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

2. Scope and Coverage This topic will cover:
Information systems internal to the organisation
Enterprise wide systems
Co-ordination roles of information systems
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3. 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

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

5. 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

6. Bureaucracy - Definitions and Sources
Simple Definition
Extended discussion with some history

7. 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)

14. 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

15. 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.

16. 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

17. 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

18. 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

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

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

21. 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

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

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

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

25. 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

26. 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

27. 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

28. References

29. Lecture 3 – Internal IS and Enterprise Systems
Any Questions?
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