1. 2.1 © 2002 by Prentice Hall c h a p t e r 2 2 INFORMATION SYSTEMS IN THE ENTERPRISE ENTERPRISE

2. 2.2 © 2002 by Prentice Hall LEARNING OBJECTIVES ANALYZE ROLES OF 6 TYPES OF INFORMATION SYSTEMSANALYZE ROLES OF 6 TYPES OF INFORMATION SYSTEMS DESCRIBE TYPES OF INFORMATION SYSTEMSDESCRIBE TYPES OF INFORMATION SYSTEMS ANALYZE RELATIONSHIPS BETWEEN BUSINESS PROCESSESANALYZE RELATIONSHIPS BETWEEN BUSINESS PROCESSES* © 2002 by Prentice Hall

3. 2.3 LEARNING OBJECTIVES EXPLAIN HOW SYSTEMS & NETWORKS CREATE NEW EFFICIENCIESEXPLAIN HOW SYSTEMS & NETWORKS CREATE NEW EFFICIENCIES EVALUATE BENEFITS & LIMITATIONS OF SYSTEMS & NETWORKSEVALUATE BENEFITS & LIMITATIONS OF SYSTEMS & NETWORKS* © 2002 by Prentice Hall

4. 2.4 MANAGEMENT CHALLENGES KEY SYSTEM APPLICATIONSKEY SYSTEM APPLICATIONS FUNCTIONAL PERSPECTIVE OF SYSTEMSFUNCTIONAL PERSPECTIVE OF SYSTEMS INTEGRATING FUNCTIONS & PROCESSESINTEGRATING FUNCTIONS & PROCESSES*

5. 2.5 © 2002 by Prentice Hall MANAGEMENT CHALLENGES 1. INTEGRATION: Different systems serve variety of functions, connecting organizational levels difficult, costly 2. ENLARGING SCOPE OF MANAGEMENT THINKING: Huge system investments, long development time must be guided by common objectives *

6. 2.6 © 2002 by Prentice Hall TYPES OF INFORMATION SYSTEMS DATA WORKERS KIND OF SYSTEM GROUPS SERVED STRATEGIC LEVEL SENIOR MANAGERS STRATEGIC LEVEL SENIOR MANAGERS MANAGEMENT LEVEL MIDDLE MANAGERS OPERATIONAL OPERATIONAL LEVEL MANAGERS OPERATIONAL OPERATIONAL LEVEL MANAGERS KNOWLEDGE LEVEL KNOWLEDGE & SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN RESOURCESMARKETING

7. 2.7 © 2002 by Prentice Hall MAJOR TYPES OF SYSTEMS EXECUTIVE SUPPORT SYSTEMS (ESS)EXECUTIVE SUPPORT SYSTEMS (ESS) DECISION SUPPORT SYSTEMS (DSS)DECISION SUPPORT SYSTEMS (DSS) MANAGEMENT INFORMATION SYSTEMS (MIS)MANAGEMENT INFORMATION SYSTEMS (MIS) KNOWLEDGE WORK SYSTEMS (KWS)KNOWLEDGE WORK SYSTEMS (KWS) OFFICE AUTOMATION SYSTEMS (OAS)OFFICE AUTOMATION SYSTEMS (OAS) TRANSACTION PROCESSING SYSTEMS (TPS)TRANSACTION PROCESSING SYSTEMS (TPS)*

8. 2.8 © 2002 by Prentice Hall TYPICAL TPS APPLICATIONS Sales & Marketing Systems MAJOR FUNCTIONS OF SYSTEMS: Sales management, market research, promotion, pricing, new productsSales management, market research, promotion, pricing, new products MAJOR APPLICATION SYSTEMS: Sales order info system, market research system, pricing systemSales order info system, market research system, pricing system*

9. 2.9 © 2002 by Prentice Hall TYPICAL TPS APPLICATIONS Manufacturing & Production Systems MAJOR FUNCTIONS OF SYSTEMS: Scheduling, purchasing, shipping, receiving, engineering, operationsScheduling, purchasing, shipping, receiving, engineering, operations MAJOR APPLICATION SYSTEMS: Materials resource planning systems, purchase order control systems, engineering systems, quality control systemsMaterials resource planning systems, purchase order control systems, engineering systems, quality control systems*

10. 2.10 © 2002 by Prentice Hall TYPICAL TPS APPLICATIONS Finance & Accounting Systems MAJOR FUNCTIONS OF SYSTEMS: Budgeting, general ledger, billing, cost accountingBudgeting, general ledger, billing, cost accounting MAJOR APPLICATION SYSTEMS: General ledger, accounts receivable, accounts payable, budgeting, funds management systemsGeneral ledger, accounts receivable, accounts payable, budgeting, funds management systems*

11. 2.11 © 2002 by Prentice Hall TYPICAL TPS APPLICATIONS Human Resources Systems MAJOR FUNCTIONS OF SYSTEMS: Personnel records, benefits, compensation, labor relations, trainingPersonnel records, benefits, compensation, labor relations, training MAJOR APPLICATION SYSTEMS: Payroll, employee records, benefit systems, career path systems, personnel training systemsPayroll, employee records, benefit systems, career path systems, personnel training systems*

12. 2.12 © 2002 by Prentice Hall TYPICAL TPS APPLICATIONS Other Types (e.g., University) MAJOR FUNCTIONS OF SYSTEMS: Admissions, grade records, course records, alumniAdmissions, grade records, course records, alumni MAJOR APPLICATION SYSTEMS: Registration system, student transcript system, curriculum class control system, alumni benefactor systemRegistration system, student transcript system, curriculum class control system, alumni benefactor system*

13. 2.13 © 2002 by Prentice Hall KNOWLEDGE LEVEL INPUTS: DESIGN SPECSINPUTS: DESIGN SPECS PROCESSING: MODELLINGPROCESSING: MODELLING OUTPUTS: DESIGNS, GRAPHICSOUTPUTS: DESIGNS, GRAPHICS USERS: TECHNICAL STAFFUSERS: TECHNICAL STAFF EXAMPLE: ENGINEERING WORK STATION KNOWLEDGE WORK SYSTEMS (KWS)

14. 2.14 © 2002 by Prentice Hall OFFICE AUTOMATION SYSTEMS (OAS) TOWARD A “PAPERLESS” OFFICETOWARD A “PAPERLESS” OFFICE REDESIGN OF WORK FLOWREDESIGN OF WORK FLOW INTEGRATED SOFTWAREINTEGRATED SOFTWARE ERGONOMIC DESIGNERGONOMIC DESIGN BRIGHT, CHEERFUL WORK SPACEBRIGHT, CHEERFUL WORK SPACE EXAMPLE: PRESENTATION GRAPHICS

15. 2.15 © 2002 by Prentice Hall MANAGEMENT LEVEL INPUTS: HIGH VOLUME DATAINPUTS: HIGH VOLUME DATA PROCESSING: SIMPLE MODELSPROCESSING: SIMPLE MODELS OUTPUTS: SUMMARY REPORTSOUTPUTS: SUMMARY REPORTS USERS: MIDDLE MANAGERSUSERS: MIDDLE MANAGERS EXAMPLE: ANNUAL BUDGETING MANAGEMENT INFORMATION SYSTEMS (MIS)

16. 2.16 © 2002 by Prentice Hall STRUCTURED & SEMI- STRUCTURED DECISIONSSTRUCTURED & SEMI- STRUCTURED DECISIONS REPORT CONTROL ORIENTEDREPORT CONTROL ORIENTED PAST & PRESENT DATAPAST & PRESENT DATA INTERNAL ORIENTATIONINTERNAL ORIENTATION LENGTHY DESIGN PROCESSLENGTHY DESIGN PROCESS* MANAGEMENT INFORMATION SYSTEMS (MIS)

17. 2.17 © 2002 by Prentice Hall MIS MIS FILES SALES DATA UNIT PRODUCT COST PRODUCT CHANGE DATA EXPENSE DATA MIS REPORTS MANAGERS TPS Order Processing System Materials Resource Planning System General Ledger System ORDER FILE PRODUCTION MASTER FILE ACCOUNTING FILES TPS DATA FOR MIS APPLICATIONS

18. 2.18 © 2002 by Prentice Hall MANAGEMENT LEVEL INPUTS: LOW VOLUME DATAINPUTS: LOW VOLUME DATA PROCESSING: INTERACTIVEPROCESSING: INTERACTIVE OUTPUTS: DECISION ANALYSISOUTPUTS: DECISION ANALYSIS USERS: PROFESSIONALS, STAFFUSERS: PROFESSIONALS, STAFF EXAMPLE: CONTRACT COST ANALYSIS DECISION SUPPORT SYSTEMS (DSS)

19. 2.19 © 2002 by Prentice Hall FLEXIBLE, ADAPTABLE, QUICKFLEXIBLE, ADAPTABLE, QUICK USER CONTROLS INPUTS/OUTPUTSUSER CONTROLS INPUTS/OUTPUTS NO PROFESSIONAL PROGRAMMINGNO PROFESSIONAL PROGRAMMING SUPPORTS DECISION PROCESSSUPPORTS DECISION PROCESS SOPHISTICATED MODELING TOOLSSOPHISTICATED MODELING TOOLS* DECISION SUPPORT SYSTEMS (DSS)

20. 2.20 © 2002 by Prentice Hall STRATEGIC LEVEL INPUTS: AGGREGATE DATAINPUTS: AGGREGATE DATA PROCESSING: INTERACTIVEPROCESSING: INTERACTIVE OUTPUTS: PROJECTIONSOUTPUTS: PROJECTIONS USERS: SENIOR MANAGERSUSERS: SENIOR MANAGERS EXAMPLE: 5 YEAR OPERATING PLAN EXECUTIVE SUPPORT SYSTEMS (ESS)

21. 2.21 © 2002 by Prentice Hall TOP LEVEL MANAGEMENTTOP LEVEL MANAGEMENT DESIGNED TO THE INDIVIDUALDESIGNED TO THE INDIVIDUAL TIES CEO TO ALL LEVELSTIES CEO TO ALL LEVELS VERY EXPENSIVE TO KEEP UPVERY EXPENSIVE TO KEEP UP EXTENSIVE SUPPORT STAFFEXTENSIVE SUPPORT STAFF* EXECUTIVE SUPPORT SYSTEMS (ESS)

22. 2.22 © 2002 by Prentice Hall INTERRELATIONSHIPS AMONG SYSTEMS ESS TPS KWS OAS DSSMIS

23. 2.23 © 2002 by Prentice Hall SYSTEMS FROM A FUNCTIONAL PERSPECTIVE SALES & MARKETING SYSTEMSSALES & MARKETING SYSTEMS MANUFACTURING & PRODUCTION SYSTEMSMANUFACTURING & PRODUCTION SYSTEMS FINANCE & ACCOUNTING SYSTEMSFINANCE & ACCOUNTING SYSTEMS HUMAN RESOURCES SYSTEMSHUMAN RESOURCES SYSTEMS*

24. 2.24 © 2002 by Prentice Hall SALES & MARKETING INFORMATION SYSTEM

25. 2.25 © 2002 by Prentice Hall MANUFACTURING INFORMATION SYSTEM

26. 2.26 © 2002 by Prentice Hall FINANCE & ACCOUNTING INFORMATION SYSTEM

27. 2.27 © 2002 by Prentice Hall HUMAN RESOURCES INFORMATION SYSTEM

28. 2.28 © 2002 by Prentice Hall EXAMPLES OF BUSINESS PROCESSES MANUFACTURING & PRODUCTION: Assembling product, checking quality, producing bills of materialsMANUFACTURING & PRODUCTION: Assembling product, checking quality, producing bills of materials SALES & MARKETING: Identifying customers, creating customer awareness, sellingSALES & MARKETING: Identifying customers, creating customer awareness, selling*

29. 2.29 © 2002 by Prentice Hall EXAMPLES OF BUSINESS PROCESSES FINANCE & ACCOUNTING: Paying creditors, creating financial statements, managing cash accountsFINANCE & ACCOUNTING: Paying creditors, creating financial statements, managing cash accounts HUMAN RESOURCES: Hiring employees, evaluating performance, enrolling employees in benefits plansHUMAN RESOURCES: Hiring employees, evaluating performance, enrolling employees in benefits plans*

30. 2.30 © 2002 by Prentice Hall SHIPPINGINVENTORY PLANNING & FORECASTING ORDER PROCESSING PRODUCTION PROCUREMENT ACCOUNTING SUPPLIERSCUSTOMERS LOGISTICS SERVICES DISTRIBUTORS INTRANET INTRANET SUPPLY-CHAIN MANAGEMENT

31. 2.31 © 2002 by Prentice Hall HOW INFORMATION SYSTEMS FACILITATES SUPPLY CHAIN MANAGEMENT DECIDE WHEN, WHAT TO PRODUCE, STORE, MOVE… RAPIDLY COMMUNICATE ORDERS… TRACK ORDER STATUS… CHECK INVENTORY AVAILABILITY, MONITOR LEVELS… TRACK SHIPMENTS… PLAN PRODUCTION BASED ON ACTUAL DEMAND… RAPIDLY COMMUNICATE PRODUCT DESIGN CHANGES… PROVIDE PRODUCT SPECIFICATIONS… SHARE INFORMATION ABOUT DEFECT RATES, RETURNS...

32. 2.32 © 2002 by Prentice Hall TRADITIONAL VIEW OF SYSTEMS WITHIN THE BUSINESS: There are functions, each having its uses of information systemsWITHIN THE BUSINESS: There are functions, each having its uses of information systems OUTSIDE THE ORGANIZATION’S BOUNDARIES: There are customers and vendorsOUTSIDE THE ORGANIZATION’S BOUNDARIES: There are customers and vendors FUNCTIONS TEND TO WORK IN ISOLATION *

33. 2.33 © 2002 by Prentice Hall Sales & Marketing Accounting Finance Manufacturing Human Resources ENTERPRISE SYSTEM Business Processes Enterprise-wide Business Processes VendorsCustomers

34. 2.34 © 2002 by Prentice Hall BENEFITS OF ENTERPRISE SYSTEMS FIRM STRUCTURE & ORGANIZATION: One organizationFIRM STRUCTURE & ORGANIZATION: One organization MANAGEMENT: Firmwide knowledge- based management processesMANAGEMENT: Firmwide knowledge- based management processes TECHNOLOGY: Unified platformTECHNOLOGY: Unified platform BUSINESS: More efficient operations & customer-driven business processesBUSINESS: More efficient operations & customer-driven business processes*

35. 2.35 © 2002 by Prentice Hall CHALLENGES OF ENTERPRISE SYSTEMS DAUNTING IMPLEMENTATIONDAUNTING IMPLEMENTATION HIGH UP FRONT COSTS & FUTURE BENEFITSHIGH UP FRONT COSTS & FUTURE BENEFITS INFLEXIBILITYINFLEXIBILITY HARD TO REALIZE STRATEGIC VALUEHARD TO REALIZE STRATEGIC VALUE*

36. 2.36 © 2002 by Prentice Hall INDUSTRIAL NETWORKS LINK FIRMS INTO INDUSTRY-WIDE SYSTEM LINK FIRMS INTO INDUSTRY-WIDE SYSTEM HORIZONTAL: Link firms in same industry, including competitorsHORIZONTAL: Link firms in same industry, including competitors VERTICAL: Link firm with suppliers in same industryVERTICAL: Link firm with suppliers in same industry*

37. 2.37 © 2002 by Prentice Hall c h a p t e r 2 2 INFORMATION SYSTEMS IN THE ENTERPRISE ENTERPRISE