Using Information Systems

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1 Introduction

Different levels of management need different information and the information can be sourced internally or externally. In this chapter we will consider the different information needs of management and the different systems available for dealing with it.

2 Internal and external information

Internal information is information collected from the company’s own records. For example, accounting records, production records, employees records.

External information is harder to obtain but is collected from outside the company. For example, information about competitors prices, information from credit rating companies, government data on inflation.

3 Information needs for decision making

You should be aware from earlier studies of the broad levels of decision making within companies and the type of information required at each level

3.1 Strategic decision making

long-term plans (e.g. 5 to 10 years) for the business

e.g. what new offices to open? What new products to launch?

Decisions made by top management

Mainly external information required.

3.2 Tactical decision making

medium-term, more detailed plans - usually involving the preparation of budgets for next year.

e.g. how many staff to employ next year

Decisions made by middle-management

Both internal and external information required.

3.3 Operational decision making

Short-term decision making

e.g. which supplier to choose for a purchase next week

Decisions made by junior management

Internal information required

4 Types of information systems

You should be aware of the following types of software available to provide information, all are explained in the free lecture that goes with this chapter:

• Transaction processing systems

• Management information systems

• Executive information systems

• Enterprise resource planning systems

• Customer relationship management software