PART I Foundations of Information Systems in Business Session 3 Understanding Is from Business perspective
HUANG Lihua, Fudan University Session 3 Understanding IS from Business Perspective PART I Foundations of Information Systems in Business
Case study Challenge Faced by FORD Management in1985 · How to do cost saving · How to do downsizing How to increase profitability by downsizing
HUANG Lihua, Fudan University Feb., - July., 2006 Challenge Faced by FORD Management in 1985 • How to do cost saving • How to do downsizing • How to increase profitability by downsizing Case study：
FORD change in Procurement Process 1)Old business process Purchasing/ When purchasing department wrote a purchase order, it sent a copy to accounts payables The vendor sent an invoice to accounts payables when they Vendor delivered goods Receiving When material control received the goods, it sent a copy of the receiving document Thus, the account payables received three documents from various Account senders: Purchasing order invoice and receiving document. It was Payables up to account payables to match the purchasing against the receiving document and the invoice. If they matched the department issued payment. Otherwise, an accounts payable clerk would investigate the discrepancy, hold up payment, generate documents and all in all gum p the work
HUANG Lihua, Fudan University Feb., - July., 2006 FORD change in Procurement Process 1）Old business process Purchasing When purchasing department wrote a purchase order, it sent a copy to accounts payables. Vendor The vendor sent an invoice to accounts payables when they delivered goods. Receiving When material control received the goods, it sent a copy of the receiving document. Account Payables Thus, the account payables received three documents from various senders：Purchasing order, invoice and receiving document. It was up to account payables to match the purchasing against the receiving document and the invoice. If they matched, the department issued payment. Otherwise, an accounts payable clerk would investigate the discrepancy, hold up payment, generate documents and all in all gum up the works
Case study: FORD change in Procurement process what is the solution to increase profitabilit b y downsIzing 思者n9
HUANG Lihua, Fudan University Feb., - July., 2006 • What is the solution to increase profitability by downsizing? Case study：FORD change in Procurement Process
FORD change in Procurement Process 2) Business process is enabled Purchasing Receiving Goods 1 When the (2) When the goods 2) arrive at the receiving purchasing dock. the clerk checks the department initiates Db to see if they correspond an order. it enters the to an outstanding purchase information into an order If so. he or she information system (3) accepts them and enters the transaction into the computer system. If The account payables dept. pay receiving can't find an according to the rule entry for the received goods, it simply returns the goods
HUANG Lihua, Fudan University Feb., - July., 2006 2）Business process IS enabled Purchasing Receiving Goods IS （1）When the purchasing department initiates an order, it enters the information into an information system； （1） （2） （2）When the goods arrive at the receiving dock,the clerk checks the DB to see if they correspond to an outstanding purchase order. If so, he or she accepts them and enters the transaction into the computer system. If receiving can’t find an entry for the received goods, it simply returns the goods。 FORD change in Procurement Process The account payables dept. pay according to the rule. (3)
FORD change in Procurement Process 3) effectiveness after use of information system After Ford instituted this new process, since there are no discrepancies between the financial record and the physical record material control is simpler and financial information is more accurate. Ford has achieve a 75%o reduction in head count(from more than 400 to 125 head counts)
HUANG Lihua, Fudan University Feb., - July., 2006 3） effectiveness after use of information system After Ford instituted this new process, since there are no discrepancies between the financial record and the physical record, material control is simpler and financial information is more accurate. Ford has achieve a 75% reduction in head count (from more than 400 to 125 head counts). FORD change in Procurement Process
FORD change in Procurement Process Question What function is the information system? What solution to organizational and management in implementation such information system? R
HUANG Lihua, Fudan University Feb., - July., 2006 FORD change in Procurement Process Question? • What function is the information system? • What solution to organizational and management in implementation such information system?
Wrap-up from cases Understanding of Information Systems An Information System is an organizational and management solution, based on information technology, to a challenge posed by the environment
HUANG Lihua, Fudan University Feb., - July., 2006 Wrap-up from cases • Understanding of Information Systems ： – An Information System is an organizational and management solution , based on information technology, to a challenge posed by the environment
Information Systems ss Processes Supply Enterprise Customer Managemen Management Management Chain Management Firm Profitability Strategic Position Data Transformation Dissemination Collection Into rdinating Controlli nformation Processing Activities anagement Activities Business value HUANG LIhua, Fudan Univers ity Feb, -July, 2006
HUANG Lihua, Fudan University Feb., - July., 2006 Information Systems Business Processes Information Processing Activities Business Value Management Activities Supply Chain Management Enterprise Management Customer Management Knowledge Management Data Collection and Storage Transformation Into Business Systems Dissemination Planning Coordinating Controlling Modeling and Decision Making Firm Profitability and Strategic Position
(D Information Systems: From Business Perspective An Information System is an organizational and management TECHNOLOGY ORGANIZA- INFORMATION solution, based on TIONS SYSTEMS information technology, to a challenge posed by the environment MANAGEMENT
HUANG Lihua, Fudan University Feb., - July., 2006 Information Systems: From Business Perspective ORGANIZATIONS TECHNOLOGY MANAGEMENT INFORMATION SYSTEMS An Information System is an organizational and management solution , based on information technology, to a challenge posed by the environment