IT Infrastructure and Suport Systems

Information Systems
Management - IS433
Semester 1, 2015
Lecture 2
2
IT Infrastructure and Support Systems
IS433 Information Management
Lecture 2 - Outline
3
Information Management for High Performance

Information deficiencies
IT Architecture
Data, Information and Knowledge
Types of Information Systems and Support
Supply Chain and Logistics Support
IT Infrastructures, Cloud Computing, and Services
Learning Objectives
4
Understand the types of information systems and
how they process data.

Understand the types of information systems used
to support business operations and decision

makers.
Describe how IT supports supply chains and
business processes.
Understand the attributes, benefits, and risks of
service-based and cloud computing
infrastructures.
Information Management
5
What is Information Management?

Deals with how information is stored and organised; and the
speed in which it is captured, analysed, and reported.
E.g. Mashups
Consumer mashup are applications that collect and combine data
multiple public sources and then organise them through browseruser interface.
http://www.housingmaps.com/
What is the Goal of Information Management?

Focuses on design and implementation of a well-planned out IT
architecture, policies and procedures required to effectively and
efficiently support the information and decision needs of the
organisation and decision needs of an organisation.
Information Deficiencies
6
Information Deficiencies
7
Contributing factors
Data Silos
Data trapped in departments and are not accessible by other ISs and cannot consistently be
updated.
Data quality becomes an issue cannot (should not) be trusted without extensive verification.
Supports single function do not support organisations cross functional needs.
E.g. health care
Lost or bypassed
Data get lost in transit from one IS to another
User-fierce format
Horrible user interface which are not user friendly at all

Poorly designed interfaces requires extra time to figure increase the risk of errors from
misunderstanding the data or ignoring it.
Non-standardised data formats
Data formats not displayed in a uniform way or standardised way.
Gross sales revenue per product line vs net sales revenue per product line
Moving Targets
Information that decision makers want keeps changing and changes faster than IS can
respond to due to the four reasons above.
Factors that drive towards

collaboration
9
Research firm Forrestor.com reported three factors
driving trend toward collaboration and information

sharing technology:
1.
2.
3.
Global Mobile Workforce

Mobile driven consumerisation growing number of
cloud based collaboration solutions that makes it easier
to collaborate and share from anywhere
Principle of any
Benefits of Information management

10
Improves decision making

Access to more comprehensive set of information
Improves prediction
New opportunities or challenges
Reduce Risk
Improve Compliance with regulations and polices through
improved information quality and governance
Reduced cost
Reduce the number of repositories and time spent locating and
integrating information
IT Infrastructure
11
IT Architecture
Road map or blueprint that guides the build out of IT
capabilities, acquisition of networks, cloud services, ISs,
software, and hardware
Defines the vision, standards, roadmap that guide the
priorities, operations, and management of the ITs supporting
the business
The blueprint must be designed with the following goals in
mind:
Business productivity and cost reduction
IT and business alignment
Business agility and speed to market
Business process re-engineering (BPR)
IT reliability and efficiency
IT Infrastructure
12
Components of IT Architecture
1
Business Architecture
The processes the business uses to meet its

goal
Application Architecture
How specific applications are designed and

how they interact with each other
Data Architecture
How an enterprises data stores are

organised and accessed
Technical Architecture
The hardware and software infrastructure

that supports applications and their
interactions
Uses and Benefits of IT Architecture

13
Maintain a close alignment between IT deliverables
and business requirements

Improve ability to respond quickly to business
changes
Develop closer partnership between business and IT
groups
Reduce complexity of existing ISs
Improve agility of new IT systems
Ensure that legal and regulatory requirements are
being met
IT Architecture
14
Business
Architecture
Business
Strategy
Business
Results
Application
Architecture
Data
Architecture
Technology
Architecture
IT Architecture (Plan to maintain ITBusiness alignment)

15
Defines the following:

Organisations mission, business functions, and future
directions
Information and information flows needed to perform the
mission
Processes for implementing new Its in response to business
changes
The current baseline architecture
The desired target architecture (future)
The sequencing plan, which consist of short and long term
strategies for managing the change from baseline to target
architecture
IT Architecture
16
Information Systems & IT Infrastructure

17
Data, Information, and Knowledge

Data: raw data
Database:
stores data in such a way that it can

be accessed, searched, retrieved, and/or
updated
Information: data thats been processed, organized, or

put into context.
Knowledge: data or information that have been

processed to convey understanding, experience,
accumulated learning, and expertise as they apply to a
current problem or activity.
Data, Information, and Knowledge

18
19
Figure 2.1 Diagram showing the relationships among information systems.

Various types of ISs and applications support managers, workers, work flows, business processes, and
transactions with supply chain partners.
Information Systems & IT Infrastructure

20
Data and Software Application Concepts
Organizations have different types of information systems that collect

and process data, distribute reports, and support decision making and
business processes.
Starting with transactions that take place at an interface (e.g.,

withdrawing cash from an ATM), a transaction processing system
(TPS) processes the data as follows:
verifies available funds

subtracts withdrawn amount updating the data in the database
TPS are critical systems
Transactions that do not get captured can result in lost sales,

dissatisfied customers, and any other data errors with financial
impact.
Data and Software Application

Concepts
21
Organizations have different types of information
systems that collect and process data, distribute

reports, and support decision making and business
processes.
HR (HRSS)
Sick Leave
Pay Slip
Performance
Finance (Navision)
P&L
Sales & Marketing (Gentrack)

Sales
Billing
Data and Software Application Concepts

22
Data captured by a TPS system are processed and stored
in a database, and then made is available for use by other

systems.
Transactions are processed in two ways:
1.
Batch processing TPS in batch processing mode

collects all transaction for a day, shift, or other time
period, and then process the data and updates the data
stores: e.g. payroll processing done weekly or fortnightly
2.
Online transaction processing or real time processing
Management Information Systems

23
MIS are referred to as general purpose reporting
systems
Objective is to provide report to managers for
tracking, operations, monitoring, and control.
Data are extracted from the database and
organized into reports using management
information systems (MIS).

24
Decision support systems (DSS).
Are interactive applications that support decision making

Support unstructured and semi-structured decisions such as
whether to make or buy products, or what new products to
develop and introduce into existing markets.
Structure decision determine whether an applicant has qualified
for a loan
Unstructured decision depend on human intelligence,
knowledge and/or experience.

25
Three Defining DSS Characteristics

An easy to use interactive interface
Models or formula that enable sensitivity analysis, what if
analysis, goal seeking, and risk analysis.
Data from multiple sources-internal and external sources plus
data added by the decision maker who may have insights
relevant to the decision situation.
Types of Information Systems and

Support
26
ISs classified into 2 categories based on type of
support: management or operations
Operations support system

Transaction Processing Systems (TPS)
27
Data is processed by a TPSe.g., sales orders, payroll,

accounting, financial, marketing, purchasing, inventory
control
Transactions are either:
Internal transactions: occur or originate from within

the organization; e.g., payroll, purchases, budget transfers, &
payments.
External transactions: originate from outside the

organization; e.g., from customers, suppliers, regulators,
distributors, and financing institutions.
TABLE 2.1 Business Transactions in a

Manufacturing Company
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Payroll and personnel

Employee time cards
Employee pay and deductions
Finance and accounting
Financial statements
Accounts receivable / Accounts payable
Sales
Invoices and billings
Sales returns
Production
Production reports
Quality control reports
Inventory management
Material usage
Inventory levels
Operations support system

Batch vs. Online Real-Time Processing
29
Processing of transactions is done in one of two modes:

1.
Batch processing: The TPS collects all transactions for

a day or other time period; and later processes the batch
of transactions at once.
2.
Online transaction processing (OLTP) or realtime processing: The TPS processes each transaction
as it occurs, which is real-time processing.
OLTP requires that a network link the input device or

Web site to the TPS.
Management support system

Management Information Systems (MIS)
30
General purpose reporting systems

are referred to as management
information systems (MIS).
3 types of reports
1. Periodic: created or run according to a pre-set
schedule.
2. Exception: generated only when something is
outside the norm.
3. Ad hoc: generated on an as needed basis.
Management support system
Decision Support Systems (DSS)

31
Support unstructured and semi-structured decisions, such as

whether to make or buy products or what new products to
develop & introduce into existing markets.
3 characteristics of DSSs:
1.
2.
3.
easy-to-use interactive interface

models that enable sensitivity analysis, what if
analysis, goal seeking, and risk analysis
data from internal databases, external sources, and
added by the decision maker who may have insights
relevant to the decision situation
IT Infrastructure
32
Role of IT Department ensure the reliability of the enterprises IT
infrastructure
What an Organisations IT infrastructure can support is determined
by five major components:
Hardware
Software
Networks and communication facilities, including the internet and intranet
Databases and data workers
Information management personnel
How you design your IT infrastructure determines the ability to
efficiently store, protect, and manage data so they can be made

accessible, searchable, shareable, and ultimately actionable.
In the past, IT managers only had two options, to build or buy the
technology.
Now the option of cloud computing is also available
Acquiring Infrastructure
Components
33
When making decisions on how to acquire your
infrastructure component, the following needs to be

considered:
1. Dependable (available, scalable)
2. Manageable
3. Adaptable
4. Affordable
Supply Chain and Logistics Support

34
Figure 2.8 Backstream and upstream components of a supply chain.
A companys competitive advantagelow cost, reliability, quality, or speed
to marketdepends on how well the supply chain is managed.
Logistics & RFID

35
Managing material and information flows to
optimize supply chain operations.

Logistics has been described as having the
right thing, at the right place, at the right time.
RFID (radio frequency identification) tags can be attached to or
embedded in packages or physical objects.
RFID readers scan and input identifying information from
the tags via radio waves.
Wal-Marts Global Sourcing Strategy

for its Backstream Supply Chain
36
Because Wal-Mart has thousands of suppliers and
constantly looks for new ones worldwide, they invested in a

new global sourcing strategy.
Benefits:
reduced cost of goods to keep prices down
increased speed to market
improved product quality
Sourcing: identifying sellers (sources) that can provide Wal-Mart
with products or services to sell in stores and online.
Global sourcing: purchase of goods or services from sellers located
anywhere in the world.
IT Infrastructures, Cloud Computing, &

Services
37
A companys IT infrastructure determines the workload that
its ISs, apps, and mobile computing devices can handle and
their speed.
IT infrastructure: collection of hardware, software,

processes, networks, and users.
IT infrastructure allows (and limits) the ability to store,
protect, and manage data so that it can be made accessible,

searchable, shareable, and actionable.
Cloud Computing
38
To improve performance at lower up-front costs, companies
are turning to cloud computing.

Cloud: term used to refer to the Internet.
Cloud computing has greatly expanded the options for
enterprise IT infrastructures.
Figure 2.10 Evolution to Cloud Computing
IT at Work 2.4
39
U.S. government spent about $68.1 billion in 2008 on IT,

with 1/3 spent on IT infrastructure. Using cloud computing
can significantly reduce costs and energy consumption.
U.S. Department of Defense (DoD):
implemented a private cloud to service many military
agencies at reduced cost.
did not adopt (public) cloud computing because of the
sensitive nature of their data.
U.S. Navy has drafted guidelines for ordering cloud
services, but standards and policies for cloud computing
have not yet been established.
What Services are Available in the Cloud?

40
Software-as-a-Service (SaaS): popular IT model in
which software is available to users as needed.

Other terms for SaaS:
on-demand computing
utility computing
hosted services
Basic idea: instead of buying and installing expensive
packaged enterprise applications, users access software

apps over a network
Moving to the Cloud raises questions

41
Which workloads should be exported to the cloud?

Which set of standards to follow for cloud computing?
How to resolve issues of privacy and security as things
move out to the cloud?

How will departments or business units get new IT
resources? Should they help themselves, or should IT remain a
gatekeeper?
Cloud computing limitations & trade-offs

42
Cloud computing runs on a shared infrastructure
so the arrangement is less customized to a specific

companys requirements.
Its more difficult to get to the root of performance
problems, like the unplanned outages that

occurred with Google's Gmail & Workday's human
resources apps.
The tradeoff is cost vs. control
Strategies for Acquiring IT Applications

43
Buy the applications (off-the-shelf approach)

Lease the applications
Developing the applications in-house (Insourcing)
The Five Major Steps of Acquisition

44
Constraints in Planning and Acquisition

45
Acquiring IT Applications Option 1 - Buy

46
Acquiring IT Applications Option 2- Lease

47
TYPES OF LEASING VENDORS Leasing can be
done in one of two ways.

The first way is to lease the application from an
outsourcer and install it on the companys premises.
The vendor can help with the installation and
frequently will offer to also contract for the operation
and maintenance of the system. Many conventional
applications are leased this way.
The second way, using an application system provider
(ASP), is becoming more popular.
Acquiring IT Applications More Options ..

48
Acquiring IT Applications More Options

49
IN-HOUSE DEVELOPMENT APPROACHES. There are two major
approaches to in-house development: building from scratch or building

from components.
Build from scratch. This option should be considered only for specialized
applications for which components are not available. It is an expensive and
slow process, but it will provide the best fit.
Build from components. Companies with experienced IT staff can use
standard components (e.g., a secure Web server), some software languages
(e.g., Java, Visual Basic, or Perl), and third-party subroutines to create and
maintain applications on their own. (Or, companies can outsource the entire
development process to an integrator that assembles the components.) From
a software standpoint, using components offers the greatest flexibility and
can be the least expensive option in the long run. However, it can also result
in a number of false starts and wasted experimentations. For this reason,
even those companies with experienced staff are frequently better off
modifying and customizing one of the packaged solutions as part of the
buy option.
Traditional Systems Development Life

Cycle
50
Software development life cycle is the
traditional systems development method that

organizations use for large-scale IT projects.
SDLC processes are systems investigation,
systems analysis, systems design, programming,
testing, implementation, operation and
maintenance.
Waterfall approach is when tasks in one phase
are completed before the work proceeds to the next
stage.
Selection of Vendors
51
Partner Connections
52
Business Process Redesign (BPR)

53
BPR
Business process redesign was preceded by business process reengineering, a
methodology in which an organization fundamentally and radically
redesigned its business processes to achieve dramatic improvement. Today,
BPR can focus on anything from the redesign of an individual process, to
redesign of a group of processes, to redesign of the entire enterprise.
BPM
A new method for restructuring, Business process management (BPM),
combines workflow systems and redesign methods. This emerging
methodology covers three process categories: people-to-people, systems-tosystems, and systems-to-people interactions. It is a blending of workflow,
process management, and applications integration.
Outsourcing & Application Service Providers

54
Outsourcing is when an organization acquires IT
applications or services from outside contractors

or external organizations.
Application service provider (ASP) is an
agent or vendor who assembles the software
needed by enterprises and packages the software
with services such as development, operations and
maintenance.
ASP manages application servers from a centrally

controlled location rather than at a customers site.
Chapter 15
Evaluating & Justifying IT Investment:

Benefits, Costs & Issues
55
Assessing the costs
Fixed costs: are those costs that remain the same

regardless of change in the activity level. For IT, fixed
costs include infrastructure cost, cost of IT services, and
IT management cost
Total cost of ownership (TCO): Formula for
calculating cost of acquiring, operating and controlling an
IT system.
Assessing the benefits (Values)
Intangible benefits. Benefits from IT that may be very
desirable but difficult to place an accurate monetary value
on.
Comparing the two
Conducting the Cost-Benefit Analysis

56
Using NPV in cost-benefit Analysis. Using the NPV
method, analysts convert future values of benefits to their

present-value equivalent by discounting them at the
organizations cost of funds.
Return on investment. It measure the effectiveness of
management in generating profits with its available assets.
The business case approach. A business case is one or
more specific applications or projects. Its major emphasis is
the justification for a specific required investment, but it
also provides the bridge between the initial plan and its
execution.
Cost-Benefit Analysis Methods

Method
Description
Benchmarks
Focuses on objective measures of performance. Metric benchmarks

provide numeric measures of performance, best-practice
benchmarks focus on how IS activities are actually performed by
successful organization.
Management by maxim
Brings together corporate executives, business-unit managers, and

IT executives to identify IT infrastructure investments that
correspond to organizational strategies and objectives.
Real-option valuation
Stems form the field of finance. Looks for projects that create
additional opportunities in the future, even if current costs exceed
current benefits.
Balanced scorecard method
Evaluates the overall health of organizations and projects, by

looking at the organizations short- and long-term financial metrics,
customers, internal business processes and learning and growth
(Kaplan and Norton, 1996).
Activity- based costing approach
Applies principles of activity-based costing (ABC)( which allocates

costs based on each products use of company activities in making
the product) to IT investment analysis.
EIAC model
Methodology for implementing IT payoff initiatives, composed of 9

phases, divided into four categories: exploration (E), involvement
(I), analysis (A) and communication (C).
57Management
IS433 Information
Managerial Issues
58
Global and Cultural Issues

Ethical and legal issues.
User involvement.
Change Management
Risk Management
Chapter 2 Link Library

59
Information Technology For Management 6th Edition, Turban, Leidner,

McLean, Wetherbe, John Wiley & Sons, Inc.
Blog on cloud computing http://infoworld.com/blogs/david-linthicum
Planners Lab, for building a DSS http://plannerslab.com
Supply Chain and Logistics Institute http://SCL.gatech.edu/
Salesforce.com cloud demos http://salesforce.com
U.S. Defense Information Systems Agency http://disa.mil
Supply Chain, Europes strategic supply chain management resource.

http://supplychainstandard.com

IT Infrastructure and Suport Systems

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Information Systems

IT Infrastructure and Support Systems

IS433 Information Management

Information Management for High Performance

IS433 Information Management

Understand the types of information systems and

how they process data.

to support business operations and decision

IS433 Information Management

What is Information Management?

What is the Goal of Information Management?

IS433 Information Management

IS433 Information Management

Data get lost in transit from one IS to another

Horrible user interface which are not user friendly at all

Non-standardised data formats

Data formats not displayed in a uniform way or standardised way.

IS433 Information Management

Factors that drive towards

Research firm Forrestor.com reported three factors

driving trend toward collaboration and information

Global Mobile Workforce

IS433 Information Management

Benefits of Information management

Improves decision making

IS433 Information Management

The processes the business uses to meet its

How specific applications are designed and

How an enterprises data stores are

The hardware and software infrastructure

IS433 Information Management

Uses and Benefits of IT Architecture

Maintain a close alignment between IT deliverables

and business requirements

IS433 Information Management

IT Architecture (Plan to maintain ITBusiness alignment)

Defines the following:

IS433 Information Management

Information Systems & IT Infrastructure

Data, Information, and Knowledge

stores data in such a way that it can

Information: data thats been processed, organized, or

Knowledge: data or information that have been

Data, Information, and Knowledge

IS433 Information Management

Figure 2.1 Diagram showing the relationships among information systems.

Information Systems & IT Infrastructure

Data and Software Application Concepts

Organizations have different types of information systems that collect

Starting with transactions that take place at an interface (e.g.,

verifies available funds

TPS are critical systems

Transactions that do not get captured can result in lost sales,

IS433 Information Management

Data and Software Application

Organizations have different types of information

systems that collect and process data, distribute

Sales & Marketing (Gentrack)

IS433 Information Management

Data and Software Application Concepts

Data captured by a TPS system are processed and stored

in a database, and then made is available for use by other

Batch processing TPS in batch processing mode