Unit 3 Lecture: 1
What is (EIS) enterprise information systems?
Enterprise information systems are systems that control how a company operates. There are silo/functional systems and there are process-based systems.
Silo/functional systems are stand-alone and do not integrate either in function or in application.
Vertically there are 3 Silo levels:
- The lowest being the transaction processing which happens autonomous and separate from each department.
- The middle management level – once again autonomous in its own department. So one manager for accounts, another for production and so on for all the departments. Not involved or aware of each other’s functions.
- The top management – may have the responsibility of multiple silos and receives individual reports from each silo manager.
Horizontally, there are as many silos as department responsibilities.
Systems that fall into the Silo mode of company operation would be legacy systems (possibly prior to 1980) that were built for a particular department’s function. The system may also be proprietary or built in the house making it very difficult to modify and maintain.
Businesses could have elected to be based on a Silo/ functional business strategy and perhaps systems followed company strategy.
Process-based systems are integrated systems usually sharing one database. Process-based businesses are based on everyone having responsibility for their function but aware of exactly what is happening everywhere else in the company.
In an integrated process-based manufacturing system, a process flow example would be: A customer order is placed, the point of sales operator captures the order and immediately credit control is alerted, if credit is approved, bill of materials will be extracted for stock availability, manufacture is alerted, product is produced an invoice generated. Behind the scene, sales figures, debtors, creditors and the ledger, as well as many more areas, are all updated.
Amazon is an example of a process-based system with two types of operation.
Customer orders a product, it is in stock and it gets shipped out, the customer is invoiced and pays.
Customer orders a product it is then sourced from a supplier and only after it arrives in stock, can it be invoiced, paid for and shipped.
What are the most significant things I have learned during this session?
That a company could elect to be a silo/functional company and that it was not forced to be so by legacy systems.