Systems Concepts

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      Chapter 2
      An Introduction to Concepts of
      Systems and Organizations
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      Systems Concepts
         System
         System Boundaries
         Systems and Subsystems
         Outputs and Inputs
         Subsystem Interfaces and Interface
          Problems
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      System
        A  system is an integrated set of components
         (tangible / intangible) to achieve a
         particular goal.
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      System Boundaries
         Boundaries   depict the scope of activities for
          a system.
         Boundaries delineate areas of
          responsibility.
         You must define the boundaries for
          business systems.
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      Subsystems
         Systems  often consist of numerous
          subsystems.
         Each subsystem has elements, interactions
          with other subsystems, and objectives.
         Subsystems perform specialized tasks for
          the overall system.
         In business, functions such as marketing,
          finance, and manufacturing are subsystems.
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      Outputs and Inputs
         Systems   produce Outputs from Inputs --
          that is the Inputs are converted to Outputs.
         Outputs of one subsystem become inputs to
          another subsystem.
         Outputs must adhere to standards to be
          useful or acceptable to the next subsystem.
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      Subsystem Interface and Interface
      Problems
          An   Interface connects each system or
           subsystem at its boundaries.
          It serves to convey the output of one system
           to the input of another system.
          Review the example in your textbook
           where the Inventory subsystem produces
           inputs to the Purchasing subsystem.
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      Systems and Their Environments
         Open  and Closed Systems - Open systems
          receive feedback from outside its
          environment.
         System Feedback - indicates if the system
          performance is meeting standards.
         System Stress and Change - as systems
          change over time they become stressed as
          new problems arise –
          for example untrained new workers in a
          system within a firm.
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      An Information System as a System
         Subsystems
         Outputs  and Inputs
         Hierarchy of Subsystems
         System Feedback
         Subsystem Interfaces
         Internal Controls
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       The Structure of an Enterprise
          An enterprise is organized into subsystems.
           An example is shown in Figure 2-9.
          Note the three major systems and their
           subsystems in this microcomputer
           dealership.
          Think about how information is used by the
           dealership owner/managers to monitor and
           control business activities.
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       Organizational Structure
                                   Owner


                D1-MKT                              D3-ADMN



       Prod-1   Prod-2       Sup            Pers      Pur     Acc



                                   D2-SRV



                         Logis      Sal       Sup
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       Using the Systems Approach in
       Problem-Solving
         1.   Define the Problem
         2.   Gather Data Describing the Problem
         3.   Identify Alternative Solutions
         4.   Evaluate These Alternatives
         5.   Select and Implement the Best Alternative
         6.   Follow Up to Determine if the Solution is
              Working
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       Define the Problem
          This critical step requires you to
           differentiate between the “problem” and
           “symptoms” of the problem.
          You must gather data describing the
           problem.
          Example problem: Sales are low - low
           sales is usually a symptom of some other
           problem such as poor advertising.
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       Gather Data Describing the
       Problem
          Study   the following in order to gather data:
           – Environment, current standards (as compared
             to outputs produced), management skills, input
             resources, and internal procedures.
          Understand  the environment first -
           customers, competitors, local community.
          Brainstorm about a low sales problem -
           what are the data to be gathered?
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       Identify Alternative Solutions
          Alternatives  may be based on different
           strategies for solving a problem. Example
           business strategies include:
           – low-cost strategy
           – Cost cutting strategy
           – value-added strategy
          Do not rule out alternatives at this point -
           those that seem infeasible may be feasible
           with additional resources.
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       Evaluate Alternatives
          Evaluate alternatives from a quantitative
           perspective.
          Evaluate alternatives from a qualitative
           perspective.
          Link the alternatives to the firm’s
           objectives and strategic direction where
           appropriate.
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       Select and Implement the Best
       Alternative
          Often requires an implementation plan.
          May require new personnel or equipment
           resources.
          May require new information systems
           support.
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       Follow Up
          Follow  up to ensure that the solution is
           working.
          Is the system meeting its goals?
          Evaluate success/failure in terms of the
           systems model.
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       Using Information Systems for
       Feedback
          Information  systems can provide feedback
           to enable the firm to respond to customer
           needs.
          Response to customers must often be on a
           real-time basis - information systems must
           provide the information needed to respond.
          This is termed “Manage by Wire”
          Discuss different examples