1. Organizational Information Systems
Chapter 7
Organizational Information Systems
Organizational Information Systems
Chapter 7
Information Systems Foundations, Jessup/Valavich

2. Chapter 7
Organizational Information Systems
Chapter Objectives
Describe characteristics that differentiate operational, managerial, and executive levels
Explain characteristics of the three levels of IS: TPS, MIS, and EIS
Describe characteristics of three IS that span levels: DSS, expert systems, and office automation
Explain the general IS needs of organizational functional areas
This chapter describes several types of information systems that are widely used in organizations. Three systems are described as being widely used to support each separate organizational level. First, transaction processing systems are described as being used to collect and process day-to-day business events that occur at the operational level. Next, management information systems are shown as being used to help mid-level manages track and control operational activities by aggregating and summarizing TPS data. Finally, executive information systems are characterized as being used by top-level managers to assist in long-range planning and decision making by delivering highly aggregate information in a very user friendly format.
Three systems are discussed that are widely used across organizational levels. First, decision support systems are described as being able to combine analytic models with numeric data to help managers make better decisions. Next, expert systems are shown as being able to make suggestions and recommendations by codifying human knowledge and expertise. Finally, office automation systems, used for preparing documents, coordinating activities, and assisting in organizational communication, are presented.
Information Systems Foundations, Jessup/Valavich

3. Different Types of Information Require Different Types of Systems
Chapter 7
Organizational Information Systems
Different Types of Information Require Different Types of Systems
Organizational levels
Operational
Managerial
Executive
Different levels have different information needs
The following sections provide a general foundation for understanding why there are various types of information systems, each with unique characteristics.
Information Systems Foundations, Jessup/Valavich

4. Levels of an Organization

5. Chapter 7
Organizational Information Systems
Operational Level
Where the routine day-to-day interaction with customers occurs
Information system
Automates repetitive activities
Improves efficiency of the customer interface
Decisions
Highly structured
Repetitive
Examples of supervisor decisions at this level include when to reorder supplies or how best to allocate personnel for the completion of a project.
Many decisions at this level are so straightforward that they can be programmed directly into operational information systems so these decisions can be made with little or no human intervention. For an example, an inventory system could keep track of inventory and issue an order for more supplies as needed.
BRIEF CASE: Transaction Processing at Eddie Bauer
Eddie Bauer now uses Web-based sales. All transactions are processed more quickly and efficiently in one single database.
Information Systems Foundations, Jessup/Valavich

6. Operational Level

7. Managerial Level Where functional managers monitor operations
Chapter 7
Organizational Information Systems
Managerial Level
Where functional managers monitor operations
Information system
Provides summary information of operational activities
Decisions
Moderately complex
Time horizon up to a few months
Semi-structured
Functional managers (marketing, finance, etc.) focus on effectively utilizing and deploying organizational resources. The scope of their decisions is usually contained within the functional area.
The decisions are referred to as semi-structured because solutions are not as clear cut as at the operational level.
BRIEF CASE: Decision Making at Sara Lee
Sara Lee’s meat division had difficulty making decisions because each different brand (Jimmy Deans, Kahns, etc.) had a different computing infrastructure. They adopted the Decision Support Suite from Information Advantage which integrated the old systems and gave managers the ability to quickly create up-to-the minute reports.
Information Systems Foundations, Jessup/Valavich

8. Managerial Level

9. Executive Level Where long-term strategic issues are decided
Chapter 7
Organizational Information Systems
Executive Level
Where long-term strategic issues are decided
Information systems
Aggregate summaries
Statistical analyses, trends, and projections
Decisions
Very complex
Long-term ramifications
Unstructured
Managers at this level include the president, chief executive officer, vice presidents, and possibly the Board of Directors. Executives must consider the ramifications of their decisions on the overall organization.
BRIEF CASE: Executive Information at Blue Cross Blue Shield of Florida
Executives at BC/BS use an Executive Information System to analyze complex data in textual and graphical summaries. This system helps the executives to more easily deal with the complexities of their rapidly changing environment and achieve a strategic advantage.
Information Systems Foundations, Jessup/Valavich

10. Executive Level

11. General Types of Information Systems
Chapter 7
Organizational Information Systems
General Types of Information Systems
All Information Systems use the basic systems model
Input, process, and output
Levels of business information systems
Transaction Processing Systems
Management Information Systems
Executive Information Systems
The following slides use the basic systems model (input, process, output) to describe various types of business information systems.
Information Systems Foundations, Jessup/Valavich

12. Transaction Processing Systems
Chapter 7
Organizational Information Systems
Transaction Processing Systems
Process business transactions
Transactions: events that occur as a regular part of business day-to-day operations
Used at operational level
Goals
Automate repetitive information processing activities to increase speed and accuracy
Lower the cost of processing
Make the organization more efficient
Because TPS are typically used to process large volumes of information, organizations have spent considerable resources designing TPS to maximize the processing speed and accuracy while lowering the cost of processing each transaction.
Much of the evolution of TPS has focused on reducing the role people play in the processing of transactions.
Information Systems Foundations, Jessup/Valavich

13. Activities of TPS Payroll processing Sales Online Batch
Chapter 7
Organizational Information Systems
Activities of TPS
Payroll processing
Sales
Online
Batch
There are many other types of transaction processing systems.
Online processing provides immediate results. Batch processing collects several transactions and processes them later. When customers need immediate notification of the success or failure of a transaction, system designers use online processing. When immediate notification is not needed, batch processing is the chosen system design.
Information Systems Foundations, Jessup/Valavich

14. Architecture of a Transaction Processing System

15. Forms of TPS Data Entry Manual Semi-automated Fully automated
Chapter 7
Organizational Information Systems
Forms of TPS Data Entry
Manual
Semi-automated
Fully automated
Manual data entry is a person manually entering a source document, such as when a clerk enters data from a form filled out by a customer.
Semi-automated data entry system uses some type of data capture device to speed the entry and processing of the transaction, such as when a check-out clerk scans a bar code into a cash register.
Fully-automated data entry requires no human intervention. Two computers “talk” to each other via a communication link.
BRIEF CASE: Transaction Processing System at Ford Motor Company
Ford has linked their WWW site to their TPS. The inputs to this system are zip codes entered by customers. Processing occurs back at Ford, where a TPS matches the customer’s zip code to one in a database containing all dealers. When a match is made, the output of the system is a report to the customer giving the name, address, and phone of the nearest dealer. This online TPS provides a valuable customer service with no human intervention.
Information Systems Foundations, Jessup/Valavich

16. Management Information Systems
Chapter 7
Organizational Information Systems
Management Information Systems
Support the ongoing decision-making activities of a business or functional area
Used at managerial level
Goals
Help managers make more effective decisions
Get the right information to the right person in the right format at the right time
Management Information Systems is a term has two meanings. It is used to describe the field of study that encompasses the use of computer-based information systems in organizations. It also refers to a specific type of organizational information system used at the managerial level.
Each functional area within an organization can have a MIS.
Information Systems Foundations, Jessup/Valavich

17. Activities of MIS Sales forecasting
Chapter 7
Organizational Information Systems
Activities of MIS
Sales forecasting
Financial management and forecasting
Manufacturing planning and scheduling
Inventory management and planning
Advertising and product pricing
These are just some of the examples of how an MIS can be used in an organization.
Information Systems Foundations, Jessup/Valavich

18. Architecture of a Management Information System

19. Executive Information Systems
Chapter 7
Organizational Information Systems
Executive Information Systems
Provide information for long-term decision making
Used at executive level
Goals
To provide aggregate information
To provide information that can be quickly scanned for trends and anomalies
EIS are not as widely used as other types of information systems. This trend is rapidly changing as more and more executives become comfortable with information technology.
Information Systems Foundations, Jessup/Valavich

20. Activities of EIS Executive-level decision-making
Chapter 7
Organizational Information Systems
Activities of EIS
Executive-level decision-making
Long-range and strategic planning
Monitoring internal and external events, and resources
Crisis management
Staffing and labor relations
One key element of an EIS is its capability to deliver both “soft” and “hard” data. Hard data includes facts and numbers mostly generated by the TPS and MIS. Soft data is news stories and other non-analytical information.
Information Systems Foundations, Jessup/Valavich

21. Architecture of an Executive Information System

22. Information Systems that Span Organizational Boundaries
Chapter 7
Organizational Information Systems
Information Systems that Span Organizational Boundaries
Decision support systems
Expert systems
Office automation systems
Functional area IS
Some information systems cannot be neatly associated with a particular level. The following slides will discuss these systems.
Information Systems Foundations, Jessup/Valavich

23. Boundary-spanning IS

24. Decision Support Systems
Chapter 7
Organizational Information Systems
Decision Support Systems
Special-purpose systems
Designed to solve a recurring problem
Support semi-structured problems
Use decision analysis tools
Allows user to examine alternative solutions
What-if analysis
The key distinction between a DSS and other types of previously described information systems is that with a DSS the user actively uses decision analysis tools to either analyze or create meaningful data to address non-routine problems. A DSS is an interactive aid. TPS, MIS, and EIS are passive receivers or givers of information.
A cash manager could examine what if scenarios of the effect of various interest rates on cash availability. Results could be displayed in both textual and graphical formats.
The most commonly used DSS is an electronic spreadsheet such as Microsoft Excel.
Information Systems Foundations, Jessup/Valavich

25. Architecture of a Decision Support System

26. Chapter 7
Organizational Information Systems
Expert Systems
Use knowledge of a subject to solve problems or provide advise
Mimic human expertise
Human knowledge represented by codifying facts and rule
Examples
Financial planning
Computer help desk
Expert systems are used to mimic human expertise by manipulating knowledge (understanding acquired through experience and extensive learning) rather than simply information.
The most difficult part of building an ES is acquiring the knowledge from the expert and getting this knowledge into a consistent and complete form capable of making recommendations.
Other examples include medical diagnosis, machine configuration, automobile diagnosis, software application assistance.
Information Systems Foundations, Jessup/Valavich

27. Architecture of a Expert System

28. Office Automation Systems
Chapter 7
Organizational Information Systems
Office Automation Systems
Develop documents
Word processing
Desktop publishing
Schedule resources
Electronic calendars
Communicate
Electronic and voice mail
Video conferencing
Groupware
Office automation systems are also covered in Chapter 3.
Smart electronic calendars can examine multiple schedules to find the first opportunity when all resources (people, rooms, equipment) are available.
Information Systems Foundations, Jessup/Valavich

29. Architecture of an Office Automation System

30. Functional Area Information Systems