information sytem

8/2/2019 Information Sytem

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Chapter 2: Information Systems inthe Enterprise


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An Information System is an organized combination of people,

hardware, software, communication networks and the data resources thatcollects, transforms and disseminates information in a organization.

Computer-based Information System


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INFORMATION

TECHNOLOGY

Hardware

Software

Databases

Networks

Other related

components

are used to build

INFORMATIONSYSTEMS

Payroll

System

Inventory

System

Marketing

System

Customer

Service

System

IS Vs IT


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Expanding Roles of IS1. Data Processing: 1950s-1960s

2. Management Reporting: 1960s-1970s

3. Decision support: 1970s-1980s

4. Strategic and End User Support: 1980s-1990s

5. Global Internetworking: 1990s-2000s


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KINDS OF INFORMATION SYSTEMS

Organizational Hierarchy

Organizational Levels

Information Systems


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Classification of IS

Information Systems

Operations

Support System ManagementSupport System

Transaction

processing

systems

Process control

systems

Office

automation

systems

Management

information

systems

Decision

support

systems

Executive

information

systems


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KINDS OF INFORMATION SYSTEMS

SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN

KIND OF SYSTEM GROUPS SERVED

STRATEGIC LEVEL SENIOR MANAGERS

MANAGEMENT LEVEL MIDDLE MANAGERS

OPERATIONAL OPERATIONALLEVEL MANAGERS

KNOWLEDGE LEVEL KNOWLEDGE &DATA WORKERS

RESOURCESMARKETING & ENGINEERING


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Four General Kinds of IS Operational-level systems

support operational managers by monitoring

the day-to-days elementary activities andtransactions of the organization. e.g. TPS. Knowledge-level systems

support knowledge and data workers in

designing products, distributing information, andcoping with paperwork in an organization. e.g.KWS, OAS

Management-level systems support the monitoring, controlling, decision-

making, and administrative activities ofmiddlemanagers. e.g. MIS, DSS

Strategic-level systems support long-range planning activities ofsenior

management. e.g. ESS


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A Framework for IS(with respect to support provided)

Executive Support Systems (ESS)

Management Information Systems (MIS) Decision Support Systems (DSS)

Knowledge Work Systems (KWS)

Office Automation Systems (OAS) Transaction Processing Systems (TPS)


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Transaction Processing Systems (TPS)

Computerized system that performs and recordsthe daily routine transactions necessary toconduct the business; these systems serve theoperational level of the organization

TYPE: Operational-level INPUTS: transactions, events PROCESSING: updating

OUTPUTS: detailed reports USERS: operations personnel, supervisors DECISION-MAKING: highly structured

EXAMPLE: payroll, accounts payable


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A Symbolic Representation for a payrollTPS

Payrol l SystemManagement

Reports

On-line

queries

Payroll

master

file

Employee data (various departments) To general ledger: wages and salaries

Government documents

Employee checks


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Typical Applications of TPS

TYPE OF TPS SYSTEM

Sales/ Manufacturing! Finance/ Human Other typesmarketing production accounting resources (e.g., university)

systems systems systems systems

Major functions Sales management Scheduling Budgeting Personnel recard Admissions

of system Market research Purchasing General ledger Benefits Grade records

Promotion Shipping/receiving Billing Cornpensation Course records

Pricing Engineering Cost accounting Labor relations Alumni

New products Operations Training

Major Sales order Materials resource General ledger Payroll Registration system

application information system planning systems

systems Market research Purchase order Accounts Employee records Student transcript

system control systems receivable/payable systemPricing system Engineering Budgeting Benefit systems Curriculum class

systems control systems

Quality control Funds managemenCareer path Alumni benefactor

systems systems systems system


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Office Automation Systems (OAS)

Computer system, such as word processing,electronic mail system, and scheduling system,that is designed to increase the productivity ofdata workers in the office.

TYPE: Knowledge-level INPUTS: documents, schedules PROCESSING: document management,

scheduling, communication OUTPUTS: documents; schedules USERS: clerical workers

EXAMPLE: document imaging system


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Knowledge Work Systems (KWS)

Information system that aids knowledge workers inthe creation and integration of new knowledge inthe organization.

TYPE: Knowledge-level INPUTS: design specifications PROCESSING: modelling OUTPUTS: designs, graphics USERS: technical staff; professionals

EXAMPLE: Engineering workstations


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Decision Support Systems (DSS)

Information system at the management level of anorganization that combines data and sophisticatedanalytical models or data analysis tools to supportsemi-structured and unstructured decision making.

TYPE: Management-level INPUTS: low volume data PROCESSING: simulations, analysis

OUTPUTS: decision analysis USERS: professionals, staff managers DECISION-MAKING: semi-structured

EXAMPLE: sales region analysis


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Characteristics of Decision-Support

Systems

1. DSS offer users flexibility, adaptability, and a

quick response.

2. DSS operate with little or no assistance fromprofessional programmers.

3. DSS provide support for decisions and problems

whose solutions cannot be specified in advance.

4. DSS use sophisticated data analysis and

modelling tools.

M t I f ti S t


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Management Information Systems(MIS)

Information system at the management level of anorganization that serves the functions of planning,controlling, and decision making by providing routinesummary and exception reports.

TYPE: Management-level INPUTS: high volume data PROCESSING: simple models OUTPUTS: summary reports USERS: middle managers DECISION-MAKING: structured to semi-structured

EXAMPLE: annual budgeting

Ch t i ti f M t i f ti


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Characteristics of Management informationSystems1. MIS support structured decisions at the

operational and management control levels.

However, they are also useful for planningpurposes of senior management staff.

2. MIS are generally reporting and control oriented.They are designed to report on existing operations

and therefore to help provide day-to-day control ofoperations.

3. MIS rely an existing corporate data-and data flows.

4. MIS have little analytical capability.

5. MIS generally aid in decision making using pastand present data.

6. MIS are relatively inflexible.

7. MIS have an internal rather than an external


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Executive Support Systems (ESS)

Information system at the strategic level of anorganization that address unstructured decisionmaking through advanced graphics andcommunications.

TYPE: Strategic level INPUTS: aggregate data; internal and external PROCESSING: interactive OUTPUTS: projections USERS: senior managers DECISION-MAKING: highly unstructured

EXAMPLE: 5 year operating plan


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Model of a Typical Executive SupportSystem

Internal Data

TPS/MIS Data

Financial DataOffice Systems

Modeling/

analysis

External Data

Dow Jones

Gallup Pol lStandard &

Poor's

ESS

workstationESS

workstation

ESSworkstation

Menus

Graphics

Communications

Local processing

Menus

Graphics

Communications

Local processing

Menus

Graphics

Communicatio

Local processin


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Major Types of Information Systems

Strategic Leve l Syste ms

5-year

sales trendforecasting

5-year

operatingplan

5-year

budgetforecasting

Profit

planning

Manpower

planning

Management-Level SystemsSales

management

Sales region

analysis

InventoryControl

Production

Sche duling

Annualbudgeting

Cost

analysis

Capital

Investment analysis

Pricing/profitability

analysis

Relocationanalysis

Contract cost

analysis

Knowledge-Level Systems

Enginee ringworkstations

Wordprocessing

Graphicsworkstations

DocumentImaging

Managerialworkstations

ElectronicCalendars

Operational Le ve l Systems

Order Tracking

Order proce ss ing

Machine control

Plant sche duling

Material move mentcontrol

Securitiestrading

Cashmanagement

Payroll

Accounts payable

Accounts rece ivable

Compensation

Training & development

Employee record ke eping

TYPES OF SYSTEMS

ESS

MIS

DSS

KWS

OAS

TPS

Sales andmarketing

M anufacturing Finance Accounting HumanResources


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Classification of ISby Organizational Structure

Departmental Information Systems

Enterprise Information System

Inter-organizational Systems

NYCE

SABRE or APOLLO


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Classification of ISby Functional Area

The accounting information system

The finance information system

The manufacturing (operations, production)information system

The marketing information system

The human resources information system


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Sales & Marketing Systems

Systems that help the firm identify customers

for the firms products or services, developproducts and services to meet customersneeds, promote products and services, sellthe products and services, and provide

ongoing customer support.EXAMPLES

System Description Organizational Level

Order processing Enter, process, and track orders Operational

Market analysis Identify customers and markets using Knowledge

data on demographics, markets,consumer behavior, and trends

Pricing analysis Determine prices for products Management

and services


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Manufacturing and Production Systems

Systems that deal with the planning,

development, and production ofproducts and services and withcontrolling the flow of production.

Examples


Machine control Control the actions of machines Operational

and equipment

Computer-aided design (CAD) Design new products using Knowledge

the computer

Production planning Decide when and how many Managementproducts should be produced

Facilities location Decide where to locate new Strategic

production facilities

d S


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Finance and Accounting Systems

Systems that keep track of the firmsfinancial assets and fund flows.

Examples


Accounts receivable Track money owed the firm Operational

Portfolio analysis Design the firm's portfolio of investments Knowledge

Budgeting Prepare short-term budgets Management

Profit planning Plan long-term profits Strategic

H R S


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Human Resources Systems

Systems that maintain employee

records; Track employee skills, jobperformance, and training; And supportplanning for employee compensationand career development.

Examples


Training and development Track employae training, skills, Operational

and performance appraisals

Career pathing Design career paths for employees Knowledge

Compensation analysis Monitor the range and distribution Management

ofemployee wages, salaries, and bene6csHuman resources planning Plan the long-term labor force needs Strategic

of the organization

E l f B i P


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Examples of Business Processes

Functional Area Business ProcessManufacturing and production Assembling the product

Checking for quality

Producing bills of materials

Sales and marketing Identifying customers

Making customers aware of the product

Selling the product

Finance and accounting paying creditors

Creating financial statements

Managing cash accounts

Human resources Hiring employees

Evaluating employees' job performance

Enrolling employees in benefits plans


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The Order Fulfillment Process (F 2.12)

Sales

Accounting

Manufacturing

& P roduction

Generate

Order

Submit

Order

Check

Credit

Approve

Credit

Generate

Invoice

Assemble

Product

Ship

Product


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Customer Relationship Management

Customer relationship managementBusiness and technology discipline to

coordinate alt of the business processesfor dealing with customers.Sales

Telephone sales

Web sales

Field sales

Retail sales

Marketing

Campaign data

Content

Data analysis

Customer Service

Call center data

Web self service data

Field service data

Wireless data

Unified view of customers

Consistent message to customersEnd-to-end customer care

Long-term customer relationships

Identification of best customers

C t R l ti hi M t


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Customer Relationship Management

Supply chain management Integration of

supplier, distributor, and customer logisticsrequirements into one cohesive process.

Supply chain Network of facilities for

procuring materials, transforming rawmaterials into finished products,' anddistributing finished produce to customers.

Supplier Manufacturer DistributorRetail

OutletCustomer

Capacity, inventory level, delivery schedule, payment terms

Orders, return requests, repair and service requests, payments


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HOW INFORMATION SYSTEMS CANFACILITATE SUPPLY CHAIN

MANAGEMENTInformation systems can help participants inthe supply chain:

Decide when and what to produce, store, andmove

Rapidly communicate orders Track the status oforders

Check inventory availability and monitorinventory levels

Track shipments

Plan production based on actual customer demand

Rapidly communicate changes in product design


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Enterprise Systems

Firm wide information systems thatintegrate key business processes so

that information can flow freelybetween different parts of the firm.

T diti l Vi f S t (F 2 15)


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Traditional View of Systems (F. 2.15)

Manufacturing Accounting FinanceMarketing and

Sales

Human

Resources

Manufacturing

Systems

Accounting

Systems

Finance

Systems

Marketing and

Sales Systems

Human

Resources

Systems

Business

Processes

Business

Processes

Business

Processes

Business

Processes

Business

Processes

Business Functions

Information Systems

Organ

izational

Boundaries

Organ

izational

Boundaries

Vendors Customers

E t i S t (F 2 16)


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Enterprise Systems (F. 2.16)

Business Process

Business Process

Business Process

Enterprise-wide business

processes

Manufacturing Accounting

Human

ResourcesSales and

Marketing

Finance

Enterprise System

Vendors Customers

Organizational

Boundaries

Organizational

Boundaries


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Benefits and Challenges ofEnterprise Systems

Benefits Firm structure and organization: One Organization

Management: Firm wide Knowledge-basedManagement Processes

Technology: Unified Platform Business: More Efficient Operations and Customer-

driven Business Processes

Challenges

Daunting Implementation High Up-front Costs and Future Benefits

Inflexibility


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Extended Enterprises

Extended Enterprises: Networks linkingsystems of multiple firms in an industry. Alsocalled extended enterprises.

Vertical industrial networks Networks forintegrating the operations of a firm with itssuppliers.

Horizontal industrial networks Networksfor linking firms across an entire industry.

Industrial Networks (F 2 17)


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Industrial Networks (F. 2.17)

Firm

1

Firm

4

Firm

3

Firm

2

Firm

1

Supplie

r

1

Supplie

r

3

Supplie

r

2

Industrial Networks

Horizontal industrial network

Vertical industrial network

Firm value chains and enterprise systems

Firms

in a single

industry

Firms in

complementary

business

Industry

value

chain

information sytem

Documents