1. Outline for Today What is Information? Information Systems & Databases
SYSTEMS DEVELOPMENT ENVIRONMENT
Outline for Today
What are Information Systems?
Information Systems in Organizations
Business Processes
Types of Business Information System
Systems from a Functional Perspective
What is Information?
The flow of information in an organization and between organizations, encompassing the information the business creates, uses and stores
Management of Information
Information is handled and recorded according to various techniques:
informal ideas
natural language (written or spoken)
drawings, diagrams,
numbers
Codes

2. What is Information Technology?
Information Systems & Databases
What is Information Technology?
Any form of technology used by people to handle information
Computers
Hardware / software
Resources:
Computer hardware
Software
Networks
Databases
What are Information Systems?
Component of an organization that manages (gets, processes, stores, communicates) the information of interest
Information Systems are the foundation of business
models and processes
They allow for the distribution of information and
refinement of knowledge within an organisation
Information systems can be leveraged with a business
context to gain competitive advantage
Examples of Information Systems
Payroll system: handles payments of employees in an organization
Sales order processing system: handles supply/orders of products
Project planning and control system: handles time/resource requirements of activities related to a project
Geographic information system: handles geo-spatial information (maps, satellite images, statistical data, etc. associated with a given geographic area)

3. Information Systems in Business
Information Systems & Databases
Information Systems in Business
An organisation must connect each functional area and each management level to one another.
Data input to the system in manufacturing must be made available to sales, accounting, and shipping.
Managers in the human resources department must have access to appropriate information regardless of its origin.
Information integration is the key.
As we go through this section, we’ll look at the types of information systems organisation’s use to bring it all together.
Business Processes & Information Systems
What is a Business Process?
A business process is a logically related set of activities that define how specific business tasks are performed.
Business processes are the ways in which organizations coordinate and organize work activities, information, and knowledge to produce their valuable products or services.
Businesses can be seen as collection of business processes. May be tied to functional area or be cross- functional
Business Processes & Information Systems
How are Business Processes related to information systems?
How well a business performs depends on how well its business processes are designed and coordinated.
Well-designed business processes can be a source of competitive strength for a company if it can use the processes to innovate or perform better than its rivals.
Conversely, poorly designed or executed business processes can be a liability if they are based on outdated ways of working and impede responsiveness or efficiency.

4. Business Process Examples
Information Systems & Databases
Business Process Examples
Developing a new product
Generating and fulfilling an order
Hiring staff
Ordering a burger in MacDonald's
Applying for a drivers license
What else?
Examples of Functional Business Processes
Functional Area
Business Process
Manufacturing & Production
Assembling the product
Checking for quality
Producing bills of materials
Sales & Marketing
Identifying customers
Making customers aware of the product
Selling the product
Finance & Accounting
Paying creditors
Creating financial statements
Managing cash accounts
Human Resources
Hiring employees
Evaluating employees’ job performance
Enrolling employees in benefits plans
How Information Technology Improves Business Processes
Information technology enhances business processes by:
Increasing efficiency of existing processes
Automating steps that were manual
Enabling entirely new processes
Change flow of information
Replace sequential steps with parallel steps
Eliminate delays in decision making
Support new business models

5. Types of Information Systems
Information Systems & Databases
Decision-Making Levels of an Organization
How do systems serve the different management groups in a business?
There is no one single information system that will satisfy all of the needs of an organisation.
ases Fiona Redmond
Comparison of Decision-Making Levels
Operational Level
Managerial
Level
Executive
Who
Foreman or supervisor
Midlevel managers and functional managers
Executive-level managers
What
Automate routine and repetitive activities
Automate the monitoring and controlling of operational activities
Aggregate summaries of past organizational data and projections of the future
Why
Improve organizational efficiency
Improve organizational effectiveness
Improve organizational strategy and planning IS
Transaction Processing Systems (TPS)
Management Information Systems (MIS)
Executive Information Systems (EIS)
Types of Information Systems
Executive-Support Systems (ESS)
Decision-Support Systems (DSS)
Management Information Systems (MIS)
Transaction Processing Systems (TPS)

6. Operational Level Information Systems & Databases
Types of Systems that span the Enterprise
Operational Level
Day-to-day business processes / daily operations
Interactions with customers
Information systems used to:
Automate repetitive tasks
Improve efficiency
Decisions:
Structured
Recurring
Can often be automated using IS
Transaction Processing System (TPS)
Transaction processing systems:
Serve operational managers and staff
Perform and record daily routine transactions necessary to conduct business
Examples: sale of a stock item, receipt of a payment from a customer, purchase, payroll, shipping
Allow managers to monitor status of operations and relations with external environment
Serve predefined, structured goals and decision making
The data are very detailed at this level.
The best TPS will be integrated throughout the organisation to supply useful information to those who need it when they need it.

7. A payroll TPS Typical Questions Managerial Level
Information Systems & Databases
A payroll TPS
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.
Typical Questions
People using transaction processing systems usually need information to help them answer routine questions such as:
How many X did we produce yesterday?
How much X do we have on hand for today’s production run?
How many stores are actually stocking X?
Where is X located inside the stores?
(X being the product)s
Managerial Level
Functional managers
Monitoring and controlling operational-level activities
Providing information to executive level
Midlevel managers
Focus on effectively utilizing and deploying resources
Goal of achieving strategic objectives
Managers’ decisions
Semistructured
Contained within business function
Moderately complex
Time horizon of few days to few months

8. How MIS Obtain Their Data from the Organization’s TPS
Information Systems & Databases
Management Information Systems - MIS
Management Information Systems
Serve middle management
designed to produce information on a periodic basis
Provide reports on firm’s current performance, based on data from TPS
Provide answers to routine questions with predefined procedure for answering them
Typically have little analytic capability
How MIS Obtain Their Data from the Organization’s TPS
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.
Typical Questions
People using management information systems usually need information to help them answer questions such as:
Is production is higher or lower than the targeted rate?
Is the company over or under their budgets?
They also need to know about trends instead of straight numbers. The questions they may ask of the system would be:
How far behind in production are we for this quarter?
How many more workers would we need if we increased production by 10,000 of X per quarter?
If we do adopt X, what positions are open for the 25 excess workers and what skills do they possess that the company can use elsewhere?

9. Decision Support Systems
Information Systems & Databases
Decision Support Systems
Decision support systems
Serve middle management
Support non-routine decision making / What-if analyses
Example: What is the impact on production schedule if December sales doubled?
Analyze results for hypothetical changes
May use external information as well as internal TPS / MIS data
Model driven DSS
Voyage-estimating systems
Voyage-Estimating Decision Support System
This DSS operates on a powerful PC. It is used daily by managers who must develop bids on shipping contracts.
Typical Questions
The sales and marketing management would use a DSS to answer a semi structured question such as: “What price should we charge for X so that we can maximize our profits, minimize our costs, and still remain competitive?”
The manager in charge of the manufacturing division could determine the best answer to this semi structured question: “How does the change in the size and packaging of X affect the other products we produce, not just in shipping, but also on the display shelf at the convenience store?”

10. Executive Information Systems
Information Systems & Databases
Executive Level
The president, CEO, vice presidents, board of directors
Decisions
Long-term strategic issues
Complex and nonroutine problems
Unstructured decisions
Long-term ramifications
Executive Information Systems
AKA Executive Support System
Support senior management
Address non-routine 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
Example: Digital dashboard with real-time view of firm’s financial performance: working capital, accounts receivable, accounts payable, cash flow, and inventory
Model of a typical Executive Information System 10

11. Before Information Systems
Information Systems & Databases
Before Information Systems
Managers received periodic printed reports that gave them lots of data, but often didn’t supply information that they could utilize to make timely decisions. Planning was sometimes a wasted effort because the information the managers needed just wasn’t there when they needed it.
For example: If there was a problem getting a shipment out to the store in Sandymount, the shipping manager may not have known about it until a customer cancelled her account six months later. The human resources department manager would likely not be able to find out about new job opportunities in a different part of the company until after the workers were laid off and had found other employment. Worse yet, production might have to stop the assembly lines because accounting hadn’t purchased enough supplies to cover the increase in the number of X rolling off the line.
Before Information Systems
With the integration of information systems up and down the management levels, and throughout the corporation, managers can often get needed information in a real-time mode.
The data are kept online, the system can gather the precise information managers need to make a decision, and the information can be cross integrated into all departments of the company.
All divisions in the company can see what’s going on throughout the corporation. Information can be passed from department to department so that they are all working “on the same page.”
Video Case
How Businesses Use Information Systems
How FedEx Works 11