Information Systems

Thanks to the work of P Beynon-Davies

Information systems

• Information systems existed in organisations before the invention of modern ICT – so they do not need modern ICT to exist

• Historical cases provide distance from modern ICT, allowing us to– Consider what constitutes an information system, and– Understand important differences between information

systems and ICT systems• In the modern, global and complex organisational world, most

information systems rely on hardware, software, data and communication technology

Table 4.1: Examples of historical information, information systems, information technology and human activity systems

This modelling technique uses four main constructs: 1. Agents2. Information flows3. Information stores 4. Processes (information-handling)

IS modelling constructs

Figure 4.1: Information system modelling constructs

Figure 4.2: An information systems model of the RAF early warning network

Infrastructure• Organised activity requires infrastructure• Infrastructure consists of systems of social organisation and

technology that support human activity• In business there are four layers of infrastructure:

1) Activity systems infrastructure2) Information infrastructure3) Information systems infrastructure4) ICT infrastructure

• Each of these layers is critically dependent on the layer below it

Figure 4.3: Levels of infrastructure

Activity systems infrastructure• The activity systems infrastructure shown on the next slide

consists of a number of activity sub-systems, eg sales, after-sales, marketing and purchasing

• These activity sub-systems relate together in flows of physical items and information

Figure 4.4: Activity systems infrastructure of a typical manufacturing organisation

Figure 4.5: Information flows between core back-end information systems

• An activity systems infrastructure relies on an associated information systems infrastructure

• An information systems infrastructure can be a back-end or front-end system

• An information system that communicates with a customer-side inventory management system

• Necessary to check the availability of finished goods for the customer

• Passes processed orders to an outbound logistics system which dispatches goods to customers matching original sales orders

• The customer is notified of the form and timing of intended delivery

Sales order processing

Figure 4.6: Sales order processing

Order entry• A key process that interfaces to the organisation’s customers• Captures the key information needed to process a customer order

– Orders might arrive through the post or over the phone – or electronically via electronic data interchange (EDI) links or the Internet

• Normally the order entry system would make an enquiry of the stock control system to check that the item is available– If an order item cannot be filled then a substitute might be

suggested or a back order generated, to be filled when stock is replenished

– A notification of a confirmed, partially filled or back order would be supplied to the customer

Figure 4.7: Order entry

Supply-side inventory management information system• Most businesses have several forms of stock or inventory

– Eg raw materials, materials for packing, finished goods and parts for maintenance of products

• Stock control or inventory management information systems are designed to record information about this material flow

• The objective for most businesses is to minimise the amount of stock held while ensuring optimal performance of other systems, such as manufacturing or production

Figure 4.8: Supply-side inventory management information system

Purchase order processing information system• Purchases are generated in two ways:

1) The inventory management system itself generates an automatic purchase order if the level of a stock item falls below a certain level

2) A purchasing or procurement unit generates purchase orders from orders it receives from the inventory management system or from requests from staff for those items not included within the general remit of inventory management

• Purchase orders are produced by purchase order handling and then sent to relevant suppliers

Figure 4.9: Purchase order processing information system

Financial information system• Financial information systems have three major sub-systems:

1) accounts receivable 2) accounts payable 3) general ledger• The information store used by the accounts receivable system is a

sales ledger – Records financial details of all amounts owed by customers to the

organisation• The information store used by the accounts payable system is the

purchase ledger– Stores details of all monies owed to suppliers by the organisation

• A general ledger system records details of all financial transactions relevant to an organisation: income, expenditure and assets – Receives information from accounts payable, accounts receivable and

inventory management systems

Figure 4.10: Financial information system

Payroll system• Payroll produces two primary outputs:

1) Payment to the employee2) Payslip or pay advice – a record of the details of payments made

• The key input into a payroll system is information of the work undertaken during a given time period, such as a week or month

– These details are collected on timesheets sent from operational departments or are automatically generated from a production scheduling and control system

• The payroll system accesses information stored on each employee, eg pay rates, tax details, to produce pay advices

• The payroll system periodically updates the general ledger system with the financial costs of labour

Figure 4.11: Payroll system

Front-end information systems

• A number of front-end information systems exist around the core back-end information systems

• Such systems face the major stakeholders of the business: – Managers, employees, customers and suppliers

• So these information systems are referred to as:• Management-facing information systems• Employee-facing information systems• Customer-facing information systems• Supplier-facing information systems

Figure 4.12: Back-end and front-end information systems infrastructure

Management information systems• Management information systems (MIS) are used by an

operational layer of management to monitor the state of the organisation at any one time

• From an MIS, managers can retrieve information about current production levels, number of orders achieved, current labour costs and other relevant managerial information

Figure 4.13: Management information systems

Outbound logistics information system• Shipment planning determines which orders will be filled and from

which location they will be shipped– The system produces two outputs:

1. A shipment plan - indicates how and when each order is to be filled2. A picking list - used by warehouse staff to select the desired goods

from the warehouse• Shipment execution supports the work of the shipping function and

coordinates the flow of goods from the business to customers– The system:

• Produces a shipping note that is attached to each despatch of goods• Passes details of the shipment to invoicing

• Invoicing systems take information supplied re shipping and produce invoices for customers using information stored about customers, orders, products and prices– Invoices may be sent at time of shipment or sometime afterwards

Figure 4.14: Outbound logistics information system

Customer-facing information systems• Customer-facing information systems

– Support demand-chain activities– Interface between back-end information systems (eg sales

order processing, inventory management) and the customer• Traditional customer-facing information systems include

– Sales, marketing, outbound logistics and after-sales systems• Recently, there is increased emphasis on integrating such systems

to form a customer relationship management or customer chain management information system

Figure 4.15: Customer-facing information systems

Supplier-facing information systems• Supplier-facing information systems support supply chain

activities• Traditional supplier-facing systems:

– Include inbound logistics and procurement – Interface with back-end information systems, such as purchase

order processing, finance and inventory management• There has been increased emphasis on integrating supplier-facing

information systems to form an integrated supply chain management or supplier relationship management system

Figure 4.16: Supplier-facing information systems

Employee-facing information systems • Support the internal value chain within organisations• Include human resource management and production control systems• Interact with key back-end information systems such as payroll

Figure 4.17: Employee-facing information systems

Figure 4.18: Part of a company’s information infrastructure

Ontology

Borrowed from philosophy meaning a systematic account or model of an area of existence – logicians refer to as Universe (Domain) of Discourse e.g. In organisations = employees, products, customers and suppliers.