Value chain vs.

competitive forces Models Both models complement each other Both models are used to aid firms in identifying where information systems can provide a competitive advantage Competitive force model examines external environment to identify threats/opportunities Value chain model highlights specific activities within firm to identify where competitive strategies can be best applied.

SIX TYPES OF INFORMATION SYSTEMS: TPS- Transaction Processing Systems OAS- Office Automation Systems KWS-Knowledge Work Systems DSS-Decision Support Systems MIS-Management Information Systems ESS-Executive Support Systems But wait! These systems serve four distinct levels in an organization. TPS--an operational level KWS and OAS-- a knowledge level DSS and MIS--a management level ESS--a strategic level Four Levels of Organizational Hierarchy Operational Level TPS: order tracking, payroll, sales, marketing Knowledge Level CAD/CAM, Lotus Notes, spreadsheet/financial planning, OA Management Level decision support/MIS: budgeting, cost analysis, production mix/scheduling, Strategic Level: ESS: forecasting, profit planning, manpower planning

SPECIFIC PURPOSES SERVED BY INFORMATION SYSTEMS TPS: Routine data processing and accounting procedures OAS: The use of technologies to produce an end product KWS: Promote the creation and design of new knowledge/information, technical/engineering expertise DSS: An information gathering and reporting tool for management, a prototype, a model MIS: Generation of preplanned, printed reports to assist in decision-making Easy-to-use, seductive software, Not designed specifically to solve specific problems. Major types of information systems TPS: lower level work (order entry) OA: document management (WP/storage) KWS: design and analysis DSS: cost analysis, pricing analysis MIS: inventory control, capital, budgeting ESS: strategic planning, profit planning TPS: Types Sales/marketing systems Manufacturing/production systems Human resources systems Industry specialized (vertical markets)

Knowledge Work Systems & OA Systems KWS: Engineers, data analysts (Wall Street rocket scientists), scientists Example: MRIs and CAT scans, biomedical OAS: knowledge workers, managers Word processing/desktop publishing/presentation programs, document imaging/management MIS

MIS: supports management level by providing routine summary reports and exception reports: Example: Which students were here in the Fall who did not choose to return in the Spring?

Provide long-term planning information to senior executives Not as far reaching and deeply rooted Does not transform the organization itself (fundamentally)

DSS DSS provides material for analysis for the solution of semi-structured problems, unique or rapidly changing problems provides the ability to do what if analysis DSS uses the data from MIS but is: more a right now analysis than a long-term structure like MIS MIS vs. TPS MIS differs from TPS in that MIS deals with summarized and compressed data from the TPS. TPS (data) to MIS (information) DSS vs. ESS DSS: provides material for analysis for: semi-structured problems, unique or rapidly changing problems Ability to do what if analysis ESS: supports senior managers with unstructured decision-making. Less analytical than DSS with less use of models (linear or forecasting) Strategic Information System vs. Strategic-Level System Strategic information system: Changes the goals, operations, products, services, environmental relationships of organizations Changes the very nature of the firms business Strategic-level system:

Strategic Systems Strategic systems are difficult to build: Entail massive socio-technical changes within the organization Organizational boundaries between firm and customer and suppliers and departments must be broken down New relationships among parts of the company and customers and suppliers must be redefined. An entirely new organizational structure Resistance to change impacts responsibilities and jobs Information Partnerships: Do they work? Retailers cooperate with airlines to award frequent flier miles Each gains access to customers of the others and information on good customers Does this relationship benefit the customer? Universal Characteristics of organizations Clear division of labor Hierarchy Explicit rules and procedures Impartial judgments Technical Qualifications for positions Maximum organizational efficiency Organizational Differences Organizational type Environment Goals Power

Constituencies Function Leadership Tasks Technology