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Management Information Systems - Class Note # 2

Prof. Yuan-Shyi Peter Chiu Feb. 2012

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Chap 2 Information Systems in the

Enterprise

2.1 Key System Applications in the Organization

2.2 Systems from a Functional Perspective

2.3 Integrating Functions and Business Processes

2.4 International Information Systems

3Fig 2.1: Types of Information Systems

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Different kinds of systemsDifferent kinds of systems

Information systems that monitor the elementary activities and transactions of the organization .

Information systems that support knowledge and data workers in an organization.

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Operational-level systems

Knowledge-level systems

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Information systems that support the monitoring, controlling, decision making, and administrative activities of middle managers.

Information systems that support the long-range planning activities of senior management .

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Strategic-level systems

Management-level systems

Different kinds of systemsDifferent kinds of systems

2.1

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Major Types of SystemsMajor Types of Systems

• Executive Support Systems (ESS)Executive Support Systems (ESS)

• Decision Support Systems (DSS)Decision Support Systems (DSS)

• Management Information Systems (MIS)Management Information Systems (MIS)

• Knowledge Work Systems (KWS)Knowledge Work Systems (KWS)

• Office Automation Systems (OAS)Office Automation Systems (OAS)

• Transaction Processing Systems (TPS)Transaction Processing Systems (TPS)

7Fig 2-2: The six major types of information systems.

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Computerized systems that perform and record the daily routine transactions necessary to conduct the business; they serve the organization’s operational level.

TPS – Transaction Processing Systems

Six Major Types of SystemsSix Major Types of Systems

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9Fig 2-4: Typical applications of TPS ■

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TYPICAL TPS APPLICATIONSSales & Marketing Systems

MAJOR FUNCTIONS OF SYSTEMS: Sales Management ; Market Research ; Promotion ; Pricing ; New Products

MAJOR APPLICATION SYSTEMS: Sales Order Info System ; Market Research System ; Pricing System

See Fig. 2-4Fig. 2-4 ( p.43 )

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TPS – TPS – Transaction Processing SystemsTransaction Processing Systems

Manufacturing Plant scheduling Material movement control Machine control

Finance Securities trading Cash management

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Accounting Payroll Account payable Account receivable

Human Resources Compensation Training & development Employee record keeping

TPS – TPS – Transaction Processing SystemsTransaction Processing Systems

2.1

13Fig 2-3: A symbolic representation for a payroll TPS.

Payroll TPS

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Information systems that aid knowledge workers in the creation and integration of new knowledge in the organization .

KWS – knowledge work systems

Six Major Types of SystemsSix Major Types of Systems

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Example: Engineering work station

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OAS – office automation systems

Computer systems, such as word processing, electronic mail systems, and scheduling systems, that are designed to increase the productivity of data workers in the office .

Six Major Types of SystemsSix Major Types of Systems

2.1

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Information systems at the management level of organization that serve the functions of planning, controlling, and decision making by providing routine summary and exception reports.

MIS – Management Information Systems

Six Major Types of SystemsSix Major Types of Systems

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Example: Annual budgetingExample: Annual budgeting

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• Structured and semi-structured decisionsStructured and semi-structured decisions

• Report control orientedReport control oriented

• Past and present dataPast and present data

• Internal orientationInternal orientation

MISMIS

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TPS DATA FOR MIS APPLICATIONS

Fig 2-5: How management information systems obtain their data the from the organization’s TPS .

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Information systems at the management level of an organization that combine data and sophisticated analytical models to support non-routine decision making.

DSS – Decision Support Systems

Six Major Types of SystemsSix Major Types of Systems

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Example:Example: Contract cost analysisContract cost analysis

20Fig 2-7: Voyage estimating decision-support system .

Decision Support System (DSS)

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Sales and marketing

Sales management Sales region analysis

Manufacturing Inventory control Production scheduling

MIS & DSSMIS & DSS

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Finance Annual budgeting Cost analysis

Accounting Capital investment analysis Pricing / profitability analysis

Human Resource Relocation analysis Contract cost analysis

MIS & DSSMIS & DSS

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Information system at the organization’s strategic level designed to address unstructured decision making through advanced graphics and communications.

ESS – Executive Support Systems

Six Major Types of SystemsSix Major Types of Systems

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Example: 5-year operating planExample: 5-year operating plan

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• 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

ESSESS

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25Fig 2-8: Model of a typical executive support system .

Executive Support System (ESS)

Figure 2-8

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Sales and marketing Sales trend forecasting

Manufacturing Operating plan

Finance Budget forecasting

Accounting Profit planning

Human Resource Personnel planning

ESSESS

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Characteristics of Different Types Characteristics of Different Types of Information Systemsof Information Systems

Information inputs

Processing

Information outputs

Users

See Table 2-1Table 2-1 ( p.41 )

2.1

28Fig 2-9: Interrelationships among systems

2.2 Systems from a Functional Perspective2.2 Systems from a Functional Perspective

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SALES & MARKETING SYSTEMS

MANUFACTURING & PRODUCTION SYSTEMS

FINANCE & ACCOUNTING SYSTEMS

HUMAN RESOURCES SYSTEMS

2.2 Systems from a Functional Perspective2.2 Systems from a Functional Perspective

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2.2 Systems from a Functional Perspective2.2 Systems from a Functional Perspective

Major functions of systems:Major functions of systems: Sales management, market research, promotion, Sales management, market research, promotion,

pricing, new productspricing, new products

Major application systems:Major application systems: Sales order info system, market research system, Sales order info system, market research system,

pricing systempricing system

Sales and MarketingSales and Marketing Systems Systems

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Sales and MarketingSales and Marketing Systems Systems

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2.2 Systems from a Functional Perspective2.2 Systems from a Functional Perspective

Major functions of systems:Major functions of systems: Scheduling, purchasing, shipping, receiving, Scheduling, purchasing, shipping, receiving,

engineering, operationsengineering, operations

Major application systems:Major application systems: Materials resource planning systems, purchase Materials resource planning systems, purchase

order control systems, engineering systems, order control systems, engineering systems, quality control systemsquality control systems

Manufacturing and ProductionManufacturing and Production Systems Systems

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Manufacturing and ProductionManufacturing and Production Systems Systems

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2.2 Systems from a Functional Perspective2.2 Systems from a Functional Perspective

Major functions of systems:Major functions of systems: Budgeting, general ledger, billing, cost Budgeting, general ledger, billing, cost

accountingaccounting

Major application systems:Major application systems: General ledger, accounts receivable, accounts General ledger, accounts receivable, accounts

payable, budgeting, funds management systemspayable, budgeting, funds management systems

Financing and AccountingFinancing and Accounting Systems Systems

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Financing and AccountingFinancing and Accounting Systems Systems

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2.2 Systems from a Functional Perspective2.2 Systems from a Functional Perspective

Major functions of systems:Major functions of systems: Personnel records, benefits, compensation, labor Personnel records, benefits, compensation, labor

relations, trainingrelations, training

Major application systems:Major application systems: Payroll, employee records, benefit systems, Payroll, employee records, benefit systems,

career path systems, personnel training systemscareer path systems, personnel training systems

Human ResourceHuman Resource Systems Systems

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Human ResourceHuman Resource Systems Systems

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Business processes Business processes

Manner in which work is organized, coordinated, Manner in which work is organized, coordinated, and focused to produce a valuable product or serviceand focused to produce a valuable product or service

Concrete work flows of material, information, and Concrete work flows of material, information, and knowledge—sets of activitiesknowledge—sets of activities

Unique ways to coordinate work, information, and Unique ways to coordinate work, information, and knowledgeknowledge

Ways in which management chooses to coordinate Ways in which management chooses to coordinate workwork

2.3 Business Processes and Information Systems

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Manufacturing and production:Manufacturing and production: Assembling Assembling product, checking quality, producing bills of product, checking quality, producing bills of materialsmaterials

Sales and marketing:Sales and marketing: Identifying customers, Identifying customers, creating customer awareness, sellingcreating customer awareness, selling

Examples of Business ProcessesExamples of Business Processes

2.3 Business Processes and Information Systems

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Cross-Functional Business Cross-Functional Business ProcessesProcesses

2.3 Business Processes and Information Systems

Fig. 2-12 The Order Fulfillment Process

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Information systems help organizationsInformation systems help organizations

Achieve great efficiencies by automating Achieve great efficiencies by automating parts of processes parts of processes

Rethink and streamline processesRethink and streamline processes

2.3 Business Processes and Information Systems

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Customer Relationship Management (CRM)Customer Relationship Management (CRM)

Manages all ways used by firms to deal withexisting and potential new customers

Uses information system to coordinate entire business processes of a firm

Provides end-to-end customer care

Provides a unified view of customer across the company

Consolidates customer data from multiple sources and provides analytical tools for answering questions

2.3 Business Processes and Information Systems

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2.3 Business Processes and Information Systems

Customer Relationship Management (CRM)

Figure 2-13

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2.3 Business Processes and Information Systems

Supply Chain Management (SCM)Supply Chain Management (SCM)

•Close linkage and coordination of activities involved in buying, making, and moving a product

•Integrates supplier, manufacturer, distributor, and customer, logistics, time

•Reduces time, redundant effort, and inventory costs

•Network of organizations and business processes

•Helps in procurement of materials, transformation of raw materials into finished products

•Helps in distribution of the finished products to customers• Includes reverse logistics - returned items flow in the

reverse direction from the buyer back to the seller

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2.3 Business Processes and Information Systems

Supply Chain ManagementFigure 2-14

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•Decide when, what to produce, store, moveDecide when, what to produce, store, move

•Rapidly communicate orders Rapidly communicate orders

•Communicate orders, track order statusCommunicate orders, track order status

•Check inventory availability, monitor levelsCheck inventory availability, monitor levels

•Track shipments Track shipments

•Plan production based on actual demand Plan production based on actual demand

•Rapidly communicate product design changeRapidly communicate product design change

•Provide product specificationsProvide product specifications

•Share information about defect rates, returnsShare information about defect rates, returns

2.3 How Information Systems Facilitate Supply Chain Management

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2.3 Collaborative CommerceCollaborative Commerce

Figure 2-15

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2.3 Enterprise SystemEnterprise System

Figure 2-17

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2.4 Global System Configuration

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HOMEWORK Chap.2

# 1 # 2 # 3

# 7 # 8 # 9

# 10: What is CRM? # 11: What is SCM?

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