Lecture 3Title:

Business Process Types of IS: TPS, MIS, DSS, and ESS

ERP System

By: Mr Hashem AlaidarosMIS 211

Objective• To know about Business Process• To be familiar with TPS, MIS, DSS and ESS and how to

manage them.• To know the Four major applications of Enterprise

Application

Business ProcessBusiness processes:

• Workflows of material, information, knowledge

• Sets of activities, steps

• are at the heart of every business

Businesses: Can be seen as collection of business processes

How well a business performs depends on how well its business processes are designed and coordinated.

Cont.Examples of functional business processes

Manufacturing and production Assembling the product

Sales and marketing Identifying customers

Finance and accounting Creating financial statements

Human resources Hiring employees

Cont.The Order Fulfillment ProcessThe Order Fulfillment Process

Fulfilling a customer order involves a complex set of steps that requires the close coordination of the sales, accounting, and manufacturing functions.

E-coordination all the business functions in an enterprise (previous figure)1. The sales function begins the process by completing a sales order,

electronically inputting the data into the system.

2. The sales system updates daily sales totals and decreases inventory.

3. The accounting department electronically receives the order and runs a credit check. If the credit is not approved, system sends an exception notification to an accounting specialist and the sales person. If credit is approved, the order is sent to the manufacturing and production system and product assembly begins.

4. When the product is completed, electronic shipping documents are prepared and logistics is notified.

5. When the product is shipped, electronic notifications are sent to Sales, Manufacturing and Production, Accounting, and the customer.

6. The system electronically bills the customer.

Information technology enhances business processesInformation technology enhances business processes in

two main ways:

1. Increasing efficiency of existing processes Automating steps that were manual (check credit or generate

invoice)

2. Enabling entirely new processes that are capable of transforming the businesses

Replace sequential steps with parallel steps Eliminate delays in decision making

Types of Information Systemshow information systems serve various management

levels in companies. It’s important that they understand how one system helps

serve other systems and that ultimately, all of them serve the entire organization.

Four Types of IS:1. TPS

2. MIS

3. DSS

4. ESS

TPS1. Transaction processing systems

Perform and record daily routine transactions necessary to conduct business Examples: sales order entry, payroll, shipping

Allow managers to monitor status of operations and relations with external environment

Serve operational levels

Serve predefined, structured goals and decision making

A Payroll TPSA Payroll TPS

A TPS for payroll processing captures employee payment transaction data (such as a time card). System outputs include online and hard-copy reports for management and employee paychecks.

MIS2. Management information systems

Serve middle management Middle management needs systems to help with monitoring,

controlling, decision making, and administrative activities. Provide reports on firm’s current performance, based on data

from TPS Provide answers to routine questions with predefined procedure

for answering them (Are things working well?) Typically have little analytic capability (predicting the future of

the company) MIS serve managers primarily interested in weekly, monthly, and

yearly results

How Management Information Systems Obtain Their Data from the How Management Information Systems Obtain Their Data from the Organization’s TPSOrganization’s TPS

In the system illustrated by this diagram, three TPS supply summarized transaction data to the MIS reporting system at the end of the time period. Managers gain access to the organizational data through the MIS, which provides them with the appropriate reports.

Sample MIS report

This report, showing summarized annual sales data, was produced by the MIS in Figure 2-3.

DSS3. Decision support systems

Serve middle management

Support nonroutine decision making

Example: What is impact on production schedule if December sales doubled?

While MIS use internal information, DSS Often use external information as well from TPS and MIS

supports “what-if” analyses

support semistructured and unstructured decision-making activities

include interactive, user-friendly software

ESS4. Executive support systems

Support senior management help senior managers address strategic issues and long-

term trends, both in the firm and in the external environment

Address nonroutine decisions requiring judgment, evaluation, and insight because there is no agreed-on procedure for arriving at a solution

Incorporate data about external events (e.g. new tax laws or competitors) as well as summarized information from internal MIS and DSS

Relationships Emphasize the connection between ESS, MIS, and DSS. MIS rely on accurate inputs from TPS. ESS rely on accurate inputs from a firm’s MIS and DSS to provide

useful information to executives. These systems should not exist in isolation from one another. If

they are isolated from each other, it is a kind of organizational dysfunction, probably inherited from the past.

Enterprise Application• Enterprise applications

• are used to ensure that TPS, MIS, DSS, and ESS work together smoothly

• Span functional areas

• Execute business processes across firm

• Include all levels of management

• Four major applications:

1. Enterprise systems (ERP)

2. Supply chain management systems

3. Customer relationship management systems

4. Knowledge management systems

Enterprise Application ArchitectureEnterprise Application Architecture

Figure 2-7

Enterprise applications automate processes that span multiple business functions and organizational levels and may extend outside the organization.

Systems That Span the Enterprise

Enterprise System (ERP)1. Enterprise systems

• Collects data from different firm functions and stores data in single central data repository

• Resolves problem of fragmented, redundant data sets and systems

• Enable: • Coordination of daily activities• Efficient response to customer orders (production, inventory)• Provide valuable information for improving management

decision making

Enterprise SystemsEnterprise Systems

Enterprise systems integrate the key business processes of an entire firm into a single software system that enables information to flow seamlessly throughout the organization. These systems focus primarily on internal processes but may include transactions with customers and vendors.

SCMS2. Supply chain management systems

• Manage firm’s relationships with suppliers• Share information about

• Orders, production, inventory levels, delivery of products and services

• Goal: Right amount of products to destination with least amount of time and lowest cost

Example of a Supply Chain Management SystemExample of a Supply Chain Management System

Customer orders, shipping notifications, optimized shipping plans, and other supply chain information flow among Haworth’s Warehouse Management System (WMS), Transportation Management System (TMS), and its back-end corporate systems.

CRMS3. Customer relationship management systems:

• Provide information to coordinate all of the business processes that deal with customers in sales, marketing, and service to optimize revenue, customer satisfaction, and customer retention

• Integrate firm’s customer-related processes and consolidate customer information from multiple communication channels

KMS4. Knowledge management systems

• businesses are beginning to realize how much expertise and

experience is locked away in employees’ heads and that it’s

important to find a way to capture that information

• Moreover, it’s important that businesses find a way to make the

expertise and experience available to a wide range of users

• employees are very reluctant to impart with their individual

knowledge due to fear or self-preservation.

KMS• Support processes for acquiring, creating, storing, distributing,

applying, integrating knowledge

• Collect internal knowledge and link to external knowledge

• Include enterprise-wide systems for:

• Managing documents, graphics and other digital

knowledge objects

• Directories of employees with expertise

• Examples:

• the knowledge required to run a fast food restaurant

• the knowledge required to operate a Web site like Amazon

Intranet and ExtranetIntranets and Extranets: As Internet-based technologies continue to expand the

basic platforms for distributing information, smaller businesses that cannot afford to implement enterprise applications can turn to intranets and extranets.

Intranets are limited to internal users; extranets are available to external users as well as

internal users. Both are an inexpensive way to quickly share information

and data across functional lines and organizational boundaries.

E-business and E-commercee-business refers to the use of digital technology

and the Internet to execute major business processes

e-commerce is more narrowly centered on the buying and selling of goods and services over the Internet.