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Lecture 3 4/10/11.

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1 Lecture 3 4/10/11

2 Perspectives on Information Systems
Business information value chain Raw data acquired and transformed Value of information system determined by competitive edge Business perspective: Calls attention to organizational and managerial nature of information systems During this and the next slide, emphasize that the end result of the business information value chain will always be profitability. Questions for students: What aspects of the business perspective might be lacking? Are there other perspectives that might provide a different picture? (sociotechnical)

3 The Business Information Value Chain
Perspectives on Information Systems The Business Information Value Chain Again, emphasize that the end result of the business information value chain is (almost) always firm profitability. You could also ask students if they could imagine any reason to create an information system besides profitability (it’s not likely that they will think of one, which will prove the point). One reason to create a system that is not primarily profit oriented is to meet the information reporting requirements of government and other authorities. From a business perspective, information systems are part of a series of value-adding activities for acquiring, transforming, and distributing information that managers can use to improve decision making, enhance organizational performance, and, ultimately, increase firm profitability. Figure 1-7

4 Contemporary Approaches to Information Systems
Perspectives on Information Systems Contemporary Approaches to Information Systems Ask students which of the two major types of approaches, behavioral and technical, they find to be most appropriate or accurate. Why do they feel this way? Emphasize that the technical approach does not ignore behavior and the behavioral approach does not ignore technology, but that they are indeed two distinct approaches. The study of information systems deals with issues and insights contributed from technical and behavioral disciplines. Figure 1-9

5 The Order Fulfillment Process
Business Processes and Information Systems The Order Fulfillment Process Emphasize that each rectangle represents one part of the larger business process of order fulfillment. Notice that this business process spans more than one type mentioned on the previous slide. Fulfilling a customer order involves a complex set of steps that requires the close coordination of the sales, accounting, and manufacturing functions. Figure 2-1

6 Perspectives on Information Systems
Levels in a Firm Ask students to think about how information systems would factor into the day-to-day jobs of each of the three types of workers in the pyramid. Business organizations are hierarchies consisting of three principal levels: senior management, middle management, and operational management. Information systems serve each of these levels. Scientists and knowledge workers often work with middle management. Figure 1-6

7 Types of Business Information Systems
A Payroll TPS Note that the outputs of the payroll system are useful not only within the company to managers, but also to regulatory agencies and other entities relying on the accuracy of the reported data. A TPS for payroll processing captures employee payment transaction data (such as a time card). System outputs include online and hard-copy reports for management and employee paychecks. Figure 2-2

8 How Management Information Systems Obtain Their Data from the Organization’s TPS
Emphasize the relationship between TPS and MIS here. MIS receive data from an organization’s TPS systems and create outputs that management can use to make strategic decisions. In the system illustrated by this diagram, three TPS supply summarized transaction data to the MIS reporting system at the end of the time period. Managers gain access to the organizational data through the MIS, which provides them with the appropriate reports. Figure 2-3

9 Voyage-Estimating Decision Support System
DSS can rely on either analytical models or large databases to provide valuable information. You could ask which of these two types the above figure best resembles (analytical models). You could also ask them what types of decisions does this system help its users make? Examples include what vessels to send to particular destinations to maximize profit, the optimal rate at which vessels should travel to maximize efficiency while still meeting their schedules, and so forth. This DSS operates on a powerful PC. It is used daily by managers who must develop bids on shipping contracts. Figure 2-5

10 Model of an Executive Support System
The digital dashboard is a common feature of modern-day ESS. Emphasize that a critical feature of ESS is ease of use and simplicity of display. Executives using an ESS want quick access to the most critical data affecting their firm. This system pools data from diverse internal and external sources and makes them available to executives in easy-to-use form. Figure 2-6

11 Systems That Span the Enterprise Enterprise Application Architecture
Representing an integrated enterprise system in a single graphic is very difficult. The basic point is that enterprise systems are very large and diverse databases that pull information from many parts of the firm, and many systems, and then dispense that information to a very wide variety of groups. This is precisely their advantage: one system, one company, one world. The multi-colored triangle represents an organization – the ovals represent the business functions and organizational levels affected by enterprise applications. The horizontal oval extends outside of the triangle because even business functions involving outside entities may be automated by enterprise applications. Enterprise applications automate processes that span multiple business functions and organizational levels and may extend outside the organization. Figure 2-7

12 Types of Business Information Systems
Enterprise Systems Emphasize the central repository used in enterprise systems for all types of information collected and used by the business. Ask students what the difficulties of creating such a system might be (standardization across many business units, size of the system). Enterprise systems integrate the key business processes of an entire firm into a single software system that enables information to flow seamlessly throughout the organization. These systems focus primarily on internal processes but may include transactions with customers and vendors. Figure 2-8

13 Executive Team Dashboard
Types of Business Information Systems Executive Team Dashboard Salesforce is a pioneer of the software-as-a-service business model, under which they provide their CRM services online to companies without proprietary CRM systems or companies looking to acquire useful marketing information at a reduced cost. Ask students if they can think of other Saas applications. How about iTunes?, or a social network like MySpace. What kinds of applications can they find at these consumer sites? Illustrated here are some of the capabilities of, a market-leading provider of on-demand customer relationship management (CRM) software. CRM systems integrate information from sales, marketing, and customer service.

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