Chapter 2 Flashcards
Please describe the Procurement Process
- Warehouse writes what they need on a purchase requisition and sends it to purchasing
- Purchasing finds the appropriate vendor and orders from them
- Purchasing receives the order and sends it to Warehouse
- Vendor sends an invoice to Accounting
- Accounting pays the invoice
Please describe the Fulfillment Process
- Sales receive a customer’s order
- Sales validates and creates the order
- Sales communicates with other departments their needs while tracking the progress of the order made
- Warehouse prepares the order and ships it to the customer
- Accounting is notified that the order has been shipped, creating an invoice for the order and sending it to the customer
- Customer pays the invoice and Accounting records the payment
Business Process Reengineering (BPR)
A strategy for making an organization’s business process more productive and profitable
Business Process Improvement (BPI)
Reducing variation in the business process by searching for root causes of the variation
Go through the phases of BPI
- Define phase
- Measure phase
- Analysis phase
- Improve phase
- Control phase
BPR vs BPI
BPR
- Huge performance gain
- Top-down change
- can handle significant changes in the firm or business environment
—–
- Too difficult, radical, lengthy and comprehensive
- Change in firms can be overwhelming
BPI
- Performed by a team
- Less costly and risky
- Delivers quantifiable results
- Bottom to top change
- If unsuccessful, the amount of resources and time used
—–
- Too many BPI projects can dissuade employees
Business Process Management (BPM)
The use various methods to discover, model, analyze, measure, improve, optimize, and automate business processes.
- BPM initially helps with profitability by decreasing cost and increasing revenue
- Eventually, it creates a competitive advantage by improving organizational flexibility, increasing customer satisfaction and ensuring compliance with rules and regulations
Business Activity Modeling (BAM)
A real-time approach to measure and manage business processes
Name some business pressures that would affect IT
Societal/Political/Legal
- Social responsibility
- Compliance with government regulations and deregulations
- Ethical issues
- Terrorist attacks and homeland security
Economic
- Global economy and strong competition
- Need for real-time operations
- Changing workforce
- Powerful customers
Technology
- Information overload
- Technological advancements
Strategic Information System (SIS)
Any IS that provides a competitive advantage or reduces a competitive disadvantage
Porter’s Competitive Forces Model
A framework for analyzing competitiveness
- Threats of new entrants
- Buyer power
- Threat of substitute product or services
- Supplier power
Porter’s Value Chain Model
Identifies where an organization can use IT to gain a competitive advantage
Primary activities
Activities that create value that customers are willing to buy
Support activities
Supports primary activities
What are some strategies for competitive advantage?
Cost leader
- Lower prices
Differentiation
- Different
Innovation
- New
Operational Effectiveness
- More efficient
Customer Oriented
-Treats customers better
