MANAGEMENT INFORMATION SYSTEMS (MIS)

Global E-Business How Business Use Information Systems

GLOBAL E-BUSINESS: HOW BUSINESS USE INFORMATION SYSYEMS Every organization deals with many different pieces of Information about their Suppliers, Customers, Invoices, Payments, their Products and Services In order to operate. Firms must organize their work activities that use information to operate efficiently and enhance overall performance of the firm. Information Systems (IS) make it possible for firms to manage their information, make better decisions, and improve the execution of their Business Processes.

GLOBAL E-BUSINESS: HOW BUSINESS USE INFORMATION SYSYEMS

BUSINESS PROCESSES Business Processes are Workflows of material, Information, and Knowledge in other word:

Business Processes are sets of activities.

Business Processes are also referred to as unique ways in which organizations coordinate work, information and knowledge and the ways in which Management chooses to coordinate work.
A BUSINESS CAN BE SEEN AS A COLLECTION OF BUSINESS PROCESSES.

(Some of these Processes are part of large encompassing

Processes)

Information Systems (IS) are all about improving the Business Processes, which lie at the very heart of a Business.

GLOBAL E-BUSINESS: HOW BUSINESS USE INFORMATION SYSYEMS

BUSINESS PROCESSES EXAMPLES Almost every Business has a way to hire (recruit) Employees. The Process of hiring employees is a Business Process in the sense that a set Of activities a firm performs in order to hire new Employees.

- Hiring employee PROCESS can be broken down into a number of different

steps such as Place Advertisement, Contact Employment Agencies, Collect Resumes, Review Resumes, Interview candidates, Rank candidates, Make employment decision and Enroll Employee into Payroll, Health scheme and Pension scheme. which are part of Employee System .

In some business Hiring process can be slow and inefficient, whereas in

others, it can be swift and highly effective. One of the major purpose of Information Systems is to enable highly efficient Processes. The performance of a Business firm depends on how well its Business Processes are designed and coordinated. Business Process can be a source of competitive strength. It can enable a company to innovate or to execute better than its rivals.

 Manufacturing and production

Assembling the product Checking for quality

Sales and Marketing

Selling the products

Finance and accounting

Managing cash accounts

GLOBAL E-BUSINESS: HOW BUSINESS USE INFORMATION SYSYEMS Many Business Processes are tied to a specific Functional Area.
e.g. - Sales and Marketing Function responsible for identifying potential Customers. - Human Resources function would be responsible for Hiring Employee . Some Business Processes cross many Business Functional Areas and require

coordination across Departments.

Example - Consider a simple Business Process of Fulfilling a Customer Order. You will notice that:
Sales Department would Create a Sales Order. The Order will pass first to Accounting Dapartment for Credit verification or

immediate Payment prior to Shipping. Then Manufacturing Department will need to pull the product from the Inventory. Then Transportation department will ship the goods . An Invoice will have to be produced by the Accounting Department and a notice will be sent to the Customer indicating that the Product has shipped. Sales Department will have to be notified of the Shipment and prepare to support the Customer by answering calls or fulfilling warranty claims.

GLOBAL E-BUSINESS: HOW BUSINESS USE INFORMATION SYSYEMS As you can see Fulfilling a Customer Order Process involves a complex set of steps that requires the close Coordination of several Departments. To efficiently perform all these steps a great deal of information is needed. The Information Systems make this possible.

HOW INFORMATION SYSTEMS ENHANCE BUSINESS PROCESSES?

Information Systems enhance Business Processes in two ways:

1. Increasing the efficiency of Existing Processes (Enhancing Existing Processes) 2. Creating New Processes that are capable of transforming the Business. (ordering a book online from amazon.com)
Information Systems automate many steps in Business Processes that were formerly performed manually.

Information Systems can enable entirely new Business Process by:- Changing the flow of information , - Making it possible for many more people to access and share information , - Replacing sequential steps with tasks that can be performed simultaneously in parallel - Eliminating delays in Decision making. You can achieve a very clear understanding of how Business actually works, and also Understand how to change the Business Processes to make it more efficient or effective by conducting a Business Process Analysis.

GLOBAL E-BUSINESS: HOW BUSINESS USE INFORMATION SYSYEMS

TYPES OF BUSINESS INFORMATION SYSTEMS - Although there are many different Business Systems, We can categorize different Systems from two different perspectives:

1. Systems from a Functional Perspective

Functional Perspective identifies Systems by their major Business Functions Sales and Marketing Systems Manufacturing and Production Systems Finance and Accounting Systems Human Resources Systems

2. Systems from a Constituency Perspective

Constituent Perspective identifies Systems in terms of major Organizational Groups that they serve. - Transaction Processing Systems (TPS)

Management Information Systems (MIS)

Decision-Support Systems (DSS) Executive Information Systems (EIS) or Executive Support Systems (ESS)

TYPES OF BUSINESS INFORMATION SYSTEMS SYSTEMS FROM A FUNCTIONAL PRESPECTIVE From a historical perspective, Functional Systems were the first kind of Systems, developed by Business firms. These Systems were located in specific Business Departments, such as Sales and Marketing Department, Production Department etc.. SALES AND MARKETING SYSTEMS The Sales and Marketing Function is responsible for selling the organizations Product and Services. Marketing Department is concerned with:- Identifying potential Customers needs and wants, - Planning for developing product and services to meet customer needs - Advertising and promoting these product and services.

TYPES OF BUSINESS INFORMATION SYSTEMS SYSTEMS FROM A FUNCTIONAL PRESPECTIVE Sales Department is concerned with: - Contacting customers, - Selling the products and services, - Taking Orders, and following up on sales. Sales And Marketing Information Systems support all Sales and Marketing Business functions. Example of Sales and Marketing Information Systems SYSTEM
Order Processing Pricing Analysis Sales trend Forecasting

DESCRIPTION
Enter, Process & Track Orders Determine Price for products Prepare 5 year Sales plan

GROUP SERVED
Operational Mgmt, and staff Middle Management Senior Management

SYSTEMS FROM A FUNCTIONAL PRESPECTIVE Example of a Sales Information System

Sales Information System captures Sales data at the moment of Sales to help the Business monitor Sales Transactions and provide information to help Management analyze Sales Trends and the effectiveness of Marketing campaign.

SYSTEMS FROM A FUNCTIONAL PRESPECTIVE MANUFACTURING AND PRODUCTION SYSTEMS

Manufacturing and Production Function is responsible for actually producing the firms goods and services.

Manufacturing and Production Systems deal with the:

Planning, Development, and Maintenance of Production facilities; Establishment of Production goals; Acquisition, Storage, and availability of materials; Scheduling of resources such as equipment, facilities , material , and labour required to produce products.

Examples of Manufacturing and Production Information Systems

SYSTEM Machine Control Production Planning DESCRIPTION Controls the actions of machines Decides when and how many Products should be produced . Decides where to locate new Production facilities Identify source of defects GROUPS SERVED Operational Management Middle Management

Facilities Location
Quality Control Inventory System

Senior Management

SYSTEMS FROM A FUNCTIONAL PRESPECTIVE

OVERVIEW OF AN INVENTORY SYSTEM (STOCK CONTROL SYSTEM)
Most Manufacturing and Production Systems use some sort of Inventory System. An Inventory System produces a Report that gives information about number of each item available in inventory, the number to be reorder replenished in each item to support Production activities. Companies can estimate the number of items to reorder, or use a formula to calculate the least expensive quantity called Economic Order Quantity to reorder.

SYSTEMS FROM A FUNCTIONAL PRESPECTIVE FINANCE AND ACCOUNTING SYSTEMS

The Finance Function is responsible for managing Firm's Financial Assets such as: Cash , equities (stocks), bonds, and other investments to maximize return on the Financial assets. To determine whether a firm is getting the best Return on its investment , the Financial Function must obtain a considerable amount of Information from sources outside of the firm (External sources). Accounting Function is responsible for maintaining and managing the Firms Financial Records such as Receipts, Disbursements, Depreciation, and Payroll in order to account for the flow of funds in a firm.

Finance And Accounting Information Systems support these activities Example of Finance and Accounting Information Systems
SYSTEM Accounts Receivables Budgeting Profit Planning DESCRIPTION Tracks money owed the firm Prepares short term Budget Plans long term Profits GROUPS SERVED Operational Management Middle Management Senior Management

SYSTEMS FROM A FUNCTIONAL PRESPECTIVE

ACCOUNT RECEIVABLES SYSTEM

This System tracks and stores important Customer data , such as Payment History, Credit Rating and Billing History.

SYSTEMS FROM A FUNCTIONAL PRESPECTIVE

HUMAN RESOURCES SYSTEMS
The Human Resources Function is responsible for attracting, developing, and maintaining the firms workforce. Human Resources Information Systems support activities such as:

Identifying potential employees, - Maintaining complete record of existing Employees, - Creating programs (TRAINING PROGRAMS ) to develop employees talents and skills.

Examples of Human Resources Information Systems

SYSTEM Training and Development Compensation Analysis Human Resource Planning DESCRIPTION Tracks employees Training skills and Performance appraisals Monitors the range of distribution Wages, Salaries and Benefits Plans the long term labour force needs of the Organization GROUPS SERVED Operational Mgmt Middle Management Senior Management

SYSTEMS FROM A FUNCTIONAL PRESPECTIVE

AN EMPLOYEE RECORD KEEPING SYSTEM
The System maintains basic employee data that can be used to produce a variety of Reports, such as List of Newly hired employees, Employees Classified by Job Type and Educational Level, Employee Job Performance Evaluation Report etc - Employee Record keeping Systems are typically designed to provide data that can satisfy Government (State) record keeping requirements.