2 IS ACTIVE DIFFERENT LEVELS Operational-level systemsSupport operational managers by monitoring the day-to-day’s elementary activities and transactions of the organization. e.g. TPS and OASKnowledge-level systemssupport knowledge and data workers in designing products, distributing information, and coping with paperwork in an organization. e.g. KWS.Management-level systemssupport the monitoring, controlling, decision-making, and administrative activities of middle managers. e.g. MIS, DSSStrategic-level systemssupport long-range planning activities of senior management. e.g. ESS
3 Classification of IS Information Systems Operations Support System Management Support SystemTransaction processing systemsOffice automation systemsDecision support systemsExecutive information systemsManagement information systemsProcess control systems
5 TPS The first Computer-based Information System Called EDP systems. Latter it was coined as Account information system (AIS)Today known as TPSTPS is an organized collection, store and dissemination of people, procedures, S/W & DB, devices used to process the basic business transaction data and records to complete business transactions.Transaction Processing Systems (TPS): designed to reflect large volumes of routine repetitive transactions or routine operations /activities or tasks of a firm which are related to customer contacts.Most of the information produced by the TPS are for the use of the person outside the organization eg employees are paid at regular intervals, expenses are monitored are compared to budget
6 Features of TPSProvide foundation data for many other systems eg they provide support for decision makers through MIS & DSSEssential to business success even today, as TPS work with a large amount of I/P & O/P data & use this data to update the official records of the company.These information play a vital role in providing value to the customers E.g. transactions like sales to customers, customer orders,, accounts payable ,payments to suppliers, A/C receivables , Billing, payroll, supplier payments are examples.
8 OIS Operations Information Systems (OIS): Gathers comprehensive data, organizes it and summarizes it in a form valuable to managers.Can help managers with non-routine decisions such as customer service and productivity.Provides sales, inventory & performance oriented data.
9 Management Information System TPS were generally unable to transform the volumes of data into aggregated ,stored ,organized and processed information needed by the managers.Over the time IS became aware of underlying logic of the processes that they followed in problem solving and structured decision making.Integrated collection of people, procedures, DB, & devices that collect, process, store and disseminate information to support decision making and Problem Solving and to help & achieve organizational goals”.MIS role is to provide the right information to the right person in the right format at right time it also answer queries and forecast trends and emphasizes on producing periodic/routine reporting on known and anticipated issues in different functional areas of businesses eg a daily list of employees and the hours they work, or a monthly report of expenses as compared to a budget.
10 Objectives of MISAn Information system at the management level of an organization that serves the functions of planning, controlling, and decision making by providing routine summary, exception reports and results of mathematical simulation.MIS is a computer based system , operational at management level/Functional level.The information provided by the MIS describes the firm or one of its major system in the terms ofWhat happened in the past,What is happeningWhat is likely to happen in future.Primary purpose of an MIS is to help an org to archive its goals by providing managers with insight into the regular operations of the orgMIS help to control, organize & plan the org program more effectivelyThese systems monitor, organize, summarize, and display information for supporting the transaction processing systems and routine decision making in the functional areas.10
11 MIS Vs PS Transaction Processing Systems (TPS) Support operationManagement and controlRoutine, normal operationsManagement Information Systems (MIS)Provide decision-making support for routine, structured decisionsClosely linked to and fed by TPS
12 MIS TPS MIS Order Processing system Sales data Customer file Product CostdataMaterialsMgtsystemProductionfileReportsProductiondataGeneralLedgersystemExpensesdataMangersA/Cfile
13 SUMMARY OF MISMIS is activities to manage information for problem solving and decision making in an entity by managed the following activities:Acquiring information by gathering data and processed the data to be the valuable information efficientlyUsing the information in the most effective wayDiscarding the information at the proper timeTYPE: Management-levelINPUTS: high volume dataPROCESSING: simple modelsOUTPUTS: summary reportsPeriodic Schedule reportsDemand or Response reportException reportPush reportUSERS: middle managersDECISION-MAKING: structured to semi-structuredEXAMPLE: annual budgetingMIS support structured decisions at the operational and management control levels. However, they are also useful for planning purposes of senior management staff.
14 Skills required in MIS Computer literacy understanding of computer terminologya recognition of the strength and weakness of the computeran ability to use the computerInformation literacyUnderstanding how to use information at each step of problem solving process.Understanding where information can be obtainedUnderstanding how to share information with other
15 MIS USES SOFTWAREMIS produces information using two types of software:1- Report –writing software that produces both periodic and special reports (special reports are also called ad-hoc reports) e.g. database management systems.2-Mathematical models are used to produce information as a result of simulation of the firm’s operations. Mathematical models that describe the firm’s operations can be written in any programming language.However special modeling languages make the task more easier and faster.15
16 MIS USERS Cont…Managers require information to identify problems ,develop alternative solution, select the best ones, and finally review the consequences of their decision.MIS are used by managers ,however other non-manager inside the firm as well as persons and organizations outside the firm. professionals use the out puts of MIS.Managers are the individuals who need the information vary widely.ManagersThe idea of using the computer as a management information system was a breakthrough because it recognized managers’ need for problem solving information. Embracing the MIS concept made several firms develop applications specifically aimed at management support.Non-managersNon-manages and staff specialists also use the MIS output.Persons & organizations in the firm’s environmentUsers outside the company benefit from the MIS as well. They can be customers receiving invoices, stockholders getting dividend checks, and the federal government checking tax reports.
17 VIRTUAL OFFICE SYSTEMS Systems that enable office automation by using EDP and communication facilities e.g. VOIP, Video conferencing, FAX, Computer conferencing, voice -mail, , audio conferencing to make manager more efficient.Now a days these systems are referred as personal productivity systems (PPS) e.g. PDA digital dairies etc.The ability of office automation also led the concept of Virtual Offices that is the performance of office activities independent of a particular physical location eh telecommuting, hoteling and other telecommuting-services.Hoteling is a extended concept of telecommuting that defines that come to the central office only when needed.Because all employees of telecommuting do not have all facilities at their homes.Hotels are the central offices with the all telecommuting facilities for all business processes.Virtual offices have made managers more available to customer and others within the organization.
18 DSSInformation system at the management level of an organization that combines data and sophisticated analytical models or data analysis tools to support semi-structured and unstructured decision making.However latter on DSS were subsequently expanded to encompass group decision making ,AI and on-line analytical processing (OLAP)It offer greater computing as well as graphical CapabilitiesSupport all phases of decision making and a variety of decision-making processes and stylesDSS SUMMARYTYPE: Management-levelINPUTS: low volume dataPROCESSING: simulations, analysisOUTPUTS: decision analysisUSERS: professionals, staff managersDECISION-MAKING: semi-structuredEXAMPLE: sales region analysis
19 Decision Support Systems Decision Support Systems (DSS): provides interactive models to help managers make better decisions.Excellent for unusual, non-programmed decisionsAnalyzes investment potential, new product pricing.Often used by middle and upper managersDSS use sophisticated analysis & modeling tools.DSS Levels of AnalysisSensitivity AnalysisThe study of the effect that changes in one or more parts of a model have on other parts of the model.What-if AnalysisChecks the impact of a change in the assumptions or other input data on the proposed solution.Goal-seeking AnalysisFind the value of the inputs necessary to achieve a desired level of output
20 Components and Structure of DSS Data ManagementIncludes the database containing relevant data for the decision situationUser InterfaceEnables the users to communicate with and command the DSSModel management softwareProvides a variety of solution modelsIncludes software with financial, statistical, graphical, project management, management science, or other quantitative modelsDialogue ManagerAllows user interaction with DSSKnowledge ManagementProvides knowledge for solution of the problem; supports any of the other subsystems or act as an independent component.
23 Cont……1.DSS offer users flexibility, adaptability, and a quick response.2. DSS operate with little or no assistance from professional programmers.3. DSS provide support for decisions and problems whose solutions cannot be specified in advance.4. DSS use sophisticated data analysis and modelling tools.NOTE: A DSSS take a rifle approach to solve an un-structured problem where as an MIS takes a shotgun approach by providing a large group of problem solving with information to solve wide range of problems
24 General Structure of DSS Model BaseDBDSS S/WproductcomputerAnalytical modelDBComprises ofprocesscost1.Behaviour Model2.Mgt science Model3.OR ModelGraphics&Reportscompetitors
25 Differences b/w MIS & DSS Decision support providedProvide inform. About the performance of the orgProvide inform. & support techniques to analyze specific problems or opportunities. Not innate human decision. Can’t overcome a faulty decision makingInformation form & frequencyPeriodic, exception, demand & push report & responsesInteractive inquiries & responsesInformation formatPre specified & fixed formatFlexible & adaptable formatInformation Processing methodologyInform. Produced by extraction & manipulation of business dataInform. Produced by analytical modeling of business data
28 Enterprise SystemsAs MIS and DSS were developed without an overall master plan. Each of them is sparing support at individual department level.During 1990 the firms began to integrate these system and consequently establishing an integrated system application that is aimed at meeting the needs of particularly all types of organization in its all types of functional areas.How to control all major business processes with a single s/w architecture in real timeThis was named as ERP system.An integration of all of (MISs) across the firm is known as enterprise resource planning system.An ERP is a cross functional computer based system that enables the management of all of the firm’s resources on an organization-wide basis.Integrated programs that can manage a company’s entire set of business operations, Often coordinate planning, inventory control, production and orderingERP provides a support systems in the transaction processing, updating, & reporting across the functions. ERP is a package encompassing all major functions of the business.
29 Cont…ERP is a cross functional enterprise systems driven by an integrated suite of S/W modules that supports the basic internal business processof a company.ERP packages build information base & provide knowledge base business function mgt. The ERP is the main system, interfaced (or) assisted by the other systems in the org. These systems provide the DB to the ERP.Enterprise systems provide a technology platform where org can integrate & co-ordinate their major internal business processes. They address the problem of organizational inefficiencies created by isolated island of information business processes & technology.ERP is a firm wide single IS that integrate key business processes so that information can flow freely between different parts of the firm to solve the business problems.ERP Systems can co-ordinate activities like decisions, & knowledge across many diff. functions, levels & business units in a firm. It includes enterprise systems or ERP, SCM, CRM, & KMS
30 Basic features of ERP Separation of the program code & the data areas Command languageScreen based flow controlCommon service functionsTransaction flow control & help functionsWord processing, text editing & action messageDiagnostic functionsBusiness values embedded in the processExtensive use of stored procedures, triggers & alertsStrange wise cost data capture for analysis & decision makingResources planning, scheduling & optimizationCan run in different network environment
31 Challenges of ERP Daunting Implementation High Up-front Costs and Future BenefitsInflexibilityExpensive & time in implementationDifficulty implementation changeRisks in using one vendorRisk of implementation failure
32 BENEFITS OF THE ERP Better management of resources Customer satisfactionBusiness operation transparency b/w business partnersThe process become faster due to work group technologyThe ERP scope enlarged through the internet/intranet accessDue to the client/server, the application of object technology & use of the front end tools, the process changes can be easily carried out.The ERP design is proactive, it make mgt alert at a no. of points like demanding the decisions.ERP still remain a valid solution with the expansion of business as it is a scalable architecture.Firm structure and organization: One OrganizationManagement: Firm wide Knowledge-based Management ProcessesTechnology: Unified PlatformBusiness: More Efficient Operations and Customer-driven Business Processes
33 ERP SELECTIONOnly a few vendors market offers an ERP packages. Even world’s two largest companies like Microsoft and IBM do not make ERP yet they run large portions of their businesses using software from ERP vendors.One ERP provider is SAP, is a large multinational company. Based in Germany.However Oracle and Siebel are main SAP competitors.PeopleSoft was another formerly a competitor ,but in Jan 2005 Oracle acquired PeopleSoft.Each product has its own USP & differs in a no.of ways in content, scope, in case of implementation etc.The selection can be made on 3 dimensions. It as follows;1. Vendor Evaluation2. Technology Evaluation3. ERP solution Evaluation
34 Vendor Evaluation Business strength of the vendor Product share in total business of the vendorFuture plans of the vendorMarket reach & resource strength of the vendorAbility to execute the ERP solutionPerspective plan of the ERP improvement with technology developmentBusiness philosophy of the vendor
35 Technology Evaluation Client server architecture & its implementation 2 tier or 3tireObject orientation in development & methodologyInterface mechanism: data transfer, real time accessSupport system technology like bar coding, EDI, imaging, comm., networkH/W – S/W configuration mgtOperating system & its levels of usage in the systemUse of case tool, screen generators, report writers, screen printers & batch processorHandling of client/server data & application logic
36 ERP Solution Evaluation ERP fit for the business of the org in terms of the functions, features & processesDegree of deviation from the standard ERP productEase of use: easy to learn, implement & trainFlexible design & ability to migrate to the ERP environmentRating on performance, response & integrationproduct quality in terms of security, reliability, & precision in resultsSolution architecture & technologyDocumentation for system handling & administration
37 Extended EnterprisesExtended Enterprises: Networks linking systems of multiple firms in an industry. Also called extended enterprises.Vertical industrial networks Networks for integrating the operations of a firm with its suppliers.Horizontal industrial networks Networks for linking firms across an entire industry.