The Strategic Role Of Information

Systems

Introduction

Information system (IS)Set of interrelated components: collect,

manipulate, store, and disseminate data and information

Provides feedback to meet an objectiveExamples: ATMs, airline reservation

systems, course reservation systems

Information Concepts: Data, Information, and Knowledge

Data: raw factsAlphanumeric, image, audio, and video

Information: collection of facts organized in such a way that they have additional value beyond the value of the facts themselves

Figure 1.2: The Process of Transforming Data into Information

Data, Information, and Knowledge

The Value of Information

Value of information is directly linked to how it helps decision makers achieve their organization’s goals

For example, value of information might be measured in:Time required to make a decisionIncreased profits to the company

The Characteristics of Valuable Information

Table 1.2: Characteristics of Valuable Information

The Characteristics of Valuable Information

Table 1.2: Characteristics of Valuable Information (continued)

What Is an Information System?

Figure 1.3: The Components of an Information System

Computer-Based Information Systems

Figure 1.4: The Components of a Computer-Based Information System

Traditional View of the Systems

Four types of system configuration:Centralized Systems Duplicated SystemsDecentralized SystemsNetworked Systems

Global System Configuration

Business Information Systems

Figure 1.5: Business Information Systems

Types of Information Systems

TYPES OF INFORMATION SYSTEMS

Enterprise Systems

Enterprise Systems

Benefits:

Firm structure and organization: One organization

Management: Firm-wide knowledge-based management processes

Technology: Unified platform

Business: More efficient operations and customer-driven business processes

Challenges:

Difficult to build: Require fundamental changes in the way the business operates

Technology: Require complex pieces of software and large investments of time, money, and expertise

Centralized organizational coordination and decision making: Not the best way for the firms to operate

Management Information Systems

Management information system (MIS)Organized collection of people,

procedures, software, databases, and devices

Provides routine information to managers/decision makers

Primary focus is operational efficiency

Management Information Systems

Figure 1.10: Management Information System

Decision Support Systems

Decision support system (DSS)Organized collection of people, procedures,

software, databases, and devicesSupports problem-specific decision making

Focus is on decision-making effectiveness

Decision Support Systems

Figure 1.11: Essential DSS Elements

Specialized Business Information Systems: Knowledge Management, Artificial Intelligence,

Expert Systems, and Virtual Reality Knowledge management systems (KMSs):

an organized collection of people, procedures, software, databases, and devices to create, store, share, and use the organization’s knowledge and experience

Artificial intelligence (AI): field in which the computer system takes on the characteristics of human intelligence

Artificial Intelligence

Figure 1.12: The Major Elements of Artificial Intelligence

Organizations and Information Systems

Figure 1.16: The Value Chain of a Manufacturing Company

Organizations and Information Systems

Supply chain management (SCM)Determines required supplies, needed

quantities, processing, and shipmentCustomer relationship management (CRM)

Helps company manage all aspects of customer encounters, including marketing, advertisement, sales, service, and maintaining loyalty

Specific Applications: Customer Relationship Management (CRM)

Specific Applications: Supply Chain

How do information systems facilitate supply chain management?

Specific Applications: Collaborative Commerce

How do information systems facilitate collaborative commerce?

Performance-Based Information Systems

Figure 1.18: Three Stages in the Business Use of Information Systems

Roles, Functions, and Careers in the IS Department

Figure 1.19: The Three Primary Responsibilities of Information Systems

Global Challenges in Information Systems

Cultural challengesLanguage challengesTime and distance

challenges Infrastructure

challengesCurrency challenges

Product and service challenges

Technology transfer issues

State, regional, and national laws

Trade agreements