Different Kinds of Systems Kenneth C. Laudon & Jane P. Laudon Four main types of IS serve four different organizational levels: Operational-level systems Knowledge-level systems Management-level systems Strategic-level systems Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Operational-level Systems Kenneth C. Laudon & Jane P. Laudon To answer routine questions and track the flow of transactions through the organization. Therefore, information generally must be easily available, current, and accurate. Supporting operational managers by keeping track of the elementary activities and transactions of the organization, such as sales, receipts, cash deposits, payroll, credit decisions, and the flow of materials in a factory Including a system to record bank deposits from automatic teller machines or one that tracks the number of hours worked each day by employees on a factory floor Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Knowledge-level Systems Kenneth C. Laudon & Jane P. Laudon To help the business firm integrate new knowledge into the business and to help the organization control the flow of paperwork Supporting the organization’s knowledge and data workers Including workstations and office systems, which are the fastest-growing applications in business today Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Management-level Systems Kenneth C. Laudon & Jane P. Laudon To serve the monitoring, controlling, decision-making, and administrative activities of middle managers Typically providing periodic reports rather than instant information on operations Including control systems for annual budgeting and inventory, and management systems for sales and human resources Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Strategic-level Systems Kenneth C. Laudon & Jane P. Laudon To match changes in the external environment with existing organizational capability Helping senior management deal with and address strategic issues and long-term trends, both in the firm and in the external environment Including a system to forecast sales trends over a five-year period or systems for profit planning and personnel planning Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Types of Information Systems Kenneth C. Laudon & Jane P. Laudon Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Kenneth C. Laudon & Jane P. Laudon Major Types of Systems There are six specific types of IS that correspond to each organizational levels as follows: Executive Support Systems (ESS) Decision Support Systems (DSS) Management Information Systems (MIS) Knowledge Work Systems (KWS) Office Systems Transaction Processing Systems (TPS) Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

The Six Major Types of IS Kenneth C. Laudon & Jane P. Laudon Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Transaction Processing Systems (TPS) Basic business systems that serve the operational level of the organization Computerized systems that performs and records the daily routine transactions necessary to conduct business Including sales order entry, hotel reservation systems, payroll, employee record keeping, and shipping At the operational level, tasks, resources, and goals are predefined and highly structured. Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

A Symbolic Representation for a Payroll TPS Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Typical Applications of TPS Kenneth C. Laudon & Jane P. Laudon Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Knowledge Work Systems (KWS) Kenneth C. Laudon & Jane P. Laudon & Office Systems Knowledge Work Systems (KWS) To aid knowledge workers (people who hold formal university degrees and are often members of recognized professions such as engineers, doctors, lawyers, and scientists) To promote the creation of new knowledge and to ensure that new knowledge and technical expertise are properly integrated into the business Including scientific or engineering design workstations Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Knowledge Work Systems (KWS) & Office Systems (Cont.) To aid data workers (people who typically have less formal advanced educational degrees and tend to process rather than create information such as secretaries, bookkeepers, filing clerks, or managers whose jobs are to use, manipulate, or disseminate information) To coordinate diverse information workers, geographic units, and functional areas Including: Systems for handling and manage documents through word processing, desktop publishing, document imaging, and digital filing Systems for scheduling through electronic calendars Systems for communicating through electronic mail (E-mail), voice mail, or videoconferencing Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Management Information Systems (MIS) To serve the management level of the organization, providing managers with reports and, in some cases, with online access to the organization’s current performance and historical records Being oriented almost exclusively to internal, not environmental or external, events Depending on underlying transaction processing systems for their data and, then, summarizing and reporting on the firm’s basic operations To serve the functions of planning, controlling, and decision making at the management level with weekly, monthly, and yearly results (not day-to-day activities) Being inflexible and having little analytical capability because most MIS use simple routines such as summaries and comparisons Including systems that report the total pounds of lettuce used this quarter by a fast-food chain or compare total annual sales figures for specific products to planned targets Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Kenneth C. Laudon & Jane P. Laudon TPS & MIS Relationship Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Kenneth C. Laudon & Jane P. Laudon A Sample of MIS Report Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Decision Support Systems (DSS) Kenneth C. Laudon & Jane P. Laudon To also serve the management level of the organization by helping managers make decisions that are unique, rapidly changing, and not easily specified in advance Using internal information from TPS and MIS and also external information such as current stock prices or product prices of competitors Having more analytical power than other systems and addressing problems where the procedure for arriving at a solution may not be fully predefined in advance Being designed so that users can work with them directly with user-friendly software and so interactive that the user can change assumptions, ask new questions, and include new data Including a system for contract cost analysis Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

A Voyage-estimating DSS Kenneth C. Laudon & Jane P. Laudon Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Executive Support Systems (ESS) Kenneth C. Laudon & Jane P. Laudon To serve senior managers who are making decisions at the strategic level of the organization To address nonroutine decisions requiring judgment, evaluation, and insight Creating a generalized computing and communications environment (including historical and competitive data) rather than providing any fixed application or specific capability Being designed to incorporate data about external events such as new tax laws or competitors and draw summarized information from internal MIS and DSS Employing the most advanced and easy-to-use graphics software (interactive graphic interfaces) and can deliver graphs and data from many sources immediately to a senior executive’s office or to a boardroom Including systems that conduct a 5-year operating plan or answer questions of: what business we should be in; and what the competitors are doing Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Kenneth C. Laudon & Jane P. Laudon A Model of ESS Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Systems from a Functional Perspective IS can be classified by the specific organizational function they serve as well as by organizational level as follows: Sales and marketing systems Manufacturing and production systems Finance and accounting systems Human resources systems Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Sales & Marketing Systems Kenneth C. Laudon & Jane P. Laudon Strategic level To monitor trends affecting new products and sales opportunities, and the performance of competitors To support planning for new products and services Management level To support market research, advertising and promotional campaigns, and pricing decisions To analyze sales performance and the performance of the sales staff Knowledge level To support marketing analysis workstations Operational level To assist in locating and contacting prospective customers, tracking sales, processing orders, and providing customer service support Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Examples of Sales & Marketing IS Kenneth C. Laudon & Jane P. Laudon Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Manufacturing & Production Systems Kenneth C. Laudon & Jane P. Laudon Strategic level To deal with the firm’s long-term manufacturing goals, such as where to locate new plants or whether to invest in new manufacturing technology Management level To analyze and monitor manufacturing and production costs and resources Knowledge level To create and distribute design knowledge or expertise to drive the production process Operational level To deal with the status of production tasks Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Examples of Manufacturing & Production IS Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Kenneth C. Laudon & Jane P. Laudon An Inventory System Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Finance & Accounting Systems Kenneth C. Laudon & Jane P. Laudon Strategic level To establish long-term investment goals for the firm To provide long-range forecasts of the firm’s financial performance Management level To help managers oversee and control the firm’s financial resources Knowledge level To support finance and accounting by providing analytical tools and workstations for designing the right mix of investments to maximize returns for the firm Operational level To track the flow of funds in the firm through transactions such as paychecks, payments to vendors, securities reports, and receipts Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Examples of Finance & Accounting IS Kenneth C. Laudon & Jane P. Laudon Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Human Resources Systems Kenneth C. Laudon & Jane P. Laudon Strategic level To identify the manpower requirements (skills, educational level, types of positions, number of positions, and cost) for meeting the firm’s long-term business plans Management level To help managers monitor and analyze the recruitment, allocation, and compensation of employees Knowledge level To support analysis activities related to job design, training, and the modeling of employee career paths and reporting relationships Operational level To track the recruitment and placement of the firm’s employees Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

Examples of Human Resources IS Kenneth C. Laudon & Jane P. Laudon Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon

An Employee Record Keeping System Kenneth C. Laudon & Jane P. Laudon Management Information Systems Eighth Edition Kenneth C. Laudon & Jane P. Laudon