Lecture Six Organizational Information Systems

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Lecture SixOrganizational Information Systems
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Objectives

• Describe different levels of an Organization
• Explain Transaction Processing System, Management
  Information System, Executive Information System
• Describe the Characteristics of Transaction
  Processing System
• Describe the Characteristics of Management
  Information System
• Describe the Characteristics of Executive
  Information System
• Explain the information systems that span
  organizational boundaries
• Explain Functional Area Information Systems

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Different Types of Information Systems for
Different Levels of the Organization

• Organizational levels
• Operational Level
• Managerial Level
• Executive Level
• Different levels have different information needs
  
• The type of information required by managers is
  directly related to
• Level of management
• Amount of structure in the decision situation
  they face.

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Structured Decision

• They involve situations where the procedures to
  follow when a decision is needed can be specified
  in advance.
• Pre-defined decisions.
• Regular could be daily.
• Procedural.
• Examples
• Checking mail,
• updating agenda,

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Semi-structured Decisions

• They involve situations where the procedures can
  be pre-specified but not enough to lead to a
  definite recommended decision.
• Pre-defined decisions but could be altered.
• Regular could be daily, possibility of change.
• Procedural but conditions could interfere.
• Examples
• having to go for an unscheduled meeting,
• unexpected opportunity for investment

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Unstructured Decisions

• They involve situations where it is not possible
  to specify in advance most of the decision
  procedures to follow.
• Not defined, unknown prior to their occurrence.
• Not regular.
• Could be one time only.
• Examples
• Canceling an appointment for an urgent matter,
• Calling for an instant meeting, etc

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Levels of an Organization
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Operational Level

• Where the routine day-to-day interaction with
  customers occurs
• Information system
• Automates repetitive activities
• Improves efficiency of the customer interface
• Decisions
• Highly structured and recurring
• Time horizon is focused on current day
• Repetitive

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Operational Level
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Managerial Level

• Where functional managers monitor operational
  level activities.
• Mid-level managers and functional managers.
• Example marketing manager, finance manager.
• Information system
• Provides summary information of operational level
  activities to the higher levels of the
  organization.
• Decisions
• Moderately complex
• Time horizon up to a few months
• Semi-structured

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Managerial Level
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Executive Level

• Where long-term strategic issues are decided
• Information systems
• Aggregate summaries
• Statistical analyses, trends, and projections
• Decisions
• Very complex
• Long-term ramifications
• Unstructured

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Executive Level
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General Types of Information Systems

• All Information Systems use the basic systems
  model

• Input time card, employee list and salary data
• Processing calculating pay and updating ledger
  and databases
• Output pay cheques, receipts and management
  reports

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Transaction Processing Systems

• Process business transactions
• Transactions events that occur as a regular part
  of business day-to-day operations
• Used at operational level
• Goals
• Automate repetitive information processing
  activities to increase speed and accuracy
• Lower the cost of processing
• Make the organization more efficient
• Increase the speed
• Increased the accuracy

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Activities of Transaction Processing Systems

• Payroll processing
• Sales and order processing
• Inventory management
• Product purchasing. Receiving, and shipping
• Accounts payable and receivable
• Online
• University class registration processing
• Airline reservation processing
• Batch
• Student final grade processing
• Payroll processing

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Payroll Processing System
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Architecture of a Transaction Processing System
Input
Output
Process
Counts and Summary Reports Inputs to other
Information Systems Feedback to System operator
or Customer
Transaction processing system data
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Forms of TPS Data Entry

• Manual
• Manually enter the source document information
  into the Transaction Processing System
• Example Entering your information to an
  information system when you apply for a new
  course.
• Semi-automated
• Use data capturing devices to increase the speed
  of Transaction processing.
• Example Barcode reader used in the grocery
  store.
• Fully automated
• Requires no human intervention for the processing
  of transaction.
• Example Tsunami alarm system.

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Management Information Systems (MIS)

• Support the ongoing decision-making activities of
  a business or functional area
• Management of IS in organizations
• Used at managerial level
• Goals
• Help managers make more effective decisions
• Get the right information to the right person in
  the right format at the right time

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Activities of MIS

• Sales forecasting
• Financial management and forecasting
• Manufacturing planning and scheduling
• Inventory management and planning
• Advertising and product pricing

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Architecture of a Management Information System
Input
Output
Process
Schedule Reports Ad-hoc Reports Exception
Report Feedback to System Operator
Management Information System data
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Management Information Systems

• Types of reports
• Scheduled report
• Key-indicator report
• Exception report
• Drill-down report
• Ad hoc report

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Executive Information Systems

• Provide information for long-term decision making
• Used at executive level
• Goals
• To provide aggregate information
• To provide information that can be quickly
  scanned for trends and anomalies

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Activities of EIS

• Executive-level decision-making
• Long-range and strategic planning
• Monitoring internal and external events, and
  resources
• Crisis management
• Staffing and labor relations

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Architecture of an Executive Information System
Input
Output
Process
Summary Reports Trend Analysis
Simulation Feedback to System Operator
Executive Information System data
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Information Systems that Span Organizational
Boundaries

• Decision Support Systems (DSS)
• Expert Systems (ES)
• Office Automation Systems (OAS)

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Information Systems that Span Organizational
Boundaries
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Decision Support Systems

• Special-purpose systems
• Designed to solve a recurring problem
• Support semi-structured problems
• Use decision analysis tools
• Allows user to examine alternative solutions
• What-if analysis
• The most commonly used DSS is an electronic
  spreadsheet, such as Microsoft Excel.

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Architecture of a Decision Support System
Output
Input
Process
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Expert Systems

• Use knowledge of a subject to solve problems or
  provide advise
• Mimic human expertise
• Human knowledge represented by codifying facts
  and rules
• Examples
• Financial planning
• Medical diagnosis
• Mechanic configuration
• Automobile diagnosis
• Train and container loading
• Computer user help desk

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Architecture of an Expert System
Output
Input
Process
Request for help Answers to Questions
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Office Automation Systems

• Develop documents
• Word processing
• Desktop publishing
• Schedule resources
• Electronic calendars
• Communicate
• Electronic and voice mail
• Video conferencing
• Groupware
• Chat Applications

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Architecture of an Office Automation System
Input
Output
Process
Messages Reports Schedules
Documents Schedules Data
Office Automation System Database
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Functional Area Information Systems
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Functional Area Information Systems

• Functional area information systems are specific
  to that particular area of the information
  systems.
• These systems designed to support the needs of a
  specific business function.

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Functional Area Information Systems

• Accounting and Finance
• Systems used for managing, Controlling, and
  auditing the financial resources of the
  organization.
• Example Inventory management
• Human Resource
• Systems used for managing, controlling, and
  auditing the human resources of the organization.
• Example Education and Training

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Functional Area Information Systems

• Marketing
• Systems used for managing new product
  development, distribution, pricing, promotional
  effectiveness, and sales forecasting of the
  products and services offered by the
  organization.
• Example Promotion and advertising
• Production and Operation
• Systems used for managing, controlling and
  auditing the production and operations resources
  of the organization
• Example Materials and resource planning