2.1 chapter 2. the strategic role of information systems
DESCRIPTION
2.3 LEARNING OBJECTIVES EXPLAIN DIFFICULTIES OF BUILDING, SUSTAINING STRATEGIC INFORMATION SYSTEMSEXPLAIN DIFFICULTIES OF BUILDING, SUSTAINING STRATEGIC INFORMATION SYSTEMS DESCRIBE HOW INFORMATION SYSTEMS SUPPORT LEVELS OF BUSINESS STRATEGYDESCRIBE HOW INFORMATION SYSTEMS SUPPORT LEVELS OF BUSINESS STRATEGY*TRANSCRIPT
2.2.11
CHAPTER 2. THE CHAPTER 2. THE STRATEGIC ROLE OF STRATEGIC ROLE OF
INFORMATION SYSTEMSINFORMATION SYSTEMS
2.2.22
LEARNING OBJECTIVESLEARNING OBJECTIVES• ANALYZE ROLES OF 6 TYPES OF ANALYZE ROLES OF 6 TYPES OF
INFORMATION SYSTEMSINFORMATION SYSTEMS• DESCRIBE TYPES OF INFORMATION DESCRIBE TYPES OF INFORMATION
SYSTEMSSYSTEMS• EXAMINE COMPETITIVE FORCES, EXAMINE COMPETITIVE FORCES,
VALUE CHAIN MODELSVALUE CHAIN MODELS**
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LEARNING OBJECTIVESLEARNING OBJECTIVES• EXPLAIN DIFFICULTIES OF BUILDING, EXPLAIN DIFFICULTIES OF BUILDING,
SUSTAINING STRATEGIC INFORMATION SUSTAINING STRATEGIC INFORMATION SYSTEMSSYSTEMS
• DESCRIBE HOW INFORMATION SYSTEMS DESCRIBE HOW INFORMATION SYSTEMS SUPPORT LEVELS OF BUSINESS SUPPORT LEVELS OF BUSINESS STRATEGYSTRATEGY
**
2.2.44
MANAGEMENT CHALLENGESMANAGEMENT CHALLENGES• INTEGRATION:INTEGRATION:
– ENTERPRISE RESOURCE MANAGEMENT– CONNECTING ORGANIZATIONAL LEVELS
DIFFICULT, COSTLY• SUSTAIN COMPETITIVE ADVANTAGE:SUSTAIN COMPETITIVE ADVANTAGE:
– INFO SYSTEMS MUST BE FLEXIBLE TO ENSURE LONG-TERM PROFITS
**
2.2.55
TYPES OF INFORMATION SYSTEMSTYPES OF INFORMATION SYSTEMS
DATA WORKERSDATA WORKERS
KIND OF SYSTEM GROUPS SERVEDKIND OF SYSTEM GROUPS SERVED
STRATEGIC LEVEL SENIOR STRATEGIC LEVEL SENIOR MANAGERSMANAGERS
MANAGEMENT LEVEL MIDDLE MANAGEMENT LEVEL MIDDLE MANAGERSMANAGERS
OPERATIONAL OPERATIONAL OPERATIONAL LEVEL OPERATIONAL LEVEL MANAGERS MANAGERS
KNOWLEDGE LEVEL KNOWLEDGE & KNOWLEDGE LEVEL KNOWLEDGE &
SALES & MANUFACTURING FINANCE ACCOUNTING HUMANSALES & MANUFACTURING FINANCE ACCOUNTING HUMAN RESOURCESRESOURCESMARKETINGMARKETING
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MAJOR TYPES OF SYSTEMSMAJOR TYPES OF SYSTEMS
• EXECUTIVE SUPPORT SYSTEMS EXECUTIVE SUPPORT SYSTEMS (ESS)(ESS)• DECISION SUPPORT SYSTEMS DECISION SUPPORT SYSTEMS (DSS)(DSS)• MANAGEMENT INFORMATION SYSTEMS MANAGEMENT INFORMATION SYSTEMS (MIS)(MIS)• KNOWLEDGE WORK SYSTEMS KNOWLEDGE WORK SYSTEMS (KWS)(KWS)• OFFICE AUTOMATION SYSTEMS OFFICE AUTOMATION SYSTEMS (OAS)(OAS)• TRANSACTION PROCESSING SYSTEMS TRANSACTION PROCESSING SYSTEMS (TPS)(TPS)
**
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TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSSales & Marketing SystemsSales & Marketing Systems
MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS:• Sales Management; Market Research; Sales Management; Market Research;
Promotion; Pricing; New ProductsPromotion; Pricing; New ProductsMAJOR APPLICATION SYSTEMS:MAJOR APPLICATION SYSTEMS:• Sales Order Info System; Market Sales Order Info System; Market
Research System; Pricing SystemResearch System; Pricing System**
TPS
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TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSManufacturing & Production SystemsManufacturing & Production Systems
MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS:• Scheduling; Purchasing; Shipping / Scheduling; Purchasing; Shipping /
Receiving; Engineering; OperationsReceiving; Engineering; OperationsMAJOR APPLICATION SYSTEMSMAJOR APPLICATION SYSTEMS::• Materials Resource Planning Systems; Materials Resource Planning Systems;
Purchase Order Control Systems; Purchase Order Control Systems; Engineering Systems; Quality Control Engineering Systems; Quality Control SystemsSystems
**
TPS
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TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSFinance & Accounting SystemsFinance & Accounting Systems
MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS:• Budgeting; General Ledger; Billing: Budgeting; General Ledger; Billing:
Cost AccountingCost AccountingMAJOR APPLICATION SYSTEMS:MAJOR APPLICATION SYSTEMS:• General Ledger; Accounts Receivable / General Ledger; Accounts Receivable /
Payable; Budgeting; Funds Payable; Budgeting; Funds Management SystemsManagement Systems
**TPS
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TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSHuman Resources SystemsHuman Resources Systems
MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS:• Personnel Records; Benefits; Personnel Records; Benefits;
Compensation; Labor Relations; TrainingCompensation; Labor Relations; TrainingMAJOR APPLICATION SYSTEMS:MAJOR APPLICATION SYSTEMS:• Payroll; Employee Records; Benefit Payroll; Employee Records; Benefit
Systems; Career Path Systems; Systems; Career Path Systems; Personnel Training SystemsPersonnel Training Systems
**
TPS
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TYPICAL TPS APPLICATIONSTYPICAL TPS APPLICATIONSOther Types (e.g., University)Other Types (e.g., University)
MAJOR FUNCTIONS OF SYSTEMS:MAJOR FUNCTIONS OF SYSTEMS:• Admissions; Grade Records; Course Admissions; Grade Records; Course
Records; AlumniRecords; AlumniMAJOR APPLICATION SYSTEMS:MAJOR APPLICATION SYSTEMS:• Registration System; Student Transcript Registration System; Student Transcript
System; Curriculum Class Control System; Curriculum Class Control System; Alumni Benefactor SystemSystem; Alumni Benefactor System
**TPS
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KNOWLEDGE LEVELKNOWLEDGE LEVEL• INPUTS:INPUTS: DESIGN SPECS DESIGN SPECS• PROCESSING:PROCESSING: MODELLING MODELLING• OUTPUTS:OUTPUTS: DESIGNS, GRAPHICS DESIGNS, GRAPHICS• USERS:USERS: TECHNICAL STAFF TECHNICAL STAFF
EXAMPLE: ENGINEERING WORK EXAMPLE: ENGINEERING WORK STATION STATION
KNOWLEDGE WORK SYSTEMS KNOWLEDGE WORK SYSTEMS (KWS)(KWS)
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OFFICE AUTOMATION SYSTEMS OFFICE AUTOMATION SYSTEMS (OAS)(OAS)
• TOWARD A “PAPERLESS” OFFICETOWARD A “PAPERLESS” OFFICE• REDESIGN OF WORK FLOWREDESIGN OF WORK FLOW• INTEGRATED SOFTWAREINTEGRATED SOFTWARE• ERGONOMIC DESIGNERGONOMIC DESIGN• BRIGHT, CHEERFULBRIGHT, CHEERFUL
WORK SPACEWORK SPACE
EXAMPLE: PRESENTATION GRAPHICSEXAMPLE: PRESENTATION GRAPHICS
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MANAGEMENT LEVELMANAGEMENT LEVEL• INPUTS:INPUTS: HIGH VOLUME DATA HIGH VOLUME DATA• PROCESSING: SIMPLE MODELSPROCESSING: SIMPLE MODELS• OUTPUTS:OUTPUTS: SUMMARY REPORTS SUMMARY REPORTS• USERS:USERS: MIDDLE MANAGERS MIDDLE MANAGERS
EXAMPLE: ANNUAL BUDGETINGEXAMPLE: ANNUAL BUDGETING
MANAGEMENT INFORMATION MANAGEMENT INFORMATION SYSTEMS SYSTEMS (MIS)(MIS)
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• STRUCTURED & SEMI-STRUCTURED & SEMI-STRUCTURED DECISIONSSTRUCTURED DECISIONS
• REPORT CONTROL ORIENTEDREPORT CONTROL ORIENTED• PAST & PRESENT DATAPAST & PRESENT DATA• INTERNAL ORIENTATIONINTERNAL ORIENTATION• LENGTHY DESIGN PROCESSLENGTHY DESIGN PROCESS
**
MANAGEMENT INFORMATION MANAGEMENT INFORMATION SYSTEMS SYSTEMS (MIS)(MIS)
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MISMIS
MIS FILESMIS FILES
SALES DATA
UNIT PRODUCT COST
PRODUCT CHANGE DATA
EXPENSE DATA
MIS REPORTS
MANAGERSMANAGERS
TPSOrder Processing
System
Materials Resource
Planning System
General Ledger
System
ORDER FILE
PRODUCTION MASTER FILE
ACCOUNTING FILES
TPS DATA FOR MIS APPLICATIONSTPS DATA FOR MIS APPLICATIONS
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MANAGEMENT LEVELMANAGEMENT LEVEL• INPUTS:INPUTS: LOW VOLUME DATA LOW VOLUME DATA• PROCESSING:PROCESSING: INTERACTIVE INTERACTIVE• OUTPUTS:OUTPUTS: DECISION ANALYSIS DECISION ANALYSIS• USERS:USERS: PROFESSIONALS, STAFF PROFESSIONALS, STAFF
EXAMPLE: CONTRACT COST ANALYSISEXAMPLE: CONTRACT COST ANALYSIS
DECISION SUPPORT SYSTEMS (DSS)DECISION SUPPORT SYSTEMS (DSS)
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• FLEXIBLE, ADAPTABLE, QUICKFLEXIBLE, ADAPTABLE, QUICK• USER CONTROLS INPUTS/OUTPUTSUSER CONTROLS INPUTS/OUTPUTS• NO PROFESSIONAL PROGRAMMINGNO PROFESSIONAL PROGRAMMING• SUPPORTS DECISION PROCESSSUPPORTS DECISION PROCESS• SOPHISTICATED MODELING TOOLSSOPHISTICATED MODELING TOOLS
**
DECISION SUPPORT SYSTEMS DECISION SUPPORT SYSTEMS (DSS)(DSS)
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STRATEGIC LEVELSTRATEGIC LEVEL• INPUTS: AGGREGATE DATAINPUTS: AGGREGATE DATA• PROCESSING:PROCESSING: INTERACTIVE INTERACTIVE• OUTPUTS:OUTPUTS: PROJECTIONS PROJECTIONS• USERS:USERS: SENIOR MANAGERS SENIOR MANAGERS
EXAMPLE: 5 YEAR OPERATING PLANEXAMPLE: 5 YEAR OPERATING PLAN
EXECUTIVE SUPPORT SYSTEMS EXECUTIVE SUPPORT SYSTEMS (ESS)(ESS)
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• TOP LEVEL MANAGEMENTTOP LEVEL MANAGEMENT• DESIGNED TO THE INDIVIDUALDESIGNED TO THE INDIVIDUAL• TIES CEO TO ALL LEVELSTIES CEO TO ALL LEVELS• VERY EXPENSIVE TO KEEP UPVERY EXPENSIVE TO KEEP UP• EXTENSIVE SUPPORT STAFFEXTENSIVE SUPPORT STAFF
**
EXECUTIVE SUPPORT SYSTEMS EXECUTIVE SUPPORT SYSTEMS (ESS)(ESS)
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INTERRELATIONSHIPS AMONG SYSTEMSINTERRELATIONSHIPS AMONG SYSTEMS
ESS
TPSKWS
OAS
DSSMIS
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SYSTEMS FROM A SYSTEMS FROM A FUNCTIONAL PERSPECTIVEFUNCTIONAL PERSPECTIVE
• SALES & MARKETING SYSTEMSSALES & MARKETING SYSTEMS• MANUFACTURING & PRODUCTION MANUFACTURING & PRODUCTION
SYSTEMSSYSTEMS• FINANCE & ACCOUNTING SYSTEMSFINANCE & ACCOUNTING SYSTEMS• HUMAN RESOURCES SYSTEMSHUMAN RESOURCES SYSTEMS
**
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STRATEGIC ROLE OF INFORMATION STRATEGIC ROLE OF INFORMATION SYSTEMSSYSTEMS
STRATEGIC INFO SYSTEM:STRATEGIC INFO SYSTEM:CAN CHANGE GOALS, OPERATIONSCAN CHANGE GOALS, OPERATIONS
PRODUCTS, SERVICESPRODUCTS, SERVICESENVIRONMENTENVIRONMENT
TO GAIN COMPETITIVE ADVANTAGETO GAIN COMPETITIVE ADVANTAGE
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COMPETITIVE FORCES MODELCOMPETITIVE FORCES MODEL
THE FIRM TRADITIONAL COMPETITION
NEW MARKET ENTRANTS
SUPPLIERS CUSTOMERS
SUBSTITUTE PRODUCTS & SERVICES
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• PRODUCT DIFFERENTIATIONPRODUCT DIFFERENTIATION• FOCUSED DIFFERENTIATIONFOCUSED DIFFERENTIATION• DATAMININGDATAMINING• LINKING CUSTOMERS & SUPPLIERSLINKING CUSTOMERS & SUPPLIERS• BECOMING LOW COST PRODUCERBECOMING LOW COST PRODUCER
**
COUNTERING COUNTERING COMPETITIVE FORCESCOMPETITIVE FORCES
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VALUE CHAIN MODELVALUE CHAIN MODELHIGHLIGHTS PRIMARY & SUPPORT HIGHLIGHTS PRIMARY & SUPPORT
ACTIVITIES THAT ADD VALUE TO ACTIVITIES THAT ADD VALUE TO PRODUCTS, SERVICESPRODUCTS, SERVICES
• PRIMARY:PRIMARY: DIRECTLY RELATED TO DIRECTLY RELATED TO PRODUCTION, DISTRIBUTIONPRODUCTION, DISTRIBUTION
• SUPPORT:SUPPORT: INFRASTRUCTURE, HUMAN INFRASTRUCTURE, HUMAN RESOURCES, TECHNOLOGY, RESOURCES, TECHNOLOGY, PROCUREMENT PROCUREMENT
**
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IMPLICATIONS FOR MANAGERS IMPLICATIONS FOR MANAGERS & ORGANIZATIONS& ORGANIZATIONS
• STRATEGIC ALLIANCES, STRATEGIC ALLIANCES, INFORMATION PARTNERSHIPSINFORMATION PARTNERSHIPS
• INDUSTRY LEVEL STRATEGIC INDUSTRY LEVEL STRATEGIC SYSTEMSSYSTEMS
• MANAGING STRATEGIC TRANSITIONSMANAGING STRATEGIC TRANSITIONS• IMPACT OF THE INTERNETIMPACT OF THE INTERNET
**
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INFORMATION SYSTEMS & INFORMATION SYSTEMS & QUALITYQUALITY
• QUALITY: Conformance to specifications, QUALITY: Conformance to specifications, customer satisfactioncustomer satisfaction
• SIMPLIFY PRODUCT, PROCESSSIMPLIFY PRODUCT, PROCESS• BENCHMARKINGBENCHMARKING• CUSTOMER DEMAND AS GUIDECUSTOMER DEMAND AS GUIDE• REDUCE CYCLE TIMEREDUCE CYCLE TIME• IMPROVE QUALITY & PRECISIONIMPROVE QUALITY & PRECISION
**
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Connect to the INTERNETConnect to the INTERNET
Laudon/Laudon Web site: http://www.prenhall.com/laudon
Additional Internet Resources related to this chapter:http://tools.org/EI/ICEIMThttp://www.brint.comhttp://www.datawarehousing.comhttp://www.erpassist.comhttp://www.sap.comhttp://www.mysap.com
© 2001 Laudon & Laudon, Essentials of Management Information Systems 4/e
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CHAPTER 2. THE CHAPTER 2. THE STRATEGIC ROLE OF STRATEGIC ROLE OF
INFORMATION SYSTEMSINFORMATION SYSTEMS