1/16: Information Systems in Business What is IS? How can we use IS?

What is IS? Information vs. Data Information can be defined as: –Data that have been processed into a form that is meaningful and useful to human beings. Data can be defined as: –Raw facts representing events in organizations or the environment before they are processed into a useful form.

What is an IS? Information System An Information System can be defined as: –Interrelated components working together to collect, process, store, and disseminate information to support decision making, coordination, control, analysis, and visualization in an organization.

What is IS? Input, Process, Output Input: collection of raw data for processing. Processing: conversion of data into information. Output: distribution of information to people or places that will use it. Feedback: output returned to modify inputs. INPUTOUTPUTPROCESS FEEDBACK

What is IS? Business Perspective An organizational and management solution, based on information technology, to a challenge posed by the environment. NOT JUST COMPUTER TECHNOLOGY ORGANIZATIONSTECHNOLOGY MANAGEMENT INFORMATION SYSTEMS SYSTEMS

How can we use IS? Scope of IS grows constantly –1950s: affect automation of clerical activities –1970s: affect managerial control & monitoring –1990s: affect core activities

Using IS: Networking Work Flattening organizations Telecommuting Virtual organizations Internet –A network of networks –World Wide Web, , FTP, eCommerce, etc. Intranet –Private network based on Internet & WWW standards

Using IS: Increasing Efficiency Improving work flows Increasing organizational flexibility –Mass customization –Micromarketing Increasing communication Expanding organizational boundaries

Using IS: eCommerce Electronic market: an IS that links buyers and sellers to exchange products, services, information, and payments. Electronic commerce: buying & selling goods & services using the Internet, networks, and other digital technologies. Electronic business: includes eCommerce & other business functions.

IS Parts: IT Infrastructure Hardware: physical equipment Software: programs & instructions that guide the computer Storage: Media & software governing it Communications: physical devices & software Image courtesy of Tiger DirectTiger Direct

IS Parts: Organizations Made of different functions working together for a common goal Business functions: –Sales & marketing –Production –Finance –Accounting –Human resources

IS Parts: Organizations In these functional areas, we find different kinds of workers: –Knowledge workers –Data workers –Production (or service) workers

IS Parts: Management Senior managers: create long-range plans Middle managers: carry out plans Operational managers: day-to-day

Key System Apps in Orgs: Groups Strategic Level: Senior Managers Management Level: Middle Managers Knowledge Level: Knowledge & Data Workers Operational Level: Operational Managers Sales & Manufacturing Finance Accounting Human Marketing Resources

Six Major Types of Systems ESS: Executive Support System MIS: Management Information System DSS: Decision Support System KWS: Knowledge Work Systems OAS: Office Automation Systems TPS: Transaction Processing Systems

Sales & Manufacturing Finance Accounting Human Marketing Resources Major Types of Systems: TPS Transaction Processing Systems Processing routine activities of the organization –Hotel reservations –Grade submissions –Employee records Operational level

Sales & Manufacturing Finance Accounting Human Marketing Resources Major Types of Systems: OAS Office Automation Systems Knowledge Level –Scheduling meetings –Desktop publishing –Document imaging systems –Presentation graphics development

Sales & Manufacturing Finance Accounting Human Marketing Resources Major Types of Systems: KWS Knowledge Work Systems Knowledge Level –CAD: Computer Aided Design –Modeling –Graphics development

Sales & Manufacturing Finance Accounting Human Marketing Resources Major Types of Systems: MIS Management Information Systems Provides reports Provides access to current performance Aids planning, controlling, & decision making Usually inflexible, predefined reports Management level

Sales & Manufacturing Finance Accounting Human Marketing Resources Major Types of Systems: DSS Decision Support Systems Combine data & modeling tools to aid non- routine decision-making Interactive, flexible “What if” analysis Management level

Sales & Manufacturing Finance Accounting Human Marketing Resources Major Types of Systems: ESS Executive Support Systems Incorporates external data with internal data Creates projections Designed to help answer questions like, “What business should we be in? Which business units should we sell off?” Strategic Level

How the systems relate to each other ESS DSSMIS TPSKWS & OAS

Organizations & IS What is an organization? How can IS affect an organization? Features of organizations –SOPs –Politics –Culture –Organizational Type –Environment –Goals –Business Processes -- cross-functional

How IS Affects Organizations Economic theory –microeconomic model of the firm: IT as factor of production As price of IT falls, IT use goes up, decreasing labor or capital costs. Behavioral Theory –decision-making hierarchy IT increases flow of information, thereby encouraging self-managed workers

Strategic Role of IS What makes an IS strategic? –An IS is strategic if it changes goals, operations, products, services, or environmental relationships to help the organization gain a competitive advantage. –A strategic IS keeps an organization ahead of the competition.

Role of Managers in Organizations Behavioral Model: Managerial Roles –Interpersonal roles: motivate, counsel, support, liaison, act as figureheads –Informational roles: act as nerve center, distribute information, act as spokespersons –Decisional roles: initiate new activities, handle disturbances, allocate resources, negotiate & mediate conflicts.

IS Helps Managers in their Roles Interpersonal: –Liaison -- electronic communication systems Informational: –Nerve center -- Management Information Systems Disseminator -- Mail, office systems Spokesperson -- Office & professional systems, workstations Decisional: –Resource allocator – Decision Support Systems

IS Systems for Decision Making Operational Knowledge ManagementStrategic Unstructured Semi Structured TPS ESS DSS MIS Office Systems KWS

IS? IT? MIS? ITS? Department New department: IS –responsible for maintaining hardware, software, data storage, and networks that make up the IT infrastructure –programmers, system analysts, IS managers –Other individuals: CIO, end users

IS Membership Programmers –Highly trained technical specialists who write computer software instructions Systems Analysts –Specialists who translate business problems and requirements into information requirements and systems; they act as liaisons between the IS department and the rest of the firm IS Managers –Leaders of the IS specialists