2.1 © 2003 by Prentice Hall

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INFORMATION INFORMATION

SYSTEMS IN THESYSTEMS IN THE

ENTERPRISEENTERPRISE

Chapter

2.2 © 2003 by Prentice Hall

Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

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)

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

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

Figure 2-17

Enterprise Systems

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

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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

Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

Business Processes and Information Systems

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

• Unique ways to coordinate work, Unique ways to coordinate work,

information, and knowledgeinformation, and knowledge

• Ways in which management chooses Ways in which management chooses

to coordinate workto coordinate work

Business Processes and Information Systems

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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

Figure 2-16

Traditional View of the Systems

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

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

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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

Types of TPS Systems

Figure 2-4

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

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System Architecture: Transaction Processing System Architecture: Transaction Processing SystemSystem

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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

Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

Financing and Accounting Systems

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

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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 research Sales order info system, market research

system, pricing systemsystem, pricing system

Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Sales and Marketing Systems

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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

Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

Manufacturing and Production Systems

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

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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, personnel systems, career path systems, personnel training systemstraining systems

Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Human Resource Systems

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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

Figure 2-11

Human Resource Systems

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

Payroll TPS

Figure 2-3

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

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System Example: Payroll System (TPS)System Example: Payroll System (TPS)

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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

Overview of Inventory Systems

Figure 2-10

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

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Management Information System (MIS)Management Information System (MIS)

• Management Information System (MIS)Management Information System (MIS)– An MIS provides managers with information and An MIS provides managers with information and

support for effective decision making, and support for effective decision making, and provides feedback on daily operations.provides feedback on daily operations.

– MIS provides information to the users in the form MIS provides information to the users in the form of reportsof reports

– Output, or reports, are usually generated through Output, or reports, are usually generated through accumulation of transaction processing data.accumulation of transaction processing data.

– MIS is an integrated collection of subsystems, MIS is an integrated collection of subsystems, which are typically organized along functional which are typically organized along functional lines within an organization.lines within an organization.

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Management Information System (MIS):

Management levelManagement level• Inputs:Inputs: High volume data High volume data

• ProcessingProcessing:: Simple models Simple models

• Outputs:Outputs: Summary reports Summary reports

• Users:Users: Middle managers Middle managers

Example: Annual budgetingExample: Annual budgeting

Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

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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

• Lengthy design processLengthy design process

Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Management Information System (MIS)

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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

Figure 2-5

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Management Information System (MIS)

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System Architecture: Management System Architecture: Management Information SystemInformation System

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Management Information SystemManagement Information System

• Scheduled reportsScheduled reports

• Key-indicator reportsKey-indicator reports

• Exception reportsException reports

• Ad hoc (demand) reportsAd hoc (demand) reports

• Drill-down reportsDrill-down reports

Creates reports managers can use Creates reports managers can use to make routine business decisionsto make routine business decisions

MISMIS

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Outputs of a Management Information Outputs of a Management Information SystemSystem

Scheduled ReportsProduced periodically, or on a schedule (daily, weekly, monthly).

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Key-Indicator ReportSummarizes the previous day’s critical activities and typically available at the beginning of each day.

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Demand ReportGives certain information at a manager’s request.

Exception ReportAutomatically produced when a situation is unusual or requires management action.

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Drill Down ReportsProvide detailed data about a situation.

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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

Decision Support System (DSS):

Management levelManagement level• Inputs:Inputs: Low volume data Low volume data

• Processing: Processing: InteractiveInteractive

• Outputs:Outputs: Decision analysis Decision analysis

• Users:Users: Professionals, staff Professionals, staff

Example: Contract cost analysisExample: Contract cost analysis

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

Figure 2-7

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Decision Support System (DSS)

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Four Types of ModelsFour Types of Models

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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

Figure 2-6

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Decision Support System (DSS)

2.32 © 2003 by Prentice Hall

Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

• 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

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Executive support system (ESS)

2.33 © 2003 by Prentice Hall

Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

Executive Support System (ESS):

Strategic levelStrategic level• Inputs:Inputs: Aggregate data Aggregate data

• Processing:Processing: Interactive Interactive

• Outputs:Outputs: Projections Projections

• Users:Users: Senior managers Senior managers

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

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

2.34 © 2003 by Prentice Hall

Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Executive Support System (ESS)

Figure 2-8

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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

Cross-Functional Business ProcessesCross-Functional Business Processes

• Transcend boundary between sales, Transcend boundary between sales, marketing, manufacturing, and research and marketing, manufacturing, and research and developmentdevelopment

• 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

Business Processes and Information Systems

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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

Figure 2-12

The Order Fulfillment Process

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

Types of Information Systems

Figure 2-1

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

TYPES OF INFORMATION SYSTEMS

Figure 2-2

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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

INTERRELATIONSHIPS AMONG SYSTEMS

Figure 2-9

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INFORMATION INFORMATION

SYSTEMS IN THESYSTEMS IN THE

ENTERPRISEENTERPRISE

Chapter

2.42 © 2003 by Prentice Hall

Knowledge Work Systems (KWS):

Knowledge levelKnowledge level• Inputs:Inputs: Design specsDesign specs

• Processing:Processing: ModelingModeling

• Outputs:Outputs: Designs, graphicsDesigns, graphics

• Users:Users: Technical staffTechnical staff

Example: Engineering work stationExample: Engineering work station

Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

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Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

Business Processes and Information Systems

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

Information systems help organizationsInformation systems help organizations

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

• Rethink and streamline processesRethink and streamline processes

2.44 © 2003 by Prentice Hall

Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL

TRAINING & DEVELOPMENT TRACK TRAINING, SKILLS, APPRAISALS OPERATIONAL

CAREER PATHING DESIGN EMPLOYEE CAREER PATHS KNOWLEDGE

COMPENSATION ANALYSIS MONITOR WAGES, SALARIES, BENEFITS MANAGEMENT

HUMAN RESOURCES PLANNING PLAN LONG-TERM LABOR FORCE NEEDS STRATEGIC

Human Resource Systems

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

2.45 © 2003 by Prentice Hall

• Finance and accounting:Finance and accounting: Paying Paying creditors, creating financial statements, creditors, creating financial statements, managing cash accountsmanaging cash accounts

• Human Resources:Human Resources: Hiring employees, Hiring employees, evaluating performance, enrolling evaluating performance, enrolling employees in employees in benefits plansbenefits plans

Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

Examples of Business Processes

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

2.46 © 2003 by Prentice Hall

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

• Sales and marketing:Sales and marketing: Identifying Identifying customers, creating customer awareness, customers, creating customer awareness, sellingselling

Essentials of Management Information SystemsEssentials of Management Information SystemsChapter 2 Information Systems in the EnterpriseChapter 2 Information Systems in the Enterprise

Examples of Business Processes

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES