Information Systems

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Information Systems
Information System (IS): A Process that collects,
processes, stores, analyzes, and disseminates
information for a specific purpose.
Computer Based information system (CBIS): an
information system that uses computer technology to
perform some or all of its intended tasks.

Information System
An information system (IS) collects, processes, stores,
analyzes, and disseminates information for a specific
purpose Application.
An information system consists of Hardware, Software,

Data, Network, Procedures, People.

The basic functions of an information system are input,

processing, output, feedback.

Major Capabilities of Information System

Perform high-speed, high-volume, numerical computation.
Provide fast, accurate, and inexpensive communication within and
between organizations.
Automate both semi-automatic business processes and manual
tasks.
Store huge amounts of information in an easy-to-access, yet
small space.
Allow quick and inexpensive access to vast amount of
information, worldwide.
Facilitate the interpretation of vast amounts of data
Enable communication and collaboration anywhere, any time.
Increase the effectiveness and efficiency of people working in
groups in one place or in several locations, anywhere.
Facilitate work in complex environment.

IT creates a Competitive Advantage

Past decade: social networking - Facebook, LinkedIn,
Twitter and blogs became extensions of businesses to
reach customers, prospects, and business partners.
Today: companies want to grab the attention of
potential and current customers on their mobiles.
Home automation, Smart cities, Internet of Things

Information Systems and IT: Core Concepts

Information System (IS) value is determined by the

relationships among ISs, people, and business processes all of which are influenced by organizational culture

Information System Primary Purpose

Collects data, processes it into information then converts
information into knowledge for a specific purpose.
Data
Elementary description of things, events, activities, and
transactions that are recorded, classified, and stored,
but not organized to convey any specific meaning.
Information
Data that has been organized so that they have meaning
and value to the recipient.
Knowledge
Information that has been organized and processed to
convey understanding, experience, and expertise as they
apply to a current problem or activity.

Evolution of IS
Transaction Processing Systems (TPS): The
computers summarizing and organizing transactions
and data in the accounting, finance, and human
resources areas.
Management Information Systems (MIS): these
systems access, organize, summarize and display
information for supporting routine decision making in
the functional areas.

Evolution of IS (contd)
Office Automation Systems (OAS): such as word
processing systems were developed to support office
and clerical workers.
Decision Support Systems (DSS): were developed to
provide computer based support for complex,
business intelligence and decision making process.

Evolution of IS (contd)
Intelligent Support System (ISS): include expert
systems which provide the stored knowledge of
experts to nonexperts, and a new type of intelligent
systems with machine-learning capabilities that can
learn from historical cases.
Knowledge Management Systems (KMS): support the
creating, gathering, organizing, integrating and
disseminating of an organization knowledge.
Cloud computing , mobile computing,

Classification of IS
The classifications are:
Classification by breath of support.
Classification by organizational level .

Classification by Breath of Support

Typical information systems that follow the hierarchical organization
structure are functional (departmental), enterprise-wide and
interorganizational.
Functional information systems are organized around the
traditional departments.
Enterprise information systems serve several department or
the entire enterprise.
Interorganizational systems connect two or more
organizations.
An organizations supply-chain describe the flow of materials,
information money and service from raw material suppliers
through factories and warehouses to the end customers.
IT provide two major types of software solution for managing supply chain
activities - Enterprise Resource Planning ( ERP) and Supply Chain
Management (SCM)

Departmental, enterprise, and

interorganizational IS

Classification by Organization Level

The typical enterprise is organized hierarchically, from
the clerical and office worker layer, to the operational
layer, the managerial layer, the knowledge worker layer
and finally the strategic layer.

Information and Knowledge Society

The term information society is derived from Manuell
Castells usage of information age in 1990. The idea of the
information society is based on technological breakthroughs.
Information is a knowledge-generating tool, but it is not
knowledge itself.
The term Knowledge society is first used by Peter Druker
in 1969.
Information is in many cases a commodity, in which case it is bought or sold,
whereas knowledge, despite certain restrictions (e.g. defence secrets,
intellectual property), belongs of right to any reasonable mind.

Information and Knowledge Society

Knowledge societies are about capabilities to identify,
produce, process, transform, disseminate and use of
information to build and apply knowledge for human
development.
The magnitude of technological change in past decades has
affected the means of knowledge creation, transmission
and processing, have brought a number of experts to
hypothesize that we stand on the threshold of a new era
of knowledge.
The use of electronic word-processing or search engines
are recent trends, yet they are already so deeply rooted
in our everyday practices that cognitive activities are
beginning to look more and more like computer-assisted
processes.

Knowledge Discovery
Data mining used to find patterns in data
Identification of data
Preprocessing
Transformation to common format
Data mining through algorithms
Evaluation

Life-cycle of Data Processing

Collection of data
Organizing data
Storing data
Processing data
Updating data
Analyzing data
Deleting data
Destroying data

Technologies supporting visualization and interpretation of Data are:

Digital imaging, GIS, GUI, graphs, animation
Identify relationships and trends

Organizational Asset

People
Data
Hardware
Software
Files
Machines
Furniture
Building

Organizational Structure

People in Organization

The IT Strategic Plan

A set of long range goals that describe the IT
infrastructure and major IS initiatives needed to
achieve the goals of the organization.
The IT plan must meet three objectives:
It must be aligned with the organizations
strategic plan
It must provide for an IT architecture
It must efficiently allocate IS development
resources among competing projects

Strategic Planning and Competitive Model

Strategy defines the plan for how a business will
achieve its mission, goals, and objectives.
Strategy planning is critical for all organizations,
including for-profits, nonprofits, government
agencies, healthcare, education, military, and social
services.
Strategic analysis is the scanning and review of the
political, social, economic and technical environment
of the organization.
SWOT analysis involves the evaluation of
strengths and weaknesses, which are internal
factors; and opportunities and threats, which are
external factors.

Basis of Porters Competitive Forces Model

Before examining the competitive forces model, its
helpful to understand that it is based on the concept
of profitability and profit margin.
PROFIT = TOTAL REVENUES - TOTAL COSTS
PROFIT MARGIN = SELLING PRICE - COST OF THE ITEM

profit margin measures the amount of profit per

unit of sales, and does not take into account all
costs of doing business.

Porters 5 competitive forces model

1.
2.
3.
4.
5.

Threat of entry of new competitors

Bargaining power of suppliers
Bargaining power of customers or buyers
Threat of substitute products or services
Competitive rivalry among existing firms in the
industry

The firms value chain, with arrows illustrating the flow of goods and services

Inter-Organizational Systems (IOS)

One of the pioneers IT system that was developed in the 1980s
to improve communications with business partners was electronic
data interchange (EDI), which involved computer-to-computer
direct communication of standard business documents (such as
purchase orders and order confirmations) between business
partners. These systems became the basis for electronic markets,
which later developed into electronic commerce.
IOS are systems that connect two or more organizations. These
systems are common among business partners and play a major
role in e-commerce as well as in supply chain management.

Managing Information Systems

Information Systems (IS) have enormous strategic value.
The Life Cycle Costs (acquisition, operation, security, and
maintenance) of these systems are to be considered.
Therefore, it is essential to manage them properly.
The responsibility for the management of information
resources is divided between two organizational entities:
The information systems department, which is a
corporate entity
the end users, who are scattered throughout the
organization.

Role of IT in IS Failures
Some IT projects are doomed from the start because
of inadequate budgeting and/or other necessary
resources.
If mail server downs for 5 minutes then ?
If public cloud server is blocked by a powerful denialof-service attack ?

Acknowledgement
Substantial portion of the Lecture slides is taken from
the course materials of following book:
Information Technology for Management, 8/e -Turban, Volonino. [John Wiley & Sons]
Introduction to Information Technology, 3/e -Turban, Rainer, Potter. [John Wiley & Sons]
Management Information Systems in the Knowledge
Economy -- Joseph, Mohapatra. [PHI]

Test your knowledge

The basic functions of an IS (information system) are _____.
(a) input, processing, output, feedback
(b) input, processing, output, people
(c) input, software, hardware, applications
(d) operation system, application programs, people

Test your knowledge

The basic functions of an IS (information system) are _____.
(a) input, processing, output, feedback
(b) input, processing, output, people
(c) input, software, hardware, applications
(d) operation system, application programs, people

Answer. (a) input, processing, output, feedback

Test your knowledge

SWOT is an acronym for _____.
(a) Silence, Winner, Opportunities, Thrills
(b) Saturation, Weakness, Over kill, Think tank
(c) Strengths, Weaknesses, Opportunities, Threats
(d) Safe, Wealthy, Opportunities, Thanks

Test your knowledge

SWOT is an acronym for _____.
(a) Silence, Winner, Opportunities, Thrills
(b) Saturation, Weakness, Over kill, Think tank
(c) Strengths, Weaknesses, Opportunities, Threats
(d) Safe, Wealthy, Opportunities, Thanks

Answer. (c) Strengths, Weaknesses, Opportunities, Threats

Test your knowledge

Which of the following is NOT part of Porters competitive model
forces?
(a) Threat of entry of new competitors
(b) Threat of information security
(c) Bargaining power of customers or buyers
(d)Threat of substitute products or services

Test your knowledge

Which of the following is NOT part of Porters competitive model
forces?
(a) Threat of entry of new competitors
(b) Threat of information security
(c) Bargaining power of customers or buyers
(d)Threat of substitute products or services

Answer. (b) Threat of information security

Test your knowledge

The ________ evaluates the newest and most innovative
technologies and determines how they can be applied for the
completive advantage.
(a) Chief Executive Officer
(b) Chief Security Officer
(c) Chief Technology Officer
(d) Chief Financial Officer

Test your knowledge

The ________ evaluates the newest and most innovative
technologies and determines how they can be applied for the
completive advantage.
(a) Chief Executive Officer
(b) Chief Security Officer
(c) Chief Technology Officer
(d) Chief Financial Officer

Answer. (c) Chief Technology Officer