Laudon & Laudon MIS, 7th Edition. Pg. 2.

HTM304: Management Information

LEARNING OBJECTIVES
Systems
• ANALYZE ROLES OF 6 TYPES OF
INFORMATION SYSTEMS
INFORMATION SYSTEMS IN THE • DESCRIBE TYPES OF INFORMATION
ENTERPRISE SYSTEMS
• ANALYZE RELATIONSHIPS
January 28, 2003 BETWEEN BUSINESS
PROCESSES
Oliver Yao
*

TYPES OF INFORMATION SYSTEMS

LEARNING OBJECTIVES KIND OF SYSTEM GROUPS SERVED

STRATEGIC LEVEL SENIOR
MANAGERS
• EXPLAIN HOW SYSTEMS &
NETWORKS CREATE NEW
MANAGEMENT LEVEL MIDDLE
EFFICIENCIES MANAGERS

• EVALUATE BENEFITS &

LIMITATIONS OF SYSTEMS & KNOWLEDGE LEVEL KNOWLEDGE &
DATA WORKERS
NETWORKS
* OPERATIONAL OPERATIONAL
LEVEL MANAGERS

SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN

MARKETING RESOURCES

TYPICAL TPS APPLICATIONS

MAJOR TYPES OF SYSTEMS Sales & Marketing Systems

• EXECUTIVE SUPPORT SYSTEMS (ESS) MAJOR FUNCTIONS OF SYSTEMS:

• DECISION SUPPORT SYSTEMS (DSS)
• MANAGEMENT INFORMATION SYSTEMS (MIS)
• KNOWLEDGE WORK SYSTEMS (KWS)
• OFFICE AUTOMATION SYSTEMS (OAS)
• TRANSACTION PROCESSING
SYSTEMS (TPS)
*
• Sales management, market research,
promotion, pricing, new products
MAJOR APPLICATION SYSTEMS:
• Sales order info system, market
research system, pricing system
*
Laudon & Laudon MIS, 7th Edition. Pg. 2.2
TYPICAL TPS APPLICATIONS
Manufacturing & 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
*
TYPICAL TPS APPLICATIONS
Human 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
* *
KNOWLEDGE WORK SYSTEMS (KWS)
KNOWLEDGE LEVEL
• INPUTS: DESIGN SPECS
• PROCESSING: MODELLING
• OUTPUTS: DESIGNS, GRAPHICS
• USERS: TECHNICAL STAFF
EXAMPLE: ENGINEERING WORK
STATION
TYPICAL TPS APPLICATIONS
Finance & Accounting Systems
MAJOR FUNCTIONS OF SYSTEMS:
• Budgeting, general ledger, billing,
cost accounting
MAJOR APPLICATION SYSTEMS:
• General ledger, accounts receivable,
accounts payable, budgeting, funds
management systems
*
TYPICAL TPS APPLICATIONS
Other 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
OFFICE AUTOMATION SYSTEMS (OAS)
• TOWARD A “PAPERLESS” OFFICE
• REDESIGN OF WORK FLOW
• INTEGRATED SOFTWARE
• ERGONOMIC DESIGN
• BRIGHT, CHEERFUL
WORK SPACE
EXAMPLE: PRESENTATION GRAPHICS
Laudon & Laudon MIS, 7th Edition. Pg. 2.3

MANAGEMENT INFORMATION MANAGEMENT INFORMATION

SYSTEMS (MIS) SYSTEMS (MIS)

MANAGEMENT LEVEL • STRUCTURED & SEMI-STRUCTURED

• INPUTS: HIGH VOLUME DATA DECISIONS
• PROCESSING: SIMPLE MODELS • REPORT CONTROL ORIENTED
• OUTPUTS: SUMMARY REPORTS • PAST & PRESENT DATA
• USERS: MIDDLE MANAGERS • INTERNAL ORIENTATION
• LENGTHY DESIGN PROCESS
EXAMPLE: ANNUAL BUDGETING *

TPS DATA FOR MIS APPLICATIONS

Example of MIS Report
TPS MIS
Order Processing SALES
DATA
System

ORDER FILE UNIT

PRODUCT
Materials Resource COST MIS REPORTS
Planning System
PRODUCT
CHANGE
PRODUCTION MASTER FILE
DATA
General Ledger
EXPENSE MANAGERS
System DATA

ACCOUNTING FILES MIS FILES

DECISION SUPPORT SYSTEMS (DSS) DECISION SUPPORT SYSTEMS (DSS)

MANAGEMENT LEVEL • FLEXIBLE, ADAPTABLE, QUICK

• INPUTS: LOW VOLUME DATA • USER CONTROLS INPUTS/OUTPUTS
• PROCESSING: INTERACTIVE • NO PROFESSIONAL PROGRAMMING
• OUTPUTS: DECISION ANALYSIS • SUPPORTS DECISION PROCESS
• USERS: PROFESSIONALS, STAFF • SOPHISTICATED MODELING TOOLS
*
EXAMPLE: CONTRACT COST ANALYSIS
Laudon & Laudon MIS, 7th Edition. Pg. 2.4

EXECUTIVE SUPPORT SYSTEMS (ESS) EXECUTIVE SUPPORT SYSTEMS (ESS)

STRATEGIC LEVEL • TOP LEVEL MANAGEMENT

• INPUTS: AGGREGATE DATA • DESIGNED TO THE INDIVIDUAL
• PROCESSING: INTERACTIVE • TIES CEO TO ALL LEVELS
• OUTPUTS: PROJECTIONS • VERY EXPENSIVE TO KEEP UP
• USERS: SENIOR MANAGERS • EXTENSIVE SUPPORT STAFF
*
EXAMPLE: 5 YEAR OPERATING PLAN

INTERRELATIONSHIPS AMONG SYSTEMS

SYSTEMS FROM A FUNCTIONAL
PERSPECTIVE
ESS
• SALES & MARKETING SYSTEMS
• MANUFACTURING & PRODUCTION
MIS DSS SYSTEMS
• FINANCE & ACCOUNTING SYSTEMS
• HUMAN RESOURCES SYSTEMS
KWS
*
TPS
OAS

SALES & MARKETING INFORMATION MANUFACTURING

SYSTEM INFORMATION SYSTEM

SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL

MACHINE CONTROL CONTROL ACTIONS OF EQUIPMENT OPERATIONAL

ORDER PROCESSING ENTER, PROCESS, TRACK ORDERS OPERATIONAL

COMPUTER-AIDED-DESIGN DESIGN NEW PRODUCTS KNOWLEDGE

MARKET ANALYSIS IDENTIFY CUSTOMERS & MARKETS KNOWLEDGE

PRODUCTION PLANNING DECIDE NUMBER, SCHEDULE OF PRODUCTS MANAGEMENT

PRICING ANALYSIS DETERMINE PRICES MANAGEMENT
FACILITIES LOCATION DECIDE WHERE TO LOCATE FACILITIES STRATEGIC

SALES TRENDS PREPARE 5-YEAR FORECASTS STRATEGIC

Laudon & Laudon MIS, 7th Edition. Pg. 2.5

FINANCE & ACCOUNTING HUMAN RESOURCES INFORMATION

INFORMATION SYSTEM SYSTEM

SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL

TRAINING & DEVELOPMENT TRACK TRAINING, SKILLS, APPRAISALS OPERATIONAL

ACCOUNTS RECEIVABLE TRACK MONEY OWED TO FIRM OPERATIONAL

CAREER PATHING DESIGN EMPLOYEE CAREER PATHS KNOWLEDGE

PORTFOLIO ANALYSIS DESIGN FIRM'S INVESTMENTS KNOWLEDGE

COMPENSATION ANALYSIS MONITOR WAGES, SALARIES, BENEFITS MANAGEMENT

BUDGETING PREPARE SHORT TERM BUDGETS MANAGEMENT
HUMAN RESOURCES PLANNING PLAN LONG-TERM LABOR FORCE NEEDS STRATEGIC

PROFIT PLANNING PLAN LONG-TERM PROFITS STRATEGIC

HTM304: Management Information EXAMPLES OF BUSINESS PROCESSES

Systems
• MANUFACTURING & PRODUCTION:
Assembling product, checking
INFORMATION SYSTEMS IN THE quality, producing bills of materials
ENTERPRISE • SALES & MARKETING: Identifying
customers, creating customer
January 30, 2003 awareness, selling
*
Oliver Yao

EXAMPLES OF BUSINESS PROCESSES SUPPLY-CHAIN MANAGEMENT

ORDER PLANNING &
CUSTOMERS SUPPLIERS
• FINANCE & ACCOUNTING: Paying PROCESSING FORECASTING

creditors, creating financial

PROCUREMENT
statements, managing cash accounts ACCOUNTING INTRANET
• HUMAN RESOURCES: Hiring
PRODUCTION
employees, evaluating performance,
enrolling employees in
benefits plans LOGISTICS
SHIPPING INVENTORY DISTRIBUTORS
SERVICES
*
Laudon & Laudon MIS, 7th Edition. Pg. 2.6

HOW INFORMATION SYSTEMS

TRADITIONAL
FACILITATES SUPPLY CHAIN
MANAGEMENT VIEW OF SYSTEMS

DECIDE WHEN, WHAT TO PRODUCE, STORE, MOVE…
RAPIDLY COMMUNICATE ORDERS…
TRACK ORDER STATUS…
CHECK INVENTORY AVAILABILITY, MONITOR LEVELS…
TRACK SHIPMENTS…
PLAN PRODUCTION BASED ON ACTUAL DEMAND…
RAPIDLY COMMUNICATE PRODUCT DESIGN CHANGES…
PROVIDE PRODUCT SPECIFICATIONS…
SHARE INFORMATION ABOUT DEFECT RATES,
RETURNS...
• WITHIN THE BUSINESS: There are
functions, each having its uses of
information systems
• OUTSIDE THE ORGANIZATION’S
BOUNDARIES: There are customers
and vendors
FUNCTIONS TEND TO WORK IN
ISOLATION
*

ENTERPRISE SYSTEM
BENEFITS OF ENTERPRISE
SYSTEMS
Manufacturing Accounting
• FIRM STRUCTURE & ORGANIZATION:
One organization
Business Processes
• MANAGEMENT: Firmwide knowledge-
Vendors Enterprise-wide Customers
based management processes
Business Processes
• TECHNOLOGY: Unified platform
• BUSINESS: More efficient operations &
Human
Finance
customer-driven business processes
Resources
*
Sales &
Marketing

CHALLENGES OF ENTERPRISE
SYSTEMS INDUSTRIAL NETWORKS

• DAUNTING IMPLEMENTATION LINK FIRMS INTO INDUSTRY-WIDE

• HIGH UP FRONT COSTS & FUTURE SYSTEM
BENEFITS • HORIZONTAL: Link firms in same
• INFLEXIBILITY industry, including competitors
• HARD TO REALIZE STRATEGIC • VERTICAL: Link firm with suppliers
VALUE in same industry
* *