Chapter 2 Mfi

Chapter 2
Information
Systems in the
Enterprise
2.1
2006 by Prentice Hall
Management Information Systems 8/e

Chapter 1 Managing the Digital Firm
TOWARD THE DIGITAL FIRM
THE EMERGING DIGITAL FIRM
ELECTRONIC BUSINESS
Electronic Commerce
Factories
Just-in-time production
Continuous inventory
replenishment
Production planning
Customers
On-line marketing
On-line sales
Built-to-order products
Customer service
Sales force automation
Remote offices and work groups

Communicate plans and policies
Group collaboration
Electronic communication
Scheduling
Suppliers
Procurement
Supply chain management
Business partners
Joint design
Outsourcing
2.2

CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS
Technical
Approaches
Computer
Science
Management
Science
Operations
Research
Sociology
Psychology
Economics
Behavioral
Approaches
2.3
Figure 1-6

Socio-Technical Systems
Optimize systems performance:

Technology and organization
Organizations mutually adjust to one another until fit is
satisfactory
2.4

Socio-technical Systems
Figure 1-7
2.5
SOURCE: Liker, et al, 1987
Management Information Systems

Chapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Types of Information Systems
2.6
Figure 2-1

Different Kinds of Systems

Three main categories of information systems serve
different organizational levels:
2.7
1.
Operational-level systems: support operational managers,

keeping track of the elementary activities and
transactions
2.
Management-level systems: serve the monitoring,

controlling, decision-making, and administrative activities
3.
Strategic-level systems: help senior management tackle

and address strategic issues
Types of Information Systems
2.8

The Four Major Types of Information Systems
2.9
Figure 2-2

Transaction Processing Systems (TPS)

A computerized system that performs and records the daily
routine transactions necessary to the conduct of the
business such as
Sales order entry, hotel reservations, payroll, employee
record keeping
Answer routine question and track flow of transaction
Provides status of internal operation
Batch transaction data accumulate over time,
processed periodically.
Real-time data processed immediately after a
transaction occurs.
2.10

A Symbolic Representation for a Payroll TPS
2.11
Figure 2-3
Other OSS
Operations Support Systems- Is to process
business transactions, control industrial processes,
support communications and collaboration, update
corporate databases efficiently
Process Control Systems monitor & control
physical processes.Water reservoir system, power
generation system
Enterprise Collaboration Systems- e-mail,chat &
video conferencing group
2.12

Management Information Systems (MIS)

pre-specified reports & displays to support decisionmaking for mid level
Managers
Inputs: High volume transaction level data
Processing: Simple models
Outputs: Summary reports/current performance
Users: Middle managers
Example: Annual Sales figure of a particular product category

2.13

Management Information Systems (MIS) (continued)
2.14
Figure 2-5

Management Information Systems (MIS) (continued)

A sample MIS report
2.15
Figure 2-6

Decision-Support Systems (DSS)

Non routine decision making for middle management
Inputs: Output from TPS and MIS
Processing: Interactive
Outputs: Decision analysis
Users: Mid-level Managers
Example: Double sales, what production? Voyage

estimating system
2.16

Decision-Support Systems (DSS) (Continued)

Voyage-estimating decision-support system
2.17
Figure 2-7

EXECUTIVE SUPPORT SYSTEMS (ESS):

Addresses non-routine decisions requiring judgment,
evaluation and insight
Inputs: Aggregate data (TPS,MIS,DSS)
Processing: Interactive
Outputs: Projections
Users: Senior managers
2.18
Example: 5 year operating plan

Model of a Typical Executive Support System
2.19
Figure 2-8

EXECUTIVE SUPPORT SYSTEMS (ESS) (Continued)

Top Level Management
Designed to the individual senior manager
Ties CEO to all levels
Very expensive to keep up
Extensive support staff
2.20

Relationship of Systems to One Another

Interrelationships among systems
2.21
Figure 2-9

Relationship of Systems to One Another

In contemporary digital firms, the different types of
systems are closely linked to one another. This is
the ideal. In traditional firms these systems tend to
be isolated from one another, and information does
not flow seamlessly from one end of the organization
to the other. Efficiency and business value tend to
suffer greatly in these traditional firms
2.22

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 info system, market research system,
pricing system
2.23

Sales and Marketing Systems

SYSTEM
DESCRIPTION
ORGANIZATIONAL
LEVEL
Order
processing
Enter, process, and track orders
Operational
Pricing analysis
Determine prices for products and

services
Management
Sales trend
forecasting
Prepare 5-year sales forecasts
Strategic
Table 2-2
2.24

Manufacturing and Production Systems

Scheduling, purchasing, shipping, receiving,
engineering, operations
Materials resource planning systems, purchase
order control systems, engineering systems,
quality control systems
2.25

Manufacturing and Production Systems
2.26
SYSTEM
DESCRIPTION
ORGANIZATIONAL
LEVEL
Machine
control
Control the actions of machines and

equipment
Operational
Production
planning
Decide when and how many products

should be produced
Management
Facilities
location
Decide where to locate new production

facilities
Strategic

Overview of an Inventory System
2.27
Figure 2-10

Financing and Accounting Systems

Budgeting, general ledger, billing, cost
accounting
General ledger, accounts receivable, accounts
payable, budgeting, funds management systems
2.28

Financing & Accounting Systems (Continued)
2.29
SYSTEM
DESCRIPTION
Accounts
receivable
Tracks money owed the firm
Operational
Budgeting
Prepares short-term budgets
Management
Profit planning
Plans long-term profits
Strategic
Table 2-4
ORGANIZATIONAL LEVEL

Human Resource Systems

Personnel records, benefits, compensation, labor
relations, training
Payroll, employee records, benefit systems,
career path systems, personnel training systems
2.30

Human Resource Systems (Continued)

SYSTEM
DESCRIPTION
ORGANIZATIONAL
LEVEL
Training and
development
Tracks employee training, skills,

and performance appraisals
Operational
Compensation
analysis
Monitors the range and distribution

of employee wages, salaries, and
benefits
Management
Human resources
planning
Plans the long-term labor force

needs of the organization
Strategic
Table 2-5
2.31

Chapter 2 Mfi

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Chapter 2

2006 by Prentice Hall

Management Information Systems 8/e

Remote offices and work groups

2006 by Prentice Hall

Management Information Systems 8/e

2006 by Prentice Hall

Management Information Systems 8/e

Optimize systems performance:

2006 by Prentice Hall

Management Information Systems 8/e

SOURCE: Liker, et al, 1987

2006 by Prentice Hall

Management Information Systems

Types of Information Systems

2006 by Prentice Hall

Management Information Systems

Different Kinds of Systems

Operational-level systems: support operational managers,

Management-level systems: serve the monitoring,

Strategic-level systems: help senior management tackle

2006 by Prentice Hall

Types of Information Systems

2006 by Prentice Hall

Management Information Systems

The Four Major Types of Information Systems

2006 by Prentice Hall

Management Information Systems

Transaction Processing Systems (TPS)

2006 by Prentice Hall

Management Information Systems

A Symbolic Representation for a Payroll TPS

2006 by Prentice Hall

2006 by Prentice Hall

Management Information Systems

Management Information Systems (MIS)

Inputs: High volume transaction level data

Processing: Simple models

Outputs: Summary reports/current performance

Users: Middle managers

Example: Annual Sales figure of a particular product category

2006 by Prentice Hall

Management Information Systems

Management Information Systems (MIS) (continued)

2006 by Prentice Hall

Management Information Systems

Management Information Systems (MIS) (continued)

2006 by Prentice Hall

Management Information Systems

Decision-Support Systems (DSS)

Inputs: Output from TPS and MIS

Outputs: Decision analysis

Users: Mid-level Managers

Example: Double sales, what production? Voyage

2006 by Prentice Hall

Management Information Systems

Decision-Support Systems (DSS) (Continued)

2006 by Prentice Hall

Management Information Systems

EXECUTIVE SUPPORT SYSTEMS (ESS):

Example: 5 year operating plan

2006 by Prentice Hall

Management Information Systems

Model of a Typical Executive Support System