The Business Organization

Rey B. Beria
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The Business Organization
In large or medium organizations, computerized
information systems do not keep just track of transactions and
day-to-day business operations, they also support the flow of
information within the organization.
This information flows both vertically and horizontally.
To understand this, we need to understand how an
organization is structured. That is, we can study the different
basic functional areas in organization and the different types
of people within these functional areas.
Functions:
Depending on the services or products they provide,
most organizations have departments that specialize in one
of five basic functions:
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The Functional Perspective of Business
Marketing
Production
Research
Human
Resources
Accounting
Management Hierarchy

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Top
Mngt.

Middle
Management
Line Managers
Line Manager
- Responsible for operational matters. Manage and monitor the employees
or workers those who actually produce the goods and services.
- They monitor day-to-day events and immediately take corrective action if
necessary.
Middle Management
- Responsible for tactical planning. Deals with control planning and
decision making.
- They implement the long term goals of the organization.
Top Management
- Responsible for long-range planning ( also called strategic planning).
- They need information that will help them to plan the future growth and
direction of the organization.

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Managerial Levels
Information Flow within the Organization

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Top
Mngt.

Middle
Management
Line Managers
Top managerial-level information flow is vertical, horizontal
and external. The vice-presidents of different departments
communicates vertically(with regional managers), horizontally
(with other vice-presidents) and externally to obtain data to
forecast.
Middle managerial-level information flow is vertical and
horizontal. Regional sales manager communicates
vertically(with district sales managers and the vice presidents
of the department) and horizontally with other middle
managers.
Line managerial-level information flow is primarily vertical.
They monitor workers activities to ensure smooth production.
They provide daily status reports to middle departments
managers.
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Information Flow
Information Flow within the Organization
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Top
Mngt.

Middle
Manage
ment
Line
Managers
Volume of
Information
Type of
Information
Low
Condensed
Unstructured
Strategic
Long range
planning
Medium
Moderately
Processed
Moderately
Structured
Tactical
Short range
improvement
Large
Detailed
Reports

Highly
Structured
Operational
Day to day
policies
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Why do we need information
system in the business?
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Information System is needed
when timely processing for fast
action is needed, same data has to
be processed in different ways
and when organization require
innovative processing.
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Types of Business Information System
Transaction Process
System (TPS)
Management
Information System
(MIS)
Decision Support
System (DSS)
Executive Support
System(ESS)
Office Automation and
Work Group System
Centralized Systems
Distributed Systems
Client Server Systems
Network Computing System
- Records day to day transactions, such as customer orders,
bills, inventories, and production output.
- The TPS helps the supervisors by generating databases that
acts as foundation of the other information system.


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Transaction Processing System (TPS)
- Information systems that capture and process data about
business transactions
Transaction
----------
-------
---------
----------
---------
Information
Examples:

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TPS
Airline
Reservations

Retail
point of sale
Bank deposit and
withdrawal
- Summarizes the detailed data of the transaction processing
system in standard report for middle managers.
- Such report might include weekly sales and production
schedules.
- MIS is an information system application that provides for
management oriented reporting.

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Management Information System (MIS)
Inventory reporting Production scheduling Sales forecast
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MIS
MIS
Produces
Information
Summary
information
Detail
information
Exception
information
- Provides a flexible tool for analysis.
- The DSS helps middle-level managers and others in the
organization to analyze a wide range of problems, such as
the effect of events and trends outside the organization.
- Like the MIS, DSS draws on the detailed data of the TPS.
- Provides its user with decision-oriented information
whenever decision making situation arises
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Decision Support System (DSS)
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DSS
Executes at work
With DSS
Types of Support
Identification of
problems or decision
making opportunities
Identification of
possible solutions
and decisions
Access to information
needed to solve a
problem or make a
decision
Analysis of possible
decision that will affect
the decision
Simulation of possible
solutions and their
likely results.
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Executive Support System (ESS)
- also known as Executive Information System (EIS).
- an easy-to-use system that presents the information in a
very highly summarized form.
- It helps top-level managers oversee the companys
operations and develop strategic plans.
- The EDD combines the internal data from TPS and MIS
with external data.
Office Automation System (OAS)
- designed primarily to support data workers.
- These systems focus on managing documents (word
processor), communicating (video conferencing) and
scheduling (Microsoft projects).
- Support wide range of business office activities
- Provide facilities for improved work flow and
communication between workers
- Workers may not be located in the same office.


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Other Information System




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OAS
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Office Automation Systems
Designed to support
--- Individuals
--- Workgroups
Personal Information Systems
- for a single user
Work group Information Systems
- for a work group
- used to create information in their areas of expertise.
- KWS consists of powerful microcomputers running
special programs that integrate the design and
manufacturing activities.
Example:
- Engineers involved in product design and manufacturing
use computer aided design / computer-aided manufacturing
(CAD/CAM).
- CAD/CAM is widely used in the manufacture of
automobiles and other products.

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Knowledge Work System (KWS)
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Centralized Systems
I have all
system data
I am doing all
processing
Provide
interfaces
Databases
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Distributed Systems
-- Components of an information system
-- Processing workload required to support the
components
Distributed
to multiple
locations
1. Client Server Systems
Solutions are distributed between client PCs and one or
more servers.
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Network Computing Systems
Presentation logic layers are implemented in a client side web
browser
The presentation logic layer then connects to the application
logic layer that run on an application server,
Subsequently connects to the database server/s
Four Kinds of Information System
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ESS
DSS
MIS
TPS
Decision Support System (DSS) use data from TPS and set of
flexible analytical tools to support middle managers. (Example:
Regional sales manager use the DSS to evaluate the impact of
promotion campaign on regional sales and corporate profit.
Management Information System (MIS) use data from
TPS to support middle-level managers. (Example: Regional
sales managers use their MIS reports to monitor weekly
divisional sales and to compare actual sales to established
sales goals
Transaction Processing System (TPS) record day-
to-day transactions to support middle managers.
(Example: Production supervisors use their TPS to
record and to monitor current inventory levels and
production line output.
- Building and supporting computer systems is a complex
work and can require the skills of many different
professionals.
- IS department may not employ individuals in all these
different roles. Companies often hire other companies or
individual to provide specialized skills.
Outsourcing
- pertains to freelance workers or outside companies are
hired as contractors to do specific jobs.


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Role of an IS Departments Members
IS Managers in IS department often is led by a chief
information officer (CIO), typically have a broad
background in IS technology, networking, and computer
systems.
Computer Scientist study the theory of computers by
undertaking research, developing new computer designs,
and attempting to achieve the next technological leap in the
industry. Takes on projects such as designing hardware or
developing new programming languages.
Technical Analysts (also called System Analyst) look for
solutions when an information systems needs to be
updated, modified or revamp.




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Role of an IS Departments Members
System Programmers create computer programs, either
as commercial products or as part of a companys
information system. Sometimes modify existing programs,
consult an application design, or provide post-development
support.
Technical Writer and Online Help authors organize
and create the instructional manual called documentation
that will teach users how to operate various pieces of the
information system. Many technical writers have shifted
their skills from producing printed documentation to
creating content for online help systems. Some
organizations however, use Online Help Authors develop
these complex systems of tutorials and instructional
information.



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Role of an IS Departments Members
Procurement Specialist Hardware or software
procurement specialist also known as purchasing agents,
choose suppliers for system components and negotiate the
terms for purchasing or leasing those items.
Security Administrators specialist who are charged
with ensuring the systems security. A security
administrator may oversee the design, installation and
maintenance of the organizations firewall.
Trainers prepare users to accept a new information
system through classes and one-one teaching sessions;
trainers give users the opportunity to explore the new
system, ask questions, and practice common task.




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Role of an IS Departments Members
System or Network Administrators - keep an
information systems up and running.
E-commerce Specialist are primarily concerned with e-
commerce strategy and planning as well building the
necessary administrative infrastructure.
Hardware Maintenance Technicians maintain the
hardware components of an information system.
Web Support Specialist often called Webmasters,
supports a companys Internet and internet operations. Web
Support involves design and construction of web pages,
monitoring traffic, managing hardware and software, and
linking Web-based applications to the companys
information system.


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Role of an IS Departments Members
Information System Department is responsible for
providing technical resources and generating the information
that the business needs to run effectively and efficiently.

- A well structured IS department also understands the
mission of the organization and works that mission in the
most direct manner possible.
- IS departments are no longer isolated from the rest of the
company and they becoming increasingly integrated in the
day-to-day operations of organizations of organizations.


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Role of an Information System Department
System design and planning. The IS Team considers
current and future information needs, ways the system can
support the organizations basic mission, and ways the
system can be used to benefit workers.
Information Generation. To ensure that workers and
managers get the exact information they need (and can
input information easily), the IS team carefully plans and
develops the types of forms and reports that must be
generated from the system.
Custom Reporting. The IS staff maybe called on to create
unique, highly customized reports from the data in the
companys transaction processing system.




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Role of an IS Department
Hardware and Software Installation and Maintenance.
This part of the job includes installing and upgrading,
troubleshooting, fixing problems, and even training
workers in the use of their computerized system.
Cost Control. In most companies, IS department is
considered a cost center that is, a portion of the business
that costs money to run but generates little or no direct
revenues.
IS department plays an important role in an
organizations financial picture by providing essential
information top the management, assisting in important
decisions, and ensuring that the systems runs as
efficiently as possible.



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Role of an IS Department
Help desk support. Many IS department operate a help
desk, a team of technical experts that helps the companys
workers solve problems with or master the use of the
information system.


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Role of an IS Department