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a)c Knowledge Management is set of processes developed in an organization to gather, create,

Store, Maintain and disseminates firm¶s knowledge. Knowledge Management is design to
store any type of data, which are involved in the decision making of an organization. KM
helps to organize information and assist people in collaborative projects and research.

Information systems that support Knowledge Management

1.cKnowledge Work Systems (KWS)

Knowledge work system is computer application and also ³Groupware´, which
designed to help knowledge workers to crate and integrate new knowledge in the
organization. Moreover it assists collaborative workgroups, who can be a group of
knowledge workers and wish to work together.

2.cOffice Automation Systems (OAS)

Office automation systems are design to increase the productivity of data workers
in the office. These systems can be computer hardware and software, which helps to
data worker to create, store, manipulate, and disseminate office information to achieve
their typical office work.

b)c Types of information systems.

i.c Transaction processing systems.(TPS)

Transaction processing systems is an operational level system, which performs and
records the daily routine transactions necessary to the conduct of the business. Purchase
Order System is an example for TPS. It records daily transactions when purchasing


ii.c Management information systems. (MIS)

Management information system is management level information system, which

converts data from internal and external sources into information and to communicate
this information in an appropriate form, to managers at all levels in all functions to
enable them to make timely decisions. Online bill pay in a bank is a MIS because it
processes the payment with the schedule date for payment with user interaction to the

iii.c Decision support systems. (DSS)

An interactive, highly user friendly system that supports management decision that is
semi structured or that cannot be specified in advanced. Groupware, videoconferencing
and web base bulleting to take group decisions are examples for DSS.

iv.c Expert information systems. (EIS)

An executive information system is a system for senior managers and top executive that
utilizes heavy graphic displays, draw together data from numerous internal and external
sources and has ³drill-down´ capabilities. In manufacturing managers using EIS to
make decisions for control manufacturing process to change the decision making
v.c Office automation systems.

Office automation refers to a wide variety of computer based technologies that make
office workers more productive at their job. Such systems like Word processing,
Desktop publishing, and Document imaging are design to facilitate the creation of
documents through computerized editing, formatting, storing and printing.


vi.c Expert systems

An expert system is a computer system programmed to knowledge that has been
supplied by human expert to solve a problem that normally requires human expertise.
Computer Aided Design (CAD) and robotics systems eliminate many manual steps in
design and production by performing much of the design work on the computer.


i.)c Information System

Information systems are use to accomplish a specific organizational or individual

objective and provide information in human readable format.

ii.)cInformation Management

Information management is a process of handle information by recording, storing,

dissemination, accusation, and retrieval in timely manner.

iii.)cInformation Technology

The technology itself can be divided into computer and communications hardware
and software that are use to data acquisition, processing, storage and disseminate of
vocal, pictorial, textual, and numerical information by using micro electronics.



i.c Transaction processing systems.(TPS)

These systems automate clerical and operational functions and track data at the most
elementary level in the organization.

ii.c Management information systems. (MIS)

Management information system is management level information system, which

serves the functions of planning, controlling and decision making by providing routine
summary and exception reports.

iii.c Decision support systems. (DSS)

Decision support system is management level information system, which supports

management level to make semi structured and unstructured decisions.

iv.c Expert information systems. (EIS)

An executive information system is a system that serves the information needs of top
executives by providing rapid access to timely information with ³drill-down´
v.c Office automation systems.

Office automation refers to a wide variety of computer based technologies that make
office workers more productive at their job.

vi.c Expert systems

An expert system is a computer advisory programmed to imitate reasoning process and
knowledge of experts in solving specific types of problems. This system is potential to
enhance productivity of an organization. c



Artificial Intelligence (AI) is a computer based system, which behave like a human. It has
ability of learn languages, accomplishing physical tasks, and decision making. Artificial
Intelligence systems can be categorized into five. Those are Natural Languages systems,
Robotics, Perceptive systems, Expert systems, and Intelligence machines.

Artificial Intelligence are use to create organizational knowledge base, which is more like
a database but it contain different features. It stores the information of organization on an active
form as organization memory. Though Artificial Intelligence enhances organizations knowledge
base, it may not get exhausted, also do not have feelings, fatigue, worry, and crisis. So AI
systems do not tend to eliminate routine and unsatisfying jobs. Moreover AI systems are useful
in Knowledge Management to update organizations knowledge base automatically as it got
information about knowledge from sources.

Mainframe computers are large computers in terms of price, power and speed. Typically,
they cost over $ 1 million and support several hundred users. Larger computers are similar in
characteristics to the smaller minicomputers. Minicomputers are small version of large
mainframe computers. Minicomputers are cheaper and less well equipped than mainframes. In
minicomputers the processor is much larger than the microcomputers and consists of more than
one silicon chip. Similarly, the size of the RAM is significantly large. Among those computers
microcomputer is cheapest and expensive one is mainframe computer.

Microcomputer is an independent computer is also called as Personal Computers.

Workstation was a computer use by a one person and, particularly for graphics, design and
engineering. It contains powerful central processor, a high resolution monitor and large memory.
It cannot use as an independent computer. The memory of the microcomputer is comparatively
low than workstations.



Different information systems contain different input and output devices. As an example
in a Purchase Order System (POS) it uses keyboard, mouse and barcode reader as input devices.
When the transaction processed it will produce receipt and display the balance amount on the
screen. This are output device in POS system. Transaction details will store in the databases or
data ware houses.

In Decision support systems or Management information systems it uses input devices

such as keyboard, mouse, and microphone. Finally it presents output on the screen hard copy. So
the output devices are monitor and printer. Then the data store in a storage devices like
databases, and hard disks.


c  c

Production Service Network is sixth largest private company in Scotland, and

also a major independent international service contractor to oil, gas and other production
industries or customers. The company¶s main activities are providing services such as project
management, engineering, constructions and maintenance and long term production operations
worldwide. Production Service Network (PNS) presently have 40 companies in subsidiaries and
joint ventures, Moreover PNS take 8,500 employees in 20 countries around the world and



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Michael Potter developed a concept of Five Forces, which are determining competitive
position and intensity of a firm. This measures and analyzes competitive strength and position of
firm. Porter refers these forces to the company external environment. In this analysis it discuss
the forces, which are closely affect firms¶ ability to serve its customers and making profits.

Production Services Network also has the huge competitive environment. They currently
deal with 720 legal entities worldwide. Moreover having 10,000 suppliers, 500,000 customers in
five continents, competitors who in the same production industry and other stakeholders as well.

â   c

Suppliers are key element of competitive environment. Because of the quality of a

product will depend on the supplier¶s materials. Suppliers can affect the industry by increasing
prices or reduce quality of raw materials. Power full suppliers can squeeze industry profitability
if firms are unable to recover cost increases of materials.

PNS¶s basically acquire materials those are oil and manufacturing tools. They need 10
million barrels of oil per year but they only have few suppliers. So when the oil price is high
suppliers used to increase price while reduce service. In short run they cannot they unable to
switch to the substitute fuels. Moreover supplier industry is unique. Then PNS decided not to
depend on one supplier and they turn to the oil supplier all around the world.

â   c

Customers are main source of revenue in an industry. Firms will do anything to attract
customers. Buyers are always bargain for higher quality or more service while force downs the
prices of goods and services. Buyers are become power full to the firm due to concentrated or
purchases are large relative to seller¶s sales, purchase accounts for a significant fraction of
supplier¶s sale, products are undifferentiated, buyers face switching costs, firms earn low profits,


threat of backward integration, and purchase product is unimportant to the quality of the final

Customer base is not tiny in PNS. There are from different companies, who are in oil,
water, gas and nuclear industries all over the world. Due to above bargaining power of customers
are tend to switch to competitors. Switching cost for clients and customers incurring when they
are trying to move one offer to another. To overcome these situation PNS managers decided to
go online towards customers. Then customers can do their orders online. Also pretend as a best
service provider in the world and they always tries to give best service to their clients and
customers. Moreover to make customer satisfaction they provide after sales services and
warranties for their products.



To almost all products or services over the world, should have substitutes. Substitutes
merely increase the competition among firms, who produce substitutes. Products with similar
functions limit the prices firm can charge for particular product.

There are more substitutes¶ services in the market for PNS services. Those who in
industries like oil industries. To survive in the market PNS tries to improve their services price,
performance, and trade ± off relative to present industries products.

c cc

Profitable industries will attract more new entrants, who looking to achieve profits. New
entrants bring new capacity to the industry. They will gain some market share and substantial
resources. So they pose to existing competitors in a same industry. There are can be more
barriers in the market to the new entrants to an existing industry. New entrants will discourage
by these barriers.

When PNS enter to the market there were more entry barriers to them. They had to
overcome barriers like Economies of Scale. They had risk of competing with existing firms,


because they entered the market with large scale. In the beginning they had only manufacturing
industry. So they had not well differentiated products. Now they having well known service as
well as they grow their production up to oil, gas and other productions as well. To start business
they required Capital. So they decided borrow $ 300 million from Bank of Scotland Corporate
Finance. High consumer Switching Costs are became problems for firm, when they enter to the
market. The government also blocked their entry beginning through licensing requirements.
Though they have barriers with government, now they are dealing with 720 legal entities.

c c

cIntensity ofc rivalry among existing firms refers to the firms in same industry putting
pressure on others.cCompetitive move by one firm can be expected to have noticeable effect on
its competitors profit potential, growth, capacity etc. Due to the intensity rivalry the force inside
existing firms in same industry will change the shape of competitive structure of an industry. c

There are several factors effecting PNS profit potential due to their rivalry in the industry.
First factor is competitors. Competitors, who are in the scale of PNS, are trying to copy their new
strategies. So PNS had to keep most of talks confidential and now only a handful of people know
what is happening.

In the beginning PNS growing slowly, because they had less market share. Most of
market is owned by other oriented companies. So it is become more difficult them to grow. Then
PNS decided to move their business away from their competitors. Moreover their fixed cost is
high compare to other companies. So they cut down their costs to cover the fixed cost. PNS have
to increase their capacity. They build plants all over the five continents. When PNS enter to the
market they had to face exit barriers. Firm had some state lands. When they want to leave from
the industry they had to sell those lands. So it is not possible for them to sell them. So it becomes
a barrier for them to leave from the industry. Moreover stakeholders, who are in the group of
task environment having often influence in a firm.


cÊ c cc c

Value chain model highlights the primary or support activities that add a margin of values
to a firm¶s products and services where information system can best be applied to achieve
competitive advantage. Value chain created to determine where the cost improvements could be
made and value creation improved. Value chain model is a supplement the competitive forces
model by identifying critical leverage points where a firm can use information technology most
effectively to enhance its competitive forces.


PNS receiving materials from their suppliers and they are from are from Scotland and
around the world. However they receiving their materials at the right time from their suppliers.
They have strong communication with their suppliers. PNS use warehouses to store their raw
materials. Logistic department of the organization is delivering inputs as soon as possible. PNS
use their warehouse to store their finished goods. Moreover company providing after sales
services for their products.PNS has strong sales administration, advertising, and sales network
that consumers are made aware of the product. PNS using web presence to reach their customers.
All this activities will create value on the customers end.


Activities such as infrastructure, human resource, technology development and

procurement will help PNS to increase their primary activities. The systems of planning, finance,
quality control etc. are crucially important to an organization¶s strategic capability in all primary
activities infrastructure also consists of the structures and routines of the organization. Human
resource is an important area for PNS. Human resources involve activities such as recruiting,
training, developing and rewarding people within the organization. All value activities have
technology. The key technologies may be concerned directly with the products. To acquire the
various resource inputs to the primary activities PNS need procurement.


c c

PNS can employ information system to know their remaining stock material levels. So
the stock become reorder level the system will inform it to management. Then they can request
materials from their suppliers. So it will reduce bargaining power of suppliers, since they deal
with suppliers regularly.

Moreover PNS can use Order Entry system to handle their day today customer orders.
This will reduce their customer bargaining power. And PNS can implement system to distribute
goods and services, which select best mode of transport materials to the work places on time.

Ship loading and unloading system can implement to do shipments properly. This is a
Decision support system and it will help cargo to picking up and dropping off products at many
different ports.

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šc Production Services Network, (2009) (G 

  ), Date accessed

šc Wikipedia, (2009) Information Systems discipline,

c), Date accessed 22/10/2009

šc Wikipedia, (2009) Artificial intelligence,

(http://en.wikipedia.org/wiki/Artificial_inteligencec), Date accessed 22/10/2009

šc Book rags, (2009) Office automation systems, (http://www.bookrags.com/research/office-

automation-systems-csci-01/), Date accessed 22/10/2009