MGMG598: Managing Business

Information and
Emerging Technologies

Associate Professor Dr. Vichita Ractham

College of Management, Mahidol University
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IS IN ENTERPRISES

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 IS must deliver business values
❑ An enterprise & the business (2)
Understand
the Business ❑ How they compete

❑ What they do
(3 – 4)
Functions & ❑ What information they need
Information ❑ How to manage data
Needs

Match IS to ❑ IS Applications & Business (5 – 8)

Business Needs needs

Know the ❑ Technology components (9-10)

Technology

Justify the ❑ Justify business values of IS (11-12)

Benefits

(Classes)
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 Learning Objectives
To gain an awareness of:
The range of Information Systems Applications which are
currently available in the market.
How these applications are categorized and grouped to
serve business users in different organizational functions
and at different responsibility levels.
Functions of applications that match operational and
managerial requirements of organizations.

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Organizations and Information Systems are
interdependent
Organization Information Systems
IS Applications IS Infrastructure

Hardware
Business
Strategy Application
Software Database
Rules
Processes
Telecom-
munications

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 Application Systems to support business needs
Understand
the
Business
Sessions 6
Functions
Functions &&
❑ The various levels of user in an organization
Information
Information
Needs
Needs ❑ Basic types of IS applications, how they support
the different users
Match IS to
Business Needs ❑ Functions of IS applications
❑ IS Strategic Planning – how organizations plan
Know the information systems to match their business
Technology strategies and business needs

Justify the
Benefits

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Application Software or Application Systems support
business processes and deliver business information
Business
Business
Information Environment
Needs

Data
Model

IS Business
Data Database, Database Applications
Structure Data Management
Warehouse System Data Analysis
Tools
Describe Store data Access data
how data Data Mining
are stored IT Tools
Environment
Manipulate data
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 Organizations consist of specialized business
functions managed at different levels
Executives/Senior Strategic Planning
Managers “What to do”

Middle
Managers
Management Control
“How to do it”
Knowledge
Professionals

Operational
Operations Control
“Do it right”
Sales and Manufacturing Finance and Human
Marketing and Production Accounting Resources

Business Functions 7
 Each level has a different focus on their
needs for IS support
Focus
Executives/Senior Strategy, Policy
Managers

Middle Decision
Managers

Knowledge Knowledge
Professionals Information

Productivity
Operations Operational
Data
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With varying requirements in terms of
Information Sources . . .

Environmental/
Strategic planning level
External
Management control level

Operational control level Internal

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… and for different Forms of Information

Strategic planning level Summary

Management control level

Operational control level

Detail

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IS are designed to match the focus at
these different levels IS FOR DIFFERENT
ORGANIZATION LEVELS
Executives/Senior
Managers Policy STRATEGIC LEVEL
SYSTEMS
Strategy

Middle MANAGEMENT
Managers Decision LEVEL SYSTEMS

Knowledge Knowledge KNOWLEDGE

Professionals LEVEL SYSTEMS
Information

Productivity OPERATIONAL
Operations LEVEL
Operational Data SYSTEMS

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Types of System –
Descriptions and examples
▪ Executive Support Systems (ESS/EIS)

▪ Decision Support Systems (DSS)

▪ Knowledge Work Systems (KWS/KMS)

▪ Management Information Systems (MIS/MRS)

▪ Office Automation Systems (OAS)

▪ Transaction Processing Systems (TPS)

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TPS: Transaction Processing Systems
Computerized systems that perform and record the
daily routine transactions necessary to conduct the
business
Tasks of a TPS:
Data Gathering
◦ What happened?, When?, How much (volume, value)?
Data Manipulation
◦ Classify (using codes), Sort, Calculate, Summarize
Data Storage
Document Preparation
Transaction Processing System - Examples
▪ Point-Of-Sales System
▪ Order-Entry System
▪ Distribution System
▪ Purchasing System
▪ Inventory Management System
▪ Accounting System
▪ Payroll System
▪ Registration System
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 Is =
Process
Pata (7/0(u)
IT

Functions of a Point-of-Sale TPS

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 Customer Management
and Order Tracking
To make shipping easier and more convenient
for customer
Lets customer handle shipping from their
desktop computer
Windows-based shipping software

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School Registration System (TPS)

▪ Input

▪ Process

▪ Store

▪ Output

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Transaction Processing System

▪ Think about your

work process

▪ Have you ever

interact with any TPS
@work?

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Example of TPS

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Typical TPS Applications
Sales & Manufacturing & Finance & Human Resource
Marketing Production Accounting Systems
Systems Systems Systems
Function: Functions: Functions: Functions:
-Sales management, - Scheduling, -Budgeting, general - Personnel records,
market research, purchasing, shipping, ledger, billing, cost benefits,
promotion, pricing receiving, engineering, accounting compensation, labor
new products operations relations, training

Application Systems: Application Systems: Application Systems: Application Systems:

- Sales order - Materials resource -General ledger, - Payroll, employee
information system, planning systems, accounts receivable, records, benefit
market research purchase order control accounts payable, systems, career path
system, pricing systems, engineering budgeting, funds systems, personnel
system systems, quality management systems training systems
control systems

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Traditional TPS serve specific business functions,
with separate databases, thus difficult to combine
information across functions
Business Functions

Information System Applications

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But many business processes are cross-functional,
IS must also support these

Order Fulfillment
Process

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 ERP is a single system for company-wide integration of
business processes
Financial Accounting Financial Controlling

Material Management FI CO AM Assets Management

MM
Sales and HR Human Resources
Distribution
SD
Business
BW Warehouse
SAP
Production PP An example of ERP system
Planning APO Planning/
Scheduling

PM PS Project System
Plant Maintenance

Quality Management QM IS
OC Industry Solutions
Office and Communication
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 Organizations implement modules that are relevant to
their business
Financial Accounting Financial Controlling

Material Management FI CO AM Assets Management

MM
Sales and HR Human Resources
Distribution
SD Modules
Implemented Business
BW Warehouse
Partially
Production PP Implemented
Planning APO Planning/
Scheduling
No need to
PM implement PS Project System
Plant Maintenance

Quality Management QM IS
OC Industry Solutions
Office and Communication
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Types of System –
Descriptions and examples
▪ Executive Support Systems (ESS/EIS)

▪ Decision Support Systems (DSS)

▪ Knowledge Work Systems (KWS/KMS)

▪ Management Information Systems (MIS/MRS)

▪ Office Automation Systems (OAS)

▪ Transaction Processing Systems (TPS)

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 Office Automation Systems (OAS)
Purposes
▪Towards a “paperless” office e.g. computer
storage and filing systems
▪Managing work flow – coordinating work
stages, tracking progress
▪Personal productivity e.g. Word
Processing, Presentation Graphics,
Spreadsheet Processing

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OAS: Office Automation System
- Examples

▪ Office Automation

▪ Work-Flow Automation

▪ Sales Force Automation

▪ Automated Support for

Education and Training
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 Automation Support for Education
and Training
▪ Computer-Based Training
▪ Distance Education
▪ E-Learning
▪ Virtual Reality

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Process Automation System
- Examples

▪ Factory Automation – manufacturing process

control systems e.g. system that controls
volume of soft drink in a can
▪ Robotics – robots for placing parts in cars, for
spraying paint on cars

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Sample: Robotic Tube Cutting System

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Sample: Automated Warehousing System

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Types of System –
Descriptions and examples
▪ Executive Support Systems (ESS/EIS)

▪ Decision Support Systems (DSS)

▪ Knowledge Work Systems (KWS/KMS)

▪ Management Information Systems (MIS/MRS)

▪ Office Automation Systems (OAS)

▪ Transaction Processing Systems (TPS)

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MRS: Management Reporting Systems or
Management Information Systems

▪ For the management level

▪ Provides managers with reports on
and access to organization’s current
performance and historical data
▪ Typically oriented to internal events
▪ Used for planning, controlling and
decision-making
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 TPS Data for MIS Applications
TPS MIS
Order Processing SALES
DATA
System

ORDER FILE UNIT

PRODUCT
Materials Resource COST MIS REPORTS
Planning System
PRODUCT
PRODUCTION MASTER FILE CHANGE
DATA
General Ledger
EXPENSE MANAGERS
System DATA

ACCOUNTING FILES MIS FILES

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MRS Characteristics
INPUTS: High volume transaction data
PROCESSING: Simple models e.g. summary,
total/subtotal, comparison actual vs planned
OUTPUTS: Summarized reports
USERS: Middle Managers
Example: Summarized Annual Sales data for each
product

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MRS serve users across organization
▪ Information provided:
▪ Past, present, future
▪ Periodic reports, special reports, simulations
▪ Serving similar needs:
▪ Across functional area
▪ Across management levels
▪ Both managers and non-managers

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Management Reporting Systems
▪ Types of Report
▪ detail
▪ summary
▪ exception
▪ Reporting frequency
▪ periodic
▪ on-demand

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Types of System –
Descriptions and examples
▪ Executive Support Systems (ESS/EIS)

▪ Decision Support Systems (DSS)

▪ Knowledge Work Systems (KWS/KMS)

▪ Management Information Systems (MIS/MRS)

▪ Office Automation Systems (OAS)

▪ Transaction Processing Systems (TPS)

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Knowledge Work Systems (KWS)

Example – Computer Aided Design (CAD)

INPUTS: Design Specs
PROCESSING: Modeling
OUTPUTS: Designs, Graphics
USERS: Technical Staff

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Where is knowledge?

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Types of System –
Descriptions and examples
▪ Executive Support Systems (ESS/EIS)
&
▪ Decision Support Systems (DSS)

▪ Knowledge Work Systems (KWS/KMS)

▪ Management Information Systems (MIS/MRS)

▪ Office Automation Systems (OAS)

▪ Transaction Processing Systems (TPS)

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DSS AT WORK

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 Decision Support Systems (DSS)

▪ Management level computer system

▪ Combines data, analytical tools, and model
Not sure that we
decide it correctly

▪ Support semi-structured & unstructured

>
-

or not ?

- -

decision making

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 Decision Support Systems (DSS)
▪ DSS aids the decision maker in the decision-making process
▪ DSS is designed to address semistructure and unstructured
decisions
Decision Operational Tactical Strategic
Structure Management Management Management
Unstructured Workgroup reorg New business planning
Cash Mgt. Workgroup perf.analysis Company reorg
Semistructured Credit Mgt. Employee perf.appraisal Product planning
Production sched Capital budgeting Merger & Acquisition
Daily work assign Product pricing Site location
Structured Inventory control Program control
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Overview of a DSS

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DSS Applications and the Digital Firm
Example:
▪ General Accident Insurance To andyze consumer

o Customer buying patterns and fraud detection I behavior based on

.
record

▪ Bank of America
o Customer profiles
▪ Frito-Lay, Inc.
o Price, advertising, and promotion selection
Etc.

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DSS for Customer Analysis and
Segmentation

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 ↑

DSS for Simulating Business Scenarios

Geographic Information Systems (GIS)

▪ Software for analyzing and displaying data using digitized maps
▪ Enhances planning and decision-making
▪ Use data visualization technology

Customer Decision-Support Systems (CDSS)

▪ Support decision-making process of an existing or potential
customer

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GIS Map

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GIS Map of the West Farm showing plots trees, and structures. Total area is about .65 acres.

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Group Decision Support System (GDSS)
(DSS extension)

Facilitator
Models

GDSS processor Inquiry DBMS

Groupware/Facilitate

GDSS contains most of the elements found in a DSS,

plus the additional of groupware to facilitate group
member communications

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Group Decision Support System (GDSS)

▪ Interactive Computer-based system

▪ Facilitates solution to unstructured problems
▪ Set of decision makers working as a group

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Group Decision Support System (GDSS)
▪ Specialized hardware and software; typically used in
conference rooms
▪ Overhead projectors, display screens
▪ Software to collect, rank, edit participant ideas and
responses
▪ May require facilitator and staff

▪ Enables increasing meeting size and increasing

productivity
▪ Promotes collaborative atmosphere, anonymity

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Sample Groupware Facility:
Electronic Meeting Room

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Types of System –
Descriptions and examples
▪ Executive Support Systems (ESS/EIS)

▪ Decision Support Systems (DSS)

▪ Knowledge Work Systems (KWS/KMS)

▪ Management Information Systems (MIS/MRS)

▪ Office Automation Systems (OAS)

▪ Transaction Processing Systems (TPS)

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Executive Support Systems (ESS/EIS)
Strategic Level
INPUTS: Aggregate Data
PROCESSING: Interactive
OUTPUTS: Projections
USERS: Senior Managers

EXAMPLE: 5 Year Operating Plan

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Executive Support Systems (ESS/EIS)
▪ Help executives focus on important performance
information
▪ Balanced scorecard method:
▪ Measures outcomes on four dimensions:
▪ Financial
▪ Business process
▪ Customer
▪ Learning and growth

▪ Key performance indicators (KPIs) measure each

dimension

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 THE BALANCED SCORECARD FRAMEWORK

In the balanced scorecard framework, the firm’s strategic objectives are operationalized along four
dimensions: financial, business process, customer, and learning and growth. Each dimension is measured
using several KPIs.

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 Role of Effective ESS
EIS is to provide the dashboard controls.
Management is the pilot.
The shareholders own the plane!

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Digital Dashboard – Integrates information from multiple
components and presents it in a unified display

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 Environmental Information and data
A Firm With
An EIS
Executive
information
system

Human
Marketing Manufacturing Financial resource
information information information information
system system system system

Environmental Information and data

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 Executive Support Systems (ESS)

▪ DRILL DOWN: ability to move from summary to

lower levels of detail
▪ Designed for specific needs of CEO
▪ Extensive support staff
▪ Executive has 24 hour per day ability to examine,
control progress throughout organization

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Organization consists of different business
functions
Executives/Senior
Managers

Middle
Managers

Knowledge
Professionals

Operations

Sales and Manufacturing Finance and Human

Marketing and Production Accounting Resources
Business Functions 67
Systems from a Functional Perspective

▪ Sales & Marketing Systems

▪ Manufacturing & Production Systems
▪ Finance & Accounting Systems
▪ Human Resources Systems

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 Sales & Marketing
Information Systems
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL

ORDER PROCESSING ENTER, PROCESS, TRACK ORDERS OPERATIONAL

MARKET ANALYSIS IDENTIFY CUSTOMERS & MARKETS KNOWLEDGE

PRICING ANALYSIS DETERMINE PRICES MANAGEMENT

SALES TRENDS PREPARE 5-YEAR FORECASTS STRATEGIC

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 Manufacturing
Information Systems
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL

MACHINE CONTROL CONTROL ACTIONS OF EQUIPMENT OPERATIONAL

COMPUTER-AIDED-DESIGN DESIGN NEW PRODUCTS KNOWLEDGE

PRODUCTION PLANNING DECIDE NUMBER, SCHEDULE OF PRODUCTS MANAGEMENT

FACILITIES LOCATION DECIDE WHERE TO LOCATE FACILITIES STRATEGIC

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 Finance &
Accounting Information System
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL

ACCOUNTS RECEIVABLE TRACK MONEY OWED TO FIRM OPERATIONAL

PORTFOLIO ANALYSIS DESIGN FIRM'S INVESTMENTS KNOWLEDGE

BUDGETING PREPARE SHORT TERM BUDGETS MANAGEMENT

PROFIT PLANNING PLAN LONG-TERM PROFITS STRATEGIC

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Human Resources
Information System
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL

TRAINING & DEVELOPMENT TRACK TRAINING, SKILLS, APPRAISALS OPERATIONAL

CAREER PATHING DESIGN EMPLOYEE CAREER PATHS KNOWLEDGE

COMPENSATION ANALYSIS MONITOR WAGES, SALARIES, BENEFITS MANAGEMENT

HUMAN RESOURCES PLANNING PLAN LONG-TERM LABOR FORCE NEEDS STRATEGIC

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 IS and Competitive Strategies
Strategy I.S. Benefit
Cost Leadership Centralised buying Cut purchasing costs
Machine tool control Cut production costs
POS inventory tracking Increased productivity
Differentiation On-line flight High product visibility
reservation e.g SABRE
Innovation On-line package Market leadership
tracking and flight
management
Growth Global telecom. Increased global market
E-commerce Increased sales
Alliance Automatic stock Reduced inventory costs/
replenishment by Increased sales
supplier
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