MIS 2000
Class 5
Process View of Organization
and Information Systems
Updated: September 2012
Outline
• Typology of information systems: Time, User, and
Organizational Function Focus
• IS Impacts on Process Design (CCCV)
• IS Impacts on Process Performance (CVCT)
• IS and Organizational Data
• Data Quality
• Functional and Non-functional Requirements for IS
• Summary
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Typology of Information Systems: Time Focus
Use Procedures
User Interface
Data
System and Application
Software
Computer hardware & software
Information System
(a more detailed view)
• 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)
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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
(teams)
Communication
Systems
(everybody)
Office Automation
Systems
(clerks, others)
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IS Types – Basic Concepts
Transaction Processing System (TPS)*
TPS is an IS that stores & processes data created in operations
(‘transactions’).
TPS is a database with stored queries reflecting daily operations.
Serves supervisory management.
Examples: Customer Order Processing System, Accounting General
Ledger, HR payroll, inventory…
Queries
Queries
Queries shorter periods
(day, week)
Database
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Management Information System (MIS)
TPS
Special Queries &
Reports
MIS is a system that outputs from TPS, additional queries and
reports to reflect the transpired business on longer run
(monthly, quarterly, semi-annually).
Reports have graphics for quick managers’ understanding.
Serves mid-level managers.
Examples same as for TPS but different content and format.
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Decision Support System (DSS)
• Support higher management levels in decision making
• Uses outputs from TPS and MIS as well as various data from the
organizational environment
• Outputs contain much less detail than in MIS and TPS, and
highly aggregated
• Lots of graphical elements (figures, gages).
Screen of DSS called
Executive dashboard
• Gauges show important
figures about HR in a
company
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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.
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Information Systems and Business Processes
Key role in optimizing
process design
(CCCF; next slides)
IS
Carries
process parts
or whole
•
manipulation of IS
is how work is done,
whether process is
optimized or not
Vehicle for
management process data
• complementing or
replacing paper trail
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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 Kia introduced 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.
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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.
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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
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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.
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IS and Process Performance
IS
Process
Design,
Performance
Organizational
Performance
Relationships between IS, Process and Organization
• 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.).
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Process Design improvement – Process Performance improvement
due to IS
Process Design
Aspect impacted
by IS
Time
Cost
Customer Value
Composition
augmentation
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
15
Functional and Non-functional Requirements for IS
•
To be able to carry a process or its parts, IS must meet
(a) functional requirements
(b) non-functional requirements.
•
Functional requirements = doing what an IS is designed for.
– Examples: Performing certain, designated activities within a process
(e.g., process order, report on product .
• Non-functional requirements = speed, user’s effort, reliability.
– Examples: speed matching a benchmark, easy to use, high
reliability (minimal system downtime).
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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.
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Quality of Data
•
•
IS is the vehicle for managing process data.
The quality of IS outputs is evaluated in terms of:
1. Accuracy (reflects factual state of affairs; e.g., accounting standards)
2. Timeliness (available on time as the business demands; sometimes
ASAP*, but not always)
3. Completeness (all the data required are provided; data entry matters!)
4. Relevance (correspond to user needs; rule applied when IS designed)
5. Non-redundant (duplication of data reduced; e.g., relational
databases)**
6. consistent (a piece of data is appears in the same format and content
throughout a system; e.g., customer name)
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Functional and Non-functional Requirements for IS
•
To be able to carry a process or its parts, IS must meet
(a) functional requirements
(b) non-functional requirements.
•
Functional requirements = doing what an IS is designed for.
– Examples: Performing certain, designated activities within a process
(e.g., process order, report on product .
• Non-functional requirements = speed, user’s effort, reliability.
– Examples: speed matching a benchmark, easy to use, high
reliability (minimal system downtime).
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Summary
• IS types can be differentiated on Time, User, and Organizational
Function
• Basic IS types serving managers are TPS, MIS and DSS
• IS can optimize process design (Composition, Complexity,
Coordination, Flexibility)
• Improvements of process design reflect in process performance
(Customer Value, Cost, Time)
• IS manage organizational data, which should meet quality
six quality requirements.
• To carry processes, IS should meet functional and non-functional
requirements.
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