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INFORMATION SYSTEM
Learning Objectives
Explain who uses information systems in a typical organization.
Understand what information systems are. Identify several types of information
systems commonly found in organizations and describe their purpose.
Key Issues 6 Departments (Horizontal flow) 3 Management Levels (Vertical flow) Computer Based Information System (CBIS)
How are organizations structured? Information whether computer-based or
not – has to flow within an organization in a way that will help managers, and the organization, achieve their goals.
To this end, organizations are often structured horizontally and vertically.Horizontally to reflect functionsVertically to reflect management levels
Organized by Department/FunctionMost Organizations have departments that perform 6 functions.
1. Research and Development (R&D)○ Conduct basic research, relating organization’s current or new
products.○ It does product development and tests and modifies new products or
services
2. Production (Manufacturing)○ Makes the product or provides the services.○ Takes the raw materials and turn them into finished goods.
3. Marketing and Sales○ Oversees advertising, promotion, and sales○ Plan , price , advertise, promote, package and distribute the services
or goods to customers
4. Accounting and Finance Handle all finance matters such as cash management, pays bills
and taxes, issues paychecks, records payments, make investment, make financial report.
5. Human Resources (Personnel) Handle with personnel matters Hire people, administer sick leave and retirement, compensation
level, professional development, employee relation, government regulations.
6. Information Systems (IS) Manage the organization’s computer-based systems and plans for
and purchases new ones.
Management Level
Organized by Management Level
ExecutiveLevel
Middle Level
Operational Level
Managers are usually classified into 3 categories: executive, middle, and operational.
These positions are often pictured as a pyramid to illustrate their usual ratio and hierarchical ranking With executive managers fewer in number and at the top of
the pyramid Operational managers greater in number and at the bottom
of the pyramid. Middle managers usually fall between the other two types of
managers, although with the increased use of information systems and other technological advances, the middle-management level is becoming less essential and has begun to disappear in some organizations. This trend is referred to as the flattening of the organizational structure.
Management Levels
Management levels are reflected in the organization chart.
An organization chart is a schematic drawing showing the hierarchy of formal relationships among an organization’s employees.
Managers on each of the three levels have different levels of responsibility and are required to make different kinds of decisions.
What are the characteristics for each level?
Operational Level
Operational Level (Lower Manager)
Where the routine day-to-day interaction with customers occurs
Dealing with Supervising and Controlling Information system
Automates repetitive activitiesImproves efficiency of the customer interface
Decisions Repetitive
Operational Level
ExecutiveLevel
Managerial Level
Operational Level
Who: Foremen or Supervisors
What: Automate routine andrepetitive activities and
events
Why IS: Improve OrganizationalEfficiency
Middle Level
Managerial Level (Middle Manager)
Where functional managers monitor operations
Dealing with Organizing and Staffing Information system
Provides summary information of operational activities
Decisions Moderately complexTime horizon up to a few years
Managerial Level
ExecutiveLevel
Managerial Level
Operational Level
Who: Mid-level Managers andFunctional Managers
What: Automate the Monitoring andControlling of Operational
Activities
Why IS: Improve OrganizationalEffectiveness
Executive Level
Executive Level (Top Manager)
Where long-term strategic issues are decided
Dealing with Planning Information systems
Aggregate summariesStatistical analyses, trends, and projections
Decisions Very complex Long-term ramifications
Top Level Title
CEO Chief Executive Officer
President
CFO Chief financial officer Vice president
COO Chief operating officer Vice president
CIO Chief information officer
Vice president
Executive Level
ExecutiveLevel
Managerial Level
Operational Level
Who: Executive-level ManagersCEO, CIO, CFO, COO
What: Aggregate Summaries of PastOrganizational Data andProjections of the Future
Why IS: Improve OrganizationalStrategy and Planning
Who Uses Information Systems?
Executive managers: strategic decisions
Middle managers: tactical decisions
Operational managers: operational decisions geared toward meeting short-term objectives
Nonmanagement workers: on-the-job decisions
COMPUTER BASED INFORMATION
SYSTEM (CBIS)
What Is an Information System?
Information system: system used to generate information to support users in an organization.
It is a collection of people, hardware, software, data, and procedures that interact to generate information to support users in an organization.
In the early days of commercial computing, businesses purchased computers almost exclusively to perform routine processing tasks related to business transactions, such as processing orders and payments. Used in this manner, the computers cut clerical expenses
considerably As time passed, it became apparent that the computer
could do much more than just transaction processing – it could also provide information to assist managers in their decision making role. As data analysis tools and information systems continue to
improve such as the data mining tools and the powerful business analytics tools – they are becoming and increasingly important and valuable business component.
By using information systems, managers spend less time gathering facts but have access to more information when making their decisions.As a result, managers have more time to do
the things they do best – thinking creatively and interacting with people.
Types of Information Systems
Transaction Processing Systems (TPS) Decision Support Systems (DSS) Executive Information Systems (EIS) Office Automation (OA)Artificial Intelligence (AI)
Transaction Processing Systems (TPS)
Transactions: events that occur as a regular part of business day-to-day operations
TPS
It is a computer-based information system that keeps track of the transactions needed to conduct business.
Activities of TPS
A transaction includes everything concerning the product or service in which the organization is engaged:Production, distribution, sales, orders.Material purchased, employees hired, taxes
paid, payroll processing, sales, and so on.
EX
Point of Sale Stock Sale report
DSS
DSS
It is a computer-based information system that support decision making.EX: A bank loan officer verifying the credit of a
loan applicant.
EX: airlines developed a DSS, the yield management system, that helps managers decide how much to overbook and how to set prices for each seat so that a plane is filled and profits are maximized.
EX: investors in comercial real estate use a DSS to forecast property values up to 40 years into the future, based on income, expense, and cash-flow projections.
Executive Information System (EIS)
EIS
An executive support system (ESS) An executive information system (EIS) It is a special type of DSS specifically
targeted to upper management. It is an easy-to-use DSS made
especially for strategic managers and specifically supports strategic decision making.
It is a type of management information system intended to facilitate and support the information and decision making needs of senior executives by providing easy access to both internal and external information relevant to meeting the strategic goals of the organization.
It is commonly considered as a specialized form of a Decision Support System (DSS).
Activities of EIS
Executive-level decision-making Structuring or modifying business plans and
strategies Monitoring internal and external events, and
resources Economic trends studying and research Business forecasting Crisis management Staffing and labor relations
OAS
Office Automation System It combines various technologies to
reduce the manual labor required in operating an efficient office environment and to increase productivity.
Office Automation System
Develop documents Word processing
Desktop publishing
Schedule resources Electronic calendars
Communicate Electronic and voice mail
Fax
Video conferencing
Groupware
Artificial Intelligence (AI)
AI
Artificial intelligence (AI), a group of related technologies used for developing machines to emulate human qualities, such as learning, reasoning, communicating, seeing, and hearing.
Today there are main areas of AI:
(1) expert systems,
(2) natural language processing,
(3) pattern recognition,
(4) intelligent agents,
(5) virtual reality and simulation devices,
(6) robotics.
Expert System An expert system, or knowledge-based
system, is a set of interactive computer programs that helps users solve problems that would otherwise require the assistance of a human expert.
Expert systems are created on the basis of knowledge collected on specific topics from human specialists, and they imitate the reasoning process of a human being.
Ex: Medical diagnosis
Natural language processing Natural language processing is the study
of ways for computers to recognize and understand human language, whether in spoken or written form.Natural languages are ordinary human
languages, such as English.Major advances in natural language
processing have occurred in speech recognition, in which computers translate spoken speech into text.
Pattern Recognition
It involves a camera and software that identify recurring patterns in what they are seeing and recognize the connections between the perceived patterns and similar patterns stored in a database.Such as facial-recognition software allows
computers to identify faces.Video surveillance cameras have been used
to pick out suspicious individual in crowds.Robot vision
Intelligent Agent
How do you find information in the vast sea of the internet?As one solution, computer scientists have
been developing so-called intelligent agent is a form of software with built-in intelligence that monitors work patterns, asks questions, and performs work tasks on your behalf.
EX: shopping robots used in online shopping. Also known as bots or network agents, these search the internet and online databases for information and bring the results back to you.
Virtual Reality (VR) It is a computer-generated artificial reality,
projects a person into a sensation of three-dimensional space.
It enables you To see three-dimensionality.to hear sounds not only near each ear but also in
various places all around you.The glove has sensors for collecting data about your
hand movements.Once you are wearing this equipment, software gives
you interactive sensory feelings similar to real-world experiences.
Simulator It is device that represent the behavior of
physical or abstract systems.Virtual-reality simulation technologies are applied
a great deal in training.For instance, to train bus drivers, they create
lifelike bus control panels and various scenarios such as icy road conditions.
They are used to train pilots on various aircraft and to prepare air-traffic controllers for equipment failures.
Architects create virtual walkthroughs of the structures they are designing.
Robotics
Robotics is the development and study of machines that can perform work that is normally done by people.
Robots are also used for more exotic purposes such as doing inspections and cleanups, checking for land mines.