Managing Information Systems

Managing Information Systems Information Systems in Organisations Part 2 Sections 2.3 and 11.1

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Objectives • To understand relationships between IS and business processes • To understand the business value of IS

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Topics • Business processes and IS – Relationship between business processes and IS – Customer Relationship Management (CRM) – Supply Chain Management (SCM)

• Business value of IS – Overview of assessing business value

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Business Processes • What are business processes?

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Examples of Business Processes • Sales and marketing – Identifying customers, selling the product

• Manufacturing and production – Assembling products, checking for quality

• Finance and accounting – Paying creditors, creating financial statements

• Human resources – Hiring employees, appraising employees 5

IS and Business Processes • Single or multiple IS can support one business process: – Can be more efficient if done correctly – Can reduce costs

• Selecting business processes to automate requires significant analysis • Business Process Re-engineering (BPR) 6

Customer Relationship Management (CRM) • Coordination of all business processes for dealing with customers • Customers are long-term assets: – Not exploitable sources of income – Good relationship with customers brings better and longer-term income

• Examples: – Siebel, GoldMine, Avaya 7

Supply Chain Management (SCM) • Coordination of all business processes for buying, making and moving products • Integration of supplier and distributor into a single process – Can reduce time and effort and inventory costs – Products on demand: suppliers can send products direct to customers

• Examples: – SAP, CSC, PeopleSoft 8

Enterprise Systems (ES) • Organisation-wide IS that integrate key business processes to facilitate information flow • Also known as Enterprise Resource Planning (ERP) systems • Integration of the six types of IS – Improves availability of information and removes duplication and associated errors – Can improve efficiency and reduce cost

• Examples: – SAP 9

Examples of ES • CRM and SCM are a step towards ES • Demonstrates how multiple business processes can be served by a suite of integrated IS • Includes external organisational links through Industrial Networks

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Business Value of IS • What is the business value of IS?

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Realising Value • Assessment of IS for implementation – Financial and non-financial models – Tangible and intangible benefits

• Benefits may go direct to customer – Reduce costs lead to reduced prices for competitiveness

• Benefits may not be realised if poorly implemented 12

Example Costs • What example costs can you think of?

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Example Costs • • • •

Hardware Software Services Personnel

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Example Tangible Benefits • What example tangible benefits can you think of?

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Example Tangible Benefits • • • • • • • •

Increased productivity Low operating costs Reduced work force Lower computer expenses Lower supplier costs Lower clerical/professional costs Reduced growth of expenses Reduced facility costs 16

Example Intangible Benefits • What example intangible benefits can you think of?

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Example Intangible Benefits • • • • • •

Improved asset use; resource control; planning Increased flexibility More timely information Increased learning Attain legal requirements Enhanced employee goodwill, job satisfaction, decision making, operations • Higher customer satisfaction • Better corporate image 18

Summary • Looked at the relationships between IS and business processes – Examples of IS used for business processes with CRM, SCM and ES

• Looked at the business value of IS – Examples of costs and benefits of IS

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