Management Information
Systems - Class Note # 2
Prof. Yuan-Shyi Peter Chiu
Feb. 2011
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Chap 2
Information Systems in the
Enterprise
2.1 Key System Applications in the Organization
2.2 Systems from a Functional Perspective
2.3 Integrating Functions and Business
Processes
2.4 International Information Systems
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Fig 2.1: Types of Information Systems
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2.1
Different kinds of systems
 Operational-level systems
 Information systems that monitor
the elementary activities and
transactions of the organization .
 Knowledge-level systems
 Information systems that support
knowledge and data workers in
an organization.
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2.1
Different kinds of systems
 Management-level systems
 Information systems that support the
monitoring, controlling, decision
making, and administrative activities
of middle managers.
 Strategic-level systems
 Information systems that support the
long-range planning activities of
senior management .
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Major Types of Systems
• Executive Support Systems (ESS)
• Decision Support Systems (DSS)
• Management Information Systems (MIS)
• Knowledge Work Systems (KWS)
• Office Automation Systems (OAS)
• Transaction Processing Systems (TPS)
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Fig 2-2: The six major types of information systems.
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2.1
Six Major Types of Systems
 TPS – Transaction Processing
Systems
 Computerized systems that perform and
record the daily routine transactions
necessary to conduct the business;
they serve the organization’s
operational level.
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Fig 2-4: Typical applications of TPS
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TYPICAL TPS APPLICATIONS
Sales & 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
See Fig.
2-4
( p.43 )
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2.1
TPS – Transaction Processing Systems
 Manufacturing
 Plant scheduling
 Material movement control
 Machine control
 Finance
 Securities trading
 Cash management
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2.1
TPS – Transaction Processing Systems
 Accounting
 Payroll
 Account payable
 Account receivable
 Human Resources
 Compensation
 Training & development
 Employee record keeping
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2.1
Payroll TPS
Fig 2-3: A symbolic representation for a payroll TPS.
◆
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2.1
Six Major Types of Systems
 KWS – knowledge work systems
 Information systems that aid
knowledge workers in the creation
and integration of new knowledge in
the organization .
Example: Engineering work station
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2.1
Six Major Types of Systems
 OAS – office automation systems
 Computer systems, such as word
processing, electronic mail systems,
and scheduling systems, that are
designed to increase the productivity
of data workers in the office .
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2.1
Six Major Types of Systems
 MIS
– Management Information
Systems
 Information systems at the management
level of organization that serve the functions
of planning, controlling, and decision
making by providing routine summary and
exception reports.
Example: Annual budgeting
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2.1
MIS
• Structured and semi-structured decisions
• Report control oriented
• Past and present data
• Internal orientation
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TPS DATA FOR MIS APPLICATIONS
Fig 2-5: How management information systems obtain their data
the from the organization’s TPS .
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2.1
Six Major Types of Systems
 DSS
– Decision Support Systems
 Information systems at the
management level of an organization
that combine data and sophisticated
analytical models to support nonroutine decision making.
Example: Contract cost analysis
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Decision Support System (DSS)
Fig 2-7: Voyage estimating decision-support system .
◆
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2.1
MIS & DSS
 Sales and marketing
 Sales management
 Sales region analysis

Manufacturing
 Inventory control
 Production scheduling
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2.1
MIS & DSS
 Finance
 Annual budgeting
 Cost analysis
 Accounting
 Capital investment analysis
 Pricing / profitability analysis
 Human Resource
 Relocation analysis
 Contract cost analysis
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2.1
Six Major Types of Systems
 ESS – Executive Support Systems
 Information system at the
organization’s strategic level designed
to address unstructured decision
making through advanced graphics
and communications.
Example: 5-year operating plan
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2.1
ESS
• Top level management
• Designed to the individual
• Ties CEO to all levels
• Very expensive to keep up
• Extensive support staff
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Executive Support System (ESS)
Figure 2-8
Fig 2-8: Model of a typical executive support system .
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2.1
ESS
 Sales and marketing  Sales trend
forecasting
 Manufacturing
 Operating plan
 Finance
 Budget forecasting
 Accounting
 Profit planning
 Human Resource
 Personnel planning
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2.1
Characteristics of Different Types
of Information Systems
 Information inputs
 Processing
 Information outputs
 Users
See Table
2-1
( p.41 )
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2.2 Systems from a Functional Perspective
Fig 2-9: Interrelationships among systems
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2.2 Systems from a Functional Perspective
 SALES & MARKETING SYSTEMS
 MANUFACTURING & PRODUCTION
SYSTEMS
 FINANCE & ACCOUNTING SYSTEMS
 HUMAN RESOURCES SYSTEMS
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2.2 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
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Sales and Marketing Systems
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2.2 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
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Manufacturing and Production Systems
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2.2 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
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Financing and Accounting Systems
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2.2 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
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Human Resource Systems
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2.3 Business Processes and
Information Systems
Business processes
Manner in which work is organized, coordinated,
and focused to produce a valuable product or
service
 Concrete work flows of material, information, and
knowledge—sets of activities
 Unique ways to coordinate work, information, and
knowledge


Ways in which management chooses to coordinate
work
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2.3
Business Processes and Information Systems
Examples of Business Processes

Manufacturing and production: Assembling
product, checking quality, producing bills of
materials

Sales and marketing: Identifying customers,
creating customer awareness, selling
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2.3
Business Processes and Information Systems
Cross-Functional Business Processes
Fig. 2-12
The Order Fulfillment Process
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2.3
Business Processes and Information Systems
Information systems help organizations

Achieve great efficiencies by automating
parts of processes

Rethink and streamline processes
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2.3
Business Processes and Information Systems
Customer Relationship Management (CRM)

Manages all ways used by firms to deal with
existing and potential new customers

Uses information system to coordinate entire business
processes of a firm
Provides end-to-end customer care

Provides a unified view of customer across the company

Consolidates customer data from multiple sources and
provides analytical tools for answering questions

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2.3
Business Processes and Information Systems
Customer Relationship Management (CRM)
Figure 2-13
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2.3
Business Processes and Information Systems
Supply Chain Management (SCM)
•Close linkage and coordination of activities involved in
buying, making, and moving a product
•Integrates supplier, manufacturer, distributor, and
customer, logistics, time
•Reduces time, redundant effort, and inventory costs
•Network of organizations and business processes
•Helps in procurement of materials, transformation of
raw materials into finished products
•Helps in distribution of the finished products to
customers
• Includes reverse logistics - returned items flow in the
reverse direction from the buyer back to the seller
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2.3
Business Processes and Information Systems
Supply Chain Management
Figure 2-14
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2.3 How Information Systems Facilitate
Supply Chain Management
•Decide when, what to produce, store, move
•Rapidly communicate orders
•Communicate orders, track order status
•Check inventory availability, monitor levels
•Track shipments
•Plan production based on actual demand
•Rapidly communicate product design change
•Provide product specifications
•Share information about defect rates, returns
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2.3 Collaborative Commerce
Figure 2-15
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2.3 Enterprise System
Figure 2-17
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2.4 Global System Configuration
Figure 2-18
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HOMEWORK Chap.2
#1
#2
#3
# 7
#8
#9
# 10: What is CRM?
# 11: What is SCM?
# 12
~ THE END ~
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