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Four Main Types Of Information Systems serving different organization Levels

1. Operational-level

2. Knowledge- level

3. Management-level

4. Strategic-level

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Types of Information Systems

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1:Operational-level Information System

Information systems that monitor the elementary activities and transactions of the organizationSupport operational managers by keeping track of the elementary activities and transactions of the organizationExample: sales,receipts,cash deposits,payroll,credit decisions,and the flow of materials in a factoryWhat happened to Mr.. X payment?Example of operational-level systems include a system to record bank deposits from automatic teller machines or one that tracks the number of hours worked each day by employees on a factory floor

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2:Knowledge Level Information System

Support knowledge and data workers in an organization.The purpose of Knowledge level system is to help the business firm discover,organize, and integrate new knowledge into the businessTo help the organization control the flow of paperworkKnowledge workers: hold formal university degree: doctors,engineers,lawyers,scientistData workers:less formal and advanced education degreessecretaries,accountant,clerk

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3:Management-level Information System

Are designed to serve the monitoring,controlling,decision-making,and administrative activities of middle managers

MIS and DSS

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4:Strategic level Information system

Helps senior management tackle and address strategic issues and long term trends , both in the firm and in the external environment.

Main concern match

Changes in external environment > existing organizational capabilities

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Six Major types of Information systems

Strategic level system ESS

Management-level system MIS & DSS

Knowledge level KWS & OAS

Operational level (TPS)

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Six Major Types of Information systems

(1) ESS Executive support systems at the Strategic level

(2) MIS (3) DSS at Management Level

(4)KWS knowledge work system

(5)OAS office automation system at the Knowledge level

(6)TPS at operational level

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Six MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

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Transaction Process Systems

Transaction: any business related exchange such as payments to employees,payments to suppliers,sales to customersProcessing business transaction was the first application of computers for most organizationsAn organized collection of people,procedures,software,databases,and devices used to record completed business transactions

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MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

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MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Types of TPS Systems

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Knowledge Work Systems

Information system that aids knowledge workers in the creation and integration of new knowledge in the organization

A knowledge work system, such as a scientific or engineering design workstation, promotes the creation of new knowledge and ensures that new knowledge and ensures that new knowledge and technical expertise are properly integrated into the business

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Office automation system

Handle and manage documents( through word processing,desktop publishing,digital filing),scheduling(through electronic calendars),and communication(through email,voice mail,video conference)

Desktop publishing produces professional publishing-quality documents by combining output from word processing software with

design elements,graphics

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Office automation system

Document imaging systems convert documents and images into digital form so that they can be stored and accessed by the computer.

Scanners

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Management Information Systems (MIS)

An organized collection of people,procedures,software,databases,and devices used to provide routine information to managers and decision makers.

The focus of an MIS is primarily on operational efficiency.

Marketing,production,finance,and other functional areas are supported by MIS.

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MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Management Information System (MIS)

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Decision Support Systems(DSS)

An organized collection of people,procedures,software,databases,and devices used to support problem-specific decision making.A DSS supports and assists all aspects of problem-specific decision making.DSS can provide assistant in solving complex problems not supported by traditional MIS.Managers play an active role in development and implementation

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MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Decision Support System (DSS)

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MIS VS. DSS

Helps organization “do things right”

Complex problems not supportedProvides standard reports generated with data and information from TPS

Helps managers

“do the right things”

Provide solution to complex problems

DSS operates from a managerial perspective

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MIS VS. DSS

Used with more structured problems

Users have less control over MIS

Some MISs make automatic decisions and replace the decision maker

Used with unstructured problems

Users have more control over DSS

Supports all aspects and phases of decision making,does not replace the decision maker

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MIS VS. DSS

Focus on information only

Indirect support system that uses regularly produced reports

May not provide immediate results,reports given once a week

Focus on actual decision , decision making style

Direct support system provides interactive reports on computer screen

Computer equipment that provides DS is on line

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Executive support systems

Information system at the strategic level of an organization designed to address unstructured decision making through advanced graphics and communicationsUsed by senior managersESS are designed to incorporate data about external events such as new tax laws or competitorsThey draw summarized information from internal MIS and DSSESS can assist the following problems

1. What business should we be in?2. What are competitors doing?3. Which unit should we sell to raise cash

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MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

Executive Support System (ESS)

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Relationship of systems

ExecutiveSupportSystems

ESS

ManagementSystems

MIS

ManagementSystems

DSS

KnowledgeSystems

KWS, OAS

Transaction Processing

SystemsTPS

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Strategic Information System

Computer systems at any level of an organization that change the goals, process, products, services, or environmental relationships to help the organization gain a competitive advantage

Merrill Lynch, for instance, used information systems to change from the stock brokerage business to the financial services business

Organizations may need to change their internal operations to take advantage of the new IS

These changes often require new managers, new work force, and a much closer relationship with customers and suppliers

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Changing concepts of Information & Information Systems

Information systems of 1950s focused on reducing the cost of routine paper processing, especially in accounting

The first information systems were semi-automatic check-processing, issuing, and canceling machines ;electronic accounting machines (EAM)

Electronic data processing (EDP)

By the 1960s, organizations used it for general management support

Any information system of the 1960s and 1970s was termed as MIS

Weekly production, monthly financial information, inventory, accounts receivable,accounts payable….

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Changing concepts of Information & Information Systems

In 1970s and early 1980s information systems were seen as providing fine-tuned, special-purpose, customized management control over the organizationThen emerged decision-support systems(DSS) and executive support systems (ESS)The purpose was to improve and speed up the decision making process of specific managers and executives in a broad range of problemsBy the mid 1980s conception of information changed again, viewed as strategic asset or resourceAs a weapon to defeat and frustrate the competitionIn 2000, information is viewed as the very foundation of business processes, products, and services

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How I.S can be used for competitive advantage/Strategy levels and IT

Strategies Models IT Techniques

Industry Cooperation vs. Competition

Licensing

Standards

Competitive forces model

Network economics

Electronic transactions

Communication networks

Information partnership

Firm Synergy

Core competencies

Core competency

Knowledge systems

Organization-wide systems

Business 1. Low cost

2. Differentiation

3. Scope

Value chain analysis

Datamining

IT-based products/services

Supply chain management

Effective customer response

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Business-Level Strategy & the value chain model

How can we compete effectively in a particular market?Market might be light bulbs, utility vehicles, or cable televisionMost common generic strategies at this level are

1. Become low cost producer (Low cost)2. Differentiate your product or services(Differentiation)3. Change the scope of competition by either(Scope)

(a) enlarge the market to include global markets (b) narrow the market by focusing on small niches not well served by your competitors

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Value Chain Model

Value chain model:Model that highlights the primary or supportive activities that add a margin of value to a firm’s products or services where information systems can best be applied to achieve a competitive advantagePrimary activities: activities most directly related to the production and distribution of a firm’s products or servicesSecondary activities: activities that make the delivery of the primary activities of a firm possible.consist of the organization’s infrastructure, human resource, technology, and procurement

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Primary ActivitiesPrimary activities: most directly related to the production and distribution of a firm’s products or servicesInclude inbound logistics, operations, outbound logistics, sales, and marketingInbound logistics receiving and storing materials for distribution to productionOperations transforms inputs to finished o/pOutbound logistics storing,and distributing producMarketing and sale promoting and selling firm’s products

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Support activities

Activities that make the delivery of the primary activities of a firm possible.

Consist of the organization’s infrastructure( administration and management), human resources( employee recruiting ,hiring and training), technology(improving products and the production process) , and procurement(purchasing input)

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Information System to Support Product/Service Differentiation

Product/service differentiationstrategy for creating brand loyalty by

developing new and unique products/services that are not easily duplicated by competitors

e.g. Citibank’s ATM

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Focused differentiation: competitive strategy for developing new market niches for specialized products or services where a business can compete in the target area better than its competitors

Datamining:analysis of large pool of data to find patterns and rules that can be used to guide decision making and predict future behavior

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I.S. to Support Low Cost Strategy

Supply chain management integrates supplier, distributors, and customer

logistics requirements into one cohesive process to reduce inventory cost or underutilized staff

e.g. Wall-Mart’s “continuous replenishment system”

“lock in” customer and raise “switching costs”expense a customer incurs in lost time and

expenditure of resources when changing from one supplier to a competing supplier

e.g. Baxter Healthcare’s “stockless inventory”

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Business Level Strategy

Th e B u s i n e s s F i r m

V e n d o r s C u s to m e rs

S u p p l y C h a i nM an ag e m e n t

S t o c k l e s s In ve n t o r yC o n t i n o u s R e p l e n i s h m e n tJ u s t - i n - t i m e d e l i ve r y

In t r a F i r m S t r a t e g y

P r o d u c t d i ffe r e n t i a t i o nF o c u s e d d i ffe r e n t i a t i o nL o w - c o s t p r o d u c e r

Efficient C usto m erR espo nse

P o int-o f-sale system sD atam ining

B u s in e s s L e v e l S tra te g y

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Firm level strategy and I.T.

A commercial partnership of two or more persons(limited 20,10 for banks)A business firm is typically a collection of businesses.The firm is organized financially as a collection of strategic business unitsReturns to the firm depends on performance of business unit.

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Synergies

Output of one unit can be used as input to another unit.Then unique nonmarket relationship can lower costs and generate profits.MergerUse of IT in these synergy situations is to tie together the operations of completely different business units,so they can act as whole

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Core competencies

Second concept for firm level strategy involves the notion of

“core competency”A core competency is an activity at which a firm is a world-class leaderMay involve being the world’s best fiber-optic manufacturer,best miniature parts designer etc..

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Industry-level Strategy and IT

A specific branch of manufacture and tradeFirms together comprise industries, such as the automotive industry,telephone…Corporation : A body of persons acting under a legal charter as a separate entity with privileges and liabilities

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Information partnership

Both companies can join forces without actually merging,by sharing informationUnique synergies can be achievedExample: American Airlines has an arrangement with CITI bank to award one mile in its frequent flier program for every dollar spent using CITI bank credit cardsAA benefits from increased customer loyaltyCITI bank gains new credit cards subscriber

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COMPETITIVE FORCES MODEL

THE FIRMTRADITIONALCOMPETITION

NEWMARKETENTRANTS

Bargaining power ofSUPPLIERS

Bargainingpower ofCUSTOMERS

SUBSTITUTEPRODUCTS& SERVICES

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Telephone industry

SBC firm Ameritech firm AT&T firm

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Should we compete with other firms in the industry

Or should we cooperate with them

Cooperate to develop industry standards, build customer awareness,work collectively with suppliers to lower costs

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Network economics At Industry Level

Model based on the concept of a network where adding another participant entails no marginal costs but can create much larger marginal gain

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Managing Strategic Transitions

• A movement from one level of socio-technical system to another. Often required when adopting strategic systems that demand changes in the social and technical elements of an organization.

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Money,people,materials,machines,equipmentsInput = Resources such as money,people,materialOutput = goods | services

For-Profit ,Nonprofit organizationNonprofit organization: social groups,religious groups,universities

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Value-Added processes

Value-added processes increase the relative worth of the combined inputs on their way to becoming final outputs of the organizationsExample:Carwashfirst- value-added process= washing the carThe output of this system----a clean,but wet, car—is worth more than the mere collection

of ingredients(soap,water)

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Carwash

Consumers are willing to pay more for the skill,knowledge,time,and energy required to wash their cars.

Second value-added process: drying – transformation of the wet car into a dry one with no water spotting

Again consumers are willing to pay more

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Value Chain

A concept that reveals how organization can add value to their products and services

A series of activities that includes inbound logistics,warehouse and storage,production,finished product storage,outbound logistics,marketing and sales,and customer service

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Meaning Of Value

Depending on the customer,value may be lower price,better service,higher quality,or the uniqueness of the product

The value comes from time,skill,knowledge

And energy invested by the company

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Role Of Information Systems Invalue-added process

External: They are used to control and monitor value-added processes to ensure effectiveness and efficiency

Contemporary definition:Information systems are part of the process itself,

internal

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Example: Phone Directory business A corporate customer

request a phone directory listing all steel suppliers in Western Europe. Using its I.S. ,the the directory business can sort files to find the supplier’s names,and phone numbers and organize them in alphabetical list

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Information system does not monitor the process externally but works as part of the process.

The later view brings with it a new perspective on how and why information systems can be used in business.

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The way an organization views the role of Information Systems will influence the ways it accomplish its value-added processes.

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Organizational Structure

It refers to Organizational subunits and the way relate to the overall organization.

Depending on the goals of the organization and its approach to management,a number of structures can be used.

Organizational structure falls into one of these categories : traditional,project,team,or multidimensional.

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Traditional Organizational Structure

Managerial pyramid shows the hierarchy of Decision making and Authority

Strategic Management

Decision Management

Operation Management

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Strategic Management

Include President of the company and vice president,has a higher degree of decision authority

More impact on corporate goals

One-of-a-kind problems to solve

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Managerial Pyramid

Strategic Management

Tactical management

Operational Management

Nonmanagement employees

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1:Flat Organizational Structure

With a reduced number of management layers

Empowerment gives employees at lower level to make decisions and solve problems without needing permission from middle level managers

Empowerment gives employees and their managers more responsibility and authority to make decisions

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Example: On the factory floor,empowerment can mean that an assembly-line worker has the ability to stop the production line to correct a problem or defect before the product is passed to the next station

Empowerment results in faster action and quicker resolution of problem

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2:Project Organizational Structure

Centered on major products or services

Example: In a manufacturing firm that produces baby food and other baby products ,each type is produced by a separate unit.

Marketing,Finance,and production are are positioned within these major units.

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PresidentBaby products company

Senior VPBaby Food Division

Senior VPDiaper Division

Senior VPStroller Division

VPfinance

VPmarket

VPsale

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3:Team Organization Structure

It is centered on work teams or groups

Teams could be small or large

Each team has a team leader

Team can be temporary or permanent

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4:Multidimensional Organizational structure

Also known as matrix organization

May incorporate several structures at the same time

Example: may have traditional functional areas and major project units

Forms a Matrix,or Grid

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|

VP

Marketing

VP

Production

VP

Finance

Publisher,

College division

Marketing

Group

Production

Group

Finance

Group

Publisher

Trade

division

Marketing Group

Production Group

Finance

Group

Publisher

High school div

Marketing

Group

Production

Group

Finance

Group

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Organizational Culture And Change

Culture is a set of major understandings and assumptions shared by a group

Pakistani culture shake hands, embrace

Organizational Culture: major understandings and assumptions for a business,corporation,or an organization

Employees be clean-cut,wear conservative outfits(orthodox,traditional)

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Effect of cultureON Information SystemsOrganizational culture can significantly affect the development and operation of Information System.

Example:unwritten understanding all inventory reports must be prepared before 10 o’clock Friday morning

Decision maker may reject a cost-reduction option that required compiling the inventory report over the weekend