(2) Information System in the Enterprise

8/8/2019 (2) Information System in the Enterprise

1/56

INFORMATIONINFORMATION

SYSTEMS IN THESYSTEMS IN THE

ENTERPRISEENTERPRISE


2/56

1. Integration: Different systems serve variety of functions, connecting organizational levelsdifficult, costly

2. Enlarging scope of management thinking:Huge system investments, long developmenttime must be guided by common objectives

MANAGEMENT CHALLENGES


3/56

Types of Information Systems

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION


4/56

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 SystemsOffice Systems

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

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS


5/56



6/56


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

Basic business systems that serve theBasic business systems that serve theoperational leveloperational level

A computerized system that performs andA computerized system that performs andrecords the daily routine transactionsrecords the daily routine transactionsnecessary to the conduct of the businessnecessary to the conduct of the business


7/56

Payroll TPS



8/56

Types of TPS Systems



9/56

K nowledge Work Systems ( K WS):

K nowledge levelInputs: Design specsProcessing: ModelingOutputs: Designs, graphics

Users: Technical staff and professionals

Example: Engineering work station



10/56

Management Information System (MIS):

Management levelInputs: High volume dataProcessing : Simple modelsOutputs: Summary reports

Users: Middle managers

Example: Annual budgeting



11/56


Management Information System (MIS)


12/56

Structured and semi-structured decisions

Report control oriented

Past and present data

Internal orientation

Lengthy design process


Management Information System (MIS)


13/56

Decision Support System (DSS):

Management levelInputs: Low volume dataProcessing: InteractiveOutputs: Decision analysis

Users: Professionals, staff

Example: Contract cost analysis



14/56


Decision Support System (DSS)


15/56


Decision Support System (DSS)


16/56

Executive Support System (ESS):

Strategic levelInputs: Aggregate dataProcessing: InteractiveOutputs: Projections

Users: Senior managers

Example: 5-year operating plan



17/56


Executive Support System (ESS)


18/56

Top level management

Designed to the individual

Ties CEO to all levels

Very expensive to keep up

Extensive support staff


Executive support system (ESS)


19/56

INTERRELATIONSHIPS AMONG SYSTEMS


20/56

Major functions of systems:Sales management, market research, promotion,

pricing, new products

Major application systems:Sales order info system, market research system,

pricing system

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Sales and Marketing Systems


21/56

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

S ales and Marketing S ystems


22/56

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

Manufacturing and Production Systems



23/56

S YSTEM DESC R TIO N O R N IZATIO NAL LEVEL

MACHI NE CO NT ROL CO NT ROL ACTIO NS OF EQ UIPME NT OPE RATIO NAL

COMP UTE R- AI DE D-D ESIG N DESIG N NEW P RO DUCTS KNOWLE DGE

P RO DUCTIO N PLA NN ING DECI DE NUMBE R SCHE DULE OF P RO DUCTS MA NAGEME NT

FACILITIES LOCATIO N DECI DE WHE RE TO LOCATE FACILITIES ST RATEGIC

M anufacturing and P roduction S ystems

S YSTEMS F R OM A F UN CTIO NAL PE R SPECTIVE


24/56

Overview of Inventory Systems



25/56

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



26/56

SYSTEM DESC R TIO N O R AN IZATIO NAL L EVE L

ACCO UNTS RECEIV ABL E T RAC K MO NEY OWE D TO F IRM OPE RATIO NAL

PO RT FO LIO ANAL YSIS DESIG N F IRM'S I NVESTME NTS KNOW LE DGE

BUD GETI NG P REP ARE S HO RT TE RM BUD GETS M ANAGEME NT

P RO F IT P LANN ING P LAN LO NG-TE RM P RO F ITS ST RATEGIC

Financing and Accounting S ystems

SYSTEMS FR OM A FUN CTIO NAL PE RSPECTIVE


27/56

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


28/56

SYSTE M DESC R I T ION ORGAN I AT IONA EVEL

T RA INING & DEVEL O M E NT T RA C K T RA INING, S KILLS , A RA IS ALS O E RA T IONAL

C AR EE R AT HI NG DES IGN E M L O YEE C AR EE R AT H S KNO LE DGE

C OM E NS AT ION ANA LYS IS MONIT OR AGES , S AL AR IES , B E NEF ITS MANA GE ME NT

H UMAN RES OUR CES L ANN ING L AN L ONG-TE RM L AB OR F ORCE NEE DS ST RA TE G IC

H uman R esource S ystems

SYSTE MS F R OM A F UN CT IONA L E R SPECT IVE


29/56

Human Resource Systems



30/56

Business processes

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

Concrete work flows of material, information, andknowledgesets of activities

Business Processes and Information Systems

ENTERPRISE APPLICATIONS


31/56

Unique ways to coordinate work,information, and knowledge

Ways in which management choosesto coordinate work




32/56


Information systems help organizations

Achieve great efficiencies by automating parts of processes

Rethink and streamline processes



33/56

Manufacturing and production: Assembling product, checking quality, producing bills of materials

Sales and marketing: Identifying customers,creating customer awareness, selling

Examples of Business Processes



34/56

Finance and accounting: Paying creditors,creating financial statements, managing cashaccounts

Human Resources: Hiring employees,evaluating performance, enrolling employees in

benefits plans

Examples of Business Processes



35/56

Cross-Functional Business Processes

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

Group employees from different functionalspecialties to a complete piece of work

Example: Order Fulfillment Process




36/56

The Order Fulfillment Process



37/56

Enterprise ApplicationsEnterprise systemsSupply chain management systemsCustomer relationship management systems

K

nowledge management systems



38/56

Within the business: There are functions, eachhaving its uses of information systems

Outside the organizations boundaries: Thereare customers and vendors

Functions tend to work in isolation

Traditional View of the Systems



39/56

Traditional View of the Systems



40/56

Enterprise Systems



41/56

Firm structure and organization: Oneorganization

Management: Firm-wide knowledge-basedmanagement processes

Technology: Unified platform

Business: More efficient operations andcustomer-driven business processes

Benefits of Enterprise Systems



42/56

Difficult to build: Require fundamental changesin the way the business operates

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

Centralized organizational coordination anddecision making: Not the best way for the firmsto operate

Challenges of Enterprise Systems



43/56

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

Integrates supplier, manufacturer, distributor, andcustomer logistics time

Reduces time, redundant effort, and inventorycosts

Supply Chain Management (SCM)



44/56

Supply Chain

Network of organizations and business processes

Helps in procurement of materials, transformationof raw materials into intermediate and finished

products




45/56

Limitations:

Inefficiencies can waste as much as 25% of companys operating costs

Bullwhip Effect: Information about the demand

for the product gets distorted as it passes from oneentity to next




46/56

Supply Chain Management



47/56

Helps in distribution of the finished products tocustomers

Includes reverse logistics - returned items flow inthe reverse direction from the buyer back to theseller




48/56

Decide when, what to produce, store, moveRapidly communicate ordersCommunicate orders, track order statusCheck inventory availability, monitor levelsTrack shipmentsPlan production based on actual demandRapidly communicate product design changeProvide product specificationsShare information about defect rates, returns

How Information Systems Facilitate Supply Chain Management



49/56

Supply chain planning system: Enables firm togenerate forecasts for a product and to developsourcing and a manufacturing plan for the product

Supply chain execution system: Manages flowof products through distribution centers and

warehouses




50/56

Uses digital technologies to enable multipleorganizations to collaboratively design, develop,

build, move, and manage products

Increases efficiencies in reducing product designlife cycles, minimizing excess inventory,forecasting demand, and keeping partners andcustomers informed

Collaborative Commerce



51/56


52/56

Private Industrial Networks

Web-enabled networks

Link systems of multiple firms in an industry

Coordinate transorganizational business processes

Industrial Networks



53/56

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 business processes of a firm




54/56

Provides end-to-end customer care

Provides a unified view of customer across thecompany

Consolidates customer data from multiple sources

and provides analytical tools for answeringquestions




55/56




56/56

K nowledge Management SystemsCreating knowledgeDiscovering and codifying knowledgeSharing knowledgeDistributing knowledge

Documents

(2) Information System in the Enterprise