1. 1 TYPES, STRATEGIC ROLE & IMPACT BY CHANDRA S. AMARAVADI INFORMATION SYSTEMS IN ORGANIZATIONS - I

2. 2 IN THIS PRESENTATION l Definition of organization l Type of organizations and defining features l An overview of the different functional areas l The different types of information systems l TP, “MIS”, DSS, OIS, ESS l The firm and its environment l IT and business strategy l Impact of information systems

3. 3 DEFINITION OF ORGANIZATION

4. 4 n Understand impact of IS n Understand strategic use n Understand how IT decisions are made WHY STUDY ORGANIZATIONS?

5. 5 The firm is viewed as a production function that takes inputs from the environment in the form of capital and labor and produces outputs. INPUTSOUTPUTS ORGANIZATION A TECHNICAL DEFINITION

6. 6 A BEHAVIORAL DEFINITION formal relationships Informal relationships Resources Decisions/ Actions A collection of social systems to fulfill some goals

7. 7 TYPES OF ORGANIZATIONS & DEFINING FEATURES

8. 8 n Hierarchical n Flat n Bureaucracy n Knowledge-based n Digital/virtual TYPES OF ORGANIZATIONS Most common among Fortune 1000 companies?

9. 9 DEFINING FEATURES OF ORGANIZATIONS (FYI) StructureStrategy Management Style Organizational Culture Product type Type of operations Environments

10. 10 AN OVERVIEW OF THE FUNCTIONAL AREAS OF THE FIRM

11. HIERARCHICAL ORGANIZATIONS n Technical defn  rational organization n Functional organization common n Company organized into mktg, HR, Acctg. Etc.

12. 12 THE MARKETING FUNCTION n Market research n Estimate demand n Develop product specs n Segment markets n Pricing and promotion n Distribution & sales Purpose: to identify & fulfill market needs

13. 13 THE PRODUCTION FUNCTION Purpose: to develop a product optimally n Develop production schedule n Production Planning and Control n Plan job capacity n Order raw material n Manufacture product

14. 14 THE ACCOUNTING FUNCTION Purpose: record financial transactions and report them n Assets n Liabilities n Equity n Revenues n Expenses Assets = Liabilities + Equity Income = Revenues - Expenses - COGS Different types of accounts

15. 15 THE ACCOUNTING CYCLE Transactions Journals Ledger Trial balance Financial statements

16. 16 THE FINANCE FUNCTION Purpose: to analyze financial statements and make funds available n Plan n Manage assets n Develop budget n Obtain financing if necessary n Report equity debt

17. 17 THE HUMAN RESOURCE FUNCTION Purpose: To plan, hire, and manage human resources n Evaluate needs n Hire personnel n Training n Maintain personnel records Reward/benefits

18. 18 THE DIFFERENT TYPES OF INFORMATION SYSTEMS

19. 19 DEFINITION OF IS A collection of computer systems to support information processing in organizations. A set of interrelated components working together to collect, processs, store and disseminate information to support decision making, co-ordination, control, analysis and visualization.

20. 20 EVOLUTION/TYPES OF INFORMATION SYSTEMS Transaction processing Reporting systems Database management systems Decision support Office information systems AI based systems Executive information systems Strategic information systems Enterprise information systems E-Commerce systems Knowledge Management systems 1950’s 1970’s 1980’s 1990’s

21. 21 TYPES OF INFORMATION SYSTEMS Transaction processing systems: process business transactions Reporting systems: summarize transaction information Database management systems: systems to manage information Decision support systems: support analysis of data to aid in d.m. Executive information systems: systems to support executive d.m. Office information systems: provide support to office workers AI & expert systems: use artificial intelligence to duplicate human activity (in organizations). Strategic systems:systems which support the strategy of the organization and improve competitive advantage. Enterprise information systems: systems which support all functional areas, from marketing to production. E-commerce systems: systems for browsing, ordering, payment etc. KM Systems: support organizational knowledge.

22. 22 u Transaction Processing Systems (TP Systems) u Enterprise Systems (ERP/MRP) u E-commerce systems (not discussed) u Office Information Systems (OIS) u Decision Support Systems (DSS/MSS) u Executive Support Systems (ESS/EIS) u KM systems (not discussed) MAJOR TYPES OF IS

23. 23 INFORMATION SYSTEMS & ORG LEVELS DATA WORKERS ORG LEVEL GROUPS SERVED STRATEGIC LEVEL SENIOR MANAGERS MANAGEMENT LEVEL MIDDLE MANAGERS OPERATIONAL OPERATIONAL LEVEL MANAGERS KNOWLEDGE LEVEL KNOWLEDGE & SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN RESOURCESMARKETING

24. 24 TP, ERP & OIS SYSTEMS

25. 25 Process business transactions customers, suppliers, government Transactions are routine Volumes are large E.g. Morgan Stanley, ??? TP SYSTEMS

26. 26 Payroll Order processing Accounts payable General ledger Asset management Invoicing Parts ordering TYPICAL TP APPLICATIONS

27. Integrated systems for the organization finance, accounting, HR etc. Also known as MRP Support core activities E.g. SAP, BAAN, JD Edwards ERP SYSTEMS

28. 28 OFFICE INFORMATION SYSTEMS Systems supporting office workers. EXAMPLES: n Business software e.g. MS Word, MS Project n Workflow e.g. Workman, Xsoft etc. n Imaging e.g. FileNet n Custom applications e.g. resume screening

29. 29 MANAGEMENT SUPPORT SYSTEMS

30. 30 MANAGEMENT SUPPORT SYSTEMS (MSS) -- FYI n Reporting systems? n Decision support systems (DSS) n Executive information systems (EIS/ESS) n Group decision support systems (GDSS) Management Support Systems

31. 31 n Aimed at management n Support for structured/semi-structured decisions n Capacity planning, vehicle routing, portfolio etc. n Model based n Generally PC Based n Customizable interfaces DECISION SUPPORT SYSTEMS

32. 32 A.K.A ESS, Executive support systems Systems for executives Summarized information on firm Executive “dashboard” EXECUTIVE INFORMATION SYSTEMS (EIS)

33. 33 u What are some typical roles for information systems? u What is management control role? u Would a computer controlled drilling machine be an example of an information system? u T/F? An information system consists of HW and SW components. u What are ERP systems? u What is RAD? u What impact does globalization have on systems? FOR DISCUSSION

34. 34 BUSINESS STRATEGY