SESSION 2 Information Systems In The Enterprise

1. SESSION 2 Information Systems In The Enterprise

2. Figure 2-1 KEY SYSTEM APPLICATIONS Types of Information Systems

3. KEY SYSTEM APPLICATIONS Major Types of Systems • Executive Support Systems (ESS) • Decision Support Systems (DSS) • Management Information Systems (MIS) • Knowledge Work Systems (KWS) • Office Automation Systems (OAS) • Transaction Processing Systems (TPS)

4. Figure 2-2 TYPES OF INFORMATION SYSTEMS

5. KEY SYSTEM APPLICATIONS • 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 • So central to the business that its failure can hurt the firm • e.g. sales order entry package tracking, payroll

6. Figure 2-3 KEY SYSTEM APPLICATIONS Payroll TPS

7. KEY SYSTEM APPLICATIONS Knowledge Work Systems (KWS) or Knowledge Management Systems: • Users: knowledge workers • Promote the creation and integration of new knowledge in the organization • Rely on internet, intranet web sites, knowledge bases and discussion forums Office Systems • Users: data workers • Designed to increase the productivity • Ex: word processing, e-mail, voice mail

8. KEY SYSTEM APPLICATIONS 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

9. KEY SYSTEM APPLICATIONS Management Information Systems (MIS) • Support structured and semi-structured decisions • Report control oriented • Past and present data • Internal orientation • have little analytical capability

10. Figure 2-5 KEY SYSTEM APPLICATIONS Management Information System (MIS)

11. KEY SYSTEM APPLICATIONS Decision Support System (DSS): • Users: management level • Semi structured decisions • Sources: MIS, TPS and external • Strong analytical power and interactive • Ex: Contract cost analysis

12. Figure 2-7 KEY SYSTEM APPLICATIONS Decision Support System (DSS)

13. KEY SYSTEM APPLICATIONS 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

14. Figure 2-8 KEY SYSTEM APPLICATIONS Executive Support System (ESS)

15. Figure 2-9 INTERRELATIONSHIPS AMONG SYSTEMS

16. 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 IS, market research system, pricing system

17. SYSTEMS FROM A FUNCTIONAL PERSPECTIVE 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, quality control systems

18. SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Financing and Accounting Systems Major functions of systems: • Budgeting, general ledger, billing, cost accounting Major application systems: • General ledger, accounts receivable, accounts payable, budgeting, funds management systems

19. SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Human Resource Systems 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

20. INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Business Processes and Information Systems 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

21. INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Business Processes and Information Systems 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

22. Figure 2-12 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES The Order Fulfillment Process

23. INTEGRATING FUNCTIONS AND BUSINESS PROCESSES 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

24. Figure 2-13 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Customer Relationship Management (CRM)

25. INTEGRATING FUNCTIONS AND BUSINESS PROCESSES 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

26. INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Supply Chain Management Figure 2-14

27. INTEGRATING FUNCTIONS AND BUSINESS PROCESSES How Information Systems Facilitate Supply Chain Management • 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

28. INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Supply Chain Management (SCM) 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

29. INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Collaborative Commerce • 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

30. INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Collaborative Commerce Private Industrial Networks • Web-enabled networks • Link systems of multiple firms in an industry • Coordinate transorganizational business processes

31. INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Enterprise Systems (Enterprise Resource Planning –ERP) • Integrate the key business processes of an entire firm • Consolidate information across the organization • Allow information to flow seamlessly throughout the organization

32. INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Enterprise Systems Benefits • 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

33. INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Enterprise Systems Challenges • 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