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  • 1. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 1 Management Information Systems, 10/e Raymond McLeod and George Schell

2. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 2 Chapter 8 Information in Action 3. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 3 Learning Objectives Know that a firms ability to develop effective information systems can be a key factor in its success. Recognize that the transaction processing system processes describes the firms basic daily operations. Be familiar with the processes performed by a transaction processing system for a distribution firm. Recognize that organizational information systems have been developed for business areas & organizational levels. Be familiar with architectures of marketing, human resources, manufacturing, & financial information systems. 4. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 4 Learning Objectives (Contd) Know the architecture of an executive information system. Understand what customer relationship management is & why is requires a large computer storage capability. Recognize how a data warehouse differs from a database. Understand the architecture of a data warehouse system. Know how data are stored in a data warehouse data repository. Know how a user navigates through the data repository. Know what on-line analytical processing (OLAP) is. Know the two basic ways to engage in data mining. 5. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 5 Information as a Critical Success Factor Critical success factor (CSF) was coined by Ronald Daniel to identify a few key activities that spell success or failure for any type of organization. Transaction processing system (TPS) is the information system that gathers data describing the firms activities, transforms the data into information, & makes the information available to users both inside & outside the firm. 1st business application to be installed on computers. Also electronic data processing (EDP) system & accounting information system. 6. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 6 Figure 8.1 Model of a TPS 7. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 7 System Overview Distribution system is a TPS used by distribution firms. Distribution firms distribute products or services to their customers. We will use data flow diagrams, or DFDs, to document the system. Figure 8.2 represents the highest level. Figure 8.3 identifies the three major subsystems. 8. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 8 Figure 8.2 Context Diagram of Distribution System 9. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 9 Figure 8.3 Figure 0 Diagram of Distribution System 10. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 10 Major Subsystems of Distribution System Systems that fill customer orders. Order entry system enters customer orders into the system. Inventory system maintains the inventory records. Billing system prepares the customer invoices. Accounts receivable system collects the money from the customers. Systems that order replenishment stock. Purchasing system issues purchase orders to suppliers for needed stock. Receiving system receives the stock. Accounts payable system makes payments. 11. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 11 Figure 8.4 Figure 1 Diagram of Systems that Fills Customers Orders 12. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 12 Figure 8.5 Figure 2 Diagram of Systems that Order Replenishment Stock 13. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 13 Major Subsystems of Distribution System (Contd) Systems that perform general ledger processes. General ledger system is the accounting system that combines data from other accounting systems for the purpose of presenting a composite financial picture of the firms operations. General ledger is the file that contains the combined accounting data. Updated general ledger system posts records that describe various actions & transactions to the general ledger. Prepare management reports system uses the contents of the general ledger to prepare the balance sheet, income statement, & other reports. 14. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 14 Figure 8.6 Figure 3 Diagram of Systems that Perform General Ledger Processes 15. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 15 Organizational Information Systems Organizational information systems are developed to meet the needs for information relating to those particular parts of the organization. Marketing information system (MKIS) provides information that relates to the firms marketing activities. Consists of a combination of input & output subsystems connected by a database. 16. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 16 Figure 8.7 Model of MKIS 17. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 17 MKIS Output subsystems provide information about critical elements in marketing mix. Marketing mix consists of 4 main ingredients that management manages in order to meet customers needs at a profit. Product subsystem provides information about the firms products. Place subsystem provides information about the firms distribution network. Promotion subsystem provides information about the firms advertising & personal selling activities. Price subsystem helps the manager make pricing decisions. Integrated-mix subsystem enables the manager to develop strategies that consider the combined effects of the ingredients. 18. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 18 MKIS (Contd) Database is populated with data from the three MKIS input subsystems. Input subsystems Transaction processing system gathers data from both internal & environmental sources & enters the data into the database. Marketing research subsystem gathers internal & environmental data by conducting special studies. Marketing intelligence subsystem gathers environmental data that serves to keep management informed of activities of the firms competitors & customers & other elements that can influence marketing operations. 19. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 19 Other Organizational Information System Human Resources information system (HRIS) provides information to managers throughout the firm concerning the firms human resources. Manufacturing information system provides information to managers throughout the firm concerning the firms manufacturing operations. Financial information system provides information to managers throughout the firm concerning the firms financial activities. 20. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 20 Figure 8.8 Model of HRIS 21. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 21 Figure 8.9 Model of Manufacturing Information System 22. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 22 Figure 8.10 Model of Financial Information System 23. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 23 Executive Information System Executive information system (EIS) is a system that provides information to upper-level managers on the overall performance of the firm; also called Executive support system (ESS). Drill-down capability allows for executives to bring up a summary display & then successively display lower levels of detail until executives are satisfied that they have obtained as much detail as is necessary. 24. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 24 Figure 8.11 An EIS Model 25. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 25 Figure 8.12 Drill-down Technique 26. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 26 Customer Relationship Management Customer relationship management (CRM) is the management of the relationships between the firm & its customers so that both the firm & its customers receive maximum value from the relationship. CRM system accumulates customer data over a long term 5 years, 10 years, or more - & uses that data to produce information for users. Uses a data warehouse. 27. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 27 Data Warehousing Data warehouse describes data storage that has the following characteristics: Storage capacity is very large. Data are accumulated by adding new records, as opposed to being kept current by updating existing records with new information. Date are easily retrievable. Date are used solely for decision making, not for use in the firms daily operations. Data mart is a database that contains data describing only a segment of the firms operations. 28. 2007 by Prentice Hall Management Information Systems, 10/e Raymond McLeod and George Schell 28 Data Warehousing System Data warehousing is the creation & use of a data ware