MIS 2000
Class 9
Process View of Organization
and Information Systems
Updated: Jan. 2014.
Outline
• Typology of information systems: Time, User, and
Organizational Function Focus (important topic, on exams!)
• IS Impacts on Process Design (CCCFIS)
• Process Design Impacts on Process Performance (CVCT)
• IS and Organizational Data
• Data Quality
• Summary
2
Typology of Information Systems: Time Focus
Use Procedures
User Interface
Databases
System and Application
Software
Computer hardware
Information System
• IS store & process data
into useful outputs *
• Outputs and so IS can be:
– Past/present focused
(recording/tracking;
e.g., reports)
– Future focused
(decision making;
e.g., scenarios - key
to decision making)
3
Typology of Information Systems (IS): User Focus
Different systems serve different groups of users.
System types have different level of detail, processing capabilities, and outputs.
Executive
Management
Management Information
System (MIS) - Mid-range
performance control & planning
Mid-level
Management
Transaction Processing
system (TPS) - Daily
operations control
Supervisory
Management
Knowledge Work
Systems
(professionals)
Decisions Support System
(DSS) - Strategic decision making
Group Support
Systems
(any teams)
Communication
Systems
(everybody)
Office Automation
Systems
(clerks, others)
4
IS Types – Basic Concepts
Transaction Processing System (TPS)
TPS serves supervisors. Stores & processes data
created in operations (‘transactions’). TPS is a
database with stored queries reflecting daily
operations.
MIS serves middle management. Uses outputs
from TPS, additional queries and reports to
reflect the transpired business in longer periods
(month, quarter).
Your lab and project.
More in next classes.
Queries
Queries
Database
DSS serves executive management. Highly
aggregated figures showing overall state of
business. Upcoming topic.
5
Typology* of Information Systems:
Organizational Function Focus
• IS based on organizational function (Purchasing, Inventory, Production,
Human Resources, Accounting, Finance, Sales, Marketing, Planning, Research,
Engineering, etc.).
• Relationship between User-based and Function-based IS types:
Organizational
Function-based IS
Human Resources IS
(HRIS)
User-based IS Type
TPS
MIS
DSS
Database of
travel claims
with some
queries
More queries and
reports on travel
claims in past month,
drawn from TPS
database
Module with if-then rules that
processes MIS reports and
identifies deviations from
organization’s rules.
6
Information Systems and Business Processes
1. Carries
process parts
or whole
• system use procedures
are the work procedures
• replacing or complementing paper trail
2. Key role in
optimizing
process design
IS
Roles
(CCCFIS; next slides)
•
•
3. Directly impacts on
process performance
Optimized process
performs better
Indirect impact of IS on
process performance
(speed, continuity…)
• IS performs its roles by responding to:
(a) functional requirements – performing useful work (doing
right things) – roles 1 and 2 above; *
(b) non-functional requirements – performing well (doing
things right) – role 3 above **
7
IS and Process Design - Composition


IS can help to optimize process design.
IS and Process Composition: IS can influence the selection of activities,
performers (workers), departments, and organizations to be included in process.
•
•
Example: A new Purchasing TPS implemented at Ford made its purchasing
order process* leaner. It had (a) different work activities than those used
before and brought a (b) 10 fold-reduction of process performers.
Example: A part quality process connected Kia with service shops. Kia
became able to determine exactly which parts did not perform well and then
to work on improving their quality. MIS at Kia and at service shops were
linked via computer network, which in effect extended the process in space
and across organizations.
8
IS and Process Design - Complexity

IS and Process Complexity: IS can absorb complexity or simplify process a process
looking from the perspective of process performers. This is possible because IS
performs some activities and decisions instead of people, which is called
automation.
•
•
Example: DSS that is usually used by a single person in decision making
process, performs very complex calculations that would be difficult even for a
group of experts to do. Many organizations.
Example: By transforming transaction data and creating reports automatically,
MIS do much of the reporting process that mid-level managers had performed
manually in the past. This capability moderates the size of this management
level, which in turn can make an organization “flatter” (less hierarchical). Many
organizations.
9
IS and Process Design - Coordination

IS and Process Coordination: IS can enhance coordination among the process
activities and process performers.
•
•
Example: The supply process at Walmart uses inventory management MIS at
Walmart stores and its distribution centres, which in turn are connected via
computer networks with sales MIS of Walmart’s suppliers. Stores, distribution
centers and suppliers are well coordinated and Walmart is able to have its
shelves filled continuously with products.
Group decision making process that includes a GDSS makes it possible for
decision makers to brainstorm in parallel (at the same time). Each person can
type his/her idea at the same time without waiting for turn to speak (as
happens in a manual group decision making process). Big user of GDSS used
to be IBM.
Facilitator
drives the
session
Decision makers
10
IS and Process Design - Flexibility

IS and Process Flexibility: IS can contribute to controlling variation in a process.

Think of variation in terms of (A) availability of options, and (B) deviation from a
benchmark. Variation form A may be desirable, while form B may not be.


Example A: Various reservation processes (hotel, travel, university course)
could be done with the start activity supported by different IS. So, a customer
of the process could use Website, email, or phone to submit booking requests.
Example B: The quality control process in manufacturing rests on controlling
variation between a part under production and desired benchmarks of size,
shape and other characteristics. In modern car manufacturing, the quality
control process is automated via IS that continuously inspect and report on
the state of assembly lines.
11
IS and Process & Organizational Performance
Process Performance
Organizational
Performance
Process Design
Information Systems
• Processes with optimized design (previous slides) perform
better in terms of customer value, time, and costs (next
slide).
• Better performing processes improve organizational
performance (profitability, service level, etc.).
12
Process Design improvement – Process Performance improvement
due to IS
Process Design
Aspect impacted
by IS
Time
Cost
Customer Value
Composition
improvement
Savings in process
time at Ford
Labor reduced at
Ford
Quality improved at
Kia
Complexity
reduction
Savings in decision
making process
Savings on midlevel management
Coordination
improvement
- Savings in Walmart’s
sourcing process
- Savings in group
decision making at
IBM
Savings in
opportunity costs
at IBM*
- Satisfied customer
at Walmart
- Satisfied group
member at IBM
Flexibility control
- Automated quality
control in car
manufacturing (mfg.)
faster than manual
- Less fallout due
to better quality
control in car mfg.
- Process options
- Quality of cars
raised
13
IS and Organizational Data

•
IS are the main vehicle for managing organizational data:
–
business documents (decisions, financial, market analyses, orders,
contracts…)
–
professional documentation (problem solving guides, engineering
drawings, manuals, knowledge repositories, patents…)
–
communications (messages and memos managed by email, chat,
electronic bulletin boards and other communication systems).
Note: Process can contain more data than those managed by the IS
that carry the process.
14
Quality of Data
•
•
IS is the vehicle for managing process data.
The quality of IS outputs is evaluated in terms of: @
1. Relevance (correspond to user needs; rule applied when IS designed)
2. Consistency (a piece of data appears in the same format and content
throughout a system; e.g., customer name with 3 parts)
3. Non-redundant (duplication of data reduced; e.g., relational
databases)**
4. Accuracy (reflects factual state of affairs; e.g., real costs)
5. Completeness (all the data required are provided; data entry matters!)
6. Timeliness (available on time as the business demands; sometimes
ASAP*, but not always)
15
Summary
• IS types can be differentiated on Time, User, and Organizational
Function
• Basic IS types serving managers are TPS, MIS and DSS
• IS can help to optimize process design (Composition, Complexity,
Coordination, Flexibility)
• Improvements in process design reflect in process performance
(Customer Value, Cost, Time)
• To carry processes, IS should meet functional and non-functional
requirements.
• IS manage organizational data, which should meet six quality
requirements.
16