2 INFORMATION SYSTEMS IN THE ENTERPRISE

LEARNING OBJECTIVES ANALYZE ROLES OF 6 TYPES OF INFORMATION SYSTEMS DESCRIBE TYPES OF INFORMATION SYSTEMS ANALYZE RELATIONSHIPS BETWEEN BUSINESS PROCESSES *

LEARNING OBJECTIVES EXPLAIN HOW SYSTEMS & NETWORKS CREATE NEW EFFICIENCIES EVALUATE BENEFITS & LIMITATIONS OF SYSTEMS & NETWORKS *

MANAGEMENT CHALLENGES KEY SYSTEM APPLICATIONS FUNCTIONAL PERSPECTIVE OF SYSTEMS INTEGRATING FUNCTIONS & PROCESSES *

MANAGEMENT CHALLENGES 1. INTEGRATION: Different systems serve variety of functions, connecting organizational levels difficult, costly 2. ENLARGING SCOPE OF MANAGEMENT THINKING: Huge system investments, long development time must be guided by common objectives *

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

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) *

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 *

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 *

TYPICAL TPS APPLICATIONS Finance & 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 *

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 *

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 *

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

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

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

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

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

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

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

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

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

INTERRELATIONSHIPS AMONG SYSTEMS ESS DSS MIS KWS OAS TPS

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE SALES & MARKETING SYSTEMS MANUFACTURING & PRODUCTION SYSTEMS FINANCE & ACCOUNTING SYSTEMS HUMAN RESOURCES SYSTEMS *

SALES & MARKETING INFORMATION SYSTEM

MANUFACTURING INFORMATION SYSTEM

FINANCE & ACCOUNTING INFORMATION SYSTEM

HUMAN RESOURCES INFORMATION SYSTEM

EXAMPLES OF BUSINESS PROCESSES MANUFACTURING & PRODUCTION: Assembling product, checking quality, producing bills of materials SALES & MARKETING: Identifying customers, creating customer awareness, selling *

EXAMPLES OF BUSINESS PROCESSES FINANCE & ACCOUNTING: Paying creditors, creating financial statements, managing cash accounts HUMAN RESOURCES: Hiring employees, evaluating performance, enrolling employees in benefits plans *

SUPPLY-CHAIN MANAGEMENT CUSTOMERS PLANNING & FORECASTING ORDER PROCESSING SUPPLIERS INTRANET PRODUCTION PROCUREMENT ACCOUNTING LOGISTICS SERVICES SHIPPING INVENTORY DISTRIBUTORS

HOW INFORMATION SYSTEMS FACILITATES SUPPLY CHAIN MANAGEMENT DECIDE WHEN, WHAT TO PRODUCE, STORE, MOVE… RAPIDLY COMMUNICATE ORDERS… TRACK ORDER STATUS… CHECK INVENTORY AVAILABILITY, MONITOR LEVELS… TRACK SHIPMENTS… PLAN PRODUCTION BASED ON ACTUAL DEMAND… RAPIDLY COMMUNICATE PRODUCT DESIGN CHANGES… PROVIDE PRODUCT SPECIFICATIONS… SHARE INFORMATION ABOUT DEFECT RATES, RETURNS...

TRADITIONAL VIEW OF SYSTEMS WITHIN THE BUSINESS: There are functions, each having its uses of information systems OUTSIDE THE ORGANIZATION’S BOUNDARIES: There are customers and vendors FUNCTIONS TEND TO WORK IN ISOLATION *

ENTERPRISE SYSTEM Manufacturing Human Resources Accounting Finance Business Processes Enterprise-wide Business Processes Vendors Customers Sales & Marketing

BENEFITS OF ENTERPRISE SYSTEMS FIRM STRUCTURE & ORGANIZATION: One organization MANAGEMENT: Firmwide knowledge-based management processes TECHNOLOGY: Unified platform BUSINESS: More efficient operations & customer-driven business processes *

CHALLENGES OF ENTERPRISE SYSTEMS DAUNTING IMPLEMENTATION HIGH UP FRONT COSTS & FUTURE BENEFITS INFLEXIBILITY HARD TO REALIZE STRATEGIC VALUE *

INDUSTRIAL NETWORKS LINK FIRMS INTO INDUSTRY-WIDE SYSTEM HORIZONTAL: Link firms in same industry, including competitors VERTICAL: Link firm with suppliers in same industry *

What are business processes What are business processes? How are they related to information systems? A business process is a logically related set of activities that defines how specific business tasks are performed, and it represents a unique way in which an organization coordinates work, information, and knowledge. Managers need to pay attention to business processes because they determine how well the organization can execute its business, and they may be a source of strategic advantage. There are business processes specific to each of the major business functions, but many business processes are cross-functional. Information systems automate parts of business processes, and they can help organizations redesign and streamline these processes.

What is the role of the information systems function in a business? The information systems department is the formal organizational unit responsible for information technology services. It is responsible for maintaining the hardware, software, data storage, and networks that comprise the firm’s IT infrastructure. The department consists of specialists, such as programmers, systems analysts, project leaders, and information systems managers, and is often headed by a CIO.

INFORMATION SYSTEMS IN THE ENTERPRISE