Management Information Systems:

Managing the Digital Firm

Learning Objectives
2.1 What are business processes? How are they related to information
systems?
2.2 How do systems serve the different management groups in a business,
and how do systems that link the enterprise improve organizational
performance?
2.3 Why are systems for collaboration and social business so important, and
what technologies do they use?
2.4 What is the role of the information systems function in a business?
2.5 How will MIS help my career?
Video Cases
• Case 1: IS in Action: VisionX Lighting Grows with Business One
• Case 2: Cemex: Becoming a Social Business
Enterprise Social Networking Transforms Sharp Corporation into
a More Innovative Connected Organization (1 of 2)
• Problem
• Hierarchical top-down processes
• New competitors
• Lack of collaboration and idea sharing
• Solutions
• Develop knowledge-sharing strategy and goals
• Redesign knowledge-sharing and collaboration processes
• Change organizational culture
• Implement Microsoft Yammer collaboration software
Enterprise Social Networking Transforms Sharp Corporation into
a More Innovative Connected Organization (2 of 2)

• Use of new information systems to improve performance and

remain competitive
• Demonstrates importance of teamwork and collaboration for
innovation and profit growth
• Illustrates importance of organizational culture and business
processes for knowledge dissemination
Business Processes (1 of 2)
• Business processes
• Flows of material, information, knowledge
• Logically related set of tasks that define how specific
business tasks are performed
• May be tied to functional area or be cross-functional
• Businesses: Can be seen as collection of business processes
• Business processes may be assets or liabilities
Business Processes (2 of 2)
• Examples of functional business processes
• Manufacturing and production
• Assembling the product
• Sales and marketing
• Identifying customers
• Finance and accounting
• Creating financial statements
• Human resources
• Hiring employees
Figure 2.1 The Order Fulfillment Process
How Information Technology Improves
Business Processes
• Increasing efficiency of existing processes
• Automating steps that were manual
• Enabling entirely new processes
• Changing flow of information
• Replacing sequential steps with parallel steps
• Eliminating delays in decision making
• Supporting new business models
Systems for Different Management Groups (1 of
2)
• Transaction processing systems
• Operational managers need systems that keep track of the elementary
activities and transactions of the organization, such as sales, receipts,
cash deposits, payroll, credit decisions, and the flow of materials in a
factory.

• Transaction processing systems (TPS) provide this kind of information.

• A transaction processing system is a computerized system that

performs and records the daily routine transactions necessary to
conduct business, such as sales order entry, hotel reservations, payroll,
employee record keeping, and shipping.
Systems for Different Management Groups (1 of
2)

• The principal purpose of systems at this level is to answer

routine questions and to track the flow of transactions through
the organization.

• How many parts are in inventory?

• What happened to Mr. Smith’s payment?

Figure 2.2 A Payroll TP S
Systems for Different Management Groups (2 of
2)
• Systems for business intelligence
• Firms also have business intelligence systems that focus on delivering
information to support management decision making.

• Business intelligence is a contemporary term for data and software

tools for organizing, analyzing, and providing access to data to help
managers and other enterprise users make more informed decisions.

• Business intelligence addresses the decision-making needs of all levels

of management.
Systems for Different Management Groups (2 of
2)

• Systems for business intelligence

• Data and software tools for organizing and analyzing data
• Used to help managers and users make improved decisions
• Management information systems
• Decision support systems
• Executive support systems
Management Information Systems
• Serve middle management
• Provide reports on firm’s current performance, based on data
from TP S
• Provide answers to routine questions with predefined
procedure for answering them
• Typically have little analytic capability
Figure 2.3 How Management Information
Systems Obtain Their Data from the
Organization’s TP S
Figure 2.4 Sample MI S Report
Consolidated Consumer Products Corporation Sales by Product and Sales Region: 2020
Decision Support Systems
• Decision-support systems (DSS) focus on problems that are
unique and rapidly changing, for which the procedure for
arriving at a solution may not be fully predefined in advance.

They try to answer questions such as these:

• What would be the impact on production schedules if we were

to double sales in the month of December?

• What would happen to our return on investment if a factory

schedule were delayed for six months?
Decision Support Systems
• Serve middle management
• Support nonroutine decision making
• Example: What is the impact on production schedule if
December sales doubled?
• May use external information as well as TP S / MI S data
• Model driven DS S
• Voyage-estimating systems
• Data driven DS S
• Intrawest’s marketing analysis systems
Figure 2.5 Voyage-Estimating Decision-Support
System
Executive Support Systems
• Executive support systems (ESS) help senior management make
these decisions.
• They address non-routine decisions requiring judgment, evaluation,
and insight because there is no agreed-on procedure for arriving at
a solution.
• ESS present graphs and data from many sources through an
interface that is easy for senior managers to use.
• Often the information is delivered to senior executives through a
portal, which uses a web interface to present integrated
personalized business content.
Executive Support Systems
• Support senior management
• Address nonroutine decisions
• Requiring judgment, evaluation, and insight
• Incorporate data about external events (e.g., new tax laws or
competitors) as well as summarized information from internal
MI S and DS S
• Example: Digital dashboard with real-time view of firm’s
financial performance
 Enterprise Applications
• Enterprise applications help businesses become more flexible and
productive by coordinating their business processes more closely
and integrating groups of processes so they focus on efficient
management of resources and customer service.

• Four major applications

• Enterprise systems
• Supply chain management systems
• Customer relationship management systems
• Knowledge management systems
Enterprise Applications
• Systems for linking the enterprise
• Span functional areas
• Execute business processes across the firm
• Include all levels of management
• Four major applications
• Enterprise systems
• Supply chain management systems
• Customer relationship management systems
• Knowledge management systems
 Enterprise Systems
• Also called enterprise resource planning (ER P) systems
• Integrate data from key business processes into single system
• Speed communication of information throughout firm
• Enable greater flexibility in responding to customer requests,
greater accuracy in order fulfillment
• Enable managers to assemble overall view of operations

• It integrate business processes in manufacturing and

production, finance and accounting, sales and marketing, and
human resources into a single software system.
Figure 2.6 Enterprise Application Architecture
Supply Chain Management (SC M) Systems

• Supply Chain Management Systems Firms use supply chain

management (SCM) systems to help manage relationships with their
suppliers.

• These systems help suppliers, purchasing firms, distributors, and

logistics companies share information about orders, production,
inventory levels, and delivery of products and services so they can
source, produce, and deliver goods and services efficiently.
Supply Chain Management (SC M) Systems

• Manage relationships with suppliers, purchasing firms, distributors,

and logistics companies
• Manage shared information about orders, production, inventory
levels, and so on
• Goal is to move correct amount of product from source to point of
consumption as quickly as possible and at lowest cost
• Type of interorganizational system: Automating flow of information
across organizational boundaries
Customer Relationship Management (CR M)
Systems
• Help manage relationship with customers
• Coordinate business processes that deal with customers in sales, marketing,
and customer service
• Goals:
• Optimize revenue
• Improve customer satisfaction
• Increase customer retention
• Identify and retain most profitable customers
• Increase sales
Knowledge Management Systems (KMS)

• Manage processes for capturing and applying knowledge and

expertise
• Collect relevant knowledge and make it available wherever
needed in the enterprise to improve business processes and
management decisions
• Link firm to external sources of knowledge
Intranets and Extranets
• Technology platforms that increase integration and expedite
the flow of information
• Intranets:
• Internal networks based on Internet standards
• Often are private access area in company’s website
• Extranets:
• Company websites accessible only to authorized vendors
and suppliers
• Facilitate collaboration
E-business, E-commerce, and
E-government
• E-business
• Use of digital technology and Internet to drive major business
processes
• E-commerce
• Subset of e-business
• Buying and selling goods and services through Internet
• E-government
• Using Internet technology to deliver information and services to
citizens, employees, and businesses
Interactive Session: Organizations: The City of
Mississauga Goes Digital
• Class discussion
• Describe the problems the City of Mississauga hoped to address using digital
technology.
• What technologies did Mississauga employ for a solution? Describe each of
these technologies and the role each played in a solution.
• What management, organization, and technology issues did the City of
Mississauga have to address in developing a solution?.
• How did the technologies in this case improve operations and decision making
at the City of Mississauga?
 What is Collaboration?

• Collaboration is working with others to achieve shared and explicit

goals.

• Collaboration focuses on task or mission accomplishment and usually

takes place in a business or other organization and between businesses.
What is Collaboration?
• Collaboration
• Short lived or long term
• Informal or formal (teams)
• Growing importance of collaboration
• Changing nature of work
• Growth of professional work—“interaction jobs”
• Changing organization of the firm
• Changing scope of the firm
• Emphasis on innovation
• Changing culture of work
Figure 2.7 Requirements for Collaboration
What is Social Business?
• Social business
• Use of social networking platforms (internal and external)
to engage employees, customers, and suppliers
• Aims to deepen interactions and expedite information sharing
• “Conversations” to strengthen bonds with customers
• Requires information transparency
• Seen as way to drive operational efficiency, spur innovation,
accelerate decision making
Crowdsourcing
Social Commerce
Business Benefits of Collaboration and
Teamwork
• Investment in collaboration technology can return large
rewards, especially in sales and marketing, research and
development
• Productivity: Sharing knowledge and resolving problems
• Quality: Faster resolution of quality issues
• Innovation: More ideas for products and services
• Customer service: Complaints handled more rapidly
• Financial performance: Generated by improvements in factors
above
Building a Collaborative Culture and Business
Processes
• “Command and control” organizations
• No value placed on teamwork or lower-level participation
in decisions
• Collaborative business culture
• Senior managers rely on teams of employees
• Policies, products, designs, processes, and systems rely on
teams
• The managers purpose is to build teams
Tools and Technologies for Collaboration and
Social Business
• E-mail and instant messaging (I M)
• Wikis
• Virtual worlds
• Collaboration and social business platforms
• Virtual meeting systems: videoconferencing, telepresence)
• Cloud collaboration services (Google Drive, Google Docs, etc.)
• Microsoft SharePoint and IB M Notes
• Enterprise social networking tools
Interactive Session: Technology: Quality
Videoconferencing: Something for Every Budget
• Class discussion
• How do the videoconferencing tools described in this case promote
collaboration and innovation?
• How is videoconferencing related to the business models and business
strategies of the organizations described in this case?
• Describe the specific ways in which videoconferencing technology
helped each of the organizations in this case improve their operations
and decision making?
• If you were a small or medium-sized business, what criteria would you
use to determine whether to use Zoom videoconferencing?
Checklist for Managers: Evaluating and Selecting
Collaboration and Social Software Tools

• Time/space matrix
• Six steps in evaluating software tools
• Identify your firm’s collaboration challenges
• Identify what kinds of solutions are available
• Analyze available products’ cost and benefits
• Evaluate security risks
• Consult users for implementation and training issues
• Evaluate product vendors
Figure 2.8 The Time/Space Collaboration and
Social Tool Matrix
The Information Systems Department
• Often headed by chief information officer (CI O)
• Other senior positions include chief security officer (CS
O), chief knowledge officer (CK O), chief privacy officer (CP
O), chief data officer (CD O)
• Programmers
• Systems analysts
• Information systems managers
• End users
Organizing the Information Systems Function

• I T governance
• Strategies and policies for using I T in the organization
• Decision rights
• Accountability
• Organization of information systems function
• Centralized, decentralized, and so on
How Will MIS Help My Career?
• The Company: Comprehensive Supplemental Insurance USA
• Position: Sales support specialist
• Job Requirements
• Interview Questions
• Author Tips