Chapter 2 Summary: Global E-business and Collaboration

One of the first pieces to understanding why information systems are important to the daily aspects of business is to first understand what business process are. Simply put, business processes are the responsibilities of each department and the steps they follow to achieve the desired results.

If I work in Human Resources, my business process to hire employees doesn’t start with offering a potential candidate the job before first interviewing them. Instead, there is a clear and defined process to hire a new employee. In business, sometimes leadership will refer to best practices or other proven business models to improve processes within their own company. If a similar process works for thousands of other companies in the same industry, why aren’t you using it?

In business, we are often asking our teams these questions: How can we make this process better? Are there any processes to streamline and cut costs? How can technology help us achieve success? Is there new technology available to complete this same task but in a faster way and with less errors?

The answer is, information technology. Information systems automate business processes, change the flow of information, eliminate delays, and give managers higher quality information that results in more informed decisions.

There are four major types of information systems. Transaction Processing Systems (TPS) are used to automate the daily tasks and flow of activities throughout the company. Examples are payroll, accounting, and inventory systems. TPS would be the computerized system that the majority of employees within the company would have access to and would use regularly. Management Information Systems (MIS) are computerized systems and software programs that are developed to assist middle management with viewing the overall performance of their department and to help them make decisions. The information systems produce reports such as dashboards, Excel spreadsheets, and graphs to help this group of managers see the bigger picture.

Decision-Support Systems (DSS) are information systems are more complex than TPS and MIS because they often utilize external factors and data from several different systems are incorporated into the DSS system. These systems help predict outcomes while factoring in different variables. DSS systems can also analyze the behavior of customers to best market a company’s products and services. Lastly, there is Executive Support Systems (ESS) and these systems are designed specifically for senior management. They often contain a dashboard or graphs and can be viewed through a portal.

Implementing enterprise applications will be necessary to allow all of the applications and different systems to work together. There are also many tools available for collaboration and teamwork within a company such as e-mail, instant messaging, Microsoft SharePoint, and virtual meetings. All in all, the Information Systems department primarily runs the various systems and applications and this group is an essential piece to the overall success of the company.

Source: Laudon, Kenneth C. & Jane P. Laudon. Management Information Systems: Managing the Digital Firm 12^th ed. Pearson Hall, 2010.