Information Systems

Gaurav Bhati
087614
Information Systems
 Refers to a system of people, data records and activities
that process the data and information in an organization,
and it includes the organization's manual and automated
processes.
 Consists of 5 parts
 People
 Procedures
 Software
 Hardware
 Data
Computer- Based Information
Systems
 Information System (IS): A Process that
collects, processes, stores, analyzes,
and disseminates information for a
specific purpose.

 Computer Based information system

(CBIS): an information system that uses
computer technology to perform some
or all of its intended tasks.
Types of Information Systems

 Transaction processing systems

 Management information systems

 Decision support systems

 Expert systems

 Office automation

 Business Intelligence
Transaction Processing Systems
 Automate the handling of data about business
activities or transactions
 Data about each transaction are captured,
transactions are verified and accepted or
rejected and validated transactions are stored
for later aggregation
 Reports may be produced immediately to
provide summary of transactions and
transactions may be moved from process to
process
Transaction Processing Systems
 The analysis and design of TPS means focusing
on the firm’s current procedures for processing
transactions
 Implies a careful tracking of data capture, flow,
processing and output
 Goal is to improve processing
 Faster
 Less people

 Efficient

 Accurate
Management Information
Systems

 Subset of the overall internal controls

of a business to solve business
problems
 costing of a product
 service or a

 business-wide strategy

 "MIS'lives' in the space that intersects

technology and business
Management Information
Systems
 Planned system of the collecting,
processing, storing and disseminating data
in the form of information needed to carry
out the functions of management
 Includes (but is not limited to): decision
support systems, resource and people
management applications, project
management and database retrieval
application
Decision Support Systems

 Specific class of computerized information

systems that supports business and
organizational decision-making activities
 A properly-designed DSS is an interactive
software-based system intended to help
decision makers compile useful information
from raw data, documents, personal
knowledge, and/or business models to
identify and solve problems and make
decisions
Decision Support Systems

 Typicalinformation that a decision

support application might gather and
present
 an inventory of all of your current
information assets
 comparative sales figures between one

week and the next

 projected revenue figures based on new

product sales assumptions

Decision Support Systems

 Ever evolving
a computer based system to aid decision
making (1970s)
 interactive computer-based systems which

help decision-makers utilize data bases

and models to solve ill-structured problems
(late 1970s)
 using suitable and available technology to

improve effectiveness of managerial and

professional activities (1980s)
Decision Support Systems

 Ever evolving
 New challenge towards the design of
intelligent workstations (late 1980s)
 1987 Texas Instruments completed

development of the Gate Assignment

Display System (GADS) for United Airlines
 Data warehousing and on-line analytical

processing (OLAP) (1990s)

Decision Support Systems

 Architecture
 the database (or knowledge base)
 the model (i.e., the decision context and

user criteria)
 the user interface
Decision Support Systems

 Classification
 Text-oriented DSS
 Database-oriented DSS

 Spreadsheet-oriented DSS

 Solver-oriented DSS

 Rule-oriented DSS

 Compound DSS
Decision Support Systems

 Applications
 Clinicaldecision support system for
medical diagnosis
 Executive dashboard for faster decision

making
 Agricultural production

 Marketing for sustainable development

Decision Support Systems

 Benefits
 Improves personal efficiency
 Expedites problem solving
 Facilitates interpersonal communication
 Promotes learning or training
 Increases organizational control
 Creates a competitive advantage over competition
 Encourages exploration and discovery on the part of the
decision maker
 Helps automate the managerial processes
Expert Systems

 An expert system is a software that

attempts to reproduce the performance
of one or more human experts, most
commonly in a specific problem
domain, and is a traditional application
and/or subfield of artificial intelligence
Expert Systems

 Example
 Q. Do you know which restaurant you want
to go to? No
 Q. Is there any kind of food you would

particularly like? No
 Q. Do you like spicy food? No

 Q. Do you usually drink wine with meals?

Yes
 Q. When you drink wine, is it French wine?

Yes
Expert Systems

 Applications
 Accounting

 Medicine

 Process Control
 Loan mortgage

 Production

 Human resources
Expert Systems

 Advantages
 Provides consistent answers for repetitive
decisions, processes and tasks
 Holds and maintains significant levels of

information
 Encourages organizations to clarify the

logic of their decision-making

 Never "forgets" to ask a question, as a

human might
Expert Systems

 Advantages
 Can work round the clock
 Can be used by the user more frequently

 A multi-user expert system can serve more

users at a time
Expert Systems

 Disadvantages
 Lacks common sense needed in some decision making
 Cannot make creative responses as human expert would in
unusual circumstances
 Domain experts not always able to explain their logic and
reasoning
 Errors may occur in the knowledge base, and lead to wrong
decisions
 Cannot adapt to changing environments, unless knowledge
base is changed
Office Automation

 Varied computer machinery and software

used to digitally create, collect, store,
manipulate, and relay office information
needed for accomplishing basic tasks and
goals. Raw data storage, electronic transfer,
and the management of electronic business
information comprise the basic activities of
an office automation system. Office
automation helps in optimizing or automating
existing office procedures
Office Automation

 Thebackbone of office automation is a

LAN, which allows users to transmit
data, mail and even voice across the
network
Business Intelligence

 Refers to skills, technologies, applications

and practices used to help a business
acquire a better understanding of its
commercial context
 Business intelligence may also refer to the
collected information itself
 BI technologies provide historical, current,
and predictive views of business operations
Business Intelligence

 Common functions of business intelligence

technologies
 Reporting
 OLAP

 Analytics

 Data mining

 Business performance management

 Benchmarking

 Predictive analytics
Application Program

A computer program designed to support a

specific task, a business process , or another
application program.

 The collection of application programs in a

single department is usually considered a
departmental information system.
Evolution of Information
System

 Thefirst business application of

computers( in the mid- 1950s) performed
repetitive. High-volume, transaction –
computing tasks. The computers”
crunched numbers” summarizing and
organizing transactions and data in the
accounting, finance, and human
resources areas. Such systems are
generally called Transaction Processing
Systems (TPSs)
Evolution of IS (cont)…
 Management Information Systems (MISs): these
systems access, organize, summarize and display
information for supporting routine decision making in
the functional areas.

 Office Automation Systems( OASs ): such as word

processing systems were developed to support
office and clerical workers.
Evolution of IS (cont)…

 DecisionSupport Systems: were

developed to provide computer based
support for complex, non-routine decision.

 End-user computing: The use or

development of information systems by
the principal users of the systems’
outputs, such as analysts, managers, and
other professionals.
Evolution of IS (cont)…

 Intelligent Support System (ISSs): Include expert

systems which provide the stored knowledge of
experts to non-experts, and a new type of
intelligent systems with machine- learning
capabilities that can learn from historical cases.

 Mobile Computing: Information systems that

support employee who are working with
customers or business partners outside the
physical boundaries of their companies; can be
done over wire line or wireless networks.
Evolution of IS (cont)…

 Knowledge Management Systems: Support the

creating, gathering, organizing, integrating and
disseminating of an organization knowledge.

 Data Warehousing: A data warehouse is a database

designed to support DSS, ESS and other analytical
and end-user activities.
Classification of IS

The two most common classifications

are:

 Classification by Breath of support.

 Classification by Organizational
Level.
Breath of support
Typical information systems that follow the
hierarchical organization structure are
functional ( departmental ) enterprise wide
and inter-organizational

Functional information systems are organized

around the traditional departments.

Enterprise information systems serve several

department or the entire enterprise.
Inter-organizational systems connect two
or more organizations.

An organization’s supply chain describe the

flow of materials , information money and
service from raw material suppliers through
factories and warehouses to the end
customers.

IT provide two major types of software

solution for managing supply chain
activities . First enterprise resource
planning ( ERP), Second Supply Chain
Management (SCM)
Departmental, Corporate, &
Inter-Organizational IS
IT outside your organization
Web-Based Systems
Web based systems: Applications or service that are
resident on a server that is accessible using a web
browser and is therefore accessible from anywhere
via the internet.

Internet (“ the Net”): a world wide system of

computer – a network of networks; a public,
cooperative and self- sustaining facility accessible to
hundreds of millions of people worldwide.

Information Superhighway. A national fiber-optic-

based network and wireless infrastructure that will
connect all internet users in a country
World Wide Web

An application that uses the transport

functions of the Internet; has
universally accepted standards for
storing, retrieving formatting, and
displaying information via a
client/server architecture
Intranet

A private network, usually within one

enterprise that uses web technologies
such as browsers and internet protocols
separated from the Internet by a
security gateway such as a firewall
Extranet

A secured network that connects

several intranet via the Internet; allows
two or more enterprise to communicate
and collaborate in a controlled fashion .
Corporate portal

Web site that provide the gateway to

corporate information from a single
point of access.
Web-Based E-Commerce Systems
 ElectronicStorefront: The web-
equivalent of a showroom or a physical
store through which an e-business can
display and/or sell its products.

 Electronicmarket: A network of
interaction and relationships over which
information, products service and
payments are exchanged.
Web-Based E-commerce (cont)…
 Electronic exchange: A web based public electronic
market in which many buyer and many sellers interact
electronically .

 Mobile commerce: The buying and selling of goods and

services in a wireless environment.

 Location Based commerce: M–commerce transaction

targeted to customers in specific locations at specific
times.

 Enterprise Web: An open environment for managing and

delivering web application by combining service from
different vendors in a technology layer that spans platform
and business systems.
 IS Strategy
 The plan an organization uses in providing
information services.
 IS allows business to implement its business
strategy.
 IS helps determine the company’s
capabilities.
 Four key IS infrastructure components are
key to IS strategy.
 These key components are sufficient to allow
the general manager to assess critical IS
issues.
 What Who Where
Hardware List of physical  Individuals who use  Physical location
components of the  it
system Individuals who 
manage it
Software List of programs,  Individuals who use  What hardware it 
applications, and  it resides upon and 
utilities Individuals who  where that 
manage it hardware is located

Networking Diagram of how  Individuals who use  Where the nodes 

hardware and  it/ Individuals who  are located, where 
software  manage it/ the wires and other 
components are  Company service  transport media are 
connected obtained from located

Data Bits of information  Individuals who use  Where the 

stored in the system it information resides
Individuals who 
manage it

Figure Information systems strategy matrix.

 Three Primary Uses Of
Information Systems
Providing support to complete a task faster, more cheaply, and
perhaps with greater accuracy and/or consistency

Providing support to improve day-to-day operations by

creating, acquiring, and transferring knowledge

Providing support in a way that enables the firm to gain

or sustain competitive advantage over rivals
 Strategy and Strategy Moves
Strategic Information System
◆ Strategy

• A plan designed to help an organization 
outperform its competitor.
 Strategic Information System
Process of formulating, implementing, and
evaluating, strategies to accomplish long-term goals
and sustain competitive advantage
 IS that help seize opportunities
 Can be developed from scratch, or they can evolve from existing ISs.

A Typical Information System
Phases of SIS

◆ Strategic planning: ◆ Strategic 
Information 
 Basic  Forecast-based   
financial planning: ◆ more thorough  System: 
planning: analysis;  
 more thorough ◆ analysis of 
 little analysis; analysis; external and 
◆ internal info + 
environmental data  internal 
 info coming  internal info + environment;
from within environmental + forecast future 
the firm; data; trends; ◆ implementation, 
evaluation and 
 only control;
managers are ◆ made by planning 
 only managers
staff (top 
◆ made by lower 
involved; are involved; level managers+ 
managers)+ 
top managers+ 
 takes 2-3 takes one consultants; 
consultants; 

weeks; month; ◆ meet once a year;
◆ throughout the 
◆ ­ five­year plans  year;
 - one year  three to five
plan years plan ◆ ­ five­year plans
 Basic Model of Strategic
Information System

Environmental Evaluation
Strategy Strategy
Scanning and
Formulation Implementation
Control
Environmental Scanning

External: Social Environment

External: Task Environment

Internal: Structure

Internal: Culture

Internal: Resources
Strategy Formulation

Vision & Mission

Objectives

Strategies

Policies
 Products
Services Markets
Customers

Technology

Mission
Employees
Elements

Survival
Growth
Profit
Public
Image
Self-Concept Philosophy
Strategy Formulation Types of Strategies

A Large Company
Corp
Level

Division Level

Functional Level

Operational Level
Strategy Implementation

Programs

Budgets

Procedures
Strategy Evaluation & Control

Internal Review

External Review

Measuring Performance

Strategic audit
Feedback/Learning Process

Internal/External Review

Revision of Decisions

Corrective Actions
 Benefits of SIS
 Clear sense of strategic vision of the
firm
 Sharper focus on what is strategically
important
 Improved understanding of a rapidly
changing environment
Competitive Situation

 Competitive Forces Model by Porter

A business framework, devised by
Michael
Porter, for analyzing competitiveness
by looking at five major forces that
might alter a firm’s competitive
standing.