5. Political activity. Political consciousness and political culture.

1. 5. Political activity.Political consciousness and political culture.

2. Learning Objectives • Identify salient characteristics of organizations • Discuss the idea of ‘business functions’ • Review the types of systems that support business functions • Talk about the issues associated with functional systems • Evaluate how information systems support business strategy • Discuss cross-functional systems (a major focus of this course)

3. What is an organization? • Technical definition • A stable, formal, social structure • Takes resources from environment, processes them and produces outputs Examples?

4. Summary – Organizational Features • Common Features • Formal Structure • SOPs • Politics • Culture • Unique Features • Organizational Type • Environment • Goals • Power • Constituencies • Functions/Processes • Leadership • Technology

5. Formal Structure • Clear division of labour • Hierarchy • Explicit rules and procedures (SOPs) • Impartial judgment • decisions made based on facts and established rules • Technical qualifications for positions • Workers only qualify for jobs if they have the right skills and experience • Maximum organizational efficiency • The organization is set up to be efficient, organizations always trying to become more efficient Does X have “Formal Structure”?

6. Standard Operating Procedures • Standard Operating Procedures (SOPs) • Standard routines used within the organization to deal with expected situations • Some formal, some rules of thumb • Process an order, deal with a customer complaint • Assist with efficiency – why? What are examples of SOPs at X?

7. Organizational Politics • Politics exist in all organizations • Different interests and viewpoints – disagreements, conflicts, struggles = politics • Political resistance – change Do you think there are Politics at X?

8. Organizational Culture • Fundamental beliefs in an organization about the ‘reason for being’ for an organization • Products • Way people should be treated • Culture can constrain politics (make sure people understand acceptable behavior) • All organizations have a culture….. What are some key characteristics of St FX culture?

9. How do organizations gain competitive advantage using information systems? • Businesses determine competitive strategies • Create processes to achieve strategies • Information systems developed to support business processes • Help organizations achieve competitive advantage • Need to avoid creating systems that are unrelated to organization’s strategy The only reason to build Information Systems is to solve business problems!

10. Case Study New wave enterprises is a relatively new company, founded in 2004, that manufactures and sells snow and surf boards. It has one retail location (Halifax) and sells its products through specialty shops through Atlantic Canada and New England. Its manufacturing operations are in Wolfville NS, it employs about 100 people. New wave has been growing rapidly. The management is trying to determine how technology can help them. • Questions: • What do you think New Wave’s major business functions (activities) are? In other words, what are the different departments that New Wave has? • What do you think some of the business problems are in each of the functions you identified? In other words, what would New Wave have to do very well in order to be successful?

11. What are business functions (activities) • Reorganized Porter Value Chain Model shows the scope and purposes of different types of functions within the organization

12. Value Chain Activities • Primary activities • Relate directly to organization’s customers and products • Marketing and sales • Inbound logistics • Operations and manufacturing • Outbound logistics • Service and support • Facilitated by support activities • Human resource • Accounting and infrastructure • Procurement • Technology activities

13. What are business functions (activities) • Relating model back to the basic definition of organizations Input Processing Output

14. What are the fundamental types of information systems?

15. Calculation Systems • Antiquated systems • Relieved workers of repetitive calculations • Labor-saving devices • Produced little information • Examples: systems that computed payroll and wrote paychecks; inventory tracking

16. Functional Systems • Facilitated the work of single department or function • Functions added to calculation system programs to provide more value • e.g. payroll expanded to become human resources • Islands of automation • Work independently from each other • Effective as independent functions • Inefficient working in cooperation with other processes across entire business • Examples: human resources; financial reporting

17. Basic Types of Functional Systems • Marketing and Sales systems • Operations systems • Manufacturing systems • Human Resource systems • Accounting and Finance systems

18. Reorganized Porter Value Chain Model and Its Relationship to Functional Systems

19. Marketing and Sales Systems • Few systems support marketing • Customer contact management • Many systems support sales • Sales Order Processing (selling stuff; calculating sales amounts, etc.) • Sales forecasting • used for planning production, managing inventory, financial reporting • Customer management • generate follow-on business

20. Manufacturing Systems • Used by companies that transform materials into products • Support production and planning • Push production planning • organization creates schedule and pushes goods through manufacturing and sales • Pull production planning • responds to customer demand • reduction in inventory triggers production • “One-off” producers fall into neither category • Manufacturing scheduling and operations

21. Human Resources Systems • Payroll • Compensation systems • Recruiting • Assessing employee performance, skills, and training • Human resource planning systems

22. Accounting and Finance Systems • Support organization’s accounting activities • General ledger • Financial reporting • Accounts receivable • Accounts payable • Cost accounting • Budgeting • Cash management • Treasury management

23. Case Study • Think about the business problems your group defined for New Wave. How could information systems help solve those problems?

24. What are the problems with functional systems? • Systems provide tremendous benefits, but are limited because they operate in isolation • Data duplication results from each application having own database • potential lack of data integrity • Business processes disjointed across functions • produces lack of integrated enterprise information • Limited information available at any one source • Inefficient decisions based on limited knowledge • Increased costs to organization

25. Major Problems of Isolated Functional Systems

26. What’s the difference between a function and a process? • Business Function: Related sets of specialized activities carried out by an organization • For efficiency – keep people who do the same thing together • Often = department • Examples? • Business Process: the way that work is organized and coordinated in an organization to add value

27. What’s the difference between a function and a process? “Customer Sale”

28. Integrated, Cross-Functional Systems • Cross-departmental systems operate across departmental boundaries • Increased functionality • Process-based systems support complete business processes • Integrated processing systems are more efficient • Needs clear line of authority • Inter-organizational systems are cross-functional systems used by two or more related companies

29. What are cross-functional systems? • Cross-functional systems are designed to overcome problems in functional systems • Customer Relationship Management (CRM) • Support the business processes of attracting, selling, managing, delivering, and supporting customers • Direct value chain activities that involve the customer • Integrates four phases of the customer life cycle: marketing, customer acquisition, relationship management, and loss/churn • All customer data stored in single database • Enterprise Resource Planning (ERP) • Support all the primary business processes as well as the human resource and accounting support processes • Enterprise-wide systems that integrate sales, order, inventory, manufacturing, and customer service activities

30. CRM Components

31. Characteristics of ERP

32. Benefits of ERP • Efficient business processes • Inventory reduction • Lead-time reduction • Improved customer service • Greater, real-time insight into organization • Higher profitability

33. What are interorganizational systems? • Systems that cross organizations • involve selling and purchasing • integrate multiple-company operations • Types of Interorganizational Systems • E-commerce • Supply Chain Management (SCM)

34. E-Commerce • Buying and selling of goods and services over public and private computer networks • Merchant companies • that take title to the goods they sell • buy goods and resell them • sell services that they provide • Nonmerchant companies • arrange for the purchase and sale of goods without ever owning or taking title to those goods • sell services provided by others

35. E-Commerce Categories

36. Benefits of E-Commerce

37. Supply Chain Management • A supply chain is a network of organizations and facilities that transforms raw materials into products delivered to customers • Involves customers, retailers, distributors, manufacturers, suppliers, transportation companies, warehouses, inventories, and some means for transmitting messages and information among the organizations involved

38. Supply Chain Relationships

39. Benefits of Information Systems on Supply Chain Performance • Reduce costs of buying and selling • Increase supply chain speed • Reduce size and cost of inventories • Improve delivery scheduling—enable JIT • Fix bullwhip effect • Do not optimize supply chain profitability