2. ďľ Challenge: monthly changes in fashions; Mango has 731 stores in 72
countries
ďľ Solutions. Inventory replenishment system tracks all sales and matches
stores with inventory.
ďľ Design teams meet weekly to adjust to trends.
ďľ Distribution system allocates bar-coded items to specific stores based on
store/product mix.
ďľ Reduces time to market, increases agility
ďľ Increases accuracy of decision making
Management Information Systems
Chapter - Information Systems in the Enterprise
Mango Case: Fast Fashion, Hot Systems
Chapter: Information Systems in the Enterprise
Source: Management Information Systems by Kenneth C. Laudon, Jane P. Laudon
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3. Management Information Systems
Chapter - Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Types of Information Systems
Figure 2-1
Chapter: Information Systems in the Enterprise
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4. Management Information Systems
Chapter - Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Different Kinds of Systems
1. Operational-level systems: support operational managers,
keeping track of the elementary activities and
transactions
2. Management-level systems: serve the monitoring,
controlling, decision-making, and administrative activities
3. Strategic-level systems: help senior management tackle
and address strategic issues
Three main categories of information systems serve
different organizational levels:
Chapter: Information Systems in the Enterprise
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5. Management Information Systems
Chapter - Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Major Types of Systems
⢠Transaction Processing Systems (TPS)
⢠Management Information Systems (MIS)
⢠Decision-Support Systems (DSS)
⢠Executive Support Systems (ESS)
Chapter: Information Systems in the Enterprise
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6. Management Information Systems
Chapter - Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
The Four Major Types of Information Systems
Figure 2-2
Chapter: Information Systems in the Enterprise
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7. Management Information Systems
Chapter - Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Transaction Processing Systems (TPS)
⢠Basic business systems that serve the
operational level
⢠A computerized system that performs and
records the daily routine transactions necessary
to the conduct of the business
Chapter: Information Systems in the Enterprise
Source: Management Information Systems by Kenneth C. Laudon, Jane P. Laudon
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8. Management Information Systems
Chapter - Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
A Symbolic Representation for a Payroll TPS
Figure 2-3
Chapter: Information Systems in the Enterprise
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9. Management Information Systems
Chapter - Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Typical Applications of TPS
Figure 2-4
Chapter: Information Systems in the Enterprise
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10. Management Information Systems
Chapter - Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Management Information Systems (MIS)
Management level
⢠Inputs: High volume transaction level data
⢠Processing: Simple models
⢠Outputs: Summary reports
⢠Users: Middle managers
Example: Annual budgetingChapter: Information Systems in the Enterprise
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11. Management Information Systems
Chapter - Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Management Information Systems (MIS) (continued)
Figure 2-5
Chapter: Information Systems in the Enterprise
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12. Management Information Systems
Chapter - Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Management Information Systems (MIS) (continued)
Figure 2-6
A sample MIS report
Chapter: Information Systems in the Enterprise
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13. Management Information Systems
Chapter - Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Decision-Support Systems (DSS)
Management level
⢠Inputs: Transaction level data
⢠Processing: Interactive
⢠Outputs: Decision analysis
⢠Users: Professionals, staff
Example: Contract cost analysis
Chapter: Information Systems in the Enterprise
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14. Management Information Systems
Chapter - Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Decision-Support Systems (DSS) (Continued)
Voyage-estimating decision-support system
Figure 2-7
Chapter: Information Systems in the Enterprise
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15. Management Information Systems
Chapter - Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
EXECUTIVE SUPPORT SYSTEMS (ESS):
⢠Inputs: Aggregate data
⢠Processing: Interactive
⢠Outputs: Projections
⢠Users: Senior managers
Example: 5 year operating planChapter: Information Systems in the Enterprise
Source: Management Information Systems by Kenneth C. Laudon, Jane P. Laudon
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16. Management Information Systems
Chapter - Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Model of a Typical Executive Support System
Figure 2-8
Chapter: Information Systems in the Enterprise
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17. Management Information Systems
Chapter - Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
EXECUTIVE SUPPORT SYSTEMS (ESS) (Continued)
⢠Top Level Management
⢠Designed to the individual senior manager
⢠Ties CEO to all levels
⢠Very expensive to keep up
⢠Extensive support staffChapter: Information Systems in the Enterprise
Source: Management Information Systems by Kenneth C. Laudon, Jane P. Laudon
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18. Management Information Systems
Chapter - Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Relationship of Systems to One Another
Interrelationships among systems
Figure 2-9
Chapter: Information Systems in the Enterprise
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19. Management Information Systems
Chapter - Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Relationship of Systems to One Another
In contemporary digital firms, the different types of
systems are closely linked to one another. This is
the ideal. In traditional firms these systems tend to
be isolated from one another, and information does
not flow seamlessly from one end of the organization
to the other. Efficiency and business value tend to
suffer greatly in these traditional firms
Chapter: Information Systems in the Enterprise
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20. Management Information Systems
Chapter - Information Systems in the Enterprise
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
Sales and Marketing Systems
Major functions of systems:
⢠Sales management, market research, promotion,
pricing, new products
Major application systems:
⢠Sales order info system, market research system,
pricing system
Chapter: Information Systems in the Enterprise
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21. Management Information Systems
Chapter - Information Systems in the Enterprise
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
Sales and Marketing Systems
SYSTEM DESCRIPTION ORGANIZATIONAL
LEVEL
Order
processing
Enter, process, and track orders Operational
Pricing analysis Determine prices for products and
services
Management
Sales trend
forecasting
Prepare 5-year sales forecasts Strategic
Table 2-2
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22. Management Information Systems
Chapter - Information Systems in the Enterprise
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
Manufacturing and Production Systems
Major functions of systems:
⢠Scheduling, purchasing, shipping, receiving,
engineering, operations
Major application systems:
⢠Materials resource planning systems, purchase
order control systems, engineering systems,
quality control systems
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23. Management Information Systems
Chapter - Information Systems in the Enterprise
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
SYSTEM DESCRIPTION ORGANIZATIONAL
LEVEL
Machine
control
Control the actions of machines and
equipment
Operational
Production
planning
Decide when and how many products
should be produced
Management
Facilities
location
Decide where to locate new production
facilities
Strategic
Manufacturing and Production Systems
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24. Management Information Systems
Chapter - Information Systems in the Enterprise
Overview of an Inventory System
Figure 2-10
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
Chapter: Information Systems in the Enterprise
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25. Management Information Systems
Chapter - Information Systems in the Enterprise
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
Financing and Accounting Systems
Major functions of systems:
⢠Budgeting, general ledger, billing, cost accounting
Major application systems:
⢠General ledger, accounts receivable, accounts payable, budgeting,
funds management systems
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26. Management Information Systems
Chapter - Information Systems in the Enterprise
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
Financing & Accounting Systems (Continued)
SYSTEM DESCRIPTION ORGANIZATION-
AL LEVEL
Accounts
receivable
Tracks money owed the firm Operational
Budgeting Prepares short-term budgets Management
Profit
planning
Plans long-term profits Strategic
Table 2-4
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27. Management Information Systems
Chapter - Information Systems in the Enterprise
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
Human Resource Systems
Major functions of systems:
⢠Personnel records, benefits, compensation, labor relations,
training
Major application systems:
⢠Payroll, employee records, benefit systems, career path systems,
personnel training systems
Chapter: Information Systems in the Enterprise
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28. Management Information Systems
Chapter - Information Systems in the Enterprise
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
Human Resource Systems (Continued)
SYSTEM DESCRIPTION ORGANIZATIONAL
LEVEL
Training and
development
Tracks employee training, skills,
and performance appraisals
Operational
Compensation
analysis
Monitors the range and distribution
of employee wages, salaries, and
benefits
Management
Human resources
planning
Plans the long-term labor force
needs of the organization
Strategic
Table 2-5
Chapter: Information Systems in the Enterprise
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29. Management Information Systems
Chapter - Information Systems in the Enterprise
Human Resource Systems (Continued) An Employee Recordkeeping System
Figure 2-11
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
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30. Management Information Systems
Chapter - Information Systems in the Enterprise
Business Processes and Information Systems
Business processes:
⢠Manner in which work is organized, coordinated, and focused to
produce a valuable product or service
⢠Concrete work flows of material, information, and knowledgeâsets
of activities
⢠Unique ways to coordinate work, information, and knowledge
⢠Ways in which management chooses to coordinate work
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
Introduction to Enterprise Applications
Chapter: Information Systems in the Enterprise
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31. Management Information Systems
Chapter - Information Systems in the Enterprise
Business Processes and Information Systems
(Continued)
⢠Information systems help organizations achieve great
efficiencies by automating parts of processes
⢠IS also contributes to completely rethinking processes.
⢠Business processes typically span several different functional
areas.
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
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32. Management Information Systems
Chapter - Information Systems in the Enterprise
Examples of Business Processes
Manufacturing and production:
⢠Assembling product, checking quality, producing
bills of materials
Sales and marketing:
⢠Identifying customers, creating customer
awareness, selling
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
Introduction to Enterprise Applications
Table 2.6
Chapter: Information Systems in the Enterprise
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33. Management Information Systems
Chapter - Information Systems in the Enterprise
Finance & accounting:
⢠Paying creditors, creating financial statements, managing cash
accounts
Human resources:
⢠Hiring employees, evaluating performance, enrolling employees in
benefits plans
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
Introduction to Enterprise Applications
Examples of Business Processes (Continued)
Table 2.6 continuedChapter: Information Systems in the Enterprise
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34. Management Information Systems
Chapter - Information Systems in the Enterprise
Business Processes and Information Systems
Cross-Functional Business Processes:
⢠Transcend boundary between sales, marketing, manufacturing, and
research and development
⢠Group employees from different functional specialties to a
complete piece of work
Example: Order Fulfillment Process
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Chapter: Information Systems in the Enterprise
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35. Management Information Systems
Chapter - Information Systems in the Enterprise
The Order Fulfillment Process
Figure 2-12
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
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Chapter: Information Systems in the Enterprise
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36. Management Information Systems
Chapter - Information Systems in the Enterprise
Systems for Enterprise-Wide Process Integration
Enterprise applications:
⢠Designed to support organization-wide process coordination and
integration
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
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Chapter: Information Systems in the Enterprise
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37. Consist of :
⢠Enterprise systems
⢠Supply chain management systems
⢠Customer relationship management systems
⢠Knowledge management systems
Management Information Systems
Chapter - Information Systems in the Enterprise
Systems for Enterprise-Wide Process Integration
(Continued)
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
Introduction to Enterprise Applications
Chapter: Information Systems in the Enterprise
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38. Management Information Systems
Chapter - Information Systems in the Enterprise
Enterprise Systems
⢠Enterprise systems, also known as enterprise resource planning
(ERP) systems, provide a single information system for
organization-wide coordination and integration of key business
processes.
⢠Information that was previously fragmented in different systems
can seamlessly flow throughout the firm so that it can be shared by
business processes in manufacturing, accounting, human
resources, and other areas.
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
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Chapter: Information Systems in the Enterprise
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39. Management Information Systems
Chapter - Information Systems in the Enterprise
Enterprise Application Architecture
Figure 2-13
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
Introduction to Enterprise Applications
Chapter: Information Systems in the Enterprise
Source: Management Information Systems by Kenneth C. Laudon, Jane P. Laudon
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40. Management Information Systems
Chapter - Information Systems in the Enterprise
Traditional âSiloâ View of Information Systems
Within the business:
⢠There are functions, each having its uses of information systems
Outside the organizationâs boundaries:
⢠There are customers and vendors
Functions tend to work in isolation
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
Introduction to Enterprise Applications
Chapter: Information Systems in the Enterprise
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41. Management Information Systems
Chapter - Information Systems in the Enterprise
Traditional View of Systems
Figure 2-14
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
Introduction to Enterprise Applications
Chapter: Information Systems in the Enterprise
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42. Management Information Systems
Chapter - Information Systems in the Enterprise
Enterprise Systems
Figure 2-15
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
Introduction to Enterprise Applications
Chapter: Information Systems in the Enterprise
Source: Management Information Systems by Kenneth C. Laudon, Jane P. Laudon
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43. Management Information Systems
Chapter - Information Systems in the Enterprise
Benefits of Enterprise Systems
⢠Help to unify the firmâs structure and organization: One
organization
⢠Management: Firm wide knowledge-based management processes
⢠Technology: Unified platform
⢠Business: More efficient operations & customer-driven business
processes
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Chapter: Information Systems in the Enterprise
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44. Management Information Systems
Chapter - Information Systems in the Enterprise
Challenges of Enterprise Systems
⢠Difficult to build: Require fundamental changes in the way the
business operates
⢠Technology: Require complex pieces of software and large
investments of time, money, and expertise
⢠Centralized organizational coordination and decision making: Not
the best way for the firms to operate
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Chapter: Information Systems in the Enterprise
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45. Management Information Systems
Chapter - Information Systems in the Enterprise
Supply Chain Management (SCM)
⢠Close linkage and coordination of activities involved in buying,
making, and moving a product
⢠Integrates supplier, manufacturer, distributor, and customer
logistics time
⢠Reduces time, redundant effort, and inventory costs
⢠Network of organizations and business processes
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
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Chapter: Information Systems in the Enterprise
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46. Management Information Systems
Chapter - Information Systems in the Enterprise
⢠Helps in procurement of materials, transformation of raw
materials into intermediate and finished products
⢠Helps in distribution of the finished products to customers
⢠Includes reverse logistics - returned items flow in the reverse
direction from the buyer back to the seller
Supply Chain Management (SCM)
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
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Chapter: Information Systems in the Enterprise
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47. Management Information Systems
Chapter - Information Systems in the Enterprise
Haworthâs Supply Chain Management Systems
Figure 2-16
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
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Chapter: Information Systems in the Enterprise
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48. Management Information Systems
Chapter - Information Systems in the Enterprise
Information from Supply Chain Management
Systems helps firms:
⢠Decide when and what to produce, store, and move
⢠Rapidly communicate orders
⢠Track the status of orders
⢠Check inventory availability and monitor inventory levels
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
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Chapter: Information Systems in the Enterprise
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49. Management Information Systems
Chapter - Information Systems in the Enterprise
Information from Supply Chain Management
Systems helps firms: (Continued)
⢠Reduce inventory, transportation, and warehousing costs
⢠Track shipments
⢠Plan production based on actual customer demand
⢠Rapidly communicate changes in product design
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
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Chapter: Information Systems in the Enterprise
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50. Management Information Systems
Chapter - Information Systems in the Enterprise
Customer Relationship Management (CRM)
⢠Manages all ways used by firms to deal with existing and potential
new customers
⢠Business and technology discipline
⢠Uses information system to coordinate entire business processes of
a firm
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Chapter: Information Systems in the Enterprise
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51. Management Information Systems
Chapter - Information Systems in the Enterprise
Customer Relationship Management (CRM)
(Continued)
⢠Provides end- to- end customer care
⢠Provides a unified view of customer across the company
⢠Consolidates customer data from multiple sources and provides
analytical tools for answering questions
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52. Management Information Systems
Chapter - Information Systems in the Enterprise
Customer Relationship Management (CRM)
Figure 2-17
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
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Chapter: Information Systems in the Enterprise
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53. Management Information Systems
Chapter - Information Systems in the Enterprise
Knowledge Management Systems
⢠Collects relevant knowledge and make it available wherever and
whenever it is needed
⢠Support business processes and management decisions
⢠Also link the firm to external sources of knowledge
⢠Support processes for acquiring, storing, distributing, and applying
knowledge
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54. Management Information Systems
Chapter - Information Systems in the Enterprise
⢠There are extraordinary opportunities to use information systems
to achieve business value, and increase profitability
MANAGEMENT OPPORTUNITIES, CHALLENGES, AND
SOLUTIONS
Management Opportunities:
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55. Management Information Systems
Chapter - Information Systems in the Enterprise
⢠Integration and the whole firm view: Given the different interests
and perspectives within a firm, it is difficult to achieve consensus
about the need for the "whole firm" viewpoint.
⢠Management and employee training: Training a large number of
employees on many systems in a large organization involves
commensurately large investments.
MANAGEMENT OPPORTUNITIES, CHALLENGES, AND
SOLUTIONS
Management Challenges:
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56. Management Information Systems
Chapter - Information Systems in the Enterprise
⢠Accounting for the cost of systems and managing demands for
systems: Given the large number of different types of systems in a
firm, and the large number of people involved with using them, it
is a complex task to understand which systems are truly necessary
and productive with high returns on investment
MANAGEMENT OPPORTUNITIES, CHALLENGES, AND
SOLUTIONS
Management Challenges: (Continued)
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57. Management Information Systems
Chapter - Information Systems in the Enterprise
MANAGEMENT OPPORTUNITIES, CHALLENGES, AND
SOLUTIONS
Solution Guidelines:
⢠Inventory the firmâs information systems: Develop
a list of firm-wide information requirements to give
a 360-degree view of the most important
information needs of the firm.
⢠Employee and management education: Ensure that
you understand how much training is required.
⢠Account for the costs and benefits: Develop an
accounting system for information services firm-
wide.
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