INFORMATION
SYSTEMS IN THE
ENTERPRISE
2.1
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Introduction
• Information system (IS):
– A set of interrelated components that
collect, manipulate, and disseminate data
and information and provide feedback to
meet an objective
• Businesses:
– Can use information systems to increase
revenues and reduce costs
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2.2
Fundamentals of Information
Systems, Sixth Edition
© 2003 by Prentice Hall
Why Learn About Information Systems in
Organizations?
• Information systems used by:
– Sales representatives
– Managers
– Financial advisors
– Educator
– Administrators
• Information systems:
– Indispensable tools to help you achieve
your career goals
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2.3
Fundamentals of Information
Systems, Sixth Edition
© 2003 by Prentice Hall
What is an Information System?
• Information system (IS) is a set of
interrelated elements that:
– Collect (input)
– Manipulate (process)
– Store
– Disseminate (output) data and
information
– Provide a corrective reaction (feedback
mechanism) to meet an objective
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2.4
Fundamentals of Information
Systems, Sixth Edition
© 2003 by Prentice Hall
Input, Processing, Output, Feedback
• Input:
– Activity of gathering and capturing raw data
• Processing:
– Converting data into useful outputs
• Output:
– Production of useful information, usually in the
form of documents and reports
• Feedback:
– Information from the system that is used to
make changes to input or processing activities
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Fundamentals of Information
Systems, Sixth Edition
© 2003 by Prentice Hall
Manual and Computerized Information
Systems
• An information system can be:
– Manual or computerized
• Example:
– Investment analysts manually draw charts
and trend lines to assist them in making
investment decisions
• Computerized information systems:
– Follow stock indexes and markets and
suggest when large blocks of stocks
should be purchased or sold
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2.6
Fundamentals of Information
Systems, Sixth Edition
© 2003 by Prentice Hall
Computer-Based Information Systems
• Single set of hardware, software,
databases, telecommunications,
people, and procedures:
– That are configured to collect,
manipulate, store, and process data into
information
• Technology infrastructure:
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2.7
– Includes all hardware, software,
databases, telecommunications, people,
Fundamentals of Information
andSixth
procedures
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Systems,
Edition
Computer-Based Information Systems (continued)
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2.8
Fundamentals of Information
Systems, Sixth Edition
© 2003 by Prentice Hall
Computer-Based Information Systems
(continued)
• Hardware:
– Consists of computer equipment used to
perform input, processing, and output
activities
• Software:
– Consists of the computer programs that
govern the operation of the computer
• Database:
– Organized collection of facts and information,
typically consisting of two or more related data
files
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2.9
Fundamentals of Information
Systems, Sixth Edition
© 2003 by Prentice Hall
Computer-Based Information Systems
(continued)
• Telecommunications, networks, and the
Internet:
– The electronic transmission of signals for
communications
• Networks:
– Connect computers and equipment to enable
electronic communication
• Internet:
– World’s largest computer network, consisting
of thousands of interconnected networks, all
freely exchanging information
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2.10
Fundamentals of Information
Systems, Sixth Edition
© 2003 by Prentice Hall
Computer-Based Information Systems
(continued)
• Intranet:
– Internal network that allows people
within an organization to exchange
information and work on projects
• Extranet:
– Network that allows selected outsiders,
such as business partners and
customers, to access authorized
resources of a company’s intranet
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Fundamentals of Information
Systems, Sixth Edition
© 2003 by Prentice Hall
Computer-Based Information Systems
(continued)
• People:
– The most important element in most
computer-based information systems
• Procedures:
– Include strategies, policies, methods,
and rules for using the CBIS
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Fundamentals of Information
Systems, Sixth Edition
© 2003 by Prentice Hall
Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
Business Processes and Information Systems
Information systems help organizations
• Achieve great efficiencies by automating
parts of processes
• Rethink and streamline processes
2.13
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Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Major Types of Information
Systems
• Executive Support Systems (ESS)
• Decision Support Systems (DSS)
• Management Information Systems (MIS)
• Transaction Processing Systems (TPS)
2.14
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Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
Enterprise Systems
2.15
Figure 2-17
© 2003 by Prentice Hall
Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
Traditional View of the Systems
Figure 2-16
2.16
© 2003 by Prentice Hall
Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
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
2.17
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Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Types of TPS Systems
Figure 2-4
2.18
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System Architecture: Transaction Processing
System
2.19
© 2003 by Prentice Hall
Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
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
2.20
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Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
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 info system, market research
system, pricing system
2.21
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Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
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,
engineering systems, quality control
systems
2.22
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Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
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
2.23
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Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
Human Resource Systems
Figure 2-11
2.24
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Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Payroll TPS
Figure 2-3
2.25
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System Example: Payroll System (TPS)
2.26
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Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
Overview of Inventory Systems
Figure 2-10
2.27
© 2003 by Prentice Hall
Management Information System (MIS)
•
Management Information System (MIS)
– An MIS provides managers with information and
support for effective decision making, and
provides feedback on daily operations.
– MIS provides information to the users in the form
of reports
– Output, or reports, are usually generated through
accumulation of transaction processing data.
– MIS is an integrated collection of subsystems,
which are typically organized along functional
lines within an organization.
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© 2003 by Prentice Hall
Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Management Information System (MIS):
Management level
• Inputs: High volume data
• Processing: Simple models
• Outputs: Summary reports
• Users: Middle managers
Example: Annual budgeting
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Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Management Information System (MIS)
• Structured and semi-structured decisions
• Report control oriented
• Past and present data
• Internal orientation
• Lengthy design process
2.30
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Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Management Information System (MIS)
Figure 2-5
2.31
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System Architecture: Management
Information System
2.32
© 2003 by Prentice Hall
Management Information System
MIS
Creates reports managers can use
to make routine business decisions
•
•
•
•
•
2.33
Scheduled reports
Key-indicator reports
Exception reports
Ad hoc (demand) reports
Drill-down reports
© 2003 by Prentice Hall
Outputs of a Management Information System
Scheduled
Reports
Produced
periodically, or
on a schedule
(daily, weekly,
monthly).
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2.34
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Key-Indicator Report
Summarizes the previous day’s critical activities
and typically available at the beginning of each
day.
2.35
© 2003 by Prentice Hall
Demand
Report
Gives certain
information at a
manager’s
request.
Exception
Report
Automatically
produced when a
situation is unusual
or requires
management action.
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2.36
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Drill Down
Reports
Provide detailed
data about a
situation.
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2.37
© 2003 by Prentice Hall
Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Decision Support System (DSS):
Management level
• Inputs: Low volume data
• Processing: Interactive
• Outputs: Decision analysis
• Users: Professionals, staff
Example: Contract cost analysis
2.38
© 2003 by Prentice Hall
Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Decision Support System (DSS)
Figure 2-7
2.39
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Four Types of Models
2.40
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Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Decision Support System (DSS)
2.41
Figure 2-6
© 2003 by Prentice Hall
Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Executive support system (ESS)
• Top level management
• Designed to the individual
• Ties CEO to all levels
• Very expensive to keep up
• Extensive support staff
2.42
© 2003 by Prentice Hall
Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Executive Support System (ESS):
Strategic level
• Inputs: Aggregate data
• Processing: Interactive
• Outputs: Projections
• Users: Senior managers
Example: 5-year operating plan
2.43
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Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Types of Information Systems
2.44
Figure 2-1
© 2003 by Prentice Hall
Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
TYPES OF INFORMATION SYSTEMS
2.45
Figure 2-2
© 2003 by Prentice Hall
Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise
INTERRELATIONSHIPS AMONG SYSTEMS
2.46
Figure 2-9
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2.47
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References
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2.48
• Marchand, D. & Horton, F. (1986). Infotrend:
profiting from your information sources. New
York, NY: Wiley.
• Eaton, J.J. & Bawden, D. (1991). What kind of
resource is information? International Journal of
Information Management, 11(2), 156-165.
• Burk, C.F. & Horton, F.W. (1988). Infomap. A
complete guide to discovering corporate
information resources. Englewood Cliffs, NJ:
Prentice Hall
• Meyer, Hester J. (2005). The nature of information,
and the effective use of information in rural
© 2003 by Prentice Hall
References
• Presentation adapted from
http://www.slideshare.net/mannyarda
les/types-of-information-systems
• Additional information can be
retrieved from
http://araku.ac.ir/~a_fiantial/ISR_Lec_
[4].pdf
2.49
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