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Information Systems

in Organisations
Session 3

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With thanks to Laudon & Laudon
Objectives

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Major Business Functions

• Sales and marketing


• Manufacturing
• Finance
• Accounting
• Human resources

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Key Elements of an Organization
• People
• Structure
• Operating Procedures
• Politics
• Culture

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Management Levels
• Senior managers: make long-range
strategic decisions about products and
services
• Middle managers: carry out the programs
and plans of senior management
• Operational managers: monitor the firm’s
daily activities

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IT Infrastructure

• Computer hardware
• Computer software
• Storage technology
• Communications technology

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Types of Information Systems
Major Types of Systems in Organizations

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Major Types of Systems in Organizations
Main Categories of IS

1. Operational-level systems

2. Management-level systems

3. Strategic-level systems

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Four Major
Major Types ofTypes of Systems
Systems in Organizations

1. Transaction Processing Systems (TPS)

2. Management Information Systems (MIS)

3. Decision-Support Systems (DSS)

4. Executive-Support Systems (ESS)

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The FourMajor
MajorTypes of Types of Information
Systems in Organizations

Systems

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Transaction Processing Systems
Major Types of Systems in Organizations
(TPS)
• Basic business systems that serve the organization’s
operational level

• Input: Transactions, events

• Processing: Sorting, listing, merging, updating

• Output: Detailed reports, lists, summaries

• Users: Operations personnel, supervisors

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Payroll TPS
Major Types of Systems in Organizations

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Typical Applications
Major Types of TPS
of Systems in Organizations

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Management Information Systems
Major Types of Systems in Organizations
(MIS)
• Serve management level; provide reports and access
to company data

• Input: Summary transaction data, high-volume data,


simple models

• Processing: Routine reports, simple models, low-level


analysis

• Output: Summary and exception reports

• Users: Middle managers

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How management information systems obtain their
Major Types of Systems in Organizations
data from the organization’s TPS

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Sample report that might be
Major Types of Systems in Organizations
produced by the MIS

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Decision-Support
Major Types of SystemsSystems
in Organizations (DSS)

• Serve management level with data analysis for making


decisions

• Input: Low-volume data or massive databases, analytic


models, and data analysis tools

• Processing: Interactive, simulations, analysis

• Output: Special reports, decision analyses, responses


to queries

• Users: Professionals, staff managers

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Voyage-estimating decision-support
Major Types of Systems in Organizations system

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Executive Support
Major Types Systems
of Systems in Organizations (ESS)

• Provide communications and computing


environment that serves the organization’s
strategic level

• Input: External and internal aggregate data

• Processing: Graphics, simulations, interactive

• Output: Projections, responses to queries

• Users: Senior Managers

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Model of Major
a typical Executive Support
Types of Systems in Organizations
System

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Major Business Functions
1. Sales and Marketing Systems

2. Manufacturing and Production Systems

3. Finance and Accounting Systems

4. Human Resource Systems

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Sales and Marketing Systems
Systems from a Functional Perspective

• Help identify customers


• Develop products and services
• Promote products and services
• Sell products and services
• Provide ongoing customer support

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ExamplesSystems
of Sales and Marketing Information
from a Functional Perspective
Systems

System Description Organizational


Level
Order Enter, process, Operational
processing and track orders

Pricing Determine prices Management


analysis for products and
services
Sales trend Prepare 5-year Strategic
forecasting sales forecasts

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Manufacturing andPerspective
Systems from a Functional Production
Systems
• Planning, development, production of products
and services
• Planning, development, maintenance of
production facilities
• Acquisition, storage, availability of materials
• Scheduling materials, facilities, labor
• Controlling the flow of production

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Examples of Manufacturing and Production
Systems from a Functional Perspective
Information Systems
System Description Organizational
Level
Machine Control the actions Operational
control of machines and
equipment
Production Decide when and Management
planning how many
products should
be produced
Facilities Decide where to Strategic
location locate new
facilities
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Overview offrom
Systems ana Functional
Inventory PerspectiveSystem

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FinanceSystems
andfromAccounting Systems
a Functional Perspective

• Manage firm’s financial assets: cash, stocks,


bonds, etc.

• Manage capitalization of firm and finding new


financial assets

• Maintain and manage financial records

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Examples of Finance and Accounting
Systems from a Functional Perspective
Information Systems
System Description Organizational
Level

Accounts Track money owed Operational


receivable the firm

Budgeting Prepare short-term Management


budgets

Profit planning Plan long-term Strategic


profits

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Systems from a Functional Perspective
Human Resources Systems

• Identify potential employees


• Maintain employee records
• Track employee skills, job performance, and
training
• Support planning for employee compensation
and career development

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Examples of Human Resources
Systems from Information Systems
a Functional Perspective

System Description Organizational


Level
Training and Track employee Operational
development training, skills, and
performance
Compensation Monitor wages, Management
analysis salaries, benefits

Human Plan long-term Strategic


resources labor force needs
planning

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Employee Record-Keeping System
Systems from a Functional Perspective

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Business Processes
Enterprise Applications

• Manner in which work is organized,


coordinated, and focused

• Concrete workflows of material, information,


and knowledge

• Unique ways to coordinate work, information,


and knowledge

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Examples ofEnterprise
Functional
Applications Business
Processes
• Manufacturing and production:
Assembling product, checking quality,
producing bills of materials

• Sales and marketing: Identifying


customers, creating customer
awareness, selling

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Enterprise Applications
Examples of Functional Business
Processes
• Finance and accounting: Paying
creditors, creating financial statements,
managing cash accounts
• Human Resources: Hiring employees,
evaluating performance, enrolling
employees in benefits plans

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