2.1

LEARNING OBJECTIVESLEARNING OBJECTIVES

• ANALYZE ROLES OF 6 TYPES OF ANALYZE ROLES OF 6 TYPES OF INFORMATION SYSTEMSINFORMATION SYSTEMS

• DESCRIBE RELATIONSHIPS AMONG DESCRIBE RELATIONSHIPS AMONG INFORMATION SYSTEMS INFORMATION SYSTEMS

• DISTINGUISH STRATEGIC DISTINGUISH STRATEGIC INFORMATION SYSTEMSINFORMATION SYSTEMS

**

2.2

LEARNING OBJECTIVESLEARNING OBJECTIVES

• DESCRIBE HOW INFORMATION DESCRIBE HOW INFORMATION SYSTEMS SUPPORT LEVELS OF SYSTEMS SUPPORT LEVELS OF BUSINESS STRATEGYBUSINESS STRATEGY

• EXPLAIN DIFFICULTIES OF EXPLAIN DIFFICULTIES OF BUILDING, SUSTAINING STRATEGIC BUILDING, SUSTAINING STRATEGIC INFORMATION SYSTEMSINFORMATION SYSTEMS

**

2.3

MANAGEMENT CHALLENGESMANAGEMENT CHALLENGES• INTEGRATION:INTEGRATION:– ENTERPRISE RESOURCE MANAGEMENT

– CONNECTING ORGANIZATIONAL LEVELS DIFFICULT, COSTLY

• SUSTAIN COMPETITIVE ADVANTAGE:SUSTAIN COMPETITIVE ADVANTAGE:– INFO SYSTEMS MUST BE FLEXIBLE TO

ENSURE LONG-TERM PROFITS

**

2.4

TYPES OF INFORMATION SYSTEMSTYPES OF INFORMATION SYSTEMS

DATA WORKERSDATA WORKERS

KIND OF SYSTEM GROUPS SERVEDKIND OF SYSTEM GROUPS SERVED

STRATEGIC LEVEL SENIOR STRATEGIC LEVEL SENIOR MANAGERSMANAGERS

MANAGEMENT LEVEL MIDDLE MANAGEMENT LEVEL MIDDLE MANAGERSMANAGERS

OPERATIONAL OPERATIONAL

OPERATIONAL LEVEL OPERATIONAL LEVEL MANAGERS MANAGERS

KNOWLEDGE LEVEL KNOWLEDGE & KNOWLEDGE LEVEL KNOWLEDGE &

SALES & MANUFACTURING FINANCE ACCOUNTING HUMANSALES & MANUFACTURING FINANCE ACCOUNTING HUMAN RESOURCESRESOURCESMARKETINGMARKETING2.5

MAJOR TYPES OF SYSTEMSMAJOR TYPES OF SYSTEMS

• EXECUTIVE SUPPORT SYSTEMS EXECUTIVE SUPPORT SYSTEMS (ESS)(ESS)• MANAGEMENT INFORMATION SYSTEMS MANAGEMENT INFORMATION SYSTEMS (MIS)(MIS)• DECISION SUPPORT SYSTEMS DECISION SUPPORT SYSTEMS (DSS)(DSS)• KNOWLEDGE WORK SYSTEMS KNOWLEDGE WORK SYSTEMS (KWS)(KWS)• OFFICE AUTOMATION SYSTEMS OFFICE AUTOMATION SYSTEMS (OAS)(OAS)• TRANSACTION PROCESSING SYSTEMS TRANSACTION PROCESSING SYSTEMS (TPS)(TPS)

**

2.6

• OPERATIONAL LEVELOPERATIONAL LEVEL

• INPUTS: TRANSACTIONS, EVENTSINPUTS: TRANSACTIONS, EVENTS

• PROCESSING: UPDATINGPROCESSING: UPDATING

• OUTPUTS: DETAILED REPORTSOUTPUTS: DETAILED REPORTS

• USERS: OPERATIONS PERSONNELUSERS: OPERATIONS PERSONNEL

EXAMPLE: ACCOUNTS PAYABLEEXAMPLE: ACCOUNTS PAYABLE

TRANSACTION PROCESSING TRANSACTION PROCESSING SYSTEMS (TPS)SYSTEMS (TPS)

TPSTPS2.7

TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSSales & Marketing SystemsSales & Marketing Systems

MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS:

• Sales Management; Market Research; Sales Management; Market Research; Promotion; Pricing; New ProductsPromotion; Pricing; New Products

MAJOR APPLICATION SYSTEMS:MAJOR APPLICATION SYSTEMS:

• Sales Order Info System; Market Sales Order Info System; Market Research System; Pricing SystemResearch System; Pricing System

**

TPSTPS2.8

TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSManufacturing & Production SystemsManufacturing & Production Systems

MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS:• Scheduling; Purchasing; Shipping / Scheduling; Purchasing; Shipping /

Receiving; Engineering; OperationsReceiving; Engineering; Operations

MAJOR APPLICATION SYSTEMS:MAJOR APPLICATION SYSTEMS:• Materials Resource Planning Systems; Materials Resource Planning Systems;

Purchase Order Control Systems; Purchase Order Control Systems; Engineering Systems; Quality Control Engineering Systems; Quality Control SystemsSystems

**

TPSTPS2.9

TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSFinance & Accounting SystemsFinance & Accounting Systems

MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS:

• Budgeting; General Ledger; Billing: Budgeting; General Ledger; Billing: Cost AccountingCost Accounting

MAJOR APPLICATION SYSTEMS:MAJOR APPLICATION SYSTEMS:

• General Ledger; Accounts General Ledger; Accounts Receivable / Payable; Budgeting; Receivable / Payable; Budgeting; Funds Management SystemsFunds Management Systems

**TPSTPS2.10

TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSHuman Resources SystemsHuman Resources Systems

MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS:• Personnel Records; Benefits; Personnel Records; Benefits;

Compensation; Labor Relations; TrainingCompensation; Labor Relations; Training

MAJOR APPLICATION SYSTEMS:MAJOR APPLICATION SYSTEMS:• Payroll; Employee Records; Benefit Payroll; Employee Records; Benefit

Systems; Career Path Systems; Systems; Career Path Systems; Personnel Training SystemsPersonnel Training Systems

**

TPSTPS2.11

TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSOther Types (e.g., University)Other Types (e.g., University)

MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS:

• Admissions; Grade Records; Course Admissions; Grade Records; Course Records; AlumniRecords; Alumni

MAJOR APPLICATION SYSTEMS:MAJOR APPLICATION SYSTEMS:

• Registration System; Student Transcript Registration System; Student Transcript System; Curriculum Class Control System; Curriculum Class Control System; Alumni Benefactor SystemSystem; Alumni Benefactor System

**

TPSTPS2.12

• KNOWLEDGE LEVELKNOWLEDGE LEVEL• INPUTS: DESIGN SPECSINPUTS: DESIGN SPECS• PROCESSING: MODELLINGPROCESSING: MODELLING• OUTPUTS: DESIGNS, GRAPHICSOUTPUTS: DESIGNS, GRAPHICS• USERS: TECHNICAL STAFFUSERS: TECHNICAL STAFF

EXAMPLE: ENGINEERING WORK EXAMPLE: ENGINEERING WORK STATION STATION

KNOWLEDGE WORK SYSTEMS KNOWLEDGE WORK SYSTEMS (KWS)(KWS)

2.13

OFFICE AUTOMATION SYSTEMS OFFICE AUTOMATION SYSTEMS (OAS)(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 GRAPHICSEXAMPLE: PRESENTATION GRAPHICS

2.14

• MANAGEMENT LEVELMANAGEMENT LEVEL

• INPUTS: HIGH VOLUME DATAINPUTS: HIGH VOLUME DATA

• PROCESSING: SIMPLE MODELSPROCESSING: SIMPLE MODELS

• OUTPUTS: SUMMARY REPORTSOUTPUTS: SUMMARY REPORTS

• USERS: MIDDLE MANAGERS USERS: MIDDLE MANAGERS

EXAMPLE: ANNUAL BUDGETINGEXAMPLE: ANNUAL BUDGETING

MANAGEMENT INFORMATION MANAGEMENT INFORMATION SYSTEMS SYSTEMS (MIS)(MIS)

2.15

• STRUCTURED & SEMI-STRUCTURED & SEMI-STRUCTURED DECISIONSSTRUCTURED DECISIONS

• REPORT CONTROL ORIENTEDREPORT CONTROL ORIENTED

• PAST & PRESENT DATAPAST & PRESENT DATA

• INTERNAL ORIENTATIONINTERNAL ORIENTATION

• LENGTHY DESIGN PROCESSLENGTHY DESIGN PROCESS

**

MANAGEMENT INFORMATION MANAGEMENT INFORMATION SYSTEMS SYSTEMS (MIS)(MIS)

2.16

MISMIS

MIS FILESMIS FILES

SALES DATA

UNIT PRODUCT COST

PRODUCT CHANGE DATA

EXPENSE DATA

MISREPORTS

MANAGERSMANAGERS

TPS

Order Processing

System

Materials Resource

Planning System

General Ledger

System

ORDER FILE

PRODUCTION MASTER FILE

ACCOUNTING FILES

2.17

TPS DATA FOR MIS APPLICATIONSTPS DATA FOR MIS APPLICATIONS

• MANAGEMENT LEVELMANAGEMENT LEVEL

• INPUTS: LOW VOLUME DATAINPUTS: LOW VOLUME DATA

• PROCESSING: INTERACTIVEPROCESSING: INTERACTIVE

• OUTPUTS: DECISION ANALYSISOUTPUTS: DECISION ANALYSIS

• USERS: PROFESSIONALS, STAFFUSERS: PROFESSIONALS, STAFF

EXAMPLE: CONTRACT COST ANALYSISEXAMPLE: CONTRACT COST ANALYSIS

DECISION SUPPORT SYSTEMS (DSS)DECISION SUPPORT SYSTEMS (DSS)

2.18

• 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 DECISION SUPPORT SYSTEMS (DSS)(DSS)

2.19

• STRATEGIC LEVELSTRATEGIC LEVEL

• INPUTS: AGGREGATE DATAINPUTS: AGGREGATE DATA

• PROCESSING: INTERACTIVEPROCESSING: INTERACTIVE

• OUTPUTS: PROJECTIONSOUTPUTS: PROJECTIONS

• USERS: SENIOR MANAGERS USERS: SENIOR MANAGERS

EXAMPLE: 5 YEAR OPERATING PLANEXAMPLE: 5 YEAR OPERATING PLAN

EXECUTIVE SUPPORT SYSTEMS EXECUTIVE SUPPORT SYSTEMS (ESS)(ESS)

2.20

• 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 EXECUTIVE SUPPORT SYSTEMS (ESS)(ESS)

2.21

INTERRELATIONSHIPS AMONG SYSTEMSINTERRELATIONSHIPS AMONG SYSTEMS

ESS

TPSKWS

OAS

DSSMIS

2.22

STRATEGIC ROLE OF INFORMATION STRATEGIC ROLE OF INFORMATION SYSTEMSSYSTEMS

STRATEGIC INFO SYSTEM:STRATEGIC INFO SYSTEM:

CAN CHANGE GOALS, OPERATIONSCAN CHANGE GOALS, OPERATIONS

PRODUCTS, SERVICESPRODUCTS, SERVICES

ENVIRONMENTENVIRONMENT

TO GAIN COMPETITIVE ADVANTAGETO GAIN COMPETITIVE ADVANTAGE

2.23

BUSINESS-LEVEL BUSINESS-LEVEL STRATEGYSTRATEGY

• PRODUCT DIFFERENTIATIONPRODUCT DIFFERENTIATION

• FOCUSED DIFFERENTIATIONFOCUSED DIFFERENTIATION

• DATAMININGDATAMINING

• SUPPLY CHAIN MANAGEMENTSUPPLY CHAIN MANAGEMENT

• EFFICIENT CUSTOMER RESPONSEEFFICIENT CUSTOMER RESPONSE

• ENHANCING CORE COMPETENCIESENHANCING CORE COMPETENCIES

**2.24

VALUE CHAIN MODELVALUE CHAIN MODEL

• HIGHLIGHTS PRIMARY & SUPPORT HIGHLIGHTS PRIMARY & SUPPORT ACTIVITIES THAT ADD VALUE TO ACTIVITIES THAT ADD VALUE TO PRODUCTS, SERVICESPRODUCTS, SERVICES

• PRIMARY: DIRECTLY RELATED TO PRIMARY: DIRECTLY RELATED TO PRODUCTION, DISTRIBUTIONPRODUCTION, DISTRIBUTION

• SUPPORT: INFRASTRUCTURE, HUMAN SUPPORT: INFRASTRUCTURE, HUMAN RESOURCES, TECHNOLOGY, RESOURCES, TECHNOLOGY, PROCUREMENT PROCUREMENT

**2.25

COMPETITIVE FORCES MODELCOMPETITIVE FORCES MODEL

THE FIRMTRADITIONAL COMPETITION

NEW MARKET ENTRANTS

SUPPLIERS CUSTOMERS

SUBSTITUTE PRODUCTS & SERVICES

2.26

MANAGING STRATEGIC MANAGING STRATEGIC TRANSITIONTRANSITION

• SOCIOTECHNICAL SHIFTSOCIOTECHNICAL SHIFT

• MANAGE TRANSITIONSMANAGE TRANSITIONS

• VENDOR-MANAGED INVENTORIESVENDOR-MANAGED INVENTORIES

• IDENTIFY TECHNOLOGY THAT IDENTIFY TECHNOLOGY THAT PROVIDES STRATEGIC PROVIDES STRATEGIC ADVANTAGEADVANTAGE

**

2.27

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2.28

2.29