Chapter 2

INFORMATION
SYSTEMS IN THE
ENTERPRISE

2.1 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Major Types of Systems

• Executive Support Systems (ESS)

• Decision Support Systems (DSS)
• Management Information Systems (MIS)
• Transaction Processing Systems (TPS)

2.2 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

Enterprise Systems

2.3 Figure 2-17 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

Business Processes and Information Systems

Business processes

• Manner in which work is organized,

coordinated, and focused to produce a
valuable product or service

• Concrete work flows of material,

information, and knowledge—sets of
activities

2.4 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

Business Processes and Information Systems

• Unique ways to coordinate work,

information, and knowledge

• Ways in which management chooses

to coordinate work

2.5 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

Traditional View of the Systems

Figure 2-16
2.6 © 2003 by Prentice Hall
 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

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

2.7 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Types of TPS Systems

Figure 2-4
2.8 © 2003 by Prentice Hall
 System Architecture: Transaction Processing
System

2.9 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Financing and 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

2.10 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Sales and 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

2.11 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Manufacturing and 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

2.12 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Human Resource 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

2.13 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Human Resource Systems

Figure 2-11
2.14 © 2003 by Prentice Hall
 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Payroll TPS

Figure 2-3
2.15 © 2003 by Prentice Hall
 System Example: Payroll System (TPS)

2.16 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Overview of Inventory Systems

Figure 2-10
2.17 © 2003 by Prentice Hall
 Management Information System (MIS)

• Management Information System (MIS)

– An MIS provides managers with information and
support for effective decision making, and
provides feedback on daily operations.
– MIS provides information to the users in the form
of reports
– Output, or reports, are usually generated through
accumulation of transaction processing data.
– MIS is an integrated collection of subsystems,
which are typically organized along functional
lines within an organization.
18
2.18 © 2003 by Prentice Hall
 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Management Information System (MIS):

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

Example: Annual budgeting

2.19 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Management Information System (MIS)

• Structured and semi-structured decisions

• Report control oriented

• Past and present data

• Internal orientation

• Lengthy design process

2.20 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Management Information System (MIS)

Figure 2-5
2.21 © 2003 by Prentice Hall
 System Architecture: Management
Information System

2.22 © 2003 by Prentice Hall

MIS Management Information System

Creates reports managers can use

to make routine business decisions
• Scheduled reports
• Key-indicator reports
• Exception reports
• Ad hoc (demand) reports
• Drill-down reports

2.23 © 2003 by Prentice Hall

 Outputs of a Management Information
System

Scheduled
Reports
Produced
periodically, or
on a schedule
(daily, weekly,
monthly).

24
2.24 © 2003 by Prentice Hall
 Key-Indicator Report
Summarizes the previous day’s critical activities
and typically available at the beginning of each
day.
2.25 © 2003 by Prentice Hall
 Demand
Report
Gives certain
information at a
manager’s
request.

Exception
Report
Automatically
produced when a
situation is unusual
or requires
management action.
26
2.26 © 2003 by Prentice Hall
Drill Down
Reports
Provide detailed
data about a
situation.

27
2.27 © 2003 by Prentice Hall
 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Decision Support System (DSS):

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

Example: Contract cost analysis

2.28 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Decision Support System (DSS)

Figure 2-7
2.29 © 2003 by Prentice Hall
 Four Types of Models

2.30 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Decision Support System (DSS)

Figure 2-6
2.31 © 2003 by Prentice Hall
 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Executive support system (ESS)

• Top level management

• Designed to the individual

• Ties CEO to all levels

• Very expensive to keep up

• Extensive support staff

2.32 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Executive Support System (ESS):

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

Example: 5-year operating plan

2.33 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Executive Support System (ESS)

2.34
Figure 2-8
© 2003 by Prentice Hall
 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

Business Processes and Information Systems

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

2.35 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

The Order Fulfillment Process

Figure 2-12
2.36 © 2003 by Prentice Hall
 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Types of Information Systems

2.37 Figure 2-1 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

TYPES OF INFORMATION SYSTEMS

Figure 2-2
2.38 © 2003 by Prentice Hall
 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

INTERRELATIONSHIPS AMONG SYSTEMS

Figure 2-9
2.39 © 2003 by Prentice Hall
2.40 © 2003 by Prentice Hall
 Chapter 2

INFORMATION
SYSTEMS IN THE
ENTERPRISE

2.41 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

KEY SYSTEM APPLICATIONS IN THE ORGANIZATION

Knowledge Work Systems (KWS):

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

Example: Engineering work station

2.42 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

Business Processes and Information Systems

Information systems help organizations

• Achieve great efficiencies by automating

parts of processes

• Rethink and streamline processes

2.43 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

Human Resource Systems

SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL

TRAINING & DEVELOPMENT TRACK TRAINING, SKILLS, APPRAISALS OPERATIONAL

CAREER PATHING DESIGN EMPLOYEE CAREER PATHS KNOWLEDGE

COMPENSATION ANALYSIS MONITOR WAGES, SALARIES, BENEFITS MANAGEMENT

HUMAN RESOURCES PLANNING PLAN LONG-TERM LABOR FORCE NEEDS STRATEGIC

2.44 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

Examples of Business Processes

• Finance and accounting: Paying

creditors, creating financial statements,
managing cash accounts

• Human Resources: Hiring employees,

evaluating performance, enrolling
employees in benefits plans

2.45 © 2003 by Prentice Hall

 Essentials of Management Information Systems
Chapter 2 Information Systems in the Enterprise

INTEGRATING FUNCTIONS AND BUSINESS PROCESSES

Examples of Business Processes

• Manufacturing and production:

Assembling product, checking quality,
producing bills of materials

• Sales and marketing: Identifying

customers, creating customer awareness,
selling

2.46 © 2003 by Prentice Hall