27. Figure 4.14: Outbound logistics information system
28.
29. Figure 4.15: Customer-facing information systems
30.
31. Figure 4.16: Supplier-facing information systems
32.
33. Figure 4.18: Part of a company ’ s information infrastructure
34. Ontology Borrowed from philosophy meaning a systematic account or model of an area of existence – logicians refer to as Universe (Domain) of Discourse e.g. In organisations = employees, products, customers and suppliers.
Notas do Editor
It is important to recognise that information systems have existed in organisations prior to the invention of modern ICT, and hence information systems do not need modern ICT to exist. The value of historical cases lies in the way in which we can distance ourselves from modern ICT and consider the essence of what information systems constitute. However, in the modern, global and consequently complex organisational world most information systems rely on hardware, software, data and communication technology to a greater or lesser degree.
This modelling technique uses four main constructs: agents, information flows, information stores and processes (information-handling).
To emphasise the historical provenance of the concept of an information system, this case considers an example of an information system that contributed to Allied victory during the 2nd World War. During the summers of the late 1930s the Royal Air Force’s Fighter Command created an information system that eventually contributed to victory in a decisive battle against the German Luftwaffe - the Battle of Britain: in 1940. Since control of the skies was an essential pre-condition of a successful sea-borne invasion, this victory caused Hitler to abandon the planned invasion of Britain and turn his attention eastwards to the Soviet Union. This, in turn, made possible the invasion of continental Europe by the Allies in 1944. The reason for discussing this historical information system is because the remoteness of time enables us to consider the issue of what constitutes an information system in a fresh light. A consideration of this particular example helps us to understand some of the important differences between information systems and ICT systems.
Organised activity of whatever form requires infrastructure. Infrastructure consists of systems of social organisation and technology that support human activity. In terms of business we shall argue that there are four layers of infrastructure. Each of these layers is critically dependent on the layer below it: activity systems infrastructure; information infrastructure, information systems infrastructure and ICT Infrastructure.
The infrastructure in Figure 4.4 consists of a number of activity sub-systems such as sales, after-sales, marketing, purchasing, receiving, warehousing, production, human resources, packing and shipping. Such activity sub-systems relate together in flows of physical items and information.
This infrastructure consists of a number of activity sub-systems such as sales, after-sales, marketing, purchasing, receiving, warehousing, production, human resources, packing and shipping. Such activity sub-systems relate together in flows of physical items and information.
Any activity systems infrastructure will rely on an associated information systems infrastructure. We may distinguish between the back-end ( core transaction processing information systems supporting the internal process of an organisation ) and front-end ( information system which interacts with internal or external stakeholders of the organisation ) information systems infrastructure. – information systems infrastructure = entire make up of an organisation’s information systems
Sales order processing is an information system that communicates with a customer-side inventory management system. This is necessary to check the availability of finished goods for the customer. It will also pass processed orders to an outbound logistics system which dispatches goods to customers matching original sales orders. The customer is notified of the form and timing of intended delivery.
Order entry is a key process that interfaces to the organisation’s customers. Order entry captures the key information needed to process a customer order. Traditionally, orders might be expected to arrive through the post or over the telephone line. More recently orders may be sent electronically and come over electronic data interchange (EDI) links or via the Internet. Normally the order entry system would make an enquiry of the stock control system to check that suitable quantities of the desired item are available. If an order item cannot be filled then a substitute item might be suggested or a back order generated. This back order will be filled later when stock is replenished. A notification of a confirmed, partially filled or back order would be supplied to the customer.
Most businesses have several forms of stock or inventory. These include raw materials, materials for packing, finished goods and parts for maintenance of products. Stock control or inventory management information systems are designed to record information about this material flow. The objective for most businesses is to minimise the amount of stock held whilst ensuring optimal performance of other systems such as manufacturing or production.
Purchases may be generated in two ways. The inventory management system itself may generate an automatic purchase order if the level of a stock item falls below a certain level. Most medium to large organisations will have a purchasing or procurement unit. Staff in this unit will be generating purchase orders on the basis of orders it receives from the inventory management system or from requests from staff for those items not included within the general remit of inventory management. Purchase orders will be produced by purchase order handling and then sent to relevant suppliers. JIT
Most financial information systems are divided up into three major sub-systems: accounts receivable, accounts payable and general ledger. The information store used by the accounts receivable system is generally called a sales ledger because it records financial details of all amounts owed by customers to the organisation. The information store used by the accounts payable system is sometimes called the purchase ledger because it stores details of all monies owed to suppliers by the organisation. A third accounting system called a general ledger system is used to record details of all the financial transactions relevant to an organisation: income, expenditure and assets. It hence receives information from accounts payable, accounts receivable and inventory management systems.
Remember: these are all Information Systems Infrastructure systems e.g. Sales order processing, inventory management, purchase order processing, financial systems, payroll All backend systems
Payroll produces two primary outputs: some payment to the employee, and a record (payslip or pay advice) of the details of the payments made. The key input into a payroll system is some information of the work undertaken during a given time period such as a week or month. These details may be collected on time-sheets sent on from operational departments or may be automatically generated from a production scheduling and control system. The payroll system will need to access information stored on each employee such as pay rates, tax details etc. to produce given pay advices. Periodically, the payroll system will update the general ledger system with the financial costs of labour.
Around the core back-end information systems a number of front-end information systems will exist. Such systems face the major stakeholders of the business: managers, employees, customers and suppliers. Hence, we refer to such information systems in terms of four groups: management information systems, employee-facing information systems, customer-facing information systems and supplier-facing information systems.
Management information systems (MIS) are used particularly by some operational layer of management to monitor the state of the organisation at any one time. From an MIS, managers would be expected to retrieve information about current production levels, number of orders achieved, current labour costs and other relevant managerial information.
A diagram of an information system for outbound logistics is included. Shipment planning determines which orders will be filled and from which location they will be shipped. The system produces two outputs: a shipment plan which indicates how and when each order is to be filled and a picking list which is used by warehouse staff to select the desired goods from the warehouse. Shipment execution supports the work of the shipping function and is used to coordinate the flow of goods from the business to customers. The system will produce a shipping note that is attached to each despatch of goods. It also passes on details of the shipment to invoicing. Invoicing systems take the information supplied on shipping and produces invoices to customers using information stored about customers, orders, products and prices. Invoices may be sent at time of shipment or some time thereafter.
Customer-facing information systems support demand-chain activities and typically interface between back-end information systems such as sales order processing, inventory management and the customer. Traditional customer-facing information systems include sales, marketing, outbound logistics and after-sales systems. Recently, there has been increased emphasis on integrating such systems together to form a customer relationship management (CRM) or customer chain management information system (CCM).
Supplier-facing information systems support supply chain activities. Traditional supplier-facing systems include inbound logistics and procurement and typically interface with back-end information systems such as purchase order processing, finance and inventory management. Not surprisingly, given the symmetric nature of buy-side and sell-side activities there has been increased emphasis on integrating supplier-facing information systems together to form an integrated supply chain management or supplier relationship management system.
Employee-facing information systems support the internal value chain within organisations. Typical employee-facing information systems include human resource management and production control systems and they are likely to interact with key back-end information systems such as payroll.
This consists of definitions of information need and activities involved in the collection, storage, dissemination and use of information within the organisation.
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