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A typical business organization has systems supporting processes for each of the major business functions: Sales and Marketing, Manufacturing and Production, Finance and Accounting, and Human Resources. 

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The relationship between Business Processes and Information Systems

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The relationship between Business Processes and Information Systems

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Businesses utilize different types of information pertaining to their suppliers, employees, customers, invoices, payments, goods/products and services. To do this efficiently and efficiently, businesses must prioritize the activities pertaining to this information. Information Systems assists in managing this information(or data) to ensure processes are strengthened and to improve decision making.

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Assembling the product

Checking for quality

Producing bills of materials.

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Identifying customers

Making customers aware of the product

Selling the product

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Paying creditors

Creating financial statements

Managing cash accounts

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Hiring employees

Evaluating employees’ job performance

Enrolling employees in benefits plans

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Enterprise Systems Firms use enterprise systems, also known as enterprise resource planning (ERP) systems, to integrate business processes in manufacturing and production, finance and accounting, sales and marketing, and human resources into a single software system. Information that was previously fragmented in many different systems is stored in a single comprehensive data repository where it can be used by many different parts of the business.

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Supply Chain Management Systems Firms use supply chain management(SCM) systems to help manage relationships with their suppliers. These systems help suppliers, purchasing fi rms, distributors, and logistics companies share information about orders, production, inventory levels, and delivery of products and services so they can source, produce, and deliver goods and services efficiently. The ultimate objective is to get the right amount of their products from their source to their point of consumption in the least amount of time and at the lowest cost. These systems increase firm profitability by lowering the costs of moving and making products and by enabling managers to make better decisions about how to organize and schedule sourcing, production, and distribution.

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Customer Relationship Management Systems Firms use customer relationship management (CRM) systems to help manage their relationships with their customers. CRM systems provide information to coordinate all of the business processes that deal with customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention. This information helps fi rms identify, attract, and retain the most profitable customers; provide better service to existing customers; and increase sales. 

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Knowledge Management Systems Some firms perform better than others because they have better knowledge about how to create, produce, and deliver products and services. This fi rm knowledge is unique, is difficult to imitate, and can be leveraged into long-term strategic benefits . Knowledge management systems (KMS) enable organizations to better manage processes for capturing and applying knowledge and expertise. These systems collect all relevant knowledge and experience in the fi rm and make it available wherever and whenever it is needed to improve business processes and management decisions. They also link the firm to external sources of knowledge.

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Enterprise applications create deep-seated changes in the way the firm conducts its business, offering many opportunities to integrate important business data into a single system. They are often costly and difficult to implement. Intranets and extranets deserve mention here as alternative tools for increasing integration and expediting the flow of information within the firm and with customers and suppliers. Intranets are simply internal company websites that are accessible only by employees. The term intranet refers to an internal network, in contrast to the Internet, which is a public network linking organizations and other external networks. Intranets use the same technologies and techniques as the larger Internet, and they often are simply a private access area in a larger company website. Likewise with extranets, which are company websites that are accessible to authorized vendors and suppliers and are often used to coordinate the movement of supplies to the firm’s production apparatus. 

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The systems and technologies we have just described are transforming firms’ relationships with customers, employees, suppliers, and logistic partners into digital relationships using networks and the Internet. 

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Transaction processing systems (TPS) provide this kind of information. A transaction processing system is a computerized system that performs and records the daily routine transactions necessary to conduct business, such as sales order entry, hotel reservations, payroll, employee record keeping, and shipping. The principal purpose of systems at this level is to answer routine questions and to track the flow of transactions through the organization. How many parts are in inventory? What happened to Mr. Smith’s payment? To answer these kinds of questions, information generally must be easily available, current, and accurate. 

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Information systems automate many steps in business processes that were formerly performed manually, such as checking a client’s credit or generating an invoice and shipping order. But today, information technology can do much more. New technology can actually change the flow of information, making it possible for many more people to access and share information, replacing sequential steps with tasks that can be performed simultaneously, and eliminating delays indecision making. New information technology frequently changes the way a business works and supports entirely new business models. 

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Information Systems: How Information Technology works with and Improve Business Processes 

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Information Systems: How Information Technology works with and Improve Business Processes 

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Firms also have business intelligence systems that focus on delivering information to support management decision making. Business intelligence is a contemporary term for data and software tools for organizing, analyzing, and providing access to data to help managers and other enterprise users make more informed decisions. Business intelligence addresses the decision-making needs of all levels of management.

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Management information systems(MIS) also designates a specific category of information systems serving middle management. MIS provide middle managers with reports on the organization’s current performance. This information is used to monitor and control the business and predict future performance. MIS summarize and report on the company’s basic operations using data supplied by transaction processing systems. The basic transaction data from TPS are compressed and usually presented in reports that are produced on a regular schedule. Today, many of these reports are delivered online.

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 Decision-support systems (DSS) focus on problems that are unique and rapidly changing, for which the procedure for arriving at a solution may not be fully predefined in advance. They try to answer questions such as these: What would be the impact on production schedules if we were to double sales in the month of December? What would happen to our return on investment if a factory schedule were delayed for six months? Although DSS use internal information from TPS and MIS, they often bring in information from external sources, such as current stock prices or product prices of competitors. These systems are employed by “super-user” managers and business analysts who want to use sophisticated analytics and models to analyze data.

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Executive support systems (ESS) help senior management make these decisions. They address nonroutine decisions requiring judgment, evaluation, and insight because there is no agreed-on procedure for arriving at a solution. ESS present graphs and data from many sources through an interface that is easy for senior managers to use. Often the information is delivered to senior executives through a portal, which uses a web interface to present integrated personalized business content. 

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Electronic business, or e-business, refers to the use of digital technology and the Internet to execute the major business processes in the enterprise. E-business includes activities for the internal management of the firm and for coordination with suppliers and other business partners. It also includes electronic commerce, or e-commerce. E-commerce is the part of e-business that deals with the buying and selling of goods and services over the Internet. It also encompasses activities supporting those market transactions, such as advertising, marketing, customer support, security, delivery, and payment. The technologies associated with e-business have also brought about similar changes in the public sector. Governments on all levels are using Internet technology to deliver information and services to citizens, employees, and businesses with which they work. E-government refers to the application of the Internet and networking technologies to digitally enable government and public sector agencies’ relationships with citizens, businesses, and other arms of government.

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Electronic Business and Electronic Commerce

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Electronic Business and Electronic Commerce

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E-government refers to the application of the Internet and networking technologies to digitally enable government and public sector agencies’ relationships with citizens, businesses, and other arms of government. In addition to improving delivery of government services, e-government makes government operations more efficient and also empowers citizens by giving them easier access to information and the ability to network electronically with other citizens

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Collaboration is working with others to achieve shared and explicit goals. Collaboration focuses on task or mission accomplishment and usually takes place in a business or other organization and between businesses. You collaborate with a colleague in Tokyo having expertise on a topic about which you know nothing. You collaborate with many colleagues in publishing a company blog. If you’re in a law firm, you collaborate with accountants in an accounting firm in servicing the needs of a client with tax problems. Collaboration can be short-lived, lasting a few minutes, or longer term, depending on the nature of the task and the relationship among participants. Collaboration can be one-to-one or many-to-many.

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Many firms today enhance collaboration by embracing social business—the use of social networking platforms, including Facebook, Twitter, and internal corporate social tools—to engage their employees, customers, and suppliers. These tools enable workers to set up profiles, form groups, and “follow” each other’s status updates. The goal of social business is to deepen interactions with groups inside and outside the firm to expedite and enhance information sharing, innovation, and decision making.

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 A collaborative, team-oriented culture won’t produce benefits without information systems in place to enable collaboration and social business. Currently there are hundreds of tools designed to deal with the fact that, in order to succeed in our jobs, we are all much more dependent on one another, our fellow employees, customers, suppliers, and managers. Some of these tools are expensive, but others are available online for free or with premium versions for a modest fee.

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Tools and Technologies for Collaboration and Social Business

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Tools and Technologies for Collaboration and Social Business

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E-mail and instant messaging (including text messaging) have been major communication and collaboration tools for interaction jobs. Their software operates on computers, mobile phones, and other wireless devices and includes features for sharing files as well as transmitting messages. Many instant messaging systems allow users to engage in real-time conversations with multiple participants simultaneously. In recent years, e-mail use has declined, with messaging and social media becoming preferred channels of communication. 

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Wikis are a type of website that makes it easy for users to contribute and edit text content and graphics without any knowledge of web page development or programming techniques. The most well-known wiki is Wikipedia, the largest collaboratively edited reference project in the world. It relies on volunteers, makes no money and accepts no advertising. 

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Virtual worlds, such as Second Life, are online 3-D environments populated by “residents” who have built graphical representations of themselves known as avatars. Companies like IBM, Cisco, and Intel Corporations use the online world for meetings, interviews, guest speaker events, and employee training. Real-world people represented by avatars meet, interact, and exchange ideas at these virtual locations using gestures, chat box conversations, and voice communication

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Virtual worlds, such as Second Life, are online 3-D environments populated by “residents” who have built graphical representations of themselves known as avatars. Companies like IBM, Cisco, and Intel Corporations use the online world for meetings, interviews, guest speaker events, and employee training. Real-world people represented by avatars meet, interact, and exchange ideas at these virtual locations using gestures, chat box conversations, and voice communication.

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Collaboration and Social Business Platforms

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Collaboration and Social Business Platforms

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There are now suites of software products providing multifunction platforms for collaboration and social business among teams of employees who work together from many different locations. The most widely used are Internet based audio conferencing and video conferencing systems, cloud collaboration services such as Google’s online services and tools, corporate collaboration systems such as Microsoft SharePoint and IBM Notes, and enterprise social networking tools such as Salesforce Chatter, Microsoft Yammer, Jive, Facebook at Work, and IBM Connections.

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Cloud Collaboration Services Google offers many online tools and services, and some are suitable for collaboration. They include Google Drive, GoogleDocs, Google Apps, Google Sites, and Google+. Most are free of charge. 

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Companies of all sizes are finding web-based online meeting tools such as Cisco WebEx, Skype for Business, and Adobe Connect especially helpful for training and sales presentations. These products enable participants to share documents and presentations in conjunction with audioconferencing and live video via webcam. 

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In an effort to reduce travel expenses and enable people in different locations to meet and collaborate, many companies, both large and small, are adopting videoconferencing and web conferencing technologies. Companies such as Heinz, GE, and PepsiCo are using virtual meeting systems for product briefings, training courses, strategy sessions, and even

inspirational chats.

A videoconference allows individuals at two or more locations to communicate simultaneously through two-way video and audio transmissions. High-end

videoconferencing systems feature telepresence technology, an integrated

audio and visual environment that allows a person to give the appearance of

being present at a location other than his or her true physical location. Free

or low-cost Internet-based systems such as Skype group videoconferencing,

Google+ Hangouts, Zoom, and ooVoo are of lower quality, but still useful for

smaller companies. Apple’s FaceTime is useful for one-to-one videoconferencing. Some of these tools are available on mobile devices.