Management Information Systems PDF

ADM 2372 Management Information Systems Mayur Joshi, PhD Assistant Professor of Information Systems [email protected] © Copyright. Mayur Joshi. 2024. and © 2024 John Wiley &...

ADM 2372 Management Information Systems Mayur Joshi, PhD Assistant Professor of Information Systems [email protected] © Copyright. Mayur Joshi. 2024. and © 2024 John Wiley & Sons Canada, Ltd. or the authors All Rights Reserved. No part of this document may be reproduced, stored in a retrieval system or transmitted in any form or b y any means, electronic, mechanical, photocopying, recording or otherwise without prior written permission from the professor. Shar ing course materials without permission or uploading course materials to a content sharing website may be treated as an instance of acad emic fraud as well as copyright infringement. 1  Week 2 Organizational Strategy, Competitive Advantage, and Information Systems (Chapter 2) 2 Learning Objectives 1. Discuss ways in which information systems enable business processes for a single functional area and cross-functional processes. 2. Differentiate among business process reengineering, business process improvement, and business process management. 3. Identify effective IT responses to different kinds of business pressures. 4. Describe the strategies that organizations typically adopt to counter Porter’s five competitive forces. 3 Chapter Outline 1. Business Processes 2. Business Process Reengineering, Business Process Improvement, and Business Process Management 3. Business Pressures, Organizational Responses, and Information Technology Support 4. Competitive Advantage and Strategic Information Systems 4 Opening Case IKEA Reshapes its Strategy With the Help of Digital Technologies Questions: 1. Is IKEA’s use of information technology consistent with the company’s overall strategy? Why or why not? 2. Browse the web for IKEA’s most recent information technology innovations? Are they consistent with the company’s overall strategy? Why or why not? 5 2.1 Business Processes Cross-Functional Processes Information Systems and Business Processes Robotic Process Automation 6 Business Processes A business process is an ongoing collection of related activities that create a product or service of value to the organization, its business partners, and/or its customers Comprised of three elements: o Inputs o Resources o Outputs Efficiency vs. effectiveness 7 Cross-Functional Processes No single department or functional area is responsible Steps executed in a coordinated, collaborative way Procurement and fulfillment cross-functional processes 8 Table 2.1 Examples of Business Processes Accounting Business Processes Managing accounts payable Managing invoice billings Managing accounts receivable Managing petty cash Reconciling bank accounts Producing month-end close Managing cash receipts Producing virtual close Finance Business Processes Managing account collection Producing property tax assessments Managing bank loan applications Managing stock transactions Producing business forecasts Generating financial cash-flow reports Applying customer credit approval and credit terms Marketing Business Processes Managing post-sale customer follow-up Handling customer complaints Collecting sales taxes Handling returned goods from customers Applying copyrights and trademarks Producing sales leads Using customer satisfaction surveys Entering sales orders Managing customer service Training sales personnel 9 Table 2.1 Examples of Business Processes Continued Production/Operations Management Business Processes Processing bills of materials Managing quality control for finished goods Processing manufacturing change orders Auditing for quality assurance Managing master parts list and files Receiving, inspecting, and stocking parts and materials Managing packing, storage, and distribution Processing physical inventory Handling shipping and freight claims Handling shipping and freight claims Handling vendor selection, files, and inspections Human Resources Business Processes Applying disability policies Producing performance appraisals and salary adjustments Managing employee hiring Handling employee orientation Managing resignations and terminations Managing files and records Applying training and tuition reimbursement Applying health care benefits Managing travel and entertainment Managing pay and payroll Managing workplace rules and guidelines Overseeing workplace safety Management Information Systems Business Processes Managing antivirus control Applying electronic mail policy Handling computer security issues incident reporting Generating internet use policy Training computer users and staff Managing service agreements and emergency services Applying disaster recovery procedures Applying user workstation standards Managing the use of personal software 10 FIGURE 2.1 Business process e-ticket ordering. 11 Information Systems and Business Processes IS play vital role in three areas of business processes o Executing the process o Capturing and storing process data o Monitoring process performance 12 Executing the Process IS help execute the process by: o Informing employees when it is time to complete a task o Providing required data o Providing a means to complete the task 13 Capturing and Storing Process Data Processes generate data o Dates, times, product numbers, quantities, prices, addresses, names, employee actions IS’s capture and store process data (aka transaction data) Capturing and storing data provides immediate, real-time feedback 14 Monitoring Process Performance IS evaluate information to determine how well a process is being executed Evaluations occur at two levels: o Process level o Instance level Monitoring identifies problems for process improvement 15 Robotic Process Automation Robotic process automation (RPA) is a system that enables enterprises to automate business processes and tasks that historically were carried out by employees. Companies that employ RPA develop software “robots”—known as bots—that automate the steps in a business process. 16 Example: IT’s About Business 2.1 Pizza Hut to Use Robots to Deliver Pizzas in Vancouver Questions: 1. Describe the steps of a typical pizza delivery business process. 2. Describe the fundamental elements of Pizza Hut’s new delivery business process in terms of inputs, resources, and outputs. 3. Explain the use of robots, such as those used by Pizza Hut, in terms of the three roles of information systems: executing the process, capturing and story data, and monitoring performance. 17 2.2 Business Process Reengineering, Business Process Improvement, and Business Process Management Reengineering Improvement Management 18 Measures of Excellence in Executing Business Processes Customer satisfaction Cost reduction Cycle and fulfillment time reduction Quality Differentiation Productivity 19 Business Process Reengineering (BPR) Michael Hammer & James Champy, 1993, Reengineering the Corporation Business process reengineering (BPR) o A radical redesign of an organization’s business processes to increase productivity and profitability o Examines business processes with a “clean slate” approach 20 Business Process Improvement (BPI) Business process improvement (BPI) o An incremental approach to move an organization toward business process centered operations o Focuses on reducing variation in process outputs by identifying the underlying cause of the variation Six Sigma is a popular methodology for BPI 21 Business Process Improvement (BPI) and DMAIC Five basic phases of successful BPI o Define o Measure o Analyze o Improve o Control 22 BPI versus BPR BPI BPR Low risk/low cost High risk/high cost Incremental change Radical redesign Bottom-up approach Top-down approach Takes less time Time consuming Quantifiable results Impacts can be All employees trained overwhelming in BPI High failure rate 23 Business Process Management (BPM) and Key Components A management system used to support continuous BPI initiatives for core business processes over time Important components of BPM: o Process modeling o Business activity monitoring (BAM) 24 BPMS and Social BPM Business process management suite (BPMS) o An integrated set of applications used for BPM Emerging trend of social BPM o Technologies enabling employees to collaborate across functions internally and externally using social media tools 25 2.3 Business Pressures, Organizational Responses, and Information Technology Support Business Pressures Organizational Responses 26 Business Pressures Market pressures Technology pressures Societal, political, and legal pressures 27 FIGURE 2.2 Business pressures, organizational performance and responses, and IT support. 28 Market Pressures Globalization Changing nature of the workforce Powerful customers 29 Globalization The integration and interdependence of economic, social, cultural, and ecological facets of life, made possible by rapid advances in IT. Globalization is markedly increasing competition. Many labour-intensive industries have moved their operations to countries with low labor costs. IT has made such moves much easier to implement. 30 Changing Nature of the Workforce The workforce is becoming more diversified: o Women o Single parents o Minorities o Persons with disabilities IT is enabling telecommuting employees 31 Powerful Customers Increasing consumer sophistication and expectations Consumers are more knowledgeable about o Products and services o Price comparisons o Electronic auctions Customer relationship management (CRM) 32 Technology Pressures Technological innovation and obsolescence o Rapid development of both new and substitute products and services Information overload o Vast stores of data, information, and knowledge o Difficulties in managing data for decision making 33 Societal, Political, and Legal Pressures Social responsibility Compliance with government regulations Protection against criminal activities Ethical issues 34 Social Responsibility Green IT o Facilities design and management o Carbon management o International and U.S. state environmental laws Digital Divide o Refers to gap between those individuals who have access to information and communications technologies and those who do not o Exists both within and among countries 35 Social Responsibility and Philanthropy in Business PatientsLikeMe Kiva Canadian Red Cross 36 Compliance with Government Regulations Government regulations regarding health, safety, environmental protection, and equal opportunity Personal Information Protection and Electronic Document Act (PIPEDA) 37 Protection against Criminal Activities Computer systems can be used to create fraudulent or fictitious transactions that are used to steal funds from banks or other organizations, or to engage in identity theft—the use of another person’s identity for financial gain. US Department of Homeland Security’s (DHS) and Canada Border Services Agency (CBSA) o Biometric screening systems 38 Ethical Issues General standards of right and wrong o Information-processing activities o Monitoring employee e-mail o Privacy of customer data 39 Group Assignment 1: IT’s About Business 2.2 Renting Electric Vehicles for Competitive Advantage Questions: 1. Describe the political/social/legal pressures on Hertz. 2. Describe the technological pressures on Hertz. 3. Describe the economic pressures on Hertz. 4. How will EVs create a competitive advantage for Hertz? 40 End of Session 41 Next session Competitive Advantage and Strategic IS 42 Organizational Responses Strategic systems Customer focus Make-to-order and mass customization E-business and e-commerce 43 2.4 Competitive Advantage and Strategic Information Systems Competitive Strategy Strategic Information Systems (SIS) Porter’s Competitive Forces Model Porter’s Value Chain Model Strategies for Competitive Advantage Business–Information Technology Alignment 44 Porter’s Competitive Forces Model 1. Threat of entry of new competitors 2. Bargaining power of suppliers 3. Bargaining power of customers/buyers 4. Threat of substitute products or services 5. Rivalry among existing firms within the industry 45 FIGURE 2.3 Porter’s Competitive Forces Model. 46 Porter’s Value Chain Model Value chain o A sequence of activities through which the organization’s inputs are transformed into valuable outputs Primary activities o Relate to production and distribution of products and services Support activities o Support primary activities contributing to competitive advantage 47 FIGURE 2.4 Porter’s Value Chain Model. 48 Primary Activities Five primary activities for manufacturing 1. Inbound logistics (inputs) 2. Operations (manufacturing and testing) 3. Outbound logistics (storage and distribution) 4. Marketing and sales 5. Services 49 Support Activities Four support activities 1. Firm’s infrastructure (accounting, finance, management) 2. Human resources management 3. Product and technology development (R&D) 4. Procurement 50 Strategies for Competitive Advantage Cost leadership Differentiation Innovation Operational effectiveness Customer orientation 51 FIGURE 2.5 Strategies for Competitive Advantage. 52 Business–Information Technology Alignment Six characteristics of excellent alignment: 1. Organizations view IT as an engine of innovation that continually transforms the business, often creating new revenue streams. 2. Organizations view their internal and external customers and their customer service function as supremely important. 3. Organizations rotate business and IT professionals across departments and job functions. 4. Organizations provide overarching goals that are completely clear to each IT and business employee. 5. Organizations ensure that IT employees understand how the company makes (or loses) money. 6. Organizations create a vibrant and inclusive company culture. 53 Example: IT’s About Business 2.3 Deploy Technology to Win Championships and Attract and Connect Fans Questions 1. Consider all the technologies discussed in this case. Taken together, are they strategically important to the MLSE’s Toronto Raptors team? Why or why not? Provide specific examples to support your answer. 2. Are they strategically important to MLSE’s Scotiabank Arena? Why or why not? Provide specific examples to support your answer. 3. Have you experienced any of the technologies discussed in the case? Do you feel your experience was improved with the use of technology? 54 Closing Case Pick n Pay Creates an Operational and Customer- Oriented Advantage with Cloud Questions: 1. Why did Pick n Pay want to upgrade their enterprise solution to one that was hosted in the cloud? 2. Why did Pick n Pay make use of Lemongrass’s services for this project? 3. How do AWS and SAP provide a competitive advantage to Pick n Pay and other retailers who use their products? 55