1. ISM - Information Systems – Basic Concepts

7/31/2019 1. ISM - Information Systems Basic Concepts

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Information SystemsBasic

Concepts

Pro.Nivedita Roy, IBS-Gurgaon


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The Digital Economy

Refers to an economy

that is based on digital technologies,

including digital communication networks,computers, and software.

Also sometimes called the Internet

economy, the New economy, or the Web

economy.



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Major Business Pressures



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Organizational Framework



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Information Systems

Is an organized set of components for collecting,

transmitting and processing data in order to deliver

information for action

In business firms, this information is necessary

for both operations and management

Todays organizations cannot be operated or

managed effectively without information systems

that are built using a range of information

technologies



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Contd.

Information Systems (IS)

Collect, process, store, analyze, and disseminateinformation for a specific purpose.

Information systems are comprised of

Inputs (data, instructions)

Outputs (reports, calculations)

Feedback mechanisms that controls the operation

An environment that it works within



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SOCIOLOGY

POLITICAL

SCIENCEPSYCHOLOGY

COMPUTER

SCIENCEOPERATIONS

RESEARCH

MANAGEMENT

SCIENCE

TECHNICAL APPROACHES

Approaches to Information Systems

MIS

BEHAVIORAL APPROACHES



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Data and Information

Data

Streams of raw facts representing events suchas business transactions

Information

Clusters of facts that are meaningful and useful

to human beings in the processes such asmaking decisions



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9Pro.Nivedita Roy, IBS-Gurgaon


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INPUT OUTPUTPROCESS

FEEDBACK

Activities in an Information System



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Capabilities of Information Systems

Fast and accurate data processing, with large capacity

storage and rapid communication between sites

Instantaneous access to information

Means of coordination

Boundary spanning



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Changing Scenario of IS

Electronic commerce

Electronic business

Digital market



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Electronic Commerce

Internet links buyers, sellers

Lower transaction costs

Goods and services advertised, bought,exchanged worldwide

Business-to-business transactions increasing



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Electronic Business

Electronic business

Executing all the firms business processes with

internet technology

Intranet

Business builds private, secure network based on

internet technology

Extranet:

Extension of intranet to authorized external users



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Attributes of Quality Information

Timeliness

Completeness

Conciseness

Relevance

Accuracy

Precision Appropriateness of form


S t C t


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System Concepts

It is an integrated set of components or entities that

interact to achieve a particular function or goal. Systems have characteristics such as boundaries,

outputs and inputs, methods of converting inputs intooutputs, and system interfaces

They are composed of interrelated and interdependentsubsystems

Every system has a boundary that defines its scope of

activities Systems may consist of numerous subsystems with

elements, interactions and objectives



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Systems and their Environments

The systems environment consists of people,

organizations and other systems that supply data to orreceive data from the system

Open Systems

These are the systems that operate in an externalenvironment and exchange information and material

with that environment

The external environment consists of the activities

external to the system boundary with which the system

can interact

An open system needs to receive feedback to change and to

continue to exist in its environmentPro.Nivedita Roy, IBS-Gurgaon

C d


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Contd.

Closed System It is relatively self-contained and does not exchange

information with its environment

Closed systems do not get the feedback they need fromthe external environment and so tends to deteriorate


C td


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Contd.

System feedback

A system needs feedback that is an indicator of currentperformance rates when compared to a set of standards,

to do its job

With effective feedback, continuing adjustments in the

activities of a system can be made to assure that the

system achieves its goals

Measuring performance against a standard is an

effective control mechanism


C td


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Contd.

Systems Entropy

This corresponds roughly to chaos or disorder- a state

that occurs without maintenance

The process of maintaining a system is a process of

decreasing entropy or increasing orderliness


Ch i i f I f i S


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Characteristics of Information Systems

Several different

information systems canexist in one organization.

A particular information

system may be composedof several separate

information systems.

Information systems areconnected by means of

electronic networks.

Inter organizational

information systemsinvolve information flow in

two or more organizations.

An enterprise wide system

or inter organizational

information system is

composed of large & small

computers & hardwareconnected by different

types of networks.



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Computer-based Information System

A computer-based information system (CBIS)

is an information system that uses computertechnology to perform some or all of its

intended tasks.



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Components of Information Systems

Hardware is a set ofdevices such as processor,monitor, keyboard, andprinter.

Software is a set ofprograms that enable thehardware to process data.

Database is a collection of

related files, tables,relations, and so on, thatstores data.

Network is a connectingsystem that permits thesharing of resourcesbetween computers.

Procedures are the set ofinstructions about how tocombine the abovecomponents.

People are those individualswho work with the systemor use its output.



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Classifications of Information Systems

Information Systems can be classified according to:

Organizational Structure

Functional Area

Support Provided

System Architecture

Activity Supported



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Classification by Organizational Structure

Departmental information systems

Frequently, an organization uses several application programsin one functional area or department.

Enterprise information systems (EIS).

While a departmental IS is usually related to a functional

area, the collection of all departmental applications when

combined with other functions applications comprises the

enterprise wide information system.

Inter organizational systems.

Some information systems connect several organizations.



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Classification by Functional Area

The Accounting Information System

The Finance Information System

The Manufacturing (operations/production)

Information System

The Marketing Information System

The Human Resources Management InformationSystem



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Evolution of Support Systems

Early 1950s

1960s

Late 1960s

Early 1970s

Transaction processing system

(TPS)

Management information systems(MISs)

Office automation system (OAS)

Decision support system (DSS)



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Evolution of Support Systems (cont.)

Early 1980s Executive information systemsEnterprise information systems (EISs)

Group support systems (GSSs)

Mid- 1980s Expert systems (ES)

Knowledge management systems (KMS)

1990s Artificial Neural Networks (ANNs)



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Interrelated Support Systems

Transaction

Processes

MIS

EIS

DSS

External

Information

Data

Warehouse

Non Computer

Support

Internet, other

Computer Support



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Classification by System Architecture

A mainframe-based system.

A standalone personal computer (PC).

A distributed or a networked computing system

(several variations exist).


Using Information Technology for


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Using Information Technology for

Competitive Advantage

Industry level effect: - It changes an industrys : Products and services

Production economics

Markets Firm level effect: - It affects key competitive forces:

Buyers

Substitute products

Suppliers

New entrants

Rivals Pro.Nivedita Roy, IBS-Gurgaon

Contd


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Contd.

Strategic level: - It supports a firms strategy:

Low-cost leadership

Product differentiation

Market specialization


Framework for Information System


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Framework for Information System

Operational level:

These are the day-to-day activities of the firm that

involve acquiring and consuming resources

Tactical level:

Managers review operational activities to make

sure goals are met and resources are not wasted

Strategic level:

Strategic planners address problems that involve

long-range analysis and prediction.



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Characteristics of Operational Systems

Repetitiveness

Predictability

Emphasis on the past

Detailed nature

Internal origin

Structured form Great accuracy


Characteristics of Tactical Systems


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Characteristics of Tactical Systems

Data are summarized, aggregated or analyzed

Variety of reports like summary, exception,

ad-hoc reports are generated

Periodic nature

Unexpected findings

Comparative nature

Summary form Both internal and external sources



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Characteristics of Strategic Planning Systems

Ad-hoc basis: produced regularly or periodically Unexpected information

Predictive nature

Summary form External data

Unstructured format

Subjectivity



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Major types of systems in organizations

Executive Support Systems (ESS)

Decision Support Systems (DSS)

Management Information Systems (MIS) Knowledge Work Systems (KWS)

Office systems

Transaction Processing Systems (TPS)



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Transaction Processing System

These are the basic business systems that serve the

operational level

It is a computerized system that performs and records

the daily routine transactions necessary for the conduct

of the business



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Knowledge Work Systems

Knowledge level

Inputs: design specifications

Processing: modeling

Outputs: designs, graphics Users: technical staff and professionals

Example: engineering work station



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Management Information System

Management level

Inputs: high-volume data

Processing: simple models

Outputs: summary reports Users: middle managers

Example: Annual Budgeting



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Decision Support System (DSS)

Management level

Inputs: low-volume data

Processing: interactive Outputs: decision analysis

Users: professionals, staff

Example: contract cost analysis



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Executive Support System (ESS)

Strategic level

Inputs: aggregate data

Processing: interactive

Outputs: projections Users: senior managers

Example: 5-year operating plan



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Sales and Marketing Systems

Major functions of systems:

Sales management, market research, promotion, pricing,

new products

Major application systems:

Sales order info system, market research system, pricingsystem



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Manufacturing and Production Systems


Scheduling, purchasing, shipping, receiving,

engineering, operations


Materials resource planning systems, purchaseorder control systems, engineering systems, qualitycontrol systems



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Financing and Accounting Systems


Budgeting, general ledger, billing, cost accounting


General ledger, accounts receivable, accounts payable,

budgeting, funds management systems



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H R S t


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Human Resource System

Major functions of systems: Personnel records, benefits, compensation, labor

relations, training


Payroll, employee records, benefit systems, career

path systems, personnel training systems



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E t i A li ti


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Enterprise Applications

Enterprise systems

Supply Chain Management Systems

Customer Relationship Management Systems Knowledge Management Systems



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Supply Chain Management (SCM)

Close linkage and coordination of activities involvedin buying, making, and moving a product

Integrates supplier, manufacturer, distributor, and

customer logistics time Reduces time, redundant effort, and inventory costs

Network of organizations and business processes



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Contd. Helps in procurement of materials, transformation of

raw materials into intermediate and finished

products

Helps in distribution of the finished products tocustomers

Includes reverse logistics - returned items flow in

the reverse direction from the buyer back to theseller


R l f IS i SCM


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Role of IS in SCM

Decide when, what to produce, store, move

Rapidly communicate orders

Communicate orders, track order status

Check inventory availability, monitor levels

Track shipments

Plan production based on actual demand

Rapidly communicate product design change

Provide product specifications

Share information about defect rates, returns


Customer Relationship Management


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Customer Relationship Management

Manages all ways used by firms to deal with existing andpotential new customers

Business and technology discipline

Uses information system to coordinate entire businessprocesses of a firm

Provides end-to-end customer care

Provides a unified view of customer across the company

Consolidates customer data from multiple sources andprovides analytical tools for answering questions


Knowledge Management System


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Knowledge Management System

Creating knowledge

Discovering and codifying knowledge

Sharing knowledge Distributing knowledge

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1. ISM - Information Systems – Basic Concepts

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