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Unit : I

Lecture by:

Surendra Shrestha, PhD

Unit-I
Foundations of Information Systems:
A framework for business users
- Roles of Information systems
- System concepts
- Organization as a system
- Components of Information Systems
- IS Activities
- Types of IS

Foundations of Information Systems:


A framework for business users
Roles of Information systems
Organization

Management

Technology

Figure: Dimension of IS

NEED for MIS:

Assistance in business and managerial


operations
Assistance in managerial decisionmaking
Support of strategic plans and
competitive advantages

Scope of Information System:

Top level

Strategic
Introduction
Middle level
Support Managerial
Decision Making

Operation level

Support for Business Operation

Figure: Hierarchy of Organization and Information system

Operation Level System: ISs that


monitors the elementary activities and
transaction of the organization.
Middle Level System: ISs that support
the monitoring controlling, decision
making, land administrative activities
of middle managers.

Top-Level Systems: Information system


that support the long range planning
activities of senior management.

Importance of Information system:


1. The increasing size of Organization
2. The increasing size of user population
3. Increase the scale of organizational
operations
4. The changing nature of business
processes
5. Frequent user interaction (Integrated
management system)
6. The increasing movement of automation
7. Changing organizational culture
8. Impact of re-engineering
9. Impact of rationalization in the business

Role & Importance of IS in the Organization:

1.Solving Problems and DecisionMaking


2.Develops the Components
3.Integrated Management System
4.Integrated Database System
5.Develops TPS and EIS
6.Support to Develop Supply Chain
Mgnt. (SCM) & Enterprise Resource
Planning (ERP) System
7.Develop MIS
8.Allow to Develop Functional IS
9.Information Technology system

Characteristics of Information System:


1. Perfection
2. Correct and Accurate
3. Concise
4. Avoid Ambiguity
5. Completeness
6. Validity and Impartiality
7. Consistency and Reliability
8. Suitable Format

Competitive Advantages of Information


System:

As per the words of pioneer of


the MIS discipline, Todays
managers need all the help they
Internet
can get. Their firms are being
Working
buffered on all sides by strong,
frequently shifted winds of
change. Organizations strategic
objectives (chosen markets,
product strategy, expected
outcomes) and their business
process (such as research and
Information System
development, production, cash
Business
flow management, and order
Globalization
Process
fulfillment) are undergoing
Reengineering significantly and volatile
changes, placing great pressure
on firms and their managers
(Cash, James I et. Al, 1994)

Competitive Advantages of Information System:

Telecommunication
Network, Technology,
Internet, Intranet

a. Globalization

Telecommunication
Network, Technology,
Internet, Intranet

Organization
Telecommunication
Network, Technology,
Internet, Intranet

Telecommunication
Network, Technology,
Internet, Intranet

Telecommunication
Network, Technology,
Internet, Intranet

Figure: Information Technology and Globalization Network

Competitive Advantages of Information System:

Server

Terminals

b. Internet-Working

Server

Terminals
Figure: Global Networking System Model

Competitive Advantages of Information System:

c. Business Process Reengineering (BPR)


Reengineering expert have outlined five major steps for BPR

1. Develop the business vision and process


objectives
2. Identify the processes to be redesigned
3. Understand and measure the performance of
existing processes
4. Identify the opportunities for applying
information technology

5. Build a prototype

BPR at Mahindra and Mahindra: BPR had became a


popularly tool globally in the mid 1990s. However, when
M&M implemented BPR, it was still novel concept in India.
M&Ms workforce resisted this attempt to reengineer the
organization. The workers went on strike for five months.
After five months, the workers ended the strike and began
work in exchange for a 30% wage hike. As the situation
returned to normalcy, BPR implementation gained
momentums. The first signs of the benefits of BPR become
evident soon after the senior staff began working on the shop
floor. Around 100 officers produced 35 engines a day as
compared to the 1200 employees producing 70 engines before
BPR was implemented.
M&M focused on two issues while implanting the BPR
reengineering the layout and method of working, and
productively. Summing up the company BPR experiences,
Anand Mahindra said,Let me put it in single way. If we have
facilities in Kandivilie today, which are not just surviving but
thriving, it is all due to BPR.

Table: BPR Concept and Application

S.
No.

Old System Rule


(before BPR)

New System Rule


(before BPR)

Technology
Supports

Manager make all


decisions

DSS Tools
and Models

Only experts can


perform complex
work

Decision making is
part of every ones
job
A generalist can do
the work of an
expert

Information can
appear in only one
place at one time
Field personnel need
office where they can
receive, store,
retrieves and transmit
information

Information can
display many places
at a time
Field personnel can
send and receive
information where
they are

Network
system

Expert
system, AI

Web
technology

Information:
Data that has been shaped into a form that is
meaningful and useful to human beings.
Informational roles:
Classification for managerial roles where
managers act as the nerve centers of their
organizations, receiving and disseminating
critical information.
Information architecture:
The particular form that information technology
takes in a specific organization to achieve
selected goals or functions

What is Information?
The Information is defined as Information is knowledge,
it is derived from the data, and the data in turn is a fact or
figure.
- Anonymous
The Information is as being in increment of knowledge
which can be inferred from data. - Tsitchiziris and Lochorsky
It is defined as data that has been processed into form
that meaningful to the recipient and is of real or
perceived value in current or prospective action or
decision.
-Davis and Olson

What is System?
- A combination of group of interrelated or interacting
elements that forms a unified whole.
- A system can also be defined as a set of elements
joined together for a common goal.
- A group of interrelated components working together
towards a common goal by accepting input thereby
producing output in an organized transformation
process.
- Herbert A. Simon, a political scientist, related the
systems concept to the study of organization by
viewing an ongoing system as a process of information
for making decisions.

System and Components of Business Organization

Management Control

Instructions

Management

Feedback

Procedure

Input:

Process:

Output:

Man,

Planning,

Goods or

Materials,

Organizing,

Services or

Money,

Coordinating,

Effectiveness and

Machine, and

staffing

efficiency

Methods

What is Information System?

Marketing

Production

Finance

Production

Central Data Base


System

User Interface

Information of
Decision -Making

What is Information System?


IS is defined as as set of people, procedures
and resources that collects transformations and
disseminates information in an organization.

I = f ( H, S, Pr, D, Pe)
I = Information

H = Hardware

S = Software

Pr = Process

D = Data, and

Pe = People
(both users and developers)

Component and Proprietors framework of IS:

1. Basic concept of IS.

2. Technology of IS.
3. Applications of IS.
4. Developments of an IS.

5. Management of IS.

Component of IS:
1. People resources: includes end users, system
analysts, system software engineers and IS design
specialists, management consultants

2. Hardware Resources: includes both computer


peripherals, data storage devices, hard disks, driver
printers, scanners, cards, paper forms, video monitors.

3. Software Resources: includes programmers,


operating system, spreadsheet programs, word
processing package, error detections, anti-virus.

4. Database Resources: includes database


management, data warehouse, data mart, data mining.

Component of IS:
5. Network Resources: includes telecommunication,
internet, intranet, extranet, web 2.0

6. Input Components: includes sales data, payroll data,


employee data, expenses data, purchase data, etc.

7. Output Components: includes management report,


graphs, textual, formats, display monitors.

8. Processes Components: includes methods and


methodology of the management principles and
functions of the management, analysis etc.

Difference between Manual and Computer Based IS:


IS that handled by the people by IS that includes computers, an
manually, that is paper files and all the data and files stores
book
electronically.
It consists of people,
It consists of people, files, racks
procedures, data, programmers
and alarms
and computer software.
Procedures are instructed by
people

Programs are instructed by


computers

Data storage and retrieval can


taken by manually.

Data storage and retrieval taken


by computer electronically.

Manually the concerned person


involve to produce the
information

Computer can processed itself


in the production of
information

Difference between Manual and Computer Based IS: ...


A group of hierarchy being
a communication elements
to some, and process the
information
Retrieving and processing
and analyzing of the data is
very slow.
Manual information system
cannot present the
information in an
appropriate document.

Computer can work as


communication device to
collect the data and process
the data or information
Dater processing, retrieving
and analysis is very fast and
accurate.
Computer can present
information by providing in
tables, graphs, charts, and
report

Difference between Manual and Computer Based IS: ...

It did not provide timely


and accurate
information.
It could not store
volume of data for
future use.
Paper work involves
very high and it
becomes more cost and
difficult to protect.

It is meant for timely


and accurate
information
It can store a huge data
in proper hardware
device.
Create paper less office
and maintenance with
low cost and prevent
from natural damages.

Changing concept of IS:


Year/
period

Information Concept

Bureaucratic
1950 60 requirement. A paper
dragon
1960 70

Generate personal
support

1970 80 Customized
Control Management

Types of IS

Purpose

Electronic
Speed and paper
Accounting
processing
Machine (EAM)
MIS

Speed general reporting


requirement

DSS and ESS


Improved and customized
decision making

1985
2000

Strategic system
competitive
advantage, Strategic
weapon

2003
till

Knowledge
Knowledge
management and
Information
Business Intelligences
System, BIS
System (BIS)

Strategic
Information
system

Promote survival and


prospects of the
organization
Promote knowledge
products or services, to
survive the competitive
environment

Types of Information Systems

Transaction Processing System (TPS)


Supports Operations
Updates Operational Databases
Examples:

ATM

Machine System Banking Transactions


Cash Register System Point of Sale Transactions
Accounting System Checking Account
Transactions
Even Pay-per-view or OnDemand is a TPS

Process Control Systems (PCS)


Supports

Operations
Monitor and Control
Industrial/Manufacturing Process
Examples:
Petroleum

Refining
Power Generation
Automobile Manufacturing

Enterprise Collaboration Systems (ECS)


Supports Operations (Surprised?)
Teamwork, communication, & collaboration
Examples:

E-mail
Chat
Video

Conferencing
Calendaring
Journaling
Workflow
File Sharing (Kazaa, Limework, Napster)

Management Information System (MIS)


Supports Management (duh?)
Analysis & Reporting
Charts, Graphs, Summary Tools
Examples:

SCT

Banner Managing College Information


(Siena uses it)
Spreadsheet (Excel) One of the first and
most basic
Oracle's Corporate Performance Management

Decision Support System (DSS)


Support Management
What-if Analysis, Decision Modeling,
Scenario Building, Highly interactive, ad hoc.
Examples

Enterprise

Decision Manager 2.0 Fair Isaac


Corporation
AIMMS 3.6

Most DSSs are custom developed for


specific companies; very few out-of-the-box
products.

Executive Information Systems (EIS)

Supports high-level strategic management


Provides critical info from other systems (MIS and
DSS).
Portal Concept: one place with links to all
information
EISs integrate external information such as
economic developments and news about related
markets and competitors. Helps strategic decision
making, not necessarily tactical.
Tactical

doing things the right way right


Strategic doing the right things

Information Flow

Information
Exchange/
Communica
tion

Enterprise Collaboration System

System
Information
Flow

Executives

Executive Information System


Managers

DSS

MIS
TPS

PCS

Operational Systems and Staff

Information Flow

Operations

Enterprise Collaboration System

Management

Executives

Executive Information System

Managers

DSS

MIS
TPS

PCS

Operational Systems and Staff