ie 154 lectures 1.pdf

7/29/2019 IE 154 Lectures 1.pdf

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IE 154

Information Systems I

Lectures

E.G. Atanacio


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Information

A tangible or intangible entity which

serves to reduce uncertainty about

some future state or event

A subject is informed by a proposition

when he is able to alter his behaviorbecause the proposition has come

before him.


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Information

Any piece of knowledge which may

rationally be applied to a decision by a

person who has the authority andresponsibility to take that decision


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Information

Collection of data, which, when

presented in a particular manner and

at an appropriate time, improves theknowledge of the person receiving it

in such a way that he is better able to

undertake a particular activity or makea particular decision


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System

A system is a set of interrelated

elements.

It is an entity which is composed of at

least two elements and a relation that

holds between each of its elements.


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State of a System

The state of a system is set of

relevant properties that that system

has at that moment of time.


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Environment of the System

Set of elements not part of the system

but a change in any of which can

produce a change in the state of thesystem


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How to Identify the Environment

Ask the following questions:

1. Does the element matter relative to

the systems goals?

Yes

2. Is it possible for the decision maker to

significantly manipulate this element?

No


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State of a Systems Environment

The state of a systems environment

is the set of its relevant properties at a

moment of time.


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Subsystem

A subsystem is a subset of elements

within a system.

The interconnections between

subsystems are called interfaces.


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Information System

A set of organized procedures which,

when executed, provides information

to support decision making A collection of people, procedures,

and equipment maintained to collect,

record, process, store, retrieve, anddisplay information


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Information System

Information systems are the means by

which people and organizations,

utilizing technologies, gather, process,store, use, and disseminate

information


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Simons Decision Making Model

Herbert A. Simon

Decision making consists of three

stages: Intelligence, Design, Choice

The original model is usually

extended to include a fourth and a

fifth stage: Implementation, Review


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Intelligence

Intelligence consists of determining

that a problem exists.

The decision maker becomes aware ofthe problem and gathers data about it.

It is the problem-finding or identification

and data collection stage.

Two types of reasons that might trigger

a decision making process: problem

detection or opportunity seeking.


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Design

In the Design stage the problem

solver tries to develop a set of

different alternative solutions, askingwhat approaches are available to

solve the problem.


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Design

Criteria:

Is it technologically and economically

feasible? Does it conform to regulations and

common practices?

Does it comply with budget and timeconstraints?


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Design

Criteria:

What are its outcomes?

Is the organizational unit affected by thealternatives ready to adopt and execute

it?


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Choice

In the Choice stage, the decision

maker chooses one of the solutions

that have been delineated.

If all the alternatives have been

evaluated well, the Choice stage isusually the simplest one to execute.


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Implementation

In the Implementation stage, the

solution is carried out.


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Review

In the Review stage, the solution

implemented is evaluated.

The main question asked is:

Was the course of action taken a

good choice?


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Intelligence

The information system for this stage

should provide the decision maker

with integrated and well-analyzed andformatted data.

It should scan data and indicate

situations calling for attention.


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Intelligence

It should also provide communication

channels for problems to be

transferred to appropriateorganizational levels.

Basically, the system for this stage

consists of two tools: Predefined routine (periodic) reports

Features to service ad hocqueries.


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Design

In the Design stage, it is assumed that

all relevant and accessible data are

already available for further analyses.Consequently, the IS for this stage

should incorporate planning and

forecasting models


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Design

A typical IS for the Design stage

includes operations research models

such as linear programming andnetworks, statistical analysis such as

regression and analysis of variance,

etc.


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Choice

The decision maker expects the IS to

provide three types of information:

Highlights of the various suggestedsolutions,

Possible scenarios and outcomes that

might be developed as a result of taking

various courses of action, and

Feedback data for monitoring the

implementation of the chosen decision


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ISs and the Decision Making Process

Intelligence

Design

Choice

Status reports

Trend reports

Exception reports

Ad hoc inquiry

Models and analytic tools

Information requiredDecision stage

insufficient data

no satisfactory solution

Alternatives (highlights)

What if?

Feedback


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Frameworks

A framework is a conceptual model

which is useful in understanding and

communicating about an idea. Frameworks for information systems

were offered by:

Robert N. Anthony (1965) Herbert A. Simon (1965)

G. Anthony Gorry and Michael S. Scott

Morton (1971)


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Anthony

Describes three types of decisions

made in an organization:

Strategic planning Management control

Operational control


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Strategic Planning

The decision maker develops

objectives and allocates resources to

attain these objectives. Decisions inthis category are made over a long

period of time and usually involve a

substantial effort and investment. Example: the development and

introduction of a new product


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Management Control

Deals with the use of resources in the

organization and often involve

financial or personnel considerations.

Example: variance analysis between

budgeted and actual cost


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Operational Control

Deals with the short-run that affects

the day-to-day operations of the firm.

Example: inventory control


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Mgt. Hierarchy and Decision Types

Supervisory

Management

Middle

Management

TopManagement

Strategic Planning

Management Control

Operational Control

HierarchyDecision Types


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Top Management

Decides on:

Organizational objectives

Changes in the objectives The resources used to attain the

objectives, and

The policies governing the acquisition,use, and disposition of the resources


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Middle Management

Assures that resources are obtained

and used effectively and efficiently to

accomplish the organizationsobjectives


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Supervisory Management

Assures that specific tasks are carried

out effectively and efficiently to

accomplish the scope of the objectiveunder their authority


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Info. Attributes of Mgt. Decisions

Information

Attributes

Management Decision

Operational

Control

Management

ControlStrategic Planning

Internal External

Narrow Wide

Detailed Aggregate

Hard Soft

Exact (High) Approximate (Low)

None Some

Present Future

Frequent Infrequent

Current Delayed (Older)

Source

Scope

Level of detail

Concreteness

Accuracy

Redundancy

Time horizon

Frequency of use

Timeliness


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Simon

Programmed decisions

Non-programmed decisions


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Programmed Decisions

The decision process is well

understood

Are routine and repetitive Are based on clear logic

Are usually quantitative

Their time horizon is short

Normally made at the low levels of the

organization


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Programmed Decisions

Usually solved through habit, clerical

procedures, and more modern

techniques like operations research,mathematical analysis, modeling, and

simulation


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Non-programmed Decisions

Novel and do not have easily

described procedures for solutions

The relevant factors and outcomesare somewhat vague

Tend to be more qualitative than

quantitative Decisions are ad hocand seldom

replicate previous decisions


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Non-programmed Decisions

Their time horizon is long

Normally made at the middle and top

levels of the organization

Non-programmed decisions are

solved using judgment, intuition, trial-and-error, rules-of-thumb, and

heuristic techniques


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Gorry and Scott Morton

Synthesized Anthonys and Simons

frameworks for decisions into a single

framework for information systems Renamed programmed and non-

programmed decision types into

structured and unstructured decisiontypes to avoid the computer

connotations evoked by the original

terms


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Gorry and Scott Morton Grid

ClassificationOperational

Control

Management

Control

Strategic

Planning

Structured Accounts

Receivable, Order

Entry, InventoryControl

Budget Analysis -

Engineered

Costs,Forecasting

Tanker Fleet Mix,

Warehouse and

Factory Location

[Semi-structured] Production

Scheduling

Variance Analysis

- Overall Budget

Unstructured Cash

Management,

PERT/COST

Systems

Budget

Preparation,

Sales and

Production

Planning

Mergers and

Acquisitions, New

Product Planning


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Gorry and Scott Morton Framework

Emphasizes two important points

Structured decisions are not confined to

operational control. Different degrees ofstructure exist in each of Anthonys

management processes. The boundary

between what is structured and what is

not is forever moving.


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It appears that most information systems

development has been in the structured

and operational control cell. Those

applications are similar in many

organizations, are more easily

understood, are easier to mechanize,

are more readily cost-justified, and arefundamental to business.


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Perhaps greater contributions to

organizational effectiveness can be

gained by developing information

systems in the other cells.


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General Functions of ISs

1. To determine user needs

2. To select pertinent data from theinfinite variety available from an

organizations environments (internal

and external)


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3. To create information by applying the

appropriate tools to the data selected

4. To communicate the generated

information to the user


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Specification of

information needsDecision making process

Measurement Data manipulation

Communication

Data

storage

Potential

information

storage


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Operational Information System

The OIS is aimed at improving the

routine business activities.

It establishes operational controlsover the day-to-day activities.

It supports the functional subsystems

of a business with emphasis onrecordkeeping.


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Also called a transaction processing

system ordata processing system

A transaction is any event or activitythat affects the organization.

Transaction processing often includes

the activities of calculation,classification, sorting, storage and

retrieval, and summarization.


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Characteristics of transaction

processing procedures:

There is a high volume of transactions Each transaction is similar

The procedures for describing the

transactions are well understood andcan be described in detail

Few exceptions to the normal

procedures occur


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Transaction processing procedures

are often called standard operating

procedures.


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Management Information System

The MIS aids the maintenance of

managerial control over the ongoing

function of the enterprise. It involves procedures for reviewing

the results of day-to-day operations

and calling attention to situations thatrequire special concern or decisions

(exception conditions).


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Management Information System

The MIS provides input to be used in

the managerial decision process and

deals with supporting well-structureddecision situations


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Decision Support System

The DSS is an interactive computer-

based system which helps decision

makers utilize data and models tosolve unstructured problems. It

utilizes the results of OIS and MIS

operations.

It is a tool for producing a model or

simulation of the future state of the

business or enterprise.


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Components of Information Systems

1. Input: data that serves as the raw

material for processing

2. Process: activity that transforms inputdata into useful information

3. Output: product, or result, of

processing


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4. Feedback: specially designed output

used for verification, quality control,

and evaluation of results5. Control: function that tests system

feedback to determine if performance

meets expectations


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6. Adjustment: product of the control

process that brings system input or

processing back in line withexpectations


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Source Process Sink

Control

FeedbackAdjustments

Input Output


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Example

SubscribersProduce

customer

bills

payment

phone bills


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Example

SubscribersProduce

customer

bills

Produce

cutoff

notices

delinquent

accounts

cutoff notices

payment

phone bills


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Elements of a Computer System

A computer system consists of:

Hardware: the physical and visible

components of the computer: thecentral processing unit, the

input/output devices or peripherals,

the memory devices, and the datacommunication links


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Software: the programs, or

instructions, which drive and use the

hardware Liveware (or Peopleware): the

personnel involved in the areas of

data preparation, systemsdevelopment, and data processing

management


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Procedures: the manner of obtaining

data and their preparation, scheduling

and operating the computer, and thedistribution of processed results or

output. The procedures include the

control steps to be taken in the event

of data errors or failure of equipment.


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Hardware Components


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System Software

System software provides the group

of programs that make it possible to

use hardware to solve problems andperform tasks. System software can

be classified into three general

categories: master programs,

language processors, and utility

programs


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Operating Systems


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Applications Software

Applications software are software

that are developed to perform specific

user tasks, such as word processing,database management, image

manipulation, media playing, Web

browsing, etc.


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Computer-Related Work RolesTechnical Knowledge

computer scientist

computer system programmer

science communications analyst/programmer

database analyst/programmer

applications programmer

systems designer

software engineer

systems architect

information systems analyst

systems information systems manager

information analyst

database administratorcomputer-acculturated manager

computer-acculturated end-user

Organizational Knowledge


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Organization for Information Systems

The mechanism for information

systems development and operations

is usually resident in an InformationSystems Department which provides

the personnel and equipment

necessary to develop and use

computer-based applications.


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Information Systems Functional Areas

Four areas encompass information

systems functional responsibility:

management, applicationsdevelopment, operations, and

technical support. Applications

development is usually subdivided

into systems analysis and

programming.


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The IS Department

Management

Applications

DevelopmentOperations

Technical

Support

Systems

AnalysisProgramming


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Management

Chief Information Officer (CIO)

primary responsibilities:

Understand the business Establish the credibility of the IS

Department

Develop competent IS staff and IT-savvy

users

Create a vision of the future and sell it


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Management

Implement an IS architecture

Foster internal and external relations


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Applications Development

Applications development involves

designing and building information

system components. Systems analysis focuses on the

identification of problems and the

determination of requirements andtheir design to solve the problems.


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Applications Development

Programming encompasses the

preparation of computer code and

manual procedures, and theirconversion to a new application to

meet the requirements identified in

analysis.


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Operations

Operations provides the hardware

and support staff for the ongoing use

of applications once developed.


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Technical Support

Technical support offers a variety of

specialized activities to facilitate the

application development andoperations functions.


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IS Steering Committee

A steering committee provides one

mechanism for linking the IS

Department with the other units. Itenables managers to oversee and

guide the operations of another

organization unit that they do not have

direct line responsibility for.


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In a typical organization, the IS

Steering Committee consists of the

decision-making membership, madeup of the heads of the different

departments, and the advisory

membership, made up of project

leaders and technical representatives.


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Exec. Vice

President

VP for

Production

VP for

Marketing

VP for

Personnel

VP for

Info. Sys.

Project

Leaders

Technical

Reps.

Decision-making membership

Advisory membership


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IS Steering Com. Responsibilities

Policy: establishes the broad

framework for the IS effort in the

organization. This involves settinggoals for the breadth and depth of IS

development and the rate at which

development proceeds.


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Budget: sets the levels of funds

allocated to the IS effort as a

proportion of the organizations overallresources. In addition to budgeting

funds, this responsibility can include

assigning user personnel to

participate in the systems effort.


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Planning: involves reviewing and

approving the long-range plans for

systems development. The planshould reflect the policy and budget

constraints established under the

policy and budget responsibilities.


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Project: reviews all requests that

involve a significant commitment of

organization resources. There is acutoff point for review the IS

Steering Committee does not

consider all activities undertaken by

the IS Department.


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Priorities: decides what projects will

be undertaken, and when. The

demand for IS resources typicallyexceeds the supply. Priorities must be

set to determine which requests will

be handled first.


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Conflicts: resolves conflicts that arise

in the project work performed by the

IS Department. These conflicts thatcannot be resolved at a lower

management level are brought to the

attention of the IS Steering

Committee.


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Monitoring: monitors ongoing projects

as they proceed through systems

development. This includes built-ingo/no-go decisions at major

checkpoints along the way. These

checks are essential for the

committee to assess the continuing

desirability of the project.


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Audit: oversees periodic general

reviews of applications in the

operational status. These audits arenecessary to determine if the

applications are meeting the

objectives established for them. When

this is not the case, the committee

initiates modifications of the system or

revision of the objectives

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