Types of Information Systems and Strategic Information Systems

1. Session 4: Types of Information Systems and Strategic Information Systems PART I Introduction to the Concept of Information Systems in Business HUANG Lihua, Fudan University

2. Organization Level in Business HUANG Lihua, Fudan University Feb., - July., 2006

3. EIS ESS DSS Management Support Systems MIS TPS Operations Support Systems Marketing And Sales Finance & Accounting Production other Type of Information Systems in Business Strategic-level systems Management-level systems Operational-level systems HUANG Lihua, Fudan University Feb., - July., 2006

4. Type of Information Systems in Business • TPS: Transaction Processing Systems • MIS: Management Information Systems • DSS: Decision Support Systems • EIS/ESS: Executive Information (Support) Systems HUANG Lihua, Fudan University Feb., - July., 2006

5. Transaction Processing Systems (TPS) • Basic business systems that serve the organization’s operational level • Input: Transactions, events • Processing: Sorting, listing, merging, updating • Output: Detailed reports, lists, summaries • Users: Operations personnel, supervisors HUANG Lihua, Fudan University Feb., - July., 2006

6. Transaction Processing Systems (TPS) • A symbolic representation for a payroll TPS HUANG Lihua, Fudan University Feb., - July., 2006

7. Typical applications of TPS HUANG Lihua, Fudan University Feb., - July., 2006

8. Management Information Systems (MIS) • Serve management level; provide reports and access to company data • Input: Summary transaction data, high-volume data, simple models • Processing: Routine reports, simple models, low-level analysis • Output: Summary and exception reports • Users: Middle managers HUANG Lihua, Fudan University Feb., - July., 2006

9. How management information systems obtain their data from the organization’s TPS HUANG Lihua, Fudan University Feb., - July., 2006

10. A Sample Report that Might be Produced by the MIS HUANG Lihua, Fudan University Feb., - July., 2006

11. Decision-Support Systems (DSS) • Serve management level with data analysis for making decisions • Input: Low-volume data or massive databases, analytic models, and data analysis tools • Processing: Interactive, simulations, analysis • Output: Special reports, decision analyses, responses to queries • Users: Professionals, staff managers HUANG Lihua, Fudan University Feb., - July., 2006

12. Voyage-estimating decision-support system HUANG Lihua, Fudan University Feb., - July., 2006

13. Executive Support Systems (ESS) • Provide communications and computing environment that serves the organization’s strategic level • Input: External and internal aggregate data • Processing: Graphics, simulations, interactive • Output: Projections, responses to queries • Users: Senior Managers HUANG Lihua, Fudan University Feb., - July., 2006

14. Model of a typical executive support system HUANG Lihua, Fudan University Feb., - July., 2006

15. Interrelationships among systems HUANG Lihua, Fudan University Feb., - July., 2006

16. Systems from a Functional Perspective • Major Business Functions • Sales and Marketing Systems • Manufacturing and Production Systems • Finance and Accounting Systems • Human Resource Systems • ……. HUANG Lihua, Fudan University Feb., - July., 2006

17. Systems from a Functional Perspective • Sales and Marketing Systems • Help identify customers • Develop products and services • Promote products and services • Sell products and services • Provide ongoing customer support • ……… HUANG Lihua, Fudan University Feb., - July., 2006

18. Systems from a Functional Perspective • Examples of Sales and Marketing Information Systems HUANG Lihua, Fudan University Feb., - July., 2006

19. Systems from a Functional Perspective • Manufacturing and Production Systems • Planning, development, production of products and services • Planning, development, maintenance of production facilities • Acquisition, storage, availability of materials • Scheduling materials, facilities, labor • Controlling the flow of production • ………. HUANG Lihua, Fudan University Feb., - July., 2006

20. Systems from a Functional Perspective • Examples of Manufacturing and Production Information Systems HUANG Lihua, Fudan University Feb., - July., 2006

21. Systems from a Functional Perspective • Overview of an inventory system HUANG Lihua, Fudan University Feb., - July., 2006

22. Systems from a Functional Perspective • Finance and Accounting Systems • Manage firm’s financial assets: cash, stocks, bonds(债券）, etc. • Manage capitalization of firm and finding new financial assets • Maintain and manage financial records • ……. HUANG Lihua, Fudan University Feb., - July., 2006

23. Systems from a Functional Perspective • Examples of Finance and Accounting Information Systems HUANG Lihua, Fudan University Feb., - July., 2006

24. Systems from a Functional Perspective • Human Resources Systems • Identify potential employees • Maintain employee records • Track employee skills, job performance, and training • Support planning for employee compensation and career development • …… HUANG Lihua, Fudan University Feb., - July., 2006

25. Systems from a Functional Perspective • Examples of Human Resources Information Systems HUANG Lihua, Fudan University Feb., - July., 2006

26. Systems from a Functional Perspective • An employee record-keeping system HUANG Lihua, Fudan University Feb., - July., 2006

27. Other Categories of Information Systems • Knowledge Management Systems • Knowledge-based systems that support the creation, organization, and dissemination of business knowledge within the enterprise. • Expert Systems • Knowledge-based systems that provide expert advise and act as expert consulates to users. HUANG Lihua, Fudan University Feb., - July., 2006

28. Evolve Role of Information Systems HUANG Lihua, Fudan University Feb., - July., 2006

29. Strategic Information Systems • Support operations or management process that provide a firm with strategic products, service, and capabilities for competitive advantage. HUANG Lihua, Fudan University Feb., - July., 2006

30. Strategic Information Systems • Information system at any level of an organization • to changes goals, operations, products, services, or environmental relationships • To helps organization gain a competitive advantage HUANG Lihua, Fudan University Feb., - July., 2006

31. Porter’s competitive forces model SUBSTITUTE PRODUCTS & SERVICES NEW MARKET ENTRANTS Traditional Competition THE FIRM SUPPLIERS CUSTOMERS HUANG Lihua, Fudan University Feb., - July., 2006

32. A Photo with Porter HUANG Lihua, Fudan University Feb., - July., 2006

33. Business Competitive Strategies • Become the low-cost producer • Differentiate product or service • Change scope of competition by enlarging or narrowing market HUANG Lihua, Fudan University Feb., - July., 2006

34. Strategic use • Cost effectiveness • Market access • Differentiation of • product or service Porter’s competitive forces with potential strategic use of information • Strategic use • Switching costs • Access to distribution • channels • Economics of scale Potential threat of new entrants Bargaining power of buyers Bargaining power of suppliers Industry competitors • Strategic use • Buyer selection • Switching costs • Differentiation • Strategic use • Selection of supplier • Threat of backward • integration Threat of substitutes • Strategic use • Redefine products and services • Improve price/performance HUANG Lihua, Fudan University Feb., - July., 2006

35. SUBSTITUTE PRODUCTS & SERVICES NEW MARKET ENTRANTS THE FIRM TRADITIONAL COMPETITION SUPPLIERS CUSTOMERS Summary of how information technology can be used to implement competitive strategies • Approach 1: Lower costs • Use IT TO substantially reduce the cost of business processes • Use IT to lower the costs of customers or suppliers. HUANG Lihua, Fudan University Feb., - July., 2006

36. 视讯联接（VIDEO LINK） 财务(FINANCING) 组织学习 (Organizational Learning) WAL-MAT总部 POS数据 (Point-of-sale data) 供应商支付 POS数据 (Point-of-sale data) 卫星通讯 零售商店 通讯支持(COMMUNICATIONS SUPPORT) 供应商 Partner 配销中心 WAL-MAT供应链 HUANG Lihua, Fudan University Feb., - July., 2006

37. Wall-Mart沃尔-马特 • 是近20年来美国发展最快的零售商。70年代公司年销售额只有4000万美元。1995年销售额已达936亿美元，列美国最大企业排名第四位， 2000年市值2567亿美元，列世界第7位， 2002年世界500强名列第一。至尽，公司已拥有2133商店、469家山姆会员商店和248家购物广场，遍布美国、墨西哥、加拿大、巴西、阿根廷、南非、印尼、中国等地。 HUANG Lihua, Fudan University Feb., - July., 2006

38. Wall-Mart沃尔-马特：成功之道：在于理念和手段Wall-Mart沃尔-马特：成功之道：在于理念和手段 • 理念：创始人沃尔顿先生倡导的尽量降低经营成本，实行低价销售。 • 宗旨：帮顾客节省每一分钱。 • 口号：天天平价，始终如一。 • 1995年经营成本占销售额的15.8%（世界上大多数零售商的经营成本在40%以上） • 手段：拥有世界上最大的私有卫星系统，与3800家供货商实现计算机联网。总部的计算机系统与16个发货中心以及1000多家商店连接，做到即时销售，大大压缩产品时间成本，减少库存风险，加速资金周转。 HUANG Lihua, Fudan University Feb., - July., 2006

39. Approach 2: Differentiate • Develop new IT features to differentiate products and services • Use IT features to focus products and services at selected market niches. • Approach 3: Innovate • Create new products and service that include IT components • Make radical changes to business processes with IT • Develop unique new markets or market niches with the help of IT HUANG Lihua, Fudan University Feb., - July., 2006

40. 应用案例——戴尔计算机公司 ：直销与个性化服务的典范 • 向企业销售:5,000家美国公司服务的“首页”计划。当戴尔公司赢得一家有400百人以上的企业客户时，它就为那家客户建立首页。首页只不过是一套比较小的网页，常常同客户的内联网联接(销售和租赁），让获准的雇员在线配置个人计算机、付款、跟踪交付的情况——每天约有500万元的戴尔个人计算机以这种方式定货。首页让客户能即刻得到技术支持（再也不用在电话里等待！），与销售人员联系。 • 向个人销售：网上订购、网上跟踪、网上支付 HUANG Lihua, Fudan University Feb., - July., 2006

41. Approach 5: Develop Alliance • Use IT to create virtual organizations of business partners (information partner) • Develop interorganizational information systems that create strategic business relationships with customers, suppliers, subcontractors, and others • Approach 4: Promote Growth • Use IT to manage regional and global business expansion • Use IT to diversify and integrated into other products and service HUANG Lihua, Fudan University Feb., - July., 2006

42. Case • 客户在Cisco公司的网上下订单以后， Cisco同时在后台连接到Fedex公司的信息系统，把运输的指令发给Fedex， Fedex则根据这些指令及时将客户的订购产品送货上门。 Cisco公司在Fedex那里获得每个运输物品的编号，将其返回给客户。客户可以随时登录到Cisco的网站，在查询订单信息的同时，能看到自己订购的物品的当前运输状态。而这些运输状态信息则是Fedex通过网络直接及时地更新Cisco网站的数据库来实现的。 HUANG Lihua, Fudan University Feb., - July., 2006

43. Approach 6: Improve Quality and Efficiency • Use IT of to dramatically improve the quality of products and service • Use IT to make continuous improvements to the efficiency of business process • Use IT to substantially shorten the time needed to develop, produce, and deliver products and service HUANG Lihua, Fudan University Feb., - July., 2006

44. Approach 8: Other Strategy • Use interorganizational information systems to create switching costs that lock in customers and suppliers • Use investment in IT to build barriers to entry against industry outsiders • Use IT components to make substitution of competing products unattractive • Approach 7: Build an IT Platform • Leverage investment in IS people, hardware, software, and networks from operational uses into strategy applications. • Build a strategic information base of internal and external data collected and analyzed by IT HUANG Lihua, Fudan University Feb., - July., 2006

45. Discussion for Moen, Incorporated • How is Moen using e-business and e-commerce technologies for competitive advantage? • How effectively is Moen implementing “the new model for an effective Net strategy”? HUANG Lihua, Fudan University Feb., - July., 2006

46. Wrap Up • Concepts • Type of information systems • From business level: TPS, MIS, DSS, EIS/ESS • From role of IS: strategic information systems • From data, infor, knowledge: Knowledge management systems • how information systems can be used to implement competitive strategies HUANG Lihua, Fudan University Feb., - July., 2006

47. Assignment for Session 4 • Group Assignment for Case study: Moen, Incorporated. (P51) • Questions 1-3 on P51. • Write and submit • Preparation for session 5 • Reading Materials • Textbook: chapter 2 • P63. Review Quiz • Write down in your book, not submit HUANG Lihua, Fudan University Feb., - July., 2006