ch02_v8_notes - Essentials of Business Information Systems...

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Essentials of Business Information Systems, 8E Chapter 2 E-Business: How Businesses Use Information Systems As we discussed in Chapter 1, the “digital firm” means more than just plunking down computers that have all the latest bells and whistles on every desk. The digital firm must connect each functional area and each management level to one another. Data input to the system in manufacturing must be made available to sales, accounting, and shipping. Managers in the human resources department must have access to appropriate information regardless of its origin. Information integration is the key to the electronic business. As we go through this chapter, we’ll look at the types of information systems organizations use at each management level. It will provide you with an early, consolidated view of information systems. To help distinguish between the type of function each one is designed to accomplish and to fit them all together, we’re going to look at them in the context of manufacturing candy bars. Yep, candy bars. Everyone likes them and everyone has eaten one, so they will be easy to relate to. We’ll call the company WorldWide Candy, Inc. and we’ll give the candy bar the timely name of “Cybernuts.” 2.1 Components of a Business A business is very similar to the information systems we described in Chapter 1. Both information systems and businesses require inputs and some sort of processing, both have outputs, and both depend on feedback for successful completion of the loop. Information systems use data as their main ingredient and businesses rely on people. However, the similarities are remarkable. Both are a structured method of turning raw products into useful entities. Organizing a Business: Basic Business Functions Whether you are a one-person show or a huge conglomerate, your business still needs four basic functions in order to be successful. Figure 2-1 shows you these functions. 2-1
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Figure 2-1: The Four Major Functions of a Business In a successful business, the four basic functions will work seamlessly together to serve five entities: Suppliers Customers Employees Invoices/payments Products and services. Business Processes What would happen if you walked into work one day and the management told the employees they could do anything, anything at all, they wanted to do that day. If Jimmy from production decided he wants to work in sales and marketing, he could. If Sally, who normally works in accounting, wants to spend the day in shipping she could. No one would have to follow any rules or established procedures. They could accomplish the work any way they choose. Sally decides that she doesn’t want to use FedEx to ship out products that day even though the company has a contract that saves them lots of money. She decides to use an alternate shipping service that will cost the company more and slow down the shipment significantly. She doesn’t see a need to tell accounting about the change. Sam decides not to use appropriate packing materials when he’s preparing glass bowls
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This note was uploaded on 11/27/2010 for the course IS 3300 taught by Professor Pettey during the Spring '08 term at Troy.

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ch02_v8_notes - Essentials of Business Information Systems...

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