Information Systems and Organisations NCC Education - Title Master Lecture 3: Internal IS and Enterprise Systems

Scope and Coverage This topic will cover: Information systems internal to the organisation Enterprise wide systems Co-ordination roles of information systems NCC Education - Slide Master

Learning Outcomes By the end of this topic students will be able to: Understand how value is added within an organisation and how different types of IS contribute Understand the relevance of integrated enterprise information systems in modern organisations Relate internal and enterprise systems to different perspectives and approaches to IS implementation

Contents Value chain and value system Internal applications Enterprise systems Emphasis – Technology and Organisations

Functions and Departments Specialisation leads to Departmental organisation But why have specialisation? Bureaucracy (an efficient way to organise?) Quality and consistency of outcome through standardisation of procedures IS leads to possibilities of automating

Bureaucracy - Definitions and Sources Simple Definition www.businessdictionary.com/definition/bureaucracy.html Extended discussion with some history http://lilt.ilstu.edu/rrpope/rrpopepwd/articles/bureacracy2.html

Organisations Create Value Using Specialisation Primary Activities deliver the main product(s) and service(s) Primary Activities are where the principal Value Creation of the organisation occurs Secondary Activities support Primary Activities (Secondary Activities are often good candidates for outsourcing)

Value Chain (or Value System) Difference between financial Resource used and Income (profit or transfer to reserves) Secondary Activities Firm Infrastructure Human Resource Management Technology Development Margin Procurement OPERATIONS Service Marketing and Sales supplies manuf shipping Primary Activities

Airline Industry Value Chain FIRM INFRASTRUCTURE -Financial Policy - Accounting -Regulatory Compliance - Legal - Community Affairs HUMAN RESOURCE MANAGEMENT Flight, route and yield analyst training Pilot Training Safety Training Baggage Handling Training Agent Training In-flight Training Product Development Market Research Computer Reservation System, In-flight System Flight Scheduling System, Yield Management System Baggage Tracking System TECHNOLOGY DEVELOPMENT Information Technology Communications PROCUREMENT Route Selection Passenger Service System Yield Management System (Pricing) Fuel Flight Scheduling Crew Scheduling Facilities Planning Aircraft Acquisition Ticket Counter Operations Gate Operations Aircraft On-board Service Baggage Handling Ticket Offices Baggage System Flight Connections Rental Car and Hotel Reservation System Promotion Advertising Advantage Program Travel Agent Programs Group Sales Lost Baggage Service Complaint Follow-up INBOUND LOGISTICS OPERATIONS OUTBOUND LOGISTICS MARKETING AND SALES SERVICE Figure 4-3 Adapted with the permission of Michael E. Porter from Competitive Advantage: Creating and Sustaining Superior Performance, copyright 1985 by Michael E. Porter.

Anthony Triangle Functional Activities Strategic Planning Tactical Budgets Tactical Profit measures Credit control Knowledge Operational Financial transactions HR FINANCE MARKETNG ….. ….. e.t.c. Functional Activities

Applications Tactical Knowledge Operational Departments Weekly/Monthly Sales Weekly/Monthly Tactical Credit Control Knowledge Daily/Hourly Financial transactions Operational Departments Finance HR Operations Sales ... e.t.c. Customer Accounts Financial Accounts Personnel Records Stock Control Sales Records Sales Ledger Purchase Ledger MRP Forecasting

Applications - Linkages Some linkages between Departmental Applications Financial Accounts Personnel Records Staff Changes Purchase Values Stock Control Purchase Ledger Purchase Details Material Requisitions Sales Values MRP Forecasts Sales Ledger Sales Records Sales Details Outstanding Balances Customer Accounts Customer Activity Forecasting

Linkage Problems Accurate capture of Transactions Timing of flows Definitions Consistency of data (identity) Tendency of ‘systems’ to multiply Transcription Human Error ...................................more?

Linkage Required to Record and Coordinate Departmental Activity Examples… Sales with Manufacturing and Stock Control Personnel with Finance Purchasing with Sales and Stock Control

Enterprise Systems Data stored and entered ONCE Linkages AUTOMATICALLY accomplished Efficient use of staff time (less staff to make manual errors such as transcription errors) Enterprise RELIES upon accuracy and timeliness of information Supports efficient and effective business processes

ES Addresses THESE Accurate capture of Transactions Timing of flows Definitions Consistency of data (identity) Tendency of ‘systems’ to multiply Transcription Human error

ES Depends Upon These… Accurate capture of transactions Definitions Effective integration of working practices and processes within and between departments

MIS in Essence Transaction Costs Transaction Recording Performance Monitoring Performance Margins & Profitability Customer Information Enterprise Analysis

Problems Transaction Data may be missing, inaccurate or inconsistent between departments and operational units Difficulties with Integration to produce Measures Time Delays Definition of Requirements Handling Ad-Hoc requests (e.g. to determine the response to a change in business environment) ES aim to address all of these

Coordinating the Value System 2. Interfaces between primary and support activities Interfaces -> 3 types Information to assist primary activities Central information requirements 1. Interfaces and critical information flows between primary activities Removing bottlenecks and delays Accuracy and consistency of information 3. Interfaces and information flows with customers and suppliers Bottlenecks and delays Accuracy and consistency

Enterprise Systems - Metaphors This lecture has taken a Mechanist/Structuralist perspective on organisations Internal and enterprise system implementation is focused on optimising the performance of processes In many organisations enterprise systems implementation could benefit from approaches that take into account Organicist and Contextualist perspectives

References www.businessdictionary.com/definition/bureaucracy.htm http://lilt.ilstu.edu/rrpope/rrpopepwd/articles/bureacracy2.html

Lecture 3 – Internal IS and Enterprise Systems Any Questions? NCC Education - End Slide Master