E-Business & Information Systems in the Enterprise MIS 205

Management Information Systems E-Business & Information Systems in the Enterprise OBJECTIVES Evaluate the role played by the major types of systems in a business and their relationship to each other Explain how enterprise applications promote business process integration and improve organizational performance Assess the challenges posed by information systems in the enterprise and management solutions MIS 205 E-Business & Information Systems

The Four Major Types of Information Systems Management Information Systems E-Business & Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS The Four Major Types of Information Systems Executive Support Systems (ESS) Decision-Support Systems (DSS) Management Information Systems (MIS) Transaction Processing Systems (TPS) MIS 205 E-Business & Information Systems

Major Types of Information Systems Management Information Systems E-Business & Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Major Types of Information Systems MIS 205 E-Business & Information Systems

Transaction Processing Systems (TPS) Management Information Systems E-Business & Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS 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 the conduct of the business Support day-to-day/routine operation by maintaining detailed records e.g. Sales, purchase, deposit, withdrawal, refunds, payment, inventory control, etc. MIS 205 E-Business & Information Systems

A Symbolic Representation for a Payroll TPS Management Information Systems E-Business & Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS A Symbolic Representation for a Payroll TPS MIS 205 E-Business & Information Systems

Typical Applications of TPS Management Information Systems E-Business & Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Typical Applications of TPS MIS 205 E-Business & Information Systems

Management Information Systems (MIS) E-Business & Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Management Information Systems (MIS) Management level Inputs: High volume transaction level data (Mostly internal) Processing: Simple models. Data is accumulated and totaled. Outputs: Summary reports & exception reports. Scheduled reports (reports generated periodically- yearly , monthly or weekly usually not day-to-day) Users: Middle managers Example: Annual budgeting MIS 205 E-Business & Information Systems

Management Information Systems (MIS) (cont.) E-Business & Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Management Information Systems (MIS) (cont.) Fig: Three TPS supply summarized transaction data to the MIS reporting system at the end of the time period MIS 205 E-Business & Information Systems

Management Information Systems (MIS) (cont.) E-Business & Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Management Information Systems (MIS) (cont.) A sample MIS report Summerized annual sales data MIS 205 E-Business & Information Systems

Management Information Systems (MIS) – (cont.) E-Business & Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Management Information Systems (MIS) – (cont.) Software May be written using business programming languages, eg, ABAP (Native language of SAP) May use SQL Can be a report writer Client Server software allows clients to get data from the server and do computations MIS 205 E-Business & Information Systems

Decision-Support Systems (DSS) Management Information Systems E-Business & Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Decision-Support Systems (DSS) Provide information & Decision Support techniques to confront specific problem / opportunity Management level Inputs: Internal and External data, User friendly interface Processing: Interactive Can change assumptions e.g. “What-if” oriented More analytical power than other systems, such as statistical analysis May involve one or more models to analyze data Outputs: Decision analysis. Users: Professionals, staff Example: Contract cost analysis MIS 205 E-Business & Information Systems

Software : Decision-Support Systems (DSS) (cont.) Management Information Systems E-Business & Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Decision-Support Systems (DSS) (cont.) Software : A DSS is usually developed using general software that is adapted for a specific decision. Simple example is spreadsheet May be statistical packages like SAS, SPSS May do data mining: searching for patterns in large amounts of data to determine business practices Group decision support systems (GDSS) Geographic information systems (GIS) MIS 205 E-Business & Information Systems

Decision-Support Systems (DSS) (cont.) Management Information Systems E-Business & Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Decision-Support Systems (DSS) (cont.) Voyage-estimating decision-support system This DSS system is used by managers who must develop bids on shipping contracts MIS 205 E-Business & Information Systems

The Difference between MIS and DSS Management Information Systems E-Business & Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS The Difference between MIS and DSS MIS: Primarily address structured problems Provides typically fixed, scheduled reports based on routine flows of data and assists in the general control of the business

The Difference between MIS and DSS Management Information Systems E-Business & Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS The Difference between MIS and DSS DSS: Support semistructured and unstructured problems Greater emphasis on models, assumptions, ad-hoc queries, display graphics Emphasizes change, flexibility, and a rapid response

EXECUTIVE SUPPORT SYSTEMS (ESS): Management Information Systems E-Business & Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS EXECUTIVE SUPPORT SYSTEMS (ESS): Inputs: Aggregated data Processing: Interactive Outputs: Projections Users: Senior managers Example: 5 year operating plan MIS 205 E-Business & Information Systems

Model of a Typical Executive Support System Management Information Systems E-Business & Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Model of a Typical Executive Support System This system pulls data from diverse sources and makes them available to executives in an easy-to-use form MIS 205 E-Business & Information Systems

EXECUTIVE SUPPORT SYSTEMS (ESS) (Continued) Management Information Systems E-Business & Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS EXECUTIVE SUPPORT SYSTEMS (ESS) (Continued) Top Level Management Designed to the individual senior manager Ties CEO to all levels Very expensive to keep up Extensive support staff MIS 205 E-Business & Information Systems

Relationship of Systems to One Another Management Information Systems E-Business & Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Relationship of Systems to One Another Interrelationships among systems MIS 205 E-Business & Information Systems

Sales and Marketing Systems Management Information Systems E-Business & Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Sales and 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 MIS 205 E-Business & Information Systems

Sales and Marketing Systems Management Information Systems E-Business & Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Sales and Marketing Systems Example of a Sales Information System

Sales and Marketing Systems Management Information Systems E-Business & Information Systems in the Enterprise     SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Sales and Marketing Systems SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL   Order processing Enter, process, and track orders Operational Pricing analysis Determine prices for products and services Management Sales trend forecasting Prepare 5-year sales forecasts Strategic MIS 205 E-Business & Information Systems

Manufacturing and Production Systems Management Information Systems E-Business & Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Manufacturing and 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 MIS 205 E-Business & Information Systems

Manufacturing and Production Systems Management Information Systems E-Business & Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Manufacturing and Production Systems Example of data flow in a Manufacturing & Production system

Manufacturing and Production Systems Management Information Systems E-Business & Information Systems in the Enterprise   SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Manufacturing and Production Systems SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL   Machine control Control the actions of machines and equipment Operational Production planning Decide when and how many products should be produced Management Facilities location Decide where to locate new production facilities Strategic MIS 205 E-Business & Information Systems

Overview of an Inventory System Management Information Systems E-Business & Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Overview of an Inventory System MIS 205 E-Business & Information Systems

Finance and Accounting Systems Management Information Systems E-Business & Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Finance 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 MIS 205 E-Business & Information Systems

Finance and Accounting Systems Management Information Systems E-Business & Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Finance and Accounting Systems An Accounts Receivable System

Finance & Accounting Systems (Continued) Management Information Systems E-Business & Information Systems in the Enterprise   SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Finance & Accounting Systems (Continued) SYSTEM DESCRIPTION ORGANIZATION-AL LEVEL   Accounts receivable Tracks money owed the firm Operational Budgeting Prepares short-term budgets Management Profit planning Plans long-term profits Strategic MIS 205 E-Business & Information Systems

Human Resource Systems Management Information Systems E-Business & Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE 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 MIS 205 E-Business & Information Systems

Management Information Systems E-Business & Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Human Resource Systems (Continued) An Employee Recordkeeping System MIS 205 E-Business & Information Systems

Human Resource Systems (Continued) Management Information Systems E-Business & Information Systems in the Enterprise   SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Human Resource Systems (Continued) SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL   Training and development Tracks employee training, skills, and performance appraisals Operational Compensation analysis Monitors the range and distribution of employee wages, salaries, and benefits Management Human resources planning Plans the long-term labor force needs of the organization Strategic MIS 205 E-Business & Information Systems

Relationship of Systems to One Another Management Information Systems E-Business & Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS 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 MIS 205 E-Business & Information Systems

Business Processes and Information Systems Management Information Systems E-Business & Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications Business Processes and Information Systems Cross-Functional Business Processes: Transcend boundary between sales, marketing, manufacturing, and research and development Group employees from different functional specialties to a complete piece of work Example: Order Fulfillment Process MIS 205 E-Business & Information Systems

The Order Fulfillment Process Management Information Systems E-Business & Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications The Order Fulfillment Process MIS 205 E-Business & Information Systems

What Are Enterprise Systems? Management Information Systems E-Business & Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications What Are Enterprise Systems? MIS 205 E-Business & Information Systems

Management Information Systems E-Business & Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications Systems for Enterprise-Wide Process Integration Enterprise applications: Designed to support organization-wide process coordination and integration Usually Consists of : Enterprise systems / Enterprise Resource Planning Systems (ERP) Supply chain management systems (SCM) Customer relationship management systems (CRM) Knowledge management systems (KM) MIS 205 E-Business & Information Systems

Example of an Enterprise Application: mySAP Business Suite Management Information Systems E-Business & Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications Example of an Enterprise Application: mySAP Business Suite MIS 205 E-Business & Information Systems

SAP is world’s largest business software vendor based in Germany Management Information Systems E-Business & Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications Example of an Enterprise Application: mySAP Business Suite SAP Enterprise Suite (mySAP Business Suite) consists of the following components: mySAP ERP (Finance, HR, Controlling, Analytics, corporate services etc) mySAP SCM (Supply Chain Management) mySAP CRM (Customer Relationship Management) mySAP SRM (Supplier Relationship Management) mySAP PLM (Product Lifecycle Management) SAP is world’s largest business software vendor based in Germany

Enterprise (ERP) Systems Management Information Systems E-Business & Information Systems in the Enterprise ENTERPRISE (ERP) SYSTEMS Enterprise (ERP) 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 now seamlessly flow throughout the firm so that it can be shared by business processes in manufacturing, accounting, human resources, and other areas. MIS 205 E-Business & Information Systems

Enterprise (ERP) Application Architecture Management Information Systems E-Business & Information Systems in the Enterprise ENTERPRISE (ERP) SYSTEMS Enterprise (ERP) Application Architecture MIS 205 E-Business & Information Systems

Traditional “Silo” View of Information Systems Management Information Systems E-Business & Information Systems in the Enterprise ENTERPRISE (ERP) SYSTEMS Traditional “Silo” View of Information 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 MIS 205 E-Business & Information Systems

Traditional View of Systems Management Information Systems E-Business & Information Systems in the Enterprise ENTERPRISE (ERP) SYSTEMS Traditional View of Systems MIS 205 E-Business & Information Systems

How Enterprise (ERP) Systems Work Management Information Systems E-Business & Information Systems in the Enterprise ENTERPRISE (ERP) SYSTEMS How Enterprise (ERP) Systems Work Enterprise Systems: Enterprise Resource Planning (ERP) systems Interdependent software modules with a common central database that support basic internal business processes for finance and accounting, human resources, manufacturing and production, and sales and marketing Enables data to be used by multiple functions and business processes for precise organizational coordination and control. MIS 205 E-Business & Information Systems

Management Information Systems E-Business & Information Systems in the Enterprise ENTERPRISE (ERP) SYSTEMS MIS 205 E-Business & Information Systems

Benefits of Enterprise Systems Management Information Systems E-Business & Information Systems in the Enterprise ENTERPRISE (ERP) SYSTEMS Benefits of Enterprise Systems A more uniform organization: create a more disciplined organizational culture. More efficient operations and customer-driven business processes: By integrating discrete business processes in sales, productions, finance, and logistic. Firm wide Information for improved decision making: The data have common, standardized definition and formats that are accepted by the entire organization. Major enterprises software vendors include SAP, PeopleSoft (ORACLE) MIS 205 E-Business & Information Systems

Network of organizations and business processes Management Information Systems E-Business & Information Systems in the Enterprise SUPPLY CHAIN MANAGEMENT SYSTEMS Supply Chain Network of organizations and business processes Helps in procurement of materials, transformation of raw materials into intermediate and finished products and Helps in distribution of the finished products to customers Materials, Payments, and information flow through the supply chain in both directions (more detail in Ch-9) MIS 205 E-Business & Information Systems

Supply Chain Management (SCM) Systems Management Information Systems E-Business & Information Systems in the Enterprise SUPPLY CHAIN MANAGEMENT SYSTEMS Supply Chain Management (SCM) Systems 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 (More detail in Ch-9) MIS 205 E-Business & Information Systems

Supply Chain Management (SCM) Process Management Information Systems E-Business & Information Systems in the Enterprise SUPPLY CHAIN MANAGEMENT SYSTEMS Supply Chain Management (SCM) Process MIS 205 E-Business & Information Systems

Customer Relationship Management (CRM) Management Information Systems E-Business & Information Systems in the Enterprise CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS Customer Relationship Management (CRM) Business and technology discipline for managing customer relationships to optimize revenue, profitability, customer satisfaction, and customer retention Manages all ways used by firms to deal with existing and potential new customers MIS 205 E-Business & Information Systems

Customer Relationship Management (CRM) Systems Management Information Systems E-Business & Information Systems in the Enterprise CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS Customer Relationship Management (CRM) Systems Capture and integrate customer data from all over the organization Consolidate and analyze the data Distribute results to various systems and customer touch points across the enterprise MIS 205 E-Business & Information Systems

Customer Relationship Management (CRM) Systems Management Information Systems E-Business & Information Systems in the Enterprise CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS Customer Relationship Management (CRM) Systems MIS 205 E-Business & Information Systems

Knowledge Management Systems Management Information Systems E-Business & Information Systems in the Enterprise Knowledge Management Systems 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 MIS 205 E-Business & Information Systems

Knowledge Management Systems Management Information Systems E-Business & Information Systems in the Enterprise Knowledge Management Systems Knowledge Management Systems MIS 205 E-Business & Information Systems

Management Opportunities: Management Information Systems E-Business & Information Systems in the Enterprise MANAGEMENT OPPORTUNITIES, CHALLENGES, AND SOLUTIONS TO ENTERPRISE-WIDE INTEGRATION Management Opportunities: There are extraordinary opportunities to use information systems to achieve business value, and increase profitability MIS 205 E-Business & Information Systems

Management Challenges: Management Information Systems E-Business & Information Systems in the Enterprise MANAGEMENT OPPORTUNITIES, CHALLENGES, AND SOLUTIONS TO ENTERPRISE-WIDE INTEGRATION Management Challenges: Integration and the whole firm view: Given the different interests and perspectives within a firm, it is difficult to achieve consensus about the need for the "whole firm" viewpoint. Management and employee training: Training a large number of employees on many systems in a large organization involves commensurately large investments. Accounting for the cost of systems and managing demands for systems: Given the large number of different types of systems in a firm, and the large number of people involved with using them, it is a complex task to understand which systems are truly necessary and productive with high returns on investment MIS 205 E-Business & Information Systems

Management Information Systems E-Business & Information Systems in the Enterprise MANAGEMENT OPPORTUNITIES, CHALLENGES, AND SOLUTIONS TO ENTERPRISE-WIDE INTEGRATION Solution Guidelines: Inventory the firm’s information systems: Develop a list of firm-wide information requirements to give a 360-degree view of the most important information needs of the firm. Employee and management education: Ensure that you understand how much training is required. Account for the costs and benefits: Develop an accounting system for information services firm- wide. MIS 205 E-Business & Information Systems