Management Information System: Session 3

Management
Information System
Session 3
Instructor: Fei Tian Associate Professor
Cell: 13705606629
Email: fei.tian.ahu@gmail.com
Web: http://210.45.208.10/dep/tf/index.htm
Session 3
Organization, Management,
Business Processes, and
Information systems
Agenda
1. Case Study: UPS

2. Types of IS with Organization Functions in TPS Level
3. Types of IS in Other Management Level Mixture of
Function and Level
4. Key Applications in Business
5. Traditional View and Current View on System
6. Strategic Information Systems
7. Assignment
fei.tian.ahu@gmail.com MIS 1-3:3/59

Case: UPS
1. In late 2000, best known for reliable,efficient package
delivery.
1) Delivery 13.6 million packages a day set by 1.8 million
shippers to 7 million consignees.
2) In 1999, its revenue is $27 billions
2. IT/IS in recent decade:
1) 1990: .UPS Net
2) 1993: DIAD(Delivery Information Acquisition Device)
3) mid of 1990: API +tracking system
4) By late 2000: 6 OnLine Tools
5) Late of 2000: e-commerce, e-logistics+……

Case Study: UPS
1. What are the input, processing, and output of

UPS’s package tracking system?
2. What technologies are used? How are these
technologies related to UPS’s business strategy?
What would happen if these technologies were
not available?
3. What change in UPS management and
organization when they use the package tracking
systems?

Case Study: UPS
1. Input:
– Package information, customer signature, pickup,
delivery and timecard data, data location(while on
route), and billing and customer clearance document.
1. Processing:
– Mainly,the data is transmitted to a central computer and
stored for retrieval.
1. Output:
– Mostly the same data as the input----pickup and delivery
time, location while on route, who signed for the
package.

Case Study: UPS
1. Technologies used include handheld computers with
devices to automatically capture shipping information,
barcode scanners, telecommunications for transmitting
data, cellular phone network, and computer.
2. The strategy is still the original one: “best service and
lowest rate”. Technology allows UPS and its customers to
always know where a package is.
3. If the technology were not available, then UPS would, as
it has through most of its history, attempt to provide that
information to its customers, but at a high price. Note the
pressure to reduce process time and cycle time

Agenda
1. Case Study: UPS

Function and Level
7. Assignment

TYPES OF INFORMATION SYSTEMS
KIND OF SYSTEM GROUPS SERVED
STRATEGIC LEVEL SENIOR
MANAGERS
MANAGEMENT LEVEL MIDDLE

MANAGERS
KNOWLEDGE LEVEL KNOWLEDGE &

DATA WORKERS
OPERATIONAL
OPERATIONAL LEVEL
MANAGERS
SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN
MARKETING RESOURCES

MAJOR TYPES OF SYSTEMS
1. TRANSACTION PROCESSING SYSTEMS (TPS)

2. KNOWLEDGE WORK SYSTEMS (KWS)
3. OFFICE AUTOMATION SYSTEMS (OAS)
4. MANAGEMENT INFORMATION SYSTEMS (MIS)
5. DECISION SUPPORT SYSTEMS (DSS)
6. EXECUTIVE SUPPORT SYSTEMS (ESS)

TYPICAL TPS APPLICATIONS
Sales & Marketing Systems
1. MAJOR FUNCTIONS OF SYSTEMS:
– Sales management, market research,
promotion, pricing, new products
1. MAJOR APPLICATION SYSTEMS:
– Sales order info system, market research
system, pricing system

Manufacturing & Production Systems

– Scheduling, purchasing, shipping, receiving,
engineering, operations
– Materials resource planning systems,
purchase order control systems, engineering
systems, quality control systems

Finance & Accounting Systems
– Budgeting, general ledger, billing, cost
accounting
– General ledger, accounts receivable, accounts
payable, budgeting, funds management
systems

Human Resources Systems
– Personnel records, benefits, compensation,
labor relations, training
– Payroll, employee records, benefit systems,
career path systems, personnel training
systems

Example: Payroll Trans. System

Other Types (e.g., University)
– Admissions, grade records, course records,
alumni
– Registration system, student transcript
system, curriculum class control system,
alumni benefactor system

Transaction Processing System (TPS)
• Characteristic:
– Basic business systems that serve the
operational level
– A computerized system that performs and
records the daily routine transactions
necessary to the conduct of the business

Agenda
1. Case Study: UPS

2. Types of IS with Organization Functions in TPS
Level
3. Types of IS in Other Management Level
4. Mixture of Function and Level
8. Assignment

KNOWLEDGE WORK SYSTEMS (KWS)
KNOWLEDGE LEVEL
1. INPUTS: DESIGN SPECS
2. PROCESSING: MODELLING
3. OUTPUTS: DESIGNS, GRAPHICS
4. USERS: TECHNICAL STAFF
• EXAMPLE: ENGINEERING WORK

STATION:CAD/CAPP/CAM

OFFICE AUTOMATION SYSTEMS
(OA)
1. TOWARD A “PAPERLESS” OFFICE

2. REDESIGN OF WORK FLOW
3. INTEGRATED SOFTWARE
4. ERGONOMIC DESIGN
5. BRIGHT, CHEERFUL WORK SPACE
• EXAMPLE: PRESENTATION GRAPHICS:

MS OFFICE

Management Information Systems (MIS)
MANAGEMENT LEVEL
1. INPUTS: HIGH VOLUME DATA
2. PROCESSING: SIMPLE MODELS
3. OUTPUTS: SUMMARY REPORTS
4. USERS: MIDDLE MANAGERS
• EXAMPLE: ANNUAL BUDGETING

TPS Data for MIS Applications
TPS MIS
Order Processing SALES
DATA
System
ORDER FILE UNIT

PRODUCT
Materials Resource COST
MIS REPORTS
Planning System
PRODUCT
CHANGE
PRODUCTION MASTER FILE
DATA
General Ledger
EXPENSE MANAGERS
System DATA
ACCOUNTING FILES MIS FILES

MANAGEMENT INFORMATION
SYSTEMS
• Characteristic:
1. STRUCTURED & SEMI-STRUCTURED
DECISIONS
2. REPORT CONTROL ORIENTED
3. PAST & PRESENT DATA
4. INTERNAL ORIENTATION

DECISION SUPPORT SYSTEMS
(DSS)
MANAGEMENT LEVEL
1. INPUTS: LOW VOLUME DATA
2. PROCESSING: INTERACTIVE
3. OUTPUTS: DECISION ANALYSIS
4. USERS: PROFESSIONALS, STAFF
• EXAMPLE: CONTRACT COST

ANALYSIS
Example: DSS

Example: DSS

DECISION SUPPORT SYSTEMS
• Characteristic:
1. FLEXIBLE, ADAPTABLE, QUICK
2. USER CONTROLS INPUTS/OUTPUTS
3. NO PROFESSIONAL PROGRAMMING
4. SUPPORTS DECISION PROCESS
5. SOPHISTICATED MODELING TOOLS

Executive Support Systems (ESS)
STRATEGIC LEVEL
1. INPUTS: AGGREGATE DATA
2. PROCESSING: INTERACTIVE
3. OUTPUTS: PROJECTIONS
4. USERS: SENIOR MANAGERS
• EXAMPLE: 5 YEAR OPERATING

PLAN

Example: ESS (EIS)

EXECUTIVE SUPPORT SYSTEMS
• Characteristic:
1. TOP LEVEL MANAGEMENT
2. DESIGNED TO THE INDIVIDUAL
3. TIES CEO TO ALL LEVELS
4. VERY EXPENSIVE TO KEEP UP
5. EXTENSIVE SUPPORT STAFF

INTERRELATIONSHIPS AMONG SYSTEMS
ESS
MIS DSS
KWS
TPS
OAS
TYPES OF INFORMATION SYSTEMS
KIND OF SYSTEM GROUPS SERVED
STRATEGIC LEVEL SENIOR
MANAGERS
MANAGEMENT LEVEL MIDDLE

MANAGERS
KNOWLEDGE LEVEL KNOWLEDGE &

DATA WORKERS
OPERATIONAL
OPERATIONAL LEVEL
MANAGERS
SALES & MANUFACTURING FINANCE ACCOUNTING HUMAN
MARKETING RESOURCES

Agenda
1. Case Study: UPS

2. Types of IS with Organization Functions in TPS
Level
3. Types of IS in Other Management Level
4. Mixture of Function and Level
8. Assignment

SALES & MARKETING
INFORMATION SYSTEM
SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL
ORDER PROCESSING ENTER, PROCESS, TRACK ORDERS OPERATIONAL
MARKET ANALYSIS IDENTIFY CUSTOMERS & MARKETS KNOWLEDGE
PRICING ANALYSIS DETERMINE PRICES MANAGEMENT
SALES TRENDS PREPARE 5-YEAR FORECASTS STRATEGIC

MANUFACTURING
INFORMATION SYSTEM
MACHINE CONTROL CONTROL ACTIONS OF EQUIPMENT OPERATIONAL
COMPUTER-AIDED-DESIGN DESIGN NEW PRODUCTS KNOWLEDGE
PRODUCTION PLANNING DECIDE NUMBER, SCHEDULE OF PRODUCTSMANAGEMENT
FACILITIES LOCATION DECIDE WHERE TO LOCATE FACILITIES STRATEGIC

FINANCE & ACCOUNTING
INFORMATION SYSTEM
ACCOUNTS RECEIVABLE TRACK MONEY OWED TO FIRM OPERATIONAL
PORTFOLIO ANALYSIS DESIGN FIRM'S INVESTMENTS KNOWLEDGE
BUDGETING PREPARE SHORT TERM BUDGETS MANAGEMENT
PROFIT PLANNING PLAN LONG-TERM PROFITS STRATEGIC

HUMAN RESOURCES
INFORMATION SYSTEM
TRAINING & DEVELOPMENT TRACK TRAINING, SKILLS, APPRAISALS OPERATIONAL
CAREER PATHING DESIGN EMPLOYEE CAREER PATHS KNOWLEDGE
COMPENSATION ANALYSIS MONITOR WAGES, SALARIES, BENEFITS MANAGEMENT
HUMAN RESOURCES PLANNING PLAN LONG-TERM LABOR FORCE NEEDS STRATEGIC

Agenda
1. Case Study: UPS

Function and Level
7. Assignment

SUPPLY-CHAIN MANAGEMENT
ORDER PLANNING &

CUSTOMERS PROCESSING FORECASTING SUPPLIERS
PROCUREMENT
ACCOUNTING INTRANET
PRODUCTION
LOGISTICS
SHIPPING INVENTORY DISTRIBUTORS
SERVICES

HOW INFORMATION SYSTEMS FACILITATES SUPPLY
CHAIN MANAGEMENT
• Decide when, what to produce,store, move…
1) Rapidly communicate orders…
2) Track order status…
3) Check Inventory Availability, monitor levels…
4) Track shipments…
5) Plan production based on actual demand…
6) Rapidly communicate product design changes…
7) Provide product specifications…
8) Share information about defect rate, returns...

Agenda
1. Case Study: UPS

Function and Level
7. Assignment

TRADITIONAL VIEW OF
SYSTEMS
1. WITHIN THE BUSINESS: There are

functions, each having its uses of information
systems
2. OUTSIDE THE ORGANIZATION’S
BOUNDARIES: There are customers and
vendors
FUNCTIONS TEND TO WORK IN

ISOLATION

ENTERPRISE SYSTEM
Manufacturing Accounting
Business Processes
Vendors Enterprise-wide Customers
Business Processes
Human Finance
Resources
Sales &
fei.tian.ahu@gmail.com
Marketing
MIS 1-3:47/59
Internet Impact on ……?
——Not only shorts time and space, but
also change the life …
 Not only change in technology

fei.tian.ahu@gmail.com
 Re-shape business model MIS 1-3:48/59
Cisco IT Architecture
Marketing, sale, distribution, HR, Travel arr. Tech. Doc.,

Deliver Process
order processing and tracing, Training, Knowledge mgt.
service
Manu-
resellers factures
customers employees
distributors
partners suppliers
Cisco COO Cisco CSC Cisco CEC

Cisco Business Web (Web-Based Application)
ERP Systems, legacy Systems
IT Infrastructure
Internet And Digital Firm
1. Information technology infrastructure:
– Provides a universal and easy-to-use set of technologies and
technology standards that can be adopted by all organizations
1. Direct communication between trading partners:
– Disintermediation removes intermediate layers, streamlines process
1. Round-the-clock service:
– Web sites available to consumers 24 hours a day
1. Extended distribution channels:
– Outlets created for attracting customers who otherwise would not
patronize
1. Reduced transaction costs:
– Costs of searching for buyers, sellers, etc. reduced

INDUSTRIAL NETWORKS
LINK FIRMS INTO INDUSTRY-WIDE

SYSTEM
1. HORIZONTAL: Link firms in same
industry, including competitors
2. VERTICAL: Link firm with suppliers in
same industry

Agenda
1. Case Study: UPS

Function and Level
7. Assignment

SABRE Evolved
1. 1960s, Began as inventory-management tool----

technical change.
2. By mid-1970s, as control centre----- flight resource
planning
3. Installed SABRE terminal in travel agencies. As
travel-industry distribution mechanism----
transform the marketing and distribution of airline
services.
4. Today, as electronic travel supermarket ----SABRE
Travel Information Network.

Information as Strategic Resource
1. 1950s: TECHNICAL CHANGES

– Data Processing (DP) era
1. 60s-70s: MANAGERIAL CONTROL
– Management Information Systems (MIS) era
1. 80s-90s: INSTITUTIONAL CORE ACTIVITIES
– Strategic Information Systems (SIS) era
GROWING IMPORTANCE

Evolve Role of Information Systems
Time period Concept of Typical Infor. Purpose Role of Infor.
information systems Systems
1950-1960s Bureaucratic Electronic Speed Speed up ,

Requirement Accounting accounting & efficiency
Machine paperwork
1960s-1970s General mgt MIS Speed general Speed up, cost,
support report efficiency
requirement
1970s-1980s Customized DSS-EIS Improve mgt, effectiveness
mgt support customized
dec. making
1985-2000s Strategic Strategic Promote Sustainable
resource, information survival, strategic
competitive systems prosperity of advantage
advantage, organization
business
foundation

Strategic Role of Information Systems
• Strategic Information Systems:

– Can change goals, operations, products,
services, environment TO gain competitive
advantage

Assignment for Session 3
1. Individual assignment: write and submit

2. Questions:
– Take example of UPS’s package tracking
systems or other case you are interested in,
please provide the a specific example of each
system level.


Management Information System: Session 3

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Management

1. Case Study: UPS

fei.tian.ahu@gmail.com MIS 1-3:3/59

fei.tian.ahu@gmail.com MIS 1-3:4/59

1. What are the input, processing, and output of

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1. Case Study: UPS

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MANAGEMENT LEVEL MIDDLE

KNOWLEDGE LEVEL KNOWLEDGE &

fei.tian.ahu@gmail.com MIS 1-3:9/59

1. TRANSACTION PROCESSING SYSTEMS (TPS)

fei.tian.ahu@gmail.com MIS 1-3:10/59

fei.tian.ahu@gmail.com MIS 1-3:11/59

1. MAJOR FUNCTIONS OF SYSTEMS:

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fei.tian.ahu@gmail.com MIS 1-3:17/59

1. Case Study: UPS

fei.tian.ahu@gmail.com MIS 1-3:18/59

• EXAMPLE: ENGINEERING WORK

fei.tian.ahu@gmail.com MIS 1-3:19/59

1. TOWARD A “PAPERLESS” OFFICE

• EXAMPLE: PRESENTATION GRAPHICS:

fei.tian.ahu@gmail.com MIS 1-3:20/59

• EXAMPLE: ANNUAL BUDGETING

fei.tian.ahu@gmail.com MIS 1-3:21/59

ORDER FILE UNIT

ACCOUNTING FILES MIS FILES

fei.tian.ahu@gmail.com MIS 1-3:22/59

fei.tian.ahu@gmail.com MIS 1-3:23/59

• EXAMPLE: CONTRACT COST

fei.tian.ahu@gmail.com MIS 1-3:25/59

fei.tian.ahu@gmail.com MIS 1-3:27/59

fei.tian.ahu@gmail.com MIS 1-3:28/59

• EXAMPLE: 5 YEAR OPERATING

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fei.tian.ahu@gmail.com MIS 1-3:34/59

MANAGEMENT LEVEL MIDDLE

KNOWLEDGE LEVEL KNOWLEDGE &

fei.tian.ahu@gmail.com MIS 1-3:36/59

1. Case Study: UPS

fei.tian.ahu@gmail.com MIS 1-3:37/59

SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL

ORDER PROCESSING ENTER, PROCESS, TRACK ORDERS OPERATIONAL

MARKET ANALYSIS IDENTIFY CUSTOMERS & MARKETS KNOWLEDGE

PRICING ANALYSIS DETERMINE PRICES MANAGEMENT

SALES TRENDS PREPARE 5-YEAR FORECASTS STRATEGIC

fei.tian.ahu@gmail.com MIS 1-3:38/59

SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL

MACHINE CONTROL CONTROL ACTIONS OF EQUIPMENT OPERATIONAL

COMPUTER-AIDED-DESIGN DESIGN NEW PRODUCTS KNOWLEDGE

PRODUCTION PLANNING DECIDE NUMBER, SCHEDULE OF PRODUCTSMANAGEMENT

FACILITIES LOCATION DECIDE WHERE TO LOCATE FACILITIES STRATEGIC

fei.tian.ahu@gmail.com MIS 1-3:39/59

SYSTEM DESCRIPTION ORGANIZATIONAL LEVEL