session 4: types of information systems and strategic information systems

HUANG Lihua, Fudan University

Session 4: Types of Information Systems and

Strategic Information Systems

PART I Introduction to the Concept of Information Systems in

Business

HUANG Lihua, Fudan UniversityFeb., - July., 2006

Organization Level in Business


Type of Information Systems in Business

EISESS

DSS

MIS

TPS

Marketing

And SalesProductionFinance

& Accountingother

Operations Support Systems

Management Support Systems

Strategic-level systems

Management-level systems

Operational-level systems


Type of Information Systems in Business

• TPS: Transaction Processing Systems

• MIS: Management Information Systems

• DSS: Decision Support Systems• EIS/ESS: Executive Information

(Support) Systems


Transaction Processing Systems (TPS)

• Basic business systems that serve the organization’s operational level– Input: Transactions, events– Processing: Sorting, listing, merging, updating– Output: Detailed reports, lists, summaries– Users: Operations personnel, supervisors


Transaction Processing Systems (TPS)

• A symbolic representation for a payroll TPS


Typical applications of TPS


Management Information Systems (MIS)

• Serve management level; provide reports and access to company data– Input: Summary transaction data, high-volume

data, simple models– Processing: Routine reports, simple models,

low-level analysis– Output: Summary and exception reports– Users: Middle managers


How management information systems obtain their data

from the organization’s TPS


A Sample Report that Might be Produced by the MIS


Decision-Support Systems (DSS)

• Serve management level with data analysis for making decisions– Input: Low-volume data or massive databases,

analytic models, and data analysis tools– Processing: Interactive, simulations, analysis– Output: Special reports, decision analyses,

responses to queries– Users: Professionals, staff managers


Voyage-estimating decision-support system


Executive Support Systems (ESS)

• Provide communications and computing environment that serves the organization’s strategic level– Input: External and internal aggregate data– Processing: Graphics, simulations, interactive– Output: Projections, responses to queries– Users: Senior Managers


Model of a typical executive support system


Interrelationships among systems


Systems from a Functional Perspective

• Major Business Functions– Sales and Marketing Systems– Manufacturing and Production Systems– Finance and Accounting Systems– Human Resource Systems– …….



• Sales and Marketing Systems– Help identify customers– Develop products and services– Promote products and services– Sell products and services– Provide ongoing customer support– ………



• Examples of Sales and Marketing Information Systems

System Description Organizational Level

Order processing

Enter, process, and track orders

Operational

Pricing analysis

Determine prices for products and services

Management

Sales trend forecasting

Prepare 5-year sales forecasts

Strategic



• Manufacturing and Production Systems– Planning, development, production of products and

services– Planning, development, maintenance of production

facilities– Acquisition, storage, availability of materials– Scheduling materials, facilities, labor– Controlling the flow of production– ……….



• Examples of Manufacturing and Production Information Systems


Machine control Control the actions of machines and equipment

Operational

Production planning

Decide when and how many products should be produced

Management

Facilities location Decide where to locate new facilities

Strategic



•Overview of an inventory system



• Finance and Accounting Systems – Manage firm’s financial assets: cash, stocks, bo

nds( 债券） , etc.– Manage capitalization of firm and finding new f

inancial assets– Maintain and manage financial records– …….



• Examples of Finance and Accounting Information Systems


Accounts receivable

Track money owed the firm

Operational

Budgeting Prepare short-term budgets

Management

Profit planning Plan long-term profits Strategic



• Human Resources Systems– Identify potential employees– Maintain employee records– Track employee skills, job performance, and

training– Support planning for employee compensation

and career development– ……



• Examples of Human Resources Information Systems


Training and development

Track employee training, skills, and performance

Operational

Compensation analysis

Monitor wages, salaries, benefits

Management

Human resources planning

Plan long-term labor force needs

Strategic



• An employee record-keeping system


Other Categories of Information Systems

• Knowledge Management Systems– Knowledge-based systems that support the

creation, organization, and dissemination of business knowledge within the enterprise.

• Expert Systems– Knowledge-based systems that provide expert

advise and act as expert consulates to users.


Evolve Role of Information SystemsTime period Concept of

informationTypical Infor. systems

Purpose Role of Infor. Systems

1950-1960s Bureaucratic Requirement

Electronic Accounting Machine

Speed accounting & paperwork

Speed up , efficiency

1960s-1970s General mgt support

MIS Speed general report requirement

Speed up, cost, efficiency

1970s-1980s Customized mgt support

DSS-EIS Improve mgt, customized dec. making

effectiveness

1985-2000s Strategic resource, competitive advantage, business foundation

Strategic information systems

Promote survival, prosperity of organization

Sustainable strategic advantage



• Support operations or management process that provide a firm with strategic products, service, and capabilities for competitive advantage.



• Information system at any level of an organization – to changes goals, operations, products,

services, or environmental relationships– To helps organization gain a competitive

advantage


Porter’s competitive forces model

THE FIRM Traditional Competition

NEW MARKET ENTRANTS

SUPPLIERS CUSTOMERS

SUBSTITUTE PRODUCTS & SERVICES


• A Photo with Porter


Business Competitive Strategies

• Become the low-cost producer

• Differentiate product or service

• Change scope of competition by enlarging or narrowing market


Potential threat of new entrants

Bargaining power of buyers

Bargaining power of suppliers

Industry competitors

Threat of substitutes

Strategic use•Cost effectiveness•Market access•Differentiation of product or service

Strategic use•Selection of supplier•Threat of backward integration

Strategic use•Switching costs•Access to distribution channels•Economics of scale

Strategic use•Redefine products and services•Improve price/performance

Strategic use•Buyer selection •Switching costs•Differentiation

Porter’s competitive forces with potential strategic use of information


Summary of how information technology can be used to implement competitive strategies

Approach 1: Lower costs

1. Use IT TO substantially reduce the cost of business processes

2. Use IT to lower the costs of customers or suppliers.

THE FIRM

TRADITIONAL COMPETITION

NEW MARKET ENTRANTS

SUPPLIERS CUSTOMERS

SUBSTITUTE PRODUCTS & SERVICES


通讯支持 (COMMUNICATIONS SUPPORT)

配销中心

供应商

供应商支付

WAL-MAT 总部

财务 (FINANCING)

卫星通讯

零售商店

POS 数据(Point-of-sale data)

组织学习 (Organizational Learni

ng)

视讯联接（ VIDEO LINK ）

POS 数据(Point-of-sale data)

WAL-MAT 供应链Partne

r


Wall-Mart 沃尔 - 马特• 是近 20 年来美国发展最快的零售商。 70

年代公司年销售额只有 4000 万美元。 1995 年销售额已达 936 亿美元，列美国最大企业排名第四位， 2000 年市值 2567亿美元，列世界第 7 位， 2002 年世界 500 强名列第一。至尽，公司已拥有 2133商店、 469 家山姆会员商店和 248 家购物广场，遍布美国、墨西哥、加拿大、巴西、阿根廷、南非、印尼、中国等地。


Wall-Mart 沃尔 - 马特：成功之道：在于理念和手段

• 理念：创始人沃尔顿先生倡导的尽量降低经营成本，实行低价销售。– 宗旨：帮顾客节省每一分钱。– 口号：天天平价，始终如一。– 1995 年经营成本占销售额的 15.8% （世界上大多数零

售商的经营成本在 40% 以上）• 手段：拥有世界上最大的私有卫星系统，与 380

0 家供货商实现计算机联网。总部的计算机系统与 16 个发货中心以及 1000 多家商店连接，做到即时销售，大大压缩产品时间成本，减少库存风险，加速资金周转。


Approach 2: Differentiate

1. Develop new IT features to differentiate products and services

2. Use IT features to focus products and services at selected market niches.

Approach 3: Innovate

1. Create new products and service that include IT components

2. Make radical changes to business processes with IT

3. Develop unique new markets or market niches with the help of IT


应用案例——戴尔计算机公司：直销与个性化服务的典范

• 向企业销售 :5,000 家美国公司服务的“首页”计划。当戴尔公司赢得一家有 400 百人以上的企业客户时，它就为那家客户建立首页。首页只不过是一套比较小的网页，常常同客户的内联网联接 ( 销售和租赁），让获准的雇员在线配置个人计算机、付款、跟踪交付的情况——每天约有 500 万元的戴尔个人计算机以这种方式定货。首页让客户能即刻得到技术支持（再也不用在电话里等待！），与销售人员联系。

• 向个人销售：网上订购、网上跟踪、网上支付


Approach 4: Promote Growth

1. Use IT to manage regional and global business expansion

2. Use IT to diversify and integrated into other products and service

Approach 5: Develop Alliance

1. Use IT to create virtual organizations of business partners (information partner)

2. Develop interorganizational information systems that create strategic business relationships with customers, suppliers, subcontractors, and others


Case

• 客户在 Cisco 公司的网上下订单以后， Cisco同时在后台连接到 Fedex 公司的信息系统，把运输的指令发给 Fedex ， Fedex则根据这些指令及时将客户的订购产品送货上门。 Cisco 公司在 Fedex 那里获得每个运输物品的编号，将其返回给客户。客户可以随时登录到 Cisco 的网站，在查询订单信息的同时，能看到自己订购的物品的当前运输状态。而这些运输状态信息则是 Fedex通过网络直接及时地更新 Cisco网站的数据库来实现的。


Approach 6: Improve Quality and Efficiency

1. Use IT of to dramatically improve the quality of products and service

2. Use IT to make continuous improvements to the efficiency of business process

3. Use IT to substantially shorten the time needed to develop, produce, and deliver products and service


Approach 7: Build an IT Platform

1. Leverage investment in IS people, hardware, software, and networks from operational uses into strategy applications.

2. Build a strategic information base of internal and external data collected and analyzed by IT

Approach 8: Other Strategy

1. Use interorganizational information systems to create switching costs that lock in customers and suppliers

2. Use investment in IT to build barriers to entry against industry outsiders

3. Use IT components to make substitution of competing products unattractive


Discussion for Moen, Incorporated

• How is Moen using e-business and e-commerce technologies for competitive advantage?

• How effectively is Moen implementing “the new model for an effective Net strategy”?


Wrap Up

• Concepts– Type of information systems

• From business level: TPS, MIS, DSS, EIS/ESS

• From role of IS: strategic information systems

• From data, infor, knowledge: Knowledge management systems

– how information systems can be used to implement competitive strategies


Assignment for Session 4• Group Assignment for Case study: Moen,

Incorporated. (P51)– Questions 1-3 on P51.– Write and submit

• Preparation for session 5– Reading Materials

• Textbook: chapter 2

– P63. Review Quiz• Write down in your book, not submit

session 4: types of information systems and strategic information systems

Documents

strategic information

concept of information

types of information

production of products

functional perspectivefinance

functional perspectivesales

functional perspectiveoverview

highvolume data