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  1. 1. Chapter 1Introduction toInformationTechnology
  2. 2. Learning Objectives• why organization should invest in IT based solution;• should organizations invest in networking and processing capacity ahead of applications needs, or be driven by the current business;• what level of IT solutions organizations should implement;• major changes that needs to be addressed in terms of organization and management;• different level of activities being performed by various level of managers and their information solutions needs.• the latest trends in Information Technology.
  3. 3. Why organization should invest in IT based solution?• Because the business is changing; competition is changing; and technology is changing.• Because of emergence of: – Globalisation, Liberalisation and Privatisation – Business Process Outsourcing – Knowledge Process Outsourcing – Digital Economy & Knowledge Economy – Organization Level Transformation
  4. 4. Why organization should invest in IT based solution?• Information technology can help all kinds of businesses improve the efficiency and effectiveness of their business processes, managerial decision making, and workgroup collaboration, thus strengthening their competitive positions in a rapidly changing marketplace.• Internet-based systems have become a necessary ingredient for business success in today’s dynamic global environment.• Information technologies are playing an expanding role in business.
  5. 5. What is Information Technology?• Information Technology can be defined as collection of computer hardware, software, databases, networking and telecommunication devices that helps the organisation to manage the business process more effectively and efficiently.• In simple terms one may say, any technological device that helps the organisation in managing its processes more effectively and efficiently qualifies to be part of IT.
  6. 6. Digital Economy• Digital Economy is defined as economy based on Information Technologies including computers, internet, intranets, and extranets.• Allows management of Digitally-enabled relationships with Customers, Suppliers and Employees.
  7. 7. Data, Information & Knowledge• Data is a collection of raw facts and figures. Data is an element of a transaction. Any transaction facts collected about the lifestyle of credit card customers, or point of sales or demographics and geographic are some of the examples of data.• Information is a collection of data (facts & figures) arranged in more meaningful manner, which helps in decision making.• Knowledge is defined as the experience and expertise acquired by an individual. Knowledge can also be defined as level of understanding in interpreting the information available for effective decision making purpose.
  8. 8. System• System can be defined as group of entities that work together to achieve a common predefined goal. INPUT PROCESS OUTPUT FEEDBACK
  9. 9. Information System• Information system is a set of procedures that collects, process, store and disseminate information to support decision making.• Information systems always have a pre- defined boundary and operate in an environment which includes other systems and also players like customers, suppliers and government departments etc.
  10. 10. Information Technology vs. Information System.• Information Technology is a means to Information System or they are similar to heart and soul relationship.• Information technology provides effective and efficient means of storing, processing and disseminating information.• Information Systems provides best practices to manage business processes. To learn about information systems, one needs to understand the organisation, management and technology.
  11. 11. Components of Information SystemENVIRONMENT Organization Information System INPUT PROCESS OUTPUT FEEDBACKSystem Boundary
  12. 12. Major Characteristics of Information Systems• Intrinsic• Accessibility• Contextual• Representation• Information system needs to be economical to develop and maintain• Information system needs to flexible and adaptable
  13. 13. Uses of Information• Identification• Collection• Controlling• Measuring and• Decision Making
  14. 14. Organizational Structure• Organizations are structured in a many ways, which is dependant on their objectives and culture.• The structure of an organization will determine the manner in which it operates and it’s performance.• Structure allows the responsibilities for different functions and processes to be clearly allocated to different departments and employees.• Organizational structures are created in such a way that it aims at maximizing the efficiency and success of the Organization.• Common organization structures that exist are: Hierarchical, Flat and Matrix.
  15. 15. Functions of Management• Management is creative problem solving which can be accomplished through four functions of management: planning, organizing, directing and controlling.• Planning: Planning is the ongoing process of developing the organizational goals and objectives and determining how they will be accomplished.• Organizing: Organizing also means to establish the internal organizational structure of the organization. The focus is on division, coordination, and control of tasks and the flow of information within the organization.• Directing: Directing also means to influence staff behavior through motivation, communication, group dynamics, leadership and discipline.• Controlling: It is a multi stage process which includes establishing performance standards based on the firms objectives; evaluating and reporting actual job performance; comparing the two, and taking corrective or preventive action as necessary.
  16. 16. MANAGEMENT LEVELS AND MANAGERIAL FUNCTIONS Planning Organization Leading ControlTop Level ManagersMiddle Level ManagersLower Level Managers
  17. 17. Decision Characteristics of Management Levels Decisional Roles Decision CharacteristicsUnstructured Strategic Management (Top Level) In orfSemi- n s m iostructured at Tactical cis io Management n De (Middle Level)Structured Operational Management (Lower Level)
  18. 18. Major Roles of Information Systems Support of Strategic Advantage Support of Managerial Decision Making Support of Business Operations
  19. 19. Types of Information Systems• Transaction Processing System (TPS)• Management Information System (MIS)• Office Automation System (OAS)• Decision Support System (DSS)• Executive Support System (ESS) and• Expert Systems (ES)
  20. 20. Characteristics of Transaction Processing System (TPS)• Serves the Operational Level or lower level management• Performs & records the daily routine transactions• Tasks, resources and goals for TPS are predefined & highly structured• TPS captures data about the organization and its environment• TPS are major producers of information about the organization• TPS failure will result in failure of the organizational system• TPS is often tied to other systems• TPS is a main feeder of data to other information systems• TPS serves the most elementary day-to-day activities of an organization• It can have strategic consequences (eg railway/air reservation system)• It usually has high volumes of input and output• TPS systems are meant to be repetitive and predictable
  21. 21. Characteristic of Management Information System (MIS)• Provide managers with reports and in some cases on-line access to the organization performance• Serves the Management control level• Produce summary reports generated by TPS• Have limited analytical capabilities and use simple models• Address structured questions that are known well in advance• Not very flexible• Rely more on existing organizational data & data flows• Generally past and present oriented• MIS are generally reporting and control oriented• Exception reports
  22. 22. Characteristics of Decision Support System (DSS)• For Semi-structured & Unstructured decisions• For managers at different levels• For groups and individuals• Adaptability and flexibility• Effectiveness, not efficiency• Humans control the machine• Modeling & Knowledge based
  23. 23. Characteristics of Executive Support System (ESS)• Serves the Strategic Level• Address unstructured decisions and involve a generalized computing and communication environment rather than fixed application.• Dependent on internal & external information• Make less use of analytical models• ESS are more oriented towards external events• More graphic oriented• What Business should we be in?• What are the competitors doing?
  24. 24. Office Automation Systems (OAS)• Office Automation Systems (OAS) are information system solutions that try to improve the productivity of employees of an organization.• OAS objective is to create the technology driven environment in an organization and it provides individuals effective ways to process personal and organisational data, perform calculations, and create documents.• They are used for increasing productivity and reducing paper work by processing major work electronically. Communication systems and groupware concepts facilitate implementation of OAS.
  25. 25. Expert Systems (ES)• Expert System (ES) are computer system or program that uses artificial intelligence techniques to solve problems that ordinarily require a knowledgeable human.• Expert Systems help to guide users to find solutions to problems that would otherwise need expert advice.• Expert Systems are useful in diagnosing, monitoring, selecting, designing, predicting and training.
  26. 26. Information Technology Trends• Information technologies are becoming the dominant force in our culture. – Worldwide Internet Use Continues to Expand – e-Business is Here to Stay – Websites are a Necessary Function of Business – Wireless Communication will Increase Significantly – Technically Trained People will be in Demand Worldwide• Information technologies will continue to transform the way we live and work. – IT is Transforming How We Conduct Business – IT is Changing How We Manufacture – IT is Changing the Role of Consumers – IT is Changing How We Travel and Move Goods – IT is Transforming How Our Governments Operate• The pace of change will accelerate. – Nano-technology is the Next New Frontier – Requirement for Service Oriented Architecture – Strong Security systems like Biometric
  27. 27. Summary• Information Technology has become integral part of life.• Organization started investing in technology to remain competitive, individual started learning about technology for their survival.• Information Technology can be simply defined as collection of computing and communication tools that help organization to manage it business processes better.• Major reasons, why organizations started looking at IT based solutions includes, change in methods the way we do businesses; global competition; global opportunities; introduction of concepts like business process outsourcing; emergence of digital economy; shift towards knowledge based economy; change in organization structure; and setting of virtual organization.• Information play an important role in any business, it acts as glue to an organisational process.• Information is always derived from Data, which is a collection of raw facts and figures.• Information is a processed meaningful data that helps in decision making.• Knowledge is a skill required to interpret the information and System is a group of entities that work together to achieve organisational goals.• Information System, which is important component of complete technology solution, can be defined as a set of procedures that collects, process, store and disseminate information to support decision making.• Major characteristics that Information Systems needs to have include – Intrinsic, Accessibility, Contextual, Representation, Flexible, Adaptable, and Economical.• Organizations use Information Systems to manage its business activities and achieve business goals. While implementing IS solutions for an organization it is important to understand the Organizational and Management structures. An organization is a collection of people and other resources that work together to achieve organizational goal. Organizations are similar to systems with inputs, processes and outputs.
  28. 28. Summary• Organizational structure determines how it operates.• Organization structures are created on the basis of their objectives and culture. The common structures are: Hierarchical, Flat and Matrix.• Organizational Culture is important to understand how business processes are being managed by the organisation. The different kinds of cultures being followed by different organisation include – Power, Role, and Task cultures. Most common among these is the Role culture, which splits the organization into various functions and the role is assigned within a function.• Management function needs to be understood wherever human efforts are involved. Typically, most organizations are divided into three management levels: top-level, middle-level and lower-level.• The key function that these managers perform at various levels are Planning, Organizing, Directing, and Controlling.• Top-level managers take decision affecting entire organisation like policy formulation, middle-level managers define action plan as per the formulated policies and the lower-level act as per the defined action plan.• There are six kinds of information systems which are used by different organisations at different levels. These systems are Transaction Processing System (TPS) meant for lower-level managers, Management Information Systems (MIS) meant for middle-level managers, Office Automation System (OAS) helps in bringing IT culture in an organisation by introducing Office support systems, Decision Support System (DSS) meant for senior-middle level executive for semi and un-structured kind of decisions, Executive Support System (ESS) meant for top-level executives for strategic decisions and Expert System (ES) are application specific intelligent systems.• The most important challenge being faced by many organizations is to understand how to integrate these always changing technologies into their business. Technology is evolving faster than the needs of businesses, finding the right application in the current business is the key challenge.