1 SESSION 2 Information Systems In The Enterprise.

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SESSION 2SESSION 2

Information Systems In The Information Systems In The EnterpriseEnterprise

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Types of Information Systems

Figure 2-1

KEY SYSTEM APPLICATIONS

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Major 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 Systems (TPS)Transaction Processing Systems (TPS)

KEY SYSTEM APPLICATIONS

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TYPES OF INFORMATION SYSTEMS

Figure 2-2

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Transaction Processing Systems (TPS):Transaction Processing Systems (TPS):

• Basic business systems that serve the Basic business systems that serve the operational leveloperational level

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

• So central to the business that its failure can So central to the business that its failure can hurt the firmhurt the firm

• e.g. sales order entry package tracking, e.g. sales order entry package tracking, payrollpayroll

KEY SYSTEM APPLICATIONS

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Payroll TPS

Figure 2-3

KEY SYSTEM APPLICATIONS

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Knowledge Work Systems (KWS) or Knowledge Management Systems:

Users: knowledge workersPromote the creation and integration of new knowledge in the organizationRely on internet, intranet web sites, knowledge bases and discussion forums

Office SystemsUsers: data workersDesigned to increase the productivity Ex: word processing, e-mail, voice mail

KEY SYSTEM APPLICATIONS

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Management Information System (MIS):

Users: managers

Serve the functions of planning, controlling, and decision making

Generally depend on TPS for their data

Contents of the info. products generated by MIS are specified in advance

KEY SYSTEM APPLICATIONS

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Support structured and semi-structured decisions

Report control oriented

Past and present data

Internal orientation

have little analytical capability

Management Information Systems (MIS)

KEY SYSTEM APPLICATIONS

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Figure 2-5

Management Information System (MIS)

KEY SYSTEM APPLICATIONS

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Decision Support System (DSS):

Users: management level

Semi structured decisions

Sources: MIS, TPS and external

Strong analytical power and interactive

Ex: Contract cost analysis

KEY SYSTEM APPLICATIONS

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Decision Support System (DSS)

KEY SYSTEM APPLICATIONS

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Executive Support System (ESS):

Users: senior managers (strategic level)

Unstructured decisions

Source: external data, MIS, DSS

Generalized computing and communications capacity

Less use of analytical models

KEY SYSTEM APPLICATIONS

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Executive Support System (ESS)

Figure 2-8

KEY SYSTEM APPLICATIONS

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INTERRELATIONSHIPS AMONG SYSTEMS

Figure 2-9

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Major functions of systems:Sales management, market research, promotion, pricing, new products

Major application systems:Sales order IS, market research system, pricing system

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Sales and Marketing Systems

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Major functions of systems:Scheduling, purchasing, shipping, receiving, engineering, operations

Major application systems:Materials resource planning systems, purchase order control systems, quality control systems

Manufacturing and Production Systems

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

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

Major application systems:General ledger, accounts receivable, accounts payable, budgeting, funds management systems

Financing and Accounting Systems

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

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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

Human Resource Systems

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

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Business processes

Manner in which work is organized, coordinated, and focused to produce a valuable product or service

Unique ways to coordinate work, information, and knowledge

IS achieves great efficiencies by automating parts of processes

Business Processes and Information Systems

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

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Cross-Functional Business Processes

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

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

Example: Order Fulfillment Process

Business Processes and Information Systems

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

22Figure 2-12

The Order Fulfillment Process

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

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Customer Relationship Management (CRM)

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

Business and Technology discipline

Uses information system to coordinate entire consumer related business processes of a firm

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

24Figure 2-13

Customer Relationship Management (CRM)

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

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Supply Chain Management (SCM)Close linkage and coordination of activities involved in buying, making, and moving a product

Integrates supplier, manufacturer, distributor, and customer

Reduces time, redundant effort, and inventory costs

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

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Supply Chain Management

Figure 2-14

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

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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

How Information Systems Facilitate Supply Chain Management

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

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Limitations:

Inefficiencies can waste as much as 25% of company’s operating costs

Bullwhip Effect: Information about the demand for the product gets distorted as it passes from one entity to next

Supply Chain Management (SCM)

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

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Uses digital technologies to enable multiple organizations to collaboratively design, develop, build, move, and manage products

Increases efficiencies in reducing product design life cycles, minimizing excess inventory, forecasting demand, and keeping partners and customers informed

Collaborative Commerce

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

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Private Industrial Networks

Web-enabled networks

Link systems of multiple firms in an industry

Coordinate transorganizational business processes

Collaborative Commerce

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

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Enterprise Systems (Enterprise Resource Planning –ERP)

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

Integrate the key business processes of an entire firm

Consolidate information across the organization

Allow information to flow seamlessly throughout the organization

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Firm structure and organization: One organization

Management: Firm-wide knowledge-based management processes

Technology: Unified platform

Business: More efficient operations and customer-driven business processes

Benefits

Enterprise Systems

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

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Difficult to build: Require fundamental changes in the way the business operates

Technology: Require complex pieces of software and large investments of time, money, and expertise

Centralized organizational coordination and decision making: Not the best way for the firms to operate

Challenges

Enterprise Systems

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES