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Information systemsfor the firm

Main types

(Source : Laudon & Laudon, Prentice- Hall, 2000)

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Four levels of applications of I.S. in the firm

• Strategy level: I.S. for top executives

• Management level: I.S. for middle management

• “Knowledge” level: I.S. for office employees

• Operations level: I.S. for production, sales, marketing, accounting, and H.R. functions

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Operations level I.S. to treat day to day transactions

IS for Salesand Marketing

IS forManufacturing

IS forAccounting &Finances

IS for Humanresources

Other IS.Example : auniversity

Mainfunctionsof the system

SalesmanagementMarket analysisPromotionPrice settingNew products

PlanningPurchasingShipping &handlingEngineeringManufacturing

BudgetingBig ledgerInvoicingComputation ofCOGS

Employees filesSocialprotectionPayWork relationsTraining

AdmissionsMarksCoursesAlumni club

Mainapplications

OrdermonitoringMarket studiesPrice lists

Stock andpurchasescontrolMachinesoperation andcontrolQuality control

Big ledgerDebtorsCreditorsBudgetingCashmanagement

Pay calculationSocialprotectionCarriermanagement

RegistrationsystemSchooling filesCourses contentcontrolQuality controlAlumni gifts

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“Knowledge” leveltwo types of information system

• Systems for basic office work: – Word processing

– Document and image creation

– Electronic calendar (Outlook…)

• Systems for intellectual work:– Engineering work stations and softwares

– Management work stations and softwares

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Management leveltwo types of information system

• Management information systems: – Sales management

– Stock control

– Yearly budgeting

– Capital investment control

– Careers evolution management

• Systems to assist middle mgt decision process:– Sales analysis by region

– Production planning

– Costs analysis and costs control

– Price analysis and profitability analysis

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Strategy level I.S. for top executives

• Five year sales forecast

• Five year operation planning

• Five year budget forecast

• Profitability forecast

• Human resources planning

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Features and users of I.S.Types of I.S. Input data Treatment Output data Users

Strategic systems Global internal &external data

Simulations,graphics,interactive

ForecastingQueries answers

Top executives

Systems to assistdecision

Databases,analytical models

Interactive,simulations,analyses

Reports, decisionanalysis, queriesanswers

In-houseconsultants &analysts

ManagementInformation Syst.

Operations/transactions summaries,simple models

Simple models,Basic analysis

Regular reports andsummaries, notesand documents

Middlemanagement

Systems for stdintellectual work

Designspecifications,knowledge mgt.

Models,Simulations,

Models, graphics,blue-prints

Technicalmanagers andemployees

Basic office worksystems

Documents,schedules

Document mgt.,Computing,communication

Documents,schedules, mail

Office employees

Operations levelsystems

Transactions,operations, events

Sorting, filtering,listing, merging,updating

Detailed reports,on-screenmonitoring, lists,summaries

Operation workers(mfg., sales,accounting, etc.)Supervisors

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Evolution of Information Systems

• Information Systems entered the firms in the 60’s– They were first used in accounting and production

control

• In the 80’s and 90’s, they entered all the other functions of the firm (from bottom up)– I.S. can tremendously increase the firm’s productivity

– Information is now considered a “product” with strategic value, whereas a generation ago it was only “red tape”

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An example

• When it was realised that gaining a new client was about 5 times more expensive than keeping an existing one, and that I.S. provided new means to analyze and retain clients, C.R.M. (Client Relationship Management) was born.

• “The most efficient sale action is to treat well your existing clients”

• You have to know them very well, and customize your relationship with them.