Lecture4(information systems&functional applications)
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  • 1. 1 Information Systems and Functional Applications Abdisalam Issa-Salwe Faculty of Professional Studies Thames Valley University
  • 2. Abdisalam Issa-Salwe, Thames Valley University 2 Why IS is important to organisations?  Understand the role and relevance of an information system aids decision making.  Identifying and evaluating appropriate information systems.  Managing the process of information gathering, processing, storage and retrieval  Managers make decisions using the information available to them at the time.
  • 3. Abdisalam Issa-Salwe, Thames Valley University 3 Life-blood of the organisation
  • 4. Abdisalam Issa-Salwe, Thames Valley University 4 MEDIATING FACTORS: Environment Culture Structure Standard Procedures Politics Management Decisions Chance ORGANISATIONS INFORMATION TECHNOLOGY The two-way Relationship between organisations and Information Technology
  • 5. Abdisalam Issa-Salwe, Thames Valley University 5 About Business Strategy  Organisation has a limited set of resources (e.g. time, people, money, physical resources) and they must decide how to use those resources.  Strategy is deciding what the organisation is going to do and how it will use its resources  A business system is a collection of people, machines and methods organised to accomplish a set of specific functions.
  • 6. Abdisalam Issa-Salwe, Thames Valley University 6 About Business Strategy? (cont…)  Contributing to the establishment of the organisation's long term business objectives e.g. identifying and evaluating external factors which may impact on the organisation  Identifying and appraising the organisation's skills and resources  Identifying and defining business options; evaluating these options, performing risk assessments and recommending strategies for adoption  Analysing the economic impact of environmental change upon the organisation  Analysing market and competitive developments in relation to marketing strategy  Contributing to the development of the organisation's information systems strategy as a complement to its business strategy
  • 7. Abdisalam Issa-Salwe, Thames Valley University 7 Examples of Strategies  Strategy 1: Manufacture equipment with the money and use the building and the people to manufacture widgets.  Strategy 2: Outsource the production of widgets and use the people and building to be widget distributor - or perhaps a widget store.  Strategy 3: Sell the patent to a larger firm, sell the building, fire the employees and retire!
  • 8. Abdisalam Issa-Salwe, Thames Valley University 8 Implications of information management in organisations  It has the potential to contribute to the achievements of organisations  It has different purposes in different organisations. These purposes will be influenced by the organisation's goals as well as by its culture and its stance on information.  It is practiced in a political, social and cultural context which shapes both what information management does and how it does it.
  • 9. Abdisalam Issa-Salwe, Thames Valley University 9 Developing IS/IT strategy  Once key strategic issues have been identified, they feed into business objectives, particularly marketing objectives.  SWOT analysis can be used in conjunction with other tools for audit and analysis, such as PEST analysis and Porter's Five-Forces analysis.
  • 10. Abdisalam Issa-Salwe, Thames Valley University 10 SWOT Analysis  SWOT analysis is an important tool for auditing the overall strategic position of a business and its environment.  SWOT is an abbreviation for Strengths, Weaknesses, Opportunities and Threats
  • 11. Abdisalam Issa-Salwe, Thames Valley University 11  Strengths and weaknesses are Internal factors:  For example, a strength could be your specialist marketing expertise. A weakness could be the lack of a new product.  Opportunities and threats are external factors.  For example, an opportunity could be a developing distribution channel such as the Internet, or changing consumer lifestyles that potentially increase demand for a company's products. A threat could be a new competitor in an important existing market or a technological change that makes existing products potentially obsolete SWOT Analysis (Cont…)
  • 12. Abdisalam Issa-Salwe, Thames Valley University 12
  • 13. Abdisalam Issa-Salwe, Thames Valley University 13 SWOT Analysis (cont…) Strength  your specialist marketing expertise.  a new, innovative product or service  location of your business  quality processes and procedures  any other aspect of your business that adds value to your product or service.
  • 14. Abdisalam Issa-Salwe, Thames Valley University 14 SWOT Analysis (cont…) Weakness could be:  lack of marketing expertise  undifferentiated products and service (i.e. in relation to your competitors)  location of your business  poor quality goods or services  damaged reputation
  • 15. Abdisalam Issa-Salwe, Thames Valley University 15 SWOT Analysis (cont…) Opportunity could be:  a developing market such as the Internet.  mergers, joint ventures or strategic alliances  moving into new market segments that offer improved profits  a new international market  a market vacated by an ineffective competitor
  • 16. Abdisalam Issa-Salwe, Thames Valley University 16 SWOT Analysis (cont…) Threat could be:  a new competitor in your home market  price wars with competitors  a competitor has a new, innovative product or service  competitors have superior access to channels of distribution  taxation is introduced on your product or service
  • 17. Abdisalam Issa-Salwe, Thames Valley University 17 Critical Success Factors (CSF)  A small number of easily identifiable operational goals  Shaped by industry, manager, environment  Believed to assure firm’s success  Used to determine organization’s information requirements
  • 18. Abdisalam Issa-Salwe, Thames Valley University 18 CSF example Example Goals CSF Profit concern Earnings per share Return on investment Market share New product Automotive industry: styling quality dealer system cost control Energy standards Not for profit Excellent health care Regional integration Improved monitoring of regulations Efficient use of resources
  • 19. Abdisalam Issa-Salwe, Thames Valley University 19 Process of Decision Making  Strategic Decision Making: Determines long-term objectives, resources, and policies  Management Control: Monitors effective or efficient usage of resources and performance of operational units
  • 20. Abdisalam Issa-Salwe, Thames Valley University 20 Process of Decision Making (cont…)  Operational control: Determines how to perform specific tasks set by strategic and middle-management decision makers  Knowledge-level decision making: Evaluates new ideas for products, services, ways to communicate new knowledge, ways to distribute information
  • 21. Abdisalam Issa-Salwe, Thames Valley University 21 Decisions  Types of management decision: Structured:  Repetitive, routine, procedure have been agreed to deal with them. Unstructured:  Judgement, insight and evaluation is necessary to deal with them.  They are usually important decisions that affect the future of the organisation, there are no set procedures.
  • 22. Abdisalam Issa-Salwe, Thames Valley University 22 Structured or Unstructured  In which town will the new branch be located?  How many extra staff do we hire for the Christmas period?  What can be done about an employee who has had too many sick days off after being warned about their attendance.  Should the stores adopt their own store card?
  • 23. Abdisalam Issa-Salwe, Thames Valley University 23
  • 24. Abdisalam Issa-Salwe, Thames Valley University 24 Information requirement  Strategic information  Tactical information  Operational information
  • 25. Abdisalam Issa-Salwe, Thames Valley University 25 Information requirement (cont…)  Strategic information: Strategic information is concerned with the whole organisation and is relevant to the long term operational success.  It is derived from both internal and external sources and is summarised at a high level.  Tactical information: Tactical information is concerned with activities or departments and is relevant to the short and medium term.  It is primarily generated internally (but may have a limited external component)...Tactical information data is based upon quantitative measures and is prepared routinely and regularly.  Operational information: Operational information is concerned with specific tasks and is relevant to the immediate term.  It is derived from internal sources and is largely quantitative, detailed since it involves the processing of raw data) and is prepared very frequently.
  • 26. Abdisalam Issa-Salwe, Thames Valley University 26 Strategic level Information  Strategic information is used to plan the objectives of the organisation, and to assess whether the objectives are being met in practice.  Strategic information systems is to help organisations to do things better, to win. (Strategic Information Systems, M Neumann, 1996).  An information system to be strategic it is to aligned with business goals as this has an impact on organisational performance.
  • 27. Abdisalam Issa-Salwe, Thames Valley University 27 Strategic level information (cont…)  Strategic information systems  computer systems at any level of an organisation that change the goals, processes, products, services, or environmental relationships to help the organisation gain a competitive advantage  Information considered as a resource, much like capital and labor  IT-critical competitive strategies: Customer lock-in, customer lock-out, new business entry
  • 28. Abdisalam Issa-Salwe, Thames Valley University 28 Strategic level information (cont…)  What do managers need to know about organisations in order to build and use information systems successfully?  What impact do information systems have on organisations?  How do information systems support the activities of managers in organisations?  How can businesses use information systems for competitive advantage?  Why is it so difficult to build successful information systems, including systems that promote competitive advantage?
  • 29. Abdisalam Issa-Salwe, Thames Valley University 29 Strategic level information (cont…)  Strategy of an organisation is the roadmap towards attainment of its long term goals and objectives.  Effective operationalisation of strategy enables effective and efficient realization of organisational goals.  In the dynamic business environment of today, information has emerged as one of the key drivers in successfully steering the organisational strategy.
  • 30. Abdisalam Issa-Salwe, Thames Valley University 30 Operational-level information  Support operational managers by keeping track of the elementary activities and transactions of the organisation.  The principle purpose of systems at this level is to answer routine questions and track the flow of transactions through the organisation.  Covers things such as sales, receipts, cash deposits, payroll, credit decisions, flow of materials.
  • 31. Abdisalam Issa-Salwe, Thames Valley University 31 Knowledge-level information  Support knowledge and data workers in an organisation. The purpose of these systems is to help the organisation discover, organise and integrate new and existing knowledge into the business, and to help control the flow of paperwork. These systems, specially in the form of collaboration tools, workstations, and office systems, are the fastest growing applications in business today.
  • 32. Abdisalam Issa-Salwe, Thames Valley University 32
  • 33. Abdisalam Issa-Salwe, Thames Valley University 33
  • 34. Abdisalam Issa-Salwe, Thames Valley University 34 Reference  BPP, Information Systems, Study Text, Paper 2.1, BPP Professional Education, United Kingdom.  Lachlan M. MacKinnon, Information: Types of Information System Systems, http://www.macs.hw.ac.uk/~lachlan/dbislectures/le ctures/types.ppt,