Chapter 2 2000 by Prentice Hall. 2-1 How Businesses Use Information Systems Uma Gupta Introduction...
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Transcript of Chapter 2 2000 by Prentice Hall. 2-1 How Businesses Use Information Systems Uma Gupta Introduction...
2000 by Prentice Hall. 2-1
Chapter 2
How BusinessesUse
InformationSystems
Uma GuptaIntroduction to Information Systems
2000 by Prentice Hall. 2-2
Learning Objectives
After studying this chapter, you will be able to:
Describe basic business structures and functional areas
Identify four types of information systems Explain the role and function of marketing information
systems Summarize the purpose of manufacturing and service
information systems Outline the purpose of financial and accounting
information systems and how they support a business
2000 by Prentice Hall. 2-3
Learning Objectives (cont.)
Explain the role and function of human resource information systems
Discuss the purpose and effects of cross-functional systems
Define and describe global information systems
2000 by Prentice Hall. 2-4
A Business Structured by Cross-Functional Teams
PRODUCTOR SERVICE
DEVELOPMENT
Accounting
Human Resources
Manufacturing
Marketing
Finance
Information Systems
2000 by Prentice Hall. 2-5
The Functional Product Design and Development Process
Marketing
Finance
Accounting Manufacturing
HumanResources
Productor ServiceDevelopment
2000 by Prentice Hall. 2-6
Four Types of Information Systems
Personal, Work-Group, Enterprise-Wide Systems Sometimes information systems are
grouped into categories based on the number of individuals who use them: personal systems (one user), work-group systems (a group of users), or enterprise-wide systems (the entire organization).
2000 by Prentice Hall. 2-7
Four Types of Information Systems (cont.)
Systems Based on Type of Decision Decisions can be classified as operational,
tactical, and strategic.
Strategic Information Systems Information systems that give a company a
significant strategic advantage over its market competitors. These can be transaction processing systems, management information systems, decision support systems, or any combination of these systems.
2000 by Prentice Hall. 2-8
Four Types of Information Systems (cont.)
Function-Oriented Information Systems Systems classified according to their
business function: marketing information systems, manufacturing information systems, financial information systems, etc.
2000 by Prentice Hall. 2-9
Comparison of Types of Decisions
Types of Decisions Description
Operational
Tactical
Strategic
Structured decisions. Routine, require minimal judgment, focus on day-to-day operations.
Semistructured decisions that support tactical goals. Often made by middle managers.
Unstructured. Rely heavily on intuition, judgment, and experience. Usually made by top-level managers and executives.
2000 by Prentice Hall. 2-10
Information Systems Based on Type of Decisions
Systems that support operational, tactical, and strategic decision are broadly classified into the following categories: Transaction processing systems (TPS) Management information systems (MIS) Intelligent support systems (ISS), which include
decision support systems (DSS), executive information systems (EIS), and expert systems (ES)
2000 by Prentice Hall. 2-11
Information Systems Based on Type of Decisions (cont.)
Intelligent support systems (ISS) refer to a group of systems that support decisions requiring the use of knowledge, intuition, experience, and expertise Decision support systems (DSS) Executive information systems (EIS) Artificial intelligence (AI) and expert systems
(ES)
2000 by Prentice Hall. 2-12
Functional Information Systems
Information systems can also be classified according to function in these four areas: Marketing Manufacturing and service Accounting and finance Human resources
2000 by Prentice Hall. 2-13
Marketing Information Systems
Information systems that meet the information needs of an organization in the areas of sales, distribution, advertising and promotion, market analysis, market intelligence, product research, service management, and other marketing functions.
2000 by Prentice Hall. 2-14
•Databases to improve customer service•Point-of-sale systems•Kiosks
Developing the Strategic Marketing Information Systems
Plan
Company Mission, Goals, Objectives
Strategic Marketing Plan
Strategic Marketing Information Plan
Marketing Information Systems
Examples:
2000 by Prentice Hall. 2-15
Manufacturing Information Systems
A set of systems that support the manufacturing and service functions of purchasing, receiving, quality control, inventory management, material requirements planning, capacity planning, production scheduling, and plant design.
2000 by Prentice Hall. 2-16
Developing a Manufacturing Information System Plan for
Manufacturing and Service Businesses
• Automation systems• Logistics systems• Material requirements planning software• Manufacturing resource planning software• Agile manufacturing environments• ERP
Company Mission, Goals, Objectives
Strategic Manufacturing and Service Plan
Strategic Manufacturing and Service Information Plan
Manufacturing Information Systems
Examples:
2000 by Prentice Hall. 2-17
Financial and Accounting Information Systems
Computerized systems that provide accounting and financial information to improve decision making.
2000 by Prentice Hall. 2-18
Developing the Strategic Financial and Accounting Information Systems Plan
General ledger systems Asset management systems Order-entry systems Cash management systemsAccounts receivable and accounts payable systems
Inventory control systems Payroll systemsCapital budgeting systems
Company Mission, Goals, Objectives
Strategic Financial and Accounting Plan
Strategic Financial and Accounting Information Systems Plan
Financial and Accounting Information Systems
Examples:
2000 by Prentice Hall. 2-19
Human Resource Information Systems (HRIS)
Computerized systems that support the planning, control, coordination, administration, and management of the human resource assets in an organization.
2000 by Prentice Hall. 2-20
Developing the Strategic Human Resource Information Systems
Plan
Personnel databases Payroll systems Benefits administration Performance appraisal
Personnel action systems (hiring, firing, recruiting)Labor law compliance system Compensation systems
Workforce scheduling systems
Company Mission, Goals, Objectives
Strategic Human Resources Plan
Strategic Human Resources Information Systems Plan
Human Resources Information Systems
Examples:
2000 by Prentice Hall. 2-21
Putting the Functions Together: Cross-Functional Systems
Systems that integrate functional systems give end users more complete information for decision making
The case for cross-functional information systems is even stronger in global companies A strong and consistent flow of information
is essential to project a uniform “face” to all people who have a stake in the business
2000 by Prentice Hall. 2-22
Global Information Systems
A system that links people, systems, and business units located around the world through the use of telecommunications (hardware and software that links two or more electronic devices that are geographically separated).
2000 by Prentice Hall. 2-23
Ten Critical Points for Global Success
Incorporate diversity into your organization
Build trust Create team identity Build consensus Teach sensitivity Establish ground rules Be fair Communicate progress Designate responsibilities Go face to face
2000 by Prentice Hall. 2-24
Guidelines for Business Information Systems Success
Give Employees Information Access for Improved Decision Making Many companies that use information systems
successfully do so because they trust employees enough to give them access to information so they can make decision that affect their jobs.
Problems Won’t Go Away. Opportunities Will. Be Prepared to Act on Both. Opportunities to apply technology to achieve
competitive advantage slip away quickly.
2000 by Prentice Hall. 2-25
Guidelines for Business Information Systems Success (cont.)
Use Information Systems to Improve Customer Satisfaction The key question when approving an information
system project should be “How will this help our company better serve our customers?”
Integration Leads to Success Companies that invest in systems that are
isolated from other internal systems often create complex problems
2000 by Prentice Hall. 2-26
Guidelines for Business Information Systems Success (cont.)
Take Calculated Risks Many new and innovative information systems are
also risky investments RISK
– “R” is for return: Are we achieving an appropriate return for the risks we take?
– “I” is for immunization: Do we have the controls and limits in place to manage risk?
– “S” is for systems: Do we have the systems to measure and report risk?
– “K” is for knowledge: Do we have the right people, skills, culture, and incentives for effective risk management?