MIS OVERVIEW WHY INFORMATION IS NEEDED?

• very important to managers

DATA VS. INFORMATION • Use it to perform their tasks
• Data – raw facts/figures • Decision making
• Information – processed data which reveals a meaning • Planning & control
• Can information become data in another undertaking/user/entity? • Strategic directions

DATA PROCESSING INFORMATION HIERARCHY (accdg. To Ray R. Larson, University of California)

• Manipulation (transformation) of data with the goal of producing information. ● Wisdom
• Input > Process > Output Distilled and integrated knowledge and understanding.
Types: ● Knowledge
• Manual data processing Information read, heard, or seen, and understood.
• Mechanical data processing ● Information
• Electronic data processing Data organized and presented.
 Data
STAGES OF DATA PROCESSING Raw material of information.
• Entering data into the IS (INPUT)
• Changing and manipulating data (data processing) TYPES OF INFORMATION IN BUSINESS FOR DECISION MAKING
• Getting information out of the IS (output) -from Anthony’s Classification of Management
• Storing data and information (storage) • Strategic Information
- For long term policy decisions
INFORMATICS • Tactical Information
• Study of information, information systems and information technology applied in - for exercising control over business resources
various phenomena • Operational Information
- to ensure proper conduction of specific operational tasks as planned.
INFORMATION
• Processed data CLASSIFICATION BY APPLICATION
• Transformed form of data • Planning Information
• Meaningful - for establishing standard norms and specifications; used for strategic,
• Perceived value – seen, remarkable tactical and operation planning.
• Has surprise value – new information • Control Information
• Has new value - for establishing control over all business activities thru feedback
• Domain-based (business-based) mechanisms
• data that has been processed into a form that is meaningful to the recipient • Knowledge Information
(USER) and of real or perceived value in current or prospective actions or - “Information about information”
decisions. • Organizational Information
- organization's environment & culture
• Functional/Operational Information • Organization
- operation specific information • Computer system
• Database Information
- large quantities of information that has multiple usage and application A system may be composed of subsystems
Closed vs. Open System
FEATURES OF QUALITY INFORMATION • stands alone; no connection to another system
• Reliability - verifiable and dependable. • interfaces and interacts with other systems
• Timely - current and it must reach the users well in time, so that important
decisions can be made in time. WHAT IS INFORMATION SYSTEM?
• Relevant - current and valid information and it should reduce uncertainties. • combination of IT and people's activities that support operations, management,
• Accurate - free of errors and mistakes, true, and not deceptive. and decision making.
• Sufficient - adequate in quantity, so that decisions can be made on its basis. • A combination of hardware, software, infrastructure and trained personnel
organized to facilitate planning, control, coordination, and decision making in an
MANAGEMENT organization.
• Planning: goal setting, environmental scanning, forecasting…
• Organizing: staffing, coordinating, delegating, understanding, COMPUTER-BASED INFORMATION SYSTEM IS..
procedures/policies • Information contributes to big growth in economy.
• Controlling: Resources (money, man, machines, materials, movement), Why?
information • Is needed in the technological change and globalization
- Measuring, evaluating, reporting, corrective action, feedback - Firm gives importance on Information System
• Leading: authority, motivating, directing, activating, supervising, negotiation,
persuading INFORMATION SYSTEM
• Communicating: informing, persuading, negotiation, corrective action, listening • as a discipline, focuses on exploring the interface between management,
information science and computer science.
SYSTEM
• input-process-output an orderly arrangement of interdependent ideas or • Feedback mechanism
constructs (ABSTRACT SYSTEM) The component that helps organizations achieve their goals, such as
• a set of elements which operate together to accomplish an objective (PHYSICAL increasing profits or improving customer service
SYSTEM)
• group of components (subsystems) PROPERTIES OF INFORMATION SYSTEM
• integrated through the common purpose of achieving some objective • Functionality
What information system does
• Usability
How easy a system is to use
SYSTEM Evidence: User-friendly
Examples: • Utility
• Human body • Worth of information system in terms of contribution
 • Computer applications in 60’s
COMPONENTS OF “IS” • Specifically accounting data
• Data/Information • Data Processing (DP) – term to describe the primary computer application
• Hardware • First computers process data in batch
• Software • First focused was on production of business & accounting reports
• Network/Telecommunications
• People NEW FOCUS – ON INFORMATION
• Procedures • H.P. Luhn & Stephen Furth (IBM) recognized that computer could do more
than process data – they developed INFORMATION RETRIEVAL
INFORMATION TECHNOLOGY • the first step toward using computer as an Information System
• Any technology used to support information gathering, processing, distribution • Concept of MIS promoted by manufacturers
and use during late 60’s
• Provide means of constructing aspects of IS
• Modern IT consists of: NEW FOCUS...
• Hardware • Primary purpose of comp apps:
• Software • To produce information for management
• Data • Concept was quickly accepted but failed in a way.
• Communications technology • Reasons why MIS effort failed:
• General lack of computer literacy among users
Q: IS MIS NEW? • Ignorance of the management role among information specialists
A: Not new • Computing equipment was expensive and limited
• Too ambitious – they could build giant IS but failed
Q: WHAT IS NEW THEN?
A: • Technology REVISED FOCUS – ON DECISION SUPPORT
• Availability of better information • Michael Scott Morton, G. Anthony Gorry, Peter Keen (MIT information scientists)
formulated the concept of DSS
• Computer is the tool in providing better information • DSS – an information-producing system aimed at a particular problem a manager
must solve, and decisions that must be made.
EVOLUTION OF CBIS • Problems that DSS can address are semi-structured ones
Initial focus - data • Structured problem is one with elements that are known and their
New focus - information relationships are understood.
Revised focus - decision support • Unstructured problem is neither the elements nor their relationships are
Current focus – communication defined.
Potential focus - consultation • Semi-structured problem consists of some elements and relationships
that are known and understood.
INITIAL FOCUS – ON DATA
• Electronic Data Processing (EDP) REVISED...
Different Manager’s Views about DSS • Executive Information Systems
• DSS replaced MIS • Expert Systems
• Regarded MIS concept as obsolete
• DSS and MIS exist in a hierarchy TPS
• DSS at the top, MIS at the middle and DP at the bottom • accepts and processes data generated during an organization’s day-to-day
• DSS provides decision support by actively involving the manager, while transactions such as payments, order, reservation, deposits, sales, etc.
MIS simply provides information that the manager needs • Before - stand-alone or LAN-based TPS
• MIS is an organizational resource • Nowadays - Online Transaction processing
• MIS is intended to provide problem-solving information, while DSS is
intended to support a particular manager in a specific way. • Usually,TPS is to computerized manual operations for:
• Faster processing
CURRENT FOCUS - ON COMMUNICATION • Increase accuracy of output
• Office Automation • Reduce clerical/staff costs
• Seeks to facilitate communication and increase productivity • Improve customer service
• Word processors • Better Data storage and management
• Teleconferencing
• Voice mail OIS
• E-mail • Uses hardware, software & networks to have better work flow and aids in
• E-calendaring communication of employees.
• Facsimile transmission • Employees perform tasks electronically rather than manually
• DTP Etc. • be used by all levels in the firm
• Software: word processing, spreadsheets, databases, presentations, e-mail, etc.
POTENTIAL FOCUS - ON CONSULTATION • communication technology such as: voice mail, fax, video conferencing and EDI
• Use AI to business problems
• AI concept
• Computer can be programmed to perform some logical reasoning like
humans.
• EXPERT systems
• functions as a specialists in a specific discipline.
• acts like an expert in the specific discipline thereby giving decisions
based on logical reasoning. MIS
• is an IS that produces accurate, timely, relevant and organized information in
TYPES OF INFORMATION SYSTEMS order for managers and even other users to make decisions, produce solutions,
• Transaction Processing Systems (TPS) monitor activities, and track progress of activities
• Office Automation Systems (OA/OAS/OIS) • Also called Mgt Reporting System because it generates reports on a regular
• Management Information Systems basis
• Decision Support Systems • Often integrated with TPS.
• Example: POS • Knowledge based – combined subject knowledge and experiences of
human
MIS... experts stored in a database.
• It can generate basic types of information: • Inference rules – set of logical judgments applied to the knowledge
• Detailed – gives detailed reporting on certain activity. based.
• Ex: detailed sales report • Can be used at all levels
• Summary – consolidates reports into summarized format.
• Ex: summary of sales report FUNCTIONAL INFORMATION SYSTEMS
• Exception – filters reports based on condition. • Accounting IS
• Ex: sales of Beverages • Financial Management Systems
• Human Resource Mgt. Systems
DSS • Marketing IS / Market Research Systems
• is an IS to provide users achieve a certain decision. It uses data coming from • Manufacturing systems
internal or external sources. • Inventory & Control Systems
It may include: • Sales Systems, etc…
• Query language
• Statistical analysis capabilities INTEGRATED IS
• Spreadsheets • An IS where transaction processing, management information and decision
• Graphics support is integrated into one system.
To help users extract data and evaluate results • Where Enterprise Integration System is now becoming popular on most big
business organizations.
EIS
• is used to support the information needs of executive management in decision- SUBSYSTEMS OF I.S.
making • Two approaches of defining the subsystems of an Information Systems are:
• It may produce charts and tables that may show trend, ratios and other • According to the organizational functions which they support
managerial statistics needed in decision making and strategic planning • According to managerial activities for which they are used.
• A data warehouse is needed to store all necessary decision- making data

• DATA WAREHOUSE stores and manages the data required to analyze historical
and current business circumstances.
• Data Mining - examine large databases to generate new information. THE ORG. STRUC. & I.S. TYPES

EXPERT SYSTEM
• is an IS that gets and stores the knowledge of human expert in a certain
discipline thereby imitating human reasoning and decision-making processes
which can be used by those who have less expertise.
Two main components:
 Management Control Formulation of budgets and resource
allocation, comparative analysis…
Strategic Planning Formulation of objectives and strategic.
forecasting

CBIS MODEL (Discuss/explain)

FUNCTIONAL…
Major Functional Some typical users
Subsystem

Marketing Sales forecasting, sales planning, customer

and sales analysis

Manufacturing Production planning and scheduling, cost

control analysis

Logistics Planning and control of purchasing,

inventories, distribution

Personnel Planning personnel requirements, analyzing SOME OF THE ADVANTAGES OF “IS”

performance, salary administration
• Decentralization
Finance and Accounting Financial analysis, cost analysis, capital • Central access of data and information
requirements planning, income • Provides better information
measurement • Minimizes information overload
• Better planning and control
Information Processing Information system planning, cost- • Aids decision making
effectiveness analysis • Enhance management capabilities
Top Management Strategic planning, resource allocation • Brings coordination

SOME OF THE DISADVANTAGES OF “IS”

ACTIVITIES… • May not always function properly
Activities subsystem Some typical uses • Constant monitoring issues
Transaction processing Processing of orders, shipments, and • Costly
receipts • Prone to breakdown (probable system failure)
Operational Control Scheduling of activities and
performance reports, summary… LESSON 2 - PLANNING & BUILDING INFORMATION SYSTEMS
 and organized in advance and the new IS can be developed according to the plan.
SOFTWARE Example: a Standalone Sales System be transformed to POS client-server based.
• Software is an embodied knowledge This approach has a low technical risk. Introduced as early as 1970s.
• Therefore Software Development - a social learning process.
• Process - a dialogue in which knowledge is put together. • Adaptive approach - used when the requirements of the system or the user's
• Building Computer Software is an iterative learning process, and the outcome needs are not well understood. The project cannot be planned completely in
"software capital" is an embodiment of knowledge collected, distilled, and advance; because some requirements may yet need to be determined as the
organized as the process is conducted. project progresses.
This approach has a high technical risk. Introduced in 1990s.
SYSTEMS DEVELOPMENT LIFE CYCLE
SDLC PHASES
• There are
many ways to
develop CBIS;
• Preparing one
is very complex.
• SLDC provides
an overall
framework for
managing the
process of
systems
development PROJECT PLANNING PHASE
 A framework for the tasks that are required to build high quality software. • Identify the scope (range, extent, possibility) of the new system
 It defines the approach that is taken as software is engineered. • Ensure that system is feasible (possible, practicable, reasonable)
 It is key fundamental concept in IS development • Develop a schedule, resource plan & budget plan

DEVELOPERS (SYSTEMS ANALYSTS) • Planning phase usually starts with a question:

• Relies on many concepts for help such as methods, models, tools & techniques. • Is there a need to develop a system?
Approaches to use: • With this, planning focuses on studying if a system is feasible thereby
• Traditional Approach - uses structured development & information gathering investigation is done.
• Object-oriented Approach - uses newer technologies to analysis, design and • Define the problem & scope of the required solution - most important.
engineering • Know all of the functions or processes that will be included in the system and that
• CASE tools, programming tools, etc. are needed to complete tasks major uses of the new system & business problems that the new system must
address.
SDLC APPROACHES • Produce the project schedule.
• Predictive approach - assumes that the development project can be planned • Staff the project
• Launch the project efficient the system is. Training is also conducted for the possible end-users of the
system.
ANALYSIS PHASE • Construct software components
• Understand the business needs & processing requirements • Verify & test
• Document them • Convert data
• Analysis phase will allow one to gather necessary requirements such as • Train users and document the system
business processes and policies. Documents are carefully analyzed in order to be • Install the system
transformed into diagram that will serve as guide in the design of the system.
• A discovery & understanding process. MAINTENANCE (SUPPORT) PHASE
• Gather information. CORE activity for discovery & understanding. • Keep the system running productively as years go by
• Define system requirements. • Maintenance phase is where a person-in-charge continuously monitors and
• Build prototypes for discovery of requirements. maintains the system's performance and efficiency. A Feedback must be done in
• Prioritize requirements. Identify priority requirements order to look into some problems of the system thereby improvement is done.
• Generate & evaluate alternatives. • Maintain the system
• Enhance the system
DESIGN PHASE • Support the users
• Design the solution system based on requirements defined & decisions made
during analysis SDLC MODELS,TOOLS, TECHNIQUES
• Design phase is the preparation of diagrams and program code. Database SOFTWARE ENGINEERING: A LAYERED TECHNOLOGY
design, entity relationship diagrams (ERDs), Data Flow Diagrams (DFD), -Tools
Flowcharts and Hierarchical Input- Process-Output (HIPO) or Architectural -Methods
Framework are some of the diagrams and activities done on this stage. -Process
Then the coding starts based on the diagrams prepared. -A “quality” focus
• Design and integrate the network. Identify needed computers, configure network
environment and identify OS that will house the new IS SOFTWARE PROCESS
• Design the application architecture. • A framework for the tasks that are required to build high quality software.
• Design the user interfaces
• Design the systems interfaces
• Design and integrate the database • It defines the approach that is taken as software is engineered.
• Prototype for design details • Set of activities whose goal is the development or evolution of software.
• Design & integrate the system controls.
METHODS LAYER
IMPLEMENTATION PHASE • Provides technical “how to’s” for building software.
• Build, test, install the new IS • Encompasses a broad array of tasks
• Train users • Rely on a set of basic principles that govern each area of the technology.
• Implementation phase is where the system is put into place. Testing is done in • Model descriptions: Descriptions of graphical models which should be
order to check whether it conforms to system requirement and to validate how produced
 • Rules: Constraints applied to system models • overall flow of activities and tasks
• Recommendations: Advice on good design practice • Degree to which work products are identified & required
• Process guidance: What activities to follow for the process and the • Manner which quality assurance are applied
methods. • Manner in which project tracking & control are applied
• Overall degree of detail & rigor with which the process is described
TOOLS • Degree to which customer/ stakeholders are involved
• Provide automated or semi-automated support for the process and the methods. • Level of autonomy given to the software project team
• tools are integrated so that information created by one tool can be used by • Degree to which team organization & roles are prescribed
another
THE PRIMARY GOAL: HIGH QUALITY
CASE is needed. Remember:
• Software systems that are intended to provide automated support for High Quality = project timeliness; Why? Less rework!
software process activities and methods
SDLC MODELS
SDLC MODELS
Prescriptive Process Model Requirements -> Design ->Implementation ->Verification ->Maintenance
• AKA traditional process model or Plan-driven process
• process activities are planned in advance & progress is measured against this WATERFALL MODEL
plan • A prescriptive model
• strive for structure & order • Classic-life cycle or Linear Model
Agile Process Model • Oldest paradigm but criticism cause devoted supporters to question its efficacy
• planning is incremental (adapt incrementally) • Systematic sequential approach to software development
• easier to change the process to reflect changing customer requirements.
WATERFALL MODEL
SOFTWARE PROCESS PHILOSOPHIES Requirement Analysis -> System Design -> Implementation -> Testing ->
Prescriptive process models Deployment -> Maintenance
• stress detailed definition, identification and application of process activities &
tasks. INCREMENTAL MODEL
Agile process models • applies linear sequences in a staggered fashion as calendar time progresses.
• emphasis on project agility, follow a set of principles that lead to a more informal • First increment is a core product
approach. Emphasizes maneuverability & adaptability. • Basic requirements addressed
• Can be used as project goes on
Whether prescriptive or agile process models • Focus: delivery of an operational product at the end of each increment.
Common goal: create high quality software
that meets the customer's needs

PROCESS MODELS MAY DIFFER IN:

 • Allow users to see how well the system supports their work
• Allows users & development team to get new ideas for requirements, & find areas
of strength & weakness in the software
Cons
• clients fail to realize that no consideration was given to the overall quality in the
• Development broken down into many mini-development projects rush to develop a prototype.
• Partial systems are successively built to produce a final total system • Developers may lose focus on the real purpose of the prototype and compromise
• Highest priority is tackled first the quality of the product.

PROTOTYPING
SPIRAL MODEL
• combines the iterative
nature of prototyping with
the controlled and
systematic aspects of the
waterfall model
• therein providing the
potential for rapid
development of
incremental versions of the
software
• Prototype - An initial version of a software system that is used to demonstrate
• Software prototype • evolutionary process begins at the center position and moves in a clockwise
• Can help in the elicitation & validation of requirements direction.
• Can helpful to explore new software solutions & to support user-interface design • Each traversal of the spiral typically results in a deliverable
• assists you and stakeholders to better understand what is to be built when • Advantage: realistic approach for large-scale software products
requirements are unsure or vague
• Best when there is an absence of detailed information regarding the input to the RAD (RAPID APPLICATION DEVELEPMENT)
system, the processing needs and the output requirements • very short development cycle
• typically, 60-90 days
Quick design ->Prototype Construction ->Evaluate prototype (stakeholder) -> • High speed adaptation of waterfall
Feedback (refine requirements) • Result of each cycle is a fully operational software
• Modeling is divided by each task
• Iteration occurs as prototype is tuned • Each task is given to each team

PROS & CONS OF PROTOTYPING

Pros
Businesses - Operate in global, rapidly changing - Environment
● Respond to news opportunities and markets, changing economic EXTREME PROGRAMMING (XP)
conditions, and the emergence of competing products and services • coined by Beck (2000)
• developed by pushing recognized good practice, such as iterative
SOFTWARE is part of business which helps responds… development, to ‘extreme’ levels.
• Example: new versions of a system may be developed by many
MANIFESTO FOR AGILE S/W DEVELOPMENT (Agile Alliance) programmers, integrated and tested within a week
• We are uncovering better ways of developing software by doing it and helping • Key activities:
others do it. Through this work we have come to value: • Planning > design > coding testing
• Individuals and interactions over processes and tools
• Working software over comprehensive documentation
• Customer collaboration over contract negotiation
• Responding to change over following a plan

SCRUM
• Principles are consistent with the manifesto
• SCRUM principles are used to guide development activities within a process that
incorporates the ff framework activities:
• Requirements, analysis, design, evolution, delivery
• Use set of "software process patterns"
• Activities: backlog, sprints, scrum meetings, demos

SCRUM MODEL
• Planning - begins with listening; requirements gathering (in user stories); TASK 3: Dose Checking
customers are involved; commitment prepared Dose checking is a safety precaution to check that the doctor has not
• Design - KISS; use Class-Responsibility- Collaborator (CRC); use SPIKE prescribed a dangerously small or large dose.
solution if necessary; Using the formulary ID for the generic drug name, look up the formulary
• Coding - develop first unit tests, then code based on test created, do unit testing and retrieve the recommended maximum and minimum dose.
when coding done. Check the prescribed dose against the minimum and maximum. If outside
• Testing - when unit tests are organized, integration and validation testing can the range, issue an error message saying that the dose is too high or too low.
occur on daily basis; incremental test development from scenarios If within the range, enable the ‘Column’ button.

USER STORY EXAMPLE DYNAMIC SYSTEMS DEVELOPMENT METHOD (DSDM)

Prescribing Medication • Provides framework for building and maintaining systems which meets tight time
Kate is a doctor who wishes to prescribe medication for a patient attending constraints using incremental prototyping
a clinic. The patient record is already displayed on her computer so she clicks on • See DSDM consortium @ www.dsdm.org
the medication field and can select current medication’, ‘new medication’ or • Activities:
‘formulary’. • Feasibility study -business basic requirements & constraints
If she selects ‘current medication’, the system asks her to check the dose. • Business study - functional & information requirements.
If she wants to change the dose, she enters the dose and then confirms the • Functional model iteration
prescription. • Design & build iteration
If she chooses ‘new medication’, the system assumes the she knows • Implementation
which medication to prescribe. She types the first few letters of the drug name. The
system displays a list of possible drugs starting with these letters. She chooses the
required medication and the system responds by asking her to check that the OTHER AGILE METHODOLOGIES
medication selected is correct. She enters the dose and then confirms the • Kanban - highly visual method popularly used within Agile project management.
prescription. • Crystal - Puts a premium on "maneuverability"
If she chooses ‘formulary’, the system displays a search box for the • Feature Driven Development - Emphasis on project management guidelines
approved formulary. She can then search for the drug required. She selects a drug and techniques
and is asked to check that the medication is correct. She enters the dose and then • Agile Modeling - Practice-based methodology for effective modeling and
confirms the prescription. documentation of software-based.
The system always checks that the dose is within the approved range. If it • More methodologies evolve.
isn’t, Kate is asked to change the dose.
After Kate has confirmed the prescription, it will be displayed for checking. 12 PRINCIPLES TO ACHIEVE AGILITY
She either clicks ‘OK’ or ‘Change’. If she clicks ‘OK’, the prescription is recorded 1. Our highest priority is to satisfy the customer through early and continuous
on the audit database. If she clicks on ‘Change’, she reenters the ‘Prescribing delivery of valuable software.
medication’ process. 2. Welcome changing requirements, even late in development. Agile processes
harness change for the customer's competitive advantage.
TASK 1: Change Dose of Prescribed Drug 3. Deliver working software frequently, from a couple of weeks to a couple of
TASK 2: Formulary Selection months, with a preference to the shorter timescale.
4. Business people and developers must work together daily throughout the • Management tasks become complex
project. • International economic influences.
5. Build projects around motivated individuals. Give them the environment and • Complexity of available technology
support they need, and trust them to get the job done. • Time frame is shortened due to fast pace change in technology
6. The most efficient and effective method of conveying information to and within a • Competitive pressure
development team is face-to- face conversation. • Social pressure
7. Working software is the primary measure of progress. • More problem solving tools available
8. Agile processes promote sustainable development. The sponsors, developers,
and users should be able to maintain a constant pace indefinitely. Management Skills
9. Continuous attention to technical excellence and good design enhances agility. • Basic management skills.
10.Simplicity—the art of maximizing the amount of work not done—is essential. • Communication (Oral and written)
11. The best architectures, requirements, and designs emerge from self-organizing • Problem solving ability. solve problem and make decisions.
teams. Decision making - act of selecting from alternate courses of action.
12. At regular intervals, the team reflects on how to become more effective, then • Computer Literacy & Information Literacy.
tunes and adjusts its behavior accordingly

LESSON 3 Computer Literacy Information Literacy

Information Management Knowledge and understanding Knowledge and understanding
• Information is managed on the use of computer esp. in on how information is properly
–by a manager the work. used in management. It includes
understanding of both computer
• The manager & non-computer methods when
–responsible for gathering raw facts (data), and processing it in order to become applied to business problems
useful information.
–...for updating, upgrading and correcting erroneous information Information literacy
It also addresses:
Information: • Is information system necessary to the operation of the business/firm?
As important as the 4M’s resources • In what way IS can be used?
•It can be: • How can we maximize IS’s functionality?
- Acquired. Data gathering
- Assembled. Data processing Management must be “System thinking”
- Replaced. New data • Thinking of an organization in terms of its sub-organizations or subsystem
- Updated. Obsolete Data/information may be removed and new ones are • Has its foundation in the field of the system dynamics
stored and managed -Jay Forrester (MIT),1956
-Recognized the need for a better way of testing ideas in engineering.
Why is managing information important? • A powerful management approach
– Creates a framework for both excellent problems solving and excellent decision Have common sense Stores and retrieves
making data/information rapidly
–Helps keep managers focused on the overall goals and operations of a business Can make decisions Performs complex functions
accurately
Instructs the computer what to do Execute long, tedious operations
System Thinking
Learn new method and techniques Perform routine tasks less
• process of understanding how those things which may be regarded as systems expensive than humans
influence one another within a complete entity, or larger system. Accumulate expertise Are adaptable (can be
• holistic approach to analysis that focuses on the way that a system's constituent programmed)
parts interrelate and how systems work over time and within the context of larger
systems. •Therefore, there is a need to combine human and computer characteristics and
qualities
Synergy
–from Greek word “work together” Human-computer synergy
–Occurs when combined resources produce output that exceeds the sum of the –Allows the results of human thought to be translated into efficient processing of
outputs of the same resources employed separately large amount of data.

IS in Business
Business (or any organization)
–Great interest on information systems
–Shift towards automation or computerization of processes, transactions and
communication

Trends that made the use of IS very important in business

• Computers’ power grew while prices dropped
• Computer programs’ variety and ingenuity have increased
• Quick and reliable communication lines and access to Internet have become
HUMAN VS. COMPUTER widely available and affordable.
HUMAN COMPUTER • Growth of Internet opened opportunities and competitiveness in global market
Work relatively slow and makes Works quickly and accurately • Increasing ratio of the workforce is computer literate.
mistakes
Formulate steps for problem solving Cannot make independent
decisions How is Information System in Business?
Before: professionals specialize in their own domains (example: accounting,
HUMAN AND COMPUTER QUALITIES marketing, finance, sales, ...) and that Information System is a domain for
HUMAN COMPUTER Information Specialists or IT people.
Think Performs operations extremely
rapidly Now: Managers and professionals use Information System daily to facilitate work.
Therefore, every worker must have knowledge on Information Systems. – They make different types of decisions
– They control different types of processes
IT and IS in Business – Information is needed to survive in the modern competitive world.
I.T. makes work faster, easier and better – Information is needed to create strong information systems and keep these
systems up to date.
Business must take advantage of it
– Knowledge workers must be familiar with IT (computer literacy) Information is needed in management
– Know how to use IS and what information should be produced (Information • In planning
literacy) • In recording
• In controlling
Without knowledge of IT and IS • In measuring
– Employees will be lag behind peers who are computer and information literate • In decision-making
–Nowadays, business org expect personnel problems with efficiency on their own Implications of Information in Business
using user-friendly IS. • Information processing has transformed our society in many ways.
• A complete business information system, accomplishes the following
Common Factors that Reflect on the Needs & Objectives of the Information functionalities.
Processing - Collection and storage of data.
• Increase impact of information processing for decision making - Transform these data into business information useful for decision making.
• Dependency of service sectors (banking, financial institutions, entertainment, - Provide controls to safeguard data.
etc.) - Automate and streamline reporting.
• Changing employment scene world over
• Growth of IT industry & its strategic importance
• Strong growth of information services fueled by increasing competition and
reduce product life cycle
• Information revolution
• Need for sustainable development & quality life
• Improvement in communication & transportation
• Reduction of energy consumption & pollution and a better ecological balance in
future
• Land record management
• Legal delivery systems
• Educational institutions
• Customer relationship management

Managers and Information

• Managers’ needs of information vary in organizational level and functional area
• Why?
 Efficiency
• Determined by the relationship between resources expended and the benefits
gained in achieving a goal
• Efficiency = benefits/costs
• One system is more efficient than another if its operating costs are lower for the
same or better quality product, or if its product’s quality is greater for the same or
lower costs

Productivity
• Productivity is commonly used as a synonym for efficiency
• However, PRODUCTIVITY specially refers to the efficiency of human resources
• improves when fewer workers are required to produce the same amount of
output, or alternately, when the same number of workers produce a larger
Output

Situation:
Preparing a payroll system with a goal of producing an individual pay slip and a
Functionalities/Features of an Information System in Business payroll form.
• Correct data input - You were able to build it, then you produce the system effecti=vely, if not,
• Proper data storage your effort is ineffective.
• Transform data correctly into information - If a competitor created the same system but finished it with fewer
• Security of data by providing control measures (limit of user access) programmers or lesser time, then your competitor is as effective but more
• Automate & streamline reporting efficient than you.
Systems Efficiency and Effectiveness
Why use IT and IS?
Efficiency Effectiveness
• makes work more effective, more efficient Indicates the manner in which the The measure for deciding whether
• Makes a person more productive inputs are used by the system the system provides the desired
• Makes work of a person faster, more accurate, & timely. output or not
Being efficient means the system Being effective means producing
Effectiveness uses inputs in a ‘right’ way. If the the right output in terms of quantity
• Defines the degree to which a goal is achieved input-output ratio is adverse, we and quality. When the system is
say that the system is inefficient ineffective, the system is out of
• A system is more or less effective depending upon:
though it produces the desired control and it needs a major
–How much of its goal it achieves, and output correction.
–The degree to which it achieves better outcomes than other systems do. A measure of the goodness of the A measure of the productivity, i.e.,
output the measure of the output against
 the input

Note: A system must be effective and efficient to the highest possibility to the user
of the system.

Goal of IT and IS
• Must contribute to both the effectiveness and efficiency of business
• Especially for business functions like accounting, finance, etc.

Goals
• may automate processes (ex: assembling cars),
• make innovative products & services accessible (ex: web-based customer
service),
• May shorten routine processes (ex: issuing purchase orders faster)
• May improve an organization’s strategic position (ex: establishing a website for
selling products before a competitor does)

IS
• Some companies use IS independently
Some reasons:
- Developed by different programmers
- Developed using different platforms
- Developed on different period which makes it difficult to interconnect.
• But IS in different business functions can be interdependent.
- This is possible when creating an enterprise system

Transaction Processing Systems

• Transaction
•Exchange involving goods and services
• Computerized system that performs and records the daily routine transactions
necessary to conduct the business; these systems serve the operational level of
the organization
TPS
● IS that supports and records transactions
● Basic business systems
○ serve the operational level
 ● performs and records the daily routine transactions necessary to the
Batch Transaction Processing Real-Time Transaction Processing
conduct of the business
● backbone of an organization's IS. Errors corrected after the Standardization is difficult or may not exist
-It monitors, collects, stores, processes & disseminates information for all routine processing
core business transactions.
-These data are input data to functional information systems applications, DSS, Time delay in gathering data, Processing needs make control difficult
storing and bulk processing
and CRM
• TYPE: Operational-level Operational costs may increase System h/w and s/w is expensive
• INPUTS : transactions, events
• PROCESSING: updating, computing Only identical data is processed Backup is critical in case of system crash
• OUTPUTS: detailed reports in one batch
• USERS: operations personnel, supervisors
Security is critical in case of crash/data security
• DECISION-MAKING: highly structured
Possibility of data corruption requires backup
Types of TPS
Batch Processing Transactions:
TPS in Finance and Accounting
- Is the processing as the collection/storage of data at the time of the event with
the actual updating of the database later when it is scheduled or there is enough Major Functions of Systems Major Application Systems
data
Example: telephone account, which may accumulate over a period of time Budgeting General Ledger

General Ledger Accounts Receivable/Payable

Real time Transaction processing
-As the immediate processing of data with the database updated as the transaction Billing Funds Management System
is being carried out
Example: POS in groceries, ATM, e-ticketing Cost Accounting

Advantages TPS in Sales/Marketing

Batch Transaction Processing Real-Time Transaction Processing Major Functions of Systems Major Application Systems
Control over time of processing Processing time is fast/quick Sales Management Sales Order Information System
Standardization Data is processed as demanded Market Research Market Research System
Reduce set-up and processing Error connection can be immediate Promotion Sales Commission System
costs
Pricing
Disadvantages
 New Products Alumni Alumni monitoring system

TPS in Manufacturing/Production Knowledge Work Systems (KWS)

● KWS aids knowledge workers while OAS aids data workers
Major Functions of Systems Major Application Systems
● Knowledge workers perform three key roles that are critical to the
Scheduling Machine control Systems organization and to the managers who work within the organization:
– Keeping the organization current in knowledge
Purchasing Purchase Order Systems – Serving as internal consultants regarding the areas of their knowledge
– Acting as change agents
Shipping/Receiving Quality Control Systems
● KWS great computing power, access to external databases, easy-to-use
Engineering interfaces, and optimization for the specific tasks to be performed.

Operations

TPS in Human Resources Knowledge Work Systems (KWS)

Knowledge level
Major Functions of Systems Major Application Systems • Inputs: Design specifications
• Processing: Modeling
Personnel Records Payroll System
• Outputs: Designs, graphics
Benefits Employee Records • Users: Technical staff and professionals

Compensation Benefits Systems Examples of knowledge work systems

• CAD/CAM systems: systems automate the creation and revision of designs,
Labor Relations Career path Systems
using computers and sophisticated graphics software.
Training
• Virtual reality systems: use interactive graphics software to aid drug designers,
architects, engineers, and medical workers by presenting precise, three-
Other Types of TPS (ex. Educational institution)
dimensional simulations of objects.
Major Functions of Systems Major Application Systems
• Investment workstations: high-end PCs used in the financial sector to analyze
Admissions Registration System trading situations instantaneously and facilitate portfolio management.
Grade records Student Transcript System
Management Info. Sys. (MIS)
Course records Curriculum class control system • focuses on the management of information systems to provide efficiency and
effectiveness of strategic decision making.
 MIS Characteristics
Management level ● Management oriented
• Inputs: High volume data –Provide information support to management…
• Processing: Simple models ● Management directed
• Outputs: Summarized reports –Be directed by management on their needs and requirements more effectively
• Users: Middle managers ● Integrated
– Comprehensive and complete view of subsystems
MIS Example: ● Common data flows
• Annual budgeting system – There is common data flow because of integration which will further help in
• Sales management avoiding duplicacy and redundancy in data collection, storage and processing.
• Inventory control & management ● Heavy planning-element
• Capital investment analysis – preparation of MIS is not a one or two-day exercise. It usually takes 3 to 5 years
• Relocation analysis and sometimes a much longer period.
TPS with MIS capability ● Subsystem concept
–When a problem is seen in 2 sub parts, then the better solution to the problem is
possible.
● Common database:
–Having one database for the entire system
● Computerized:
– The use of computers for MIS increases the effectiveness and the efficiency of
the system.
● User friendly/Flexibility:
–An MIS should be flexible.
● Information as a resource:
– Information is the major ingredient of any MIS.

Decision-Support Systems (DSS)

● Interactive, computer-based systems that aid users in judgment and
MIS Features
choice activities
● Structured and semi-structured decisions
Management level
● Report control oriented
• Inputs: Low volume data
● Past and present data
• Processing: Interactive
Must be in all types
• Outputs: Decision analysis
● Timeliness
• Users: Managers, Professionals, staff
● Accuracy
● Consistency
DSS example:
● Completeness
• Sales Region analysis
● Relevance
• Production Cost Scheduling analysis ● 5-year sales trend forecasting
• Pricing/profitability analysis ● 5-year operating plan system
• Contract cost analysis ● 5-year budget forecasting
● Profit planning
● Personnel planning

ESS features
● Top level management
● Designed to the individual
● Ties CEO to all levels
● Very expensive to keep up
● Extensive support staff
DSS Sample Report

TOPIC 4: Information System in the Enterprise

• Information systems help organizations

–Achieve great efficiencies by automating parts of processes
–Rethink and streamline processes

Executive-Support System (ESS)

Intended to be used by the senior managers directly to provide support to non-
programmed decisions in strategic management.

Strategic Level:
• Inputs: Aggregate (collective) data Management Challenges
• Processing: Interactive 1. Integration: Different systems serve variety of functions, connecting
• Outputs: Projections organizational levels is difficult and costly
• Users: Senior managers 2. Enlarging scope of management thinking:
Huge system investments, long development time must be guided by common
ESS Example: objectives
 Enterprise Applications
• Enterprise systems
• Enterprise Resource Planning
• Supply chain management systems
• Customer relationship management systems
• Knowledge management systems

Traditional view of systems

• Within the business: –There are functions, each having its uses of information
systems
Business processes
• Outside the organization’s boundaries: –There are customers and suppliers
• Manner in which work is organized, coordinated, and focused to produce a
● Functions tend to work in isolation
valuable product or service
• Concrete work flows of material, information, and knowledge—sets of activities
• Unique ways to coordinate work, information, and knowledge
• Ways in which management chooses to coordinate work

Example of Business Processes

• Manufacturing and production: Assembling product, checking quality, producing
bills of materials
• Sales and marketing: Identifying customers, creating customer awareness,
selling
• Finance and accounting: Paying creditors, creating financial statements,
managing cash accounts
• Human Resources: Hiring employees, evaluating performance, enrolling
employees in benefits plans
• With the business processes in the organization, how can it be utilized to create
an Information system?

Cross-Functional Business Processes

• Transcend boundary between sales, marketing, manufacturing, and research and
development
• Group employees from different functional specialties to a complete piece of work
Example: Order Fulfillment Process
 • With this
–ERP systems is a clear phenomenon in the IT marketplace

Enterprise System
• software package that enables the integration of transactions-oriented data and
business processes throughout an organization (and perhaps eventually
throughout the entire interorganizational supply chain)

• A.k.a
–Enterprise-wide Information System
–Enterprise Integration System

Historical context of Ent.Sys • includes ERP software and

• There were “island of automation” –different systems were created independently • related packages:
or loosely –advanced planning and scheduling,
• 1970s – vision to have an integrated IS… –sales force automation,
–But was not possible due to: –customer relationship management, and
• Capacity of computers –product configuration.
• Programming languages were not flexible
• Organization were contented to manage themselves along narrow • provide a technology platform that enables firm to integrate and coordinate their
functional lines business processes.

Historical... • a single system that is central to the firm and ensure that information can be
• 1990s, many IS communities started developing integrated systems • Many shared across all functional levels and management hierarchies.
companies tried redeveloping their core transaction systems for client/server
architecture • are invaluable in eliminating the problem of information fragmentation caused by
– But it was expensive and highly failure prone multiple information systems in an organization, by creating a standard data
– Packages as an alternative to in-house development became an structure.
appealing option CHARACTERISTICS OF ENT. SYS.
– Packages got a huge boosts • Integration
• 1998 – many implemented ERPS systems - “seamless integration” of all the
– Reasons why annual revenue got its high mark information flowing through a company -
—financial and accounting information,
• ERP vendors took advantage human resource information, supply
–Focused on smaller firms chain information, and customer
–SAP, Inc. $3.3 Billion revenue in 1997 for their sales on SAP information” (Davenport, 1998, p. 121).
–Integration depends on “configuring”
(setting up) the system in particular ways • Decrease computer operating costs
• It depends on which modules to install and integrate • Consolidate multiple different systems of the same type
• Packages
–Most are commercial packages Business Reasons for adopting Enterprise Systems
• Purchased or leased from software vendor rather than being developed • Accommodate business growth
in-house... • Improve informal and/or inefficient business processes
–IS has different life cycle • Clean up data and records through standardization
• Package adopters forgo/curtail the analysis of current information • Reduce business operating and administrative expenses
requirement and business processes. Configuring is different from programming. • Reduce inventory carrying costs and stockouts
Configuring is selecting a module of the package while programming is more of • Eliminate delays and errors in filling customers’ orders
creating new software functionality. • Provide integrated IT support
–Organization enter into a long term relationship with the software vendor. • Standardize procedures
• Improve companywide decision support
• Best Practices
–Built to support generic business processes which may differ from the way the
firm does business but they are designed to fit the needs of the organization
• Some Assembly required Enterprise Systems...
–What is integrated is the software, not the computing platform where it runs • Externally focused systems
–great difficulty integrating their enterprise software with a package of hardware, –coordinate business activities with customers, suppliers, and business partners
operating systems, database management systems software, and who operate outside the organizational boundary. – Systems that communicate
telecommunications suited to their particular organizational size, structure, and across organizational boundaries are called interorganizational systems (IOS).
geographic distribution.
• Internally focused applications
• Evolving –Systems used in the value chain.
–Rapidly changing, architecturally changing Value chain – set of business activities
–1980s – enterprise systems were designed for mainframe architecture Value Chain
–Now – designed for client-server architecture and –Having a web-enabled • Primary activities and support activities
versions of the software – Primary activities are functional areas within an organization that process inputs
and produce outputs. It includes Inbound logistics, Operations and manufacturing,
Technical Reasons for adopting Enterprise Systems Outbound logistics, Marketing and sales, Customer service
• Integrate applications cross-functionally – Support activities are those activities that enable primary activities to take place.
• Replace hard-to-maintain interfaces • Infrastructure (hardware & software)
• Reduce software maintenance burden through outsourcing • Human resources (hiring, interview scheduling, payroll, benefits)
• Eliminate redundant data entry and concomitant errors and difficulty analyzing • Technology development (software selection, Internet, intranet,
data extranet)
• Improve IT architecture • Procurement (purchasing of goods and services required as
• Ease technology capacity constraints inputs primary services)
 functional systems such as manufacturing, finance, procurement and distribution.
• allow companies to replace their existing ISs and also help to standardize the
• Everything an enterprise does should create value for its customers (acdg. to flow of management information and have been regarded as the next step in the
Porter) –Creating value has cost evolution of MRPII (Manufacturing Resource Planning).
• i.e. creating cars something of value but must pay various inputs
such as materials, supplies, and time of employees.

Benefits of Enterprise Systems

• Firm structure and organization: One organization
• Management: Firm-wide knowledge-based management processes
• Technology: Unified platform
• Business: More efficient operations and customer-driven business processes
Challenges of Enterprise Systems
• Difficult to build: Require fundamental changes in the way the business
operates
• Technology: Require complex pieces of software and large investments of time,
money, and expertise
• Centralized organizational coordination and decision making: Not the best
way for the firms to operate Benefits from ERP
• Business process automation
Types of enterprise systems • Timely access to management information
• Packaged applications • Improvement in the supply chain via the use of E-communication and E-
• Custom applications commerce.
• Stand-alone applications • Companies that use ERP can gain a competitive advantage from the way they
implement the system and then exploit the resulting data. Many companies that
THINGS RELATED TO ERP have installed ERP have claimed to be more nimble within the marketplace than
Inventory, Service, Sales, Purchasing, CRM, MRP, Financials, Product their competitors with hard-to change custom made systems (Latamore, 1999)

ERP ERP Systems

• aims to integrate business processes through the support of an integrated • ERP Software vendor market had experienced rapid growth in the late 90s
computer information system (O’Brien, 1999). • Some ERP software
• It has been estimated that businesses around the world have been spending –SAP AG
almost $10 billion per year on ERP systems. –Oracle Corp.
• Integrated applications –PeopleSoft
• Groups of software applications integrated to form enterprise-wide information –J.D. Edwards
systems –Baan Corp
• allows the corporate management of a business, and aims to integrate individual
 and customers as an integrated whole (Escalle et al., 1999).
• Most ERP are based on Client/Server model NOT ring, bus, or peer2peer
topologies. • Organization must assess itself, if it is ready for ERP
• Empty boxes represent 3rd party add-on modules – careful planning, assessing, implementation and management
Basic SAP Modules • The organization must also be organized before ERP is implemented
Third Party Modules • The key factor of an ERP implementation is the way in which the software is
• Customer Relationship Management (CRM)— configured. The most important issue to identify before an implementation is the
builds and maintains customer related data ‘core’ of the business, which can be identified by the use of the business model
• Customer Self-Service (CSS)—allows (Chung and Snyder, 2000).
customers to complete tasks without assistance
• Sales Force Automation (SFA)—automates ERP software best features
sales tasks such as order processing and • Peoplesoft best meets its human resource information needs
tracking • Oracle Applications is best suited for its financial information needs
• Supply Chain Management (SCM)—plans and • SAP is ideal for tracking information in its manufacturing processes.
executes demand planning, inventory acquisition,
manufacturing, distributing and selling Reasons why companies use ERP
• Product Lifecycle Management (PLM)—manages product data from design • Integrate financial information
through disposal of product • Integrate customer order information
• Standardize and speed up manufacturing processes
• Reduce inventory
• Standardize HR information

THINGS RELATED TO CUSTOMER RELATIONSHIP MANAGEMENT

E-mail Integration, Follow up and Projects, Documents, E-mail Marketing, Sales
Calls, Relationship Management

ERM
• Manages all ways used by firms to deal with existing and potential new
ERP Implementation customers
• When successfully implemented • Uses information system to coordinate entire business processes of a firm
–Links all areas of the company including order management, • Provides end-to-end customer care
manufacturing, human resources, financial systems, and distribution with external • Provides a unified view of customer across the company
suppliers and customers into a tightly integrated system with shared data and • Consolidates customer data from multiple sources and provides analytical tools
visibility (Chen, 2001). for answering questions
• Potential benefits include drastic declines in inventory, breakthrough reductions
in working capital, abundant information about customer wants and needs, along CRM model
with the ability to view and manage the extended enterprise of suppliers, alliances • managing a company’s interactions with current and future customers.
• involves using technology to organize, automate, and synchronize sales, THINGS RELATED TO SUPPLY CHAIN MANAGEMENT
marketing, customer service, and technical support Analysis, Management, Manufacturing, Time to Market, Distribution, Plan,
CRM Types & Variations Procurement, Logistic, Profit
• Sales Force Automation (SFA) – uses software to streamline the sales process
• Marketing – systems for marketing track and measure campaigns over multiple SCM
channels • Supply network
• Customer service and support – create, assign and manage requests made by • management of a network of interconnected businesses involved in the provision
customers of product and service packages required by the end customers in a supply chain
• Appointments – Appointment CRMs automatically provide suitable appointment • Close linkage and coordination of activities involved in buying, making, and
times to customers moving a product
• Integrates supplier, manufacturer, distributor, and customer logistics time
ERM • Reduces time, redundant effort, and inventory costs
• Network of organizations and business processes
• Helps in procurement of materials, transformation of raw materials into
intermediate and finished products

• Supply chain
– the producers of supplies that a company uses
– What if supply chain does not collaborate?

• Two objectives of upstream information flow:

– Accelerate product development
– Reduce costs associated with suppliers

SCM Limitations:
CRM
• Inefficiencies can waste as much as 25% of company’s operating costs
• New opportunities for competitive advantage
• Bullwhip Effect: Information about the demand for the product gets distorted as it
• CRM vendors
passes from one entity to next
• SAP AG, Oracle, Salesforce.com, Microsoft CRM, Amdocs • Some companies
Some SCM SOFTWARE
using CRM:
• Accellos
– MGM
• Epicor
– American Airlines
• CoreIMS
– Marriott International
• Geneva Business Management Systems
• CRM vendors offer...
• 3PL Central
–Subscription-based web tools (cloud computing)
–Software as a Service (SaaS)
–Salesforce.com
– first to provide enterprise applications through a web browser
 Knowledge Management System
• Creating knowledge
• Discovering and codifying knowledge
• Sharing knowledge
• Distributing knowledge

Interorganizational Systems (IOS)

• Are systems shared by two or more organizations to transfer data electronically
• key purpose: to streamline the flow of information from one company’s operations
to another
• provides electronic transmission of information to another company.
• Competitive advantage can be accomplished by integrating multiple business
SCM processes to meet a wide range of unique customer needs.
• Helps in distribution of the finished products to customers • Sharing information between organizations helps companies to adapt more
• Includes reverse logistics - returned items flow in the reverse direction from the quickly to changing market conditions.
buyer back to the seller
• Vertical Information interchange
How I.S. Facilitate SCM –Output of an organization is used in the processes of another organization
• Decide when, what to produce, store, move –Example: Kmart, Wal-Mart, Toys R Us allow their suppliers to connect to their
• Rapidly communicate orders inventory system – thereby saving time and money because suppliers do much of
• Communicate orders, track order status inventory control and monitoring
• Check inventory availability, monitor levels
• Track shipments • Electronic Data Interchange (EDI)
• Plan production based on actual demand –An interorganizational IS that utilize telecommunications to exchange data.
• Rapidly communicate product design change –It is also a set of hardware, software, and standards that accommodates
• Provide product specifications interorganizational exchanges of data
• Share information about defect rates, returns –Has been used in some industries over the past 3 decades
SCM
• Supply chain planning system: Enables firm to generate forecasts for a product The Formula for Enterprise System Success
and to develop sourcing and a manufacturing plan for the product • Secure executive sponsorship
• Supply chain execution system: Manages flow of products through distribution • Get help from outside experts
centers and warehouses • Thoroughly train users
• Take a multidisciplinary approach to implementation
Things related to KMS
Project management, Workflow, Decision Support, Document Management, Data
Warehouse, Groupware