© Pearson Prentice Hall 2009 7-1 Functional & Cross-Functional Systems.

© Pearson Prentice Hall 2009 7-1

Functional & Cross-Functional Systems


Q1 – What are the differences between functional and cross-functional systems?

Fig 7-1 History of IS Within Organizations

This chart depicts the history of information systems beginning with calculation systems, moving to functional systems that served a single department or function, and ending with integrated systems that span an entire organization.


Q2 – How do functional systems relate to the value chain?

Fig 7-2 Reorganized Porter Value Chain Model

Porter’s value chain model from Chapter 3 is reorganized to show primary and support activities from a customer’s perspective, beginning with Marketing and Sales on the left, to Service and Support on the right.


Q2 – How do functional systems relate to the value chain?

Fig 7-3 Reorganized Porter Value Chain Model & Its Relationship to Functional Systems

This view of Porter’s value chain model shows five functional systems that support the primary and support activities.


Q3 – What are the functions of the five basic functional systems?

It’s important to understand that a functional application is a computer program with features and functions to support a particular business activity.

A functional system, on the other hand, is a complete information system that uses five components—hardware, software, data, procedures, and people.



Fig 7-4 Functions of Sales & Marketing Systems

This figure shows five functions of a Sales and Marketing System: Lead-generation Lead-tracking Customer-

management Sales forecasting Product and brand

management



Fig 7-6 Functions of Operations Information Systems

This figure shows the four functions of an operations information system—order entry, order management, finished-goods inventory management, and customer service.



Fig 7-7 Functions of Manufacturing Information Systems

This figure shows the four functions of a manufacturing information system—inventory, manufacturing planning, manufacturing scheduling, and manufacturing operations.



Fig 7-11 Functions of Human Resources Information Systems

The five human resources information system functions are shown in this figure—recruiting, compensation, assessment, planning, and development and training.



Fig 7-12 Functions of Accounting Information Systems

Eight functions of a combined accounting and finance information system are shown below.


Q4 – What are the problems of functional systems?

Fig 7-13 Major Problems of Isolated Functional Systems

Here are some of the problems caused by functional information systems that, by their nature, don’t integrate business processes and data throughout an organization.

Fig 7-14 Example of System Integration Problem


Q5 – What is business process design?

Companies are redesigning their business processes to take advantage of cross-functional information systems. They are taking advantage of activity linkages and integrating activities in what’s called business process design, sometimes called redesign.

There are a lot of challenges in designing and redesigning business processes. It’s expensive, time consuming, and difficult to keep up with normal

business activities. Employees resist the changes in work responsibilities and normal habits. The ultimate outcome is always uncertain. Will the new processes work

better than the old ones?


Q5 – What is business process design?

Fig 7-15 Example of SAP R/3 Ordering Process

Inherent processes built into business process design software require an organization to conform its activities to the program. That can save a company substantial design costs.

Inherent processes can also cause disruptions to operations and employees.

This figure provides an example of inherent processes in an ordering process.


Q6 – What are the functions and characteristics of the three major cross-functional systems?

There are three major cross-functional systems: customer relationship management, enterprise resource planning, and enterprise application integration.

A Customer Relationship Management (CRM) system offers these benefits:

Integration of primary business activities Tracking of all customer interactions Storage of customer data in single a database Support of customer life cycle.



Figure 7-16, to the top right, shows how a CRM system integrates the primary business activities in the value chain model.

Figure 7-17, to the bottom right, depicts the four phases of the customer life cycle and shows how a CRM system integrates them into three major processes: solicitation, lead-tracking, and relationship management.



Fig 7-18 CRM Components

The chart below shows the major components of a Customer Relationship Management (CRM) system: solicitation, lead tracking (presale), and relationship management (post sale).



Fig 7-19 CRM Centered on Integrated Customer Database

Customer Relationship Management (CRM) systems store data in a single database and link CRM processes to one another.



The second type of cross-functional system is an Enterprise Resource Planning (ERP) System that provides more integration than a CRM by integrating primary value chain activities with human resources and accounting support activities across the enterprise.

Fig 7-20 ERP Systems and the Value Chain



The characteristics of an ERP system are presented in figure 7-21 to the right.

The benefits of an ERP are presented in figure 7-22 below.



Fig 7-23 ERP Implementation

Here are the required tasks to implement an ERP system: determine current and ERP models remove inconsistencies implement the ERP system.



An Enterprise Application Integration (EAI) System is the third type of cross-functional system. When an ERP system is inappropriate for an organization, it can still

integrate its existing systems through layers of software that connect applications together.

EAI systems enable a business’s existing applications to communicate and share data, providing many of the benefits of a cross-functional system without some of the disadvantages.

A business can leverage its existing systems while enabling a gradual move to a more complicated ERP system.



Fig 7-24 Enterprise Application Integration (EAI) Architecture

An EAI system doesn’t have a central database but uses metadata to provide the organization with a virtual integrated database as this figure shows.



The benefits an EAI offers to an organization include: Lower costs to implement than a full ERP. Less disruption to operations and employees. Integration of selected parts of the organization. A step-wise implementation process that allows the business

eventually to achieve the full benefits of an ERP.

The steps for an EAI system implementation include: Identifying sources of major isolation problems. Specifying the scope of the EAI implementation. Developing and implementing selected EAI systems. Assessing the benefits of EAI. Stopping further EAI development, expanding EAI efforts, or

switching to ERP.

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