THE STRATEGIC ROLE OF INFORMATION SYSTEMS

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2. THE STRATEGIC ROLE OF INFORMATION SYSTEMS
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LEARNING OBJECTIVES

• ANALYZE ROLES OF 6 TYPES OF INFORMATION SYSTEMS
• DESCRIBE RELATIONSHIPS AMONG INFORMATION SYSTEMS
• DISTINGUISH STRATEGIC INFORMATION SYSTEMS

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LEARNING OBJECTIVES

• DESCRIBE HOW INFORMATION SYSTEMS SUPPORT LEVELS
  OF BUSINESS STRATEGY
• EXPLAIN DIFFICULTIES OF BUILDING, SUSTAINING
  STRATEGIC INFORMATION SYSTEMS

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MANAGEMENT CHALLENGES

• INTEGRATION
• ENTERPRISE RESOURCE MANAGEMENT
• CONNECTING ORGANIZATIONAL LEVELS DIFFICULT,
  COSTLY
• SUSTAIN COMPETITIVE ADVANTAGE
• INFO SYSTEMS MUST BE FLEXIBLE TO ENSURE LONG-TERM
  PROFITS

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TYPES OF INFORMATION SYSTEMS
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MAJOR TYPES OF SYSTEMS

• EXECUTIVE SUPPORT SYSTEMS (ESS)
• MANAGEMENT INFORMATION SYSTEMS (MIS)
• DECISION SUPPORT SYSTEMS (DSS)
• KNOWLEDGE WORK SYSTEMS (KWS)
• OFFICE AUTOMATION SYSTEMS (OAS)
• TRANSACTION PROCESSING SYSTEMS (TPS)

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TRANSACTION PROCESSING SYSTEMS (TPS)

• OPERATIONAL LEVEL
• INPUTS TRANSACTIONS, EVENTS
• PROCESSING UPDATING
• OUTPUTS DETAILED REPORTS
• USERS OPERATIONS PERSONNEL
• EXAMPLE ACCOUNTS PAYABLE

TPS
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TYPICAL TPS APPLICATIONSSales Marketing Systems

• MAJOR FUNCTIONS OF SYSTEMS
• Sales Management Market Research Promotion
  Pricing New Products
• MAJOR APPLICATION SYSTEMS
• Sales Order Info System Market Research System
  Pricing System

TPS
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TYPICAL TPS APPLICATIONSManufacturing
Production Systems

• MAJOR FUNCTIONS OF SYSTEMS
• Scheduling Purchasing Shipping / Receiving
  Engineering Operations
• MAJOR APPLICATION SYSTEMS
• Materials Resource Planning Systems Purchase
  Order Control Systems Engineering Systems
  Quality Control Systems

TPS
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TYPICAL TPS APPLICATIONSFinance Accounting
Systems

• MAJOR FUNCTIONS OF SYSTEMS
• Budgeting General Ledger Billing Cost
  Accounting
• MAJOR APPLICATION SYSTEMS
• General Ledger Accounts Receivable / Payable
  Budgeting Funds Management Systems

TPS
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TYPICAL TPS APPLICATIONSHuman Resources Systems

• MAJOR FUNCTIONS OF SYSTEMS
• Personnel Records Benefits Compensation Labor
  Relations Training
• MAJOR APPLICATION SYSTEMS
• Payroll Employee Records Benefit Systems
  Career Path Systems Personnel Training Systems

TPS
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TYPICAL TPS APPLICATIONSOther Types (e.g.,
University)

• MAJOR FUNCTIONS OF SYSTEMS
• Admissions Grade Records Course Records Alumni
• MAJOR APPLICATION SYSTEMS
• Registration System Student Transcript System
  Curriculum Class Control System Alumni
  Benefactor System

TPS
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KNOWLEDGE WORK SYSTEMS (KWS)

• KNOWLEDGE LEVEL
• INPUTS DESIGN SPECS
• PROCESSING MODELLING
• OUTPUTS DESIGNS, GRAPHICS
• USERS TECHNICAL STAFF
• EXAMPLE ENGINEERING WORK
  STATION

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OFFICE AUTOMATION SYSTEMS (OAS)

• 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)

• STRUCTURED SEMI-STRUCTURED DECISIONS
• REPORT CONTROL ORIENTED
• PAST PRESENT DATA
• INTERNAL ORIENTATION
• LENGTHY DESIGN PROCESS

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TPS DATA FOR MIS APPLICATIONS
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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)

• 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
• EXAMPLE 5 YEAR OPERATING PLAN

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EXECUTIVE SUPPORT SYSTEMS (ESS)

• TOP LEVEL MANAGEMENT
• DESIGNED TO THE INDIVIDUAL
• TIES CEO TO ALL LEVELS
• VERY EXPENSIVE TO KEEP UP
• EXTENSIVE SUPPORT STAFF

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INTERRELATIONSHIPS AMONG SYSTEMS
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STRATEGIC ROLE OF INFORMATION SYSTEMS

• STRATEGIC INFO SYSTEM
• CAN CHANGE GOALS, OPERATIONS
• PRODUCTS, SERVICES
• ENVIRONMENT
• TO GAIN COMPETITIVE ADVANTAGE

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BUSINESS-LEVEL STRATEGY

• PRODUCT DIFFERENTIATION
• FOCUSED DIFFERENTIATION
• DATAMINING
• SUPPLY CHAIN MANAGEMENT
• EFFICIENT CUSTOMER RESPONSE
• ENHANCING CORE COMPETENCIES

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VALUE CHAIN MODEL

• HIGHLIGHTS PRIMARY SUPPORT ACTIVITIES THAT ADD
  VALUE TO PRODUCTS, SERVICES
• PRIMARY DIRECTLY RELATED TO PRODUCTION,
  DISTRIBUTION
• SUPPORT INFRASTRUCTURE, HUMAN RESOURCES,
  TECHNOLOGY, PROCUREMENT

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COMPETITIVE FORCES MODEL
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MANAGING STRATEGIC TRANSITION

• SOCIOTECHNICAL SHIFT
• MANAGE TRANSITIONS
• VENDOR-MANAGED INVENTORIES
• IDENTIFY TECHNOLOGY THAT PROVIDES STRATEGIC
  ADVANTAGE

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2. THE STRATEGIC ROLE OF INFORMATION SYSTEMS
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