1. 9/5: Ch. 2 Strategic Role of IS Key system applications in organizations Strategic role of information systems How information systems promote quality

2. Key System Apps in Orgs: Groups Strategic Level: Senior Managers Management Level: Middle Managers Knowledge Level: Knowledge & Data Workers Operational Level: Operational Managers Sales & Manufacturing Finance Accounting Human Marketing Resources

3. Operational Level Strategic Level: Senior Managers Management Level: Middle Managers Knowledge Level: Knowledge & Data Workers Operational Level: Operational Managers Sales & Manufacturing Finance Accounting Human Marketing Resources

4. Knowledge Level Strategic Level: Senior Managers Management Level: Middle Managers Knowledge Level: Knowledge & Data Workers Operational Level: Operational Managers Sales & Manufacturing Finance Accounting Human Marketing Resources

5. Management Level Strategic Level: Senior Managers Management Level: Middle Managers Knowledge Level: Knowledge & Data Workers Operational Level: Operational Managers Sales & Manufacturing Finance Accounting Human Marketing Resources

6. Strategic Level Strategic Level: Senior Managers Management Level: Middle Managers Knowledge Level: Knowledge & Data Workers Operational Level: Operational Managers Sales & Manufacturing Finance Accounting Human Marketing Resources

7. Six Major Types of Systems ESS: Executive Support System MIS: Management Information System DSS: Decision Support System KWS: Knowledge Work Systems OAS: Office Automation Systems TPS: Transaction Processing Systems

8. Sales & Manufacturing Finance Accounting Human Marketing Resources Major Types of Systems: TPS Transaction Processing Systems Processing routine activities of the organization –Hotel reservations –Grade submissions –Employee records

9. Sales & Manufacturing Finance Accounting Human Marketing Resources Transaction Processing Systems Operational Level –Sales: order processing & tracking –Manufacturing: machine control, inventory control –Finance: securities trading, cash management –Accounting: payroll, A/R, A/P –Human Resources: compensation, employee records

10. Sales & Manufacturing Finance Accounting Human Marketing Resources Major Types of Systems: OAS Office Automation Systems Knowledge Level –Scheduling meetings –Desktop publishing –Document imaging systems –Presentation graphics development

11. Sales & Manufacturing Finance Accounting Human Marketing Resources Major Types of Systems: KWS Knowledge Work Systems Knowledge Level –CAD: Computer Aided Design –Modeling –Graphics development

12. Sales & Manufacturing Finance Accounting Human Marketing Resources Major Types of Systems: MIS Management Information Systems Provides reports Provides access to current performance Aids planning, controlling, & decision making Usually inflexible, predefined reports

13. Sales & Manufacturing Finance Accounting Human Marketing Resources Management Information Systems Management Level –Sales & Marketing: Sales management, region analysis –Manufacturing: Long-range inventory control & planning, production scheduling –Finance & Accounting: budgeting, capital investment analysis, profitibility analysis –Human Resources: relocation analysis, contract cost analysis

14. Sales & Manufacturing Finance Accounting Human Marketing Resources Major Types of Systems: DSS Decision Support Systems Combine data & modeling tools to aid non- routine decision-making Interactive, flexible “What if” analysis

15. Sales & Manufacturing Finance Accounting Human Marketing Resources Major Types of Systems: ESS Executive Support Systems Incorporates external data with internal data Creates projections Designed to help answer questions like, “What business should we be in? Which business units should we sell off?” Strategic Level

16. How the systems relate to each other ESS DSSMIS TPSKWS & OAS

17. Key System Apps in Orgs: Functions Strategic Level: Senior Managers Management Level: Middle Managers Knowledge Level: Knowledge & Data Workers Operational Level: Operational Managers Sales & Manufacturing Finance Accounting Human Marketing Resources

18. Systems in Sales & Marketing Sales & Manufacturing Finance Accounting Human Marketing Resources Sales trend forecasting Pricing analysis Market analysis Order processing

19. Systems in Manufacturing Sales & Manufacturing Finance Accounting Human Marketing Resources Facilities Location Planning Production Planning CAD Machine Control

20. Systems in Finance & Accounting Sales & Manufacturing Finance Accounting Human Marketing Resources Profit Planning Budgeting Portfolio Analysis Accounts Receivable

21. Systems in Human Resources Sales & Manufacturing Finance Accounting Human Marketing Resources Human Resources Planning Compensation Analysis Designing Career Paths Tracking Training & Development

22. Strategic Role of IS What makes an IS strategic? –An IS is strategic if it changes goals, operations, products, services, or environmental relationships to help the organization gain a competitive advantage. –A strategic IS keeps an organization ahead of the competition.

23. 4 Paths to Competitive Advantage Product differentiation Focused differentiation Linking tightly to suppliers & customers Becoming the low-cost producer

24. Product Differentiation Creating new products that are not easily duplicated by others Citibank created ATMs

25. Focused Differentiation Developing new market niches for specialized products Datamining can aid here –Analysis of large amounts of data to find patterns and rules that can predict future behavior.

26. Linking to Customers & Suppliers Providing greater service to customers Integrating inventory management practices with suppliers Lower costs, increase loyalty

27. Becoming the Low-Cost Producer Lower internal costs Reduce inventories Walmart

28. How IS Promote Quality Definition of quality: conformance to producer specifications and customer satisfaction. Information Systems contribute to TQM –TQM: Total Quality Management The entire organization is responsible for quality

29. How IS contribute to TQM Simplifying the product & the process Benchmarking Using customer demands to improve products Reducing cycle time Improving quality & precision of the design Increasing precision of production.

30. Next Time Chapter 3 pg. 72 - 107 Information Systems, Organizations, and Management