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Chapter 7

,Functional A lications &

Integration

th

Turban, Leidner, McLean, WetherbeLecture Slides by L. Beaubien, Providence College

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John Wiley & Sons, Inc.


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e ate unct ona areas an us ness processes to t evalue chain model

Identify functional management information systems

demonstrate how it is supported by IT

production/operations management, including logistics

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escr e t e support prov e y an t e e tomarketing and sales

Describe the support provided by IT and the Web toaccounting and finance

Describe the support provided by IT and the Web tohuman resources management

Describe the benefits and issues of integratingfunctional information systems

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Functional Areas Value ChainPerspective

The value chain model views activities in organizationsas either primary (reflecting the flow of goods and

services) or secondary (supporting the primaryactivities . T e organizationa structure o irms isintended to support both of these types of activities.

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Functional Areas in a Business

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Transaction Processing Informationystems

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With OLTP and Web technolo ies such as an extranet,

suppliers can look at the firms inventory level or productionschedule in real time. The suppliers themselves, inartnershi with their customers, can then assume

responsibility for inventory management and ordering.

Interactive Internet TPS expands OLTP to provideenhanced real time transaction processing over theInternet or intranets. Multi-store chains can access acentralized computer system no longer requiring in-storeprocessors.

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TPS Mana in Production/O erations &

Managing Production/ Operations & LogisticsManaging Production/ Operations & Logistics

Logistics

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

A few of the IT supported POM areas are:

cons era y among organ zat ons.

Planning production/operations

Product lifecycle management (PLM)

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n- ouse og st cs ater a s anagement

Logistics management deals with ordering, purchasing,n oun og s cs rece v ng , an ou oun og s cs

(shipping) activities. These logistical activities crossseveral primary and secondary activities on the value

Inventory management determines how much

inventory to keep. Overstocking can be expensive;

.

so are un ers oc con ons.

Manufacturing quality-control systems can be- -

total quality management (TQM) effort. They

provide information about the quality of incoming

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and finished goods.


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POM planning is a major component of operational systems

Material Requirements Planning (MRP) is software that facilitates the plan for

purchasing or producing parts, subassemblies, or materials in the case of interdependentitems. It integrates Master Production Schedules, BOMs, and Inventory levels.

system by determining the costs of parts and the associated cash flow. It also estimatescosts of labor, tools, equipment repair, and energy while generating a requirements

report.us - n- me ys ems s an approac a a emp s o m n m ze was e o a n s

(space, labor, materials, energy, etc.) and to continuously improve processes andsystems. 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 oryears. Software tools such as: program evaluation and review technique (PERT) and thecritical path method(CPM) are used to manage milestones, resources, costs, etc.

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distribution of work. These systems deal with resource allocation and reallocation.


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-


CIM is a conce t that romotes the inte ration of various com uterizedfactory systems. It has three basic goals: (1) the simplification of all

manufacturing technologies and techniques, (2) automation of as manyof the manufacturing processes as possible, and (3) integration and

Typical integrated technologies are:

, ,functions via computer hardware and software.

FMS - Flexible-manufacturing systems

JIT Just-in-Time

CAD Computer Aided Design

CAE Computer Aided Engineering

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GT - Group technology


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-


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manufacturers to control and share product-relateddata as part of a products design and developmente or . e - ase supp y c a ns an o ertechnologies are employed to automate this

collaborative effort.

This electronic-based collaboration can reduce

product cost

travel expenses costs associated with product-change management

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Marketing and Sales SystemsMarketing and Sales Systems

Channel systems are the TPS involved in the process of

with their needs. These systems link and transformmarketing, sales, procurement, logistics, and deliveryac v es w o er corpora e unc ona areas.

Some of the channel-s stem activities are:

customer relations

distribution channels and in-store innovations

marketing management telemarketing

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It is essential for companies to know who their customers are and to

rea em proper y. nnova ve pro uc s an serv ces, success u

promotions, customization, and customer service are a necessity formost organization.

. 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 trackw o t e r ex st ng an potent a customers are. ese prospect ve-customer sts can eanalyzed and sorted by classification for direct mailing, e-mailing, or telemarketing.

Mass Customization. Todays customers prefer customized products. Through masscustomization, thepractice 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.

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vert s ng an romot ons. pec a promot ons or coupons are presente to t ecustomer via mails, email, wireless and pervasive computing applications.


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Organizations can distribute their products and services through a variety

. , .

Representatives, or distributors (to name a few). IT-Supported Distribution Channels

Location Based Mapping

Self-service convenience stores

Hand-held wireless devices that scan the bar code UPC

Smart card or credit card

Self-checkout machines

Check-writers attached to cash registers

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ompu er za on o var ous ac v es n re a s ores

Video-based systems count and track shoppers in a physical store


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Man marketin mana ement decision a lications are su orted bcomputerized information systems.

Pricing of Products or Services. Sales volumes are largely determined by therices of roducts or services as is rofit.

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

searc e or ren s an re a ons ps. New Products, Services, and Market Planning. New products and services can

be an expensive risk.Will it sell?Requires careful analysis, planning,

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, .

Web-Based Systems support marketing and sales through data capture


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Accounting and finance functional areas manage the inflow andoutflow of organizational assets. This involves all functions of an

organization including payroll, billing, cash management, etc.

Financial and Economic Forecasting

Planning for Incoming FundsBudgeting

Capital Budgeting

Financial and Economic Forecasting

Planning for Incoming Funds

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Budgeting

Capital Budgeting


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TPS Accounting and Finance Systems(Continued)

E-Commerce Applications of Financial Transactions

o a s oc exc anges an mu p e currenc es

E-BondsFactoring online

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Electronic bill presentment and payments

Virtual Close

Investment Management

Financial Analysis

Access to Financial and Economic Re orts

Control and Auditing

Budgetary Control and Auditing

Financial Ratio Analysis

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Profitability Analysis and Cost Control

Product Pricing


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Web-based systems have increased the popularity of human

resources n orma on sys ems w c prov e app ca ons ma n y

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

Recruitment is finding employees, testing them, anddeciding which ones to hire. The Web has enhanced the

recruitment process.Position Inventory

HRM Portals and Salary Surveys

Human Resources Maintenance and Development

Performance Evaluation

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Training and Human Resources Development


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TPS Human Resources S stems Continued

ManagementPersonnel Plannin

Labor Management Negotiations

Pa roll and Em lo eesRecordsBenefits Administration

Employee Relationship Management

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Integration of functional information systems

Priority of transaction processing

Finding Innovation Applications

Using the Web

Systems Integration

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t ca ssues


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Co ri ht 2008 John Wile & Sons Inc. All ri hts reserved. Re roduction ortranslation of this work beyond that permitted in Section 117 of the 1976 United

States Copyright Act without the express written permission of the copyrightowner is unlawful. Request for further information should be addressed to thePermissions Department, John Wiley & Sons, Inc. The purchaser may makeac -up cop es or s er own use on y an not or str ut on or resa e. e

Publisher assumes no responsibility for errors, omissions, or damages, causedby the use of these programs or from the use of the information contained

herein.

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