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Ch- 2 Information System in the Enterprise

Major Types of System in the Organization

Kinds of Information System Strategic level Management level Knowledge Level Operational Level

Groups Served

Senior Managers Middle Managers Knowledge and Data worker Operational Managers

Functional Sales & Manufacturing Finance Accounting HR Area Marketing

. ‡ The principal purpose of systems at this level is to answer routine question and to track the flow of transactions through the organizations. payroll. cash deposits. such as sales. receipts. ‡ Examples of operational-level systems include a system to record bank deposit from ATM or one that tracks the number of hours worked each day by employees on a factory floor. and the flow of materials in a factory.Operational Level Systems ‡ Operational ±level systems support operational managers by keeping track of the elementary activities and transactions of the organization.

Knowledge-level systems ‡ Knowledge-level systems support the organization knowledge and data workers. especially in the form of workstations and office systems. . are among the fastest growing application in business today. ‡ Knowledge ±level systems. ‡ The purpose of Knowledge-level systems is to help the business firm integrate new knowledge in to the business and to help the organization control the flow of paperwork.

. They tend to focus on less-structured decision for which information requirements are not always clear.Management-level Systems ‡ Management-level Systems serve the monitoring. as well as data from inside cannot be easily drawn from existing operational-level systems. ‡ This system often answer ³what-if´ question: Example. decision-making and administrative activities of middle managers ‡ Some Management-level Systems support nonroutine decision making. controlling. ‡ Answer to these questions frequently require new data from outside the organization. What would be the impact on production schedules if we were to double sales in this month. What would happen to our ROI if a factory schedule were delayed for six months.

Strategic-level Systems ‡ Strategic-level Systems helps senior management tackle and address strategic issues and long-term trends. both in the firm in the and in the external environment. ‡ Their principal concern is matching changes in the external environment with existing organizational capability. .

Types of Information System ‡ ‡ ‡ ‡ ‡ ‡ Transaction Processing System (TPS) Management Information System (MIS) Decision Support System (DSS) Expert System (ES) Office System (OS) Knowledge Works System (KWS) .

analytical models and data analysis tools Routine Summary transaction data. simple high volume data. low level analysis simple models Senior Managers Professionals. Interactive Low-volume Interactive.Characteristics of Information Processing Systems Types Information of Input System ESS Processing Information Output Projection. data or massive simulations. responses to queries Users Aggregate data. responses to queries Special reports. decision analyses. reports. staff managers DSS MIS Summary and exception report Middle Managers . database analysis optimized for data analysis. models. Graphics. external. internal Simulations.

lists. lists. events Detailed reports. knowledge base Documents. graphics Professionals. supervisors . technical staff Office System Document management. schedules Modeling. communication Documents. mail Clerical workers TPS Transactions. simulation Models. schedules. summaries Detailed reports.KWS Design specifications. summaries Operational personnel. scheduling.

Employee data Various Department To general ledger: wages and salaries Payroll System Payroll master file Management Reports Government documents Online Queries A symbolic representation of a payroll TPS .

Data element in payroll master file Number. Pay rate. vacation time. Address. Gross pay ENO EName Gross Pay Tax Earning . Occupation. Department. Name.

Transaction include such as sales. ‡ They may also make miscellaneous adjustments to the record in a file or database. purchases and inventory changes. purchases. deposits. data about the customer. salesperson etc. such as sales.Transaction Processing System ‡ Transaction processing system is an information system that manipulates data from business transactions. such as name and address changes to a customer file. ‡ Transaction processing systems record and process data that result form business transactions. . when an organization sells something to a customer on credit. withdrawals. must be stored and processed. product. ‡ For example. refunds and payment. ‡ Transaction processing system produce a variety of information products for internal or external use.

A transaction processing systems involve the following steps : ‡ Data entry activities ‡ Transaction processing activities ‡ File and database processing ‡ Document and report generation ‡ Inquiry processing activities .

TPS Order file Order Processing Systems MIS Files Sales data Unit Production cost data Production Change Data Expenses data MIS Production master file Master Resource Planning System Reports Managers Accounting Files General ledger System .

complex application area to act as an expert consultant to end user. The different components of user Hardware. ‡ It also gives the reasoning and judgment to a user. Knowledge . Software.Expert System ‡ An expert system is a knowledge based information system that uses its knowledge about a specific. ‡ They can be used for either operational or management depending on whether they are giving expert advice to control operational processes or to help managerial end user in making decisions. ‡ Expert system provides answer to questions by making conclusions using knowledge contained in its knowledge database.base .

‡ Knowledge workers are people who hold formal university degrees and who are often members of recognized profession such as engineers. and scientists. lawyers.Knowledge Work and Office Systems ‡ Knowledge Work and Office Systems serve the information needs at the knowledge level of the organization. ‡ Their jobs consist primarily of creating new information and knowledge. such as scientific or engineering design workstations. promote the creation of new knowledge and technical expertise are properly integrated into business ‡ Office systems are information technology applications designed to increase data workers productivity by supporting coordinating and communicating activities of the typical office . KWS. doctors.

‡ The systems communicate with customers. suppliers. voice mail or video conferencing . scheduling through electronic calendars. and communication through electronic mail. and digital filing. ‡ Typical office systems handle and manage documents through word processing. document imaging. desktop publishing. and other organizations outside the firm and serves as clearing house for information and knowledge flow.

. Human Resource Systems. Finance and Accounting Systems.Systems From A Functional Perspective ‡ ‡ ‡ ‡ Sales and Marketing Systems. Manufacturing and Production Systems.

and advertising and promotion these products and services.Sales and Marketing Systems. planning and developing products and services to meet their needs. ‡ Knowledge level sales and marketing system support marketing a . advertising and promotional campaigns and pricing decision. sales and marketing system support market research. sales and marketing systems monitor trends affecting new products and sales opportunities. ‡ The sales and marketing function is responsible for selling the organization¶s product or service. ‡ At the management level. ‡ Marketing is concerned with identifying the customers for the firm¶s products or services. determining what they need or want. They analyze sales performance and the performance of the sales staff. support planning for new products and services and monitor the performance of competitors. ‡ At the top level.

‡ At the operational-level. . processing orders. sales and marketing system assist in locating and contacting prospective customers.analysis workstation. and providing customer service support. tracking sales.

markets. consumer.Examples of Sales and Marketing Information Systems System Description Organizational Level Operational Level Order Enter Process and track Processing orders Market analysis Identify customers and market using data on demographics. behavior and trends Determine prices for products and services Knowledge Pricing analysis Middle Sales Prepare 5-year sales forecast Strategic trends forecasting .

‡ Strategic-level manufacturing systems deal with the firm¶s long-term manufacturing goals. ‡ At the operational level controlling the actions of machines and equipments. ‡ At the management-level .Manufacturing and Production Systems ‡ The manufacturing and production function is responsible for actually producing the firm¶s goods and services. manufacturing and production systems analyze and monitor manufacturing and production cost and resource. . where to locate new plants or whether to invest in new manufacturing technology. ‡ At the knowledge-level designing of new products using the computer.

Units on order.Data elements in inventory master file Item code. Description. Units on hand. Inventory Status Report Item Code Description Units on hand Units on order .

Shipment Order Data Inventory control System Inventory master file Management Reports Online Queries Overview of an Inventory System. This system provides information about no of items available in inventory to support manufacturing and production activities. .

System Machine control Description Control the actions of machines and equipments Organizational Level Operational Level ComputerDesign new products aided design using the computer. Production Planning Facilities Production Decide when and how many products should be produced Decide where to locate new production facilities Knowledge Middle Strategic .

. ‡ Strategic level system for the finance and accounting function establish long-term investment goals for the firm and provide long range forecasts of the firm¶s financial performance. ‡ At the management level. bonds. stocks.Finance and Accounting Systems ‡ The finance function is responsible for managing the firm¶s financial asset. ‡ Knowledge systems support finance and accounting by providing analytical tools and workstations for designing the right mix of investments to maximize returns for the firms. depreciation. information system help managers oversee and control the firm¶s financial resources. and other investment in order to maximize the return of these financial asset ‡ The accounting function is responsible for maintaining and managing the firm¶s financial records ± receipts. such as cash. payroll to account for the flow of funds in a firm.

payments to vendors. .‡ Operational systems in finance and accounting track the flow of funds in the firm through transactions such as paycheck. securities reports and receipts.

Systems Accounts Receivable Portfolio analysis Budgeting Description Track the money owed the firm Design the firm¶s portfolio of investments Prepare short-term budgets Plan long term profits Organizational Level Operational Knowledge Management Profit Planning Strategic .

and creating programs to develop employees talents and skills. . maintaining complete records on existing employees. ‡ At the management ± level. number of positions and cost) for meetings the long term business plan. allocation and compensation of employees.Human Resource System ‡ The human resources function is responsible for developing. training and modeling of employee career paths and reporting relations. attracting and maintaining the firm¶s work force. type of positions. ‡ HR information systems support activities such as identifying potential employees. ‡ Strategic-level human resource systems identify the manpower requirement (skills. ‡ Knowledge system for human resource support analysis activities related to job design. education level. human system help managers monitor and analyze the recruitment.

Data elements in employee master file Employee: Number. Sex. Termination reason Termination Report Name Number Reason . Job title. Name. Department. Address. Date of hire.‡ HR operational system track the recruitment and placement of the firm¶s employee. Date Martial Status. Educational Background. Age. Date of termination. Salary.

Employee data Various Department To Payroll Human Resource System Employee master file Management Reports Online Queries An employee record keeping system. This system maintain data on the firm¶s employee to support the HR function .

and performance appraisals Career Design career path for pathing employee Compensate Monitor the range and analysis distribution of employee wages. development skills. and benefits Human Resource Planning Plan the long term labor force needs of the organization Knowledge Management Strategic .Systems Description Organizational Level Operational Training and Track employee training. salaries.

INTERRELATIONSHIPS: -TPS generally feed all other systems .MIS generally indicate when a DSS is needed and provide input for them to crunch .ESS take all internal data but usually only summary data from MIS and DSS level Output data from one is input data for others to process .


information and knowledge ± sets of activities.Integrate Function and Business Processes Process refer to the manner in which work is organized. and the ways in which management choose to coordinate the work. ‡ Business . information. marketing. manufacturing and research & development. coordinated and focused to produce a valuable product or services. ‡ Business process are concrete work flow of material. and knowledge. ‡ Business process can also be a liability if they are based on outdated ways of working that imped organizational responsiveness and efficiency. ‡ Business process refers to the unique ways in which organization coordinate work. ‡ Many business process are cross functional. transcending the boundaries between sales.

‡ Enterprise system create an integrated organization wideplatform to coordinate key internal process of the firm. ‡ Enterprise applications are designed to support organization ± wide process coordination and integration. entering the order) the accounting function (credit checking and billing for the orders. the order fulfillment process at many companies requires cooperation among the sales function (receiving the order. ‡ Information system for supply chain management and customer relationship management and help coordinate process for managing the firm¶s relationship with its suppliers and customers.‡ These cross-functional process cut across the traditional organizational structure. . grouping employees from different functional specialties to complete piece of work. ‡ For example.

Creating financial statements. Managing cash accounts Human Resource Hiring employees. checking for products. Make customer aware of the product. Enrolling employees in benefits plans . Producing bills of materials Identifying bills of materials. Selling the product. Evaluating employees job performance. Finance and accounts Paying the creditors.Examples of Functional Business Process Functional Area Manufacturing and Production Sales and Marketing Business Process Assembling the products.