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
Organisational Hierarchies
Strategic
Planning
Tactical
Knowledge
Operational
Budgets
Profit
measures
Credit
control
Financial
transactions
HR
FINANCE
MARKETNG ….. ….. e.t.c.
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 technology
1. 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
1980s
1985s
• Automated
functions in
organisations, such
as payroll, stock
control, invoices.
• It was controlled
by IS departments
• Made smaller
systems and
department based
systems.
• 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 Emails, 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 longterm relationship with the customer.
The purpose of CRM is to;
1. Gather customer data faster
2. Identify and capture valuable customers and discourage less
valuable ones.
3. Increase customer loyalty
4. Reduce cost of servicing the customer
5. Make it easy to get the same type of customers.
Customer
acquisition
How can we acquire
customer?
Customer
selection
How can we
determine the
most profitable
customer?
Customer
retention
How can we keep
the 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 emails, 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 IOS
E-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 cocreates. 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.