Introduction to
Information
Systems
THE EVOLUTION IN COMPUTER APPLICATIONS
Aninformation system is a conceptual system that enables
managers to control and monitor a firm’s physical systems
used to transform input resources into output resources
MANAGERS AS INFORMATION SYSTEM USERS
Managers exist at various managerial levels and within
various business areas of the firm
What level an IS is developed for influences how it operates
The 3 primary management levels are:
1. Strategic planning level
2. Management control level
3. Operational control level
Information Systems Serve 3
Roles
IS can support 3 different levels in business
Expanding Role of IS
Information Systems are being used in
more areas, especial at the strategic level.
At the same time, Information Systems are
expanding participation of
End Users
Biggest advantages of IS:
Information can flow up
the pyramid faster and
more effectively.
Decision-Making Levels of an Organization
Executive level (top)
Long-term decisions
Unstructured decisions
Managerial level (middle)
Decisions covering weeks and months
Semistructured decisions
Operational level (bottom)
Day-to-day decisions
Structured decisions
Types of Information Systems
Operations support systems
What are they?
Efficiently process business transactions
Control industrial processes
Support communications and collaboration
Update corporate databases
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
Two ways to process transactions
Batch Processing:
Accumulate transactions over time and process periodically
Example: a bank processes all checks received in a batch at
night
Online Processing:
Process transactions immediately
Example: a bank processes an ATM withdrawal immediately
Management Support Systems
What are they?
Provide information and support for effective decision
making by managers
Types of Management Support Systems
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 managers
Example: easy access to actions of competitors
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
Transaction Processing Systems
It gathers data from the firm’s physical system and environment and enters it into
its database
The software also transforms the data into information for the firm’s managers
and other individuals in the firm’s environment
Supports Operations
Updates Operational Databases
Examples:
ATM Machine System – Banking Transactions
Cash Register System – Point of Sale Transactions
Accounting System – Checking Account Transactions
Even Pay-per-view or OnDemand is a TPS
Process Control Systems (PCS)
Supports Operations
Monitor and Control Industrial/Manufacturing Process
Examples:
Petroleum Refining
Power Generation
Automobile Manufacturing
Enterprise Collaboration Systems (ECS)
SupportsOperations (Surprised?)
Teamwork, communication, and collaboration
Examples:
E-mail
Chat
Video Conferencing
Calendaring
Journaling
Workflow
File Sharing (Kazaa, Morpheus, Limework, Napster)
Management Information Systems
Management information systems (MIS) transform the data in
frontline systems, such as transaction processing systems into
information useful to managers
Typical MIS modules are report-writing software, and models that
can simulate firm operations
Information from the MIS is then used by organizational problem
solvers as an aid in decision-making, as illustrated.
Firms can also interact with suppliers or others to form inter
organizational information systems (IOS), in which the MIS
supplies information to the other members of the IOS as well as
the firm's users
Management Information System (MIS)
Supports Management
Analysis & Reporting
Charts, Graphs, Summary Tools
Examples:
SCT Banner – Managing College Information (Siena uses
it)
Spreadsheet (Excel) – One of the first and most basic
Oracle's Corporate Performance Management
Decision Support System (DSS)
Support Management
What-if Analysis, Decision Modeling, Scenario
Building, Highly interactive, ad hoc.
Examples
Enterprise Decision Manager 2.0 Fair Isaac Corporation
AIMMS 3.6
Most
DSS’s are custom developed for specific
companies; very few out-of-the-box products.
Decision Support Systems (DSS)
A DSS is a system used to assist managers in making decisions
to help solve a specific problem
Figure 1.10 shows the 3 sources for the information to be
delivered to users: a relational database, a knowledge base,
and a multidimensional database
Two additional types of DSS-related software are:
group decision support systems: used in aiding a group of
managers work out decisions, and
artificial intelligence: in which a program is created for a
computer to logically analyze a problem on its own
Executive Information Systems (EIS)
Supports high-level strategic management
Provides critical info from other systems (MIS and DSS).
Portal Concept: one place with links to all information
EIS’s integrate external information such as economic
developments and news about related markets and
competitors. Helps strategic decision making, not
necessarily tactical.
Tactical – doing things the right way right
Strategic – doing the right things
Information Flow Executives
Enterprise Collaboration System
Executive Information System
System
Information
Flow Managers DSS
MIS
Information
Exchange/ TPS
Communication
PCS
Operational Systems and Staff
Information Flow Executives
Enterprise Collaboration System
Management Executive Information System
Managers DSS
MIS
Operations
TPS
PCS
Operational Systems and Staff
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 systems
Provide support for many functions
Information Systems that Span Organizational Boundaries
Enterprise Resource Planning Systems (ERP)
Over time, firms began to use many different kinds of
information systems throughout the firm
During the 1990s firms began to see the value in integrating all
of these systems so that they could function as a coordinated
unit
ERP systems are computer-based systems aimed at meeting
this need that enable the management of all of a firm’s
resources on an organization-wide basis
THE ROLE OF INFORMATION IN MANAGEMENT PROBLEM
SOLVING
While a problem can be harmful or potentially harmful to a firm in
a negative way, it can also be beneficial or potentially beneficial in
a positive way
The outcome of the problem-solving activity is a solution
A decision is a particular selected course of action
Simon described problem-solving as being made up of four phases:
Intelligence activity
Design activity
Choice activity
Review activity
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
Effectiveness?
THE FUTURE OF INFORMATION TECHNOLOGY
The future of information technology will be driven by the
following two trends:
Ongoing cost reductions and increased power of information
technologies
Convergence between computers and communications
To take advantage of these new possibilities, managers must
learn to incorporate information systems into decision making
