TUTORIAL 1 ANSWERS

1. How do Information Systems differ from Information Technology?

Information systems are set of procedures that collect, processes, store and disseminates
information to support organizational decision-making and control. For example, Enterprise
Resource Planning (ERP) systems, and Customer Relationship Management (CRM) systems.
Information technology is the use of computer systems to manage, protect, process and exchange
information. For example, managing databases and data storage solutions.

Purpose:
Information systems involve analyzing and designing systems to solve business problems and
improve efficiency while Information technology involves managing and maintaining the
technology resources that power information systems.

2. What are some of the benefits businesses gain from effectively using BIS?
Enhanced Decision-Making: BIS facilitates decision-making through predictive analytics,
allowing businesses to identify new opportunities and risks. This enables them to respond
quickly and develop strategies to mitigate potential risks, thereby becoming more agile.
Support Operations: BIS can support businesses by automating routine tasks, thereby reducing
manual work and decreasing costs. This increased automation leads to higher productivity and
greater efficiency.
Competitive advantage: BIS can provide businesses insights into market trends, customer
behavior, and competitor activities. Businesses can develop innovative products with superior
value and minimise threat of substitution thus leading to competitive advantage.
CRM: BIS can support businesses by leveraging CRM systems. CRM systems can track
customer experiences and purchase history. It helps to build strong relationship with existing
clients and increases loyalty. Also it creates barriers to entry for new competitors who lack
similar customer insights and cannot match its capabilities.
 3. What are some current trends shaping the future of Business Information Systems?

Cloud computing

Scalability and Flexibility: Cloud-based BIS offer scalable solutions that can grow with a
business’s needs. They provide flexibility and access to advanced features without the need for
extensive on-premises infrastructure.

Artificial intelligence

Automate routine task

Predictive Analytics: These technologies are used for predictive analytics, enabling businesses
to anticipate trends, customer behavior, and potential risks.

Big Data Analytics

Data-Driven Decision-Making: The ability to analyze large volumes of data in real-time is
driving more informed decision-making. Advanced analytics tools help businesses gain insights
from complex data sets.

4. Imagine you're a small business owner. How could you use a Customer Relationship
Management system to your advantage?
Reducing threat of new competitors:
CRM systems can track customer experiences and purchase history. It helps to build strong
relationships with existing clients and increases loyalty. Also it creates barriers to entry for new
competitors who lack similar customer insights and cannot match its capabilities.
Personalise customer experiences:
As a CRM system tracks detailed information about customers, a small business owner can
leverage this data to analyze buying trends and preferences. This analysis enables the owner to
develop products and services that better align with customer expectations, ultimately enhancing
satisfaction and driving sales.
 5. A large manufacturing company wants to improve its supply chain efficiency. How
can a Supply Chain Management system help?
Improved Inventory Management
A Supply Chain Management (SCM) system can significantly enhance the efficiency of a large
manufacturing company’s supply chain through improved inventory management. Real-time
inventory tracking allows for visibility into inventory levels across various locations, reducing
the likelihood of stockouts and overstock situations. Demand forecasting tools utilize historical
sales data and predictive analytics to maintain optimal inventory levels, ensuring that production
and sales are aligned with customer demand.
Enhanced Supplier Management
SCM systems facilitate better communication and collaboration with suppliers, allowing
for more coordinated planning and problem-solving. They also enable the tracking and
evaluation of supplier performance based on metrics such as delivery times, quality, and
cost, helping to identify and address issues promptly to maintain a smooth supply chain
operation.

6. Explain how a marketing team could use a Business Intelligence tool to improve
their campaigns.

Data-Driven Decision Making

BI tools provide comprehensive data analytics that enable marketing teams to make informed
decisions. By analyzing data from various sources such as social media, website traffic, email
campaigns, and sales, marketers can identify what strategies are working and which ones are not.
This helps in making data-driven decisions rather than relying on intuition or guesswork.

Customer Insights

BI tools aggregate and analyze customer data, providing deep insights into customer behavior,
preferences, and demographics. By understanding who the customers are, what they are
interested in, and how they interact with the brand, the marketing team can create more targeted
and personalized campaigns.

Predictive Analytics

BI tools often come with predictive analytics capabilities that help forecast future trends based
on historical data. This allows the marketing team to anticipate customer behavior, market
trends, and potential challenges.
 7. A bank wants to improve its customer service and reduce wait times. How can
information systems help?

Chatbots and AI-Powered Customer Support

Chatbots and AI-powered customer support systems can handle routine inquiries and provide
instant assistance to customers. These systems can answer frequently asked questions, guide
customers through common processes, and escalate more complex issues to human
representatives. By handling a significant portion of customer inquiries, these systems reduce the
workload on human staff and minimize wait times.

Self-Service Kiosks and ATMs

Self-service kiosks and advanced ATMs can handle a wide range of transactions, such as
deposits, withdrawals, account inquiries, and bill payments. By enabling customers to complete
these transactions without waiting for a teller, these systems reduce congestion in branches and
free up staff to assist with more complex issues.

Customer Relationship Management (CRM) Systems

CRM systems can help banks manage customer interactions more effectively. By providing a
unified view of customer information and interactions, bank employees can quickly access
relevant details and provide personalized service. CRM systems can also automate routine tasks
such as appointment scheduling, follow-up reminders, and customer inquiries, reducing the time
customers spend waiting for responses.

8. What are the ethical considerations for storing and using large amounts of customer
data in business information systems?

Privacy

 Data Collection: Only collect data that is necessary for the business purpose. Avoid
collecting excessive or irrelevant information.
 Transparency: Be transparent about data collection practices, explaining why data is
collected, how it will be used, and who will have access to it.

Data Accuracy and Quality

 Accuracy: Ensure that the data collected is accurate and up-to-date. Incorrect or outdated
data can lead to poor decision-making and harm customer trust.
 Data Validation: Implement processes for validating and verifying the accuracy of
customer data regularly.
Security

 Data Protection: Implement robust security measures to protect customer data from
breaches, theft, or unauthorized access. This includes encryption, firewalls, and regular
security audits.
 Access Control: Limit access to customer data to authorized personnel only. Use role-
based access controls to ensure that employees only have access to the data necessary for
their job functions.