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Chapter 2
Global E-Business and Collaboration
Student Learning Objectives
1. What are business processes? How are they related to information systems?
2. How do systems serve the different management groups in a business and how do
systems that link the enterprise improve organizational performance?
3. Why are systems for collaboration and social business so important and what
technologies do they use?
4. What is the role of the information systems function in a business?
Learning Catalytics is a “bring your own device” student engagement, assessment, and
classroom intelligence system. It allows instructors to engage students in class with real-
Key Terms
The following alphabetical list identifies the key terms discussed in this chapter. The
page number for each key term is provided.
Business intelligence, 47
Enterprise systems, 53
Chief data officer (CDO), 68
Executive support systems (ESS), 52
Chief information officer (CIO), 67
Information systems department, 67
Chief knowledge officer (CKO), 68
Information systems managers, 67
Chief privacy officer (CPO), 68
Interorganizational system, 54
Chief security officer (CSO), 67
IT governance, 69
Collaboration, 56
Knowledge management systems (KMS), 54
systems, 54
Cyberlockers, 62
Portal, 52
Decision-support systems (DSS), 48
Programmers, 67
Digital dashboard, 52
Social business, 57
Electronic business (e-business), 55
Supply chain management (SCM) systems, 53
Electronic commerce (e-commerce), 55
Systems analysts, 67
E-government, 55
Teams, 56
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Teaching Suggestions
The opening vignette, “Social Networking Takes Off at Kluwer,” provides an outstanding
example of how one business is using new collaboration tools to improve employee
communications and performance and help the organization streamline operations and
speed up key business functions. Kluwer is a knowledge-intensive company that was
hampered by outdated processes and tools for managing information.
Kluwer adopted an enterprise social networking platform called Microsoft Yammer that
Section 2.1, “What are business processes? How are they related to information
systems?” Table 2.1 may help students understand that every business, large and small,
uses the same basic business processes. Referring back to this table may help as you
examine information needs for each functional area. You could have students select a
Section 2.2, “How do systems serve the different management groups in a business and
how do systems that link the enterprise improve organizational performance?” This
section focuses on how information systems serve various management levels in
Type of System
Information Inputs
Information Outputs
Users
Transaction
Processing Systems
(TPS)
Transactions; daily
events
Detailed reports;
lists; summaries
Operations
personnel; first-line
supervisors
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Management
Information
Systems (MIS)
Summary
transaction data;
high-volume data;
simple models
Summary and
exception reports
Middle managers
Decision-Support
Optimized for data
Interactive;
Professionals, staff
Typically, DSS and ESS will be the least familiar. Students may better understand them if
you ask these types of questions: Why do national retail chains open stores in certain
locations and not others? How can a retail chain determine which type of clothing to
stock at different geographic locations?
Most importantly, students need to understand that each type of information system
supports the different kinds of decisions made at each managerial level.
It’s quite possible students feel overwhelmed by all the different kinds of information
systems described in the first part of this section. “Systems for Linking the Enterprise”
Supply chain management systems: Students should understand the importance of a
business managing its relationships with suppliers through a free-flowing exchange of
information. The concept may seem foreign to those students who think a company is a
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talked to a different department in the company. Discuss how important it is for every
functional area in a business to have the same consolidated view of its customers to avoid
these kinds of problems.
Knowledge management systems: Few, if any, students have probably had any experience
with these systems. Point out that businesses are beginning to realize how much expertise
and experience is locked away in employees’ heads and that it’s imperative to find a way
Interactive Session: Technology: Vail Ski Resorts Goes High-Tech for High Touch
Case Study Questions
1. List and describe the types of systems described in this case study.
Transaction Processing Systems: collect basic data such as the number of skiers
using each lift at any time; number of meals sold at each food outlet; how many
vertical feet each skier skies each day; the race time of each skier in the EpicMix
Racing program.
Management Information Systems: allows instantaneous decisions to offer skiers
rewards for switching to a different lift to keep lines shorter; steer skiers to different
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Executive Support Systems: help executives determine the most effective marketing
2. How do these systems improve the operation of the business?
Rather than guessing which customers to target in marketing campaigns, the
information systems used by Vail Ski Resort can help executives make sure they are
targeting those who will return and spend the most money. Vail Ski Resorts can offer
3. How do these systems support decision making? Identify three different
decisions that can be supported by these systems.
In reference to question 1, three decisions that the Vail Ski Resort information
systems support are:
• Marketing campaigns: which customers should receive more advertisements,
discounts, and enticements? Which customers promise the greatest return on
investment?
• Maintenance/upgrade of equipment: which lifts should receive more
maintenance and how frequently? Which lifts are most popular and why?
4. Why is improving the guest experience so important at Vail Mountain Resort?
In a single word—competition. All of the amenities offered by Vail Mountain Resort
Section 2.3 “Why are systems for collaboration and social business so important and
what technologies do they use?” Students have probably used most of these systems
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phones, instant messaging, social networking sites, and wikis in a business setting to
communicate, collaborate, and share ideas with team members, business partners,
customers, and suppliers.
One exercise you can use to reinforce the usefulness of team collaboration is to have
small student groups explore social networking sites or Twitter to see how many postings
Table 2.2 emphasizes the benefits of collaboration while Figure 2.7 highlights the
necessity of having the appropriate organization structure and culture, along with the
Many times people and businesses decide which collaborative tools to use based on
which ones they are most familiar with rather than which are the most appropriate tool
for the task at hand.
You can have student teams evaluate one or more collaborative programs for an
organization to which they belong like a sports team, sorority/fraternity, workplace, or
Interactive Session: Management: Is Social Business Working Out?
Case Study Questions
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Management: Employees that are used to collaborating and doing business in more
Organization: Companies that have tried to deploy internal social networks have
found that employees are used to doing business in a certain way and overcoming the
2. Compare the experiences implementing internal social networks of the two
organizations. Why was one more successful than the other? What role did
management play in this process?
NASA’s Goddard Space Flight Center used a custom-built enterprise social network
called Spacebook to help small teams collaborate without e-mailing larger groups.
User profiles, group workspaces like file sharing, wikis, discussion forums, and
3. Should all companies implement internal enterprise social networks? Why or
why not?
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Section 2.4. “What is the role of the information systems function in a business?” If
possible, arrange a session with the school’s information systems department to allow
students to see first-hand how such a center works and who is responsible for running the
Review Questions
2-1 What are business processes? How are they related to information systems?
Define business processes and describe the role they play in organizations.
A business process is a logically related set of activities that define how specific
business tasks are performed. Business processes are the ways in which organizations
coordinate and organize work activities, information, and knowledge to produce their
Describe the relationship between information systems and business processes.
Information systems automate manual business processes and make an organization
more efficient. Data and information are available to a wider range of decision
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2-2 How do systems serve the different management groups in a business and how
do systems that link the enterprise improve organizational performance?
Describe the characteristics of transaction processing systems (TPS) and the
roles they play in a business.
Transaction processing systems (TPS) are computerized systems that perform and
record daily routine transactions necessary in conducting business; they serve the
organization’s operational level. The principal purpose of systems at this level is to
answer routine questions and to track the flow of transactions through the
organization.
• At the operational level, tasks, resources, and goals are predefined and highly
Describe the characteristics of management information systems (MIS) and
explain how MIS differ from TPS and from DSS.
Middle management needs systems to help with monitoring, controlling, decision
making, and administrative activities.
• MIS provide middle managers with reports on the organization’s current
performance. This information is used to monitor and control the business and
predict future performance.
• MIS summarize and report the company’s basic operations using data
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MIS differs from TPS in that MIS deals with summarized and compressed data from
the TPS.
Although MIS have an internal orientation, DSS will often use data from external
sources, as well as data from TPS and MIS. DSS supports “what-if” analyses rather
Describe the characteristics of decision-support systems (DSS) and how they
benefit businesses.
Decision-support systems (DSS) support nonroutine decision making for middle
managers.
• DSS provide sophisticated analytical models and data analysis tools to support
semistructured and unstructured decision-making activities.
• DSS use data from TPS, MIS, and external sources, in condensed form,
allowing decision makers to perform “what–if” analysis.
Describe the characteristics of executive support systems (ESS) and explain how
these systems differ from DSS.
Executive support systems (ESS) help senior managers address strategic issues and
long-term trends, both in the firm and in the external environment.
• ESS address nonroutine decisions requiring judgment, evaluation, and insight
because there is no agreed-on procedure for arriving at a solution.
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Explain how enterprise applications improve organizational performance.
An organization operates in an ever-increasing competitive and global environment.
The successful organization focuses on the efficient execution of its processes,
Define enterprise systems, supply chain management systems, customer
relationship management systems, and knowledge management systems and
describe their business benefits.
Enterprise systems integrate the key business processes of an organization into a
single central data repository. This makes it possible for information that was
previously fragmented in different systems to be shared across the firm and for
different parts of the business to work more closely together.
Business benefits include:
• Information flows seamlessly throughout an organization, improving
coordination, efficiency, and decision making.
In short, supply chain management (SCM) systems help businesses better manage
relationships with their suppliers. Objective of SCM: Get the right amount of
products from the companies’ source to their point of consumption with the least