Managing Information Systems

Managing Information Systems Information Systems in Organisations Part 1 Sections 2.1 and 2.2

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Objectives • To understand the role of IS within organisations • To understand the diversity of types of IS within a business / organisation • To understand relationships between IS and business functions

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Topics • Types of Information System in Organisations: – By organisational level – By function within organisational level – Examples in functional areas

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IS at the Organisational Level KIND OF SYSTEM STRATEGIC LEVEL

MANAGEMENT LEVEL

KNOWLEDGE LEVEL

GROUPS SERVED SENIOR MANAGERS

MIDDLE MANAGERS

KNOWLEDGE & DATA WORKERS

OPERATIONAL LEVEL

OPERATIONAL MANAGERS SALES &

MARKETING

MANUFACTURING FINANCE ACCOUNTING HUMAN RESOURCES

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IS at the Organisational Level • Operational-level – Elementary activities and routine transactions – Data current and accurate

• Knowledge-level – Support knowledge and data workers – Integrate new knowledge into the business – Office automation 5

IS at the Organisational Level • Management-level – Periodic monitoring, control, decision-making and administration – Is the business working well?

• Strategic-level – Long-term (e.g. 5 year) planning and strategy – Internal and external information 6

Examples • What examples can you think of at the different organisational levels?

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Types of IS • • • • • •

Transaction Processing Systems (TPS) Knowledge Work Systems (KWS) Office Automation Systems (OAS) Management Information Systems (MIS) Decision-support Systems (DSS) Executive Support Systems (ESS) 8

Transaction Processing Systems Systems that perform and record daily routine transactions necessary for business Operational-level Systems Order tracking Machine control

Securities trading

Payroll

Compensation

Order processing

Cash management

Accounts payable

Training and development

Accounts receivable

Employee records

Plant scheduling Material movement and control

Sales and Marketing

Manufacturing

Finance

Accounting

Human Resources 9

Knowledge Work Systems Systems that aid the creation and integration of new knowledge into an organisation Knowledge-level Systems Engineering workstations

Graphics workstations

Managerial workstations

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Office Automation Systems Systems that are designed to increase the productivity of data workers Knowledge-level Systems Word processing

Document imaging

E-mail / electronic calendars

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Management Information Systems Systems that serve planning, control and decisionmaking through routine summary and reports Management-level Systems Sales management Sales and Marketing

Inventory control Manufacturing

Annual budgeting Finance

Capital investment Accounting

Relocation analysis Human Resources

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Decision-support Systems Systems that combine data, models and analysis tools for non-routine decision-making Management-level Systems Sales region analysis Sales and Marketing

Production scheduling Manufacturing

Cost analysis

Finance

Pricing / profitability analysis

Contract cost analysis

Accounting

Human Resources

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Executive Support Systems Systems that support non-routine decision-making through advanced graphics and communications Strategic-level Systems 5-year sales trend forecasting Sales and Marketing

5-year operating plan Manufacturing

5-year budget forecasting Finance

Profit planning Accounting

Personnel planning Human Resources

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Interrelationships • TPS major producer of data • External data also required for MIS, DSS and ESS • Typical loose coupling of systems • ‘Digital firms’ have tighter integration

ESS

MIS

KWS OAS

DSS

TPS

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Functional Examples • Examples of IS by function: – – – –

Sales and marketing Manufacturing and production Finance and accounting Human resources

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Sales and Marketing System

Description

Organisational Level

Order processing

Enter, process and track orders

Operational

Market analysis

Identify customers and markets

Knowledge

Pricing analysis

Determine prices

Management

Sales trends

Prepare 5 year forecasts

Strategic

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Manufacturing and Production System

Description

Organisational Level

Machine control

Control actions of equipment

Operational

Computer-aided design Design new products (CAD)

Knowledge

Production planning

Decide number and schedule of products

Management

Facilities location

Decide where to locate Strategic facilities 18

Finance and Accounting System

Description

Organisational Level

Accounts receivable

Track money owed to firm

Operational

Portfolio analysis

Design firm’s investments

Knowledge

Budgeting

Prepare short-term budgets

Management

Profit planning

Plan long-term profits

Strategic

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Human Resources System

Description

Organisational Level

Training and development

Track training, skills and appraisals

Operational

Career paths

Design employee career paths

Knowledge

Compensation analysis Monitor wages, salaries and benefits

Management

Human resources planning

Strategic

Plan long-term workforce needs

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Summary • Looked at the role of IS within organisations – At organisational levels

• Looked at the diversity of types of IS within a business / organisation – Six different functional types of IS

• Looked at relationships between IS and business functions – Examples by functional area 21