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									Foundation Of Information
Systems In Business




      Ir. Muhril Ardiansyah, M.Sc., Ph.D.   1
Learning Objectives:
 Understand the concept of a system and how
  it relates to information systems.




                  Ir. Muhril Ardiansyah, M.Sc., Ph.D.   2
What Is An Information System?
 An Information System can be any organized
  combination Of:
  - people,
  - hardware,
  - software,
  - communications networks,
  - policies.



                Ir. Muhril Ardiansyah, M.Sc., Ph.D.   3
What Is An Information System?
(continued)
 People rely on modern information systems
  to communicate using a variable:
   - physical devices (hardware).
   - information processing instruction and
     procedures (software).
   - communications channels (network).
   - stored data (data resources).



                  Ir. Muhril Ardiansyah, M.Sc., Ph.D.   4
Examples Of Information Systems:
 Smoke signals for communication
 Card catalog in a library
 The cash register




                  Ir. Muhril Ardiansyah, M.Sc., Ph.D.   5
Real World Case:
Heidelberg: Using IT To Build Smart Products And Services

 Consider Heidelberger Druckmaschinen AG of
  Germany, the number one maker of high end end
  printing presses for printers and print media
  producers throughout the world. For all of its long
  history, the company has offered repair services to its
  customers.

  Several years ago, Heidelberg developed the ability
  to monitor its equipment remotely using built in
  sensors, networking microprocessors, and other
  information technologies.



                     Ir. Muhril Ardiansyah, M.Sc., Ph.D.    6
Real World Case:
Heidelberg: Using IT To Build Smart Products And Services
(continued)

Heidelberg soon found that it could provide
maintenance much more cost effectively with the smart
products.

Now with its machines communicating continuously
over the internet, relaying information about their status
between the print shops and Heidelberg’s regional and
global technical support specialists, the company has
the access and insight to optimize printing performance
in customer’s shops and minimize maintenance and
repair costs for Heidelberg as well as its customers.

                      Ir. Muhril Ardiansyah, M.Sc., Ph.D.    7
Real World Case:
Heidelberg: Using IT To Build Smart Products And Services
(continued)

With such smart services, Heidelberg now offers total
supports of its products, which for example, can extend
even to the removal and resale of its machines.

Thus the self monitoring and networking capabilities
built into its products provide a strategy opportunity for
Heidelberg to use information technology to become a
partner in the successful operations of its customers,
while reducing its costs and creating new sources of
revenue from smart services.

                      Ir. Muhril Ardiansyah, M.Sc., Ph.D.    8
Real World Case:
Heidelberg: Using IT To Build Smart Products And Services
(continued)

Questions:
 Why should manufacturing companies build
  smart products and provide smart services?

   What business benefits can be gained?
   Provide several examples beyond discussed
  in this case



                     Ir. Muhril Ardiansyah, M.Sc., Ph.D.    9
Real World Case:
Heidelberg: Using IT To Build Smart Products And Services
(continued)

Questions (continued)
 What information technologies are used by the
  companies in this case to build smart products and
  provide smart services?

 What are some limitations of a smart products and
  smart services strategies?

 Use the internet to investigate how Heidelberg, is
  proceeding in its use of smart products and services.


                     Ir. Muhril Ardiansyah, M.Sc., Ph.D.    10
Computer Based Information System
& Information Technologies:
1.   Computer hardware technologies.
2.   Computer software technologies.
3.   Telecommunications network technologies.
4.   Data resource management technologies.




                  Ir. Muhril Ardiansyah, M.Sc., Ph.D.   11
The Major Areas Of Information Systems
Knowledge Needed By Business Professionals

1. Foundation concepts.
   concept about the components and roles of
   information systems.

2. Information technologies.
   hardware, software, networks, data
   management, many internet based
   technologies.


                  Ir. Muhril Ardiansyah, M.Sc., Ph.D.   12
The Major Areas Of Information Systems
Knowledge Needed By Business Professionals
(continued)
3. Business applications.
   operations, management, competitive advantage of
   a business.

4. Development processes.
   plan, develop, and implement information systems
   to meet business opportunities.

5. Management challenges.
   the challenges of effectively and ethically managing
   information technology at end user, enterprise, and
   global levels of a business.

                     Ir. Muhril Ardiansyah, M.Sc., Ph.D.   13
The Fundamental Roles Of
Information System In Business
There are three fundamental reasons:
1. Support of its business processes and
   operations.
2. Support of decision making by its employees
   and managers.
3. Support of its strategies for competitive
   advantage.



                 Ir. Muhril Ardiansyah, M.Sc., Ph.D.   14
Trends In Information Systems:
1. Data processing: 1950s – 1960s
   - electronic data processing systems
     -- transaction processing, record keeping,
        and traditional accounting applications.

2. Management reporting: 1960s – 1970s
   - management information systems
     -- management reports of pre specified
        information to support decision making.

                  Ir. Muhril Ardiansyah, M.Sc., Ph.D.   15
Trends In Information Systems
(continued):
3. Decision support: 1970s – 1980s
   - decision support systems

4. Strategic and User Support: 1980s – 1990s
   - end user computing systems
   - executive information systems
   - expert systems
   - strategic information systems

                 Ir. Muhril Ardiansyah, M.Sc., Ph.D.   16
Trends In Information Systems
(continued):
4. Electronic Business and Commerce: 1990s
   – 2000s
   - internet based e business and e
     commerce systems




                Ir. Muhril Ardiansyah, M.Sc., Ph.D.   17
The Role Of “E Business” In Business
 Many business today are using internet
  technologies to Web enable business
  process and to create innovative e business
  application.




                 Ir. Muhril Ardiansyah, M.Sc., Ph.D.   18
The Role Of E Business In Business
(continued)
 E business:
  the use of internet technologies to work and
  empower business process, electronic
  commerce, and enterprise collaboration
  within a company and with its customers,
  suppliers, and other business stakeholders.




                 Ir. Muhril Ardiansyah, M.Sc., Ph.D.   19
Business Today

                                                                       Company
                                                                       Boundary
                    Supply chain management:
                   procurement, distribution, and
                             logistics
                Internet
 Engineering
                      Manufacturing and                               Accounting
    and
                         production                                   and finance
  research
                                                           Internet
               Customer relationship management:
               Marketing, Sales, Customer Service

                           Ir. Muhril Ardiansyah, M.Sc., Ph.D.                      20
Business Today (continued)

                   Suppliers and other
                    business partners

                                          Extranets

                         Company
                         Boundary



     Extranets
                 Consumers and business
                       customers
                  Ir. Muhril Ardiansyah, M.Sc., Ph.D.   21
Business Today (continued)
 Intranet:
   the internet and internet like networks inside
  the enterprise.

 Extranet:
  the internet and internet like networks
  between an enterprise and its trading
  partners.


                  Ir. Muhril Ardiansyah, M.Sc., Ph.D.   22
Business Today (continued)
 Electronic commerce:
  the buying, selling, marketing, and servicing
  of products, services, and information over a
  variety of computer networks.




                  Ir. Muhril Ardiansyah, M.Sc., Ph.D.   23
Types Of Information Systems


                     Information Systems




     Operations                                             Management
   Support Systems                                         Support Systems


                     Ir. Muhril Ardiansyah, M.Sc., Ph.D.                     24
Types Of Information Systems
(continued)


                          Operations
                           Support
                           Systems



Specialized   Transaction                   Process        Enterprise
Processing    Processing                    Control        Collaboration
 Systems       Systems                      Systems        Systems




                     Ir. Muhril Ardiansyah, M.Sc., Ph.D.                   25
Types Of Information Systems
(continued)


                       Management
                         Support
                        Systems



Management    Decision                    Executive       Specialized
Information   Support                    Information      Processing
  Systems     Systems                      Systems        Systems




                    Ir. Muhril Ardiansyah, M.Sc., Ph.D.                 26
Types Of Information Systems
(continued)
 Operations support systems:
  - Transaction processing systems
    -- process data resulting from business
       transactions, update operational
       databases, and produce business
       documents.
       Examples: Sales and inventory,
                  processing and accounting
                  systems.

                 Ir. Muhril Ardiansyah, M.Sc., Ph.D.   27
Types Of Information Systems
(continued)
 Operations support systems (continued):
  - Process control systems.
    -- minor and control industrial process.
       Examples: Petroleum refining, power
                 generation, steel producing
                 systems.




                 Ir. Muhril Ardiansyah, M.Sc., Ph.D.   28
Types Of Information Systems
(continued)
 Operations support systems (continued):
  - Enterprise collaboration systems.
    -- support team, workgroup, and enterprise
       communications and collaboration.
       Examples: email, chat, video
                  conferencing groupware
                  systems.


                 Ir. Muhril Ardiansyah, M.Sc., Ph.D.   29
Types Of Information Systems
(continued)
 Management support systems:
  - Management information systems
    -- provide information in the form of pre
       specified reports and displays to support
       business decision making.
       Examples: Sales analysis,
                   production performance,
                   cost trend reporting systems.

                  Ir. Muhril Ardiansyah, M.Sc., Ph.D.   30
Types Of Information Systems
(continued)
 Management support systems (continued):
  - Decision support systems
    -- provide interactive ad hoc support for the
       decision making processes of managers
       and other business professionals.
       Examples: product pricing,
                  profitability forecasting,
                  risk analysis.

                  Ir. Muhril Ardiansyah, M.Sc., Ph.D.   31
Managerial Challenges Of Information
Technology

The Business
Enterprise:                     Information                  Customer Value
Strategies/Processes            Technology                   Business Value
/Structure/Culture
                                                               Business/IT
    Business/IT               Business/IT
                                                                 Goals
    Challenges               Developments




                       Ir. Muhril Ardiansyah, M.Sc., Ph.D.                    32
Managerial Challenges Of Information
Technology (continued)

                              Business/IT
Business/IT Challenges        Developments                        Business/IT Goals

   •Speed and flexibility
                                   * Use of the
 requirements of product                                           •Give customers
                                      internet,
      development,                                                  what they want,
                                     intranets,
    manufacturing, and                                            when and how they
                                  extranets, and
     delivery cycles,                                                want it, at the
                                     the WEB
                                                                      lowest cost
     •Integration of e
      business and e                                               • Coordination of
   commerce into the                                              manufacturing and
       organization’s                                             business process
   strategies, process,                                           with suppliers and
  structure, and culture                                              customers
                            Ir. Muhril Ardiansyah, M.Sc., Ph.D.                        33
Developing Information System (IS)
Solutions


 Investigate                 Analyze


                                                                      Design




               Maintain                                         Implement



                          Ir. Muhril Ardiansyah, M.Sc., Ph.D.                  34
The IS (Information System)
Functions:
 A major functional area of business equally
  as important to business success, as the
  function of:
   - accounting,
   - finance,
   - operations management,
   - marketing,
   - human resource management.

                  Ir. Muhril Ardiansyah, M.Sc., Ph.D.   35
The IS (Information System)
Functions (continued):
 An important contributor to:
  - operational efficiency,
  - employee productivity,
  - customer service and satisfaction.

 A major source of information and support
  needed to promote effective decision making
  by managers and business professionals.

                  Ir. Muhril Ardiansyah, M.Sc., Ph.D.   36
The IS (Information System)
Functions (continued):
 A vital ingredient in developing competitive
  products and services that give an
  organization a strategic advantage in the
  global market place.




                  Ir. Muhril Ardiansyah, M.Sc., Ph.D.   37
Foundation Concepts: The
Components Of Information Systems:
 Technology:
  the computer network are systems of information
  processing component that use a variety of:
  hardware,
  software,
  data management,
  and telecommunication network technologies.

 Applications:
  the electronic business and commerce applications
  involve interconnected business information systems.

                    Ir. Muhril Ardiansyah, M.Sc., Ph.D.   38
Foundation Concepts: The Components Of
Information Systems (continued):
 Development:
  that developing ways to use information
 technology in business includes designing the
 basic components of information system.

 Management:
 the managing information technology
 emphasizes the quality, strategic business
 value, security.
                 Ir. Muhril Ardiansyah, M.Sc., Ph.D.   39
What Is A System?
Systems have three basic functions:
1. Input:
   Involves capturing and assembling elements
   that enter the system to be processed.
   Example: - raw materials,
             - energy,
             - data.


                 Ir. Muhril Ardiansyah, M.Sc., Ph.D.   40
What Is A System? (continued)
Systems have three basic functions (continued):
2. Processing:
   involves transformation processes that convert input
   into output.
   Example: - manufacturing process,

3. Output:
   involves transferring elements that have been
   produced by a transformation process to their
   ultimate destination.
    Example: - finished products,
              - human services
                     Ir. Muhril Ardiansyah, M.Sc., Ph.D.   41
Stakeholders In The Business
Environment

                                            CONTROL

                                          Management

                                                              FEEDBACK

                                       Information System


          Economic                    Business Process:                       Goods and Services:
     Resources: people,                market, develop,                        products, services,
      money, material,                  produce, and                        payments, contributions,
       machines, land,                 deliver, products                    information, other effects
      facilities, energy,               and services,
         information                  support customers,
                                                                                    OUTPUT
                                       other processes
            INPUT
                                           PROCESSING
Financial Institutions, Labor Unions, Stockholders, Customers, Competitors, The Community,
Government Agencies, Suppliers

                                      Ir. Muhril Ardiansyah, M.Sc., Ph.D.                                42
Components Of An Information
System

PEOPLE RESOURCES (end users and IS specialists); SOFTWARE RESOURCES (programs and
procedures); HARDWARE RESOURCES (machines and media); NETWORK RESOURCES
(communications media and network support); DATA RESOURCES (data and knowledge bases);

                                     SYSTEM ACTIVITIES
                               Control System Performance




            Input Of Data                  Processing                     Output Of
              Resources                     Data Into                    Information
                                           Information                    Products




                                   Storage Of Data Resources



                                  Ir. Muhril Ardiansyah, M.Sc., Ph.D.                    43
Examples Of Information System
Resources And Products

             Information Systems Resources And
                          Products

 People                                                           Network
Resources                                                        Resources


            Hardware        Software                   Data      Information
            Resources      Resources                 Resources    Products




                        Ir. Muhril Ardiansyah, M.Sc., Ph.D.                    44
Information Systems Resources And
Products
 People resources:
  - specialist (system analysts, software
                developers, system operators).
  - end users (anyone else who uses
                 information systems).

 Hardware resources:
  - machines (computers, video monitor, magnetic disk
               drives, printers, optical scanners).
  - media (floppy disks, magnetic tape, optical disks,
           plastic cards, paper forms).
                      Ir. Muhril Ardiansyah, M.Sc., Ph.D.   45
Information Systems Resources And
Products (continued)
 Software resources:
  - programs (operating system program, spreadsheet
              programs, word processing programs).
  - procedures (data entry procedures, error correction
                procedures).

 Data resources:
  - product description, customer records, employee
    files, inventory databases.


                    Ir. Muhril Ardiansyah, M.Sc., Ph.D.   46
Information Systems Resources And
Products (continued)
 Network resources:
  - communications media, communication
    processors, network access and control
    software.

 Information products:
  - management reports and business
    documents using text and graphics displays,
    audio responses, and paper forms.

                 Ir. Muhril Ardiansyah, M.Sc., Ph.D.   47
Business Examples
           INFORMATION SYSTEM ACTIVITIES

 Input. (optical scanning of bar coded tags on
            merchandise)
 Processing. (calculating employee pay, taxes, and
               other payroll deductions)
 Output. (producing reports and displays about sales
           performance)
 Storage. (maintaining records on customers,
            employees, and products)
 Control. (generating Muhril Ardiansyah, M.Sc., Ph.D. to indicate proper
                     Ir.
                         audible signals                                48
Recognizing Information Systems
As a business professional, You should be able
to recognize the fundamental components of
information systems You encounter.

You should be able to identify:
** The people, hardware, software, data, and network
   resources they use.
** The types of information products they produce.
** The way thy perform input, processing, output,
   storage, and control activities.

                    Ir. Muhril Ardiansyah, M.Sc., Ph.D.   49
Real World Case 4
Continental Airlines: This Call Is Being Monitored




                   Ir. Muhril Ardiansyah, M.Sc., Ph.D.   50

								
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