Chapter INFORMATION SYSTEMS IN THE ENTERPRISE

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1 Chapter 2 INFORMATION SYSTEMS IN THE ENTERPRISE

2 What is Information System? Set of Interrelated Components that collect, process, store and distribute information to support decision making and control in an Organization.

3 Figure 2-1 KEY SYSTEM APPLICATIONS IN THE ORGANIZATION Types of Information Systems

4 Systems from a Functional Perspective 1. Sales and Marketing Systems 2. Manufacturing and Production System 3. Finance and Accounting System 4. Human Resources System

5 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Sales and Marketing Systems Responsible for selling the organizations products. Major functions of systems: Sales management, market research, promotion, pricing, new products Major application systems: Sales order info system, market research system, pricing system

6 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Sales and Marketing 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

7 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Manufacturing and 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

8 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Manufacturing and Production 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

9 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Financing and Accounting Systems Major functions of systems: Budgeting, general ledger, billing, cost accounting Major application systems: General ledger, accounts receivable, accounts payable, budgeting, funds management systems

10 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Financing and Accounting Systems 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

11 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Human Resource 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

12 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Human Resource Systems 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

13 SYSTEMS FROM A FUNCTIONAL PERSPECTIVE Human Resource Systems Figure 2-11

14 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Business Processes and Information Systems Business processes Manner in which work is organized, coordinated, and focused to produce a valuable product or service Concrete work flows of material, information, and knowledge sets of activities

15 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Business Processes and Information Systems Unique ways to coordinate work, information, and knowledge Ways in which management chooses to coordinate work

16 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Business Processes and Information Systems Information systems help organizations Achieve great efficiencies by automating parts of processes Rethink and streamline processes

17 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Examples of Business Processes Manufacturing and production: Assembling product, checking quality, producing bills of materials Sales and marketing: Identifying customers, creating customer awareness, selling

18 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Examples of Business Processes Finance and accounting: Paying creditors, creating financial statements, managing cash accounts Human Resources: Hiring employees, evaluating performance, enrolling employees in benefits plans

19 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Enterprise Systems Figure 2-17

20 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Benefits of Enterprise Systems Firm structure and organization: One organization Management: Firm-wide knowledge-based management processes Technology: Unified platform Business: More efficient operations and customerdriven business processes

21 INTEGRATING FUNCTIONS AND BUSINESS PROCESSES Challenges of Enterprise Systems Difficult to build: Require fundamental changes in the way the business operates Technology: Require complex pieces of software and large investments of time, money, and expertise Centralized organizational coordination and decision making: Not the best way for the firms to operate

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