Introduction to Information Systems ISYS 263 David Chao

What is an Information System? An organized combination of… –People –Hardware and software –Communication networks –Data resources –Policies and procedures This system… –Stores, retrieves, transforms, and disseminates information in an organization An organizational solution, based on information technology, to challenges posed by the environment.

Fundamental Roles of IS in Business

Types of Information Systems Operations Support Systems –Efficiently support day-to-day operations Management Support Systems –Provide information and support for effective decision making by managers Strategic Information Systems –Help get a strategic advantage over customer

Transaction Processing Systems, TPS –Record and process business transactions Any exchange of money or other benefits between two or more parties Order processing, purchasing General ledger, accounts payable, accounts receivable –Large amount of data, high processing speed, high reliability, accuracy, and security (fault tolerant) –Data: internal, historical, detailed Operations Support Systems

Current Trend in Operations Support Systems Enterprise Resources Planning ERP –for the internal world of a company Customer Relationship Management CRM –for the external world of a company.

Enterprise Resources Planning, ERP ERP software is multi-module application software that integrates activities across functional departments, from product planning, parts purchasing, inventory control, product distribution, to order tracking. ERP software may include application modules for the finance, accounting and human resources aspects of a business. –Integrated –Cross-functional –Shared database Major vendors: –SAP, Oracle, Microsoft

Customer Relationship Management, CRM Front office operations: Direct interaction with customers, e.g. phone calls, , online services etc. Call Center Sales Force Automation tracks all contact that has been made with a given customer, the purpose of the contact, and any follow up that might be required. Sales Intelligence Cross-selling/Up-selling/Switch-selling Example: SalesForce.Com

Types of Management Support Systems Management Information Systems (MIS) –Reports and displays –Example: daily sales analysis reports Decision Support Systems (DSS) –Interactive and ad hoc support –Example: a what-if analysis to determine where to spend advertising dollars Executive Information Systems (EIS) –Critical information for executives and managers –Example: easy access to actions of competitors

Management Information Systems Facilitate management control by producing summarized reports that compare actual performance against planned performance on a regular and recurring basis. –Management control: Ensuring that performance meets established standards. Serve middle management Provide reports on firm’s current performance, based on data from TPS

Sample MIS Report

–Serve middle management –Support nonroutine decision making E.g. What is impact on production schedule if December sales doubled? –Often use external information as well from TPS and MIS Decision support systems

Information and Management Decisions A decision is a selection between several courses of action: –Penalty for bad decision Information helps reduce uncertainty: –Incomplete information Information systems improve decision- making effectiveness by providing decision makers with information related to the decisions for which they are responsible.

Structured Decision –The information requirements are known precisely. –The criteria for making decision are known. –The quality of a decision can be measured precisely.

Manager + Computer (DSS) Solution Computer Solution Manager Solution Structured Semistructured Unstructured DEGREE OF PROBLEM STRUCTURE The DSS Focuses on Semistructured Problems

–Support senior management –Address nonroutine decisions requiring judgment, evaluation, and insight –Incorporate data about external events (e.g. new tax laws or competitors) as well as summarized information from internal MIS and DSS Executive support systems

Components of an Information System Information technology People Database Procedure

People Information specialists –programmer, system analyst, database administrator, etc. End-user: –Menu-level end users –Command-level end users –End-user programmer End-user computing and management

Ethical Responsibilities What uses of IT might be considered improper or harmful to other individuals or society? What is the proper business use of the Internet or a company’s IT resources? How can you protect yourself from computer crime?

Do you think it is wrong to Copy company’s software for use at home? 35 % say no. Use company equipment like computers to search for a new job? 34% say no. Blame your own personal errors on technological glitches? 39% say no. Use office computers to do personal shopping on the Internet? 46% say no.

Workplace PCs May Not Be Very Private Don’t be fooled: It may be personal, but it is not private. Cyber-surveillance: The person most likely to be spying on you is your boss. 27% of businesses surveyed by the American Management Association said they review employee . Reasons: –Productivity –Liability –Network performance

Database A group of related files –Support business operations –Provide information

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Major Functions of Database Management Creating a database –Analysis: Entity-Relationship Diagram –Design: Design file structure –Implementation Accessing a database Updating a database

Database Security Logical protection: –Illegal access –Illegal update –Virus Physical protection

Internet firms flocks to store data in blast-proof bunker Some biggest companies are running their Internet operations on systems installed in a 300-foot-deep nuclear blast-proof bunker.

Procedures Procedure: A step-by-step process or a set of instructions for accomplishing specific results. –Operations –Backup and Recovery –Security –Development