Instructor: Ms Shama Siddiqui

INFORMATION TECHNOLOGY-I

INFORMATION TECHNOLOGY

• The various hardware, software, networking and data management components necessary for the system to operate.

• It includes:• Computer hardware technologies.• Computer software technologies.• Telecommunication network technologies.• Data resource management technologies.

Foundations of Information Systems

in Business

Chapter # 1

1. To explain why knowledge of information systems is important for business professionals and identify five areas of information systems knowledge they need.

2. To illustrate with examples that how the business applications of information systems can support a firm’s business processes, managerial decision making, and strategies for competitive advantage.

Learning Objectives

Learning Objectives

3. To provide examples of several major types of information systems from your experiences with business organizations in the real world.

4. To identify several challenges that a business manager might face in managing the successful and ethical development and use of information technology in a business.

Learning Objectives

5. To 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.

System

• A system is a set of interrelated components, with a clearly defined boundary, working together to achieve a common set of objectives.

• Subsystem: Components which work under centralized system.

Information System

• It is an organized combination of people, hardware, software, communication networks, data resources, and policies and procedures that stores, retrieves, transforms information in an organization.

Main Purpose of IS

• Problem Solving• Decision making

Information Systems vs. Information Technology

• Information Systems (IS) – All components and resources necessary to deliver information and information processing functions to the organization i.e using available resources to support operations, management, and decision making

• Information Technology (IT) – Any technology that helps to produce, store, manipulate, communicate and /or disseminate information

Why Study Information Systems?

• Information technology can help all kinds of businesses improve the efficiency and effectiveness of their business processes, managerial decision making, and workgroup collaboration, thus strengthening their competitive positions in a rapidly changing marketplace.

Why Study Information Systems

• Internet-based systems have become a necessary ingredient for business success in today’s dynamic global environment.

• Information technologies are playing an expanding role in business.

Computer based Information Systems

These systems use the following information technologies.

• Computer Hardware Technologiesincluding microcomputers, midsize servers, and large mainframe systems, and the input, output, and storage devices that support them

• Computer Software Technologiesincluding operating system software, Web browsers, software productivity suites, and software for business applications like customer relationship management and supply chain management

Contd…• Telecommunications Network Technologies

including the telecommunications media, processors, and software needed to provide wire-based and wireless access and support for the Internet and private Internet-based networks (for very fast transmission as compared to postal mails.)

• Data Resource Management Technologiesincluding database management system software for the development, access, and maintenance of the databases of an organization

Components of IS•Data Input to produce information.

•Hardware Components or peripheral devices.

•Software Sets of instructions that tell the computer, how to take input, perform and store.

•Telecommunications Hardware and software that facilitate fast transmission of text, pictures, sounds as a form of electronic data.

• People IS professionals and users who

analyze organizational information needs, design and construct IS, write computer programs, operate the hardware and maintain software.

• Procedures Rules for achieving optimal and

secure operations in data processing.

Frame work of IS for Business Professionals

• Foundation concepts Fundamental behavioral, technical, business and managerial concepts about the

concepts and roles of IS.• Information Technologies Major concepts, developments and management of issues in information technology.• Business Applications The major uses of IS for the operations, management and the competitive advantage

of a business.• Development processes How business professionals, and information specialists plan, develop, and

implement IS to meet business opportunities.• Management challenges The challenge of effectively and ethically managing IT at the end user, enterprise,

and global levels of the business.

Roles of IS in Business

• Support business processes Example: Most retail stores now use computer-based

IS to help their employees record customer purchases, keep track of inventory, pay employees, and evaluate sales trends.

• Support Decision Making After an analysis provided by computer-based IS,

managers can make better decisions. For example, what lines of merchandise are needed to be added or discontinued, or what kind of investment that require.

• Support competitive advantage Gaining a strategic advantage over competitors

requires innovative applications for IT. For example: Online shopping

Trends in Information Systems

• MIS: This is the concept of developing business applications for that

provides managerial end users with predefined management reports that would give managers the informations they needed fro decision-making purposes. For example: Sales managers may use their networked computers and web browsers to get instantaneous displays about the sales results of their products and to access their corporate intranet for daily sales reports that evaluate the sales made by each salesperson.

• DSS This support can be tailored to the unique decisions, and

decision making styles, of managers as they confronted specific types of problems in the real world.

• EIS EIS provides information to top management

executives in easy-to-use diplays. For example, top executives My use touchscreen terminals to instantly view text and graphics displays that highlights key areas of organizational and competitive performance.

• End user computing End users could now use their own computing

resources to support their job requirements instead of waiting for the indirect support for the support of centralized corporate information services departments.

• Artificial Techniques Business systems include intelligent software agents

that can be programmed and deployed inside a system.

• Expert System Can serve as consultants to users by providing

expert advice in limited subject areas.• E-commerce The buying, selling, marketing and servicing of

products, services over a variety of computer networks.

Types of Information Systems

Operation Support Systems

Definition:• Information systems that process data

generated by and used in business operations• Goal is to efficiently process business

transactions, control industrial processes, support enterprise communications and collaboration, and update corporate databases

Examples of Operations Support Systems

• Transaction Processing Systems (TPS) – process data resulting from business transactions, update operational databases, and produce business documents.

A TPS is a basic business system. It:– is often tied to other systems such as the inventory system

which tracks stock supplies and triggers reordering when stocks get low;

– serves the most elementary day-to-day activities of an organisation;

– supports the operational level of the business;

Examples of Operations Support Systems•supplies data for higher-level management decisions (e.g. MIS, EIS); •is often critical to survival of the organisation; •mostly for predefined, structured tasks; •can have strategic consequences (eg airline reservation system); •usually has high volumes of input and output; •provides data which is summarised into information by systems used by higher levels of management; •need to be fault-tolerant.

Process Control Systems (PCS) – monitor and control industrial processes.

Enterprise Collaboration Systems – support team, workgroup, and enterprise communications an collaboration.

Management Support Systems

Definition:• Information systems that focus on providing

information and support for effective decision making by managers

Management Support Systems• Management Information Systems (MIS) – provide

information in the form of pre-specified reports and displays to support business decision making.

• Transactions recorded in a TPS are analyzed and reported by an MIS.

• They have large quantities of input data and they produce summary reports as output. Used by middle managers. An example is an annual budgeting system.

Management Support Systems• Decision Support Systems (DSS) – provide interactive ad hoc

support for the decision making processes of managers and other business professionals.

• Helps strategic management staff (often senior managers) make decisions by providing information, models, or analysis tools. For support of semistructured and unstructured decisions (structured decisions can be automated). Used for analytical work, rather than general office support.

• They are flexible, adaptable and quick. The user controls inputs and outputs. They support tare sophisticated modelling tools so managers can make simulations and predictions.

• Their inputs are aggregate data, and they produce projections. An example job for a DSS would be a 5 year operating plan

Management Support Systems

• Executive Information Systems (EIS) – provide critical information from MIS, DSS, and other sources tailored to the information needs of executives

• Also known as an Executive Support System (ESS), it provides executives information in a readily accessible, interactive format.

• They are a form of MIS intended for top-level executive use. An EIS/ESS usually allows summary over the entire organisation and also allows drilling down to specific levels of detail. They also use data produced by the ground-level TPS so the executives can gain an overview of the entire organisation.

• Used by top level (strategic) management. They are designed to the individual. They let the CEO of an organisation tie in to all levels of the organisation. They are very expensive to run and require extensive staff support to operate.

Managerial IS• Expert Systems – provide expert advice for operational chores or

managerial decisions• "a computer system or program that uses artificial intelligence

techniques to solve problems that ordinarily require a knowledgeable human. The method used to construct such systems, knowledge engineering, extracts a set of rules and data from an expert or experts through extensive questioning. This material is then organized in a format suitable for representation in a computer and a set of tools for inquiry, manipulation, and response is applied. While such systems do not often replace the human experts, they can serve as useful adjuncts or assistants. Among some of the successful expert systems developed are INTERNIST, a medical diagnosis tool that contains nearly 100,000 relationships between symptoms and diseases, and PROSPECTOR, an aid to geologists in interpreting mineral data."

Operational & Managerial ISAdvantages of expert systems:• The computer can store far more information than a human.

• The computer does not 'forget', make silly mistakes or get drunk when it is most needed.

• Data can be kept up-to-date.

• The expert system is always available 24 hours a day and will never 'retire'.

• The system can be used at a distance over a network.

Operational & Managerial ISKnowledge Management Systems – support the creation, organization, and dissemination of business knowledge to employees and managersKnowledge Management Systems ("KMS") exist to help businesses create and share information. These are typically used in a business where employees create new knowledge and expertise - which can then be shared by other people in the organisation to create further commercial opportunities. Good examples include firms of lawyers, accountants and management consultants.KMS are built around systems which allow efficient categorisation and distribution of knowledge. For example, the knowledge itself might be contained in word processing documents, spreadsheets, PowerPoint presentations. internet pages or whatever. To share the knowledge, a KMS would use group collaboration systems such as an intranet.

What is E-Business?

Definition: • The use of Internet technologies to work and

empower business processes, electronic commerce, and enterprise collaboration within a company and with its customers, suppliers, and other business stakeholders.

• An online exchange of value.

IS Classifications by Scope

• Functional Business Systems – support basic business functions such as accounting, marketing, finance, HRM,etc.

• Strategic Information Systems – support processes that provide a firm with strategic products, services, and capabilities for competitive advantage

• Cross-functional Information Systems – integrated combinations of information systems

Enterprise Collaboration Systems

Definition:• Involve the use of software tools to support

communication, coordination, and collaboration among the members of networked teams and workgroups.

What is E-Commerce?

Definition:The buying and selling, and marketing and servicing of products, services, and information over a variety of computer networks.

Measures of Success• Efficiency – Minimize costs– Minimize time – Minimize the use of information resources

• Effectiveness – Support an organization’s business strategies– Enable its business processes– Enhance its organizational structure and culture – Increase the customer business value of the enterprise

Developing IS Solutions

• Investing the economic or technical feasibility of the proposed application.

• Analyzing the business requirements of the organization.

• Designers and end users design the IS.• Implementing the system by acquiring and

learning the necessary softwares.• Maintaining the business value of the system by

making improvements.

Ethical Challenges of IT

IT Career Trends• Rising labor costs have resulting in large-scale movement to

outsource programming functions to India, the Middle East and Asia-Pacific countries.

• More new and exciting jobs emerge each day as organizations continue to expand their wide-scale use of IT.

• Frequent shortages of qualified information systems personnel.

• Constantly changing job requirements due to dynamic developments in business and IT ensure long-term job outlook in IT remains positive and exciting.

The IS Function represents…

• A major functional area of business equally as important to business success as the functions of accounting, finance, operations management, marketing, and human resource management.

• An important contributor to operational efficiency, employee productivity and morale, and customer service and satisfaction.

The IS Function represents…

• A major source of information and support needed to promote effective decision making by managers and business professionals.

• A vital ingredient in developing competitive products and services that give an organization a strategic advantage in global marketplace.

The IS Function represents…

• A dynamic, rewarding, and challenging career opportunity for millions of men and women.

• A key component of the resources, infrastructure, and capabilities of today’s networked business enterprise.

What is a System?

Definition:A group of interrelated components, with a clearly defined boundary, working together toward a common goal by accepting inputs and producing outputs in an organized transformation process.

System Components

• Input – capturing and assembling elements that enter the system to be processed

• Processing – transformation steps that convert input into output

• Output – transferring elements that have been produced by a transformation process to their ultimate destination

Cybernetic Systems

Definition: a self-monitoring, self-regulating system.

• Feedback – data about the performance of a system

• Control – monitoring and evaluating feedback to determine whether a system is moving toward the achievement of its goal

A Business System

IS MODEL

Information System Resources

• People – end users and IS specialists

• Hardware – physical devices and materials used in information processing including computer systems, peripherals, and media

• Software – sets of information processing instructions including system software, application software and procedures

Information Systems Resources (con’t)

• Data – facts or observations about physical phenomena or business transactions

• Network – communications media and network infrastructure

Data vs. Information

• Data – raw facts or observations typically about physical phenomena or business transactions

• Information – data that have been converted into a meaningful and useful context for specific end users

Network Resources

• Communications Media – examples include twisted-pair wire, coaxial and fiber-optic cables, microwave, cellular, and satellite wireless technologies

• Network Infrastructure – examples include communications processors such as modems and internetwork processors, and communications control software such as network operating systems and Internet browser packages.

Information Systems Activities

• Input of Data Resources• Processing of Data into Information• Output of Information Products• Storage of Data Resources• Control of System Performance

Recognizing Information Systems

Fundamental Components of IS• People, hardware, software, data and network

resources used

• Types of information products produced

• Input, processing, output, storage and control activities performed

Summary

• There is no longer a distinction between an IT project and a business initiative.

• Information systems are an important contributor to operational efficiency, employee productivity and morale, and customer service and satisfaction.

Summary

• Information systems are a major source of information and support needed to promote effective decision making by managers and business professionals.

• Information systems can be categorized based on their intended purpose.

Summary

• Managing and using information systems can pose several challenges including the development process and ethical responsibilities.