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Foundations of Information Systems in Business Syafrizal Helmi.

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1 Foundations of Information Systems in Business Syafrizal Helmi

2 Explain why knowledge of information systems is important for business professionals and identify five areas of information systems knowledge they need. Explain why knowledge of information systems is important for business professionals and identify five areas of information systems knowledge they need. Chapter Objectives

3 An IS Framework for Business Professionals

4 Give examples to illustrate how electronic business, electronic commerce, or enterprise collaboration systems could support a firms business processes, managerial decision making, and strategies for competitive advantage. Give examples to illustrate how electronic business, electronic commerce, or enterprise collaboration systems could support a firms business processes, managerial decision making, and strategies for competitive advantage.

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6 Provide examples of the components of real world information systems. Illustrate that in an information system, people use hardware, software, data, and networks as resources to perform input, processing, output, storage, and control activities that transform data resources into information products. Provide examples of the components of real world information systems. Illustrate that in an information system, people use hardware, software, data, and networks as resources to perform input, processing, output, storage, and control activities that transform data resources into information products. Chapter Objectives

7 Provide examples of several major types of information systems from your experiences with business organizations in the real world. Provide examples of several major types of information systems from your experiences with business organizations in the real world. Identify several challenges that a business manager might face in managing the successful and ethical development and use of information technology in a business. Identify several challenges that a business manager might face in managing the successful and ethical development and use of information technology in a business. Chapter Objectives

8 Capital managementCapital management Foundation of doing businessFoundation of doing business ProductivityProductivity Strategic opportunity and advantageStrategic opportunity and advantage There are four reasons why IT makes a difference to the success of a business:

9 IT is the largest single component of capital investment in the world The success of your business in the future may well depend on how you make IT investment decisions. Capital Management:

10 Information Technology Capital Investment Figure 1-1 Source: Based on the data in U.S. Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, Tables 5.2 and 5.8, 2004.

11 Most businesses today could not operate without extensive use of information systems and technologies. Most businesses today could not operate without extensive use of information systems and technologies.

12 Foundation IT Using IT to Growth business Using IT to Growth business

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14 IT is vital to the development of new products.IT is vital to the development of new products.

15 IT can increase market share. IT can increase market share.

16 IT can help a business become a high-quality, low-cost producer IT can help a business become a high-quality, low-cost producer

17 The Interdependence between Organizations and Information Systems Figure 1-2

18 Productivity IT is one of the most important tools managers have to increase productivity and efficiency of businesses

19 IT Increase Productivity

20 Strategic Opportunity and Advantage: Create competitive advantage: IT makes it possible to develop competitive advantages.

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23 Differentiate yourself from your competitors: Amazon has become the largest book retailer in the United States on the strength of its huge online inventory and recommender system. It has no rivals in size and scope. Strategic Opportunity and Advantage:

24 Create new services: eBay has developed the largest auction trading platform for millions of individuals and businesses. Competitors have not been able to imitate its success.

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26 New Business Models: Dell Computer has built its competitive advantage on an IT enabled build-to- order business model that other firms have not been able to imitate.

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28 1.Internet growth and technology convergence : Growth in e-business, e- commerce, and e- government, eTrade.com, making many traditional business models obsolete: the corner music store and video store. Growing impact of IT in business firms can be assessed from the following five factors:

29 2. Transformation of the business enterprise : Flattening, Decentralization, Flexibility, Location independence, Low transaction and coordination costs, Empowerment, Collaborative work and teamwork

30 : 3. Growth of a globally connected economy : Management and control in a global marketplace, Competition in world markets, Global workgroups, Global delivery systems

31 4. Growth of knowledge and information-base economies : Knowledge and information-based economies, New products and services, Knowledge as a central productive and strategic asset, Time- based competition, Shorter product life, Turbulent environment, Limited employee knowledge base

32 Emergence of the digital firm : Digitally enabled relationships with customers, suppliers, and employees, Core business processes accomplished using digital networks, Digital management of key corporate assets

33 Information Systems Resources People Software Hardware Networks Data Components of an Information System

34 What is an Information System? Input of Data Resources Input of Data Resources Processing Data Processing Data Output of Information Products Output of Information Products Control of System Performance Storage of Data Resources

35 What is a System? Manufacturing Process Input of Raw Materials Output of Finished Products Environment Other Systems Control by Management Control Signals Control Signals Feedback Signals Feedback Signals System Boundary

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37 Components of an Information System

38 Functions of an Information System

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40 Attributes of Information Quality

41 Information Systems Are More than Computers

42 Penggunaan SI secara efektif membutuhkan pemahaman dari organisasi, manajemen, dan IT yang membentuk sistem tersebut. Penggunaan SI secara efektif membutuhkan pemahaman dari organisasi, manajemen, dan IT yang membentuk sistem tersebut.

43 Major Roles of Information Systems Support Strategies for Competitive Advantage Support Business Decision Making Support Business Processes and Operations

44 The Business Information Value Chain Figure 1-7

45 The e-Business Enterprise Manufacturing and Production Engineering & Research Accounting, and Finance Suppliers and Other Business Partners Supply Chain Management Procurement, Distribution, and Logistics Customer Relationship Management Marketing Sales Customer Service Consumer and Business Customers Company Boundary Intranets The Internet Extranets

46 History of the role of Information Systems Data Processing Management Reporting Decision Support Strategic & End User Electronic Commerce Electronic Data Processing - TPS Management Information Systems Decision Support Systems - Ad hoc Reports End User Computing Exec Info Sys Expert Systems SIS Electronic Business & Commerce -Internetworked E-Business & Commerce

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48 Types of Information Systems Transaction Processing Systems Process Control Systems Enterprise Collaboration Systems Operations Support Systems Management Information Systems Decision Support Systems Executive Information Systems Management Support Systems Information Systems

49 Other Categories of Information Systems Expert Systems Knowledge Management Systems Functional Business Systems Strategic Information Systems Cross-Functional Information Systems

50 The Information Systems Development Process

51 Management Challenges of the E-business Enterprise Business Strategies Business Processes Business Needs Customer Relationships Business Partners Suppliers Business Customers Ethical Considerations Potential Risks? Potential Laws? Possible Responses? IS Human Resources IS Development IT Infrastructure IS Performance Organization Structure and Culture User Acceptance

52 Types of Information Systems

53 Major Types of Systems Transaction Processing Systems (TPS) Management Information Systems (MIS) Decision-Support Systems (DSS) Executive Support Systems (ESS)

54 Transaction Processing Systems (TPS)

55 A Symbolic Representation for a Payroll TPS

56 Management Information Systems Management Information Systems Chapter 2 Information Systems in the Enterprise MAJOR TYPES OF SYSTEMS IN ORGANIZATIONS Typical Applications of TPS

57 Management Information Systems (MIS)

58 Management level Inputs: High volume transaction level data Processing: Simple models Outputs: Summary reports Users: Middle managers Example: Annual budgeting

59 Management Information Systems (MIS)

60 Management Information Systems (MIS) (continued) Figure 2-6 A sample MIS report

61 Decision-Support Systems (DSS)

62 Management level Inputs: Transaction level data Processing: Interactive Outputs: Decision analysis Users: Professionals, staff Example: Contract cost analysis

63 Decision-Support Systems (DSS) (Continued) Voyage-estimating decision-support system

64 Executive Support Systems (ESS)

65 EXECUTIVE SUPPORT SYSTEMS (ESS): Inputs: Aggregate data Processing: Interactive Outputs: Projections Users: Senior managers Example: 5 year operating plan

66 Model of a Typical Executive Support System Figure 2-8

67 Figure 2-2

68 Relationship of Systems to One Another

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70 Traditional View of Systems

71 Enterprise Systems

72 Thanks for your Attention

73 Sources : Kenneth C Loudon & Jane P Loudon, Management Information System, managing the digitAL firm, Sources : Kenneth C Loudon & Jane P Loudon, Management Information System, managing the digitAL firm,


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