1. 2.1 2 2 INFORMATION SYSTEMS IN THE ENTERPRISE ENTERPRISE Chapter

2. 2.2 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 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise MANAGEMENT CHALLENGES

3. 2.3 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise Types of Information Systems Figure 2-1 KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

4. 2.4 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise Major Types of Systems (ESS) Executive Support Systems(ESS) Executive Support Systems (DSS) Decision Support Systems(DSS) Decision Support Systems (MIS) Management Information Systems(MIS) Management Information Systems (KWS) Knowledge Work Systems(KWS) Knowledge Work Systems (OAS) Office Automation Systems(OAS) Office Automation Systems (TPS) Transaction Processing Systems(TPS) Transaction Processing Systems KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

5. 2.5 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise TYPES OF INFORMATION SYSTEMS Figure 2-2

6. 2.6 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Transaction Processing Systems (TPS): Basic business systems that serve the operational levelBasic business systems that serve the operational level A computerized system that performs and records the daily routine transactions necessary to the conduct of the businessA computerized system that performs and records the daily routine transactions necessary to the conduct of the business

7. 2.7 Knowledge Work Systems (KWS): Knowledge level Inputs: Design specsInputs: Design specs Processing: ModelingProcessing: Modeling Outputs: Designs, graphicsOutputs: Designs, graphics Users: Technical staffUsers: Technical staff Example: Engineering work station Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

8. 2.8 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 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

9. 2.9 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 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Management Information System (MIS)

10. 2.10 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise Decision Support System (DSS): 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 KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

11. 2.11 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise 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 KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

12. 2.12 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise 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 KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Executive support system (ESS)

13. 2.13 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTERRELATIONSHIPS AMONG SYSTEMS Figure 2-9

14. 2.14 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Unique ways to coordinate work,Unique ways to coordinate work, information, and knowledge Ways in which management choosesWays in which management chooses to coordinate work Business Processes

15. 2.15 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise Business Processes INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Information systems help organizations Achieve great efficiencies by automating parts of processesAchieve great efficiencies by automating parts of processes Rethink and streamline processesRethink and streamline processes

16. 2.16 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 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 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise Examples of Business Processes INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

17. 2.17 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Customer Relationship Management (CRM) 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 Business and Technology disciplineBusiness and Technology discipline Uses information system to coordinate entire business processes of a firmUses information system to coordinate entire business processes of a firm

18. 2.18 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES 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 Network of organizations and business processesNetwork of organizations and business processes Helps in procurement of materials, transformation of raw materials into intermediate and finished productsHelps in procurement of materials, transformation of raw materials into intermediate and finished products

19. 2.19 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Helps in distribution of the finished products to customersHelps in distribution of the finished products to customers Includes reverse logistics - returned items flow in the reverse direction from the buyer back to the sellerIncludes reverse logistics - returned items flow in the reverse direction from the buyer back to the seller Supply Chain Management (SCM)

20. 2.20 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Supply Chain Management Figure 2-14

21. 2.21 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Limitations: Inefficiencies can waste as much as 25% of company’s operating costsInefficiencies can waste as much as 25% of 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 Supply Chain Management (SCM)

22. 2.22 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise Figure 2-16 Traditional View of the Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

23. 2.23 Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise Figure 2-17 Enterprise Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

24. 2.24 Difficult to build: Require fundamental changes in the way the business operatesDifficult to build: Require fundamental changes in the way the business operates Technology: Require complex pieces of software and large investments of time, money, and expertiseTechnology: Require complex pieces of software and large investments of time, money, and expertise Centralized organizational coordination and decision making: Not the best way for the firms to operateCentralized organizational coordination and decision making: Not the best way for the firms to operate Essentials of Management Information Systems Chapter 2 Information Systems in the Enterprise Challenges of Enterprise Systems INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

25. 2.25

26. 2.26 3 3 INFORMATION SYSTEMS, ORGANIZATIONS, MANAGEMENT, AND STRATEGY Chapter

27. 2.27 1.Sustainability of competitive advantage 2. Fitting technology to the organization (or vice-versa) MANAGEMENT CHALLENGES Essentials of Management Information Systems Chapter 3 Information Systems, Organizations, Management, and Strategy

28. 2.28 ORGANIZATIONS AND INFORMATION SYSTEMS Figure 3-1 Essentials of Management Information Systems Chapter 3 Information Systems, Organizations, Management, and Strategy MEDIATING FACTORS: Environment Culture Structure Standard Procedures Politics Management Decisions Chance ORGANIZATIONS INFORMATION TECHNOLOGY The Two-Way Relationship Between Organizations and Information Technology

29. 2.29 Technical Microeconomic Definition of the Organization “PROCESS VIEW” Essentials of Management Information Systems Chapter 3 Information Systems, Organizations, Management, and Strategy ORGANIZATIONS AND INFORMATION SYSTEMS Figure 3-2

30. 2.30 Essentials of Management Information Systems Chapter 3 Information Systems, Organizations, Management, and Strategy COMMON FEATURES OF ORGANIZATIONS The Behavioral View of Organizations “HUMAN RELATIONS VIEW” Figure 3-3

31. 2.31 Essentials of Management Information Systems Chapter 3 Information Systems, Organizations, Management, and Strategy Organizations are bureaucracies that have certain structural features Clear division of laborClear division of labor HierarchyHierarchy Explicit rules and proceduresExplicit rules and procedures Impartial judgmentsImpartial judgments Technical qualificationsTechnical qualifications Maximum organizational efficiencyMaximum organizational efficiency ORGANIZATIONS AND INFORMATION SYSTEMS Common Features of Organizations

32. 2.32 Essentials of Management Information Systems Chapter 3 Information Systems, Organizations, Management, and Strategy Standard Operating Procedures: Precise rules, procedures, and practicesPrecise rules, procedures, and practices Enable organizations to cope with all expected situationsEnable organizations to cope with all expected situations ORGANIZATIONS AND INFORMATION SYSTEMS Common Features of Organizations

33. 2.33 Essentials of Management Information Systems Chapter 3 Information Systems, Organizations, Management, and Strategy Organizational Politics: Divergent viewpoints leads to political struggle, competition, and conflictDivergent viewpoints leads to political struggle, competition, and conflict Hamper organizational changeHamper organizational change ORGANIZATIONS AND INFORMATION SYSTEMS Common Features of Organizations

34. 2.34 Essentials of Management Information Systems Chapter 3 Information Systems, Organizations, Management, and Strategy Organizational Culture: a set of fundamental assumptions about: What products the organization should produceWhat products the organization should produce How and where it should produce themHow and where it should produce them For whom they should be producedFor whom they should be produced ORGANIZATIONS AND INFORMATION SYSTEMS Common Features of Organizations

35. 2.35 Essentials of Management Information Systems Chapter 3 Information Systems, Organizations, Management, and Strategy Figure 3-5 THE CHANGING ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONS Information Technology Services

36. 2.36 Essentials of Management Information Systems Chapter 3 Information Systems, Organizations, Management, and Strategy TPS OAS MIS KWS DSS ESS Organizational Level TYPE OF DECISIONOPERATIONALKNOWLEDGEMANAGEMENTSTRATEGIC STRUCTURED ACCOUNTS RECEIVABLE ELECTRONIC PRODUCTION SCHEDULING COST OVERRUNS SEMI-BUDGET STRUCTUREDPREPARATION PROJECT SCHEDULING FACILITY LOCATION UNSTRUCTUREDPRODUCT DESIGN NEW PRODUCTS NEW MARKETS Figure 3-9 MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS Different Kinds of Information Systems

37. 2.37 Essentials of Management Information Systems Chapter 3 Information Systems, Organizations, Management, and Strategy Figure 3-10 MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS Decision-Making Process

38. 2.38 Rational: People, organizations, and nations engage in consistent, value-maximizing calculations or adaptations within certain constraintsRational: People, organizations, and nations engage in consistent, value-maximizing calculations or adaptations within certain constraints Cognitive style: Underlying personality dispositions toward the treatment of information, selection of alternatives, and evaluation of consequencesCognitive style: Underlying personality dispositions toward the treatment of information, selection of alternatives, and evaluation of consequences Systematic decision makers:Cognitive style,describes people who approach a problem by structuring it in terms of some formal methodSystematic decision makers: Cognitive style, describes people who approach a problem by structuring it in terms of some formal method Intuitive: Cognitive style, describes people approaching a problem with multiple methods in an unstructured mannerIntuitive: Cognitive style, describes people approaching a problem with multiple methods in an unstructured manner Organizational models of decision making:Consider structural and political characteristics of an organizationOrganizational models of decision making: Consider structural and political characteristics of an organization Essentials of Management Information Systems Chapter 3 Information Systems, Organizations, Management, and Strategy MANAGERS, DECISION MAKING, AND INFORMATION SYSTEMS Models of Decision Making

39. 2.39 Essentials of Management Information Systems Chapter 3 Information Systems, Organizations, Management, and Strategy INFORMATION SYSTEMS AND BUSINESS STRATEGY Firm Value Chain Figure 3-11

40. 2.40 Essentials of Management Information Systems Chapter 3 Information Systems, Organizations, Management, and Strategy Figure 3-13 INFORMATION SYSTEMS AND BUSINESS STRATEGY Stockless Inventory Compared to Traditional and Just-in-time Supply Methods

41. 2.41 INFORMATION SYSTEMS AND BUSINESS STRATEGY Core Competency: Activity at which a firm excels as a world- class leaderActivity at which a firm excels as a world- class leader Information system encouraging the sharing of knowledge across business units enhances competencyInformation system encouraging the sharing of knowledge across business units enhances competency Essentials of Management Information Systems Chapter 3 Information Systems, Organizations, Management, and Strategy Firm-Level Strategy and Information Technology

42. 2.42 INFORMATION SYSTEMS AND BUSINESS STRATEGY The competitive forces model: Describes the interaction of external influences, specifically threats and opportunities, affecting an organization’s strategy and ability to competeDescribes the interaction of external influences, specifically threats and opportunities, affecting an organization’s strategy and ability to compete Essentials of Management Information Systems Chapter 3 Information Systems, Organizations, Management, and Strategy Industry-Level Strategy and Information Systems

43. 2.43 Essentials of Management Information Systems Chapter 3 Information Systems, Organizations, Management, and Strategy Figure 3-15 INFORMATION SYSTEMS AND BUSINESS STRATEGY Porter’s Competitive Forces Model