1. Types of information systems in organizations and its characteristics
Faculty of Business, Finance, and Hospitality
Prepared by: Teo Siew
Copyright© 2017 MAHSA UNIVERSITY

2. Learning Objectives
Evaluate the role played by systems serving the various levels of management in a business and their relationship to each other.
Explain how enterprise applications improve organizational performance.

3. Information Systems in Business Functions
Functional business area: services within a company that support main business
Includes accounting, finance, marketing, human resources, etc.
Part of a larger enterprise system

4. Accounting Accounting information systems: Help record transactions
Produce periodic statements
Create required reports for law
Create supplemental reports for managers
Contain controls to guarantee adherence to standards

5. Finance Finance systems:
Facilitate financial planning and business transactions
Tasks include organizing budgets, managing cash flow, analyzing investments, and making decisions

6. Marketing
Marketing’s purpose is to pinpoint likely customers and promote products
Marketing information systems help:
Analyze demand for products in regions and demographic groups
Identify trends in demand for products/services
Determine how advertising campaigns affect profit
Web provides opportunity to collect marketing data as well as promote products and services

7. Human Resources Human resource (HR) management systems assist in:
Record-keeping
Employee evaluation
Employee benefits

8. Types of Information Systems
Transaction processing systems
Serve operational managers and staff
Perform and record daily routine transactions necessary to conduct business
Examples: sales order entry, payroll, shipping
Allow managers to monitor status of operations and relations with external environment
Serve predefined, structured tasks, resources and goals for decision making

9. Types of Information Systems
Transaction processing systems
Major producers of information for other types of systems.
Central to a business

10. A Payroll TPS
A TPS for payroll processing captures employee payment transaction data (such as a time card). System outputs include online and hard-copy reports for management and employee paychecks.
FIGURE 2-2

11. Types of Information Systems
Management information systems
Serve middle management
help with monitoring, controlling, decision making, and administrative activities.
Provide reports on firm’s current performance, based on data from TPS
Provide answers to routine questions with predefined procedure for answering them
Typically have little analytic capability

12. How MIS Obtain Their Data from the Organization’s TPS
FIGURE 2-3
In the system illustrated by this diagram, three TPS supply summarized transaction data to the MIS reporting system at the end of the time period. Managers gain access to the organizational data through the MIS, which provides them with the appropriate reports.

13. Sample MIS Report
FIGURE 2-4
This report, showing summarized annual sales data, was produced by the MIS in Figure 2-3.

14. Types of Information Systems
Decision support systems
Serve middle management
Support non-routine decision making
Example: What is the impact on production schedule if December sales doubled?
May use external information as well TPS / MIS data
Provide sophisticated analytical models and data analysis tools
Focus on problems that are unique and rapidly changing
Are designed so that users can work with them directly

15. Voyage-Estimating Decision Support System
FIGURE 2-5
This DSS operates on a powerful PC. It is used daily by managers who must develop bids on shipping contracts.

16. Types of Information Systems
Executive support systems
Support senior management
Address non-routine decisions
Requiring judgment, evaluation, and insight
Incorporate data about external events (e.g. new tax laws or competitors) as well as summarized information from internal MIS and DSS
Provide a generalized computing and communications capacity that can be applied to a changing array of problems
Are designed for ease-of-use and rely heavily on graphical presentations of data

17. Types of Information Systems
Knowledge management systems (KMS)
Support processes for capturing and applying knowledge and expertise
How to create, produce, deliver products and services
Collect internal knowledge and experience within firm and make it available to employees
Link to external sources of knowledge

18. Types of Information Systems
Knowledge management systems (KMS)
Enable:
support processes for acquiring, storing, distributing, and applying knowledge
managing and distributing documents, graphics, and other digital knowledge objects
systems for creating corporate knowledge directories of employees with special areas of expertise
office systems for distributing knowledge and information
knowledge work systems to facilitate knowledge creation
use intelligent techniques that codify knowledge and experience for use by other members

19. Types of Information Systems
Expert System: supports knowledge-intensive decision making
Uses artificial intelligence techniques
Can preserve the knowledge of retiring experts

20. Types of Information Systems
Enterprise systems
Also known as enterprise resource planning (ERP)
Collects data from different firm functions and stores data in single central data repository
Resolves problem of fragmented data
Enable:
Coordination of daily activities
Efficient response to customer orders (production, inventory)
Help managers make decisions about daily operations and longer-term planning

21. Web-Empowered Enterprises
E-commerce: buying and selling goods and services through Internet
Internet is a vast network of computers connected globally
Web has a profound impact on information systems
A place to conduct e-commerce
An emerging advertising medium
© Cengage Learning 2015

22. References
Kenneth C. Laudon & Jane P. Laudon (2015) Management Information System: Managing the Digital Firm, 14th edition. Pearson.