lesson 5: information systems presentation

Lesson 5: Information Systems

Fundamentals of Information Technology

Knowing the potential impact of information

systems and having the ability to put this knowledge

to work can result in success in organizations

reaching their goals…

System users, business managers, and

information systems professionals must work

together to build a successful information

system

Levels of Management in Organizations:(Information Needs & Decision Making)

Source: Essentials of Management Information SystemsSource: Essentials of Management Information Systems

Need information to make strategic (long term) decisions

Need information to make tactical(short term) decisions

Need information to make operational (daily) decisions

What is an Information System?

1. …a set of interrelated components that collect, manipulate, and disseminate data and information and provide feedback to meet an objective…Businesses can use information systems to increase revenues and reduce costs. (Star & Reynolds, 2011)

2. …an organized combination of people, hardware, software, communication networks, data and procedures that stores, retrieves, transforms, and disseminate information in an organization.

Roles of Information Systems in Business Support business processes and operations for lower level management Support decision making for middle management Support strategies for competitive advantage for top level management

Categories of Information Systems

Manual Information System Computer-based Information System

Example:Using filing cabinets in

hospitals to store records of patients is a manual information system

Example: Using a school

management system to register university students and follow their progress throughout each term would be an example of a computerized information system

Computer-Based Information Systems-Technology Infrastructure

…all hardware, software, databases, telecommunications,

people, and procedures configured to collect, manipulate, store, and

process data into information

Source: Principles of Information Systems, Tenth Edition

Components of a Computer-Based Information Systems

Computer-Based Information Systems (CBIS) Hardware:

Consists of computer equipment used to perform input, processing, and output activities

Software: Consists of the computer

programs that govern the operation of the computer

Database: Organized collection of

facts and information, typically consisting of two or more related data files

• Telecommunications networks and the Internet

• The electronic transmission of signals for communications

People: The most important element

in most computer-based information systems

Procedures: Include strategies, policies,

methods, and rules for using the CBIS

Types of Information Systems in BusinessTransaction Processing SystemsManagement Information Systems Decision Support SystemsOffice Automation Systems

Information Systems at Different Levels of Management

• ESS: ESS: Helps address strategic issues and long-term trends, both in firm and in external environment.

• MIS & DSS: MIS & DSS: Helps with monitoring, controlling, decision making, and administrative activities.

• TPS: TPS: Keeps track of basic activities and transactions of organization (e.g., sales, receipts, deposits, withdrawals, payroll, flow of materials in a factory).).

Transaction Processing Systems :

– Transaction:Any business-related

exchange, such as payments to employees and sales to customers

– Transaction Processing System (TPS): Organized collection of people, procedures, software, databases, and devices used to record completed business transactions

– Serve operational managers.– Principal purpose is to answer routine

questions and to track the flow of transactions through the organization.

– Example: inventory questions, granting credit to customer, performing deposits & withdrawals

– Monitor status of internal operations and firm’s relationship with external environment.

– Major producers of information for other systems.

– Highly central to business operations and functioning.

Two types of Transaction Processing Systems (TPS)Batch TPS:

Batch processing involves processing several transactions at the same time, and the results are not immediately available when the transaction is being entered. There is a time delay. Transactions are accumulated over a period and processed in groups at a date in the future. For example, IS used in payroll systems

Online TPS (OLTP):Processes data as soon as it becomes available. There is no time

delay. It processes transactions in real time. This is used for systems in which time is critical. For example, IS used in an airline reservation system

Management information system (MIS):

Organized collection of people, procedures, software, databases, and devices that provides routine information to managers and decision makers

• Provide middle managers with reports on firm’s performance to monitor firm and help predict future performance.

• Produces summaries and reports on basic operations using data collected from a TPS.

• Provide weekly, monthly, annual results, but may enable drilling down into daily or hourly data.

• Typically not very flexible systems with little analytic capability.

Decision Support System (DSS):

Used to support problem-specific decision makingUsed when problem is complex and information

needed to determine appropriate action is difficult to obtain

For example, an IS that is used daily by managers to develop bids contracts

This relies on both internal and external data to make decisions.

It does not make the final decision but will operate more as a guide to managers

Exper t systems:

Give computer ability to make suggestions and function like an expert in a particular field

Virtual reality: Simulation of a real or

imagined environment that can be experienced visually in three dimensions

• Tools that capture the expertise of knowledge workers and provide advice to non-experts in a given field.

Executive Suppor t Systems (ESS):

• Serve senior managers information to make strategic decisions.

• Address strategic issues and long-term trends.

E.g., Five years plan for product diversification?

• handles non-routine informational problems.

• Provide generalized computing capacity that can be applied to changing array of problems.

• Draw summarized information from MIS, DSS, and data from external events.

• Typically use portal with Web interface to present content.

Table 1.5: Showing major components of an ESS


Implications: Information Systems (IS) in Society, Business, and Industry

Have been developed to meet the needs of all types of organizations and people

Speed and widespread use opens users to a variety of threats from unethical people

Security, Privacy, and Ethical Issues in Information Systems and the InternetDrawbacks of information systems:

Personal data, including Social Security and credit card numbers, can be lost or stolen

To protect against threats to your privacy and data: Install security and control measures

Use of information systems: Raises work concerns, including job loss through increased

efficiency

Enterprise Systems for Functional Areas in Organizations

Enterprise systems are used at all levels of management and work across several functional areas in the organization.

Functional areas and operating divisions of business:Finance and accountingSales and marketingManufacturingHuman resource managementLegal information systemsDistribution and Logistics

Enterprise Systems

Sales and MarketingMajor Function: Sales management, market research,

promotion, pricing, new productsMajor Applications:

1. Point of Sale Terminals in supermarkets2. Inventory systems for stock control3. Sales Ordering systems4. Marketing research system5. Pricing System

IS in Sales and Marketing

Accounting and Finance Major Function: Accounts Receivable (Credit Sales), Accounts

Payable (Credit Purchases), Budgeting, General Ledger, Billing, Payroll

Major Applications:General LedgerAccounts ReceivableAccounts PayableBudgeting

IS in Accounting and Finance

Human ResourceMajor Function: Personnel records, Employee Benefits,

Compensation, Labor Relations, Professional Development Training

Major Application:Payroll, Employee RecordsEmployee Benefit SystemsPersonnel Training Systems

IS in Human Resource

Information Systems in IndustryBelow is a list of industries in which IS can be used:

Airline industryInvestment firmsBanksTransportation industryPublishing companiesHealthcare maintenance organizationsRetail companiesPower management and utility companiesProfessional servicesManagement consulting firms

SourcesLaudon, K. and Laudon, J. (2013). Essentials of Essentials of

Management Information Systems. New York Management Information Systems. New York University. PearsonUniversity. Pearson

Star, R. and Reynolds, G. (2011). Principles of Information Systems, Tenth Edition. Cengage Learning, USA