Session 1

Information Systems
 Objectives
• Conduct in class
– Honesty
– Integrity
– Equitable
– Timeliness
• Session plan
• Value of information
• Role of IS in organisations
 What is a Digital Organization?
• 3 essential characteristics:
1) Digitized business processes and practices
2) Consistent improvement and innovation – Business Process Re-engineering (BPR) leading to
competitive advantage & excellence seeking mind-set
3) Use of ICT to manage businesses for clear alignment between Business & Systems strategy
• Digital – technological – ICT focused solutions mind-set (e.g. automation, APIs,
workflow, knowledge-based decision-making, creation of digital knowledge libraries)
• Key usage of ICT: Data management – analytics – tools – Efficiency & Effectiveness –
KPIs – measurement and management
• Empowered employees
• Consistently innovating practices and processes for Excellence seeking
• A “different” view on Competitive Advantage…. ??? What is competitive advantage?
• Seamlessly Aligned: Vision – Mission – Strategy – Operational Plan – Financial Plan –
Systems & Technology strategy
• Technology examples: AWA, Aladdin (BlackRock), RenderMan (Disney), Pixar University,
WebEx Cloud service (CISCO)
 What is a Digital Organization?
• 3 essential characteristics:
1) Digitized business processes and practices
2) Consistent improvement and innovation – Business Process Re-engineering (BPR) leading to
competitive advantage & excellence seeking mind-set
3) Use of ICT to manage businesses for clear alignment between Business & Systems strategy
• Digital – technological – ICT focused solutions mind-set (e.g. automation, APIs,
workflow, knowledge-based decision-making, creation of digital knowledge libraries)
• Key usage of ICT: Data management – analytics – tools – Efficiency & Effectiveness –
KPIs – measurement and management
• Empowered employees
• Consistently innovating practices and processes for Excellence seeking
• A “different” view on Competitive Advantage…. ??? What is competitive advantage?
• Seamlessly Aligned: Vision – Mission – Strategy – Operational Plan – Financial Plan –
Systems & Technology strategy
• Technology examples: AWA, Aladdin (BlackRock), RenderMan (Disney), Pixar University,
WebEx Cloud service (CISCO)
 Business
Data Information Knowledge
Intelligence

DATA
No Value, meaningless

INFORMATION
Has Value, processed

KNOWLEDGE
A information set built using principles, laws, experience
etc. It is an asset of high value.
Know how: Ability to apply knowledge in practice
Wisdom: Judicious Use of know how & knowledge

BUSINESS INTELLIGENCE
A set of Information & knowledge entities, backed by systems,
tools & technology, organized to provide insight in the
scenario.
 Business
Data Information Knowledge
Intelligence

Facts without context is ‘Data’

Data processed in context is ‘Information’
Information processed in context is ‘Knowledge’
Knowledge in context of application is ‘Know-How’
Know-how in context of right use is a ‘Wisdom’
Data/Information/ Knowledge/ Knowledge Assets
& supporting infrastructure of systems, and Tools to
use it is a ‘Business Intelligence’
 Illustration
Data / Information / Knowledge

 Rainfall statistics: Data

 Analysis of data by seasons : Information
 Rainfall Pattern Model: Knowledge
 Knowledge & Models used for rain
forecast: Business Intelligence
 TATA MOTORS

Vehicle sales by month

Jan 10,000
Feb 9,000 DATA

Mar 12,000  No decision-making value

 No meaningful response
Apr 13,000 of any kind from the reader

May 12,000
 TATA MOTORS
Vehicle sales by month: Context: Model

Sales by Month/Model Indica Indigo Sumo

Jan 10,000 4000 3000 3000
Feb 9,000 3000 2000 4000 How would you
Mar 12,000 6000 3000 3000 increase the
value further?
Apr 13,000 7600 4400 1000
May 12,000 5000 3000 4000

This is ‘Information’
 Context is model
 Gives sales by model x month
 A better representation of sales
 Generates Mental Response
 Has a value for marketing
 TATA MOTORS
• Vehicle sales by month: Context: Model & Previous year sales

How would you

Sales by
Month/Model Indica Indigo Sumo improve the value of
sales Information?
Jan - 10,000 5000 3000 2000
Total Sales
Feb - 9,000 3000 2000 4000
30000
Mar - 12,000 6000 3000 3000
25000
Apr - 13,000 7600 4400 1000 20000

May- 12,000 5000 3000 4000 15000

Total 26,600 15,400 16,000 10000

5000
Last Year 30,000 11,000 16,000
0
Indica Indigo Sumo

Jan to May Pre Year

 More meaningful due to comparison
 More revealing on model
 Evokes managerial response
 Customer Segment: Indica

The information value increased by adding

comparative dimension by customer segment.
This information evokes mental response,
may prompt action.
 Customer Segment Vs Competition

Information processed with wider context by including

competition Provides better insight in the car market in terms
preferences & perceptions of customers. Information value is
increased tremendously.
Characteristics of good information
• Accurate
• Timely
• Relevant to context & subject
Roles of IS in Business
 Importance of Information

We need Information for:

Business Operations & control

Decision Making
Business Management: Strategy & Implementation
Performance Measure & control: Targets,
Budgets, KPIs

Achieving Goals & Targets

 Organisation & Information:
DM Perspective
External Low

TOP
MGMT
[Strategic
Decisions]
Source of Structured
Information MIDDLE Information
MGMT
[BUSINESS DECISIONS]

OPERATIONAL
MGMT
Internal [Operations Decisions] High
What is an Information System?
Any organized combination of people,
hardware, software, communications
networks, and data resources that stores,
retrieves, transforms, and disseminates
information in an organization.
 Information Systems vs.
Information Technology
• Information Systems (IS) – all components
and resources necessary to deliver
information and information processing
functions to the organization

• Information Technology (IT) – various

hardware components & software necessary
for the system to operate
Trends in Information Systems
 Session 2

Business processes & functions

Business functions
Business functions & processes
 What is a Business Process?

1. A pragmatic definition
A Business Process describes how something is done in
an organization

In general terms…
Business - Organizational entity that deploys resources to provide
customers with desired products and services
Process (Merriam-Webster’s Dictionary)
(i) A natural phenomenon marked by gradual changes
that
lead to a particular result
(ii) A natural continuing activity or function
(iii) A series of actions and operations conducing to an
end 23
 What is a Business Process?

2. Traditional Process definition in OM literature

A process specifies the transformation of inputs to outputs

Inputs Process Outputs

The transformation model of a process

Different types of transformations

• Physical (Ex. raw material  finished product)
• Locational (Ex. flying from Denver to L.A.)
• Transactional (Ex. depositing money in a bank)
• Informational (Ex. accounting data  financial statement)
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 What is a Business Process?
3. A more comprehensive process definition
A business process is a network of connected activities and buffers
with well defined boundaries and precedence relationships, which
utilize resources to transform inputs into outputs with the purpose
of satisfying customer requirements

Resources

Process

Suppliers Inputs Outputs Customers

25
 Process Types and Hierarchies

1. Individual processes
– Carried out by a single individual

Make up

2. Vertical or Functional processes

– Contained within one functional unit or department

Make up

3. Horizontal or Cross Functional processes

– Spans several functional units, departments or
companies

26
Illustration: Process Types and Hierarchies

CEO

Marketing Operations Accounting

Buying a TV
commercial

Order Request Production planning Order Fulfilled

Individual process Vertical process Horizontal process

27
Example of a business Process

28
 Business processes
• Network of activities, resources, facilities &
information that interact to achieve business
function
• E.g.: inventory management, manufacturing
• 2 ways of differentiating
– Where: individual, vertical, horizontal
– What transformations: physical, informational …
 Components of business process
• Activities: transforms resources & information
of one type into another
• Resources: items of value
• Facilities: structures used within processes
• Activities use information to determine how
to transform inputs into outputs
• Example: inventory mgt.
 Why important?
• Identify what tasks are important to your larger business goals
• Improve process efficiency
• Streamline communication between people – functions –
external stakeholders
• Standardize a set of procedures to complete tasks that really
matter to your business
• Reduce errors - Prevent chaos from creeping into your day-to-
day operations
• Adapt to change
• Accountability - Set approvals to ensure accountability and
optimum use of resources
 Key management activities
• Business Process Development and
Management(BPDM) is the holistic process of
designing, creating, and implementing new
business processes or modifying existing ones.
• BPDM involves identifying the steps and
activities required to achieve a specific
business goal, and designing a process that is
efficient, effective, and aligned with the
organization's overall strategy.
 Key management activities
• Business process modeling is a diagrammatic/structural
representation of flow of business activities in an
organization or function within an organization.
• Its primary use is to document and baseline the current
flow of activities in order to identify improvements and
enhancements for speedy accomplishment of tasks.
• A standard such as Business Process Modeling Notation
(BPMN), is a globally accepted standard that most
process professionals easily identify with.
 Key management activities
• Business process analysis is the process of
identifying business requirements and
deciding on solutions that best solve business
problems.
• This can consist of process improvement,
policy development, organizational change, or
strategic planning.
 Key management activities
• Business process simulation is a tool for the
analysis of business processes to measure
performance, test process design, identify
bottlenecks, test changes,
• Find how a process operates in different
environmental conditions with different
datasets.
 Key management activities
• Business process mapping is a procedure to
document, clarify, and break down process
sequences into logical steps. The mapping is
either done in written format or visualized
using flow charts.
 Key management activities
• Business process automation is a technology-
driven strategy to automate a business
process in order to accomplish it with
minimum cost and in a shorter time.
 Key management activities
• Business process monitoring is the active
monitoring of processes and activity to help
management gain insight into important
transactions and processes within an
enterprise.
• This helps management understand how their
processes are functioning, and if they’re
aligned with the company’s business goals.
 Key management activities
• Business process reengineering is a complete
redesign of business processes after thorough
analysis in order to bring drastic impact.
• It involves identifying the core of inefficiency,
removing tasks that don’t add any value, and
even implementing a top-to-bottom change in
the way a process is designed in order to bring
about an overall transformation.
 Session 3

Classifying MIS
IS components
Characteristics of good information
• Accurate
• Timely
• Relevant to context & subject
Roles of IS in Business
 Importance of Information

We need Information for:

Business Operations & control

Decision Making
Business Management: Strategy & Implementation
Performance Measure & control: Targets,
Budgets, KPIs

Achieving Goals & Targets

What is an Information System?
Any organized combination of people,
hardware, software, communications
networks, and data resources that stores,
retrieves, transforms, and disseminates
information in an organization.
Types of Information Systems
 Operation Support Systems
Definition:
• Information systems that process data
generated by and used in business operations
• Goal is to efficiently process business
transactions, control industrial processes,
support enterprise communications and
collaboration, and update corporate databases
 Examples of Operations Support Systems

• Transaction Processing Systems (TPS) – process data

resulting from business transactions, update operational
databases, and produce business documents.

• Process Control Systems (PCS) – monitor and control

industrial processes.

• Enterprise Collaboration Systems – support team,

workgroup, and enterprise communications an
collaboration.
 Management Support Systems
Definition:
• Information systems that focus on providing
information and support for effective decision
making by managers
 Management Support Systems
• Management Information Systems (MIS) – provide
information in the form of pre-specified reports and
displays to support business decision making.

• Decision Support Systems (DSS) – provide interactive

ad hoc support for the decision making processes of
managers and other business professionals.

• Executive Information Systems (EIS) – provide critical

information from MIS, DSS, and other sources
tailored to the information needs of executives.
 Decision Support System (DSS)

◆
Voyage estimating decision-support system . 53
 Operational & Managerial IS
• Expert Systems – provide expert advice for
operational chores or managerial decisions

• Knowledge Management Systems – support

the creation, organization, and dissemination
of business knowledge to employees and
managers
 IS Classifications by Scope
• Functional Business Systems – support basic business
functions

• Strategic Information Systems – support processes

that provide a firm with strategic products, services,
and capabilities for competitive advantage

• Cross-functional Information Systems – integrated

combinations of information systems
IS & mgt levels
Major types of information systems. 57
 Measures of Success
• Efficiency
– Minimize costs
– Minimize time
– Minimize the use of information resources

• Effectiveness
– Support an organization’s business strategies
– Enable its business processes
– Enhance its organizational structure and culture
– Increase the customer business value of the enterprise
Interrelationship
Developing IS Solutions