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Chapter 11EDI, Supply Chain Management, and Global Information Systems Learning Objectives When you finish this chapter, you will: Understand the importance of interorganizational and international ISs. Recognize the role EDI plays in saving costs in business operations. Be able to describe the vertical and horizontal information integration among companies. List the legal, cultural, and other challenges to implementing informational exchange systems. Sharing Information Systems Interorganizational Information Systems Systems shared by two or more organizations Built and owned by one organization Increases efficiency and effectiveness Organizations use similar systems to serve international sites Vertical Information Exchange Vertically related Output of one organization used in processes of another Integrating ISs between vertically related organizations highly beneficial Saves time and money Better serves customers Vertical Information Interchange Electronic Data Interchange What is EDI? Exchange of electronic data using interorganizational information systems Set of hardware, software, and standards that accommodate the EDI process Electronic Data Interchange Benefits of EDI Cost Savings Speed Accuracy Security System Integration Just-in-time Support Electronic Data Interchange Electronic Data Interchange Electronic Data Exchange How does EDI work? Supplier’s proposal sent electronically to purchasing organization. Electronic contract approved over network. Supplier manufactures and packages goods, attaching shipping data recorded on a bar code. Quantities shipped and prices entered in system and flowed to invoicing program; invoices transmitted to purchasing organization. Electronic Data Exchange Manufacturer ships order. Purchasing organization receives packages, scans bar code, and compares data to invoices actual items received. Payment approval transferred electronically. Bank transfers funds from purchaser to supplier’s account using electronic fu
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