huang lihua, fudan university session 3 understanding is from business perspective part i...
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HUANG Lihua, Fudan University
Session 3 Understanding IS from Business Perspective
PART I Foundations of Information Systems in Business
HUANG Lihua, Fudan UniversityFeb., - July., 2006
Challenge Faced by FORD Management in 1985
• How to do cost saving
• How to do downsizing
• How to increase profitability by downsizing
Case study :
HUANG Lihua, Fudan UniversityFeb., - July., 2006
FORD change in Procurement Process
1 ) Old business process
PurchasingWhen purchasing department wrote a purchase order, it sent a copy to accounts payables.
VendorThe vendor sent an invoice to accounts payables when they delivered goods.
Receiving When material control received the goods, it sent a copy of the receiving document.
AccountPayables
Thus, the account payables received three documents from various senders : Purchasing order, invoice and receiving document. It was up to account payables to match the purchasing against the receiving document and the invoice. If they matched, the department issued payment. Otherwise, an accounts payable clerk would investigate the discrepancy, hold up payment, generate documents and all in all gum up the works.
HUANG Lihua, Fudan UniversityFeb., - July., 2006
• What is the solution to increase profitability by downsizing?
Case study : FORD change in Procurement Process
HUANG Lihua, Fudan UniversityFeb., - July., 2006
2 ) Business process IS enabled
PurchasingReceiving Goods
IS
( 1 ) When the purchasing department initiates an order, it enters the information into an information system ;
( 1 ) ( 2 )( 2 ) When the goods arrive at the receiving dock,the clerk checks the DB to see if they correspond to an outstanding purchase order. If so, he or she accepts them and enters the transaction into the computer system. If receiving can’t find an entry for the received goods, it simply returns the goods 。
FORD change in Procurement Process
The account payables dept. payaccording to the rule.
(3)
HUANG Lihua, Fudan UniversityFeb., - July., 2006
3 ) effectiveness after use of information system
After Ford instituted this new process, since there are no discrepancies between the financial record and the physical record, material control is simpler and financial information is more accurate. Ford has achieve a 75% reduction in head count (from more than 400 to 125 head counts).
FORD change in Procurement Process
HUANG Lihua, Fudan UniversityFeb., - July., 2006
FORD change in Procurement Process
Question?
• What function is the information system?
• What solution to organizational and management in implementation such information system?
HUANG Lihua, Fudan UniversityFeb., - July., 2006
Wrap-up from cases
• Understanding of Information Systems :– An Information System is an organizational and
management solution , based on information technology, to a challenge posed by the environment.
HUANG Lihua, Fudan UniversityFeb., - July., 2006
Information SystemsBusiness Processes
Information Processing Activities
Business Value
Management Activities
SupplyChainManagement
EnterpriseManagement
CustomerManagement
KnowledgeManagement
DataCollectionandStorage
TransformationIntoBusinessSystems
Dissemination
Planning CoordinatingControlling Modeling andDecision Making
FirmProfitability
andStrategicPosition
HUANG Lihua, Fudan UniversityFeb., - July., 2006
Information Systems: From Business Perspective
ORGANIZA-
TIONS
TECHNOLOGY
MANAGEMENT
INFORMATIONINFORMATION
SYSTEMSSYSTEMS
An Information System is an organizational and management solution , based on information technology, to a challenge posed by the environment.
HUANG Lihua, Fudan UniversityFeb., - July., 2006
ORGANIZATIONS
• PEOPLE: Managers, knowledge workers, data workers, production or service workers
• STRUCTURE: Organization chart, groups of specialists, products, geography
*
HUANG Lihua, Fudan UniversityFeb., - July., 2006
ORGANIZATIONS
• OPERATING PROCEDURES: Standard Operating Procedures (SOP), rules for action
• POLITICS: Power to persuade, get things done
• CULTURE: Behavior of staff, employee
*
HUANG Lihua, Fudan UniversityFeb., - July., 2006
MAJOR BUSINESS FUNCTIONS
• SALES & MARKETING
• MANUFACTURING
• FINANCE
• ACCOUNTING
• HUMAN RESOURCES
• ……
*
HUANG Lihua, Fudan UniversityFeb., - July., 2006
COMPUTER TECHNOLOGY
• HARDWARE
• SOFTWARE
• DATA STORAGE
• COMMUNICATIONS
• NETWORKS
*
HUANG Lihua, Fudan UniversityFeb., - July., 2006
SOCIOTECHNICAL PERSPECTIVE
OPTIMIZE SYSTEM PERFORMANCE:
Technology & Organization Mutually Adjust to One Another Until Fit Is Satisfactory
*
SOURCE: Liker, et al, 1987
HUANG Lihua, Fudan UniversityFeb., - July., 2006
SYSTEM INTERDEPENDENCE
BUSINESSBUSINESS
StrategyStrategy
RulesRules
ProceduresProcedures
ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM
HARDWAREHARDWARE
SOFTWARESOFTWARE DATABASEDATABASE
TELE-TELE-COMMUNICATIONSCOMMUNICATIONS
INTERDEPENDENCEINTERDEPENDENCE
HUANG Lihua, Fudan UniversityFeb., - July., 2006
Learning from Cisco
HUANG Lihua, Fudan UniversityFeb., - July., 2006
IS Application in Cisco
• ERP: Enterprise Resource Planning
• SCM: Supply Chain Management
• CRM: Customer Relationship Management
• E-Business/e-Commerce
• EIS/DSS
• ………
HUANG Lihua, Fudan UniversityFeb., - July., 2006
CompanyBoundary
IS App. Framework in Business
Manufacturing,Production,Operation
Supply Chain Management:Procurement, Distribution, and Logistics
Customer Relationship Management:Marketing, Sale, and Customer service
Accounting& Finance
Engineering and Research
Consumer and Business Customers
Suppliers and Other Business Partners
Intranet
The Internet
Extranet
HUANG Lihua, Fudan UniversityFeb., - July., 2006
CompanyBoundary
IS App. Framework in Business
Manufacturing,Production,Operation
Supply Chain Management:Procurement, Distribution, and Logistics
Customer Relationship Management:Marketing, Sale, and Customer service
Accounting& Finance
Engineering and Research
Consumer and Business Customers
Suppliers and Other Business Partners
Intranet
The Internet
Extranet
ERP
Purchase Order
Sell Order
HUANG Lihua, Fudan UniversityFeb., - July., 2006
Wrap Up
• Re-conceptualizing IS from Business Perspective
• IS Application Framework in Business
HUANG Lihua, Fudan UniversityFeb., - July., 2006
Assignment for Session 3
• Individual Assignment and submit– Please suggest to Mr. Wang which IS
application will be adopted by his company in coming future?
• Preparation for session 4– Reading Materials
• Textbook: chapter 2
– Group Case study: Moen, Incorporated. (P51)• Preparing the case study questions on P.51