CISB113 Fundamentals of Information Systems Types of IS in Organization

Learning Outcomes At the end of this lesson, you should be able to: Describe Porter’s Value Chain Describe the types of IS in organization

Another concept to help identify opportunities for strategic IT An organization is a series of basic activities that add values to its products and services. Value chain is a network of value-creating processes. Consists of 5 primary processes and 4 support processes. Porter’s Value Chain

The Value Chain Primary Processes Business activities that are directly related to the manufacture of products or delivery of service Support Processes Business activities that help support the day-to- day operation of the business (indirectly contribute to manufacturing of product and delivery of service)

The Porter’s Value Chain Support processes Primary processes The goal of these activities is to offer the customer a level of value that exceeds the cost of the activity, resulting in a profit

Primary ActivitiesDescription Inbound LogisticsReceiving, storing, and disseminating inputs to products OperationsTransform inputs into the final product Outbound LogisticsCollecting, storing, and physically distributing the products to buyers Marketing and SalesInducing buyers to purchase the products and providing a means for them to do so ServiceAssisting customer’s use of the product and thus maintaining and enhancing the product’s value The Porter’s Value Chain Kroenke, D,M. (2010) Experiencing MIS, 2 nd Edition Pearson

Support ActivitiesDescription Human Resource Management Recruiting, compensation, evaluation, and training employees InfrastructureIncludes activities such as accounting, finance, general management, legal and government affairs ProcurementFinding vendors, setting up contractual arrangements, negotiating prices, and ordering products. Technology Development Research and development on new methods, procedures, technical tools The Porter’s Value Chain Kroenke, D,M. (2010) Experiencing MIS, 2nd Edition Pearson

NOT JUST A COMPILATION OF ACTIVITIES THAT ARE INDEPENDENT OF EACH OTHER; INSTEAD, IT IS A SYSTEM OF ACTIVITIES THAT ARE INTERDEPENDENT BECAUSE THEY ARE RELATED BY THEIR LINKAGES One activity may affect the cost or performance of others E.g. product design change reduces manufacturing costs & improves reliability, service costs decrease The Porter’s Value Chain

StrategicLevelManagementLevel Knowledge Level Operational Level Executive Support System Decision Support System Management Info System Knowledge Management System Office Automation System Transaction Processing System 5 year sales trend, Budget Forecasting, Planning Cost Analysis, Pricing Analysis, Staff Performance Analysis, Annual Budget Word Processing, Desktop Publishing, System Support Order Processing, Payment Processing, Payroll, POS, Material Movement Types of IS in Organization

Automates routine and repetitive tasks that are critical to the operation of the organization, such as preparing a payroll, billing customers, Point-of-Sale and Warehouse operations. Data collected from this operation supports the MIS and DSS systems employed by Middle Management Types of IS: Transaction Processing Systems

Transaction Processing Systems Record and process business transactions Sales, inventory, and accounting Batch Processing Accumulate transactions over time and then process periodically e.g.: Banks process all checks in a batch at night Online Processing Process all transactions immediately e.g: A bank processes ATM withdrawals immediately

Electronic communication is only one aspect of what is now known as an office automation system (OAS). Other aspects include word processing systems, document management systems and desktop publishing systems. OAS systems are predominantly used by clerical workers who support managers at all levels. Among clerical workers, those who use, manipulate, or disseminate information are referred to as data workers. Types of IS: Office Automation Systems

An additional level of staff support now exists between top and middle management. These are professional people, such as financial and marketing analysts that act as advisors and assistants to both top and middle management. They are responsible for finding or developing new knowledge (External Content) for the organization and integrating it with existing knowledge (Internal Content). KMS that support these knowledge workers range from Internet search engines and expert systems, to Web-based computer-aided design and sophisticated data management systems Types of IS: Knowledge Management Systems

These systems access, organize, summarize, and displayed information for supporting routine decision making in the functional areas. Geared toward middle managers, MIS are characterized mainly by their ability to produce periodic reports (exceptional report, summary report) such as a daily list of employees and the hours they work, or a monthly report of expenses as compared to a budget Primary purpose to process data into information Types of IS : Management Information Systems

These systems support complex non-routine decisions. Primary purpose to process data into information. DSS systems are typically employed by tactical level management whose decisions and what-if analysis are less structured. Some DSS methodologies – Simulation – Queries – What-If – Data mining Types of IS : Decision Support Systems

ESS systems or Enterprise Information Systems (EIS) originally were implemented to support Senior Management. These systems have been expanded to support other managers within the enterprise. Emphasizes graphical displays and easy-to-use user interfaces. In general, EIS are enterprise-wide DSS that help top-level executives analyze, compare, and highlight trends in important variables so that they can monitor performance and identify opportunities and problems Types of IS : Executive Support Systems

Summary of Types of IS Types of ISDescription Transaction Processing SystemsAutomates routine and repetitive tasks that are critical to the operation of the organization e.g. payroll system, customer billing, Point-of-Sale Office Automation SystemsUsed by data workers for clerical type of works and basic communication e.g. , word-processing, presentation, desktop publishing Knowledge Management Systems Supports knowledge workers who are responsible for finding or developing new knowledge for the organization and integrating it with existing knowledge e.g. web-based computer aided information seeking, learning management systems

Summary of Types of IS Types of ISDescription Management Information Systems These systems access, organize, summarize, and displayed information for producing periodic reports e.g. daily list of employees and the hours they work, or a monthly report of expenses as compared to a budget Decision Support SystemsUsed by managers to support complex non-routine decisions. e.g. Answering query such as ‘which female permanent employee sells the most product in the last quarter?’ Executives Support Systems Enterprise-wide DSS that help top-level executives (senior management) analyze, compare, and highlight trends in important variables so that they can monitor performance and identify opportunities and problems. Emphasizes graphical displays and easy-to-use user interfaces

e-Commerce e-Commerce is the buying, selling, and marketing of products, services, and information over the Internet and other networks Enterprise Business Systems e-Business e-Business refers to the automation of an organisation’s internal business processes using Internet and browser technologies.

Understand and Describe the following : 1.Value Chain 2.Value Chain’s Primary Processes 3.Value Chain’s Support Processes 4.What is the significance of understanding the value chain in business 5.Batch Processing 6.e-Business 7.e-Commerce Describe, explain the types of users for the following systems 1. Transaction Processing Systems 2.Office Automation Systems 3.Knowledge Management Systems 4.Management Information Systems 5.Decision Support Systems 6.Executive Support Systems Class Activity

Learning Outcomes At the end of this lesson, you should be able to: Describe Porter’s Value Chain Describe the types of IS in organization

Questions?