Four Main Types Of Information Systems serving different organization Levels
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Transcript of Four Main Types Of Information Systems serving different organization Levels
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Four Main Types Of Information Systems serving different organization Levels
1. Operational-level
2. Knowledge- level
3. Management-level
4. Strategic-level
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Types of Information Systems
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1:Operational-level Information System
Information systems that monitor the elementary activities and transactions of the organizationSupport operational managers by keeping track of the elementary activities and transactions of the organizationExample: sales,receipts,cash deposits,payroll,credit decisions,and the flow of materials in a factoryWhat happened to Mr.. X payment?Example of operational-level systems include a system to record bank deposits from automatic teller machines or one that tracks the number of hours worked each day by employees on a factory floor
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2:Knowledge Level Information System
Support knowledge and data workers in an organization.The purpose of Knowledge level system is to help the business firm discover,organize, and integrate new knowledge into the businessTo help the organization control the flow of paperworkKnowledge workers: hold formal university degree: doctors,engineers,lawyers,scientistData workers:less formal and advanced education degreessecretaries,accountant,clerk
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3:Management-level Information System
Are designed to serve the monitoring,controlling,decision-making,and administrative activities of middle managers
MIS and DSS
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4:Strategic level Information system
Helps senior management tackle and address strategic issues and long term trends , both in the firm and in the external environment.
Main concern match
Changes in external environment > existing organizational capabilities
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Six Major types of Information systems
Strategic level system ESS
Management-level system MIS & DSS
Knowledge level KWS & OAS
Operational level (TPS)
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Six Major Types of Information systems
(1) ESS Executive support systems at the Strategic level
(2) MIS (3) DSS at Management Level
(4)KWS knowledge work system
(5)OAS office automation system at the Knowledge level
(6)TPS at operational level
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Six MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
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Transaction Process Systems
Transaction: any business related exchange such as payments to employees,payments to suppliers,sales to customersProcessing business transaction was the first application of computers for most organizationsAn organized collection of people,procedures,software,databases,and devices used to record completed business transactions
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MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
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MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Types of TPS Systems
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Knowledge Work Systems
Information system that aids knowledge workers in the creation and integration of new knowledge in the organization
A knowledge work system, such as a scientific or engineering design workstation, promotes the creation of new knowledge and ensures that new knowledge and ensures that new knowledge and technical expertise are properly integrated into the business
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Office automation system
Handle and manage documents( through word processing,desktop publishing,digital filing),scheduling(through electronic calendars),and communication(through email,voice mail,video conference)
Desktop publishing produces professional publishing-quality documents by combining output from word processing software with
design elements,graphics
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Office automation system
Document imaging systems convert documents and images into digital form so that they can be stored and accessed by the computer.
Scanners
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Management Information Systems (MIS)
An organized collection of people,procedures,software,databases,and devices used to provide routine information to managers and decision makers.
The focus of an MIS is primarily on operational efficiency.
Marketing,production,finance,and other functional areas are supported by MIS.
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MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Management Information System (MIS)
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Decision Support Systems(DSS)
An organized collection of people,procedures,software,databases,and devices used to support problem-specific decision making.A DSS supports and assists all aspects of problem-specific decision making.DSS can provide assistant in solving complex problems not supported by traditional MIS.Managers play an active role in development and implementation
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MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Decision Support System (DSS)
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MIS VS. DSS
Helps organization “do things right”
Complex problems not supportedProvides standard reports generated with data and information from TPS
Helps managers
“do the right things”
Provide solution to complex problems
DSS operates from a managerial perspective
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MIS VS. DSS
Used with more structured problems
Users have less control over MIS
Some MISs make automatic decisions and replace the decision maker
Used with unstructured problems
Users have more control over DSS
Supports all aspects and phases of decision making,does not replace the decision maker
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MIS VS. DSS
Focus on information only
Indirect support system that uses regularly produced reports
May not provide immediate results,reports given once a week
Focus on actual decision , decision making style
Direct support system provides interactive reports on computer screen
Computer equipment that provides DS is on line
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Executive support systems
Information system at the strategic level of an organization designed to address unstructured decision making through advanced graphics and communicationsUsed by senior managersESS are designed to incorporate data about external events such as new tax laws or competitorsThey draw summarized information from internal MIS and DSSESS can assist the following problems
1. What business should we be in?2. What are competitors doing?3. Which unit should we sell to raise cash
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MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS
Executive Support System (ESS)
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Relationship of systems
ExecutiveSupportSystems
ESS
ManagementSystems
MIS
ManagementSystems
DSS
KnowledgeSystems
KWS, OAS
Transaction Processing
SystemsTPS
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Strategic Information System
Computer systems at any level of an organization that change the goals, process, products, services, or environmental relationships to help the organization gain a competitive advantage
Merrill Lynch, for instance, used information systems to change from the stock brokerage business to the financial services business
Organizations may need to change their internal operations to take advantage of the new IS
These changes often require new managers, new work force, and a much closer relationship with customers and suppliers
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Changing concepts of Information & Information Systems
Information systems of 1950s focused on reducing the cost of routine paper processing, especially in accounting
The first information systems were semi-automatic check-processing, issuing, and canceling machines ;electronic accounting machines (EAM)
Electronic data processing (EDP)
By the 1960s, organizations used it for general management support
Any information system of the 1960s and 1970s was termed as MIS
Weekly production, monthly financial information, inventory, accounts receivable,accounts payable….
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Changing concepts of Information & Information Systems
In 1970s and early 1980s information systems were seen as providing fine-tuned, special-purpose, customized management control over the organizationThen emerged decision-support systems(DSS) and executive support systems (ESS)The purpose was to improve and speed up the decision making process of specific managers and executives in a broad range of problemsBy the mid 1980s conception of information changed again, viewed as strategic asset or resourceAs a weapon to defeat and frustrate the competitionIn 2000, information is viewed as the very foundation of business processes, products, and services
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How I.S can be used for competitive advantage/Strategy levels and IT
Strategies Models IT Techniques
Industry Cooperation vs. Competition
Licensing
Standards
Competitive forces model
Network economics
Electronic transactions
Communication networks
Information partnership
Firm Synergy
Core competencies
Core competency
Knowledge systems
Organization-wide systems
Business 1. Low cost
2. Differentiation
3. Scope
Value chain analysis
Datamining
IT-based products/services
Supply chain management
Effective customer response
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Business-Level Strategy & the value chain model
How can we compete effectively in a particular market?Market might be light bulbs, utility vehicles, or cable televisionMost common generic strategies at this level are
1. Become low cost producer (Low cost)2. Differentiate your product or services(Differentiation)3. Change the scope of competition by either(Scope)
(a) enlarge the market to include global markets (b) narrow the market by focusing on small niches not well served by your competitors
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Value Chain Model
Value chain model:Model that highlights the primary or supportive activities that add a margin of value to a firm’s products or services where information systems can best be applied to achieve a competitive advantagePrimary activities: activities most directly related to the production and distribution of a firm’s products or servicesSecondary activities: activities that make the delivery of the primary activities of a firm possible.consist of the organization’s infrastructure, human resource, technology, and procurement
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Primary ActivitiesPrimary activities: most directly related to the production and distribution of a firm’s products or servicesInclude inbound logistics, operations, outbound logistics, sales, and marketingInbound logistics receiving and storing materials for distribution to productionOperations transforms inputs to finished o/pOutbound logistics storing,and distributing producMarketing and sale promoting and selling firm’s products
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Support activities
Activities that make the delivery of the primary activities of a firm possible.
Consist of the organization’s infrastructure( administration and management), human resources( employee recruiting ,hiring and training), technology(improving products and the production process) , and procurement(purchasing input)
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Information System to Support Product/Service Differentiation
Product/service differentiationstrategy for creating brand loyalty by
developing new and unique products/services that are not easily duplicated by competitors
e.g. Citibank’s ATM
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Focused differentiation: competitive strategy for developing new market niches for specialized products or services where a business can compete in the target area better than its competitors
Datamining:analysis of large pool of data to find patterns and rules that can be used to guide decision making and predict future behavior
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I.S. to Support Low Cost Strategy
Supply chain management integrates supplier, distributors, and customer
logistics requirements into one cohesive process to reduce inventory cost or underutilized staff
e.g. Wall-Mart’s “continuous replenishment system”
“lock in” customer and raise “switching costs”expense a customer incurs in lost time and
expenditure of resources when changing from one supplier to a competing supplier
e.g. Baxter Healthcare’s “stockless inventory”
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Business Level Strategy
Th e B u s i n e s s F i r m
V e n d o r s C u s to m e rs
S u p p l y C h a i nM an ag e m e n t
S t o c k l e s s In ve n t o r yC o n t i n o u s R e p l e n i s h m e n tJ u s t - i n - t i m e d e l i ve r y
In t r a F i r m S t r a t e g y
P r o d u c t d i ffe r e n t i a t i o nF o c u s e d d i ffe r e n t i a t i o nL o w - c o s t p r o d u c e r
Efficient C usto m erR espo nse
P o int-o f-sale system sD atam ining
B u s in e s s L e v e l S tra te g y
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Firm level strategy and I.T.
A commercial partnership of two or more persons(limited 20,10 for banks)A business firm is typically a collection of businesses.The firm is organized financially as a collection of strategic business unitsReturns to the firm depends on performance of business unit.
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Synergies
Output of one unit can be used as input to another unit.Then unique nonmarket relationship can lower costs and generate profits.MergerUse of IT in these synergy situations is to tie together the operations of completely different business units,so they can act as whole
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Core competencies
Second concept for firm level strategy involves the notion of
“core competency”A core competency is an activity at which a firm is a world-class leaderMay involve being the world’s best fiber-optic manufacturer,best miniature parts designer etc..
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Industry-level Strategy and IT
A specific branch of manufacture and tradeFirms together comprise industries, such as the automotive industry,telephone…Corporation : A body of persons acting under a legal charter as a separate entity with privileges and liabilities
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Information partnership
Both companies can join forces without actually merging,by sharing informationUnique synergies can be achievedExample: American Airlines has an arrangement with CITI bank to award one mile in its frequent flier program for every dollar spent using CITI bank credit cardsAA benefits from increased customer loyaltyCITI bank gains new credit cards subscriber
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COMPETITIVE FORCES MODEL
THE FIRMTRADITIONALCOMPETITION
NEWMARKETENTRANTS
Bargaining power ofSUPPLIERS
Bargainingpower ofCUSTOMERS
SUBSTITUTEPRODUCTS& SERVICES
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Telephone industry
SBC firm Ameritech firm AT&T firm
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Should we compete with other firms in the industry
Or should we cooperate with them
Cooperate to develop industry standards, build customer awareness,work collectively with suppliers to lower costs
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Network economics At Industry Level
Model based on the concept of a network where adding another participant entails no marginal costs but can create much larger marginal gain
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Managing Strategic Transitions
• A movement from one level of socio-technical system to another. Often required when adopting strategic systems that demand changes in the social and technical elements of an organization.
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Money,people,materials,machines,equipmentsInput = Resources such as money,people,materialOutput = goods | services
For-Profit ,Nonprofit organizationNonprofit organization: social groups,religious groups,universities
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Value-Added processes
Value-added processes increase the relative worth of the combined inputs on their way to becoming final outputs of the organizationsExample:Carwashfirst- value-added process= washing the carThe output of this system----a clean,but wet, car—is worth more than the mere collection
of ingredients(soap,water)
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Carwash
Consumers are willing to pay more for the skill,knowledge,time,and energy required to wash their cars.
Second value-added process: drying – transformation of the wet car into a dry one with no water spotting
Again consumers are willing to pay more
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Value Chain
A concept that reveals how organization can add value to their products and services
A series of activities that includes inbound logistics,warehouse and storage,production,finished product storage,outbound logistics,marketing and sales,and customer service
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Meaning Of Value
Depending on the customer,value may be lower price,better service,higher quality,or the uniqueness of the product
The value comes from time,skill,knowledge
And energy invested by the company
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Role Of Information Systems Invalue-added process
External: They are used to control and monitor value-added processes to ensure effectiveness and efficiency
Contemporary definition:Information systems are part of the process itself,
internal
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Example: Phone Directory business A corporate customer
request a phone directory listing all steel suppliers in Western Europe. Using its I.S. ,the the directory business can sort files to find the supplier’s names,and phone numbers and organize them in alphabetical list
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Information system does not monitor the process externally but works as part of the process.
The later view brings with it a new perspective on how and why information systems can be used in business.
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The way an organization views the role of Information Systems will influence the ways it accomplish its value-added processes.
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Organizational Structure
It refers to Organizational subunits and the way relate to the overall organization.
Depending on the goals of the organization and its approach to management,a number of structures can be used.
Organizational structure falls into one of these categories : traditional,project,team,or multidimensional.
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Traditional Organizational Structure
Managerial pyramid shows the hierarchy of Decision making and Authority
Strategic Management
Decision Management
Operation Management
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Strategic Management
Include President of the company and vice president,has a higher degree of decision authority
More impact on corporate goals
One-of-a-kind problems to solve
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Managerial Pyramid
Strategic Management
Tactical management
Operational Management
Nonmanagement employees
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1:Flat Organizational Structure
With a reduced number of management layers
Empowerment gives employees at lower level to make decisions and solve problems without needing permission from middle level managers
Empowerment gives employees and their managers more responsibility and authority to make decisions
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Example: On the factory floor,empowerment can mean that an assembly-line worker has the ability to stop the production line to correct a problem or defect before the product is passed to the next station
Empowerment results in faster action and quicker resolution of problem
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2:Project Organizational Structure
Centered on major products or services
Example: In a manufacturing firm that produces baby food and other baby products ,each type is produced by a separate unit.
Marketing,Finance,and production are are positioned within these major units.
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PresidentBaby products company
Senior VPBaby Food Division
Senior VPDiaper Division
Senior VPStroller Division
VPfinance
VPmarket
VPsale
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3:Team Organization Structure
It is centered on work teams or groups
Teams could be small or large
Each team has a team leader
Team can be temporary or permanent
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4:Multidimensional Organizational structure
Also known as matrix organization
May incorporate several structures at the same time
Example: may have traditional functional areas and major project units
Forms a Matrix,or Grid
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|
VP
Marketing
VP
Production
VP
Finance
Publisher,
College division
Marketing
Group
Production
Group
Finance
Group
Publisher
Trade
division
Marketing Group
Production Group
Finance
Group
Publisher
High school div
Marketing
Group
Production
Group
Finance
Group
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Organizational Culture And Change
Culture is a set of major understandings and assumptions shared by a group
Pakistani culture shake hands, embrace
Organizational Culture: major understandings and assumptions for a business,corporation,or an organization
Employees be clean-cut,wear conservative outfits(orthodox,traditional)
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Effect of cultureON Information SystemsOrganizational culture can significantly affect the development and operation of Information System.
Example:unwritten understanding all inventory reports must be prepared before 10 o’clock Friday morning
Decision maker may reject a cost-reduction option that required compiling the inventory report over the weekend