Week 4: Internal Information Systems

1. Week 4: Internal Information Systems MIS 2101: Management Information Systems

2. Agenda • Organizational Levels • Type of Decisions • Type of Information • Horizontal Information Systems • used by different levels • Vertical Information Systems • used across organizational levels

3. Decision-Making Levels of an Organization

4. Operational Level Day-to-day business processes E.g., Interactions with customers Type of Decisions Structured Recurring Short or Immediate Term Role of IT Automate repetitive tasks Improve efficiency Examples?

5. Managerial Level Functional managers / Midlevel managers Type of Decisions Semi-structured Contained within business function Moderately complex Time horizon of few days to few months Role of IT Automate monitoring and control of operational activities

6. Executive Level The president, CEO, vice presidents, board of directors Type of Decisions Long-term strategic issues Complex and non-routine problems Unstructured decisions Long-term ramifications Role of IT Automate summaries of organizational data Projections for the future 7-6

7. Summary

8. Agenda • Organizational Levels • Type of Decisions • Type of Information • Horizontal Information Systems • used by different levels • Vertical Information Systems • used across organizational levels

9. Transaction Processing System Operational level Usually front end information systems Purpose Processing of business events and transactions Examples Payroll processing Sales and order processing Inventory management

10. Architecture of a TPS: Inputs Source Documents Different data entry methods

11. Architecture of a TPS: Processing Online processing Immediate results Batch processing Transactions collected and later processed together Used when immediate notification not necessary

12. Architecture of a TPS: Outputs Counts, summary reports Inputs to other systems Feedback to systems operator

13. Summary of TPS Characteristics

14. Management Information Systems Managerial level Purpose: Produce reports Support of midlevel managers’ decisions Examples Sales forecasting Financial management and forecasting Manufacturing, planning and scheduling Inventory management and planning

15. Architecture of an MIS: Outputs

16. Summary of MIS Characteristics

17. Executive Information Systems A.k.a. Executive support system Executive level Purpose Aid in executive decision-making Provide information in highly aggregated form Examples Monitoring of internal and external events and resources Crisis management

18. Architecture of an EIS: Inputs Hard data Facts and numbers Generated by TPS & MIS Purchased data Soft data Nonanalytical information Web-based news portals Customizable Delivery to different media

19. Architecture of an EIS: Outputs Summary reports Trends Simulations

20. EIS Output: Digital Dashboards Digital dashboard Presentation of summary information Information from multiple sources Ability to drill down if necessary

21. Summary of EIS Characteristics

22. Summary: Types of Information Systems Weaker EIS MIS TPS Controls and Security Stronger Operations Staff Transaction Processing Source: Business Driven Technology, by Haag, Baltzan, Phillips, McGraw Hill, 2006 (with modifications)

23. Summary: Decision Levels Decision Level Description Example Type of Information Executive Competitive advantage Market leader Long term New products that change the industry External events, rivals, sales, costs quality, trends. Management Improve operations without restructuring New tools to cut costs or imp- rove efficiency Expenses, schedules, sales models, forecast Operations Day-to-day actions keep company running Scheduling employees, placing orders. Transactions, accounting, HRM, inventory 23

24. Agenda • Organizational Levels • Type of Decisions • Type of Information • Horizontal Information Systems • used by different levels • Vertical Information Systems • used across organizational levels

25. Seven Information Systems that Span IntraOrganizational Boundaries

26. 1. Decision Support Systems Decision making support for recurring problems Used mostly by managerial level employees (can be used at any level) Interactive decision aid What-if analyses Analyze results for hypothetical changes

27. Common DSS Models Information Systems Today: Managing in the Digital World 7-27

28. 2. Intelligent Systems Artificial intelligence Simulation of human intelligence Reasoning, learning, sensing, hearing, walking, talking, etc.

29. Intelligent Systems Three types Expert systems Neural networks Intelligent agents

30. Expert Systems Reproduce Performance of Human Experts Accounting, Medicine System asks series of questions Inferencing/pattern matching Matching user responses with predefined rules If-then format

31. Neural Network System Approximation of human brain functioning Training to establish common patterns Past information Computer Security, Loan Processing New data compared to patterns

32. Example: Neural Network System Loan processing system relying on a neural network -32

33. Intelligent Agent Systems Program working in the background Bot (software robot) Provides service when a specific event occurs

34. Intelligent Agent Types Buyer agents (shopping bots) – search for best price User agents – perform a task for the user Monitoring and sensing agents – keep track of key information Data-mining agents – analyze large amounts of data Web crawlers (web spiders) – browse the Web for specific information Destructive agents – malicious agents designed by spammers

35. 3. Data Mining and Visualization Systems Application of sophisticated statistical techniques

36. Visualization Display of complex data relationships using graphical methods Visualization of a weather system

37. Text Mining Extraction of information from textual documents Web crawlers used to extract information from Internet Leverage “wisdom of the crowds”

38. 4. Office Automation Systems Developing documents, scheduling resources, communicating Examples Word processing Desktop publishing Electronic calendars E-mail

39. 5. Collaboration Technologies Increased need for flexible teams Virtual teams – dynamic task forces Forming and disbanding as needed Fluctuating team size Easy, flexible access to other team members Need for new collaboration technologies

40. Groupware Enables more effective team work Distinguished along two dimensions

41. Benefits of Groupware

42. Video Conferencing Costs – few thousand dollars to $500,000 Dedicated videoconferencing systems Located within organizational conference rooms Highly realistic

43. 6. Knowledge Management Systems Generating value from knowledge assets Collection of technology-based systems Knowledge assets Skills, routines, practices, principles, formulas, methods, heuristics and intuition Used to improve efficiency, effectiveness and profitability Documents storing both facts and procedures Examples Databases, manuals, diagrams, books, etc.

44. Benefits and Challenges of Knowledge Based Systems

45. 7. Functional Area Information Systems Cross-organizational-level IS Support specific functional area Focus on specific set of activities

46. Business Processes Supported by Functional Area Information Systems

47. Cases

48. Amazon.com Personalized greeting Memory for recent purchases Targeted “gold box” offers and bargains Fraud protection Shipping vs. billing address comparison Method of shipment checks Credit card sources checks “One-click” shopping • 35 million customers worldwide • Innovations leading to satisfaction

49. Too Much Technology? RFID and Privacy RFID tags Latest in technological tracking devices Information imprinted on a tag Tag generates signature signal Special RFID reader interprets signal Use of RFID tags Pharmaceutical industry Tracking of medication from factory to pharmacy Retail businesses