Lecture4

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Lecture4

  1. 1. Information Systems in theEnterprise 1
  2. 2. KINDS OF INFORMATION SYSTEMS Organizational Hierarchy Organizational Levels Information Systems 2
  3. 3. KINDS OF INFORMATION SYSTEMS KIND OF SYSTEM GROUPS SERVED STRATEGIC LEVEL SENIOR MANAGERS MANAGEMENT LEVEL MIDDLE MANAGERS KNOWLEDGE LEVEL KNOWLEDGE & DATA WORKERSOPERATIONAL OPERATIONALLEVEL MANAGERS SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN MARKETING & ENGINEERING RESOURCES 3
  4. 4. Four General Kinds of IS Operational-level systems  support operational managers by monitoring the day-to-day’s elementary activities and transactions of the organization. e.g. TPS. Knowledge-level systems  support knowledge and data workers in designing products, distributing information, and coping with paperwork in an organization. e.g. KWS, OAS Management-level systems  support the monitoring, controlling, decision-making, and administrative activities of middle managers. e.g. MIS, DSS Strategic-level systems  support long-range planning activities of senior management. e.g. ESS 4
  5. 5. 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) 5
  6. 6. Transaction Processing Systems (TPS) Computerized system that performs and records the daily routine transactions necessary to conduct the business; these systems serve the operational level of the organization• TYPE: Operational-level• INPUTS: transactions, events• PROCESSING: updating• OUTPUTS: detailed reports• USERS: operations personnel, supervisors• DECISION-MAKING: highly structuredEXAMPLE: payroll, accounts payable 6
  7. 7. A Symbolic Representation for a payroll TPSE m p lo y e e d a ta (v a r io u s d e p a r tm e n ts ) T o g e n e r a l le d g e r : w a g e s a n d s a la r ie s M anagem ent P ayr o ll S yste m R e po rts G o v e rn m e n t do cu m e n ts P ayro ll m aste r E m p lo y e e c h e c k s fi l e O n -lin e q u e r ie s 7
  8. 8. Typical Applications of TPS TYPE OF TPS SYSTEM Sales/ Manufacturing! Finance/ Human Other types marketing production accounting resources (e.g., university) systems systems systems systemsMajor functions Sales management Scheduling Budgeting Personnel recard Admissionsof 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 TrainingMajor Sales order Materials resource General ledger Payroll Registration systemapplication information system planning systemssystems Market research Purchase order Accounts Employee records Student transcript system control systems receivable/payable system Pricing system Engineering Budgeting Benefit systems Curriculum class systems control systems Quality control Funds managementCareer path Alumni benefactor systems systems systems system 8
  9. 9. Office Automation Systems (OAS) Computer system, such as word processing, electronicmail system, and scheduling system, that is designed toincrease the productivity of data workers in the office.• TYPE: Knowledge-level• INPUTS: documents, schedules• PROCESSING: document management,scheduling, communication• OUTPUTS: documents; schedules• USERS: clerical workersEXAMPLE: document imaging system 9
  10. 10. Knowledge Work Systems (KWS) Information system that aids knowledge workers in thecreation and integration of new knowledge in theorganization.•TYPE: Knowledge-level• INPUTS: design specifications• PROCESSING: modelling• OUTPUTS: designs, graphics• USERS: technical staff; professionalsEXAMPLE: Engineering workstations 10
  11. 11. Decision Support Systems (DSS) Information system at the management level of anorganization that combines data and sophisticatedanalytical models or data analysis tools to support semi-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-structuredEXAMPLE: sales region analysis 11
  12. 12. Characteristics of Decision-Support Systems1. DSS offer users flexibility, adaptability, and aquick response.2. DSS operate with little or no assistance fromprofessional programmers.3. DSS provide support for decisions and problemswhose solutions cannot be specified in advance.4. DSS use sophisticated data analysis andmodelling tools. 12
  13. 13. Management Information Systems (MIS)Information system at the management level of anorganization that serves the functions of planning, controlling,and decision making by providing routine summary andexception reports.• TYPE: Management-level• INPUTS: high volume data• PROCESSING: simple models• OUTPUTS: summary reports• USERS: middle managers• DECISION-MAKING: structured to semi-structuredEXAMPLE: annual budgeting 13
  14. 14. Characteristics of Management Information Systems1. MIS support structured decisions at the operational and management control levels. However, they are also useful for planning purposes 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 of operations.3. MIS rely an existing corporate data-and data flows.4. MIS have little analytical capability.5. MIS generally aid in decision making using past and present data.6. MIS are relatively inflexible.7. MIS have an internal rather than an external orientation. 14
  15. 15. Executive Support Systems (ESS) Information system at the strategic level of an organizationthat address unstructured decision making throughadvanced graphics and communications. TYPE: Strategic level• INPUTS: aggregate data; internal and external• PROCESSING: interactive• OUTPUTS: projections• USERS: senior managers• DECISION-MAKING: highly unstructuredEXAMPLE: 5 year operating plan 15
  16. 16. Model of a Typical Executive Support System ESS w o r k statio n M enus G r a p h ic s C o m m u n ic a tio n s L o c a l p r o c e s s in gESS In te r n a l D a ta E xte r n al D ata ESSw o r k statio n T P S /M IS D a ta D ow Jones w o r k statio n F in an c ial D ata G allup P o ll O ffi c e S y s t e m s S tan d ar d & M o deling / P o o r s M enus analysis M enus G r a p h ic s G r a p h ic s C o m m u n ic a tio n s C o m m u n ic a tio n s L o c a l p r o c e s s in g L o c a l p r o c e s s in g 16
  17. 17. Major Types of Information SystemsT Y P E S O F SY ST E M S S tr a te g ic L e v e l S y s te m s E SS 5 -y e a r 5 -y e a r 5 -y e a r P r o fit M anpo w e r o p e r a tin g budg e t s a le s t r e n d p la n n in g p la n n in g p la n fo r e c a s t in g fo r e c a s t in g M a n a g e m e n t-L e v e l S y s te m s S a le s In v e n to ry A nnual C a p it a l R e lo c a t io n M IS m anag e m e nt C o n tro l b u d g e t in g I n v e s t m e n t a n a ly s is a n a ly s is P r ic in g /p r o fit a b ilit y C o n tra c t c o s t D SS S a le s r e g io n P r o d u c tio n C o st a n a ly s is a n a ly s is a n a ly s is S c h e d u lin g a n a ly s is K n o w le d g e - L e v e l S y s t e m s K W S E n g in e e r in g G r a p h ic s M a n a g e r ia l w o r k s t a t io n s w o r k s t a t io n s w o r k s t a t io n s O A S W o rd D o cum e nt E le c t r o n ic p r o c e s s in g I m a g in g C a le n d a r s O p e r a tio n a l L e v e l S y s te m s M a c h in e c o n tr o l S e c u r it ie s P a y r o ll C o m p e n s a t io n T P S t r a d in g O r d e r T r a c k in g P la n t s c h e d u lin g A c c o u n t s p a y a b le T r a in in g & d e v e lo p m e n t O r d e r p r o c e s s in g M a t e r ia l m o v e m e n t C a s h A c c o u n t s r e c e iv a b le E m p lo y e e r e c o r d k e e p in g c o n tro l m anag e m e nt S a le s a n d M a n u fa c t u r in g F in a n c e A c c o u n t in g H um an m a r k e t in g R e s o u rc e s 17
  18. 18. Relationship between different IS ESS MIS DSS KWS/ TPS OASTPS is a major producer of information for other systems 18
  19. 19. Classification of IS by Organizational Structure Departmental Information Systems Enterprise Information System Inter-organizational Systems  NYCE  SABRE or APOLLO 19
  20. 20. Classification of IS by 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 20
  21. 21. Sales & Marketing Systems  Systems that help the firm identify customers for the firm’s products or services, develop products and services to meet customer’s needs, promote products and services, sell the products and services, and provide ongoing customer support. EXAMPLESSystem Description Organizational LevelOrder processing Enter, process, and track orders OperationalMarket analysis Identify customers and markets using Knowledge data on demographics, markets, consumer behavior, and trendsPricing analysis Determine prices for products Management and services 21
  22. 22. Manufacturing and Production Systems  Systems that deal with the planning, development, and production of products and services and with controlling the flow of production. ExamplesSystem Description Organizational LevelMachine control Control the actions of machines Operational and equipmentComputer-aided design (CAD) Design new products using Knowledge the computerProduction planning Decide when and how many Management products should be producedFacilities location Decide where to locate new Strategic production facilities 22
  23. 23. Finance and Accounting Systems  Systems that keep track of the firm’s financial assets and fund flows. Examples System Description Organizational LevelAccounts receivable Track money owed the firm OperationalPortfolio analysis Design the firms portfolio of investments KnowledgeBudgeting Prepare short-term budgets ManagementProfit planning Plan long-term profits Strategic 23
  24. 24. Human Resources Systems  Systems that maintain employee records; Track employee skills, job performance, and training; And support planning for employee compensation and career development. Examples System Description Organizational LevelTraining and development Track employae training, skills, Operational and performance appraisalsCareer pathing Design career paths for employees KnowledgeCompensation 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 24
  25. 25. Examples of Business ProcessesFunctional Area Business ProcessManufacturing and production Assembling the product Checking for quality Producing bills of materialsSales and marketing Identifying customers Making customers aware of the product Selling the productFinance and accounting paying creditors Creating financial statements Managing cash accountsHuman resources Hiring employees Evaluating employees job performance Enrolling employees in benefits plans 25
  26. 26. The Order Fulfillment Process (F 2.12) G e n e ra te S u b m it S a le s O rd er O rd er A c c o u n t in g C hec k A p p ro v e G e n e ra te C r e d it C r e d it I n v o ic e M a n u f a c t u r in g A s s e m b le S h ip & P r o d u c t io n P ro d u c t P ro d u c t 26
  27. 27. Customer Relationship Management  Customer relationship management Business and technology discipline to coordinate alt of the business S a le s T e le p h o n e s a le s processes for dealing with customers. W e b s a le s F ie ld s a le s R e t a il s a le s U n if ie d v i e w o f c u s t o m e r sM a r k e t in g C a m p a ig n d a t a C o n s is t e n t m e s s a g e t o c u s t o m e r s C o n ten t E n d -to -e n d c u s to m e r c a re D a t a a n a ly sis L o n g - t e r m c u s t o m e r r e la t io n s h ip sC u s t o m e r S e r v ic e I d e n t if ic a t io n o f b e s t c u s t o m e r s C a ll c e n t e r d a t a W e b se lf se r v ic e d a t a F ie ld s e r v ic e d a t a W ir e le s s d a t a 27
  28. 28. Customer Relationship Management Supply chain management Integration of supplier, distributor, and customer logistics requirements into one cohesive process. Supply chain Network of facilities for procuring materials, transforming raw materials into finished products, and distributing finished produce to customers. C a p a c it y , in v e n t o r y le v e l, d e liv e r y s c h e d u le , p a y m e n t t e r m s R e t a il S u p p lie r M a n u fa c tu re r D is t r ib u t o r C u s to m e r O u t le t O r d e r s , r e t u r n r e q u e s t s , r e p a ir a n d s e r v ic e r e q u e s t s , p a y m e n t s 28
  29. 29. HOW INFORMATION SYSTEMS CANFACILITATE SUPPLY CHAINMANAGEMENT Information systems can help participants in the supply chain: Decide when and what to produce, store, and move Rapidly communicate orders Track the status of orders Check inventory availability and monitor inventory levels Track shipments Plan production based on actual customer demand Rapidly communicate changes in product design 29
  30. 30. Enterprise Systems Firm wide information systems that integrate key business processes so that information can flow freely between different parts of the firm. 30
  31. 31. Traditional View of Systems (F. 2.15) B u s in e s s F u n c tio n s M a r k e tin g a n d H um an M a n u fa c tu r in g A c c o u n tin g F in a n c e S a le s R e sou rce s O r g a n iz a t io n a l O r g a n iz a tio n a l B o u n d a r ie s B o u n d a r ie s B u s in e s s B u s in e s s B u s in e s s B u s in e s s B u s in e s s P rocesse s P rocesse s P roce sse s Processes Processes H um an M a n u fa c tu r in g A c c o u n tin g F in a n c e M a r k e tin g a n d R esources S y ste m s S y ste m s S y ste m s S a le s S y s te m s S y s te m sV en dors I n fo r m a tio n S y s te m s C u stom e rs 31
  32. 32. Enterprise Systems (F. 2.16) M a n u fa c tu r in g A c c o u n tin g E n te r p r is e S y s te m B u s in e s s P r o c e s s O r g a n iz a tio n a l O r g a n iz a tio n a l B o u n d a r ie s B o u n d a r ie s B u s in e s s P r o c e s s V e n dors B u s in e s s P r o c e s s C u sto m e rs E n te r p r is e -w id e b u s in e s s proce sse s H um an S a le s a n d F in a n c eR e sou rce s M a r k e tin g 32
  33. 33. Benefits and Challenges ofEnterprise Systems  Benefits  Firm structure and organization: One Organization  Management: Firm wide Knowledge-based Management Processes  Technology: Unified Platform  Business: More Efficient Operations and Customer-driven Business Processes  Challenges  Daunting Implementation  High Up-front Costs and Future Benefits  Inflexibility 33
  34. 34. Extended Enterprises Extended Enterprises: Networks linking systems of multiple firms in an industry. Also called extended enterprises. Vertical industrial networks Networks for integrating the operations of a firm with its suppliers. Horizontal industrial networks Networks for linking firms across an entire industry. 34
  35. 35. Industrial Networks (F. 2.17) H o r iz o n ta l in d u s tr ia l n e tw o r kF ir m s F ir m F ir m F ir m F ir min a s in g le 1 2 3 4in d u s t r y F ir m v a lu e c h a in s a n d e n t e r p r is e s y s t e m s In d u s try v a lu e I n d u s t r ia l N e t w o r k s c h a in F ir m s in F ir m S u p p lie S u p p lie S u p p lie c o m p le m e n t a r y 1 r r r 1 2 3 b u s in e s s V e r t ic a l in d u s t r ia l n e t w o r k 35

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