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Information Systemsin Business

Information SystemsInformation Systemsin Businessin Business

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2

Information Systems

Information System (IS): A Process that:

collects,

processes,

stores, analyzes, and

disseminates

information for a specific purpose.

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Three Important Dimensions of Information Systems

Organizations

Management

Technology

You will need to understand and balance thesedimensions of information systems in order to createbusiness value.

Dimensions of Information Systems

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People

Structure

Business processes

Culture

Politics

The Organizational Dimension of Information Systems

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SimulatingSimulating

Decision makingDecision making

PlanningPlanning

Innovating new processesInnovating new processes

Setting agendasSetting agendas & Targets

The Management Dimension of Information Systems

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Hardware:Hardware: Physical equipmentPhysical equipment

Software:Software: Detailed preprogrammed instructionsDetailed preprogrammed instructions

Storage:Storage: Physical media for storing data and thePhysical media for storing data and the

softwaresoftware

Information technology is one of the tools managersInformation technology is one of the tools managersuse to cope with change:use to cope with change:

The Technology Dimension of Information Systems

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Communications technology:Communications technology: Transfers dataTransfers data

from one physical location to anotherfrom one physical location to another

Networks:Networks: Links computers to share data orLinks computers to share data or

resourcesresources

The Technology Dimension of Information Systems

(Continued)

Managers need to know enough about informationManagers need to know enough about information

technology to make intelligent decisions about how totechnology to make intelligent decisions about how to

use it for creating business value.use it for creating business value.

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9

Classification of Information Systems

The two most common classifications are:

Classification by breath of support

Classification by organizational level .

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10

Departmental, corporate, and inter-

organizational IS

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Classification by Organization Levels

The typical enterprise is organized

hierarchically, from the:

clerical and office worker layer, to the operational layer,

the managerial layer, the knowledge worker layer and

finally the strategic layer.

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Types of Information Systems

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MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

1. Operational-level systems: support operationalmanagers, keeping track of the elementary activities andtransactions

2. Management-level systems: serve the monitoring,controlling, decision-making, and administrative activities

3. Strategic-level systems: help senior managementtackle and address strategic issues

Three main categories of information systems serve

different organizational levels:

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MAJOR TYPES OF SYSTEMS IN

ORGANIZATIONS

Transaction Processing Systems (TPS)

Management Information Systems (MIS)

Decision-Support Systems (DSS)

Executive Support Systems (ESS)

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Typical Applications of TPS

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Management Information Systems (MIS)

Management level

Inputs: High volume transaction level data

Processing: Simple models

Outputs: Summary reports

Users: Middle managers

Example: Annual budgeting

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Management Information Systems (MIS) (continued)

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Management Information Systems (MIS) (continued)

A sample MIS report

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Decision-Support Systems (DSS)

Management level

Inputs: Transaction level data

Processing: Interactive

Outputs: Decision analysis

Users: Professionals, staff

Example: Contract cost analysis

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Decision-Support Systems (DSS) (Continued)

Voyage-estimating decision-support system

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EXECUTIVE SUPPORT SYSTEMS (ESS):

Inputs:Aggregate data

Processing: Interactive

Outputs: Projections

Users: Senior managers

Example: 5 year operating plan

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EXECUTIVE SUPPORT SYSTEMS (ESS) (Continued)

Top Level Management

Designed to the individual senior manager

Very expensive to keep up

Extensive support staff

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The Four Major Types of Information Systems

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Relationship of Systems to One Another

Interrelationships among systems

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Traditional Silo View of Information Systems

Within the business:Within the business:

There are functions, each having its uses ofThere are functions, each having its uses ofinformation systemsinformation systems

Outside the organizationOutside the organizations boundaries:s boundaries:

There are customers and vendorsThere are customers and vendors

Functions tend to work in isolationFunctions tend to work in isolation

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Traditional View of Systems

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CrossCross--Functional Business Processes:Functional Business Processes:

Cut across boundaries between Sales, Marketing,Cut across boundaries between Sales, Marketing,

Manufacturing, and Human Resource, etc.Manufacturing, and Human Resource, etc.

Group employees from different functional specialtiesGroup employees from different functional specialties

to a complete piece of workto a complete piece of work

Example: Order Fulfi llment ProcessExample: Order Fulfillment Process

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The Order Fulfil lment Process

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Systems for Enterprise-Wide Process Integration

Enterprise applications:

Designed to support organizationDesigned to support organization--wide processwide process

coordination and integrationcoordination and integration

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Enterprise Systems

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Consist ofConsist of :

Enterprise Resource Planning (ERP)

Supply chain management systems

Customer relationship management systems

Knowledge management systems

Systems for Enterprise-Wide Process Integration

(Continued)

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Enterprise Application Architecture

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Integrated Systems Approach

Common set of applications

Usually requires re-engineering of businessprocesses Better alignment

Limited customization Easier upgrades

Overcomes inefficiencies of independent

systems Integrated data supports multiple business

functions

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Benefits of Enterprise Systems

Help to unify the firmHelp to unify the firms structure and organization:s structure and organization:

One organizationOne organization

Management:Management: Firm wide knowledgeFirm wide knowledge--basedbased

management processesmanagement processes

Technology:Technology: Unified platformUnified platform

Business:Business: More efficient operations & customerMore efficient operations & customer--

driven business processesdriven business processes