Learning for "What are the information systems in the digital enterprise?"

In this piece of learning, we will learn what the role of information systems are in the digital enterprise. We will do this by:

• Considering the major types of the systems that are used in the enterprise
• What these major systems do for the enterprise
• The different layers of the enterprise
• The role of the different layers in the enterprise

Organisational functional areas

In considering the different types of information systems that organisations use, we need to first consider the different layers of the organisation and the roles of these layers within the enterprise. Organisations are structured in many different ways. Some organisations have fixed structures where there are certain positions such as operations, middle management and senior management with established lines of communications and well-defined rules and roles. Organisations could be much more dynamic in which at any point in time an employee may belong to a team or teams. In turn these teams maybe formed and reformed for different tasks and projects.

But there are essentially three ways of organising the employees within the organisation:

• By function: Enterprise is divided into groups of people that have similar jobs and responsibilities. Examples of these are "Human Resources", "Sales and Marketing" and "Finance and Accounts"

• By product: Organisation could have a number of divisions according to the different products. For example Rolls Royce could be seen as the composition of aircraft engine, helicopter division, car division, etc.

• By process: At times business processes play a part in the divisions. For example a group of people could be groups as customer services, logistics, warehousing, product design, etc.

This list does not intend to be exhaustive. There maybe other ways organising the enterprise for example by major customer (For example Ernest and Young have a Shell department), by market (For example education, government).

There are different types of expertise, different interests and different needs and requirements and so in order to cater for these needs we need to have different types of information systems.

For the purpose of this communicate; we consider the organisation to be of four major functional areas and in three major layers. This is depicted in the diagram below.

So in this case organisation is divided into strategic layer, management layer and the operational layer. It is further divided into the different functional areas of Sales and marketing, manufacturing and production, finance and accounting, and human resources. And so in this case we are essentially talking about 12 different areas of interests. Systems could be built to address the needs of these different areas of interests.

Information systems aim to serve all the major business functions and so a typical enterprise would have operational, management and strategic systems for each of the functional areas. For example, manufacturing system on the operational level records daily number of products manufactured or the amount of row material used. These operational level data are aggregated for the middle manager to track monthly production figures or wastage of raw material. Strategic managers on the other hand may use the data to forecast production capacity over long period of time, say 5 years.

• Now do Task 1 from the Tasks page

Three types of management information systems

Information systems can be divided into three different categories:

• Operational level systems: These systems are used at the operational level of the organisation. At this level we are concerned with transactions and labour intensive business processes.
• Management level systems: These systems are used by the middle managers within the organisation to control operations and fulfil administrative activities.
• Strategic level systems: These systems are used by senior managers to fulfil strategic issues within the organisation.

Operational level systems

These systems are used at the supervisory level in the organisation. This is the lowest level in the hierarchy of managers. Managers working at this level coordinate the work of other employees who are not themselves managers. At this level managers are responsible for elementary and routine data to day activities and decision makings in the enterprise. These tasks typically do not require judgment and discretion. Their responsibility is to make sure that specific tasks are carried out correctly and efficiently.

At this level our attention is focused on elementary transactions and activities. Tasks involved at this level have relatively short length of life, typically no more than a number of days. Operational level information systems are usually transaction processing systems that aid operational level managers to keep track of transactional and elementary processes and activities. Examples of transactions are sales, material flow, cash deposits, receipts, delivery notes, etc. Their purpose is to answer routine questions and aid the tracking of transactions. So the primary use of these systems is to capture raw data such as sales, validate the data to make sure entries are correct and in the correct format such as checking to make sure items are in stock, enable tracking of data for example answer queries on the state of the order, etc.

Management level systems

This is the level that lies in the middle of hierarchy of managers. At this level, managers use information systems to organise and control the activities of operational level managers. Decisions that are made at this level are more tactical and are made to implement the strategic decisions explained below. In other words, strategic decisions have to be broken down into implementable packages, i.e. relatively short and step like solutions.

Tasks involved at this level have a longer life, typically 1 to 3 years. Managers at this level use summaries of transaction records to help them plan, control and make decisions. Middle managers need information to monitor operations and control the allocation of resources effectively. So information systems at this level use transaction data to develop summarised and aggregated information that help analysis of issues. Their purpose is not to support the operational tasks but help middle managers control the operations.

Strategic level systems

These systems are used by the strategic managers in the organisation. These are a set of management positions that are concerned with developing the enterprise missions and objectives. Decisions that are made at this level have a profound impact on the organisation's success or failure and so they are referred to as the strategic decisions. Examples of issues at this level are such as such as building brand, developing partnerships with other organisations, developing new products and expanding into new markets.

Systems at this level help management tackle and address these strategic issues typically over a long period of time. Information used by these systems are both from within the enterprise and from the environment external to the enterprise. The idea is to consider and match changes that happen out side the organisation with the enterprise capabilities. Examples are predicting trends in the market, working out the cost of a project, considering the gaps in the market that enterprise should target. These systems are therefore made to provide the strategic managers with information that assists them in preparing and planning long term decisions for the enterprise.

• Now do Task 2 from the Tasks page

Enterprise systems and applications

So far we have discussed many types of information systems and considered the use of information systems within the electronic business. e_Business strategy is about developing or changing business processes to achieve business goals using information technology as much as possible. In general strategies are developed to achieve the following:

· People integration

· Information integration

· Process integration

People integration

One of the major aims of e_Business is to facilitate more effective communication with the employees. This could be the communication between the business and the employee and/or communication among he employees. One of the ways businesses manage information and in particular knowledge that people within the organisation have is by getting the employees to communicate with each other, often leading collaborations on tasks and projects as well as exchanges of ideas.

The issues concerned at this level are point of access and technologies that are used to achieve the above. Intension is to develop a multi-channel access through which employees could communicate and so mobile communication, web-based systems, Local Area Networks and Wide Area Networks, Virtual Private Networks, etc are considerations and most probably systems are configured to provide many channels for access to information. Collaborative systems such as blogs, discussion forums and email are implementations that encourage collaboration among the employees. Enterprise portals are about replacing the employees desktop by a web-based application that works as window to all resources that employee requires. Examples of these resources are software, collaborative forums, various databases, external information from outside the organisation, e-learning for personal development, manuals to systems, etc.