What is an information system?
• An information system is an organized combination of people, hardware, software, and data resources that collects, transforms, and disseminates information in an organization.
• Information system is an organizational and management solution, based on information technology, to a challenge posed by the environment.
Why study information systems?
• An end-user perspective– Enhance personal productivity, and the
productivity of their work groups and department.
– Increase your opportunities for success:• be aware of the management problems and
opportunities presented by the information technology.
Why study information systems?
• An enterprise perspective: Information systems play a vital role in the business success of an enterprise.– Efficient operations– Effective management– Competitive advantage
Information System is a major functional area of business
• A major part of the resources of an enterprise and its cost of doing business.
• An important factor affecting operational efficiency, employee productivity, customer service, etc.
• A major source of information needed to promote effective decision making.
• An important ingredient in developing competitive products and services that give an organization a strategic advantage in the marketplace.
• A challenge career opportunity.
Business Are Becoming Internetworked Enterprises
• The internet and Internet-like networks (intranets and extranets) have become the primary information technology infrastructure that supports the business operations of many organizations.
• Electronic commerce:– The buying and selling, and marketing and servicing of
products, services, and information over a variety of computer networks.
• Globalization:– Global markets, global production facilities, global partners,
global competitors, global customers.
Techies might finally be able to move into top management
• More Chief Information Officers (CIOs) are reporting directly to CEOs.
• More CIOs are being included on management committees.
• In a recent survey of executives at capital market firms, 89% believed that technology managers would assume greater responsibilities.
What Is Information System?
• Fundamental roles of information systems
• Types of Information Systems
• Information System Activities
• Components of an Information System
Fundamental roles of information systems
• Support of business operations.
• Support of managerial decision making.
• Support of strategic competitive advantage:– Business process reengineering.– Competitive strategies:
• cost strategies
• differentiation strategies
• etc
Functional Business Information Systems
ProductionOperations
ProductionOperations
MarketingMarketing
Human ResourceManagement
Human ResourceManagement
FinanceFinanceAccountingAccounting
FunctionalBusinessSystems
Targeted Marketing on the Web p 233
• Community: virtual communities• Content: advertising banner placed on various
website pages• Context: advertising appears only in web pages
that are relevant to the product• Demographic/Psychogrphic: income, age,
education• Online behaviors: tracking techniques such as
cookies
Push/Pull
• Internet push marketing:– Email marketing– Web page personalization
• Internet pull marketing– Product web page
Customer Relationship Management
• It costs six times more to sell to a new customer than to sell to an existing one.
• A typical dissatisfied customer will tell eight to ten people about his or her experience.
• A company can boost its profit 85% by increasing its annual customer retention by only 5%.
• The odds of selling a product to a new customer are 15%, whereas the odds of selling to an existing customer are 50%.
• 70% of complaining customers will do business with the company again if it quickly takes care of a service snafu.
Customer Relationship Management
SalesCross-SellUp-SellTeleSales
Store Frontand FieldService
Marketing andFulfillment
CustomerService andSupport
Retentionand LoyaltyPrograms
Customer
Contact Management
Cross-Functional Enterprise Systems
• Systems that cross the boundaries of traditional business functions in order to reengineer and improve vital business processes all cross the enterprise.– Share information resources– Improve the efficiency and effectiveness of
business processes.
Enterprise Resource Planning
• ERP is a cross-functional enterprise system that integrates many of the business processes that must be accomplished within the manufacturing, logistics, distribution, accounting, finance, and human resources functions of a business.
Enterprise Resource Planning
SalesDistribution,OrderManagement
Accountingand Finance
ProductionPlanning
Human Resources
IntegratedLogistics
Customer/Employee
Support of Managerial Decision Making
• Structured decision– The information requirements are known
precisely– The criteria for making decision are known– The quality of a decision can be measured
precisely
• Unstructured decision
Manager + Computer(DSS)
Solution
ComputerSolution
ManagerSolution
Structured Semistructured Unstructured
DEGREE OF PROBLEM STRUCTUREDEGREE OF PROBLEM STRUCTURE
The DSS Focuses on Semistructured ProblemsThe DSS Focuses on Semistructured Problems
Information Systems for Strategic Advantage
Competitive forces model by Michael Porter
Threat of New Entrants
Bargaining Powerof Suppliers
Bargaining Powerof Customers
Rivalry amongExisting Competitors
Threat of SubstituteProducts
Competitive Strategies
• Cost leadership strategy.• Product differentiation strategy.• Innovation strategy: Finding new way of doing
business.• Alliance strategy: Establish alliances with
customer, suppliers, competitors, other company.• Growth strategy: expanding, diversifying,
integrating.
Strategic Roles for Information Systems
• Improving business operations• Promoting business innovation• Locking in customers and suppliers
– Interorganizational IS, EDI, automatic inventory replenishment system
• Creating switching costs– make customers dependent on the continued use of
innovative IS.• Raising barriers to entry
– discourage competitors from entering a market
Strategic Uses of Information Technology
ImprovingBusinessProcess
PromoteBusinessInnovation
Locking in Customers and Suppliers
Use IT to reduce costs of doing business
•Use IT to improve quality•Use IT to link business to customers and suppliers
Use IT to create new products or services
EnhanceEfficiency
Create NewBusiness Opportunities
Maintain ValuableCustomers and Relationships
Strategy
IT Role
Outcome
Types of Information Systems
• Operations support systems– Transaction processing systems– Office automation systems
• Management support systems– Management information systems– Decision support systems– Executive support systems
• Strategic information systems– Can be TPS, MIS, DSS, etc.– Systems that help an organization to meet strategic
objectives
Transaction Processing Systems
• Support day-to-day business operations
• batch processing, online processing
• large amount of data, high processing speed, high reliability, accuracy, and security (fault tolerant)
• Data: internal, historical, detailed
Examples of TPS
• Order entry system
• Billing system
• Accounts receivable system
• Accounts payable system
• Payroll system
• General ledger system
Management Information Systems(Information Reporting Systems)
• Facilitate management control by producing summarized reports that compare actual performance against planned performance on a regular and recurring basis.
• Management control: Ensuring that performance meets established standards.
Information System Activities
• Input of data resources
• Processing of data into information– calculating, comparing, sorting, classifying,
and summarizing
• Output of information products
• Storage of data resources
Hardware• Input devices
• CPU and primary storage– RAM - temporary storage– Processor
• Control Unit - decoder
• Arithmetic & Logic Unit (ALU)
– Machine cycle:• fetch instruction
• decode instruction
• execute instruction
• place results in memory
Hardware• Microcomputers
– personal computing, workstation,network server.
• Minicomputers– Departmental and workgroup systems,
network server, workstation.
• Mainframes– Enterprisewide systems, transaction
processors
• Networked computer systems
Local area network• Peer-to-peer network:
– no dedicated server
– allow file sharing with password protection
• Client/Server network– at least one computer as dedicated server
– improved security, performance
– Network Operating System (NOS), Windows NT Server
– Downsizing: replacing mainframes by networked micro/minicomputers.
– Upsizing: replacing PC based systems by networked micro/minicomputers.
– Distributed processing.– Client/Server computing.
Hardware Trends
• CPU: Parallel processor systems.• Storage:
– RAID (Redundant Arrays of Inexpensive Disks): Arrays of disk drives that provides a fault tolerant capability by storing multiple copies of data on several disks.
• RAID hardware/RAID software, Mirroring.
– Erasable optical disk.
• Input/output: video and multimedia input/output, voice recognition and response, optical and magnetic recognition.
• Hand-held devices
Software
• System software– Operating system
• Application software– University’s registration system
• Application development software
Operating system functions
– User interface– Resource management (managing hardware)– Task management (managing the
accomplishment of tasks)– File management (managing data and
program files)– Utilities (providing a variety of supporting
services)
Application development software
• Low level language
• High level language– Third generation– Fourth generation– Fifth generation
Compiler
• Translator: Translate the source program to machine executable code.
• Interpreter: Translate one command at a time.– VBScript, JavaScript
Object-oriented development tools
– graphics-oriented user interface– component programming– event-driven programming– codes are reusable,– Examples, C++, JAVA, VisualBasic.
Portability Java: Write Once Run Anywhere
Java Source Code
Java Byte Code(Intermediate Code)
Java Byte Code
Java Virtual Machine(JVM)
Executable Code
Microsoft’s .Net
• Language must compliance with Common Language Specification, CLS.
• Compile the language into Microsoft Intermediate Language (MSIL) code.
• The MSIL code is then executed in the Common Language Runtime (CLR), which conceptually is same as the JVM, where it is translated into machine code by a compiler.
Microsoft .Net: a new monopoly?
• Web services: – A web service is a collection of functions packaged as a
single entity, published to the network for other application to use.
• Microsoft passport: – An internet authentication service that provides single
sing-on to passport-enabled web sites and services.
• Microsoft hailstorm: – A consumer-oriented, subscription-based internet
services.
Groupware• Electronic messaging.
• Information sharing – Users can access the information, change it,
comment on it, and add new information (at different times)
– Example: Lotus Note.
• Document conferencing (WhiteBoard or Application conferencing)– Allow group members to confer on a
document at the same time.
Groupware
• Audio/video conferencing
• Electronic conferencing– Combining document conferencing with
videoconferencing.
• Group scheduling .
People
• Information specialists– programmer, system analyst, database
administrator, etc.
• End-user:– Menu-level end users– Command-level end users– End-user programmer
• End-user computing
What Stimulated End-User Computing?
• An increase in computing literacy• The information services backlog• Low-cost hardware• User-friendly software
– General-purpose productivity software– Office automation applications– Group wares– Application development software
Traditional Communications Chain
DatabaseAdministrator
UserUserSystemsAnalyst
Programmer Operator ComputerComputer
NetworkSpecialist
IS and EUCThe End-User Computing
Communication Chain
User Computer
InformationSpecialists
SupportSupport
CommunicationCommunication
EUC Risks
• Poorly aimed systems
• Poorly designed/ documented systems
• Inefficient use of information resources
• Loss of data integrity
• Loss of security
Controls for end-user applications
• Thorough documentation of user-developed systems.
• A formal process for evaluating and acquiring new hardware and software.
• Formal testing, security control for access, backup and recovery procedures for all user systems.
Do you think it is wrong to• Copy company’s software for use at home?• 35 % say no.
• Use company equipment like computers to search for a new job?
• 34% say no.
• Blame your own personal errors on technological glitches?
• 39% say no.
• Use office computers to do personal shopping on the Internet?
• 46% say no.
Workplace PCs May Not Be Very Private
• Don’t be fooled: it may be personal, but it is not private.
• Cyber-surveillance: the person most likely to be spying on you is your boss. 27% of businesses surveyed by the American management association said they review employee email.
• Reasons:– Productivity
– Liability
– Network performance
An example of database application
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Major Functions of Database Management
• Creating a database– Analysis: Entity-Relationship Diagram– Design: Design file structure– Implementation
• Accessing a database
• Updating a database
Database Security
• Logical protection:– Illegal access– Illegal update– Virus
• Physical protection
Internet firms flocks to store data in blast-proof British bunker
• Some of Britain’s biggest companies are running their Internet operations on systems installed in a 300-foot-deep nuclear blast-proof bunker.– IRA bombings– Anti-Capitalists