Informatics - class 4

and Integration

model.
Identify functional management information systems.
Describe the transaction processing system and

demonstrate how it is supported by IT.
Describe the support provided by IT and the Web to production/operations management, including logistics.
Describe the support provided by IT and the Web to marketing and sales.
Describe the support provided by IT and the Web to accounting and finance.
Describe the support provided by IT and the Web to human resources management.
Describe the role of IT in facilitating CRM.
Describe the benefits and issues of integrating functional information systems.

Taking
CRM
Self-service
Retail Pricing
Sales Promotions
Sales Force Management.
Customer Loyalty
Interactive Marketing

business and customers.
Back office administrative tasks and ops.
Datamining ops that

support management

Data Analysis and statistical forecasting.

Operation Level of the company is normally highly structured and predefined.

Dynamic and what-if features.

Run The Company

Integrated

Clerical documents, schedules, mail, manuals, etc.

activities in organizations as either primary (reflecting the flow of

goods and services) or secondary (supporting the primary activities). The organizational structure of firms is intended to support both of these types of activities.

business process that links all the procurement from suppliers, the

transformation activities inside a firm (the value chain) and the distribution of goods or services to customers via wholesalers and retailers.

consists of several smaller information systems that support specific activities

performed in the functional area.
Integrated or independent: The specific IS applications in any functional area can be integrated to form a coherent departmental functional system, they can be integrated across departmental lines to match a business process or be completely independent.
Interfacing: Functional information systems may interface internally with each other to form the organization-wide information system or externally systems outside the organization.
Supportive of different levels: Information systems applications support the three levels of an organization’s activities: operational, managerial, and strategic

Functional information systems support the organization, processes and business model.

Enterprise Wide Environment – All business units.

core business transactions.
In every organization there are business transactions

that provide its mission-critical activities. Each transaction may generate additional transactions. Since the computations involved in most transactions are simple and the transaction processes are well defined they can be easily computerized.

The primary goal of TPS is to provide all the information needed to keep the business running properly and efficiently.

provide all the information needed to keep the business running

properly and efficiently.

either a report or an entry in the database. In

addition to a scheduled reports, users can query the TPS for ad hoc information. The system will provide the appropriate response by accessing the transaction database.

Service Request

Receiving Inventory

The flow of information in a typical TPS transaction, such as a customer purchase or receiving inventory.

technologies such as an extranet, suppliers can look at the

firm’s inventory level or production schedule in real time. The suppliers themselves, in partnership with their customers, can then assume responsibility for inventory management and ordering.
Interactive Internet TPS expands OLTP to provide enhanced real time transaction processing over the Internet or intranets. Multi-store chains can access a centralized computer system no longer requiring in-store processors.

IT supported POM areas are:
In-house logistics and materials management
Planning production/operations
Computer-integrated

manufacturing (CIM)
Product lifecycle management (PLM
Automating design work and manufacturing

The production and operations management (POM) function in an organization is responsible for the processes that transform inputs into useful outputs. In comparison to the other functional areas, POM is very diversified as are the supporting TPS. It also differs considerably among organizations.

how much inventory to keep. Overstocking can be expensive; so

are understock conditions.
Manufacturing quality-control systems can be stand-alone systems or part of an enterprise-wide total quality management (TQM) effort. They provide information about the quality of incoming material as well as the quality of work-in-process and finished goods.

Logistics management deals with ordering, purchasing, inbound logistics (receiving), and outbound logistics (shipping) activities. These logistical activities cross several primary and secondary activities on the value chain.

Managing Production/Operations & Logistics

software that facilitates the plan for purchasing or producing parts,

subassemblies, or materials in the case of interdependent items. It integrates Master Production Schedules, BOM’s and Inventory levels.
Manufacturing Resource Planning (MRP II) adds functionalities to a regular MRP system by determining the costs of parts and the associated cash flow. It also estimates costs of labor, tools, equipment repair, and energy while generating a requirements report.
Just-in-Time Systems is an approach that attempts to minimize waste of all kinds (of space, labor, materials, energy, and so on) and to continuously improve processes and systems. The JIT concept is used in mass customization and build-to-order environments.
Project Management. A project is usually a one-time effort composed of many interrelated activities, costing a substantial amount of money, and lasting for weeks or years. Software tools such as: program evaluation and review technique (PERT) and the critical path method (CPM) are used to manage milestones, resources, costs, etc.
Work Management Systems (WMS) automatically manage the prioritization and distribution of work. These systems deal with resource allocation and reallocation.

POM planning is a major component of operational systems.

Managing Production/Operations & Logistics

Flexible-manufacturing systems
JIT – Just-in-Time
MRP – Materials Requirements Planning
CAD –

Computer Aided Design
CAE – Computer Aided Engineering
GT - Group technology

CIM is a concept that promotes the integration of various computerized factory systems. It has three basic goals: (1) the simplification of all manufacturing technologies and techniques, (2) automation of as many of the manufacturing processes as possible, and (3) integration and coordination of all aspects of design, manufacturing, and related functions via computer hardware and software.

Managing Production/Operations & Logistics

that enables manufacturers to control and share product-related data as

part of a products design and development efforts. Web-based supply chains and other technologies are employed to automate this collaborative effort.

Managing Production/Operations & Logistics

This electronic-based collaboration can
reduce product cost
travel expenses
reduce costs associated with product-change management
reduce the time it takes to get a product to market

TPS involved in the process of getting a product or

service to customers and dealing with their needs. These systems link and transform marketing, sales, procurement, logistics, and delivery activities with other corporate functional areas.

Some of the channel-system activities are:
customer relations
distribution channels and in-store innovations
marketing management
telemarketing

know who their customers are and to treat them properly.

Innovative products and services, successful promotions, customization, and customer service are a necessity for most organization.

Customer Profiles and Preference Analysis. Sophisticated information systems are being developed to collect data on existing and potential customers, their demographics (age, gender, income level), and preferences.
Prospective Customer Lists and Marketing Databases. All firms need to know and track who their existing and potential customers are. These prospective-customer lists can be analyzed and sorted by classification for direct mailing, e-mailing, or telemarketing.
Mass Customization. Today’s customers prefer customized products. Through mass customization, the practice of maintaining WIP inventory, manufacturers can offer different product configurations at reasonable prices.
Personalization. Special product offers are made, based on where the customer spent their time and on what they may have purchased.
Advertising and Promotions. Special promotions, coupons are presented to the customer via mails, email, wireless and pervasive computing applications.

Marketing and Sales Systems

their products and services through a variety of delivery channels.

A company may use its own outlets, mfg. Representatives or distributors to name a few.

IT-Supported Distribution Channels
Internet
Location Based Mapping
Self-service convenience stores
Improving Shopping and Checkout at Retail Stores
Hand-held wireless devices that scan the bar code UPC
Smart card or credit card
Information kiosk enable customers to view catalogs in stores
Self-checkout machines
Check-writers attached to cash registers
Computerization of various activities in retail stores
Video-based systems count and track shoppers in a physical store

Marketing and Sales Systems

are supported by computerized information systems.
Pricing of Products or

Services. Sales volumes are largely determined by the prices of products or services as is profit.
Salesperson Productivity. Salespeople differ from each other in selling skill. Sales-force automation increases salesperson productivity by providing them with mobile devices, access to information, etc.
Profitability Analysis profit contribution of certain products and services can be derived from cost-accounting systems
Sales Analysis And Trends. Marketing TPS collect sales figures that can be searched for trends and relationships.
New Products, Services, and Market Planning. New products and services can be an expensive risk. “Will it sell?” Requires careful analysis, planning, forecasting and Market research.
Web-Based Systems support marketing and sales through data capture

Marketing and Sales Systems

functional areas manage the inflows and outflow of organizational assets.

This involves all functions of an organization including payroll, billing, cash management, etc.

Financial Planning and Budgeting
Financial and Economic Forecasting
Planning for Incoming Funds
Budgeting
Capital Budgeting
Managing Financial Transactions
Financial and Economic Forecasting
Planning for Incoming Funds
Budgeting
Capital Budgeting

Transactions
Global stock exchanges and multiple currencies
E-Bonds
Factoring online
Electronic re-presentment of

checks
Electronic bill presentment and payments
Virtual Close
Expense Management Automation
Investment Management
Financial Analysis
Access to Financial and Economic Reports
Control and Auditing
Budgetary Control and Auditing
Financial Ratio Analysis
Profitability Analysis and Cost Control
Product Pricing

popularity of human resources information systems which provide applications mainly

related to acquiring, hiring, rewarding, developing, training, protecting and retaining human resources.

Recruitment is finding employees, testing them, and deciding which ones to hire. The Web has enhanced the recruitment process.
Position Inventory
HRM Portals and Salary Surveys
Employee Selection
Human Resources Maintenance and Development
Performance Evaluation
Training and Human Resources Development

Management
Personnel Planning
Labor –Management Negotiations
Payroll and Employees’ Records
Benefits Administration
Employee Relationship Management
Responsible

for the workforce

are the core of a business and that a company’s

success depends on effectively managing relationships with them. It focuses on building long-term and sustainable customer relationships that add value both for the customer and the company.

Types of CRM
Operational CRM is related to typical business functions involving customer services, order management, invoice/billing, etc.
Analytical CRM involves capture and analysis of customer data.
Collaborative CRM deals with all the communication, coordination, and collaboration between vendors and customers.

manually by corporations for generations. However, eCRM (electronic CRM) started

in the mid-1990s, when customers began using Web browsers, the Internet, and other electronic touch points.
The use of these technologies made customer services much more effective and efficient than before. Through these technologies, data generated about customers can be easily supplied to marketing, sales, and customer service applications and analysis.

Scope of eCRM
Foundational services, the minimum necessary services such as order fulfillment.
Customer-centered services such as order tracking.
Value-added services such as online information.

Web.
Search and Comparison Capabilities
Free Products and Services
Technical and Other Information

and Service
Allowing Customers to Order Products and Services Online
Letting Customers Track Accounts or Order Status
Tools for Customer Service
Personalized Web Pages
FAQs
Chat Rooms
E-Mail and Automated Response
Call Centers
Troubleshooting Tools
Wireless CRM

CRM Activities

tears down barriers between and among departments & corporate headquarters

and reduces duplication of effort.

stand-alone functional information systems is a major problem for many

organizations. Although client/server architecture is more amenable to integration than legacy systems, there are still problems of integrating different types of data and procedures used by functional areas. Also, there is an issue of willingness to share information, which may challenge existing practices and cultures.
Priority of transaction processing. Transaction processing may not be an exotic application, but it deals with the core processes of organizations. It must receive top priority in resource allocation, balanced against innovative applications needed to sustain competitive advantage and profitability, because the TPS collects the information needed for most other applications.
The customer is king/queen. In implementing IT applications, management must remember the importance of the customer/end-user, whether external or internal. Some innovative applications intended to increase customers’ satisfaction are difficult to justify in a traditional cost-benefit analysis. Empowering customers to enter into a corporate database can make customers happy since they can conduct self-service activities such as configuration and tracking and get quick answers to their queries. Self-services can save money for a company as well, but it may raise security and privacy concerns. Corporate culture is important here, too. Everyone in the organization must be concerned about customers. Management should consider installing a formal CRM program for this purpose.

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