Mis

Foundations of Information Systems

Why should you study information systems?How does a firm use information systems?

What are the components of an information system?

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Why study Information Systems and Information Technology?

Vital component of successful businessesHelps businesses expand and competeBusinesses use IS and IT

To improve efficiency and effectiveness of business processes

For managerial decision making

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What is a system?

A system Is a set of interrelated componentsWith a clearly defined boundaryWorking together to achieve a common set of

objectives

“A system is an orderly grouping of interdependent components linked together according to a plan to achieve a specific objective”

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Characteristics of a System

OrganizationInteractionInterdependenceIntegrationCentral Objective

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Elements of a System

Input and OutputProcessorControlFeedbackEnvironmentBoundaries and Interface

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Types of SystemsPhysical or AbstractOpen or Closed

o Characteristics of Open System Input from outside Entropy Process, output and cycles Differentiation Equifinality

“man-made” information systemso Formal Information Systemso Informal Information Systemso Computer-Based Information Systems

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What is a system(again)?

A system Is a set of interrelated componentsWith a clearly defined boundaryWorking together to achieve a common set of

objectivesBy accepting inputs and producing outputs in an

organized transformation process

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Systems have three basic functions:

Input involves capturing and assembling elements that enter the system to be processed

Processing involves transformation process that convert input into output

Output involves transferring elements that have been produced by the transformation process to their ultimate destination

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A business as a system

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Data versus Information

Data are raw facts about physical phenomena or business transactions

Information is data that has been converted into meaningful and useful context for end users

Example:Sales data is names, quantities and dollar

amountsSales information is amount of sales by product

type, sales territory or salesperson

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What is an Information System?

An organized combination of PeopleHardwareSoftwareCommunications networksData resourcesPolicies and procedures

That stores, retrieves, transforms, and disseminates information in an organization

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Components of an ISPeople

End users: the people who use the IS or the information from the IS

IS specialists: the people who develop and operate IS

Hardware ResourcesAll physical devices used in information processingMachines, data media, peripherals

Software ResourcesAll information processing instructions including

programs and proceduresSystem software, application software and

procedures

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Components of an IS (cont.)

Data ResourcesFacts about the business transactionsProcessed and organized informationDatabases of organized data

Network ResourcesCommunications mediaNetwork infrastructure: hardware and softwareThe Internet, intranets and extranets

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Information System (IS) versus Information Technology (IT)

IS is all the components and resources necessary to deliver information and functions to the organization

IT is hardware, software, networking and data management

In theory, IS could be paper based But we will focus on Computer-Based

Information Systems (CBIS)

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IS Function represents

Major functional area of businessImportant contributor to operational efficiency,

employee productivity, morale, customer service and satisfaction

Major source of information and support for effective decision making

Vital ingredient in developing competitive products and services in the global marketplace

Dynamic and challenging career opportunityKey component of today’s networked business

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Information systems model

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What should a Business Professional know about IS?

Foundation Concepts: fundamental behavioral, technical, business and managerial concepts

Information Technology: Hardware, software, networks, data management and Internet-based technology

Business Applications: Major uses of the IS in the organization

Development Processes: How to plan, develop and implement IS to meet business opportunities

Management Challenges: The challenges of effectively and ethically managing IT

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IS Knowledge Framework for Business Professionals

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What does IS do for a business?

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Business Applications expanding role over time

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Types of IS

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Operations support systems

What are they?Efficiently process business transactionsControl industrial processesSupport communications and collaborationUpdate corporate databases

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Types of Operations Support Systems

Transaction Processing SystemsRecord and process data from business

transactionsExamples: sales processing, inventory systems,

accounting systemsProcess Control Systems

Monitor and control physical processesExample: in a petroleum refinery use sensors to

monitor chemical processesEnterprise Collaboration Systems

Enhance team and work group communicationsExamples: e-mail, videoconferencing

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Two ways to process transactions

Batch Processing:Accumulate transactions over time and process

periodicallyExample: a bank processes all checks received

in a batch at nightOnline Processing:

Process transactions immediatelyExample: a bank processes an ATM withdrawal

immediately

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Management Support Systems

What are they?Provide information and support for effective

decision making by managers

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Types of Management Support Systems

Management Information Systems (MIS)Provide reports and displays to managersExample: daily sales analysis reports

Decision Support Systems (DSS)Provide interactive ad hoc support for decision

makingExample: A what-if-analysis to determine where

to spend advertising dollarsExecutive Information Systems (EIS)

Provide critical information for executives and managers

Example: easy access to actions of competitors

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Operational or Management Systems

Expert SystemsProvide expert adviceExample: credit application advisor

Knowledge Management SystemsSupport creation, organization and dissemination

of business knowledge throughout companyExample: Intranet access to best business

practices

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Classifications of IS by scope

Functional business systemsFocus on operational and managerial applications of

basic business functionsExamples: support accounting, finance or marketing

Strategic information systemsHelp get a strategic advantage over its customersExamples: shipment tracking, e-commerce web

systemsCross-functional information systems

Systems that are combinations of several types of information systems

Provide support for many functions

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Challenges and Opportunities of IT

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Measuring success of an IS

EfficiencyMinimize cost, time and use of information

resourcesEffectiveness

Support business strategiesEnable business processesEnhance organizational structure and culture Increase the customer and business value

What’s the difference between Efficiency and Effectiveness?

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Developing IS Solutions

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Ethical challenges of IT applications

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Ethical responsibilities

What uses of IT might be considered improper or harmful to other individuals or society?

What is the proper business use of the Internet or a company’s IT resources?

How can you protect yourself from computer crime?

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IS Activities

Input of data resourcesData entry activities

Processing of data into informationE.g., calculate, compare, sort, classify, summarize

Output of information productsMessages, reports, forms and graphic images

Storage of data resourcesData elements and databases

Control of system performanceMonitoring and evaluating feedback

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Recognizing IS

As a business professional, you should be able to look at an IS and identifyThe people, hardware, software, data and

network resources they useThe type of information products they produceThe way they perform input, processing, output,

storage and control activities

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Case : Aviall Inc.From Failure to Success with IT

Supplier of airplane parts and componentsHad lost track of its inventory

Price-tracking software didn’t work with inventory control or purchasing forecasting

Sent wrong parts to wrong customersSales falling

Needed a middleware vision: get all the software to work together

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Case Study Questions

1. Why do you think that Aviall failed in their implementation of an airplane parts and components inventory control system?

2. How ahs information technology brought new business success to Aviall? How did IT change Aviall’s business model?

3. How could other companies use Aviall’s approach to the use of IT to improve their business success? Give several examples.