MIS 2000 Chapter 2: How Businesses Use Information Systems

1. MIS 2000 Chapter 2: How Businesses Use Information Systems

2. Outline • Typologies of Information Systems (Department; User) • Business Process • Transaction Processing Systems • Management Information Systems (Reporting Systems) • Decision Support Systems • Executive Information (Support) Systems • Knowledge Management Systems • Systems Crossing Departments and User Groups • Enterprise Resource Planning Systems • Customer Support Systems • Supply Chain Systems 9.200 Information Systems for Management

3. Types of ISes - Organizational Function Served • Purchasing Systems (“back-end” of organizations) • Production Systems (Manufacturing, Services) – involved in core business operations . Cases: Kia’s Quality Management System • Human Resources, Accounting, Inventory Systems – Market Star’s Travel Expense Systems • Sales & Marketing Systems (“front-end” of organizations) Supply Back-End Delivery Front End ORGANIZATION 9.200 Information Systems for Management

4. Types of ISes – User of Information (Constituency) • Systems have different data processing capabilities. • Different “constituency types” can be modules in the same system. Examples of TPS, MIS, DSS: - Market Star’s Travel Expense Sys. - Kia’s Quality Mgt. Sys, Executive Management Strategic planning & control Mid-level Management) Mid-range performance control & planning Supervisory Management Everyday operations control • Also important: • Knowledge Management Systems – User: Professionals (p. 53 in 4th ed.) • * The MIS area of study today refers to all these systems, not just MIS/Reporting Systems 9.200 Information Systems for Management

5. Relationship Between Two Typologies • The relationship between functional and constituency • typology is also shown in Tables 2-2 though 2-5 9.200 Information Systems for Management

6. Understanding Organizations as Processes • Process refers to connected tasks from a start to an end point. Tasks can be performed in different organizational functions. • Process must deliver value for customer - external customer (consumer), or internal customer (functions, another process) • Examples: Customer support process; Order Fulfillment Process Order Fulfillment Process 9.200 Information Systems for Management IS in Organizations 6 9.200 Information Systems for Management

7. Transaction Processing Systems (TPS) • Serves operational level, Supervisory Mgt. • Records daily, routine activities • Example: sales order entry, hotel room reservation, payroll, ticketing systems 9.200 Information Systems for Management

8. Management Information Systems (MIS) • Serve mid-management level • Provide scheduled, summary or exception reports • Use data collected by TPS • Oriented to internal, not external events of organization 9.200 Information Systems for Management

9. Decision Support Systems (DSS) • Middle and higher level management • Semi-structured & unstructured decision-making • Use external as well as internal data • Process data through analytical models with some decision rules (e.g., appropriate expenses model, maximize/minimize, optimization) – model-driven system • Another kind of DSS uses lots of data and special data mining techniques – data-driven system 9.200 Information Systems for Management

10. Executive Information Systems (EIS) • Also called Executive Support Systems • Serve strategic level of the organization • Support non-routine decision-making • Use graphics software to create visual information display of key summary information • Use data from sources within and outside organizations • Have drill-down capability to reveal what is behind summary information 9.200 Information Systems for Management

11. Knowledge Management Systems • Help knowledge workers (e.g., doctors, engineers, “degreed” people) • Help manage knowledge • Examples: Expert System, Computer Aided Design Systems for architects, Knowledge Bases (e.g., Lexis) 9.200 Information Systems for Management

12. Systems Crossing Departments and User Groups – Customer Relationship Management System • Coordination of all processes that involve customers (marketing, sales, service) • Maximizing value to customer (key data entity) • Providing value for customer • Combining data from multiple sources 9.200 Information Systems for Management

13. Supply Chain Management Systems • Coordinating all activities in the supply chain • Purchase raw materials, manufacture product, inventory, logistics (distribution) • Involving external suppliers (key data) and customers • Minimizing costs, inventory, and cycle time • Use Internet or some company private computer networks • (NOTE: Disregard discussion on pp. 51-2) 9.200 Information Systems for Management

14. Enterprise Resource Planning Systems • Centralize data management – biz entities (customer, supplier, employee…) defined same for entire enterprise => integrated picture of business • Can support all departments (products: SAP, Oracle, PeopleSoft) • TPS, MIS/RS and DSS capabilities (via Data Warehouse and special reporting tools) • ERP software can be used for Supply Chain Systems and CRM systems 9.200 Information Systems for Management