Four Main Types Of Information Systems serving different organization Levels

1. Four Main Types Of Information Systems serving different organization Levels • Operational-level • Knowledge- level • Management-level • Strategic-level

2. Types of Information Systems

3. 1:Operational-level Information System • Information systems that monitor the elementary activities and transactions of the organization • Support operational managers by keeping track of the elementary activities and transactions of the organization • Example: sales,receipts,cash deposits,payroll,credit decisions,and the flow of materials in a factory • What happened to Mr.. X payment? • Example of operational-level systems include a system to record bank deposits from automatic teller machines or one that tracks the number of hours worked each day by employees on a factory floor

4. 2:Knowledge Level Information System • Support knowledge and data workers in an organization. • The purpose of Knowledge level system is to help the business firm discover,organize, and integrate new knowledge into the business • To help the organization control the flow of paperwork • Knowledge workers: hold formal university degree: doctors,engineers,lawyers,scientist • Data workers:less formal and advanced education degrees • secretaries,accountant,clerk

5. 3:Management-level Information System • Are designed to serve the monitoring,controlling,decision-making,and administrative activities of middle managers • MIS and DSS

6. 4:Strategic level Information system • Helps senior management tackle and address strategic issues and long term trends , both in the firm and in the external environment. • Main concern match Changes in external environment > existing organizational capabilities

7. Six Major types of Information systems Strategic level system ESS Management-level system MIS & DSS Knowledge level KWS & OAS Operational level (TPS)

8. Six Major Types of Information systems • (1)ESS Executive support systems at the Strategic level • (2) MIS (3) DSS at Management Level • (4)KWS knowledge work system (5)OAS office automation system at the Knowledge level • (6)TPS at operational level

9. Six MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

10. Transaction Process Systems • Transaction: any business related exchange such as payments to employees,payments to suppliers,sales to customers • Processing business transaction was the first application of computers for most organizations • An organized collection of people,procedures,software,databases,and devices used to record completed business transactions

11. MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

12. MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Types of TPS Systems

13. Knowledge Work Systems • Information system that aids knowledge workers in the creation and integration of new knowledge in the organization • A knowledge work system, such as a scientific or engineering design workstation, promotes the creation of new knowledge and ensures that new knowledge and ensures that new knowledge and technical expertise are properly integrated into the business

14. Office automation system • Handle and manage documents( through word processing,desktop publishing,digital filing),scheduling(through electronic calendars),and communication(through email,voice mail,video conference) • Desktop publishing produces professional publishing-quality documents by combining output from word processing software with design elements,graphics

15. Office automation system • Document imaging systems convert documents and images into digital form so that they can be stored and accessed by the computer. • Scanners

16. Management Information Systems (MIS) • An organized collection of people,procedures,software,databases,and devices used to provide routine information to managers and decision makers. • The focus of an MIS is primarily on operational efficiency. • Marketing,production,finance,and other functional areas are supported by MIS.

17. MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Management Information System (MIS)

18. Decision Support Systems(DSS) • An organized collection of people,procedures,software,databases,and devices used to support problem-specific decision making. • A DSS supports and assists all aspects of problem-specific decision making. • DSS can provide assistant in solving complex problems not supported by traditional MIS. • Managers play an active role in development and implementation

19. MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Decision Support System (DSS)

20. Helps organization “do things right” Complex problems not supported Provides standard reports generated with data and information from TPS Helps managers “do the right things” Provide solution to complex problems DSS operates from a managerial perspective MIS VS. DSS

21. Used with more structured problems Users have less control over MIS Some MISs make automatic decisions and replace the decision maker Used with unstructured problems Users have more control over DSS Supports all aspects and phases of decision making,does not replace the decision maker MIS VS. DSS

22. Focus on information only Indirect support system that uses regularly produced reports May not provide immediate results,reports given once a week Focus on actual decision , decision making style Direct support system provides interactive reports on computer screen Computer equipment that provides DS is on line MIS VS. DSS

23. Executive support systems • Information system at the strategic level of an organization designed to address unstructured decision making through advanced graphics and communications • Used by senior managers • ESS are designed to incorporate data about external events such as new tax laws or competitors • They draw summarized information from internal MIS and DSS • ESS can assist the following problems • What business should we be in? • What are competitors doing? • Which unit should we sell to raise cash

24. MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Executive Support System (ESS)

25. Relationship of systems Executive Support Systems ESS Management Systems MIS Management Systems DSS Transaction Processing Systems TPS Knowledge Systems KWS, OAS

26. Strategic Information System • Computer systems at any level of an organization that change the goals, process, products, services, or environmental relationships to help the organization gain a competitive advantage • Merrill Lynch, for instance, used information systems to change from the stock brokerage business to the financial services business • Organizations may need to change their internal operations to take advantage of the new IS • These changes often require new managers, new work force, and a much closer relationship with customers and suppliers

27. Changing concepts of Information & Information Systems • Information systems of 1950s focused on reducing the cost of routine paper processing, especially in accounting • The first information systems were semi-automatic check-processing, issuing, and canceling machines ;electronic accounting machines (EAM) • Electronic data processing (EDP) • By the 1960s, organizations used it for general management support • Any information system of the 1960s and 1970s was termed as MIS • Weekly production, monthly financial information, inventory, accounts receivable,accounts payable….

28. Changing concepts of Information & Information Systems • In 1970s and early 1980s information systems were seen as providing fine-tuned, special-purpose, customized management control over the organization • Then emerged decision-support systems(DSS) and executive support systems (ESS) • The purpose was to improve and speed up the decision making process of specific managers and executives in a broad range of problems • By the mid 1980s conception of information changed again, viewed as strategic asset or resource • As a weapon to defeat and frustrate the competition • In 2000, information is viewed as the very foundation of business processes, products, and services

29. How I.S can be used for competitive advantage/Strategy levels and IT

30. Business-Level Strategy & the value chain model • How can we compete effectively in a particular market? • Market might be light bulbs, utility vehicles, or cable television • Most common generic strategies at this level are • Become low cost producer (Low cost) • Differentiate your product or services(Differentiation) • Change the scope of competition by either(Scope) • (a) enlarge the market to include global markets • (b) narrow the market by focusing on small niches not well served by your competitors

31. Value Chain Model • Value chain model:Model that highlights the primary or supportive activities that add a margin of value to a firm’s products or services where information systems can best be applied to achieve a competitive advantage • Primary activities: activities most directly related to the production and distribution of a firm’s products or services • Secondary activities: activities that make the delivery of the primary activities of a firm possible.consist of the organization’s infrastructure, human resource, technology, and procurement

32. Primary Activities • Primary activities: most directly related to the production and distribution of a firm’s products or services • Include inbound logistics, operations, outbound logistics, sales, and marketing • Inbound logistics receiving and storing materials for distribution to production • Operations transforms inputs to finished o/p • Outbound logistics storing,and distributing produc • Marketing and sale promoting and selling firm’s products

33. Support activities • Activities that make the delivery of the primary activities of a firm possible. • Consist of the organization’s infrastructure( administration and management), human resources( employee recruiting ,hiring and training), technology(improving products and the production process) , and procurement(purchasing input)

34. Information System to Support Product/Service Differentiation • Product/service differentiation • strategy for creating brand loyalty by developing new and unique products/services that are not easily duplicated by competitors e.g. Citibank’s ATM

35. Focused differentiation: competitive strategy for developing new market niches for specialized products or services where a business can compete in the target area better than its competitors • Datamining:analysis of large pool of data to find patterns and rules that can be used to guide decision making and predict future behavior

36. I.S. to Support Low Cost Strategy • Supply chain management • integrates supplier, distributors, and customer logistics requirements into one cohesive process • to reduce inventory cost or underutilized staff • e.g. Wall-Mart’s “continuous replenishment system” • “lock in” customer and raise “switching costs” • expense a customer incurs in lost time and expenditure of resources when changing from one supplier to a competing supplier • e.g. Baxter Healthcare’s “stockless inventory”

37. Business Level Strategy

38. Firm level strategy and I.T. • A commercial partnership of two or more persons(limited 20,10 for banks) • A business firm is typically a collection of businesses. • The firm is organized financially as a collection of strategic business units • Returns to the firm depends on performance of business unit.

39. Synergies • Output of one unit can be used as input to another unit. • Then unique nonmarket relationship can lower costs and generate profits. • Merger • Use of IT in these synergy situations is to tie together the operations of completely different business units,so they can act as whole

40. Core competencies • Second concept for firm level strategy involves the notion of “core competency” • A core competency is an activity at which a firm is a world-class leader • May involve being the world’s best fiber-optic manufacturer,best miniature parts designer etc..

41. Industry-level Strategy and IT • A specific branch of manufacture and trade • Firms together comprise industries, such as the automotive industry,telephone… • Corporation : A body of persons acting under a legal charter as a separate entity with privileges and liabilities

42. Information partnership • Both companies can join forces without actually merging,by sharing information • Unique synergies can be achieved • Example: American Airlines has an arrangement with CITI bank to award one mile in its frequent flier program for every dollar spent using CITI bank credit cards • AA benefits from increased customer loyalty • CITI bank gains new credit cards subscriber

43. COMPETITIVE FORCES MODEL NEW SUBSTITUTE MARKET PRODUCTS ENTRANTS & SERVICES TRADITIONAL THE FIRM COMPETITION Bargaining power of SUPPLIERS Bargaining power of CUSTOMERS

44. Telephone industry SBC firm Ameritech firm AT&T firm

45. Should we compete with other firms in the industry • Or should we cooperate with them • Cooperate to develop industry standards, build customer awareness,work collectively with suppliers to lower costs

46. Network economics At Industry Level • Model based on the concept of a network where adding another participant entails no marginal costs but can create much larger marginal gain

47. Managing Strategic Transitions • A movement from one level of socio-technical system to another. Often required when adopting strategic systems that demand changes in the social and technical elements of an organization.

48. Money,people,materials,machines,equipments • Input = Resources such as money,people,material • Output = goods | services • For-Profit ,Nonprofit organization • Nonprofit organization: social groups,religious groups,universities

49. Value-Added processes • Value-added processes increase the relative worth of the combined inputs on their way to becoming final outputs of the organizations • Example:Carwash • first- value-added process= washing the car • The output of this system----a clean,but wet, car—is worth more than the mere collection of ingredients(soap,water)

50. Carwash • Consumers are willing to pay more for the skill,knowledge,time,and energy required to wash their cars. • Second value-added process: drying – transformation of the wet car into a dry one with no water spotting • Again consumers are willing to pay more