This document discusses key concepts in information systems, including transaction processing systems (TPS), management information systems (MIS), and how information systems support various business functions like accounting, sales, production, and human resources. It also covers integrating functional systems, interorganizational systems, and issues in designing global information systems.

1. Introduction to Information Systems
BY SUJITH B R
.
Functional, Enterprise, and Interorganizational Syste

2.  The role and function of Management Information
Systems (MIS) and Transaction Processing Systems
(TPS) in organizations
 How functional information systems support
Accounting & Finance; Sales and Marketing;
Production and Operations; and Human Resource
Management
 How and why information systems should be
integrated
 The role of interorganizational systems

3. Functional Information Systems
 Comprised of several small information system focused
on specific activities
 Specific IS applications can be
 completely independent, or
 integrated to form a departmental functional system
 also, can be integrated to support a broad business process
(cross-departmental)
 Interface with each other to form the organization
wide information system
 Interface with the environment

4. Functional Information Systems (continued)
 Management Information Systems
 Provide routine information to managers in
the functional areas
Business
Transactions
TPS
Management
Information
System
Data Warehouse
Databases
Internal
External
Reports
Scheduled
Demand
Exception

5. Transaction Processing Systems
Every business event that occurs during
business operations is called a transaction
Business events (transactions) can trigger other
business events
Each event (transaction) can be described by
a number of data items
Transaction processing systems (TPS) are
designed to record and store the data that
describes every business event that occurs

6. Transaction Processing Systems (continued)
 TPSs were the first to be automated – repetitive,
consistent, high-volume tasks are ideal candidates for
computerization
 TPSs provide foundation for all other information systems
 Many TPSs are outward-reaching and convey impressions
to the customers about the quality of the business
Customer
makes a
purchase
POS
system
Transaction file
Update
files
Inventory file
Sales file

7. Transaction Processing System (continued)
 Some characteristics of TPSs
 Process large volume of data
 Data sources mostly internal, and output intended mainly for
internal use
 TPS operate regularly (on demand, daily, weekly, etc.)
 Require large storage (database) capacity
 Require high processing speed (due to the high volume)
 Input and output data known and well-understood (highly
structured)
 Requires high processing reliability; organizations cannot function
for long without TPSs

8. Methods of Processing Transactions
Batch Processing: simple, inexpensive
Employee
timecards
Data entry
of timecard
data
Payroll transactions
Process
payroll
Employee data:
Pay rate
Withholdings
Etc.
Employee
paychecks
Cash on hand Payroll summary

9. Methods of Processing Transactions
Online Processing: complex, expensive
Customer
makes a
purchase
POS
system
Transaction history file
Inventory file
Sales file

10. Methods of Processing Transactions
Hybrid Processing: simple, inexpensive, more accurate
Badge reader
collects employee
work data
Payroll transactions
Whenever employees
arrive / leave work
Process
payroll
Employee data:
Pay rate
Withholdings
Etc.
Employee
paychecks
Cash on hand Payroll summary
Normal payroll
schedule:
weekly, monthly,
etc.

11. Typical TPS Tasks
 Order processing
 Ledger entries
 Payments and receipts
 Inventory management, shipping, and receiving
 Payroll
 Periodic reports and statements

12. Accounting and Finance Systems
Financial Planning and Budgeting
Financial and economic forecasting
Budgeting
Investment Management
Access to financial and economic reports
Financial analysis

13. Financial Controls
Budgetary Controls
Auditing
Financial Health Analysis
Profitability Analysis and Cost Control
Accounting and Finance Systems

14. Marketing & Sales Systems
 Distribution Channel (definition)
 providing the goods or services to the customer; may extend
through various intermediaries such as wholesalers and retailers
Other Channel Systems
 support all marketing linkages, such as after-sales customer
support
Manufacturing
Distribution
R&D/Design
Accounting/Finance
Company
Dealer Systems
Delivery Systems
Customer Support
SystemsSales Systems
Target Marketing
Systems
Market Intelligence
Systems
Channel
Systems

15. Marketing & Sales Systems (continued)
 Customer Service
customer profiles and preference analysis
mass customization – high volume production of
specialized product
targeted advertising
customer inquiry systems and automated Help Desk
 Telemarketing
advertisement and reaching customers
order processing
customer service
sales support
account management

16. Marketing & Sales Systems (continued)
 Distribution Channels
Delivery and shipping management
Improve retail stores
 Marketing Management
Set and monitor prices of products or services
Monitor and evaluate salesperson productivity
Evaluate profitability of products / customers
Assess sales trends
Analyze new products, services, and markets

17. Marketing & Sales Systems (continued)
 Ethical and Social Issues in IT-supported Sales
Activities
Information collection and usage
Privacy concerns
 Current trend – Customer Relationship
Management (CRM)
Focus is on developing a one-to-one relationship with
customers

18. Production & Operations Management
Systems
Logistics and Material Management
Logistics Management
• Ordering, purchasing, and inbound and outbound
shipping
Inventory Management
• Determine how much inventory to carry
Quality Control
• Monitor and report quality of materials, work in
process, and finished goods

19. Planning Production/Operations
Material Requirements Planning; MRP II
Just-In-Time
Project Management (PERT & CPM)
Short-term scheduling
Automatic Design Work and Manufacturing
Computer Aided Design (CAD)
Computer Aided Manufacturing (CAM)
Computer Integrated Manufacturing (CIM)
Production & Operations Management
Systems (continued)

20. Human Resources Management Systems
 Recruitment
Keep track of vacancies
Advertise positions via Internet
Employee selection
 Human Resources Maintenance and Development
Training and retraining employees
Performance assessment
Turnover, tardiness, and absenteeism analysis

21. Human Resources Management Systems
Human Resources Management and
Planning
Maintain personnel files and skills inventory
Administer benefits
Comply with government reporting
Personnel planning
Succession planning
Labor negotiations

22. Integrated Information Systems
Reasons for Integration
Existing, functionally oriented information
systems are deficient:
• cannot give employees all the information they
need
• do not let different departments communicate
effectively
• crucial sales, inventory, and production data often
entered manually into separate computer systems

23. Integrated Information Systems
How to Integrate Information Systems
Connect existing systems
• maximize the use of existing systems and allows the
addition of new applications
Using supply chain management software
• Overcomes the isolation of traditional departmental
structure by integrating processing across several
functional areas
Use Enterprise Resource Planning software
• control all major business processes with a single
software architecture in real time
• increased efficiency to improve quality, productivity,
and profitability

24. Interorganizational Information Systems
(IOS)
 Electronic systems involving information flow
among two or more organizations in an on-going
relationship
 Objective – efficient transaction processing
 Many large businesses require suppliers to be
linked to them though IOS applications
 IOSs may be implemented with
Private, third-party networks (value-added networks)
Publicly accessible networks (Internet)

25. Interorganizational Systems (continued)
 Types of Interorganizational Systems
 Global systems
 Electronic data interchange (EDI)
 Electronic funds transfer (EFT)
 Extranets
 Shared databases
 Integrated messaging

26. Issues in IOS / Global IS Design
 Cultural differences
 Economic and political differences
 Cross-border data transfer concerns

27. Summary
 Role and function of TPSs
 Role and function of MISs
 In-depth review of how Iss support various
business functional areas
 Need and methods for integrating functional
information systems
 Interorganizational and global information
systems provide great opportunities but also
great complexity