DPB1033

MANAGEMENT INFORMATION
SYSTEM
CHAPTER 4
INFORMATION SYSTEMS AND ORGANIZATION STRATEGY
Describe how information technologies improves business processes
Identify types of information system (IS)

Office Information System (OIS)

An Office Information System (OIS) is a special purpose Automated
Information System (AIS) oriented to word processing, electronic mail,
and other similar office functions.
An OIS is normally comprised of one or more central processing units,
control units, storage devices, user terminals, and interfaces to connect
these components.
For example;
Office Information Systems provides client needs analysis, requirements
definition, networking systems design and quality maintenance.
Describe how information technologies improves business processes
Identify types of information system (IS)

Transaction Processing System

A transaction processing system is a computerized system that performs
and records the daily routine transactions necessary to conduct business,
such as sales order entry, hotel reservations, payroll, employee record
keeping, and shipping.
The principal purpose of systems at this level is to answer routine questions
and to track the flow of transactions through the organization.
For example;
The flow of payroll system.
A payroll system keeps track of money paid to employees. An employee time
sheet with the employee’s name, social security number, and number of
hours worked per week represents a single transaction for this system. Once
this transaction is input into the system, it updates the system’s database.
Describe how information technologies improves business processes
Identify types of information system (IS)

Management Information System

The term management information systems (MIS) also designates a specific
category of information systems serving middle management.
MIS provide middle managers with reports on the organization’s current
performance. This information is used to monitor and control the business
and predict future performance.
MIS summarize and report on the company’s basic operations using data
supplied by transaction processing systems.
For Example:
Total annual sales figures for specific products to planned targets.
Describe how information technologies improves business processes
Identify types of information system (IS)

Decision Support System

Decision-support systems (DSS) focus on problems that are unique and
rapidly changing, for which the procedure for arriving at a solution may not
be fully predefined in advance.
DSS use internal information from TPS and MIS, they often bring in
information from external sources, such as current stock prices or product
prices of competitors. These systems are employed by “super-user”
managers and business analysts who want to use sophisticated analytics and
models to analyze data.
For example:
Pricing strategies.
Describe how information technologies improves business processes
Identify types of information system (IS)

Executive Support System

Executive support systems (ESS) help senior management make these
decisions. They address non-routine decisions requiring judgment,
evaluation, and insight because there is no agreed-on procedure for arriving
at a solution.

ESS present graphs and data from many sources through an interface that is
easy for senior managers to use. Often the information is delivered to senior
executives through a portal, which uses a Web interface to present
integrated personalized business content.
Describe how information technologies improves business processes
Identify types of information system (IS)

Executive Support System

ESS are designed to incorporate data about external events, such as new
tax laws or competitors, but they also draw summarized information from
internal MIS and DSS.

They filter, compress, and track critical data, displaying the data of
greatest importance to senior managers. Increasingly, such systems include
business intelligence analytics for analyzing trends, forecasting, and “drilling
down” to data at greater levels of detail.
Describe how information technologies improves business processes
Identify the enterprises application system

Enterprise Resource Planning Systems

EnterpriseSystems Firms use enterprise systems, also known as enterprise
resource planning (ERP) systems, to integrate business processes in
manufacturing and production, finance and accounting, sales and marketing,
and human resources into a single software system.
Information that was previously fragmented in many different systems is
stored in a single comprehensive data repository where it can be used by
many different parts of the business.
For example;
a customer places an order, the order data flow automatically to other parts
of the company that are affected by them.
Describe how information technologies improves business processes
Identify the enterprises application system

Supply Chain Management Systems

Help manage relationships with their suppliers. These systems help
suppliers, purchasing firms, distributors, and logistics companies share
information about orders, production, inventory levels, and delivery of
products and services so they can source, produce, and deliver goods and
services efficiently.
For example;
Firms to link electronically to customers and to outsource their work to
other companies.
Describe how information technologies improves business processes
Identify the enterprises application system

Customer Relationship Management Systems

Help manage their relationships with their customers. 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. This information helps firms identify, attract, and retain the
most profitable customers; provide better service to existing customers; and increase
sales.
For example;
Keep reserve previous customer’s record for future transaction.
Describe how information technologies improves business processes
Identify the enterprises application system

Knowledge Management Systems

Some firms perform better than others because they have better
knowledge about how to create, produce, and deliver products and services.
This firm knowledge is unique, difficult to imitate, and can be leveraged into
long-term strategic benefits.
Knowledge management systems (KMS) enable organizations to better
manage processes for capturing and applying knowledge and expertise.
These systems collect all relevant knowledge and experience in the firm,
and make it available wherever and whenever it is needed to improve
business processes and management decisions. They also link the firm to
external sources of knowledge.
For example;
Google search engine.
Describe how information technologies improves business processes
Identify functional business systems

Accounting And Finance

Financial and accounting processes, including general ledger, accounts payable,
accounts receivable, fixed assets, cash management and forecasting, product-cost
accounting, cost-center accounting, asset accounting, tax accounting, credit
management, and financial reporting.

Human Resources
Human resources processes, including personnel administration, time
accounting, payroll, personnel planning and development, benefits
accounting, applicant tracking, time management, compensation, workforce
planning, performance management, and travel expense reporting.
Describe how information technologies improves business processes
Identify functional business systems

Engineering, manufacturing or Product Development

Manufacturing and production processes, including procurement, inventory
management, purchasing, shipping, production planning, production
scheduling, material requirements planning, quality control, distribution,
transportation execution, and plant and equipment maintenance.

Marketing and sales

Sales and marketing processes, including order processing, quotations,
contracts, product configuration, pricing, billing, credit checking, incentive
and commission management, and sales planning
Describe how information technologies improves business processes
Identify functional business systems

Distribution channel.
Digital markets provide many opportunities to sell directly to the consumer,
bypassing intermediaries, such as distributors or retail outlets. Eliminating
intermediaries in the distribution channel can significantly lower purchase
transaction costs.

Customer Service
People working together using collaboration and social tools can solve
customer complaints and issues faster and more effectively than if they were
working in isolation from one another.
Identify the people in information systems
Describe roles of people in the design, development and use of information systems

Programmers
Programmers are highly trained technical specialists who write the software
instructions for computers.

System analysts
Systems analysts constitute the principal liaisons between the information
systems groups and the rest of the organization. It is the systems analyst’s
job to translate business problems and requirements into information
requirements and systems.

Information systems managers

Information systems managers are leaders of teams of programmers and
analysts, project managers, physical facility managers, telecommunications
managers, or database specialists.
Identify the people in information systems
Describe roles of people in the design, development and use of information systems

Chief information officer (CIO)

The CIO is a senior manager who oversees the use of information technology in
the firm. Today’s CIOs are expected to have a strong business background as
well as information systems expertise and to play a leadership role in
integrating technology into the firm’s business strategy.
Chief security officer (CSO)
in charge of information systems security for the firm and is responsible for
enforcing the firm’s information security policy. The CSO is responsible for
educating and training users and information systems specialists about
security, keeping management aware of security threats and breakdowns, and
maintaining the tools and policies chosen to implement security.
Chief knowledge officer (CKO)
Responsible for the firm’s knowledge management program. The CKO helps
design programs and systems to find new sources of knowledge or to make
better use of existing knowledge in organizational and management processes.
Identify the people in information systems
Describe roles of people in the design, development and use of information systems

End Users
End users are representatives of departments outside of the information
systems group for whom applications are developed. These users are playing an
increasingly large role in the design and development of information systems.
Identify the people in information systems
Describe the importance of where the information-systems function is placed in an
organization

There are many types of business firms, and there are many ways in which
the IT function is organized within the firm. A very small company will not
have a formal information systems group. It might have one employee who is
responsible for keeping its networks and applications running, or it might use
consultants for these services.
Larger companies will have a separate information systems department,
which may be organized along several different lines, depending on the nature
and interests of the firm.
IT governance includes the strategy and policies for using information
technology within an organization. It specifies the decision rights and
framework for accountability to ensure that the use of information technology
supports the organization’s strategies and objectives.
Identify the people in information systems
Identify the different types of users of information systems

Innovators.
Innovators are the first individuals to adopt a new technology. Innovators are
willing to take risks, are the youngest in age, have the highest social class,
have great financial liquidity, are very social, and have the closest contact
with scientific sources and interaction with other innovators.

Early adopters.
The early adopters are those who adopt innovation after a technology has been
introduced and proven. For example; A young education people.

Early majority.
Individuals in this category adopt an innovation after a varying degree of time.
This time of adoption is significantly longer than the innovators and early
adopters.
Identify the people in information systems
Identify the different types of users of information systems

Late majority.
The late majority will adopt an innovation after the average member of the
society.

Laggards.
Individuals in this category are the last to adopt an innovation. Unlike those in
the previous categories, individuals in this category show no opinion
leadership.