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1 IS715 – The Development, Management and Exploitation of Business Information Systems Week 1 - Strategic Management Information in Context.

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Presentation on theme: "1 IS715 – The Development, Management and Exploitation of Business Information Systems Week 1 - Strategic Management Information in Context."— Presentation transcript:

1 1 IS715 – The Development, Management and Exploitation of Business Information Systems Week 1 - Strategic Management Information in Context

2 2 Objectives: 1 to introduce the concept of strategic information 2 to understand the role of information in organisations 3 to look at internal sources of strategic information 4 to recognise the importance of external sources

3 3 What is Strategic Information (SI)?

4 4 Lecture Structure: Building Blocks of Strategic Information Requires awareness of: 1 data, information, knowledge 2 characteristics of information 3 managerial activities 4 managerial decision making 5 management levels 6 information requirements of levels 7 systems to support 8 CBIS & competitive advantage

5 5 1. Data, Information, Knowledge What is this? A slight inclination of the cranium is as adequate as a spasmodic movement of the optic to an equine devoid of its visionary capacity

6 6 What is this?

7 7 Definitions Data, is the record of an event or fact. Information is data processed for a purpose. G Curtis. Business Information Systems.

8 8 More definitions... Data items are the raw materials for producing information. Information is generally defined as data that is meaningful or useful to the recipient. Davis & Olsen. Management Information Systems

9 9 Final definitions... Data refers to facts. When data are filtered through one or more processors to that they take on both meaning and value to a person, they become information. Parker & Case. Management Information Systems.

10 10 2. Characteristics of Information

11 11 3. Managerial Activities To manage is to forecast and plan, to organise, to command, to co-ordinate and control. Fayol 1916 going to look at : information needs, levels of management,nature of problems etc.

12 12 What Does a Manager Do? operational process involving management functions of : planning, organising, staffing, directing, leading, controlling increasingly complex resulting from: IT developments globalisation international economics - Twin towers shrinking time frames - chasing the sun social constraints - green purchasing

13 13 4. Managerial Decision Making what Information does a manager need ? Information needs determined by decisions that must be made which are determined by set objectives Objectives Decisions Info Needs Decisions Info Needs

14 14 Model of Decision Making Simon (1960) Intelligence Choice Design Develop awareness that problem exists. Gather information on the problem. Try to develop alternative solutions. May require additional info. at this stage Heavily reliant on Design stage being undertaken properly. Should be straight forward. Decision Stage Search and scanning procedures Formulate model, search for alternatives, Predict/measure outcomes Select the best or best alternatives, design a plan of action

15 15 Decision Making Model

16 16 Types of Decision

17 17 5. Management Levels Operational Tactical Strategic Unstructured (non-programmable) Structured (programmable)

18 18 Levels of Decision Making Strategic Decision Making involves establishing objectives outlining long-term plans to meet those objectives Tactical Decision Making implementing decisions made at strategic level allocating resources needed to meet organisational objectives Operational Decision Making executing tasks ensure efficient, effective

19 19 Nature of Decisions at Management Levels

20 20 6. Decision Levels and Info Type Orientation Planning Horizon Performance Focus Coverage Level of Detail Uncertainty Degree of objectivity Level of Accuracy primarily internal immediate/few days current activities specific activities highly detailed low objectively measured high accuracy levels required internal & external short /medium term historical & current dept/function detailed & summarised reports degree of uncertainty objective & subjective data moderate accuracy levels more external medium/long term predictive rather than historical performance total organisation typically highly summarised high levels of uncertainty higher proportion is subjective accuracy less critical to decisions at this level Info Attributes OperationalTacticalStrategic

21 21 7. Computer Based Information Systems (CBIS) What is an information system? An information system is a group of interrelated components that work collectively to carry out input, processing, output, storage and control actions in order to convert data into information products that can be used to support forecasting, planning, control, co-ordination, decision making and operational activities in an organisation. Business Information Systems (Bocij 1999)

22 22 What are the Resources? people - users of the system (designers etc.) hardware - all machinery software - includes manuals, company documentation communication - intranets, extranets data - all data access regardless of form information technology - the technology computer based information systems (CBIS)

23 23 What are the CBISs

24 24 Transaction Processing Systems (TPS) basis of business operations recording and processing basic data sales, purchases etc. batch or online online - banking batch - bill processing main activities data capture data validation processing classification sorting data retrieval calculation summarising

25 25 outputs from TPS transaction documents action documents ie. airline tickets, picking slips to identify warehouse products information documents confirmation - list of credit card charges etc. query responses/reports transaction logs error (edit) reports detail reports summary reports

26 26 Strategic Use of TPS underestimated as purely technically oriented can provide strategic advantage by focusing on internal and customer interfaces airlines - TPS systems provide strategic information i.e. Platform Thomas Cook allows horizontal & vertical integration

27 27 Exploitation of TPS for Strategic Decision Making tracking systems locational systems asset management systems growing area electronic market place - securities, software, ideas, goods, services on the Internet

28 28 Office Automation Systems (OAS) applying IT to common office tasks word processing spreadsheets fax machines

29 29 Management Information Systems (MIS) designed to produce information needed for successful management of process, department or business support recurring decisions, where information needs have been determined in advance

30 30 Management Information Systems alternative views MIS - includes operational systems and TPS that only used indirectly by managers BIS - business information systems - used to describe all types of IS used in business ie. DSS, OIS and more appropriate than MIS MIS taken to include DSS, EIS, ES

31 31 Decision Support Systems (DSS) provide information to support semi or unstructured decisions provide information when needed users interact with the system identify, retrieve information to support decision, solve problem what if problems next phase - group decision support systems aimed middle and lower management

32 32 Executive Information Systems (EIS) internal, external information highly summarised form spot opportunity, problem or trend identify course of action to solution can have forecasting capabilities represent strategic planning tool serve control needs of high level management

33 33 EIS Characteristics immediate, easy access to information user friendly interface, graphic etc. no middle user access to int/ext. databases through standard interface includes future & current data easily tailored to specific mangers drill down capacity - see the detail behind the summaries

34 34 Expert Systems apply human knowledge & experience to range of problems comprises knowledge base controlled by rules knowledge base represents knowledge, experience of experts in given area rules organise knowledge base, allow interrogation examples : choosing computer system, performing medical diagnosis

35 35 8. CBIS & Competitive Advantage Porter - 5 competitive forces threat new entrants bargaining power of suppliers bargaining power of customers threat of substitute products or services rivalry amongst competitors competitive strategies to address cost leadership product differentiation innovation

36 36 Using CBIS for Strategic Advantage improving operational efficiency raising barriers to entry locking in customers and suppliers - American Airlines, SABRE promoting business innovation increasing switching costs leverage

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