lecture 2. 1.organizational level 2.business functions /interests/speciality 3.supported business...
TRANSCRIPT
Lecture 2
1. Organizational Level 2. Business Functions /Interests/Speciality 3. Supported Business Process(s)
Information Systems serve differentmanagement levels and major business
functions
Classification of Information Systems
Types of Information Systems
Categories of Information System
• Support Operational ManagersSupport Operational Managers
• Keep track of elementary activities and transactions of the Keep track of elementary activities and transactions of the
organization organization
• E.g. Sales receipts, cash deposits, payroll, daily log maintenance, E.g. Sales receipts, cash deposits, payroll, daily log maintenance,
the flow of materials in a factory and query management in a the flow of materials in a factory and query management in a
service firm etc. service firm etc.
Operational Level Systems
• Support Middle ManagersSupport Middle Managers
• Monitoring, controlling, decision-making, and administrative Monitoring, controlling, decision-making, and administrative
activitiesactivities
• Provide periodic reports rather than instant information on Provide periodic reports rather than instant information on
operations operations
• Attrition Reporting System, Planned Vs. Actual Reports etc.Attrition Reporting System, Planned Vs. Actual Reports etc.
Knowledge/Management Level Systems
• Support Senior Management Support Senior Management
• Help tackling and addressing strategic issues and long term Help tackling and addressing strategic issues and long term
trends related to the firm and external environment.trends related to the firm and external environment.
• The principle concern is matching changes in the external The principle concern is matching changes in the external
environment with the existing organizational capability.environment with the existing organizational capability.
• E.g. Employment level and capacity planning for next 3-5 years, E.g. Employment level and capacity planning for next 3-5 years,
long term industry cost trends, product and services focus for the long term industry cost trends, product and services focus for the
next 5 years etc.next 5 years etc.
Strategic Level Systems
Major 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 Systems Office Systems
• Transaction Processing Systems (TPS)Transaction Processing Systems (TPS)
Major Types of Systems
Major Types of Systems
Transaction Processing Systems (TPS):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 A computerized system that performs and records the daily routine transactions necessary to the conduct of the businesstransactions necessary to the conduct of the business
• E.g. Employee record keeping, sales order entry etc.E.g. Employee record keeping, sales order entry etc.
• Central to business – TPS failure for few hours can lead to a firms Central to business – TPS failure for few hours can lead to a firms demise – Airlines without computerized demise – Airlines without computerized
• Reservation systems??Reservation systems??
Major Types of Systems
Payroll TPS
Major Types of Systems
Types of TPS Systems
Major Types of Systems
Knowledge Work Systems (KWS):
Knowledge levelInputs: Design specsProcessing: ModelingOutputs: Designs, graphicsUsers: Technical staff and professionals
Example: Engineering work station
Major Types of Systems
Management Information System (MIS):
Serve the management level of the organizationProvides managers with summaries and reports
on the company’s basic operations on regular schedule
Internal orientation not environmental/externalGenerally not flexible and have little analytical
capabilityUse simple routines (E.g. summaries and
comparisons) as apposed to sophisticated mathematical models /statistical techniques.
Major Types of Systems
Management Information System (MIS):
Management levelInputs: High volume dataProcessing: Simple modelsOutputs: Summary reportsUsers: Middle managers
Example: Annual budgeting
Major Types of Systems
Management Information System (MIS)
Major Types of Systems
Decision Support System (DSS):
Serve the management level of the organizationHelp managers make decisions that are unique,
rapidly changing and not easily specified in advance.
Address problems where the procedure for arriving at a solution may not be fully defined in advance.
Use both internal and external sources of information
Also referred to business intelligence More analytical power, interactive and user friendly
Major Types of Systems
Decision Support System (DSS):
Management levelInputs: Low volume dataProcessing: InteractiveOutputs: Decision analysisUsers: Professionals, staff
Example: Contract cost analysis
Major Types of Systems
Decision Support System (DSS)
Major Types of Systems
Decision Support System (DSS)
Major Types of Systems
Executive Support System (ESS):
Used by Senior/Strategic Management They address non-routine decisions requiring
judgments, evaluation and insight as there is no agreed-on procedure for arriving at a solution
Incorporate data about external events and draw summarized information from internal MIS, DSS.
General computing/communications capacity applied to an array of problems not just specific problems
E.g. What are competitors going? New acquisitions? etc
Major Types of Systems
Executive Support System (ESS):
Strategic levelInputs: Aggregate dataProcessing: InteractiveOutputs: ProjectionsUsers: Senior managers
Example: 5-year operating plan
Major Types of Systems
Executive Support System (ESS)
The Information Technology
Top level management
Designed to the individual
Ties CEO to all levels
Very expensive to keep up
Extensive support staff
Executive support system (ESS)
The Information Technology
The Interrelationships
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL
ORDER PROCESSING ENTER, PROCESS, TRACK ORDERS OPERATIONAL
MARKET ANALYSIS IDENTIFY CUSTOMERS & MARKETS KNOWLEDGE
PRICING ANALYSIS DETERMINE PRICES MANAGEMENT
SALES TRENDS PREPARE 5-YEAR FORECASTS STRATEGIC
Sales and Marketing Systems
Systems Functional Perspective
Major functions of systems:Scheduling, purchasing, shipping,
receiving, engineering, operations
Major application systems:Materials resource planning
systems, purchase order control systems, engineering systems, quality control systems
Manufacturing and Production Systems
Systems Functional Perspective
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL
MACHINE CONTROL CONTROL ACTIONS OF EQUIPMENT OPERATIONAL
COMPUTER-AIDED-DESIGN DESIGN NEW PRODUCTS KNOWLEDGE
PRODUCTION PLANNING DECIDE NUMBER, SCHEDULE OF PRODUCTS MANAGEMENT
FACILITIES LOCATION DECIDE WHERE TO LOCATE FACILITIES STRATEGIC
Manufacturing and Production Systems
Systems Functional Perspective
Major functions of systems:Budgeting, general ledger, billing,
cost accounting
Major application systems:General ledger, accounts
receivable, accounts payable, budgeting, funds management systems
Financing and Accounting Systems
Systems Functional Perspective
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL
ACCOUNTS RECEIVABLE TRACK MONEY OWED TO FIRM OPERATIONAL
PORTFOLIO ANALYSIS DESIGN FIRM'S INVESTMENTS KNOWLEDGE
BUDGETING PREPARE SHORT TERM BUDGETS MANAGEMENT
PROFIT PLANNING PLAN LONG-TERM PROFITS STRATEGIC
Financing and Accounting Systems
Systems Functional Perspective
Major functions of systems:Personnel records, benefits,
compensation, labor relations, training
Major application systems:Payroll, employee records, benefit
systems, career path systems, personnel training systems
Human Resource Systems
Systems Functional Perspective
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL
TRAINING & DEVELOPMENT TRACK TRAINING, SKILLS, APPRAISALS OPERATIONAL
CAREER PATHING DESIGN EMPLOYEE CAREER PATHS KNOWLEDGE
COMPENSATION ANALYSIS MONITOR WAGES, SALARIES, BENEFITS MANAGEMENT
HUMAN RESOURCES PLANNING PLAN LONG-TERM LABOR FORCE NEEDS STRATEGIC
Human Resource Systems
Systems Functional Perspective
Business processes
Sets of logically related activities for accomplishing a specific business result.
Manner 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 activities
Business Processes and Information Systems
Enterprise Applications
Unique ways to coordinate work, information, and knowledge
Ways in which management chooses to coordinate work
Business Processes and Information Systems
Enterprise Applications
Business Processes and Information Systems
Information systems help organizations
Achieve great efficiencies by automating parts of processes
Rethink and streamline processes
Enterprise Applications
Manufacturing and production: Assembling product, checking quality, producing bills of materials
Sales and marketing: Identifying customers, creating customer awareness, selling
Examples of Business Processes
Enterprise Applications
Finance and accounting: Paying creditors, creating financial statements, managing cash accounts
Human Resources: Hiring employees, evaluating performance, enrolling employees in benefits plans
Examples of Business Processes
Enterprise Applications
Cross-Functional Business Processes
Transcend boundary between sales, marketing, manufacturing, and research and development
Group employees from different functional specialties to a complete piece of work
Example: Order Fulfillment Process
Business Processes and Information Systems
Enterprise Applications
The Order Fulfillment Process
Enterprise Applications
Enterprise ApplicationsEnterprise systemsSupply chain management systemsCustomer relationship management
systemsKnowledge management systems
Enterprise Applications
Within the business: There are functions, each having its uses of information systems
Outside the organization’s boundaries: There are customers and vendors
Functions tend to work in isolation
Traditional View of the Systems
Enterprise Applications
Traditional View of the Systems
Enterprise Applications
Enterprise Systems
Enterprise Applications