Management Information Systems

Information Systems in the Enterprise

Trends in Information systems

Transaction Processing Systems (TPS)

Management Information Systems (MIS)

Decision-Support Systems (DSS)

Executive Information Systems (EIS)

Expert system (ES)

Strategic Information system (SIS)

Internetworked e – biz & e – com systems

2.1 Internetworked enterprise & global e – biz operations

 Management Information Systems
Information Systems in the Enterprise

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Different Kinds of Systems

Three main categories of information systems serve
different organizational levels:
1. Operational-level systems: support operational managers,
keeping track of the elementary activities and transactions
(sales, receipts)
Routine questions / ATM transaction

2. Management-level systems: serve the monitoring,

controlling, decision-making, and administrative activities
of middle managers
- periodic reports/Non routine decision making / what-if

3. Strategic-level systems: help senior management tackle &

address strategic issues & long term trends
2.2
 Management Information Systems
Information Systems in the Enterprise

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

2.3
 Management Information Systems
Information Systems in the Enterprise

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Transaction Processing Systems (TPS)

• A computerized system that performs and records
the daily routine transactions necessary to the
conduct of the business
• Batch processing & Online processing
• Sales order entry, reservation systems, pay roll
• Highly structured
• TPS failure for few hours - lead to firm’s demise
- UPS, airline reservation system
• Monitor status of internal operations & external
relationships
2.4 • Producers of info. For other types of IS
 Management Information Systems
Information Systems in the Enterprise

A Symbolic Representation for a Payroll TPS

2.5 Figure 2-3

 Management Information Systems
Information Systems in the Enterprise

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Typical Applications of TPS

2.6
 Management Information Systems
Information Systems in the Enterprise

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Management Information Systems (MIS)

MIS - Management level of the organization, providing
manager’s with reports & often online access to the
org. current performance & historical records
- Depend on TPS for data
- Produces summarized weekly, monthly & yearly
results or even daily or hourly reports
- Routine questions
• Inputs: High volume transaction level data
• Processing: Simple models
• Outputs: Summary reports
• Users: Middle managers
- Periodic schedule, Exception, demand & push
reports
Example: sales report
2.7
 Management Information Systems
Information Systems in the Enterprise

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Management Information Systems (MIS) (continued)

2.8
 Management Information Systems
Information Systems in the Enterprise

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Management Information Systems (MIS) (continued)

A sample MIS report

2.9
 Management Information Systems
Chapter 2 Information Systems in the Enterprise

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Decision-Support Systems (DSS)

Management level –Address problems that are not
fully defined in advance

• Inputs: Transaction level data

• Processing: Interactive

• Outputs: Decision analysis

• Users: Professionals, staff

Example: Contract cost analysis

2.10
 Management Information Systems
Chapter 2 Information Systems in the Enterprise

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Decision-Support Systems (DSS) (Continued)

Voyage-estimating decision-support system

2.11
1
2

DSS Components
User

User Interface

KBS1

DBMS MBMS

KBS2 KBS3

2.12
 Management Information Systems
Information Systems in the Enterprise

EXECUTIVE SUPPORT SYSTEMS (ESS):

ESS – support strategic level of the org.

- Address non-routine decisions requiring
judgment, evaluation, & insight b’ce there is no
agreed procedure for arriving at a solution.
• Inputs: Aggregate data
• Processing: Interactive
• Outputs: Projections
• Users: Senior managers

Example: 5 year operating plan

2.13
 Management Information Systems
Information Systems in the Enterprise

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

EXECUTIVE SUPPORT SYSTEMS (ESS) (Continued)

• Top Level Management
• Designed to the individual senior manager
• Ties CEO to all levels
• Very expensive to keep up
• Employ more advanced graphics s/w
- Filter, compress, track critical data, displaying data
of greater importance to senior managers.
- Deliver information through a portal, which uses
web interface to present integrated personalized
business content from various sources.
- Easy to use graphics interface
2.14
 Management Information Systems
Information Systems in the Enterprise

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Model of a Typical Executive Support System

2.15
 Management Information Systems
Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

• Expert system:
- Knowledge based IS that uses its knowledge about a specific, complex
application area to act as an expert consultant to end users.
• Strategic Information system:
- apply IT to a firm’s products/services/business processes to help it gain
a strategic advantage over its competitors

2.16
 Management Information Systems
Information Systems in the Enterprise

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Relationship of Systems to One Another

Interrelationships among systems

2.17
 Management Information Systems
Information Systems in the Enterprise

MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

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

2.18
 Management Information Systems
Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Sales and Marketing Systems

Sales & marketing IS support:
Sales – contacting customers, selling products/ services, taking orders
& following up on sales
Marketing – Identifying & determining customers needs & wants,
planning & developing products to meet their needs,& advt &
promotion
* Strategic level : monitor trends affecting new products, support
planning for new products & monitor the performance of competitor
* Management level : market research, advertising & promotional
campaign, pricing decisions

* Operational level: Locating prospective customer, tracking sales

2.19
 Management Information Systems
Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Sales and Marketing Systems

SYSTEM DESCRIPTION ORGANIZATIONAL
LEVEL

Order processing Enter, process, and track orders Operational

Pricing analysis Determine prices for products and Management

services

Sales trend Prepare 5-year sales forecasts Strategic

forecasting

2.20
 Management Information Systems
Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Manufacturing and Production Systems

Manufacturing & production IS:

Support – planning, development & maintenance of production facilities
- establishment of production goals
- acquisition, storage & availability of production materials
- scheduling of equipment, facilities, materials
- allocation of labor
Product life cycle management (PLM) : based on a data repository that
organizes every piece of info. that goes into making a particular
product ( formula cards, packaging information, shipping
specifications & patent data) // eg: Engineers/ Retailers
CAD – Automate the modeling & design of products

2.21
 Management Information Systems
Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Manufacturing and Production Systems

SYSTEM DESCRIPTION ORGANIZATIONAL
LEVEL

Machine Control the actions of machines and Operational

control equipment

Production Decide when and how many products Management

planning should be produced

Facilities Decide where to locate new production Strategic

location facilities

2.22
 Management Information Systems
Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Overview of an Inventory System

2.23
 Management Information Systems
Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Financing and Accounting Systems

Financial & Accounting IS:
Support- Financial functions like
* managing cash, stocks, bonds & other investments
* to maximize the return on these financial assets
* determine whether the firm is getting better ROI
- Accounting functions like
* maintaining & managing firms financial records to account for flow of
funds in a firm

2.24
 Management Information Systems
Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Financing & Accounting Systems (Continued)

SYSTEM DESCRIPTION ORGANIZATION-
AL LEVEL

Accounts Tracks money owed the firm Operational

receivable

Budgeting Prepares short-term budgets Management

Profit planning Plans long-term profits Strategic

2.25
 Management Information Systems
Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Human Resource Systems

Human Resource IS: Support
- Identifying potential employees
- Maintaining complete records on
- existing employees
- Creating pgms. to develop
- employees
- talents & skills

2.26
 Management Information Systems
Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Human Resource Systems (Continued)

SYSTEM DESCRIPTION ORGANIZATIONAL
LEVEL

Training and Tracks employee training, skills, Operational

development and performance appraisals

Compensation Monitors the range and distribution of Management

analysis employee wages, salaries, and
benefits

Human resources Plans the long-term labor force needs Strategic

planning of the organization

Table 2-5
2.27
 Management Information Systems
Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Human Resource Systems (Continued) An Employee Recordkeeping System

2.28 Figure 2-11

 Management Information Systems
Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
Introduction to Enterprise Applications

Business Processes and Information Systems

Business processes:
• Manner in which work is organized, coordinated,
and focused to produce a valuable product or
service
• Concrete work flows of material, information, and
knowledge—sets of activities
• Unique ways to coordinate work, information, and
knowledge
• Ways in which management chooses to
coordinate work
2.29
 Management Information Systems
Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
Introduction to Enterprise Applications

Business Processes and Information Systems

(Continued)

• Information systems help organizations

achieve great efficiencies by automating parts
of processes

• IS also contributes to completely rethinking

processes.

• Business processes typically span several

different functional areas.

2.30
 Management Information Systems
Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
Introduction to Enterprise Applications

Examples of Business Processes

Manufacturing and production:

• Assembling product, checking quality, producing bills
of materials

Sales and marketing:

• Identifying customers, creating customer awareness,
selling

2.31
 Management Information Systems
Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES:
Introduction to Enterprise Applications

Examples of Business Processes (Continued)

Finance & accounting:

accounting
• Paying creditors, creating financial statements,
managing cash accounts

Human resources:
resources
• Hiring employees, evaluating performance,
enrolling employees in benefits plans

2.32