CHAPTER 2. THE STRATEGIC ROLE OF INFORMATION SYSTEMS

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CHAPTER 2. THE STRATEGIC ROLE OF INFORMATION
SYSTEMS
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LEARNING OBJECTIVES

• ANALYZE ROLES OF 6 TYPES OF INFORMATION SYSTEMS
• DESCRIBE TYPES OF INFORMATION SYSTEMS
• EXAMINE COMPETITIVE FORCES, VALUE CHAIN MODELS

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LEARNING OBJECTIVES

• EXPLAIN DIFFICULTIES OF BUILDING, SUSTAINING
  STRATEGIC INFORMATION SYSTEMS
• DESCRIBE HOW INFORMATION SYSTEMS SUPPORT LEVELS
  OF BUSINESS STRATEGY

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MANAGEMENT CHALLENGES

• INTEGRATION
• ENTERPRISE RESOURCE MANAGEMENT
• CONNECTING ORGANIZATIONAL LEVELS DIFFICULT,
  COSTLY
• SUSTAIN COMPETITIVE ADVANTAGE
• INFO SYSTEMS MUST BE FLEXIBLE TO ENSURE LONG-TERM
  PROFITS

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TYPES OF INFORMATION SYSTEMS
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MAJOR TYPES OF SYSTEMS

• EXECUTIVE SUPPORT SYSTEMS (ESS)
• DECISION SUPPORT SYSTEMS (DSS)
• MANAGEMENT INFORMATION SYSTEMS (MIS)
• KNOWLEDGE WORK SYSTEMS (KWS)
• OFFICE AUTOMATION SYSTEMS (OAS)
• TRANSACTION PROCESSING SYSTEMS (TPS)

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TYPICAL TPS APPLICATIONSSales Marketing Systems

• MAJOR FUNCTIONS OF SYSTEMS
• Sales Management Market Research Promotion
  Pricing New Products
• MAJOR APPLICATION SYSTEMS
• Sales Order Info System Market Research System
  Pricing System

TPS
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TYPICAL TPS APPLICATIONSManufacturing
Production Systems

• MAJOR FUNCTIONS OF SYSTEMS
• Scheduling Purchasing Shipping / Receiving
  Engineering Operations
• MAJOR APPLICATION SYSTEMS
• Materials Resource Planning Systems Purchase
  Order Control Systems Engineering Systems
  Quality Control Systems

TPS
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TYPICAL TPS APPLICATIONSFinance Accounting
Systems

• MAJOR FUNCTIONS OF SYSTEMS
• Budgeting General Ledger Billing Cost
  Accounting
• MAJOR APPLICATION SYSTEMS
• General Ledger Accounts Receivable / Payable
  Budgeting Funds Management Systems

TPS
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TYPICAL TPS APPLICATIONSHuman Resources Systems

• MAJOR FUNCTIONS OF SYSTEMS
• Personnel Records Benefits Compensation Labor
  Relations Training
• MAJOR APPLICATION SYSTEMS
• Payroll Employee Records Benefit Systems
  Career Path Systems Personnel Training Systems

TPS
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TYPICAL TPS APPLICATIONSOther Types (e.g.,
University)

• MAJOR FUNCTIONS OF SYSTEMS
• Admissions Grade Records Course Records Alumni
• MAJOR APPLICATION SYSTEMS
• Registration System Student Transcript System
  Curriculum Class Control System Alumni
  Benefactor System

TPS
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KNOWLEDGE WORK SYSTEMS (KWS)

• KNOWLEDGE LEVEL
• INPUTS DESIGN SPECS
• PROCESSING MODELLING
• OUTPUTS DESIGNS, GRAPHICS
• USERS TECHNICAL STAFF
• EXAMPLE ENGINEERING WORK
  STATION

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OFFICE AUTOMATION SYSTEMS (OAS)

• TOWARD A PAPERLESS OFFICE
• REDESIGN OF WORK FLOW
• INTEGRATED SOFTWARE
• ERGONOMIC DESIGN
• BRIGHT, CHEERFUL WORK SPACE
• EXAMPLE PRESENTATION GRAPHICS

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MANAGEMENT INFORMATION SYSTEMS (MIS)

• MANAGEMENT LEVEL
• INPUTS HIGH VOLUME DATA
• PROCESSING SIMPLE MODELS
• OUTPUTS SUMMARY REPORTS
• USERS MIDDLE MANAGERS
• EXAMPLE ANNUAL BUDGETING

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MANAGEMENT INFORMATION SYSTEMS (MIS)

• STRUCTURED SEMI-STRUCTURED DECISIONS
• REPORT CONTROL ORIENTED
• PAST PRESENT DATA
• INTERNAL ORIENTATION
• LENGTHY DESIGN PROCESS

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TPS DATA FOR MIS APPLICATIONS
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DECISION SUPPORT SYSTEMS (DSS)

• MANAGEMENT LEVEL
• INPUTS LOW VOLUME DATA
• PROCESSING INTERACTIVE
• OUTPUTS DECISION ANALYSIS
• USERS PROFESSIONALS, STAFF
• EXAMPLE CONTRACT COST ANALYSIS

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DECISION SUPPORT SYSTEMS (DSS)

• FLEXIBLE, ADAPTABLE, QUICK
• USER CONTROLS INPUTS/OUTPUTS
• NO PROFESSIONAL PROGRAMMING
• SUPPORTS DECISION PROCESS
• SOPHISTICATED MODELING TOOLS

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EXECUTIVE SUPPORT SYSTEMS (ESS)

• 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)

• TOP LEVEL MANAGEMENT
• DESIGNED TO THE INDIVIDUAL
• TIES CEO TO ALL LEVELS
• VERY EXPENSIVE TO KEEP UP
• EXTENSIVE SUPPORT STAFF

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INTERRELATIONSHIPS AMONG SYSTEMS
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SYSTEMS FROM A FUNCTIONAL PERSPECTIVE

• SALES MARKETING SYSTEMS
• MANUFACTURING PRODUCTION SYSTEMS
• FINANCE ACCOUNTING SYSTEMS
• HUMAN RESOURCES SYSTEMS

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STRATEGIC ROLE OF INFORMATION SYSTEMS

• STRATEGIC INFO SYSTEM
• CAN CHANGE GOALS, OPERATIONS
• PRODUCTS, SERVICES
• ENVIRONMENT
• TO GAIN COMPETITIVE ADVANTAGE

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COMPETITIVE FORCES MODEL
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COUNTERING COMPETITIVE FORCES

• PRODUCT DIFFERENTIATION
• FOCUSED DIFFERENTIATION
• DATAMINING
• LINKING CUSTOMERS SUPPLIERS
• BECOMING LOW COST PRODUCER

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VALUE CHAIN MODEL

• HIGHLIGHTS PRIMARY SUPPORT ACTIVITIES THAT ADD
  VALUE TO PRODUCTS, SERVICES
• PRIMARY DIRECTLY RELATED TO PRODUCTION,
  DISTRIBUTION
• SUPPORT INFRASTRUCTURE, HUMAN RESOURCES,
  TECHNOLOGY, PROCUREMENT

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IMPLICATIONS FOR MANAGERS ORGANIZATIONS

• STRATEGIC ALLIANCES, INFORMATION PARTNERSHIPS
• INDUSTRY LEVEL STRATEGIC SYSTEMS
• MANAGING STRATEGIC TRANSITIONS
• IMPACT OF THE INTERNET

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INFORMATION SYSTEMS QUALITY

• QUALITY Conformance to specifications, customer
  satisfaction
• SIMPLIFY PRODUCT, PROCESS
• BENCHMARKING
• CUSTOMER DEMAND AS GUIDE
• REDUCE CYCLE TIME
• IMPROVE QUALITY PRECISION

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Connect to the INTERNET
Laudon/Laudon Web site http//www.prenhall.co
m/laudon Additional Internet Resources related
to this chapter http//tools.org/EI/ICEIMT htt
p//www.brint.com http//www.datawarehousing.com
http//www.erpassist.com http//www.sap.com
http//www.mysap.com
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CHAPTER 2. THE STRATEGIC ROLE OF INFORMATION
SYSTEMS