Info Systems Test 3.pdf

CHAPTER 10 Functional Area IS IS that belongs to, or involves a single function/department IS provide support for the various functional areas in an organization by increasing each area’s internal efficiency and effectiveness Often provide information in a variety of reports What FAIS helps with Acc...

CHAPTER 10 Functional Area IS IS that belongs to, or involves a single function/department IS provide support for the various functional areas in an organization by increasing each area’s internal efficiency and effectiveness Often provide information in a variety of reports What FAIS helps with Accounting and Finance Marketing Production and Operations Management Manage organizational money flows Financial planning and budgeting Managing financial transactions Investment Management Control and Auditing Customer Relationship Management (CRM) Systems Manage an organization’s supply chain In-house logistics, and materials management Quality Control MRP I (Materials Requirements planning) MRP II (Manufacturing Resource Planning) Human Resources Management Recruitment HR Development HR Planning and Management Cross-Functional Area IS IS that belongs to, or involves two or more functions/departments Transaction Any business event that generates data worth being captured and stored into a database Transaction Processing Systems (TPS) TPS are cross-functional systems that support the monitoring, collection, storage, and processing of data from an organization’s business transactions, each of which generates data TPS collects data continuously, and in real time TPS is a cross-functional IS Source Data Automation Organizations try to automate the TPS data entry with source data automation as much as possible because of the large volume of data involved Batch Transaction Processing Under BTP, the firm collects data from transactions as they happen, placing them into batches, then prepares and processes the batches periodically. Online Transaction Processing (OLTP) Under OLTP, business transactions are processed online as they happen. The system performs processing tasks in real time. Online does NOT mean over the internet Handling transaction processing is complicated, the following issues arise… Multiple processes may try and change the same data simultaneously Errors result from overlapping updates Inconsistencies arise from a failure of any component at any time Processes must be in place to cancel, reverse, correct, or adjust transactions All edits, cancellations, need to have an audit trail Reports All information systems produce reports ○ Routine Reports Are produced at normal intervals (daily sales reports, hourly reports) ○ Exception Reports Include only information that falls outside certain thresholds or criteria ○ Adhoc (on-demand) reports Drill down reports ○ Key Performance Indicator (KPI) reports Summarize the performance of critical activities ○ Comparative Reports Analyze the performance of business units over a particular period Enterprise Resource Planning (ERP) Systems ERP systems are cross-functional systems They correct a lack of communication among functional areas Adopt a business process view of the overall organization Integrate the planning, management, and use of all of an organization’s resources ERP System Hierarchy MRP I -> MRP II -> ERP -> ERP II ○ ERP Originally developed to facilitate only manufacturing processes Later extended as ERP II systems to electronically connect all the facets of the value chain ○ ERP II Inter-organizational cross-functional systems Delivered as e-business suites Modular, web-enabled software suites that integrate Now commonly referred to as ERP systems Customer relationship management Supply chain management Decision support Enterprise Portals Other business applications and functions ERP Benefits Organizational Flexibility and Agility ○ Break down many old functional silos of processes, IS, and information resources ○ Organizations can react quickly to changing business conditions and capitalize on new business opportunities Decision Support ○ Provide essential information on business performance across functional areas ○ This information significantly improves managers’ ability to make better, more timely decisions Quality and Efficiency ○ Integrate and improve an organization’s business processes, resulting in significant improvements in the quality of customer service, production, and distribution ERP Drawbacks and Risks Companies may need to change existing business processes to fit the predefined business processes of the software Complex, expensive, and time consuming to implement Hardware and software are a small part of total costs Underestimating the complexity of the planning, development, and training required to prepare for a new ERP system Failure to perform data conversion, and testing for a new system Extensive training is required Failure can cripple, or kill a business Implementing ERP Systems On-premise ERP Implementation ○ Vanilla Approach Use the standard ERP package using built-in configuration options ○ Custom Approach Analyze needs and have the software customized in response to the documented design document Complete customization is extremely rare, and it is risky ○ Best of Breed Use the ERP Vanilla software, make minor customizations, and integrate the other software modules Combines the benefits of the vanilla and customized systems while avoiding the extensive costs and risks associated with complete customerization ○ SaaS (Cloud) ERP Implementation Lease ERP software that is cloud-based (SaaS) normally using the vanilla approach Advantages Anywhere, anytime use Lower initial costs of hardware and software Scalable: Pay for only what you use Disadvantages Security issues associated with internet-based computing Using the vanilla approach potentially reduces competitive advantage Lose control over a strategic IS (ERP systems are mostly strategic IS) Enterprise Application Integration For some organizations, integrated ERP systems are not appropriate They have isolated information systems that need to be connected with one another Enterprise Application Integration (EAI) system ○ Integrates existing systems by providing software, called middleware that connects multiple applications ○ Allows existing applications to communicate and share data ○ Enables organizations to use existing applications CHAPTER 11 Intellectual Capital of a business Human Capital Structural Capital Relational Capital Customer Relationship Management (CRM) Customer-focused and customer-driven organizational strategy ○ Returns to personal marketing rather than market to a mass of people Goal is to develop highly individualized offers that customers are more likely to accept Is not a process or a technology per se; rather it is a customer-centric way of thinking and acting Helps companies acquire new customers, retain existing profitable customers, and grow relationships with existing customers CRM uses IT to create a cross-functional enterprise system All successful CRM policies share two basic elements… Identify the many types of customer touch points Consolidate data about each customer Data Consolidation= 360-Degree view of customers Collaborative CRM systems Provide effective and efficient interactive communication with the customer throughout the entire organization Integrate communications between the organization and its customers in all aspects of marketing, sales, and customer support Operational CRM Systems Front-office processes are those that directly interact with customers The two major component of operational CRM systems are ○ Customer-facing applications ○ Customer-touching applications Customer Facing Applications Allow employees interact directly with customers ○ Applications include… Customer service and support Salesforce Automation Marketing Campaign Management Customer Service and Support ○ Systems that automate service requests, complaints, product returns, and request for information Example: The Call Center Salesforce Automation ○ Automatically records all of the components in a sales transaction process Marketing ○ Systems enable marketers to identify and target their best customers, to manage marketing campaigns, and to generate quality leads for the sales teams Cross-Selling The marketing of additional related products to customers based on a previous purchase Up-Selling Selling a new or existing customer a better product then they are currently using Product Bundling Offerings of telecom companies Campaign Management ○ Help organizations plan campaigns that send the right messages to the right people through the right channels Customer-Touching Applications Customers interact directly with online technologies rather than with a company representative Customers typically can use these applications to help themselves ○ Also referred to as a e-CRM applications Search and Comparison Capabilities ○ E-shopping website, and search engine Technical and Other Information and Services ○ Product Manuals and instructions Customized/Personalized Products and Services ○ Canada Post, FedEx, and UPS FAQs Email Automated Responses Loyalty Programs ○ VIP Porter - Frequent Flyer Points; Casino Points Analytical CRM Systems Provide business intelligence by analyzing customer behaviour and perceptions Create statistical models of customer behaviour, and the value of customer relationships over time ○ Purposes Designing and executing targeted marketing campaigns Increasing customer acquisition, cross-selling, and up-selling Providing input into decisions relating to products and services Providing financial forecasting and customer profitability analysis CRM Systems may be… Implemented on-premise Accessed on-demand in the cloud On-Demand CRM Example of cloud computing or software-as-a-service (SaaS) Systems hosted by an external vendor in the vendor’s data center which spares the organization the costs associated with purchasing the system, maintenance, and employees need to know only how to access and use it Mobile CRM An interactive system that enables an organization to conduct communications related to sales, marketing, and customer services activities through a mobile medium for the purpose of building and maintaining relationships its customers Open-Source CRM The source code for open-source software is available at no cost Given the complexity of the open-source software, integration issues, and lack of reliable updates, a huge amount of IT expertise is required Social CRM The use of social media technology and services to… ○ Understand customer sentiment ○ Enable organizations to engage their customers in a collaborative conversation Real-Time CRM Customers are always-on, always-connected, knowledgeable, and less loyal Real-time CRM - Respond to customer inquiries in real time 24/7 Benefits of Operational CRM Systems Provide efficient, personalized marketing, sales and service Get a 360-degree view of each customer Give sales and service employees access to a complete history of customer interaction with the organization Improve sales and account management Form individualized relationships with customers Identify the most profitable customers and provide them the services they need Provide employees with the information and processes necessary to know their customers Understand and identify customer needs Effectively build relationships among the company, its customer base, and its distribution partners A majority of CRM implementations do not deliver the promised benefits and/or even damage customer relationships Reasons for Failure CRM systems make the job of frontline employees more complicated Technology is implemented and it is hoped that it will solve all current business problems No business process change and cultural change Not solving business process problems first The lack of understanding, training & preparation Limited Top Management Support Key stakeholders should be involved from before making a decision to acquire a CRM system Supply Chain The flow of materials, information, money, and services from raw material suppliers, through factories and warehouses, to the end customers. Includes the organizations and processes that create and delivery products, information, and services to end customers Supply Chain Visibility The ability for all organizations in a supply chain to access or view relevant data on purchased materials as these materials move through their suppliers’ production processes and transportation networks Three Segments of the Supply Chain Upstream ○ Where sourcing or procurement from external suppliers occurs Internal ○ Where manufacturing, assembly, and packaging takes place Downstream ○ Where distribution takes places, frequently by external distributors Tiers of Suppliers A supplier may have one or more sub suppliers, a sub supplier may have its own sub supplier(s), and so on… ○ Tier 3 - Suppliers produce basic products such as glass, plastic, and rubber ○ Tier 2 - Suppliers use these inputs to make windshields, tires, and plastic moldings ○ Tier 1 - Suppliers produce integrated components such as dashboards and seat assemblies The Flows in the Supply Chain Material Flows ○ The physical products, raw materials, and supplies that flow along the chain. Also includes reverse flow (returned products, damaged) Information Flows ○ Data related to demand, shipments, orders, returns, and schedules as well as changes in any of these data Financial Flows ○ Involve money transfers, payments, credit card information and authorization, payment schedules, e-payments, and credit-related data Functions of Supply Chain Management (SMC) To plan, organize, and optimize the various activities performed along the supply chain Inter-organizational Inform Systems (IOS) Information flows among two or more organizations Reduce the problems, or friction along the supply chain Reduce uncertainty and risk by decreasing inventory levels, and cycle time Eliminate paper, reduce errors, lower costs of transactions SCM Systems Facilitate information sharing along the supply chain ○ Automatic notification to suppliers ○ Allowing suppliers directly access relevant parts of the ERP system Vendor-managed Inventory ○ When the supplier, rather than the retailer, manages the entire inventory process for a particular product or group of products Electronic Data Interchange (EDI) A communication standard that enables business partners to exchange routine documents, such as purchasing orders, electronically EDI formats these documents according to agreed-upon standards ○ Then transmits messages over the internet using a converter, called translator EDI Benefits: Minimize data entry errors, Reduces Cycle Time, Increases Productivity, Minimizes paper usage and storage. To implement SCM systems, a company must connect the Intranet of its various partners to create the Extranet Allows external business partners to enter the corporate intranet of other organizations, via the internet, to access data, place orders, check the status of those orders, communicate and collaborate Uses VPN technology to make communication over the internet more secure Extranet Benefit: Faster processes, Information Flow, Improved order entry and customer service, lower costs, overall improved business effectiveness CHAPTER 13 IS Strategic Plan A set of long-range goals that… ○ Describe the IT infrastructure ○ Identify the major IT initiatives needed to achieve the organization’s goals Must meet three criteria: ○ Be aligned with the organization’s strategic plan ○ Provide for an IT architecture that seamlessly networks users, applications, and databases ○ Efficiently allocate IS development resources among completing projects so that the projects can be completed on time and within budget and still have the required functionality The IT Steering Committee A group of managers from various functional areas ○ The committee’s major tasks are to… Link organizational strategy with IT strategy Approve the allocation of resources for the IT function Establish performance measures for the IT function Ensure that the performance standards are met Elements of a typical IS operational plan Mission ○ Derived from the IT strategy IT Environment ○ A summary of the information needs of the individual functional areas of the entire organization Objectives of the IT function Constraints of the IT function Application portfolio ○ Inventory of present information systems and a detailed plan of projects to be developed or continued Resources Allocation and project management Evaluating and Justifying IT Investment Assessing the Costs ○ Calculating the dollar value of IT investments is not as simple as it may seem Major Challenges ○ Allocating fixed costs among different IT projects ○ Ongoing maintenance costs and unanticipated expenses Assessing the Benefits Cost-Benefit Analysis ○ Tangible Costs ○ Intangible Costs ○ Tangible Benefits ○ Intangible Benefits Strategies for Acquiring IT Applications Purchase a pre written application ○ Pros Many different types of off-the-shelf software Can save time by buying rather than building Company can know what it is getting before it invests in the product Purchased software may eliminate the need to hire personnel ○ Cons Software may not exactly meet the company’s needs Software may be difficult or impossible to modify Limited control over improvements Software may be difficult to integrate Vendors may discontinue software Customize a Prewritten Application ○ Pros Achieve a competitive advantage due to the system that meets the company’s unique requirements ○ Cons Customizing a prewritten application can be extremely difficult Not suitable if the software is likely to become obsolete in a short time ‘ Lease the application (subscription) ○ Can save a company both time and money ○ Apply the 80/20 rule Should meet 80% company needs Modifying should fill remaining 20% Use Open-Source Software ○ ○ ○ Use it as is, customize it, or develop applications with it The same as proprietary application except licensing, no payment / support A great degree of internal IT expertise is required Outsourcing ○ Acquire applications from outside contractors ○ Can be done domestically and internationally Pros Knowledge of outside experts Cons Loss of IT knowledge Corporate secrets and data transferred to third parties Communication problems, especially in offshoring Continuous Development ○ A software development project is not viewed has having a defined product, with development stopped when the product is implemented ○ Software development project is viewed as constantly changing in response to changing business conditions and in response to user acceptance Custom Development ○ Build the entire application in-house ○ Use open-source or closed-sources approaches Pros Good fit with organization’s requirements Retaining IT expertise Cons Time consuming Errors High Costs - Often more expensive than buying or using SaaS Traditional Systems Development Life Cycle Consists of six processes, each of which has clearly defined tasks: ○ Systems Investigation Initial Stage - Feasibility Study Options: ○ 1. Do nothing and continue to use the existing system unchanged ○ 2. Modify or enhance the existing system ○ 3. Develop a new system Technical Feasibility Determines whether the organization can use its existing systems to achieve the project’s performance objectives Determines whether the company can develop and/or acquire the hardware, software, and communication components Economic Feasibility Determines whether the project is an acceptable financial risk Does the organization have the necessary time and money ○ Behavioral Feasibility Addresses the human issues of the systems development project Assess the acceptance level of… ○ Employees ○ Customers ○ Suppliers ○ Managers Systems Analysis Examine the business problem that may be solved with a new/improved system Gather information about an existing system Determine requirements for a new/improved system The goal is to produce a set of system requirements ○ Systems Design How the system will be designed to resolve the business problem ○ Programming and Testing Programming Translating the design specifications into computer code Testing The process that assesses whether the computer code will produce the expected and desired results It is also intended to detect errors, or bugs, in the computer code Implementation The process of converting from an old system to a new one Operation and Maintenance ○ ○ Data Conversion Converting data elements from the old database to the new database Correcting data errors Filtering out unwanted data Consolidating data from several databases Improperly organized and formatted data is a major cause of failures Joint Application Design A group-based tool for collecting user requirements and creating systems design Rapid Application Development Relies on prototyping and integrated computer-assisted software engineering (ICASE) tools Quickly produce a required system ○ Key Features Collect user requirements Continuously rely on user input Iterative Approach Prototypes are developed and refined in stages At the end, functional components are produced CHAPTER 3 Ethics Refers to the principles of right and wrong that individuals use to make choices that guide their behavior Deciding what is right or wrong is not always easy or clear-cut Ethical Frameworks The Utilitarian Approach ○ States that an ethical action is the one that provides the most good or does the least harm ○ Ethical Corporate Action would be the one that produces most good and least harm The Rights Approach ○ Maintains that an ethical action is the one that best protects and respects the rights of the affected parties The Fairness Approach ○ Ethical actions treat all human beings equally, or, if unequally, then fairly, based on defensible standard The Common Good Approach ○ Emphasizes the respect and compassion for all people The Deontology Approach ○ The morality of an action is based on whether the action itself is right or wrong based on certain rules Ethics in the Corporate Environment Fundamental Principles of ethics include: ○ Responsibility ○ Accountability ○ Liability Ethics in IT Some issues that occur ethically are… ○ Privacy Issues ○ Accuracy Issues ○ Property Issues ○ Accessibility Issues Privacy - The right to be left alone and to be free of unreasonable personal intrusions Information Privacy - The right to determine when, and to what extent info can be gathered A Digital Dossier - an aggregated electronic profile of you and your habits CCTV on tolls, public places, and work Credit Card Transactions Phone Calls Government Records Bossware - Collects data about employees by continuously monitoring their computer activities during regular working hours (and even beyond) ULR Filtering by companies - Blocking Certain Websites China’s Social Credit System - For each citizen, it combines data from various sources collected by private companies, public agencies, CCTV cameras, drones, internet, social media Rates the trustworthiness of all citizens by analyzing their social behaviours ○ Based on blacklisting and whitelisting