2. • Data items refer to elementary description
of things, events, activities and
transactions that are recorded, classified
and stored but are not organised to
convey any specific meaning.
• Data items can be numbers, letters,
figures, sounds and images.
E.g.: collection of numbers 3.11,2.96,3.95
and characters B,A,C,E,A
3. • Information refers to data that have been
organized so that they have meaning and
value to the recipient.
• E.g.: A grade point average of 7.0 by itself
is data, but student’s name coupled with
his or her GPA is information.
4. • Knowledge consists of information that has
been organized and processed to convey
understanding, experience, accumulated
learning, and expertise as they apply to a
current business problem.
• E.g. : Based on the accumulated knowledge the
company may decide to interview only those
students with GPA over 7.0.
GPA information is used to address a business
problem i.e.hiring successful employee.
5. Information System
• An information system is a set of
interrelated components that work together
to collect, store, process and
disseminate information for a specific
purpose like to support decision making,
coordination, control, analysis, and
visualization in an organization.
6. • CBIS is an information system that uses computer technology to
perform some or all of its intended tasks.
• Its Information Technology components include:
– Hardware consists of devices such as the processor, monitor,
keyboard and printer. Together, these devices accept, process
and display data and information.
– Software is a program or collection of programs that enable the
hardware to process data.
– Database is a collection of related files or tables containing data.
– Communication Networks is a connection sys(wired/wireless)
that permits different computers to share resources .
– Business Procedures are the instructions for combining the
above components to process information and generate the
desired output.
– People are those individuals who use the hardware and software,
interface with it, or utilize its output.
Computer-based Information
System(CBIS)
9. Levels of Management &
Decisions(contd.)
• The planning to pursue the organization’s vision is known as
Strategic Planning. The planning to achieve the tactical objectives of the
organization is known as Operational Planning. Strategic Planning is long
lasting as compared to Operational Planning.
• Tactical is a process of selecting ways to achieve an objective or
strategic plan. “The use of tactical management in a business environment
allows a manager to choose the best tactics or methods for each
situation that arises, rather than following a particular standard
procedure.
• Tactics are the properly organized actions that help to achieve a certain
end. Tactics is a subset of strategy, i.e. without the strategy, tactics can
do nothing. Tactics try to find out the methods through which strategy can
be implemented.
11. Organization as a System
•Raw
Material
•Machinery
•Technology
•Real Estate
•Computers
•People
•Manufacturing
•Marketing
•Accounting
•Advertising
•Billing
•Payroll
•Product
•Service
•Financial
Results
Input Processing Output
Feedback
Control Component
Tactical & Strategic
Information
Suppliers
Customers
Competitors
Business Partners Government
Labor
Unions
12. Types of Information Systems
• Transaction Processing Systems (TPS)
• Management Information Systems (MIS)
• Decision Support Systems (DSS)
• Executive’s Information Systems (EIS)
• Enterprise Resource Planning (ERP)
13. Transaction Processing
Systems (TPS)
• These systems have been designed to collect,
process and store transactions that occur in the day to
day operations of a company.
• One property of this system that enables to work
effectively is the ability to accurately record multiple
transactions even if the different transactions take place
simultaneously.
• They are built to be able to handle large volumes of
transactions.
14. Transaction Processing
Systems (TPS)
• Processes and stores day-to-day
business transactions
• Used at Operational Level
• Overall usage is well defined and
repetitive in nature
• Highly structured decisions
• Very detailed information on each
aspect
15. • For example,
– Inventory
– Payroll
– Airline reservation
– Online shopping
Transaction Processing
Systems (TPS)
17. • Advantages:
– Precise information
– Needed to run the business
• Limitations:
– Not suitable for decision making
– Information usually can not flow across
departments
Transaction Processing
Systems (TPS)
18. Management Information
Systems (MIS)
• These systems make use of information
technology to help managers ensure a smooth
and efficient running of the organization.
• Information collected by these systems is given
to the managers so that they can easily evaluate
the company’s current performance from
previous outputs.
• Serves Managers with reports and access to
organization’s current performance and
historical records.
19. Management Information
Systems (MIS)
• MIS provide the base for data analysis which is further
required for decision making.
• Used mainly at Tactical level
• Gathers information from TPS and external sources
• MIS summarize and report on the company’s basic
operations. The basic transaction data from TPS are
compressed and are usually presented in long reports
that are produced on a regular schedule
• A typical MIS transforms transaction level data from say
for eg. from inventory, production, and accounting into
MIS files that are used to provide managers with
reports.
20. • MIS usually serve managers primarily interested in weekly,
monthly, and yearly results, although some MIS enable
managers to drill down to see daily or hourly data if required.
• MIS generally provide answers to routine questions that have
been specified in advance and have a predefined procedure
for answering them.
• For example,Comparison report of total annual sales figures
for specific products to planned targets.
• These systems are generally not flexible and have little
analytical capability. Most MIS use simple routines such as
summaries and comparisons, as opposed to sophisticated
mathematical models or statistical techniques.
23. Decision Support System (DSS)
• The main objective of decision support systems is to
provide solutions to problems and decisions that are
rapidly changing, and not easily specified in advance.
• They address problems where the procedure for arriving
at a solution may not be fully predefined in advance.
• Used at tactical and strategic management level.
• Takes input from Operational systems, from MIS
,external sources(such as current stock prices or product
prices of competitors)
• DSS systems are also referred to as business
intelligence systems because they focus on helping
users make better business decisions.
24. • DSS have more analytical power than the other
information systems.
• They use a variety of statistical and mathematical
models to analyze data, or they condense large amounts
of data into a form in which they can be analyzed by
decision makers.
• DSS are designed so that users can work with them
directly; these systems explicitly include user-friendly
software.
• DSS are interactive; the user can change assumptions,
ask new questions, and include new data.
25. An interesting, small, but powerful DSS is the voyage-estimating system of a large
American metals company that exists primarily to carry bulk cargoes of coal, oil, ores,
and finished products for its parent company. The firm owns some vessels, charters
to others, and bids for shipping contracts in the open market to carry general cargo. A
voyage-estimating system calculates financial and technical voyage details. Financial
calculations include ship time/ costs (fuel, labor, capital), freight rates for various
types of cargo, and port expenses. Technical details include a myriad of factors, such
as ship cargo capacity, speed, port distances, fuel and water consumption, and
loading patterns (location of cargo for different ports).
The system can answer questions such as the following: Given a customer delivery
schedule and an offered freight rate, which vessel should be assigned at what rate
to maximize profits? What is the optimal speed at which a particular vessel can
optimize its profit and still meet its delivery schedule? What is the optimal loading
pattern for a ship bound for the U.S. West Coast from Malaysia The system operates
on a powerful desktop personal computer, providing a system of menus that makes it
easy for users to enter data or obtain information.
27. Another example,
Intrawest—the largest ski operator in North America—collects
and stores vast amounts of customer data from its Web site,
call center, lodging reservations, ski schools, and ski
equipment rental stores. It uses special software to analyze
these data to determine the value, revenue potential, and
loyalty of each customer so managers can make better
decisions on how to target their marketing programs. The
system segments customers into seven categories based on
needs, attitudes, and behaviors, ranging from “passionate
experts” to “value-minded family vacationers.” The company
then e-mails video clips that would appeal to each segment to
encourage more visits to its resorts.
28. • A bank loan officer verifying the credit of a loan
applicant and then deciding whether to offer loan or not.
• DSS (Decision Support System) in Amazon can be seen
in how Amazon presents its customers with the chance
to choose items from a best selling list added to the
home page. It is also implemented in a service provided
by the website called “Look inside the book”. Customers
are left with the choice to make a decision in buying a
specific book or not by taking a look at random pages of
the content of the book.
29. • It has the following fundamental
components
– User interface
– Database
– DSS/Knowledge model
• Specifies relationships between variables and/or
parameters
• Performs what-if analysis
• Provides alternate solutions
• Stores the predictions
Decision Support System (DSS)
30. What-If Analysis
Let's imagine that you and your friends decide to get together for the day. However,
before the fun can begin, you must first decide what it is you'll be doing. Your friend
Katy wants to go to the amusement park, while your friend Sara wants to go to the
zoo. Tom wants to go biking, and Sam wants to catch a movie. While they are all
great ideas, you know that there is a limit of how much money each of you are willing
to spend. While biking costs nothing, the amusement park costs $25 per person, the
zoo is $15 per person, and a movie is $10 per person. Because each of you only has
$35 to spend for the day, you'll have to choose your activities accordingly. By looking
at the different combinations of activities, you can determine which ones you can
afford to partake in. What you and your friends are essentially doing is participating
in what-if analysis.
31. So what is meant by the term, what-if analysis? Well, it is a way for a company,
individual, or economist, to plug in different scenarios and values to determine a
range of possible outcomes. This type of analysis is often done when data is limited
and a company wants to make the most informed decision. Oftentimes, a software
program like Microsoft Excel is utilized to plug different numbers into cells and see
how they affect the outcome. Using our earlier example, you and your friends could
combine various activities to see which combinations added up to $35 or less. This
could help you make the best informed decision about how to spend your money for
the day.
• Uses of What-If Analysis
Obviously what-if analysis doesn't provide a guaranteed outcome, but it does provide
a tool for companies to look at a range of plausible outcomes. It also allows a
company to change the input data to see how it affects the outcome. This is
beneficial when a company is trying to determine how much material or labor to apply
to various aspects of its business. For example, a company might realize that if it
hires 10 employees it can make 25 gadgets, but if it hires 15 employees it can
produce 40 gadgets.
32. • Also known as Executive’s Support System (ESS)
• Considered to be a specialized form of DSS or they are integrated
along with DSS.
• Mainly focuses on graphical display and easy-to-use interfaces
• Designed for senior managers at strategic levels for decision making
• It consists of workstations with menus, interactive graphics, and
communications capabilities that can be used to access historical and
competitive data from internal corporate systems and external
databases .
• Because ESS are designed to be used by senior managers who often
have little, if any, direct contact or experience with computer-based
information systems, they incorporate easy-to-use graphic interfaces.
• Strong reporting and drill-down capabilities
• Can track critical aspects.
Executive’s Information System
(EIS)
33. Executive’s Information System
(EIS)
• Also called as Executive Support System (ESS) is a reporting tool
that allows you to turn your organization's data into useful
summarized reports. These reports are generally used by executive
level managers for quick access to reports coming from all company
levels and departments such as billing, cost accounting , staffing,
scheduling, and sometimes even from external sources.
• In addition to providing quick access to organized data from
departments, some Executive Support System tools also provide
analysis tools that predicts a series of performance outcomes over
time using the input data. This type of ESS is useful to executives as
it provides possible outcomes and quick reference to statistics and
numbers needed for decision-making.
• ESS are designed to incorporate data about external events, such
as new tax laws or competitors, but they also draw summarized
information from internal MIS and DSS. They filter, compress, and
track critical data, displaying the data of greatest importance to
senior managers.
34. • For example, an ESS can provide a senior manager, on
his desktop, a minute-to-minute view of the firm’s
financial performance as measured by working capital,
accounts receivable, accounts payable, cash flow, and
inventory.
• ESS employ the most advanced graphics software and
can present graphs and data from many sources.
• Often the information is delivered to senior executives
through a portal, which uses a Web interface to present
integrated personalized business content from a variety
of sources.
36. • Advantages:
– Easy to use for upper level executives
– No technical skill set required
– Strong drill down capabilities
– High implementation cost
– Not effective for small organizations
Executive’s Information System
(EIS)
37. Enterprise Resource Planning
(ERP)
• ERP is an acronym for Enterprise Resource Planning
• ERP software integrates the various business functions into one
complete system to streamline processes and information across
the entire organization.
• The central feature of all ERP systems is a shared database that
supports multiple functions used by different business units.
• In practice, this means that employees in different divisions—for
example, accounting and sales—can rely on the same information
for their specific needs.
• We can simply define ERP as System or software that used to
manage all the resources of the whole enterprise. Right from
employee payments to a single screw coming into the enterprise,
everything can be managed & tracked by using ERP Systems.
38. • There are many vendors in the market which are providing
traditional ERP solutions .Though implementation platforms or
technologies are different, there are common & basic modules of
ERP which can be found in any ERP System. Depending on
organizations need required components are integrated &
customized ERP system is formed.
All the below-mentioned modules can be found in an ERP system:
• Human Resource
• Inventory
• Sales & Marketing
• Purchase
• Finance & Accounting
• Customer Relationship Management(CRM)
• Engineering/ Production
• Supply Chain Management (SCM)
39.
40. • Each component mentioned above is specialized to
handle the defined business processes of the
organization.
• ERP is a cross-functional software that supports all the
business processes within the organization.
• In an organization, ERP helps to manage business
processes of various departments & functions through
the centralized application.
• We can make all the major decisions by screening the
information provided by ERP.
41. • Main objectives are
– Integrates all business processes under single roof
– Improves efficiency,accuracy and productivity
– Reduce operational and administrative costs
– Decreased costs lead to increased profits
– Streamlines the workflow and processes
Enterprise Resource Planning
(ERP)
42. Impact of IT on Organizations
1)IT reduces the number of middle
managers and experts.
2)IT changes the manager’s job
3)IT will eliminate jobs
4)IT impacts Employees at work
43. IT reduces the number of
middle managers and experts.
• It makes IT managers more productive
• Consequently IT reduces the number of
middle managers.
44. IT changes the manager’s job
• Decision making is the most important
managerial task
• IT changes the way managers make
decisions.
– IT provides near-real-time information
– Managers have less time to make decision
– IT provides tools to assist in decision making
45. Will IT eliminate jobs?
• The competitive advantage of replacing
people with IT and machines is increasing
rapidly.
• Increasing the use of IT in business also:
– Creates new job categories
– Requires more employees with IT knowledge
and skill
46. IT impacts Employees at work
• IT impacts employees’ health and safety
– Job stress
– Long term use of the keyboard and mouse
• IT provides opportunities for people with
disabilities
– Speech recognition for employees unable to
type due to physical impairment
– Audible screen tips for employees who are
visually impaired
47. Importance of IS to Society
• IT affects our quality of life
• The Robots revolution is here now
• Improvements in Healthcare
48. IT affects our Quality of Life
• IT has changed the way we work
– Smartphones provide constant access to
text,email and voice communications.
– The lines between time at work and leisure
time at home have become blurred.
– Rather than 9 to 5 job, its 24 hour job but with
convenience at home rather than going to
office.
– Surveys indicate employees take laptops and
smartphones on vacation.
49. The Robots revolution is here
now
• Robotics used in Industry:
– Manufacturing
– Hospitals
– Farming Operations
• Robotics used in the home:
– Roomba to vacuum our floors
– Looj to clean our gutters
– Verro to clean our pools
– Scooba to wash our floors
50. Improvements in Healthcare
• IT used in Healthcare :
– Expert systems make better/faster diagnoses
– Monitor critically ill patients more accurately
– Streamline the process of researching and
developing new drugs
– Machine Vision to enhance the work of
radiologists
– Allow surgeons to use virtual reality to plan
complex surgeries and use robots to perform
surgery(Robotic Surgeries)
51. Organizational Strategy,Competitive
Advantage and Information Systems
• IS can be strategic…it can provide
competitive advantage if used properly.
• Competitive advantage refers to any
assets that provide an organization with an
edge against its competitors in some
measures such as cost, quality or speed.
52. • There are many pressures that affect an
organization. A knowledgeable strategy
will help an organization handle those
pressures and make its survival possible.
• A strategy will be an integration of
information systems and efforts of the
employees to achieve competitive
advantage.
53. Business pressures
• Business environment is a combination of
social, legal, political, economic factors in
which businesses conduct their operations.
Significant changes in any of these factors
are likely to create business pressures on
organizations
• The three major types of business pressures
are market, technology and societal
pressures.
55. • Technology Pressures
1)Technological innovation
• Rapid creation of substitute products
2)Information overload
• (search engines and data mining tools)
56. • Societal/Political/Legal Pressures
• Green IT,energy conservation steps,computer
power management,solar enabled
machines,carbon management
• Compliance with Government Regulations
57. Porter five forces model is a strategy model proposed by Porter which
provides a framework for assessing and analysing the competitive strength
and position of a company.
58. Porters Value chain model
• A value chain is a chain of activities for a firm operating in a specific industry. The
product passes through each activity in the value chain and gains some value at each
stage. It is a powerful tool for strategic planning
