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1. Introduction to Information Systems
BY SUJITH B R
.
Functional, Enterprise, and Interorganizational Syste

2.  The role and function of Management Information
Systems (MIS) and Transaction Processing Systems
(TPS) in organizations
 How functional information systems support
Accounting & Finance; Sales and Marketing;
Production and Operations; and Human Resource
Management
 How and why information systems should be
integrated
 The role of interorganizational systems

3. Functional Information Systems
 Comprised of several small information system focused
on specific activities
 Specific IS applications can be
 completely independent, or
 integrated to form a departmental functional system
 also, can be integrated to support a broad business process
(cross-departmental)
 Interface with each other to form the organization
wide information system
 Interface with the environment

4. Functional Information Systems (continued)
 Management Information Systems
 Provide routine information to managers in
the functional areas
Business
Transactions
TPS
Management
Information
System
Data Warehouse
Databases
Internal
External
Reports
Scheduled
Demand
Exception

5. Transaction Processing Systems
Every business event that occurs during
business operations is called a transaction
Business events (transactions) can trigger other
business events
Each event (transaction) can be described by
a number of data items
Transaction processing systems (TPS) are
designed to record and store the data that
describes every business event that occurs

6. Transaction Processing Systems (continued)
 TPSs were the first to be automated – repetitive,
consistent, high-volume tasks are ideal candidates for
computerization
 TPSs provide foundation for all other information systems
 Many TPSs are outward-reaching and convey impressions
to the customers about the quality of the business
Customer
makes a
purchase
POS
system
Transaction file
Update
files
Inventory file
Sales file

7. Transaction Processing System (continued)
 Some characteristics of TPSs
 Process large volume of data
 Data sources mostly internal, and output intended mainly for
internal use
 TPS operate regularly (on demand, daily, weekly, etc.)
 Require large storage (database) capacity
 Require high processing speed (due to the high volume)
 Input and output data known and well-understood (highly
structured)
 Requires high processing reliability; organizations cannot function
for long without TPSs

8. Methods of Processing Transactions
Batch Processing: simple, inexpensive
Employee
timecards
Data entry
of timecard
data
Payroll transactions
Process
payroll
Employee data:
Pay rate
Withholdings
Etc.
Employee
paychecks
Cash on hand Payroll summary

9. Methods of Processing Transactions
Online Processing: complex, expensive
Customer
makes a
purchase
POS
system
Transaction history file
Inventory file
Sales file

10. Methods of Processing Transactions
Hybrid Processing: simple, inexpensive, more accurate
Badge reader
collects employee
work data
Payroll transactions
Whenever employees
arrive / leave work
Process
payroll
Employee data:
Pay rate
Withholdings
Etc.
Employee
paychecks
Cash on hand Payroll summary
Normal payroll
schedule:
weekly, monthly,
etc.

11. Typical TPS Tasks
 Order processing
 Ledger entries
 Payments and receipts
 Inventory management, shipping, and receiving
 Payroll
 Periodic reports and statements

12. Accounting and Finance Systems
Financial Planning and Budgeting
Financial and economic forecasting
Budgeting
Investment Management
Access to financial and economic reports
Financial analysis

13. Financial Controls
Budgetary Controls
Auditing
Financial Health Analysis
Profitability Analysis and Cost Control
Accounting and Finance Systems

14. Marketing & Sales Systems
 Distribution Channel (definition)
 providing the goods or services to the customer; may extend
through various intermediaries such as wholesalers and retailers
Other Channel Systems
 support all marketing linkages, such as after-sales customer
support
Manufacturing
Distribution
R&D/Design
Accounting/Finance
Company
Dealer Systems
Delivery Systems
Customer Support
SystemsSales Systems
Target Marketing
Systems
Market Intelligence
Systems
Channel
Systems

15. Marketing & Sales Systems (continued)
 Customer Service
customer profiles and preference analysis
mass customization – high volume production of
specialized product
targeted advertising
customer inquiry systems and automated Help Desk
 Telemarketing
advertisement and reaching customers
order processing
customer service
sales support
account management

16. Marketing & Sales Systems (continued)
 Distribution Channels
Delivery and shipping management
Improve retail stores
 Marketing Management
Set and monitor prices of products or services
Monitor and evaluate salesperson productivity
Evaluate profitability of products / customers
Assess sales trends
Analyze new products, services, and markets

17. Marketing & Sales Systems (continued)
 Ethical and Social Issues in IT-supported Sales
Activities
Information collection and usage
Privacy concerns
 Current trend – Customer Relationship
Management (CRM)
Focus is on developing a one-to-one relationship with
customers

18. Production & Operations Management
Systems
Logistics and Material Management
Logistics Management
• Ordering, purchasing, and inbound and outbound
shipping
Inventory Management
• Determine how much inventory to carry
Quality Control
• Monitor and report quality of materials, work in
process, and finished goods

19. Planning Production/Operations
Material Requirements Planning; MRP II
Just-In-Time
Project Management (PERT & CPM)
Short-term scheduling
Automatic Design Work and Manufacturing
Computer Aided Design (CAD)
Computer Aided Manufacturing (CAM)
Computer Integrated Manufacturing (CIM)
Production & Operations Management
Systems (continued)

20. Human Resources Management Systems
 Recruitment
Keep track of vacancies
Advertise positions via Internet
Employee selection
 Human Resources Maintenance and Development
Training and retraining employees
Performance assessment
Turnover, tardiness, and absenteeism analysis

21. Human Resources Management Systems
Human Resources Management and
Planning
Maintain personnel files and skills inventory
Administer benefits
Comply with government reporting
Personnel planning
Succession planning
Labor negotiations

22. Integrated Information Systems
Reasons for Integration
Existing, functionally oriented information
systems are deficient:
• cannot give employees all the information they
need
• do not let different departments communicate
effectively
• crucial sales, inventory, and production data often
entered manually into separate computer systems

23. Integrated Information Systems
How to Integrate Information Systems
Connect existing systems
• maximize the use of existing systems and allows the
addition of new applications
Using supply chain management software
• Overcomes the isolation of traditional departmental
structure by integrating processing across several
functional areas
Use Enterprise Resource Planning software
• control all major business processes with a single
software architecture in real time
• increased efficiency to improve quality, productivity,
and profitability

24. Interorganizational Information Systems
(IOS)
 Electronic systems involving information flow
among two or more organizations in an on-going
relationship
 Objective – efficient transaction processing
 Many large businesses require suppliers to be
linked to them though IOS applications
 IOSs may be implemented with
Private, third-party networks (value-added networks)
Publicly accessible networks (Internet)

25. Interorganizational Systems (continued)
 Types of Interorganizational Systems
 Global systems
 Electronic data interchange (EDI)
 Electronic funds transfer (EFT)
 Extranets
 Shared databases
 Integrated messaging

26. Issues in IOS / Global IS Design
 Cultural differences
 Economic and political differences
 Cross-border data transfer concerns

27. Summary
 Role and function of TPSs
 Role and function of MISs
 In-depth review of how Iss support various
business functional areas
 Need and methods for integrating functional
information systems
 Interorganizational and global information
systems provide great opportunities but also
great complexity