E-BUSINESS & INFORMATION SYSTEMS IN THE ENTERPRISE MIS 205.

E-BUSINESS & INFORMATION SYSTEMS IN THE ENTERPRISE

MIS 205

OBJECTIVES

• Evaluate the role played by the major types of systems in a business and their relationship to each other

• Explain how enterprise applications promote business process integration and improve organizational performance

• Assess the challenges posed by information systems in the enterprise and management solutions

Management Information SystemsManagement Information SystemsE-Business & Information Systems in the EnterpriseE-Business & Information Systems in the Enterprise

2 MIS 205 E-Business & Information Systems


MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

The Four Major Types of Information Systems

Transaction Processing Systems (TPS)

Management Information Systems (MIS)

Decision-Support Systems (DSS)

Executive Support Systems (ESS)




Major Types of Information Systems




Transaction Processing Systems (TPS)

• Basic business systems that serve the operational level

• A computerized system that performs and records the daily routine transactions necessary to the conduct of the business

• Support day-to-day/routine operation by maintaining detailed records e.g. Sales, purchase, deposit, withdrawal, refunds, payment, inventory control, etc.




A Symbolic Representation for a Payroll TPS




Typical Applications of TPS




Management Information Systems (MIS)

Management level

• Inputs: High volume transaction level data (Mostly internal)

• Processing: Simple models. Data is accumulated and totaled.

• Outputs: Summary reports & exception reports. Scheduled reports (reports generated periodically- yearly , monthly or weekly usually not day-to-day)

• Users: Middle managers Example: Annual budgeting




Management Information Systems (MIS) (cont.)


Fig: Three TPS supply summarized transaction data to the MIS reporting system at the end of the time period



Management Information Systems (MIS) (cont.)A sample MIS report

10 MIS 205 E-Business & Information SystemsSummerized annual sales data

• Software– May be written using business programming languages, May be written using business programming languages,

eg, ABAP (Native language of SAP)eg, ABAP (Native language of SAP)

– May use SQLMay use SQL

– Can be a report writerCan be a report writer

– Client Server software allows clients to get data from the Client Server software allows clients to get data from the server and do computationsserver and do computations



Management Information Systems (MIS) – (cont.)


Management level

Inputs: Internal and External data, User friendly interface Processing: Interactive

Can change assumptions e.g. “What-if” oriented More analytical power than other systems, such as

statistical analysis May involve one or more models to analyze data

Outputs: Decision analysis. Users: Professionals, staff

Example: Contract cost analysis

Provide information & Decision Support techniques to confront specific problem / opportunity



Decision-Support Systems (DSS)


Software : A DSS is usually developed using general software that is adapted for a specific decision. Simple example is spreadsheet May be statistical packages like SAS, SPSS May do data mining: searching for patterns in large amounts of data to

determine business practices Group decision support systems (GDSS) Geographic information systems (GIS)



Decision-Support Systems (DSS) (cont.)




Decision-Support Systems (DSS) (cont.)Voyage-estimating decision-support system


This DSS system is used by managers who must develop bids on shipping contracts



• Primarily address structured problems

• Provides typically fixed, scheduled reports based

on routine flows of data and assists in the general

control of the business

The Difference between MIS and DSS The Difference between MIS and DSS

MIS:



The Difference between MIS and DSS The Difference between MIS and DSS

• Support semistructured and unstructured problems

• Greater emphasis on models, assumptions, ad-hoc queries, display graphics

• Emphasizes change, flexibility, and a rapid response

DSS:



EXECUTIVE SUPPORT SYSTEMS (ESS):

• Inputs: Aggregated data

• Processing: Interactive

• Outputs: Projections

• Users: Senior managers

Example: 5 year operating plan




Model of a Typical Executive Support System


This system pulls data from diverse sources and makes them available to executives in an easy-to-use form



EXECUTIVE SUPPORT SYSTEMS (ESS) (Continued)

• Top Level Management• Designed to the individual senior manager • Ties CEO to all levels• Very expensive to keep up• Extensive support staff




Relationship of Systems to One Another Interrelationships among systems



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





Example of a Sales Information System




SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL

Order processing

Enter, process, and track orders Operational

Pricing analysis Determine prices for products and services

Management

Sales trend forecasting

Prepare 5-year sales forecasts Strategic




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





Example of data flow in a Manufacturing & Production system




Machine control

Control the actions of machines and equipment

Operational

Production planning

Decide when and how many products should be produced

Management

Facilities location

Decide where to locate new production facilities

Strategic




Overview of an Inventory System





Finance and Accounting Systems

Major functions of systems: • Budgeting, general ledger, billing, cost Budgeting, general ledger, billing, cost

accountingaccounting

Major application systems: • General ledger, accounts receivable, accounts General ledger, accounts receivable, accounts

payable, budgeting, funds management systemspayable, budgeting, funds management systems


An Accounts Receivable System



Finance and Accounting Systems



Finance & Accounting Systems (Continued)

SYSTEM DESCRIPTION ORGANIZATION-AL LEVEL

Accounts receivable

Tracks money owed the firm Operational

Budgeting Prepares short-term budgets Management

Profit planning Plans long-term profits Strategic




Human Resource Systems

Major functions of systems: • Personnel records, benefits, compensation, labor Personnel records, benefits, compensation, labor

relations, trainingrelations, training

Major application systems: • Payroll, employee records, benefit systems, Payroll, employee records, benefit systems,

career path systems, personnel training systemscareer path systems, personnel training systems



Human Resource Systems (Continued) An Employee Recordkeeping System





Human Resource Systems (Continued)


Training and development

Tracks employee training, skills, and performance appraisals

Operational

Compensation analysis

Monitors the range and distribution of employee wages, salaries, and benefits

Management

Human resources planning

Plans the long-term labor force needs of the organization

Strategic




Relationship of Systems to One Another

In contemporary digital firms, the different types of systems are closely linked to one another. This is the ideal. In traditional firms these systems tend to be isolated from one another, and information does not flow seamlessly from one end of the organization to the other. Efficiency and business value tend to suffer greatly in these traditional firms



Business Processes and Information Systems

Cross-Functional Business Processes: Cross-Functional Business Processes:

• Transcend boundary between sales, marketing, Transcend boundary between sales, marketing, manufacturing, and research and developmentmanufacturing, and research and development

• Group employees from different functional Group employees from different functional specialties to a complete piece of workspecialties to a complete piece of work

Example: Order Fulfillment ProcessExample: Order Fulfillment Process

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES: Introduction to Enterprise Applications



The Order Fulfillment Process



What Are Enterprise Systems? What Are Enterprise Systems?





Systems for Enterprise-Wide Process Integration

Enterprise applications:

• Designed to support organization-wide process Designed to support organization-wide process coordination and integrationcoordination and integration


Usually Consists of Usually Consists of :

1. Enterprise systems / Enterprise Resource Planning Systems (ERP)

2. Supply chain management systems (SCM)

3. Customer relationship management systems (CRM)

4. Knowledge management systems (KM)


MIS 205 E-Business & Information Systems39


Example of an Enterprise Application: mySAP Business Suite


SAP Enterprise Suite (mySAP Business Suite) consists of the following components: mySAP ERP (Finance, HR, Controlling, Analytics,

corporate services etc) mySAP SCM (Supply Chain Management) mySAP CRM (Customer Relationship Management) mySAP SRM (Supplier Relationship Management) mySAP PLM (Product Lifecycle Management)

SAP is world’s largest business software vendor based in Germany


Example of an Enterprise Application: mySAP Business Suite



1. Enterprise (ERP) Systems

• Enterprise systemsEnterprise systems, also known as enterprise , also known as enterprise resource planning (ERP) systems, provide a resource planning (ERP) systems, provide a single information system for organization-wide single information system for organization-wide coordination and integration of key business coordination and integration of key business processes.processes.

• Information that was previously fragmented in Information that was previously fragmented in different systems can now seamlessly flow different systems can now seamlessly flow throughout the firm so that it can be shared by throughout the firm so that it can be shared by business processes in manufacturing, business processes in manufacturing, accounting, human resources, and other areas.accounting, human resources, and other areas.

1. ENTERPRISE (ERP) SYSTEMS



Enterprise (ERP) Application Architecture




Traditional “Silo” View of Information Systems

Within the business:Within the business: • There are functions, each having its uses of There are functions, each having its uses of

information systemsinformation systems

Outside the organization’s boundaries:Outside the organization’s boundaries: • There are customers and vendorsThere are customers and vendors

Functions tend to work in isolationFunctions tend to work in isolation




Traditional View of Systems



How Enterprise (ERP) Systems Work


• Enterprise Resource Planning (ERP) systems

• Interdependent software modules with a common central database that support basic internal business processes for finance and accounting, human resources, manufacturing and production, and sales and marketing


Enterprise Systems:

• Enables data to be used by multiple functions and business

processes for precise organizational coordination and control.



Benefits of Enterprise Systems

• A more uniform organization: A more uniform organization: create a more disciplined create a more disciplined organizational culture.organizational culture.

• More efficient operations and customer-driven business More efficient operations and customer-driven business processes: processes: By integrating discrete business processes in By integrating discrete business processes in sales, productions, finance, and logistic. sales, productions, finance, and logistic.

• Firm wide Information for improved decision making: Firm wide Information for improved decision making: The The data have common, standardized definition and formats data have common, standardized definition and formats that are accepted by the entire organization.that are accepted by the entire organization.

Major enterprises software vendors include SAP, PeopleSoft (ORACLE)



Supply Chain

• Network of organizations and business processes

• Helps in procurement of materials, transformation of raw materials into intermediate and finished products and

• Helps in distribution of the finished products to customers

• Materials, Payments, and information flow through the supply chain in both directions (more detail in Ch-9)

2. SUPPLY CHAIN MANAGEMENT SYSTEMS



Supply Chain Management (SCM) Systems

• Coordination of business processes to speed

information, product, and fund flows up and

down a supply chain to reduce time, redundant

effort, and inventory costs (More detail in Ch-9)





Supply Chain Management (SCM) Process




Customer Relationship Management (CRM)

• Business and technology discipline for managing Business and technology discipline for managing

customer relationships to optimize revenue, customer relationships to optimize revenue,

profitability, customer satisfaction, and customer profitability, customer satisfaction, and customer

retentionretention

• Manages all ways used by firms to deal with Manages all ways used by firms to deal with existing and potential new customersexisting and potential new customers

3. CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS


Customer Relationship Management (CRM) Systems Customer Relationship Management (CRM) Systems

• Capture and integrate customer data from all over the organization

• Consolidate and analyze the data

• Distribute results to various systems and customer touch points across the enterprise





Customer Relationship Management (CRM) Systems Customer Relationship Management (CRM) Systems




Knowledge Management Systems

• Collects relevant knowledge and make it available Collects relevant knowledge and make it available

wherever and whenever it is neededwherever and whenever it is needed

• Support business processes and management Support business processes and management

decisionsdecisions

• Also link the firm to external sources of Also link the firm to external sources of

knowledgeknowledge

• Support processes for acquiring, storing, Support processes for acquiring, storing,

distributing, and applying knowledgedistributing, and applying knowledge

4. Knowledge Management Systems



Knowledge Management Systems

4. Knowledge Management Systems



• There are extraordinary opportunities to use There are extraordinary opportunities to use

information systems to achieve business value, information systems to achieve business value,

and increase profitability and increase profitability

MANAGEMENT OPPORTUNITIES, CHALLENGES, AND SOLUTIONS TO ENTERPRISE-WIDE INTEGRATION

Management Opportunities: Management Opportunities:



• Integration and the whole firm view:Integration and the whole firm view: Given the different interests and Given the different interests and

perspectives within a firm, it is difficult to achieve consensus about perspectives within a firm, it is difficult to achieve consensus about

the need for the "whole firm" viewpoint. the need for the "whole firm" viewpoint.

• Management and employee training:Management and employee training: Training a large number of Training a large number of

employees on many systems in a large organization involves employees on many systems in a large organization involves

commensurately large investments.commensurately large investments.

• Accounting for the cost of systems and managing demands for Accounting for the cost of systems and managing demands for

systems:systems: Given the large number of different types of systems in a Given the large number of different types of systems in a

firm, and the large number of people involved with using them, it is a firm, and the large number of people involved with using them, it is a

complex task to understand which systems are truly necessary and complex task to understand which systems are truly necessary and

productive with high returns on investment productive with high returns on investment


Management Challenges: Management Challenges:



Solution Guidelines:Solution Guidelines:

• Inventory the firm’s information systems: Inventory the firm’s information systems: Develop Develop a list of firm-wide information requirements to give a list of firm-wide information requirements to give a 360-degree view of the most important a 360-degree view of the most important information needs of the firm.information needs of the firm.

• Employee and management education:Employee and management education: Ensure that Ensure that you understand how much training is required.you understand how much training is required.

• Account for the costs and benefits: Account for the costs and benefits: Develop an Develop an accounting system for information services firm- accounting system for information services firm- wide.wide.



E-BUSINESS & INFORMATION SYSTEMS IN THE ENTERPRISE MIS 205.

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