2.1 Prof Jess Role @ UEAB 2012 2 2 INFORMATION SYSTEMS IN THE ENTERPRISE ENTERPRISE.

2.2.11 Prof Jess Role @ UEAB 2012

22INFORMATION INFORMATION

SYSTEMS IN THESYSTEMS IN THE

ENTERPRISEENTERPRISE


LEARNING OBJECTIVESLEARNING OBJECTIVES

• ANALYZE ROLES OF 6 TYPES OF ANALYZE ROLES OF 6 TYPES OF INFORMATION SYSTEMSINFORMATION SYSTEMS

• DESCRIBE TYPES OF INFORMATION DESCRIBE TYPES OF INFORMATION SYSTEMSSYSTEMS

• ANALYZE RELATIONSHIPS ANALYZE RELATIONSHIPS BETWEEN BUSINESS BETWEEN BUSINESS PROCESSESPROCESSES

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LEARNING OBJECTIVESLEARNING OBJECTIVES

• EXPLAIN HOW SYSTEMS & EXPLAIN HOW SYSTEMS & NETWORKS CREATE NEW NETWORKS CREATE NEW EFFICIENCIESEFFICIENCIES

• EVALUATE BENEFITS & EVALUATE BENEFITS & LIMITATIONS OF SYSTEMS & LIMITATIONS OF SYSTEMS & NETWORKSNETWORKS

**


MANAGEMENT MANAGEMENT CHALLENGESCHALLENGES

• KEY SYSTEM APPLICATIONSKEY SYSTEM APPLICATIONS

• FUNCTIONAL PERSPECTIVE OF FUNCTIONAL PERSPECTIVE OF SYSTEMSSYSTEMS

• INTEGRATING FUNCTIONS & INTEGRATING FUNCTIONS & PROCESSESPROCESSES

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MANAGEMENT MANAGEMENT CHALLENGESCHALLENGES

1. INTEGRATION: Different systems serve 1. INTEGRATION: Different systems serve variety of functions, variety of functions, connecting connecting organizational levels difficult, costlyorganizational levels difficult, costly

2. ENLARGING SCOPE OF MANAGEMENT 2. ENLARGING SCOPE OF MANAGEMENT THINKING: Huge system investments, THINKING: Huge system investments, long development time must be guided long development time must be guided by common objectives by common objectives

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TYPES OF INFORMATION SYSTEMSTYPES OF INFORMATION SYSTEMS

DATA WORKERSDATA WORKERS

KIND OF SYSTEM GROUPS SERVEDKIND OF SYSTEM GROUPS SERVED

STRATEGIC LEVEL SENIOR STRATEGIC LEVEL SENIOR MANAGERSMANAGERS

MANAGEMENT LEVEL MIDDLE MANAGEMENT LEVEL MIDDLE MANAGERSMANAGERS

OPERATIONAL OPERATIONAL

OPERATIONAL LEVEL OPERATIONAL LEVEL MANAGERS MANAGERS

KNOWLEDGE LEVEL KNOWLEDGE & KNOWLEDGE LEVEL KNOWLEDGE &

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


MAJOR TYPES OF SYSTEMSMAJOR 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 AUTOMATION SYSTEMS (OAS)OFFICE AUTOMATION SYSTEMS (OAS)• TRANSACTION PROCESSING TRANSACTION PROCESSING SYSTEMS (TPS)SYSTEMS (TPS)

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TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSSales & Marketing SystemsSales & Marketing Systems

MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS:

• Sales management, market research, Sales management, market research, promotion, pricing, new productspromotion, pricing, new products

MAJOR APPLICATION SYSTEMS:MAJOR APPLICATION SYSTEMS:

• Sales order info system, market Sales order info system, market research system, pricing systemresearch system, pricing system

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TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSManufacturing & Production SystemsManufacturing & Production Systems

MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS:• Scheduling, purchasing, shipping, Scheduling, purchasing, shipping,

receiving, engineering, operationsreceiving, engineering, operationsMAJOR APPLICATION SYSTEMS:MAJOR APPLICATION SYSTEMS:• Materials resource planning systems, Materials resource planning systems,

purchase order control systems, purchase order control systems, engineering systems, quality control engineering systems, quality control systemssystems

**


TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSFinance & Accounting SystemsFinance & Accounting Systems

MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS:• Budgeting, general ledger, billing, Budgeting, general ledger, billing,

cost accountingcost accountingMAJOR APPLICATION SYSTEMS:MAJOR APPLICATION SYSTEMS:• General ledger, accounts receivable, General ledger, accounts receivable,

accounts payable, budgeting, funds accounts payable, budgeting, funds management systemsmanagement systems

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TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSHuman Resources SystemsHuman Resources Systems

MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS:• Personnel records, benefits, Personnel records, benefits,

compensation, labor relations, trainingcompensation, labor relations, training

MAJOR APPLICATION SYSTEMS:MAJOR APPLICATION SYSTEMS:• Payroll, employee records, benefit Payroll, employee records, benefit

systems, career path systems, personnel systems, career path systems, personnel training systemstraining systems

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TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSOther Types (e.g., University)Other Types (e.g., University)

MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS:• Admissions, grade records, course Admissions, grade records, course

records, alumnirecords, alumni

MAJOR APPLICATION SYSTEMS:MAJOR APPLICATION SYSTEMS:• Registration system, student transcript Registration system, student transcript

system, curriculum class control system, system, curriculum class control system, alumni benefactor systemalumni benefactor system

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KNOWLEDGE LEVELKNOWLEDGE LEVEL• INPUTS: DESIGN SPECSINPUTS: DESIGN SPECS• PROCESSING: MODELLINGPROCESSING: MODELLING• OUTPUTS: DESIGNS, GRAPHICSOUTPUTS: DESIGNS, GRAPHICS• USERS: TECHNICAL STAFFUSERS: TECHNICAL STAFF

EXAMPLE: ENGINEERING WORK EXAMPLE: ENGINEERING WORK STATION STATION

KNOWLEDGE WORK SYSTEMS KNOWLEDGE WORK SYSTEMS (KWS)(KWS)


OFFICE AUTOMATION SYSTEMS OFFICE AUTOMATION SYSTEMS (OAS)(OAS)

• TOWARD A TOWARD A ““PAPERLESSPAPERLESS”” OFFICE OFFICE

• REDESIGN OF WORK FLOWREDESIGN OF WORK FLOW

• INTEGRATED SOFTWAREINTEGRATED SOFTWARE

• ERGONOMIC DESIGNERGONOMIC DESIGN

• BRIGHT, CHEERFULBRIGHT, CHEERFUL WORK SPACEWORK SPACE

EXAMPLE: PRESENTATION GRAPHICSEXAMPLE: PRESENTATION GRAPHICS


MANAGEMENT LEVELMANAGEMENT LEVEL

• INPUTS: HIGH VOLUME DATAINPUTS: HIGH VOLUME DATA

• PROCESSING: SIMPLE MODELSPROCESSING: SIMPLE MODELS

• OUTPUTS: SUMMARY REPORTSOUTPUTS: SUMMARY REPORTS

• USERS: MIDDLE MANAGERS USERS: MIDDLE MANAGERS

EXAMPLE: ANNUAL BUDGETINGEXAMPLE: ANNUAL BUDGETING

MANAGEMENT INFORMATION MANAGEMENT INFORMATION SYSTEMS (MIS)SYSTEMS (MIS)


• STRUCTURED & SEMI-STRUCTURED & SEMI-STRUCTURED DECISIONSSTRUCTURED DECISIONS

• REPORT CONTROL ORIENTEDREPORT CONTROL ORIENTED

• PAST & PRESENT DATAPAST & PRESENT DATA

• INTERNAL ORIENTATIONINTERNAL ORIENTATION

• LENGTHY DESIGN PROCESSLENGTHY DESIGN PROCESS

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MANAGEMENT INFORMATION MANAGEMENT INFORMATION SYSTEMS (MIS)SYSTEMS (MIS)


MISMIS

MIS FILESMIS FILES

SALES DATA

UNIT PRODUCT COST

PRODUCT CHANGE DATA

EXPENSE DATA

MISREPORTS

MANAGERSMANAGERS

TPS

Order Processing

System

Materials Resource

Planning System

General Ledger

System

ORDER FILE

PRODUCTION MASTER FILE

ACCOUNTING FILES

TPS DATA FOR MIS TPS DATA FOR MIS APPLICATIONSAPPLICATIONS


MANAGEMENT LEVELMANAGEMENT LEVEL

• INPUTS: LOW VOLUME DATAINPUTS: LOW VOLUME DATA

• PROCESSING: INTERACTIVEPROCESSING: INTERACTIVE

• OUTPUTS: DECISION ANALYSISOUTPUTS: DECISION ANALYSIS

• USERS: PROFESSIONALS, STAFFUSERS: PROFESSIONALS, STAFF

EXAMPLE: CONTRACT COST ANALYSISEXAMPLE: CONTRACT COST ANALYSIS

DECISION SUPPORT SYSTEMS DECISION SUPPORT SYSTEMS (DSS)(DSS)


• FLEXIBLE, ADAPTABLE, QUICKFLEXIBLE, ADAPTABLE, QUICK

• USER CONTROLS INPUTS/OUTPUTSUSER CONTROLS INPUTS/OUTPUTS

• NO PROFESSIONAL PROGRAMMINGNO PROFESSIONAL PROGRAMMING

• SUPPORTS DECISION PROCESSSUPPORTS DECISION PROCESS

• SOPHISTICATED MODELING TOOLSSOPHISTICATED MODELING TOOLS

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DECISION SUPPORT SYSTEMS DECISION SUPPORT SYSTEMS (DSS)(DSS)


STRATEGIC LEVELSTRATEGIC LEVEL

• INPUTS: AGGREGATE DATAINPUTS: AGGREGATE DATA

• PROCESSING: INTERACTIVEPROCESSING: INTERACTIVE

• OUTPUTS: PROJECTIONSOUTPUTS: PROJECTIONS

• USERS: SENIOR MANAGERS USERS: SENIOR MANAGERS

EXAMPLE: 5 YEAR OPERATING PLANEXAMPLE: 5 YEAR OPERATING PLAN

EXECUTIVE SUPPORT SYSTEMS EXECUTIVE SUPPORT SYSTEMS (ESS)(ESS)


• TOP LEVEL MANAGEMENTTOP LEVEL MANAGEMENT

• DESIGNED TO THE INDIVIDUALDESIGNED TO THE INDIVIDUAL

• TIES CEO TO ALL LEVELSTIES CEO TO ALL LEVELS

• VERY EXPENSIVE TO KEEP UPVERY EXPENSIVE TO KEEP UP

• EXTENSIVE SUPPORT STAFFEXTENSIVE SUPPORT STAFF

**

EXECUTIVE SUPPORT SYSTEMS EXECUTIVE SUPPORT SYSTEMS (ESS)(ESS)


INTERRELATIONSHIPS AMONG SYSTEMSINTERRELATIONSHIPS AMONG SYSTEMS

ESSESS

TPSTPSKWSKWS

OASOAS

DSSDSSMISMIS


SYSTEMS FROM A FUNCTIONAL SYSTEMS FROM A FUNCTIONAL PERSPECTIVEPERSPECTIVE

• SALES & MARKETING SYSTEMSSALES & MARKETING SYSTEMS

• MANUFACTURING & PRODUCTION MANUFACTURING & PRODUCTION SYSTEMSSYSTEMS

• FINANCE & ACCOUNTING SYSTEMSFINANCE & ACCOUNTING SYSTEMS

• HUMAN RESOURCES SYSTEMSHUMAN RESOURCES SYSTEMS

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SALES & MARKETING SALES & MARKETING INFORMATION SYSTEMINFORMATION SYSTEM

SALES

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


MANUFACTURING MANUFACTURING INFORMATION SYSTEMINFORMATION SYSTEM


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


FINANCE & ACCOUNTING FINANCE & ACCOUNTING INFORMATION SYSTEMINFORMATION SYSTEM


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


HUMAN RESOURCES HUMAN RESOURCES INFORMATION SYSTEMINFORMATION SYSTEM


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


EXAMPLES OF BUSINESS EXAMPLES OF BUSINESS PROCESSESPROCESSES

• MANUFACTURING & PRODUCTION: MANUFACTURING & PRODUCTION: Assembling product, checking Assembling product, checking quality, producing bills of materialsquality, producing bills of materials

• SALES & MARKETING: Identifying SALES & MARKETING: Identifying customers, creating customer customers, creating customer awareness, sellingawareness, selling

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EXAMPLES OF BUSINESS EXAMPLES OF BUSINESS PROCESSESPROCESSES

• FINANCE & ACCOUNTING: Paying FINANCE & ACCOUNTING: Paying creditors, creating financial creditors, creating financial statements, managing cash accountsstatements, managing cash accounts

• HUMAN RESOURCES: Hiring HUMAN RESOURCES: Hiring employees, evaluating performance, employees, evaluating performance, enrolling employees in enrolling employees in benefits benefits plansplans

**


SUPPLY-CHAIN MANAGEMENT


HOW INFORMATION SYSTEMS HOW INFORMATION SYSTEMS FACILITATES SUPPLY CHAIN FACILITATES SUPPLY CHAIN

MANAGEMENTMANAGEMENT

DECIDE WHEN, WHAT TO PRODUCE, STORE, MOVEDECIDE WHEN, WHAT TO PRODUCE, STORE, MOVE……RAPIDLY COMMUNICATE ORDERSRAPIDLY COMMUNICATE ORDERS……TRACK ORDER STATUSTRACK ORDER STATUS……CHECK INVENTORY AVAILABILITY, MONITOR LEVELSCHECK INVENTORY AVAILABILITY, MONITOR LEVELS……TRACK SHIPMENTSTRACK SHIPMENTS…… PLAN PRODUCTION BASED ON ACTUAL DEMANDPLAN PRODUCTION BASED ON ACTUAL DEMAND……RAPIDLY COMMUNICATE PRODUCT DESIGN CHANGESRAPIDLY COMMUNICATE PRODUCT DESIGN CHANGES……PROVIDE PRODUCT SPECIFICATIONSPROVIDE PRODUCT SPECIFICATIONS……SHARE INFORMATION ABOUT DEFECT RATES, RETURNS...SHARE INFORMATION ABOUT DEFECT RATES, RETURNS...


TRADITIONALTRADITIONALVIEW OF SYSTEMSVIEW OF SYSTEMS

• WITHIN THE BUSINESS: There are WITHIN THE BUSINESS: There are functions, each having its uses of functions, each having its uses of information systemsinformation systems

• OUTSIDE THE ORGANIZATIONOUTSIDE THE ORGANIZATION’’S S BOUNDARIES: There are customers and BOUNDARIES: There are customers and vendorsvendors

FUNCTIONS TEND TO WORK IN ISOLATIONFUNCTIONS TEND TO WORK IN ISOLATION**


Sales & Marketing

Accounting

Finance

Manufacturing

Human Resources

ENTERPRISE SYSTEMENTERPRISE SYSTEM

Business ProcessesBusiness Processes

Enterprise-wideEnterprise-wide Business ProcessesBusiness Processes

Vendors Customers


BENEFITS OF ENTERPRISE BENEFITS OF ENTERPRISE SYSTEMSSYSTEMS

• FIRM STRUCTURE & ORGANIZATION: FIRM STRUCTURE & ORGANIZATION: One organizationOne organization

• MANAGEMENT: Firmwide knowledge-MANAGEMENT: Firmwide knowledge-based management processesbased management processes

• TECHNOLOGY: Unified platformTECHNOLOGY: Unified platform• BUSINESS: More efficient operations & BUSINESS: More efficient operations &

customer-driven business processescustomer-driven business processes

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CHALLENGES OF ENTERPRISE CHALLENGES OF ENTERPRISE SYSTEMSSYSTEMS

• DAUNTING IMPLEMENTATIONDAUNTING IMPLEMENTATION

• HIGH UP FRONT COSTS & FUTURE HIGH UP FRONT COSTS & FUTURE BENEFITSBENEFITS

• INFLEXIBILITYINFLEXIBILITY

• HARD TO REALIZE STRATEGIC HARD TO REALIZE STRATEGIC VALUEVALUE

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INDUSTRIAL NETWORKSINDUSTRIAL NETWORKS

LINK FIRMS INTO INDUSTRY-WIDE LINK FIRMS INTO INDUSTRY-WIDE SYSTEMSYSTEM

• HORIZONTAL: Link firms in same HORIZONTAL: Link firms in same industry, including competitorsindustry, including competitors

• VERTICAL: Link firm with suppliers VERTICAL: Link firm with suppliers in same industryin same industry

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What are business processes? What are business processes? How are they related to How are they related to information systems?information systems?

• A business process is a logically related set of activities that defines how specific business tasks are performed, and it represents a unique way in which an organization coordinates work, information, and knowledge. Managers need to pay attention to business processes because they determine how well the organization can execute its business, and they may be a source of strategic advantage. There are business processes specific to each of the major business functions, but many business processes are cross-functional. Information systems automate parts of business processes, and they can help organizations redesign and streamline these processes.


What is the role of the information systems function in

a business?• The information systems department is the

formal organizational unit responsible for information technology services. It is responsible for maintaining the hardware, software, data storage, and networks that comprise the firm’s IT infrastructure. The department consists of specialists, such as programmers, systems analysts, project leaders, and information systems managers, and is often headed by a CIO.


INFORMATION INFORMATION

SYSTEMS IN THESYSTEMS IN THE

ENTERPRISEENTERPRISE

2.1 Prof Jess Role @ UEAB 2012 2 2 INFORMATION SYSTEMS IN THE ENTERPRISE ENTERPRISE.

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