Essentials of Management

Information Systems
Fifteenth Edition, Global Edition

Chapter 2
Global E-business and
Collaboration

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Learning Objectives
2.1 Identify the major features of a business that are
important for understanding the role of information
systems.
2.2 Explain how information systems serve different
management groups in a business and how systems
that link the enterprise improve organizational
performance.
2.3 Understand why systems for collaboration, social
business, and knowledge management are so important,
and the technologies they use.
2.4 Describe the role of the information systems function in a
business.
2.5 Understand how MIS can help your career.
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Video Case
• How Slack Is Preparing for the Future of Work

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Microsoft Teams Helps Toyota Motor
North America (TMNA) Do Even
Better (1 of 2)
• Problem
– Large multinational company
– Covid-19 pandemic shutdown
• Information System: Virtual meetings and monitoring
– Provide new tools for online meetings, knowledge-sharing,
innovation, organizational monitoring

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Microsoft Teams Helps Toyota Motor
North America (TMNA) Do Even
Better (2 of 2)
• Use of new information systems to improve their
performance and remain competitive
• Demonstrates importance of systems supporting
collaboration and teamwork to an organization’s ability to
innovate, execute, grow, profit, and survive
• Illustrates how new technology, coupled with new
business processes enabled TMNA to maintain
corporate culture during Covid-19 pandemic

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Organizing a Business: Basic
Business Functions (1 of 2)
• Business: formal organization that makes products or
provides a service in order to make a profit
• Four basic business functions
– Manufacturing and production
– Sales and marketing
– Finance and accounting
– Human resources

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Organizing a Business: Basic
Business Functions (2 of 2)
• Five basic business entities
– Suppliers
– Customers
– Employees
– Invoices/payments
– Products and services

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Figure 2.1 The Four Major Functions
of a Business

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Business Processes
• Logically related set of activities that define how specific
business tasks are performed
– The tasks each employee performs, in what order, and on
what schedule
– E.g., Steps in hiring an employee
• Some processes tied to functional area
– Sales and marketing: identifying customers
• Some processes are cross-functional
– Fulfilling customer order

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Figure 2.2 The Order Fulfillment
Process

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How IT Enhances Business
Processes
• Automation of manual processes
• Change the flow of information
• Replace sequential processes with simultaneous activity
• Transform how a business works
• Drive new business models

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Managing a Business and Firm
Hierarchies
• Firms coordinate work of employees by developing
hierarchy in which authority is concentrated at top.
– Senior management
– Middle management
 Scientists and knowledge workers
– Operational management
 Production and service workers
 Data workers

• Each group has different needs for information.

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Figure 2.3 Levels in a Firm

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The Business Environment
• Businesses depend heavily on their environments for
capital, labor, supplies, and more.
• Broader environment
– Technology and science, economy, politics, international
change
• Immediate environment
– Customers, suppliers, competitors, regulators, stockholders

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Figure 2.4 The Business Environment

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The Role of Information Systems in a
Business
• Firms invest in information systems in order to:
– Achieve operational excellence
– Develop new products and services
– Attain customer intimacy and service
– Improve decision making
– Achieve competitive advantage
– Ensure survival
– Promote environmental, social, and governance (ESG)
goals

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Systems for Different Management
Groups
• Transaction processing systems (TPS)
– Keep track of basic activities and transactions of
organization
• Systems for business intelligence
– Address decision-making needs of all levels of management
 Management information systems (MIS)
 Decision support systems (DSS)
 Executive support systems (ESS)

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Transaction Processing Systems
• Serve operational managers
• Principal purpose is to perform and record daily routine
transactions necessary to conduct business; answer
routine questions
– E.g., sales order entry, shipping, employee record keeping
• Monitor status of internal operations and firm’s relationship
with external environment
• Major producers of information for other systems
• Highly central to business operations and functioning

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Figure 2.5 A Payroll TPS

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Management Information Systems
• Provide middle managers with reports on firm’s
performance, to help monitor firm and predict future
performance
• Summarize and report on basic operations using data from
TPS
• Provide weekly, monthly, annual results, but may enable
drilling down into daily or hourly data
• Typically not very flexible systems with little analytic
capability

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Figure 2.6 How MIS Obtain Their Data
from the Organization’s TPS

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Figure 2.7 Sample MIS Report

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Decision Support Systems
• Serve middle managers
• Support nonroutine decision making
– Example: What is impact on production schedule if
December sales double?
• May use external information as well as TPS/MIS data
• Model driven DSS
– Voyage-estimating systems
• Data driven DSS
– Alterra Mountain Company’s marketing analysis systems

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Figure 2.8 Voyage-Estimating
Decision Support System

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Spotlight on Organizations: Carbon
Lighthouse Lights Up with the
Internet of Things (IoT), Big Data,
and Cloud Computing
• Class discussion
– Identify the problem described in this case study. Is it a
people problem, an organizational problem, or a technology
problem? Explain your answer.
– What role have the IoT, Big Data, and cloud computing
played in developing a solution for this problem?
– Describe Carbon Lighthouse’s problem-solving methodology
for reducing both carbon emissions and costs.

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Executive Support Systems
• Support senior management
• Address strategic issues and long-term trends
– E.g., what products should we make in five years?
• Address nonroutine decision making
• Draw summarized information from M I S, DSS, as well as
data from external events
• Typically use portal with web interface, or digital
dashboard, to present content
– Example: Valero’s Refining Dashboard

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Systems for Linking the Enterprise
• Enterprise applications
– Systems that span functional areas, focus on executing
business processes across the firm, and include all levels of
management
• Four major types
– Enterprise systems
– Supply chain management systems
– Customer relationship management systems
– Knowledge management systems

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Figure 2.9 Enterprise Application
Architecture

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Enterprise Systems
• Also called enterprise resource planning (ERP ) systems
• Integrate data from key business processes into single
system
• Speed communication of information throughout firm
• Enable greater flexibility in responding to customer
requests, greater accuracy in order fulfillment
• Enable managers to assemble overall view of operations

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Supply Chain Management (SCM )
Systems
• Manage relationships with suppliers, purchasing firms,
distributors, and logistics companies
• Manage shared information about orders, production,
inventory levels, and so on
– Goal is to move correct amount of product from source to
point of consumption as quickly as possible and at lowest
cost
• Type of interorganizational system
– Automate flow of information across organizational
boundaries

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Customer Relationship Management
(CRM ) Systems
• Help manage relationship with customers
• Coordinate business processes that deal with customers in
sales, marketing, and customer service
• Goals:
– Optimize revenue
– Improve customer satisfaction
– Increase customer retention
– Identify and retain most profitable customers
– Increase sales

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Knowledge Management Systems

• Manage processes for capturing and applying knowledge

and expertise
• Collect relevant knowledge and make it available wherever
needed in the enterprise to improve business processes
and management decisions
• Link firm to external sources of knowledge

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Intranets and Extranets
• Technology platforms that increase integration and
expedite the flow of information
• Intranet:
– Internal network based on Internet standards
– Often are private access area in company’s website
 Example: Cubic Telecom

• Extranets:
– Company websites accessible only to authorized vendors
and suppliers
– Facilitate collaboration

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E-business, E-commerce, and
E-government
• E-business:
– Use of digital technology and Internet to drive major
business processes
• E-commerce:
– Subset of e-business
– Buying and selling goods and services through Internet
• E-government:
– Using Internet technology to deliver information and
services to citizens, employees, and businesses

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What is Collaboration?
• Working with others to achieve shared and explicit goals
– May be short-lived or longer term
– May be informal or formal (teams)
• Growing importance of collaboration:
– Changing nature of work
– Growth of professional work
– Changing organization of the firm
– Changing scope of the firm
– Emphasis on innovation
– Changing culture of work and business

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What is Social Business?
• Use of social networking platforms (internal and external)
to engage employees, customers, suppliers
• Aims to deepen interactions and expedite information
sharing
• “Conversations” to strengthen bonds with customers and
employees
• Requires information transparency
• Seen as way to drive operational efficiency, spur
innovation, accelerate decision making

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Business Benefits of Collaboration
and Social Business
• Research has found that a focus on collaboration is central
to how digitally advanced companies create business
value and establish competitive advantage.
• Benefits include:
– Productivity: sharing knowledge and resolving problems
– Quality: faster resolution of quality issues
– Innovation: more ideas for products and services
– Customer service: complaints handled more rapidly
– Financial performance: generated by improvements in
factors above

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Figure 2.10 Requirements for
Collaboration

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Tools and Technologies for
Collaboration and Teamwork (1 of 2)
• Email and instant messaging (I M )
– Example: Slack
• Virtual worlds:
– Example: Second Life; Metaverse
• Wikis:
– Example: Wikipedia

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Tools and Technologies for
Collaboration and Teamwork (2 of 2)
• Collaboration and social business environments
– Virtual meeting systems (videoconferencing; telepresence)
 Examples: Zoom, Microsoft Teams; Apple FaceTime
– Cloud collaboration services
 Examples: Google Drive, Dropbox
– Microsoft SharePoint (collaboration and document
management service)
– Enterprise social networking tools:
 Examples: Salesforce Chatter; Microsoft Yammer

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Spotlight on Technology: Zoom –
Quality Videoconferencing for Every
Budget
• Class discussion
– How is videoconferencing related to the business models
and business strategies of the organizations described in
this case?
– Describe the specific ways in which videoconferencing
technology helped each of the organizations in this case
improve their operations and decision making.
– If you were a small or medium-sized business, what people,
organization, and technology criteria would you use to
determine whether to use Zoom videoconferencing.

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Checklist for Managers: Evaluating
and Selecting Collaboration and
Social Software Tools
• Time/space matrix
• Six steps in evaluating software tools
– Identify your firm’s collaboration challenges
– Identify what kinds of solutions are available
– Analyze available products’ cost and benefits
– Evaluate security risks
– Consult users for implementation and training issues
– Evaluate product vendors

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Figure 2.11 The Time/Space
Collaboration and Social Tool Matrix

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Systems for Knowledge Management
• Different types of knowledge
– Structured: formal text documents
– Tacit: informal, not written down
– Semistructured: email
– Unstructured: video and graphics
• Enterprise Content Management (ECM) systems
– Unified repository of documents, reports, presentations, best
practices
– Can also collect and organize semistructured and
unstructured knowledge
– Also have capabilities for locating and sharing expertise

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Figure 2.12 Enterprise Content
Management System

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The Information Systems Department
• Formal organizational unit responsible for IT services.
Consists of:
– Programmers
– Systems analysts
 Principal liaisons to rest of firm
– Information systems managers
– In many companies, headed by CIO
 Large companies may also have CSO, CPO, CKO, CDO

• End users
– Representatives of departments outside information
systems group for whom applications are developed

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Information Systems Services
• Computing services
• Telecommunications services
• Data management services
• Application software services
• IT management services
• IT standards services
• IT educational services
• IT research and development services

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How MIS Can Help Your Career
• The Company: CareerKNOWLEDGE
• Position Description
• Job Requirements
• Interview Questions
• Author Tips

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