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Samenvatting Information Systems
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Information Management SummaryContents
Information Management Summary......................................................................................................1
Chapter 7............................................................................................................................................1
Chapter 4............................................................................................................................................4
Chapter 5...........................................................................................................................................7
Chapter 10..........................................................................................................................................9
Chapter 6..........................................................................................................................................12
Chapter 7
Core Business Processes
Order-to-cash: the process associated with selling a product or service. Steps/subprocesses:
Create customer record check credit create order allocate stock pick, pack & ship
prepare & send invoice collect payment. This can vary because of in-store/online but also because
business-to-business companies can’t collect easily such data.
Procure-to-pay: processes associated with procuring goods form external vendors.
Steps/subprocesses: Negotiate price & terms issue purchase order receive goods receive
invoice settle payment. An ineffective process can create errors in purchase order and invoice
processing. This can lead to increase of costs.
Make-to-stock/make-to-order: the process associated with producing goods and entails make-to-
stock and make-to-order. Make-to-stock process: goods are produced based on forecasts and are
stocked in a warehouse customers orders are fulfilled form the warehouse. Pushed-based
approach. Steps/subprocesses: Procure inputs schedule production production quality
control stock product.
Make-to-order process: raw materials, subcomponents and accessories are procured based
forecasts, but actual manufacturing does not start until an order is received in extreme cases
design and engineering start only when an order is received. Pull-based approach.
Steps/subprocesses: Process sales order (design/engineer product) procure inputs schedule
production production quality control ship products.
These core business processes enable the creation of supply chains of the company.
Information systems are used to improve/optimize their core business processes (core activities) to
gain competitive advantage. Core activities are performed by the functional areas that process
inputs and produce outputs. Supportive activities are those activities that enable core activities to
take place.
Core activities
- Inbound Logistics Activities: involves the business activities associated with receiving and
stocking raw materials, parts & products.
- Operations & Manufacturing Activities: transforms inputs into outputs., activities like order
processing and/or manufacturing or assembly process that transforms raw materials and
components into end products.
- Outbound Logistics Activities: activities associated with outbound logistics mirror those of
inbound logistics. It focuses on the distribution of end products within the order-to-cash
business process.
, - Marketing and Sales Activities: are associated primarily with the presales activities of the
company. This includes the creation of marketing literature, communication with potential
and existing customers and pricing of the goods and services.
- Customer Service Activities: focuses on post-sales activities, customer services. Information
systems can also be used to track service requests.
Supportive activities
- Administrative Activities: focuses on the processes and decision making that orchestrate the
day-to-day operations of an organization, particularly those processes that span
organizational functions and levels. This includes systems and processes from virtually all
functional areas – accounting, finance, marketing, operations.
- Infrastructure Activities: refers to buildings, machinery and IS infrastructure components that
must be implemented to provide necessary components that facilitate both primary and
support activities.
- Human Resource Activities: encompass all business activities associated with employee
management.
- Technology Development Activities: includes the design and development of applications
that support primary activities so as to improve products/services.
- Procurement Activities: refers to the purchasing of goods and services that are required as
inputs to the primary activities.
Value system: connecting all the internal value chains within the company, in which information
flows from one company’s value chain to another company’s value chain.
Upstream information flows: consists of information that is received from another company.
Downstream information flows: relates to the information that is produced by a company and sent
along to another organization.
The rise of enterprise systems.
Standalone applications: systems that focus on the specific needs of individual departments are
typically not designed to communicate with others systems in the organization. So these systems are
not helpful when department A needs information from department B. So these systems are typically
either fast approaching or beyond the end of their useful life within the organization, also referred as
legacy systems.
Enterprise-wide information system/enterprise system: is an integrated suite of business
applications for virtually every business process, allowing companies to integrate data across
functional areas on a company-wide basis. Rather than storing data in separate places throughout
the organization, enterprise systems use an integrated database to provide a central repository
common all users. Select the right one!
Supporting Business Processes.
Information systems can be used to support either internally or externally focused business
processes. Internally focused systems: support functional areas, business processes and decision
making within the organization. These activities can be viewed as a series of links in a chain along
which information flows within the organization, at each stage value is added. Externally focused
systems: help to streamline communications and coordinate business processes with customers,
suppliers, business partner and other who operate outside the organization’s boundaries. A system
that communicates across organizational boundaries is sometime referred to as an
interorganizational system. The key purpose is to streamline the flow of information from one
company’s operations to another.
Improving business processes through enterprise systems.
, Package software/off-the-shelf software: is written by third-party vendors for the needs of many
different users and organizations, supporting standardized, repetitive tasks, such as word processing,
payroll processing or preparing taxes. These programs can be quiet cost effective because of the
vendor that builds the application can spread out development costs through selling to a large
number of users. Not suited for unique tasks.
Custom software: is designed and developed exclusively for specific organizations and can
accommodate their particular business needs. But this is more expensive because the organization
has to bear all the costs associated with designing and developing software.
Enterprise systems are designed around modules, which are components that can be selected and
implemented as needed. Each module is designed to replace a legacy system.
- Vanilla Versus Customized Service: vanilla version: features and modules that an enterprise
system comes with out of the box. If the vanilla version does not support a certain business
process, the company ,y require a customized version. Customization: provides either
additional software that is integrated with the enterprise system or consists of direct changes
to the vanilla application itself.
- Best Practice-Based Software: Best practices reflect the techniques and processes, identified
through experience and research that have consistently shown results superior to those
achieved with other means.
- Business Process Management: business process management (BPM): is a systematic,
structured approach by all or part of an organization whereby people critically examine,
rethink, and redesign business processes in order to achieve dramatic improvements in one
or more performance measures. Was called: business processes reengineering(BPR).
Steps:
1. Develop a vision for the organization that specifies objectives.
2. Identify critical processes that need to be redesigned.
3. Understand and measure the existing processes as a baseline for future improvements.
4. Identify ways that information systems can be used to improve processes.
5. Design and implement a prototype of the new processes.
- Benefits and Costs of Enterprise Systems: Benefits: improved availability of information,
increased interaction throughout the organization, improved lead times for manufacturing,
improved customer interaction, reduced operating expenses, reduced inventory, reduced IS
costs, improved supplier integration, improved compliance with standard; rules; regulations.
Costs: software licenses, maintenance costs, technical costs, hardware costs, travel and
training costs for personnel, ongoing customization and integrating costs, business process
studies, project governance costs.
Enterprise resource planning (ERP)
Replace standalone applications by providing various modules based on a common database and
similar application interfaces that serve the entire enterprise rather than portions of it. ERP systems
make accessing data easier by providing a central repository, giving personnel access to accurate, up-
to-date information throughout the organization.
Responding to compliance and regulatory demands.
ERP systems improve and ease an organization’s ability to implement audit controls and comply with
government-impose regulations. All ERP systems are designed to include an abundance of control
features that can mirror an organization’s business processes.
Choosing an ERP system.
A lot of factors must be taken in consideration when selecting an ERP system. Most of them are
packaged software, so they must comply with the business.
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