Information System

Why Information Systems?

• The Competitive Business Environment
• Three powerful worldwide changes have altered the environment of
business.
• Emergence of the global economy An increasing dependence on
imports and exports is emerging. Information systems provide the
communication and analytic power that firms need for conducting
trade and managing businesses on a global scale. Globalization and IT
bring new threats to local businesses.
• Transformation of industrial economies Major leading economies are
transforming to knowledge- and information-based service
economies. Information and knowledge intense products are
becoming the foundation for many services & products.
• Transformation of the business enterprise: Tradition firms were hierarchical,
structured with set of specialists and depends on division of labor.
The new style includes flexible set of generalists, depend on informal
commitments and goals, flexible arrangement of teams, and customer orientation
for task forces.

• A Business Perspective on Information Systems

• From a business perspective, an information system is an
organizational and management solution, based on information
technology, to a challenge posed by the environment.
Business Information System
Business information systems are sets of inter-related procedures using IT
infrastructure in a business enterprise to generate and disseminate desired
information.
Such systems are designed to support decision making by the people associated
with the enterprise in the process of attainment of its objectives.
The business information system gets data and other resources of IT
infrastructure as input from the environment and process them to satisfy the
information needs of different entities associated with the business enterprise.
 Management
Decisions
(Environment)

Data Input Process Output Information

Storing &
retrieving

Control

Feedback
Features of Business information System
1. The business information systems are subject to the dynamics of
business environment.
They need to be flexible enough to absorb the inevitable changes in
the information needs of business.
They have to be efficient to satisfy the demands of the business
managers.
2. Business information systems need to be proactive.
They should anticipate changes in information needs of users and
accordingly adapt themselves to suit their needs.
Decision making becomes a matter of imitating what competitors are
doing or planning to do, rather than making an informed choice.

3. The purpose of business information system is to cater to the

information needs for decision making in business.

4. The cost effectiveness is a matter of prime concern in the develop-

ment and maintenance of business information systems.
 Systems Applications in the Organization

Decisions Management Levels Information Systems

Unstructured Senior ESS

Strategic Management
DSS
Knowledge and
GIS, CAD/CAM,
Tactical Data Worker
OAS
Middle
Management MIS

Lower
TPS
Management
Technical
(Operational)
Buy Make Sell Keep
Functions
Structured Track
1. Transaction Processing Systems (TPS) serve the people in the operational
level of an organization. It collects and stores information about transactions, and
controls some aspects of transactions. A sale of item in the store is an example of
a transaction.

2. Knowledge work systems (KWS) is used by technical staff as model functions

to convert design specifications into graphical designs. It uses computer-aided
design/manufacture (CAD/CAM).

3. Office automation systems (OAS) serve those that belong to the knowledge
level of an organization. The system helps individuals in the processing of
personal and organizational data, perform calculations, and create documents.
e.g. word processing, spreadsheets, file managers, personal calendars,
presentation packages.
4. Decision-support systems (DSS) help the strategic management staff (senior
officers) in making decisions. The system uses information, models, or analysis
tools in order for managers to make simulations and predictions. Example of
DSS is the 5-year investment plan.

5. Management information systems (MIS) serve the management level of the

organization. The system condenses and converts the TPS data into information
for purposes of monitoring performance and managing the organization.
Transactions that were recorded in the TPS are analyzed and reported by an
MIS. Example of an MIS output is the budget report.

6. Executive support systems (ESS) serve the strategic level of an

organization. A system provides top-level executive of a readily accessible,
interactive format to get the overview of the entire organizations performance.
Role of IS in Organization
Three fundamental roles played by information systems in businesses.
1. Information systems support business processes and operations.
2. They support decision making of employees and managers
3. They support strategies for competitive advantage.

These three fundamental roles encompass any other roles played by information
systems in an organization.
 The New Role of Information Systems in
Organization
The Widening Scope of Information Systems
◦ Growing interdependence between business strategy, rules, and procedures on one
side and information systems soft., hardware, databases, and telecommunications on
the other.

◦ The Network Revolution and the Internet

◦ Information systems play important role because of soaring power and declining cost
of computer technology.
◦ The most widely used network is the Internet.
◦ Separating work from location
◦ It is possible now to organize globally while working locally.
◦ Many workers can work remotely from their homes or cars
◦ Collaborative teamwork across thousands of miles is a reality.

◦ Reorganizing work flows

◦ Electronic work flows have reduced the cost of operations in many
companies by displacing paper and the manual routines.
◦ Improved work-flow management has enabled corporations to cut costs
significantly and improve customer service.
◦ Increasing flexibility of organizations
◦ Using communication technologies one can organize the company into more
flexible ways, increase their ability to respond to changes, and take
advantage of new opportunities.

◦ Redefining organizational boundaries

◦ Networked IS enable transactions to be exchanged electronically among
different companies.
◦ Systems linking a company to its customers, distributors, or suppliers are
termed inter organizational systems.
◦ Electronic market is an information system that links together buyers and
sellers to exchange information, products, services, and payments.
◦ The are like middlemen to facilitate the transactions.