Chapter 7

Enterprise-Wide
Information Systems
 Chapter 7 Objectives
Understand how information technology
supports business activities
Understand enterprise systems and how
they evolved
Understand software applications that are
internally or externally focused
Understand how to implement enterprise
systems
 Enterprise Systems
Enterprise systems
Info. Sys. supports various business activities for
internal operations (manufacturing, human resource
management) as well as external interactions with
customers, suppliers, and business partners.
Enterprise systems are information systems that
allow companies to integrate information across
operations on a company-wide basis
Also known as enterprise-wide information systems
 Enterprise Systems
Information flow for an order
Information begins to accumulate at the point of entry when a customer sends
an order to the company and flows through the various links.
 Enterprise Systems
Information flow for an order
When a customer places an order, the order is entered
into an order-entry application.
The information containing the order is sent to the
fulfillment department.
Fulfillment department picks the items from inventory,
packages them for distribution, and produces packing
list.
The package, along with the packing list, is forwarded to
the shipping department.
Shipping department coordinates the shipment,
produces invoice, and sends the package and invoice to
the customer.
 Enterprise Systems
Externally focused systems coordinate
business activities with customers,
suppliers, and business partners who
operate outside the organizational
boundary.
Systems that communicate across
organizational boundaries are called
interorganizational systems (IOS).
 Enterprise Systems
Interorganizational systems (IOS)
The key purpose of an IOS is to streamline the
flow of information from one companys operations
to anothers
It provides electronic transmission of information to
another company.
Competitive advantage can be accomplished here
by integrating multiple business processes to meet
a wide range of unique customer needs.
Sharing information between organizations helps
companies to adapt more quickly to changing
market conditions.
 Information flow across
organizational boundaries
 Information flow across
organizational boundaries
When a company places an order for
components, the supplier performs the shipping
activity. The supplier delivers a physical package
and electronic invoice to the customer.
The customers receiving department takes the
delivery and verifies the invoice. Then the
receiving department stocks the items in the
inventory and updates the inventory level.
Value chain framework
 Enterprise Systems
Internally Focused Applications
Value chain the set of business activities
Functional areas can be broken down into
primary and support activities.
Primary activities are functional areas within
an organization that process inputs and
produce outputs.
Support activities are those activities that
enable primary activities to take place.
 Enterprise Systems
Internally Focused Applications
Primary activities include:
Inbound logistics
Operations and manufacturing
Outbound logistics
Marketing and sales
Customer service
 Enterprise Systems
Internally Focused Applications
Support activities include:
Infrastructure (hardware & software)
Human resources (hiring, interview scheduling, payroll,
benefits)
Technology development (software selection, Internet,
intranet, extranet)
Procurement (purchasing of goods and services required as
inputs primary services)
 Enterprise Systems
Externally Focused Applications
Integrate internal applications with those outside:
suppliers, partners, customers
Upstream information
Information received from another organization
Downstream information
Information sent to another organization
Value system framework
 Types of Enterprise Systems
Packaged applications
Custom applications
Stand-alone applications
 Types of Enterprise Systems
Legacy Systems
Older systems
Tend to be infrastructure-specific
Usually linked to a specific business need
Not integrated
 Types of Enterprise Systems
ERP Implementation
Modules
Vanilla version
Customizations
Best practices
Business process reengineering (BPR)
 Types of Enterprise Systems
Customer Relationship Management
(CRM)
Sales Force Automation (SFA)
New opportunities for competitive advantage
Examples:
MGM
American Airlines
Marriott International
 Types of Enterprise Systems
Supply Chain Management (SCM)
Supply chain the producers of supplies that a
company uses
Supply network
What if supply chain does not collaborate?
Two objectives of upstream information flow:
Accelerate product development
Reduce costs associated with suppliers
The Formula for Enterprise
System Success
Secure executive sponsorship
Get help from outside experts
Thoroughly train users
Take a multidisciplinary approach to
implementation