Types of IS

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Types of IS Powered By Docstoc
					    Learning Objectives

1. Understand the concept of a system and how it
   relates to information systems.
2. Explain why knowledge of information systems
   is important for business professionals and
   identify five areas of information systems
   knowledge they need.
3. Give examples to illustrate how the business
   applications of information systems can
   support a firm’s business processes,
   managerial decision making, and strategies for
   competitive advantage.                       1- 1
    Learning Objectives

4. Provide examples of several major types of
   information systems from your experiences
   with business organizations in the real world.
5. Identify several challenges that a business
   manager might face in managing the
   successful and ethical development and use of
   information technology in a business.

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    Learning Objectives

6. Provide examples of the components of real
   world information systems. Illustrate that in an
   information system, people use hardware,
   software, data and networks as resources to
   perform input, processing, output, storage, and
   control activities that transform data resources
   into information products.
7. Demonstrate familiarity with the myriad of
   career opportunities in information systems.

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What does IS do for a business?

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The Nature and Types of Information Systems

For most businesses, there are a variety of requirements for
• Senior managers need information to help with their
   business planning.
• Middle management needs more detailed information to
   help them monitor and control business activities.
• Employees with operational roles need information to
   help them carry out their duties.
As a result, businesses tend to have several "information
systems" operating at the same time.

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Classification of Information Systems

It is useful to classify information systems into groups that
share similar characteristics.
Such a classification may help in identifying systems,
analysing them, planning new systems, planning
integration of systems, and making decisions such as the
possible outsourcing of systems.
Information systems are classified in this section by
organizational levels and by the type of support

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Organizational Levels

Organizations are made up of components such as divisions,
departments, and work units, organized in hierarchical
levels. For example, most organizations have functional
departments, such as production and accounting, which
report to plant management, which report to a division head.
Thus, we can find information systems built for
headquarters, for divisions, for the functional
departments, for operating units, and even for individual

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Typical information systems that follow the organizational
structure are functional (departmental), enterprisewide,
and interorganizational.

INFORMATION SYSTEMS: The major functional
information systems are organized around the traditional
departments— functions—in a company: manufacturing
(operations/production), accounting, finance, marketing,
and human resources.

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departmental information system is usually related to a
functional area, other information systems serve several
departments or the entire enterprise.

These information systems together with the departmental
applications comprise the enterprisewide information
system (EIS).

One of the most popular enterprise applications is
enterprise resources planning (ERP).
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A special enterprise system that crosses several
departments is the transaction processing system (TPS).
The TPS automates routine and repetitive tasks that are
critical to the operation of the organization, such as
preparing a payroll or billing customers.

information systems connect two or more organizations.
They are referred to as interorganizational information
systems (IOSs). For example, the worldwide airline
reservation system is composed of several systems
belonging to different airlines. Of these, American
Airlines’ SABRE system is the largest; thousands of
travel agents and hundreds of airlines are connected to it.
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Departmental, corporate, and interorganizational information systems

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Classification by the Type of Support Provided

Another way to classify information systems is according
to the type of support they provide, regardless of the
functional area. For example, an information system can
support office workers in almost any functional area.

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System                       Employees Supported       Description
                                                       Processes an organization’s basic business
Transaction processing
                             All employees             transactions (e.g., purchasing, billing,
system (TPS)
Management                                             Provides routine information for
information system           All employees             planning, organizing, and controlling
(MIS)                                                  operations in functional areas.
Office automation                                      Increases productivity of office workers;
                             Office workers
system (OAS)                                           includes word processing.
                                                       Helps create, edit, format, distribute, and
Word processing system       Office workers
                                                       print documents.
                                                       Allows engineers to design and test
CAD/CAM                      Engineers, draftspeople   prototypes; transfers specifications to
                                                       manufacturing facilities.
Communication and                                      Enable employees and customers to
collaboration systems                                  interact and work together more
                             All employees
(e.g., e-mail, voice mail,                             efficiently.
call centres, others)
Desktop publishing                                     Combines text, photos, graphics to produce
                             Office workers
System                                                 professional-quality documents.
Document management                                    Automates flow of electronic documents.
                             Office workers
system (DMS)
                                                       Combines models and data to solve
Decision support system      Decision makers,
                                                       semi-structured problems with extensive
(DSS)                        Managers
                                                       user involvement.
Executive support            Executives, senior        Supports decisions of top managers.
system (ESS)                 Managers
                                                       Supports working processes of groups of
Group support system         People working in
                                                       people (including those in different
(GSS)                        Groups
                                                       Provides stored knowledge of experts to
                             Knowledge workers,
Expert system (ES)                                     nonexperts and decision recommendations
                                                       based on built-in expertise.
Knowledge work system        Managers, knowledge       Supports the gathering, organizing, and use
(KWS)                        Workers                   of an organization’s knowledge.
Neural networks, case-       Knowledge workers,        Learn from historical cases, even with
based reasoning              Professionals             vague or incomplete information.
                                                       Stores huge amounts of data that can be
                             Managers, knowledge
Data warehouse                                         easily accessed and manipulated for
                                                       decision support.
                                                       Gathers and uses large amounts of data for
                             Decision makers,
Business intelligence                                  analysis by DSS, ESS and intelligent
                                                       Support employees who work with
Mobile computing
                             Mobile employees          customers or business partners outside the
                                                       physical boundaries of the organization.

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Strategic-Level Systems

Information systems that operate at this level support
strategic managers to track and deal with strategic issues,
assisting long-range planning. A principle area is tracking
changes in the external conditions (market sector,
employment levels, share prices, etc.) and matching these
with the internal conditions of the organisation.

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Types of IS

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    Operations support systems

• What are they?
  – Efficiently process business transactions
  – Control industrial processes
  – Support communications and collaboration
  – Update corporate databases

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    Types of Operations Support Systems

• Transaction Processing Systems
  – Record and process data from business transactions
  – Examples: sales processing, inventory systems,
    accounting systems
• Process Control Systems
  – Monitor and control physical processes
  – Example: in a petroleum refinery use sensors to
    monitor chemical processes
• Enterprise Collaboration Systems
  – Enhance team and work group communications
  – Examples: e-mail, videoconferencing

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    Two ways to process transactions

• Batch Processing:
  – Accumulate transactions over time and process
  – Example: a bank processes all checks received in a
    batch at night
• Online Processing:
  – Process transactions immediately
  – Example: a bank processes an ATM withdrawal

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     Management Support Systems

• What are they?
  – Provide information and support for effective decision
    making by managers

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     Types of Management Support
• Management Information Systems (MIS)
  – Provide reports and displays to managers
  – Example: daily sales analysis reports
• Decision Support Systems (DSS)
  – Provide interactive ad hoc support for decision making
  – Example: A what-if-analysis to determine where to
    spend advertising dollars
• Executive Information Systems (EIS)
  – Provide critical information for executives and
  – Example: easy access to actions of competitors

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     Operational or Management Systems

• Expert Systems
  – Provide expert advice
  – Example: credit application advisor
• Knowledge Management Systems
  – Support creation, organization and dissemination of
    business knowledge throughout company
  – Example: Intranet access to best business practices

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     Classifications of IS by scope
• Functional business systems
  – Focus on operational and managerial applications of basic
    business functions
  – Examples: support accounting, finance or marketing
• Strategic information systems
  – Help get a strategic advantage over its customers
  – Examples: shipment tracking, e-commerce web systems
• Cross-functional information systems
  – Systems that are combinations of several types of information
  – Provide support for many functions

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     Measuring success of an IS

• Efficiency
  – Minimize cost, time and use of information resources
• Effectiveness
  – Support business strategies
  – Enable business processes
  – Enhance organizational structure and culture
  – Increase the customer and business value
• What’s the difference between Efficiency and

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Developing IS Solutions

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Ethical challenges of IT applications

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    Ethical responsibilities

• What uses of IT might be considered improper or
  harmful to other individuals or society?
• What is the proper business use of the Internet
  or a company’s IT resources?
• How can you protect yourself from computer

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    IS Function represents

• Major functional area of business
• Important contributor to operational efficiency,
  employee productivity, morale, customer service
  and satisfaction
• Major source of information and support for
  effective decision making
• Vital ingredient in developing competitive
  products and services in the global marketplace
• Dynamic and challenging career opportunity
• Key component of today’s networked business
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     Cybernetic system

• All systems have input, processing and output
• A cybernetic system, a self-monitoring, self-
  regulating system, adds feedback and control:
  – Feedback is data about the performance of a system
  – Control involves monitoring and evaluating feedback to
    determine whether a system is moving towards the
    achievement of its goal

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A Cybernetic system

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A business as a system

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Information systems model

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    Components of an IS

• People Resources
 – End users: the people who use the IS or the
   information from the IS
 – IS specialists: the people who develop and operate IS
• Hardware Resources
 – All physical devices used in information processing
 – Machines, data media, peripherals
• Software Resources
 – All information processing instructions including
   programs and procedures
 – System software, application software and procedures

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    Components of an IS (cont.)

• Data Resources
 – Facts about the business transactions
 – Processed and organized information
 – Databases of organized data
• Network Resources
 – Communications media
 – Network infrastructure: hardware and software
 – The Internet, intranets and extranets

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     Data versus Information

• Data are raw facts about physical phenomena or
  business transactions
• Information is data that has been converted into
  meaningful and useful context for end users
• Example:
  – Sales data is names, quantities and dollar amounts
  – Sales information is amount of sales by product type,
    sales territory or salesperson

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     IS Activities

• Input of data resources
  – Data entry activities
• Processing of data into information
  – E.g., calculate, compare, sort, classify, summarize
• Output of information products
  – Messages, reports, forms and graphic images
• Storage of data resources
  – Data elements and databases
• Control of system performance
  – Monitoring and evaluating feedback
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