Information systems
for the firm
Main types
(Source : Laudon & Laudon, Prentice- Hall, 2000)
1
Four levels of applications
of I.S. in the firm
• Strategy level: I.S. for top executives
• Management level: I.S. for middle
management
• “Knowledge” level: I.S. for office
employees
• Operations level: I.S. for production, sales,
marketing, accounting, and H.R. functions
2
Operations level
I.S. to treat day to day transactions
IS for Sales
IS for
IS for
and Marketing Manufacturing Accounting &
Finances
IS for Human
resources
Other IS.
Example : a
university
Main
functions
of the system
Sales
management
Market analysis
Promotion
Price setting
New products
Planning
Purchasing
Shipping &
handling
Engineering
Manufacturing
Budgeting
Big ledger
Invoicing
Computation of
COGS
Employees files
Social
protection
Pay
Work relations
Training
Admissions
Marks
Courses
Alumni club
Main
applications
Order
monitoring
Market studies
Price lists
Stock and
purchases
control
Machines
operation and
control
Quality control
Big ledger
Debtors
Creditors
Budgeting
Cash
management
Pay calculation
Social
protection
Carrier
management
Registration
system
Schooling files
Courses content
control
Quality control
Alumni gifts
3
“Knowledge” level
two types of information system
• Systems for basic office work:
– Word processing
– Document and image creation
– Electronic calendar (Outlook…)
• Systems for intellectual work:
– Engineering work stations and softwares
– Management work stations and softwares
4
Management level
two types of information system
• Management information systems:
–
–
–
–
–
Sales management
Stock control
Yearly budgeting
Capital investment control
Careers evolution management
• Systems to assist middle mgt decision process:
–
–
–
–
Sales analysis by region
Production planning
Costs analysis and costs control
Price analysis and profitability analysis
5
Strategy level
I.S. for top executives
•
•
•
•
•
Five year sales forecast
Five year operation planning
Five year budget forecast
Profitability forecast
Human resources planning
6
Features and users of I.S.
Types of I.S.
Input data
Strategic systems
Global internal &
external data
Output data
Users
Simulations,
graphics,
interactive
Databases,
Interactive,
analytical models
simulations,
analyses
Operations/transact Simple models,
ions summaries,
Basic analysis
simple models
Forecasting
Queries answers
Top executives
Reports, decision
analysis, queries
answers
Regular reports and
summaries, notes
and documents
In-house
consultants &
analysts
Middle
management
Systems for std
intellectual work
Design
specifications,
knowledge mgt.
Models,
Simulations,
Models, graphics,
blue-prints
Technical
managers and
employees
Basic office work
systems
Documents,
schedules
Document mgt.,
Computing,
communication
Documents,
schedules, mail
Office employees
Operations level
systems
Transactions,
operations, events
Sorting, filtering,
listing, merging,
updating
Detailed reports,
on-screen
monitoring, lists,
summaries
Operation workers
(mfg., sales,
accounting, etc.)
Supervisors
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Systems to assist
decision
Management
Information Syst.
Treatment
Evolution of Information Systems
• Information Systems entered the firms in the 60’s
– They were first used in accounting and production
control
• In the 80’s and 90’s, they entered all the other
functions of the firm (from bottom up)
– I.S. can tremendously increase the firm’s productivity
– Information is now considered a “product” with
strategic value, whereas a generation ago it was only
“red tape”
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An example
• When it was realised that gaining a new client was
about 5 times more expensive than keeping an
existing one, and that I.S. provided new means to
analyze and retain clients, C.R.M. (Client
Relationship Management) was born.
• “The most efficient sale action is to treat well your
existing clients”
• You have to know them very well, and customize
your relationship with them.
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