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Understanding Information Systems in Organizations: Functional Areas and System Types

This chapter explores the critical role of information systems within organizations, focusing on various functional areas such as Accounting, Marketing, Finance, Human Resources, and Operations. It discusses types of information systems at operational, tactical, and strategic levels, including Transaction Processing Systems, Management Information Systems, and Decision Support Systems. The chapter highlights the importance of cross-functional systems like ERP and SCM, and the integration of tools such as Microsoft Excel and Access in managing data, emphasizing the value of combining functional systems for enhanced efficiency.

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Understanding Information Systems in Organizations: Functional Areas and System Types

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Presentation Transcript

  1. Chapter 7 Information Systems within Organizations

  2. Recall: Functional Areas • Accounting • Marketing • Finance • Human Resources • Operations/Production • Ninja Arts

  3. Recall: Types of Info. Systems Operational Level (Spongebob Level) • Transaction Processing System • Example: Cash register system • Process Control System • Example: Assembly line system • Enterprise Collaboration System • Examples: Outlook, SharePoint, WebEX

  4. Recall: Types of Info. Systems Tactical and Strategic Management Level (Princess Level) • Management Information System • Static reports, aggregating data into information • Decision Support System • Interactive reports and data modeling • Executive Information Systems • Portal system, aggregates info at the strategic level, info from beyond the enterprise

  5. Recall: Functional vs. Enterprise Functional System • Example • Comprehensive accounting software solution • Multi-company consolidations, • Advanced budgeting • 140+ customizable reports and financial statements. Enterprise System • Example • Oracle's PeopleSoft Enterprise • Customer Relationship Management • Project Management • Financial Management • Supply Chain Management • Human Capital Management

  6. Example: Peachtree • Used for only one functional area: Accounting • What type of system is it? • Transaction Processing System – Accounting is all about processing day-to-day transactions • Management Information System – Summary reports help managers make daily, weekly, quarterly, and yearly decisions. • Helps aggregate operational data for managerial decision making.

  7. Example: Oracle’s PeopleSoft CRM • It’s a management information system that easily integrates with other TPS and ECS systems, it may have DSS type features. • What functional areas use this system? • Customer Relationship Management • (Marketing) • Project Management • (Operations) • Asset Lifecycle Management • (Accounting) • Financial Management • (Finance) • Human Capital Management • (Human Resources)

  8. Real Systems rarely fit into one cell

  9. Functional Systems are often multi-category

  10. Robust category-based systems are often cross-functional

  11. Where does Microsoft Excel fit in?

  12. Where does Microsoft Access fit in?

  13. Where does an Enterprise Database fit in?

  14. Tools vs. Complete Systems • Excel is often a tool used in a bigger system. • Tools are often general purpose; they are flexible and robust. • General purpose: Excel can be used as a calculator to add up Easter eggs or to add the cost of an F-35 jet fighter. • Robust: Excel has plug-ins to do quantum mechanics or financial calculations.

  15. Components vs. Complete Systems • A DBMS (like Access) is also a tool. • A tool for managing raw data. • But a DBMS is also a key component in bigger systems (like Peachtree or PeopleSoft). • PeopleSoft is actually built “on top of” an Oracle Enterprise DBMS. • PeopleSoft is a user interface and program that give a DBMS more capabilities (logical control). The DMBS manages the “physical” data.

  16. Another way to look at Information Systems • Porter’s value chain

  17. Where functional system fit • How 4 of the 5 functional systems directly support the value chain

  18. Why are cross-functional system really valuable? • Marketing is so connected to service and support. • Future sales come from customer loyalty and care • Why manage these with two separate systems?

  19. Why are cross-functional system really valuable? • Accounting and HR support the entire value chain. • Why manage these with two separate systems? • Combining an HR and Accounting systems creates efficiencies; how so?

  20. HR + Accounting

  21. Marketing + Operations = CRM

  22. Two other cross-functional (Enterprise Systems) • ERP (Enterprise Resource Planning) • Even more integration than a CRM • ERP = CRM (Marketing & Operations) + Accounting + HR + a little bit of Finance • SCM (Supply Chain Management) • Unique in the sense that it often combines three or more enterprises • Supplier, Retailer and Customer

  23. ERP Benefits (Chapter 7)

  24. ERP Characteristics (Chapter 7)

  25. SCM (Chapter 8) • To be continued…

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