What is an Information System?

An information system is the set of interrelated components that collect, process, store and distribute information used by/support one or more business process.
 

Input: The collection of raw data. Processing: The manipulation of data into information. Output: Distributing valuable information.

Also Includes both technology and people

Information System Is A System

Functions of Information Systems
E nviro nm ent O r g a n i za ti o n In fo r m a t i o n S y s t e m P ro cessing C l a s s i fy A rrange C alc u late F eedback

IN P U T

O U TP U T

Brief History of IS

1950's : Electronic Data Processing/ Automatic Data Processing 1960's : Management Information Systems (i.e. Report generating systems) 1970's : Decision Support Systems (DSS), Office Automation Systems 1980's : Information as strategic tool, End-User Computing, Managerial control 1990's : Integration: Core activities + Information as a product

Basic Components of Information Systems
Hardware is a device such as a processor, monitor, keyboard or printer Software is a program or collection of programs that enable hardware to process data. Database is a collection of related files or tables containing data.

Basic Components of Information Systems (Continued)

Network is a connecting system (wireline or wireless) that permits different computers to share resources. Procedures are the set of instructions about how to combine the above components in order to process information and generate the desired output. People are those individuals who use the hardware and software, interface with it, or uses its output.

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 meeting Data that has been organized so that they have meaning and value to the recipient Information that has been organized and processed to convey understanding, experience and expertise as they apply to a current problem or activity

Information

Knowledge

Roles of IS

Support daily tasks of line workers  within a business function  across business functions  knowledge work and production work  support effectiveness and efficiency Support decision making  across management levels and functions  individual and group  strategic, control (e.g., scheduling, resource allocations)

Roles of IS (continued)

Provide feedback
 Effectiveness

(e.g., conformance), Efficiency (e.g., cost, cycle time), Adaptability (e.g., response time)  Between levels, between functions

Facilitate communication
 Policy

and Goals  Coordination and direction

Interact with environment (e.g., Customers, Suppliers).

KINDS OF INFORMATION SYSTEMS
KIND OF SYSTEM GROUPS SERVED

               STRATEGIC LEVEL                                      SENIOR MANAGERS

MANAGEMENT  LEVEL                                                        MIDDLE MANAGERS

KNOWLEDGE  LEVEL                                                                               KNOWLEDGE & DATA WORKERS
                                                                                                                O   OPERATIONAL                                                                                                                  PERATIONAL LEVEL                                                                                                                      MANAGERS SALES &    MANUFACTURING  FINANCE    ACCOUNTING   HUMAN MARKETING & ENGINEERING RESOURCES

Information System - Classification By Support Function
Senior Mgr
•5-year sales trend •Profit Planning •5-year budget forecasting •Product development •Sales Management •Inventory Control •Annual budget •Production Scheduling •Cost Analysis •Pricing Analysis •Simulation •Pgm coding •System support •Word Processing •Desktop Publishing •Order Processing •Fulfillment •Material Movement •A/R, A/P, GL •Payroll •POS

Executive Support System

Management Information System Decision Support System Middle Managers Intelligent Support Systems Knowledge Management System Office Automation System

Data Workers

Transaction Processing System Operational Managers

Operational-level systems  support operational managers by monitoring the day-to-day’s elementary activities and transactions of the organization. e.g. TPS. Knowledge-level systems  support knowledge and data workers in designing products, distributing information, and coping with paperwork in an organization. e.g. KWS, OAS Management-level systems  support the monitoring, controlling, decisionmaking, and administrative activities of middle managers. e.g. MIS, DSS Strategic-level systems  support long-range planning activities of senior management. e.g. ESS

Four General Kinds of IS

A Framework for IS (with respect to support provided)
     

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

People in organizations

Transaction Processing Systems (TPS)
Computerized system that performs and records the daily routine transactions necessary to conduct the business; These systems serve the operational level of the organization
• • • • • •

TYPE: Operational-level INPUTS: transactions, events PROCESSING: updating OUTPUTS: detailed reports USERS: operations personnel, supervisors DECISION-MAKING: highly structured

EXAMPLE: payroll, accounts payable

A Symbolic Representation for a payroll TPS
E m p lo y e e d a ta (v a r io u s d e p a r tm e n ts ) T o g e n e r a l le d g e r : w a g e s a n d s a la r ie s

P ayr o ll S yste m

M anagem ent R e po rts G o v e rn m e n t do cu m e n ts

P ayro ll m aste r fi l e

E m p lo y e e c h e c k s O n -lin e q u e r ie s

Office Automation Systems (OAS)
Computer system, such as word processing, electronic mail system, and scheduling system, that is designed to increase the productivity of data workers in the office. TYPE: Knowledge-level INPUTS: documents, schedules PROCESSING: document management,scheduling, communication • OUTPUTS: documents; schedules • USERS: clerical workers
• • •

EXAMPLE: document imaging system

Knowledge Work Systems (KWS)
Information system that aids knowledge workers in the creation and integration of new knowledge in the organization.
•TYPE: Knowledge-level • INPUTS: design specifications • PROCESSING: modelling • OUTPUTS: designs, graphics • USERS: technical staff; professionals

EXAMPLE: Engineering workstations

Decision Support Systems (DSS)
Information system at the management level of an organization that combines data and sophisticated analytical models or data analysis tools to support semi-structured and unstructured decision making. •TYPE: Management-level • INPUTS: low volume data • PROCESSING: simulations, analysis • OUTPUTS: decision analysis • USERS: professionals, staff managers • DECISION-MAKING: semi-structured EXAMPLE: sales region analysis

Types of Decisions • Unstructured Decisions
• Novel, non-routine decisions requiring judgment and insights • Examples: Approve capital budget; decide corporate objectives

• Structured Decisions
• Routine decisions with definite procedures • Examples: Restock inventory; determine special offers to customers

Types of Decisions (continued) • Semistructured Decisions
• Only part of decision has clear-cut answers provided by accepted procedures • Examples: Allocate resources to managers; develop a marketing plan

Characteristics of Decision-Support Systems
1. DSS offer users flexibility, adaptability, and a quick response.

2. DSS operate with little or no assistance from professional programmers.

3. DSS provide support for decisions and problems whose solutions cannot be specified in advance.

4. DSS use sophisticated data analysis and modelling tools.

Management Information Systems (MIS)
Information system at the management level of an organization that serves the functions of planning, controlling, and decision making by providing routine summary and exception reports.
• • • • • •

TYPE: Management-level INPUTS: high volume data PROCESSING: simple models OUTPUTS: summary reports USERS: middle managers DECISION-MAKING: structured to semi-structured

EXAMPLE: annual budgeting

Characteristics of Management Information Systems

1. Support structured decisions at the operational

and management control levels. However, they are also useful for planning purposes of senior management staff. 2. Its reporting and control oriented and help provide day-to-day control of operations. 3. It rely an existing corporate data-and data flows. 4. It have little analytical capability. 5. It generally aid in decision making using past and present data. 6. It are relatively inflexible. 7. It have an internal rather than an external orientation.

Executive Support Systems (ESS)
Information system at the strategic level of an organization that address unstructured decision making through advanced graphics and communications. TYPE: Strategic level
• INPUTS: aggregate data; internal and external

• • • •

PROCESSING: interactive OUTPUTS: projections USERS: senior managers DECISION-MAKING: highly unstructured

EXAMPLE: 5 year operating plan

Major Types of Information Systems
T Y P E S O F SY ST E M S E SS S tr a te g ic L e v e l S y s te m s 5 -y e a r 5 -y e a r 5 -y e a r P r o fit o p e r a tin g budg e t s a le s t r e n d p la n n in g p la n fo r e c a s t in g fo r e c a s t in g M anpo w e r p la n n in g

M IS D SS

S a le s m anag e m e nt S a le s r e g io n a n a ly s is

In v e n to ry C o n tro l P r o d u c tio n S c h e d u lin g

M a n a g e m e n t-L e v e l S y s te m s C a p it a l A nnual R e lo c a t io n I n v e s t m e n t a n a ly s is a n a ly s is b u d g e t in g C o st a n a ly s is P r ic in g /p r o fit a b ilit y a n a ly s is C o n tra c t c o s t a n a ly s is

K W S O A S

E n g in e e r in g w o r k s t a t io n s W o rd p r o c e s s in g

K n o w le d g e - L e v e l S y s t e m s G r a p h ic s w o r k s t a t io n s D o cum e nt I m a g in g

M a n a g e r ia l w o r k s t a t io n s E le c t r o n ic C a le n d a r s

M a c h in e c o n tr o l T P S O r d e r T r a c k in g P la n t s c h e d u lin g

O p e r a tio n a l L e v e l S y s te m s S e c u r it ie s P a y r o ll t r a d in g A c c o u n t s p a y a b le

C o m p e n s a t io n T r a in in g & d e v e lo p m e n t

O r d e r p r o c e s s in g M a t e r ia l m o v e m e n t C a s h m anag e m e nt c o n tro l S a le s a n d m a r k e t in g M a n u fa c t u r in g F in a n c e

A c c o u n t s r e c e iv a b le E m p lo y e e r e c o r d k e e p in g

A c c o u n t in g

H um an R e s o u rc e s

Classification of IS by Functional Area

The accounting information system The finance information system The manufacturing (operations, production) information system The marketing information system The human resources information system

Sales & Marketing Systems

Systems that help the firm identify customers for the firm’s products or services, develop products and services to meet customer’s needs, promote products and services, sell the products and services, and provide ongoing customer support.

EXAMPLES System Order processing Market analysis Description Enter, process, and track orders Identify customers and markets using data on demographics, markets, consumer behavior, and trends Determine prices for products and services Organizational Level Operational Knowledge

Pricing analysis

Management

Manufacturing and Production Systems

Systems that deal with the planning, development, and production of products and services and with controlling the flow of production.
Organizational Level Operational Knowledge Management Strategic

Examples System Description Machine control Control the actions of machines and equipment Computer-aided design (CAD) Design new products using the computer Production planning Decide when and how many products should be produced Facilities location Decide where to locate new production facilities

Finance and Accounting Systems

Systems that keep track of the firm’s financial assets and fund flows.

Examples System Description Accounts receivable Track money owed the firm Portfolio analysis Design the firm's portfolio of investments Budgeting Prepare short-term budgets Profit planning Plan long-term profits

Organizational Level Operational Knowledge Management Strategic

Human Resources Systems

Systems that maintain employee records; Track employee skills, job performance, and training; And support planning for employee compensation and career development.

Examples System Description Training and development Track employae training, skills, and performance appraisals Career pathing Design career paths for employees Compensation analysis Monitor the range and distribution ofemployee wages, salaries, and bene6cs Human resources planning Plan the long-term labor force needs of the organization

Organizational Level Operational Knowledge Management Strategic

Expert System

An expert system is a computer program that represents and reasons with knowledge of some specialist subject with a view to solving problems or giving advice. Possess knowledge Specific domain Solving problem or giving advice

Expert Systems Features

Expertise  Capable of making expert level decisions Symbolic reasoning
 

Knowledge represented symbolically Reasoning mechanism symbolic

Deep knowledge  Knowledge base contains complex knowledge Self-knowledge  Able to examine own reasoning  Explain why conclusion reached

Major Components of Expert Systems

User Interface Inference Engine Knowledge Base

Components of Expert Systems
The Expert System
Expert Advice

User Interface Programs

Inference Engine Program

Knowledge Base

User

Workstation

Expert System Development
Knowledge Engineering

Knowledge Acquisition Program Workstation
Expert and/or Knowledge Engineer

Major Components of Expert Systems

Three major components 1. Knowledge base

Facts  Special heuristics to direct use of knowledge  the software that represents the knowledge 2. Inference engine  Brain  Control structure  Rule interpreter  The reasoning mechanism that draws conclusions (the interpreter or control structure)

3. User interface •Language processor •The hardware and software that provide the dialog between user and the computer

Benefits of Expert Systems
          

Increased outputs Increased productivity Decreased decision-making time Increased process and product quality Reduced downtime Capture of scarce expertise Flexibility Ease of complex equipment operation Elimination of expensive monitoring equipment Operation in hazardous environments Access to knowledge and help desks

Benefits of Expert Systems (contd.)
        

Ability to work with incomplete, imprecise, uncertain data Provides training Enhanced problem solving and decision-making Rapid feedback Facilitate communications Reliable decision quality Ability to solve complex problems Ease of knowledge transfer to remote locations Provides intelligent capabilities to other information systems

E.S in Business Applications

Finance  Insurance evaluation, credit analysis, tax planning, financial planning and reporting, performance evaluation Data processing  Systems planning, equipment maintenance, vendor evaluation, network management Marketing  Customer-relationship management, market analysis, product planning Human resources  HR planning, performance evaluation, scheduling, pension management, legal advising Manufacturing  Production planning, quality management, product design, equipment maintenance and repair

Limitations
 

  

Knowledge not always readily available Difficult to extract expertise from humans  Approaches vary  Natural cognitive limitations  Vocabulary limited  Wrong recommendations Lack of end-user trust Knowledge subject to biases Systems may not be able to arrive at conclusions

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