Information Systems

Basic Concepts

Data and Information

Data
Streams of raw facts representing events such
as business transactions
Information
Clusters of facts that are meaningful and useful
to human beings in the processes such as
making decisions

Attributes of Quality
Information

Timeliness
Completeness
Conciseness
Relevance
Accuracy
Precision
Appropriateness of form

System Concepts
It is an integrated set of components or entities that
interact to achieve a particular function or goal.
Systems have characteristics such as boundaries,
outputs and inputs, methods of converting inputs into
outputs, and system interfaces
They are composed of interrelated and interdependent
subsystems
Every system has a boundary that defines its scope of
activities
Systems may consist of numerous subsystems with
elements, interactions and objectives
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Systems and their Environments

The systems environment consists of people,
organizations and other systems that supply data to or
receive data from the system
Open Systems
These are the systems that operate in an external
environment and exchange information and material
with that environment
The external environment consists of the activities
external to the system boundary with which the system
can interact
An open system needs to receive feedback to change and to
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continue to exist in its environment

Contd.
Closed System
It is relatively self-contained and does not exchange
information with its environment
Closed systems do not get the feedback they need from
the external environment and so tends to deteriorate

Contd.
System feedback
A system needs feedback that is an indicator of current
performance rates when compared to a set of standards,
to do its job
With effective feedback, continuing adjustments in the
activities of a system can be made to assure that the
system achieves its goals
Measuring performance against a standard is an
effective control mechanism

Information Systems
Is an organized set of components for collecting,
transmitting and processing data in order to
deliver information for action
In business firms, this information is necessary
for both operations and management
Todays organizations cannot be operated or
managed effectively without information systems
that are built using a range of information
technologies
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Contd.
Information Systems (IS)
Collect, process, store, analyze, and disseminate
information for a specific purpose.

Information systems are comprised of

Inputs (data, instructions)
Outputs (reports, calculations)
Feedback mechanisms that controls the operation
An environment that it works within
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Approaches to Information
Systems
TECHNICAL APPROACHES

COMPUTER

OPERATIONS

SCIENCE

RESEARCH
MANAGEMENT
SCIENCE

MIS
SOCIOLOGY

PSYCHOLOGY

POLITICAL
SCIENCE

BEHAVIORAL APPROACHES
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Activities in an Information System

INPUT

PROCESS

OUTPUT

FEEDBACK

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Characteristics of Information Systems

Several different
information systems can
exist in one organization.
A particular information
system may be composed
of several separate
information systems.
Information systems are
connected by means of
electronic networks.

Inter organizational
information systems
involve information flow in
two or more organizations.
An enterprise wide system
or inter organizational
information system is
composed of large & small
computers & hardware
connected by different
types of networks.
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Computer-based Information
System

A computer-based information system (CBIS)

is an information system that uses computer
technology to perform some or all of its
intended tasks.

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Components of Information
Systems
Hardware is a set of
devices such as processor,
monitor, keyboard, and
printer.
Software is a set of
programs that enable the
hardware to process data.
Database is a collection of
related
files,
tables,
relations, and so on, that
stores data.

Network is a connecting
system that permits the
sharing of resources
between computers.
Procedures are the set of
instructions about how to
combine the above
components.
People are those individuals
who work with the system
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or use its output.

Business applications of
Information System

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Capabilities of Information
Systems

Fast and accurate data processing, with large capacity

storage and rapid communication between sites
Instantaneous access to information
Means of coordination
Boundary spanning

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Changing Scenario of IS
Electronic commerce
Electronic business
Digital market

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Electronic Commerce
Internet links buyers, sellers
Lower transaction costs
Goods and services advertised, bought,
exchanged worldwide
Business-to-business transactions increasing
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Electronic Business
Electronic business
Executing all the firms business processes with
internet technology
Intranet
Business builds private, secure network based on
internet technology
Extranet:
Extension of intranet to authorized external users
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Classifications of Information
Systems
Information Systems can be classified
according to:
Organizational Structure
Functional Area
Support Provided
System Architecture
Activity Supported

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Classification by Organizational Structure

Departmental information systems
Frequently, an organization uses several application programs
in one functional area or department.

Enterprise information systems (EIS).

While a departmental IS is usually related to a functional
area, the collection of all departmental applications when
combined with other functions applications comprises the
enterprise wide information system.

Inter organizational systems.

Some information systems connect several organizations.
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Classification by Functional Area

The Accounting Information System
The Finance Information System
The Manufacturing (operations/production)
Information System
The Marketing Information System
The Human Resources Management Information
System

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Classification by Support Provided

Transaction Processing System (TPS)
Management Information System (MIS)
Knowledge Management System (KMS)
Office Automation System (OAS)
Decision Support System (DSS)
Enterprise Information System (EIS)
Group Support System (GSS)
Intelligent Support System (ISS)
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Evolution of Support Systems

Early 1950s
1960s

Late 1960s
Early 1970s

Transaction processing system (TPS)

Management information systems
(MISs)
Office automation system (OAS)
Decision support system (DSS)
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Evolution of Support Systems (cont.)

Early 1980s

Executive information systems

Enterprise information systems (EISs)
Group support systems (GSSs)

Mid- 1980s

Expert systems (ES)

Knowledge management systems (KMS)

1990s

Artificial Neural Networks (ANNs)

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Interrelated Support Systems

Transaction
Processes

MIS

DSS

External
Information

Data
Warehouse

EIS

Non Computer
Support

Non Computer
Support
Internet, other
Computer Support

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Classification by System Architecture

A mainframe-based system.
A standalone personal computer (PC).
A distributed or a networked computing system
(several variations exist).

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Using Information Technology for

Competitive Advantage
Industry level effect: - It changes an industrys :
Products and services
Production economics
Markets
Firm level effect: - It affects key competitive forces:
Buyers
Substitute products
Suppliers
New entrants
Rivals

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Contd.
Strategic level: - It supports a firms strategy:
Low-cost leadership
Product differentiation
Market specialization

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Framework for Information System

Operational level:
These are the day-to-day activities of the firm that
involve acquiring and consuming resources
Tactical level:
Managers review operational activities to make
sure goals are met and resources are not wasted
Strategic level:
Strategic planners address problems that involve
long-range analysis and prediction .
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Characteristics of Operational Systems

Repetitiveness
Predictability
Emphasis on the past
Detailed nature
Internal origin
Structured form
Great accuracy
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Characteristics of Tactical Systems

Data are summarized, aggregated or analyzed
Variety of reports like summary, exception,
ad-hoc reports are generated

Periodic nature
Unexpected findings
Comparative nature
Summary form
Both internal and external sources
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Characteristics of Strategic Planning Systems

Ad-hoc basis: produced regularly or periodically

Unexpected information
Predictive nature
Summary form
External data
Unstructured format
Subjectivity

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Major types of systems in organizations

Executive Support Systems (ESS)
Decision Support Systems (DSS)
Management Information Systems (MIS)
Knowledge Work Systems (KWS)
Office systems
Transaction Processing Systems (TPS)

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Transaction Processing System

These are the basic business systems that serve the
operational level
It is a computerized system that performs and records
the daily routine transactions necessary for the conduct
of the business

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Knowledge Work Systems

Knowledge level
Inputs: design specifications
Processing: modeling
Outputs: designs, graphics
Users: technical staff and professionals
Example: engineering work station

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Management Information System

Management level
Inputs: high-volume data
Processing: simple models
Outputs: summary reports
Users: middle managers
Example: Annual Budgeting

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Decision Support System (DSS)

Management level
Inputs: low-volume data
Processing: interactive
Outputs: decision analysis
Users: professionals, staff
Example: contract cost analysis

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Executive Support System (ESS)

Strategic level
Inputs: aggregate data
Processing: interactive
Outputs: projections
Users: senior managers
Example: 5-year operating plan

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Sales and Marketing Systems

Major functions of systems:
Sales management, market research, promotion, pricing,
new products
Major application systems:
Sales order info system, market research system, pricing
system

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Manufacturing and Production Systems

Major functions of systems:
Scheduling, purchasing, shipping, receiving,
engineering, operations
Major application systems:
Materials resource planning systems, purchase
order control systems, engineering systems, quality
control systems
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Financing and Accounting Systems

Major functions of systems:
Budgeting, general ledger, billing, cost accounting
Major application systems:
General ledger, accounts receivable, accounts payable,
budgeting, funds management systems

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Human Resource System

Major functions of systems:
Personnel records, benefits, compensation, labor
relations, training
Major application systems:
Payroll, employee records, benefit systems, career
path systems, personnel training systems

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Enterprise Applications

Enterprise systems
Supply Chain Management Systems
Customer Relationship Management Systems
Knowledge Management Systems

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Supply Chain Management (SCM)

Close linkage and coordination of activities
involved in buying, making, and moving a product
Integrates supplier, manufacturer, distributor, and
customer logistics time
Reduces time, redundant effort, and inventory costs
Network of organizations and business processes

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Contd.
Helps in procurement of materials, transformation of
raw materials into intermediate and finished
products
Helps in distribution of the finished products to
customers
Includes reverse logistics - returned items flow in
the reverse direction from the buyer back to the
seller
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Role of IS in SCM

Decide when, what to produce, store, move

Rapidly communicate orders
Communicate orders, track order status
Check inventory availability, monitor levels
Track shipments
Plan production based on actual demand
Rapidly communicate product design change
Provide product specifications
Share information about defect rates, returns
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Customer Relationship Management

Manages all ways used by firms to deal with existing and
potential new customers
Business and technology discipline
Uses information system to coordinate entire business
processes of a firm
Provides end-to-end customer care
Provides a unified view of customer across the company
Consolidates customer data from multiple sources and
provides analytical tools for answering questions
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Knowledge Management System

Creating knowledge
Discovering and codifying knowledge
Sharing knowledge
Disseminating knowledge

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Topic
Information System
(IS) Concepts:
Understanding Data
and Information
Business as a
System, Business
Process
What is Information
System
Classification of IS
in organization
Attributes of
Information Quality
Intranet, extranet,
internet, worldwide

Cases to be
covered
Sew What? Inc.: The role of
information technology in small
business success (p.54 of MIS
by OBrien, Marakas & Behl 10th
Edition);
IT infrastructure and Business
Process Synergy at Meru cabs
Pvt. Ltd. Prepared by Prof.
Kartikeya Bolar, P.13 of ISM
eBook).
Amazon.com: Success with
Information Technology (P.5 of
Introduction to Information
Systems by OBrien James A.
12th Edition)
IT Adoption Indian
Construction Sector (P.10 of
MIS by OBrien, Marakas &
Behl 10th Edition);
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