© Paradigm Publishing, Inc. 10-1

Chapter 10 Information Systems

Chapter 10Information Systems

© Paradigm Publishing, Inc. 10-2

Presentation Overview

• The Role of an Information System• Information Systems Classified by Function• Planning and Updating Information System

s• Choosing a New Information System• The Process of Developing a New Informati

on System

© Paradigm Publishing, Inc. 10-3

The Role of an Information System

An information system is a combination of people, hardware, software, computer networks, and data that organizations use to manage daily and long-term operations.

© Paradigm Publishing, Inc. 10-4

The Role of an Information System

What role do information systems play in business?

Computer-based information systems offer four key advantages over traditional information systems.

• Improved speed• Improved efficiency• Improved quality• Improved measurability

© Paradigm Publishing, Inc. 10-5

Information Systems Classified by Function

What are some common functional classifications for information systems?– Distribution management– Office information– Management information– Decision support– Executive support– Factory automation

© Paradigm Publishing, Inc. 10-6

Information Systems Classified by Function

Distribution Management Systems– Designed to deliver products quicker, cheaper,

and with fewer errors. – The major advantage provided by this type of

system is the reduction of inventory overhead.

© Paradigm Publishing, Inc. 10-7

Information Systems Classified by Function

In a traditional inventory system, regularly scheduled deliveries move products from warehouse storage to storerooms until they are needed to stock the shelves.

© Paradigm Publishing, Inc. 10-8

Information Systems Classified by Function

In a just-in-time distribution system, deliveries are smaller and more frequent so that products are only in the storeroom briefly.

© Paradigm Publishing, Inc. 10-9

Information Systems Classified by Function

In a stockless inventory distribution system, deliveries move products from warehouse storage directly to the shelves with no need for a storeroom.

© Paradigm Publishing, Inc. 10-10

Information Systems Classified by Function

Office Information System (OIS)– Used to automate office work.– Typically provides the following functions

• Maintaining standard operating procedures• Connectivity• Electronic data processing

© Paradigm Publishing, Inc. 10-11

Information Systems Classified by Function

Management Information System (MIS)– Provides information that assists in the

management of business operations.– Typically

• Integrates information from different departments or functions into one database

• Provides support to management in the form of regular reports

© Paradigm Publishing, Inc. 10-12

Information Systems Classified by Function

Decision Support SystemHelps managers make informed business judgments.

• Data modeling provides a simulation of a real-world situation built into a software application.

• A expert system is a sophisticated DSS that attempts to model an expert’s knowledge of a topic.

• An online analytical processing (OLAP) system defines and clarifies methods of handling what-if questions posed to large databases.

© Paradigm Publishing, Inc. 10-13

Information Systems Classified by Function

Executive Support System (ESS)– Attempts to bring together information from an

entire organization, not just one department or group.

– Supports strategic decision-making by facilitating the creation of high-level summary reports.

© Paradigm Publishing, Inc. 10-14

Information Systems Classified by Function

Factory Automation and Plant Operations– A computer-aided manufacturing (CAM)

system involves the direct use of computers to manufacture products.

– A computer-integrated manufacturing (CIM) system connects all departments in a manufacturing company.

– A statistical quality control (SQC) system assesses how well a factory is operating.

© Paradigm Publishing, Inc. 10-15

Planning and Updating Information Systems

What are the effects of upgrading or switching to a computer-based IS?

– Expanded technical staff– Increased information technology costs– Increased profit margins– Enhanced product quality– Reduced clerical staff– Temporary disruption

© Paradigm Publishing, Inc. 10-16

Choosing a New Information System

What are important factors to consider when choosing a new IS?

– User interface design– Open versus closed system– Niche information system– Turnkey system– System support

© Paradigm Publishing, Inc. 10-17

Choosing a New Information System

• User Interface Design– The interface design should be user-friendly

and intuitive.– Critical information should be readily apparent.

• Open or Closed System?– In an open system, the company’s IT staff can

alter the system or hire a third party to do so.– A closed system must be supported by the

original vendor.

© Paradigm Publishing, Inc. 10-18

Choosing a New Information System

Niche Information System– Serves a specially focused set of customers.– Does not require a lot of training or

technological know-how.– Can be expensive and tends to lag

technologically.

© Paradigm Publishing, Inc. 10-19

Choosing a New Information System

Turnkey System– Contains everything a business needs to get a

new IS up and running.– Usually the best and most expensive.– The services of support people are included.

© Paradigm Publishing, Inc. 10-20

Choosing a New Information System

System Support– Ask whether or not installation, staff training,

and on-site service and repair are included in the package.

– If they are not, these extra costs must be factored into calculations of the total cost.

© Paradigm Publishing, Inc. 10-21

The Process of Developing a New Information System

The development of information systems follows an ongoing cycle that includes planning, design, implementation, and support.

© Paradigm Publishing, Inc. 10-22

The Process of Developing a New Information System

Gantt charts help to visually communicate the critical steps and schedule for a project.

© Paradigm Publishing, Inc. 10-23

The Process of Developing a New Information System

Designing the System– The functional specification document states

exactly what the IS must accomplish.• This document is usually written first.

– The design specification spells out how these goals will be reached.

© Paradigm Publishing, Inc. 10-24

The Process of Developing a New Information System

Commonly Used Information Systems Software

© Paradigm Publishing, Inc. 10-25

The Process of Developing a New Information System

Implementation– A prototype is a miniprogram that

demonstrates how the system works.• This step is sometimes skipped.

– In the development stage, software programming is done and the technicians ensure that the hardware works.

– Before any system can be installed, hardware and software must be purchased.

© Paradigm Publishing, Inc. 10-26

The Process of Developing a New Information System

Implementation– Once the system is installed, it undergoes beta

testing—a period of rigorous testing to ensure that the system functions as designed.

– User training often occurs at the same time.– Finally, the system must be approved by the

committee or executive overseeing its purchase.

© Paradigm Publishing, Inc. 10-27

The Process of Developing a New Information System

The Support Stage– A system goes into the support stage after it has

been accepted and approved.– A support contract allows users to contact the

systems integrator for technical support, training, and on-site troubleshooting.

© Paradigm Publishing, Inc. 10-28

On the Horizon

Based on the information presented in this chapter and your own experience, what do you think is on the horizon?