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Chapter 2
Global E-Business and Collaboration
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?
5. What is the role of the information systems function in a business?
Chapter Outline
2.1 Business Processes and Information Systems
Business Processes
How Information Technology Improves Business Processes
2.2 Types of Information Systems
Systems for Different Management Groups
Systems for Linking the Enterprise
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, 77
Chief information officer (CIO), 99
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systems, 86
Cyberlockers, 94
Decision-support systems (DSS), 79
Digital dashboard, 82
IT governance, 100
Knowledge management systems (KMS), 86
Management information systems (MIS), 77
Portal, 82
Programmers, 99
Transaction processing systems (TPS), 76
Teaching Suggestions
The opening vignette, “TELUS Embraces Social Learning,” provides an outstanding
example of how the company embraced social business tools to significantly reduce its
learning budget all the while it increased the amount of learning and education available
to its employees. These technologies are the very same ones every business needs to
succeed.
Prior to incorporating the new social business tools, 90 percent of the TELUS learning
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Section 2.1, “Business Processes and 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
Section 2.2, “Types of Information Systems” This section focuses on how information
systems serve various management levels in companies. The ultimate goal is for students
to realize that one system helps serve other systems and, working together, all the
systems serve the entire organization.
Type of System
Information Inputs
Information Outputs
Users
Transaction
Processing Systems
(TPS)
Transactions; daily
events
Detailed reports;
lists; summaries
Operations
personnel; first-line
supervisors
Information
Systems (MIS)
transaction data;
high-volume data;
simple models
exception reports
Systems (DSS)
analysis, analytic
models and data
analysis tools
simulations;
analysis
managers
Executive Support
Systems (ESS)
Aggregate data;
external, internal
Projections;
responses to queries
Senior managers
It’s likely students’ main encounter will be with TPS systems when they first begin their
careers. Stress the importance of accurate data at the TPS level because it serves as the
initial source for the other systems.
supports the different kinds of decisions made at each managerial level.
Interactive Session: Technology: SCHIPHOL INTERNATIONAL HUB
Case Study Questions:
1. How many levels of complexity can you identify in Schiphol’s baggage conveyors
network?
There are at least 4 layers of complexity each intermingled with others. The layers are:
1. System complexity – the system is rigged to enact a co-operation between many
technological layers both at software and hardware levels(e.g. conveyor belts, scanners,
security checkers, etc.);
2. What are the management, organization, and technology components of Schiphol’s
baggage conveyors network?
1. Management components comprise at least the following: governance of people;
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3. What is the problem that Schiphol is trying to solve? Discuss the business impact of
this problem.
Schipol is trying to increase the revenue stream by optimizing customer experience while
4. Think of the data that the network uses. What kinds of management reports can be
generated from that data?
Data items circulating across Schipol Conveyor Network comprises of four items:
scheduling data; hit/failure reports; delays; usage information. All of this data was
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
closed entity and shouldn’t share data or information with anyone outside the
organization. A review of a typical supply chain may be helpful: sourcing, producing, and
delivering goods and services. It may also be helpful to engage the students in an exercise
that lists all the entities involved in producing and delivering goods and services.
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Intranets and extranets: As Internet-based technologies continue to expand the basic
platforms for disseminating information, smaller businesses that cannot afford to
implement enterprise applications can turn to intranets and extranets. Your difficulty will
be getting students to understand the difference between the two since they operate
basically the same way. Intranets are limited to internal users; extranets are available to
external users as well as internal users. Both are an inexpensive way to quickly
disseminate information and data across functional lines and organizational boundaries.
Interactive Session: Management: Piloting Procter & Gamble from Decision
Cockpits
Case Study Questions
1. What management, organization, and technology issues had to be addressed
when implementing Business Sufficiency, Business Sphere, and Decision
Cockpits?
Management: Managers and executives were receiving data and information but
only when it was days or weeks old—too late to make on-the-spot decisions and
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2. How did these decision-making tools change the way the company ran its
business? How effective are they? Why?
These solutions eliminate time spent debating different data sets, and instead use a
system that allows leaders to focus on immediate business decisions using the most
accurate data available at that precise moment.
3. How are these systems related to P&G’s business strategy?
Managers and employees are able to make faster and better decisions than were
previously possible. The company enjoys a reduced complexity involved in
generating a statistical report, as well as cost reductions from maintaining one
Section 2.3 “Systems for Collaboration and Teamwork” Students have probably used
most of these systems without even realizing their business value. Your task is to relate
these increasingly common technologies to business processes and needs. Discuss how
they can use cell 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.
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Table 2-2 (page 90) emphasizes the benefits of collaboration while Figure 2-7 (page 92)
highlights the necessity of having the appropriate organization structure and culture,
along with the right technology, to successfully use collaboration in an organization.
Discuss how the absence of even one of these three can hinder or prevent collaboration.
Ask students to draw on their own experiences to compare and contrast firms with a
collaborative culture to those without.
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
even their use in your classroom. Have them use the time/space matrix in Figure 2-8
(page 97) and the information in the section “Checklist for Managers: Evaluating and
Selecting Collaboration Software Tools” (page 97) to help select the best tool.
Section 2.4. “The Information Systems Function in 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 systems. Have the
IS staff and students participate in a Question and Answer forum about how typical
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Review Questions
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
Describe the relationship between information systems and business processes.
Information systems automate manual business processes and make an organization
2. How do systems serve the different management groups in a business?
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
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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
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
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
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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.
3. How do systems that link the enterprise improve organizational performance?
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