Managing Information Systems

Information Systems in Organisations

Part 1
Sections 2.1 and 2.2

1
 Objectives
• To understand the role of IS within
organisations
• To understand the diversity of types of IS
within a business / organisation
• To understand relationships between IS and
business functions

2
 Topics
• Types of Information System in
Organisations:
– By organisational level
– By function within organisational level
– Examples in functional areas

3
 IS at the Organisational Level
KIND OF SYSTEM GROUPS SERVED
STRATEGIC LEVEL SENIOR MANAGERS

MANAGEMENT LEVEL MIDDLE MANAGERS

KNOWLEDGE LEVEL KNOWLEDGE &

DATA WORKERS

OPERATIONAL OPERATIONAL
LEVEL MANAGERS
SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN
MARKETING RESOURCES 4
 IS at the Organisational Level
• Operational-level
– Elementary activities and routine transactions
– Data current and accurate
• Knowledge-level
– Support knowledge and data workers
– Integrate new knowledge into the business
– Office automation

5
 IS at the Organisational Level
• Management-level
– Periodic monitoring, control, decision-making
and administration
– Is the business working well?
• Strategic-level
– Long-term (e.g. 5 year) planning and strategy
– Internal and external information

6
 Examples
• What examples can you think of at the
different organisational levels?

7
 Types of IS
• Transaction Processing Systems (TPS)
• Knowledge Work Systems (KWS)
• Office Automation Systems (OAS)
• Management Information Systems (MIS)
• Decision-support Systems (DSS)
• Executive Support Systems (ESS)

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 Transaction Processing Systems
Systems that perform and record daily routine
transactions necessary for business
Operational-level Systems
Order tracking Machine control Securities trading Payroll Compensation

Order Plant scheduling Cash management Accounts Training and

processing payable development

Material movement Accounts Employee

and control receivable records

Sales and Manufacturing Finance Accounting Human

Marketing Resources
9
 Knowledge Work Systems
Systems that aid the creation and integration of new
knowledge into an organisation
Knowledge-level Systems
Engineering workstations Graphics workstations Managerial workstations

10
 Office Automation Systems
Systems that are designed to increase the
productivity of data workers
Knowledge-level Systems
Word processing Document imaging E-mail / electronic
calendars

11
 Management Information Systems
Systems that serve planning, control and decision-
making through routine summary and reports
Management-level Systems
Sales Inventory control Annual budgeting Capital Relocation
management investment analysis

Sales and Manufacturing Finance Accounting Human

Marketing Resources

12
 Decision-support Systems
Systems that combine data, models and analysis
tools for non-routine decision-making
Management-level Systems
Sales region Production Cost analysis Pricing / Contract cost
analysis scheduling profitability analysis
analysis
Sales and Manufacturing Finance Accounting Human
Marketing Resources

13
 Executive Support Systems
Systems that support non-routine decision-making
through advanced graphics and communications
Strategic-level Systems
5-year sales 5-year operating 5-year budget Profit Personnel
trend plan forecasting planning planning
forecasting
Sales and Manufacturing Finance Accounting Human
Marketing Resources

14
 Interrelationships
• TPS major producer of data
ESS
• External data also required
for MIS, DSS and ESS
• Typical loose coupling of MIS DSS

systems
• ‘Digital firms’ have tighter
integration KWS
TPS
OAS

15
 Functional Examples
• Examples of IS by function:
– Sales and marketing
– Manufacturing and production
– Finance and accounting
– Human resources

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 Sales and Marketing
System Description Organisational
Level
Order processing Enter, process and Operational
track orders

Market analysis Identify customers and Knowledge

markets

Pricing analysis Determine prices Management

Sales trends Prepare 5 year Strategic

forecasts

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 Manufacturing and Production
System Description Organisational
Level
Machine control Control actions of Operational
equipment

Computer-aided design Design new products Knowledge

(CAD)

Production planning Decide number and Management

schedule of products

Facilities location Decide where to locate Strategic

facilities

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 Finance and Accounting
System Description Organisational
Level
Accounts receivable Track money owed to Operational
firm

Portfolio analysis Design firm’s Knowledge

investments

Budgeting Prepare short-term Management

budgets

Profit planning Plan long-term profits Strategic

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 Human Resources
System Description Organisational
Level
Training and Track training, skills Operational
development and appraisals

Career paths Design employee Knowledge

career paths

Compensation analysis Monitor wages, Management

salaries and benefits

Human resources Plan long-term Strategic

planning workforce needs

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 Summary
• Looked at the role of IS within organisations
– At organisational levels
• Looked at the diversity of types of IS within a
business / organisation
– Six different functional types of IS
• Looked at relationships between IS and business
functions
– Examples by functional area

21