Management Information Systems Lecturer: Gareth Jones

Learning Objectives What are the major features of a business that are important for understanding the role of information systems? How do information systems support the major business functions: sales and marketing, manufacturing and production, finance and accounting, and human resources? How do systems serve the various levels of management in a business and how are these systems related? Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Learning Objectives (II) How do enterprise applications, collaboration and communication systems, and intranets improve organizational performance? What is the role of the information system’s function in a business? Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Business Components Business: Formal organization that makes products or provides a service in order to make a profit Four basic business functions Manufacturing and production Sales and marketing Finance and accounting Human resources Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Business Functions Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Business Entities Five basic business entities: Suppliers Customers Employees Invoices/payments Products and services Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Business Processes are… Logically related set of tasks that define how specific business tasks are performed The tasks each employee performs, in what order, and on what schedule E.g. Steps in hiring an employee Some processes tied to functional area Sales and marketing: Identifying customers Some processes are cross-functional Fulfilling customer order Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Orders with business functions Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Business Management Firms coordinate work of employees by developing hierarchy in which authority is concentrated at top Senior management Middle management Operational management Knowledge workers Data workers Production or service workers Each group has different needs for information Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Business Heirarchy Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Business Environment Immediate environment factors Global environment factors Technology and science Economy Politics International change Immediate environment factors Customers Suppliers Competitors Regulations Stockholders Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Business Environment Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Remember from yesterday? Firms invest in information systems in order to: Achieve operational excellence Develop new products and services Attain customer intimacy and service Improve decision making Promote competitive advantage Ensure survival Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Systems supporting Factors Sales and marketing systems Manufacturing and production systems Finance and accounting systems Human resources systems Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Sales and Marketing Sales and marketing systems Support activities for selling and marketing firm’s products or services Senior management: Monitor trends affecting products and sales, planning for new products and services, monitor performance of competitors Middle management: Support market research, analyze marketing campaigns, pricing decisions, sales performance Operational management and employees: Locating and contacting prospective customers, process orders, provide customer service support Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Sales and Marketing Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Manufacturing Manufacturing and production systems Support activities for producing firm’s products or services Senior management: Help plan long-term manufacturing goals, such as technology investments and locating new plants Middle management: Analyze and monitor manufacturing and production costs and resources Operational management Manage status of production tasks Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Manufacturing Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Finance Finance and accounting systems Support activities for managing financial assets, firm’s capitalization, and financial records Senior management: Establish long-term investment goals and provide long-range forecasts of firm’s financial performance Middle management: Oversee and control firm’s financial resources Operational management Track flow of funds in firm through transactions (paychecks, payments, securities reports, receipts, etc.) Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Finance Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Human Resources (HR) Human resources systems Support activities for attracting, developing, and maintaining firm’s workforce Senior management: Identify manpower requirements (skill, education level, types and numbers of positions, etc.) for meeting long-term business plans Middle management: Monitor and analyze recruitment, allocation, and compensation of employees Operational management Track recruitment and placement of employees Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

HR Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Support Systems Transaction processing systems Keep track of basic activities and transactions of organization (e.g. sales, receipts, cash deposits, payroll, credit decisions, flow of materials in a factory) Management information systems and decision-support systems Help with monitoring, controlling, decision-making, and administrative activities Executive support systems: Help address strategic issues and long-term trends, both in firm and in external environment Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Transaction Support Systems Transaction processing systems Serve operational managers Principal purpose is to answer routine questions and to track the flow of transactions through the organization E.g. Inventory questions, granting credit to customer Monitor status of internal operations and firm’s relationship with external environment Major producers of information for other systems Highly central to business operations and functioning Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Management Information Systems Provide middle managers with reports on firm’s performance To monitor firm and help predict future performance Summarize and report on basic operations using data from TPS Provide weekly, monthly, annual results, but may enable drilling down into daily or hourly data Typically not very flexible systems with little analytic capability Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

TSS and MISS Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

MIS Report Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Decision Support Systems Decision support systems (DSS) Support non-routine decision making for middle management E.g. What would impact on production schedules be if sales doubled in December? Use information from TPS, MIS, and external sources Use models to analyze data E.g. voyage estimating system of metals company that calculates financial and technical voyage details Focus on extracting, analyzing information from large amounts of data Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Decision Support Systems Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Executive Support Systems (ESS) Serve senior managers Address strategic issues and long-term trends E.g. What products should we make in 5 years? Address non-routine decision-making Provide generalized computing capacity that can be applied to changing array of problems Draw summarized information from MIS, DSS and data from external events Typically use portal with Web interface to present content Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

ESS Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Relationships with each other TPS: Major source of data for other systems ESS: Primarily a recipient of data from lower-level systems Other systems may exchange data as well Exchange of data between functional areas E.g. Sales order transmitted to manufacturing system In most organizations, systems are loosely integrated Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Enterprise Applications Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Enterprise Application Architecture Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Enterprise Systems Integrate data from key business processes into single system Speed communication of information throughout firm Enable greater flexibility in responding to customer requests, greater accuracy in order fulfillment Enable managers of large firms to assemble overall view of operations Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Enterprise Systems Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Supply Chain Management Manage relationships with suppliers, purchasing firms, distributors, and logistics companies Manage shared information about orders, production, inventory levels, etc. Goal is to move correct amount of product from source to point of consumption as quickly as possible and at lowest cost Type of inter-organizational system: Automating flow of information across organizational boundaries Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Supply Chain Management Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Customer Relationship Management Help manage relationship with customers Coordinate business processes that deal with customers to optimize revenue and customer satisfaction, and increase sales Combine sales, marketing, and service record data from multiple communication channels to provide unified view of customer, eliminate duplicate efforts E.g. Saab CRM applications to achieve 360º view of customers resulted in greater follow-up rate on sales leads and increased customer satisfaction Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Knowledge Management Systems Intangible knowledge assets Knowledge about producing and delivering products Source of value and advantage for firms Knowledge management systems: Help capture, storage, distribute, and apply knowledge so that it can be leveraged for strategic benefit Include systems for: Managing and distributing documents, graphics, other digital knowledge objects Creating knowledge directories of employees with specialized expertise Distributing knowledge Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

E-Terms E-business E-commerce E-government: Use of digital technology and Internet to drive major business processes E-commerce Subset of e-business Buying and selling goods and services through Internet E-government: Using Internet technology to deliver information and services to citizens, employees, and businesses Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Key Points 4 Business Functions and Systems 5 Business Entities Support Systems (TSS, MIS, DSS, ESS) Management Systems (SCM, CRM, KMS) Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009

Case Study Part 1 Identify all the current processes in the case study and think about the: Business Functions Business Entities Please justify any assumptions you make Management Information Systems (BUS-141 MIS) Tuesday, 17 March 2009