Emerging Technologies for Information systems

Summary chapter -02

In the last lecture, we have seen there are different organisations with different functions, and they use different IS.

Let us evaluate the organisational structure of a company.According to Anthony Triangle, there are four categories of

hierarchies in an organisation as you can see in the next slide.

So, when we summarize them we will be able to find 3 categories such as;

Executives – taking long term decisions Managers - making short term decisions and planning Supervisors - doing day-to-day operations and planning

StrategicPlanning

Tactical

Knowledge

Operational

Organisational Hierarchies

HR FINANCE MARKETNG ….. ….. e.t.c.

Financial transactions

Creditcontrol

Profit measures

Budgets

Functional Activities

Therefore, we find that even in one department of an organisation, we need different information systems;

Say for example in Finance Department;

At operational level we need IS for daily operation, which is to be handled by staff/employees.

At knowledge level, we need IS for managing operations daily basis – which is to be handled by supervisors.

At tactical level(middle management)- we need information systems for the planning and control of short term decisions – which is to be handled by managers

At strategic level(executive management)- we need information systems for planning and control of long term decisions – which is to be handled by executives(C.E.Os, Board Directors)

Read the case study carefully, and remember the same type of situations are given in examinations.

The way Siemens operate the technology1. Used knowledge Management system – Siemens called it as

ShareNet system. 2. Online Purchase – e-procurement.3. Improved internal administrative processes. 4. Used Order & Request systems to deal with customers.

There are three forces affecting or influencing Information Systems such as;

Continuous business pressures Fast-changing technology Rapidly (fast) evolving (developing) organizations.

Development of IS over the years

1965-1975

• Automated functions in organisations, such as payroll, stock control, invoices.

• It was controlled by IS departments

1980s

• Made smaller systems and department based systems.

1985s

• IS became popular. Departments such as HR, Finance, Manufacturing, Distribution started depending on technology

• 1995s • Internet and

mobile phones developed.

Classifying IS

We can classify IS according to formality(who uses and how), purpose, reach and complementatries.

1. IS by formality There different types of IS according to the formality from

informal human systems, paper-based systems and computer based systems.

For example a small business owner would decide price of a product based on the product type and customer, bigger organizations may use a price list to make the price, again larger businesses include sales information in computer software to the task.

a. Human Information Systems

Human information systems means using sense organs (by touch, taste, experience) to collect information, process or analyse information and finally to distribute the information. These are informal information systems.

b. Paper – based information systems People use many paper based systems, because they are cheap and easy to

understand. There are many advantages for paper based information systems such as;

1. Cheap or less expensive 2. Every office having papers, so it becomes much easy. 3. Information on paper giving an opportunity to file the copy for auditing. 4. All stages of transactions can be traced.

c. Computer based information system

Collect information electronically, analyse electronically, distribute electronically.

For example ‘barcodes’ in supermarkets help to track the product details.

Retailing or shopping malls use electronic point of sale terminals to track the purchase of items and control the inventory.

Financial services use ATM.Travel – computer based reservation systems. Manufacturing – computer aided design and manufacturing(CAD)

Barcodes and EPOS

2. Classifying IS by purpose

Information systems can be classified by purposes such as Operational purpose

Monitoring purpose Decision support purpose Communication purpose 1. Operational purpose For processing daily transactions such as payroll, order entry systems,

e.t.c. another example is EPOS systems that controls the stock and manage supply chain. Bar-coding systems is another example. Radio Frequency Identification technology is another example that used to track goods and materials in production process. Radio-frequency identification (RFID), uses a tag(sticker) attached to the item transmits information about the item.

2. Monitoring

Monitoring systems are used to check the performance, functions and people. These systems monitor financial matters, quality, personal performance, departmental output or production.

For example student Trail Systems that is used to monitor the academic progress of students.

3. Decision support systems – DDS (Expert Systems or Knowledge Systems)

Helps to calculate the results of different actions. The system does this by making a model of the process or situation. For example business use DSS to analyse the consequence of investments, banks use DSS prior to approve the loans.

Computer based Decision Support Systems are not as good as people. People call them as knowledge systems, and these systems get support from human experts to take the best decision on sensitive situations.

4.Communication

Communication systems are for overcoming the barriers of time and distance. For example E-mails, World Wide Web, Groupware,9 system that support cooperation between people working physically separate teams. Another example is Virtual teams that companies use to develop new products through teams located different parts of the world.

Classifying IS by the reach(limit) computer based IS differs in geographic reach. 1. Individual systems Individual systems allow individuals to decide for what they could be used and

how may it be controlled. But there are some disadvantages too, because software that an individual uses may not be compatible with that of other staff uses. For example Microsoft word processor, spreadsheets or excel.

2. Local or departmental systems These type of IS is used when an organization or company has different

departments or units, and having different responsibilities for each.

3. company-wide systems

Company-wide systems connect departments and people in an organization together. For example a hotel uses centralised system for a guest in the hotel, and all the departments access to the same data.

4. Inter-organizational systems These systems are connecting different organizations together

electronically. This helps the organization to connect to buyers, suppliers and partners in their business processes. The main objectives are to increase productivity, quality speed and flexibility.

5. Community systems Community systems are used by customers to exchange negative or

positive information about the company. Examples MySapce, YouTube, Facebook e.t.c.

4. Classifying IS by their complementarities

• This means the amount of organizational change for IS. Some IS do not need changes in the organization, others need changes for example ERP requires changes in the organization for operation.

a. Functional systems These systems help people to perform independent tasks efficiently.

For example word processor, spreadsheets. These systems require minimum changes.

b. Network systems Network systems help people to communicate, that include E-

mails, instant messages, blogs, groupware, and these sytems brings the changes with them.

Enterprise systems

• Enterprise systems allow companies to restructure or modify interactions among employees, partners e.t.c.

These technologies are from top-down. These systems redesign business processes, and making sure that correct procedures are followed. They bring high degree of monitoring and management control. These systems need more organizations changes.

Managing information systems with enterprise –wide systems

• Enterprise systems or enterprise resource planning systems are software applications that coordinate activities, decisions and knowledge across many different functions in an organisation. The main purposes are to increase efficiency and service. For example a customer orders a car from an organisation that manufactures the car, here sales, accounting, production, purchasing and so on should coordinate each other to exchange the information between different departments. It is done with the help of a central database which connects to all departments.

ERP systems help organisations to;

Connect or link customer and financial information. Standardize manufacturing processes and reduce inventory. Improve information for management decisions. Help online connections with suppliers and customer systems. ( check the diagram 2.2 p.p 43) Main suppliers or manufactures of ERP systems are SAP,

PeopleSoft, Oracle. ERP systems are semi-finished products that the user

organisations tailor or customise according to their needs.

Organisational and Management issues with ERP Systems

1.It is not clear if ERP Systems bring competitive advantages or not.2.ERP systems promote centralised decision making and

coordination which may not be suitable for some organisations. 3. ERP systems are inflexible. They do not allow companies to

adopt change according to the market requirements. 4. The generic or standard business models used by ERP wont be

useful for all types of organisations. 5. ERP systems are expensive to install. 6. ERP systems require staff training 7. It affects people, culture, decision making.

Knowledge management systems

Knowledge management means improve the way organisations create, acquire, capture, store, share and use knowledge. This is related to customers, markets, products, and services.

(check table 2.3)

Knowledge management helps to share data and information to any distance. Implementing KM will improve performance in an organisation. There are three main purposes for K.M as follows;

Code(regulate) and share best practices Create corporate knowledge and directories Create knowledge networks For example British Petroleum company share all the employee information

online with separate pages for all the employees.

Organisational and management issues of KM systems

Systems with technical, cognitive( knowledge by understanding) perspective fail to consider the structure and culture of people and their beliefs, values. Different cultured staff found it hard to share the knowledge and experience with no reward and that too with additional work load.

KM is exploiting knowledge about previous projects, technical discoveries, techniques e.t.c.

KM thereby, reuses the knowledge but creating new knowledge is better than using old ones.

KM provides too much information to managers and this wont help much to improve the performance.

People will be more interested to use KM, if culture recognizes and rewards the sharing of knowledge.

Managing customer processes with CRM

Customer relationship management systems help companies to retain(keep) existing customers. This system is to build a long-term relationship with the customer.

The purpose of CRM is to; 1. Gather customer data faster2. Identify and capture valuable customers and discourage less

valuable ones. 3. Increase customer loyalty 4. Reduce cost of servicing the customer5. Make it easy to get the same type of customers.

Customer acquisition

How can we acquire customer?

Customer retention

How can we keep the customer

Customer selection

How can we determine the most profitable

customer?

Customer extension

How can we increase

customer loyalty?

CRM collects customer data and analyse as follows;who are the loyal customers?Who are the most profitable customers?What do they buy?

• The main objective of CRM is to increase lifetime value of customers measured by;

• Recency value - who purchased recently • Frequency value – who buys frequently • Monetary value – who spend the most

Mobile CRM With large number of customers, using mobiles the CRM experts

target to reach customer by mobile phone messages.

Organisational and management issues of CRM systems

• CRM systems results in higher failures around the world. • Main problem is the lack of changes in the management. • Implementing successful CRM requires a clear strategy, failing to do so making

it a failure. • Once the strategy is made business processes, structure, people and so on have

to be adapted to make the CRM system work. • Companies must consider job descriptions of staff, performance measures,

compensation systems, training programs.• If customers got options such as tele-phone, website, mail, marketing and sales

companies must treat them together. For example customer may order by phone, check the status of process by website and complaint by e-mails, but companies must handle all these channels.

• Company staff must be customer- oriented. • Poor change in management is big problem in implementing CRM successfully.

Inter-organizational systems

These are systems that coordinate or cooperate between organisations, customers, suppliers, business partners.

There are two IOSE-commerce – selling product service over internet E-business - all organisation’s processes are connected by internet

including suppliers and customers. For example ; e-shopping. E-procurements

M- Commerce It means the customer service by mobile phones. Example – ticketing,

travel. E-tickets are available for the travelers via internet.

Organisational and management issues with IOS

• IOS should also be used to have new customers. • There should be a strategy for companies and companies should not be

satisfied with only IOS and Internet.• IOS should be used to strengthen the advantages such as unique products,

excellent operations, product knowledge and relationships. • Another challenge is to decide whether to handle associated physical process

or not. For example when making all by internet if to follow manual procedures as back-up? (payment roll, arranging shipment, after-sale service e.t.c.

• A major management issue is the extent to which internet provides opportunities to improve existing businesses, again it threatens the entry of competitors.

• The strategy of doing e-business or e- commerce must have external (supplier, customer, competitor) and internal elements.

Customer participation

In modern business, customers are not just consumers, but co-creates. Customers actively involve n today’s business. So we call customer co-creators or co-producers. Traditionally customer pays for the product or service, new pattern customers consume and contribute their opinion or feedbacks in Google, Wikipedia e.t.c.

For example google, MySapce, amazon e.t.c.