Chapter 7 - Information Systems for Competitive Advantage (Summary Notes)

Chapter 7 - Information Systems for Competitive Advantage (Summary Notes)

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Chapter 7 – Information Systems for Competitive Advantage WHAT ARE THE FUNDAMENTAL TYPES OF I.S. WITHIN ORGANIZATIONS I.S. have 3 systems that have evolved over time: CALCULATION SYSTEMS The very first I.S., calculation systems – are calculating machines that are more accurate than humans as long as they work correctly. The purpose of these early systems was to relieve workers of tedious, repetitive calculations. The first systems computed payroll and wrote paycheques; they applied debits to credits to the general ledger and balanced the company’s accounting records. They also kept track of inventory quantities. These systems were labour-saving devices, but in truth they produced little information. None of them survived today. FUNCTIONAL SYSTEMS The functional system of the second era facilitated the work of a single department or function. They grew as a natural expansion of the capabilities of the systems of the first era. For example, payroll expanded to become human resources, and etc. The problem with functional applications is their isolation. In fact, they are sometimes called islands of automation because they work independently of one another. Unfortunately, independent, isolated systems cannot produce the productivity and efficiency necessary for many businesses. INTEGRATED, CROSS-FUNCTIONAL SYSTEMS The isolation problems of functional systems led to the third era of information systems. In this era, systems were designed not to facilitate the work of a single department or function, but rather to integrate the activities in an entire business process. Because those activities cross departmental boundaries, such systems are sometimes called cross-departmental or cross-functional systems , or process-based systems . This cross functionality are now even used by two or more related companies, which is referred to as interorganizational systems . The most common include e-commerce and supply chain management systems. Most organizations today have a mixture of functional and integrated systems. WHAT ARE FUNCTIONAL SYSTEMS The value chain starts with marketing and sales activities. Sales and order activities are followed by in-bound logistics, operations and manufacturing, out-bound logistics, and finally, service and support. The primary activities are facilitated by human resources,
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accounting and infrastructure, procurement, and technology activities. Figure 7-4 lists principal functional systems used in five value chain activities. See page 204-205. MARKETING AND SALES SYSTEMS Marketing and sales systems consist of: o Product management is the primary functional system for marketing. Product managers use such systems to help assess how well their product- marketing efforts are working. Sales data are summarized by product, product category, and business line. o
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Chapter 7 - Information Systems for Competitive Advantage (Summary Notes)

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