2. Types of Information Systems
Computer-Based Information Systems
The IT architecture and IT infrastructure
provide the basis for all information
systems in
the organization. Recall that an
information system (IS) collects,
processes, stores, analyzes,
and disseminates information for a
specific purpose.
3. A computer-based information
system
(CBIS) is an information system that
uses computer technology to perform
some or
all of its intended tasks. Although not all
information systems are computerized,
today
most are. For this reason the term
information system (IS) is typically
used synonymously
with computer-based information system.
4. The basic components of
information systems are:
Hardware
Software
A database
A network
7. Enterprise resource planning
(ERP) systems
are designed to correct a lack of
communication among the functional area ISs.
ERP systems were an important innovation
because the various functional area ISs were
often developed as standalone systems and did
not communicate effectively (if at all) with one
another.
ERP systems resolve this problem by tightly
integrating the functional area ISs via a common
database.
8. A transaction processing
system (TPS)
supports the monitoring, collection, storage,
and
processing of data from the organization’s basic
business transactions, each of which generates
data.
For example, when you are checking out of
Wal-Mart, each time the cashier swipes an
item across the bar code reader, that is one
transaction.
The TPS collects data continuously, typically in
real time—that is, as soon as the data are
generated—and provides the input data for the
corporate databases.
9. interorganizational
information systems (IOSs)
Information systems that connect two or more
organizations
IOSs support many interorganizational
operations,
of which supply chain management is the best
known. An organization’s supply
chain describes the flow of materials,
information, money, and services from suppliers
of raw material
through factories and warehouses to the end
customers.
11. Office automation systems
(OASs) typically support the clerical staff,
lower and middle
managers, and knowledge workers.
These employees use OASs to develop
documents (word
processing and desktop publishing software),
schedule resources (electronic calendars), and
communicate (e-mail, voice mail,
videoconferencing, and groupware).
12. Functional area information
systems (FAISs)
summarize data and prepare reports,
primarily
for middle managers but sometimes for
lower-level managers as well.
Because these reports typically concern a
specific functional area, report generators
(RPGs) are an important type of
functional area IS.
13. Business intelligence (BI)
systems
provide computer-based support for
complex, nonroutine
decisions, primarily for middle managers
and knowledge workers. (They also
support
lower-level managers, though to a lesser
extent.)
These systems are typically used with a
data warehouse and allow users to
perform their own data analysis.
14. Expert systems (ESs)
attempt to duplicate the work of human
experts by applying reasoning capabilities,
knowledge, and expertise within a specific
domain.
These systems are primarily designed to
support knowledge workers.
15. Dashboards (also called digital
dashboards)
support all managers of the organization.
They provide rapid access to timely
information and direct access to
structured information
in the form of reports.
16. Competitive Advantage and
Strategic Information Systems
A competitive strategy is a statement that
identifies a business’s strategies to compete, its
goals,
and the plans and policies that will be required
to carry out those goals (Porter, 1985).
Through
its competitive strategy, an organization seeks a
competitive advantage in an industry.
That is, it seeks to outperform its competitors
in some measure such as cost, quality, or speed.
19. The threat of entry of new competitors. The
threat of new competitor entry is high
when it is easy to enter your market and low
when significant barriers to entry exist. An
entry barrier is a product or service feature
that customers have learned to expect from
organizations in a certain industry. This feature
must be offered by a competing organization
for it to survive in the marketplace.
20. The bargaining power of
suppliers.
Supplier power is high when buyers have
few
choices from whom to buy and low when
buyers have many choices. Therefore,
organizations
would rather have more potential
suppliers to be able to better negotiate
price,
quality, and delivery terms.
21. The bargaining power of
customers (buyers).
Buyer power is high when buyers have many
choices from whom to buy and low when
buyers have few choices.
For example, in the past,
students had few places from which to buy
their textbooks (typically, one or two campus
bookstores).
As a result, students had low buyer power.
Today, students have a multitude of choices to
choose from, and as a result, student buyer
power has greatly increased.
22. The threat of substitute products
or services.
If there are many substitutes for an
organization’s
products or services, then the threat of
substitutes is high. If there are few
substitutes,
then the threat is low.
Today, new technologies create
substitute products very rapidly.
23. The rivalry among existing firms
in the industry.
The threat from rivalry is high when
there is intense competition among many
firms in an industry.
The threat is low when the competition
is among fewer firms and is not as
intense.
24. Porter’s Value Chain Model
Although the Porter competitive forces
model is useful for identifying general
strategies, organizations use his value
chain model (1985) to identify specific
activities where they can use competitive
strategies for greatest impact.
The value chain model also shows points
where an organization can use
information technology to achieve
competitive advantage.
25. Porter’s Value chain primary
activities
1. Inbound logistics (inputs)
2. Operations (manufacturing and
testing)
3. Outbound logistics (storage and
distribution)
4. Marketing and Sales
5. Services
27. Strategies for Competitive
Advantage
Cost leadership strategy.
◦ Produce products and/or services at the lowest cost in the
industry.
Differentiation strategy.
◦ Offer different products, services, or product features.
Innovation strategy.
◦ Introduce new products and services, add new features to
existing products and services, or develop new ways to produce
them.
Operational effectiveness strategy.
◦ Improve the manner in which internal business processes are
executed so that a firm performs similar activities better than its
rivals.
Customer-orientation strategy.
◦ Concentrate on making customers happy.
