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Foundation of Information Systems

Reading:Laudon & Laudonchapter 1

Additional Reading:Brien & Marakaschapter 1

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OutlineInformation Systems

Definition, RoleFunctions of Information Systems in Business Today

Perspectives on Information Systems and Information Technology

Understanding Information SystemsA Business Problem-Solving Approach

Information Systems and your Career

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SolutionHigh resolution, organized video allows teams to review games and scout new players more efficiently.Synergy Sports Technology’s tools help collect, organize, and distribute video of NBA games

Demonstrates IT’s role in reducing cost, organizing data, and increasing efficiencyIllustrates the emerging digital firm landscape where businesses can use tools to analyze critical data

Problem?Escalating salaries and travel costs, difficulty of increasing revenue by improving employee performance

NBA Teams make a Slam Dunk with IT

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NBA Teams make a Slam Dunk with IT

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Information SystemsSet of interrelated components that

Collect/retrieve, process, store, and distribute information toSupport decision making, coordination, control

Help managers and workersAnalyze problemsVisualize complex subjectsCreate new products

Not necessarily employ computersSmoke signals, Card storage in library, etc.

What is System?Set of Interrelated components, with clearly defined boundary, working together to achieve common set of objectives

Information System

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Information SystemsData → Stream of Raw factsInformation → Data shaped into useful/meaningful form

Information System

Raw data from a supermarket checkout counter can be processed and organized to produce meaningful information, such as thetotal unit sales of dish detergent or the total sales revenue from dish detergent for a specific store or sales territory.

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Information TechnologyVarious hardware/software, networking, data management components necessary for IS to operate

PCs, disk drives, hand held PDA, iPodsOperating Systems - Windows, Linux,MS Office desktop productivity suite, programs, …

IS and IT often used interchangeably

Fundamental Roles of IS in BusinessSupport of business process and operations

Support of business decision making

Support of strategies for competitive advantage

Information System

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Functions

Basic ActivitiesFeedbackEnvironmental Actors

Information System

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Role of People and OrganizationsInformation Systems Literacy

Behavioral and technical approach

Computer LiteracyFocuses on knowledge of IT

Management Information Systems (MIS)Focuses on Information System Literacy → COMP5131Issues surrounding development, use, impact of information systems, used by managers and employees

Information System

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ORGANIZATIONSORGANIZATIONS TECHNOLOGYTECHNOLOGY

PEOPLEPEOPLE

INFORMATIONINFORMATION

SYSTEMSSYSTEMS

Dr. Chen, The Challenge of the Information Systems Technology TM TM --1010

Dimensions of Information Systems

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OrganizationsIntegral Part – Vice Versa

Coordinate work through structured hierarchy and business processes

Business processes → Logically related tasks and behaviors for accomplishing work

Fulfilling an order, Developing a new productMay be informal or include formal rules

Culture embedded in information systemsWhat is Organizational Culture ?Example → UPS’s concern with placing service to customer first

Information Systems

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PeopleRequires skilled people → Build, Maintain and Use

Adequate Training

Employee attitudes affect ability to use systems productively

Role of managersPerceive business challengesSet organizational strategyAllocate human and financial resourcesCreative work, new products, services

Information Systems

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TechnologyIT Infrastructure → Foundation or platform that information systems built on

Computer hardwareComputer softwareData management technologyNetworking and telecommunications technology

Internet and Web, extranets, intranetsVoice, video communications

Information Systems

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Case Study Case Study -- United Parcel ServiceUnited Parcel Service

Using a handheld computer called a Delivery Information Acquisition Device (DIAD), UPS drivers automatically capture customers’signatures along with pickup, delivery, and time card information. UPS information systems use these data to track packages while they are being transported.

Information System

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UPS Competes Globally with Information TechnologyUPS Competes Globally with Information Technology

Information System

• Case Study Questions• What are the inputs, processing, and outputs of UPS’s package

tracking system?

• What technologies are used?

• How are these technologies related to UPS’s business strategy?

• What problems do these technologies solve?

• What would happen if these technologies were not available?

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Types of Information Systems

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Types of Operations Support SystemsTransaction Processing Systems

Record and process data from business transactionsExamples: sales processing, inventory systems, accounting sales processing, inventory systems, accounting systemssystems

Process Control SystemsMonitor and control physical processesExample: in a petroleum refinery use sensors to monitor chemical processes

Enterprise Collaboration SystemsEnhance team and work group communicationsExamples: e-mail, videoconferencing

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Processing TransactionsBatch Processing

Accumulate transactions over time and process periodicallyExample: a bank processes all checks received in a batch at night

Online ProcessingProcess transactions immediatelyExample: a bank processes an ATM withdrawal immediately

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Management Support SystemsWhat are they?

Provide information and support for effective decision making by managers

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Types of Management Support SystemsManagement Information Systems (MIS)

Provide reports and displays to managersExample: daily sales analysis reports

Decision Support Systems (DSS)Provide interactive ad hoc support for decision makingExample: A what-if-analysis to determine where to spend advertising dollars

Executive Information Systems (EIS)Provide critical information for executives and managersExample: easy access to actions of competitors

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Other CategoriesExpert Systems

Provide expert advice and act as consultant to usersExample: process monitor, credit application advisor

Knowledge Management SystemsSupports creation, organization of business knowledgeExample: Internet access to best business practices

Strategic Information SystemsSupport operations/management processes that provide strategic product/services for competitive edgeExample: Online stock trading, shipment tracking

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The Problem Solving ApproachFew Business problems are simple or straightforwardA Model of The Problem Solving Process

Problem IdentificationSolution DesignSolution Evaluation and ChoiceImplementation

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Problem IdentificationIncludes

Agreement that problem existsDefinition of problemCauses of problemWhat can be done given resources of firm

Typical Organizational ProblemOutdated business processesUnsupportive culture and attitudesPolitical in-fightingTurbulent business environment, changeComplexity of taskInadequate resources

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Problem IdentificationTypical Technology Problems

Insufficient or aging hardware, Outdated SoftwareInsufficient telecommunications/database capacityIncompatibility of old systems with new technologyRapid technological change

Typical People ProblemsLack of employee trainingDifficulties of evaluating performanceLegal and regulatory complianceWork environmentPoor or indecisive managementLack of employee support and participation

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Model for Problem Solving ApproachSolution Design

Often many possible solutionsConsider as many as possibleRange of Solutions → Technology, Organization, PeopleMost Successful Solutions → Integrated Approach

Evaluation and ChoiceCostFeasibility given resources and skillsLength of time needed to implement solution

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Model for Problem Solving ApproachImplementation

Building or purchasing solutionTesting solution, employee trainingChange managementMeasurement of outcomesFeedback, evaluation of solution

Evaluation and ChoiceCostFeasibility given resources and skillsLength of time needed to implement solution

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Model for Problem Solving Approach

Problem Solving: Process, Not an EventSometimes chosen solution doesn’t work or needs adjustment

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Role of Critical ThinkingWhat is Critical Thinking?• Sustained suspension of judgment with an awareness

of multiple perspectives and alternatives

• Without critical thinking, easy to jump to conclusions, misjudge a problem and waste resources

• Best protection against incorrect results

Four ElementsMaintaining doubt and Suspending judgmentBeing aware of different perspectivesTesting alternatives and letting experience guideBeing aware of organizational and personal limitations

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ConnectionsBusiness Objectives, Problems, Solutions• When firms cannot achieve business objectives

these objectives become challenges

• Information systems often present solutions, partially or fully, to these challenges

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Interactive Session Interactive Session –– Saks CustomersSaks CustomersQuestions

What is the problem affecting the performance of Saks?

What information does Saks need to solve this problem? What other pieces of data does Saks need in addition to those in its nine-box grid? Where can Saks acquire this information?

What role should managers and employees have in designing the solution?

Design a report that represents the information Saks needs to implement its merchandising strategy

How might a better understanding of customer preference support Saks’ strategy of improving existing facilities?

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Information Systems and Business CareersAccounting

Accountants → Information SystemsSummarize TransactionsCreate Financial RecordsOrganize DataPerform Financial Analysis

SkillsIT, software used in auditing, accounting functionsSystem and network security issuesEnterprise systems for financial reporting

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Information Systems and Business CareersFinance

Financial Management/Services → Information SystemsDevelop Financial ReportsDirect Investment ActivitiesImplement Cash Management Strategies

SkillsIT, software used by financial managers and financial services firmsNew technologies for financial transactions, tradingEnterprise systems for financial reporting

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Information Systems and Business Careers

Equities analysts depend heavily on information systems for organizing and analyzing very large amounts of financial data

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Information Systems and Business CareersMarketing and Advertising

Technology driven changes Internet Advertising → Fastest growing, 30% annually

13 billion US$ in 2006Expected 200,000 new jobs by 1012 in US

SkillsUnderstanding of Internet, marketing database systemsImpact on marketing activities → brand development, promotion, salesEnterprise systems for product management, sales force management, customer relationship management

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Information Systems and Business CareersOperations Management Services/Manufacturing

Coordinate and Optimize Resources to produce goods and services

Industrial Production ManagersAdministrative Services ManagersOperation Analysts

SkillsHardware and software platforms for operations management How enterprise systems for production management, supplier management, sales force management, customer relationship management are used to achieve efficient operations and meet other goals

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Information Systems and Business CareersManagement

Largest single group in US – 14 million membersIndustrial Production ManagersAdministrative Services ManagersOperation Analysts

SkillsHardware and software to improve management, enhance leadership and coordination, improve achievement of overall corporate objectivesIn-depth understanding of how enterprise systems are used to achieve efficient operations and help make better decisions for improving firm performance

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Information Systems and Business CareersInformation Systems

Most dynamic of all business professions, fastest 5/20IT → Key business objectivesOutsourcing and Offshoring

ImpactManagerial IS positions ↑, Lower-level technical jobs ↓

SkillsIn-depth knowledge of how new and emerging hardware and software to achieve six business objectivesAn ability to take a leadership role in the design and implementation of new information systems

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Information Systems and Business CareersCommon Requirements

How IT helps achieve six business objectives

Central role of databases

Information analysis, impact of environment

Working with specialists and systems designers

Ethical, social, legal environment and issuesUse of IT to meet legal requirements