MANAGEMENT INFORMATION SYSTEMS

MODULE I: MANAGEMENT INFORMATION SYSTEMS

CHAPTER II: GLOBAL E-BUSINESS AND COLLABORATION

1. Business Processes and Information Systems

● Business processes:
o Workflows of material, information, knowledge
o Sets of activities, steps
o May be tied to functional area or be cross-functional
● Businesses: Can be seen as collection of business processes
● Business processes may be assets or liabilities

Every business can be seen as a collection of business processes, some of which are part of larger encompassing processes. For
instance, uses of mentoring, wikis, blogs, and videos are all part of the overall knowledge management process. Many business
processes are tied to a specific functional area.

Examples of functional business processes

The Order Fulfilment Process

What at first appears to be a simple process, fulfilling an order, turns out to be a very complicated series of business processes
that require the close coordination of major functional groups in a firm. Moreover, to efficiently perform all these steps in the
order fulfilment process requires a great deal of information. The required information must flow rapidly both within the firm
from one decision maker to another; with business partners, such as delivery firms; and with the customer. Computer-based
information systems make this possible.
To have efficiency in fulfilment process required:

Information technology enhances business processes in two main ways:

● Increasing efficiency of existing processes

o Automating steps that were manual
● Enabling entirely new processes that are capable of transforming the businesses
o Change flow of information
o Replace sequential steps with parallel steps
o Eliminate delays in decision making

System for different Management Groups:

● Transaction processing systems

o Perform and record daily routine transactions necessary to conduct business
o 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

The purpose of these systems is to answer routine questions about the flow of transactions through the organization. These
systems are a necessity for any business.

2. Types of Information System

A 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 pay checks.

System for Business Intelligence:

● Management information systems

o Serve middle management
o Provide reports on firm’s current performance, based on data from TPS
o Provide answers to routine questions with predefined procedure for answering them
o Typically have little analytic capability
How Management Information Systems Obtain Their Data from the Organization’s TPS

This show the relationship between TPS and MIS. MIS receive data from an organization’s TPS systems and create outputs that
management can use to make strategic decisions.

Sample MIS Report

Decision support systems

● Serve middle management

● Support non-routine decision making
o Example: What is impact on production schedule if December sales doubled?
● Often use external information as well from TPS and MIS
● Model driven DSS
o Voyage-estimating systems
● Data driven DSS
● Intrawest’s marketing analysis systems

Voyage-Estimating Decision Support System

Decision-support systems (DSS) focus on problems that are unique and rapidly changing, for which the procedure for arriving at a
solution may not be fully predefined in advance.

Business intelligence

● Class of software applications

● Analyse current and historical data to find patterns and trends and aid decision-making
● Used in systems that support middle and senior management
o Data-driven DSS
o Executive support systems (ESS)

Business intelligence is a type of software used in analysing data, and is used in both DSS and ESS. As an example, the BMW
Oracle boat described in the chapter opening case was using business intelligence – the software analysed huge amounts of data,
including real-time data, to determine hidden factors and correlations that make a sailboat go faster, and help the sailors make
decisions in navigating and managing the boat.

Executive support systems

● Support senior management

● Address non-routine decisions
o Requiring judgment, evaluation, and insight
● Incorporate data about external events (e.g. new tax laws or competitors) as well as summarized information from
internal MIS and DSS
● Example: Digital dashboard with real-time view of firm’s financial performance: working capital, accounts receivable,
accounts payable, cash flow, and inventory

A critical feature of ESS is ease of use and simplicity of display. Executives using an ESS want quick access to the most critical data
affecting their firm.

Systems from a constituency perspective

● Transaction processing systems: supporting operational level employees

● Management information systems and decision-support systems: supporting managers
● Executive support systems: supporting executives

In a constituency perspective, systems are distinguished on the basis of who uses the system– operational managers, middle
management, and senior management. Systems are often designed to fit the specific needs of each of these groups in a firm.
These groups form “constituencies” that CIOs must appeal to for support.

Relationship of systems to one another

● TPS: Major source of data for other systems

● ESS: Recipient of data from lower-level systems
● Data may be exchanged between systems

Systems for Linking the Enterprise:

● Enterprise applications
o Systems for linking the enterprise
o Span functional areas
o Execute business processes across firm
o Include all levels of management
o Four major applications:
▪ Enterprise systems
▪ Supply chain management systems
▪ Customer relationship management systems
▪ Knowledge management systems

Enterprise applications are used to manage the information used in the systems discussed previously. In other words, enterprise
applications are used to ensure that TPS, MIS, DSS, and ESS work together smoothly.
Enterprise Application Architecture

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

The purpose of this graphic is simply to illustrate that enterprise systems are very large and diverse databases that pull
information from many parts of the firm and enable processes both across the firm, at different organizational levels, as well as
with suppliers and customers.

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

Supply chain management (SCM) systems

● Manage firm’s relationships with suppliers

● Share information about
o Orders, production, inventory levels, delivery of products and services
● Goal: Right amount of products to destination with least amount of time and lowest cost

SCM systems are inter-organizational systems, automating the flow of information across organizational boundaries. This
distinction is important because SCM systems must be designed with the business processes of potential partners and suppliers in
mind.

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

Knowledge management systems (KMS)

 ● Support processes for acquiring, creating, storing, distributing, applying, integrating knowledge
o How to create, produce, distribute products and services
● Collect internal knowledge and experience within firm and make it available to employees
● Link to external sources of knowledge
● Knowledge management systems are useful for helping a firm’s employees understand how to perform certain business
processes or how to solve problems.

Alternative tools that increase integration and expedite the flow of information

Intranets: Internal company Web sites accessible only by employees.

Internet: A public network linking organization and other external networks.

Extranets: Company Web sites accessible externally only to vendors and suppliers. Often used to coordinate supply chain.

Enterprise applications are typically extremely expensive as well as difficult to implement. Intranets and extranets use Internet
technology to communicate internally to employees, allow employees to communicate with each other and share documents,
and to help communication with vendors. They are essentially password protected Web sites. The simplest intranets and
extranets may use static web pages to relay information, while more sophisticated versions may be database-driven and enable
key business processes.

E-business

● Use of digital technology and Internet to drive major business processes. Includes e-commerce and activates for the
internal management for the firm and for coordination with suppliers.
● E-business refers to the use of the Internet and networking to enable all parts of the business.

E-commerce

● Subset of e-business
● Buying and selling goods and services through Internet
● E-commerce refers to just that part of business that involves selling goods and services over the Internet. And
encompasses activates supporting market transaction like advertising.

E-government:

● Using Internet technology to deliver information and services to citizens, employees, and businesses

3. Systems for Collaboration and Teamwork

Collaboration: is working with others to achieve shared an explicit goals

● Short-lived or long-term
● Informal or formal (teams)

Growing importance of collaboration:

● Changing nature of work

● Growth of professional work – “interaction jobs”
● Changing organization of the firm
● Changing scope of the firm
● Emphasis on innovation
● Changing culture of work

A number of factors are leading to a growing emphasis on collaboration in the firm. Work is changing, requiring more cooperation
and coordination. Professions play a larger role in firms than before, and this often requires more consultation among experts
than before. Organizations are flatter, with many more decisions made far down in the hierarchy. Organizations are more far flung
around the globe, in multiple locations. There’s an emphasis on finding and sharing ideas which requires collaboration.
Business benefits of collaboration and teamwork

● Investments in collaboration technology can produce organizational improvements returning high ROI
● Benefits:
o Productivity
o Quality
o Innovation
o Customer service
o Financial performance
o Profitability, sales, sales growth

Research regarding the business benefits of collaboration is anecdotal; however, business and academic communities generally
regard collaboration as an essential driving factor in business success: Firms that collaborate more make more money.

Requirement for Collaboration

Successful collaboration requires an appropriate organizational structure and culture, along with appropriate collaboration
technology.

Building a collaborative culture and business processes

● “Command and control” organizations

o No value placed on teamwork or lower-level participation in decisions
● Collaborative business culture
o Senior managers rely on teams of employees
o Policies, products, designs, processes, systems rely on teams
o Managers purpose is to build teams

Technology for collaboration and teamwork

15 categories of collaborative software tools

● Email and instant messaging

● White boarding
● Collaborative writing Web presenting
● Collaborative reviewing
● Work scheduling
● Event scheduling
● Document sharing /wikis
● File sharing
● Mind mapping
 ● Screen sharing Large audience Webinars
● Audio conferencing
● Co-browsing
● Video conferencing

Two dimensions of collaboration technologies

● Space (or location) – remote or colocated

● Time – synchronous or asynchronous

Six steps in evaluating software tools

● What are your firm’s collaboration challenges?

● What kinds of solutions are available?
● Analyze available products’ cost and benefits
● Evaluate security risks
● Consult users for implementation and training issues
● Evaluate product vendors

When evaluating collaboration tools for your businesses, the first step is to identify the kind of problem you have. The key
problems are time and location. Generally, no one has enough time and often key people are not in the right place. Some teams
may need to work together in real-time, while others may simply need shared documentation. In analysing collaboration tools by
the space/time dimensions you can determine what types of tools will solve your problem. The six steps in evaluating software is
applicable not only for collaboration tools but any software solution for your company. First determine the challenge or problem,
look for solutions for this particular problem and so forth.

4. The Time/Space Collaboration Tool Matrix

Collaboration technologies can be classified in terms of whether they support interactions at the same or different time or place
whether these interactions are remote or co-located.
 5. The Information Systems function is Business

The information systems department of a firm is responsible for coordinating all of the systems previously mentioned in this
chapter. How the department is organized depends on the nature and size of the business. Small companies may not have a
formal department, while large companies may have several departments for different business functions, or they have an IT
Department in each corporate division.

● Formal organizational unit responsible for information technology services

● Often headed by chief information officer (CIO)
o Other senior positions include chief security officer (CSO), chief knowledge officer (CKO), chief privacy officer
(CPO)
● Programmers
● Systems analysts
● Information systems managers

End users

● Representatives of other departments for whom applications are developed

● Increasing role in system design, development

IT Governance:

● Strategies and policies for using IT in the organization

● Decision rights
● Accountability
● Organization of information systems function
● Centralized, decentralized, etc.

As the development of business information systems matures, end users have been increasingly recognized as pivotal to
developing a successful system. In addition, the information systems department has also been recognized as a powerful resource
for developing new products, services and efficiencies. As such, IT governance is a central business concern – being able to use IT
efficiently and effectively has become more and more essential to a business’ success.