2.1

THE STRATEGIC ROLE OF INFORMATION SYSTEMS

2.2

LEARNING OBJECTIVES

• ANALYZE ROLES OF 6 TYPES OF INFORMATION SYSTEMS

• DESCRIBE TYPES OF INFORMATION SYSTEMS

• EXAMINE COMPETITIVE FORCES, VALUE CHAIN MODELS

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2.3

LEARNING OBJECTIVES

• EXPLAIN DIFFICULTIES OF BUILDING, SUSTAINING STRATEGIC INFORMATION SYSTEMS

• DESCRIBE HOW INFORMATION SYSTEMS SUPPORT LEVELS OF BUSINESS STRATEGY

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2.4

MANAGEMENT CHALLENGES• INTEGRATION:

– ENTERPRISE RESOURCE MANAGEMENT

– CONNECTING ORGANIZATIONAL LEVELS DIFFICULT, COSTLY

• SUSTAIN COMPETITIVE ADVANTAGE:– INFO SYSTEMS MUST BE FLEXIBLE TO

ENSURE LONG-TERM PROFITS

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2.5

TYPES OF INFORMATION SYSTEMS

DATA WORKERS

KIND OF SYSTEM GROUPS SERVED

STRATEGIC LEVEL SENIOR MANAGERS

MANAGEMENT LEVEL MIDDLE MANAGERS

OPERATIONAL OPERATIONAL LEVEL

MANAGERS

KNOWLEDGE LEVEL KNOWLEDGE &

SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN RESOURCESMARKETING

2.6

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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2.7

TYPICAL TPS APPLICATIONSSales & 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

*TPSTPS

2.8

TYPICAL TPS APPLICATIONSManufacturing & 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

*TPSTPS

2.9

TYPICAL TPS APPLICATIONSFinance & Accounting Systems

MAJOR FUNCTIONS OF SYSTEMS:• Budgeting; General Ledger; Billing:

Cost Accounting

MAJOR APPLICATION SYSTEMS:• General Ledger; Accounts

Receivable / Payable; Budgeting; Funds Management Systems

*TPSTPS

2.10

TYPICAL TPS APPLICATIONSHuman Resources 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

*TPSTPS

2.11

TYPICAL TPS APPLICATIONSOther Types (e.g., University)

MAJOR FUNCTIONS OF SYSTEMS:• Admissions; Grade Records; Course

Records; Alumni

MAJOR APPLICATION SYSTEMS:• Registration System; Student

Transcript System; Curriculum Class Control System; Alumni Benefactor System

*TPSTPS

2.12

KNOWLEDGE LEVEL• INPUTS: DESIGN SPECS• PROCESSING: MODELLING• OUTPUTS: DESIGNS, GRAPHICS• USERS: TECHNICAL STAFF

EXAMPLE: ENGINEERING WORK STATION

KNOWLEDGE WORK SYSTEMS (KWS)

2.13

OFFICE AUTOMATION SYSTEMS (OAS)

• TOWARD A “PAPERLESS” OFFICE• REDESIGN OF WORK FLOW• INTEGRATED SOFTWARE• ERGONOMIC DESIGN• BRIGHT, CHEERFUL

WORK SPACE

EXAMPLE: PRESENTATION GRAPHICS

2.14

MANAGEMENT LEVEL• INPUTS: HIGH VOLUME DATA• PROCESSING: SIMPLE MODELS• OUTPUTS: SUMMARY REPORTS• USERS: MIDDLE MANAGERS

EXAMPLE: ANNUAL BUDGETING

MANAGEMENT INFORMATION SYSTEMS (MIS)

2.15

• STRUCTURED & SEMI-STRUCTURED DECISIONS

• REPORT CONTROL ORIENTED• PAST & PRESENT DATA• INTERNAL ORIENTATION• LENGTHY DESIGN PROCESS

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MANAGEMENT INFORMATION SYSTEMS (MIS)

2.16

MIS

MIS FILES

SALES DATA

UNIT PRODUCT COST

PRODUCT CHANGE DATA

EXPENSE DATA

MISREPORTS

MANAGERS

TPS

Order Processing

System

Materials Resource

Planning System

General Ledger

System

ORDER FILE

PRODUCTION MASTER FILE

ACCOUNTING FILES

TPS DATA FOR MIS APPLICATIONS

2.17

MANAGEMENT LEVEL• INPUTS: LOW VOLUME DATA• PROCESSING: INTERACTIVE• OUTPUTS: DECISION ANALYSIS• USERS: PROFESSIONALS, STAFF

EXAMPLE: CONTRACT COST ANALYSIS

DECISION SUPPORT SYSTEMS (DSS)

2.18

• FLEXIBLE, ADAPTABLE, QUICK• USER CONTROLS INPUTS/OUTPUTS• NO PROFESSIONAL PROGRAMMING• SUPPORTS DECISION PROCESS• SOPHISTICATED MODELING TOOLS

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DECISION SUPPORT SYSTEMS (DSS)

2.19

STRATEGIC LEVEL• INPUTS: AGGREGATE DATA• PROCESSING: INTERACTIVE• OUTPUTS: PROJECTIONS• USERS: SENIOR MANAGERS

EXAMPLE: 5 YEAR OPERATING PLAN

EXECUTIVE SUPPORT SYSTEMS (ESS)

2.20

• 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 SYSTEMS (ESS)

2.21

INTERRELATIONSHIPS AMONG SYSTEMS

ESS

TPSKWS

OAS

DSSMIS

2.22

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

• SALES & MARKETING SYSTEMS• MANUFACTURING & PRODUCTION

SYSTEMS• FINANCE & ACCOUNTING SYSTEMS• HUMAN RESOURCES SYSTEMS

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2.23

STRATEGIC ROLE OF INFORMATION SYSTEMS

STRATEGIC INFO SYSTEM:

CAN CHANGE GOALS, OPERATIONS

PRODUCTS, SERVICES

ENVIRONMENT

TO GAIN COMPETITIVE ADVANTAGE

2.24

COMPETITIVE FORCES MODEL

THE FIRMTRADITIONAL COMPETITION

NEW MARKET ENTRANTS

SUPPLIERS CUSTOMERS

SUBSTITUTE PRODUCTS & SERVICES

2.25

• PRODUCT DIFFERENTIATION• FOCUSED DIFFERENTIATION• DATAMINING• LINKING CUSTOMERS & SUPPLIERS• BECOMING LOW COST PRODUCER

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COUNTERING COMPETITIVE FORCES

2.26

VALUE CHAIN MODEL

HIGHLIGHTS PRIMARY & SUPPORT ACTIVITIES THAT ADD VALUE TO PRODUCTS, SERVICES

• PRIMARY: DIRECTLY RELATED TO PRODUCTION, DISTRIBUTION

• SUPPORT: INFRASTRUCTURE, HUMAN RESOURCES, TECHNOLOGY, PROCUREMENT

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2.27

IMPLICATIONS FOR MANAGERS & ORGANIZATIONS

• STRATEGIC ALLIANCES, INFORMATION PARTNERSHIPS

• INDUSTRY LEVEL STRATEGIC SYSTEMS

• MANAGING STRATEGIC TRANSITIONS

• IMPACT OF THE INTERNET

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2.28

INFORMATION SYSTEMS & QUALITY

• QUALITY: Conformance to specifications, customer satisfaction

• SIMPLIFY PRODUCT, PROCESS• BENCHMARKING• CUSTOMER DEMAND AS GUIDE• REDUCE CYCLE TIME• IMPROVE QUALITY & PRECISION

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