The Strategic Role Of Information
Systems
by
Matthew
Martin, 2004
Contents
- Introduction
- Hierachical Levels And Systems
- Strategic-Level Systems
- Management-Level Systems
- Knowledge-level Systems
- Operational Level Systems
- Functional Areas Of An Organisation
- Types Of System
- Strategic Level
- Executive Support Systems (ESS)
- Management-Level
- Decision-Support Systems (DSS)
- Management Information Systems (MIS)
- Knowledge-Level
- Knowldege Work Systems (KWS)
- Office Automation Systems (OAS)
- Operational-Level
- Transaction Processing Systems (TPS)
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Introduction
By strategic we mean the long-term, far-reaching
role of IT systems in an organisation. Large organisations have a number
of levels of organisation, each with different emphases and specialities.
Consequently each has needs for different types of IT systems.
Two main
ways of dividing up an organisation are used in the diagram:
-
Hierarchical levels
- Functional areas.
The types of information system required at the different
levels within an organisation and for different functional areas need
to be considered.
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Hierarchical Levels And Systems
The hierarchy of the organisation can be divided
into four levels:
1. Strategic
2. Management
3. Knowledge
4. Operational
Each of these levels requires its own types of systems.
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Strategic-Level Systems
For strategic managers to
track and deal with strategic issues, assisting long-range planning.
A principle area is tracking changes in the external conditions (market
sector, employment levels, share prices, etc.) and matching these
with the internal conditions of the organisation.
Management-Level Systems
Used for the monitoring, controlling, decision-making,
and administrative activities of middles management. Some of these systems
deal with predictions or “what if…” type questions. e.g. “What
would happen to our profits if the completion of the new production
plant was delayed by 6 months?” Tracking current progress in accord
with plans is another major function of systems at this level.
Knowledge-Level Systems
Support knowledge and data workers.
- Support
the discovery, processing and storage of knowledge.
- Control
the flow of paper work.
- Enable
group working.
This is one of the fastest growing areas of business
software.
Operational-Level Systems:
Support operational managers
tracking elementary activities. These can include tracking customer
orders, invoice tracking, etc. Operational-level systems ensure
that business procedures are followed.
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Functional Areas Of An Organisation
The organisation can also be divided into five functional
areas:
1. Sales
& Marketing
2. Manufacturing
3. Finance
4. Accounting
5. Human
resources
These functional areas exist at all four levels of
the organisation, being represented from the operational-level up to
the strategic-level.
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Types Of System
Putting the functional areas together with the hierarchical
levels of the organisation, we can examine the different types of systems
needed in an organisation.
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Strategic-Level
Executive Support Systems (ESS)
This category is used by senior managers, assisting
them in strategic decision making by creating a general environment
for communications and computing suitable for unstructured decision
making. ESS presents information about the external world (such as new
government regulations) and also summarises information from MIS and
DSS from within the organisation.
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Management-Level
Decision-Support Systems (DSS)
DSS assist managers in making semi-structured decisions,
required for rapidly changing environments and where complete information
about a situation is not available. These systems may summarise information
from TPS and MIS and also bring in information from external sources.
Management Information Systems (MIS)
Provides analysis and reports for managers. These
systems may also be able to provide historical profiles about the organisations
performance. MIS is used for planning, decision-making and control at
the management level.
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Knowledge-Level
Knowledge Work Systems (KWS)
KWS are used by knowledge workers, the specialist
workers within the organisation. KWS promote the development of new
knowledge and also ensure that this new knowledge is properly integrated
into the organisation. Knowledge workers are often highly qualified,
with highly specialised skills. They perform complex tasks; KWS assist
them in these tasks. Examples include computer programmers, geologists,
architects, market analysts.
Office Automation Systems (OAS)
OAS are used by data workers. Often OAS co-ordinated
data workers, perhaps in geographically separate sites, working in different
areas of the organisation. OAS also may perform specialised tasks, like
scheduling, desktop publishing or document imaging. Data workers are
typically not as highly qualified as knowledge workers and are not specialised
to the same extent. Knowledge workers include secretaries, PAs, accountants.
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Operational-Level
Transaction Processing Systems (TPS)
Basic business systems that are used in the operational
environment of the organisation. These can include payroll systems,
ordering systems and employee records systems. TPS enforces strict procedures
for carrying out business processes.
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