An information system is any organized combination of people, hardware, software, networks, and policies that collects, manages and disseminates information to support business processes and decision making. There are different types of information systems that support various levels and functions within an organization, including transaction processing systems, knowledge work systems, office automation systems, management information systems, decision support systems, and executive information systems. Businesses invest in information systems to achieve objectives like operational excellence, new products and services, customer intimacy, improved decision making, competitive advantage, and organizational survival.

1. Foundation Of Information Systems
In Business

2.  Understand the concept of a system and how it relates to
information systems.

3. What Is An Information System?
 An Information System can be any organized combination
Of:
- people,
- hardware,
- software,
- communications networks,
- policies.

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. 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. • 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. 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. • 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. 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. • 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. • 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. 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. • 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. 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. • 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. 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. 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. 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. 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. 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. Types Of Information Systems
Operations Support
Systems
Specialized
Processing Systems Transaction
Processing
Systems
Process Control
Systems
Enterprise
Collaboration
Systems

22. Management
Support Systems
Management
Information
Systems
Decision
Support
Systems
Executive
Informatio
n Systems
Specialized
Processing
Systems

23. Types of IS

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.  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. 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)

27. MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS

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. 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. TPS
 Manufacturing
Plant scheduling
 Material movement control
 Machine control
 Finance
 Securities trading
 Cash management

31.  Accounting
 Payroll
 Account payable
 Account receivable
 Human Resources
 Compensation
 Training & development
 Employee record keeping

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.  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.  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. 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.  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. MIS & DSSMIS & DSS
 Sales and marketing
 Sales management
 Sales region analysis
 Manufacturing
 Inventory control
 Production scheduling

38. Finance
 Annual budgeting
 Cost analysis
 Accounting
 Capital investment analysis
 Pricing / profitability analysis
Human Resource
 Relocation analysis
 Contract cost analysis

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. ESSESS
 Sales and marketing  Sales trend
forecasting
 Manufacturing  Operating plan
 Finance  Budget forecasting
 Accounting  Profit planning
 Human Resource  Personnel planning

41. Characteristics of Different Types of InformationCharacteristics of Different Types of Information
SystemsSystems
 Information inputs
 Processing
 Information outputs
 Users

42. Systems from a Functional PerspectiveSystems from a Functional Perspective
 SALES & MARKETING SYSTEMS
 MANUFACTURING & PRODUCTION SYSTEMS
 FINANCE & ACCOUNTING SYSTEMS
 HUMAN RESOURCES SYSTEMS

43. 43
Sales and MarketingSales and Marketing SystemsSystems

44. 44
Manufacturing and ProductionManufacturing and Production SystemsSystems

45. 45
Financing and AccountingFinancing and Accounting SystemsSystems

46. 46
Human ResourceHuman Resource SystemsSystems