This document discusses the strategic role of information systems. It describes different types of information systems like transaction processing systems, management information systems, decision support systems, executive support systems, knowledge work systems, and office automation systems. It explains how these systems can be used at different levels of an organization to gain competitive advantage through product differentiation, linking customers and suppliers, and becoming a low-cost producer. The document also discusses using information systems to counter competitive forces and improve quality.

1. THE STRATEGIC ROLE OF
INFORMATION SYSTEMS
2.1

2. LEARNING OBJECTIVES
• ANALYZE ROLES OF 6 TYPES OF
INFORMATION SYSTEMS
• DESCRIBE TYPES OF INFORMATION
SYSTEMS
• EXAMINE COMPETITIVE FORCES,
VALUE CHAIN MODELS
*
2.2

3. LEARNING OBJECTIVES
• EXPLAIN DIFFICULTIES OF
BUILDING, SUSTAINING STRATEGIC
INFORMATION SYSTEMS
• DESCRIBE HOW INFORMATION
SYSTEMS SUPPORT LEVELS OF
BUSINESS STRATEGY
2.3 *

4. MANAGEMENT CHALLENGES
• INTEGRATION:
– ENTERPRISE RESOURCE
MANAGEMENT
– CONNECTING ORGANIZATIONAL
LEVELS DIFFICULT, COSTLY
• SUSTAIN COMPETITIVE ADVANTAGE:
– INFO SYSTEMS MUST BE FLEXIBLE TO
ENSURE LONG-TERM PROFITS
*
2.4

5. TYPES OF INFORMATION SYSTEMS
KIND OF SYSTEM GROUPS SERVED
STRATEGIC LEVEL SENIOR
MANAGERS
MANAGEMENT LEVEL MIDDLE
MANAGERS
KNOWLEDGE LEVEL KNOWLEDGE &
DATA WORKERS
OPERATIONAL OPERATIONAL
LEVEL MANAGERS
SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN
2.5 MARKETING RESOURCES

6. MAJOR TYPES OF SYSTEMS
• EXECUTIVE SUPPORT SYSTEMS (ESS)
• DECISION SUPPORT SYSTEMS (DSS)
• MANAGEMENT INFORMATION SYSTEMS (MIS)
• KNOWLEDGE WORK SYSTEMS (KWS)
• OFFICE AUTOMATION SYSTEMS (OAS)
• TRANSACTION PROCESSING SYSTEMS (TPS)
*
2.6

7. TYPICAL TPS APPLICATIONS
Sales & 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
*
2.7
TPS

8. TYPICAL TPS APPLICATIONS
Manufacturing & 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
2.8
TPS
*

9. TYPICAL TPS APPLICATIONS
Finance & Accounting Systems
MAJOR FUNCTIONS OF SYSTEMS:
• Budgeting; General Ledger; Billing:
Cost Accounting
MAJOR APPLICATION SYSTEMS:
• General Ledger; Accounts
Receivable / Payable; Budgeting;
Funds Management Systems
*
2.9
TPS

10. TYPICAL TPS APPLICATIONS
Human Resources 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
2.10
TPS
*

11. TYPICAL TPS APPLICATIONS
Other Types (e.g., University)
MAJOR FUNCTIONS OF SYSTEMS:
• Admissions; Grade Records; Course
Records; Alumni
MAJOR APPLICATION SYSTEMS:
• Registration System; Student
Transcript System; Curriculum Class
Control System; Alumni Benefactor
System
2.11
TPS
*

12. KNOWLEDGE WORK SYSTEMS (KWS)
KNOWLEDGE LEVEL
• INPUTS: DESIGN SPECS
• PROCESSING: MODELLING
• OUTPUTS: DESIGNS, GRAPHICS
• USERS: TECHNICAL STAFF
EXAMPLE: ENGINEERING WORK
STATION
2.12

13. OFFICE AUTOMATION SYSTEMS (OAS)
• TOWARD A “PAPERLESS” OFFICE
• REDESIGN OF WORK FLOW
• INTEGRATED SOFTWARE
• ERGONOMIC DESIGN
• BRIGHT, CHEERFUL
WORK SPACE
EXAMPLE: PRESENTATION GRAPHICS
2.13

14. MANAGEMENT INFORMATION
SYSTEMS (MIS)
MANAGEMENT LEVEL
• INPUTS: HIGH VOLUME DATA
• PROCESSING: SIMPLE MODELS
• OUTPUTS: SUMMARY REPORTS
• USERS: MIDDLE MANAGERS
EXAMPLE: ANNUAL BUDGETING
2.14

15. MANAGEMENT INFORMATION
SYSTEMS (MIS)
• STRUCTURED & SEMI-
STRUCTURED DECISIONS
• REPORT CONTROL ORIENTED
• PAST & PRESENT DATA
• INTERNAL ORIENTATION
• LENGTHY DESIGN PROCESS
*
2.15

16. TPS DATA FOR MIS APPLICATIONS
TPS MIS
Order Processing SALES
DATA
System
ORDER FILE UNIT
PRODUCT
Materials Resource COST MIS REPORTS
Planning System
PRODUCT
CHANGE
PRODUCTION MASTER FILE
DATA
General Ledger
EXPENSE MANAGERS
System DATA
ACCOUNTING FILES MIS FILES
2.16

17. DECISION SUPPORT SYSTEMS (DSS)
MANAGEMENT LEVEL
• INPUTS: LOW VOLUME DATA
• PROCESSING: INTERACTIVE
• OUTPUTS: DECISION ANALYSIS
• USERS: PROFESSIONALS, STAFF
EXAMPLE: CONTRACT COST ANALYSIS
2.17

18. DECISION SUPPORT SYSTEMS (DSS)
• FLEXIBLE, ADAPTABLE, QUICK
• USER CONTROLS INPUTS/OUTPUTS
• NO PROFESSIONAL PROGRAMMING
• SUPPORTS DECISION PROCESS
• SOPHISTICATED MODELING TOOLS
*
2.18

19. EXECUTIVE SUPPORT SYSTEMS
(ESS)
STRATEGIC LEVEL
• INPUTS: AGGREGATE DATA
• PROCESSING: INTERACTIVE
• OUTPUTS: PROJECTIONS
• USERS: SENIOR MANAGERS
EXAMPLE: 5 YEAR OPERATING PLAN
2.19

20. EXECUTIVE SUPPORT SYSTEMS
(ESS)
• TOP LEVEL MANAGEMENT
• DESIGNED TO THE INDIVIDUAL
• TIES CEO TO ALL LEVELS
• VERY EXPENSIVE TO KEEP UP
• EXTENSIVE SUPPORT STAFF
*
2.20

21. INTERRELATIONSHIPS AMONG SYSTEMS
ESS
MIS DSS
KWS
TPS
OAS
2.21

22. SYSTEMS FROM A
FUNCTIONAL PERSPECTIVE
• SALES & MARKETING SYSTEMS
• MANUFACTURING & PRODUCTION
SYSTEMS
• FINANCE & ACCOUNTING SYSTEMS
• HUMAN RESOURCES SYSTEMS
*
2.22

23. STRATEGIC ROLE OF INFORMATION
SYSTEMS
STRATEGIC INFO SYSTEM:
CAN CHANGE GOALS, OPERATIONS
PRODUCTS, SERVICES
ENVIRONMENT
TO GAIN COMPETITIVE ADVANTAGE
2.23

24. COMPETITIVE FORCES MODEL
NEW SUBSTITUTE
MARKET PRODUCTS
ENTRANTS & SERVICES
TRADITIONAL
THE FIRM
COMPETITION
SUPPLIERS CUSTOMERS
2.24

25. COUNTERING
COMPETITIVE FORCES
• PRODUCT DIFFERENTIATION
• FOCUSED DIFFERENTIATION
• DATAMINING
• LINKING CUSTOMERS & SUPPLIERS
• BECOMING LOW COST PRODUCER
*
2.25

26. VALUE CHAIN MODEL
HIGHLIGHTS PRIMARY & SUPPORT
ACTIVITIES THAT ADD VALUE TO
PRODUCTS, SERVICES
• PRIMARY: DIRECTLY RELATED TO
PRODUCTION, DISTRIBUTION
• SUPPORT: INFRASTRUCTURE,
HUMAN RESOURCES,
TECHNOLOGY, PROCUREMENT
2.26 *

27. IMPLICATIONS FOR MANAGERS
& ORGANIZATIONS
• STRATEGIC ALLIANCES,
INFORMATION PARTNERSHIPS
• INDUSTRY LEVEL STRATEGIC
SYSTEMS
• MANAGING STRATEGIC
TRANSITIONS
• IMPACT OF THE INTERNET
*
2.27

28. INFORMATION SYSTEMS &
QUALITY
• QUALITY: Conformance to
specifications, customer satisfaction
• SIMPLIFY PRODUCT, PROCESS
• BENCHMARKING
• CUSTOMER DEMAND AS GUIDE
• REDUCE CYCLE TIME
• IMPROVE QUALITY & PRECISION
*
2.28