Ch. 10 Information Systems Within The Organizations

Front 1

Transaction Processing Systems(TPS)

Back 1

Information system that supports the monitoring, collection, storage, and process ing of data from the organization’s basic business transactions, each of which generates data.

Front 2

features of TPS

Back 2

–Continuous‘real-time’ data collection–Efficientlyhandle high volumes of data and large variations in those volumes–Avoiderrors and downtime–Recordresults accurately and securely–Maintainprivacy and security–Sourcedata automationBatchprocessing

Front 3

Information Systemsfor Accounting and Finance

Back 3

•Financial Planning andBudgeting•Managing FinancialTransactions•Investment ManagementControl and Auditing

Front 4

Information Systems for Production/ Operations Management

Back 4

•In-House Logistics andMaterials Management•Inventory Management•Quality Control•Planning Production andOperations•Computer-IntegratedManufacturingProduct Life CycleManagement

Front 5

Enterprise Resource Planning (ERP) Systems

Back 5

systems Information systems that take a business process view of the overall organi zation to integrate the planning, management, and use of all of an organization’s resources, employing a common software platform and database.

Front 6

Major Benefits ofERP Systems

Back 6

•Organizationalflexibility and agility•DecisionsupportQualityand efficiency

Front 7

Major Limitations ofERP Implementations

Back 7

•SinceERP’s are based on best practices companies may need to change their methods ofachieving business objectivesERPsystems can be complex, expensive, and time-consuming to implement.

Front 8

Major Causes of ERPImplementation Failure

Back 8

•Failureto involve affected employees in the planning and development phases and inchange management processes

•Tryingto do too much too fast in the conversion process

•Insufficienttraining in the new work tasks required by the ERP system

- Thefailure to perform proper data conversion and testing for the new system

Front 9

Implementing ERPSystems

Back 9

•On-Premise ERPImplementation–Vanillaapproach–CustomapproachBestof breed approach

Front 10

ERP II Systems

Back 10

ERP systems were originally deployed to facilitate business processes associated with manu facturing, such as raw materials management, inventory control, order entry, and distribution. However, these early ERP systems did not extend to other functional areas, such as sales and marketing. They also did not include any customer relationship management (CRM) capabili ties that enable organizations to capture customer-specific information. Finally, they did not provide Web-enabled customer service or order fulfillment.

Front 11

vanilla approach:

Back 11

In this approach, a company implements a standard ERP package, using the package’s built-in configuration options. When the system is implemented in this way, it will deviate only minimally from the package’s standardized settings. The vanilla approach can make the implementation quicker, but the extent to which the software is adapted to the organization’s specific processes is limited. Fortunately, a vanilla implemen tation provides general functions that can support the firm’s common business processes with relative ease, even if they are not a perfect fit for those processes.

Front 12

Custom approach

Back 12

In this approach, a company implements a more customized ERP system by developing new ERP functions designed specifically for that firm. Decisions con cerning the ERP’s degree of customization are specific to each organization. To utilize the custom approach, the organization must carefully analyze its existing business processes to develop a system that conforms to the organizations particular characteristics and processes. In addition, customization is expensive and risky because computer code must be written and updated every time a new version of the ERP software is released. Going further, if the customization does not perfectly match the organization’s needs, then the system can be very difficult to use.

Front 13

Best of breed approach

Back 13

This approach combines the benefits of the vanilla and customized systems while avoiding the extensive costs and risks associated with complete customization.

Front 14

Three majoradvantages of using a cloud-based ERP system are:

Back 14

•Thesystem can be used from any location that provides Internet access

•Companiesusing cloud-based ERP avoid the initial hardware and software expenses that aretypical of on-premise implementations

-Cloud-basedERP solutions are scalable, meaning it is possible to extend ERP support to newbusiness processes and new business partners (e.g., suppliers) by purchasingnew ERP modules.

Front 15

Three majordisadvantages of using cloud-based ERP systems are:

Back 15

•It isnot clear whether cloud-based ERP systems are more secure than on-premisesystems

•Companiesthat adopt cloud-based ERP systems sacrifice their control over a strategic ITresource

- Lackof control over IT resources when the ERP system experiences problems

Front 16

ERP Support forBusiness Processes

Back 16

•The Procurement,Fulfillment, and Production Processes -

interorganizationalProcesses: ERP with SCM and CRM

Front 17

procurement process

Back 17

originates when a company needs to acquire goods or services from external sources, and it concludes when the company receives and pays for them.

Front 18

fulfillment process

Back 18

also known as the order to-cash process, the company sells goods to a customer. Fulfillment originates when the company receives a customer order, and it concludes when it receives a payment from the customer.

Front 19

production process

Back 19

The production process can follow two different strategies: make-to-stock and make-to-order (see the discussion of the pull model and the push model in Chapter 11). Make-to-stock occurs when the company produces goods to create or increase an inventory; that is, finished products that are stored in the warehouse and are available for sales. In contrast, make-to-order occurs when the production is generated by a specific customer order.

Front 20

Interorganizational Processes

Back 20

typically involve supply chain management (SCM) and customer relationship management (CRM) systems.

Front 21

ERP SCM

Back 21

systems have the capability to place automatic requests to buy fresh perish able products from suppliers in real time.

Front 22

ERP CRM

Back 22

systems also benefit businesses by generating forecasting analyses of product consumption based on critical variables such as geographical area, season, day of the week, and type of customer. These analyses help grocery stores coordinate their supply chains to meet customer needs for perishable products. Going further, CRM systems identify particu lar customer needs and then utilize this information to suggest specific product campaigns.

Front 23

routine reports

Back 23

are produced at scheduled intervals. They range from hourly quality control reports to daily reports on absenteeism rates. Although routine reports are extremely valuable to an organization, managers frequently need special information that is not included in these reports.

Front 24

drill down reports

Back 24

display a greater level of detail. For example, a manager might examine sales by region and decide to “drill down” to more detail by focusing specifically on sales by store and then by salesperson.

Front 25

key indicator reports

Back 25

summarize the performance of critical activities. For example, a chief financial officer might want to monitor cash flow and cash on hand.

Front 26

comparative reports

Back 26

compare, for example, the performances of different business units or of a single unit during different times.

Front 27

exception reports

Back 27

include only information that falls outside certain threshold standards. To implement management by exception, management first creates performance standards.