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SESSION 2SESSION 2
Information Systems In The Information Systems In The EnterpriseEnterprise
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Types of Information Systems
Figure 2-1
KEY SYSTEM APPLICATIONS
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Major Types of Systems
• Executive Support Systems (ESS)Executive Support Systems (ESS)
• Decision Support Systems (DSS)Decision Support Systems (DSS)
• Management Information Systems (MIS)Management Information Systems (MIS)
• Knowledge Work Systems (KWS)Knowledge Work Systems (KWS)
• Office Automation Systems (OAS)Office Automation Systems (OAS)
• Transaction Processing Systems (TPS)Transaction Processing Systems (TPS)
KEY SYSTEM APPLICATIONS
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TYPES OF INFORMATION SYSTEMS
Figure 2-2
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Transaction Processing Systems (TPS):Transaction Processing Systems (TPS):
• Basic business systems that serve the Basic business systems that serve the operational leveloperational level
• A computerized system that performs and A computerized system that performs and records the daily routine transactions records the daily routine transactions necessary to the conduct of the businessnecessary to the conduct of the business
• So central to the business that its failure can So central to the business that its failure can hurt the firmhurt the firm
• e.g. sales order entry package tracking, e.g. sales order entry package tracking, payrollpayroll
KEY SYSTEM APPLICATIONS
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Payroll TPS
Figure 2-3
KEY SYSTEM APPLICATIONS
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Knowledge Work Systems (KWS) or Knowledge Management Systems:
Users: knowledge workersPromote the creation and integration of new knowledge in the organizationRely on internet, intranet web sites, knowledge bases and discussion forums
Office SystemsUsers: data workersDesigned to increase the productivity Ex: word processing, e-mail, voice mail
KEY SYSTEM APPLICATIONS
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Management Information System (MIS):
Users: managers
Serve the functions of planning, controlling, and decision making
Generally depend on TPS for their data
Contents of the info. products generated by MIS are specified in advance
KEY SYSTEM APPLICATIONS
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Support structured and semi-structured decisions
Report control oriented
Past and present data
Internal orientation
have little analytical capability
Management Information Systems (MIS)
KEY SYSTEM APPLICATIONS
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Figure 2-5
Management Information System (MIS)
KEY SYSTEM APPLICATIONS
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Decision Support System (DSS):
Users: management level
Semi structured decisions
Sources: MIS, TPS and external
Strong analytical power and interactive
Ex: Contract cost analysis
KEY SYSTEM APPLICATIONS
12Figure 2-7
Decision Support System (DSS)
KEY SYSTEM APPLICATIONS
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Executive Support System (ESS):
Users: senior managers (strategic level)
Unstructured decisions
Source: external data, MIS, DSS
Generalized computing and communications capacity
Less use of analytical models
KEY SYSTEM APPLICATIONS
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Executive Support System (ESS)
Figure 2-8
KEY SYSTEM APPLICATIONS
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INTERRELATIONSHIPS AMONG SYSTEMS
Figure 2-9
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Major functions of systems:Sales management, market research, promotion, pricing, new products
Major application systems:Sales order IS, market research system, pricing system
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
Sales and Marketing Systems
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Major functions of systems:Scheduling, purchasing, shipping, receiving, engineering, operations
Major application systems:Materials resource planning systems, purchase order control systems, quality control systems
Manufacturing and Production Systems
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
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Major functions of systems:Budgeting, general ledger, billing, cost accounting
Major application systems:General ledger, accounts receivable, accounts payable, budgeting, funds management systems
Financing and Accounting Systems
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
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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
Human Resource Systems
SYSTEMS FROM A FUNCTIONAL PERSPECTIVE
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Business processes
Manner in which work is organized, coordinated, and focused to produce a valuable product or service
Unique ways to coordinate work, information, and knowledge
IS achieves great efficiencies by automating parts of processes
Business Processes and Information Systems
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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Cross-Functional Business Processes
Transcend boundary between sales, marketing, manufacturing, and research and development
Group employees from different functional specialties to a complete piece of work
Example: Order Fulfillment Process
Business Processes and Information Systems
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
22Figure 2-12
The Order Fulfillment Process
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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Customer Relationship Management (CRM)
Manages all ways used by firms to deal with existing and potential new customers
Business and Technology discipline
Uses information system to coordinate entire consumer related business processes of a firm
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
24Figure 2-13
Customer Relationship Management (CRM)
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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Supply Chain Management (SCM)Close linkage and coordination of activities involved in buying, making, and moving a product
Integrates supplier, manufacturer, distributor, and customer
Reduces time, redundant effort, and inventory costs
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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Supply Chain Management
Figure 2-14
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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Decide when, what to produce, store, move
Rapidly communicate orders
Communicate orders, track order status
Check inventory availability, monitor levels
Track shipments
Plan production based on actual demand
Rapidly communicate product design change
Provide product specifications
Share information about defect rates, returns
How Information Systems Facilitate Supply Chain Management
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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Limitations:
Inefficiencies can waste as much as 25% of company’s operating costs
Bullwhip Effect: Information about the demand for the product gets distorted as it passes from one entity to next
Supply Chain Management (SCM)
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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Uses digital technologies to enable multiple organizations to collaboratively design, develop, build, move, and manage products
Increases efficiencies in reducing product design life cycles, minimizing excess inventory, forecasting demand, and keeping partners and customers informed
Collaborative Commerce
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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Private Industrial Networks
Web-enabled networks
Link systems of multiple firms in an industry
Coordinate transorganizational business processes
Collaborative Commerce
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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Enterprise Systems (Enterprise Resource Planning –ERP)
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
Integrate the key business processes of an entire firm
Consolidate information across the organization
Allow information to flow seamlessly throughout the organization
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Firm structure and organization: One organization
Management: Firm-wide knowledge-based management processes
Technology: Unified platform
Business: More efficient operations and customer-driven business processes
Benefits
Enterprise Systems
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES
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Difficult to build: Require fundamental changes in the way the business operates
Technology: Require complex pieces of software and large investments of time, money, and expertise
Centralized organizational coordination and decision making: Not the best way for the firms to operate
Challenges
Enterprise Systems
INTEGRATING FUNCTIONS AND BUSINESS PROCESSES