There are three main categories of information systems that serve different organizational levels: 1. Operational-level systems support operational managers and track basic transactions. 2. Management-level systems serve middle managers and provide reports and historical records to support planning, controlling, and decision making. 3. Strategic-level systems help senior management address long-term strategic issues and trends.

1. Kinds of Information Systems
Different types of Information Systems
1)Categorisation on the basis of Levels
• Operational level systems
• Management-level systems
• Strategic-level systems
2)Categorisation on the basis of Users
• Knowledge Workers
• Data Workers
3) Categorisation on the basis of the characteristics
• Structured Decisions
• Semi-structured Decisions
• Unstructured Decisions

2. The information systems support of people in organizations.
Three main categories of information systems serve different organizational levels:

3. 1. Operational-level systems: support operational managers, keeping track of the elementary activities and
transactions e.g., sales, receipts and cash deposits
- purpose of this system is to answer the routine questions and to track the flow of transactions
- track the no.of hours worked each day by employees on a factory floor
2. Management-level systems: serve the monitoring, controlling, decision-making and administrative
activities of middle managers
e.g- are things working well ?
what –if questions
3. Strategic-level systems: help senior management tackle and address strategic issues and long term trends, e.g:
what will be employment level in five years, what products should we be making
Major Types of Systems
• Transaction Processing Systems (TPS)
• Management Information Systems (MIS)
• Decision-Support Systems (DSS)
• Executive Support Systems (ESS)

4. 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 conduct the
business
• Transactions are events that occur as part of doing business, such as sales, purchases, deposits,
withdrawals, refunds and payments
i,e they record the routine transactions that take place in everyday operations
e.g – check the status of sales order, employee record keeping ,amount of stock in inventory
The Transaction Processing System records the data from everyday operations throughout every division or
department
Major modules-
 Order processing-System receives, summarizes and stores the orders
 Accounts payable and receivables – records the debit, credit and balance of each customer or vendor
generated from sales journals or purchase orders

5.  Receiving and shipping of goods-
 Payroll-

6. Candy bar manufacturing company
 TPS will record quantity of sugar required in making the candy bar
 records the time it takes from beginning to end to make the candy bar
 record the number of people working on the assembly line when candy bar is made and what functions
they perform.
 record the sales and marketing actions surrounding the sale of the product
 records how many stores are actually stocking the candy bar and where the product is located inside the
stores.
 records how much did the company pay to package the product, store the product, and ship the candy
bar to the stores
 how many truck drivers were required to deliver the product to the local store.
 The best Transaction Processing System will be integrated throughout the organization to supply useful
information to those who need it when they need it.

7.  Office Automation System -worker must complete the necessary paperwork to be filed with the Patent
Office.
 makes easy work of developing press releases that Sales and Marketing will use to announce the new and
improved Cybernuts candy bar.
 The clerical workers in Human Resources will use their OAS to process the job changes
 An Office Information System is used by data workers to fulfill the coordination and communication
functions vital to a company
 Management Information Systems (MIS)
Management level
• Inputs:High volume transaction level data
• Processing: Simple models
• Outputs: Summary reports
• Users: Middle managers
Example: Annual budgeting
 serve the management level of the organization
 provides reports, historical records etc
 serve the functions of planning, controlling & decision making at the management level
 The MIS draws data from the Transaction Processing System to help managers answer structured
questions - such as "How much more sugar must we purchase if we increase production from 5000 candy
bars to 7000 candy bars?"
 Accounting managers will know the quantity of increase in purchase of sugar and milk to support the new
recipe.
 The Shipping manager will know in time to plan for the new size wrapper for the Cybernuts candy bar.
 The Sales and Marketing manager can know almost instantaneously that the shipment is going to be
delayed ( change in recipe)

10. MIS report may consists of
 Average daily sales with details for each product and each region
 Daily production of data
 Seasonal sales
 Personal and project assignment and the number of hours logged in by each person for the month and for
the week
 Printing and paper charges for the year
 Routine reports- periodic reports; Monthly absenteeism
 Adhoc(demand) reports – need special information which is not included in routine reports(drill down
report, key indicator report, comparative report)
 Exception report-

11.  Help management sense the organisation by seeing and reviewing all the activities as well as take
decisions regarding future activities
 computer based IS that provide interactive information support to managers and business professionals
during the decision making process.
 use internal information from TPS & MIS, as well as external information
 have more analytical power, condense large amount of data ,designed so that users can work directly
 The Sales and Marketing management of WorldWide Candy would use a DSS to answer a semi structured
question such as "What price should we charge for the candy bar so that we can maximize our profits and
minimize our costs?"
 Manufacturing Division could determine the best answer to the semi structured question, "How does the
change in the size and packaging of the candy bar affect the other products we produce, not just in
shipping, but also on the display shelf at the convenience store?"

12.  Decision Support Systems are used for complex "what-if" questions that require internal and external
data. Decisions at this management level are mostly semi structured, so the Information System must
respond to the unique requirements of the executives.

13. DSS involves 4 basic types of analytical modeling activities
 What –if analysis: end user can change the value of variables and observe the resulting change
Eg: tax rate
 Sensitivity analysis: value of only one variable is changed repeatedly and the resulting changes on the
other variable is observed
 What if analysis with repeated change to only one variable at a time
 Used when uncertain about the assumptions made in estimating the value of certain key variable.
Goal seeking analysis: reverse of what if.
 Sets a target value for a variable and repeatedly change other variable until the target is reached.
Optimization analysis: complex extension of
Goal seeking analysis.
 The goal is to find the optimum value for one or more target values, given certain constraints

14.  Then the values of the other variables are changed until the best value for the target variables are
achieved
EXECUTIVE SUPPORT SYSTEMS (ESS):
• Inputs:Aggregate data
• Processing:Interactive
• Outputs:Projections
• Users:Senior managers
Example: 5 year operating plan
 goal of EIS is to provide top executives with immediate and easy access to information about firm’s CSFs,
that are critical to accomplish the strategic objectives.
 Eg: E-com vs traditional sales
 Presented in the forms tailored to the preferences of the executives using the system.
 ESS provides minute to minute view of the firm’s financial performance as measured by working capital
,accounts receivables, accounts payables and inventory
 serve the strategic level
 -address the non routine decisions requiring judgment & evaluation because there is no agreed on
procedure for arriving at a solution
 -incorporate data about external events (competitors), but also draws data from MIS & DSS
 -filters the data to save time & effort of the executives
 -e.g-what are the competitors doing
 An Executive Support System helps managers make strategic decisions affecting the entire company. The
systems use internal and external data to give executives the information they need to determine the
proper course of action in unstructured situations.

15. • Top Level Management
• Designed to the individual senior manager
• Ties CEO to all levels
• Very expensive to keep up

16. 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

17. Functional Business Systems
Definition:
 Information systems that support the business functions of accounting, finance, marketing, operations
management, and human resource management

19. Interactive Marketing
Definition:
 Customer-focused marketing process that is based on using the Internet, intranets, and extranets to
establish two-way transactions between a business and its customers or potential customers
Goal:
 Use networks to attract and keep customers who will become partners with the business in creating,
purchasing, and improving products and services
Sales Force Automation
Definition:
 Information systems that improve the delivery of information and support to salespeople with the goal of
improving sales productivity and marketing responsiveness
 Sales and Marketing Systems

20. Major functions of systems:
• Sales management, market research, promotion, pricing, new products
Major application systems:
• Sales order info system, market research system, pricing system
Manufacturing Systems
Definition:
 Information systems that support the production/operations function that includes all activities
concerned with the planning and control of the processes producing goods and services
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

21. 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

23. Designed to support
 Planning to meet the personnel needs of the business
 Development of employees
 Control of all personnel policies and programs.
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

26. Business Processes and Information Systems
Business processes:
• Is a set of logically related activities for accomplishing a specific business results.
• Manner in which work is organized, coordinated, and focused to produce a valuable product or service
• Unique ways to coordinate work, information, and knowledge
• Ways in which management chooses to coordinate work
• Concrete work flows of material, information, and knowledge—sets of activities
Examples of Business Processes
Manufacturing and production:
• Assembling product, checking quality, producing bills of materials
Sales and marketing:
• Identifying customers, creating customer awareness, selling

27. Finance & accounting:
• Paying creditors, creating financial statements, managing cash accounts
Human resources:
• Hiring employees, evaluating performance, enrolling employees in benefits plans
Cross-Functional Business Processes:
• cross boundary between sales, marketing, manufacturing, and research and development
• Group employees from different functional specialties to complete a piece of work
Example: Order Fulfillment Process
Cross-Functional Business Processes:
• cross boundary between sales, marketing, manufacturing, and research and development
• Group employees from different functional specialties to complete a piece of work
Example: Order Fulfillment Process

28. Business Processes and Information Systems
• Purpose of IS is to enable highly efficient business processes
• Information systems help organizations achieve great efficiencies by automating parts of processes
• IS also contributes to completely rethinking processes.
 Analyzing the customer request for service process ,how many steps involved ,how many people
involved, how much it costs.
 Analyzing the customer request for service process ,how many steps involved ,how many people
involved, how much it costs.
 Traditional “Silo” View of Information Systems
Within the business:
• There are functions, each having its uses of information systems

29. Outside the organization’s boundaries:
• There are customers and vendors
Functions tend to work in isolation
Systems for Enterprise-Wide Process Integration
Enterprise applications:
• Designed to support organization-wide process coordination and integration
• Systems for Enterprise-Wide Process Integration (Continued)
Consist of :
• Enterprise systems
• Supply chain management systems
• Customer relationship management systems
• Knowledge management systems

30. All these enterprise applications integrates a related set of functions and business processes to enhance the
performance of the organization as a whole.
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.

34. • Gives a company an integrated real-time view of its core business processes
• ERP software suites typically consist of integrated modules of…
Manufacturing
Distribution
Sales
Accounting
Human Resource Management
Business Value of Enterprise Systems
• A more uniform organization
• More efficient operations and customer-driven business processes
• Firmwide information for improved decision making
• Benefits of Enterprise Systems

35. • Help to unify the firm’s structure and organization: One organization
• Management: Firm wide knowledge-based management processes
• Technology: Unified platform
• Business: More efficient operations & customer-driven business processes
Benefits (conti)
• Quality and efficiency---Helps improve the quality and efficiency of customer service, production,
& distribution by creating a framework for integrating and improving internal business processes
• Decreased Costs---Reductions in transaction processing costs and hardware, software, and IT
support staff
• Decision support---Provides cross-functional information on business performance to assist
managers in making better decisions
• Enterprise agility----Results in more flexible organizational structures, managerial responsibilities,
and work roles
• 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

36. Causes of ERP failures
• Underestimating the complexity of the planning, development, and training required
• Failure to involve affected employees in the planning & development phases and change
management programs
• Trying to do too much, too fast
• Insufficient training
• Believing everything the software vendors and/or consultants say
• Trends
• Flexible ERP
• Web-enabled ERP
• Interenterprise ERP
• E-Business Suites

37. • ACC Limited,
• 14 manufacturing plants,
• 30 ready mix concrete plants,
• 20 sales units,
• 54 zonal offices ,
• Distribution network comprises -160 warehouses,
• 9000 distributors,
• 50,000 retail outlets
• DELMIA's Digital Manufacturing Products and Solutions allow manufacturers in any industry to virtually
define, plan, create, monitor and control all production processes. From early process planning and
assembly simulation to a complete definition of the production facility and equipment, DELMIA assists
companies to achieve maximum production efficiency, lower cost, improve quality and reduce time to
market.
• The Supply Chain
• Network of organizations and business processes for procuring raw materials, transforming into products,
and distributing them to customers
 A cross-functional inter enterprise system that uses IT to help support & manage the links between some
of company’s key business processes and those of its suppliers, customers, & business partners.
• Materials, information, and payments flow through the supply chain in both directions.
 Goal is to create a fast, efficient, & low-cost network of business relationships.
 Supply Chain Management (SCM)
 Close linkage and coordination of activities involved in buying, making, and moving a product
 Integrates supplier, manufacturer, distributor customer
 Reduces time, redundant effort, and inventory costs
 Network of organizations and business processes
 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

38.  Coordination of business processes to speed information, product, and fund flows up and down a supply
chain to reduce time, redundant effort, and inventory costs
SCOR (Chain Operations Reference Model)-cross industry process reference model for SCM.
• Defines a common set of SC processes to help companies better understand SCM issues and set goals for
SC improvement.
• identifies five major supply chain processes:
• Plan: Balancing demand and supply to meet sourcing, production, and delivery requirements
• Source: Procurement of goods and services needed to create a product or service
• Make: Processes that transform a product into a finished state
• Deliver: Processes to manage order transportation and distribution
• Return: Processes associated with product returns and post delivery customer support
• Logistics:
• Planning and control of all factors that have an impact on the supply chain

39. BUSINESS PROCESS IN SUPPLY CHAIN LIFE CYCLE

54. Business Value of Supply Chain Management Systems
• Improved customer service and responsiveness
• Cost reduction
• Cash utilization
• Benefits
• Can provide faster, more accurate order processing, reductions in inventory levels, quicker time
to market, lower transaction and materials costs, & strategic relationships with suppliers

55. PROBLEMS
 A lack of proper demand planning knowledge
 Inaccurate or overoptimistic demand forecast
 Lack of adequate collaboration among marketing, production & inventory management departments
within a company & with suppliers, distributors & others
 Even the software of SCM is immature, incomplete & hard to implement

66. Analytical CRM:
• Applications that analyze customer data generated by operational CRM applications to provide
information for improving business performance
• Examples: Develop customer segmentation strategies and customer profiles; analyze customer or
product profitability; identify trends in sales length cycle; analyze leads generated and conversion rates

67. Business Value of Customer Relationship Management Systems
• Increased customer satisfaction
• More effective marketing and reduced direct marketing costs
• Lower costs for customer acquisition and retention
• Increased revenue from identifying most profitable customers and segments for marketing, cross-
selling, up-selling
• Reduce churn rate:
• Number of customers who stop using or purchasing products or services from a company

69. 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 for creating new
knowledge and integrating it into the organization
• Include enterprise wide systems for managing and distributing documents ,graphics and other digital
graphics for creating corporate knowledge directories of employees with special areas of expertise,
office systems for distributing knowledge and information.
• KM applications are expert systems that codify the knowledge of experts in information systems that
can be used by other members of the organisation and tools for knowledge discovery that recognise
patterns and important relationships in large pools of data.