Bitt I 2008 Lec1


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Lecture 1, BITT1 2008

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Bitt I 2008 Lec1

  1. 1. <ul><li>A TUTORIAL </li></ul><ul><li>from Management Information System </li></ul><ul><li>by </li></ul><ul><li>James A. O'Brien and George M. Marakas </li></ul><ul><li>McGraw-Hill </li></ul>
  2. 2. What is a System? <ul><li>A set of interrelated components </li></ul><ul><li>With a clearly defined boundary </li></ul><ul><li>Working together </li></ul><ul><li>To achieve a common set of objectives </li></ul>
  3. 3. What is an Information System? <ul><li>An organized combination of… </li></ul><ul><ul><li>People </li></ul></ul><ul><ul><li>Hardware and software </li></ul></ul><ul><ul><li>Communication networks </li></ul></ul><ul><ul><li>Data resources </li></ul></ul><ul><ul><li>Policies and procedures </li></ul></ul><ul><li>This system… </li></ul><ul><ul><li>Stores, retrieves, transforms, and disseminates information in an organization </li></ul></ul>
  4. 4. Information Technologies <ul><li>Information Systems </li></ul><ul><ul><li>All the components and resources necessary to deliver information and functions to the organization </li></ul></ul><ul><ul><li>Could be paper based </li></ul></ul><ul><li>Information Technologies </li></ul><ul><ul><li>Hardware, software, networking, data management </li></ul></ul><ul><li>Our focus will be on computer-based information systems (CBIS) </li></ul>
  5. 5. Fundamental Roles of IS in Business
  6. 6. Types of Information Systems <ul><li>Operations Support Systems </li></ul><ul><ul><li>Efficiently process business transactions </li></ul></ul><ul><ul><li>Control industrial processes </li></ul></ul><ul><ul><li>Support communication and collaboration </li></ul></ul><ul><ul><li>Update corporate databases </li></ul></ul><ul><li>Management Support Systems </li></ul><ul><ul><li>Provide information as reports and displays </li></ul></ul><ul><ul><li>Give direct computer support to managers during decision-making </li></ul></ul>
  7. 7. Purposes of Information Systems
  8. 8. Operations Support Systems <ul><li>What do they do? </li></ul><ul><ul><li>Efficiently process business transactions </li></ul></ul><ul><ul><li>Control industrial processes </li></ul></ul><ul><ul><li>Support communications and collaboration </li></ul></ul><ul><ul><li>Update corporate databases </li></ul></ul>
  9. 9. Types of Operations Support Systems <ul><li>Transaction Processing Systems </li></ul><ul><ul><li>Record and process business transactions </li></ul></ul><ul><ul><li>Examples: sales processing, inventory systems, accounting systems </li></ul></ul><ul><li>Process Control Systems </li></ul><ul><ul><li>Monitor and control physical processes </li></ul></ul><ul><ul><li>Example: using sensors to monitor chemical processes in a petroleum refinery </li></ul></ul><ul><li>Enterprise Collaboration Systems </li></ul><ul><ul><li>Enhance team and workgroup communication </li></ul></ul><ul><ul><li>Examples: email, video conferencing </li></ul></ul>
  10. 10. Two Ways to Process Transactions <ul><li>Batch Processing </li></ul><ul><ul><li>Accumulate transactions over time and process periodically </li></ul></ul><ul><ul><li>Example: a bank processes all checks received in a batch at night </li></ul></ul><ul><li>Online Processing </li></ul><ul><ul><li>Process transactions immediately </li></ul></ul><ul><ul><li>Example: a bank processes an ATM withdrawal immediately </li></ul></ul>
  11. 11. Management Support Systems <ul><li>What do they do? </li></ul><ul><ul><li>Provide information and support for effective decision making by managers </li></ul></ul><ul><ul><ul><li>Management information systems </li></ul></ul></ul><ul><ul><ul><li>Decision support systems </li></ul></ul></ul><ul><ul><ul><li>Executive information systems </li></ul></ul></ul>
  12. 12. Types of Management Support Systems <ul><li>Management Information Systems (MIS) </li></ul><ul><ul><li>Reports and displays </li></ul></ul><ul><ul><li>Example: daily sales analysis reports </li></ul></ul><ul><li>Decision Support Systems (DSS) </li></ul><ul><ul><li>Interactive and ad hoc support </li></ul></ul><ul><ul><li>Example: a what-if analysis to determine where to spend advertising dollars </li></ul></ul><ul><li>Executive Information Systems (EIS) </li></ul><ul><ul><li>Critical information for executives and managers </li></ul></ul><ul><ul><li>Example: easy access to actions of competitors </li></ul></ul>
  13. 13. Other Information Systems <ul><li>Strategic Information Systems </li></ul><ul><ul><li>Help get a strategic advantage over customer </li></ul></ul><ul><ul><li>Examples: shipment tracking, e-commerce Web systems </li></ul></ul><ul><li>Functional Business Systems </li></ul><ul><ul><li>Focus on operational and managerial applications of basic business functions </li></ul></ul><ul><ul><li>Examples: accounting, finance, or marketing </li></ul></ul>
  14. 14. Developing IS Solutions
  15. 15. Data Versus Information <ul><li>Data are raw facts about physical phenomena or business transactions </li></ul><ul><li>Information is data that has been converted into meaningful and useful context for end users </li></ul><ul><li>Examples: </li></ul><ul><ul><li>Sales data is names, quantities, and dollar amounts </li></ul></ul><ul><ul><li>Sales information is amount of sales by product type, sales territory, or salesperson </li></ul></ul>
  16. 16. IS Activities <ul><li>Input of data resources </li></ul><ul><ul><li>Data entry activities </li></ul></ul><ul><li>Processing of data into information </li></ul><ul><ul><li>Calculations, comparisons, sorting, and so on </li></ul></ul><ul><li>Output of information products </li></ul><ul><ul><li>Messages, reports, forms, graphic images </li></ul></ul><ul><li>Storage of data resources </li></ul><ul><ul><li>Data elements and databases </li></ul></ul><ul><li>Control of system performance </li></ul><ul><ul><li>Monitoring and evaluating feedback </li></ul></ul>
  17. 17. <ul><li>To succeed, a business must develop strategies to counter these forces… </li></ul><ul><ul><li>Rivalry of competitors within its industry </li></ul></ul><ul><ul><li>New entrants into an industry and its markets </li></ul></ul><ul><ul><li>Substitute products that may capture market share </li></ul></ul><ul><ul><li>Bargaining power of customers </li></ul></ul><ul><ul><li>Bargaining power of suppliers </li></ul></ul>Competitive Forces
  18. 18. Competitive Forces and Strategies
  19. 19. <ul><li>Cost Leadership </li></ul><ul><ul><li>Become low-cost producers </li></ul></ul><ul><ul><li>Help suppliers or customers reduce costs </li></ul></ul><ul><ul><li>Increase cost to competitors </li></ul></ul><ul><ul><ul><li>Example: Priceline uses online seller bidding so the buyer sets the price </li></ul></ul></ul><ul><li>Differentiation Strategy </li></ul><ul><ul><li>Differentiate a firm’s products from its competitors’ </li></ul></ul><ul><ul><li>Focus on a particular segment or niche of market </li></ul></ul><ul><ul><ul><li>Example: Moen uses online customer design </li></ul></ul></ul>Five Competitive Strategies
  20. 20. <ul><li>Innovation Strategy </li></ul><ul><ul><li>Unique products, services, or markets </li></ul></ul><ul><ul><li>Radical changes to business processes </li></ul></ul><ul><ul><ul><li>Example: Amazon’s online, full-service customer systems </li></ul></ul></ul><ul><li>Growth Strategy </li></ul><ul><ul><li>Expand company’s capacity to produce </li></ul></ul><ul><ul><li>Expand into global markets </li></ul></ul><ul><ul><li>Diversify into new products or services </li></ul></ul><ul><ul><ul><li>Example: Wal-Mart’s merchandise ordering via global satellite tracking </li></ul></ul></ul>Competitive Strategies (continued)
  21. 21. <ul><li>Alliance Strategy </li></ul><ul><ul><li>Establish linkages and alliances with customers, suppliers, competitors, consultants, and other companies </li></ul></ul><ul><ul><li>Includes mergers, acquisitions, joint ventures, virtual companies </li></ul></ul><ul><ul><ul><li>Example: Wal-Mart uses automatic inventory replenishment by supplier </li></ul></ul></ul>Competitive Strategies (continued)
  22. 22. <ul><li>These strategies are not mutually exclusive </li></ul><ul><ul><li>Organizations use one, some, or all </li></ul></ul><ul><ul><li>A given activity could fall into one or more categories of competitive strategy </li></ul></ul><ul><li>Not everything innovative serves to differentiate one organization from another </li></ul><ul><ul><li>Likewise, not everything that differentiates organizations is necessarily innovative </li></ul></ul>Using Competitive Strategies
  23. 23. <ul><li>Lock in Customers and Suppliers </li></ul><ul><ul><li>Deter them from switching to competitors </li></ul></ul><ul><li>Build in Switching Costs </li></ul><ul><ul><li>Make customers and suppliers dependent on the use of innovative IS </li></ul></ul><ul><li>Erect Barriers to Entry </li></ul><ul><ul><li>Discourage or delay other companies from entering the market </li></ul></ul><ul><ul><li>Increase the technology or investment needed to enter </li></ul></ul>Other Competitive Strategies
  24. 24. <ul><li>Build Strategic IT Capabilities </li></ul><ul><ul><li>Take advantage of strategic opportunities when they arise </li></ul></ul><ul><ul><li>Improve efficiency of business practices </li></ul></ul><ul><li>Leverage Investment in IT </li></ul><ul><ul><li>Develop products and service that would not be possible without a strong IT capability </li></ul></ul>Other Competitive Strategies
  25. 25. <ul><li>Called BRP or simply Reengineering </li></ul><ul><ul><li>Fundamental rethinking and radical redesign of business processes </li></ul></ul><ul><ul><li>Seeks to achieve improvements in cost, quality, speed, and service </li></ul></ul><ul><li>Potential payback is high, but so is risk of disruption and failure </li></ul><ul><li>Organizational redesign approaches are an important enabler of reengineering </li></ul><ul><ul><li>Includes use of IT, process teams, case managers </li></ul></ul>Reengineering Business Processes
  26. 26. BPR Versus Business Improvement
  27. 27. <ul><li>IT plays a major role in reengineering most business processes </li></ul><ul><ul><li>Can substantially increase process efficiencies </li></ul></ul><ul><ul><li>Improves communication </li></ul></ul><ul><ul><li>Facilitates collaboration </li></ul></ul>The Role of Information Technology
  28. 28. <ul><li>Many processes are reengineered with… </li></ul><ul><ul><li>Enterprise resource planning software </li></ul></ul><ul><ul><li>Web-enabled electronic business and commerce systems </li></ul></ul>A Cross-Functional Process
  29. 29. <ul><li>IT that supports this process… </li></ul><ul><ul><li>CRM systems using intranets and the Internet </li></ul></ul><ul><ul><li>Supplier-managed inventory systems using the Internet and extranets </li></ul></ul><ul><ul><li>Cross-functional ERP software to integrate manufacturing, distribution, finance, and human resource processes </li></ul></ul><ul><ul><li>Customer-accessible e-commerce websites for order entry, status checking, payment, and service </li></ul></ul><ul><ul><li>Customer, product, and order status databases accessed via intranets and extranets </li></ul></ul>Reengineering Order Management
  30. 30. <ul><li>Agility is the ability to prosper </li></ul><ul><ul><li>In rapidly changing, continually fragmenting global markets </li></ul></ul><ul><ul><li>By selling high-quality, high-performance, customer-configured products and services </li></ul></ul><ul><ul><li>By using Internet technologies </li></ul></ul><ul><li>An agile company profits in spite of </li></ul><ul><ul><li>Broad product ranges </li></ul></ul><ul><ul><li>Short model lifetimes </li></ul></ul><ul><ul><li>Individualized products </li></ul></ul><ul><ul><li>Arbitrary lot sizes </li></ul></ul>Becoming an Agile Company
  31. 31. How IT Helps a Company be Agile
  32. 32. Network Concepts <ul><li>A network is an interconnected or interrelated chain, group, or system </li></ul><ul><li>The number of possible connections on a network is N ( N – 1) or N 2 – N </li></ul><ul><ul><li>N = number of nodes (points of connection) </li></ul></ul><ul><ul><li>Example: 10 computers on a network = 10(10 –1) = 10x9 = 90 possible connections </li></ul></ul>
  33. 33. Internet Networking Technologies <ul><li>Internet networking technologies are being used as technology platform </li></ul><ul><ul><li>Web browser suites </li></ul></ul><ul><ul><li>HTML Web page editors </li></ul></ul><ul><ul><li>Network management software </li></ul></ul><ul><ul><li>Firewalls </li></ul></ul><ul><li>Being applied in Internet, intranet, and extranet applications </li></ul><ul><li>Reinforces previous move toward client/server networks based on open-systems architecture </li></ul>
  34. 34. Middleware <ul><li>Middleware </li></ul><ul><ul><li>A general term for any programming that mediates between two separate programs </li></ul></ul><ul><ul><li>Allows a particular database to access other databases without custom programming </li></ul></ul><ul><li>Commonly known as the “plumbing” of an information system </li></ul><ul><ul><li>It routes data and information between back-end data sources and end user applications </li></ul></ul><ul><ul><li>An essential component of any IT infrastructure </li></ul></ul>
  35. 35. The Internet Revolution <ul><li>The Internet has become a global information superhighway </li></ul><ul><ul><li>Millions of smaller, private networks operating independent of, or in harmony with, each other </li></ul></ul><ul><ul><li>10 servers in 1991 to over 46 million today </li></ul></ul><ul><ul><li>Sustained growth in excess of 1 million servers per month </li></ul></ul><ul><ul><li>No central computer system </li></ul></ul><ul><ul><li>No governing body </li></ul></ul><ul><ul><li>Based on common standards </li></ul></ul>
  36. 36. Business Use of the Internet
  37. 37. The Role of Intranets <ul><li>Many companies have sophisticated and widespread intranets, offering… </li></ul><ul><ul><li>Detailed data retrieval </li></ul></ul><ul><ul><li>Collaboration </li></ul></ul><ul><ul><li>Personalized customer profiles </li></ul></ul><ul><ul><li>Links to the Internet </li></ul></ul><ul><li>Intranets use Internet technologies </li></ul><ul><ul><li>Web browsers and servers </li></ul></ul><ul><ul><li>TCP/IP network protocols </li></ul></ul><ul><ul><li>HTML publishing and databases </li></ul></ul>
  38. 38. Intranets <ul><li>Intranets are protected by… </li></ul><ul><ul><li>Passwords </li></ul></ul><ul><ul><li>Encryption </li></ul></ul><ul><ul><li>Firewalls </li></ul></ul><ul><li>Customers, suppliers, and other business partners can access an intranet via extranet links </li></ul>
  39. 39. Business Value of Intranets <ul><li>Intranets support </li></ul><ul><ul><li>Communications and collaboration </li></ul></ul><ul><ul><li>Business operations and management </li></ul></ul><ul><ul><li>Web publishing </li></ul></ul><ul><ul><li>Intranet portal management </li></ul></ul>
  40. 40. Intranets as Information Portals
  41. 41. Extranets <ul><li>Network links that use Internet technologies to connect the intranet of a business to the intranets of another </li></ul><ul><li>Virtual Private Networks </li></ul><ul><ul><li>Direct private network links, or private secure Internet links between companies </li></ul></ul><ul><li>Unsecured Extranet </li></ul><ul><ul><li>Link between a company and others via the Internet, relying on encryption of sensitive data and firewall security systems </li></ul></ul>
  42. 42. Extranet Connectivity
  43. 43. Business Value of Extranets <ul><li>Web browser technology makes customer and supplier access to intranets easier and faster </li></ul><ul><li>Another way to build and strengthen strategic relationships </li></ul><ul><li>Enables and improves collaboration between a business, customers, and partners </li></ul><ul><li>Facilitates online, interactive product development and marketing </li></ul>
  44. 44. Types of Communications Networks <ul><li>Primary types of communications networks </li></ul><ul><ul><li>Wide Area </li></ul></ul><ul><ul><li>Local Area </li></ul></ul><ul><ul><li>Virtual Private </li></ul></ul><ul><ul><li>Client/Server </li></ul></ul><ul><ul><li>Peer-to-peer </li></ul></ul>
  45. 45. Wide Area Network (WAN) <ul><li>Telecommunication network that covers a large geographic area </li></ul>
  46. 46. Local Area Network (LAN) <ul><li>Connects computers within a limited physical area, such as an office, classroom, or building </li></ul>
  47. 47. Virtual Private Networks (VPN) <ul><li>Used to establish secure intranets and extranets </li></ul><ul><ul><li>The Internet is the main backbone network </li></ul></ul><ul><ul><li>Relies on network firewalls, encryption, and other security features to build a “pipe” through the Internet </li></ul></ul><ul><ul><li>Creates a private network without the high cost of a separate proprietary connection </li></ul></ul>
  48. 48. Virtual Private Network
  49. 49. <ul><li>A virtual company uses IT to link… </li></ul><ul><ul><li>People </li></ul></ul><ul><ul><li>Organizations </li></ul></ul><ul><ul><li>Assets </li></ul></ul><ul><ul><li>Ideas </li></ul></ul><ul><li>Inter-enterprise information systems link… </li></ul><ul><ul><li>Customers </li></ul></ul><ul><ul><li>Suppliers </li></ul></ul><ul><ul><li>Subcontractors </li></ul></ul><ul><ul><li>Competitors </li></ul></ul>Creating a Virtual Company
  50. 50. A Virtual Company
  51. 51. <ul><li>Basic business strategies </li></ul><ul><ul><li>Share information and risk with alliance partners </li></ul></ul><ul><ul><li>Link complimentary core competencies </li></ul></ul><ul><ul><li>Reduce concept-to-cash time through sharing </li></ul></ul><ul><ul><li>Increase facilities and market coverage </li></ul></ul><ul><ul><li>Gain access to new markets and share market or customer loyalty </li></ul></ul><ul><ul><li>Migrate from selling products to selling solutions </li></ul></ul>Virtual Company Strategies
  52. 52. Logical Data Elements
  53. 53. Logical Data Elements <ul><li>Character </li></ul><ul><ul><li>A single alphabetic, numeric, or other symbol </li></ul></ul><ul><li>Field or data item </li></ul><ul><ul><li>Represents an attribute (characteristic or quality) of some entity (object, person, place, event) </li></ul></ul><ul><ul><ul><li>Examples: salary, job title </li></ul></ul></ul><ul><li>Record </li></ul><ul><ul><li>Grouping of all the fields used to describe the attributes of an entity </li></ul></ul><ul><ul><ul><li>Example: payroll record with name, SSN, pay rate </li></ul></ul></ul>
  54. 54. Logical Data Elements <ul><li>File or table </li></ul><ul><ul><li>A group of related records </li></ul></ul><ul><li>Database </li></ul><ul><ul><li>An integrated collection of logically related data elements </li></ul></ul>
  55. 55. Electric Utility Database
  56. 56. Database Structures <ul><li>Common database structures… </li></ul><ul><ul><li>Hierarchical </li></ul></ul><ul><ul><li>Network </li></ul></ul><ul><ul><li>Relational </li></ul></ul><ul><ul><li>Object-oriented </li></ul></ul><ul><ul><li>Multi-dimensional </li></ul></ul>
  57. 57. Hierarchical Structure <ul><ul><li>Early DBMS structure </li></ul></ul><ul><ul><li>Records arranged in tree-like structure </li></ul></ul><ul><ul><li>Relationships are one-to-many </li></ul></ul>
  58. 58. Network Structure <ul><ul><li>Used in some mainframe DBMS packages </li></ul></ul><ul><ul><li>Many-to-many relationships </li></ul></ul>
  59. 59. Relational Structure <ul><li>Most widely used structure </li></ul><ul><ul><li>Data elements are stored in tables </li></ul></ul><ul><ul><li>Row represents a record; column is a field </li></ul></ul><ul><ul><li>Can relate data in one file with data in another, if both files share a common data element </li></ul></ul>
  60. 60. Relational Operations <ul><li>Select </li></ul><ul><ul><li>Create a subset of records that meet a stated criterion </li></ul></ul><ul><ul><ul><li>Example: employees earning more than $30,000 </li></ul></ul></ul><ul><li>Join </li></ul><ul><ul><li>Combine two or more tables temporarily </li></ul></ul><ul><ul><li>Looks like one big table </li></ul></ul><ul><li>Project </li></ul><ul><ul><li>Create a subset of columns in a table </li></ul></ul>
  61. 61. Multidimensional Structure <ul><li>Variation of relational model </li></ul><ul><ul><li>Uses multidimensional structures to organize data </li></ul></ul><ul><ul><li>Data elements are viewed as being in cubes </li></ul></ul><ul><ul><li>Popular for analytical databases that support Online Analytical Processing (OLAP) </li></ul></ul>
  62. 62. Multidimensional Model
  63. 63. Object-Oriented Structure <ul><li>An object consists of </li></ul><ul><ul><li>Data values describing the attributes of an entity </li></ul></ul><ul><ul><li>Operations that can be performed on the data </li></ul></ul><ul><li>Encapsulation </li></ul><ul><ul><li>Combine data and operations </li></ul></ul><ul><li>Inheritance </li></ul><ul><ul><li>New objects can be created by replicating some or all of the characteristics of parent objects </li></ul></ul>
  64. 64. Object-Oriented Structure Source: Adapted from Ivar Jacobsen, Maria Ericsson, and Ageneta Jacobsen, The Object Advantage: Business Process Reengineering with Object Technology (New York: ACM Press, 1995), p. 65. Copyright @ 1995, Association for Computing Machinery. By permission.
  65. 65. Object-Oriented Structure <ul><li>Used in object-oriented database management systems (OODBMS) </li></ul><ul><li>Supports complex data types more efficiently than relational databases </li></ul><ul><ul><li>Examples: graphic images, video clips, web pages </li></ul></ul>
  66. 66. Evaluation of Database Structures <ul><li>Hierarchical </li></ul><ul><ul><li>Works for structured, routine transactions </li></ul></ul><ul><ul><li>Can’t handle many-to-many relationship </li></ul></ul><ul><li>Network </li></ul><ul><ul><li>More flexible than hierarchical </li></ul></ul><ul><ul><li>Unable to handle ad hoc requests </li></ul></ul><ul><li>Relational </li></ul><ul><ul><li>Easily responds to ad hoc requests </li></ul></ul><ul><ul><li>Easier to work with and maintain </li></ul></ul><ul><ul><li>Not as efficient/quick as hierarchical or network </li></ul></ul>
  67. 67. Database Development <ul><li>Database Administrator (DBA) </li></ul><ul><ul><li>In charge of enterprise database development </li></ul></ul><ul><ul><li>Improves the integrity and security of organizational databases </li></ul></ul><ul><ul><li>Uses Data Definition Language (DDL) to develop and specify data contents, relationships, and structure </li></ul></ul><ul><ul><li>Stores these specifications in a data dictionary or a metadata repository </li></ul></ul>
  68. 68. Data Dictionary <ul><li>A data dictionary </li></ul><ul><ul><li>Contains data about data (metadata) </li></ul></ul><ul><ul><li>Relies on specialized software component to manage a database of data definitions </li></ul></ul><ul><li>It contains information on.. </li></ul><ul><ul><li>The names and descriptions of all types of data records and their interrelationships </li></ul></ul><ul><ul><li>Requirements for end users’ access and use of application programs </li></ul></ul><ul><ul><li>Database maintenance </li></ul></ul><ul><ul><li>Security </li></ul></ul>
  69. 69. Entity Relationship Diagram