Types of Business Information Systems

• Systems from a functional perspective

– Sales and marketing systems
– Manufacturing and production systems
– Finance and accounting systems
– Human resources systems
• Systems from a constituency perspective
– Transaction processing systems
– Management information systems and decision-support
systems
– Executive support systems
• Relationship of systems to one another
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
 Management Information Systems
Chapter 2 Information Systems in the Enterprise

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Transaction Processing Systems (TPS):

• Basic business systems that serve the operational level

• A computerized system that performs and records the daily

routine transactions necessary to the conduct of the business
 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Knowledge Work Systems (KWS):

Knowledge level
• Inputs: Design specs
• Processing: Modeling
• Outputs: Designs, graphics
• Users: Technical staff and professionals

Example: Engineering work station

 Management Information System (MIS):

Management level
• Inputs: High-volume data
• Processing: Simple models
• Outputs: Summary reports
• Users: Middle managers

Example: Annual budgeting

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
• Structured and semi-structured decisions

• Report control oriented

• Past and present data

• Internal orientation

• Lengthy design process

 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Decision Support System (DSS):

Management level
• Inputs: Low-volume data
• Processing: Interactive
• Outputs: Decision analysis
• Users: Professionals, staff

Example: Contract cost analysis, Consumer pattern

analysis
 Executive Support System (ESS):
Strategic level
• Inputs: Aggregate data
• Processing: Interactive
• Outputs: Projections
• Users: Senior managers
Example: 5-year operating plan
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
 MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Executive support system (ESS)

• Top level management

• Designed to the individual
• Ties CEO to all levels
• Very expensive to keep up
• Extensive support staff
INTERRELATIONSHIPS AMONG SYSTEMS
 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Sales and 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
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Sales and Marketing Systems

 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Manufacturing and Production Systems

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
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Financing and Accounting Systems

Major functions of systems:

• Budgeting, general ledger, billing, cost accounting

Major application systems:

• General ledger, accounts receivable, accounts
payable, budgeting, funds management systems
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Human Resource Systems

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
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
 Management Information Systems
Chapter 2 Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Management Information Systems (MIS)

• Management information system (MIS)

• An MIS provides managers with information and
support for effective decision making, and provides
feedback on daily operations
• Output, or reports, are usually generated through
accumulation of transaction processing data
• Each MIS is an integrated collection of subsystems,
which are typically organized along functional lines
within an organization
Sources of Management Information

Schematic
 Employees

Corporate
Databases Corporate
databases
of intranet
of
external
internal
data
data Decision
support
systems

Transaction Databases Management Executive

Business processing of information Application support
transactions systems valid systems databases systems
transactions

Drill-down reports Expert

Exception reports systems
Demand reports
Operational Key-indicator reports
databases
Input and Scheduled
error list reports
 Outputs of a
Management Information System
• Scheduled reports
• Produced periodically, or on a schedule (daily, weekly, monthly)

• Key-indicator report
• Summarizes the previous day’s critical activities
• Typically available at the beginning of each day

• Demand report
• Gives certain information at a manager’s request

• Exception report
• Automatically produced when a situation is unusual or requires
management action

• Drill Down report

• Drill Down reports are triggered by clicking on a designated field of an
existing report. Drill Down reports can be cascading i.e. trigger report B
from report A and trigger report C from report B, etc.
 Scheduled Report Example

Daily Sales Detail Report

Prepared: 08/10/xx
Order Customer Sales Ship
# ID Rep ID Date Quantity Item # Amount
P12453 C89321 CAR 08/12/96 144 P1234 $3,214
P12453 C89321 CAR 08/12/96 288 P3214 $5,660
P12453 C03214 GWA 08/13/96 12 P4902 $1,224
P12455 C52313 SAK 08/12/96 24 P4012 $2,448
P12456 C34123 JMW 08J/13/96 144 P3214 $720
 Key Indicator Report Example

Daily Sales Key Indicator Report

This Last Last

Month Month Year
Total Orders Month to Date $1,808 $1,694 $1,014

Forecasted Sales for the Month $2,406 $2,224 $2,608

Demand Report Example

Daily Sales by Sales Rep Summary Report

Prepared: 08/10/xx
Sales Rep ID Amount
CAR $42,345
GWA $38,950
SAK $22,100
JWN $12,350
 Exception Report Example

Daily Sales Exception Report – ORDERS OVER $10,000

Prepared: 08/10/xx
Order Customer Sales Ship
# ID Rep ID Date Quantity Item # Amount
P12453 C89321 CAR 08/12/96 144 P1234 $13,214
P12453 C89321 CAR 08/12/96 288 P3214 $15,660
P12453 C03214 GWA 08/13/96 12 P4902 $11,224
… … … … … … …
… … … … … … …
Drill Down Report Example
 Outputs of a Management
Information System
Earnings by Quarter (Millions)
Actual Forecast Variance
2ND Qtr 1999 $12.6 $11.8 6.8%
Drill Down Reports
Provide detailed data 1st Qtr 1999 $10.8 $10.7 0.9%
about a situation.
4th Qtr 1998 $14.3 $14.5 -1.4%
3rd Qtr 1998 $12.8 $13.3 -3.0%
 Characteristics of a Management
Information System
• Provides reports with fixed and standard
formats
– Hard-copy and soft-copy reports
• Uses internal data stored in the computer
system
• End users can develop custom reports
• Requires formal requests from users
 Management Information Systems
for Competitive Advantage
• Provides support to managers as they work
to achieve corporate goals
• Enables managers to compare results to
established company goals and identify
problem areas and opportunities for
improvement
 MIS and Web Technology
• Data may be made available from
management information systems on a
company’s intranet
• Employees can use browsers and their PC
to gain access to the data
 Functional Aspects

• MIS is an integrated collection of functional

information systems, each supporting
particular functional areas.

Schematic
 Internet
Internet An Organization’s
MIS

Financial
MIS
Business
transactions

Drill down reports

Accounting
Transaction Databases MIS Exception reports
processing of
Demand reports
systems valid
transactions Key-indicator reports
Marketing
MIS Scheduled reports

Business
transactions Databases Human
of
Resources Etc.
external
data MIS
Extranet
Extranet
Etc.
 Financial MIS

• Provides financial information to all

financial managers within an organization.

Schematic
 Databases of Financial
Databases of
internal data external data DSS

Business
transactions
Transaction Databases
processing of valid
Financial
systems transactions MIS Financial
for each applications
TPS databases

Business
transactions
Financial statements
Financial
Operational Uses and management ES
Internet databases
Internetoror of funds
Extranet
Extranet Financial statistics
for control

Business Customers,
transactions Suppliers
 Inputs to the Financial
Information System
• Strategic plan or corporate policies
– Contains major financial objectives and often projects
financial needs.
• Transaction processing system (TPS)
– Important financial information collected from almost
every TPS - payroll, inventory control, order processing,
accounts payable, accounts receivable, general ledger.
– External sources
– Annual reports and financial statements of competitors
and general news items.
 Financial MIS Subsystems and
Outputs
• Financial subsystems
– Profit/loss and cost systems
– Auditing
– Internal auditing
– External auditing
– Uses and management of funds
Manufacturing MIS

Schematic
 Databases of Manufacturing
Databases of
internal data external data DSS

Business
transactions
Transaction Databases
processing of valid
Manufacturing
systems transactions MIS Manufacturing
for each applications
TPS databases

Business Quality control reports

transactions
Process control reports Manufacturing
Operational ES
JIT reports
Internet databases
Internetoror MRP reports
Extranet
Extranet
Production schedule
CAD output

Business Customers,
transactions Suppliers
Inputs to the Manufacturing MIS
• Strategic plan or corporate policies.
• The TPS:
– Order processing
– Inventory data
– Receiving and inspecting data
– Personnel data
– Production process
• External sources
 Manufacturing MIS Subsystems
and Outputs
• Design and engineering
• Master production scheduling
• Inventory control
• Manufacturing resource planning
• Just-in-time inventory and manufacturing
• Process control
• Computer-integrated manufacturing (CIM)
• Quality control and testing
 Marketing MIS

• Supports managerial activities in product

development, distribution, pricing
decisions, and promotional effectiveness

Schematic
 Databases of Manufacturing
Databases of
internal data external data DSS

Transaction Databases
Business processing of valid
Marketing
transactions systems transactions MIS Marketing
for each applications
TPS databases

Sales by customer

Sales by salesperson Manufacturing

Operational Sales by product ES
databases Pricing report
Total service calls
Customer satisfaction
 Inputs to Marketing MIS
• Strategic plan and corporate policies
• The TPS
• External sources:
– The competition
– The market
 Marketing MIS Subsystems and
Outputs
• Marketing research
• Product development
• Promotion and advertising
• Product pricing
 Human Resource MIS

• Concerned with all of the activities related

to employees and potential employees of
the organization
 Databases of Manufacturing
Databases of
internal data external data DSS

Transaction Databases Human

Business processing of valid Resource Human
transactions systems transactions resource
for each MIS applications
TPS databases

Benefit reports

Salary surveys Manufacturing

Operational Scheduling reports ES
databases Training test scores
Job applicant profiles
Needs and planning
reports
 Inputs to the Human Resource
MIS
• Strategic plan or corporate policies
• The TPS:
– Payroll data
– Order processing data
– Personnel data
• External sources
 Human Resource MIS
Subsystems and Outputs
• Human resource planning
• Personnel selection and recruiting
• Training and skills inventory
• Scheduling and job placement
• Wage and salary administration
 Other MISs
• Accounting MISs
– Provides aggregated information on accounts
payable, accounts receivable, payroll, and other
applications.
• Geographic information systems (GISs)
– Enables managers to pair pre-drawn maps or
map outlines with tabular data to describe
aspects of a particular geographic region.