapore, and Russia are good examples of how globalization has flattened the world. They have become major exporters to other countries, especially industrialized and advanced countries such as the United States and many European countries. Emerging countries, such as Poland, the Ukraine, and Ireland, are excellent examples of increasing globalization. Ask students to provide examples of truly digital firms (Cisco Systems and Dell Computers), as opposed to those businesses (local mom-and-pop stores or a local doctor’s office) that still perform many business processes outside of integrated information systems. Review the six strategic business objectives: operational excellence; new products, services, and business models; customer and supplier intimacy; improved decision making; competitive advantage; and survival. The rest of the text will continually refer back to these six objectives as reasons why firms should incorporate and integrate business processes with information systems.
Section 1-2: What exactly is an information system? How does it work? What are its people, organizational, and technology components? This section gives students the facts and definitions that underpin information systems and allow students to knowledgeably discuss information systems. Students do not need the knowledge of a technical person, but they do need to understand the role of information technology and how it must support the organization’s business strategy. They must also understand how information technology can be used to help transform a business. Note that the chapter’s definitions and terms help prepare students to discuss information systems as an intricate part of business systems. Encourage students to see that technology is subordinate to the organization and its purposes.
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6 This is also a good place to reinforce the differences between information systems literacy and computer literacy. When asked to describe company information systems, students often depict information systems in terms of technology. It is important to stress that information systems are more than just technology, and that they have management, organization, and technology dimensions. The diagram at the beginning of the chapter can be used to illustrate this point. Ask students why some companies can achieve much better results using information systems while others cannot. That will help them understand the concept of complementary assets and show that there is much more to building a digital firm than simply buying the latest, greatest hardware and software. It will also help them understand the delicate relationship between technology, management, and organizations’ assets. Interactive Session: Technology: UPS Competes Globally with Information Technology Case Study Questions 1. What are the inputs, processing, and outputs of UPS’s package tracking system? Inputs: The inputs include package information, customer signature, pickup, delivery, time-card data, current location (while en route), and billing and customer clearance documentation. Processing: The data are transmitted to a central computer and stored for retrieval. Data are also reorganized so that they can be tracked by customer account, date, driver, and other criteria. Outputs: The outputs include pickup and delivery times, location while en route, and package recipient. The outputs also include various reports, such as all packages for a specific account or a specific driver or route, as well as summary reports for management.
2. What technologies does UPS use? How are these technologies related to UPS’s business strategy? Technologies include handheld computers (DIADs), barcode scanning systems, wired and wireless communications networks, desktop computers, UPS’s central computer (large mainframe computers), and storage technology for the package delivery data. UPS also uses telecommunication technologies for transmitting data through pagers and cellular phone networks. The company uses in-house software for tracking packages, calculating fees, maintaining customer accounts, and managing logistics, as well as software to access the World Wide Web. UPS has used the same strategy for more than 90 years. Its strategy is to provide the “best service and lowest rates.” One of the most visible aspects of technology is the customer’s ability to track his/her package via the UPS website. However, technology also enables data to seamlessly flow throughout UPS and helps streamline the workflow at UPS. Thus, the technology described in the scenario enables UPS to be more competitive, efficient, and profitable. The result is an information system solution to the business challenge of providing a high level of service with low prices in the face of mounting competition.
3. What strategic business objectives do UPS’s information systems address? •
Operational excellence: UPS has maintained leadership in small-package delivery services despite stiff .
7 competition from FedEx and the U.S. Postal Service by investing heavily in advanced information technology. •
New products, services, and business models: In June 2009, UPS launched a new web-based Post-Sales Order Management System (OMS) that manages global service orders and inventory for critical parts fulfillment. The system enables high-tech electronics, aerospace, medical equipment, and other companies anywhere in the world that ship critical parts to quickly assess their critical parts inventory, determine the most optimal routing strategy to meet customer needs, place orders online, and track parts from the warehouse to the end user.
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Customer and supplier intimacy: Customers can download and print their own labels using special software provided by UPS or by accessing the UPS website. UPS spends more than $1 billion each year to maintain a high level of customer service while keeping costs low and streamlining its overall operations. UPS also provides tools that enable customers, such Cisco Systems, to embed UPS functions, such as tracking and cost calculations, into their own websites so that they can track shipments without visiting the UPS site.
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Improved decision making: Special software creates the most efficient delivery route for each driver that considers traffic, weather conditions, and the location of each stop. UPS estimates its delivery trucks save 28 million miles and burn 3 million fewer gallons of fuel each year as a result of using this technology.
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Competitive advantage: UPS is leveraging its decades of expertise managing its own global delivery network to manage logistics and supply chain activities for other companies. Its Supply Chain Solutions division provides a complete bundle of standardized services to subscribing companies at a fraction of what it would cost to build their own systems and infrastructure.
4. What would happen if UPS’s information systems were not available? Arguably, UPS might not be able to compete effectively without technology. If the technology were not available, then UPS would, as it has through most of its history, attempt to provide that information to its customers, but at higher prices. From the customers’ perspective, these technologies provide value because they help customers complete their tasks more efficiently. Customers view UPS’s technology as value-added services as opposed to increasing the cost of sending packages.
Section 1-3: “How will a four-step method for business problem solving help you solve information system-related problems? Too often, information systems are thought to be all about hardware and software. Issues that focus on human behavioral aspects of information systems are overlooked or minimized. That can lead to disaster. After contrasting the technical and behavioral approaches, you should stress to your students that the sociotechnical approach does not ignore the technical but considers it as a part of the organization.
Section 1-4: What information systems skills and knowledge are essential for business careers?
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8 As an exercise, instructors may wish to have their students surf the internet for job opportunities at Monster.com (www.monster.com) or another employment application site. Divide your class into groups to represent the major functional areas such as finance, accounting, marketing, human resource management, production and operations, information systems, and others. Ask each group to find five jobs being advertised in each of the functional areas. Have them list the required qualifications being requested as they relate to the field of information systems. Because your students should have access to email, you may want to send them an “MIS Word of the Day.” Check out http://www.whatis.com, http://whatis.techtarget.com, or one of the many other online computer terminology dictionaries to locate words and definitions that supplement the Laudon text. Students often enjoy the electronic interactions with their instructor, and the words are yet another way to reinforce learning. Interactive Session: Organizations: Will AI Kill Jobs? Case Study Questions 1. What are the various views on the impact of AI on jobs? What do you think will happen in your country? There are three views on what AI will do to jobs: (a) Job killer: AI applications will become smart enough to perform most tasks, will never get tired, and will never talk back. They will be ideal employees, which is why they will gradually replace human employees completely and leave everyone out of a job. (b) Job changer: There will be a division of labor between human workers and AI. AI applications will do simple, trivial, and boring tasks involving large amounts of data, freeing their human colleagues to focus on complex and challenging assignments. People and machines will complement each other. (c) Job creator: Just like how the rise of the Internet has generated a huge demand for expertise in web programming, website design, e-marketing, and so on, AI will create new jobs. For example, AI initiatives needs teams of experts to work out algorithms, write computer programs, feed materials for training, fine-tune models, and fix them when they are out of order. All three cases may exist in all countries. Countries which rely more on primary (agriculture) and secondary (manufacturing) industries are more like to experience case (a) in these industries. Countries which depend on tertiary (service) industries are more likely to experience cases (b) and (c). All cases will lead to the same consequences: education and (re-)training. In case (a), education and training will help workers change jobs if AI applications evolve to perform their current job roles. In case (b), the complicated jobs assigned to human workers may need advanced knowledge to perform. In case (c), new occupations require new knowledge and skills developed through education and training. Lifelong learning is the key to keep one afloat in the job market and adaptable to the ever-changing world.
2. Some people think that AI does not kill jobs but transforms business models. Do you agree? Why or why not?
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9 AI will kill jobs and transform business models as well. An enterprise needs to review its business processes and decide which will be done by AI and which by human employees before introducing AI applications as to optimize man–machine cooperation for the best results. In some situations, a company may need to redefine its business rules, workflow, job descriptions, and even organizational structure, in addition to reviewing the way it does business, to maximize the results of AI initiatives. Companies may also need to create entirely different roles for managing intelligent technologies. Therefore, AI transforms not only the business model but also the ecosystem of the whole company.
Section 1-5: How will MIS help my career? This section addresses how the chapter’s elements and information can help in securing a good job as a financial client support and sales assistant. These types of jobs are becoming more popular as information technology becomes more important in the workplace.
Review Questions 1-1 Why are information systems so essential for running and managing a business today? List and describe six reasons information systems are so important for business today. Six reasons why information systems are so important for business today include: 1. 2. 3. 4. 5. 6.
Operational excellence New products, services, and business models Customer and supplier intimacy Improved decision making Competitive advantage Survival Information systems are the foundation for conducting business today. In many industries, survival and even existence without extensive use of IT is inconceivable, and IT plays a critical role in increasing productivity. Although information technology has become more of a commodity, when coupled with complementary changes in organization and management, it can provide the foundation for new products, services, and ways of conducting business that provide firms with a strategic advantage.
Describe the challenges and opportunities of globalization. Customers no longer need to rely on local businesses for products and services. They can shop 24/7 for virtually anything and have it delivered to their door or desktop. Companies can operate 24/7 from any geographic location around the world. Jobs can just as easily move across the state or across the ocean. Employees must continually develop high-level skills through education and on-the-job experience that cannot be outsourced. Business must avoid markets for goods and services that can be produced offshore much cheaper. The emergence of the internet into a full-blown international communications system has drastically reduced the costs of operating and transacting business on a global scale.
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(Learning Objective 1: Why are information systems so essential for running and managing a business today? AACSB: Application of knowledge) 1-2 What exactly is an information system? How does it work? What are its people, organization, and technology components? Describe the three activities in an information system that produce the information that organizations need. Organizations need information to make decisions, control operations, analyze problems, and create new products or services. These activities can be categorized as input, processing, and output. Input captures and collects raw data from within the organization or from its external environment. Processing converts this raw input into meaningful forms. Output transfers the processed information to the people, who use it in various activities. (AACSB: Application of knowledge)
Define an information system and describe the activities it performs. The textbook defines an information system as a set of interrelated components that work together to collect, process, store, and disseminate information to support decision making, coordination, control, analysis, and visualization in an organization. In addition to supporting decision making, information systems may also help managers and workers analyze problems, visualize complex subjects, and create new products.
(Learning Objective 2: What is an information system? How does it work? What are its people, organizational, and technology components? AACSB: Application of knowledge) Explain the differences between information and data; why is the former essential to the latter? Information refers to data that have been shaped into a form that is meaningful and useful to human beings. Data, in contrast, are streams of raw facts that represent events occurring in organizations or other environments before they have been organized and arranged into a form that users can understand and use. (AACSB: Application of knowledge)
Describe how the parts of an organization’s culture can be found embedded in its information systems. Each organization has a unique culture (or fundamental set of assumptions, values, and ways of doing things) that has been accepted by most of its members, which is often reflected in its information systems. An organization that focuses on customer service will have customer service orientated aspects and systems embedded into its information system. An organization that prides itself on the freshness of its products and ingredients will focus on developing sophisticated tracking and usage systems. (AACSB: Application of knowledge)
1-3 How will a four-step method for business problem solving help you solve information systemrelated problems?
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11 Explain why it is essential to consider the problem solving process a process and not an event. The chosen solution may only apply to and work for the current problem; it may need to be constantly monitored and adapted over time. In some cases, the chosen solution may not actually solve the problem, so a new approach may be necessary. In other cases, the solution may appear to work, but subtle changes in the root cause of the problem may render the solution irrelevant or less effective. Problems, like other aspects of business considerations and systems, are liable to change. Therefore, the business should be aware of potential solutions in case the situation changes.
(Learning Objective 3: How will a four-step method for business problem solving help you solve information system-related problems?, AACSB: Application of knowledge.)
Identify and describe the people related techniques that might be used to implement solutions to problems. Implementing solutions involves building the solution first and then introducing it into the
organization. Often, this is an integral part of change management, which comprises processes and techniques that businesses use to successfully implement change. Most information systems necessitate changes to the firm’s business processes. It may be necessary to design new, more efficient business processes. There may be a need to introduce the change to groups of employees, create new training modules to bring employees quickly up to speed on the new information system and processes, and finally, offer rewards or incentives to encourage people to enthusiastically support the changes. Implementation also includes measuring outcomes. After a solution has been implemented, it must be evaluated to determine how well it is working and whether any additional changes are required to meet the original objectives. This information is fed back to the problem solvers. Therefore, based on experience, the causes of the problem can change over time, solutions can be adapted, and new choices made. (Learning Objective 3: How will a four-step method for business problem solving help you solve information system-related problems?, AACSB: Application of knowledge.) Explain how you might distinguish between technological, organizational and people perspectives in relation to information systems. The technical approach to information systems emphasizes the use of mathematical models to study information systems, and the physical technology and formal capabilities of these systems. The disciplines that contribute to the technical approach are computer science, management science, and operations research. Computer science is concerned with establishing theories of computability, methods of computation, and methods of efficient data storage and access. Management science emphasizes the development of models for decision making and management practices. Operations research focuses on mathematical techniques to optimize selected parameters within organizations, such as transportation, inventory control, and transaction costs. The information systems field is also concerned with behavioral issues that arise in the development and long-term maintenance of information systems. Issues such as strategic business integration, design, implementation, utilization, and management cannot be explored effectively with the models used in the technical approach. Other behavioral disciplines .
12 contribute important concepts and methods. For instance, sociologists study information systems with an eye toward how groups and organizations shape the development of systems and how systems affect individuals, groups, and organizations. Psychologists study information systems to understand how human decision makers perceive and use formal information. Economists study information systems with an interest in understanding the production of digital goods, the dynamics of digital markets, and how new information systems change control and cost structures within a firm. The behavioral approach does not ignore technology. Indeed, information systems technology is often the stimulus for a behavioral problem. But this approach does not generally focus on technical solutions. Instead, it concentrates on changes in attitudes, management and organizational policy, and behavior. (Learning Objective 3: How will a four-step method for business problem solving help you solve information system-related problems?, AACSB: Application of knowledge.) Describe the role of information systems in business problem solving. Problem solving requires critical thinking in which one suspends judgment to consider multiple perspectives and alternatives. There are a number of reasons why business firms invest in information systems and technologies. Six business objectives of information systems include: operational excellence; new products, services, and business models; customer/supplier intimacy; improved decision making; strategic advantage; and survival. When firms cannot achieve these objectives, they become “challenges” or “problems” that receive attention. Managers and employees who are aware of these challenges often turn to information systems as one of the solutions or the entire solution.
(Learning Objective 3: How will a four-step method for business problem solving help you solve information system-related problems? AACSB: Application of knowledge.) 1-4 What information system skills and knowledge are essential for business careers? Describe the role of information systems in careers in accounting, finance, marketing, management, and operations management and explain how careers in information systems have been affected by new technologies and outsourcing? Each of the major business fields requires an understanding of information systems. Accounting: Accountants need to understand future changes in hardware, software, and network security essential for protecting the integrity of accounting systems along with new technologies for reporting in online and wireless business environments. Finance: Financial people need to understand future IT changes, financial database systems, and online trading systems for managing investments and cash. Marketing: Marketing personnel require an understanding of marketing database systems and systems for customer relationship management as well as web-based systems for online sales. Operations management: These individuals need knowledge of changing hardware, software, and database technologies used in production and services management and an in-depth understanding of how
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13 enterprise-wide information systems for production management, supplier management, sales force management, and customer relationship management achieve efficient operations. Careers in information systems: The individuals clearly need to understand the central role databases play in managing information resources of the firm and how new hardware and software technologies can enhance business performance. They also need skills for leading the design and implementation of new management systems, working with other business professionals to ensure systems meet business objectives, and working with software packages providing new system solutions.
List and describe the information system skills and knowledge that are essential for all business careers. Common information systems skills and knowledge for all business careers include an understanding of how information systems help firms achieve major business objectives; an appreciation of the central role of databases; skills in information analysis and business intelligence; sensitivity to the ethical, social, and legal issues raised by systems; and the ability to work with technology specialists and other business professionals in designing and building systems.
(Learning Objective 4: What information system skills and knowledge are essential for business careers? AACSB: Application of knowledge)
Discussion Questions 1-5 Information systems are too important to be left to computer specialists. Do you agree? Why or why not? Student answers to this question will vary.
1-6 If you were setting up the web site for a business firm, what management, organization, and technology issues might you encounter? Student answers to this question will vary.
1-7 How have global and national statutes and regulations impacted the use of information systems? Student answers to this question will vary.
Hands-On MIS Projects This section gives students an opportunity to analyze real world information systems needs and requirements. It provides several exercises you can use to determine if students are grasping the material in the chapter. Management Decision Problems .
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1-8 Magical Toys: Magical Toys is in dire need of an easy-to-use information system to keep track of its sales and inventory. The information system in question can either be part of a bigger system for the whole enterprise or just a system for procurement and sales, depending on the company’s needs and size. It should be able to perform in real time, which means that the managers should be able to view sales and stock at any given time for each store separately or for the entire chain. This also means that the employees are free to focus on serving customers and that some errors will be avoided. However, no information system can deal with inconsistencies in inventory due to shoplifting, miscalculations in the number of goods delivered to the store, and so on. Therefore, inventory checks are still necessary.
1-9 Bargain Land: Bargain Land wants to keep costs as low as possible and has therefore not yet implemented an automated method for keeping track of inventory at each store. The company has no up-to-date knowledge of stock levels and inventory. There is the potential for carrying either too much or too little inventory with no available real-time stock records. There is no ability to identify whether business problems relating to stock losses are internal or external issues. Any theft is not readily noticeable as there is no up-to-date record. There is the potential to over order or to carry surplus or redundant stock. Redundant stock will lead to pricing problems as stock might need to be sold off at a further discounted price, thereby impacting on profits, cash flows and the company's ability to reinvest. The company is unable to differentiate individual store performance in real-time and to account for seasonal trends and differing customer expectations and tastes. The company needs to determine the actual business problems—mismanagement of inventory, too little or too much inventory, no ability to track inventory. The lack of an information system to manage inventory is actually increasing the company's costs rather than decreasing them. Clarity is required around the exact problem the company wants to solve. As the company wants to reduce costs, the lack of an information system is counteracting this aim. The lack of ability to monitor the sales and performance of individual stores in real-time affects both the company's and the individual stores' ability to effectively target its customer base. A decision needs to be made about the complexity of the information system required to fulfill the company's needs. A simple, off-the-shelf software package may be sufficient whilst still keeping costs down.
(Learning Objective 1: Why are information systems so essential for running and managing a business today?, AACSB: Analytical thinking, Application of knowledge.)
Improving Decision Making: Using Databases to Analyze Sales Trends: Software skills: Database querying and reporting Business skills: Sales trend analysis 1-10 This exercise helps students understand how they can use database software to produce valuable information from raw data. The solutions provided here were created using the Query Wizard and Report Wizard capabilities of Microsoft Access. Students can, of course, create more sophisticated reports if they wish, but most information can be obtained from simple query and reporting functions. The main challenge is to get students to ask the right questions about the information.
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Which products should be restocked? Which stores and sales regions would benefit from a promotional campaign and additional marketing? Which times of the year should products be offered at full price, and when should discounts be used?
The answers to the questions can be found in the Microsoft Access File named: MIS13ch01_solutionfile.mdb
(Learning Objective 2: What is an information system? How does it work? What are its people, organizational, and technology components?, AACSB: Analytical thinking.) Improving Decision Making: Using the Internet to Locate Jobs Requiring Information Systems Knowledge Software skills: Internet-based software Business skills: Job searching 1-11 In addition to having students research jobs in their chosen career field, it may be quite interesting to have them research jobs in other career fields so they can see that virtually every job and/or career requires information systems skills.
(Learning Objective 4: What information system skills and knowledge are essential for business careers? AACSB: Written and oral communication, Analytical thinking, Reflective thinking, Application of knowledge) Collaboration and Teamwork Project 1-12 In MyLab MIS, you will find a Collaboration and Teamwork Project dealing with the concepts in this chapter. You will be able to use Google Drive, Google Docs, Google Sites, Google +, or other open source collaboration tools to complete the assignment.
Business Problem-Solving Case: New Technology at UPS Clashes with Outdated Ways of Working
1-13. Identify the problem faced by UPS. Was it a people problem, an organizational problem, or a management problem? Explain your answer. The major challenge faced by UPS is staying competitive with new rivals such as Amazon.com and appropriately updating investments in information technology. The problem encompasses problems at the people, organizational, and managerial levels: ❖ Outdated equipment required more employee ‘touch points’ at the sorting centers. Each additional ‘touch point’ introduces additional possibility for error, even with well-qualified workers. ❖ At the organization level, errors were adding up to missorted packages which can add a day to deliveries, and degrading customer service.
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16 ❖ At the managerial level, managers were working with historical data to make decisions regarding undeliverable packages. With new technology, they now have access to real-time data to help make actual decisions (i.e., staffing) versus estimating.
1-14. Describe the solution to this problem pursued by UPS? Is this a successful solution? Why or why not? The primary solution being integrated by UPS is the automation of older facilities to reduce the number of human touch points. This investment, including super hubs, can now sort packages 30 percent more efficiently, and with far fewer errors. In another example, an upgraded facility with 750 workers were able to process the same number of packages as an older facility with 1,170 workers. By all accounts, the upgrades have been very successful.
1-15. Diagram the packing sorting process at UPS before and after automation. Using Business Process Model and Notation (BPMN), the following two diagrams illustrate the packing sorting process before and after automation.
1-16. How did automated package sorting change operations and decision making at UPS?
The automated package sorting improved operations by requiring fewer human touch points and automating most of the process with the exception unloading and loading boxes onto a trailer. In some instances, new automated facilities provided additional jobs. Based on IT innovations including Bluetooth enhancements providing real-time information to managers, decisions can be made using actual data rather than historical data requiring estimating. This improvement allows for better allocation of resources and increased efficiency with fewer errors.
(Learning Objective 1: How are information systems transforming business and why are they so essential for running and managing a business today? AACSB: Analytical thinking, Reflective thinking, Application of knowledge)
MyLab MIS Go to the Assignments section of your MyLab to complete these writing exercises. .
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1-17 What are the strategic objectives that firms try to achieve by using information systems? For each strategic objective, give an example of how a firm could use information systems to achieve the objective. View rubrics in MyLab MIS.
1-18 Describe three ways in which information systems are transforming how business is conducted. View rubrics in MyLab MIS.
For an example illustrating the concepts found in this chapter, view the videos in MyLab MIS.
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Chapter 2 Global E-Business and Collaboration Learning Objectives 2-1 What major features of a business are important for understanding the role of information systems? 2-2 How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? 2-3 Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use? 2-4 What is the role of the information systems function in a business? 2-5 How will MIS help my career? Learning Catalytics is a “bring your own device” student engagement, assessment, and classroom intelligence system. It allows instructors to engage students in class with real-time diagnostics. Students can use any modern, web-enabled device (smartphone, tablet, or laptop) to access it. For more information on using Learning Catalytics in your course, contact your Pearson Representative. The lecture notes for this text includes a Learning Catalytics activity for each introductory case.
Chapter Outline 2-1
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What major features of a business are important for understanding the role of information systems? Organizing a Business: Basic Business Functions Business Processes Managing a Business and Firm Hierarchies The Business Environment The Role of Information Systems in a Business How do systems serve different management groups in a business, and how do systems that link the enterprise improve organizational performance? Systems for Different Management Groups Systems for Linking the Enterprise E-Business, E-Commerce and E-Government Why are systems for collaboration, and social business, and knowledge management so important, and what technologies do they use? What is Collaboration? What is Social Business? Business Benefits of Collaboration and Social Business Building a Collaborative Culture and Business Processes Tools and Technologies for Collaboration and Social Business Systems for Knowledge Management What is the role of the information systems function in a business? The Information Systems Department Information Systems Services How will MIS help my career? .
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Key Terms The following alphabetical list identifies the key terms discussed in this chapter. The page number for each key term is provided. Business, 67 Information systems department, 92 Business intelligence, 74 Information systems managers, 92 Business processes, 68 Interorganizational system, 79 Chief data officer (CDO), 93 Knowledge management systems (KMS), 79 Chief information officer (CIO), 92 Knowledge workers, 70 Chief knowledge officer (CKO), 93 Management information systems (MIS), 74 Chief privacy officer (CPO), 92 Middle management, 70 Chief security officer (CSO), 92 Operational management, 70 Collaboration, 82 Portal, 76 Customer relationship management (CRM) Production or service workers, 70 systems, 79 Data workers, 70 Programmers, 92 Decision-support systems (DSS), 74 Senior management, 70 Digital dashboard, 77 Social business, 83 E-government, 81 Structured knowledge, 91 Electronic business (e-business), 81 Supply chain management (SCM) systems, 78 Electronic commerce (e-commerce), 81 Systems analysts, 92 End users, 93 Tacit knowledge, 91 Enterprise applications, 77 Teams, 82 Enterprise content management (ECM) systems, Telepresence, 86 91 Enterprise systems, 78 Transaction processing systems (TPS), 73 Executive support systems (ESS), 76
Teaching Suggestions The opening vignette, "Enterprise Social Networking Transforms Sharp Corporation into a More Innovative Connected Organization," provides an outstanding example of how the company embraced social business tools to improve its odds for success, and solidify its commitment to using unique innovative technology to contribute to the culture and welfare of individuals throughout the world. These technologies are the very same ones every business needs to succeed. Sharp was facing stiff competition from Asian competitors and looked to ways to improve its business processes and organizational communication. Sharp, employees 50,000 people worldwide and the large, centralized firm with a traditional hierarchical culture made it difficult for employees to experiment and innovate on their own. Directives were only flowing downward, and the company’s younger employees were looking for opportunities to share ideas and opinions freely. Sharp implemented Yammer, Microsoft’s enterprise social networking platform for internal business uses, which enables employees to create groups to collaborate on projects and share and edit documents. It also includes a news feed that allows employees to easily learn what’s happening company wide.
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By using Yammer, employees share updates, ask for feedback, and connect volunteers around improvement initiatives. One project resulted in a 60 percent simplification of a key quality process that saved the company thousands of euros and reduced overall end-to-end process time. Within months of implementation, over 10,000 users within the company were using Yammer. The system has helped improved the flow of information in both directions (i.e., management to rank-in-fileemployees) with some department managers using Yammer to solicit input from employees regarding potential technologies that could be implemented in the organization to improve process and business efficiencies. Section 2-1: What major features of a business are important for understanding the role of information systems? Table 2-1 may help students understand that every business, large and small, uses the same basic business processes. Referring back to this table may help as you examine information needs for each functional area. You could have students select a business with which they are familiar and identify some of the business processes involved in each of the basic functional areas. Another good classroom exercise is to use Figure 2-2 (Page 43) to compare how the order fulfillment process can be accomplished sequentially, as the figure shows, versus simultaneously, as a new information system would allow. The explanation of firm hierarchies sets the basis for the rest of the text as it explains the various levels of management. Senior management requires a different type of information than do middle management, operational management, knowledge workers, data workers, and production or service workers. Throughout the text, students will need this information to understand how and why each type of information system is necessary. Section 2-2: How do systems serve different management groups in a business and how do systems that link the enterprise improve organizational performance? This section focuses on how information systems serve various management levels in companies. The ultimate goal is for students to realize that one system helps serve other systems and, working together, all the systems serve the entire organization. Type of System Transaction Processing Systems (TPS) Management Information Systems (MIS) Decision Support Systems (DSS)
Information Inputs Transactions; daily events
Information Outputs Detailed reports; lists; summaries
Users Operations personnel; first-line supervisors
Summary transaction data; high-volume data; simple models Optimized for data analysis, analytic models and data
Summary and exception reports
Middle managers
Interactive; simulations; analysis
Professionals, staff managers
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Executive Support Systems (ESS)
analysis tools. Aggregate data; external, internal
Projections; responses to queries
Senior managers
It’s likely that students’ main encounter will be with TPS systems when they first begin their careers. Stress the importance of accurate data at the TPS level since it serves as the initial source for the other systems. Typically, DSS and ESS systems will be the least familiar. Students may better understand them if you ask these types of questions: Why do national retail chains open stores in certain locations and not others? How can a retail chain determine which type of clothing to stock at different geographic locations? Most importantly, students need to understand that each type of information system supports the different kinds of decisions made at each managerial level. Enterprise systems: Central to this section is the need to coordinate activities, decisions, and knowledge across the firm’s different levels, functions, and business units. Enterprise systems use a single central data repository in order to supply all users with a consolidated view of employees, customers, suppliers, and vendors. The key to effectively using enterprise systems is to eliminate redundancy and duplication, not just in the information systems but also in business processes. Supply chain management systems: Students should understand the importance of a business managing its relationships with suppliers through a free-flowing exchange of information. The concept may seem foreign to those students who think a company is a closed entity and shouldn’t share data or information with anyone outside the organization. A review of a typical supply chain may be helpful: sourcing, producing, and delivering goods and services. It may also be helpful to engage the students in an exercise that lists all the entities involved in producing and delivering goods and services. Customer relationship management systems: Ask students how many times they’ve quit doing business with a company because of poor customer service. Ask them how many times they’ve had to supply a business with the same information simply because they talked to a different department in the company. Discuss how important it is for every functional area in a business to have the same consolidated view of its customers to avoid these kinds of problems. Knowledge management systems: Few, if any, students have probably had any experience with these systems. Point out that businesses are beginning to realize how much expertise and experience is locked away in employees’ heads and that it’s imperative to find a way to capture that information. Moreover, it’s important that businesses find a way to make the expertise and experience available to a wide range of users. On the other hand, students should understand that employees are very reluctant to impart their individual knowledge due to fear or self-preservation. Intranets and Extranets: As internet-based technologies continue to expand the basic platforms for disseminating information, smaller businesses that cannot afford to implement enterprise applications can turn to intranets and extranets. Your difficulty will be getting students to understand the difference between the two since they operate basically the same way. Intranets are limited to internal users;
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22 extranets are available to external users as well as internal users. Both are an inexpensive way to quickly disseminate information and data across functional lines and organizational boundaries. E-business, e-commerce, and e-government: Have students give examples of their own experiences with of each of these. Students are most often confused between e-business and e-commerce. Stress that e-business refers to the use of digital technology and the internet to execute major business processes, while e-commerce is more narrowly centered on the buying and selling of goods and services over the internet. Interactive Session: Organizations: Japan Embraces E-governance Tools for Tokyo 2020 Case Study: Suggested Answers: 1. Describe the identity verification system and describe the inputs, business processes, and the outputs of the system. The inputs, processes, and outputs of the IT applications planned for Tokyo 2020 are listed below. •
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Electronic Visa System: The inputs include detailed personal information, travel plans and schedules, supplementary documents, and payment authorization for visa fees. The process includes evaluating the personal and passport information provided by the applicant. The outputs include the evaluation outcome and a visa if applicable. Identity Verification System: The inputs include a an on-the-spot photo of the face of the user and a digital image of the user stored in the identity lanyard. The process includes comparing the images from the two sources. The outputs include the comparison results and access allowance or denial. Crowd Forecasting System: The inputs include images captured by police vehicles. The processes include forecasting the possibility of crowds gathering around competition arenas and identifying any abnormal situations. The outputs include congestion forecasts, phone messages for guiding spectators to less crowded exits, and flagging of abnormal situations for follow-up by the police. Heatstroke Warning System: The inputs include heat index information from the Ministry of the Environment, crowd forecast data, and real-time weather data from Yahoo! Japan. The processes include calculating the risk level and deciding whether to issue a heatstroke warning. The outputs include the risk of heatstroke and heatstroke warnings to the public and workers of Tokyo 2020.
2. Discuss how these IT applications strengthen the relationship between citizens and their government. Each of these IT applications serve different purposes of e-government. •
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Electronic Visa System: The Electronic Visa System is a new online channel for applying for a one-time entry visa to Japan in additional to the traditional method of doing it in person at any Japanese embassy or consulate. The simplified and streamlined visa application and issuance processes also improve efficiency. Therefore, the Electronic Visa System helps to improve delivery of government services and make government operations more efficient. Identity Verification System: The Identity Verification System decides whether the user is an accredited attendee within 0.3 seconds, making security checks faster and more secure. Therefore, the Identity Verification System helps to make government operations more efficient.
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Crowd Forecasting System: The Crowd Forecasting System helps spectators leave venues through less crowded exits after the end of an event. Therefore, the Crowd Forecasting System helps to empower citizens by giving them easier access to information. Heatstroke Warning System: The Heatstroke Warning System issues warnings to the public and to the workers of Tokyo 2020 so that they can take countermeasures in time. Therefore, the Heatstroke Warning System helps to empower citizens by giving them easier access to information.
3. What are the implementation challenges of these systems? How can they be addressed? These IT applications to be employed in Tokyo 2020 have various implementation challenges. Electronic Visa System •
Identity theft and forgery of documents: Since the application for the electronic visa, including supplementary documents, is submitted online, personal appearance at a visa office is not mandatory. Hence, identity theft or submission of falsified documents is possible. The Japanese government may reduce this risk by requiring the applicants to submit multiple supplementary documents issued by the government of the applicant or authenticated third parties (such as credit card companies) and by handling high-risk applicants manually.
Identity Verification System •
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High implementation costs: The cost of developing such a system from scratch will be quite high, since facial recognition requires top-quality cameras and advanced technology to ensure accuracy and speed. The average cost of installing and implementing such a system would be high considering the number of kiosks involved. Using an existing system developed by the private sector would lower the risks and costs associated with system development. Changes in appearance: If the facial image of the authenticated participant was collected some time before the event, there may be some discrepancies between the photo in the database (and the identity lanyard) and the facial image captured by the camera in the kiosk and may result in false alarms. This is particularly the case with junior spectators, whose appearance may change rapidly within several months. Then, checking the identity of the user will require human involvement. Equipment should be available at kiosks for replacing the facial image of the authenticated participant if necessary. Testing and fine-tuning: The performance of the facial recognition system depends on its design. The system should be tested repeatedly in various scenarios with different camera angles, background colors, etc. and should be fine-tuned for optimal performance.
Crowd Forecasting System • Computation power: Tokyo 2020 has numerous venues widely scattered across the crowded Tokyo metropolitan area. The crowd forecasting system must be scalable to analyze the large quantity of images captured by the cameras installed on police vehicles. Tokyo may test the computation power of this system beforehand in other events at these venues.
Heatstroke Warning System 4. What people, organization, and technology factors contributed to development of these IT applications? The people, organizational, and technological factors that contributed to the development of these IT applications include the following.
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People factors include a limited number of workers due to the shrinking workforce of the country and the large number of participants of Tokyo 2020, including athletes, workers, volunteers, spectators, and journalists. Organization factors include government initiation and good collaboration between the public and private sectors, a specific goal of hosting Tokyo 2020.
Technology factors include technological know-how, good infrastructure such as 5G networks, and the potential to apply IT applications in other contexts.
Section 2-3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use? Students have probably used most of these systems without even realizing their business value. Your task is to relate these increasingly common technologies to business processes and needs. Discuss how they can use cell phones, instant messaging, social networking sites, and wikis in a business setting to communicate, collaborate, and share ideas with team members, business partners, customers, and suppliers. One exercise you can use to reinforce the usefulness of team collaboration is to have small student groups explore social networking sites to see how many postings by businesses they can find. For instance, Twitter has tweets for free Honey Bunches of Oats at Walmart and a tweet for an article about General Electric’s solar technology. Businesses also make use of the popular YouTube.com to post videos of their products. This exercise will help demonstrate how businesses must constantly adapt their marketing strategies to reach customers. You can also generate a discussion about students’ experiences on these kinds of sites in relation to business uses and ask them to relate how effective these new methods of engaging customers are. Table 2.2 (Page 58) describes important application of social business inside and outside the firm. Because some of these applications are relatively unknown, you can have teams of students explore one or two of them and then present to the class a list of characteristics, capabilities, advantages, and disadvantages for each one. Table 2.3 (Page 58) emphasizes the benefits of collaboration and social business while Figure 2.10 (Page 59) highlights the necessity of having the appropriate organization structure and culture, along with the right technology, to successfully use collaboration in an organization. Discuss how the absence of even one of these three can hinder or prevent collaboration. Ask students to draw on their own experiences to compare and contrast firms with a collaborative culture to those without.
Many times, people and businesses decide which collaborative tools to use based on which ones they are most familiar with, rather than which are the most appropriate tool for the task at hand. You can have student teams evaluate one or more collaborative programs for an organization to which they belong like a sports team, sorority/fraternity, workplace, or even their use in your classroom. Have them use the time/space matrix in Figure 2.11 (Page 64) and the information in the section "Checklist for Managers: Evaluating and Selecting Collaboration Software Tools" to help select the best tool.
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25 Enterprise content management (ECM) systems help manage company knowledge including semistructured, semistructured, and unstructured types of information. Year ago, statistics were particularly valuable because companies often didn’t have enough data to make decisions. As such, they used statistics based on samples of the population data. We still use statistics, but today, many companies have too much data, and EMCs help to capture, store, retrieve, distribute, and preserve vast amounts of data. Interactive Session: Technology: Videoconferencing: Something for Everyone Case Study Questions 1. Compare the capabilities of the videoconferencing tools described in this case. How do they promote collaboration and innovation? The Cisco’s IX5000 immersive telepresence system offers leading-edge telepresence and is much more affordable and easier to use than in the past. It is sleekly sculpted, with high-definition video and theatrequality sound, creating a high-quality lifelike collaboration experience for 8 to 18 people. Video and other content can move across any of the screens. Zoom provides a less expensive and easier to use cloud-based option for online video and audio conference, collaboration, chat, screen-sharing, and webinars across various devices. Zoom provides a free basic version for up to 100 participants and for around $20 per month offer services that can accom9odate up to 1,000 participants and 10,000 viewers. Videoconferencing is becoming a tool of choice to promote collaboration and innovation as they allow individuals to manage business processes and to connect an collaborate with others around the world.
2. How is videoconferencing related to the business models and business strategies of the organizations described in this case? Nepris uses Zoom to connect teachers with industry experts to help make the instructional experience more immersive with real-world application. Zoom provides a reasonably priced option to allow Nepris to compete in this niche space. FCTI, which is a leading US ATM network and service provider, also uses Zoom for video conferencing. The goal is to help employees collaborate more effectively than email, text messaging, or phone calls.
3. Describe the specific ways in which videoconferencing technology helped each of the organizations in this case improve their operations and decision making. Zoom provides both companies with the opportunity to conference via tablets and smartphones. As such, both companies can participate in meetings and collaborations from remote locations. In the case of Nepris, it allows experts to participate with instructors while accommodating the industry expert’s busy, and often remote, schedules.
(Learning Objective 3: Why are systems for collaboration, social business, and knowledge management so important, and what technologies do they use? AACSB: Application of knowledge)
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Section 2-4: What is the role of the information system’s function in a business? If possible, arrange a session with the school’s information systems department to allow students to see first-hand how such a center works and who is responsible for running the systems. Have the IS staff and students participate in a Question and Answer forum about how typical processes are handled. Many students have a better appreciation of how these complex centers work when they actually see one in operation rather than just reading about it. Stress to students that in all but the smallest of firms these systems are critical to the operational efficiency and sheer survival in a very competitive marketplace. Most importantly, students should understand that the IS staff is responsible for the well-being of all users in an organization. Users and the IS staff are teammates not polarizing opposites. Section 2-5: How will MIS help my career? addresses how the chapter’s elements and information can help in securing a good job as a sales support specialist. These types of jobs are becoming more popular as information technology becomes more important in the workplace.
Review Questions 2-1 What major features of a business are important for understanding the role of information systems? Describe with examples how business processes are tied to the specific functional area of an organization. A business process is a logically related set of activities that define how specific business tasks are performed. Business processes are the ways in which organizations coordinate and organize work activities, information, and knowledge to produce their valuable products or services. Business processes for the manufacturing and production area include product assembling, quality checking, and producing bills of materials. For the sales and marketing area, business processes include identifying customers, making customers aware of the product, and selling the product. For finance and accounting, business processes include paying creditors, creating financial statements, and managing cash accounts. For human resources, business processes include hiring employees, evaluating employees’ job performance, and enrolling employees in benefits plans. (Learning Objective 1: What major features of a business are important for understanding the role of information systems?, AACSB: Application of knowledge.)
Define business processes and describe the role they play in organizations. A business process is a logically related set of activities that define how specific business tasks are performed. Business processes are the ways in which organizations coordinate and organize work activities, information, and knowledge to produce their valuable products or services. Business processes for the manufacturing and production area include product assembling, quality checking, and producing bills of materials. For the sales and marketing area, business processes include identifying customers, making customers aware of the product, and selling the product. For finance and accounting, business processes include paying creditors, creating financial statements, and managing cash
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27 accounts. For human resources, business processes include hiring employees, evaluating employees’ job performance, and enrolling employees in benefits plans.
Identify and describe the different levels in a business firm and their information needs. From highest to lowest, the three levels of the organizational hierarchy are senior, middle, and operational management. •
Senior managers need summary information that quickly informs them about the overall performance of the firm, such as gross sales revenues, sales by product group and region, and overall profitability. • Middle managers need more specific information on the results of specific functional areas and departments of the firm, such as sales contacts by the sales force, production statistics for specific factories or product lines, employment levels and costs, and sales revenues for each month or even each day. o Knowledge workers, such as engineers, scientists, or architects, design products or services and create new knowledge for the firm. They may need access to external scientific databases or internal databases with organizational knowledge. • Operational managers need transaction-level information, such as the number of parts in inventory each day or the number of hours logged on Tuesday by each employee. o Production or service workers actually produce the product and deliver the service. Production workers need access to information from production machines. Service workers need access to customer records so they can take orders and answer questions from customers. Types of information systems include transaction processing at the operational level, decision-support systems and management information systems at the middle level, and executive support systems at the senior level.
(Learning Objective 1: What major features of a business are important for understanding the role of information systems? AACSB: Application of knowledge) Explain why environments are important for understanding a business. Business environments are constantly changing. New developments in technology, politics, customer preferences, and regulations happen all the time. In general, when businesses fail, it is often because they failed to respond adequately to changes in their environments. A firm must monitor changes in its environment and share information with key entities in that environment in order to stay in business. External business environmental forces include: technology and science, the economy, international change, and politics. Internal business environmental forces include: customers, suppliers, stockholders, regulations, and competitors.
(Learning Objective 1: What major features of a business are important for understanding the role of information systems? AACSB: Application of knowledge) 2-2 How do systems serve different management groups in a business and how do systems that link the enterprise improve organizational performance?
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28 Describe the characteristics of business intelligence and explain why it is important in terms of decision making. Most organizations have business intelligence systems that focus on delivering information to support management decision making. Business intelligence comprises all the activities related to the data and software tools used for organizing, analyzing, and providing access to the data. These data are designed to help managers and other enterprise users make more informed decisions. Business intelligence is useful for decision making at all levels of management. (AACSB: Application of knowledge)
Describe the characteristics of transaction processing systems (TPS) and the role they play in a business. Transaction processing systems (TPS) are computerized systems that perform and record daily routine transactions necessary in conducting business; they serve the organization’s operational level. The principal purpose of systems at this level is to answer routine questions and to track the flow of transactions through the organization. • •
At the operational level, tasks, resources, and goals are predefined and highly structured. Managers need TPS to monitor the status of internal operations and the firm’s relationship with its external environment. • TPS are major producers of information for other types of systems. • Transaction processing systems are often so central to a business that TPS failure for a few hours can lead to a firm’s demise and perhaps that of other firms linked to it.
Describe the characteristics of management information systems (MIS), decision support systems (DSS), and executive support systems (ESS) and explain how each type of system helps managers make decisions. Middle management needs systems to help with 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 the business and predict future performance. • MIS summarizes and report the company’s basic operations using data supplied by TPS. The basic transaction data from TPS are compressed and usually presented in reports that are produced on a regular schedule. • MIS serves managers primarily interested in weekly, monthly, and yearly results, although some MIS enable managers to drill down to see daily or hourly data if required. • MIS generally provides answers to routine questions that have been specified in advance and have a predefined procedure for answering them. • MIS generally are not flexible and have little analytical capability. • Most MIS use simple routines, such as summaries and comparisons, as opposed to sophisticated mathematical models or statistical techniques. Examples include sales and profit per customer and per region, relocation summary and analysis, inventory control, capital investment analysis, and even a report on students who were here in the fall but did not to return in the spring.
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29 While MIS have an internal orientation, DSS will often use data from external sources, as well as data from TPS and MIS. DSS support “what-if” analyses rather than a long-term structured analysis of MIS. Whereas MIS are generally not flexible and provide little analytical capabilities, DSS are designed for analytical purposes and are flexible. Decision-support systems (DSS) support non-routine decision making for middle managers. DSS provide sophisticated analytical models and data analysis tools to support semi-structured and unstructured decision-making activities. • DSS use data from TPS, MIS, and external sources, in condensed form, allowing decision makers to perform “what-if” analysis. • DSS focus on problems that are unique and rapidly changing; procedures for arriving at a solution may not be fully predefined. • DSS are designed so that users can work with them directly; these systems include interactive, userfriendly software. •
Executive support systems help senior managers address strategic issues and long-term trends, both in the firm and in the external environment. • ESS address non-routine decisions requiring judgment, evaluation, and insight because there is no agreed-on procedure for arriving at a solution. • ESS provide a generalized computing and communications capacity that can be applied to a changing array of problems. • ESS are designed to incorporate data about external events, such as new tax laws or competitors, but they also draw summarized information from internal MIS and DSS. • ESS are designed for ease-of-use and rely heavily on graphical presentations of data.
(Learning Objective 2: How do systems serve the different management groups in a business and how do systems that link the enterprise improve organizational performance? AACSB: Application of knowledge) Explain how a digital dashboard works. Data from an ESS are presented in the form of a digital dashboard. On a single screen, it displays graphs and charts of the key performance indicators for managing a company. Digital dashboards are an increasingly popular tool for management decision-makers. Senior management have the necessary data at their fingertips to guide their work. Data captured at the factory or sales floor level are immediately made available for high-level or detailed views in executive dashboards and reports. A digital dashboard is a vital part of the real-time management of an organization and its operations. (AACSB: Application of knowledge)
Explain how and why an organization might want to implement enterprise applications. What might be involved? It is difficult to ensure that all the systems within an organization work in harmony . Most organizations have a collection of new and legacy systems that simply do not interact with one another. One possible solution to this problem is to implement an enterprise application. The organization can thus invest in systems that span all of its functional areas. Enterprise applications can help make the business more flexible and productive by helping coordinate business processes more closely and integrating groups of processes to ensure that they focus on the efficient management of resources and customer service. (AACSB: Application of knowledge)
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Explain how customer relationship management helps an organization manage their interactions with customers. Customer relationship management (CRM) systems aim to provide information to coordinate all the business processes that deal with customers. This includes sales, marketing, and customer service. The idea is to optimize revenue, customer satisfaction, and customer retention. CRM information can help businesses identify, attract, and retain the most profitable customers. This is achieved by enabling the business to provide better service to its existing customers and, thereby, increase sales. (AACSB: Application of knowledge)
2-3 Why are systems for collaboration and social business, and knowledge management so important and what technologies do they use? List the ways in which businesses have changed working conditions, procedures and systems to encourage social business. Social business refers to the use of social networking platforms—including Facebook, Twitter, and internal corporate social tools—to engage employees, customers, and suppliers. These tools enable workers to set up profiles, form groups, and “follow” each other’s status updates. The goal of social business is to deepen group interactions within and outside the firm to expedite and enhance information sharing, innovation, and decision making. Typically, a business uses a wide range of applications. These include: • • • • • • • •
Social networks: Connect people through personal and business profiles Crowdsourcing: Harness collective knowledge to generate new ideas and solutions Shared workspaces: Coordinate projects and tasks; co-create content Blogs and wikis: Publish and rapidly access knowledge; discuss opinions and experiences Social commerce: Share opinions about purchasing or purchase on social platforms File sharing: Upload, share, and comment on photos, videos, audio files, and text documents Social marketing: Use social media to interact with customers; derive customer insights Communities: Discuss topics in open forums; share expertise
(Learning Objective 3: Why are systems for collaboration and social business so important and what technologies do they use?, AACSB: Application of knowledge.) Explain the purpose and the mission of a team within a business organization. Employees may collaborate informally, in groups that are not an official part of the firm’s organizational structure, or formally in teams. Teams have a specific mission that someone in the business assigns to them. Team members need to collaborate to accomplish specific tasks and achieve the team mission, which might be, for instance, to “win the game,” or “increase online sales by 10 percent.” Teams are often short-lived, depending on the problems that they have to tackle and the time it takes to find a solution and accomplish the mission.
(Learning Objective 3: Why are systems for collaboration and social business so important and what technologies do they use?, AACSB: Application of knowledge.)
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