Chapter

INFORMATION

SYSTEMS IN THE
ENTERPRISE
This lecture is based on materials in Essentials of Management Information Systems by Laudon and Laudon 5/e and the summary slides available on their website. However, some material herein also represents the perspective of Gregory Rose of Washington State University. Where materials are taken verbatim from the Laudon and Laudon slides, they represent the views of the book and are copyrighted by the authors and the publisher. Where the sequence or content differ, the content is 1 considered the work of Gregory Rose with all copyrights reserved.

Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise OBJECTIVES

This lecture will cover the following perspectives about software: From the software developers perspective From the end users perspective (who is using and for what goal) From the business process perspective
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Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Types of Information Systems

These perspectives provide ways to view various subtypes of systems in business Why do you need to be aware of the various subtypes of systems?
For discussing your needs with different stakeholders For allocation of resources This is your catalog of what you could buy if you had all the resources in the World
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Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

From the software developers perspective Software is mostly a collection of software components assembled and reused as needed (like Lego blocks) Developers created these components to accumulate in the marketplace over time

Once only automated small subset of tasks Components now exist for just about any business function Now have components for sale individually at one extreme and bundled together as Inter4 organizational services at the other

Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

From the software developers perspective (continued) Applications dont really exist except as a way to describe a set of software services
Sold based on marketing and sales Many services share components but are bundled and marketed differently based on user group and task Sales staff may end up selling multiple software systems that are actually 90%+ the same code to your firm. 5

Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Types of Information Systems

From the end users perspective Different software helps different groups of users at different levels within business hierarchy Services are marketed based on
what level in the hierarchy user is located and what goal they are using the system for
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Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

From the end users perspective (continued)

Overview of Operational Level Systems: Produces routine answers. Nuts and bolts of the business.

Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

From the end users perspective (continued)

Overview of Management Level Systems: Support monitoring, controlling, decision-making, and administration by middle management.

Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

From the end users perspective (continued)

Overview of Strategic Level Systems: Information Systems that Support LongRange Planning of Senior Management.

Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

From the end users perspective (continued)

Marketing terms for services at different levels

Level 1-Transaction Processing Systems (TPS) Level 2-Management Information Systems (MIS) Level 2-Decision Support Systems (DSS)

Level 3-Executive Support Systems (ESS)

Lets discuss each

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Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

From the end users perspective (continued)

Lowest Level (operational)Transaction Processing Systems (TPS):

Inputs: Transactions or events Processing: Sorting; listing; merging; updating Outputs: Detailed reports; lists; summaries Users: Operational personnel; supervisors

A computerized system that performs and records daily routine transactions necessary to the conduct of the business Example: payroll system; production instructions11

Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

From the end users perspective (continued)

Level two (management level)Management Information System (MIS):

Inputs: Summary transaction data Processing: Simple models; low level analysis Outputs: Summary reports Users: Middle managers

Example: Weekly, monthly, and annual resource allocation. Not five year plans and not daily details, but something in between.
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Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

From the end users perspective (continued)

Management Information System (MIS) Some characteristics of MIS that make them differ from DSS (on next slide)
Structured and semi-structured decisions Output is often the kind that you need routinely each term (quarter, month, year) to evaluate how to proceed next (quarterly sales data for past 5 years) Generally, you can eyeball your decision

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Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

From the end users perspective (continued)

Also level two (management level)Decision Support System (DSS):

Inputs: databases optimized for statistical analysis Processing: Interactive. Simulations and statistical analysis Outputs: Responses to queries; statistical test results. Users: Professionals, staff

Example: Could answer the following query:

We need to trim 5% of our menu offerings to limit complexity in operations. Which items are the worst performing; are most likely to lead to sales of other products left on the menu, and have the most ingredients unique to their recipes?
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Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

From the end users perspective (continued)

Top level (strategic level)Executive Support System (ESS): Inputs: Aggregate data. Internal and external Processing: Interactive and graphical simulations Outputs: Projections Users: Senior managers Example: 5-year operating plan. Answer question like what are long-term industry cost trends and how are we doing relative to them? Gets data from all internal IS plus external industry data bases 15

Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

From the end users perspective (continued)

Characteristics of Executive Support Systems (ESS)

Top level management Designed to the individual Ties CEO to all levels Very expensive to keep up

Extensive support staff

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Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

From the end users perspective (continued)

INTERRELATIONSHIPS: -These systems can share data and be interconnected -TPS generally feed all other systems - MIS generally indicate when a DSS is needed and provide input for them to crunch - ESS take all internal data but usually only summary data from MIS and DSS level Output data from one is input data for others to process

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Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

From the end users perspective (continued)

When talking to sales staff with these terms, what matters here is (1) who is using the system and (2) what is their objective A single software package like Microsoft Office or even an application like Microsoft Excel could be classified as any or all of the following: DSS, TPS, MIS, or ESS (albeit, a trivial ESS, DSS, etc.) A service is provided by the CBIS is a solution. It is a DSS, etc., depending on what solution in the corporate hierarchy it serves.
Analogy: a BMW is either a luxury car or an expensive paper weight depending on what you use it for. But it 18 can be either or both.

Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

From the business process perspective

We now understand what the types of systems are sold based on hierarchy within an organization Services are also marketed based on business process Business processes Def: manner in which work is organized, coordinated, and focused to produce a valuable product or service
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Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

From the business process perspective

Buying software based on business process perspective (continued)

Has specialists who develop, sell, implement, and maintain just those niche processes Within a given industry, each specialized type of software exists Usually, specialists exist within each functional area and industry

(e.g., my old firm hired technologists and taught them about foodservice, or foodservice people and taught them about technologybut both skills were 20 needed for foodservice management software)

Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

From the business process perspective

Google on a function and industry and see for yourself what is available

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Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

From the business process perspective

Not all business processes are contained within a single functional area Many business processes are cross-functional

Cross-Functional Business Processes Def: Transcend boundary between sales, marketing, manufacturing, and research and development (e.g., order fulfillment process)

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Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

The Order Fulfillment Process

Here you see that order fulfillment cuts across sales, accounting, and manufacturing and distribution
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Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

From the business process perspective

The largest business process is the entire business itself If goes across entire enterprise, is called an Enterprise System (ERP) If across multiple firms is interorganizational system (IOS). Eliminates media breaks! This way software has a single point of management to handle integration and settle disputes. Standardization of hardware, software, and data allows for easier maintenance Share data and avoid redundancy
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Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

From the business process perspective

Problems with firm-wide software

Difficult to build: Often manual processes need to be changed at same time. Creates political and motivational problems Technology: Standardization of hardware, software, and data difficult if systems are legacy Centralized organizational coordination and decision making:
Takes control away from end users Makes decision making across groups easier but may be bad decisions.

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Essentials of Management Information Systems

Chapter 2 Information Systems in the Enterprise Conclusion

That is the menu of what solutions are possible Also provides the categorization you need to use to discuss what you are looking to acquire Next up: discussions on how to decide which software to acquire given resources are finite

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