SESSION 2 Information Systems In The Enterprise 1

SESSION 2 Information Systems In The Enterprise 1

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

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) 3

TYPES OF INFORMATION SYSTEMS Figure 2 -2 4

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 5

KEY SYSTEM APPLICATIONS Payroll TPS Figure 2 -3 6

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 7

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 8

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 9

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

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 11

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

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 13

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

INTERRELATIONSHIPS AMONG SYSTEMS Figure 2 -9 15

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 16

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 17

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 18

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 19

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 20

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 21

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

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 23

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

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 25

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

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 27

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 28

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 29

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 30

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 31

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Enterprise Systems Benefits Firm structure and organization: One organization Management: Firm-wide knowledgebased management processes Technology: Unified platform Business: More efficient operations and customer-driven business processes 32

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 33