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Week 4: Internal Information Systems MIS 2101: Management Information Systems Agenda Organizational Levels Horizontal Information Systems Type of Decisions Type of Information used by different levels Vertical Information Systems used across organizational levels Decision-Making Levels of an Organization 3 Operational Level Day-to-day business processes 4 E.g., Interactions with customers Type of Decisions Structured Recurring Short or Immediate Term Role of IT Automate repetitive tasks Improve efficiency Examples? Managerial Level Functional managers / Midlevel managers Type of Decisions Semi-structured Contained within business function Moderately complex Time horizon of few days to few months Role of IT Automate monitoring and control of operational activities 5 Executive Level The president, CEO, vice presidents, board of directors Type of Decisions Long-term strategic issues Complex and non-routine problems Unstructured decisions Long-term ramifications Role of IT 6 Automate summaries of organizational data Projections for the future 7-6 Summary Operational Level Managerial Level Who Foreman or supervisor Midlevel managers and functional managers Executive-level managers What Automate routine and repetitive activities Automate the monitoring and controlling of operational activities Aggregate summaries of past organizational data and projections of the future Why Improve organizational efficiency Improve organizational effectiveness Improve organizational strategy and planning IS Transaction Processing Systems (TPS) Management Information Systems (MIS) Executive Information Systems (EIS) 7 Executive Level Agenda Organizational Levels Horizontal Information Systems Type of Decisions Type of Information used by different levels Vertical Information Systems used across organizational levels Transaction Processing System Operational level Purpose Usually front end information systems Processing of business events and transactions Examples Payroll processing Sales and order processing Inventory management 9 Architecture of a TPS: Inputs Source Documents 10 Different data entry methods Architecture of a TPS: Processing Online processing Batch processing 11 Immediate results Transactions collected and later processed together Used when immediate notification not necessary Architecture of a TPS: Outputs Counts, summary reports Inputs to other systems Feedback to systems operator 12 Summary of TPS Characteristics 13 Management Information Systems Managerial level Purpose: Produce reports Support of midlevel managers’ decisions Examples Sales forecasting Financial management and forecasting Manufacturing, planning and scheduling Inventory management and planning 14 Architecture of an MIS: Outputs 15 Summary of MIS Characteristics 16 Executive Information Systems A.k.a. Executive support system Executive level Purpose Aid in executive decision-making Provide information in highly aggregated form Examples 17 Monitoring of internal and external events and resources Crisis management Architecture of an EIS: Inputs Hard data Facts and numbers Generated by TPS & MIS Purchased data Soft data Nonanalytical information Web-based news portals Customizable Delivery to different media 18 Architecture of an EIS: Outputs Summary reports Trends Simulations 19 EIS Output: Digital Dashboards Digital dashboard Presentation of summary information Information from multiple sources Ability to drill down if necessary 20 Summary of EIS Characteristics 21 Summary: Types of Information Systems Weaker EIS MIS Controls and Security TPS Stronger Operations Staff Transaction Processing Source: Business Driven Technology, by Haag, Baltzan, Phillips, McGraw Hill, 2006 (with modifications) 22 Summary: Decision Levels Decision Level Description Example Type of Information Executive Competitive advantage Market leader Long term New products that change the industry External events, rivals, sales, costs quality, trends. Management Improve operations without restructuring Operations Day-to-day actions keep company running 23 New tools to Expenses, cut costs or impschedules, sales rove efficiency models, forecast Scheduling employees, placing orders. Transactions, accounting, HRM, inventory Agenda Organizational Levels Horizontal Information Systems Type of Decisions Type of Information used by different levels Vertical Information Systems used across organizational levels Seven Information Systems that Span IntraOrganizational Boundaries 25 1. Decision Support Systems Decision making support for recurring problems Used mostly by managerial level employees (can be used at any level) Interactive decision aid What-if analyses 26 Analyze results for hypothetical changes Common DSS Models 27 Information Systems Today: Managing in the Digital World 7-27 2. Intelligent Systems Artificial intelligence 28 Simulation of human intelligence Reasoning, learning, sensing, hearing, walking, talking, etc. Intelligent Systems Three types 29 Expert systems Neural networks Intelligent agents Expert Systems Reproduce Performance of Human Experts Accounting, Medicine System asks series of questions Inferencing/pattern matching 30 Matching user responses with predefined rules If-then format Neural Network System Approximation of human brain functioning Training to establish common patterns Past information Computer Security, Loan Processing New data compared to patterns 31 Example: Neural Network System Loan processing system relying on a neural network 32 -32 Intelligent Agent Systems Program working in the background Bot (software robot) Provides service when a specific event occurs 33 Intelligent Agent Types 1. Buyer agents (shopping bots) – 2. User agents – search for best price perform a task for the user 3. Monitoring and sensing agents – information 4. Data-mining agents – analyze large amounts of data 5. Web crawlers (web spiders) – specific information 6. Destructive agents – spammers 34 keep track of key browse the Web for malicious agents designed by 3. Data Mining and Visualization Systems Application of sophisticated statistical techniques 35 Visualization Display of complex data relationships using graphical methods Visualization of a weather system 36 Text Mining Extraction of information from textual documents Web crawlers used to extract information from Internet Leverage “wisdom of the crowds” 37 4. Office Automation Systems Developing documents, scheduling resources, communicating Examples 38 Word processing Desktop publishing Electronic calendars E-mail 5. Collaboration Technologies Increased need for flexible teams Virtual teams – dynamic task forces Forming and disbanding as needed Fluctuating team size Easy, flexible access to other team members Need for new collaboration technologies 39 Groupware Enables more effective team work Distinguished along two dimensions 40 Benefits of Groupware 41 Video Conferencing Costs – few thousand dollars to $500,000 Dedicated videoconferencing systems Located within organizational conference rooms Highly realistic 42 6. Knowledge Management Systems Generating value from knowledge assets Collection of technology-based systems Knowledge assets Skills, routines, practices, principles, formulas, methods, heuristics and intuition Used to improve efficiency, effectiveness and profitability Documents storing both facts and procedures Examples Databases, manuals, diagrams, books, etc. 43 Benefits and Challenges of Knowledge Based Systems 44 7. Functional Area Information Systems Cross-organizational-level IS Support specific functional area Focus on specific set of activities 45 Business Processes Supported by Functional Area Information Systems 46 Cases 47 Amazon.com • 35 million customers worldwide • Innovations leading to satisfaction Fraud protection Personalized greeting Memory for recent purchases Targeted “gold box” offers and bargains Shipping vs. billing address comparison Method of shipment checks Credit card sources checks “One-click” shopping 48 Too Much Technology? RFID and Privacy RFID tags Latest in technological tracking devices Information imprinted on a tag Tag generates signature signal Special RFID reader interprets signal Use of RFID tags Pharmaceutical industry Tracking of medication from factory to pharmacy Retail businesses 49