MANAGEMENT INFORMATION SYSTEMS

Managing the Digital Firm

Chapter 2
GLOBAL E-BUSINESS AND
COLLABORATION
Business Processes and Information
Systems
• Business processes:
• Workflows of material, information, knowledge
• Sets of activities, steps
• May be tied to functional area or be cross-functional
• Businesses: Can be seen as collection of business processes
• Business processes may be assets or liabilities
Business Processes and Information
Systems
• Examples of functional business processes
• Manufacturing and production
• Assembling the product
• Sales and marketing
• Identifying customers
• Finance and accounting
• Creating financial statements
• Human resources
• Hiring employees
Business Processes and Information
Systems
The Order
Fulfillment Process

Figure 2.1
Fulfilling a customer order
involves a complex set of
steps that requires the close
coordination of the sales,
accounting, and
manufacturing functions.
Business Processes and Information
Systems
• Information technology enhances business processes in
two main ways:
1. Increasing efficiency of existing processes
• Automating steps that were manual
2. Enabling entirely new processes that are capable of transforming
the businesses
• Change flow of information
• Replace sequential steps with parallel steps
• Eliminate delays in decision making
Types of Information Systems
• Transaction Processing
Systems (TPS)
• Management Information
Systems (MIS)
• Decision Support Systems
(DSS)
• Executive Support Systems
(ESS)
Types of Information Systems
• Transaction Processing Systems (TPS)
• Perform and record daily routine transactions necessary to
conduct business
• Examples: sales order entry, payroll, shipping
• Allow managers to monitor status of operations and relations with
external environment
• Serve operational levels
• Serve predefined, structured goals and decision making
Types of Information Systems
A Payroll TPS

Figure 2.2
A TPS for payroll processing captures
employee payment transaction data
(such as a timecard). System outputs
include online and hard-copy reports
for management and employee
paychecks.
Types of Information Systems
• Management Information Systems (MIS)
• Serve middle management
• Provide reports on firm’s current performance, based on
data from TPS
• Provide answers to routine questions with predefined
procedure for answering them
• Typically have little analytic capability
Types of Information Systems
How Management Information Systems Obtain Their Data from the Organization’s TPS

Figure 2.3
In the system illustrated
by this diagram, three
TPS supply summarized
transaction data to the
MIS reporting system at
the end of the time
period. Managers gain
access to the
organizational data
through the MIS, which
provides them with the
appropriate reports.
Types of Information Systems
Sample MIS Report

Figure 2.4
This report, showing summarized
annual sales data, was produced
by the MIS in Figure 2-3.
Types of Information Systems
• Decision Support Systems (DSS)
• Serve middle management
• Support non-routine decision making
• Example: What is impact on production schedule if December sales
doubled?
• Often use external information as well from TPS and MIS
Types of Information Systems
• Business Intelligence (BI)
• Class of software applications
• Analyze current and historical data to find patterns and trends
and aid decision-making
• Used in systems that support middle and senior management
• Data-driven DSS
• Executive Support Systems (ESS)
Types of Information Systems
• Executive Support Systems (ESS)
• Support senior management
• Address non-routine decisions
• Requiring judgment, evaluation, and insight
• Incorporate data about external events (e.g. new tax laws or
competitors) as well as summarized information from internal MIS
and DSS
• Example: Digital dashboard with real-time view of firm’s financial
performance: working capital, accounts receivable, accounts
payable, cash flow, and inventory
Types of Information Systems
• Systems from a constituency perspective
• TPS:
• Supporting operational level employees
• MIS and DSS:
• Supporting middle managers
• ESS:
• Supporting executives
Types of Information Systems
• Relationship of systems to one another
• TPS: Major source of data for other systems
• ESS: Recipient of data from lower-level systems
• Data may be exchanged between systems
• In reality, most businesses’ systems are only loosely
integrated (but they are getting better!)
Types of Information Systems
• Enterprise applications
• Systems for linking the enterprise
• Span functional areas
• Execute business processes across firm
• Include all levels of management
• Four major applications:
• Enterprise Systems (ES)
• Supply Chain Management Systems (SCMS)
• Customer Relationship Management Systems (CRMS)
• Knowledge Management Systems (KMS)
Types of Information Systems
Enterprise Application Architecture

Figure 2.5
Enterprise applications automate processes
that span multiple business functions and
organizational levels and may extend
outside the organization.
Types of Information Systems
• Enterprise Systems
• Collect data from different firm functions and stores data in single
central data repository
• Resolve problem of fragmented, redundant data sets and systems
• Enable:
• Coordination of daily activities
• Efficient response to customer orders (production, inventory)
• Provide valuable information for improving management decision making
Types of Information Systems
• Supply Chain Management Systems (SCMS)
• Manage firm’s relationships with suppliers
• Share information about
• Orders, production, inventory levels, delivery of
products and services
• Goal:
• Right amount of products to destination with least amount
of time and lowest cost
Types of Information Systems
• Customer Relationship Management Systems (CRMS):
• Provide information to coordinate all the business processes that
deal with customers in sales, marketing, and service to optimize
revenue, customer satisfaction, and customer retention
• Integrate firm’s customer-related processes and consolidate
customer information from multiple communication channels
Types of Information Systems
• Knowledge Management Systems (KMS):
• Support processes for acquiring, creating, storing, distributing,
applying, integrating knowledge
• How to create, produce, distribute products and services
• Collect internal knowledge and experience within firm and make it
available to employees
• Link to external sources of knowledge
Types of Information Systems
• Alternative tools that increase integration and expedite the
flow of information
• Intranets:
• Internal company Web sites accessible only by employees
• Extranets:
• Company Web sites accessible externally only to vendors and
suppliers
• Often used to coordinate supply chain
Types of Information Systems
• E-business
• Use of digital technology and Internet to drive major business processes
• E-commerce
• Subset of e-business
• Buying and selling goods and services through Internet
• E-government:
• Using Internet technology to deliver information and services to citizens,
employees, and businesses
Systems for Collaboration and
Teamwork
• Technology for collaboration and teamwork (cont.)
• Social Networking
• Wikis
• Virtual Worlds
• Internet-Based Collaboration Environments
• Virtual meeting systems (telepresence)
• Google Apps/Google sites
• Microsoft SharePoint
• Lotus Notes
Systems for Collaboration and
Teamwork
• Two dimensions of collaboration technologies
• Space (or location) – remote or collocated
• Time – synchronous or asynchronous
• Six steps in evaluating software tools
1.What are your firm’s collaboration challenges?
2.What kinds of solutions are available?
3.Analyze available products’ cost and benefits
4.Evaluate security risks
5.Consult users for implementation and training issues
6.Evaluate product vendors
The Information Systems Function in
Business
• Information Systems Department:
• Formal organizational unit responsible for information technology services
• Often headed by Chief Information Officer (CIO)
• Other senior positions include Chief Security Officer (CSO), Chief Knowledge Officer
(CKO), Chief Privacy Officer (CPO)
• Programmers
• Systems analysts
• Information systems managers
The Information Systems Function in
Business
• End Users
• Representatives of other departments for whom applications are
developed
• Increasing role in system design, development
• IT Governance:
• Strategies and policies for using IT in the organization
• Decision rights
• Accountability
• Organization of information systems function
• Centralized, decentralized, etc.
Thank you
Chapter 2