INFORMATION SYSTEMS IN THE ENTERPRISE 2.1 © 2003 by Prentice Hall 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 2 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 3 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 4 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 5 2.5 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 6 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: 7 2.7 – Includes all hardware, software, databases, telecommunications, people, Fundamentals of Information andSixth procedures © 2003 by Prentice Hall Systems, Edition Computer-Based Information Systems (continued) 8 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 9 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 1 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 1 2.11 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 1 2.12 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 © 2003 by Prentice Hall 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 © 2003 by Prentice Hall 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 © 2003 by Prentice Hall 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 © 2003 by Prentice Hall 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 © 2003 by Prentice Hall 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 © 2003 by Prentice Hall 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 © 2003 by Prentice Hall 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 © 2003 by Prentice Hall 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 © 2003 by Prentice Hall 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 © 2003 by Prentice Hall System Example: Payroll System (TPS) 2.26 © 2003 by Prentice Hall 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. 28 2.28 © 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 2.29 © 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) • Structured and semi-structured decisions • Report control oriented • Past and present data • Internal orientation • Lengthy design process 2.30 © 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) Figure 2-5 2.31 © 2003 by Prentice Hall 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). 34 2.34 © 2003 by Prentice Hall 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. 36 2.36 © 2003 by Prentice Hall Drill Down Reports Provide detailed data about a situation. 37 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 © 2003 by Prentice Hall Four Types of Models 2.40 © 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) 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 © 2003 by Prentice Hall 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 © 2003 by Prentice Hall 2.47 © 2003 by Prentice Hall References 4 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 © 2003 by Prentice Hall