Chapter Two

• Components of a Business• Types of Business Information Systems• Systems for Collaboration and Teamwork• The information Systems Function in Business

Problem Solving

Problem Identification

Solution Design

Solution Evaluation &

Choice

Implementation

Feed

back

Set Goals

Think – Smart!

S = SpecificM = MeasurableA = AttainableR = Relevant T = Time Bound

Is it Ideal!

I = Identify Problems & OpportunitiesD = Define Alternative GoalsE = Explore Possible StrategiesA = Anticipate and ActL = Look and Learn

Thinking of a Business?

What are some of the Functions we need to think about?

PAY BILLS

Accou

nts Pay

able

Accounts Receivables

Balance Sheets

Profit & Loss Statements

Monitor Finance Flow

Update Payroll

Employee benefits

Recruiting

Employee Training

Performance recordsCreate product

inventory control

Outsourcing

Quality assurance

Job costing

Forecasting

Planning – both capacity/material

Dete

rmin

e cu

stom

ers n

eeds

Develop product/service concepts

Developing the

product

consumer marketing research

Let’s go into Business?

DevelopCompany Name

The Briefcase Corporation!

Slogan

If you wanna be number one,

sometimes you’ve gotta go

number two!

What products or services should

we provide?

“strategic choice”

Who are our customers?

Our competitors?

What types of employees will we

need?

How many?

How are we going to Share

Information and Monitor our

PERFORMANCE?

I really enjoy the soft seat after a

crappie meeting!

Setting up Departments/Functions •Accounting

▫ Pay bills, develop financial records, monitor finance flow, create wealth.

•Human Resources▫ Update Payroll, benefits, recruiting, training, performance records

•Manufacturing/Production▫ Create product, inventory control, outsourcing, quality assurance, job

costing, forecasting, planning – both capacity/material

•Sales/Marketing Force▫ Determine customers needs, develop product/service concepts,

developing the product, consumer marketing research

Developing the Hierarchy

•Responsibilities/Accountability

▫ Senior management – long-term decisions, ensures financial performance and creates the vision for the organization to achieve.

▫ Middle Management – develops the technical planning aspects in support of Senior Managers request. Develops the programs and plans to ensure success. Knowledge workers – often are engineers, technology developers, a

range of scientists – in effort to create new knowledge

▫ Operational Management – monitors the daily activities of the business, and organizes the process to getting things done.

Sr.

Management

Middle Manageme

nt, Knowledge

Workers

Operational Management,

Production and Service Workers,

Data Workers

Actio

nDecision

Options

Intelligence

Knowledge

Data

Executive

Support

System

Manageme

nt

Information

System

Decision

Support

SystemDecision Support System

Management

Information

System

Executive Support System

TPS

TPS

Systems Needed and at what level?

Strateg

ic Plannin

g

Tactical Planning

Operational Planning

Systems Needed and at what level?

•Transaction Process System –▫ Monitor internal operations & the external environment▫ Built by supplying data from income/expenses/schedules ▫ Operational Mangers require reports relative to the operation of

the business

•Management Information System▫ Provides reports in relation to company’s performance▫ Forecast future performance from historical information▫ Review transactions with that of inventory (cycle-time)▫ Review historical results and make comparisons ▫ Enable routine questions (Inventory Ratios)▫ Middle managers often plan targets objectives

Continuation

•Decision-Support System▫ Business intelligence – slice and dice information – drill down▫ Collect large amounts of information to develop mathematical

models▫ Enables us as mangers to make better decisions!!!▫ It provides Middle management with the ability to predict an

outcome

•Executive Support System▫ Is used in developing strategy – creating a vision ▫ Decision-making that requires judgment and/or evaluation▫ Provides graphs utilizing a portal connection ▫ Senior mangers will review Key Performance Indicators (KPI)

Transaction Processing System

PayrollSystem

Employee/file Database

Employee Work Hours To General Ledger

To Government Agencies

Employee Paychecks

Human Resource

Payroll Report

Raw Data - Input

Processed

Output

Database TableEmployee_NumberDepartment_NumberEmployee_NameHome_AddressPay_RateGross_Pay

Federal_TaxFICAMedicare Health_CareNet_PayTotal_Earnings_YTD

Query

1. Total employees making above $35K

2. Who are working in Production3. Without signing up for Health

Insurance

Management Information Systems

OrderProcess System

Materials

Resource

Planning

System

General LedgerSystem MI

S

MIS FILESTRANSACTION PROCESSING SYSTEM

Order File

Production

MasterFile

Accounting

Files

Sales Data

Unit ProductCost Data

ExpenseData

REPORTS+ =

Customer _NumberProduct_CodeProduct_DescriptionUnit_CostAverage_Sales/MonthActual_Sales/YearTotal_Sales/DivisionTotal_Travel_Expense/Division

Question? Do I need more

people or more Division

al Offices

Decision-Support System - BIS

Total Sales• Department• Employee

Customer Information• What was purchase• When it was purchase• How often

Retail Example

Inventory Data• What sold• What’s on-hand• What’s Ordered• Turnover Ratio

Analytical Models

Database

Store Overhead• Employee Expense

Mining Data CollectedWhat is sold, by whom, and by what departmentWhen is the customer buying and what time of dayWhat is in inventory, what is ordered/date of deliveryOur cost to sell product – price/expense/profit

The amount of Employees needed during Customer demands. Uncover trends and forecast results. Controlling overhead expenses in relation to Inventory. The amount of resources needed to meet the demands relevant to customer tracking patterns

Middle Mangement

Executive Support Systemsfor Senior Managers

Enterprise Applications & Systems

Enterprise Applications (EAS)•Enables all of the systems to work together•Spans across the Enterprise within each

function•Performs business functions:

▫ Order processing▫ Production scheduling▫ Customer information▫ Accounting

•Enables business functions and departments to share information.

Enterprise System (ES)• Is a large scale of integrated applications

▫Handles multiple operations

▫Hardware & Software packages▫Networks▫Uses data storage▫ Information flows to/from enterprise applications▫Data analytics from selected databases

•Also know as “Enterprise Resource Planning” system

Supply Chain Management System•Enables an interconnection to other

business•Creates relationships with

▫Customer sales/customer satisfaction▫Identify, attract, and retain customers▫Track most profitable customers▫Marketing capabilities – develop target

markets

Knowledge Management System•Review historical experiences

▫ What we did back when (tracking results) ▫ How did a particular decision make a difference (what worked –

what did not)

•Review Lesson Learned▫ Customer issues▫ The outcome of problem solving▫ Resolutions

•Builds product knowledge▫ How to questions▫ Develop new methodology

The Electronic Business

•E-Business

▫Deploys an internet platform technology▫Enables sharing of information and supports

communication between partners▫Enables us to provide Services to other

businesses and to our employees▫Enables online transactions between the firm

and suppliers (Partners)

E-Commerce• Also uses a web platform• It enables online transactions between B2B & C2B• Requires security to protect information• Requires online customer support

• Banks, EBay, online stores, iTunes, software companies

Collaboration and Teamwork

•Benefits

▫Productivity▫Quality▫Innovation▫Customer Services▫Profitability

SharePoint

The Role of Information Systems

• IT is an enabler of the business objectives ▫ Achieve operational quality▫ Develop new products and services ▫ Improve the decision-making process▫ Achieve & Sustain competitive advantage ▫ Supports organizational survival mode▫ Creates a foundation for customer/supplier relationships

•Being able to be proactive with the means to react with options, while acknowledging predictable outcomes

The End!

Teamwork! Homework!

Case Study Coming Due!