Transcript CM3003 - Payap University

Information Systems – Week 2
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Last week – Introduction
» What is an Information System?
» Why use Information Systems?
» Reading and Preparation for Case studies
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This week
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Discussion of Assignment – any teams yet?
Strategic Role of Information Systems
Types of system and how they fit in
Case Studies
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Strategic Role
“Understanding Information Technology (IT) is vital to
every manager simply because IT is part of every
manager's job. Managers in the 1990s must use IT to
leverage their contributions to the organisation, and they
must be knowledgeable about IT so that they can lead
others to do the same.”
Professor Richard L. Nolan, Harvard Business School
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Strategic Role of Information Systems
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Strategic Information System
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Can Change:
» Goals, Operations
» Products, Services
» Environment
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To Gain Competitive Advantage
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Changing Concepts of IS
Time
period
Conception of
information
Information
system
Purpose
1950-1960
Bureaucratic requirement
Electronic
Accounting
Speed accounting &
Paper processing
1960s-1970s
General purpose support
MIS
Speed general Reporting
requirements
DSS - ESS
Improve, customize
Decision making
Strategic
system
Promote survival and
prosperity of
organization
1970s-1980s
1985-now
Customized management
support
Strategic resource
Competitive
advantage
Business foundation
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Business-level Strategy
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Product Differentiation
Focused Differentiation
Data-mining
Supply Chain Management
Efficient Customer Response
Enhancing Core Competencies
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Strategy Levels & IT
Strategies
Industry
Firm
Models
IT technologies
Cooperation vs competition
Licensing
Standards
Competitive forces model
Network economies
Electronic transactions
Communications networks
Interorganizational systems
Information partnerships
Synergy
Core competencies
Core competency
Knowledge systems
Organizational systems
Value chain analysis
Datamining
It-based products / services
Interorganizational systems
Supply chain management
Efficient customer response
Business Low cost
Differentiation
Scope
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Competitive Forces Model
NEW
MARKET
ENTRANTS
SUBSTITUTE
PRODUCTS &
SERVICES
THE FIRM
SUPPLIERS
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TRADITIONAL
COMPETITION
CUSTOMERS
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Countering Competitive Forces
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Product differentiation
Focused differentiation
Link customers & suppliers
Low-cost producer
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Use the Internet!
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Countering Competitive Forces
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Product Differentiation
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RBC Centura
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Focused Differentiation
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Hyatt Hotels TravelWeb
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Links to Customers and
Suppliers
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Federal Express
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Low-cost Producer
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AVEX Electronics
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Low-cost Vendor
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E-Buyer
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Types of Information System
KIND OF SYSTEM
GROUPS SERVED
STRATEGIC LEVEL
SENIOR MANAGERS
MANAGEMENT LEVEL
MIDDLE MANAGERS
KNOWLEDGE LEVEL
KNOWLEDGE &
DATA WORKERS
OPERATIONAL
LEVEL
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SALES &
MARKETING
OPERATIONAL
MANAGERS
MANUFACTURING
FINANCE
ACCOUNTING
HUMAN
RESOURCES
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Major Types Of Systems
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Executive Support Systems (ESS)
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Management Information Systems (MIS)
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Decision Support Systems (DSS)
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Knowledge Work Systems (KWS)
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Office Automation Systems (OAS)
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Transaction Processing Systems (TPS or OLTP)
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Transaction Processing Systems (TPS)
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Operational Level
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Inputs: Transactions, Events
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Processing: Updating
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Outputs: Detailed Reports
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Users: Operations Personnel
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Example: Accounts Payable
The following examples are taken from Laudon & Laudon
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TPS
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Typical TPS Applications
Sales & Marketing Systems
Major System Functions:
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Sales Management
Market Research
Promotion
Pricing
New Products
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Major System Applications:
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Sales Order Info System
Market Research System
Pricing System
TPS
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Manufacturing & Production Systems
Major System Functions:
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Scheduling
Purchasing
Shipping/Receiving
Engineering
Operations
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Major System Applications:
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TPS
Materials
Resource Planning Systems
Purchase Order Control
Engineering Systems
Quality Control
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Finance & Accounting Systems
Major System Functions:
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Budgeting
General Ledger
Billing
Cost Accounting
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Major System Applications:
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General Ledger
Accounts Receivable/Payable
Budgeting
Funds Management
TPS
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Human Resource Systems
Major System Functions:
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Personnel Records
Benefits
Compensation
Labour Relations
Training
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Major System Applications:
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Payroll
Employee Records
Benefit Systems
Career Path Systems
Personnel Training Systems
TPS
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Others – e.g. University
Major System Functions:
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Admissions
Grade Records
Course Records
Time-tabling
Alumni relations
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Major System Applications:
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Registration System
Student Transcript System
Curriculum Class Control
Scheduling
Alumni Benefactor System
TPS
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Knowledge Work Systems (KWS)
KNOWLEDGE LEVEL
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Inputs: Design Specs
Processing: Modelling
Outputs: Designs, Graphics
Users: Technical Staff
EXAMPLE:
ENGINEERING WORK STATION
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Office Automation Systems (OAS)
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Toward A “Paperless” Office
Redesign Of Work Flow
Integrated Software
Ergonomic Design
Bright, Cheerful Work Space
EXAMPLE: PRESENTATION GRAPHICS
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Management Information Systems (MIS)
MANAGEMENT LEVEL
 Inputs: High Volume Data
 Processing: Simple Models
 Outputs: Summary Reports
 Users: Middle Managers
EXAMPLE: ANNUAL BUDGETING
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Management Information Systems (MIS)
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Structured & Semi-structured Decisions
Report Control Oriented
Past & Present Data
Internal Orientation
Lengthy Design Process
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TPS Data for MIS Applications
TPS
MIS
Order Processing
SALES
DATA
System
ORDER FILE
Materials Resource
Planning System
PRODUCTION MASTER FILE
General Ledger
System
ACCOUNTING FILES
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PRODUCT
COST
MIS
REPORTS
PRODUCT
CHANGE
DATA
EXPENSE
DATA
MANAGERS
MIS FILES
Source: Laudon & Laudon
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Decision Support Systems (DSS)
MANAGEMENT LEVEL
 Inputs: Low Volume Data
 Processing: Interactive
 Outputs: Decision Analysis
 Users: Professionals, Staff
EXAMPLE: CONTRACT COST ANALYSIS
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Decision Support Systems (DSS)
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Flexible, Adaptable, Quick
User Controls Inputs/outputs
No Professional Programming
Supports Decision Process
Sophisticated Modeling Tools
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Executive Support Systems (ESS)
STRATEGIC LEVEL
 Inputs: Aggregate Data
 Processing: Interactive
 Outputs: Projections
 Users: Senior Managers
TOP LEVEL MANAGEMENT
 Designed to the Individual
 Ties CEO to All Levels
 Very Expensive to Keep Up
 Extensive Support Staff
EXAMPLE: 5 YEAR
OPERATING PLAN
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Interrelationships Among Systems
ESS
MIS
KWS
DSS
TPS
OAS
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Goodsell Estate Agents
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Problems identified:
» Sales slipping
» Rapid staff turnover
» Not working as a team
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What can be done?
» Analysis of missed sales
– Are we not showing customers what they want?
– Is it lack of expertise from rapid turnover?
» How can we share information among the team?
– Could improve morale and cut attrition
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Zilkha Exploration
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A new approach to oil exploration
» Virtual company with low overheads
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Purchased oil exploration data, not leases
» Hired expert geologists to analyse mass of data
» Analysed data using latest computer technology
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Then bought leases and contracted other to drill
» Had twice the hit rate for new oil fields than
conventional exploration procedures
» Zilkha was bought out for a billion dollars in 1998
http://www.zilkha.com/zilkhaenergy/
http://www.zilkha.com/
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