Management Information Systems - Class Note # 2

Prof. Yuan-Shyi Peter Chiu Feb. 2012 1

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

Fig 2.1: Types of Information Systems

2.1 Different kinds of systems

Operational-level systems Information systems that monitor the elementary activities and transactions of the organization . Knowledge-level systems Information systems that support knowledge and data workers in an organization.
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2.1 Different kinds of systems

Management-level systems Information systems that support the monitoring, controlling, decision making, and administrative activities of middle managers. Strategic-level systems Information systems that support the long-range planning activities of senior management .
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Major Types of Systems

Executive Support Systems (ESS)

Decision Support Systems (DSS)

Management Information Systems (MIS) Knowledge Work Systems (KWS) Office Automation Systems (OAS) Transaction Processing Systems (TPS)

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

2.1 Six Major Types of Systems

TPS Transaction Processing Systems

Computerized systems that perform and record the daily routine transactions necessary to conduct the business; they serve the organizations operational level.
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Fig 2-4: Typical applications of TPS

TYPICAL TPS APPLICATIONS

Sales & Marketing Systems
MAJOR FUNCTIONS OF SYSTEMS:
Sales Management ; Market Research ; Promotion ; Pricing ; New Products Sales Order Info System ; Market Research System ; Pricing System

MAJOR APPLICATION SYSTEMS:

See Fig.

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( p.43 )

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2.1
TPS Transaction Processing Systems

Manufacturing
Plant scheduling Material movement control Machine control

Finance
Securities trading Cash management
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2.1
TPS Transaction Processing Systems Accounting
Payroll Account payable Account receivable

Human Resources
Compensation Training & development Employee record keeping
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2.1
Payroll TPS

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

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2.1 Six Major Types of Systems

KWS knowledge work systems

Information systems that aid knowledge workers in the creation and integration of new knowledge in the organization .
Example: Engineering work station
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2.1 Six Major Types of Systems

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 .

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2.1 Six Major Types of Systems

MIS

Management Information Systems

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.

Example: Annual budgeting

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2.1 MIS
Structured and semi-structured decisions

Report control oriented

Past and present data Internal orientation

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TPS DATA FOR MIS APPLICATIONS

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

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2.1 Six Major Types of Systems

DSS

Decision Support Systems

Information systems at the management level of an organization that combine data and sophisticated analytical models to support nonroutine decision making.
Example: Contract cost analysis
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Decision Support System (DSS)

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

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2.1
MIS & DSS Sales and marketing
Sales management Sales region analysis

Manufacturing
Inventory control Production scheduling
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2.1 MIS & DSS

Finance
Annual budgeting Cost analysis

Accounting
Capital investment analysis Pricing / profitability analysis

Human Resource
Relocation analysis Contract cost analysis
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2.1 Six Major Types of Systems

ESS Executive Support Systems

Information system at the organizations strategic level designed to address unstructured decision making through advanced graphics and communications.
Example: 5-year operating plan
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2.1 ESS
Top level management
Designed to the individual Ties CEO to all levels

Very expensive to keep up

Extensive support staff
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Executive Support System (ESS)

Figure 2-8

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

2.1
ESS

Sales and marketing Sales trend

Manufacturing Finance Accounting Human Resource

forecasting

Operating plan Budget forecasting Profit planning Personnel planning

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2.1
Characteristics of Different Types of Information Systems Information inputs

Processing
Information outputs

Users
See Table

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( p.41 )

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2.2 Systems from a Functional Perspective

Fig 2-9: Interrelationships among systems

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2.2 Systems from a Functional Perspective

SALES & MARKETING SYSTEMS
MANUFACTURING & PRODUCTION
SYSTEMS

FINANCE & ACCOUNTING SYSTEMS HUMAN RESOURCES SYSTEMS

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2.2 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

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Sales and Marketing Systems

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2.2 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
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Manufacturing and Production Systems

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2.2 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
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Financing and Accounting Systems

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2.2 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
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Human Resource Systems

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2.3 Business Processes and Information Systems

Business processes
Manner in which work is organized, coordinated, and focused to produce a valuable product or service Concrete work flows of material, information, and knowledgesets of activities Unique ways to coordinate work, information, and knowledge

Ways in which management chooses to coordinate work

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2.3

Business Processes and Information Systems

Examples of Business Processes

Manufacturing and production: Assembling

product, checking quality, producing bills of materials

Sales and marketing: Identifying customers,

creating customer awareness, selling

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2.3

Business Processes and Information Systems

Cross-Functional Business Processes

Fig. 2-12 The Order Fulfillment Process

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2.3

Business Processes and Information Systems

Information systems help organizations

Achieve great efficiencies by automating parts of processes Rethink and streamline processes

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2.3

Business Processes and Information Systems

Customer Relationship Management (CRM)

Manages all ways used by firms to deal with

existing 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

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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)

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 Management

Figure 2-14

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2.3 How Information Systems Facilitate

Supply Chain Management

Decide when, what to produce, store, move

Rapidly communicate orders Communicate orders, track order status Check inventory availability, monitor levels Track shipments

Plan production based on actual demand

Rapidly communicate product design change Provide product specifications Share information about defect rates, returns
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2.3 Collaborative Commerce

Figure 2-15

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2.3 Enterprise System

Figure 2-17

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2.4 Global System Configuration

Figure 2-18

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HOMEWORK Chap.2 #1 #2 #3 # 7 #8 #9 # 10: What is CRM? # 11: What is SCM? # 12

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