Management

Information Systems
(Chapter # 2)
:By
Dr. Shakeel Iqbal
 Systems Designed to Serve the Various
Levels of Management in a Business

• A business firm has systems to support different

groups or levels of management. These systems
include:
1. Transaction Processing System (TPS)
2. Management Information System (MIS)
3. Decision Support System (DSS)
4. Executive Support Systems (ESS)
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 Systems Designed to Serve the Various
Levels of Management in a Business

1. Transaction Processing System (TPS): is a

computerized system that performs & records the daily
routine transactions necessary to conduct business such
as sales order entry, payroll, employee record keeping,
etc.
• Basic purpose is to answer routine questions & to track
the flow of information through the organization e.g.,
inventory checking, payment records.
• At operational level tasks, resources & goals are 3

predefined and highly structured e.g., allowing credit to

a customer.
 Systems Designed to Serve the Various
Levels of Management in a Business

• TPS are the major producers of information

for the other systems & business functions e.g,
payroll TPS supplies data to the company’s
general ledger system which is used in
preparation of financial statements — it also
provides data for insurance, pension, tax, etc.
• TPS are central to a business that TPS failure
for a few hours can lead to a firm’s demise & 4

perhaps that of other firms linked to it: Airline

without their computerized reservation systems?
 Systems Designed to Serve the Various
Levels of Management in a Business

2. Management Information System (MIS): a

specific category of IS serving middle
management.
• MIS provide middle managers with reports on
the organization’s current performance: it
helps to monitor & control the business & predict
future performance.
• Input for MIS: data supplied by TPS: reports are 5

generated on a regular schedule & mostly

 Systems Designed to Serve the Various
Levels of Management in a Business

• MIS typically provide answers to routine

questions and have a predefined procedure for
answering them e.g., fuel consumed by a company
— Actual vs. Planned.
• Limitation: These systems generally are not
flexible & have little analytical capability: mostly
use simple routines, such as summaries and
comparisons as opposed to sophisticated6

mathematical models or statistical techniques.

 Systems Designed to Serve the Various
Levels of Management in a Business

3. Decision Support System (DSS): Support

more non-routine decision making: address
unique problems for which procedures for
arriving at a solution may not be fully
predefined: Examples: What would be the impact
on production schemes if we were to double
sales in the month of December?
• Input for DSS: TPS, MIS, external sources such as 7

stock prices, competitor prices.

 Systems Designed to Serve the Various
Levels of Management in a Business

Examples of DSS:
Model Driven DSS:
• Voyage-estimating DSS: Given a customer delivery schedule & an offered
freight rate, which vessel should be assigned at what rate to maximize
profits? Optimal speed? Optimal loading pattern?
Data Driven DSS:
• Intra-west — the largest ski operator in North America: collects & stores
large amounts of customer data, uses special software to analyze these
data to determine the value, revenue potential and loyalty of each
customer. 8
 Systems Designed to Serve the Various
Levels of Management in a Business

4. Executive Support System (ESS):

• ESS helps senior management make non-routine
decisions requiring judgment, evaluation &
insight.
• ESS presents graphs & data from many sources
through an interface that is easy for senior
managers to use.
• Information is often delivered through a portal
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which uses a web interface to present integrated

 Systems Designed to Serve the Various
Levels of Management in a Business

4. Executive Support System (ESS):

• Mostly such systems include business intelligence
analytics for analyzing trends, forecasting
&“drilling down” to data at greater levels of
detail.
• Digital Dashboard: displays on a single screen
graphs and charts of key performance indicators
for managing a company. 10
Systems Designed to Assist Different
Functional Areas of Business
• Businesses grow over a period of time: Organic growth
+ acquisitions.
• The result is many IS each serving a specific functional
area or requirement: challenge is how to get them
talk.
• Solution: Enterprise applications: Systems that span
functional areas, focus on executing business process
across the business firm and include all levels of
management. 11

• Advantage of Enterprise applications: * Help business

Systems Designed to Assist Different
Functional Areas of Business
• Examples of Systems designed to assist different
functional areas of business:
1. Supply Chain Management (SCM)
Systems
2. Customer Relationship Management
(CRM) Systems
3. Knowledge Management (KM Systems)
4. Enterprise Systems (ES) 12
Systems Designed to Assist Different
Functional Areas of Business
1. SCM Systems: are used to help manage relationships
with suppliers.
• These systems help suppliers, purchasing firms,
distributors & logistics companies share information
about orders, production, inventory levels and delivery of
products so that they can source, produce and deliver
goods & services efficiently.
• The objective is to get the right amount of their products
from their source to their point of consumption in the
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least amount of time and at the lowest cost.
Systems Designed to Assist Different
Functional Areas of Business

• SCM Systems: Advantage: lower cost -> higher

profitability.
• Inter-organizational system: automate the flow of
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information across organizational boundaries.
Systems Designed to Assist Different
Functional Areas of Business
2. CRM systems: help companies manage their
relationships with their customers.
• These systems provide information to coordinate all of the
business products that deal with customers in sales,
marketing & service to optimize revenue, customer
satisfaction & customer retention.
• Advantages:- Firms can identify, attract & retain the most
profitable customers.
• Provide better services to existing customers. -> Increase
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sales.
 Systems Designed to Assist Different
Functional Areas of Business
3. KM systems: enable organizations to better manage processes for
capturing and applying knowledge and expertise.
• These systems collect all relevant knowledge and experience in the
firm & make it available wherever & whenever it is needed to improve
business processes & management decision.
• These systems also link the firm to external sources of knowledge.
• Advantage: Some firms perform better than others because they have
better knowledge about how to create, produce and deliver products &
services. This firm knowledge is difficult to imitate, unique & can be
leveraged into long term strategic benefits.
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 Systems Designed to Assist Different
Functional Areas of Business
4. ES: also known as (ERP) systems: integrate business
processes in manufacturing & production, finance &
accounting, sales & marketing & human resources into a
single software system.
• Silos vs. Single comprehensive data repository.
• Example: Customer places an order; the data is
automatically shared by all concerned departments:
warehouse -> shipments.
Accounting department -> Invoices. Customer
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services -> track shipment & keep customer updated.
Systems for Collaboration and
Teamwork

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Systems for Collaboration and
Teamwork
Requirements for Collaboration
1. Collaboration Capability
- Open culture
- Decentralized structure
- Breadth of collaboration
2. Collaboration Technology
- Use of collaboration technology for implementation & operations.
- Use of collaboration technology for strategic planning.
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Systems for Collaboration and
Teamwork

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 Systems for Collaboration and
Teamwork
Tools & Technologies for Collaboration & Teamwork
1. Email & IM: Internet + mobile technology.
- Real-time group conversations.

2. Social Networking: * Quickly becoming corporate tools,

Facebook, WhatsApp, LinkedIn.

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 Systems for Collaboration and
Teamwork
Tools & Technologies for Collaboration & Teamwork
3. Wikis: are a type of website that makes it easy for users to
contribute & edit text content and graphics without any
knowledge of webpage development or programming techniques.
• Example: Wikipedia
• Wikis are ideal tools for storing and sharing company knowledge &
insights.
• Wikis are less costly than formal KMS and they can be much more
dynamic & current.

4. Virtual Worlds: are online 3-D environments populated by

residents who have built graphical representations of themselves 22

known as avatars (Example: Second Life).

• IBM/INSEAD are using this virtual world to house online meetings,
Systems for Collaboration and
Teamwork
Tools & Technologies for Collaboration & Teamwork
Internet-Based Collaboration Environments:
(a) Virtual meeting system: Telepresence
(b) Google Apps/Google Sites:- Google Calendar, Google
Gmail, Google Talk, Google Docs, Google Sites, Google Video,
Google Groups.
(c) Microsoft SharePoint: is a browser-based collaborative
& doc management platform, combined with a powerful
search engine that is installed on corporate servers.
• Microsoft SharePoint is used by SMEs that use Microsoft
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server & networking products.

Systems for Collaboration and
Teamwork
Tools & Technologies for Collaboration & Teamwork
Internet-Based Collaboration Environments:
 SharePoint software makes it possible for employees to
share their office docs and collaborate on project using
office docs as the foundation.
 Sony Electronics use Microsoft SharePoint.
d) IBM Lotus Notes: Used by very large firms (Fortune
1000).
Toshiba, Air France, Global Hyatt use IBM Lotus Notes as
their primary collaboration & teamwork tools. It provides24 all
the basic collaboration tools as Google Apps/Google Sites
and SharePoint do but with a few added features.
Systems for Collaboration and
Teamwork
Tools & Technologies for Collaboration & Teamwork
Internet-Based Collaboration Environments:
• Lotus Notes has social networking enhancements and the
ability for your team to develop its own custom
applications.
• The most beneficial feature of Lotus Notes for very large
corporations is the higher levels of security and reliability
along with the ability to keep control over sensitive
information
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Systems for Collaboration and
Teamwork

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