IE-401 MANAGEMENT

INFORMATION SYSTEM (MIS)

Lecture-3 (Global E-Business)
Dr. Sikandar Bilal Khattak
Department of Industrial Engineering
University of Engineering and Technology Peshawar, Pakistan
 This Lecture
■ Business Processes

■ Functional Perspective

■ Systems for Management Groups

■ Enterprise Applications

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 Background
■ A business must deal with many different pieces of information about:

– Suppliers

– Customers

– Employees

– Invoices

– Payments

– Products and Services

■ Information System helps the organizations to manage different types of

information for better decision making.
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 Business Processes
Definition
■ Manner in which work is organized, coordinated, and focused to produce a
valuable product or service.

■ Collection of activities required to produce a product or service

– Activities are supported by flow of material, information, and knowledge

among the participants.

■ Coordination of work, information, and knowledge, and the ways in which

management chooses to coordinate work.

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 Business Processes
Significance
■ Performance of a business firms depends on how well its business processes
are designed and coordinated.

■ A business process can be a source of competitive strength.

– Involves innovation or is executed better than others.

■ A busines process can be a liability

– If it is inefficient or impedes organization responsiveness and efficiency.

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 Business Processes
Specific Functional Areas
■ Many business processes are tied to a specific
functional area.

– For Example
■ Sales and marketing function

– responsible for identifying customers

■ Human resource function

– responsible for hiring employees.

■ Manufacturing and Production

– Responsible for assembling product

■ Finance and Accounting

– Creating financial statements

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 Business Processes
Cross Functional Areas
■ Some business processes cross many
different functional areas

– Requires coordination across

departments

– For Example (Figure 2.1)

■ The sales department receive the order

■ Account department verify payment

■ Production department produces the

product.

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 Business Processes
Role of Information Technology (IT)
■ Information technology enhances business processes in two main ways
1. Increasing efficiency of existing processes

– Automating steps that were manual

2. Enabling entirely new processes that are capable of transforming the

businesses

– Change flow of information

– Replace sequential steps with parallel steps

– Eliminate delays in decision making

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 Business Processes
Conclusion

■ Its important to play close attention to business processes.

■ Analyzing business processes is important

– to understanding how a business works.

– To improve/change a business by improving its processes

■ To make it more efficient and effective

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FUNCTIONAL PERSPECTIVE

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 Functional Perspective
■ A business organization has systems supporting processes for each of the
major business functions and for each of the main management group.

1. Sales and marketing

2. Manufacturing and Production

3. Finance and Accounting

4. Human Resource

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 Functional Perspective
1. Sales and Marketing Systems
■ Functional concerns include:

– Sales management, customer

identification market research,
advertising and promotion, pricing, new
products

■ Examples of systems:

– Order processing (operational level)

– Pricing analysis (middle management)

– Sales trend forecasting (senior

management)

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 Functional Perspective
2. Manufacturing and Production Systems
■ Functional concerns include:

– Managing production facilities,

production goals, production materials,
and scheduling

■ Examples of systems:

– Machine control (operational

management)

– Production planning (middle

management)

– Facilities location (senior management)

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 Functional Perspective
3. Finance and Accounting Systems
■ Functional concerns include:

– Managing financial assets (cash,

stocks, etc.) and capitalization of firm,
and managing firm’s financial records

■ Examples of systems:

– Accounts receivable (operational

management)

– Budgeting (middle management)

– Profit planning (senior management)

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 Functional Perspective
4. Human Resource Systems
■ Functional concerns include:

– Identifying potential employees, maintaining

employee records, creating programs to
develop employee talent and skills

■ Examples of systems:

– Training and development (operational

management)

– Compensation analysis (middle management)

– Human resources planning (senior

management)

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 SYSTEMS FOR
MANAGEMENT GROUPS

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 Transaction Processing System (TPS)
■ Perform and record daily routine
transactions necessary to conduct
business
– E.g. sales order entry, payroll, shipping
■ Allow managers to monitor status of
internal operations and relations with
external environment
■ Serve operational levels

■ Serve predefined, structured goals and

decision making

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 Business Intelligence System (BIS)
■ Focus on delivering information to support management decision making

■ It’s a contemporary term for data and software tools for organizing, analyzing,
and provide access to data to help mangers and other enterprise users to
make informed decisions.

■ Addresses decision making needs of all management levels.

■ Business intelligence at middle management help with monitoring, controlling,

decision making, and administrative activities.

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 Management Information System (MIS)
■ Serve middle management

■ Provide reports on firm’s current

performance, based on data from
TPS

■ Provide answers to routine

questions with predefined
procedure for answering them

■ Typically have little analytic

capability
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 Decision Support System (DSS)
■ Serve middle management

■ Focus on problems that unique and rapidly changing.

– Procedures for solution may not be fully

predefined in advance.
■ Support nonroutine decision making
– E.g. What is impact on production schedule if
December sales doubled?
■ Often use external information as well from TPS and
MIS
■ Model driven DSS
– Voyage-estimating systems
■ Data driven DSS
– Intrawest’s marketing analysis systems

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 Executive Support System (ESS)
■ Support senior management through a portal

■ Address nonroutine decisions requiring

judgment, evaluation, and insight

■ Incorporate data about external events (e.g. new

tax laws or competitors) as well as summarized
information from internal MIS and DSS

– E.g. ESS that provides minute-to-minute view

of firm’s financial performance as measured
by working capital, accounts receivable,
accounts payable, cash flow, and inventory.

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 Digital Dashboard
■ Popular tool for management decision
makers

■ Display information on a single screen

■ Typically information is related to Key

Performance Indicators (KPIS) in the
form of

– Graphs

– Charts

– Animations

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 Relationship of System to one another
■ TPS

– Major source of data for other

systems

■ ESS

– Recipient of data from lower-level

systems

■ Data may be exchanged between

systems

■ In reality, most businesses’ systems only

loosely integrated

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ENTERPRISE APPLICATIONS

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 Enterprise Applications
■ Multiple systems in an organizations.

■ Corporations usually acquire small businesses having different

systems
– Might have a mix of old and new systems

■ One of the solution is to implement enterprise applications.

• Span functional areas

• Execute business processes across firm

• Include all levels of management

• Four major applications:

• Enterprise systems
• Supply chain management systems
• Customer relationship management systems
• Knowledge management systems

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 Enterprise Applications
Enterprise Systems
■ Collects data from different firm functions and
stores data in single central data repository

■ Resolves problem of fragmented, redundant

data sets and systems

■ Enable:

– Coordination of daily activities

– Efficient response to customer orders

(production, inventory)

– Provide valuable information for

improving management decision making

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 Enterprise Applications
Supply Chain Management Systems
■ Manage firm’s relationships with
suppliers

■ Share information about

– Orders, production, inventory levels,

delivery of products and services

■ Goal: Right amount of products to

destination with least amount of time
and lowest cost

■ One type of Interorganizational System

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 Enterprise Applications
Customer Relationship Management (CRM) Systems
■ Provide information to coordinate all
of the business processes that deal
with customers in sales, marketing,
and service to optimize revenue,
customer satisfaction, and customer
retention.

■ Integrate firm’s customer-related

processes and consolidate customer
information from multiple
communication channels

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 Enterprise Applications
Knowledge Management Systems
• Support processes for acquiring, creating, storing, distributing, applying,
integrating knowledge

• Collect internal knowledge and link to external knowledge

• Include enterprise-wide systems for:

• Managing documents, graphics and other digital knowledge objects

• Directories of employees with expertise

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 Enterprise Applications
Intranets
■ Internal networks built with same tools and standards as Internet

■ Used for internal distribution of information to employees

■ Typically utilize private portal providing single point of access to

several systems

■ May connect to company’s transaction systems

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 Enterprise Applications
Extranets
■ Intranets extended to authorized users outside the company

■ Expedite flow of information between firm and its suppliers

and customers

■ Can be used to allow different firms to collaborate on product

design, marketing, and production

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 Enterprise Applications
E-Business
■ Use of digital technology and Internet to execute major business
processes in the enterprise

■ Includes e-commerce (electronic commerce):

– Buying and selling of goods over Internet

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 Enterprise Applications
E-Government
■ The application of Internet and networking technologies to digitally
enable government and public sector agencies’ relationships with

– citizens,

– businesses,

– and other arms of government

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 References
■ Chapter 2, Management Information Systems By K.C. Laudon, J.P. Laudon, 17th
Edition

■ Chapter 2, Management Information Systems By K.C. Laudon, J.P. Laudon, 12th

Edition

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 Thank You
Any Questions?

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