Types of Information Systems

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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 Systems (TPS)Transaction Processing Systems (TPS)

3 Fig 2-2: The six major types of information systems.

4Fig 2-4: Typical applications of TPS ■

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TYPICAL TPS APPLICATIONSSales & 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

See Fig. 2-4Fig. 2-4 ( p.43 )

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TPS – TPS – Transaction Processing SystemsTransaction Processing Systems

Manufacturing Plant scheduling Material movement control Machine control

Finance Securities trading Cash management

2.1

7

Accounting Payroll Account payable Account receivable

Human Resources Compensation Training & development Employee record keeping

TPS – TPS – Transaction Processing SystemsTransaction Processing Systems

2.1

8 Fig 2-3: A symbolic representation for a payroll TPS.

Payroll TPS

2.1

◆

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Information systems that aid knowledge workers in the creation and integration of new knowledge in the organization .

KWS – knowledge work systems

Six Major Types of SystemsSix Major Types of Systems

2.1

Example: Engineering work station

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OAS – office automation systems

Computer systems, such as word processing, electronic mail systems, and scheduling systems, that are designed to increase the productivity of data workers in the office .

Six Major Types of SystemsSix Major Types of Systems

2.1

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Information systems at the management level of organization that serve the functions of planning, controlling, and decision making by providing routine summary and exception reports.

MIS – Management Information Systems

Six Major Types of SystemsSix Major Types of Systems

2.1

Example: Annual budgetingExample: Annual budgeting

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• Structured and semi-structured decisionsStructured and semi-structured decisions

• Report control orientedReport control oriented

• Past and present dataPast and present data

• Internal orientationInternal orientation

MISMIS

2.1

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TPS DATA FOR MIS APPLICATIONS

Fig 2-5: How management information systems obtain their data the from the organization’s TPS .

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Information systems at the management level of an organization that combine data and sophisticated analytical models to support non-routine decision making.

DSS – Decision Support Systems

Six Major Types of SystemsSix Major Types of Systems

2.1

Example:Example: Contract cost analysisContract cost analysis

15 Fig 2-7: Voyage estimating decision-support system .

Decision Support System (DSS)

◆

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Sales and marketing

Sales management Sales region analysis

Manufacturing Inventory control Production scheduling

MIS & DSSMIS & DSS

2.1

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Finance Annual budgeting Cost analysis

Accounting Capital investment analysis Pricing / profitability analysis

Human Resource Relocation analysis Contract cost analysis

MIS & DSSMIS & DSS

2.1

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Information system at the organization’s strategic level designed to address unstructured decision making through advanced graphics and communications.

ESS – Executive Support Systems

Six Major Types of SystemsSix Major Types of Systems

2.1

Example: 5-year operating planExample: 5-year operating plan

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• 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

ESSESS

2.1

20 Fig 2-8: Model of a typical executive support system .

Executive Support System (ESS)

Figure 2-8

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Sales and marketing Sales trend forecasting

Manufacturing Operating plan

Finance Budget forecasting

Accounting Profit planning

Human Resource Personnel planning

ESSESS

2.1

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Characteristics of Different Types of Characteristics of Different Types of Information SystemsInformation Systems

Information inputs

Processing

Information outputs

Users

See Table 2-1Table 2-1 ( p.41 )

2.1

23Fig 2-9: Interrelationships among systems

2.2 Systems from a Functional Perspective2.2 Systems from a Functional Perspective

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SALES & MARKETING SYSTEMS

MANUFACTURING & PRODUCTION SYSTEMS

FINANCE & ACCOUNTING SYSTEMS

HUMAN RESOURCES SYSTEMS

2.2 Systems from a Functional Perspective2.2 Systems from a Functional Perspective

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2.2 Systems from a Functional Perspective2.2 Systems from a Functional Perspective

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

Sales and MarketingSales and Marketing Systems Systems

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Sales and MarketingSales and Marketing Systems Systems

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2.2 Systems from a Functional Perspective2.2 Systems from a Functional Perspective

Major functions of systems:Major functions of systems: Scheduling, purchasing, shipping, Scheduling, purchasing, shipping,

receiving, engineering, operationsreceiving, engineering, operations

Major 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

Manufacturing and ProductionManufacturing and Production Systems Systems

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Manufacturing and ProductionManufacturing and Production Systems Systems

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2.2 Systems from a Functional Perspective2.2 Systems from a Functional Perspective

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

accountingaccounting

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

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

Financing and AccountingFinancing and Accounting Systems Systems

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Financing and AccountingFinancing and Accounting Systems Systems

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2.2 Systems from a Functional Perspective2.2 Systems from a Functional Perspective

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, systems, career path systems, personnel training systemspersonnel training systems

Human ResourceHuman Resource Systems Systems

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Human ResourceHuman Resource Systems Systems

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Business processes Business processes

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

Concrete work flows of material, Concrete work flows of material, information, and knowledge—sets of information, and knowledge—sets of activitiesactivities

Unique ways to coordinate work, Unique ways to coordinate work, information, and knowledgeinformation, and knowledge

Ways in which management chooses to Ways in which management chooses to coordinate workcoordinate work

2.3 Business Processes and Information Systems

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Cross-Functional Business ProcessesCross-Functional Business Processes

2.3 Business Processes and Information Systems

Fig. 2-12 The Order Fulfillment Process

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Information systems help Information systems help organizationsorganizations

Achieve great efficiencies by Achieve great efficiencies by automating parts of processes automating parts of processes

Rethink and streamline processesRethink and streamline processes

2.3 Business Processes and Information Systems

INTRODUCTION But what is a process and how does it tie into information systems? And in what ways do processes have a role in business?

We have all heard the term process before, but what exactly does it mean? A process is a series of tasks that are completed in order to accomplish a goal. A business process, therefore, is a process that is focused on achieving a goal for a business. If you have worked in a business setting, you have participated in a business process. Anything from a simple process for making a sandwich at Subway to building a space shuttle utilizes one or more business processes.

Every day, each of us will conduct many processes without even thinking about them: getting ready for work, using an ATM, reading our e-mail, etc. But as processes grow more complex, they need to be documented. For businesses, it is essential to do this, because it allows them to ensure control over how activities are undertaken in their organization. It also allows for standardization: McDonald’s has the same process for building a Big Mac in all of its restaurants.

The processes when mapped with a singular database is called an ERP enterprise resource management.

With a centralized database: All data in an ERP system is stored in a single, central database. This centralization is key to the success of an ERP – data entered in one part of the company can be immediately available to other parts of the company. 

A software application: The system is a software application, which means that it has been developed with specific logic and rules behind it. It has to be installed and configured to work specifically for an individual organization.

That can be used to run an entire company: An ERP can be used to manage an entire organization’s operations. If they so wish, companies can purchase modules for an ERP that represent different functions within the organization, such as finance, manufacturing, and sales. Some companies choose to purchase many modules, others choose a subset of the modules. 

When an ERP vendor designs a module, it has to implement the rules for the associated business processes. A selling point of an ERP system is that it has best practices built right into it. In other words, when an organization implements an ERP, it also gets improved best practices as part of the deal!

BPM is more than just automating some simple steps. While automation can make a business more efficient, it cannot be used to provide a competitive advantage. BPM, on the other hand, can be an integral part of creating that advantage.

If done properly, business process management will provide several key benefits to an organization, which can be used to contribute to competitive advantage. These benefits include:1)Empowering employees. When a business process is designed correctly and supported with information technology, employees will be able to implement it on their own authority. In our returns-policy example, an employee would be able to accept returns made before fourteen days or use the system to make determinations on what returns would be allowed after fourteen days. 2)Built-in reporting. By building measurement into the programming, the organization can keep up to date on key metrics regarding their processes. In our example, these can be used to improve the returns process and also, ideally, to reduce returns. 3)Enforcing best practices. As an organization implements processes supported by information systems, it can work to implement the best practices for that class of business process. In our example, the organization may want to require that all customers returning a product without a receipt show a legal ID. This requirement can be built into the system so that the return will not be processed unless a valid ID number is entered. 4)Enforcing consistency. By creating a process and enforcing it with information technology, it is possible to create a consistency across the entire organization. In our example, all stores in the retail chain can enforce the same returns policy. And if the returns policy changes, the change can be instantly enforced across the entire chain. 

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

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

Uses information system to coordinate entire business processes of a firm

Provides end-to-end customer care

Provides a unified view of customer across the company

Consolidates customer data from multiple sources and provides analytical tools for answering questions

2.3 Business Processes and Information Systems

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2.3 Business Processes and Information Systems

Customer Relationship Management (CRM)

Figure 2-13

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2.3 Business Processes and Information Systems

Supply Chain Management (SCM)Supply Chain Management (SCM)

•Close linkage and coordination of activities involved in buying, making, and moving a product

•Integrates supplier, manufacturer, distributor, and customer, logistics, time

•Reduces time, redundant effort, and inventory costs

•Network of organizations and business processes

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

•Helps in distribution of the finished products to customers• Includes reverse logistics - returned items flow in the reverse direction from the buyer back to the seller

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2.3 Business Processes and Information Systems

Supply Chain ManagementFigure 2-14