6-1 chapter 6 (part i) organizational information systems robert riordan, carleton university

6-1

Chapter 6(Part I)

OrganizationalInformation

Systems

www.pearsoned.ca/jessup

Robert Riordan, Carleton University

6-2Information Systems Today, 2/C/e ©2008 Pearson Education Canada

Learning Objectives

1. Describe the characteristics that differentiate the operational, managerial, and executive levels of an organization

2. Explain the characteristics of the three information systems designed to support each unique level of an organization: Transaction Processing Systems (TPS), Management Information Systems (MIS), and Executive Information Systems (EIS)


Learning Objectives

3. Describe the characteristics of six information systems that span the organizational, managerial, and executive levels: Decision Support Systems (DSS), Expert Systems (ES), Office Automation Systems (OAS), Collaboration Technologies, Functional Area Information Systems, and Global Information Systems


The Organizational Pyramid

Figure 9.1 The management pyramid


Management:

- the process of directing tasks and directing resources to achieve organizational goals

- management functions: planning, organizing, directing, motivating, controlling...

The Nature of Managerial Work


• Planning– Planning at different levels

• Long-term mission and vision• Strategic goals• Tactical objectives

– Most important planning activities• Scheduling• Budgeting• Resource allocation



Figure 9.3 An example of a mission statement, strategic goals, and tactical objectives for an in-line skate manufacturer



Figure 9.4 The main ingredients of planning



Figure 9.5 Examples of processes used to control projects

• Control– Managers control activities by comparing

plans to results.



Levels of the Organization


Levels of the Organization Explained

Executive LevelStrategic planning and responses to strategic issues occur here. Executive decisions are usually unstructured and are made using consolidated internal and external information

Executive LevelStrategic planning and responses to strategic issues occur here. Executive decisions are usually unstructured and are made using consolidated internal and external information

Managerial LevelMonitoring and controlling of operational activities and executive information support occur here. Managerial decisions are usually semistructured and are made using procedures and ad hoc tools

Managerial LevelMonitoring and controlling of operational activities and executive information support occur here. Managerial decisions are usually semistructured and are made using procedures and ad hoc tools

Operational LevelDay-to-day business processes and interactions with customers occur here. Operational decisions are usually structured and are made using established policies and procedures

Operational LevelDay-to-day business processes and interactions with customers occur here. Operational decisions are usually structured and are made using established policies and procedures


Who, What, Why: Organizational Level


Who, What, Why: Managerial Level


Who, What, Why: Executive Level


Basic Systems Model


System Type: Transaction Processing Systems


System Description: Transaction Processing Systems

TPSs are a special class of information system designed to process business events and transactions

Architecture Components• Source Documents – these contain the event or

transaction information to be processed by system• Data Entry Methods

• Manual – a person entering a source document by hand• Semiautomated – using a capture device to enter the source

document (e.g. a barcode scanner)• Fully Automated – no human intervention, one computer

talks or feeds another computer (e.g. automatic orders from inventory systems)

• Processing – transactions can be either: • Online – processed individually in real-time • Batch – grouped and processed together at a later time


System Example: Payroll System (TPS)


System Architecture: Transaction Processing System


System Type: Management Information System


System Description: Management Information Systems

MISs are used by managerial employees to support recurring decision making in managing a function or the entire business

Supported Activities• Scheduled Reporting - the system produces automatically

based on a predetermined schedule. Some include:• Key Indicator – High-level summaries to monitor

performance (e.g. Monthly Sales Report)• Exception – Highlights situations where data is out of normal

range (e.g. Monthly Late Shipments)• Drill Down – Provides lower-level detail aggregated in a

summary report (printed only if needed)

• Ad Hoc Reporting – unscheduled reports that are usually custom built to answer a specific question (e.g. sales data by person report to identify issues)


System Architecture: Management Information System


System Type: Executive Information System (EIS)


System Description: Executive Information Systems

EISs, also called Executive Support Systems (ESS), are special purpose information systems to support executive decision-making

System DetailsThese systems use graphical user interfaces to display consolidated information and can deliver both:

• Soft Data - textual news stories or non-analytical data• Hard Data – facts, numbers, calculations, etc.

Supported ActivitiesThe activities supported by these kinds of systems include:

• Executive Decision Making• Long-range Strategic Planning• Monitoring of Internal and External Events• Crisis Management• Staffing and Labour Relations


System Architecture: Executive Information Systems


System Example: Executive Reporting Drill-down (EIS)

Second LevelData Drill Down

First LevelGraphical Summary


Systems That Span Organizational Boundaries


System Description: Decision Support Systems

Decision Support SystemsSpecial-purpose information systems designed to support managerial-level employees in organizational decision making

System Details These systems use computational software to construct models for analysis (most common is MS Excel) to solve semi-structured problems (e.g. sales or resource forecasts)

Supported Activities: “What-if” analysis – changing one or more variables in the model to observe the effect (e.g. What is the payment if the interest rate increases by 1% ?)


Characteristics of Decision Support Systems


System Description: Common Decision Support Systems


System Architecture: Decision Support Systems


System Example – Loan Calculator

Variables to be Analyzed Loan Calculator Model

Analysis Results


System Description: Expert Systems

Expert SystemsSpecial-purpose systems used by operational level employees to make decisions usually made by more experienced employees or an expert in the field

System Details These systems use inference engines that match facts and rules, sequence questions for the user, draw a conclusion, and present a recommendation to the user

Supported Activities:These systems support many activities, including:

• Medical Diagnosis• Machine Configuration• Financial Planning• Software Application Assistance (help wizards)


System Architecture: Expert Systems


System Dialogue Example – Expert SystemsEnd userThe end-user usually sees an expert system through an , an example of which follows:

Q. Do you know which restaurant you want to go to? A. No Q. Is there any kind of food you would particularly like? A. No Q. Do you like spicy food? A. No Q. Do you usually drink wine with meals? A. Yes Q. When you drink wine, is it French wine? A. Yes

As can be seen from this dialog, the system is leading the user through a set of questions, the purpose of which is to determine a suitable set of restaurants to recommend. This dialog begins with the system asking if the user already knows the restaurant choice (a common feature of expert systems) and immediately illustrates a characteristic of expert systems; users may choose not to respond to any question. In expert systems, dialogs are not pre-planned. There is no fixed control structure. Dialogs are synthesized from the current information and the contents of the knowledge base. Because of this, not being able to supply the answer to a particular question does not stop the consultation.

Explanation systemAnother major distinction between expert systems and traditional systems is illustrated by the following answer given by the system when the user answers a question with another question, "Why", as occurred in the above example. The answer is:

A. I am trying to determine the type of restaurant to suggest. So far Chinese is not a likely choice. It is possible that French is a likely choice. I know that if the diner is a wine drinker, and the preferred wine is French, then there is strong evidence that the restaurant choice should include French.


System Description: Office Automation Systems

Office Automation SystemsA collection of software and hardware products that increase productivity within the office setting

Supported ActivitiesThe activities supported by these kinds of systems include:

• Scheduling ResourcesExamples: electronic calendars with resource management (equipment, facilities, etc.)

• Document PreparationExamples: software (word processing and desktop publishing); hardware (printers)

• CommunicatingExamples: e-mail, voice mail, videoconferencing and groupware


System Architecture: Office Automation Systems


System Example – Scheduling System


System Description: Collaboration Technologies

VideoconferencingSoftware and hardware that allow parties to meet electronically with both picture and voice Supported Activities

• Stand-alone Videoconferencing • High quality, typically very expensive systems using

dedicated microphones, cameras and hardware• Can support meetings between several people and

locations simultaneously • Desktop Videoconferencing

• Lower quality, relatively inexpensive systems using a PC, small camera, and a microphone or telephone for voice communication

• Allows two individuals to communicate from a desktop


System Description: Collaborative Techs (Groupware)

GroupwareSoftware that enables people to work together more effectively

Supported Activities

These systems come in two types:• Asynchronous Groupware – Systems that do not

require users to be on the system working at the same time, including: e-mail, newsgroups, workflow automation, group calendars, and collaborative writing tools

• Synchronous Groupware – Systems that allow and support simultaneous group interactions including shared whiteboards, electronic meeting support systems, video communication systems


System Description: Groupware


System Description: Groupware Benefits


System Examples – Groupware


System Examples – Collaborative Technology

Children Create Awareness for Darfur http://voicethread.com/#q.b85497.i433611


System Description: Global Information Systems

Global Information SystemsA variety of special-class systems used to support organizations that operate globally

Supported ActivitiesDepending on the organization, one or more of these systems may be required (definitions on next slide):

• International Accounting Systems• Transnational Information Systems• Multinational Information Systems• Global Information Systems• Collaborative Information Systems


System Examples: Global Information Systems


System Description: Functional Area Info Systems

Functional Area Information SystemsCross-organizational information systems are designed to support a specific functional area

Supported ActivitiesThe following functional organizations have systems to support their operational and managerial activities

• Accounting• Finance• Human Resources• Marketing• Operations


System Examples: Functional Area Info Systems


Finance Information Systems

• Finance area: acquires and manages cash for a business

• Acquire thru shares or loans• Invest cash wisely• Company must maintain liquidity

– Meet short term obligations• Need to analyze considerable financial info


Tactical Systems in Finance

• A BUDGETING SYSTEMS

- plan revenues and expenses line-by-line- Can summarize in various ways- Can compare this year’s budget to last year’s- Can compare actual expenses vs budgeted (get

actuals from General ledger System)


• BUDGETING (cont’d)• Comparing budgeted to actuals allows for

variances analysis• Eg. Current budgeted expenses, actual

expenses and variances by line item• Eg. Projected expenses for each budget line

item for entire year based on expenses incurred to date



• BUDGETING (cont’d)

• Spreadsheet-type systems are useful for budgeting (ie. formulas)

• Can use last year’s budget as a base for next year and maybe 5 years

• How are such system tactical? explain



B CASH MANAGEMENT SYSTEMS• Ensure that business has sufficient cash to meet

its needs– For day-to-day operations– For acquisition of long-term assets

• Important output is the cash flow report– Can forecast cash flows for , say 6 months– Flow= tl cash receipts – tl cash payments



C. CAPITAL BUDGETING SYSTEMS- Provide help with planning acquisition (disposal)

of major plant assets that will be used by the business during many years

- Provide outgoing and incoming cash for the life of the asset- Use assumptions- Consider the time value of money (net present

value)



• C. CAPITAL BUDGETING SYSTEMS

• Eg. Can help to decide whether to lease or buy a new printer

• What computing is useful here?



D. INVESTMENT MANAGEMENT SYSTEMS

- oversee organization’s investment in stocks, bonds, and other securities

- Online databases provide immediate updates for stock and bond prices



INVESTMENT MANAGEMENT SYSTEMS

e.g. Value Screen inputs the current price of each stock and calculates the gain or loss the company’s investment portfolio would generate if sold now

what computing is needed here?



Strategic Systems in Finance

• Support very high-level managers• Strategic systems relate to organizational goals• Often, such systems use internal data (which

may have originated in organizational AIS) and external data (eg. From online databases that contain economic, social, demographic, etc, info)


A FINANCIAL CONDITION ANALYSIS SYSTEMS- Provide insightful analyses of financial

statements and data (e.g., ratios: current ratio, debt:equity ratio)

- Online databases can allow for financial analysis of competitors, suppliers, buyers and other organizations)



B. LONG RANGE FORECASTING SYSTEMS

- May use both internal and external data- Apply statistical techniques- May use graphics- Analyze trends



C. CORPORATE PLANNING SYSTEMS- Use data from past, like forecasting systems- More elaborate; contain simulation models of

various aspects of business- Models must have valid assumptions


6-1 chapter 6 (part i) organizational information systems robert riordan, carleton university

Documents

proceduresinformation

expert systems es

decision support systems

office automation systems

managerial decisions

executive information

executive decisions

operational decisions