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Essentials of

Management InformationSystems

Kenneth C. Laudon, Jane P. Laudon

Instructor: Mr. Ahmed Al Astal

Chapter 2

INFORMATION SYSTEMS IN THE ENTERPRISE

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Chapter Objectives

•What are the major types of systems in a business? What role do they play?

•How do information systems support the major business functions?

•Why should managers pay attention to business processes?

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Chapter Objectives ( Cont.)

•What are the benefits and challenges of using enterprise systems?•What are the benefits of using systems to support supply chain management and collaborative commerce?•What are the benefits of using information systems for customer relationship management and knowledge management?

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MANAGEMENT CHALLENGES

•Integration: Different systems serve variety of functions, connecting organizational levels difficult, costly

•Enlarging scope of management thinking: Huge system investments, long development time must be guided by common objectives

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Key System Applications in the Organizations

Organizations can be divided into strategic, management, knowledge, and operational levels and into five major functional areas: sales and marketing, manufacturing, finance, accounting, and human resources.

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Kinds of Information Systems:• Operational Level Systems: IS that monitor the

elementary activities and transactions of the organization.

• Knowledge Level Systems: IS that support knowledge and data workers in the organization

• Management Level Systems: IS that support the monitoring, controlling, decision making, and administration in the middle managers.

• Strategic Level Systems: IS that support the long range planning activities of senior managers.

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Major Types of Systems in Organizations

1.Executive Support Systems (ESS)2.Decision Support Systems (DSS)3.Management Information Systems (MIS)4.Knowledge Work Systems (KWS)5.Office Systems 6.Transaction Processing Systems (TPS)

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Major Types of Systems in Organizations

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Major Types of Systems in Organizations

1) Transaction Processing Systems (TPS):

• Basic business systems that serve the operational level

• A computerized system that performs and records the daily routine transactions necessary to the conduct of the business

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Major Types of Systems in Organizations (Cont.)

2) Knowledge Work Systems (KWS):

Information systems that aid knowledge workers in the creation and integration of new knowledge in the organization.

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Major Types of Systems in Organizations (Cont.)

2) Knowledge Work Systems (KWS) ( cont. ):

Knowledge level•Inputs: Design specs•Processing: Modeling•Outputs: Designs, graphics•Users: Technical staff and professionals

Example: Engineering work station

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Major Types of Systems in Organizations (Cont.)

3) Office Systems

• Computer systems such as word processing, electronic mails, and scheduling systems, that are designed to increase productivity of data and knowledge workers in the office.

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Major Types of Systems in Organizations (Cont.)

4) Management Information System (MIS):

Management level•Inputs: High-volume data•Processing: Simple models•Outputs: Summary reports•Users: Middle managers

Example: Annual budgeting

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Management Information System (MIS) (Cont.)

•Structured and semi-structured decisions

•Report control oriented

•Past and present data

•Internal orientation

•Lengthy design process

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Major Types of Systems in Organizations (Cont.)

5) Decision Support System (DSS):

Management level•Inputs: Low-volume data•Processing: Interactive•Outputs: Decision analysis•Users: Professionals, staff

Example: Contract cost analysis

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Major Types of Systems in Organizations (Cont.)

6) Executive Support System (ESS):

Strategic level•Inputs: Aggregate data•Processing: Interactive•Outputs: Projections•Users: Senior managers

Example: 5-year operating plan

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Executive Support System (ESS)(Cont.)

•Top level management

•Designed to the individual

•Ties CEO to all levels

•Very expensive to keep up

•Extensive support staff

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Interrelationships Among Systems