1. 2.1 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization INFORMATION SYSTEMS IN THE ORGANIZATION

2. 2.2 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization What are the major types of systems in a business? What roles do they play?What are the major types of systems in a business? What roles do they play? Why should managers pay attention to business processes? Why do firms need to integrate their business processes?Why should managers pay attention to business processes? Why do firms need to integrate their business processes? What are the benefits and challenges of using enterprise systems?What are the benefits and challenges of using enterprise systems? continued OBJECTIVES

3. 2.3 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization What are the benefits of using systems to support supply chain management and collaborative commerce?What are the benefits of using systems to support supply chain management and collaborative commerce? What are the benefits of using information systems for customer relationship management and knowledge management?What are the benefits of using information systems for customer relationship management and knowledge management? OBJECTIVES (continued)

4. 2.4 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization FAST-TRACK FASHIONS AT ZARA

5. 2.5 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization 1.Integration: Different systems serve variety of functions, connecting organizational levels difficult, costly 2.Enlarging Scope of Management Thinking: Huge system investments, long development time must be guided by common objectives MANAGEMENT CHALLENGES

6. 2.6 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

7. 2.7 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Different Kinds of Systems Operational-Level SystemsOperational-Level Systems – –Monitor the elementary activities and transactions of the organization Knowledge-Level SystemsKnowledge-Level Systems – –Support knowledge and data workers continued 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

8. 2.8 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Different Kinds of Systems (continued) Management-Level SystemsManagement-Level Systems – –Support the monitoring, control, decision-making, and administrative activities of middle managers Strategic-Level SystemsStrategic-Level Systems – –Support the long-range planning of senior management 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

9. 2.9 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Six Major Types of Systems Transaction Processing Systems (TPS)Transaction Processing Systems (TPS) Knowledge Work Systems (KWS)Knowledge Work Systems (KWS) Office SystemsOffice Systems Management Information Systems (MIS)Management Information Systems (MIS) Decision Support Systems (DSS)Decision Support Systems (DSS) Executive Support Systems (ESS)Executive Support Systems (ESS) 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

10. 2.10 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

11. 2.11 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Six Major Types of Systems

12. 2.12 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Transaction Processing Systems (TPS): Computerized systems that perform and record the daily routine transactions necessary to conduct businessComputerized systems that perform and record the daily routine transactions necessary to conduct business Serve the operational levelServe the operational level 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Six Major Types of Systems

13. 2.13 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Six Major Types of Systems

14. 2.14 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Six Major Types of Systems

15. 2.15 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Knowledge Work Systems (KWS): Information systems that aid knowledge workers in the creation and integration of new knowledge in the organizationInformation systems that aid knowledge workers in the creation and integration of new knowledge in the organization Office Systems: Computer systems, such as word processing, e-mail, and scheduling systems that are designed to increase the productivity of data workers in the officeComputer systems, such as word processing, e-mail, and scheduling systems that are designed to increase the productivity of data workers in the office 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Six Major Types of Systems

16. 2.16 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Knowledge Work Systems (KWS): Knowledge Level Inputs: Design specsInputs: Design specs Processing: ModelingProcessing: Modeling Outputs: Designs, graphicsOutputs: Designs, graphics Users: Technical staff and professionalsUsers: Technical staff and professionals Example: Engineering work station 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Six Major Types of Systems

17. 2.17 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Management Information System (MIS): Management Level Inputs: High-volume dataInputs: High-volume data Processing : Simple modelsProcessing : Simple models Outputs: Summary reportsOutputs: Summary reports Users: Middle managersUsers: Middle managers Example: Annual budgeting 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Six Major Types of Systems

18. 2.18 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Management Information System: Structured and semi-structured decisionsStructured and semi-structured decisions Report control orientedReport control oriented Past and present dataPast and present data Internal orientationInternal orientation Lengthy design processLengthy design process 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Six Major Types of Systems

19. 2.19 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Six Major Types of Systems

20. 2.20 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Six Major Types of Systems

21. 2.21 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Decision Support System (DSS): Decision Support System (DSS): combines data and analytical models or data analysis tools to support semi-structured and unstructured decision-making Management level Inputs: Low-volume dataInputs: Low-volume data Processing: InteractiveProcessing: Interactive Outputs: Decision analysisOutputs: Decision analysis Users: Professionals, staffUsers: Professionals, staff Example: Contract cost analysis 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Six Major Types of Systems

22. 2.22 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Six Major Types of Systems

23. 2.23 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Executive Support System (ESS): Strategic level Inputs: Aggregate dataInputs: Aggregate data Processing: InteractiveProcessing: Interactive Outputs: ProjectionsOutputs: Projections Users: Senior managersUsers: Senior managers Example: 5-year operating plan 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Six Major Types of Systems

24. 2.24 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Executive Support Systems Top level managementTop level management Designed to the individualDesigned to the individual Ties CEO to all levelsTies CEO to all levels Very expensive to keep upVery expensive to keep up Extensive support staffExtensive support staff 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Six Major Types of Systems

25. 2.25 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Six Major Types of Systems

26. 2.26 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization 2.1 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Relationship of Systems to One Another

27. 2.27 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization 2.2 ENTERPRISE APPLICATIONS Enterprise Applications Systems that can coordinate activities, decisions, and knowledge across many different functions, levels and business unitsSystems that can coordinate activities, decisions, and knowledge across many different functions, levels and business units Includes enterprise systems, supply chain management systems, customer relationship management systems and knowledge management systemsIncludes enterprise systems, supply chain management systems, customer relationship management systems and knowledge management systems

28. 2.28 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Business Processes Manner in which work is organized, coordinated, and focused to produce a valuable product or serviceManner in which work is organized, coordinated, and focused to produce a valuable product or service Concrete work flows of material, information, and knowledge—sets of activitiesConcrete work flows of material, information, and knowledge—sets of activities Integrating Functions and Business Processes 2.2 ENTERPRISE APPLICATIONS

29. 2.29 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Integrating Functions and Business Processes 2.2 ENTERPRISE APPLICATIONS

30. 2.30 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Manufacturing and Production: Assembling product, checking quality, producing bills of materialsManufacturing and Production: Assembling product, checking quality, producing bills of materials Sales and Marketing: Identifying customers, creating customer awareness, sellingSales and Marketing: Identifying customers, creating customer awareness, selling Examples of Business Processes ENTERPRISE APPLICATIONS

31. 2.31 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Finance and Accounting: Paying creditors, creating financial statements, managing cash accountsFinance and Accounting: Paying creditors, creating financial statements, managing cash accounts Human Resources: Hiring employees, evaluating performance, enrolling employees in benefits plansHuman Resources: Hiring employees, evaluating performance, enrolling employees in benefits plans Examples of Business Processes ENTERPRISE APPLICATIONS

32. 2.32 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Cross-Functional Business Processes Transcend boundary between sales, marketing, manufacturing, and research and developmentTranscend boundary between sales, marketing, manufacturing, and research and development Group employees from different functional specialties to complete a piece of workGroup employees from different functional specialties to complete a piece of work Example: Order Fulfillment Process 2.2 ENTERPRISE APPLICATIONS Integrating Functions and Business Processes

33. 2.33 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Integrating Functions and Business Processes 2.2 ENTERPRISE APPLICATIONS

34. 2.34 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Enterprise Systems Provide a technology platform where organizations can integrate and coordinate major business processesProvide a technology platform where organizations can integrate and coordinate major business processes Also known as Enterprise Resource Planning Systems (ERP)Also known as Enterprise Resource Planning Systems (ERP) Enterprise Systems 2.2 ENTERPRISE APPLICATIONS

35. 2.35 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Traditional View of Systems Within the business: There are functions, each having its uses of information systemsWithin the business: There are functions, each having its uses of information systems Outside the organization’s boundaries: There are customers and vendorsOutside the organization’s boundaries: There are customers and vendors Functions tend to work in isolation 2.2 ENTERPRISE APPLICATIONS Enterprise Systems

36. 2.36 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Enterprise Systems 2.2 ENTERPRISE APPLICATIONS

37. 2.37 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Enterprise Systems 2.2 ENTERPRISE APPLICATIONS

38. 2.38 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Enterprise Systems 2.2 ENTERPRISE APPLICATIONS

39. 2.39 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Benefits and Challenges of Enterprise Systems 2.2 ENTERPRISE APPLICATIONS Benefits Firm structureFirm structure –Integrated corporation ManagementManagement –Firm-wide knowledge-based management processes Technology:Technology: –Unified platform Business:Business: –More efficient operations and customer- driven business processes

40. 2.40 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Benefits and Challenges of Enterprise Systems 2.2 ENTERPRISE APPLICATIONS Challenges 1.Difficult & costly to build 2.Complex technology 3.Need to rework business processes 4.Centralized organizational coordination and decision making may not be suitable for all organizations 5.Difficult to attain strategic differentiation

41. 2.41 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Supply Chain Management (SCM) Close linkage and coordination of activities involved in buying, making, and moving a productClose linkage and coordination of activities involved in buying, making, and moving a product Integrates supplier, manufacturer, distributor, and customer logistics timeIntegrates supplier, manufacturer, distributor, and customer logistics time Reduces time, redundant effort, and inventory costsReduces time, redundant effort, and inventory costs Supply Chain Management and Collaborative Commerce 2.2 ENTERPRISE APPLICATIONS

42. 2.42 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Supply Chain Network of organizations and business processesNetwork of organizations and business processes Helps in procurement of materials, transformation of raw materials into intermediate and finished products, and distributing final products to customersHelps in procurement of materials, transformation of raw materials into intermediate and finished products, and distributing final products to customers Reverse Logistics The return of items from buyers to sellers in a supply chainThe return of items from buyers to sellers in a supply chain 2.2 ENTERPRISE APPLICATIONS Supply Chain Management and Collaborative Commerce

43. 2.43 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization 2.2 ENTERPRISE APPLICATIONS Supply Chain Management and Collaborative Commerce

44. 2.44 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Limitations: Inefficiencies can waste as much as 25% of a company’s operating costsInefficiencies can waste as much as 25% of a company’s operating costs Bullwhip Effect: Information about the demand for the product gets distorted as it passes from one entity to nextBullwhip Effect: Information about the demand for the product gets distorted as it passes from one entity to next 2.2 ENTERPRISE APPLICATIONS Supply Chain Management and Collaborative Commerce

45. 2.45 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization 2.2 ENTERPRISE APPLICATIONS Supply Chain Management and Collaborative Commerce

46. 2.46 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization 2.2 ENTERPRISE APPLICATIONS Supply Chain Management and Collaborative Commerce Supply Chain Planning System: Enables firm to generate forecasts for a product and to develop sourcing and a manufacturing plan for the productSupply Chain Planning System: Enables firm to generate forecasts for a product and to develop sourcing and a manufacturing plan for the product Supply Chain Execution System: Manages flow of products through distribution centers and warehousesSupply Chain Execution System: Manages flow of products through distribution centers and warehouses

47. 2.47 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization 2.2 ENTERPRISE APPLICATIONS Supply Chain Management and Collaborative Commerce

48. 2.48 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Uses digital technologies to enable multiple organizations to collaboratively design, develop, build, move, and manage productsUses digital technologies to enable multiple organizations to collaboratively design, develop, build, move, and manage products Increases efficiencies in reducing product design life cycles, minimizing excess inventory, forecasting demand, and keeping partners and customers informedIncreases efficiencies in reducing product design life cycles, minimizing excess inventory, forecasting demand, and keeping partners and customers informed Collaborative Commerce 2.2 ENTERPRISE APPLICATIONS

49. 2.49 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Collaborative Planning, Forecasting, and Replenishment (CPFR)Collaborative Planning, Forecasting, and Replenishment (CPFR) –Collaboration of firms with their suppliers and buyers to: Formulate demand forecasts Develop production plans Coordinate shipping, warehousing and stocking activities Collaborative Commerce 2.2 ENTERPRISE APPLICATIONS

50. 2.50 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Collaborative Commerce 2.2 ENTERPRISE APPLICATIONS

51. 2.51 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Collaborative Commerce 2.2 ENTERPRISE APPLICATIONS

52. 2.52 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Private Industrial Networks Web-enabled networksWeb-enabled networks Link systems of multiple firms in an industryLink systems of multiple firms in an industry Coordinate transorganizational business processesCoordinate transorganizational business processes Industrial Networks for Interorganizational Business Processes 2.2 ENTERPRISE APPLICATIONS

53. 2.53 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Customer Relationship Management (CRM) 2.2 ENTERPRISE APPLICATIONS Manages all ways used by firms to deal with existing and potential new customersManages all ways used by firms to deal with existing and potential new customers Uses information system to integrate all business processes surrounding a firm’s interactions with its customers in sales, marketing, and serviceUses information system to integrate all business processes surrounding a firm’s interactions with its customers in sales, marketing, and service

54. 2.54 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Customer Relationship Management (CRM) 2.2 ENTERPRISE APPLICATIONS Provides end-to-end customer careProvides end-to-end customer care Provides a unified view of customer across the companyProvides a unified view of customer across the company Consolidates customer data from multiple sources and provides analytical tools for answering questionsConsolidates customer data from multiple sources and provides analytical tools for answering questions

55. 2.55 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Customer Relationship Management (CRM) 2.2 ENTERPRISE APPLICATIONS

56. 2.56 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization Knowledge Management Systems Creating knowledgeCreating knowledge Discovering and codifying knowledgeDiscovering and codifying knowledge Sharing knowledgeSharing knowledge Distributing knowledgeDistributing knowledge 2.2 ENTERPRISE APPLICATIONS Knowledge Management Systems in the Enterprise

57. 2.57 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization 2.2 ENTERPRISE APPLICATIONS Knowledge Management Systems in the Enterprise

58. 2.58 Copyright © 2005 Pearson Education Canada Inc. Management Information Systems, Second Canadian Edition Chapter 2: Information Systems in the Organization INFORMATION SYSTEMS IN THE ORGANIZATION