CHAPTER-2

Management Information Systems 8/e
Chapter 2 Information Systems in the Enterprise
KEY SYSTEM APPLICATIONS IN THE ORGANIZATION
Types of Information Systems
Figure 2-1

Management Information Systems 8/e
Chapter 2 Information Systems in the Enterprise
MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Figure 2-2

1. TRANSACTION PROCESSING
SYSTEM
 SERVE THE OPERATIONAL LEVEL OF
ORGANIZATION
 MONITORS AND SUPPORTS THE
ORGANIZATION’S BASIC BUSINESS
TRANSACTIONS

DIFFERENT TYPES OF
INFORMATION SYSTEMS
1. TRANSACTION PROCESSING
SYSTEM
 PROVIDES THE BACKBONE FOR MANY
APPLICATIONS INVOLVING THE OTHER
SUPPORT SYSTEMS
 IS CONSIDERED CRITICAL TO THE
SUCCESS OF ANY ORGANIZATION SINCE
IT SUPPORTS THE MISSION-CENTRAL
OPERATIONS

2. KNOWLEDGE WORK SYSTEM
 ENHANCES THE PRODUCTIVITY OF
KNOWLEDGE WORKERS
3. OFFICE AUTOMATION SYSTEM (OAS)
 ENHANCES THE PRODUCTIVITY OF DATA
WORKERS

DIFFERENT TYPES OF
INFORMATION SYSTEMS
4. MANAGEMENT INFORMATION SYSTEM
 PROVIDES MANAGEMENT WITH PERIODIC
REPORTS AND ACCESS TO THE
ORGANIZATION’S CURRENT AND PAST
PERFORMANCE
 MIS REPORTS ARE GENERATED FROM DATA
FROM TPS
 ARE NOT HIGHLY ANALYTICAL
 ARE RELATIVELY INFLEXIBLE

5. DECISION SUPPORT SYSTEM
 PROVIDE COMPUTERIZED SUPPORT TO
COMPLEX NONROUTINE AND PARTIALLY
STRUCTURED DECISIONS
 HAVE MORE ANALYTICAL MODELS AND DATA
ANALYSIS CAPABILITIES THAN MIS
 DRAW INFORMATION FROM EXTERNAL AND
INTERNAL SOURCES

6. EXECUTIVE SUPPORT SYSTEM
 SUPPORTS THE STRATEGIC LEVEL OF
ORGANIZATION
 HAS LIMITED ANALYTICAL CAPABILITIES
BUT USES SOPHISTICATED MODELING
TOOLS
 USES INTERNAL AND EXTERNAL
INFORMATION

USE OF INFORMATION SYSTEMS FOR
COORDINATING ALL THE BUSINESS
PROCESSES RELATED TO DEALING
WITH CUSTOMERS

INTERRELATED NETWORK OF FACILITIES
AND DISTRIBUTION METHODS THAT
OBTAIN MATERIALS, TRANSFORMS
MATERIALS INTO FINISHED GOODS,
AND DELIVER THE FINISHED GOODS
TO CUSTOMERS

Limitations:
Inefficiencies can waste as much as 25% of company’s operating costs
Bullwhip Effect: Information about the demand for the product gets distorted as it passes from one entity to next

Management Information Systems 8/e
Chapter 2 Information Systems in the Enterprise
ENTERPRISE APPLICATIONS
Supply Chain Management
Figure 2-15

ENTERPRISE APPLICATIONS
 Supply chain planning system:
Enables firm to generate forecasts for a product and to develop sourcing and a manufacturing plan for the product
 Supply chain execution system:
Manages flow of products through distribution centers and warehouses

Collaborative
Commerce
 Uses digital technologies to enable multiple organizations to collaboratively design, develop, build, move, and manage products
 Increases efficiencies in reducing product design life cycles, minimizing excess inventory, forecasting demand, and keeping partners and customers informed

Management Information Systems 8/e
Chapter 2 Information Systems in the Enterprise
ENTERPRISE APPLICATIONS
Collaborative Commerce
Figure 2-16

EXTENDED ENTERPRISES OR
INDUSTRIAL NETWORKS
SYSTEMS THAT LINK ENTERPRISE
SYSTEMS OF MANY FIRMS IN THE
INDUSTRY
TWO TYPES OF INDUSTRIAL
NETWORKS
 VERTICAL INDUSTRIAL NETWORKS
 HORIZONTAL INDUSTRIAL NETWORKS

AN INTEGRATED INFORMATION SYSTEM,
WHICH FACILITATES THE EXCHANGE OF
DATA AMONG CORPORATE DIVISIONS
THROUGH UNIFICATION OF KEY
BUSINESS PROCESSES

 GREATER CONTROL AND BETTER DECISION
MAKING FOR THE MANAGEMENT
 IMPROVED CUSTOMER SERVICE AND ORDER
PROCESSING
 UNIFICATION OF BUSINESS FUNCTIONS
AND PROCESSES
 INTEGRATION OF DISPARATE
TECHNOLOGIES

 DIFFICULT TO IMPLEMENT
 HIGH UP-FRONT COSTS FOR LONG-
TERM BENEFITS
 DIFFICULT TO CHANGE
 MAY LACK STRATEGIC BENEFITS FOR
THE FIRM

Knowledge Management
Systems
 Discovering and codifying knowledge
 Creating knowledge
 Sharing knowledge
 Distributing knowledge