Foundation Of Information Systems In Business


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Foundation Of Information Systems In Business

  1. 1. Foundation Of Information Systems In Business
  2. 2.  Understand the concept of a system and how it relates to information systems.
  3. 3. What Is An Information System?  An Information System can be any organized combination Of: - people, - hardware, - software, - communications networks, - policies.
  4. 4. What Is An Information System? (continued)  People rely on modern information systems to communicate using a variable: - physical devices (hardware). - information processing instruction and procedures (software). - communications channels (network). - stored data (data resources).
  5. 5. How Information Systems Are TransformingHow Information Systems Are Transforming BusinessBusiness  Increase in cell phone usage,  Increase in Internet usage,  Internet shoping,  Online payment,  Advertisement on the Internet,  Awareness of prices,  Etc.
  6. 6. • Businesses invest in IT to achieve six important business objectives 1. Operational excellence 2. New products, services, and business models 3. Customer and supplier intimacy 4. Improved decision making 5. Competitive advantage 6. Survival Business Drivers of Information SystemsBusiness Drivers of Information Systems The Role of Information Systems in Business Today
  7. 7. Operational Excellence:Operational Excellence:  Improved efficiency results in higher profits  Information systems and technologies help improve efficiency and productivity  Efficiency: It is the using resources in such a way as to maximize the production of goods and services. The Role of Information Systems in Business Today
  8. 8. • Information systems and technologies enable firms to create new products, services, and business models • Business model: How a company produces, delivers, and sells its products and services • Product: Any commercial good. • Service: Non-material equivalent of a good in economics and marketing. New products, services, and business models:New products, services, and business models: The Role of Information Systems in Business Today
  9. 9. New products, services, and business models:New products, services, and business models: The Role of Information Systems in Business Today With its stunning multitouch display, full Internet browsing, digital camera, and portable music player, Apple’s iPhone set a new standard for mobile phones. Other Apple products have transformed the music and entertainment industries.
  10. 10. • Customers who are served well become repeat customers who purchase more • Mandarin Oriental hotel • Uses IT to foster an intimate relationship with its customers, keeping track of preferences, etc. • Close relationships with suppliers result in lower costs • JCPenney • IT to enhance relationship with supplier in Hong Kong Customer and supplier intimacy:Customer and supplier intimacy: The Role of Information Systems in Business Today
  11. 11. • Real-time data improves ability of managers to make decisions. • Data may be about: • Production, • Selling, • Customer complain, • problems, • Etc. Improved decision making:Improved decision making: The Role of Information Systems in Business Today
  12. 12. The Role of Information Systems in Business Today Information Builders’ digital dashboard delivers comprehensive and accurate information for decision making. The graphical overview of key performance indicators helps managers quickly spot areas that need attention.
  13. 13. • Often results from achieving previous business objectives • Advantages over competitors: • Charging less for superior products, • Better performance, and • Better response to suppliers and customers Competitive advantage:Competitive advantage: The Role of Information Systems in Business Today
  14. 14. The Role of Information Systems in Business Today In a Toyota factory, the assembly line produces a superior product in less time, using less inventory, and having fewer defects than the competition. Toyota uses information systems to monitor inventory levels and manage production scheduling.
  15. 15. • Businesses may need to invest in information systems out of necessity; simply the cost of doing business • Keeping up with competitors • Citibank’s introduction of ATMs • Federal and state regulations and reporting requirements • Toxic Substances Control Act and the Sarbanes- Oxley Act Survival:Survival: The Role of Information Systems in Business Today
  16. 16. Perspectives on Information Systems and Information Technology • Information technology: The hardware and software a business uses to achieve objectives • Information system: Interrelated components that manage information to: • Support decision making and control • Help with analysis, visualization, and product creation • Data: Streams of raw facts • Information: Data shaped into meaningful, useful form What Is an Information System?What Is an Information System?
  17. 17. The Fundamental Roles Of Information System In Business There are three fundamental reasons: 1. Support of its business processes and operations.( like keeping inventories record or payment details etc.) 2. Support of decision making by its employees and managers. 3. Support of its strategies for competitive advantage.
  18. 18. Trends In Information Systems: 1. Data processing: 1950s – 1960s - electronic data processing systems -- transaction processing, record keeping, and traditional accounting applications. 2. Management reporting: 1960s – 1970s - management information systems -- management reports of pre specified information to support decision making.
  19. 19. Cont. 3. Decision support: 1970s – 1980s - decision support systems 4. Strategic and User Support: 1980s – 1990s - end user computing systems - executive information systems - expert systems - strategic information systems
  20. 20. Electronic Business and Commerce: 1990s – 2000s - internet based e business and e commerce systems  Many business today are using internet technologies to Web enable business process and to create innovative e business application.
  21. 21. Types Of Information Systems Operations Support Systems Specialized Processing Systems Transaction Processing Systems Process Control Systems Enterprise Collaboration Systems
  22. 22. Management Support Systems Management Information Systems Decision Support Systems Executive Informatio n Systems Specialized Processing Systems
  23. 23. Types of IS
  24. 24. Different kinds of systemsDifferent kinds of systems  Operational-level systems  Knowledge-level systems • Information systems that monitor the elementary activities and transactions of the organization .(like TPS) • Information systems that support knowledge and data workers in an organization. (KWS, OAS)
  25. 25.  Management-level systems  Strategic-level systems • Information systems that support the monitoring, controlling, decision making, and administrative activities of middle managers. (DSS, MIS) • Information systems that support the long-range planning activities of senior management . (EIS)
  26. 26. Major Types of Systems  Executive Support Systems (ESS)Executive Support Systems (ESS)  Decision Support Systems (DSS)Decision Support Systems (DSS)  Management Information Systems (MIS)Management Information Systems (MIS)  Knowledge Work Systems (KWS)Knowledge Work Systems (KWS)  Office Automation Systems (OAS)Office Automation Systems (OAS)  Transaction Processing Systems (TPS)Transaction Processing Systems (TPS)
  28. 28.  Transaction Processing Systems (TPS)Transaction Processing Systems (TPS) • Basic business systems that serve the operational levelBasic business systems that serve the operational level • A computerized system that performs and records theA computerized system that performs and records the daily routine transactions necessary to the conduct ofdaily routine transactions necessary to the conduct of the businessthe business • EXAMPLE:EXAMPLE: payroll, accounts payablepayroll, accounts payable
  29. 29. TYPICAL TPS APPLICATIONS Sales & Marketing Systems  MAJOR FUNCTIONS OF SYSTEMS:  Sales Management ;  Market Research ;  Promotion ; Pricing ; New Products  MAJOR APPLICATION SYSTEMS:  Sales Order Info System ;  Market Research System ;  Pricing System
  30. 30. TPS  Manufacturing Plant scheduling  Material movement control  Machine control  Finance  Securities trading  Cash management
  31. 31.  Accounting  Payroll  Account payable  Account receivable  Human Resources  Compensation  Training & development  Employee record keeping
  32. 32.  KWS – knowledge work systems Information systems that aid knowledge workers in the creation and integration of new knowledge in the organization . Example: Engineering work station
  33. 33.  OAS – office automation systems  Computer systems, such as word processing, electronic mail systems, and scheduling systems, that are designed to increase the productivity of data workers in the office .
  34. 34.  MIS – Management Information Systems  Information systems at the management level of organization that serve the functions of planning, controlling, and decision making by providing routine summary and exception reports.  Example: Annual budgetingExample: Annual budgeting
  35. 35. MIS • Structured and semi-structured decisionsStructured and semi-structured decisions • Report control orientedReport control oriented • Past and present dataPast and present data • Internal orientationInternal orientation
  36. 36.  DSS – Decision Support Systems  Information systems at the management level of an organization that combine data and sophisticated analytical models to support non- routine decision making. Example:Example: Contract cost analysisContract cost analysis
  37. 37. MIS & DSSMIS & DSS  Sales and marketing  Sales management  Sales region analysis  Manufacturing  Inventory control  Production scheduling
  38. 38. Finance  Annual budgeting  Cost analysis  Accounting  Capital investment analysis  Pricing / profitability analysis Human Resource  Relocation analysis  Contract cost analysis
  39. 39.  ESS – Executive Support Systems  Information system at the organization’s strategic level designed to address unstructured decision making through advanced graphics and communications Example: 5-year operating planExample: 5-year operating plan
  40. 40. ESSESS  Sales and marketing  Sales trend forecasting  Manufacturing  Operating plan  Finance  Budget forecasting  Accounting  Profit planning  Human Resource  Personnel planning
  41. 41. Characteristics of Different Types of InformationCharacteristics of Different Types of Information SystemsSystems  Information inputs  Processing  Information outputs  Users
  42. 42. Systems from a Functional PerspectiveSystems from a Functional Perspective  SALES & MARKETING SYSTEMS  MANUFACTURING & PRODUCTION SYSTEMS  FINANCE & ACCOUNTING SYSTEMS  HUMAN RESOURCES SYSTEMS
  43. 43. 43 Sales and MarketingSales and Marketing SystemsSystems
  44. 44. 44 Manufacturing and ProductionManufacturing and Production SystemsSystems
  45. 45. 45 Financing and AccountingFinancing and Accounting SystemsSystems
  46. 46. 46 Human ResourceHuman Resource SystemsSystems