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By M.P.Jayarama Shetty
Information system consists of all the components that work together to process data and produce information. All business information systems consists of many subsystems with sub goals, all contributing to the organizations main goal.
TERMS-INFORMATION SYSTEM & INFORMATION TECHNOLOGY
Information system: An organized combination of people, hardware, software and communication networks and data resources that store, retrieve, transform and disseminate information in an organization. Information technology: Various hardware components necessary for the system to operate.
. Efficient gathering of information. Business: To arrive at sound decisions and solve critical problems. storing it for further use and manipulating it as and when necessary.Purpose of information system Personal: For entertainment. enlightenment or to get information. helps an organization to achieve its business goals.
payments. sales. Support decision making: Date of purchase. . offer innovative products. use of intranet.Role of information system Supports business process: receipts. how to minimize cost. competitive advantage. how to maximize profitability etc. inventory management etc. customer friendly. Supports competition. purchases. IVRs[interactive voice response] etc.
Components of information system 1.Hardware: Computer and its peripheral equipments.Data: Input that takes the system to produce information. Input. eg: telephone. . 2. Output and storage devices and also data communication equipments.
sound and animations in the form of electronic data. display information and store data and information.Software: Set of instructions that instructs the computer to take data. . pictures.Telecommunication: hardware and software that facilitates fast transmission and reception of text. 4. process it.Components 3.
5.People: professionals and users who analyze organizational information needs. back up. .Components «. write computer programmes.. passwords. operate the hardware and maintain the software. Procedures: Rules for achieving optimal and secure information in data processing[data security. 6. piracy/privacy etc. virus attacks. design and construct information system.
Output: Getting the information out of information system.Stages of processing in information system Input: Entering data in to the information system. Processing: Changing and manipulating the data in information system. Storage: Storage of data and information for future use. .
. Data storage: capacity to store large volume. Coordination: facilitates greater coordination through accurate information sharing and effective communication.fast and accurate.Capabilities of information system Data processing. Information: Instant access/real time access.
Enables differentiation of products and services. Facilitates modeling. Facilitates organizational memory and learning. Supports automation. .Capabilities«« Supports: Decision making.
a statement or a picture. It may be in the form of number. It is a raw material in the production of information . Data:Data is derived from the Latin word µdatum¶. Data are objective measurement of attributes/characteristics of entities like people/place/things/events.raw facts or observations.Unit-1 Introduction to information system.
Data to be manipulated to become information. Information thus consists of data that have been retrieved processed or otherwise used for information purposes or as a basis of forecasting or decision making. . Data is raw material and information is output.Information Facts or conclusions that have meaning with the situation.
Characteristics of useful information Relevant-Related to a particular objective. Accurate-Correct and true data. . incomplete information is useless. Complete-All information required. Economical-deriving information at lowest operational cost. Current-Latest/updated information needed.
SEBI/RBI/IRDA. Regulators.Outside the organization: Government. Auditors-External/Internal/Concurrent/RBI. Share holders etc. purchase etc. Government interferes during frauds etc. public relations. Auditors.Users of information 1. 2. regulators. production. .Within the organization: Finance personnel.
Organization is the system and the parts[divisions. processing it and producing output in an organized manner.System and subsystem A system is a range of components that work together to achieve a common goal or multiple goals by accepting inputs. . departments. A subsystem is a part of a larger system. functions units etc] are the subsystems.
.Types of information systems 1. update operational database.process data generated by and used in business operations. B)Transaction processing systems: Record and process data. Operations Support Systems: A)Support business operations.
steel production. eg: power generation. D) Process control system: Monitor and control physical process. bottling plant etc. .Types of information systems C)Batch processing & Real time processing: Eg: Order/payrolls/sales/inventory processing.
Types of information systems E) Enterprise collaboration system: Enhance team and work group communications and productivity. Examples: Email. Video conferencing and other office automation systems. .
A) Management information system: Is an integrated user machine system for providing information to support operations. Provide information to support effective decision making by the managers. control and decision making. The system utilizes computer hardware and software models for analysis.Management support systems . management and decision making functions in an organization. 2. planning.
Management support system B. interactive support during decision making process. Decision support system: Provides direct. risk calculations etc. Eg: Product pricing. other financial forecasting. sales/service[online services] profitability[future forecast]. .
profit planning. evaluating actions of competitors.Management support system C. . Easy to use displays. personnel planning. Eg: Five years sales trend forecasting. Executive Information system: Provide critical information from variety of internal and external sources.
3. Other types of information system Expert systems: are knowledge based. process monitoring system etc. act as expert consultants eg: Diagnostics systems. eg: marketing/sales strategies and access to best practices. . Knowledge management systems: are knowledge based[e-learning] supports creation and dissemination of business knowledge.etc.
Give competitive edge. . Eg: Ecommerce web systems shipment tracking etc.Strategic information system Support activities that have strategic advantage.
Functional business systems Support operational and managerial applications related to business functions. Eg: Information systems that support various applications in marketing. accounting etc. .
Identify the software requirement for getting the relevant information to support the risks.Development of infrastructure Access information requirements of a business. . Use telecom/network facilities for access. Go for hardware requirements to run the software.
CPU Internal memory-RAM/ROM.Basic hardware components Input devices. Output devices. External storage ± hard disk/cd/dvd. Central processing unit. .
Classification of computers 1.Super Computers: Largest in physical size. Used in weather forecasting. High processing speed. simulations« . Costs heavily. Use multiple processor.
.2.Mainframe computers Less powerful and less expensive Ability to run multiple operations systems Have multiple processors Used in banks. Insurance companies etc.
. Generally called as workstations. Used as shared resources. Acts as server. Micro Computers: PCs. 4. Mid range computers: Smaller than mainframe and less powerful.Classification of computers 3. used for CAD[computer aided design] and cam[computer aided manufacturing]. Notebook computers etc.
manipulating numbers or copying/deleting documents etc. . Application software System software Open source system. to a computer to execute any and all process including displaying texts.Business software-types of software What is a software! A series of instructions.
graphics etc. CRM-customer relationship management. Eg: software for payroll. . presentation tools. spread sheets. Performs information processing tasks for end users.Application software A programme developed to address a specific need. Word processor. It can be application specific or general purpose.
windows. Network management systems. Acts as a n interface between computer and user. Eg: operating systems[Linux. deleting]etc Develop to work in association with as many applications as possible. Application work with system software when they are developed to be compatible with that software.[file loading. . copying.System software Manage computer resources and perform routine tasks. XP etc.
recognition of one¶s contribution. solving programming problems. SQL.Open source software Proprietary software v/s open source s/w: Software developed and sold for profit v/s Software developed and made available free of cost. thunderbird. . Eg: Mozilla Firefox. Sharing of source codes.
Advantages of telecommunications in business: Better business communications[intranetwithin organization]. Facilitates transactions over the net. Workforce can be mobile and flexible[use of networks can easily transfer data fast].[streamlined/standardized process]. Efficient business processes. Business networks & telecommunications . Quick transmission/distribution of data [real time].
Bandwidth and media Bandwidth: It is speed [transmission rate] at which data are communicated. Cable television. Dial up connections through regular phone lines carry only one transmission at a time. wireless connections carry multiple transmissions simultaneously. Transmission rate measured as bits per second[bps]. fiber optic cables. .
radio and satellite transmissions. . Twisted pair cables: electric power lines.Media It is the means through which bits are transmitted. Tangible v/v intangible-cable v/s radio waves.
. management or knowledge work.Ch-3. Applications of information system. An information system is strategic if its objective is to improve competitive positions of the organization. Helps firms to attract customers and retain them for an extended period of time. May include system that supports operations.
T: It is all about how to use the technology rather than which technology you use. Innovative use of I.Characteristics of strategic information system External focus: they change the way the firms compete in the market place. High degree of projectors. .
vouchers for special customers. . offering free products/credit facility for regular customers/bonus.Strategies in competitive market Differentiation of service: offering value added service/special schemes etc of product. For service-use of Web/IVR etc For customer service-change from labor intensive to technology intensive. Cost leadership-for product-use of I T is to reduce process/labour cost.
It helps in identify the customers to be served and customizing the product or service for their needs. . It could be customer segment or a geographical region. Smaller firms compete by specializing in product or service for a limited size slot.Companies that focus on narrow customer segment Focused differentiation-company identifies a segment of the market which it can serve in a superior way.
Relatively difficult to pursue for smaller companies.Cost focus Company serving a narrow market segment with which product or service that it offers at a significantly lower cost than competitors. . Use of IT facilitates operational efficiencies.
Competitive focus of the companies.
Customers Suppliers Existing competitors Potential substitute prodcts[diversification]
Using I S to our advantage
1.threat of new competitors: Use technology/expertise that is available to the competitors. Use barriers to entry[for the competitors] Obtain legal protection/IPR [intellectual property rights] for and artistic work. Eg: Microsoft patenting software, cell companies offering TV on mobiles etc.
2.Intensify rivalry among the existing competitors: Change the basis of competition Eg: FED express facilitating parcel tracking. Real estate business going web etc.
. pressure from potential substitute products: Track the market changes using information service and be the first mover/introducer. Eg:e-bay dominating on line auctions etc.I S advantages 3.
Merger/Acquisition[two companies to agree].Bargaining power of the customer: Introduces switching cost eg: selling of ink jet printers bellow cost-replace a depleted ink or toner with the one that the printer manufacturer¶s sell. strategic alliance[for a given output/processing/capitalization etc] .I S-advantages 4. quality]. Competitive tactics: the alternative the firm has-internal innovation[technology. costcutting.
Payrolls. . deposits. Maintenance of personal records for internal and external regulations.Types of MIS/applications of MI S 1. promotion. tax calculations-TDS on salary.S: Types of applications: a) Employee record management.Human resource management: I. employee photographs etc.
. automates selection process.S b) Recruitment and promotion. PC¶s enable data base search.HRM related I. automated recruitment and selection software. Use of Intranets for posting vacancies linked to employees. web searching for qualified candidates with job openings and use of tracking system to Email candidates and updates the corporate HR database with their resumes.
access employee and departments. professional conduct etc by using evaluation software for standardizing the evaluation process.HRM related I S C] Training: Improving employee skills by using multi media software/simulated trainings etc reduces training costs. . communication skills. D]evaluation: evaluation of technical ability.
commission. Reduced amount of work of HR staff decrease the companies overhead costs if given access to the system.HRM related IS E]compensations and benefits management. Manage compensation-salary. bonuses etc and benefits like health insurance. . life insurance. retirement plans etc. hourly pay.
. sales.Customer relationship management system. prospecting [for a certain group]. Enhance[customer satisfaction]: by supporting superior service through a responsive team of sales and service specialists. Phases of CRM: Acquire[new customer]: by superior job of contact management. marketing and order fulfillment.
Retain: help identify and reward most loyal. . Concessions of various nature extended to HNI/corporate customers who facilitate volume growth and profitability.CRM-phases of CRM contd. Customer profitability analysis statement.. profitable customers. production and productivity. Companies must not only acquire new customers but also retain existing customers.
Sales force-streamlining and automation. .enable sharing across the company.CRM-phases Goals of CRM system: Finding Data-reduce time Knowledge. Marketing efforts-Market research[looking for references].
enabling budgeting.CRM CRM systems: Credit information about customers' likes and dislikes¶. . Use statistical models to predict sales volumes of different products and different designs of the same products aiding manufacturing capacities and production live.
High level of inventory leads to financial burden. It needs to be controlled to have optimum level of investment in all types of inventories. . Stock levels should be always balanced.Inventory information systems What is inventory: Stock of raw material and finished goods available for the firm for production and sale.
quantity ordered and received etc«.. To prepare purchase order and inventory status reports accurately and on time. To prepare various analysis reportsdefective materials. To generate reports to assist the management for making effective and timely decisions .Objectives of inventory-I S To maintain optimum level of raw material and finished goods.
Material requisition slips indicating the quantity used. Delivery challans indicating quantity sold of various items to buyers.Inputs to the system Data of suppliers. Material rejection note indicating quantity of items rejected to vendors and reasons. Goods received notes indicating the quantity received. vendors. raw materials and finished goods. . buyers.
Customer service: web enabled service. . buying habits etc when they use the web. Using of telemarketing and web for personalized marketing. answers to FQRs on the website etc. Use personal information of the customer to identify their interests. use of IVR etc..Targeted marketing Use database to define µprospective customer¶(consistent) accurately. tastes. automated customer service.
manufacturing shipping and invoicing. Enabling immediate order fulfillment. loading the sales information to enable order processing.Sales force automation Note books with internet facilities to sales people with specialized software for manipulating the customer information. . Generation of e-bills and electronic payment of bills.
. Integrating and automation of customer servicing processes.What CRM system does ? Instant and complete view of the customer. Integration of related business operation with IT framework of web enabled software and databases. Single and complete view of the company and its products/services for customers. Better service for customers.
It needs to be controlled to have optimum level of investment in all types of inventories.Inventory information system What is inventory: Stock of raw material and finished goods available in the firm for production and sale. . High level of inventory leads to financial burden. Stock levels should be always balanced.
To prepare purchase order and inventory status reports accurately and on time.S.Objectives of inventory I. quantity ordered and received etc. To maintain optimum levels of raw materials and finished goods. To generate reports to assist the management for making effective and timely decisions. . To prepare various analysis reports-defective materials.
.Inputs to the system Data of suppliers. vendors. material requisition slips indicating the quantity used. buyers. Delivery chalans indicating quantity sold of various items to buyers. Material rejection note indicating quantity of items rejected to vendors and reasons. raw materials and finished goods. Goods received notes indicating the quantity received.
3. Output from the system .Materials transfer reports.Purchase order with details. 4. 5.Purchase analysis report-indicating quantity and other details of items purchased from various suppliers.Purchase book-for quantity & other details. issued and closing balance. received.issued to other branches or departments. 2.Inventory status report-quantity sold. 6.1.Materials return receipt-quantity of items rejected with details.
It also provides information to managers to make accurate and timely decisions to manage operations.Inventory management system does not make decisions or manage operations. 7. . It provides information to efficiently manage materials. 8. people and equipment and communicate with the suppliers and customers.Output from the system contd..
creditors and managers with information to make decisions/generate reports. It records.Accounting information systemAIS AIS is the system of records that a business keeps to maintain its accounting system. and reports events using accounting methods to achieve accounting objectives. . investors. processes. Purpose of AIS is to accumulate data and provide decision makers.
disseminate the information to the interested parties and helps in creating the reports to the managers. produce periodic statements. .What AIS does? Help record transactions. Creation of financial reports. Generation of sales information. AIS facilities: Cost accounting. accounts payable & accounts receivable details/data. collect and process transaction data.
It is a field of study that explores how computers can be used for tasks that require the human characteristics of intelligence. It includes the following branches of study: Problem solving Natural languages Robotics .Expert system Artificial intelligence-AI. imagination and intuition.
the computer uses an µinference engine¶(a software) to access. given a knowledge base(a set of facts and rules about those facts). . select and interpret a set of rules to make up new facts. Inference engine-combines data with the data relationships stores to diagnose interpret. Next.Expert system-how the computer learns Computers learn. suggest the solution.
E. The term µcustomer¶ and µprofit¶ are examples of such symbolic strings. Uses symbolic reasoning to solve the problems. purchases etc .g.What expert system does? Performs at a human expert level in a specialized domain. Artificial intelligence(AI) applications process strings of characters that represent real world/entities or concepts.-sales.
.What expert system does Applies proceedings to a solution based on experience/informal methods by trial and error to guide reasoning process.
1.classifications-identifying an object based on certain characteristics. 3.diagnosis-detect and understand malfunction disease from data. 4. . 2.Process control-controlling a physical process based on monitoring.monitoring-continuous observations of data to check any deviations to take remedial action.Expert system used in«.
as it has high performance. Expert system makes consistent recommendations.Expert systems-benefits Faster completion of a task than a human expert. Error rate of successful expert system is very low. diagnosis. Enables immediate response. . decision.
e-knowledge. Facilitates building up of organizational knowledge. Ease to get everything at one place. Can operate in an environment that are hazardous for human experts. best professionals. Captures scarce expertise.. as it operates through networks and engines. .Expert system benefits«. e-learning.
Problems with knowledge acquisition-lack of data accessibility. .Expert systems-limitations Limitations of technology-no automatic learning capacity. Unwillingness/non availability of domain experts. Long term weakening of innovation in the performance of the people.
.Unit-4.Decision making and support systems Introduction: Decision-act or process of deciding. Arriving at a formal judgement. Deciding a settlement of a question.
To arrive at right decision. . Use of computers facilitates effective and efficient processing. Large amount of information requires great amount of processing.Decision support Decision support: Why support-to make quality decisions. Decision making-making the decision a necessity.
choice-collecting the optimum course of action. 2.Decision making process 1. .design-method of considering the data.intelligence-collection of facts and ideas. 3.
.Types of problems(decisions) 1. -can be made with the help of computer system.Structured problem: programmed decision -can be delegated or outsourced. -cost of solving the problem is low compared to the non programmed problems.
-computers may be used to process large volumes of data. -are difficult to structure in logical or mathematical forms. -higher authority cannot delegate but take decisions. .Unstructured problems-non programmed decisions -cannot be delegated as they are managed directly.
new product service/new product development(NPD) etc« -cost is high. Hence higher authority must be in charge.Unstructured problems«« -acquisition of capital projects or purchase of scarce and capital items under fluctuations/fluctuating price conditions. .
. -considering factors-demand and supply. Intelligence-design-choice.Unstructured problems«. Semi structured problems or semi programmed decisions. -middle level officials taking decision. -at least one phase of the three phases of decision making can be handled by defined procedure.
It is also used as business intelligence or management support systems. select the best-use of intranet to cut cost. DSS are used at all levels of organization. Helps managers select one of many alternative solutions to a problem.Decision support system DSS is a computer based information system. just in time(JIT) for stock etc« . Evaluate various alternatives.
Computer processes the data through desired modules. Computer presents the results/output in easy to understand formats. Computer searches vast amount of data to focus on relevant facts(data management module). .How decision support system works(DSS)? Process of DSS Users enter a request in a convenient manner(dialogue management module).
Component/structure of DSS Decision support system: 1. 2.Dialogue management system. 3. .Module management sub system.Data management sub system.
It is data base/data warehouse. Takes care of data mapping. data validation. Mapping-selecting required customer. etc for last 5 years.Component/structure DSS«. 1. demand. .Data management system. data integration and data processing. Validation-verification of data& be available throughout. Eg: data about raw materials. Data base may be specially created or already existing. price.
Models may be based on experience or mathematical research to establish relationship between the factors. Models are used to predict output on the basis of different inputs.Module management sub system Offers different models for representation.2. . Models can be fixed or dynamic.
Used for research and development. Images/modules on how to produce Control of price/demand and supply(market) Eg:Models developed by airline industry to maximize revenue or engineering model.2. Module management contd« Companies usually do not share the details of the models-private/confidential due to other competitors. .
. OR What would it take in terms of input factors to achieve a particular performance? (goal seeking analysis). if increase the price of the product µx¶ by Rs:2 what will be the demand?-what.3. if analysis. Facilitates user interaction.Dialogue management sub system. DSS answers the question like.
commands etc«. . access and select database. Better interpretation and contradiction can be made easily.Dialogue management subsystem«. Dialogue may be in the form of menus. Prompts a user to select a model. enter programmes. Results may be displayed in a table graph.
Faster rate of reaching a decision-facilitated by in built models-customized mode to satisfy one¶s needs. computer assistance is required. . Compatibility-faster processing speeds.Features of DSS Supports decision making-even to process larger volume of data.
. eg. supports easy modification of models. High quality decision taking is made possible by integration of available information.Features of DSS««. CBS Software-modification & Customization. Finacle introduced & upgraded for better operations. .
Features of DSS««
User friendly-facilitating problem solving at all levels in the organization. Efficient and effective. Assists the user at any time. Problems solved.
Benefits of DSS
Improves personal efficiency. Expedites problem solving(speed up the progress of problems solving in the organization) Facilitates interpersonal communication. Promotes learning and training. Increases organizational control. Generates new evidence in support of a decision.
Benefits of DSS««.
Creates a competitive advantage over others. Encourage exploration and discovery on the part of the decision maker. Reveals new approaches to thinking about the problem space. Helps automate the managerial problem(all branches are inter connected).
Decision-analytic DSS .
.User of information a) Within the organization-finance personnel. auditors. production.. public relations. shareholders etc. purchases. Regulators. etc« b) Outside the organization: Government. Government interferes during frauds etc. Regulators-SEBI(securities and exchange board of India) Auditors: external-outside the organization Internal-within the organization.
System and subsystem A system is a range of components that work together to achieve a common goal or multiple goals by accepting input. . processing it and producing output in an organized manner. A subsystem is a part of a larger system..) are the subsystems. units etc. functions. departments. Organization is the system and the parts(divisions.
system Strategic information system.CH-3 applications of inf. . An information system is strategic if its objective is to improve competitive positions of the organization. management or knowledge work. May include system that supports operation. Helps firms to attract customers and retain them for an extended period of time.
High degree of projectors: standardized/streamlined/processed.T: it is all about how to us the technology rather than which technology you use. External focus: they change the way the firms compete in the market place. . Innovative use of I.S.Characteristics of strategic I. Emarket-online purchasing.
. bonus. . 2.Strategies in competitive market 1.Differentiation: Of service-offering value added service/special schemes etc« Of products: offering free products/credit facility for regular customers.for customer service change from labor intensive to technology intensive. vouchers for special customers. For service-use of web/IVR etc.Cost leadership-for product-use if IT is to reduce process/labor cost.
Companies that focus on narrow customer segment 1. It could be a customer segment or a geographical region. . It helps in identify the customers to be served and customizing the product or service for their needs. Smaller firms compete by specializing in product or service for limited size slot.Focussed differentiation: Company identifies a segment of the market which it can serve in a superior way.
Focus on narrow cust. Use of I T facilitates operational efficiencies. . Relatively difficult to pursue for smaller companies.segment 2.Cost focus: Company serving a narrow market segment with which products or service that it offers at a significantly lower cost than competitors.
Competitive forces of the companies Customers Suppliers Existing competitors Potential substitute products .
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