Any number of these crises can lead to a break down in the social order of the high density urban areas of the United States. Could you survive without public utilities or supermarkets through a winter? Are there enough people around you that are prepared to band together and help one another during social unrest?
More and more people are reevaluating their living arrangements to be prepared for prolonged disasters. But what if you have to stay in a big city for work? Have you developed some contingency plans? Are you located in a part of the city that will allow escape through the rural byways? Have you made a transportation plan? The finance function is also in charge of managing the capitalization of the firm. In order to determine whether the firm is getting the best return on its investments, the finance function must obtain a considerable amount of information from sources external to the firm.
System Description Organization level Account receivable Track money owned the firm Operational Level Portfolio Analysis Design the firms portfolio of investments Knowledge level Budgeting Prepare short term budgets Management level Profit planning Plan long term profits Strategic level 4.
Management level Human resource planning Plan the long term labor force needs of the organization. Enterprise Application System See book Fig traditional view of system In most organizations, separate systems built over a long period of time support discrete processes and discrete business function.
Generating and fulfilling an order is a multistep process involving activities performed by the sales, manufacturing and production, and accounting functions. Fig: Enterprise systems Enterprise systems can integrate the key business processes of an entire firm into a single software system that allows information to flow seamlessly throughout the organization.
These systems may include transactions with customers and vendors. These systems focus primarily on the internal processes but may include transactions with customers and vendors. Enterprise system provides a technology platforms where organization can integrated and coordinate their major internal business processes.
They address the problem of organizational inefficiencies created by isolated islands of information, business processes and technology. A large organization typically has many different kind of information systems that support different functions, organizational levels and business processes. Most of these systems are built around different functions; business units and business processes that do not talk to each other. Managers might have a hard time assembling the data they need for a comprehensive, overall picture of the organizations operations.
Enterprise systems, also known as Enterprise Resource Planning ERP systems solve the above mentioned problem by providing a single information system for organization- wide coordination of key business processes. The enterprise system collects data from various key business and stores the data in a a single comprehensive data repository where they can be used by other parts of business. Managers emerge with more precise and timely information for coordinating the daily operations of the business and firm-wide view of business processes and information flows.
Benefits of Enterprise system? See yourself consult book Challenges of enterprise system? See yourself consult book Supply Chain Management System SCM The above figure illustrates the major entities in the supply chain and the flow of the information upstream and downstream to coordinate the activities involved in buying, making and moving products. Suppliers transform raw materials into intermediate products or components and then manufacturers turn them into finished products.
The products are shipped to distribution centers and from there to retailers and customers. The supply chain is a network of organizations and business processes for procuring materials, transforming raw materials into intermediate and finished products and distributing the finished products to customers. The supply chain includes reverse logistics in which returned items flow in the reverse direction from the buyers back to the seller.
The upstream portion of supply chain includes the organizations suppliers and their suppliers and the processes for managing relationship with them. The downstream portion consists of the organization and processes for distributing and delivering products to their final customers. Information systems must be aligned with the organization to provide information that important groups within the organization need.
At the same time the organization must be aware of and be open influences of information systems in order to benefit from new technologies. The interaction between IT and organizations is very complex and is influence by a great many mediating factors including organizations structure, standard operating procedure, politics, culture, surrounding environment and management decisions.
What is an Organization????? Fig: technical Microeconomic definition of organization. An organization is a stable, formal, social structure that takes resources from the environment and processes them to produce outputs. Capital and labor are primary production factors provided by the environment. The organization the firm transforms these inputs into products and services in a production function.
The products and services are consumed by environment in …………….. An organization is more stable then an informal group in terms of longevity and routines. Organizations are formal legal entities with internal rules and procedures that must abide by laws. Organizations are also social structures because they are a collection of social elements. Fig: The behavioral view of organization A more realistic behavioral definition of an organization is that is a collection of rights, privilege, obligations and responsibilities that are delicately balanced over a period of time through conflict resolution.
In this behavioral view of firm, people who work in organizations develop ways of working; they gain attachments to existing relationship; and they make arrangements and subordinates and superior about how work will be done, how much work will be done and under what condition.
How does these definitions of organization relate to Information System Technology??? The firm is seen as infinitely malleable with capital and labor substituting for each other quite easily. But the more realistic behavioral definition of an organization suggest that building new information systems or building old ones involves more than a technical rearrangement of machines or workers- that some information system that change the organizational balance of rights, privilege, obligations, responsibilities and feelings that have been established over a long period of time.
Organizations arrange specialist in a hierarchy of authority in which everyone is accountable to someone and authority in which everyone is accountable to someone and authority is limited to specific actions. Authority and actions are further limited by abstract rules and procedures Standard Operating Procedures SOPs that are interpreted and applied to specific cases. These rules create a system of impartial and universal decision making; everyone is treated equally.
Organizations try to hire and promote employees on the basis of technical qualifications and professionalism not personal connection. The organization is devoted to the principle of efficiency: maximizing output using limited inputs.
Organizations have different shapes or structure for many other reasons. They differ in their ultimate goals and the types of power used to achieve them some organizations have utilitarian goals business , others have normative goods universities, religious groups.
Organizations also serve different groups or have different constituencies, some primarily benefiting their members, others benefiting clients, stock holders or the public.
The nature of leadership differs greatly from one to another organization. Some organizations may more democratic than other. Another way organization differs is by task they perform and the technology they use. Some organization perform primarily routine task that could be reduced to formal use that require little judgment. IT should result in a decline in the number of middle managers and clerical workers as IT substitutes for their labor. IT also helps firms contract in size because it can reduce transaction cost.
According to transaction cost theory, firms and individuals seek to economize on transaction cost, much as they do on Santosh Dhungana MIS Version 1.
Using markets is expensive because of costs such as locating and communicating with distance suppliers, buying insurance, obtaining information on products and so on. IT especially by the use of networks can help firms lower the cost of market participation transaction cost. Information systems make it possible for companies such as CISCO systems and Dell Computer to outsource their production to contract manufacturers such as Flextronics instead of making their product themselves.
In the above fig1 transaction cost decreases by the help of IT enable organization then traditional organization. Information technology also can reduce internal management cost. IT by reducing the cost of acquiring and analyzing information, permits organizations to reduce agency cost because it becomes easier for manager to observe a greater number of employees. IT also expand the power and space of small organizations by allowing them to perform coordinating activities such as processing orders or keep track of inventory with very few clerks and managers.
More firms may operate as virtual organizations where work no longer is tied to geographical location. Virtual organization use networks to link people, assets, and ideas. Another behavioral approach views information systems as the outcome of political competition between organizational groups for influence over the organizations policies, procedures, and resources. Information systems potentially change an organizations structure, culture, politics, and work.
The Internet and Organizations -Internet WWW have an important impact on the relationships between firms and external entities and even on the organizational business process inside a firm. Interpersonal Roles 2. Informational Roles 3. What are the alternatives? Which should you choose?
Is this choice working? Models of Decision Making 1. Organizational Model Considers the structural and political characteristics of an organization. Bureaucratic Model Whatever organization do is the result of routines and existing business process developed over years of active use.
Political Model What an organization does is a key result of political bargains struck among key leaders and interest groups. Strategic Information System SIS It change the goals, operations, products, services or environmental relationships of organizations to help them gain and edge over competitors.
Systems that have these effects may even change the business of organizations. Strategic information system can be used at all organizations.
Strategic information system can be used at all organizational levels and it is not restricted to strategic level system. There are a number of information systems operating at different level of strategy the business, the firm and the industry level Santosh Dhungana MIS Version 1. There are various forces that effect on organizations ability to compete and therefore greatly influence firms business strategy. There are threats from new market entrance and from substitute products and services.
Customers and suppliers develop bargaining power. Traditional competitors constantly adopt their strategies to maintain their market positioning. In fig 2 shows the new competitive force model. The digital firm era requires a more dynamic view of the boundaries between firms, customers and suppliers with competition occurring among industry sets.
Information Systems and Business strategies Business can use strategic information systems to gain an edge over competitors. Such systems change organizations goal, business processes, products, services or environmental relationships driving them into firms of behaviour. Information systems can be used to support strategy at the business, firm and industry level. At the business level of strstegy, information systems can be used to help firms become the low cost procedures, differentiate products and services or serve new markets.
Value chain analysis is useful at the business level to highlight specific activities in the business where information systems are most like to have a strategic impact.
At the firm level, information systems can be used to achieve new efficiencies or to enhance services can by trying together the operations of different business unit so that they can function as a whole or promoting the sharing of knowledge across business units. At the industry level, systems can promote competitive advantage by facilitating cooperation with other firms in the industry, creating consortiums or communities for sharing information, exchanging transactions or coordinating activities.
The competitive force model, information partnership and network economies are useful concepts for identifying strategic opportunities for systems at industry level. Chapter 4 Electronic Business, Electronic commerce and The Emerging digital firms Internet technology and digital firm - The internet is rapidly becoming the infrastructure of choice for electronic commerce because it offers business an even easier way to link with other business and individual at a very low cost.
New business models and value propositions - The internet has introduced major changes in the way companies conduct business. The internet has changed that relationship. Some of the traditional channels for exchanging product information have become unnecessary or uneconomical and business models based on the coupling of information with products and services may no longer be necessary.
Such information can be found now abundance on the way, the investors can use financial websites to place their own trades directly for very small transaction fee. The changing economics of Information Richness Reach Fig: The changing economics of Information The internet and the web have vastly increased the total amount and quality of information available to all market participants, consumers and merchants alike.
It also reduces the search cost, the time and money spent locating a suitable product and determining the best price for that product. Information Asymmetry It is the situation where the relative bargaining power of two parties in a transaction is determined by one party in the transaction then other party. The web has reduced the information asymmetry surrounding in the business.
Before the internet business had to make trade-off between the richness and reach of their information. Richness It is the measurement of the depth and details of information that a business can supply to the customer as well as information the business collects about the customer. Rich It is the measurement of how many people a business can connect with and how many products it can offer to those people.
In the above figure, it shows the changing economics of information. In the past, companies had to trade-off between the richness and reach of their information. Internet connectivity and universal standards for information to large number of people reduce tradeoff. Internet Business Models 1. Virtual Storefront: Sells physical products directly to consumers or to individual business.
Eg: amazon. Information broker: Provides product, pricing and availability information to individuals and business. Generates revenue from advertising or from directing buyers to sellers.
Eg: Edmunds. Transaction broker: Saves users money and time by processing online sales transactions, generating a fee each time a transaction occurs. Also provides information on rates and terms.
Eg: expedia. Online market place: Provides a digital environment where buyers and sellers can meet, search for products, display products and establish prices for those products.
Can provide online auctions or reserve auctions where buyers submit bids to multiple bids to multiple sellers to purchase at a buyer specified price as well as negotiated or fixed pricing. Eg: ebay. Content provider: Creates revenue by providing digital content such as digital news, music, photos or video ever the wave.
The customer may pay to access the content or revenue may be generated by selling advertising space. Eg: cnn. Online service provider Provides online service for individuals and business. Generates revenue from subscription or transaction fees, from advertising or from collecting marketing information from users. Eg: xdrive. Virtual community Provides online meeting, place where people with similar interest can communicate and find useful information.
Eg: facebook. Portal Provides initial point of entry to the web along with specialized content and other services. Eg: yahoo. Business-to-consumer B2C electronic commerce involve electronic retailing of products and services directly to individual consumers. Such as Milpro. For example, eBay, the giant Web auction site. Until recently almost all e-commerce transactions took place over wired networks. Now cell phones and other wireless handheld digital appliances are internet enabled so that they can be used to send t email or access websites.
The use of handheld wireless devices for purchasing goods and services is called mobile commerce or m-commerce. Customer Centered Retailing 1. Direct Sales over the Web Manufacturers can sell their product and services directly to retail customers bypassing intermediaries such as distributor or retail outlets.
Eliminating intermediaries in the distribution channel can significantly lower purchase transaction cost. Operator of virtual storefront such as amazon. In this 4th Edition we have updated our country-by-country and state-by-state reviews based on the continuing political and demographic changes, including recent events such as the exaggerated Covid 19 pandemic which revealed which local and national governments were quick to create permanent economic damage and curtail personal liberties under the improper use of emergency powers.
There is no place that is perfectly safe. Everyone has to choose between desolate and remote areas with greater safety from people, with the added costs of travel, building and being away from society with potential impact to job, family, spouse, health, climate and many other factors.
We help you develop your own customized strategy in this book, by taking you through each threat and helping you recognize which threats require relocation and which can be mitigated through common-sense preparations. To help you evaluate the pros and cons of each area we have summarized the most valuable information in easy-to-read formats including:.
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