FUNCTIONAL, ENTERPRISE AND INTERORGANIZATIONAL INFORMATION SYSTEMS

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CHAPTER 8

• FUNCTIONAL, ENTERPRISE AND INTERORGANIZATIONAL
  INFORMATION SYSTEMS

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Information System Support for Management
Stra- tegic Level
Accounting IS
Financing IS
Manufacturing IS
Tactical Level
Human Resources IS
Operational Level
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Characteristics ofFunctional Information Systems

• Comprise of several smaller information systems
• Specific IS applications
• can be completely independent
• can be integrated to form a departmental
  information system
• can be integrated across departmental lines
• Interface with each other to form the enterprise
  information system
• Interface with the environment

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Transaction Processing Information Systems

• Transaction
• major business operation
• provides the mission-critical activities
• may generate additional transaction
• Transaction Processing System (TPS)
• computerized information system
• supports the transaction processing

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Characteristics of TPS

• The main objective to support business running
  properly and efficient
• Main characteristics
• Large amount of data is processed
• The sources of data are mostly internal, and the
  output is intended mainly for an internal
  audience
• The TPS processes data on a regular basis
• Input and output data are structured
• High level of detail
• Low computation complexity

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Technical Requirements

• Large storage (database) capacity
• High processing speed
• High level of accuracy, data integrity, and
  security
• High processing reliability
• Fault tolerance

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The Operation of TPS

• Data input
• Capturing
• Entering
• Data processing
• Validating
• Editing
• Running calculations
• Manipulating
• Information output

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Data Processing

• Batch processing data is collected and
  processed periodically
• Online processing data is processed as soon as
  data received
• Client-Server TPS
• Internet-based TPS
• Hybrid processing

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TPS Outputs

• Report main type of TPS outputs
• Detailed periodic report
• Summary report
• Exception report

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TPSs (Examples)

• Order entry systems
• Billing Systems
• Purchasing systems
• Accounts receivable systems
• Payroll systems
• Inventory control systems
• General ledger systems

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Management Information Systems

• Provide routine information to managers in the
  functional areas
• MIS inputs
• Come from TPS
• Internal databases
• External databases
• MIS outputs various reports

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MIS outputs

• Routine, scheduled reports
• Exception reports
• Ad hoc reports
• Drill-down reports
• Key-indicator reports
• Comparative reports

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Accounting Finance Systems

• Financial Planning and Budgeting
• Financial and Economic Forecasting
• Planning for Cash Management
• Budgeting
• Investment management
• Financial control
• Budgetary control ? Auditing
• Financial health analysis ? Profitability
  analysis
• Cost control

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Marketing Sales Systems

• Distribution Channels
• provide the goods or services to the customers
• May be short, long or contain other channels
• support all marketing linkages, such as
  after-sales customer support
• Marketing management
• Customer relationship management

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Production and Operations Systems

• Supply-Chain Management
• Logistics and Material Management
• Planning Production/Operations
• Automatic Design Work and Manufacturing

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Supply-Chain Management (SCM)
INFORMATION FLOW
SCM plans and controls the flow of information
and cash
CASH FLOW
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Supply-Chain Management (SCM)

• A supply chain
• the flow of materials, from material suppliers to
  end customers
• The information and cash flows from end customers
  to raw material suppliers
• SCM is to plan, organize and control supply-chain
  activities.

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Logistics and Material Management

• Inventory Management
• determining how much inventory to keep
• what to order, from whom, when to order and how
  much
• inventory model economic order quantity (EOQ)
• Quality Control
• providing information about the quality of
  incoming material and parts,
• standard quality control information systems and
  expert systems

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Planning Production/Operations

• Material Requirements Planning (MRP)
• Just-in-Time Systems - minimizes waste of all
  kinds, improves processes and systems, and
  maintains respect for all workers
• Manufacturing Resource Planning (MRPII) -
  connects the regular MRP to other functional
  areas
• Project Management

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Automatic Design Work and Manufacturing

• Computer-Aided Design (CAD)
• Designs parts and items, compiles list of parts
• Computer-Aided Manufacturing (CAM)
• Uses digital design output and control the
  production
• Computer-Integrated Manufacturing (CIM)
• Simplification technologies
• Automation of many manufacturing processes
• Integration of design, manufacturing and related
  functions

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Human Resources Management Systems

• Hiring
• Positions inventory
• Performance Evaluation
• Benefits administration
• Features
• Interface with environment
• Use Internet and Intranet

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How to Integrate Information Systems

• Connect existing systems
• maximizes the use of existing systems and
  minimizes the changes in them
• Using Supply Chain Management software
• uses one integrated package in one or several
  functional areas
• Enterprise Resource Planning (ERP)
• controls all major business processes with a
  single software architecture in real time

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ERP
Central SAP Database Servers
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Definition of Interorganizational Information
System

• Supports information flows between two or more
  organizations
• Strategic impact of IOISs
• Networks
• Private (VANs)
• Publicly accessed (VPNs)

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Types of Interorganizational Systems

• Global systems
• Electronic data interchange (EDI)
• Electronic funds transfer (EFT)
• Extranets
• Shared databases
• Integrated messaging

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Global Information Systems

• Who Uses Global Systems?
• Companies with divisions in foreign countries
• Virtual Global Corporations
• Business activities depend on
• Goals
• Basic strategies

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Goals for International Activities

• International sales
• International production and sales
• International product development, production,
  and sales

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Basic Strategies

• International Products are designed in central
  location, may be produced and sold based on local
  conditions
• Multinational International divisions operate
  independently of each other

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Virtual Global Corporations

• Each partner brings its core competence
• Full utilization of resources
• Opportunism
• Spanning boundaries between organizations
• IT support

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Benefits ofGlobal Information Systems

• Effective communication at a reasonable cost
• Effective collaboration with groupware software,
  Group DSS, extranets, and teleconferencing devices

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Electronic Data Interchange (EDI)

• Components of EDI
• Data formatting standards
• EDI translators
• Networks
• VANs
• Internet