1

Objectives• To understand the role of IS within

organisations• To understand the diversity of

types of IS within a business / organisation

• To understand relationships between IS and business functions

2

IS at the Organisational Level

DATA WORKERSDATA WORKERS

KIND OF SYSTEM GROUPS SERVEDKIND OF SYSTEM GROUPS SERVED STRATEGIC LEVEL SENIOR MANAGERSSTRATEGIC LEVEL SENIOR MANAGERS

MANAGEMENT LEVEL MANAGEMENT LEVEL MIDDLE MANAGERS MIDDLE MANAGERS

OPERATIONAL OPERATIONAL OPERATIONAL OPERATIONAL LEVEL MANAGERS LEVEL MANAGERS

KNOWLEDGE LEVEL KNOWLEDGE &KNOWLEDGE LEVEL KNOWLEDGE &

SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN RESOURCESRESOURCESMARKETINGMARKETING

3

IS at the Organisational Level

• Operational-level– Elementary activities and routine

transactions– Data current and accurate

• Knowledge-level– Support knowledge and data workers– Integrate new knowledge into the business– Office automation

4

IS at the Organisational Level

• Management-level– Periodic monitoring, control, decision-

making and administration– Is the business working well?

• Strategic-level– Long-term (e.g. 5 year) planning and

strategy– Internal and external information

5

question• Discuss the different IS used at

different organisational levels?

6

Types of IS• Transaction Processing Systems (TPS)• Knowledge Work Systems (KWS)• Office Automation Systems (OAS)• Management Information Systems

(MIS)• Decision-support Systems (DSS)• Executive Support Systems (ESS)

7

Transaction Processing Systems

Operational-level SystemsOrder tracking

Machine control

Securities trading

Payroll Compensation

Order processing

Plant scheduling

Cash management

Accounts payable

Training and development

Material movement and control

Accounts receivable

Employee records

Sales and

Marketing

Manufacturing

Finance Accounting

Human Resource

s

Systems that perform and record daily routine transactions necessary for business

8

Knowledge Work Systems

Knowledge-level SystemsEngineering workstations

Graphics workstations Managerial workstations

Systems that aid the creation and integration of new knowledge into an organisation

9

Office Automation Systems

Knowledge-level SystemsWord processing Document imaging E-mail / electronic

calendars

Systems that are designed to increase the productivity of data workers

10

Management Information Systems

Management-level SystemsSales management

Inventory control

Annual budgeting

Capital investment

Relocation analysis

Sales and Marketing

Manufacturing

Finance Accounting

Human Resources

Systems that serve planning, control and decision-making through routine summary and reports

11

Decision-support Systems

Management-level SystemsSales region analysis

Production scheduling

Cost analysis Pricing / profitability analysis

Contract cost analysis

Sales and Marketing

Manufacturing

Finance Accounting

Human Resources

Systems that combine data, models and analysis tools for non-routine decision-making

12

Executive Support Systems

Strategic-level Systems5-year sales trend forecasting

5-year operating plan

5-year budget forecasting

Profit planning

Personnel planning

Sales and Marketing

Manufacturing

Finance Accounting

Human Resources

Systems that support non-routine decision-making through advanced graphics and communications

13

Interrelationships• TPS major producer

of data• External data also

required for MIS, DSS and ESS

• Typical loose coupling of systems

• ‘Digital firms’ have tighter integration

ESS

TPSKWS

OAS

DSSMIS

14

Functional Examples• Examples of IS by function:

– Sales and marketing– Manufacturing and production– Finance and accounting– Human resources

15

Sales and MarketingSystem Description Organisation

al LevelOrder processing Enter, process

and track ordersOperational

Market analysis Identify customers and markets

Knowledge

Pricing analysis Determine prices Management

Sales trends Prepare 5 year forecasts

Strategic

16

Manufacturing and Production

System Description Organisational Level

Machine control Control actions of equipment

Operational

Computer-aided design (CAD)

Design new products

Knowledge

Production planning

Decide number and schedule of products

Management

Facilities location Decide where to locate facilities

Strategic

17

Finance and Accounting

System Description Organisational 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

18

Human ResourcesSystem Descriptio

nOrganisational Level

Training and development

Track training, skills and appraisals

Operational

Career paths Design employee career paths

Knowledge

Compensation analysis

Monitor wages, salaries and benefits

Management

Human resources planning

Plan long-term workforce needs

Strategic

19

Summary• Looked at the role of IS within

organisations– At organisational levels

• Looked at the diversity of types of IS within a business / organisation– Six different functional types of IS

• Looked at relationships between IS and business functions– Examples by functional area