1. 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
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Kenneth C. Laudon & Jane P. Laudon

2. 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

3. 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

4. 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

5. 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

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

7. 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

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

9. 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
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Kenneth C. Laudon & Jane P. Laudon

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

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

12. 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
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Kenneth C. Laudon & Jane P. Laudon

13. 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 ( ), voice mail, or videoconferencing
Management Information Systems
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Kenneth C. Laudon & Jane P. Laudon

14. 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

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

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

17. 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
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Kenneth C. Laudon & Jane P. Laudon

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

19. 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

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

21. 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
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Kenneth C. Laudon & Jane P. Laudon

22. 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

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

24. 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

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

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

27. 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

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

29. 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

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

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